Anthony Ashbolt and Simon Arundell v HM Revenue & Customs
| Jurisdiction | England & Wales |
| Judge | Lady Justice Simler DBE,Lady Justice Simler,Mrs Justice Whipple |
| Judgment Date | 18 June 2020 |
| Neutral Citation | [2020] EWHC 1588 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 18 June 2020 |
| Docket Number | Case No: CO/3245/2019 |
[2020] EWHC 1588 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Simler DBE
and
Mrs Justice Whipple DBE
Case No: CO/3245/2019
Mr Jonathan Fisher QC and Mr James Lake (instructed by Bird & Bird LLP) for the Claimants
Mr Andrew Bird (instructed by HMRC Solicitors Office and Legal Services) for the Defendants
The Second Defendant did not appear and was not represented
Hearing dates: 6 May 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Lady Justice Simler and
Introduction
Her Majesty's Revenue and Customs (referred to below as “HMRC”) have been conducting a criminal investigation (known as Operation Skeet) into suspected offences of fraud by false representation and cheating the public revenue. Anthony Ashbolt and Simon Arundell (together referred to as “the claimants”) were among a number of individuals suspected of having submitted documents to HMRC which were and were known by each of them to be false. The criminal investigation into Mr Ashbolt commenced on 11 January 2018 and in relation to Mr Arundell commenced on 16 March 2018.
The claimants' application for judicial review concerns the lawfulness of the issue of search and seizure warrants by the Crown Court sitting at Leeds on 15 March 2019 in respect of both of their home addresses and the business address of Simon Arundell (“the Warrants”) as part of that criminal investigation. The Warrants were executed on 14 May 2019 and the claimants were each arrested and interviewed. There is no challenge to their arrests and interviews. Warrants were issued and executed in respect of home and/or business addresses of other individuals in Operation Skeet but they have not been challenged.
The application for search warrants was prepared by an HMRC officer, Philip Hirst, pursuant to section 114(2)(a) of the Police and Criminal Evidence Act 1984 (PACE”). The application itself was made pursuant to section 9 of PACE. Mr Hirst gave evidence in support of the application to His Honour Judge Mairs at the hearing on 15 March 2019, and the judge acceded to the application and made the orders sought.
By their grounds of claim, the claimants contended that the Warrants were unlawfully issued and executed. Permission to challenge the lawfulness of the execution of the Warrants (insofar as it was an independent challenge to that relating to their issue) was refused by Sir Duncan Ouseley, who otherwise granted permission to apply for judicial review. Further, although it appeared that the challenge extended to the decision of HMRC to apply for search warrants, that challenge has not been pursued, and the application accordingly proceeds as a challenge to the lawfulness of the issue of the Warrants.
Mr Jonathan Fisher QC with Mr James Lake, who appear for the claimants, advance two principal grounds in support of the claim. First, they submit the Warrants could (and should) not have been issued unless the judge was satisfied that there were reasonable grounds for believing that an indictable offence had been committed and there were no such grounds. The evidence before the judge demonstrated only that the claimants had engaged in lawful tax avoidance, and not evasion, and there were no reasonable grounds for believing they had acted dishonestly. Secondly, the Warrants were neither necessary nor proportionate. In particular there were other less invasive methods by which the material could have been obtained. It was open to HMRC to obtain production orders instead and insufficient material was placed before the judge to explain why service of production orders would have been bound to fail. There was no sufficient basis for thinking that the investigation may be seriously prejudiced if the claimants were put on notice of an application for a production order. The claimants accordingly invite the court to quash the Warrants and require HMRC to return all material (including copies of any such material) seized when the Warrants were executed and to undertake that no use shall be made of any knowledge gained from any unlawfully seized material.
The application is resisted. Mr Andrew Bird who appears on behalf of HMRC, contends in summary that offences of fraud by false representation contrary to sections 1 and 2 of the Fraud Act 2006 and cheating the public revenue contrary to common law were being investigated and there were ample grounds for believing that one or both of those offences had been committed by the claimants. Secondly, Mr Hirst's evidence before HHJ Mairs was that alerting the claimants to the existence of a criminal investigation “would give rise to the risk that relevant evidence may be destroyed, concealed, or fabricated, or that collusion [might take] place between the suspects and/or the scheme promoters”. In other words, his evidence was that other methods of obtaining the material were bound to fail. The judge was entitled to accept that evidence and to conclude in consequence, that the purpose of the search might be frustrated or seriously prejudiced if notice were to be given. Accordingly, HMRC submit that the Warrants were both necessary and proportionate. Mr Bird submits in the alternative, that if for any reason the court concludes that the Warrants should be quashed, the terms of the relief granted should permit HMRC to retain digital images and copy material to be used in the event of future criminal proceedings in accordance with the approach of the Divisional Court in Cook v SOCA [2011] 1 WLR 144 and R (Cummins) v SOCA [2010] EWHC 2111 (Admin). It will be open to the claimants to apply under section 78 PACE to exclude any such material relied on, on grounds of unfairness, in any subsequent criminal proceedings.
The issues for determination are accordingly as follows;
i) Issue 1: whether the judge was entitled to find that the “first set of access conditions” in Schedule 1 paragraph 2 of PACE were satisfied, and in particular that there were reasonable grounds for believing that an indictable offence had been committed: paragraph 2(b).
ii) Issue 2: If so, whether the judge was entitled to find (a) that other methods of obtaining the material had not been tried because it appeared to HMRC they were bound to fail; and (b) the additional criterion in Schedule 1 paragraph 12 and 14(d) was satisfied, namely that service of notice of an application for a production order “may seriously prejudice the investigation”.
iii) Issue 3: what if any relief should be granted in the event of any finding of unlawfulness?
Before dealing with the facts it is convenient to set out the legislative framework and the legal principles applicable to this application.
The Legal Framework
Section 9(1) PACE provides for “a constable” to obtain access to certain material for the purposes of a criminal investigation by making an application under Schedule 1 of PACE. Although not a constable, it is common ground that Mr Hirst is entitled to make an application for a search warrant to obtain access to material pursuant to section 9 and Schedule 1 of PACE.
Schedule 1 makes provision for a circuit judge to issue three types of order: a production or access order pursuant to paragraph 4 of Schedule 1; or a search warrant pursuant to paragraph 12. There are access conditions that must be fulfilled before any such order can be made. These are set out at paragraphs 2 and 3 of the Schedule. The necessary conditions may be fulfilled by satisfaction of the first or second set of access conditions in the case of all three orders; but for a search warrant, in addition, one of the additional conditions set out in paragraph 14 must be fulfilled.
Here, in support of the application for search warrants, HMRC relied on fulfilment of the first set of access conditions at paragraph 2, together with the additional conditions set out at paragraph 14 (d) of Schedule 1.
So far as relevant, schedule 1 provides:
“1. If on an application made by a constable a judge is satisfied that one or other of the sets of access conditions is fulfilled, he may make an order under paragraph 4 below.
2. The first set of access conditions is fulfilled if—
(a) there are reasonable grounds for believing—
(i) that an indictable offence has been committed;
(ii) that there is material which consists of special procedure material or includes special procedure material and does not also include excluded material on premises specified in the application, or on premises occupied or controlled by a person specified in the application (including all such premises on which there are reasonable grounds for believing that there is such material as it is reasonably practicable so to specify);
(iii) that the material is likely to be of substantial value (whether by itself or together with other material) to the investigation in connection with which the application is made; and
(iv) that the material is likely to be relevant evidence;
(b) other methods of obtaining the material—
(i) have been tried without success; or
(ii) have not been tried because it appeared that they were bound to fail; and
(c) it is in the public interest, having regard—
(i) to the benefit likely to accrue to the investigation if the material is obtained; and
(ii) to the circumstances under which the person in possession of the material holds it, that the material should be produced or that access to it should be given.
3. …
4. An order under this paragraph is an order that the person who appears to the...
To continue reading
Request your trial