Intertrade Wholesale Ltd & Ors, R (On the Application Of) v Revenue And Customs & Anor, Court of Appeal - Administrative Court, November 09, 2018, [2018] EWHC 3046 (Admin)

Resolution Date:November 09, 2018
Issuing Organization:Administrative Court
Actores:Intertrade Wholesale Ltd & Ors, R (On the Application Of) v Revenue And Customs & Anor

Neutral Citation Number: [2018] EWHC 3046 (Admin)

Case No: CO/2680/2018




Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 9 November 2018

Before :


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Between :

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Alun Jones QC and David Bedenham

(instructed by Rainer Hughes, Solicitors) for the Claimants

James Fletcher (instructed by HMRC) for the First Defendant

Hearing date: 25 October 2018

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Mr Justice Supperstone :


  1. The Claimants renew their application for permission to challenge the lawfulness of the decision made on 18 June 2018 of a justice of the peace (``the Justice'') sitting at Birmingham Magistrates' Court to grant, on an application made by HM Commissioners for Revenue and Customs (``HMRC''), 11 search warrants under s.8 of the Police and Criminal Evidence Act 1984 (``PACE'') in relation to premises owned or occupied by the Claimants. The Claimants also challenge the lawfulness of the subsequent execution of those warrants on 20 June 2018, and the decision to arrest and handcuff some individual Claimants.

  2. Permission was refused on the papers by Sir Ross Cranston on 20 September 2018.

    Factual Background

  3. HMRC is conducting a criminal investigation named ``Operation Bowshot'' which concerns potential large-scale excise duty evasion and the subsequent laundering of the criminal funds generated. The laundered monies are suspected to be derived from the sale of illicit alcohol imported from the Continent and other organised crime groups across the UK. The total loss to HMRC since 1 April 2010 is estimated to be in excess of £440m. The investigation is being carried out in conjunction with a French Judicial Customs operation, and a Joint Investigation Team (``JIT'') agreement was signed on 21 July 2016. The JIT agreement covering the operation has since been extended.

  4. The application for search warrants and their execution in respect of an earlier phase of Operation Bowshot were the subject of previous judicial review proceedings. On 11 December 2017 the Divisional Court (Gross LJ and Carr J) found in R (on the application of Superior Import/Export Limited and others) v HMRC and Birmingham Magistrates' Court [2017] EWHC 3172 (Admin) that the warrants were vitiated due to their drafting. HMRC failed to meet the requirements of s.15 of PACE and provide sufficient information such that the Justice could properly be satisfied for the purposes of s.8(1) of PACE (see para 86). However the court did not find any bad faith on the part of the HMRC, or make a finding that the statutory pre-conditions for the grant of the warrants were not met. Those proceedings are currently subject to a s.59 application by which the HMRC seeks permission to retain the seized material or copies thereof.

    Grounds of Challenge

  5. The Claimants advance five grounds of challenge:

    i) Ground 1: failure to make full and frank disclosure in relation to ten matters:

    a) That HMRC intended to search for material relating to companies/individuals not named in the warrants;

    b) That HMRC had in 2010 conducted raids and unlawfully detained the trading stock of Millennium Cash and Carry (the director of which at that time was Rishi Lakhani and the shareholders of which at that time were Rishi Lakhani and Panna Mashru) ultimately resulting in HMRC paying out £1.6m in damages;

    c) That HMRC intended to make arrests (including of persons who would be in a position to claim legal privilege over material that was being seized);

    d) That HMRC intended to search for items likely to include special procedure and/or excluded material;

    e) That HMRC intended to unlawfully apply handcuffs and otherwise breach the PACE codes of practice;

    f) That French public officials would actively take part in the search (and the fact that the JIT agreement did not apply to the Claimants and, in any event, had expired);

    g) Relevant disclosures that had been made in other proceedings (a successful judicial review brought by Superior Import/Export Ltd, see para 4 above);

    h) That HMRC intended to prevent the operation of CCTV at the premises to be searched;

    i) That there was a recent history of dialogue and ``open book'' compliance with HMRC and HMRC had been provided with full explanations for the ``lifestyle'' of the Claimants.

    j) That HMRC had very recently approved Millennium Cash and Carry as a ``fit and proper'' person to trade in the alcohol industry (and has not sought to assess Millennium Cash and Carry or any of the Claimants for any UK excise duty or VAT).

    ii) Ground 2: there was a breach of section 8(1) of PACE;

    iii) Ground 3: there were no reasonable grounds (a) to suspect an indictable offence had been committed, and (b) that the premises to be searched would have on them material ``likely to be of substantial value... to the investigation of the offence'', as required by section 8(1) of PACE;

    iv) Ground 4: the entries, searches and seizures were unlawful under s.15(1) and s.16(8) of PACE;

    v) Ground 5: the handcuffing of Rishi Lakhani and John Radley was unlawful.

  6. The grounds are set out in detail in a 42-page document dated 1 October 2018, entitled ``Argument in support of an application for injunctive relief and renewed application for permission'' (``the Claimants' Argument''), settled by Mr Alun Jones QC and Mr David Bedenham, whom he leads, which Mr Jones developed in his oral submissions.

    Ground 1: HMRC failed to make full and frank disclosure when applying for the search warrants in respect of ten matters

  7. Sir Ross Cranston considered and dealt with each of these matters in the reasons he gave for refusing permission. Mr Jones submits that in so doing the judge fell into error.

  8. The relevant principles in relation to the duty of disclosure and how a court upon review should approach such issues are set out by Holroyde LJ at paragraphs 18-20 of Hart v HMRC [2017] EWHC 3091 (Admin): the question for the court is whether the information that it is alleged should have been given...

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