Commissioners of Inland Revenue and Another v Rossminster Ltd and Others
| Jurisdiction | England & Wales |
| Judgment Date | 13 December 1979 |
| Date | 13 December 1979 |
| Court | Chancery Division |
HIGH COURT OF JUSTICE (QUEEN'S BENCH DIVISION, DIVISIONAL COURT)-
COURT OF APPEAL-
HOUSE OF LORDS-
Revenue power to search premises for evidence of suspected tax fraud - Validity of search warrant - Whether warrant must contain particulars of suspected offence - Whether manner of search and seizure of documents lawful - Scope of judicial review - Taxes Management Act 1970, s 20C - SC Ord 53.
The Respondents were two companies and two individuals. One of the individuals (P) was a director of R Ltd. and the other (T), was a chartered accountant who had a close business relationship with that company. On 12 July 1979, in the course of an investigation by the Revenue into suspected criminal offences, informations on oath were laid by the second Appellant, a Revenue officer, before a Circuit Judge, who, pursuant to s 20C(1) of the Taxes Management Act 1970, issued warrants authorising Revenue officers to enter and search (inter alia) the Respondents' premises. The entry and search was carried out on the following day, 13 July, and large quantities of documents were seized. The Respondents applied to the Queen's Bench Division for judicial review for, inter alia, (i) an order of certiorari to quash the search warrants and (ii) declarations that the method of search and seizure was unlawful and an abuse of power, so that the Appellants were not entitled to sieze any of the documents and were bound to deliver them up. The Divisional Court refused the applications. The Court of Appeal allowed the Respondents' appeals and made the Orders sought.
Held, in the House of Lords, allowing the Crown's appeals,
(i) that the warrants were valid, in that they followed the statutory language; there was accordingly no need for them to specify what offence or offences were suspected (Lord Salmon dissenting on the ground that the warrants did not state on their face that the Circuit Judge was himself satisfied that there were reasonable grounds for suspecting the commission of tax fraud);
(ii) that no declaration that the search and seizure was unlawful ought to be made, first, because it would be inappropriate to make a final order against the Crown (against which interim relief was not available) on disputed evidence and in proceedings for judicial review; secondly, because public interest privilege, at the investigation stage of an enquiry into suspected fraud, entitled the searching officers not to give reasons for their belief that the documents seized might be required as evidence, notwithstanding that the test of reasonable cause for such belief is objective; thirdly, because the Respondent's evidence, even if uncontradicted, did not raise a prima facie case of abuse of power.
Per Curiam: Per Lords Wilberforce, Diplock and Scarman: It would ordinarily be "just and convenient" to defer trial of an action for damages for trespass following a search and seizure until after the conclusion, within a reasonable time, of the
criminal investigation. At that stage, the public interest privilege which affords the investigator immunity from the need to justify the reasonableness of his beliefs will lapse.Per Lords Diplock and Scarman: Liversidge v. Anderson [1942] AC 206 disapproved.
The case came before the Divisional Court of the Queen's Bench Division (Eveleigh L.J. and Park and Woolf JJ.) on 30 and 31 July and 1 August 1979, when judgment was given in favour of the Crown, with costs.
Eveleigh L.J.-This application concerns the search for documents and the seizure of documents at four different premises, when the Revenue purported to act under s 20C of the Taxes Management Act 1970, as amended in 1976. They had obtained warrants relating to each of the premises, and as they are in the same form it is sufficient to read one of them. They were all obtained on the authority of Judge Leonard, sitting at the Central Criminal Court. The document is headed "Search Warrant". It is addressed to
Raymond Quinlan, and to the persons named in the first schedule annexed to this warrant. Officers of the Board of Inland Revenue. Information on oath having been laid this day by Raymond Quinlan in accordance with the provisions of Section 20C of the Taxes Management Act 1970 stating that there is reasonable ground for suspecting that an offence involving fraud in connection with or in relation to tax has been committed, and that evidence of it is to be found on the premises described in the second schedule annexed hereto. You are hereby authorised to enter those premises, together with all or any of the officers of the Board of Inland Revenue named in the first schedule hereto and together with such constables as you may require, if necessary by force, at any time within fourteen days from the time of issue of this warrant, and search them; and on entering those premises with this Warrant you may seize and remove any things whatsoever found there which you have reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence.
Application has been made to this Court for certiorari to quash the warrant on the ground that it was improperly issued, that the learned Judge did not or could not have properly exercised his discretion in relation to that, and that it is bad on the face of it, because it lacks particularity. Application is also made for mandamus for a declaration and for damages, all on the grounds of abuse of power by the Revenue.
It is not necessary to state the precise relief claimed in the motion. Indeed, some of the matters in respect of which relief is prayed, for example, access to the documents, has been resolved by mutual agreement by the parties, but generally speaking what this Court is concerned with to decide is whether the documents were lawfully taken or not, and whether the Revenue exceeded their power in seizing them.
Section 20C of the Taxes Management Act 1970, in so far as it is relevant, reads as follows:
"(1) If the appropriate judicial authority is satisfied on information on oath given by an officer of the Board that-(a) there is reasonable ground for suspecting that an offence involving any form of fraud in connection with, or in relation to, tax has been committed and that evidence of it is to be found on premises specified in the information; and (b)"- which is not relevant for this purpose-"the authority may issue a warrant in writing authorising an officer of the Board to enter the premises, if necessary by force, at any time within 14 days from the time of issue of the warrant, and search them."
Subsection (3) reads:
On entering the premises with a warrant under this section, the officer may seize and remove any things whatsoever found there which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence as is mentioned in subsection (1) above.
There then follow subs (4) and subs (5) which respectively deal with the provision of a list and access to the documents.
It is contended on behalf of the Applicant that the Revenue must specify a particular offence when applying for the warrant to the Circuit Judge who is the judicial authority for the purposes of the section and, further, that the warrant itself must prescribe that offence, and that the warrant must specify the documents which are seizable or describe them with some particularity which relates them to the offence. It is also contended that s 20C (3) permits seizure only of documents that are limited to being evidence of the offence which it is said has to be specified when application is made for the warrant.
It is further submitted that when the seizure is challenged or, alternatively, if a prima facie case of irregularity is shown, then it is incumbent upon the Revenue to justify their behaviour, and justification involves giving details of the offence and of the "reasonable cause" for the belief. So, it is said, justification involves stating the offence, stating the belief and the cause for it. Finally, it is submitted in this case that should it be that after the documents have been seized those which are admitted to have been seized wrongfully are returned, none the less the whole seizure is bad, and if all of the documents are returned, no copies may be kept by the Revenue, because they will be copies that have been obtained as a result of a seizure which taken as a whole is itself bad.
The Revenue seek to answer those contentions by saying that all that is necessary is to satisfy the Judge that there are grounds to suspect that some offence or other involving fraud against the Revenue has been committed. Further, they contend that on a proper construction of s 20C (3) the Revenue can seize anything which might be evidence of any offence of the kind referred to in s 20C (1). It is further said that once the Judge is satisfied of the grounds for suspicion there is no necessity to tell the Applicant of the nature of the offence and no necessity to tell the Applicant what the grounds are. It has further been submitted on behalf of the Revenue that if they are called upon to justify the seizure a bare assertion of the words in s 20C(3) is in law enough, namely, it is enough to depose that they have reasonable cause to believe that the documents may be required as evidence for the purposes of proceedings, etc.
It is said that a lack of detail is justified in this type of case because these are not criminal proceedings. They are preliminary stages, which may result in criminal proceedings, and to descend to detail would in all probability involve the disclosure of the names or name of the informants or an informant. It is further argued that s 20C(3) gives the officers who are conducting the search an unfettered discretion, as I understand the argument, that their assertion of a belief and reasonable cause is enough. This Court was referred to the...
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