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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Mudie & Anor, R (On the Application Of) v H M Customs & Excise  EWCA Civ 237 (04 February 2003)
Cite as:  QB 1238,  EWCA Civ 237,  2 WLR 1344
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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
ADMINISTRATIVE COURT LIST
(MR JUSTICE GRIGSON)
B e f o r e :
LORD JUSTICE BROOKE
LORD JUSTICE LAWS
| T H E Q U E E N |
(ON THE APPLICATION OF
(1) ADRIAN MUDIE
(2) CHRISTINA MUDIE)
|KENT MAGISTRATES COURT ||Defendant/Respondent|
|H M CUSTOMS & EXCISE||Interested Party |
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
MR DAVID BARNARD AND MR ANDREW BIRD (instructed by H M Customs & Excise, London, SE1 9PJ ) appeared on behalf of the Respondent
(AS APPROVED BY THE COURT)
Crown Copyright ©
"1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.
3. Everyone charged with a criminal offence has the following minimum rights:
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require."
"Proceedings before any court for dealing with an individual accused of an offence."
"In this Part 'criminal proceedings' means-
(a) proceedings before any court for dealing with an individual accused of an offence."
Mr Sherratt revised this submission so as to apply it to Schedule 3, paragraph 2(1) of the Access to Justice Act, which provides:
"A court before which any criminal proceedings take place, or are to take place, has power to grant a right to representation in respect of those proceedings except in such circumstances as may be prescribed."
"Proceedings for condemnation shall be civil proceedings."
The question whether paragraph 8 of that Schedule could, by force of section 3 of the Human Rights Act, be so read has not previously been raised in these proceedings. I have the greatest possible doubt whether the section would authorise or empower paragraph 8 to be read as if "civil" meant "criminal". It does not seem to me that it could. If, as Mr Sherratt's substantive argument suggests, there will be some instances of paragraph 8 which are criminal and others which are civil, then I cannot see how section 3 could possibly be prayed in aid in the way contended for.
"1(1) The Commissioners shall, except as provided in sub-paragraph (2) below 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.
6. where notice of claim in respect of any thing is duly given in accordance with paragraphs 3 and 4 above, the Commissioners shall take proceedings for the condemnation of that thing by the court, and if the court finds that the thing was at the time of seizure liable to forfeiture the court shall condemn it 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.
13. In any proceedings arising out of the seizure of any thing, the fact, form and manner of the seizure shall be taken to have been as set forth in the process without any further evidence thereof, unless the contrary is proved.
14. In any proceedings, the condemnation of a court of any thing as forfeited may be proved by the production either of the order or certificate of condemnation or of a certified copy thereof purporting to be signed by an officer of the court by which the order or certificate was made or granted."
"The attached schedule of goods have been seized under Section 139 of the Customs and Excise Management Act 1979 together with vehicle Index No 92 HKH under Section 14(1)(a) of the aforementioned Act. This is without prejudice to any further action that the Commissioners of Customs and Excise may take against you in connection with this importation.
You should also be aware that any further attempt by you to smuggle Excise goods into the UK may render you liable to prosecution under the provisions of Section 170 of the Customs and Excise Management Act 1979. A person found guilty of an offence under this Section is liable to an unlimited fine and/or up to seven years imprisonment."
"1. On or about the 21st March 2001 at Eastern Docks, Dover, certain goods, namely 20 kilogrammes of tobacco, 6172 cigarettes, 100 cigarillos, 40.95 litres of spirits, 4.5 litres of still wine and 13 litres of beer were imported into the United Kingdom.
2. The Community traveller who imported the excise goods, on being required to do so, had failed to satisfy the Commissioners that the goods had not been held or used for a commercial purpose. The goods were therefore seized as liable to forfeiture by force of article 5 of the Excuse Duties (Personal Reliefs) Order 1992 SI No 3155 ('the Order')."
"I refer to your letter dated 4 October 2001 which acknowledges from the outset that the proceedings in the above case are defined as 'civil proceedings'. In accordance with this definition, the court has no authority, statute or otherwise, to grant representation orders in respect of Mr and Mrs Mudie."
There followed the application for permission to seek judicial review. As I understand it, the condemnation proceedings issued in the Magistrates' Court have been stayed meantime.
"This decision identified three principal criteria which it has become the European Court's practice to consider when deciding whether proceedings have a criminal character: (1) the manner in which the domestic state classifies the proceedings; (2) the nature of the offence; and (3) the character of the penalty to which the proceedings may give rise."
The Master of the Rolls proceeded to observe that the first criteria normally carries little weight; indeed it has been said to be no more than a starting point. He referred to Oztürk v Germany (1984) 6 EHRR 409. At paragraph 54 he continued:
"When one examines the cases that followed Oztürk, it become apparent that neither the offence nor the penalty has to be particularly serious for the European Court to classify the proceedings as criminal."
At paragraph 62 and following The Master of the Rolls gave reasons for holding that anti-social behaviour orders should not be classified as criminal for the purposes of Article 6.
"21. The issue of fact which is at the centre of condemnation proceedings is whether or not the goods are to be used for private or commercial purposes. No one is in a better position to know whether they are to be used for private or commercial purposes than someone in the appellant's position. Accordingly, if his evidence is not accepted by the magistrates or the Crown Court, there is a reflection upon his character. The reflection arises out of the fact that he has not satisfied the magistrates or the Crown Court on the balance of probabilities as to the truth of his account as to why the goods were brought into this country. However, in my judgment, that does not mean that the proceedings are criminal. Nor does it mean, in my judgment, that there is anything wrong with the form of the legislation which resulted in the condemnation proceedings. The form of the Order enables members of the public, under article 5, to bring in quantities of goods specified in the Schedule without being under any risk of being proceeded against by Customs and Excise in reliance on article 5(3) of the Order. If members of the public choose to bring in greater quantities than that, then the onus is placed upon them to satisfy the Commissioners for Customs and Excise that the goods are required for private, and not commercial, purposes. The Order indicates the quantities of goods which the Commissioners have concluded can reasonably be regarded in general as being the sort of quantities that an individual would import for private purposes. If quantities in excess of those are brought into the country, they are not necessarily for commercial purposes. However, in such circumstances there is a presumption that the goods are being brought in for commercial purposes and the onus is placed upon someone in the appellant's position to rebut that presumption. The presumption is rebuttal by giving evidence which, on the balance of probabilities, satisfies the courts that they are required for private purposes.
22. . I turn to the question of whether forfeiture proceedings are criminal. Full weight must be given to the consequence of goods being forfeited and condemned as forfeited. However, reference must also be made to the fact that the legislation categorises the proceedings as civil. Reference is also to be made to the fact that none of the usual consequences of a criminal conviction follow from condemnation and forfeiture proceedings. There is no conviction or finding of guilt. Under domestic law the person concerned is not treated as having a conviction. The person concerned is not subject to any other penalty, apart from the consequences of the forfeiture and loss of the goods."
"65. The forfeiture of the Krügerrands by the courts and the subsequent refusal of the Commissioners of Customs and Excise to subsequent refusal of the Commissioners of Customs and Excise to restore them were measures consequential upon the act of smuggling committed by X and Y."
(they were not the appellants in the litigation):
"Criminal charges under domestic law were brought against the smugglers but not against AGOSI in respect of that act.
The fact that measures consequential upon an act for which third parties were prosecuted affected in an adverse manner the property rights of AGOSI cannot of itself lead to the conclusion that, during the course of the procedures complained of, any 'criminal charge' for the purposes of Article 6, could be considered as having been brought against the applicant company.
66. The compatibility of the consequential measures with the applicant's Convention rights has been examined in the present judgment on the basis of Article 1 of Protocol No 1.
None of the proceedings complained of can be considered to have been concerned with 'the determination of [a] criminal charge' against the applicant company; accordingly, Article 6 of the Convention did not apply in this respect."
On its own this short reasoning goes little distance, save that it shows that the court did not regard condemnation proceedings as criminal per se. If not criminal per se, it is difficult to see how they could be criminal at all. Their classification cannot, and I will return to this, depend upon the extent to which the Commissioners' policies or actions under the legislation are or are not draconian, or the extent to which there may be ancillary or consequential proceedings which are truly criminal in their nature.
"50. Air Canada considered that it had been, in effect, fined by the Commissioners and that neither the condemnation proceedings nor the theoretical possibility of judicial review satisfied the requirements of Article 6(1).
51. The Government, on the other hand, with whom the Commission agreed, pointed out that under domestic law no criminal charges had been brought and that the criminal courts had not been involved in the matter.
52. The Court agrees with the Government's observation. It is also noteworthy that the Court of Appeal specifically rejected the argument made by counsel for Air Canada that section 141 of the 1979 Act was tantamount to a criminal provision. In this connection, the Court of Appeal pointed out that the description of the relevant provisions as being 'civil' did not preclude it from finding that a provision was, in effect, 'criminal' in nature. However, the matter was resolved with reference to earlier cases which deduced that section 141 provided a process in rem against inter alia any vehicle used in smuggling.
The Court is, for the same reasons, similarly persuaded.
Moreover, the factors referred to above -- the absence of a criminal charge or a provision which is 'criminal' in nature and the lack of involvement of the criminal courts -- taken together with the fact that there was no threat of any criminal proceedings in the event of non-compliance, are sufficient to distinguish the present case from that of DEWEER v BELGIUM where the applicant was obliged to pay a sum of money under constraint of the provisional closure of his business in order to avoid criminal proceedings from being brought against him.
53. It is further recalled that a similar argument had been made by the applicant in the AGOSI case. On that occasion the Court held that the forfeiture of the goods in question by the national court were measures consequential upon the act of smuggling committed by another party and that criminal charges had not been brought against AGOSI in respect of that act. The fact that the property rights of AGOSI were adversely affected could not of itself lead to the conclusion that a 'criminal charge' for the purposes of Article 6, could be considered as having been brought against the applicant company.
54. Bearing in mind that, unlike the AGOSI case, the applicant company had been required to pay a sum of money and that its property had not been confiscated, the Court proposes to follow the same approach.
55. Accordingly the matters complained of did not involve 'the determination of [a] criminal charge'."
The decision in that case was taken by a majority of five to four of the judges.
"The applicant also disputes the Government's view that a forfeiture order is a preventive and not a punitive measure. He recalls in this connection that the Court in Phillips v The United Kingdom (no 41078/1998, 5 July 2001 (unreported)) found that the confiscation order in that case was part of the sentencing process and therefore punitive in nature.
The Court notes that criminal charges have never been brought against the applicant, nor against any other party. It is the applicant's contention that the forfeiture of his money in reality represented a severe criminal sanction, handed down in the absence of the procedural guarantees afforded to him under Article 6 of the Convention, in particular his right to be presumed innocence.
The Court does not accept that view. In its opinion, the forfeiture order was a preventive measure and cannot be compared to a criminal sanction, since it was designed to take out of circulation money which was presumed to be bound up with the international trade in illicit drugs. It follows that the proceedings which led to the making of the order did not involve 'the determination ... of a criminal charge (see Raimondi v Italy judgment of 22 February 1994, Series A no. 281-A, p.20 at 43; and more recently, Arcuri and Others v Italy (no 54029/99, inadmissibility decision of 5 July 2001 (unreported)); Reila v Italy (no 52439/99, inadmissibility decision of 4 September 2001 (unreported)). It further observes that the applicant's reliance on the above-mentioned Phillips judgment does not improve his argument on the applicability of Article 6 under its criminal head to the forfeiture proceedings. The confiscation order impugned in that case followed on from the applicant's prosecution, trial and ultimate conviction on charges of importing an illegal drug. It did not give rise to the determination of a separate or new charge against the applicant. The confiscation order was found by the Court in the Phillips case to be analogous to a sentencing procedure (ibid at 34 and 39), and, to that extent, attracted the applicability of Article 6. As previously noted, the circumstances of the instant case are different.
It also notes that in its Phillips judgment the Court attached weight to the facts that the purpose of the confiscation order in that case was not the conviction or acquittal of the applicant and that the making of the confiscation order had no implications for his criminal record (ibid. at 34). For the Court, these are also relevant considerations for concluding that Article 6 under its criminal head does not apply to the forfeiture proceedings in the instant case.
The Court finds further support for this conclusion in the above-mentioned Air Canada and AGOSI judgments. It does not consider it decisive for the outcome of the applicability issue in this case that in the Air Canada case the applicant company had by its negligence exposed itself to the threat of seizure of one of its aircraft of that an offence of drug smuggling had been committed through the use of its aircraft or that, as in the AGOSI case, third parties had been prosecuted and convicted of the criminal offences associated with the property forfeited. The Court in its Air Canada judgment did not attach importance to these considerations, preferring to lay stress on the fact that no criminal charge was ever brought against the applicant company and that the domestic legal provision under which its aircraft was seized provided a process in rem against any vehicle used in smuggling (ibid. pp. 19-20 at 52). Similarly, in its AGOSI judgment, the Court considered that the fact that measures consequential upon an act for which third parties were prosecuted affected in an adverse manner the property rights of AGOSI 'cannot of itself lead to the conclusion that, during the course of the proceedings complained of, any 'criminal charge', for the purposes of Article 6, could be considered as having been brought against the applicant company' (ibid. p.22 at 65)."
38. The three criteria long established by the case-law and applied by the judge below for determining whether the scheme is criminal or civil are: first, the domestic classification of the proceedings (effectively determinative if the classification is criminal but no more than a starting point if, as here, it is civil); second, the essential nature of the "offence" (I would prefer the more neutral term "liability", which can be either criminal or civil); third, the nature and degree of severity of the potential penalty. Rather, however, than follow the conventional route I propose instead to consider classification from a broader standpoint, recognising that the second and third criteria, albeit in theory to be applied alternatively, can apply cumulatively and in any event raise substantially overlapping considerations. Generally under the second criterion one considers whether the liability is punitive and deterrent, whilst under the third regard is had to its nature and severity. All these considerations, however, necessarily raise the question whether liability involves blameworthiness. If it does, then by its very nature it may be thought to include a punitive (in the sense of retributive) element.
39. The decided cases state the applicable principles. Few, however, seem to me helpful with regard to their individual facts. Han is perhaps the closest in point, and tends to support the view that the scheme is criminal. There, however, criminality was more obviously involved in that the statutory liability only arose when the "… conduct involves dishonesty …" which, as Potter LJ pointed out "… would otherwise be treated, or generally regarded, as criminal in nature". And there, indeed, the Commissioners were required to prove the dishonesty, albeit only to a civil standard. The case is thus distinguishable.
40. So too, however, is the decision of the Divisional Court (Lord Woolf CJ and Poole J) in Goldsmith -v- Customs & Excise Commissioners  1 WLR 1673 - not referred to either in Han or by Sullivan J below - upon which the appellants seek to rely. There it was decided that condemnation and forfeiture proceedings under section 139 of the Customs & Excise Management Act, 1979, following the applicant's failure to prove that the 26kg of tobacco he imported were for his personal (rather than commercial) use, were civil. As Lord Woolf CJ stated:
"… none of the usual consequences of a criminal conviction follow from condemnation and forfeiture proceedings. There is no conviction or finding of guilt. Under domestic law the person concerned is not treated as having a conviction. The person concerned is not subject to any other penalty, apart from the consequences of the forfeiture and loss of the goods."
But it is surely one thing to be unable to justify importing goods which are then confiscated; quite another to be penalised £2,000 for each clandestine entrant dishonestly or negligently brought in.
41. The only other authority I should mention in this connection is Air Canada -v- United Kingdom (1995) EHRR 150, again not referred to in Han and again relied upon by the appellants, in which the ECHR declined to classify, as criminal, proceedings (again under the Customs & Excise Management Act, 1979) by which Air Canada were required to pay a £50,000 penalty to redeem their forfeited aircraft. A number of features of this case, however, distinguish it from the present, essentially: a) the Court's acceptance that the process was in rem; b) the discretion there as to the amount of the penalty payable in lieu of forfeiture; c) liability was not dependent on culpability although in fact the penalty was imposed for the latest in a long series of security lapses by the airline; and d) the amount was not large in relation to the value of the aircraft or the drugs which had been smuggled in. These considerations apart, the decision was by a majority of 5:4, the dissenting judgments being perhaps the more powerfully reasoned, and the Strasbourg jurisprudence having since then moved yet further towards the respondents' position - see particularly AP, MP and TP -v- Switzerland (1997) 26 EHRR 541 and Lauko -v- Slovakia (2001) 33 EHRR 40 (both considered in Han).
42. Having, as stated, formed the view that liability under this scheme is indeed targeted at those truly regarded as in some degree culpable, it follows that I incline to the judge's view that, for Article 6 purposes, the scheme is properly to be regarded as criminal."
"In a classic passage in Proprietary Articles Trade Association v Attorney General for Canada  AC 310, 324 Lord Atkin observed:
'Criminal law connotes only the quality of such acts or omissions as are prohibited under appropriate penal provisions by authority of the state. The criminal quality of an act cannot be discerned by intuition; nor can it be discovered by reference to any standard but one: Is the act prohibited with penal consequences?'
in Customs and Excise Commrs v City of London Magistrates' Court  1 WLR 2020,2025 Lord Bingham of Cornhill CJ, expressed himself in similar vein:
'It is in my judgment the general understanding that criminal proceedings involve a formal accusation made on behalf of the state or by a private prosecutor that a defendant has committed a breach of the criminal law, and the state or the private prosecutor has instituted proceedings which may culminate in the conviction and condemnation of the defendant'."
"As regards products required by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be chargeable in the Member State in which they are acquired."
"Without prejudice to Article 6,7 and 8 excise duty shall become chargeable where products for consumption in a Member State are held for commercial purposes in another Member State.
In this case, the duty shall be due in the Member State in whose territory the products are and shall become chargeable to the holder of the products.
To establish that the products referred to in Article 8 are intended for commercial purposes, Member States must take account, inter alia, of the following...."
There are five indents:
"(a) the commercial status of a holder of the products and his reasons for holding them,
(b) the place where the products are located or, if appropriate, the mode of transport used,
(c) any document relating to the products,
(d) the nature of the products,
(e) the quantity of the products."
These provisions are reflected in the revised subordinate legislation which has been made in substitution of the revoked PRO. I need not go to the new domestic measures.