Rajan Marwaha v Director of Border Revenue & Anor

Acceptance of statutory compensation under paragraph 17(1) of Schedule 3 to the Customs and Excise Management Act 1979 prevents the claimant from maintaining an action concerning the seizure, detention, sale or destruction of the goods. The phrase “maintain any action” includes bringing a new claim as well as continuing an existing one.

The statutory scheme provides a final, limited form of compensation and does not preserve a right to claim additional common-law damages. An estoppel by convention may prevent a claimant who has used and benefited from the statutory scheme from disputing that the goods were destroyed under paragraph 16. In any event, consequential losses must be caused by the destruction, rather than by an earlier seizure or detention.

The claimant imported dried poppy heads which were seized and later destroyed by Border Force. Earlier condemnation proceedings established that the goods were not liable to forfeiture. The claimant then obtained and accepted £174,072 under paragraph 17 of Schedule 3 to the Customs and Excise Management Act 1979, representing the market value of the goods at seizure.

He subsequently brought a claim for substantial damages arising from the destruction, including consequential business losses. The defendants argued that paragraph 17(3) barred the claim, and alternatively that the losses were caused by seizure and detention rather than destruction. The issues included the construction and application of paragraph 17(3), causation and, if necessary, quantum.

1. Claim dismissed. The claimant’s acceptance of £174,072 under paragraph 17(1) of Schedule 3 engaged paragraph 17(3). The restriction applies to both the continuation of an existing action and the commencement of a new one. The context and purpose of the statutory scheme require that construction; otherwise a claimant could accept the statutory payment and immediately sue for further sums.
2. The statutory compensation scheme is final and limited. It provides market value, not common-law damages or consequential losses. A reservation of rights in correspondence cannot override the unqualified statutory consequence of accepting the tendered amount. The referee’s determination was final and conclusive, although the operative bar arose from acceptance of payment.
3. The claimant was estopped by convention from arguing that the goods were not destroyed under paragraph 16. Both parties proceeded on the shared understanding that the statutory scheme applied. The claimant invoked the scheme, participated in the reference and banked the payment. It would be unconscionable to permit him subsequently to deny that assumption. The estoppel was confined to that issue and did not create a wider bar to damages claims.
4. Following R (HM Revenue & Customs) v Machell, the relevant question was whether the goods were in fact destroyed under paragraph 16, not whether the defendants would have formed the necessary opinion about perishability. The court therefore rejected the defendants’ alternative argument based on a hypothetical decision.
5. Independently, the evidence showed that the consequential losses were caused by seizure and retention, not destruction. Sales fell immediately after seizure, nearly two years before the first destructions, and the claimant’s own evidence attributed the interruption of the business to seizure.
6. If damages had been recoverable, market-value damages would have been £174,072, already paid. Transport costs of £5,648 would have been recoverable. Loss of profit would have been confined to the third consignment and assessed at £66,867. The broader consequential-loss claim was too speculative and remote, and lacked a reliable evidential foundation.

The claim was dismissed against both defendants. Costs and consequential matters were reserved for written submissions.

The judgment records earlier condemnation proceedings concerning the seized consignments. The High Court decision in those proceedings, reported as [2018] 1 WLR 758, held that the poppy heads were not poppy straw and were not liable to forfeiture. The present claim was a first-instance damages claim concerning the subsequent destruction of the goods.