Home > Cases > R (Checkprice (UK) Ltd (in administration)) v Revenue and Customs Commissioners [2010] EWHC 682 (Admin)

Checkprice was the owner of alcoholic beverages. It supplied its goods to various companies, including one known as Star Beers Sussex Ltd (Star Beers) under conditions of sale whereby title to the goods remained with Checkprice until Star Beers made payment for them. The goods were stored in Star Beers’ non-bonded warehouse. The defendant (HMRC) became suspicious that duty had not been paid and properly accounted for in respect of the goods which were transferred to Star Beers’ warehouse. The specific allegation made against Checkprice was that it was avoiding the payment of duty (or that it was/would be reclaiming it, or was/would be paying a lower duty than otherwise required), by appearing to export its goods to France (by way of having empty lorries sent on journeys to France), when in fact it was diverting the goods for sale within the United Kingdom (i.e. to Star Beers).

In the event, HMRC officers commenced a process of inspection of Star Beers’ warehouse. Officers went to the warehouse on two occasions, seized the alcoholic beverages stored there, and detained them in a secure warehouse controlled by HMRC. The managing director of Checkprice asserted that the goods which had been detained had not been paid for, and thus Checkprice retained title to them. HMRC did not challenge that assertion. In the event, Checkprice brought judicial review proceedings against HMRC.

Checkprice claimed, inter alia, that HMRC were liable in conversion for the continued detention of the seized goods – which included a quantity of Strongbow cider, and other beverages (see [21] of the judgment for Checkprice’s three-fold categorisation of its goods) – beyond a reasonable period under the detention power in s 139(1) of the Customs and Excise Management Act 1979 (see [10] of the judgment) and, if HMRC was so liable, damages should be awarded, pursuant to, inter alia, principles arising under ordinary domestic law. At the hearing, the following matters were accepted by the parties: (i) that by the time the proceedings were issued most of the goods in question had passed their sell-by dates and had been destroyed, and that the remainder were destroyed about two months after the proceedings were issued, as they had also passed their sell-by dates (see [9] of the judgment for further detail); (ii) that Checkprice had paid a total of £54,126.45 for the goods which it had subsequently lost by reason of HMRC’s destruction of the same; and (iii) in respect of procedure, pursuant to CPR 7 and 54, it was possible to bring a claim for damages based on causes of action (conversion of goods) which arose in private law in judicial review proceedings.

The court held that HMRC had wrongly converted significant quantities of Checkprice’s goods. Checkprice would be entitled to substantial damages for conversion in relation to some of the Strongbow cider, to be assessed by reference to the value of those goods at the time of their conversion. In addition, Checkprice would be entitled to nominal damages, assessed at £500, in relation to the remainder of the goods that had been converted by HMRC. That would provide Checkprice with a just remedy, reflecting the loss it had actually suffered; that being the opportunity to prove – in the magistrates’ court – that duty had been paid on the goods concerned, rather than an outright right to have those goods back. No award would be made to Checkprice in respect of any its consequential losses (namely, the loss in profits that might have otherwise been made but for the conversion); they were too speculative and too remote to be compensated by an award of additional compensation.

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