Eastenders Cash and Carry plc & Ors, R (On the application of) v Revenue and Customs

Factual and Procedural Background

Two joined appeals were before the United Kingdom Supreme Court.

• The Eastenders Appeal (Company A): Officers of The Commissioners entered Company A’s warehouses under section 118C(2) of the Customs and Excise Management Act 1979 (“the 1979 Act”). Lacking documentation to demonstrate payment of excise duty, the officers detained large quantities of alcohol while tracing the supply chain. Some goods were eventually seized and condemned; others were returned when enquiries proved inconclusive. Company A sought judicial review of the detention. The High Court (Judge Sales) upheld the detention; the Court of Appeal (majority) declared it unlawful. The Commissioners appealed to the Supreme Court.
• The First Stop Appeal (Company B): Officers entered Company B’s retail and warehouse premises under section 112(1) of the 1979 Act. A small quantity of spirits was seized immediately; a larger quantity was detained pending verification of duty status. When detention exceeded four months, Company B brought judicial-review proceedings. The High Court (Judge Singh) held the detention unlawful and dis-applied the costs immunity in section 144(2). The Court of Appeal reversed those findings. Company B appealed to the Supreme Court on both detention and costs.

Legal Issues Presented

1. Whether the power in section 139(1) of the 1979 Act to “seize or detain any thing liable to forfeiture” requires the goods to be actually liable to forfeiture, or whether reasonable suspicion suffices.
2. Whether, apart from section 139(1), customs officers possess an implied ancillary power to detain goods temporarily while completing an inspection or investigation into duty status.
3. Whether the immunity from damages and costs in section 144(2) applies when detention is later found unlawful, and how that affects the costs orders made below.

Arguments of the Parties

The Commissioners’ Arguments

• Section 139(1) should be construed to allow detention on reasonable suspicion; if that construction fails, a residual implied power exists incident to statutory inspection powers (ss. 112, 118C).
• Detention was reasonable in length and purpose; therefore lawful.
• Even if unlawful, section 144(2) bars an award of costs because officers acted on reasonable grounds.

Company A and Company B’s Arguments

• Section 139(1) applies only when goods are in fact liable to forfeiture; suspicion is insufficient.
• No other statutory power authorises detention; therefore the goods were unlawfully detained once visual inspection ended.
• Because detention was unlawful and reasons given were erroneous, section 144(2) does not protect The Commissioners from costs.

Table of Precedents Cited

Court's Reasoning and Analysis

The Supreme Court (Judges Sumption, Reed, Neuberger, Mance and Carnwath concurring) reasoned as follows:

1. Textual Interpretation: The phrase “liable to forfeiture” in section 139(1) refers to actual liability, not reasonable suspicion, demonstrated by consistent legislative drafting elsewhere in the 1979 Act where Parliament expressly invoked “reasonable grounds” when intended.
2. Consequences of Textual Reading: Limiting section 139(1) to actual liability would leave a practical gap, because effective enforcement requires holding goods while verifying duty status.
3. Historic and Common-Law Context: Examination of pre-1952 customs statutes and the decision in Jacobsohn shows a long-standing implied power to detain goods temporarily as an incident of statutory inspection powers.
4. Statutory Continuity: The introduction of an explicit detention power in 1952 (now section 139(1)) did not impliedly repeal the ancillary power recognised in Jacobsohn; the two powers serve different temporal and functional purposes.
5. Application to Company A: Officers were conducting a lawful inspection under section 118C(2); reasonable suspicions warranted detaining the goods until enquiries finished. Detention length was reasonable; therefore lawful under the implied power, notwithstanding inapplicability of section 139(1).
6. Application to Company B: The same reasoning applied under sections 112 and 112A. The legality of detention depends on possession of power, not on the officers’ citation of section 139(1). Given ongoing enquiries and reasonable suspicion, detention was lawful.
7. Costs: Because detention was lawful, the claimants ought not to have succeeded below. Section 144(2) therefore never engaged; costs should be dealt with in the ordinary way. Prior costs orders were set aside.

Holding and Implications

Holding: The Court allowed The Commissioners’ appeal in respect of Company A and dismissed Company B’s appeal on detention, but allowed the appeal on costs in both cases.

Implications: Customs officers possess an implied statutory power to detain goods for a reasonable period while completing inspections or enquiries into duty status, even where goods are not yet proven “liable to forfeiture.” Section 139(1) applies only where goods are actually liable to forfeiture. Future enforcement actions must distinguish between detention for investigation (implied power) and detention or seizure under section 139(1). Costs orders made on the mistaken premise that detention was unlawful were vacated, and no new precedent limiting officers’ investigatory powers was set.