R v Epsom Magistrates' Court, ex parte Bell and Another
| Jurisdiction | England & Wales |
| Judgment Date | 27 May 1988 |
| Date | 27 May 1988 |
| Court | Divisional Court |
Queen's Bench Division (Divisional Court).
Mr. Edmund Lawson Q.C. and Miss Veronica Lackovic (instructed by Kingsley Napley) for the applicants.
Mr. Guy Sankey (instructed by the Solicitor for Customs and Excise) for the Crown.
Before: Parker L.J. and Pill J.
The following case was referred to in the judgment:
I.R. Commrs. & Anor. v. Rossminster Ltd. & Ors. ELR[1980] A.C. 952
Value added tax - Offence in connection with VAT - Access to information by Customs and Excise - Orders granted by magistrate for access to bank accounts - Orders not limited in subject-matter or time - Officer making application did not specify offence or grounds for belief that offence had been committed - Whether orders valid - Value Added Tax Act 1983 schedule 7 subsec-or-para 10Value Added Tax Act 1983, Sch. 7, para. 10A.
This was an application for judicial review seeking an order of certiorari to quash seven orders made by a magistrate pursuant to theValue Added Tax Act 1983, Value Added Tax Act 1983 schedule 7 subsec-or-para 10Sch. 7, para. 10A, addressed to the Midland Bank plc that the bank should give access to certain bank accounts to an authorised person and permit an authorised person to remove and take away certain records.
A solicitor, B, had been summonsed to appear before the justices to answer an information that he had knowingly been concerned in the fraudulent evasion of VAT by a company of which he was a director. B had agreed to co-operate with the Customs and Excise but had not been asked to disclose his firm's bank accounts. While B was remanded on bail in respect of the charge, an officer of the Customs and Excise made an ex parte application to a magistrate under the Value Added Tax Act 1983, Value Added Tax Act 1983 schedule 7 subsec-or-para 10Sch. 7, para. 10A(1) for orders addressed to a branch of the Midland Bank requiring the bank to give him access to details of six accounts in the name of B's firm and one in the joint names of the firm and a client.
The officer stated that he had reason to believe that an offence had been committed but did not adduce any evidence of the grounds on which his belief was based or his reasons for believing that the bank accounts would reveal relevant information. He merely said that he believed that funds belonging to a company of which B was a director were deposited in one of the accounts but he did not know which one, and it was therefore necessary to have access to them all.
The magistrate granted orders unlimited as to time or subject-matter simply requiring the bank to permit an authorised person to copy and take away any information which he "considers necessary".
The applicants, the two partners in the firm, applied for judicial review to quash the orders with leave of a judge who stayed execution of the orders pending the hearing of the application.
Held, quashing the magistrate's orders:
1. The orders on their face were in excess of jurisdiction and invalid. Limitations as to subject-matter and time should have been imposed.
2. Paragraph 10A(2)(b) required the officer making the application to have "reasonable" grounds for believing that an offence had been committed and that the information required was relevant. A mere suspicion was not enough. (I.R. Commrs. & Anor. v. Rossminster Ltd. & Ors. ELR[1980] A.C. 952, distinguished.)
3. The granting of orders under para. 10A(1) was not a mere formality. The magistrate himself must be satisfied that its requirements were complied with. It was not enough that the applicant said they were. (Dictum of Lord Dilhorne in I.R. Commrs. & Anor. v. Rossminster Ltd. & Ors., at p. 1004, applied.)
4. There was no information before the magistrate which could have satisfied him (a) that there were reasonable grounds for belief that an offence in connection with VAT had been committed or (b) that the Midland Bank was in possession of recorded information which might be required as evidence for the purpose of proceedings in respect of such offence.
5. While in certain circumstances an ex parte application under para. 10A would be justified even when a charge had been made, it was desirable that the application should be made on notice. In this case there was no danger that a reputable bank would allow the information to be destroyed and the need for an application on notice was all the more important when it related to a solicitor's client account.
6. In the circumstances the application should have been made under the Bankers Books Evidence Act 1879 rather than under para. 10A.
The grounds of the application were that the orders were on their face invalid because they were unlimited in point of time or subject-matter; that there was no evidence to warrant any reasonable justice making the orders; that it was unreasonable to apply for the orders at all since the first applicant had already shown a willingness to co-operate; and that it was oppressive to apply for the orders ex parte so that no representations could be made on behalf of the second applicant in the firm or the applicants' client whose bank account it was sought to disclose.
Parker L.J.: The applicants, Malcolm Arthur Bell and Ronald Thomas Barrett, are solicitors practising in partnership under the firm name Harold Bell & Co. On 12 May 1988 they moved, pursuant to leave granted by Nolan J. on 26 February of this year, for judicial review of seven orders, made by a justice of the peace for the county of Surrey on 15 February 1988. The relief sought in the case of each of the orders was an order of certiorari to quash. Having heard the applicants' motion on 12 May, we granted the relief sought with costs for reasons to be given later. In this judgment I give my reasons for concluding that the applicants were entitled to the relief sought.
Each of the said orders was granted on information on oath laid by one Nigel Hart Birkett, a senior officer of H.M. Customs and Excise, acting under the authority of the Commissioners for the purpose of theValue Added Tax Act 1983 ("the Act").
It was so laid in pursuance, or purported pursuance, of Finance Act 1985 schedule 7 subsec-or-para 10Sch. 7, para. 10A to the Act as inserted by Finance Act 1985 section 23 schedule 7 subsec-or-para 6sec. 23 and Sch. 7, para. 6 to the Finance Act 1985.
Paragraph 10A, so far as immediately material is in the terms following:
10A(1) Where, on an application by an authorised person, a justice of the peace or, in Scotland, a justice (with the meaning of section 462section 462 of the Criminal Procedure (Scotland) Act 1975) is satisfied that there are reasonable grounds for believing -
(a) that an offence in connection with the tax is being, has been or is about to be committed, and
(b) that any recorded information (including any document of any nature whatsoever) which may be required as evidence for the purpose of any proceedings in respect of such an offence is in the possession of any person,
he may make an order under this paragraph.
10A(2) An order under this paragraph is an order that the person who appears to the justice to be in possession of the recorded information to which the application relates shall -
(a) give an authorised person access to it, and
(b) permit an authorised person to remove and take away any of it which he reasonably considers necessary,
not later than the end of the period of seven days beginning on the date of the order or the end of such longer period as the order may specify.
At the time when the informations were laid before the justice the position was:
(2) that by summons dated 16 December 1987 Mr. Bell had been summoned to appear before the...
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