Seabrook Warehousing Ltd v HM Revenue and Customs

Permission to apply for judicial review should not be refused merely because a statutory appeal may provide an adequate remedy where the challenge is directed to the underlying regulatory regime rather than only to an individual decision. The court should examine whether the statutory appeal has jurisdiction over the pleaded grounds. A hypothetical test transaction is not a satisfactory alternative unless it is practically available, causes no disadvantage, and can be established with the public authority’s co-operation. Delay will not ordinarily defeat a challenge to regulations before they have adversely affected the claimant. Where the challenge is otherwise arguable, permission may properly be granted despite a possible statutory appeal.

Seabrook Warehousing Ltd challenged the regime governing its approval as a duty representative and the consequences of operating without an authorised duty representative. Holman J had refused permission to apply for judicial review, accepting HMRC’s objection that the claimant had an adequate alternative remedy under the statutory appeal mechanism in section 16 of the Finance Act 1994.

On appeal, the claimant accepted that a challenge confined to the revocation decision could be raised in a statutory appeal, but maintained that its wider challenges concerned the regime itself. The central issues were whether those grounds fell within the statutory appeal jurisdiction, whether a test transaction supplied an adequate alternative remedy, and whether the challenge was brought too late.

1. Permission granted. The application for judicial review was otherwise arguable, and the grounds concerning the regulatory regime were not shown to be within the jurisdiction conferred by section 16 of the Finance Act 1994. The court expressed a strong provisional view to that effect, while noting that the issue had not been fully argued and that the view was reached at the permission stage only.
2. The position differed between the grounds. A challenge confined to the revocation decision could be determined in a statutory appeal, because the tribunal could consider whether the Commissioners’ decision was one they should reasonably have reached. The wider grounds instead challenged the regime which made the relevant business practically impossible without an authorised duty representative.
3. HMRC’s proposed alternative of creating an appealable decision by depositing potentially dutiable goods in an unauthorised warehouse was insufficiently established. Such a route would need to be practically possible, involve no disadvantage to the claimant, and be capable of being arranged with HMRC’s co-operation. The court was not persuaded on those matters.
4. The challenge was not defeated by delay. The claimant was not required to challenge the lawfulness of the regulations immediately upon their introduction, before the Commissioners had taken a decision causing them adverse business consequences. HMRC’s position that the substantive challenge could still be raised through a statutory appeal also weakened any practical justification for refusing permission on grounds of lateness.
5. The court did not endorse an unduly restrictive view of the scope of statutory appeals under section 16 or cognate provisions. It saw no reason to question the particular decisions in Atom Supplies Ltd v HMRC [2015] UKFTT 388 (TC) and The Learning Centre (Romford) Ltd v HMRC [2017] UKFTT 492 (TC) concerning tribunal powers, but held that the possible appeal route did not justify refusing permission in this case. The application was initially directed to proceed in the High Court, but following further written submissions it was directed that the application be retained in the Court of Appeal.

1. Court of Appeal (Civil Division): Permission to apply for judicial review was granted. The court declined to refuse permission on the basis of an adequate alternative remedy or delay, and the application was ultimately retained in the Court of Appeal.
2. High Court, Queen’s Bench Division, Administrative Court: Holman J had refused permission on the basis that the claimant had an adequate alternative remedy under the statutory appeal mechanism.