The claimant sought judicial review of the lawfulness of search warrants given to the Commissioners and executed at their various offices. The Revenue had suspect the dishonest implementation of a tax avoidance scheme. The claimants said that there were no sufficient ground for the request for and issue of the warrants. The investigation had been ongoing, and the claimants had co-operated and supplied documents as requested. The claimants followed a practice of clients signing a draft document, which was altered with their consent before being dated. The claimants said this was unobjectionable; the Revenue said this impugned their validity.
Held: The decision to issue the warrants was unlawful. There were no grounds to suspect dishonesty the decision gave too much weight to other elements, and there was material misrepresentation or non-disclosure. The Court needs to exercise a broad discretion which recognises the importance of supervising this highly intrusive jurisdiction but also has regard to substantial justice and the public interest: ‘this seems to . . have been something of a borderline case for the deployment of the nuclear weapon of an application under s. 20C. If HMRC were to persuade the Court that this was a proper case for the issue of search warrants (covering not only business premises but the private homes of over twenty individuals) on an ex parte basis, it was incumbent on them to put their case with scrupulous accuracy and in such a way that the Judge was able to make a fair assessment of the grounds for suspicion being put forward. That did not occur.’
The defendant had no evidence that the alterations to the drafts had been authorised by the clients. There is no authority to justify the transfer of a signature page from one document to another different one, and ‘The parties in the present case must be taken to have regarded signature as an essential element in the effectiveness of the documents: that is to be inferred from their form. In such a case I believe that the common understanding is that the document to be signed exists as a discrete physical entity (whether in a single version or in a series of counterparts) at the moment of signing. The significance of this is not entirely talismanic (though it would not affect my view even if it were): the requirement that a party sign an actual existing authoritative version of the contractual document gives some, albeit not total, protection against fraud or mistake.’ The documents here were deeds and the changes made them ineffective under the 1989 Act. There are ways of using multiple parts of documents executed separately to avoid the diffculties suggested. There were material deficencies in the implementation of the schemes. The judge had erred in accepting the inference of dishonesty, but that was only one limb of the application made.
Underhill J
[2008] EWHC 2721 (Admin), [2009] STC 743, [2009] BTC 3, [2008] STI 2670, [2009] Lloyd’s Rep FC 135
Bailii
Taxes Management Act 1970, Law of Property (Miscellaneous Provisions) Act 1989 1(3)
England and Wales
Citing:
Cited – Regina v Southwark Crown Court and Another, Ex Parte Sorsky and Defries QBD 21-Jul-1995
A search warrant should be issued on behalf of a foreign court only after a fullest consideration of the law, but it could be used to allow removal of material as evidence of foreign offences. The court heard an application to a Crown Court judge . .
Mentioned – Energy Financing Team Ltd and others v The Director of the Serious Fraud Office, Bow Street Magistrates Court Admn 22-Jul-2005
The claimants sought to set aside warrants and executions under them to provide assistance to a foreign court investigating alleged unlawful assistance to companies in Bosnia Herzegovina.
Held: The issue of such a warrant was a serious step. . .
Cited – United Dominions Trust Ltd v Western 1976
A party signing a document containing blanks must envisage that they will be completed, and he will be bound so long as the words inserted fell within the scope of what he could reasonably have expected. . .
Cited – Raiffeisen Zentralbank Osterreich A G v Crossseas Shipping Ltd and Others CA 2000
The claimant creditor bank made changes to the guarantee executed by the guarantee without its approval and after it had been signed and duly executed, by inserting the details of a service agent.
Held: The insertion did not work to alter the . .
Cited – Regina v Inland Revenue Commissioners ex parte Rossminster Ltd HL 13-Dec-1979
The House considered the power of an officer of the Board of Inland Revenue to seize and remove materials found on premises which a warrant obtained on application to the Common Serjeant authorised him to enter and search; but where the source of . .
Cited – Energy Financing Team Ltd and others v The Director of the Serious Fraud Office, Bow Street Magistrates Court Admn 22-Jul-2005
The claimants sought to set aside warrants and executions under them to provide assistance to a foreign court investigating alleged unlawful assistance to companies in Bosnia Herzegovina.
Held: The issue of such a warrant was a serious step. . .
Cited – O’Hara v Chief Constable of the Royal Ulster Constabulary HL 21-Nov-1996
The plaintiff had been arrested on the basis of the 1984 Act. The officer had no particular knowledge of the plaintiff’s involvement, relying on a briefing which led to the arrest.
Held: A reasonable suspicion upon which an arrest was founded . .
Cited – Regina v Lewes Crown Court ex parte Hill 1991
Bingham LJ said: ‘The Police and Criminal Evidence Act governs a field in which there are two very obvious public interests. There is, first of all, a public interest in the effective investigation and prosecution of crime. Secondly, there is a . .
Cited – J v Crown Prosecution Service CA 24-Jun-2005
The defendant had been made subject to a criminal restraint order so as to preserve his assets pending the outcome of criminal proceedings. He complained that the order affected property which was not his.
Held: Such an order could cover . .
Cited – Serious Fraud Office v A CACD 2-Aug-2007
The Director said the Judge had been wrong to discharge on grounds of want of disclosure a restraint order previously made ex parte under the Proceeds of Crime Act at the request of a foreign investigator.
‘The proper approach is to consider . .
Cited by:
See Also – Revenue and Customs v Mercury Tax Group Ltd SCIT 17-Feb-2009
SCIT NOTIFICATION OF TAX AVOIDANCE SCHEMES – penalty -whether scheme notifiable – no. . .
Cited – Garguilo v Gershinson and Brooks Both Acting As Joint Fixed Charge Receivers of Moore In Respect of 140 High Street, Godalming (Deeds) LRA 6-Jan-2012
LRA Whether lease validly executed – section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 – R v Her Majesty’s Commissoners of Revenue and Customs [2008] EWHC 2721 – Shah v Shah [2001] EWCA 138 . .
Cited – Mills and Another, Regina (on The Application of) v Sussex Police and Another Admn 25-Jul-2014
The claimants faced criminal charges involving allegations of fraud and corruption. They now challenged by judicial review a search and seizure warrant saying that it was unlawful. A restraint order had been made against them and they had complied . .
Lists of cited by and citing cases may be incomplete.
Taxes Management
Updated: 11 November 2021; Ref: scu.343955