Lee Qualter v Crown Court at Preston

JurisdictionEngland & Wales
JudgeMr Justice William Davis
Judgment Date03 October 2019
Neutral Citation[2019] EWHC 2563 (Admin)
CourtQueen's Bench Division (Administrative Court)
Docket NumberCase No: CO/130/2019
Date03 October 2019

[2019] EWHC 2563 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Gross

Mr Justice William Davis

Case No: CO/130/2019

Between:
Lee Qualter
Commercial Reduction Services Ltd
Commercial Energy Ltd
Energy Search Ltd
Claimant
and
Crown Court at Preston
Defendant

and

Cheshire West and Chester Council
First Interested Party

and

BES Commercial Electricity Limited
Business Energy Solutions Limited
BES Water Limited
Commercial Power Limited
Andrew Pilley
Michelle Davidson
Second to Seventh Interested Parties

Chris Daw QC (instructed by Farleys Solicitors) for the Claimant

Andrew Thomas QC and Anna Pope (instructed by Adkirk Law) for the Interested Party

Philip Marshall QC and Matthew Morrison (instructed by Weightmans Solicitors) for the Interested Parties

The Defendant did not appear and was not represented

Hearing dates: 19 th June 2019

Approved Judgment

Mr Justice William Davis

Introduction

1

This is the judgment of the Court to which we have each contributed.

2

Energy Search Limited, Commercial Reduction Services Limited and Commercial Energy Limited act as brokers between energy companies and small businesses requiring an energy supply. Lee Qualter is a director of all three companies. On 18 December 2018 HH Judge Mark Brown sitting in the Crown Court at Preston granted production orders pursuant to Section 345 of the Proceeds of Crime Act 2002. The orders were made on the application of Cheshire West and Chester Council (“CWAC”). They provided access to financial material in relation to the three companies and to personal and business accounts held by Lee Qualter and a man named Darren Martindale. The precise terms of the orders are not relevant in these proceedings.

3

The three companies and Lee Qualter seek judicial review of Judge Brown's granting of those orders. Their case is that CWAC had no power to make an application for production orders pursuant to Section 345 of the 2002 Act. A production order under Section 345 can only be made in relation to a party who is subject to a confiscation investigation or a money laundering investigation. The Claimants' case is that any such investigations by CWAC were ultra vires. Mr Martindale, the other party against whom production orders were made, is not party to these proceedings and does not seek judicial review.

4

The Second and Third Interested Parties are energy supply companies (to which we shall refer collectively as “BES”) with which the Claimants dealt. Andrew Pilley and Michelle Davidson are the directors of those companies. The Fourth Interested Party was intending to commence trading as a non-domestic water supplier. Because it was linked to BES and because BES was and is under investigation by CWAC, no such trading has taken place. The Fifth Interested Party trades as an energy aggregator. Its purpose notionally is to act as an intermediary between brokers and suppliers so that brokers can offer the best tariffs to customers. Andrew Pilley and Michelle Davidson are also the directors of that company.

5

CWAC is a local authority. As its name indicates its primary responsibility is to provide local authority services to the inhabitants of a substantial part of Cheshire including the City of Chester. In the case of CWAC this includes enforcement of trading standards. Officers employed by CWAC have been undertaking and continue to undertake investigations into the trading activities and practices of the Claimants and of the Second to Seventh Interested Parties.

The structure of trading standards regulation and investigations

6

The regulation of trading practices has its origins in the policing of weights and measures. Regulation of weights and measures has a very long history. From the nineteenth century control of weights and measures was assumed by municipal and other local authorities. The ambit of the weights and measures departments in local authorities gradually widened as they assumed more statutory responsibilities. So it was that they assumed the title of trading standards.

7

Trading standards officers working for local authorities came to be responsible for safeguarding the interests of consumers and businesses via a wide range of legislation covering environmental health, licensing and unfair trading. The extent to which any individual authority engaged in such safeguarding activity varied widely. As the House of Commons Committee of Public Accounts reported in November 2011 some areas had as few as two trading standards officers while other authorities employed over a hundred officers.

8

In addition, enforcing consumer protection simply via individual local authority trading standards officers could not keep pace with the changing landscape of business activity. When trading was a local activity and consumers tended to lose money due to a single instance of trading malpractice, the structure based on the historic model of a local weights and measures inspector was sufficient to protect consumers. This did not apply once companies were able to engage with consumers nationally. Initially this was via telephone marketing and sales. More recently online activity has become dominant.

9

In 1973 the Fair Trading Act established the Office of Fair Trading which was empowered to engage in investigation and prosecution of nationwide rogue trading and consumer fraud. However, that office focused on protection of consumers from problems caused by new and emerging markets or from lack of effective competition. It had a particular remit in relation to cartels. Many cases with a national profile were not regarded as sufficiently important to be taken on by the Office of Fair Trading. The report of the House of Commons Public Accounts Committee to which we already have referred considered that “enforcing consumer protection has not kept pace with the changing nature of the problems it is intended to tackle”. It recommended that there should be reform of the enforcement system for dealing with trader malpractices occurring at a regional or national level. The Committee noted that the Government was in the process of consulting on reforming consumer law enforcement. It urged the Government to address the detailed proposals in its report.

10

Reform of consumer law enforcement followed. In 2012 the Office of Fair Trading was abolished. Its strategic functions passed to new statutory bodies which do not concern us. Responsibility for delivering consumer protection related work with a national or regional scope was given to a body entitled National Trading Standards (“NTS”). NTS is not a public body nor is it a legal entity. It operates via a board consisting of trading standards officers from different parts of England and Wales. It is funded by central government. The department currently responsible for providing the budget of NTS is the Department for Business, Energy and Industrial Strategy following the merger of the Department for Business, Innovation and Skills, the department initially given this responsibility, with the Department of Energy and Climate Change. In 2018/2019 the annual grant to NTS (paid via the Chartered Trading Standards Institute which is a registered company) was £12,961,000. The grant was expressed as being intended to support inter alia the objective of delivery and coordination of national enforcement projects in relation to consumer protection.

11

The grant letter of 23 April 2018 setting out the terms of the 2018/2019 annual grant stated that the grant was provided to support “the delivery of national and cross-local consumer enforcement work”. One method of enforcement identified in an annex to the grant letter was the work of Regional Investigation Teams. The desired outcome of their work was taking “effective action against rogue traders whose cross-regional activities are beyond the reach of individual local authorities”. Within the key performance indicators to be met by NTS was “commissioning local authorities to undertake national prosecutions where appropriate”.

12

Although this grant letter significantly post-dates the matters with which we are concerned, we are satisfied that the nature and purpose of NTS and the work done by Regional Investigation Teams has not changed since NTS was established in 2012. The NTS Annual Business Plan for 2018/2019 set out the core strategic objectives of that body. Each was described as a long-term objective and function of NTS. One stated objective was to “ensure effective delivery and co-ordination of national and cross-boundary enforcement projects in relation to serious consumer crime (including eCrime and business to business fraud) and mass marketing scams”.

13

NTS does not conduct its own investigations. It does not engage in the work of trading standards enforcement. Rather, it commissions and funds Regional Investigation Teams. Those teams initially were known as scambuster teams before being given a more formal name. There are seven such teams across England and Wales. Each team is based within a particular local authority and those working as a part of the team will be employed by or seconded to that local authority. As with NTS, Regional Investigation Teams do not have any independent legal status or persona. Cases will be referred to NTS for funding whether by individual local authorities or by a Regional Investigation Team.

14

In the North West Region (covering Lancashire, Cheshire, Merseyside and Greater Manchester) all of the local authorities within the region carrying out trading standard functions in 2012 signed a protocol entitled “Protocol for Trading Standards North West Scambuster Investigations”. This was intended to put into effect a scheme for utilising funds made available by NTS. The protocol identified CWAC as the lead partner for the Regional Investigation Team (or...

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1 cases
  • Bes Commercial Electricity Ltd v Cheshire West and Chester Borough Council
    • United Kingdom
    • Queen's Bench Division
    • 26 Marzo 2020
    ...in the relevant judgment of the Divisional Court in Lee Qualter Commercial Reduction Services Ltd v Crown Court at Preston and others [2019] EWHC 2563 from which I have gratefully plagiarised the abbreviated description which follows. THE REGULATORY FRAMEWORK 17 In summary, following the ab......
2 books & journal articles
  • Local Authority Prosecutions: When the General Power to Prosecute Gives way to a Specific Power
    • United Kingdom
    • Journal of Criminal Law, The No. 87-1, February 2023
    • 1 Febrero 2023
    ...satisfy the expediency test: see, for example, R v AB andothers [2017] 1 WLR 4071.In R (Qualter and others) v Crown Court at Preston [2020] 1 WLR 1073, which was concerned withthe question whether s.222(1) and the expediency test applied to a local authority trading standards inves-tigation......
  • Local Authority Prosecutions: When the General Power to Prosecute Gives way to a Specific Power
    • United Kingdom
    • Journal of Criminal Law, The No. 87-1, February 2023
    • 1 Febrero 2023
    ...satisfy the expediency test: see, for example, R v AB andothers [2017] 1 WLR 4071.In R (Qualter and others) v Crown Court at Preston [2020] 1 WLR 1073, which was concerned withthe question whether s.222(1) and the expediency test applied to a local authority trading standards inves-tigation......

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