Commissioners of Inland Revenue and Another v Rossminster Ltd .; Commissioners of Inland Revenue and Another v AJR Financial Services Ltd .; Commissioners of Inland Revenue and Another v Plummer .; Commissioners of Inland Revenue and Another v Tucker,

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Wilberforce,Viscount Dilhorne,Lord Diplock,Lord Salmon,Lord Scarman
Judgment Date13 Dec 1979
Judgment citation (vLex)[1979] UKHL J1213-1

[1979] UKHL J1213-1

House of Lords

Lord Wilberforce

Viscount Dilhorne

Lord Diplock

Lord Salmon

Lord Scarman

Commissioners of Inland Revenue and Another
(Appellants)
and
Rossminster Limited
(Respondents)
Commissioners of Inland Revenue and Another
(Appellants)
and
AJR Financial Services Limited
(Respondents)
Commissioners of Inland Revenue and Another
(Appellants)
and
Plummer
(Respondent)
Commissioners of Inland Revenue and Another
(Appellants)
and
Tucker
(Respondent)
[Consolidated Appeals]

Upon Report from the Appellate Committee to whom was referred the Cause Commissioners of Inland Revenue and another against Rossminster Limited, Commissioners of Inland Revenue and another against AJR Financial Services Limited, Commissioners of Inland Revenue and another against Plummer, and Commissioners of Inland Revenue and another against Tucker, That the Committee had heard Counsel as well on Monday the 29th as on Tuesday the 30th and Wednesday the 31st days of October last upon the four Petitions and Appeals of the Commissioners of Inland Revenue of Somerset House, The Strand, London, WC2 and of Raymond Quinlan of Melbourne House, The Aldwych, London, WC2 praying that the matter of the Orders set forth in the Schedules thereto, namely Orders of Her Majesty's Court of Appeal of the 16th day of August 1979 might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Orders might be reversed, varied or altered or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet (which said Appeals were by an Order of this House of the 9th day of October 1979 ordered to be consolidated); as also upon the Case of Rossminster Limited, AJR Financial Services Limited, Ronald Anthony Plummer and Roy Clifford Tucker lodged in answer to the said appeals; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Orders of Her Majesty's Court of Appeal of the 16th day of August 1979 complained of in the said Appeal be, and the same are hereby, Set Aside and that the Order of the Divisional Court of the Queen's Bench Division of Her Majesty's High Court of Justice of the 1st day of August 1979 be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay or cause to be paid to the said Appellants the Costs incurred by them in the Court of Appeal and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Divisional Court of the Queen's Bench Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.

Lord Wilberforce

My Lords,

The organised searches by officers of the Inland Revenue on Friday, 13 July 1979, on the respondents' office and private premises were carried out under powers claimed to be conferred by Act of Parliament—the Finance Act 1976, section 57, and Schedule 6, paragraph 20c amending the Taxes Management Act 1970, section 20.

The integrity and privacy of a man's home, and of his place of business, an important human right has, since the second world war, been eroded by a number of statutes passed by Parliament in the belief, presumably, that this right of privacy ought in some cases to be over-ridden by the interest which the public has in preventing evasions of the law. Some of these powers of search are reflections of dirigisme and of heavy taxation, others of changes in mores. Examples of them are to be found in the Exchange Control Act 1947, the Finance Act 1972 (in relation to VAT) and in statutes about gaming or the use of drugs. A formidable number of officials now have powers to enter people's premises, and to take property away, and these powers are frequently exercised, sometimes on a large scale. Many people, as well as the respondents, think that this process has gone too far; that is an issue to be debated in Parliament and in the Press.

The courts have the duty to supervise, I would say critically, even jealously, the legality of any purported exercise of these powers. They are the guardians of the citizens' right to privacy. But they must do this in the context of the times, i.e., of increasing Parliamentary intervention, and of the modern power of judicial review. In my respectful opinion appeals to 18th century precedents of arbitrary action by Secretaries of State and references to general warrants do nothing to throw light on the issue. Furthermore, while the courts may look critically at legislation which impairs the rights of citizens and should resolve any doubt in interpretation in their favour, it is no part of their duty, or power, to restrict or impede the working of legislation, even of unpopular legislation; to do so would be to weaken rather than to advance the democratic process.

It is necessary to be clear at once that Parliament, in conferring these wide powers, has introduced substantial safeguards. Those relevant to this case are three:

(1) No action can be taken under section 20C without the approval of the Board of Inland Revenue—viz., two members, at least, acting personally. This Board consists of senior and responsible officials expert in the subject matter, who must be expected to weigh carefully the issues of public interest involved.

First, were the warrants valid? Secondly, can the actual action taken under subsection (3) be challenged on the ground that the officers did not have, or could not have had, reasonable cause to believe that the documents they seized might be required as evidence for the purposes of proceedings in respect of a "tax fraud"? A third possible issue, namely, that there was not before the judge sufficient material on which to be satisfied as the section requires was not pursued, nor thought sustainable by the Court of Appeal. It is not an issue now.

The two first mentioned are the only issues in the case. Three judges have decided them in favour of each side. For myself I have no doubt that the view taken by the Divisional Court on each was correct and I am willing to adopt their judgment. I add a few observations of my own.

1

I can understand very well the perplexity, and indeed indignation, of those present on the premises, when they were searched. Beyond knowing, as appears in the warrant, that the search is in connection with a "tax fraud", they were not told what the precise nature of the fraud was, when it was committed, or by whom it was committed. In the case of a concern with numerous clients, for example, a bank, without this knowledge the occupier of the premises is totally unable to protect his customers' confidential information from investigation and seizure. I cannot believe that this does not call for a fresh look by Parliament. But, on the plain words of the enactment, the officers are entitled if they can persuade the Board and the judge, to enter and search premises regardless of whom they belong to: a warrant which confers this power is strictly and exactly within the Parliamentary authority, and the occupier has no answer to it. I accept that some information as regards the person(s) who are alleged to have committed an offence and possibly as to the approximate dates of the offences must almost certainly have been laid before the Board and the judge. But the occupier has no right to be told of this at this stage, nor has he the right to be informed of the "reasonable grounds" of which the judge was satisfied. Both courts agree as to this: all this information is clearly protected by the public interest immunity which covers investigations into possible criminal offences. With reference to the police, Lord Reid stated this in these words:

"The police are carrying on an unending war with criminals many of whom are today highly intelligent. So it is essential that there should be no disclosure of anything which might give any useful information to those who organise criminal activities. And it would generally be wrong to require disclosure in a civil case of anything which might be material in a pending prosecution; but after a verdict has been given or it has been decided to take no proceedings there is not the same need for secrecy". ( Conway v. Rimmer [1968] A.C. 910, 953.)

The Court of Appeal took the view that the warrants were invalid because they did not sufficiently particularise the alleged offence(s). The court did not make clear exactly what particulars should have been given—and indeed I think that this cannot be done. The warrant followed the wording of the statute "fraud in connection with or in relation to tax": a portmanteau description which covers a number of common law (cheating) and statutory offences (under the Theft Act 1968 et. al.). To require specification at this investigatory stage would be impracticable given the complexity of "tax frauds" and the different persons who may be involved (companies, officers of companies, accountants, tax consultants, taxpayers, wives of taxpayers etc.). Moreover, particularisation, if required, would no doubt take the form of a listing of one offence and /or another or others and so would be of little help to those concerned. Finally, there would clearly be power, on principles well accepted in the common law, after entry had been made in connection with one particular offence, to seize material bearing upon other offences within the portmanteau. So, particularisation, even if practicable, would not help the occupier.

I am unable, therefore, to escape the conclusion, that adherence to...

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