Graysons Freight Services Limited & Anor v The Commissioners for HMRC

Interim relief pending an appeal to the First-tier Tribunal requires more than a reasonable prospect of success. The American Cyanamid principles must be adapted, and an additional factor is required. A claimant relying on the risk of business failure must provide compelling, independent and detailed financial evidence showing that refusal of relief would make the appeal effectively academic and engage Article 6 rights.

For judicial review, the ordinary American Cyanamid test applies. Statutory powers to control goods under CEMA and the relevant customs regulations may be considered independently. A power conditioned on goods failing to be exported does not necessarily form a gateway to a separate power to require information or movement of goods.

The claimants operated a bonded warehouse and supplied alcoholic products to duty-free outlets. HMRC issued an instruction requiring goods exported under an export declaration to be presented to Border Force before being loaded for ferry transport. HMRC later issued a direction prohibiting removal of goods from the warehouse without payment of duty.

The claimants appealed the direction to the First-tier Tribunal and commenced judicial review proceedings concerning the instruction. They sought interim relief in both matters, permission to bring judicial review proceedings and expedition. The central issues were whether interim relief should be granted, whether HMRC had power to issue the instruction, and whether permission for judicial review should be given.

1. Interim relief concerning the direction. The application was refused. Pending an appeal to the First-tier Tribunal, the American Cyanamid principles require adaptation. A reasonable prospect of success is insufficient; an additional factor must justify relief. The example identified in R (on the application of ABC Ltd) v HMRC [2018] 1 WLR 1205 is where refusal would make the appeal illusory by forcing the claimant out of business and thereby violating Article 6 rights.
2. Any claim based on business failure requires compelling evidence. A director’s narrative is insufficient. The evidence should include detailed financial material and an independent professional assessment providing proper insight into the prospects of the appeal and the alleged consequences of refusing relief. The accountants’ evidence was not sufficiently independent or detailed and did not establish that either company would be forced into liquidation or similar.
3. The balance of convenience also favoured refusal. There was a strong public interest in HMRC’s effective policing of bonded warehouses, while the claimants had not shown sufficient financial hardship. Delay in progressing the proceedings was not, however, treated as a significant factor against them.
4. Interim relief concerning the instruction. The application was refused under the ordinary American Cyanamid test. Section 52A(6) of CEMA was not conditional upon the circumstances in section 52A(5). It could be exercised where goods fell within section 52A(1). The instruction was therefore within the statutory power.
5. In any event, regulations 41 and 45 of the Customs (Export) (EU Exit) Regulations 2019/108 provided additional legal bases. Regulation 41 permitted requirements concerning information and the handling or dealing with goods, and regulation 45 permitted steps to verify an export declaration.
6. The balance of convenience independently favoured refusal. The instruction imposed only a minor operational burden, did not itself impose a financial liability, and served the public interest in preventing diversion of goods. The claimants had not shown losses caused by the instruction alone.
7. Permission to bring judicial review proceedings was refused. The challenge was unarguable because HMRC had power under section 52A and, in any event, under the regulations. Section 31(2)(a) of the Senior Courts Act also supported refusal because the outcome would have been the same if another power had been specified. Expedition was not ordered.

First-instance decision. The claimants’ appeal against the Commissioner’s Direction remained before the First-tier Tribunal, which had jurisdiction to determine expedition but no power to grant the interim relief sought.