R Sharer v City of London Magistrates' Court HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lord Justice Davis,MR JUSTICE GLOBE,LORD JUSTICE DAVIS |
| Judgment Date | 05 May 2016 |
| Neutral Citation | [2016] EWHC 1412 (Admin) |
| Docket Number | CO/5360/2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 05 May 2016 |
[2016] EWHC 1412 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Lord Justice Davis
Mr Justice Globe
CO/5360/2015
Mr A Jones QC (instructed by Rainer Hughes) appeared on behalf of the Claimant
The First Defendant did not appear and was not represented
Mr A Bird (instructed by Her Majesty's Revenue and Customs) appeared on behalf of the Second Defendant
This is yet another case whereby it is sought to challenge searches and seizures made (on this occasion by officers of Her Majesty's Revenue and Customs) pursuant to warrants issued by a magistrate under section 8 of the Police and Criminal Evidence Act 1984. It is said that the warrants as issued were invalid. By a claim form issued on 4 November 2015 quashing orders of such warrants are sought.
The background facts can be relatively shortly stated. The warrants were issued on 9 September 2015 by a Justice at the City of Westminster Magistrates' Court. Short written reasons for authorising the issue of the warrants were given by the Justice concerned. The warrants were directed at the claimant, Marcus Sharer. The premises at which the warrants were directed were his residence, 28b Finchley Lane, London NW4, and secondly office premises, being an estate agent's business operating under the name "Flats & Houses" and run by a Mr Friedlander at 24 Stamford Hill, London N16. It seems that Mr Sharer had a desk at those premises from which he conducted his business affairs. The warrants were executed at both premises on 16 September 2015. Mr Sharer was himself at home that morning in the relatively early hours when the officers attended and the warrant with regard to those premises was shown to him. He was cooperative and he provided the officers with a key and other details relating to the Stamford Hill premises.
An amount of paperwork and files were taken from both premises. Mr Sharer in his witness statement describes the position as this:
"From my home the officers seized a PC, laptop, tablet, mobile phone and approximately 30 paper physical files. I was left some property sheets. The majority of the files contained legal advice from firms of solicitors …"
Then Mr Sharer describes telling the officers about the details of the business address of Flats & Houses and he said:
"They seized a PC, over 75 physical files, 72 computer files which were on PC.
All the things seized included legally privileged information, that is, contains conveyancing advice, legal advice, report on titles, completion statements and material relating to legal disputes from solicitors and legal advice relating to finance."
There is also a statement from Mr Friedlander, who was present at the Stamford Hill address when the officers attended and he describes what happened there in his presence. Amongst other things, as Mr Sharer said, a computer was taken from the business premises.
The evidence indicates that while the search was going on at those business premises when Mr Friedlander himself was present, a solicitor, Mr Johal, acting on behalf of Mr Sharer, rang the officers and said there was legally privileged material contained in the computer on Mr Sharer's desk. Accordingly, as is in the evidence, the officers then exercised their powers under section 50 of the Criminal Justice and Police Act 2001 to seize the computer and a notice to that effect was given at that time to Mr Friedlander in the absence of Mr Sharer.
Subsequently, as it would appear, there has been correspondence about these matters. Proposals have been made by the Revenue in that regard to the extent that professional privilege is asserted. But there seems to be at the moment currently something of an impasse, perhaps precisely because of these proceedings. The position of Mr Alun Jones QC on behalf of Mr Sharer at all events is that this material should never have been taken in the first place and should be returned.
The background relating to the request for the issue of the warrants was very fully set out in the applications directed to the Magistrates' Court seeking the issue of the warrants. On the face of it, those applications are carefully and thoroughly drafted. Summarising the position very shortly, however, for present purposes, Her Majesty's Revenue and Customs were asserting that since 2006 Mr Sharer had purchased some 33 properties, 24 of which had then been sold on. It is asserted that there is reason to believe that the estimated gross profit on such sales may have been in the order of some £1 million. Of those properties which had been retained, it is said that they or some of them had been converted into flats and had been rented out. It is assessed that Mr Sharer has been trading as a property developer and as a professional landlord as it were; yet, as it is said, he has declared no income on his personal tax affairs since 2003. The belief is stated that he has been deliberately evading the payment of income tax or other relevant taxes on his property development and rental income businesses or business.
The applications for the warrants set out those background matters in considerably more detail than I have sought to do so just now. Indeed, the statement of those background facts runs to 13 paragraphs. But on the face of the application form, which is in the form consistent with that prescribed by the Consolidated Criminal Practice Direction 2013, under the heading "Material Sought" this is said:
"(a) What are you looking for? Identify the material for which you want to search in as much detail as practicable."
And then there follow six bullet points as to the material which the officers were looking for.
"Hard copy and electronic items which may evidence the offences of the fraudulent evasion of Income Tax and Cheating the Public Revenue by Marcus Moses Sharer between January 2003 and the date of the execution of the warrant namely: material which identifies any properties that have been bought and or sold by Sharer. Including documents relating to the sale, purchase and conversion of property including planning applications, mortgage applications, offers and statements, banking records and accounting documents.
Material which identifies any rental properties owned by Sharer, including banking records, accounting documents, tenancy agreements, deposit protection scheme information, property maintenance documents, invoices and estate agents documents.
Material relating to rental income from properties owned by Marcus Sharer, including records of rents received, rent books, rental agreement, and details of any associated expenses relating to the properties.
Material relating to Sharer working as an Estate Agent or Letting Agent including property listings, property letting and management contracts and property agent sale contracts.
Material relating to Sharer running a property development or rental business.
Computer and communication devices, peripheral equipment and electronic storage media which are believed to contain any of the items listed above or are believed to have been used in the running of Sharer's property businesses."
Under question (b), this is posed:
"Why do you believe that the material for which you want to search is likely to be of substantial value to the investigation? …"
The answer:
"I believe that the material specified above will enable us to confirm the full extent of the fraud, calculating his total tax liability, and ascertain the true number of properties he has developed, sold and rented … I believe that the material sought will also provide evidence of Sharer's deliberate and premeditated conduct in carrying out the fraud."
These of course are part of the allegations currently being made. Nothing as yet has been proved.
Then under (d) this question is posed:
"Is there any reason to think that the material for which you want to search consists of or includes items subject to legal privilege, excluded material or special procedure material?"
The answer is given as follows:
"No. The material sought is likely to be relevant evidence and be of substantial value to the investigation of the offence and it is not expected to consist of or include items subject to legal privilege, excluded material or special procedure. I consider that it is possible that special procedure material may be present at the premises to be searched, for example credit reference checks undertaken on behalf of Sharer's tenants. However, no such material is sought within the scope of this application. Should it not be reasonably practicable to determine the extent of the contents of an item, then such an item may be seized under provision of section 50 of the Criminal Justice and Police Act 2001, and dealt with in line with such legislation and HMRC procedures."
The warrants were granted specifying precisely the material sought as had been set out in the application notices. What is now said by Mr Alun Jones QC on behalf of the claimant is that the warrants were issued without satisfying the statutory preconditions for their issue, and in consequence excessive and unauthorised search and seizure eventuated. There is no longer pursued a ground raised on the claim form that if the warrants had been validly issued, then the officers in the course of their searches had exceeded that which they had been authorised...
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...of computers as opposed to their contents is not objectionable: see R (Sharer) v City of London Magistrates' Court and HMRC [2016] EWHC 1412 (Admin) (at [54]) and, even more recently, R ((A) and (B)) v Central Criminal Court and another [2017] 1 WLR 3567 (at [73] to [85]) in particular. 75 ......
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