Cheema & Ors v Nottingham and Newark Magistrates Court & Anor [2013] EWHC 3790 (Admin)

Case No CO/6677/2013

[2013] EWHC 3790 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

DIVISIONAL COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 11/12/2013

Before

THE RIGHT HONOURABLE LORD JUSTICE TREACY

THE HONOURABLE MR JUSTICE KING

Between

Amrick Cheema (1)Claimants

Rajinder Cheema (2)Claimant

Bridget Kaur (3)Claimant

Gurjit Singh Thakar (4)Claimant

Nottingham and Newark Magistrates Court (1)Defendants

Her Majesty’s Revenue and Customs (2)Defendant

Alun Jones QC and Rizwan Ashiq (instructed by Rainer Hughes Solicitors) for Claimants

Amy Mannion (instructed by HMRC) for Defendants

Hearing Hearing dates: 15 th November 2013

Judgment

[1]By these proceedings for judicial review lodged on 31st May 2013 the Claimants seek to challenge:(i) the issuing by the First Defendant through a Justice of the Peace, Mr James, on 17th May 2013, on the Information of the Second Defendant, sworn by an Officer of the second defendant, Christopher James Stevens, of a search warrant pursuant to section 8 of the Police and Criminal Evidence Act 1984 (the 1984 Act); and

(ii) the execution of this warrant on 21st May 2013 at each of the four addresses specifically listed in the schedule to the warrant in the course of which a considerable quantity of material was seized including five electronic devices, namely a lap top, a PC, two USB sticks and an iPad.

[2]By its Acknowledgement of Service, the Second Defendant conceded that the entries, searches and seizures were unlawful on a basis which is explained below, but indicated that it was going to make an application to the Crown Court for an order under section 59 (6) of the Criminal Justice and Police Act 2001 authorising the retention of the property. It further stated that pending the resolution of this judicial review and the section 59 application, all material seized had been isolated and secured but had not been viewed or examined. With one exception the material has not been copied. The one exception relates to the electronic devices. The five devices have been ‘imaged’ and the images retained but not viewed or examined. The devices themselves remain with the Second Defendant save for the laptop which has been returned at the request of the First Claimant.

[3]The relief sought by section 6 of the claim form is in these terms: - an order to quash the warrant, - a declaration that the entries, searches and seizures of 21 May 2013 were unlawful, - costs, - damages, - an order that all property seized and any copies taken, are returned to the Claimants.

[4]The warrant on its face authorised a search for the following listed articles:

‘Correspondence and other documentation relating to the structure, registration and ownership of companies; Documentation relating to VAT invoices and returns; Customer records, banking, financial and accountancy documentation, including correspondence, payment slips and money service bureau transactions; Documentation relating to the income and employment of Amrick and Rajinder Cheema, Bridget Kaur and Gurjit Singh Thakar; Documentation relating to tax credit claims; Documentation relating to mobile telephone documents and billing; Mobile telephones, faxes and other telecommunications equipment; Computers, laptops, tablets and other storage media; Documentation relating to the movement and control of cash and assets overseas.’

[5]This list then concluded with the following words:

‘any high value items suspected of being the proceeds of crime and any other items which appear relevant to the offences under investigation.’

[6]Four specified premises authorised to be entered and searched under the warrant, were listed in the attached schedule as follows:(1) 18 Ring Fence, Shepshed, Loughborough, Leicestershire LE12 9HY

(2) 15 Shepshed Road, Hathen, Leicestershire LE12 5LL

(3) 38 Manston Close, Leicester, Leicestershire LE4 9NA

(4) 56-58 Rolleston Street, Leicester, Leicestershire LE5 3SA

[7]Although not stated on the face of the warrant, premises(1) was the home address of the Third Claimant, premises

(2) was the home of the First and Second Claimants, premises

(3) was the home of the Fourth Claimant and premises

(4) were the business premises of a company run by the First and Second Claimants.

[8]In addition that schedule of premises at its foot made further provision for the entry and search of any other premises occupied or controlled by the Claimants, by the inclusion on its face of the following words:

‘and/or Premises occupied by or controlled by Bridget Kaur, Rajinder Cheema, Amrick Cheema, Bridget Kaur and Gurjit Singh Thakar’

It is below those words that the signature of the authorising magistrate appears.

[9]In other words the warrant on its face by virtue of this additional provision was not a ‘specified premises warrant’ but an ‘all premises warrant’ as referred to in section 8(1B) of the 1984 Act.

[10]The First and Second Claimants are husband and wife. The Third Claimant is the sister of the First Claimant. The Fourth Claimant is the former husband of the Third Claimant.

[11]Although no Acknowledgement of Service has been lodged by the First Defendant, what has been produced is a copy of a document received by the Second Defendant from the First Defendant, being a copy of the Information as sworn by Officer Stevens as annotated on the reverse by the legal advisor to the magistrate. The first annotation reads as follows:

‘Married couple behind Phoenix companies and putting family members and staff up front. 4 individuals based on rag trade area of Leicester. Issuing invoices to a legit company work done and invoices are genuine. Companies have failed to declare VAT and pay it over.’

The second annotation reads as follows:

‘reasonable grounds to believe that evidence will be found on the premises Seeking entry to the premises without a warrant would be likely to result in evidence being destroyed or removed Approved by Mr James on 17/5/13 at 3.35pm’

[12]The Information itself explained in some detail the nature of the Investigation being undertaken by the Second Defendant under the title ‘Operation Endgame’ which was the background to the application for the warrant, it being an investigation into a number of indictable offences in which the Claimants were believed to be involved. These offences included: - the fraudulent evasion of Value Added Tax (VAT) contrary to section 72(8) of the VAT Act of 1994; - false representation and possession of articles contrary to sections 2 and 8 of the Fraud Act 2008; - the fraudulent evasion of income tax contrary to section 106(a) of the Taxes Management Act 1970 and tax credit fraud contrary to section 35 of the Tax Credit Act 2002; - money laundering offences contrary to sections 327, 328, and 329 of the Proceeds of Crime Act 2002.

[13]As to the involvement of the individual Claimants, the Information stated amongst other things:

‘Amrick Cheema and Rajinder Cheema are married and live in a substantial property in Hathen, Leicestershire. They are believed to be the controlling minds behind the use of a series of phoenix companies and de-registered VAT numbers that are the foundation for this criminal activity. It is suspected that Amrick Cheema has used and is using family, associates and employees to front these companies in an attempt to distance themselves from the criminality. These associates are believed to be Bridget Kaur and Gurjit Singh Thakar. It is believed that Amrick Cheema, Rajinder Cheema, Bridget Kaur and Gurjit Singh Thakar are involved in the fraudulent evasion of VAT, income tax and associated money laundering activities through four companies known as House of Designs Limited, HOD Ltd, T Processors Limited and Premier Mode all of which have ceased trading. The VAT evaded by their activities is excess of £250,000.’

The grounds of challenge

[14]Four grounds of challenge appear in the claim form.

Ground One

[15]The first ground is founded on the provisions of section 15(1) of the 1984 Act which provides in part that ‘an entry on or search of premises under a warrant is unlawful unless it complies with this section and section 16 below‘, and alleges non compliance with subsection (6)(b) of section 15. This provides as follows:

‘(6) A warrant – (a) … (b) shall identify, so far as practicable, the articles or persons to be sought.’

[16]It is to be noted that section 15 is headed :

‘Search warrants – safeguards’

[17]Ground one as it appeared in the claim form was in the following terms:

‘The warrant should be quashed and the entries, searches and seizures declared unlawful because it did not identify with sufficient precision the property which the officers of the Second defendant might seize.’

[18]Mr Alun Jones QC, on behalf of the Claimants, did not before us pursue the quashing of the warrant on this ground, seeking now only the declaration of unlawfulness. He was wise to do so. It is established jurisprudence that non compliance with the provisions of section 15 or 16 does not render the warrant itself unlawful but rather renders unlawful the entry and search (and necessarily any seizure consequent upon such unlawful search) under the authority of non-compliant warrant. See for example the observations of this court in R (on the application of Mathew Goode) v The Crown Court at Nottingham

[2013] EWHC 1728 (Admin)

at paragraph 45; and at paragraph 43 in the judgment of my lord, Lord Justice Treacy, in R (on the application of Lees and others) v Solihull Magistrates Court

[2013] EWHC 3779 (Admin)

, the claim which was heard immediately before the present case.

Grounds two, three and four

[19]Grounds two, three and fourdo go to challenge the validity of the warrantor more precisely thelawfulness of the decision of the Magistrate to issue the warrant under section 8,and do so by reference to the pre-conditions which have to be met before the power to issue the warrant can arise.

[20]Section 8(1) requires that the magistrate be satisfied that there are reasonable grounds for believing that a number of what has been described elsewhere as ‘access criteria’ have been made out, namely:(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

(d) that it does not consist of or include items subject to legal privilege, excluded material or special procedure material;

(e) that any of the conditions specified in subsection (3) below applies in relation to each set of premises specified in the application;

[21]Relevant to the present claim, section 8(1B) imposes an additional requirement for the issuing of an ‘all premises’ warrant that the magistrate also be satisfied of the matters set out therein, namely:

‘(a) that because of the particulars of the offence referred to in paragraph (a) of subsection (1) above, there are reasonable grounds for believing that it is necessary to search premises occupied or controlled by the person in question which are not specified in the application in order to find the material referred to in paragraph (b) of that subsection; and (b) that it is not reasonably practicable to specify in the application all the premises which he occupies or controls and which might need to be searched.’

[22]What these grounds then seek to do in their different ways is to challenge the rationality of the magistrate‘s decision that these preconditions had been met in this particular case on the information before him.

[23]Thus: 1. Ground two is that ‘there were no reasonable grounds for believing that in accordance with section 8(1)(d) of the Act that the items to be searched for did not include special procedure material as defined in section 14 of the Act’ 2. Ground three is that ‘there were no reasonable grounds for believing in accordance with section 8(1)(c) of the Act that the items to be searched for were likely to be ‘relevant evidence’ as defined by section 8(4) of the Act as anything that would be admissible in evidence at trial for the offence’ 3. Ground four is that ‘there can have been no reasonable grounds for believing that the conditions of section 8(1B) of the Act were satisfied so as to justify the issue of an all premises warrant’.

[24]Given these grounds do go to the validity of the warrant, Mr Jones did on these grounds pursue an order that the warrant be quashed, albeit he conceded that relief is always in the discretion of the court.

[25]The limitations of the consequences of any quashing order should be noted. Unlike the consequences of non compliance with section 15 or 16 which are provided for by the express terms of section 15(1), the quashing of any warrant cannot render unlawful any prior entry or search or seizure in reliance upon the authority of the warrant, to found, for example, a civil claim for damages for trespass. At most it would render continuing possession of anything seized unlawful. It is well established that a warrant issued by a magistrate under section 8 (as with any warrant purportedly issued in exercise of an existing statutory power) is valid unless and until it is quashed. Until quashed, it remains a lawful authority and justification for any entry or seizure if such is in accordance with its terms. See Goode para 52; McGrath v Chief Constable of the Royal Ulster Constabulary [2001] UK HL 39,

[2001] 3 WLR 31

[26]Before considering any of these grounds further it is necessary to deal with the preliminary point taken on behalf of the Second Defendant that because of the concession of unlawful seizure made in its Acknowledgment of Service, and its pending application to the Crown Court under s 59 of the Criminal Justice and Police Act 2001 (the 2001 Act) for an order authorising retention of the articles seized, these proceedings have become academic and should be considered no further other than in the context of any extant claim for damages for trespass.

[27]The Acknowledgment of Service (AOS) was lodged on the 16th July 2013. Within it the Second Defendant conceded that the entries, searches and seizures of 21st May were unlawful pursuant to section 15(1) of the 1984 Act and further that the original items seized fell to be returned to the Claimants.

[28]This concession was based on an acceptance that to the extent indicated in the concession the warrant had failed to comply with the statutory requirement under section 15(6)(b) that the warrant identify, so far as practicable, the articles to be sought.

[29]In other words the Second defendant was conceding ground one of the Claim although not to the full extent of the non compliance with section 15(6) (b) asserted by the Claimants. The concession went only to the final element of the description of articles, ‘any other items which appear relevant to the offences under investigation’ and then only to the inadequacy of the final phrase ‘offences under investigation’.

[30]Thus paragraph 6, 7 and 9 of the AOS read:

‘6. Whilst the Second Defendant would contend that in large part this description meets the statutory requirements, the final phase “and any other items which appear relevant to the offences under investigation” where the offences which are under investigation are not set out, does not, in the circumstances of these warrants, amount to identifying, so far as is practicable, the articles to be sought. The Second Defendant accepts that, in the particular circumstances of this case, it would have been practicable to state the offences under investigation. 7. As a result, the Second Defendant is prepared to concede, to this extent only, that the entries, searches and seizures under the four warrants issued on 21 May for were unlawful pursuant to section 15(1) of the 1984 Act. … 9. It follows … that the Second Defendant concedes: (1) that the entries, searches and seizures of 21 May 2013 were unlawful; and (2) that the original items seized fall to be returned to the Claimants.’

[31]These concessions were clearly based upon the recent line of authority emanating from this court that the use of such a phrase by which to identify the articles, without any means from within the warrant of identifying what the stated offences were, would, absent any sustainable argument based on lack of practicability, fall foul of section 15(6)(b). See R (Anand) v HMRC

[2012] EWHC 2989 (Admin)

; (decided in October 2012) R(van der Pijl and de Greef) v Crown Court at Kingston upon Thames

[2012] EWHC 3745 (Admin)

; R (Hoque and Das ) v City of London Magistrates Court

[2013] EWHC 725 (Admin)

[32]The AOS did not concede any of the other grounds of the claim which were not specifically addressed. Instead it was submitted that in light of the concessions made, the claim had become academic and permission should be refused. The concession that the entries, searches and seizures were unlawful meant that the Declaration sought was not needed. The concession that the items seized fell to be returned did not require this court to consider whether an order for their return should be made since the Second Defendant was preparing an application to the Crown Court under section 59(5) of the 2001 Act for an order under section 59(6) authorising the retention of the seized property. It would be for the Crown Court to address the issue of retention or return. If the Crown Court refused retention, the Second Defendant would make proper return of its own volition.

[33]That section 59 allows for such an application on the part of the Second Defendant and for such an order to be made, was not disputed before us. Section 59 applies where anything has been seized in exercise or purported exercise of a relevant power of seizure (section 59(1)) which includes the power of seizure under a warrant purportedly issued under section 8 of the 1984 Act (see section 59(10)). Under section 59(6) the Crown Court, as the appropriate judicial authority (see section 64) ‘on any application under this section’ and if satisfied that the retention of property is justified on grounds falling within subsection (7), may authorise the retention of any property which(a) has been seized in exercise or purported exercise of a relevant power of seizure and

(b) falls to be returned.

[34]The grounds provided for under subsection (7) include, under (7) (a), that if the property were returned it would ‘immediately become appropriate’:

‘(a) to issue on the application of the person who is in possession of the property at the time of the application under this section, a warrant in pursuance of which, or in exercise of which, it would be lawful to seize the property’

[35]This court in R(El-Kurd) v Winchester Crown Court and SOCA

[2011] EWHC 1853

(Admin) has held that this discretionary power to order retention extends to property which has been unlawfully seized as has been conceded in this case, in only purported exercise of a relevant power, and further that such an order can be made on an application under section 59(5)(b) by a person such as the present defendant who is in unlawful possession, in consequence of only a purported exercise of a relevant power of seizure.

[36]The section thus contemplates that a person such as the Second Defendant can apply to the Crown Court to retain such unlawfully seized property, on the grounds that the statutory criteria for the issue of a section 8 warrant to seize the property are in fact satisfied and if the property were returned, an immediate grant of such a warrant in proper statutory form would be appropriate enabling the lawful seizure of the property. As was said in El-Kurd, (paragraph 60) the purpose of this new discretionary power is in an appropriate case to avoid the police or other agency having to return property, with the obvious risk of its destruction, which it is not otherwise entitled to retain, if it would upon return, be entitled to seize it pursuant to a fresh warrant.

[37]Such a section 59 application has now been issued. Miss Mannion on behalf of the Second Defendant accordingly submits that as the Crown Court Judge hearing the application will need to be satisfied that the requirements of section 8 of PACE are now met, it is simply not necessary to reach a decision on the Claimants’ grounds 2, 3 and 4 since these concern what is now an irrelevant or immaterial question, namely whether the Justice of the Peace in May 2013 could properly have been satisfied of these requirements.

[38]The section 59 application was duly made to the Crown Court at Nottingham on the 29th July 2013 but by order of Collins J of the 2nd September, when considering on the papers the question of permission in this present claim, it was directed to be heard by a Judge of the High Court sitting in the Royal Courts of Justice as a Judge of the Nottingham Crown Court. This application was listed to be heard immediately following the hearing of the present claim with this court reconstituting itself for this purpose as the Crown Court. A ruling giving further directions in the section 59 application is being handed down concurrently with the judgments in these proceedings.

[39]Some support for Miss Mannion’s submissions are to be found in the observations of Collins J when granting permission in the Order of 2nd September. Those observations included the following:

‘1. Since the unlawfulness of the search warrant is accepted, the declaration sought is not needed. The application made pursuant to section 59 means that the items seized will not be returned pending a decision on that application. In the meantime the items must be kept secure and they must not be viewed or examined. 2. In the circumstances this claim is not needed save in relation to damages… . 3. … . 4. However, claims such as these are on the increase and there is a need for consideration of the correct approach of this court (a) where the unlawfulness of the warrant is accepted but a s.59 application is made and (b) where any error in the application for the warrant is said to be merely technical (a point raised in Lees).’

[40]In my judgment, however, notwithstanding the acceptance by the Second Defendant of the unlawfulness of the seizure in this case, and the existence of the pending section 59 application, there continues to be a need for further consideration by this court of the entirety of the grounds by which the Claimants have sought to challenge both the legality of the warrant and the lawfulness of the entries, searches and seizures. This is because the outcome of such consideration and any consequential relief granted by this court will be matters which any court hearing the section 59 application will need to take into account when determining whether to exercise the discretionary power to authorise retention. These will inform the section 59 court in the exercise of the discretion.

[41]As this court in El-Kurd emphasised, the power to authorise the retention of property which has been unlawfully seized and which would otherwise fall to be returned is a discretionary one which necessarily impinges upon the liberty of the subject and the hitherto existing legal safeguards governing the grant and execution of entry/search warrants in relation to private property. The section 59 court will need to look to the extent and nature of the illegality giving rise to the fact that the property would otherwise fall to be returned. The full circumstances of the illegality requires rigorous examination to determine, for example, whether this is a case of mere technicality or one involving more serious default on the part of the Applicant, involving, for example, bad faith or the misleading of the Magistrates Court which issued the warrant, or a ‘less than rigorous and scrupulous approach to the drawing up and execution of the initial warrant’. See the observations of Stadlen J in El-Kurd at paragraph 65. The court will need to consider whether any illegality concerned only the way in which the warrant was drawn up, and if so the extent of any non compliance with the statutory requirements, or whether it went also to the grounds for the grant of the warrant and hence the legality of the warrant itself, and whether this court has for example quashed the warrant.

[42]Absent however the further consideration by this court of the grounds in this claim, this exercise which the s 59 court will have to undertake in examining the full circumstances of the illegality of the current possession, would necessarily and in my judgment unjustifiably be limited to and circumscribed by the limited illegality conceded by the Second Defendant in its AOS. As demonstrated, this went only to the terms of the warrant in its identification of the articles concerned and not to any of the other grounds alleging the lawfulness of the very grant of the warrant, and then went only to a very narrow aspect of the terms of the warrant.

[43]This is because the legal validity of the warrant cannot not itself be challenged in the Crown Court. That Court has no jurisdiction to examine the circumstances of the issue of a warrant by a Magistrates Court. It has no jurisdiction to quash any such warrant and no jurisdiction to grant a declaration as to the unlawfulness of any entry, search and seizure under such a warrant. See Goode at paragraph 51 following observations of Stanley Burton LJ in R (Dulai) v Chelmsford Magistrates Court and the judgments in Lees at paragraph 56.

[44]In so far as this court were to consider that the terms of the warrant fell foul of the statutory requirement of specificity under section 15(6)(b) to an extent greater than that conceded by the Second Defendant, then the extent of the default as found by this court must necessarily be a relevant matter to which the section 59 court should have regard.

Conclusions on the grounds of Claim

[45]I accordingly proceed to give my conclusions on each of the grounds of claim advanced.

[46]In view of the concession made by the Second Defendant, the conclusion that the entry, search and seizures were unlawful on this ground, must follow.

[47]I turn however to consider the extent to which the terms of this warrant did not comply with the requirement of section 15(6)(b).

[48]The principles to be applied to be gleaned from the line of authority to which I have already referred, can be summarised as follows (and see further the judgments in Lees at paras 39-40):(i) The purpose of this mandatory statutory requirement is to enable anyone interested in the exercise of a warrant to know what are the limits of the power of search or seizure which have been granted. This is necessary so that such a person can be put in a position to enable him to challenge the lawfulness of the seizure of any particular item. Accordingly, it is now well established that the terms of the warrant must be precise and intelligible by reference exclusively to its own terms and not by reference to any other material (see Van Der Pijl at paragraphs 53 and 54).

(ii) The obligation ‘to identify as far as practicable the articles to be sought’ is a reference to the articles which the magistrate decided fell within section 8(1) and for the search of which he issued the warrant. Accordingly in considering whether the obligation has been satisfied it is necessary to look to the Information in order to identify what those articles must have been and what, if any, were the identified parameters (such as by reference to a specific offence or a specific company).

(iii) It is for the magistrate to decide whether there were reasonable grounds to believe that there was on the premises concerned, identifiable material falling within the terms of section 8(1)(b) (‘likely to be substantial value to the investigation of the offence’) and 8(1)(c) (likely to be relevant evidence) and for that material to be identified in the warrant. The responsibility for making that decision of ‘substantial value’ or ‘relevance’ cannot be left to the judgment of the officer executing the search and any warrant which by its terms has this effect (such as ‘any other item believed to be of evidential value’ (as in Anand, and see too in Hoque and Das) will not be compliant.

[49]It must follow that the warrant in the present case fell foul of these principles in using the words: ‘any other items which appear relevant to the offences under investigation’.

[50]The Second Defendant has conceded one of the relevant defects in this terminology namely the failure to identify within the warrant what the offences under investigation were.

[51]However in my judgment it was deficient in another respect: ‘any other items which appear relevant’ impermissibly delegates to the officer the responsibility of making the judgment of relevance. It gives him too wide a margin of discretion as to what could be seized and disables anyone reading the warrant from ascertaining the limits of his authority.

[52]I have not however been persuaded that any other part of the list is non compliant. I go to three particular features of which complaint is made by Mr Jones on the grounds of imprecision.

[53]The phrase ‘any high value item suspected of being the proceeds of crime’ is in my view within the bounds of acceptability. There was clearly information before the magistrate giving reasonable grounds to believe that offences of tax evasion had been committed and that the proceeds of such crime were being channelled into the purchase of high value items such as expensive motor cars. It is difficult to see as a matter of practicability how this category of article could be more precisely defined. It was necessary to have some limiting words to the phrase ‘high value items’ and as has been said in Lees (para 46) an officer always has to make some form of judgment at the time of the seizure as to whether an article falls within the articles defined by the warrant.

[54]Equally, the reference to ‘companies’ without restriction to the companies identified in the Information is not in my judgment in the circumstances of this particular investigation and of the modus operandi of the offences which were believed to have been committed as explained in the Information, too wide a description. The justifiable parameters of any search will necessarily vary from case to case. Based on the present Information there were clearly reasonable grounds to believe that a number of frauds had been carried out through a sequence of companies associated with the First and Second Claimants using family members (the Third and Fourth Claimants) in positions to conceal their involvement, and that the method of operation adopted involved the successive use of ‘phoenix companies’ and deregistered VAT numbers. The magistrate was entitled to be satisfied that the use of phoenix companies was an ongoing phenomenon and not restricted to the particular companies which the Information had so far been able to identify.

[55]Similarly with regard to the complaint that there was no express limitation as to the date or period to which the documentation to be sought could relate: in another case involving a more confined investigation this objection may have validity but not in my view in the context of the present investigation which was clearly based upon the belief that the frauds were ongoing and had been for some considerable time and where the date of their onset was itself a matter of investigation.

[56]I turn to the remaining grounds challenging the validity of the warrant by reference to the section 8 criteria.

[57]I do not find this ground made out.

[58]Section 14 (2) defines as far as is currently material, ‘special procedure material’ as:

‘(2) material … in the possession of a person who (a) acquired or created it in the course of any trade, business, profession, or other occupation and (b) holds it subject (i) to an express or implied undertaking to hold it in confidence … .’

[59]This ground was argued by Mr Jones on the basis that the authorised search included a search at business premises (the premises at Rolleston Street) for amongst other things ‘Customer records, banking, financial and accounting documentation, … payment slips, documentation relating to tax credit claims’, and that this had to mean that such material was, absent any evidence to the contrary, likely to contain material held on behalf of a third party subject to an express or implied confidence undertaking.

[60]I regard this line of reasoning as fallacious. It is in fact based on no more than speculation. A challenge such as this which seeks to challenge the validity of the warrant on the grounds that one or more of the section 8 ‘access criteria’ were not made out, is (absent anything to suggest the wrong test was applied) a challenge on public law grounds to the rationality of the justice’s decision that he was satisfied there were reasonable grounds to believe that these had been established. However in context of this particular ground I can see no basis for such a challenge. By the express terms of the Information, the applicant Officer of the HMRC (Mr Stevens) affirmed there were reasonable grounds for believing amongst other things that the material being sought did not consist of or include special procedure material and the Justice of the Peace, Mr James, before whom Mr Stevens appeared, patently accepted that evidence. In my judgment there has to be something which goes beyond mere speculation before this court can find that the Justice in so finding was acting irrationally. I see the force in the submission made by Miss Mannion on behalf of the Second Defendant, that it is telling that in the period from the 23rd May 2013 to date, there has been no express claim made on behalf of the Claimants that any material seized was special procedure material.

[61]In the course of submissions Mr Jones refined his challenge under this head to one focussing on the absence of any material within the Information or any known additional material which was before the Magistrate, which could justify any reasonable belief that two of the premises upon which the search was authorised, namely those at 18 Ring Fence (number (1)) and at Marston Close ((3)) were premises upon which material likely to be relevant evidence, was present.

[62]He was right so to confine his argument and on this limited basis I do find this ground made out for the following reasons.

[63]There were patently within the Information matters to justify a reasonable belief that the Third and Fourth Claimants were party to the frauds under investigation and that any premises in which either resided or to which either was connected, would have relevant evidence present upon them.

[64]As indicated, as a matter of fact it has not been disputed that of the two disputed addresses, the first is where the Third Claimant lives, and the other is the home of the Fourth Claimant. However this is nowhere stated in the Information narrative and there is nothing before us to suggest that the Magistrate was orally informed of these facts.

[65]I am mindful that we must not assume, in the absence of any record, that anything was added to supplement the written Information (see Latham LJ in Redknapp v City of London Police

[2008] EWHC 1177 (Admin)

at paragraph 15) and in these circumstances I do not consider that the position can be rescued by reference to the assertion in the Information that:

‘it is necessary to search the premises referred to on the accompanying schedule as it is believed evidence of Mr and Mrs Cheema’s, Bridget Kaur’s, and Gurjit Thakar’s involvement in criminal activities and the material sought will be at these premises.’

[66]Before the Magistrate could be satisfied that there were reasonable grounds to believe that this was so, there had to be some material before him connecting each of the addresses with one or more of the Claimants. In respect of two of the addresses, namely the home of Mr and Mrs Cheema (15 Shepshed Road) and the business premises of one of the alleged phoenix companies formed by the First Claimant (Rolleston Street) this was so, but it was not so in the case of the other two.

[67]In these circumstances I consider that this ground of challenge to the validity of the warrant, has to succeed.

[68]I have already explained how this warrant in the form in which it was issued, by virtue of that which was on the foot of the attached schedule, was an ‘all-premises warrant’.

[69]The Second Defendant concedes that the criteria for the grant of such a warrant could not have been made out before the Magistrate. It is clear that the Magistrate cannot have applied his mind to these criteria, notwithstanding they are repeated in the Warrant as issued at the foot of the schedule, since they are not addressed within the Information which was in terms an application for ‘a specified premises warrant’.

[70]The court has received a witness statement on this matter from the responsible officer, Mr Stevens. I am are satisfied that the issue of a warrant containing such an all premises provision could not have been intended by the Magistrate and was the result of pure error on the part of those making the application to the Magistrate (that is to say the Second Defendant and its officer, Mr Stevens, in particular). Although the application to the Magistrate was intended to be only for a specified premises warrant, unfortunately the ‘all premises clause’ in the pro forma draft warrant was not deleted before being presented to him for his consideration. Further, unfortunately, this error was missed not only by Mr Stevens, for which he has apologised, but also by the clerk to the Magistrate, and obviously by the Magistrate himself.

[71]This is in the circumstances a challenge to the validity of the warrant based on a pure technicality. It was caused by a mistake in the draft and I accept that it cannot be used as an indication of any bad faith on the part of those making the application or of any attempt to avoid the statutory requirements for an all premises warrant. No attempt was made to utilise this provision in the warrant. No attempt was made to enter or search any premises other than the four specified and I accept that no such further entry/search was contemplated by the Second Defendant.

[72]The fact remains however that the warrant was issued in the form it was, and on that basis, this ground of challenge to its validity, must succeed.

Relief

[73]I turn to the question of relief.

[74]Notwithstanding the concession of the Second Defendant as to the unlawfulness of the entries, searches and seizures of the 21st May, I would grant a Declaration to this effect. I consider the Claimants are entitled to such a declaration in part as ‘a vindication of right’, and further because in any representations they choose to make as Interested Parties in the s 59 application before the Crown Court, they should not have to rely solely upon the concession to this effect made by the Second Defendant. The grant of a declaration will enable the Claimants to rely upon the basis upon which this court has granted the declaration, in particular the extent which this court has found there has been non compliance with the statutory requirements and the circumstances in which this has come about. As to the latter, although I would absolve the Second Defendant of any bad faith as to which there is no evidence whatsoever, I would echo in relation to this case the following concerns of my lord, Lord Justice Treacy, expressed in Lees at paragraph 62 relating to the drafting of the warrant. ‘… It is clear that such warrants are prepared by officers who do not have the benefit of legal scrutiny. It is clear also that notwithstanding a number of decisions of this court prior to 2013 relating to the contents of warrants, HMRC have been slow to respond to the need for care and attention in the drawing of search warrants whose effect is to make substantial inroads into individual freedoms. We were told for example that the warrant templates altered in the light of the decision in Anand in October 2012 were only made available in July 2013’

[75]I would also in the circumstances make an order quashing the warrant. I am mindful of the observations of Pitchford LJ in Hoque and Das that in that case no purpose was to be served in quashing a warrant already executed (see paragraph 16) (although I note a quashing order was made in Van der Pijl). However (unlike in Hoque and Das) on the basis of my findings under ground three, this was a warrant which was illegally granted by the magistrate albeit only because of the inclusion of two of the four premises listed in the attached schedule. Although I accept for the reasons already given, that the warrant could have been lawfully issued in respect of those premises had the connection of the premises to the Third and Fourth Claimants been properly identified within the Information, and that the other two addresses connected to the First and Second Claimants were properly included within the warrant, this was on its face a single indivisible warrant whose illegality was, on ground three (unlike ground four), not based on a mere technicality. A warrant unlawfully granted to search premises in these circumstances should in my judgment be quashed, again as a vindication of the Claimants’ rights.

[76]As regards the return of the property, in principle the Claimants must be entitled to the return of the entirety of their property which on the basis of this judgment was unlawfully seized and is in the continuing unlawful possession of the Second Defendant. This must in principle extend to any copies whose legal status in the possession of the Second Defendant cannot be any different in the circumstances of this case from that of the originals from which the copies were made. If the possession of the originals was always unlawful (as it was) the same must be true of the possession of the copies (cf. the observations of Leveson LJ in R (Cook) v Serious Organised Crime Agency

[2010] EWHC 2119 (Admin)

at paragraph 13).

[77]Given however the pending application of the Second Defendant to the Crown Court under section 59 of the 2001 Act on the grounds that the conditions in section 59 (7) are satisfied, I would not order any return. Clearly, if those conditions are satisfied, there is an obvious public interest in the retention of the property for the purposes of the criminal investigation identified by the Second Defendant both in the Information which was before the Magistrate in May 2013 and in the section 59 application itself. However, as already explained, it will be for the Crown Court to decide in the exercise of its discretion whether, if those grounds are satisfied, that public interest should prevail over any countervailing public interest in the upholding the requirement for due legal process in the grant and execution of warrants to enter and search private property. I have no reason to doubt that if on the section 59 application, the retention of any property is not authorised, the originals and any copies of such property will be returned .by the Second Defendant without the need for any intervention of this court.

[78]I would accordingly grant the declaration of unlawfulness sought by the Claimants together with an order quashing the warrant of the 17th May 2013. I would invite the parties before us to draw up the necessary order and to provide brief written submissions as to costs. The Order should make provision for any damages claim arising from this judgment to be tried by a single judge of the Queens Bench Division. Given that the outcome of the section 59 application may have a bearing on that claim, any trial should await the outcome of that application.

[79]I agree.