Morville Trading Ltd (R) v Crown Court Manchester
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BURNETT |
| Judgment Date | 13 November 2009 |
| Neutral Citation | [2009] EWHC 3680 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/10920/2009 |
| Date | 13 November 2009 |
[2009] EWHC 3680 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Before: Mr Justice Burnett
CO/10920/2009
Mr A Jones QC appeared on behalf of the Claimants
First Defendant was not represented, did not attend
Mr Bird appeared on behalf of the Second Defendant
First Interested Party was not represented, did not attend
Second Interested Party was not represented, did not attend
(As Approved)
: Three of the claimants in these proceedings are individuals who trade through and control the companies who are the five other claimants. The proceedings concern a production order made pursuant to Schedule 1 paragraph (2) of the Police and Criminal Evidence Act 1984 (“PACE”) by His Honour Judge Goldstone QC on 9 February 2009. It was directed to Deloitte LLP (“Deloitte”) which gave consultancy advice and were accountants to the claimants or at least most of them.
This application for permission to apply for judicial review has two targets in its sight. The first is the decision of 9 February 2009 to grant the production order. For that reason the Crown Court at Manchester is the first defendant although, as is usual, it has taken no part in proceedings; HM Revenue & Customs (“HMRC”) is the second defendant; Deloitte and the Chief Constable of Lancashire Constabulary are interested parties. The latter is an interested party because the police and HMRC are jointly investigating a suspected VAT fraud which is at the heart of these proceedings. It was an officer of HMRC, Andrew Milne, who applied for the production order.
The second target of these proceedings is a decision, or more properly described as a series of decisions, made by HMRC in connection with material produced to it by Deloitte which, the claimants contend, attracts legal professional privilege (“LPP”).
This matter first came before me on Tuesday 3 November on an application made by the claimants for an injunction to restrain HMRC, its officers, servants and agents from inspecting, examining, reading, copying or otherwise using any of the material produced by Deloitte pursuant to the production order. The parties had agreed in advance of that hearing that it would be convenient for permission to be considered at the same time. In the course of argument it seemed to me that with some effort on both sides it might be possible to dispose consensually of the injunction application and all matters relating to the mechanics of how LPP material should be treated. The parties came to the same conclusion on that occasion.
The dispute over the treatment of LPP material arose in circumstances to which I shall have to return. In essence, it centred on apparent disagreement about how a relatively small amount of LPP material, said to lie within the large body of documentation produced by Deloitte, should be dealt with. The parties having agreed that they hoped to be able to resolve their grievances centring on this topic, Mr Jones QC, who appears for the claimants, indicated that the second target of the application for permission to apply for judicial review was very likely to become academic. All that was left to consider at that first hearing was the application relating to the issue of the production order.
The time estimate for the hearing last week was unfortunately unduly optimistic. The result was that I was unable to give judgment on the permission application at the end of the hearing through lack of time. Alas the parties have been unable to resolve their differences over the LPP material. The matter has been re-listed today to enable the issues to be further ventilated. For reasons that I shall endeavour to explain, permission to apply for judicial review of the order of Judge Goldstone and the decisions of the HMRC relating to the treatment of LPP material are refused. In those circumstances the application for an injunction becomes academic. But I should make clear that I do not consider that there was merit in that application on its facts in any event.
The main protagonists involved in this application have been engaged in litigation since the HMRC and police executed search warrants on various premises which had been obtained in Spring 2008. Eight search warrants were issued between 31 March and 3 April 2008 by His Honour Judge Brown, sitting at Preston Crown Court. They were all executed on 3 April 2008. One of those warrants was directed towards the premises of solicitors then representing the claimants, Messrs Hill Dickinson in Liverpool. Two warrants were directed towards the premises of Hindocha & Co in Preston. That was the trading name of an accountant closely connected with the claimants. The other six warrants concerned premises of Faisaltex Ltd (one of the claimants) and various residential properties of others of the claimants.
The legality of the warrants was challenged in judicial review proceedings. Lord Justice Keene in the Divisional Court handed down judgment in those proceedings on 21 November 2008, ( [2008] EWHC 2832 (Admin)). There had been a two-day hearing in October 2008. Permission to apply for judicial review of the decisions to apply for and the grant of search warrants was refused in all but one instance. That concerned the warrant issued in connection with the premises of the solicitors.
The police, who were the applicants for the warrant, had decided not to give notice of that application, nor to use the “notice to produce” procedure because they considered that to do so might seriously prejudice the investigation. The Divisional Court held that there was no proper basis for that concern and that the judge erred in accepting it as a reason for making the application without notice. For that reason the warrant directed towards Messrs Hill Dickinson was quashed.
The judgment of the court sets out the background to the application for the search warrants between paragraphs [11] and [16], to which further reference can be made for the detail. It was not suggested that Messrs Hill Dickinson did not have documents material to the investigation. The judicial review challenge was founded on a serious procedural irregularity. Furthermore that warrant had not been concerned with LPP material.
Be that as it may, following the quashing of the warrant by the Divisional Court, the police made an on-notice application for a production order before His Honour Judge Cornwell at the Crown Court at Preston.
On 9 February 2009 Judge Cornwell gave judgment in connection with a preliminary issue that had been raised by these claimants as interested persons in the police application for a production order. It was argued before him by Mr Jones that as a matter of principle no production order should be made because the body of material sought would inevitably contain LPP material. Judge Cornwell rejected that argument and, on the basis of a number of decisions of the Divisional Court, approved a procedure whereby documents said to be privileged would be read by independent counsel with a view to his agreeing or disagreeing with that proposition. It was anticipated that if, after consideration, independent counsel agreed with the proposition then the documents would be returned without more. In the event of disagreement, then the matter would be adjudicated upon by the judge.
There was further argument later in the year which resulted in the decision of 13 August 2009 in which the production order was granted. Judge Cornwell noted that the circumstances were unusual in that the material had in fact been in the possession of the police for about three months before it was returned following the order of the Divisional Court. All the material had been copied to the interested parties in those proceedings who are, of course, the claimants in the proceedings before me as well as to their various solicitors.
The result was that argument on the substantive application before Judge Cornwell was made on all sides with full knowledge of the content of all of the documents that might be in issue. Mr Jones again appeared and resisted the grant of the production order. He was unsuccessful. And, so far as I am aware, that decision is not the subject of a challenge. The order made by Judge Cornwell included a protocol for dealing with LPP issues.
In the meantime civil proceedings had been issued by the claimants on 12 March 2009 seeking damages for trespass to property and goods arising out of the execution of the search warrants issued in the Spring of 2008.
On 20 March 2009 Mr Justice Blake considered an application for interim an injunction pending trial in connection with material seized on 3 April 2008. The injunction sought was in essentially the same terms as had been sought before me in connection with the Deloitte material. Its purpose was to stop the police and HMRC from doing anything with the large volumes of documents seized, or with anything derivative of seeing that body of evidence. The factual premise was that LPP material might be within the large body seized or that material had been seized in excess of the terms of the warrants.
Mr Justice Blake was satisfied that there was a serious triable issue, namely whether the police were entitled to seize a computer which was known to contain LPP material with a view to examining it later. That was a particular feature of...
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