Kingdom Corporate Ltd v Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lord Justice Bean,Mrs Justice Tipples |
| Judgment Date | 21 December 2023 |
| Neutral Citation | [2023] EWHC 3315 (Admin) |
| Year | 2023 |
| Court | King's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/0987/2023 |
The King on the Application of
[2023] EWHC 3315 (Admin)
Lord Justice Bean
Mrs Justice Tipples
Case No: CO/0987/2023
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Jonathan Lennon KC (instructed by Rahman Ravelli) for the Claimants
Tom Rainsbury (instructed by HMRC Solicitors) for the First Defendant
The Second Defendant did not appear and was not represented
Hearing date: 7 December 2023
Approved Judgment
This judgment was handed down remotely at 10.00am on 21 December 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
On 13 January 2023 HMRC obtained authority to conduct a search of the business premises of Kingdom Corporate Ltd (“KCL”) under s 289 of the Proceeds of Crime Act 2002 (“ POCA”). They attended the premises on 16 January 2023 and found bundles of approximately £350,000 in cash and foreign currency of a further £50,000 or thereabouts. The second Claimant, Mr Kamar, a director of KCL, failed to inform HMRC of a safe hidden in the kitchen area. According to the evidence of HMRC officers, when it was discovered he stated that there was no money in it. He also said that he did not have the keys as someone had stolen the keys from his bag years ago; and that the safe was last opened in 2006.
A locksmith attended and drilled a hole in the safe, revealing large wads of banknotes. Mr Kamar then provided a key to the safe. The money was seized at 17:38 that afternoon by HMRC officer Imogen Johnson.
On the morning of 17 January 2023 Ms Johnson emailed the North London Magistrates' Court with this request:
“I would like to book a slot for a 1 st detention Hearing for Stratford Magistrates Court for 2pm on Wednesday 18 th January 2023. The 48 hour time period expires at 17:38 hours so grateful if you can assist.”
She attached a form (Form A) an HMRC standard form headed “Application for Continued Detention of Seized Cash”. Nisha Patel, an officer of the Magistrates' Court, replied advising that the application had been listed to be heard at 14:00 the following day.
The parties duly attended at Thames Magistrates' Court at 14:00 on Wednesday 18 January 2023, each side being represented by counsel. They were initially informed that the hearing would take place in Court 3. The list caller in Court 3 explained that the magistrates were dealing with custody cases and HMRC's application would have to wait until after those cases. The parties then waited for over an hour and a half, with counsel and HMRC officers making numerous visits to Court 3 to seek an update. At approximately 16:00, counsel for HMRC addressed the bench and legal adviser and made it clear that the case was an urgent cash detention application which had to be dealt with before 17:30. This was to no avail. At 17:00, the list caller explained that Court 3 had shut for the day. The parties were then told that Court 7 would hear the application after their custody cases. After a further period of waiting, counsel for HMRC was advised that Court 7 would be closing. The parties were then told that Court 6 would hear their application.
The case was called on at 17:20 in Court 6 before two lay magistrates sitting with a legal adviser. Copies of the Information, photographs and forms were handed up. Ms Johnson confirmed the contents of the Information. At 17:32, she was cross-examined. At 17:48, the Bench retired. At 17:50, the Bench returned. According to the attendance note of Mr Khan of Rahman Ravelli, solicitors for KCL and Mr Kamar, the decision to grant an order for continued detention of the cash was announced before an objection was raised by counsel for KCL and Mr Kamar that time had run out at 17:38 and the order was thus out of time. The legal adviser had apparently advised the Bench that, since the case had been called on before 17.38, the order had been validly made. Mr Rainsbury, for HMRC, does not argue that the legislation can be interpreted in that way.
On 20 January a lawyer in HMRC's legal department emailed the Claimants' solicitors to tell them that HMRC proposed to “re-seize the monies and have a fresh detention order be applied for and heard on Tuesday 24 January”. The response was that the Claimants required the return of the cash by 23 January and warned that any attempt to seek a further cash detention order would be resisted. HMRC in turn notified the Claimant's solicitors that the “administrative return and re-seizure” would occur at HMRC's regional centre at Stratford, East London, on 23 January, should they wish to be present to observe it.
On 23 January an HMRC officer, Mr Keith Hedinburgh, re-seized the cash at the Stratford regional centre. He did so there due to the obvious security risks posed by transporting large amounts of cash. The Claimants did not attend.
On 24 January the hearing of HMRC's second application took place at Thames Magistrates' Court before District Judge McIvor. Ms Cassidy-Taylor of the Claimants' solicitors has provided a witness statement setting out what occurred at the hearing. Ms Becerra of HMRC applied for an order for the further detention of seized cash. She said it was not in dispute that the original detention order had been made outside the 48 hour time limit and accepted that that order had thus been unlawful. Counsel for the Claimants opposed the application and argued that the original order had been made in excess of the court's jurisdiction and was void ab initio. The District Judge ruled in favour of HMRC. There is no transcript of her oral ruling, but a note of it reads as follows:-
“I am satisfied that HMRC was entitled to lawfully reseize money yesterday. It would be absurd if the cash had to be physically returned to the Respondent (including by way of electronic transfer) simply in order for it to be immediately reseized. This is £350,000 in cash and it has to be properly cared for. I rule that HMRC's re-seizure of the cash yesterday was lawful and their application for a cash detention order can be renewed under section 295 of POCA 2002.”
She granted an order for the detention of the cash for six months. She expressed the view that the first detention order (made by the lay Bench on 18 January) had been “null and void”. Mr Lennon KC, on behalf of the Claimants against whose property it was made, submits that, though wrong in law, it was a valid order and had to be obeyed until set aside. For my part I think Mr Lennon is right, but I do not think that it affects the outcome of the appeal.
Sections 294–298 of POCA 2002
Sections 294–297 provide, so far as material:
294.
(1) An officer of Revenue and Customs… may seize any cash if he has reasonable grounds for suspecting that it is—
(a) recoverable property [which includes property obtained through unlawful conduct or which represents such property]
(b) intended by any person for use in unlawful conduct.
(2) An officer of Revenue and Customs… may also seize cash part of which he has reasonable grounds for suspecting to be—
(a) recoverable property, or
(b) intended by any person for use in unlawful conduct,
if it is not reasonably practicable to seize only that part.
(3) This section does not authorise the seizure of an amount of cash if it or, as the case may be, the part to which his suspicion relates, is less than the minimum amount.
…
295.
(1) While the officer of Revenue and Customs, constable, SFO officer or accredited financial investigator continues to have reasonable grounds for his suspicion, cash seized under section 294 may be detained initially for a period of 48 hours.
…
(2) The period for which the cash or any part of it may be detained may be extended by an order made by a magistrates' court or (in Scotland) the sheriff; but the order may not authorise the detention of any of the cash—
(a) beyond the end of the period of six months beginning with the date of the order,
(b) in the case of any further order under this section, beyond the end of the period of two years beginning with the date of the first order.
(3) A justice of the peace may also exercise the power of a magistrates' court to make the first order under subsection (2) extending the period.
(4) An application for an order under subsection (2)—
(a) in relation to England and Wales and Northern Ireland, may be made by the Commissioners of Customs and Excise, a constable, an SFO officer or an accredited financial investigator,
(b) …
and the court, sheriff or justice may make the order if satisfied, in relation to any cash to be further detained, that either of the following conditions is met.
(5) The first condition is that there are reasonable grounds for suspecting that the cash is recoverable property and that either—
(a) its continued detention is justified while its derivation is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected, or
(b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded.
…
296 Interest
(1) If cash is detained under section 295 for more than 48 hours (calculated in accordance with section 295(1B)], it is at the first opportunity to be paid into an interest-bearing account and held there; and the interest accruing on it is to be added to it on its forfeiture or release.
297 Release of detained cash
(1) This section applies while any cash is detained under section 295.
(2) A magistrates' court or (in Scotland) the sheriff may direct the release of the whole or any part of the cash if the following condition is...
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