England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE CO/1017/2002
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice The Strand London WC2A 2LL
		29 January 2004

Thursday 29 January 2004

MR JUSTICE HENRIQUES:

1. This is an application by way of judicial review seeking to challenge the decision of the Crown Court sitting at Portsmouth on 26 November 2001 dismissing the claimant's appeal against the order for forfeiture under Schedule 3 of the Customs and Excise Management Act 1979 by Portsmouth Magistrates' Court on 14 September 2001 of 19,780 cigarettes that the claimant had brought into the country on 21 November 2000 and which was seized by HM Customs and Excise under Article 5 Excise Duties (Personal Reliefs) Order 1992.
2. Permission to claim judicial review had initially been refused on paper and at a renewed oral hearing before Pitchers J permission was also refused on 19 July 2002. Some 12 days later the Divisional Court gave judgment in what is known as the Hoverspeed case [2002] EWHC 1630 (Admin), [2002] 3 WLR 1219. The court held that the Excise Duty (Personal Reliefs) Order 1992 (the PRO) was incompatible with European Community law in two respects:

(1) The PRO makes Excise duty imported from another member state (where duty has been paid) additionally chargeable to UK excise duty without it being established that the goods are imported into the UK for commercial purposes; and

(2) it places a persuasive burden on the individual to prove that the goods are not held for commercial purposes where such goods are held in excess of the minimum indicative levels laid down in the 1992 Directive and in the Schedule in the PRO.

Hoverspeed went to the Court of Appeal, but these aspects of the judgment were not challenged.

3. Accordingly it follows that both in the magistrates' court and in the Crown Court the proceedings against the claimant were conducted on an erroneous basis. The persuasive burden was on the claimant to prove that the goods were not held for commercial purposes, whereas the correct legal position is that there was a civil burden (balance of probabilities) imposed on the Commissioners to prove that the goods were not for the claimant's own use (or were for a commercial purpose).
4. For the single reason that the proceedings before the Crown Court were conducted on an erroneous basis, Laws LJ granted judicial review permission. He specifically indicated that all the other points raised by Mr Boxall, who represented himself then as he has today, were without any force and permission was limited to the single point that the hearing in the lower court proceeded on an erroneous basis.
5. From time to time the attention of Mr Boxall has strayed from that limitation put by Laws LJ on his grant of permission. More than once Mr Boxall has focused upon the legality of the seizure. I propose, however, to decide this case on the single point referred to by Laws LJ.
6. In the ordinary course of events, where both justices and the Crown Court have proceeded on an erroneous basis, their findings are liable to be quashed. In the particular circumstances of this case, however, Customs and Excise seek to argue that the Crown Court's decision would have been necessarily the same if the burden had been correctly applied; or alternatively, that if the case is remitted to the justices, that equally the decision would be exactly the same as if the burden had been correctly applied.
7. The claimant contends that the Crown Court was clearly exercised as to the effect of the burden of proof. The importance of the presumption was clearly stressed. I have had the opportunity of reading the log. At 1528 the judge said to Mr Ward, who at that stage stood alongside Mr Boxall:

"Without giving evidence I cannot see how you can rebut the presumption."

In due course Mr Boxall said that he was not calling any evidence; he was relying on his statement. He stated, "There is no evidence of commercial -- I intended to smoke all the cigarettes and save the duty".

8. In giving judgment the log records the judge as saying this:

"Law -- where guidelines exceeded, rebuttal of the presumption. Bench must be satisfied presumption rebuttal. All the evidence we have is statements. No great weight. Had evidence been given on oath, the presumption has not been rebutted."

9. That extract from the log is plainly a partial note by the court associate. The claimant is, however, entitled to say that an elementary translation of the log meant that with no sworn evidence the statements carried insufficient weight to rebut the presumption. Without that erroneous presumption it is submitted that the decision may well have been different.
10. On behalf of Customs and Excise it is submitted that the reversal of the persuasive burden makes no difference in the particular circumstances of this case. Considering the overall quantity, 40,000 cigarettes between two travellers, and the amount claimed by Mr Boxall (19,780), it is submitted that on the evidence before the Crown Court there was an overwhelming probability that the goods were not for his own use. In addition, the officers noted that it was not just cigarettes that were being imported, but also two types of hand- rolling tobacco.
11. My attention is drawn by Mr Bird, who appears on behalf of the Customs and Excise, specifically to paragraph 173 of the Hoverspeed decision in which Brooke LJ said:

"As a matter of strict law we consider that the claimants' contentions are correct. Whether this will make much difference as a matter of practice is open to question. After all, as Lord Woolf CJ pointed out in Goldsmith v Customs and Excise Commissioners [2001] 1 WLR 1673 .... no one is in a better position to know whether the goods are to be used for private or commercial purposes than the person in possession of them and, if customs officers do not believe him, there is in practical terms not much difference between his failing to satisfy them that they are not being held for his own use (the PRO test) and them being satisfied that they are being held for 'commercial' use (the test under the Directive). In a borderline case, however, the location of the burden of proof may well make a difference."

12. The critical question is whether or not this is a borderline case. Customs and Excise in particular point to the sheer volume, namely 40,000 cigarettes between the two travellers. The minimum guideline at the time was 800 cigarette set out in the Schedule to the order. In the revised post-Hoverspeed guidelines the figure is 3,200. Mr Bird also points to the pooled nature of the importation. The initial response was "The cigarette belong to both of us". It appeared, submitted Mr Bird, to be a joint importation.
13. Before the Crown Court Mr Boxall did not give evidence. He sought to rely on the written statement. He was told that little weight would be attached to it. Accordingly, it was inevitable that he was unable to rebut the presumption. In answer to a direct question from me, Mr Boxall indicates that in the event of this matter being remitted to the justices to be retried, he does intend to give evidence. He indicates that with a presumption against him, he felt unable to rebut the presumption by the giving of oral evidence and that should this matter be retried without a presumption against him, he is minded to give evidence.
14. Mr Bird for his part points out that there is an illogicality about that approach. He for his part contends that it would be more logical for a person in Mr Boxall's position to give evidence when he faced a presumption than with a presumption in his favour. Be that as it may, I am able to approach this matter on the basis that at a rehearing Mr Boxall intends to give evidence. It may well be that at long last the hopelessness of conducting proceedings without giving evidence either with the burden in his favour or against him is now apparent to him.
15. Mr Bird has drawn my attention to section 141 of the Customs and Excise Management Act. The Crown Court held that the goods of Mr Boxall and Mr Ward were mixed together. That decision is not open to review by this court, having regard to the limited permission granted by Laws LJ. The consequence of such a finding and the application by the judge of section 141 is that the totality of the goods were held to be liable to forfeiture. Be that as it may, such apparent consequence is not within the ambit of this decision. Nor am I concerned with proportionality: see Newbury [2003] EWHC 702 (Admin). I must decide whether upon an accurate post-Hoverspeed application of the law the court's decision must necessarily be the same.
16. The facts could not be more simple. On 21 November 2000, Mr Boxall and Mr Ward arrived on foot from Bilbao in Northern Spain on the vessel Pride of Bilbao. Mr Boxall had a suitcase containing 90 cartons of Lambert and Butler cigarettes and a holdall containing 35 x 40 gramme packets of Golden Virginia Tobacco and 10 x 40 gramme packets of Old Holborn tobacco, 5 x 20 packets of Lambert and Butler cigarettes and two depleted rolls of brown parcel tape. In the holdall were a few personal effects. Nothing else was in the suitcase. Mr Boxall was told that he was in possession of a quantity of tobacco goods, being cigarettes and hand-rolling cigarettes, which exceeds the minimum indicative levels. Mr Lee of HM Customs and Excise stated, "I require you to satisfy me that these goods are not being imported for a commercial purpose. To that end I am going to ask you a number of questions. If I am not satisfied the goods will be liable to forfeiture." Mr Boxall indicated that he would not answer questions without a solicitor present. He made some telephone calls but was apparently unable to obtain advice. He continued to refuse to answer questions and insisted on leaving with the cigarettes. He was told the only way he could leave was to satisfy Mr Lee that there was no element of commerciality involved. He refused to answer the questions. He was told if he continued to do so the goods would be seized. Only then did he agree to be interviewed. The interview lasted 38 minutes. There is not a semblance of an admission in that interview. He said that the tobacco was for personal use. He smoked 60 a day and more at night and the cigarettes would last for nine or ten months. He bought them abroad to offset the cost of his holiday by saving money on subsequent purchases of cigarettes. At one stage of the holiday a case containing 70 cartons had been stolen. In total he had purchased 170 cartons at approximately £12 a carton, at a total cost of approximately £2,000.
17. He was asked about his means. It was established that he had received the sum of £10,000 from litigation. It is also true to say that he was self-employed and had been off sick.
18. Various matters cited in Article 9 of the Directive were explored. There was and is no evidence that the claimant had a relevant business, nor any indicators that he was in any way commercially involved. Put simply, he said, "If I smoked 400 cigarettes a week and I buy them at Spanish prices, I can save quite a bit of money." He pointed out that he was anxious to recover the cost of his holiday so far as he could by buying cigarettes at a discount. He took four holidays in the year. On his most recent holiday he had bought no cigarettes; it had been a golfing holiday.
19. In addition to the interview there was before the Crown Court an affidavit from Mr Boxall. In that affidavit the claimant re-asserted that the cigarette were all for personal use. He dealt with two other topics which do not assist him, namely the fact that the cigarettes had been destroyed in advance of the condemnation proceedings, precluding, he submitted, a fair hearing of his case, and he referred to two persons that he had represented as a Mackenzie friend in proceedings against Customs and Excise. Nevertheless, his case remained consistent, namely that the cigarettes were for his own use.
20. I have been asked to bear in mind by Mr Bird, and I do so, that the claimant failed to file the claim form properly and that he failed to raise in the court below the matters upon which he now relies. Further, the claimant failed to serve an amended claim form setting out the grounds upon which permission had been granted until 16 December 2003. Whilst these criticisms are properly made, the purpose of judicial review must be borne in mind. A claim for judicial review means a claim to review the lawfulness of an enactment, decision, action or failure to act in relation to the exercise of a public function. In this case the Portsmouth Crown Court proceeded on a wholly erroneous basis. Mr Boxall's case was determined on a basis contrary to law. It requires a very clear, plain and compelling factual scenario for a reviewing judge to conclude that the result must necessarily be the same before a court applying the correct onus of proof. A person is entitled to have a decision of a court, be it a civil or criminal court, reached according to law. Mr Boxall has been deprived of that opportunity.
21. I have to consider whether this is a borderline case in this sense: may a court reconsidering this same matter, with the onus of proof correctly stated, come to a different decision, particularly having regard to the intention as presently stated by the claimant to give evidence unincumbered now with an adverse presumption? Sheer volume alone, in my judgment, does not suffice in circumstances such as this for the Commissioners, having regard to the fact that an explanation has never been heard and adjudicated upon by Mr Boxall. Whilst I have been able to observe him as his own advocate in these proceedings, I have not heard his explanation given and tested on oath as to his possession of the cigarettes in question.
22. There are persons who for their own use buy tobacco and alcohol in very considerable quantities. A ten-month supply does not in itself preclude the explanation that the goods were purchased for personal consumption. Having regard to the history of this matter, and applying the strict test as I do, I am simply unable to come to the decision that the result must necessarily be the same before a court applying the correct onus of proof.
23. Accordingly I grant judicial review. I quash the decision of the Portsmouth Crown Court. I remit this case to the Portsmouth Justices so that they may retry, according to law, these condemnation proceedings.
24. Prior to this case commencing, at a stage when Mr Boxall had the advantage of counsel, I was asked in the event of Mr Boxall prevailing to make an order for costs to be made by the interested party, that is Her Majesty's Customs and Excise, to be submitted to the Legal Services Commission so that they can consider the effect to be given to the existing statutory charge. Is there anything you would like to say about that, Mr Bird?
25. MR BIRD: My Lord, the result obtained is precisely the result that we put forward by way of a settlement in August of last year.
26. MR JUSTICE HENRIQUES: Yes, I am aware of that. Unfortunately, you withdrew it.
27. MR BIRD: We did withdraw it, but only after it had not been accepted, and of course that was before our costs were incurred. After that Mr Boxall and his legal team have always insisted that remission is the one thing that they would not have. They have wanted damages, they have wanted various other forms of relief, all of which they have failed on.
28. MR JUSTICE HENRIQUES: Has there ever been a renewed offer to deal with the matter?
29. MR BIRD: No, there has never been a counter-offer by Mr Boxall, "Please will you remit?"
30. MR JUSTICE HENRIQUES: In a sense everyone is here because of Hoverspeed.
31. MR BIRD: In a sense one is also here because Mr Boxall did not give evidence.
32. MR JUSTICE HENRIQUES: That may well be. We are also talking about public money, are we not?
33. MR BIRD: From one department to the another. In fact, whatever my learned friend this morning said as to the statutory charge of reply, as a result of my Lord's ruling Mr Boxall has not recovered or preserved any property. That will be a matter for the magistrates.
34. MR JUSTICE HENRIQUES: Yes.
35. MR BIRD: And in any event the value of the property now will probably be fairly minimal, so there is not much for the challenge to bite on. My Lord, in my submission the proper order is either no order as to costs in these proceedings or costs reserved to the magistrates, but that would probably be out of all proportion to what is at stake.
36. MR JUSTICE HENRIQUES: The fact of the matter is that today has cost Mr Boxall nothing. His costs (and there is certain justice in this) will have been paid by the state, albeit by the Legal Services Commission. The order that would ensure that departed counsel is remunerated would be a legal aid assessment. So I make an order for legal aid assessment of the claimant's costs and, save for that, no order as to costs. You would be content with that?
37. MR BIRD: Yes, my Lord.
38. MR JUSTICE HENRIQUES: Is there anything you would like to say, Mr Boxall?
39. THE CLAIMANT: No, my Lord.
40. MR JUSTICE HENRIQUES: It will costs you nothing. You would not recover costs yourself; they would have gone to the Legal Services Commission. Are there any directions that might assist in relation to the matter coming back before the justices?
41. MR BIRD: My Lord, the other clarification we seek is that the decision of the Portsmouth Crown Court is quashed solely in relation to Mr Boxall --
42. MR JUSTICE HENRIQUES: Yes, of course.
43. MR BIRD: -- and not in relation to Mr Ward.
44. MR JUSTICE HENRIQUES: No, I have no power at all in relation to Mr Ward.
45. MR BIRD: My Lord, so far as directions are concerned, may we suggest this: that upon remission the magistrates then list the matter for directions in the first instance with no requirement for Mr Boxall to attend so that a date can be fixed?
46. MR JUSTICE HENRIQUES: Yes. Where are you living, Mr Boxall?
47. THE CLAIMANT: Peterlee, my Lord.
48. MR JUSTICE HENRIQUES: Where is that?
49. THE CLAIMANT: The north east, my Lord -- County Durham.
50. MR JUSTICE HENRIQUES: So the first hearing you need not attend. It will only be a hearing to fix the date. I will make an order that you be excused from attending the preliminary hearing, the purpose of which will be to fix the full hearing date.
51. THE CLAIMANT: Yes, my Lord.
52. MR JUSTICE HENRIQUES: You will, of course, have to consider such matters as -- obviously you have taken a decision to give evidence yourself. A fairly critical decision, I would have thought, is whether you call Mr Ward to give evidence.
53. THE CLAIMANT: Yes, my Lord.
54. MR JUSTICE HENRIQUES: You will no doubt be notified about the preliminary hearing. It is a case which can comfortably be heard within a day, is it not?
55. THE CLAIMANT: Is there any possibility of the proceedings being transferred, my Lord?
56. MR JUSTICE HENRIQUES: I am sorry, no.
57. THE CLAIMANT: Because I did put ten witness statements in at the initial proceedings in the magistrates' court -- that's members of my family. My mother is at present suffering from lung cancer. So what would be the situation as regards evidence from her because obviously she would not be able to attend Portsmouth Magistrates' Court?
58. MR JUSTICE HENRIQUES: I am afraid I cannot make any decision today concerning venue. I would be very surprised indeed -- it would be most unusual for proceedings to be moved between magistrates' courts in circumstances such as that.
59. THE CLAIMANT: There is only one other thing I would like to ask. The matters that have been found by yourself today, they wouldn't be part of those proceedings?
60. MR JUSTICE HENRIQUES: No. I have not found anything at all today. It comes down to this. I can summarise my findings as this: your case is arguable. I think, Mr Bird, you would agree with that, would you not? Prima facie, on paper, your case is arguable.
61. MR BIRD: My Lord, yes.
62. THE CLAIMANT: I don't want the situation where Customs come along with a transcript of what you have said and --
63. MR JUSTICE HENRIQUES: It is not something anybody can quote, certainly as to facts in any event. Mr Bird, you would agree with that?
64. MR BIRD: I do not know why Mr Boxall is worried, but suppose he changed his mind and decided not to give evidence, I might well raise it on the matter of costs in the magistrates' court.
65. MR JUSTICE HENRIQUES: Yes. The message may well have got through to Mr Boxall that failure to give evidence is certain to result in a loss.
66. THE CLAIMANT: Is it possible to have those proceedings recorded, my Lord?
67. MR JUSTICE HENRIQUES: The proceedings are recorded. The judgment in any event, as this is a substantive hearing, will be transcribed.
68. THE CLAIMANT: I am not talking about these proceedings, my Lord. I am talking about the rehearing.
69. MR JUSTICE HENRIQUES: All that is a matter for the magistrates' court. But I can tell you that it is most unusual to have them transcribed simply because of the public cost. If all magistrates' court hearings were transcribed the costs of running the magistrates' courts would be infinitesimal.