Graysons Freight Services Limited & Anor v The Commissioners for HMRC

Mr Justice Wall:

1. This is an application by the claimants for interim relief, permission to bring judicial review proceedings and expedition.

2. The First Claimant runs a warehouse approved to hold dutiable goods in duty suspense. The Second Claimant is a retail company specialising in the supply of alcoholic products to duty free shopping outlets and similar enterprises. Both companies are under the control of Mr Roberto Wheel. The defendants are the Commissioners for Revenue and Customs.

3. On 27 May 2025 the defendants issued an instruction (hereafter called “the Instruction”) to the claimants pursuant to s52(6) CEMA. “The instruction” was to the effect that all goods travelling under an export declaration were, from that time forward, to be presented to Border Force before they were put onto a ferry. The claimants were instructed to contact Border Force at least two hours before traveling out of the UK for instructions as to how that was to be achieved in the case of any particular load. “The Instruction” was issued because the defendants had concerns that some goods which had previously left the bonded warehouse had been improperly diverted to the domestic market.

4. There followed a number of incidents which caused further concern to the defendants. Details of those incidents can be found in an email sent by the defendants to the claimants on 11 June 2025. On 27 May 2025 officers working for the defendants attended the warehouse. They were initially refused entry to the premises and, once they did secure entry, were initially refused access to the paperwork they asked to see. This was accompanied by hostility towards them from a driver who was present at the warehouse. On 5 June 2025 Mr Wheel was spoken to about the incident and indicated that it was nothing to do with him, which was interpreted by the defendants as a lack of willingness on his part to co-operate with them. On 9 June 2025, another driver refused to provide the defendants’ officers with personal details, details of his employer and access to his vehicle. Mr Wheel was told of the difficulties but, it is said, did not resolve them.

5. Although the defendants’ account of some of these allegations are accepted by the claimants as being accurate, for example the hostility expressed by one of the drivers to the officer who attended the premises, the claimants assert more generally that they have been exaggerated or misinterpreted by the defendants. These will be issues which may have to be determined at a later stage should the case proceed further.

6. On 12 June 2025 the defendants issued the claimants with a Commissioner’s Direction (hereafter called “the Direction”) under the power in Reg 17(3) Excise Warehousing (Etc) Regulations 1988 (hereafter “the Regulations”). “The Direction” prohibited the removal of goods from the warehouse without duty on them first being paid. It was to remain in force for 30 days and will expire on 11 July 2025. The defendants made clear in the course of oral submissions to me that they might seek to issue a further direction in similar terms on the expiry of “the Direction” or at some stage thereafter. They have not yet decided whether they deem such a course presently to be necessary.

7. There is no statutory right of appeal in respect of “the Instruction” of 27 May 2025. The decision to issue “the Instruction” can only be challenged by judicial review. Judicial review proceedings were commenced in respect of “the Instruction” on 23 June 2025.

8. There is a statutory right of appeal against the issue of “the Direction”. The route of appeal is to the First Tier Tribunal (Tax Chamber). An appeal against “the Direction” was lodged on 19 June 2025.

9. There is obviously power in this court to consider interim relief in the course of the judicial review application in respect of “the Instruction”. The FTT has no power to grant interim relief as part of the appeals process in relation to “the Direction”. Any application for interim relief pending appeal in respect of “the Instruction” must be made to this court.

10. Further background facts and the arguments advanced on both sides can be found in the claimants’ skeleton argument and the defendants’ objection to the Interim Injunction and Summary Grounds lodged before this application was heard. I should record that those documents and oral submissions on both sides have been of great assistance to the court.

11. There is outlined in the documents to which I have already referred a dispute as to the ambit of the application for interim relief which is before me today. The Judicial Review claim form makes this application for interim relief: “ the effect of the Commissioner’s Direction issued to the First Claimant is suspended pending determination by the FTT of the First Claimant’s appeal against that Direction” . This is clear reference to “the Direction” of 12 June 2025 which requires the payment of duty before goods are removed from the warehouse. It does not seek interim relief in respect of “the Instruction” dated 27 May 2025 which demanded checks of goods before they were exported. However, the claimants have also made an application dated 23 June 2025 that their judicial review application be considered urgently. Part of the draft order attached to that application reads, “(e) Until the substantive hearing of the judicial review or further Order, (i) the Respondent must not require any person, firm or company collecting goods from Graysons’ bonded warehouse to sign or otherwise consent to “the instruction” dated 27 May 2025 or any similar iteration thereof. (ii) The effect of the Commissioners Direction dated 12 June 2025 is suspended pending determination by the First Tier Tribunal (Tax Chamber) of Grayson’s appeal against it” . That purports to extend the application for interim relief so that it covers both “the Instruction” of 27 May and “the Direction” of 12 June. The defendants’ case advanced in writing was that I should limit my consideration to what it pleaded in the claim form. It was, however, fairly conceded in oral argument that the defendants were put on notice by the terms of the draft order that the application was to be made as it was and that they have suffered no prejudice from it being advanced in this way. The claimants today made an oral application that their claim form be amended so that the claim for interim relief reads as per the draft order. I acceded to that application. It causes no prejudice and it is obviously desirable that all claims for interim relief in both sets of proceedings should be considered at the same time.

12. I also acceded to further applications made at the outset of the hearing to admit into evidence witness statements from Hamza Bone dated 7 July 2025 filed by the defendants and Roberto Wheel dated 7 July 2025 filed by the claimants; the former being a customs official and the latter the director of each of the claimant companies. The former statement was served first and was out of time. It was a lengthy witness statement setting out the financial analysis of the claimants’ businesses by the defendants. It was of obvious significance to the issues I had to decide and I was assured that the claimants had considered it and were able to make submissions about it. Although the claimants did not agree that it should be admitted into evidence, they did not make strenuous objection. It was, I found, in the interests of justice that it should be admitted. The second witness statement of Mr Wheel was designed to be an answer to that of Mr Bone. Having admitted the statement of Mr Bone, justice required that I should admit that of Mr Wheel. No argument to the contrary was mounted.

13. Although I am considering interim relief in respect of these two sets of proceedings together, the test is agreed to be different depending on whether the interim relief relates to the judicial review proceedings (in which case the usual American Cyanamid test is to be applied) or relates to the proceedings in the FTT. The power to grant interim relief by this court pending an appeal in the FTT is to exercised rarely. In such cases the principles set out in American Cyanamid are to be adapted. It is not a sufficient foundation for the grant of interim relief that the appeal has a reasonable prospect of success. There must be a further factor justifying the grant of relief. In R (on the application of ABC Ltd) v HMRC the Court of Appeal gave as an example of a case in which an injunction might be appropriate in these circumstances as one where the failure to grant interim relief would violate the claimant’s Article 6 rights. That might be where the failure to grant interim relief would render any appeal illusory because that failure to grant relief would cause the claimant to go out of business. Claims of this nature need to be supported by compelling evidence. [2018] 1 WLR 1205 “It would call for more than a narrative statement from a director of the business speaking of the dire consequences of delay. The statements should be supported by documentary financial evidence and a statement from an independent professional doing more than reformulating his client’s opinion” [para 85]. The court in that case also made it clear that “material would have to be deployed which provided a proper insight into the prospects of success in an appeal [para 85] ” along with “detailed evidence of the attempts made to secure expedition in the FTT and the reasons why those attempts failed ”.

14. I shall deal first with the claim for relief insofar as it relates to the FTT proceedings, that is insofar as it relates to “the Direction”. I have concluded that I should refuse interim relief as (a) the claim has only limited prosects of success, (b) there is no sufficient evidence of an extra factor justifying the granting of interim relief as required in ABC , and (c) the balance of convenience test is against the claimants.

15. (a) The prospects of success. The power to issue directions such as “the Direction” in this case is to be found in Regulation 17(3) of “the Regulations”: “In such cases as the Commissioners may direct the proper officer may impose conditions and restrictions on the removal of goods from an excise warehouse in addition to those imposed elsewhere in these regulations” . Commissioner David Howard in reliance on this power directed on 30 October 1997 that “the proper officer may impose additional conditions and restrictions on the removal of any goods from an excise warehouse in the case of any warehouse in which goods are not owned by the occupier are warehoused”. This undoubtedly provides a legal basis for the defendants to act as they did. That power is established without reference to the earlier exercise of a s52A CEMA power to issue an instruction. “The Direction” does not rely on the validity of “the Instruction” for its own validity. The legality of each action is to be considered separately.

16. The only basis for challenge is that the decision to exercise this power was exercised unreasonably. I do not say that this is unarguable as there is a dispute of fact as to some of the events which led to the issuing of “the Direction”. However, there is evidence which might well be thought sufficient to justify the defendants in acting as they did. They were concerned about the way in which the warehouse was being operated or used. They had issued “the Instruction” designed to monitor the use of the warehouse by inspecting goods leaving it before they were exported. They had been met with a number of actions which could be said to have interfered with that public duty. They had met with hostility which impaired the ability of the officers employed by the customs safely to carry out their duties in an atmosphere of security. Access to the warehouse, lorries and paperwork had at times been delayed or denied. The defendants have a duty to act so as to prevent fraud in a system which might be thought to be capable of being abused if not properly monitored. It will be an uphill task for the claimants to establish that, on the reports received from the customs officers who attended the premises, the action the defendants took were unreasonable.

17. (b) Even if the prospects of success were thought to be greater than I have assessed them to be, it would not be enough for the claimants simply to establish a triable issue on appeal. They would have to establish an additional factor such as that set out in ABC , that a failure to grant interim relief would damage the claimants’ Article 6 rights because they would be forced to cease to trade rendering any appeal academic. I have read the two witness statements of Roberto Wheel, and those of Jagdish Natt and Christopher Watson in support of this application. I have read that of Mr Bone for the defendants.

18. I note that Mr Wheel asserts concern for the future viability of the businesses he runs if the application for interim relief fails. ABC makes clear that the expression of such concerns by a businessman behind a company is not evidence capable of establishing an Article 6 right for obvious reasons. There is an obvious incentive for the owner of a business to inflate the difficulties his business is encountering in order to obtain interim relief which will improve the business’s position. I am urged to consider that unusually I should put such fears aside in the case of Mr Wheel as he has not had any previous complaints as to the way in which he runs his businesses and therefore should be taken at his word. I decline to approach his evidence as I am urged to approach it. The incentive which might lead to the inflation of a business’s difficulties operates as much on someone who has not had previous complaints as on someone who has previously been complained about. That is, with respect to the argument, why the Court of Appeal in ABC indicated that the court should look to independent expert evidence to justify a claim of this nature.

19. Therefore I turn to the evidence of Messrs Natt and Watson. They are accountants. Mr Natt provides a statement on the financial state of the First Claimant; Mr Watson, who is similarly qualified, presents a similar report in respect of the Second Claimant. I am unpersuaded that this evidence is sufficient to achieve that which it sets out to achieve for these reasons: • First, in respect of Mr Watson, there are connections between himself and those who have had a role in managing the claimant companies. The clear requirement in ABC is that applications of this sort should be supported by independent evidence. Mr Watson is not provably independent. Further, he failed to declare in his witness statement that he had the connections unearthed by the defendants. That too is a cause of concern. I reach that conclusion despite being urged by the claimants to ignore or give little weight to the fact that he was not a truly independent witness given the urgency of the application. I accept that the urgency of the application meant that it might be more costly to obtain a report from someone who was truly independent but such a report is necessary if an application for interim relief is to be made. A court considering interim relief will not hear live evidence tested in cross examination. It must be able to have confidence that someone approaching the company’s finances independently has concluded that, absent interim relief, the company will not survive to prosecute its appeal. That confidence is fatally dented when the evidence is not independent. • Second, Mr Natt has been disciplined in the past for failing to exercise proper professional scepticism when producing a statement in support of a client. This serves to reduce very significantly the weight that can be attached to his evidence. There is real concern that any evidence from someone who has found to have behaved in this way in the past is little more than a restatement of the concerns of his client. • Third, in the case of both accountants, their witness statements are short and do little more than produce a single summary sheet which is designed to support their claims. They do not produce company accounts, bank statements, cash flow statements or any detail which might convince of the correctness of their assertions. There is no base material upon which the defendants or the court can assess the reliability of their conclusions. • Fourth, in the case of Mr Natt’s report, he has sought to compare two trading periods to show a downturn in business. He did not, as one might expect, take the period after 12 June and compare it to the period immediately before that date or to the equivalent period from previous years. His periods of comparison were before and after a date in May. It is difficult to see how this could enable the court to determine whether there was any decrease in business flowing from “the Direction” which was not issued until 12 June. • Fifth, there is no evidence as whether or not there are other ways in which the claimant companies could survive until trial without the protection of an injunction. Whether, for example, the First Claimant could obtain a loan, delay paying its creditors or survive on an overdraft; whether the Second Claimant could use another bonded warehouse to conduct its business. The claimants asserted that this was not a proper factor for the court to consider. They say that the court can, without evidence, assume that none of these routes would have been open to either company. I do not accept that. Some enquiries may have been more viable than others. It might be thought, for example, that there is a real prospect of the Second Claimant using other bonded warehouses if their business is being damaged by the restrictions being imposed on the First Claimant’s warehouse. It is significant that there is no evidence or suggestion that any attempt has been made to circumvent the difficulties allegedly caused to the claimants by the terms of “the Direction”. The lack of any apparent action in this regard is more significant than the failure to take any particular step. • Sixth, the witness statement of Mr Bone, which exhibits a large amount of relevant paperwork, suggests that the claimants have at least to some extent been modifying their business models to cope with the difficulties allegedly caused by “the Direction”. This is in itself suggestive that the businesses will be able to adapt to the change in their commercial environment and will survive. Equally significantly, this issue is not addressed by the claimants. They have not acknowledged it and then sought to explain why such changes will not be enough to enable their businesses to survive a protracted period in which their trading was subject to the terms of “the Direction”. There is not acknowledgement that this has happened at all.

20. For the reasons listed above, I do not find that there is any evidence here capable of showing that either claimant company would be forced into liquidation or similar were I to refuse the application for interim relief. There is no evidence that interim relief is required to protect their Article 6 rights. I refuse to grant this application on that basis.

21. (c) Finally, in any event, I would refuse the application on the balance of convenience test. I particularly take into account the following: (a) There is a strong public interest in ensuring that the defendants can police the use of bonded warehouses effectively. An order which suspends “the Direction” would reduce their ability to do so in this case; (b) Relying on my earlier findings, there is no sufficient evidence that refusing the application will cause real financial hardship for the claimants; and (c) The defendants urge me to conclude that there has not been proper expedition of this case by the claimants and that this should count against my making an order. I do not accept that. I accept that these claims could have bene made a day or two earlier than they were and that there has been some delay in agreeing with the defendants a timetable to expedite proceedings in the FTT. However, I do not find that the delays are of such magnitude that they should have an impact on my decision. Applications for expedition have already been made to the FTT and this court and answers are awaited. That more might have been done, is not enough to render delay a significant factor for my consideration.

22. I turn next to the application insofar as it relates to “the Instruction”. Applying in this case the American Cyanamid test, I have concluded that (a) there is no proper issue to be tried, and (b) the balance of convenience lies in refusing to grant the application.

23. (a) The claimants argue that the defendants did not have the right to make “the Instruction” under s52A CEMA as they purported to do. The defendants argue that they had the right to do so under s52A CEMA but that, if they are wrong about that, they could have made a similar direction using other powers.

24. Section 52A reads: (1) This section applies to any goods the export of which is required to be made in accordance with the applicable export provisions. (2) … (3) … (4) … (5) If (a) in breach of the applicable export provisions, any dutiable or restricted goods fail to be exported from the United Kingdom by the time by which they were required to be exported, and (b) notice of the failure is not immediately given to an officer of Revenue and Customs, the goods are (in addition to being liable to forfeiture under subsection (2)) subject to the control of an officer of Revenue and Customs as mentioned in subsection (6) even if the procedure provided for by the applicable export provisions is discharged. (6) An officer of Revenue and Customs may – (a) require any person to provide such information and documents to the officer as may be specified by the officer, and (b) require the goods to be moved to, and kept in, such place as may be specified by the officer. The claimants’ case is that the powers in s52A(6) are only exercisable if the circumstances in s52A(5) arise. The defendants assert that the powers in s52A(6) are powers which can be exercised whenever there are “ any goods the export of which is required to be made in accordance with the applicable export provisions” as set out in s52A(1). Section 52A(5) merely confirms that the power can be exercised in addition to the powers of forfeiture under s52A(2). It is accepted that the goods in this case fall within the description of relevant goods within s52A(1) but that the conditions in s56A(5) do not apply to them.

25. I accept the defendants’ argument on this point. There is nothing to suggest that s52A(5) is a gateway to the use of s52A(6). The power in s52A(6) is exercisable in any case in which goods of the type described in s52A(1) are under consideration. Any argument to the contrary stretches the obvious meaning of the statute to breaking point.

26. In any event the defendants point to two additional powers which they assert enable them to issue an instruction such as that issued in this case: Regulations 41 and 45 of the Customs (Export) (EU Exit) Regulations 2019/108. Regulation 41 reads: “(1) the goods in respect of which an export declaration is made are subject to the control of any HMRC officer throughout the period beginning with the acceptance of the export declaration and ending when – (a) they are exported from the United Kingdom; (b) they are forfeited or destroyed; or (c) the export declaration in respect of the goods is amended so that it no longer applies to the goods or is withdrawn. (2) The control that may be exercised by an officer includes the requirements mentioned in paragraph (3). (3) an officer may require a person – (a) to provide information (and documents) to the officer as specified by that officer, (b) to handle the goods, or otherwise deal with them, in accordance with instructions given by the officer (whether orally or in any other way), or (c) …” It is agreed that the goods in this case are covered by the description in Reg 41(1). The defendants assert that, this being so, the powers in Reg 41(3)(a) and (b) would allow a customs officer to issue an instruction that the goods were to be made available for inspection by Border Force before they left the country and that the claimants had to contact Border Force to enable instructions to be given as to how this was to be achieved in any particular case. The claimants assert that, properly read, “the Instruction” comprises one instruction only which is “ You must contact Border Force on 03000 738421 a minimum of 2 hours before travelling out of the UK for instructions on how to present the goods and vehicle. Details will be provided when contact is made with Border Force”. They say that this must be so because “the Instruction” goes on to state that “ failure to comply with the instruction may result in a penalty”. This passage follows directly on from the passage set out above as to the duty to make contact with Border Force 2 hours before the export of the goods occurs. That requirement is also set out in bold type. Therefore, it is said that it is that passage alone which constitutes the instruction. That is not an instruction to “ provide information” as set out in Reg 41(3)(a) and so that power could not have been used to issue an instruction of the nature contained in “the Instruction”. I reject that argument for two reasons. First, the duty to inform Border Force that goods are to be moved involves the imparting of information to Border Force. It is the provision of that information (the time of movement) which triggers what is to happen thereafter. Second, I do not read “the Instruction” in the way the claimants suggest it is to be read. The document is to be construed as whole. The first line of “the Instruction” reads, “we require that the goods travelling under this export declaration are presented to Border Force”. This is clearly not only a part of the instruction but the main object of it. This is an instruction to “handle the goods, or otherwise deal with them, in accordance with instructions given by the officer” and therefore covered by Reg 41(3)(b). This power empowers the defendants to issue an instruction such as that issued in this case in addition to the power contained in s52A.

27. The second equivalent power to that in s52A relied on is contained in Reg 45, which reads: (1) An HMRC officer may verify an export declaration by taking any of the following steps – (a) … (b) steps to establish the accuracy of an export declaration or any document required to accompany it.” This again would enable an officer of HMRC to take steps akin to those taken by the issuing of “the Instruction” in this case.

28. I have concluded that the defendants had the power to act as they did in reliance on s52A CEMA. They would in any event have had the power to do so under the Regulations referred to above. I do not consider that the claimants have a properly arguable case to the contrary.

29. (b) I would in any event have rejected the claim for interim relief. The factors I primarily take into account in assessing where the balance of convenience lies include: (i) The relatively trivial interference with the claimants’ business presented by “the Instruction”. It does not prevent goods being moved in and out of the warehouse. It does not impose any financial burden on the claimants when they do so. It does not render any duty payable at a time or in circumstances when it was not previously due. (ii) There is no evidence that the claimants have sustained losses as a result of complying with this instruction alone. (iii) It is again important that the defendants can police the movement of goods out of a bonded warehouse in circumstances in which they have some reason to fear that this has previously resulted in goods being diverted. (iv) There is a public interest in companies being able to undertake legitimate trade but the limitations on their being able to do so in this case are minimal. (v) The claimants suggest that there is no need for this restriction to remain in place as the computer system which controls the movement of goods out of bonded warehouse for export (the EMCS system) is capable of providing the defendants with all the information they require to police these movements. The defendants dispute this. I have not seen a copy of a document from EMCS showing what information it collates. I assume in favour of the claimants that it is capable of providing all of the necessary information. Even in such circumstances, there is an advantage to Border Force receiving a telephone call once goods are on the move or on the point of being moved. It is a single event which triggers their consideration of what steps to take to check goods emerging from a bonded warehouse which has attracted concerns. One telephone call to ensure that a load is not missed is not an onerous imposition. (vi) I bear in mind that the FTT cannot award damages if the claimants win in due course. I can attach little weight to this factor given my views as to the likely outcome of the FTT hearing.

30. It follows that I refuse to grant the interim relief sought insofar as it relates to “the Instruction”.

31. Finally, I deal with permission to bring judicial review proceedings relating to the issuing of “the Instruction”. There has been no paper determination of this application. Nevertheless, the complainants asked me to determine it today. In making that application, they were fully aware that they were forfeiting a right for a second consideration which they would have had if a first determination on paper is considered and refused. I acceded to the request. I heard full argument today and am best placed to make a determination on the application for leave.

32. I can deal with this application shortly. For reasons given above I regard the application as unarguable. The defendants had the power to invoke s52A in the circumstances in which they did so. In addition, the defendant could have exercised other powers to issue an instruction in similar terms. The outcome would have been the same for the claimants had they done so: s31(2)(a) Senior Courts Act. Judicial Review is a discretionary remedy. There would be no injustice to the claimants even if the wrong power was specified by the defendants. I refuse the application for leave to bring judicial review proceedings.

33. For the sake of completeness I record that I do not expedite proceedings. I cannot order the expedition of FTT proceedings. That is a matter for the Tribunal to decide. There are no longer any proceedings in the Administrative Court requiring expedition.