R (H) v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stanley Burnton |
| Judgment Date | 23 October 2002 |
| Neutral Citation | [2002] EWHC 2164 (Admin) |
| Docket Number | CO/5053/2001 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 23 October 2002 |
[2002] EWHC 2164 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
The Honourable Mr Justice Stanley Burnton
CO/5053/2001
Alan Newman QC and Graham Brodie (instructed by Burton Copeland) for the Claimant
Nicholas Ainley (instructed by Malcolm McHaffie, Solicitor of Inland Revenue) for the Defendants
Introduction
On 16 August 2001, officers of the Inland Revenue went to the home address of the Claimant and his family in Bristol and executed a warrant issued pursuant to the provisions of section 20C of the Taxes Management Act 1970 ("the TMA"), authorising them to enter those premises and search them. On the same day similar warrants were executed at the homes of the Claimant's business partner and at their offices, but those searches have no direct relevance to the issues before me.
The Claimant and his family were in France on holiday when the Revenue officers arrived. They contacted the Claimant's father-in-law, to whom I shall refer as P, who had keys to the house. He came to the Claimant's house and read the warrant. He opened the door to the officers, and remained to see what happened, and to secure the house when the search had been completed.
The items of interest to the officers included an Imac (i.e. an Apple Mackintosh) computer of the Claimant and a PC used by his son. In circumstances that I shall have to consider below, P signed an agreement ("the agreement") authorising the imaging (i.e., the copying) of the hard drives (also referred to as the hard disks) of both computers at the Claimant's home, and if it proved impossible to complete the process at the premises, their removal for the imaging to be completed elsewhere. The terms of the agreement are set out in the annex to this judgment.
Later that morning, at 09.54, P managed to speak to H on the telephone. The telephone at the house was then passed to Roger Dillon, the Team Leader of the Revenue officers conducting the search, and he spoke to H. The Revenue contend that in the course of that telephone conversation H approved the signing of the agreement by P on his behalf.
It proved impossible to image the hard drive of either computer at H's home. Later that day, both computers were removed by the Inland Revenue officers. On 21 August 2001 the hard drive of the Imac was imaged and that computer was subsequently returned to H. However, pending the determination of these proceedings the image has not been read. The hard disk of the PC is damaged and has not yet been read. It has been retained by the Defendants. The computer itself together with a new hard drive has been returned to H.
H does not challenge the lawfulness of the issue of the warrant under section 20C. He does not dispute that the Inland Revenue officers had reasonable cause to believe that there might be information stored on the hard drives of the Imac computer that "might be required as evidence for the purposes of proceedings" in respect of "an offence involving serious fraud in connection with, or in relation to, tax". I shall refer to such information and documents as "incriminating".
However, it is common ground the hard drive of the computer also contained data of no relevance to any offence. In these circumstances, H contends:
(a) That section 20C did not confer authority on the Inland Revenue officers to copy the entirety of the hard drive of the computer. In the absence of an agreement with H, at most they were entitled to examine the contents of the hard drive in the course of their search and to require the copying or printing of any file or document they found that might be required as evidence for the purposes of relevant proceedings, pursuant to section 20C(3A). In other words, they were required to sift the contents of the hard drive during their search and select the material that was incriminating.
(b) That P did not have H's authority to enter into the agreement.
(c) That he, H, did not ratify or approve the agreement during the course of his telephone conversation with Mr Dillon.
(d) That in any event the agreement was signed by P in circumstances in which the Inland Revenue officers had failed to make full disclosure of the advantages to the Revenue of the agreement; and that the Revenue are therefore not entitled to rely on it.
(e) Although the agreement is not binding on H, by agreeing in clause 5 that the imaging and removal of the computer were not a seizure and removal within the terms of section 20C(3) of the Taxes Management Act 1970, the Inland Revenue officers are precluded from relying on their powers under that provision.
Each of these contentions is disputed by the Commissioners.
Identical contentions are raised by H in relation to his son's PC. In the case of that computer, however, Mr Newman QC, on behalf of H, sought to argue that in any event the officers could not have had reasonable cause to believe that anything on its hard drive might be required as evidence within the meaning of section 20C(3)(b).
I should make it clear that H is a man of hitherto good character, and that the fact that he did not take issue with the lawfulness of the warrant or the reasonable beliefs of the Inland Revenue officers does not indicate any acceptance that there were grounds for any such beliefs. There are difficulties in raising such issues when a claimant has not had access to the confidential material which led to the issue of the warrant.
The statutory provisions
Section 20C of the Taxes Management Act 1970 provides, so far as is relevant:
"(1) If the appropriate judicial authority is satisfied on information given on oath by an officer of the Board that—
(a) there is reasonable ground for suspecting that an offence involving serious fraud…in relation to tax…has been…committed and that evidence of it is to be found on premises specified in the information; and
(b) in applying under this section, the officer acts with the approval of the Board given in relation to the particular case,
the authority may issue a warrant in writing authorising an officer of the Board to enter the premises, if necessary by force, at any time within 14 days from the time of issue of the warrant, and search them.
…
(3) An officer who enters the premises under the authority of a warrant under this section may—
(a) …
(b) seize and remove any things whatsoever found there which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence as is mentioned in subsection (1) above; and
(c) search or cause to be searched any person found on the premises whom he has reasonable cause to believe to be in possession of any such things; but no person shall be searched except by a person of the same sex.
(3A) In the case of any information contained in a computer which is information that—
(a) an officer who enters the premises as mentioned in subsection (3) above has reasonable cause to believe may be required as evidence for the purposes mentioned in paragraph (b) of that subsection; and
(b) is accessible from the premises,
the power of seizure under that subsection includes a power to require the information to be produced in a form in which it can be taken away and in which it is visible and legible."
Section 20CC is headed "Procedure where documents etc. are removed"; curiously, however, the word "document" does not appear in it. Subsection (3) provides:
"Where anything which has been removed by an officer of the Board … is of such a nature that a photograph or copy of it would be sufficient –
(a) for use as evidence at a trial for an offence, or
(b) for forensic examination or for investigation in connection with an offence,
it should not be retained longer than is necessary to establish that fact and to obtain the photograph or copy."
Section 20D(3) provides:
"… in sections 20 to 20CC above 'document' means, subject to (irrelevant), anything in which information of any description is recorded."
The application of the statutory provisions to a computer
Mr Newman submitted that these provisions conferred no authority on an officer to remove a computer or a hard disk for the purpose of subsequently sifting through the files on it in order to identify those which were, or might be, evidence of a relevant offence. He relied on the decision of the Divisional Court in R v Chesterfield Justices, ex parte Bramley [2000] QB 576, on what he submitted were the materially identical provisions of the Police and Criminal Evidence Act 1984. He also referred to, and relied upon, internal guidance issued by the Commissioners which made it clear that it was not competent for officers to remove a computer from the premises of a suspected person without first examining the relevance of each file found on it. The practical difficulties caused by the lack of a power to remove a computer in order to copy its hard disk will be remedied when section 50 of the Criminal Justice and Police Act 2001 comes into force. Section 50 of the 2001 Act is as follows:
"50. Additional powers of seizure from premises
(1) Where –
(a) a person who is lawfully on any premises finds anything on those premises that he has reasonable grounds for believing may be or may contain something for which he is authorised to search on those premises,
(b) a power of seizure to which this section applies or the power conferred by subsection (2) would entitle him, if he found it, to seize whatever it is that he has grounds for believing that thing to...
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