First Stop Wholesale Ltd. R (on the application of) v Revenue & Customs

Seizure notices under the Customs and Excise Management Act 1979 must be assessed according to substance, not technical form. The question is whether, in their factual context, the notices sufficiently conveyed that the goods were seized because the relevant duty was believed to be unpaid. A notice need not use technically precise language where its practical meaning is clear. The allocation of the legal burden of proof is also relevant when distinguishing immigration detention authorities. Even if a notice were defective, judicial review relief may be refused where the claimant suffered no real prejudice and can contest liability in the forfeiture proceedings. Costs normally follow the event, and requiring an unsuccessful claimant to pay HMRC’s costs did not infringe Article 6 on the facts.

First Stop Wholesale Ltd sought judicial review of seizure notices issued by HMRC in July 2011 concerning alcohol detained and removed from its warehouse and associated retail premises. The notices referred to goods being liable to forfeiture under the Customs and Excise Management Act 1979 and stated that no evidence of UK duty payment had been provided.

The claimant argued that the notices failed to allege positively that duty had not been paid and were therefore defective. HMRC contended that the notices had to be read realistically and that their meaning was clear in the context of the investigation. The claimant also challenged the anticipated costs order by reference to Article 6. The issues were whether the notices were lawful, whether relief should be refused in any event, and what costs order was appropriate.

1. Claim dismissed. The seizure notices were lawful when read as a matter of substance rather than form or technicality. The court accepted that the notices, viewed against the month-long investigation and the claimant’s involvement in supplying information, conveyed that HMRC believed the relevant UK duty had not been paid on the goods.
2. The analogy with Christie v Leachinsky [1947] AC 573 supported a practical approach. A notice need not employ technical or precise language if the recipient understands in substance the reason for the interference with property.
3. The claimant’s reliance on Khawaja v Secretary of State for the Home Department [1984] AC 74 was rejected as an exact analogy. In the immigration context, the detaining authority bore the legal burden of proving the precedent fact. Under section 154(2) of the 1979 Act, the owner bore the legal burden in the forfeiture proceedings concerning these goods.
4. Even if the notices had been defective, relief would have been refused in the court’s discretion. The claimant knew the case it had to meet, suffered no real prejudice, and could seek to discharge its burden in the pending magistrates’ court proceedings.
5. Costs followed the event. The claimant was ordered to pay HMRC’s costs, subject to detailed assessment if not agreed. The order was not unfair and did not infringe Article 6. Permission to appeal was granted, not because there was a real prospect of success, but because there was another compelling reason: the Court of Appeal should have the opportunity to consider issues arising from related proceedings together.

Permission to bring the judicial review claim was granted by Cranston J on 3 February 2012. The judgment also referred to an earlier related claim determined by Mr Justice Singh on 27 March 2012. This was a first-instance judicial review decision; permission to appeal was granted on the basis of another compelling reason.