R Anand v HM Revenue and Customs

JurisdictionEngland & Wales
JudgeLord Justice Pitchford,Mr Justice Foskett
Judgment Date09 October 2012
Neutral Citation[2012] EWHC 2989 (Admin)
Docket NumberCO/10617/2011
CourtQueen's Bench Division (Administrative Court)
Date09 October 2012
The Queen on the Application of Anand
Her Majesty's Revenue and Customs

[2012] EWHC 2989 (Admin)


Lord Justice Pitchford

Mr Justice Foskett





Royal Courts of Justice


London WC2A 2LL

Miss H Malcolm QC and Matthew Butt (instructed by Jeffrey Green Russell Ltd)) appeared on behalf of the Claimant

Mr Andrew Bird (instructed by the HMRC) appeared on behalf of the Defendant

Lord Justice Pitchford

This is a challenge by way of judicial review to the lawfulness of a search warrant, issued 1 August 2011, by a lay bench of Justices sitting at Crawley Magistrates' Court. The warrant itself was signed by the Chairman of the bench, a Mr or Mrs Brown.


The claimant is the sole director of a company called Animation Film Company Limited ("Animation"). His home was, at the material time, in Coventry, but when in London he used an address in Quinton Street. The business of the company was, or purported to be, animation film production. The company's office address was stated to be 18 Soho Square, which was an address at which serviced offices were available, together with a mailing facility.


The claimant registered Animation for VAT purposes on 1 February 2009. The company submitted VAT returns in respect of the periods ending 30 April 2009, 31 July 2009 and 31 October 2009, claiming repayment of VAT in the total sum of about £623,901. Her Majesty's Revenue and Customs ("HMRC") repaid £345,255.05 in respect of the first two of those three periods, but has made no repayment in respect of the third. In October 2010 Animation submitted two Corporation Tax Returns to HMRC's Film Tax Unit ("FTU"). Animation sought Film Tax Relief ("FTR") of £657,000 on claimed production costs of £2.6 million. In respect of the VAT period ending 31 October 2009, Animation submitted invoices purporting to support the claim for repayment of £278,646. The VAT officer dealing with the return was unable to make contact with Animation's alleged suppliers and an inquiry commenced.


In October 2010 Animation issued an Internet press release claiming that it was in production of a film called "Billy the Beagle", which was due for release in June 2011. The claim for FTR specified that the £2.6 million production costs were incurred in the production of Billy the Beagle. No such film has been released.


Invoices purporting to support the claims for VAT repayment and FTR were issued by four companies. HMRC has been unable to verify the invoices, or indeed the recipients, of payments of very large sums from Animation's bank account. The claimant has been a director of eight further companies working purportedly in the film industry. Between them they received £1.7 million in VAT repayments and FTR during the period June 2008 and December 2010. The claimant himself had not submitted a self-assessment tax return since 2005. HMRC records show him not to be in Pay As You Earn employment. That was regarded by HMRC as suspicious, having regard to his directorships in companies having a substantial turnover. As a result, HMRC suspected that the claimant and his companies were involved in a conspiracy to cheat the Revenue. HMRC made an application for search warrants at a number of addresses associated with the claimant and his companies.


In an information placed before the Justices, the first defendant set out the case for its belief that a fraud on the Revenue had been committed through companies with which the claimant was associated. The information contained the following as to the address of 12 Quinton Street:

"HMRC has reasonable grounds to suspect that documentary evidence and electronic evidence relating to the film industry, computer equipment, portable media storage devices, telephones and fax machines, will be found at [the address]."


The present claim concerns that address at which a warrant was executed on 3 August 2011. The warrant issued under the signature of "P Brown" was in the following material terms:

"Date: 1st August 2011

On this day an application supported by an information was made by Natasha Elissa Maria Brewer an Officer of HM Revenue & Customs for the issue of a warrant under section 8 of the Police and Criminal Evidence Act 1984 to enter:

12 Quinton Street, London SW18 3QS

and search for …

i. All business records, including sales and purchase invoices, accounting documents and any such material used or relied upon to administer and manage the business including communication devices.

ii. All personal/business bank accounts (UK and/or foreign), cheque books, records of debits, credits, payable orders and transfers and other records relating to accounts with any bank, building society or other financial institutions, that are believed to be linked to the offences under investigation.

iii. Computers, diskettes, other electronic storage media and mobile telephones.

Iv. Any other items believed to be of an evidential value.



Section 15(1) of the Police and Criminal Evidence Act 1984 provides:

"(1)This section… has effect in relation to the issue to constables under any enactment, including an enactment contained in an Act passed after this Act, of warrants to enter and search premises; and an entry on or search of premises under a warrant is unlawful unless it complies with this section and section 16 below."

Section 15(6) provides:

"A warrant—

(a)shall specify—

(i)the name of the person who applies for it;

(ii)the date on which it is issued;

(iii)the enactment under which it is issued; and

(iv)each set of premises to be searched, or (in the case of an all premises warrant) the person who is in occupation or control of premises to be searched, together with any premises under his occupation or control which can be specified and which are to be searched; and

(b) shall identify, so far as is practicable, the articles or persons to be sought."


The claimant contends that the warrant issued in respect of 12 Quinton Street was drawn so widely that no one reading it would have understood to what documents and objects it related, other than the fact that they were present in that address. For that reason it was invalid and unlawful. In consequence the search and seizure carried out under the warrant were also unlawful.


As I have said, the warrant was executed on 3 August 2011. The claimant was arrested and interviewed. The material recovered on execution of the warrant was examined. Images of the hard drives in two computers recovered during the search were taken, and the resulting information has been served as evidence in the prosecution of the claimant and others for an offence of conspiracy to cheat the Revenue. Other relevant documents were recovered during the search. They too have been copied for the purposes of that prosecution.


On 21 September 2011, the claimant's solicitors wrote a pre-action protocol letter seeking from the first defendant disclosure of the information placed before the Magistrates' Court in support of the application for the warrant. The first defendant responded to that request on 29 September 2011 by providing redacted copies of the information. Not until 2 November 2011, the day before the expiration of the outer limit of bringing the claim provided by CPR rule 54.5(1), was the claim form issued. Rule 54.5(1) requires the claim to be made "promptly". The first defendant argues that the claimant waited six weeks before making any communication with the first defendant, and a further four weeks after receiving the redacted information before issuing the claim. It is submitted by Mr Bird, on behalf of HMRC, that the claim was not made promptly and should be dismissed for that reason.


The principal argument advanced to attack the validity of the warrant is that, on its face, it failed to comply with the requirements of section 15(6)(b) of Police and Criminal Evidence Act 1984. I accept the contention that the claim was not made promptly. That conclusion does not, however, automatically bar the claim for review. The court is being asked to exercise its discretion to permit the review to proceed. The exercise of discretion will be governed by consideration of the substantive merits of the claim, its subject matter and whether prejudice has resulted from the delay. The subject matter of the claim is the liberty of the individual and the intrusion upon that liberty by the execution of a search warrant at his home. I can identify no significant prejudice to the first defendant, nor is prejudice advanced by Mr Bird since HMRC proceeded unhindered with its investigation and prosecution. For reasons, which I shall explain, I consider that the claim has merit. I would permit the claim to proceed.


In other circumstances delay may, however, be a factor properly to be considered in the context of relief. In the light of events which have taken place since the claim was issued, those considerations will be unlikely to influence this court.


In support of the claim that the warrant failed to meet the requirements of section 15(6)(b), Miss Helen Malcolm QC relies upon the decision of this court in R (Energy Financing Team Limited) v Director of Serious Fraud and Bow Street Magistrates' Court and Others [2005] EWHC 1626 (Admin), [2006] 1 WLR 1316 (Kennedy LJ and Crane J). The court was there concerned with the terms of a warrant obtained on behalf of the Director of the Serious Fraud Office performing the obligations of the Secretary of State in response to a request for international co-operation under section 4(2A) of the Criminal...

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