Court finds HMRC's entry and search unlawful

In the recent judicial review case of R (on the application of Lees & Ors)[1], the High Court held that the execution of search and seizure warrants obtained by HMRC was unlawful.

This was on the basis that the warrants lacked sufficient specificity of detail as to the articles sought and accordingly the occupiers of the relevant premises had been unable to ascertain the extent of the powers of search and seizure available to those executing the warrants.

Background

The warrants were issued in the context of an on-going HMRC investigation into the storage and sale of non-duty paid excise goods and associated money laundering activity.

The warrants were issued in January 2013 under section 8, Police and Criminal Evidence Act 1984 ('PACE') to search the Claimants' home addresses. The warrants were executed on 6 February 2013. Various items were seized from the premises and two of the Claimants were arrested and later interviewed under caution.

On 10 April 2013 the Claimants applied for judicial review of the issue/execution of the warrants on the grounds that:

1. the warrants did not identify with sufficient precision the property which might be seized under them;
2. the description of property sought in the warrants 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) PACE; and
3. HMRC failed to give full and frank disclosure of all relevant facts to the Magistrates when the facts were applied for.

In light of disclosure of information provided to the Magistrates, the third ground was not pursued by the Claimants.

Decision

Ground One

There was no reference in the warrants to identify what offence or offences were believed on reasonable grounds to have been committed. HMRC accepted the criticisms of the warrants and in the circumstances the Court had "little difficulty in concluding that the entry, search and seizure at both sets of premises was unlawful".

The Court emphasised that the obligation contained in section 15(6)(b) PACE, for the warrant to identify as far as practicable the articles to be sought, is necessary to enable anyone interested in the execution of a warrant to know what are the limits of the power of search or seizure being granted.

Ground Two

The Claimants submitted that the Magistrates could not have been satisfied that there were reasonable grounds for believing that the material to be sought was likely to be relevant evidence, however the Court held that the information placed before the Magistrates was:

"… such that a Justice of the Peace could properly be satisfied that there were reasonable grounds for believing that an indictable offence had been committed, and that the material on the relevant premises was likely to be relevant evidence."

Remedies

HMRC argued that an alternative remedy was available to the Claimants in the form of section 59, Criminal Justice and Police Act 2001 ('CJPA'). Alternatively, if criminal proceedings were initiated, an application could be made to exclude material relied on by HMRC from the seizures under section 78 PACE.

The Court was not persuaded by these arguments. The only forum to challenge the validity of a warrant is in judicial review proceedings (R (Goode)[2]). The legality of the warrant could not be challenged by the Crown Court, nor could it quash the warrant, or grant a declaration as to the unlawfulness of entry, search and seizure. Section 59 was not, therefore, an alternative remedy.

As to the section 78 remedy, with no criminal proceedings currently afoot, the remedy was not realistically available. Section 78 also retains to the Crown Court the power to admit in evidence materials that are the result of an unlawful seizure.

This was not a case where there was no basis for issuing a warrant or where there were significant flaws in the warrants' issue. The Court did not therefore consider it appropriate to exercise its discretion to quash the warrants. Similarly, the Court was satisfied that, had the warrants been properly drafted, there would have been reasonable grounds to seize and retain the items held by HMRC.

HMRC were ordered to return all property and any copies which had been taken of such material seized within 14 days of the making of the order, unless, within 14 days, HMRC made an application to the Crown Court under section 59 CJPA.

Comment

This case is a helpful reminder of the remedies available to claimants for judicial review who have been the subject of an unlawful search and seizure, but where the underlying warrants have not been quashed.

The Court was critical of the lackadaisical approach that HMRC had taken in the preparation of the warrants, which were prepared without "the benefit of legal scrutiny". An example of HMRC's slow response was that warrant templates, which had been modified in light of R (Anand)[3]in October 2012, were only made available to HMRC officers in July 2013. The Court suggested that these were legitimate concerns for the Crown Court to consider, in exercising its discretion, in the event that a section 59 application was made.

A point to note of broader significance to judicial review proceedings is that despite being brought more than three weeks within the longstop 3 month deadline provided for by CPR 54.5(1)(b), the Court was persuaded that the claim was not filed promptly, as required by CPR 54.5(1)(a). The Court chose, however, not to exercise its discretion to deny relief to the Claimants. This is a timely reminder to anyone contemplating judicial review proceedings to act promptly.

The blog was written by Nigel Brook.

[1] R (on the application of Robin Lees, Anne Lees, Karl Morgan, and Joanne Morgan) v Solihull Magistrates' Court and HMRC [2013] EWHC 3779 (Admin)[BAILII].

[2] R (Goode) v The Crown Court at Nottingham [2013] EWHC 1726 (Admin) [BAILII].

[3] R (Anand) v HMRC [2012] EWHC 2989 (Admin) [BAILII].