Jonathan Edward Peter Tipper & Ors, R (on the application of) v The Crown Court at Birmingham

So far as now pursued, the Claimants make two applications, in separate but related proceedings, for permission to apply for judicial review. The decisions challenged are, respectively, those of:

A separate application is made to set aside or vary part of the order of Lang J, made on the papers on 30 March 2021, so as to permit the broadening of the principal applications to encompass a challenge to two further decisions of Birmingham Magistrates’ Court, (DJ MacMillan) each made on 10 July 2020, whereby he extended the period of detention of certain ‘listed assets’, under section 303L of POCA. By her order (so far as material), Lang J refused the Claimants’ application, dated 11 November 2020, to amend the claim forms and statement of facts and grounds, as constituting an improper attempt to extend the scope of the claims to include actions which extended beyond the decisions challenged by the claim forms, for which the Claimants had alternative statutory remedies and which had been made out of time.

The warrants and approvals under challenge were executed in simultaneous operations at the homes of, and other premises associated with, the Claimants, on 8 July 2020. At the same time, restraint orders granted by the Crown Court were served on the Claimants and certain other family members, as well as on a company. Broadly stated, it is the Claimants’ contention that the relevant warrants and approvals were obtained by the Interested Party, HMRC, in breach of the duty of candour which attached to the making of its without notice applications and, in relation to the application made under PACE, in circumstances in which the court could not be satisfied that the condition imposed by paragraph 14(d) of Schedule 1 to that Act obtained. The broader challenge which they seek to advance by amendment asserts that the Magistrates’ Court lacked jurisdiction to make the decisions which it made on 10 July 2020, having been misled as to the timing of the earlier seizures of listed assets, and, accordingly, authorised a further period of detention which was unlawful.

The Claimants’ criticism is expressly directed at the allegedly inaccurate and/or incomplete basis on which each application was advanced before the relevant court and not at the relevant courts, which, in the ordinary way, have declined to participate in these proceedings. Before me, the Claimants were represented by Mr John Hardy KC and the Interested Party by Mr Andrew Bird KC. I am grateful to them both for their clear and thorough submissions, including those advanced in writing subsequent to the hearing.

For current purposes, it is necessary to summarise the background to this matter only in broad terms, though I have been provided with, and considered with care, a wealth of material, including the amended witness statements of: the First Claimant, dated 22 April 2021 and its exhibit; the Fourth Claimant, dated 24 April 2021; and the Fifth Claimant, also dated 24 April 2021. Subsequent to the hearing, on 5 November 2021, I was provided, by the Claimants, with an additional bundle and explanatory note and, by the Respondent, with the two further detention orders which had been made on 10 July 2020; on 21 January 2022, by the Claimants, with the witness statement of David Donovan, investigating officer in HMRC, dated 26 April 2021 and prepared in connection with a different, related investigation, together with an explanatory note; and, on 2 February 2022, with HMRC’s response to that material.

As at the date of the hearing before me, none of the Claimants had been charged with any offence. The written applications for the warrants and approvals the subject of challenge identified fraudulent evasion of VAT, cheating the public revenue, fraud by false representation, money laundering, and conspiracy to commit those offences as being the offences the subject of a criminal investigation, named Operation Salmon. The focus of that investigation was a fraud believed to have had at its centre Backoffice One Limited, of which the First and Third Claimants were each fifty percent shareholders and former directors and the Fifth Claimant was a current director, appointed on the date on which the First and Third Claimants had resigned their directorships; 1 August 2017.

The essence of the case under investigation is that a legal tax avoidance vehicle has been used for a criminal purpose, resulting in a loss to the Exchequer of a sum in excess of £85,200,000. HMRC believes that outsourcing companies made false claims of input tax in respect of sham sourcing companies which were not genuine trading entities but had been created in order to perpetrate a fraud. To quote from paragraph 10 of the Claimants’ Amended Statement of Facts and Grounds, dated 26 April 2021, ‘Put in elementary terms, according to HMRC the male Claimants were ‘rigging the books’, and the fourth and sixth female Claimants were enjoying the proceeds of their husbands’ misdeeds.’ Each of the Claimants denies any criminal activity.

In or about July 2012, the First and Third Claimants had founded a company which provided outsourced labour and associated administrative services. Temporary employees were supplied to employers through, or by, employment agencies all of the payroll responsibilities for whom were undertaken by that company. By 2017, the business had evolved into a corporate structure comprising a number of companies, each of which said to be engaged in particular activities undertaken by the business. The Fifth Claimant had joined as Chief Financial Officer in December 2015. In essence, HMRC alleges that the business was operated in an unlawful manner, resulting in the non-payment of the substantial sum previously mentioned.

The Claimants say that the structuring and operation of the corporate group had necessitated the taking of much legal and accounting advice, requiring regular liaison with HMRC. To HMRC’s knowledge, in January 2016 they had appointed Mazars LLP, initially to assist with a civil investigation by HMRC and, subsequently, as their tax advisors and auditors. Mazars, together with solicitors, Shakespeare Martineau, had instructed leading counsel to advise in relation to the proposed business model and its potential tax implications. In March 2016, Mazars had provided tax advice on a proposed restructure. Mr Tipper (whose evidence is adopted by Messrs Foulsham and Cleary) states that, following advice received from leading counsel, his understanding was that the proposed business model was sound, from a tax perspective. At paragraph 50 of his witness statement, he states:

Following the conclusion of enquiries by HMRC’s civil enforcement division into the affairs and dealings of two of the principal companies (Abacus Outsource Ltd (‘Abacus’) and MyPay Accountants Ltd (‘MyPay’)) and associated companies, on 18 January 2019 HMRC launched its criminal investigation into the Claimants’ business dealings (Operation Salmon). On the Claimants’ case in these proceedings, there was no apparent connection between the conclusion of the civil enquiries and the commencement of the criminal investigation. Abacus and MyPay went into members’ voluntary liquidation, for the purposes of an asset sale and subsequent company restructure. The liquidators drew up final accounts for both companies, respectively dated 31 January and 20 September 2019, which showed that HMRC had given clearance for each company to be wound up and, in the case of (a) Abacus, had authorised a VAT repayment in the sum of c. £35,000 and (b) MyPay, had authorised refunds of c. £45,000 in corporation tax and c. £2,700 in PAYE. That authorisation had followed extensive enquiries and protracted civil involvement by HMRC in the affairs of the First, Third and Fifth Claimants’ businesses, in the course of which HMRC had requested documentation and been provided, voluntarily, with in excess of 30,000 documents. At no stage had HMRC deregistered the companies for VAT. None of that information, it is said, was disclosed to the courts which considered the applications for the warrants and approvals which the Claimants seek permission to challenge.

It is common ground that an application for a warrant under PACE is governed by, in combination, section 9 of, and paragraphs 2 and 12 of Schedule 1 to, PACE and that, for current purposes, there is a discrete requirement that one of the four conditions specified in paragraph 14 of Schedule 1 be satisfied.

In summary, the Claimants contend that:

The prospective further challenge to the orders of the Magistrates’ Court, the subject of Lang J’s order, is founded upon a contention that the timings of the seizures which took place under s. 303J of POCA on 8 July 2020 were such that the statutory rubric for authorising extended detention had not been satisfied. In particular, it is said that the relevant orders were made more than 48 hours after the seizures had taken place and that there is no proper evidential basis for the timings recorded by the Magistrates Court, having regard to those recorded, or, in the case of the Fifth Claimant, not recorded, on the property control sheets left at the relevant properties and events on the relevant date. In response to HMRC’s contention that an application could have been made to the Magistrates Court under section 303N of POCA, for release of the detained property, the Claimants submit that that provision is not apt to challenge jurisdiction. They further contend that the chronology of events and of HMRC’s disclosure, together with the Claimants’ need to prioritise compliance with the restraint orders, was such that it had not been possible to advance the proposed challenge at an earlier stage. In Mr Hardy’s submission, time for the making of the application had not started to run until the information on which it was founded had been disclosed to the Claimants. In any event, it is said, no great prejudice would be caused to HMRC were permission to amend and to seek judicial review out of time, to be granted; on the face of the available evidence, the matter should be heard and it is in the interests of the administration of justice ‘that the component parts of this judicial review challenge be heard by the same court’.

HMRC has filed Amended Summary Grounds of Resistance. It resists the grant of permission, on a number of bases, asserting that, albeit made within 3 months of the decisions challenged, the original claims have been made out of time (a submission which, realistically, Mr Bird, ‘trailed very lightly’ before me) and that, in any event, there has been no arguable breach of the duty of candour, or inadequacy in disclosure. Contrary to the Claimants’ submission, at no point had Abacus or MyPay, or the group business model, been given ‘a clean bill of health’, as the Claimants knew, or ought to have known. When making disclosure to the court, there had been nothing improper in HMRC’s making of ‘anticipatory arguments in rebuttal’; a normal approach, designed to assist the judge in determining whether there were at least reasonable grounds for concluding that the access conditions were satisfied, notwithstanding the existence of counter-arguments. The additional requirement imposed by paragraph 14 of Schedule 1 to PACE, together with relevant caselaw, had been drawn, expressly, to the court’s attention and evidence had been provided as to why (1) each of the Claimants would not provide material voluntarily and would be unlikely to comply with a production order; and (2) the condition imposed by paragraph 14(d) was satisfied. The Claimants had not exhibited the tax advice which they had received, nor had they suggested that they had waived privilege in it, or provided it to HMRC. There must be a question over whether the advice received had been correct and, in any event, applied to the model as implemented in practice. Those matters remained unknown. The judge had been entitled to conclude that, for HMRC to have given advance warning of an application for the special procedure material which was likely to be present in the home (as opposed to office) premises to be produced ‘may seriously prejudice the investigation’. Letters dated 8 July 2020 had been addressed to the First and Third Claimants but had given notice of applications for production orders against corporate entities which were under the control of third parties, who, in HMRC’s view, would not be likely to act in contempt of court by concealing or destroying documents. In any event, those letters had not been supplied to the Claimants until after the warrants had been executed and the respective premises secured. By that stage, there had been no reason not to make them aware that further material would be sought by less intrusive means, demonstrating a considered and proportionate approach by HMRC’s criminal investigators, based in the same case team. HMRC further submits that, in their application for permission to apply for judicial review, the Claimants ought to have drawn the court’s attention to the fact that, upon the application of the Crown Prosecution Service, restraint orders had been made, by Birmingham Crown Court (HHJ Henderson), on 7 July 2020, applications to set aside which had been pending at the time of their claims.

Finally, HMRC contends that the outcome for the Claimants would not have been substantially different had the conduct complained of not occurred — the warrants and approvals would still have been issued by the respective courts; if anything, the disclosure of further information would have reinforced each application, such that permission to claim judicial review ought to be refused in accordance with sections 31(3C) and (3D) of the Senior Courts Act 1981 (‘the SCA’).

To the broadened challenge in respect of which permission to amend was refused by Lang J, HMRC responds that time runs from the date of the decisions under challenge: R (Presvac Engineering Ltd and Another) v Secretary of State for Transport [1992] 4 Admin LR 121, CA. The application to amend was made on 11 November 2020, long after time for challenging those decisions had expired; relates to decisions which had been made at a hearing on notice to the Claimants, which they, nevertheless, failed to attend or contest; constitutes a(n unmeritorious) dispute of fact and identifies no error of law on the part of the judge; gave rise to an alternative remedy under section 303N of POCA, pursuant to which the Claimants could have applied to the Magistrates’ Court for the property to be released from detention; is made absent any attempt to address the necessary criteria for relief from sanction; and seeks relief which is academic because the orders under challenge expired in January 2021 and the seized items were released from detention under section 303L of POCA on 17 June and 5 July 2021 and returned to the relevant Claimants, there being no longer any listed assets proceedings in relation to those items. (It should be noted that, in the course of his oral submissions, Mr Bird rowed back from that final contention, as recorded later in this judgment [42].)

Mr Bird was right to trail his coat lightly in relation to limitation; the relevant claim form was filed within three months of the decisions which it seeks to challenge and, whilst the Claimants’ obligation was to file them promptly, there is nothing to suggest that they did not do so in all the circumstances. In essence, Mr Bird’s submission was that they could have been filed up to two weeks earlier, though no indication of the basis for selection of that particular period was given. There is nothing in this point, which does not afford a valid objection to the grant of permission.

The legislative framework relevant to special procedure material was set out by the Divisional Court in Hart [12] to [15], repeated below:

In the present case, as in Hart, HMRC relied upon the first set of access conditions and upon the further condition identified in paragraph 14(d).

As set out in Hart [16] to [19]:

In this case, the application for the warrants under PACE ran to 85 pages, setting out, in considerable detail, the offences being investigated, the bases for HMRC’s belief that they had been committed and by which natural and corporate persons, the material sought and that which it would serve to clarify or evidence. In section 2(c)(i), under the pro forma heading, ‘..what methods did you consider trying but rejected as bound to fail? Explain why you thought those methods were bound to fail’, a detailed account was given, relating to the First, Third, Fourth, Fifth and Sixth Claimants (amongst other persons and entities), reproduced below:

Section 7 of the application form, in the form included within the hearing bundle, is reproduced below:

Pages 74 to 85 of the application notice comprised a table setting out the various premises to be searched; the reasons for HMRC’s belief that material would be on those premises; and the reasons why the further necessary conditions would be met. The court’s attention was directed to that table by section 3(c) of the application form, in support of HMRC’s contention that service of an application under paragraph 4 of Schedule 1 to PACE might seriously prejudice the investigation. So far as material for present purposes, the table included the following text:

At paragraphs 10(e) and 11 of the skeleton argument lodged in support of the applications made, it was said:

I have been provided with the transcript of the hearing before HHJ Carr, from which it is clear (pages 6A – 7A, 1 July 2020) that he had in mind, from the outset, the applicable statutory requirements; Mr Hardy has not suggested otherwise. At pages 5E – 6G, 2 July 2020, the judge read into the record his decision, noting his conclusion that each of the applications met the requisite legal tests, for the reasons set out in the application, and that the issuing of the warrants was necessary, justified and proportionate.

Whilst the Claimants’ challenge by reference to paragraph 14 of Schedule 1 to PACE is free-standing, it is linked to its contention that HMRC did not comply with its duty of candour, which I shall address first.

In the circumstances set out above, I am satisfied that it is not reasonably arguable that HMRC did not discharge its duty of candour, as that duty is elucidated in Hart. Mr Bird is right to contend that nothing in that duty requires a prospective argument on the part of those to whom the application relates to be identified without answer and Mr Hardy could direct me to no authority to the contrary. As long as all relevant material is fairly presented, there is no reason why an applicant cannot indicate the reasons why, in his or her submission, that material affords no, or insufficient, answer to the application made. Properly, Mr Hardy did not suggest that such an approach could not be taken by counsel when advancing the application and, that being so, it is difficult to see why those same points could not be made in the application form itself, in order that the judge might be suitably assisted. In this case, it was made clear to the court that there had been earlier co-operation with HMRC and that professional advice had been sought. The arguments likely to be advanced by the relevant individuals in that connection were identified. As HMRC observed, the taking of advice would not avail its recipients if the arrangements to which the advice related had themselves been a sham. It is not suggested that the advice itself had been made available to HMRC. Similarly, prior apparent co-operation, however extensive, with HMRC’s civil enquiries would not avail those in question if subsequent analysis by HMRC had resulted in its belief that the materials provided had been fraudulent. Putting on the defence hat and asking what, if the applicant’s advocate were representing the respondents, s/he would be saying to the judge, does not require the applicant uncritically to accept the merit in that position, or to abstain from identifying the applicant’s response to it in order that the judge be in a position to make an informed, balanced and fair decision. As Mr Bird observed, in an inter partes application it is open to counsel for the applicant to reply to the points raised on behalf of the respondents; the duty of candour in an ex parte application reflects the need to draw to the court’s attention that which would be advanced were counsel for the respondents to be present, but it does not deprive the applicant of the right of reply which would ordinarily follow in such circumstances.

In a letter addressed to a partner of Smith and Williamson LLP, insolvency practitioners, dated 5 March 2019, to which HMRC’s application did not refer, HMRC had refused Abacus’ claim for input tax in respect of specified transactions, on the basis that those transactions had been connected with fraudulent evasion of VAT, to the actual or constructive knowledge of Abacus. Having set out the reasons therefor, HMRC had set out its conclusion that, ‘When considering the above factors it must have been the case that Abacus Outsource Ltd was a knowing participant in an overall VAT fraud and accordingly your right to deduct on those transactions has been denied.’ On 10 July 2019, HMRC formally had reflected the denial of input VAT by raising a charge to VAT in the sum of £5,173,358, plus interest in the sum of £106,549.91, to be paid by Abacus. In the event, the debt was written off because Abacus had been dissolved on 22 May 2019, and a decision was taken by HMRC not to seek its restoration to the register. Whether or not the letter of 5 March 2019 had been disclosed to the directors of Abacus at the relevant time, Mr Bird is right to submit that it is not indicative of a ‘clean bill of health’ having been issued by HMRC and that, had fuller information regarding the dealings between the Claimants and HMRC been provided in the application form, it would inevitably have incorporated reference to that letter and to HMRC’s related actions, which could only have served to fortify the application. Mr Hardy acknowledged that the letter ought to have formed part of the fuller information with which he contends the court ought to have been provided and that, on the face of it, it was adverse to the Claimants, but submitted that it would have fallen to be considered in the context of all other available material and that it was difficult to form a clear view as to what the judge might have done had he been faced with it; he might have concluded that it was incomprehensible. I regard that latter submission as fanciful.

It is no part of this court’s role to determine the substantive merit, if any, in HMRC’s stated beliefs regarding the Claimants or the business model with which they were concerned/from which they benefited and I do not do so. For current purposes, I am satisfied that nothing stated by HMRC in its application under PACE, or omitted from it, even arguably negated its duty of candour, or resulted in an application which was unfairly presented. Sufficient information had been provided to alert the court to prior voluntary co-operation with HMRC, the seeking/taking of advice from reputable professional advisors and the submissions which would be likely to flow from those matters on behalf of the now Claimants.

Against that background, the applicant had set out cogent grounds for her belief, on the basis of the investigation to that date and the evidence available to her, that there was no available lesser measure which would be likely to be effective in securing the relevant documents. Those grounds had included HMRC’s stated concern to identify precisely where material was located, as evidence of which individuals were in control of which aspects of the suspected fraud, and to avoid the risk that certain individuals would tip off others. She had adequately explained her reasons, focusing on the facts of the case, in terms which were reasonable and compelling and which had explored, at suitable length, why a less intrusive order appeared bound to fail.

The requirement imposed by paragraph 14(d) of Schedule 1 to PACE was distinct, but related to those considerations. As noted above, by section 3(c) of the application the court’s attention had been drawn to the table at the end of the form, on which HMRC relied for that purpose. From the material there provided, in the context of the information disclosed by section 7 of the application (both of which highlighted in HMRC’s skeleton argument), it was open to the judge to conclude that he was satisfied that the condition imposed by paragraph 14(d) was fulfilled, if necessary having sought any clarification which he deemed appropriate. HMRC’s letters of 8 July 2020, notifying the Claimants that orders for the production of further material by corporate entities would be sought, do not undermine that conclusion, for the reasons advanced in these proceedings by HMRC, summarised at paragraph 14 above. Judicial questioning of the nature set out at paragraph 42 of Hart, which Mr Hardy submitted to have been conspicuous by its absence in this case, was not required because the application form itself, to the truth of which the applicant had attested at the hearing, had set out the information which the questioning in that case had been designed to elicit. I have had regard to the conclusions reached by the Divisional Court on the facts of Hart, in particular at [57] to [59], as Mr Hardy has urged me to do. Ultimately, each case is fact-sensitive. In this case, in my judgment, the challenge based on paragraph 14(d) of Schedule 1 is not arguable with a realistic prospect of success.

In all the circumstances, I am satisfied that it is not arguable that the warrant should be set aside, including by reason of any material non-disclosure which might well have led the judge to issue a warrant which, had there been full candour, he would have refused to issue, or, put another way, which might reasonably have led him to refuse to issue the warrant. It follows that I refuse permission to apply for judicial review of the PACE warrant, whether on the basis of inadequate exploration of a less intrusive option, and/or of material non-disclosure. Further, in relation to the latter, I accept Mr Bird’s submission, having regard to HMRC’s correspondence with Smith and Williamson, in March 2019, and related actions, that it is highly likely that, had fuller information been provided to the court, the outcome for the Claimants would not have been substantially different. It follows that, in accordance with sections 31(3C) and 31(3D) of the SCA, I ‘must’ refuse to grant leave to apply for judicial review, on that basis.

Separate applications for search and seizure warrants were made before the same judge, at the same hearing, in relation to: (1) Jonathan Tipper; (2) James Foulsham and Danielle Foulsham; (3) Andrew Cleary and Nicola Cleary; (4) James Foulsham and Jonathan Tipper; and (5) Jonathan Tipper, for the dominant purpose of benefiting a confiscation investigation in Operation Salmon. The material in question could not be sought under PACE, hence the need for applications under section 352 of POCA. Each application contained the following question and answer, at section 3, followed by application-specific free text. The example below is taken from the first application made in relation to Jonathan Tipper:

Section 5 of each application was headed ‘Duty of Disclosure’ and contained the following pro forma text:

By section 352(1) of POCA, a judge is empowered, on the application of an appropriate officer, to issue a search and seizure warrant, if s/he is satisfied that either of the requirements for so doing is fulfilled. Those requirements are set out in section 352(6): (a) that a production order made in relation to material has not been complied with and there are reasonable grounds for believing that the material is on the premises specified in the application for the warrant, or (b) that section 353 is satisfied in relation to the warrant. For current purposes, it is unnecessary to set out the requirements of section 353 in full, though it should be noted that, amongst the conditions imposed by sub-sections 353(3) and (4) is one that there be reasonable grounds for believing that it would not be appropriate to make a production order, for any one or more of three specified reasons, including that the investigation might be seriously prejudiced unless an appropriate person were able to secure immediate access to the material. Those conditions are reflected in the terms of the pro forma application form, from which I have cited above.

On behalf of HMRC, it is, rightly, accepted that the duty of candour applies equally to an application under section 352 of POCA (see the principles set out in R (Chatwani & Others) v (1) NCA and (2) Birmingham Crown Court [2015] EWHC 1283 (Admin), DC [105] to [107]). The alleged failure by HMRC to have complied with that duty has as its basis the same alleged failure to have referred to all relevant material, or, at least, the qualification of that material by inappropriate commentary, which I have addressed above. It is not reasonably arguable, for essentially the same reasons. Here again, it is not arguable that the relevant warrants should be set aside by reason of a material non-disclosure which might well have led the judge to issue a warrant which, had there been full candour, he would have refused to issue, or, put another way, which might reasonably have led him to refuse to issue the warrants. It follows that I refuse permission to apply for judicial review on this ground, too, and, as above, in accordance with sections 31(3C) and 31(3D) of the SCA.

The relevant approvals were sought from the Magistrates’ Court, as required by (as the case may be) sections 47G and 303E of POCA. They related, respectively, to Messrs Tipper; Foulsham; and Cleary (under section 47G), and to Jonathan Tipper; James and Danielle Foulsham; and Andrew and Nicola Cleary (under section 303E). All applications made under 47G set out the timing and nature of the criminal investigation commenced by HMRC in January 2019, noting that it was ongoing, as was the exact quantification of criminal benefit; set out HMRC’s planned activities going forward, including searches under sections 9 of PACE and 352 of POCA and the making of an application for a restraint order; set out the bases upon which it was contended that the applicant had reasonable grounds for suspecting that realisable property might otherwise be made unavailable for satisfying any confiscation order, or that the value of the property might be diminished; listed the premises, persons and/or vehicles to be searched and detailed the currently known assets which it was intended to seize; and concluded with a section headed ‘Duty of Disclosure’ which, so far as material for present purposes, cross-referred to the application which had been made under PACE. In Mr Tipper’s case, and in that of James and Danielle Foulsham, that section also included the material relating to Smith and Williamson and the declared capital gain of £4 million, cited at paragraph 34 above. All applications made under section 303E set out the timing and nature of the criminal investigation commenced by HMRC in January 2019, noting that it was ongoing, as was the exact quantification of criminal benefit; listed the premises, persons and/or vehicles to be searched and detailed the currently known assets which it was intended to seize; identified the known ‘listed assets’ (as that term is defined by section 303B); and concluded with a section headed ‘Duty of Disclosure’ which cross-referred to the application which had been made under PACE. As before, in Mr Tipper’s case, and in connection with James Foulsham, reference was made to the engagement of Smith and Williamson and the declared capital gain of £4 million for the 2017/18 tax year.

For current purposes, it is not necessary to recite the legislative framework relating to the applications here under consideration; here again, the basis of the application for judicial review is confined to the applicant’s alleged failure to have complied with his duty of candour, in the respects previously identified and considered. For the reasons earlier set out, I am satisfied that, in connection with these applications, too, it is not reasonably arguable that the relevant approvals should be set aside by reason of a material non-disclosure which might well have led the district judge to approve that which, had there been full candour, he would have refused to approve, or, put another way, which might reasonably have led him to refuse approval. It follows that I refuse permission to apply for judicial review on this ground, too, and, here again, in accordance with sections 31(3C) and 31(3D) of the SCA.

The application to set aside/vary the order of Lang J

As Mr Hardy acknowledged in the course of the hearing, if the application for permission to apply for judicial review on the existing grounds were to be refused, as it has been, there could and would be no claim to amend. It follows that, by reason of my conclusions above, his application to vary the order of Lang J, so as to permit an amendment which would advance an additional challenge, to separate decisions, fails for that primary reason. For the sake of completeness, however, I address, below, its substantive merit.

By section 303K of POCA, detention of listed assets seized under section 303J may be authorised by a ‘senior officer’ for up to 48 hours, that is for up to 42 hours beyond an initial period of 6 hours. Under section 303L, the period for which all or part of that property may be detained may be extended by a first order of the Magistrates’ Court for up to 6 months, beginning with the date of the order. The order must be made before any previously authorised period of extension has expired: Revenue and Customs Commissioners v Mann [2021] EWHC 1182 (Admin). The first orders for further detention, made, unopposed, on 10 July 2020, related to property seized from, respectively, Jonathan Tipper and Andrew Cleary. Each pro forma order, extending the period of detention for a period of six months from that date, was completed by DJ MacMillan and recorded the following:

HMRC has since acknowledged: (1) by letter dated 9 December 2020, that there had been two seizures of different assets from the First Claimant, timed at 12:01 and 12:29 on 8 July 2020; and (2) by letter dated 18 December 2020, that the timing of the relevant seizure from Mr Cleary had, in fact, been 11:44 on 8 July. It is said that Senior Officer David Birtwistle had authorised an initial extension of the period of detention, at 13:51 (in re: the First Claimant) and at 14:20 (in re: the Fifth Claimant). If those matters are correctly stated, each order had been made within 48 hours of the relevant seizure and the district judge had had jurisdiction to make both orders. The prospective basis of challenge to his orders is that the contemporaneous evidence is said to indicate that the timings of each relevant seizure had been incorrectly stated and that, in each case, the relevant property had, at least arguably, been seized more than 48 hours in advance of the orders made. It is said that the ‘overwhelming inference’ from the available material is that the property in question had been seized much earlier, having regard to alleged discrepancies in the timings and the inherent lack of credibility in the timings advanced by HMRC.

Notwithstanding the fact that the property in question has since been released from detention, Mr Bird acknowledged in oral submissions that this challenge, were it to be permitted by amendment, would not be academic, as the declaratory relief which would be sought by the Claimants might have a bearing on any asserted entitlement to damages, in response to which the orders made by the district judge would be said by HMRC to have provided a lawful basis for detention (without prejudice to its contention that the statutory regime for compensation for which section 303W of POCA provides, where goods are seized but, ultimately, not forfeited, excludes a right to claim common law damages).

I accept Mr Hardy’s submission that section 303N of POCA did not afford an appropriate alternative mechanism through which to challenge the court’s jurisdiction to make the original orders. That section provides (with emphasis added):

I also accept Mr Hardy’s submission that the property control sheets record, or fail to record (as the case may be), timings which might reasonably be said to give rise to questions as to whether the relevant property had been detained for a period in excess of 48 hours at the time of the district judge’s orders (irrespective of whether time runs from a formal act of seizure or from any asserted ‘effective surrender’ of the property by Mr Cleary to Mr Donovan at an earlier time on 8 July 2020). I further accept that the seizure timing recorded in each of the judge’s orders did not constitute a finding of fact, so much as a record of the timing which he had been given by HMRC, albeit on an uncontested basis. Nevertheless, this had been a hearing on notice to the Claimants, who had been at liberty to attend and to question the officer as to the timing of the seizures and to make the associated submission that the district judge lacked jurisdiction to make the orders sought by HMRC. It is accepted by Mr Hardy that copies of the property control sheets had been left at the Claimants’ premises, albeit, it is said, in incomplete, or faintly legible form. Having elected not to do so at the hearing before the Magistrates’ Court, it is not appropriate for the Claimants to seek to raise an issue of fact for the first time by way of judicial review and no error of law by the judge is asserted on the basis of the material with which he had been provided. It is no answer for Mr Hardy to assert, as he does, that the Claimants had instructed solicitors to deal with the restraint orders which had been made separately and which had required disclosure of assets within one month, by comparison with which the hearing on 10 July had been considered to be a minor matter.

Furthermore, the decisions of 10 July 2020 were not identified as being the subject of intended challenge (by way of application to amend the claim forms) until 11 November 2020. That was four months after the decisions which it was proposed to challenge had been made, and there is no satisfactory explanation for why that challenge could not have been included within the original claim forms, filed in October 2020, or, in any event, raised within three months of the relevant decisions. Whilst Mr Hardy submits that it had not been until 7 January 2021 that full disclosure (including the officers’ notebooks) had been made available to the Claimants, that cannot explain the Claimant’s ability to make their original application to amend their claim forms to raise the relevant challenge two months earlier. In Presvac [133D to 134A], the Court of Appeal rejected a submission that a cause of action did not arise and, therefore, that time did not begin to run for the making of an application for judicial review, until the proposed applicant had sufficient evidence reasonably to mount an application which would have reasonable prospects of success, or for which he had sufficient ‘ammunition’ with which reliably to make an application. It held that each such submission amounted to the importation of qualifying words into the relevant provision (now to be found in CPR 54.5(1)) of which the actual wording did not admit, whilst acknowledging [134A-B] that the applicant’s subjective state of knowledge might be of relevance to whether there was good reason for the applicable limitation period to be extended. On the facts as summarised earlier in this and the preceding paragraph, in my judgment it cannot be said that the Claimants lacked sufficient evidence/ammunition to mount an application within time. I note that the original claim forms, filed in October 2020, were accompanied by a document entitled ‘Preliminary Grounds’ and that, in the ‘Finalised Grounds’ of challenge, dated 25 November 2020, a challenge concerning property seized under section 47 of POCA had been included, expressly, on a precautionary basis:

In my judgment, this application marks an attempt to achieve by amendment a challenge to two decisions of the Magistrates’ Court which were not the subject of the original claim forms; which would have been out of time were it to have been the subject of a separate claim; and where no good reason for extending the applicable limitation period exists.

Furthermore, for the reasons set out at paragraph 44 above, the broadened challenge is not arguable with a realistic prospect of success, such that permission would not be granted to advance it, and I would have refused the amendment on that, additional basis, had I granted permission to advance the original bases of challenge to the decisions of 2 and 6 July 2020.

Summary of conclusions

For the reasons set out in this judgment: