Robin Lees and Others v Solihull Magistrates' Court (1st Defendant) The Commissioners for HM Revenue & Customs (2nd Defendant)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Treacy,Mr Justice King |
| Judgment Date | 05 December 2013 |
| Neutral Citation | [2013] EWHC 3779 (Admin) |
| Date | 05 December 2013 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/4231/2013 |
[2013] EWHC 3779 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Treacy
and
Mr Justice King
Case No: CO/4231/2013
Mr Alun Jones QC (instructed by Rainer Hughes Solicitors) for the Claimants
Mr Rupert Jones (instructed by HMRC Solicitors Office) for the Second Defendant
The Claimants seek judicial review of the grant of search warrants by the First Defendant, Solihull Magistrates' Court, on 21 st January 2013 and the execution of those warrants by officers of the Second Defendant (HMRC) on 6 th February 2013.
The First and Third Claimants were arrested on 6 th February 2013 as suspects in a criminal investigation into the storage and sale of non-duty paid excise goods contrary to Section 170 of the Customs and Excise Management Act 1979 and associated money laundering activity contrary to Sections 327 to 329 of the Proceeds of Crime Act 2002.
The investigation concerned a Birmingham based haulage company, Cross Transport Limited, and an alcohol distribution company, AQ Wholesale Limited, based in Manchester. In addition, the investigation covered Castle Trade Services Limited (Castle Trade), which is based in Wolverhampton, and of which the First and Third Claimants are director and manager respectively.
At present the investigation is still ongoing. The First and Third Claimants are on police bail until January 2014.
On 20 th July 2012 search warrants were executed at the premises of Cross Transport Limited, and some 260,000 litres of alcohol were seized, with an alleged evasion of duty being put at more than £556,000.00. Cross Transport Limited's unit is not an approved storage location for non-duty paid excise goods. On 25 th July 2012 Mohammed Hussain, director of AQ Wholesale Limited, informed HMRC that the alcohol seized belonged to him and that it had been obtained from Castle Trade. Thus it was that HMRC decided to extend their investigation to include Castle Trade.
On 21 st January 2013 HMRC obtained warrants under Section 8 of the Police and Criminal Evidence Act 1984 (PACE) to search the Claimants' home addresses. The warrants were in identical terms and were executed on 6 th February 2013. Various items were seized in the course of the searches, and the First and Third Claimants were arrested for the offences set out above, and interviewed under caution at police stations.
The Claimants filed their claim on 10 th April 2013, a little over two months after the searches and arrests, which would have been the first they knew about the earlier obtaining of warrants. Issues are raised by the Second Defendant as to the promptness of filing the claim and as to the existence of an alternative remedy, either pursuant to Section 59 of the Criminal Justice and Police Act 2001 or, in the event of any prosecution, under Section 78 of PACE.
Ground One
It was asserted that the warrants should be quashed as defective because the warrants did not identify with sufficient precision the property which might be seized under them.
Each warrant authorised officers to enter the premises and search for:
"• Business and individual records including transportation and shipping documents, invoices, faxes, correspondence and other documentation relating to the supply of excise goods.
• Banking financial and accounting document, telephone and electronic communication records, diaries and written records.
• Mobile phones, fax machines, computers, electronic storage media, satellite navigation devices and other communication equipment which are believed to contain material relating to the facilitation of the offences under investigation.
• Documents relating to the movement and control of monies and assets and any other material, which appears relevant to the facilitation and methodology of the offences under investigation."
Ground Two
This ground asserted that the description of property sought in the warrant was so wide that the Magistrates could not have been satisfied that there were reasonable grounds for believing that such material was likely to be relevant evidence for the purposes of Section 8(1)(c) of PACE.
The information before the Magistrates set out the offences being investigated and identified material likely to be relevant evidence. The offences identified were Being knowingly concerned in, or taking steps with others, with a view to the Fraudulent Evasion of Excise Duty contrary to Section 170 of the Customs and Excise Management Act 1979, and "associated money laundering offences" contrary to Sections 327, 328 and 329 of the Proceeds of Crime Act 2002. The information then described the background history concerning Cross Transport Limited and Mohammed Hussain set out above, thus explaining how Castle Trade came into the investigation.
Other material information provided to the Justices included:
"Castle Trade are currently deemed to be "non-compliant" as they have failed to render any returns or business records to HMRC to substantiate their trading activity. They have also failed to show that any duties have been paid despite repeated requests by HMRC in order to verify their VAT returns…"
"It is believed that the companies and persons involved are producing false documentation to facilitate the fraud. Both the residential and business addresses will likely have computers, mobile phone/telecommunication data and other electronic media (e.g. USB memory sticks) which may evidence those mentioned roles within the fraud under investigation. The false documents used and records of communications in relation to the fraud are suspected of being stored on media devices likely to be found at the premises searched.
Therefore, it is necessary to search the business and residential addresses listed in this information in order to secure the evidence relating to the alleged offence. The search will be for material of [sic] associating Cross Transport Limited with AQ Wholesale Limited and Castle Trade Services Limited to the fraud being committed."
The information provided to the Magistrates showed that Hussain had provided documentation which he said he had received from Castle Trade in relation to the alcohol, and that Hussain had claimed in interview that Castle Trade had assured him that duty had been paid.
There was thus evidence of a chain of supply of a large quantity of alcohol in relation to which duty had not been paid, flowing from Castle Trade through AQ Wholesale to Cross Transport, in whose warehouse the goods were found.
Ground Three
The First and Third Claimants alleged that HMRC were in serious breach of their duty to give full and frank disclosure of all relevant facts to the Magistrates when the warrants were applied for. In the interviews that took place on 6 th February 2013, after the execution of the warrants, both the First and Third Claimants alleged that Castle Trade invoices had been effectively forged by Mr Hussain for his own purposes. Thus, they were the victims of forgery, and HMRC enquiries should have revealed this and been placed before the Justices, consistent with HMRC's duty of full and frank disclosure at the time of seeking the warrant on 21 st January 2013.
Relevant Legislation
Section 8 of PACE 1984 provides:
"(1) If on an application made by a constable a justice of the peace is satisfied that there are reasonable grounds for believing —
(a) that an indictable offence has been committed; and
(b) that there is material on premises…which is likely to be of substantial value (whether by itself or together with other material) to the investigation of the offence; and
(c) that the material is likely to be relevant evidence; and
(d) that it does not consist of or include items subject to legal privilege, excluded material or special procedure material; and
(e) that any of the conditions specified in subsection (3) below applies in relation to each set of premises specified in the application, he may issue a warrant authorising a constable to enter and search the premises.
…
(4) In this Act, "relevant evidence", in relation to an offence, means anything that would be admissible as evidence at trial for the offence."
Section 15 of PACE 1984 provides:
"(1) This section and section 16 below have 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 and search of premises under a warrant is unlawful unless it complies with this section and section 16 below.
…
(6) A warrant —
(a)…
(b) shall identify, as far as practicable, the articles or persons to be sought."
Section 16(8) of PACE 1984 provides:
"A search under a warrant may only be a search to the extent required for the purpose for which the warrant was issued."
The Parties' Submissions
Ground One
Ground one relates to Section 15. The challenges are to the terms of the warrant in the sense that there was a failure of that document to identify so far as was practicable the articles to be seized. It was said that this warrant lacked sufficient specificity of detail as to the articles sought so as to comply with Section 15(6)(b).
By reference to the bullet points in the extract from the warrant cited at paragraph 9 above, Mr Alun Jones QC, for the claimants, pointed out that not only was...
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