Intertrade Wholesale Ltd v The Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 17 December 2018 |
| Neutral Citation | [2018] EWHC 3476 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB/2018/000090 |
| Date | 17 December 2018 |
[2018] EWHC 3476 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Freedman
Case No: QB/2018/000090
Alun Jones QC and David Bedenham (instructed by Rainer Hughes, Solicitors) for the Claimants
James Fletcher (instructed by HMRC) for the First Defendant
Hearing dates: 23 rd November 2018
Approved Judgment
Introduction
The Claimants apply for injunctive relief in relation to the seizures of very substantial material, electronic and documentary, from the Claimants' premises on 20 June 2018 by HMRC pursuant to search warrants issued on the application of HMRC by Birmingham Magistrates' Court two days before. The injunction sought is in the following terms, namely:
“a. Review;
b. Make use of;
c. Copy, or
d. Transmit to any other person or authority
Any of the material seized (or photographs, copies, notes or records taken of material documents) from or on the Claimants' premises on 20–21 June 2018.”
The history of this matters is that there have been associated judicial review proceedings which were dismissed by Supperstone J on 9 November 2018 who gave a reserved judgment (“the Judgment”). I shall at the outset quote from paragraphs 3–4 of the Judgment where Supperstone J said the following:
“ 3. HMRC is conducting a criminal investigation named “Operation Bowshot” which concerns potential large-scale excise duty evasion and the subsequent laundering of the criminal funds generated. The laundered monies are suspected to be derived from the sale of illicit alcohol imported from the Continent and other organised crime groups across the UK. The total loss to HMRC since 1 April 2010 is estimated to be in excess of £440m. The investigation is being carried out in conjunction with a French Judicial Customs operation, and a Joint Investigation Team (“JIT”) agreement was signed on 21 July 2016. The JIT agreement covering the operation has since been extended.
4. The application for search warrants and their execution in respect of an earlier phase of Operation Bowshot were the subject of previous judicial review proceedings. On 11 December 2017 the Divisional Court (Gross LJ and Carr J) found in R (on the application of Superior Import/Export Limited and others) v HMRC and Birmingham Magistrates' Court [2017] EWHC 3172 (Admin) [“the Superior Import/Export case”] that the warrants were vitiated due to their drafting. HMRC failed to meet the requirements of s.15 of PACE and provide sufficient information such that the Justice could properly be satisfied for the purposes of s.8(1) of PACE (see para 86). However the court did not find any bad faith on the part of the HMRC, or make a finding that the statutory preconditions for the grant of the warrants were not met. Those proceedings are currently subject to a s.59 application by which the HMRC seeks permission to retain the seized material or copies thereof.”
In respect of the Superior Import/Export case, on 21 June 2017, copies of almost all the material seized from properties associated with Mr Harpreet Singh Johal in Kent, were sent to France pursuant to the JIT agreement which records “According to French legislation, all information collected in the framework of the JIT must be included in the judicial file and can be used in the criminal proceedings.” The legal power to transfer material in this way is conferred by section 19 of the Crime International Cooperation Act (“the 2003 Act”).
The JIT agreement is an agreement for establishing a joint investigation team (“JIT”) between France and the United Kingdom relating to mutual legal assistance in regard to criminal matters. Its purpose is:
“ to facilitate the investigations in France and the United Kingdom into offences of Fraud and money laundering committed by organised crime groups of individuals. It has as its objective the identification and arrest, with a view to bringing them to justice, of the perpetrators.
In particular, the JIT aims to:
• gather evidence and facilitate the exchange of information between investigation teams, in order to substantiate the links between the criminal organisation/s involved and any additional criminal organisations or individuals identified during the investigation;
• facilitate the involvement of investigators from one Member State in the investigations being pur sued by the other;
…
• use the evidence gathered for the purpose of prosecution, and the restraint and confiscation of the proceeds of crime in France and in the United Kingdom…”
It is also stated in the JIT agreement that:
“in England and Wales, seconded JIT members are permitted, subject to UK law and subject to the approval of the JIT leader, to be present and participate at operational meetings and police procedures, at searches, at interviews of witnesses and suspects with technical support, and other operational aspects of the investigation, including surveillance operations.”
Under a heading at paragraph 13.2 “Recording of and use of information obtained during the JIT”, it is stated as follows:
“Information obtained during the operation of and pursuant to the agreement in Member States party to the agreement, whether obtained directly in the Member State or received from a partner Member State party to the agreement, should be recorded, assessed and processed in each Member state in accordance with the laws and procedures of that Member State.
The confidentiality of material obtained during the JIT shall be respected by the JIT members in accordance of the law and procedure of the Member States.
……..
According to French legislation, all information collected in the framework of the JIT must be included in the judicial file and can be used as evidence in criminal proceedings.”
Annexed to the JIT agreement is a list of members of the JIT who include the Second Defendant, namely Chloe Hautcolas, Customs Inspector and other members headed by Chief Customs Officer Wilfrid Corrazin. The UK members include Helen Wilkes, an investigation officer of HMRC.
Following judgment on 11 December 2017, consequential orders were made on 8 January 2018. The warrants were declared unlawful and the warrant quashed and the entries into, searches at and seizures from the Claimants' premises were accordingly unlawful. There was no order made in relation to the return of the documents and/or copy documents save that HMRC was given permission to make an application in Birmingham Crown Court under section 59 of the Criminal Justice and Police Act 2001. No order was made in relation to the materials which had been sent to France on 21 June 2017. It was stated that the claim did not seek any relief in that regard, HMRC had stated that only copy documents had been sent to France and “the copy documents are now with the French authorities over which this Court has no jurisdiction”.
On 11 January 2018, a District Judge made an extradition order against Mr Johal. An appeal was lodged, but Mr Johal has since voluntarily submitted himself to the French authorities and has been bailed. On 18 June 2018, the Birmingham Magistrates Court issued the search warrants referred to in paragraph 1 above. It was said in the judicial review proceedings before Supperstone J that a central plank of the application for search warrants was connections between Mr Johal and Mr Rishi Lakhani, the Sixth Claimant in these proceedings. On 20 June 2018, the warrants were executed by officers of HMRC. The Claimants say in the Particulars of Claim at paragraph 9 that they were assisted in the search by officers of the French Customs Authority including Ms Hautcolas. At paragraph 11, they say that during the search those officers were liaising with HMRC officers in relation to the search and were also searching for and then passing items to be seized to HMRC officers.
By an email dated 27 June 2018 from Karn Chopra on behalf of HMRC to Mr Panessar, solicitor for the Claimants, it was stated that the material taken on the search had not been submitted to the French authorities or any other person. However, Karn Chopra went on to state that HMRC and the French authorities are one team under the JIT agreement so technically the French authorities have the material, although not physically since they have not been provided with the material by HMRC.
On 9 July 2018, the Claimants issued the claim for judicial review. On 7 July 2018 and on 17 July 2018, limited injunctive relief was granted by Mostyn J, which was varied on 15 August 2018. On 21 September 2018, Sir Ross Cranston refused an application for permission to apply for judicial review. On 9 November 2018, Supperstone J dismissed the renewed oral application for judicial review.
Supperstone J made limited observations in the Judgment where he indicated that if relief was appropriate, it would be in a private law rather than a pubic law action. He rejected 10 allegations of failure to make full and frank disclosure. In respect of the fourth of those matters entitled “the entries, searches and seizures were unlawful by virtue of s.15(1) and s.16(8) of PACE”, he said the following:
“ 42. The Claimants contend that the entries, searches and seizures from the premises authorised to be searched were unlawful, by virtue of s.15(1) of PACE because, contrary to s.16(8), the searches exceeded the authority granted by HMRC.
43. The facts relied on under the first allegation of nondisclosure set out under Ground 1 (see para 10 above) are relied on in support of this ground.
44. In my...
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