England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(MR JUSTICE NEUBERGER)

		Royal Courts of Justice Strand London, WC2
		28th July 2004

Wednesday, 28th July 2004
1. LORD JUSTICE BUXTON: This appeal from a decision of Neuberger J, as he then was, which was itself a decision on an appeal from the Customs and VAT Tribunal, is yet another case in this court that addresses the activities of Her Majesty's Customs and Excise in investigating, and where necessary taking steps to recover duty in respect of, the importation by persons returning from other countries within the European Union with large amounts of dutiable goods.
2. The framework of the law that governs those activities was set out by the Master of the Rolls in Lindsay v Customs and Excise Commissioners [2002] 1 WLR 1766. I do not need to set out in extenso what Lord Phillips there said. It is only necessary here to summarise the elements in the scheme that are of relevance to the issues in this appeal.
3. First, duty is payable on certain types of goods including, relevantly to this appeal, cigarettes and tobacco, which are imported for a "commercial purpose". By statutory provision, particularly the Excise Duties (Personal Reliefs) Order 1992, various considerations have to be taken into account. Firstly, there is exempt from duty any goods that are imported for the importer's own use. Secondly, if goods are imported that are above certain permitted, or perhaps more accurately guideline, amounts, the question arises as to whether they are indeed for a commercial purpose. That is to say, as understood by this court in Lindsay, either for own use or as personal gifts to other people. The guideline limits relevant to our case are 800 cigarettes and 1 kilogram of tobacco.
4. Secondly, Her Majesty's Customs can prosecute for fraudulent evasion of duty under section 170 of the Customs and Excise Management Act (CEMA), but they more often use their statutory powers of forfeiture of goods unlawfully imported on which duty has not been paid, or ancillary items such as the motor vehicles in which they have been carried. Thus, by section 49 of CEMA goods imported without the payment of duty are liable to forfeiture, and by section 141 where goods are liable to forfeiture any vehicle carrying them is also liable to be so forfeit.
5. The procedure has a number of elements which appear to have grown up over the years and which do not always easily fit with each other. Schedule 3 of the Customs and Excise Management Act lays down a procedure relating to forfeiture. The relevant paragraphs for our purposes are as follows:

"1-(1) The Commissioners shall... give notice of the seizure of any thing as liable to forfeiture and of the grounds therefor to any person who to their knowledge was at the time of the seizure the owner or one of the owners thereof.

...

"3. Any person claiming that any thing seized as liable to forfeiture is not so liable shall, within one month of the date of the notice of seizure or, where no such notice has been served on him, within one month of the date of the seizure, give notice of his claim in writing to the Commissioners at any office of customs and excise.

...

"5. If on the expiration of the relevant period under paragraph 3 above for the giving of notice of claim in respect of any thing no such notice has been given to the Commissioners, or if, in the case of any such notice given, any requirement of paragraph 4 above is not complied with, [that lays down certain limited requirements for the content of a notice of claim] the thing in question shall be deemed to have been duly condemned as forfeited.

...

"8. Proceedings for condemnation shall be civil proceedings and may be instituted -

(a) in England or Wales either in the High Court or in a magistrates' court;

[that relates back to paragraph 6 which provides that such procedures shall be taken by the Commissioner when a notice of claim is duly given to them]"

6. The procedure therefore is that the importer gives the notice of claim and it is for the Commissioners, when receiving such notice, then to initiate legal proceedings for condemnation: that is to say, for a decision as to whether the items are truly forfeit. Under section 152(b) of the CEMA the Commissioners have a discretionary power to "restore, subject to such conditions (if any) as they think proper, any thing forfeited or seized under those Acts".
7. The legislation provides for a review to be made by Her Majesty's Customs of any decision as to forfeiture, and by section 16 of the Finance Act 1994 an appeal lies to a VAT and Duties Tribunal with respect to any decision on such a review. So if the Commissioners decide, having reviewed the matter, that they will not exercise their powers under section 152, the importer can appeal that decision to the tribunal and the tribunal has limited, but only limited, powers to itself review the decision.
8. I turn to the facts of this case. Mr Gascoyne was stopped at Dover by customs officers when he was returning from France on 15th April 2001. He was driving a Land Rover vehicle. He was accompanied by a friend of his, a Miss Gifford. Hidden in the boot of the vehicle were 10,000 cigarettes and 32 kilograms of rolling tobacco: that is to say, for those who are not familiar with this expression, tobacco used in order to produce cigarettes by rolling them in a machine or by hand.
9. These amounts attracted the attention of the officers because they very much exceeded the guideline limits set out in the legislation to which I have already referred. The amount of the cigarettes exceeded those guidelines by 12 times, the amount of the tobacco exceeded those guidelines by 32 times. The duty on those amounts would have been something like £5,000.
10. Mr Gascoyne claimed, however, that all of the goods were for his and/or Miss Gifford's personal use, and therefore, under the provisions already set out, were not dutiable. He was not believed in that claim by the officers, who confiscated his goods together with the Land Rover in which they were carried.
11. In circumstances that are controversial in this appeal, and to which I shall have to return, Mr Gascoyne's case was investigated by the tribunal on an appeal to it against a refusal of Her Majesty's Commissioners to review the confiscation orders.
12. In order to put this case into some sort of context it will be appropriate to set out the facts upon which Mr Gascoyne relied and the conclusions of the tribunal on those facts. They are to be found in paragraph 47 of the tribunal's ruling, the tribunal having looked into the facts in a fashion that, on one view of the issues in this appeal, was not open to it. Be that as it may, they reached detailed conclusions:

"On 15th April 2001 the Appellant and his partner Miss Gifford were stopped by officers of the Commissioners at Eastern Docks, Dover. They did not initially disclose to the officers the considerable amount of excise goods that were contained in the vehicle. Officers discovered in the vehicle a large quantity of excise goods, some of which were in a box mixed among clothing and a large part of the tobacco was found hidden in a compartment in the boot of the vehicle. In the vehicle the officers found 10,000 cigarettes and 32 kilograms of hand-rolling tobacco (640 pouches). This quantity was considerably in excess of the guidelines which were 800 cigarettes per person and 1kg of hand-rolling tobacco per person for each person's own use. The smoking habits revealed by the Appellant and Miss Gifford to the officers indicated that it would have taken them far more than one year to smoke the tobacco themselves. Indeed at the hearing the Appellant admitted that in fact he had only smoked at the time about 1 pouch of tobacco per week and Miss Gifford a few cigarettes. On that basis the Appellant had been purchasing almost twelve years' supply of tobacco. Even if he had smoked 2 pouches a week, he would have been purchasing almost six years' supply. We find that it is not credible that the Appellant and Miss Gifford had purchased tobacco and cigarettes solely for their own use. There was no suggestion by either of them that they were purchasing the goods for anyone else. We find that the explanation that they gave as to the purpose of their journey and their intentions concerning where they were visiting was not credible. We did not believe that they had intended to travel to Bruges and changed their mind after they had been to Adinkerke. We did not believe the Appellant's contention that he had travelled to Adinkerke to buy chocolates for a neighbour. In fact he never purchased any chocolates and we did not believe his explanation. We did not believe his assertion that he was not aware of the guidelines. Neither he nor Miss Gifford were able to demonstrate to the officers that they knew how to roll tobacco. We did not believe the explanation of the Appellant that he used a machine to roll tobacco, but that he had lost the machine on the previous day in France, and that he had not been experienced in rolling tobacco without a machine nor did we believe his explanation that he felt unwell and embarrassed by the officers and that this inhibited his ability to roll the cigarettes. We bear in mind that there is no evidence that the Appellant had previously imported excise goods in excess of the guidelines or that he was a frequent traveller. We find that the appellant at his interview did attempt to mislead the officers and that his actions were not those of a shopper who was purchasing goods for his own use in good faith. The Appellant admitted in evidence that his previous habit was to purchase hand-rolling tobacco at a price considerably less than the retail price in the United Kingdom from people in public houses. The Appellant had contended that the tobacco was for his own use and that he was not intending to sell it for a profit. He denied that he intended to give any of it to friends or family. He denied that he was purchasing the tobacco for anyone else. We find however that on all the evidence the amount of hand-rolling tobacco some 32 kilograms was so large a quantity that bearing in mind the smoking habits of the Appellant and his partner we conclude that the Appellant was a commercial smuggler. We did not believe his evidence that the tobacco was for the own use of himself and his partner."

13. Mr Gascoyne appealed to Neuberger J against the tribunal's refusal of his application to quash the decision of the Commissioners not to return his motorcar. Those who originally advised Mr Gascoyne, not Mr Godsmark who has appeared in the appeal today and came into the case after limited permission to appeal had been granted, made in that appeal to Neuberger J a wholesale attack upon the Commissioners' policy in respect of seizure and confiscation, and more particularly their policy as to automatic confiscation, claiming that that policy was inconsistent with Article 6 and Article 1 of the First Protocol to the European Convention on Human Rights.
14. The learned judge rejected that attack in its entirety, and refused permission to appeal. This court subsequently gave permission on two issues only, which are now before us, and which it is fair to say were not central to the main thrust of the appeal as originally advanced. The issues with which we are now concerned are as follows. They are ground 1 and ground 2 before us, as they were in the original notice of appeal.
15. Ground 1. On 17th April 2001, that is two days after the confiscation of his motorcar, Mr Gascoyne wrote a letter to Her Majesty's Customs. It is contended on his behalf that Customs should have interpreted that letter as a notice under paragraph 3 of schedule 3 to CEMA, and therefore should have exercised their obligation under paragraph 6 of that schedule to institute condemnation proceedings in the Magistrates' Court or the High Court. Their failure to do so had wrongly deprived Mr Gascoyne of his right to seek to persuade a judge that the goods had indeed been imported for his own use. The effect of that, not in the law as it was believed to be at that time but in the law as it may be now (a matter to which I shall have to return) was that that issue could not be revisited before the tribunal.
16. The judge rejected this complaint because he held that the letter of 17th April was not a notice of claim under paragraph 3 of schedule 3 and that the customs authorities should not have treated it as such.
17. Ground 2. The judge held that if the letter of 17th April was indeed a notice under paragraph 3, and although the time had long since passed when condemnation proceedings could be brought in the Magistrates' Court, there being a 6 month limitation for all Magistrates' Court proceedings, it was not necessarily the case that such proceedings were not available to Her Majesty's Customs in the High Court.
18. Mr Gascoyne originally at least said that that was wrong, and contended that the judge should have held that the failure of the Customs and Excise to act on 17th April letter in 2001 precluded them from purporting to do so now, if the judge's holding on ground 1 were held to be incorrect. That ground did not arise before the judge in view of his holding on ground 1, but he nevertheless considered it and rejected it. It has taken a somewhat different form before us from that in which it originally appeared in the notice of appeal, but it is still a live issue.
19. Before addressing these issues it is necessary to deal with a complication that arises from another importation case in this court, Gora v Customs & Excise Commissioners [2004] QB 93. Put shortly, and it will have to be looked at in more detail in a minute, this court said that jurisdiction to determine whether goods had been lawfully forfeited could only arise under the Schedule 3 procedure. The tribunal in any subsequent proceedings was bound to take as a given that decision, or the deemed decision that arose under paragraph 5 if no application was made for condemnation proceedings.
20. The effect of the decision of this court in Gora is, in my view, correctly set out in paragraph 3 of the headnote of the Law Reports report in these terms at page 94:

"... once a court in condemnation proceedings determined that goods were liable to forfeiture, there was no jurisdiction in the tribunal to determine what the court had found as a fact in those proceedings, namely that duty had not been paid on the goods; that there was a clear division between the tribunal's jurisdiction to determine whether any thing forfeited was to be restored, and that of the court in condemnation proceedings; that, if the goods-owner failed to give notice of claim that goods seized were not liable to forfeiture and should be restored, the effect of the deeming provision in paragraph 5 of Schedule 3 to the 1979 Act prevented him from challenging the forfeiture by providing that the goods were to be treated as forfeited."

That is a correct recension of what was said by Pill LJ in the leading judgment in this court in paragraphs 57 and 58 of his judgment.

21. When this appeal originally came on before this court, I think in February, both parties, Mr Gascoyne and the Commissioners, supported as correct the observations of this court in Gora. The court was concerned by that consensus and asked that it should be provided with the assistance of an advocate to the court, and today we have had the advantage of submissions in writing and orally by Miss Ingrid Simler.
22. In fact, on the view that I take of this appeal, the correctness of Gora does not arise on the issues before us, although it does affect a collateral question of jurisdiction. Also, the matter has been debated before us at some length and it would not, in my view, be right, in view of that development, and of the concerns previously expressed by the court, if I were to say nothing about it.
23. The concerns expressed previously by this court about the case of Gora are set out in the observations of the Master of the Rolls when the present appeal was first before this court in February of this year. That is to be found in paragraph 10 of the transcript of the observations of Lord Phillips. He said this:

"If the views expressed in Gora are correct, it would seem to follow that once goods are deemed to have been duly condemned and forfeited the owner will not be permitted, in proceedings under section 152, to advance a case that the penalty was disproportionately harsh and that this will emasculate the jurisdiction of the VAT tribunal. The further consequence, so it seems to us, may well be that whenever the owner of goods that have been seized makes a written application to the Commissioners under section 152 that is based on hardship, the Commissioners are bound to treat the applications as a claim that the seizure was unlawful and commence condemnation proceedings."

24. As Mr Anderson QC, who appears for the Customs and Excise, ventured to suggest to us, and I respectfully agree, that exposition of Lord Phillips (it must be emphasised, set out after the court had received no submissions at all about the Gora case) does not accurately express the problem that Gora poses. I would venture to say two things about it.
25. First, as to the concern that Lord Phillips expressed about the owner's ability to advance a case as to the penalty's harshness in section 152 proceedings, it is not the case, even on the strictest view of Gora, that the jurisdiction under section 152(b) is excluded entirely by a finding or a deemed finding in the Magistrates' Court. All that Gora says, and it is quite a lot to say, but all that it says, is that in those proceedings issues that were, or were deemed to have been, considered in the Magistrates' Court cannot be reopened.
26. In other words, in the tribunal you assume the correctness of the findings that the Magistrates' Court did make or is deemed to have made. That does not exclude the exercise of the discretionary powers of the Commissioners, and after that the tribunal, albeit that those powers have to be exercised on the assumptions as to lawfulness of importation that the Magistrates' Courts make.
27. Secondly, it is not right that when a claim is based upon hardship the Commissioners have to treat the application as a claim that the seizure was unlawful. The two issues are different. The fact that someone complains about the hardship of having to hand his car over (as, for instance, Mr Gascoyne in this case said it caused him difficulties because of his state of health) is nothing to do with, and does not in itself excite an issue as to, whether the goods were lawfully forfeit in the first place.
28. Gora, does, however, undoubtedly cause a difficulty. The problem is that by holding that the lawfulness of any seizure can only be considered under Schedule 3 proceedings, that is to say, either in condemnation proceedings or in default of such condemnation proceedings because they have not been sought, that issue cannot be revisited in the tribunal proceedings. And it also seems to flow from that finding, although Pill LJ did not expressly say so, that the facts necessary to establish the legality issue, that is to say, the question, as it almost always will be, of whether the goods were for the importer's "own use", cannot be reopened either. That, of course, is a particularly serious matter if, because no application was made to challenge the seizure, the deeming provisions of paragraph 5 therefore apply.
29. If Gora is correct, or rather, if the observations in Gora are correct, there are at least two implications that are either directly or indirectly potentially relevant to our case. First, if the observations in Gora were correct, the construction point, that is to say, the very matter with which we are concerned with in this court, did not arise in front of the judge and he should not have considered it. That is because the proceedings before him were an appeal from the decision of the tribunal. In the view taken in Gora the tribunal had no jurisdiction to consider the lawfulness of the seizure, and therefore would appear to have had no jurisdiction to order the return of the goods, as the judge envisaged in paragraph 54 of his judgment, because of some default, as alleged in this case, on the part of the Commissioners.
30. The judge was well aware of that difficulty, but he accepted jurisdiction on the basis of a common view of the parties as to the jurisdiction of the tribunal. Having set out the legislation he said this at page 308, letter C:

"... in addition to the procedure described in paragraphs 3ff of Schedule 3 to CEMA, it is agreed that the review and appeal procedures, under section 152 of CEMA and sections 14 to 16 of the 1994 Act [that is the Finance Act], can involve consideration of the question of whether the goods and/or vehicle were validly seized, and are not merely limited to the question of their restoration (whether on terms or otherwise). While I can see an argument to the contrary, it appears to me that that common assumption, which I understand has always represented the view and practice of the commissioners and the tribunal, is correct. I think it would require clear words in a provision such as section 152 of CEMA or sections 14 to 16 of the 1994 Act before the reviewing officer or the tribunal (as the case may be) was precluded from considering the validity of any seizure or forfeiture."

It can be seen that that assumption shared by both parties does not appear to be borne out by the observations in Gora.

31. When the court put this point to Mr Godsmark QC, who has argued this case for Mr Gascoyne, he, as I understood it, readily agreed that the more appropriate course for his client, if he had had the benefit of Mr Godsmark's advice at that stage, would have been to seek judicial review of the Commissioners' construction of 17th April letter, which is the only matter really in issue between Mr Gascoyne and the Commissioners, rather than to appeal: since that latter course might be thought now to indicate an acceptance of the assumption by the Commissioners that the letter was not a claim under Schedule 3 to CEMA.
32. Mr Godsmark, however, said that if he was right, if his client had indeed made a claim under Schedule 3 and the Commissioners had wrongly not issued condemnation proceedings, then it followed that the vehicle had never passed out of Mr Gascoyne's ownership. That being so, the judge was entitled in this appeal, even though it was not put to him in this way, to review the validity of the nature and terms of the letter.
33. I would be minded, in the unusual circumstances of this case, to accept that submission, and in any event would certainly not turn away the appeal on the issue of construction simply on the basis just set out: even though it is not the basis that should have been pursued if it is assumed, as we are asked to assume, that the statements in Gora were correct.
34. Further, as I shall indicate shortly, there are reasons for thinking that the statements in Gora did not represent the entire extent of the law on this issue; and therefore, in any event, by a rather narrow margin, the judge had jurisdiction even on the grounds that were put before him.
35. The second implication of Gora is that if Gora is correct the applicant loses his opportunity to complain about seizure if he puts in the wrong notice; that is to say, does not put in a Schedule 3 notice.
36. Mr Godsmark emphasises that the consequences of that error by an importer, or alternatively of a misunderstanding of his letter by Customs, are, accordingly, very serious, and the court should, in effect, err in favour of the importer in analysing the true effect of what he wrote.
37. Those being the respects in which Gora is potentially relevant, it is therefore necessary to pass on and address the question of whether, in fact, we are bound to decide this case in the light of the observations of this court in Gora.
38. Miss Simler argued that the observations to which she at least took objection, that is to say, the paragraphs of Pill LJ's judgment to which I have already made reference, were obiter. I accept that submission. The case was pursued on an unusual basis. The tribunal that had originally considered the case had been grappling with the question of whether the proceedings before it for restoration of goods involved the determination of a criminal charge in terms of Article 6 of the European Convention on Human Rights and therefore whether the fair trial requirements for a criminal action had been duly met.
39. The tribunal formulated preliminary points on that issue for the opinion of the court, points that were agreed as the substance of the appeal. However, when those points arrived in this court, and I have explained the limited nature of them, the Commissioners entered what is described in the law report as a cross appeal, but I think must in fact must have been a respondent's notice, claiming that the tribunal did not have jurisdiction to determine whether the goods were forfeit, even where they had been deemed to be forfeit under the provisions of paragraph 5 of Schedule 3.
40. It was not necessary for this court to consider that issue in order to deal with the preliminary points in Article 6. Not only was it not necessary, it was not even appropriate, and the appeal was dismissed by this court in paragraph 53 without going anywhere near the matter of the tribunal's jurisdiction. However, seeking to be helpful, this court then went on to give its view on the points raised by the Commissioners. I can only hope that the helpfulness that I am equally attempting to extend does not cause further difficulty.
41. Be that as it may, what Pill LJ said in paragraph 54 was this:

"What is described as a cross-appeal arises by reason of a finding of the tribunal in the Gora cases that in certain circumstances the tribunal has a jurisdiction in relation to forfeiture. These appeals are in relation to findings on preliminary points upon which this issue did not arise. That being so, the court cannot pass judgment upon it but it is, in my view, appropriate that the court should express a view on what is a fundamental point for the guidance of the tribunal."

42. That is what the Lord Justice did, with the concurrence of the other members of this court, in the terms that I have already indicated. It is therefore undoubtedly the case that the court was not giving a decision on any point that was active before it. In technical terms, the observations were therefore indeed obiter dicta.
43. Against that it has to be said that this was not some passing observation, but a reasoned view of the court in a reserved judgment in a case where the court had had the benefit of argument by leading counsel on both sides. Normally one would hesitate, particularly in relation to a case decided very recently, to express any sort of contrary view.
44. The difficulty about the observations in Gora was, however, this. As I shall shortly indicate, I, for my part, do not find the observations open to difficulty when looked at purely from the point of view of domestic law. There is, however, one issue relating to the European Convention in respect of which the observations do seem open to doubt.
45. It is clear, as I shall describe shortly, that that issue and the argument supporting it was not put before the court in Gora. That appears to have been because, as I have said, this matter arose somewhat peripherally, and it simply does not seem to have occurred to anybody that there was a Convention difficulty about one aspect of the Gora observations.
46. All that said, I shall now turn to express my view on what was said by Pill LJ. So far as domestic law is concerned I would respectfully say that the observations were clearly correct. I do not think it can have been intended that the exporter before the tribunal would have a second bite at the cherry of lawfulness, having failed in the condemnation proceedings, or let them go by default.
47. To the extent that it was argued that the literal provisions of section 152(b) are wide enough to allow such a second bite, I would agree that that is so, but the reason why the importer cannot have that liberty is not because of the terms of the statute, but because of the normal English law rules of res judicata or abuse of process.
48. As I have already said, that conclusion does not lead to the more severe conclusion, tentatively drawn by Lord Phillips in paragraph 10 of the original judgment in this case, in that it does not cause the tribunal to be effectively functus even on issues of discretion.
49. I turn to Convention. The forfeiture process interferes with Mr Gascoyne's rights to his property that are potentially protected by Article 1 of the First Protocol to the Convention.
50. That is made clear in the judgment of this court in Lindsay, to which I have already referred, and more particularly in paragraph 52 of the leading judgment of Lord Phillips of Worth Matravers in that case. That being so, issues of proportionality, and indeed of due process in the arrangements made by this jurisdiction for dealing with issues of forfeiture, potentially arise.
51. As to those, in my view, there is no Convention objection to holding that an actual finding in condemnation proceedings binds in a tribunal application, be it binding as to the decision as to lawfulness of seizure, or binding as to the underlying facts. In that respect, one can draw assistance, and the European Court of Human Rights has drawn assistance, from the parallel jurisprudence of Article 6. If the importer has actually been in court, first of all he has had his day in court in front of a judicial body, and, secondly, as is well known, Convention jurisprudence permits a proportionate restriction on access to a court, provided the essential rights that are in contest from a Convention point of view are not thereby rendered nugatory. That was decided in Lithgow v United Kingdom [1986] 8 EHRR 329, incidentally a First Protocol case, at paragraph 194.
52. Secondly, however, that jurisprudence itself creates a great deal more difficulty in relation to the deeming provisions under paragraph 5 of Schedule 3. One's instincts, if no more, suggest that the extent to which it was held in Gora that those provisions necessarily prevent any further consideration of the legality of the seizure was an excessive limitation.
53. Miss Simler drew our attention in that connection to what was said by Lord Phillips in Lindsay at paragraph 64 of his judgment: that the principle of proportionality requires that each case should be considered on its particular facts. Lord Phillips then went on to indicate the sort of facts that might be relevant.
54. As it seems to me, for an importer to be completely shut out in the only tribunal before which he has in fact appeared from ventilating the matters that are deemed to have been decided against him because of paragraph 5 of Schedule 3 does not adequately enable him to assert his Convention rights.
55. In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen those issues: though the tribunal will always have very well in mind, considerations of, or similar to, abuse of process in considering whether such issues should in fact be ventilated before it.
56. The mere fact that the applicant has not applied to the Commissioners, and therefore there have been no condemnation proceedings, would not, in my view, be enough. But, in my judgment, it goes too far to say that the deeming provisions have always, in every case, got to be paramount.
57. I do not think that that issue was ever brought to the attention of this court in Gora. If it had been, I doubt whether the court would have expressed itself in quite the unqualified terms that it adopted.
58. How, if at all, does that affect our case? First, since paragraph 5 does not conclude for all purposes the issue of whether the goods are lawfully forfeit, the judge was entitled to entertain an appeal from the tribunal on the construction point: at least because the tribunal could, theoretically, go behind the alleged failure to give a notice in condemnation proceedings if it were alleged, as it is here, that such a notice was given but was wrongly not acted on by Customs and Excise.
59. Secondly, we have at least to have in mind, when considering the construction issues, the extent to which the failure to give a section 3 notice shuts the importer out from subsequent claims that the procedure was unlawful and that the goods, as a matter of fact, were for his own use. But for reasons that I shall now indicate, those considerations are in the background and are not dispositive.
60. At long last, therefore, I do turn to the actual issues in the appeal. Ground 1 is a short point of construction of the sort on which this court will hesitate before differing from the view of an extremely experienced trial judge.
61. In order to see this point in its full form, it is necessary to set out the letter of 17th April which is the object of this issue:

"Dear Sir or Madam,

"On Sunday 15/04/01, I was stopped and searched by Customs and Excise Officers. I had been on an Easter break to France, where we also had a day-trip to Belgium. Whilst re-fuelling at a garage in Belgium, we were offered tobacco and cigarettes by the proprietor, which we accepted, on the understanding that there was now no limit to the amount, which could be brought back into the UK, since Duty-Free has now been abolished. Until presented with 'Notice 1' by Customs and Excise, I have never heard of, or seen it before, there is certainly no information at the dock, or on board the ferry, which I could see, that gives any information about these limits.

"The products were not hidden (only from direct view for vehicle security reasons) due to the fact that I thought that I was perfectly legal. I totally agree with Customs & Excise procedures in aiming to reduce Firearms, Drugs and People Trafficking, into the UK, but I think that the Officers may need a little more training in understanding people with special needs, as I reported that I was a diabetic, and had not eaten for 9 hours, and needed food before I could take medication, but it was three hours later, after I was told that my car was being seized along with the goods which I had purchased, that I was asked to leave. This caused big problems on my journey home, which I will address in a separate letter.

"So, after losing my job, £300 travelling expenses, a deep scratch on the bonnet of my car and panels broken, caused by Customs and Excise Officers, two dizzy spells due to diabetes and a possible doctors fee, thirteen hours of travelling on trains and coaches, and now the expense of returning to Dover if my vehicle is released.

"Would you please advise me whether my vehicle and goods are to be returned to me as soon as possible, so that I can make arrangements to collect them, or alternatively loan a car, as I desperately require transport to seek, and use for work, otherwise my mortgage will also be under threat.

"All goods purchased were solely for our own personal use, not for re-sale. I am totally innocent of not seeing 'Notice 1' and its contents before Sunday, and also the legal amount of items, which may be brought into the UK. Thank you for your time in this matter, and I look forward to hearing from you in the near future."

62. What is relied on, and indeed all that is relied on, is the sentence almost at the end of the letter, "All goods purchased were solely for our own personal use, not for re-sale."
63. That is said necessarily to raise a challenge under Schedule 3, and should have been so acted on by the Commissioners. The judge at paragraph 57 of his judgment said that the test that he had to apply was the understanding of the letter which would have been held by a reasonable person in the position of the Commissioners, bearing in mind the factual circumstances as they would have reasonably been known to those Commissioners. He cited by analogy the observation of Lord Steyn in the case of Mannai [1997] AC 767G, the construction should be made "taking into account the relevant objective contextual scene."
64. Both protagonists expressed themselves as content with that rubric. I would respectfully agree. The analysis has to be made in the context that is relevant. The most obvious context in this case is the statutory scheme well known to the Commissioners, and the explanation of it that they gave to the letter writer. That scheme, as we have seen, makes a clear distinction between condemnation and restoration. By the same token there is a clear distinction between contesting the seizure, which leads to condemnation proceedings that turn solely on issues of law; and asking for the return of the goods as a matter of discretion on the part of the Commissioners, to be reviewed as such discretion by the tribunal.
65. The scheme was explained to Mr Gascoyne by, and his letter was written in the context of, the notices that were served on him when the goods were seized.
66. I take those comparatively shortly. He was handed a notice saying that the goods, that is to say, the tobacco and cigarettes and the vehicle, had been seized under section 141 of the CEMA. He was given a list of the goods in question with a note to it saying:

"The notes overleaf explain how you may be able to get your things back and what to do if you think Customs were wrong to take them."

67. On the back of that there is set out some guidance in the following terms, "1. How can I get my things back?" He is told that alcohol and tobacco will not be returned if brought into the UK for sale.
68. The note then goes on:

"In other cases, if you accept that we had the right to seize the things listed overleaf, we may return them to you on certain conditions. These will usually include paying a sum of money."

69. Various other conditions are set out including that he should write about that to someone called the Queen's Warehousekeeper at a given address.
70. Then:

"2. What if I think Customs were wrong to seize the things?

"You have the right to challenge our decision in court. Make your claim in writing, stating your full name and address, within one month of the date of seizure and send it to the Customs Office shown overleaf.

"If you make a proper claim against seizure civil proceedings must follow and a court will decide whether the things are liable to seizure and forfeiture. Since there will be a court hearing we strongly advise you to get legal advice before making a claim."

71. In my judgement, that notice sets out in non-technical language the respective arrangements for an application for return, if you accept that they had the right to seize the things listed overleaf; and, 2, on the other hand, what to do if you think the Customs were wrong to seize the things. It is also not irrelevant to note that, perfectly properly, the importer is warned that a court hearing will follow and that he should obtain legal advice; and, by implication, though not expressly stated, he will incur cost for his advisers.
72. Now, for my part, I see no reason why the Commissioners, having given a notification in those terms, should not, and why a reasonable person in the shoes of the Commissioners should not, assume that the importer will have read and understood the notice. In particular, it is open to them to assume that the importer will have grasped that asserting that the Commissioners were "wrong to seize the things" is a serious step involving going to court and the employment of lawyers.
73. I do not think that there is any ground for the reasonable Commissioner to lean in the direction of assuming that an importer who does not make that claim really wants to go through the process of challenging the decision.
74. That, though expressed in much more detailed terms, was the view taken by the learned judge. The relevant parts are paragraphs 60 to 67 of his judgment:

"60 None the less, even bearing in mind these factors, I have reached the conclusion that the April letter was an application for restoration under section 152(b) of CEMA, rather than a notice of claim under paragraph 3 of Schedule 3. First, it is clear from note I on the back of "Seizure Information" that an application for restoration is to be sent to "The Queen's Warehousekeeper" at Priory Court, whereas, although apparently mutually inconsistent, the information on the back of the "Seizure Information" and of the "Seizure of Vehicle" indicate that an appeal against seizure should be addressed differently (either to the customs office at Priory Court or to the Excise Support Team at the Eastern Car Terminal). The April letter was sent to the Queen's Warehousekeeper, at Priory Court. Quite apart from the terms of the notices, a warehousekeeper would not be expected to decide a dispute as to whether items were properly seized, as opposed to whether they should be returned.

"61 Secondly, reading the April letter as a whole, it appears to me that its message is that Mr Gascoyne believed that he was entitled to bring into this country as much tobacco products as he wished, and that he was unaware of what he called "Notice I", namely the quantities specified in the Schedule to the PRO. The tone and effect of the letter, at least to my mind, is more a mitigation, seeking to invoke the discretion of the commissioners to return the vehicle, rather than a claim that it was improperly seized.

"62 As Miss Simor both conceded and pressed, there is one sentence in the April letter which could be invoked to support the proposition that it was a notice of claim under paragraph 3. That sentence is: "All goods purchased were solely for our own personal use, not for resale". A lawyer, familiar with the legislation then in force, would conclude that, if this allegation was made out, then the items were improperly seized and could not be forfeited. Accordingly, I accept that this sentence does provide a powerful basis for contending that, fairly read, the April letter should be treated as a notice of claim under paragraph 3.

"63 None the less, I do not accept that such a reading would be justified. It seems to me that one sentence cannot be, as it were, lifted from the rest of the April letter, and scrutinised on its own. It must be construed as part of the April letter, in its context. The letter was plainly written by a non-lawyer without the benefit of legal advice, and I do not think it is legitimate to make legally based deductions from the sentence to justify the contention that it is a notice of claim, when that was not spelt out. If, on the other hand, one is entitled to invoke such a subtle approach, then a lawyer would also appreciate that the review and appeal procedures, initiated by a section 152 application, would enable the validity of the seizure to be considered.

"64 I also think this conclusion is reinforced by the informality of the April letter. The "claim in writing" contemplated by note 2 on the back of "Seizure Information" suggests a relatively formal document, or at least a document where the "claim" is spelt out. This is rather supported by the "strong" advice "to get legal advice before making a claim."

"65 While it would be quite wrong to place a heavy burden on an individual seeking to invoke his statutory rights in respect of goods which have been seized by customs officers, the position of the commissioners has to be considered as well. To my mind, reading the April letter as a whole, a reasonable person in the position of the commissioners, knowing the law, and appreciating Mr Gascoyne as a layman, would have thought that it was a request for restoration, and not a notice of claim.

"66 It is not as if construing the April letter as an application for restoration precludes Mr Gascoyne challenging the seizure. The one-month time limit in paragraph 3 would not have prevented Mr Gascoyne from making a claim under that paragraph after restoration had been refused by the commissioners on 3 May. In any event, as the facts of this case show, if the April letter was simply an application for restoration, Mr Gascoyne was still able to maintain a right to argue against the validity of the seizure on the review under sections 14 and 15, and on an appeal to the tribunal under section 16, of the 1994 Act.

"67 Accordingly, albeit with hesitation, I have concluded that the April letter was not a notice of claim under paragraph 3, and was properly treated by the commissioners as an application for review under section 152(b) of CEMA. None the less, particularly as I regard the contrary view as strongly arguable, it is right to consider whether the goods and Land Rover should be returned if that conclusion is wrong, and the April letter was a valid notice of claim."

75. I have already indicated that my own view, such as it is, accords with that of the judge. However, the real question is whether the judge's view was open to him. In my judgement, it clearly was. Most cogent, if I may respectfully say so, in his argument in paragraph 61 to 63. The letter has to be read as a whole and in the context of the warning notices. The judge was quite right to see the whole thrust and implication of this letter as being an appeal to mercy and for assistance, and not as any sort of assertion of legal rights. It was entirely within the range of reasonable reactions of the Commissioners not to realise, if indeed it was the case, that Mr Gascoyne was seeking condemnation proceedings.
76. What, however, about paragraph 66? In the light of Gora what the judge says there is not correct, or at least not unequivocally correct. That is because failure to give a paragraph 3 notice will, in most cases, preclude subsequent challenge to the lawfulness of the seizure. I do not think that the judge thought that that consideration in fact affected his view on the proper construction of the letter, coming as it does after he had effectively decided that point. But there are two further points that may be relevant.
77. Firstly, Mr Anderson QC drew attention in this context to paragraph 52 of Gora, which I have already set out. He contended that that common understanding of what the law was at that time was part of the relevant factual matrix, that had to be taken into account when construing the letter. I originally expressed some scepticism about that point, but I am now persuaded that it was in fact correct. Although, in the light of Gora, what the two parties and the Customs and Excise and everybody else thought was the law may not have been correct, none the less that was the factual matrix within which the Customs received the letter. That is not a strong point, but it is a point in support of the judge's view.
78. Secondly, as I have said, I do not see how the background of the law can affect construction. One has to ask one's self, as the Commissioners did, what Mr Gascoyne was saying to them. As the judge stresses, this was a letter written by a layman. There is no reason to think that he was affected in his decision as to whether to challenge the lawfulness of the seizure, or in the way in which he expressed himself, by the reflection that he could have another bite at the cherry in the tribunal proceedings: proceedings which there is no reason to think, when he wrote the letter, he knew anything at all about.
79. I am therefore satisfied that the judge was correct on the point of construction.
80. Mr Godsmark was indeed driven to say that there was an obligation of law on the Commissioners to interpret any reference to "own use" as a Schedule 3 application, or at least to be astute to find that. I think that that puts far too great a burden on the Commissioners. I do not think that they should be astute to reach that conclusion and therefore drive what may be an unwilling applicant into court.
81. In that connection, we were told by Mr Anderson, supported by useful documentation, that the Commissioners are introducing a new system which is effectively intended, without going into details, to make assurance doubly sure, that the importer understands and knows about the implications of not giving a Schedule 3 notice. Mr Godsmark, of course, sought to turn that to his client's advantage by saying that that was effectively an admission that the present system is inadequate.
82. I do not think that it was either an admission of that, or that it so demonstrates. So far as the system itself is concerned, we were properly told that that was put forward in deference to the observations of this court in February. We are grateful to the Commissioners for telling us about that, but we think we are in danger of making their task more, rather than less, difficult if we were to comment further on the implications of that system, or its implications for the interpretation of these provisions.
83. I turn to ground 2, which does not arise before us any more than it did before the judge. It is a very short point. It was originally suggested that there should be an implied 6 month limitation period in High Court proceedings just as there is in the Magistrates' Court. Mr Godsmark realistically recognised that that submission could not be sustained. He merely sought to keep open the possibility that an abuse of process argument could be adduced in proceedings taken by the Commissioners in the High Court a considerable length of time after the original seizure.
84. I, for my part, would accept that that is certainly a possibility, but, like any abuse of process arguments, it is a matter for the court faced with the proceedings if they are taken. Again, I do not think it would be helpful for this court to try to speculate as to what the answer might be. It is fair to say that the judge did address that question, but I must not be taken as either rejecting or accepting what he said about the particular issue that might arise in this case.
85. I would therefore dismiss this appeal. I would add one final thing. I dismiss the appeal in this case with no regret because I do not think that the underlying merits of the case stand up to scrutiny. I have already set out the tribunal's findings on the case as put to it by Mr Gascoyne, they having had the opportunity and advantage of hearing him give evidence and be cross-examined. The learned judge said in paragraph 84:

"In light of what was said by Mr Gascoyne and Ms Gifford to the customs officers, it seems to me that, to put it at its lowest, the customs officers... were plainly entitled to reach the conclusion that they did on this issue simply on the basis that they did not believe Mr Gascoyne."

86. That, I fear I have to say, is almost certainly likely to have been the conclusion had this matter been ventilated, as Mr Gascoyne says it should have been, before a court rather than before the tribunal.
87. The amount brought in in this case was enormous, and Her Majesty's Customs were entirely entitled to take the severe view that they did. However, simply on the technical issues that have been argued before us, the appeals are dismissed.
88. LORD JUSTICE CARNWATH: I agree that the appeal should be dismissed for the reasons given by Buxton LJ.
89. On the wider issues I have, with respect, rather greater doubts than Buxton LJ about the correctness of some of the observations of this court in Gora, but I agree that it would be inappropriate for us to go behind those observations. That is not only because it was a recent considered judgment given for guidance, but also because I am not convinced that any alternative solution is without its problems. The difficulties arise from the very unsatisfactory mismatch of the two statutory procedures derived from different historical sources. That is something which only the legislature can correct.
90. The particular problem identified by the Master of the Rolls, in the previous hearing of this case, arose directly from his consideration of the decision of the Divisional Court in Customs and Excise Commissioners v Newbury [2003] 1 WLR, where it was held that issues of proportionality under the Human Rights Act could be considered by the court in condemnation proceedings. The concern of the Master of the Rolls (in the passage of the transcript which Buxton LJ has read) was that the combined effect of Newbury and Gora might be that such issues of proportionality could not be considered at all by the tribunal. For the reasons given by Buxton LJ I agree that that is not the consequence of those decisions. I should add that the correctness of the Divisional Courts' decision in Newbury itself is not before us, but may itself require reconsideration in the future.
91. LORD JUSTICE BROOKE: I agree with the judgment of Buxton LJ. I also agree with what Carnwath LJ has said about the unsatisfactory condition of the statutory provisions governing these matters. I hope that those who are concerned with simplifying procedures in tax matters will bear the observations of this court in mind as they continue with their difficult task. The appeal is therefore dismissed.

ORDER: appeal dismissed; no order as to costs.