England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		11/12/2017

Mrs Justice Carr :

Introduction

1. This is a challenge by the Claimants to the lawfulness of the decision on 7^th June 2017 by a Justice of the Peace ("the Justice") sitting at the Second Defendant, Birmingham Magistrates' Court ("the BMC") to grant 3 search warrants ("the warrants") under s. 8 of the Police and Criminal Evidence Act 1984 ("PACE") in relation to premises owned or occupied by them. The warrants were issued on the application of an officer of Her Majesty's Revenue & Customs ("HMRC"). The Claimants also challenge the lawfulness of the subsequent execution of the warrants by HMRC on 15^th June 2017.
2. The warrants authorised the entry and search of the following premises:

a) Crown House, Home Gardens, Dartford, Kent DA1 1DZ ("the Crown House premises"). The Crown House Premises are occupied by the First Claimant, Superior Import/Export Ltd ("Superior"). The sole director of Superior is Mr Harpreet Singh Johal ("Mr Harpreet Johal");

b) The Priory, Swanley Village Road, Swanley, Kent BR8 7NU ("the Priory premises"). The Priory premises are owned by the Second Claimant, Mr Balbir Singh Johal ("Mr Balbir Johal"), who is the father of Mr Harpreet Johal;

c) 98 Rochester Road, Gravesend, Kent DA12 2 HZ ("the Rochester Road premises"). The Rochester Road premises are owned by the Third Claimant, Mrs Gurdev Kaur Johal ("Mrs Gurdev Johal"), who is the grandmother of Mr Harpreet Johal.

3. HMRC's application for the warrants was made against the background of an agreement entered into between the United Kingdom, the Crown Prosecution Service ("the CPS") and HMRC on the one hand, and the Examining Magistrate in the Tribunal of Lille on the other, for the purpose of establishing a joint investigation team between France and the United Kingdom in accordance with Article 13 of the Convention of 29^th May 2000 relating to Mutual Assistance in Criminal Matters between the member states of the European Union ("the Convention") and/or the Framework Decision of the Council of 13^th June 2001 relating to Joint Investigation Teams ("the JIT agreement"). The JIT agreement was disclosed late in these proceedings (on 9^th November 2017) pursuant to an order of McGowan J on 2^nd November 2017, when the CPS was also joined as an Interested Party to cover the possibility of a public interest immunity application. No such applicatio in fact been pursued and the CPS is by consent now removed from the proceedings.
4. Subsequent to the issue of these proceedings on 7^th July 2017, on 11^th July 2017 Mr Harpreet Johal was arrested (in England) under a European Arrest Warrant ("EAW") issued in the Lille courts on 26^th June 2017 and based on a French domestic warrant dated 21^st June 2017. Extradition proceedings against Mr Harpreet Johal are currently part-heard in Westminster Magistrates' Court and due to resume on 13^th December 2017. This claim has been heard on an expedited basis.

Factual summary

5. HMRC has been undertaking a criminal investigation called "Operation Bowshot" concerning potential large scale excise duty evasion and the subsequent laundering of the criminal funds generated, undertaken by an organised crime group in the West Midlands and London areas. The laundered monies were suspected to be derived from the sale of illicit alcohol imported from the continent and other organised crime groups across the UK. The total tax loss to HMRC since April 2010 was estimated at over £440 million.
6. The JIT agreement was directed at setting up a joint investigation team in charge of the French investigation into a fraudulent organisation in France specialising in alcoholic beverages and the UK investigation in Operation Bowshot. It recorded that links between the French and British investigations had been established and expanded to link Mr Harpreet Johal to the financing of "illicit undutied loads of alcohol", with Mr Harpreet Johal being suspected of contacting a French national suspected to have control of a bonded warehouse from which "frequent loads of undutied alcohol" were sent. The purpose of the joint investigation team was to facilitate the investigations in France and the UK. The term of the JIT agreement was one year from the date of signature, extendable by written consent of the parties.
7. The JIT contained a series of provisions for mutual co-operation between the French and English authorities, including the following:

"2.2 Purpose of the joint investigation team:

…

In particular, the JIT aims to:

- gather evidence and facilitate the exchange of information between investigative teams….;

- facilitate the involvement of investigators from one Member State in the investigations being pursued by the other;…

- identify the instruments and proceeds of crime;

- use the evidence gathered for the purposes of prosecution, and the restraint and confiscation of the proceeds of crime in France and the United Kingdom."

And:

"9. EVIDENCE

…The JIT leaders shall agree the processes and procedures to be followed regarding the sharing between them of evidence obtained pursuant to the JIT in each Member State…."

And:

"13. 2 Recording of and use of information obtained during the JIT

...Without prejudice to Article 13 and subject to the law of the Member State in which material is obtained, the JIT members and prosecution authorities may use as evidence in criminal proceedings all information exchanged in the framework of the JIT, unless the providing party imposes conditions or restrictions on the use of specified material….

13.3 Consultation with regard to legal proceedings

The Parties to the agreement designated…will ensure they consult each other, in agreement with the appropriate authorities of their State, on the timing and method of intervention by the investigators and on the best manner in which to undertake eventual legal proceedings."

8. The JIT also provided:

"10. GENERAL CONDITIONS OF THE AGREEMENT

In general, the conditions laid down in Article 13 of the Convention… shall apply as implemented by each Member State in which the JIT operates."

The application

9. In the morning of 7^th June 2017 Ms Helen Wilkes of the HMRC ("Ms Wilkes") presented to the BMC an application for 21 warrants to enter and search various properties and vehicles, including for the warrants under present scrutiny ("the application").
10. The application was on the standard form for an application under s.8 of PACE (as stated in the heading of the document itself). It was signed by Ms Wilkes and the senior reviewing officer, Mr David Homans ("Mr Homans") at HMRC in the late afternoon of 6^th June 2017.
11. It indicated at the outset that Ms Wilkes was not a constable but another person authorised to apply for a search warrant. (Clarification of that authority was given later in box 1b): Ms Wilkes was a duly authorised officer of HMRC pursuant to s. 114(2)(a) of PACE and the PACE (Application to Revenue and Customs) Order SI 2015/1783 as amended. The application had been authorised by a senior officer of HMRC with grade equivalent to the rank of Superintendent.) Ms Wilkes also indicated that she expected any warrant to be executed on 15^th June 2017.
12. In Box 1 Ms Wilkes identified the offences under investigation as:

"- Being knowingly concerned in the fraudulent evasion of Excise Duty contrary to section 170(2) of the Customs and Excise Management Act 1979

- Conspiracy to commit fraud contrary to section 1 of the Criminal Law Act 1977

- Money laundering offences contrary to sections 327, 328 and 329 of the Proceeds of Crime Act 2002."

13. In Box 2, Ms Wilkes set out a lengthy explanation of the investigation with particulars of the case against 8 named individuals, including Mr Harpreet Johal. After a brief introductory overview of Operation Bowshot Ms Wilkes identified the JIT agreement as follows:

"3) The investigation is being carried out in conjunction with an ongoing French Judicial Customs (SNDJ) operation, codenamed 'Operation Eurostock' and a Joint Investigation Team (JIT) agreement was created at Eurojust on 21/07/16. This has allowed the two departments to work in tandem and to freely exchange information in relation to the fraud, in order to substantiate the links between the criminal organisations involved and to use any evidence gathered, for the purposes of prosecution and the restraint and confiscation of the proceeds of crime in both France and the UK."

14. The case against Mr Harpreet Johal was particularised in paragraphs 37 to 45 of Box 2. At paragraph 47 Ms Wilkes stated:

"47) The evidence obtained so far during this investigation as explained above strongly suggests that the individuals:..SALH….PAUL…SINGH…JOHAL…DHANDA….CONLON…MOHAMMAD….DARBAR, each played a pivotal role in this suspected complex fraud and together they have defrauded [HMRC] of approximately £441,584,000 between the period 01/04/10 to date."

Mr Harpreet Johal's individual role was then described in the following terms:

"JOHAL is suspected of being in overall control of the fraud in the London area and has connections with other individuals suspected to have an involvement in alcohol fraud. He also has regular liaison with the French suspects, concerning the importations for his companies and displays a vast amount of wealth and assets, suspected to have been purchased through the proceeds of this crime."

15. In Box 3 Ms Wilkes answered the following questions:

a) What she was looking for. She stated that there were in excess of 200 known companies and individuals concerned in this suspected fraud, referred to an attached schedule, which covered the period 1^st April 2010 to date and "all business and personal material deemed relevant to the investigation [was] to be seized";

b) Why she believed that the material for which she wanted to search was likely to be of substantial value to the investigation. She stated that, if identified, the items would assist in proving the suspects' knowledge and involvement. It was unlikely that the items could be obtained in any other way. The material would also assist HMRC in freezing assets and bank accounts connected to the suspects;

c) Why she believed that the material for which she wanted to search was likely to be relevant evidence. She referred to the high likelihood of arrangements for importation being made by email or telephone, and the existence of fraudulent duplicate paperwork. Business records would provide details of any business activity, declared and undeclared. Banking material would allow further enquiries and facilitate the obtaining of production order material.

16. The entry in Box 3d) read as follows:

"(d) Is there any reason to think that the material for which you want to search consists of or includes items subject to legal privilege, excluded material or special procedure material?

No, there is no intention to search for or seize any such material."

17. In Box 4 Ms Wilkes indicated that she was applying for warrants in respect of more than one set of premises, completing the form setting out each of the premises in question, each with the address, reasons for believing that material was on those premises and for believing that the access conditions (in s. 8(1)e) of PACE) were met. The Crown House, Priory and Rochester Road premises were each included in this schedule.
18. In Box 7 Ms Wilkes identified those persons whom she wanted to take part in the search, including French officers.
19. In Box 8 Ms Wilkes addressed the duty of disclosure as follows:

"8) Duty of disclosure…

Is there anything of which you are aware that might reasonably be considered capable of undermining any of the grounds of this application, or which for some other reason might affect the court's decision? Include anything that reasonably might call into question the credibility of information you have received, and explain why you have decided that that information still can be relied upon.

There is nothing at this stage in the investigation that I am aware of that may undermine the case or affect the court's decision on granting this application. It is likely that there will be some legitimate business records and/or cash derived from genuine transactions at the business premises connected to the OCG, however it is necessary to seize all material in order to ascertain which is legitimate and which is fraudulent."

The hearing

20. The application was then heard before the Justice, with Ms Wilkes giving evidence on oath. The following questions were asked and answered in summary as follows:

a) Were the UK suspects aware of the operation as a result of the French intervention in January 2017? (Answer: still business as usual since the French arrests. HMRC not aware if the targets were aware. The targets were still believed to be in the country.)

b) Why was HMRC waiting a week from authorisation of the warrants to carry out the intervention? (Answer: explanation given);

c) What type of properties was HMRC intending to search and where there any local sensitivities in the areas concerned? (Answer: mixture of residential and business. Children might/would be present. Women officers would be attending.)

d) Where were the vehicles likely to be located? (Answer: the vehicles should be at the premises.)

e) When did the investigation start? (Answer: the investigation was taken on in June 2016.)

The warrants

21. The Justice then proceeded to grant the warrants under s. 8 of PACE, valid for 3 months from the date of issue. He recorded his reason for doing so in writing as : "Amount of evidence provided. Warrants are necessary and proportionate given the scale of the operation."
22. The warrants relevant for present purposes were all in identical terms and all related to Mr Harpreet Johal. It does not appear that there has been any challenge to the other 18 warrants issued in relation to other suspects.
23. Each warrant authorised HMRC officers to enter no more than once the premises specified:

"…to search for: All material deemed relevant to the suspected fraud and investigation concerning the companies and individuals listed in the attached document, for the period 01/04/10 to present, which may include: electronic media including laptops, computers, tablets, memory cards, dongles, external hard drives, mobile phones, other communication devices, printers, fax machines, Satellite Navigation Systems, CCTV, discs, Imac's (sic), business records including purchase invoices, sales invoices, copies of accounts, diaries, calendars, CMR's (sic), delivery notes, evidence pertaining to money laundering including cash, foreign banking documents, copy cheques, cheque book stubs, paying in books, bank statements, merchant acquirer data, account opening documentation, documents relating to savings accounts, valuable jewellery and watches, high value items, documentation relating to the purchase or sale of property or assets in the UK and abroad and travel documents including UK and foreign passports or identity cards, non UK duty paid Excise goods."

Execution and arrest

24. The warrants were executed, as presaged, on 15^th June 2017. Mr Harpreet Johal's solicitors were provided with the warrants and schedule of companies and individuals identified at the Priory premises by Ms Jennifer Davis ("Ms Davis"). Whilst HMRC had hoped to arrest Mr Harpreet Johal at the time of the searches, he was in fact abroad at the time.
25. However, as indicated above, on 11^th July 2017 Mr Harpreet Johal was arrested in England under a EAW. The fraudulent conduct relied on for the EAW reflected the conduct of Mr Harpreet Johal also forming the basis for the issue of the warrants. HMRC was not involved in and was unaware at the time of the application for and issue of the EAW by the French judicial authorities.
26. Further, as indicated above, extradition proceedings against Mr Harpreet Johal are currently underway. They are supported by an opinion of Mr Simon Rowlinson dated 18^th September 2017 to the effect that France is the most appropriate forum for trial.

Grounds of challenge and relief claimed

27. Seven grounds of challenge are raised, broken down as follows:

a) Ground 1: it was unlawful and irrational for the BMC to issue warrants when HMRC's express purpose was to exceed the powers conferred by those warrants;

b) Ground 2: the warrants failed to embody the safeguards set out in s. 15(6)(b) of PACE. As will be seen below, this ground has expanded to cover a more general complaint that the warrants did not satisfy the pre-condition requirements of s. 8 of PACE;

c) Ground 3: there were no reasonable grounds for belief, as required by s. 8(1)(d) of PACE that the material sought did not consist of or include items subject to legal privilege or special procedure material;

d) Ground 4: the Justice failed to consider whether the other statutory preconditions for the issue of the warrants were satisfied;

e) Ground 5: the warrants should be set aside by reason of a breach of the duty to give full and frank disclosure;

f) Ground 6: there was excessive searching contrary to s. 16(8) of PACE, such that the entry into all 3 premises was unlawful by virtue of s. 15(1) of PACE;

g) Ground 7: the application for the warrants should have been made under s. 13 of the Crime International Co-operation Act 2003 ("the 2003 Act"). This ground too has been developed further into a complaint as to the transfer, if any, of material obtained by HMRC under the warrants to the French authorities.

28. The Claimants seek orders quashing the warrants, declaring that the entries into, searches at and seizures from the properties were unlawful. They seek the return of all property seized, together with any copies taken and an order that no use be made of anything seized or knowledge obtained as a result.
29. Further, the Claimants submit that it is reasonable to assume that the EAW was issued in the light of documents or knowledge obtained as a result of the execution of the warrants. If the warrants are quashed, or the entries, searches and seizures declared unlawful, the Claimants seek the return of all documents seized, all copies taken and an order that no use be made of any documents obtained or knowledge gained. It is also suggested that the Court could make an order that HMRC request the return of any copies supplied to the French authorities under s. 19 of the 2003 Act or, in the event of extradition being ordered, for the extraditing or High Court on appeal to request an assurance from the French authorities not to use any such material or knowledge.

Evidence on the claim

30. There have been numerous witness statements served in support of the claim as follows:

a) Mr Harpreet Johal. He describes his personal and career background. He denies any wrongdoing and suggests that HMRC misunderstands in particular how the bonded system works. He states that he was shocked at HMRC's searches of premises with dogs where his unwell parents resided and also the Rochester Road premises where his elderly grandmother resides and of which he is not the registered owner. He states that of the names listed in HMRC's schedule, 98% are not known to him. He states his belief that HMRC's actions were "wholly unlawful";

b) Mr Balbir Johal. He describes the search of the Priory premises on 15^th June 2017 from his perspective and speaks of his ill health and that of his wife. His grandson was also present in the premises at the time. He fails to see why HMRC attended at his property. It seemed from their actions that they were intent on searching every part of his property and went through everything "without just cause". He states that the whole experience has been very bad for him and his whole family;

c) Mrs Gurdev Johal. She describes the search of the Rochester Road premises from her perspective. She says that she felt humiliated and upset and the whole incident has left her shocked and scared;

d) Ms Samantha Currey ("Ms Currey"). She is Mr Harpreet Johal's personal assistant. She attended the search of the Crown House premises. She says that she was working at home at the time but attended the premises when alerted to HMRC's arrival. She says that she told the HMRC officers that they would regularly provide paperwork to HMRC and so she did not understand the purpose of the search. She describes how Superior's solicitor, Mr Sanjay Panesar ("Mr Panesar"), arrived and, after discussion with her, raised the issue of legally privileged and special procedure material with the HMRC officers. She states that the officers looked at personal material on a computer and took other documentation including private and confidential material relating to other business which have nothing to do with Mr Harpreet Johal. She adds that there has been "constant monitoring" of Superior;

e) Mr Panesar who, as indicated above, is Superior's solicitor. He attended first the Priory premises at the time of HMRC's search. He states that he explained to HMRC officers that he thought that the search warrant was too wide and advised that the occupants would not understand the documents because of language differences. He also attended the Crown House premises. He asserted to HMRC officers that there would be special procedure and legally privileged material on the premises. He did not assert that all material would be legally privileged, but only that everything would contain some legally privileged material. The officers stopped the search, took legal advice and then continued. He states that he also raised the question of notices under s. 50 of the Criminal Justice and Police Act 2001 ("the 2001 Act"). No such notices were ever served;

f) Mr Christopher Mann. He is a tax advisor to Superior. He states that Superior has provided records to HMRC on a monthly basis. He has also attended a meeting with HMRC on behalf of Superior alongside Mr Harpreet Johal and Ms Currey on 10^th May 2017 when no concerns were raised by HMRC.

31. Witness statements in defence have been served from the following for HMRC:

a) Ms Wilkes. She explains the background to the application for warrants and their drafting and issue. She explains that April 2010 was chosen as the start date because that is the month when one of the principal subjects of the investigation was released from prison. She sets out the alleged importation into the UK of alcohol upon which duty had not been paid to HMRC. She sets out particulars of the French investigation, including that suspects had been arrested and admitted fraud but refused to comment on the alleged involvement of UK suspects. She refers to the HMRC investigation with French Judicial Customs under the JIT. She states that the information and warrants were completed by her and checked by case manager Mr Christopher Coleman ("Mr Coleman"), senior case officer Matthew Davies ("Mr Davies") and an independent senior officer who conducted a quality assurance check, namely Mr Homans. She explains that she referred to the existence of legitimate material in box 8 of the application because it was reasonable to expect such material to exist and that it would assist in proving knowledge of the correct accounting and retention procedures to be followed. She explains why she did not consider there to be any special procedure material on the premises as the items being searched for were not business confidential material but material such as invoices and contact details. She sets out the checks undertaken on the addresses prior to the searches;

b) Mr Davies. He confirms his review of the warrants drafted by Ms Wilkes. He explains that, given the nature of Superior's business, he did not envisage any special procedure or legally privileged material to be present at any of the premises that HMRC intended to search. He asked the independent authorising officer, Mr Homans, to review the application;

c) Mr Coleman. He also provides evidence of checking the warrants. He listed the French officers to be present during search. He was in operational control of searches;

d) Ms Nicola Gape. She explains how she composed a briefing prior to the searches, with a power point presentation;

e) Mr James Lowe. He conducted the operational briefing on 14^th June 2017, having assisted Ms Gape in its preparation. It was delivered to approximately 70 officers including officers of the French Service Nationale de Douane Judiciaire;

f) Ms Jennifer Davis. She was the officer in charge of the search at the Priory premises and explains interaction with family members and gives evidence as to the use of dogs;

g) Ms Claire Herold. She provides evidence of her interaction with Mrs Gurdev Kaur and other family members during the search of the Rochester Road premises;

h) Mr Mark Norton. He was the Gold Officer during search and explains how he dealt with legal professional privilege issues. He was advised that the assertion that all material was subject to legal privilege could not be correct. (As set out above, Mr Panesar denies ever making such a broad assertion, only that all material would contain some privileged material);

i) Mr Stephen Thompson. He was the Bronze Officer in charge of the search of the Crown House premises. He explains how he dealt with Mr Panesar's objections relating to legal professional privilege and how the search was carried out.

Relevant legislation

PACE

32. It is necessary to set out below the material parts of PACE for present purposes. S. 8 provides materially as follows :

"8 Power of justice of the peace to authorise entry and search of premises

(1) If on an application made by a constable a justice of the peace is satisfied that there are reasonable grounds for believing—

(a) that an indictable offence has been committed; and

(b) that there is material on premises mentioned in subsection (1A) below which is likely to be of substantial value (whether by itself or together with other material) to the investigation of the offence; and

(c) that the material is likely to be relevant evidence; and

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

(e) that any of the conditions specified in subsection (3) below applies, he may issue a warrant authorising a constable to enter and search the premises in relation to each set of premises specified in the application…..

(2) A constable may seize and retain anything for which a search has been authorised under subsection (1) above…

(4) In this Act "relevant evidence", in relation to an offence, means anything that would be admissible in evidence at a trial for the offence."

33. S.15(1) provides:

"15 Search warrants-safeguards

(1) This section and section 16 below have effect in relation to the issue to constables under any enactment…. of warrants to enter and search premises and an entry on or search of premises is unlawful unless it complies with this section and section 16 below."

34. S. 15(6) provides:

"A warrant-

(a)…

(b) shall identify, as far as practicable, the articles or persons to be sought."

35. S. 16(8) provides:

"A search under a warrant may only be a search to the extent required for which the warrant was issued."

The 2001 Act

36. S. 50 of the 2001 Act provides:

"50 Additional powers of seizure from premises

(1) Where—

(a) a person who is lawfully on any premises finds anything on those premises that he has reasonable grounds for believing may be or may contain something for which he is authorised to search on those premises,

(b) a power of seizure to which this section applies or the power conferred by subsection (2) would entitle him, if he found it, to seize whatever it is that he has grounds for believing that thing to be or to contain, and

(c) in all the circumstances, it is not reasonably practicable for it to be determined, on those premises—

(i) whether what he has found is something that he is entitled to seize, or

(ii) the extent to which what he has found contains something that he is entitled to seize,that person's powers of seizure shall include power under this section to seize so much of what he has found as it is necessary to remove from the premises to enable that to be determined."

Ground 1: it was unlawful and irrational for the BMC to issue warrants when HMRC's express purpose was to exceed the powers conferred by those warrants

37. This first ground focuses on section (8) of the application which, as set out above and in connection with the "duty of disclosure", states:

"It is likely that there will be some legitimate business records and/or cash derived from genuine transactions at the business premises connected to the OCG, however it is necessary to seize all material in order to ascertain which is legitimate and which is fraudulent."

38. The Claimants submit that nothing in PACE permits material to be seized on this basis. It indicates that HMRC considered that it could seize all documents from a business in order to sift later. This is forbidden: see R v Chesterfield Justices, ex parte Bramley [2000] QB 57. Whilst s.50 of the 2001 Act permits, in appropriate circumstances, containers to be seized so that the contents can be sifted later, this intention goes far beyond that contemplated use of powers. Put shortly, it is said that the Justice should not have issued warrants knowing that they were to be used to exceed the extent of his authority as set out on the warrants, which confined the area of searches to things "deemed relevant to the suspected fraud and investigation".
39. It is common ground that an officer is only empowered to seize material falling within the scope of the warrant (or within s. 19 of PACE) and not authorised to seize material for the purpose of subsequent sifting. The dispute is thus not one of legal principle but rather of construction.
40. I do not consider that, fairly read, the statement in box 8 indicated any intention on the part of HMRC, express or otherwise, to exceed the powers conferred by the scope of the warrants. Importantly, the context of the statement was the discharge of HMRC's duty of full and frank disclosure. The reference to seizing material was not a reference to an intention to seize any material, irrespective of relevance. Rather HMRC intended to seize by reference to relevance and in accordance with the warrants. HMRC was (quite properly) highlighting the likely existence of legitimate business records and cash from legitimate business sources. (Such records could of course be relevant in their own right as evidence of an understanding on the part of Superior and Mr Harpreet Johal of due process.) In short, I find no merit in ground 1.
41. For reasons which will become obvious, I defer my consideration of ground 2 to the end of this judgment and move directly now to ground 3.

Ground 3: there were no reasonable grounds for believing, as required by s. 8(1)(d) of PACE, that the material sought did not consist of or include items subject to legal privilege or special procedure material

42. The Claimants submit that it was obvious that computers and documents of the kind specified were likely to contain items subject to legal privilege (as defined in s. 10 of PACE) or special procedure material (as defined in s. 14 of PACE, in the form of business-confidential material). They suggest that at page 10 of the written application, HMRC deliberately evaded the question in its answer at paragraph 3(3):

"(d) Is there any reason to think that the material for which you want to search consists of or includes items subject to legal privilege, excluded material or special procedure material?

No, there is no intention to search for or seize any such material."

43. The Claimants submit that the test is not whether officers intend to search for such material, but whether the material to be seized (in this case including any type of computer) might include such material. This is said to be a serious breach when (a) the principal purpose of the warrants, and of the written information supporting them, was to seize computers likely to include the prohibited material; and (b) the same written information was used to support applications for 21 warrants, many of them applying to business premises.
44. There is in my judgment no proper basis for the imputation of bad faith on the part of HMRC or any attempt deliberately to evade. The question is unclearly phrased and has been unfortunately answered. Fairly read, however, what HMRC was saying was that there was no reason to think that the material it wanted to search for or seize would consist of or include special procedure or legally privileged material. Put another way, there were reasonable grounds for believing that the material to be searched for did not consist of or include items subject to legal privilege or special procedure material. Moreover, it had no intention to search for or seize any such material. Thus, after the answer to the question in the negative, HMRC was stating that if it encountered any such material it did not intend to search or take it. The legitimacy of such an approach finds strong support in the comments of Davis LJ in R (Sharer) v City of London Magistrates' Court and HMRC (supra) (in particular at [49] to [52]). In circumstances where Superior was an alcohol trader – and not, for example, a firm of lawyers, accountants or likely to be dealing with trade secrets – I find nothing substantive to criticise in HMRC's position on this question. To the extent that there were, for example, confidential employees' records on site, that was not relevant material for which the HMRC wanted to search. To the extent that such material may have been contained on computers, that does not materially alter the position (see in particular [54] of R (Sharer) v City of London Magistrates' Court and HMRC (supra)).
45. For these reasons, I dismiss Ground 3.

Ground 4: the Justice failed to consider whether the other statutory preconditions for the issue of the warrants were satisfied

46. The Claimants submit that the notes of the hearing before the Justice indicate that there was no proper analysis of the application. There were questions about children (about which the application said nothing), an inconsequential question about cars, and the Justice then indicated that he would grant the warrants. The Justice can have given no thought at all as to whether the conditions in section 8(1)(b) and (c) of PACE were satisfied. The description of the offences under investigation were inadequately and far too vaguely described. Nor was there sufficient evidence, as opposed to suspicion, to justify the belief on reasonable grounds that an indictable offence had been committed.
47. This is a very difficult ground of challenge to sustain. The fact that there was only a short hearing does not mean that there was no proper scrutiny of the application by the Justice. There is no suggestion of insufficient time. It cannot be said, for example, that the Justice gave no thought to the question of whether there would be material on the premises likely to be of substantial value to the investigation and relevant when those parts of the access criteria in s. 8 of PACE were directly addressed in the application.
48. Nor am I persuaded that the offences were too vaguely described in the application or that there was insufficient evidence to justify a belief on reasonable grounds that an indictable offence had been committed (subject to my findings as to the adequacy of the application otherwise in relation to the list of 237 individuals and organisations as set out below). The nature of the offences and their statutory basis were set out as required in box 1 of the application. The next box (2) then contained an extended exposé of the nature of the investigation into the illicit importation of significant quantities of non-duty paid alcohol (founding the offence of fraudulent evasion of duty), the suspects using a French bond to obtain alcohol then imported and distributed directly using sham companies for the payments (founding the conspiracy), the proceedings going to the purchase of assets and investments (founding the money laundering). In box 2 Ms Wilkes also set out the material leading HMRC to believe that the indictable offences had been committed, including links between individuals, financial links between companies, significant observations, suspicious meetings and transactions, previous convictions, use of money laundering methodology, inconsistencies in known income versus lifestyle, recorded conversations discussing fraud, seizures of cash subsequently forfeited as the proceeds of crime and seizures of non-duty paid alcohol. The case against each individual suspect was also particularised.
49. I therefore dismiss ground 4.

Ground 5: the warrants should be set aside by reason of a breach of the duty to give full and frank disclosure

50. It is common ground that there was a duty on HMRC to give full and frank disclosure. The Claimants submit that the following matters should have been, but were not, drawn to the attention of the Justice:

a) the good compliance history of Superior and Mr Harpreet Johal in relation to their tax affairs;

b) the fact that the Priory premises were occupied by Mr Harpreet Johal's parents who were in ill-health;

c) the fact that the Rochester Road premises were occupied by, among others, a woman of 85 years.

51. Reliance is placed on Practice B of the PACE Code which provides:

"The officer shall make reasonable enquiries to:

i) establish if:

... anything is known about the likely occupier of the premises and the nature of the premises themselves;

... the premises have been searched previously and how recently; (ii) obtain any other relevant information."

52. The Claimants submit that no proper enquiries were made as to occupiers and that elsewhere incorrect information was provided, resulting for example in the false suggestion that Mr Harpreet Johal was the registered owner of the Rochester Road premises, when he was not.
53. However, I do not consider that there was a failure on the part of HMRC to give full and frank disclosure:

a) as for a history of good tax compliance, it is difficult to see how a good history would be relevant in circumstances where compliance is an ingredient of being able to trade at all. But in any event the Justice was informed of routine HMRC visits, of communication with Mr Harpreet Johal and of the possibility of some legitimate trading as well. This point was not in the event pressed by Mr Jones with any vigour;

b) as to occupancy of the properties, HMRC made reasonable investigations by reference to correspondence and HMRC records, checks on the electoral roll and with the Land Registry for the Rochester Road premises together with a drive-by observation. The Priory premises were also observed. Ms Wilkes set out the position as understood in relation to the properties in paragraph 38 of box 2 of the application. It appears that the Justice was informed that at least some children may be living at the residential addresses. It was also indicated that wives would not be arrested;

c) as for the additional matters referred to, such as the health of the occupants or full extent of occupancy, HMRC cannot have failed to make full and frank disclosure of that of which they were unaware. The complaint is in reality one of a failure to make proper enquiries, as opposed to a failure to make full and frank disclosure. There is no material to suggest that HMRC failed to disclose material matters of which they were aware. It is also highly questionable as to how HMRC would have had access to information such as the occupants' medical health records or details in any event.

54. Additionally the Claimants submit, in the light of the recent disclosure of the JIT agreement, that there was a failure on the part of HMRC to disclose the fact that prior to the application it had already been agreed between the French and UK authorities that Mr Harpreet Johal would be charged in France. The short answer here is that, after assurance and further material from the CPS, I am quite satisfied that no such decision had been taken by the CPS (or agreement reached to that effect). No such agreement was reached until (well) after the warrants had been issued and executed. In reply, Mr Jones fairly accepted this.
55. For these reasons, I dismiss ground 5.

Ground 6: there was excessive searching contrary to s. 16(8) of PACE, such that the entry into all 3 premises was unlawful by virtue of s. 15(1) of PACE

56. The Claimants submit that there was excessive searching as set out in the statements of Mr Balbir Johal, Mrs Gurdev Kaur and Ms Currey. The evidence of Mr Panesar is also said to show excessive searching in relation to the search for what was obviously special procedure material, as well as irrelevant material.
57. On their face, the warrants are very wide. This is of course at the heart of the Claimants' complaint on ground 2. It makes a complaint of excessive searching unpromising. As Jowitt J said in R v Chief Constable of the Warwickshire Constabulary and another ex parte Fitzpatrick and others [1999] 1 WLR 564 (at 575G):

"Subject to the de minimis principle, which common sense requires, I conclude that a search has exceeded the purpose for which the warrant was issued…when material which does not satisfy those criteria has been seized. But in deciding whether it has been shown that a particular seizure was unlawful it is necessary to take as starting point the fact that one is examining the propriety or the judgment of the officer executing the warrant made in the circumstances in which he found himself and on the basis of what was or should have been known to him."

58. The allegation of excessive searching is contentious and denied by HMRC. The searches were limited to the premises specified in the warrants for the material set out in the warrants. Again in R v Chief Constable of the Warwickshire Constabulary and another ex parte Fitzpatrick and others (supra) Jowitt J said (at 579D):

"Judicial review is not a fact finding exercise and it is an extremely unsatisfactory tool by which to determine, in any but the clearest of cases, whether there has been a seizure of material not permitted by a search warrant. In my judgment a person who complains of excessive seizure in breach of section 16(8) should not, save in such cases, seek his remedy by way of judicial review but should rely on his private law remedy when he will have a tribunal will be able to hear evidence and make findings of fact unfettered by Wednesbury principles".

As this authority makes clear, judicial review is an extremely difficult forum for the disposal of disputed allegations of facts such as these.

59. In all the circumstances and for the purpose of these proceedings, not least given the width of the warrants, I am not persuaded on the material before me that the allegation of excessive searching under s. 16 of PACE has been made out. I therefore dismiss ground 6.

Ground 7: the application for the warrant should have been made under s. 13 of the 2003 Act

60. This ground has given rise to detailed examination of ss.13, 16 and 19 of the 2003 Act (and the Crime (International Co-operation) Act 2003 (Exercise of Functions) Order 2013). In simple terms, however, it is no more than a "red herring". Whilst HMRC at one stage intimated that its powers under the 2003 Act were or might have been relevant jurisdictionally to the issue of the warrants, it is clear that they are not. The point can be taken shortly.
61. S. 13 of the 2003 Act provides:

"13 Requests for assistance from overseas authorities

(1) Where a request for assistance in obtaining evidence in a part of the United Kingdom is received by the territorial authority for that part, the authority may—

(a) if the conditions in section 14 are met, arrange for the evidence to be obtained under section 15, or

(b) direct that a search warrant be applied for under or by virtue of section 16 or 17 or, in relation to evidence in Scotland, 18."

62. S. 16 of the 2003 Act provides:

"16 Extension of statutory search powers in England and Wales and Northern Ireland

(1) Part 2 of the Police and Criminal Evidence Act 1984 (c. 60) (powers of entry, search and seizure) is to have effect as if references to indictable offences in section 8 of, and Schedule 1 to, that Act included any conduct which—

(a) constitutes an offence under the law of a country outside the United Kingdom, and

(b) would, if it occurred in England and Wales, constitute an indictable offence.

(2) But an application for a warrant or order by virtue of subsection (1) may be made only—

(a) in pursuance of a direction given under section 13, or

(b) if it is an application for a warrant or order under section 8 of, or Schedule 1 to, that Act by a constable for the purposes of an investigation by an international joint investigation team of which he is a member."

63. No relevant request for assistance has been made by an overseas authority for the purpose of s. 13 of the 2003 Act, and no s.13 direction has ever been made. Moreover, Ms Wilkes was not a "constable" for the purpose of s. 16 of the 2003 Act (and no extending order was made by the Treasury under s. 27 of the 2003 Act). Thus, she could never have issued or advanced the application under s. 13 of the 2003 Act in any event.
64. It is clear on the face of the application that HMRC was proceeding under s. 8 of PACE and seeking to meet the requirements of PACE, and not the 2003 Act. That then leaves the question newly raised by the Claimants as to what jurisdiction HMRC has to share information with the French authorities. In this regard, HMRC has not indicated what, if any, material or knowledge obtained from execution of the warrants has been so shared.
65. The JIT agreement itself cannot found the necessary jurisdiction. As set out above, however, it was made expressly pursuant to the Convention. The Convention can provide a jurisdictional basis for transfer, if it is part of English law. The parties were invited to submit written submissions post-hearing on this fresh issue. By those submissions, HMRC submits that whilst the Convention itself does not have direct effect, its provisions have been implemented into domestic law. On 13^th June 2002 the Council of the European Union issued a Council Framework Decision on Joint Investigation Teams 2002/465/JHA, replicating Article 13 of the Convention. The UK is bound by the terms of that decision by Commission Decision 2014/858/EU of 1^st December 2014 on the Notification by the UK of its wish to participate in acts of the Union in the field of police co-operation and judicial co-operation in criminal matters. The Claimants disagree that it can be said that the Framework Decision of 2002 has been implemented into UK law but accept that the UK opted into that Framework Decision. Whether it is accepted that HMRC therefore had power to share information in accordance with the JIT is not clear. While my inclination is to prefer HMRC's submissions, in circumstances where the Court has not heard full argument on the point, where it is not known if any information has in fact been shared by HMRC and if so in what circumstances, and given the scope of the original claim which was limited to a challenge to the lawfulness of the issue of the warrants and subsequent execution, it is unnecessary to make any finding in this regard.
66. Pausing here, there is nothing so far to make good the claim. However, I turn now to the outstanding ground 2.

Ground 2: the warrants failed to embody the safeguards set out in s. 15(6)(b) of PACE

67. As set out above, s. 15(6)(b) of PACE provides that a warrant shall identify, as far as practicable, the articles or persons to be sought.
68. In R (Energy Financing Team Ltd) v Director of the Serious Fraud Office [2005] EWHC 1626 Kennedy LJ said (at [24]):

"The warrant needs to be drafted with sufficient precision to enable both those who execute it and those whose property is affected by it to know whether any individual document or class of documents falls within it."

69. In the same case Crane J also stated (at [37]):

"While for these reasons I would not quash the warrant in the instant case, a warrant should be capable of being understood by those carrying out the search and by those whose premises are being searched, without reference to any other document."

70. Where a broad investigation is underway, it may be less practicable to specify the articles in question. In Glenn and Co v HMRC [2011] EWHC 2998 (Admin) Simon J (as he then was) (at [58] to [65]) identified that often there would be two competing factors: the important consideration that the warrant should be sufficiently clear and precise for those interested in their execution to know precisely what are the limits of the power on the one hand and the nature of the investigation on the other, as noted by Lord Woolf CJ in Kent Pharmaceuticals Ltd v. Serious Fraud Office [2002] EWHC 3023 (Admin) (at [24]). There may be difficulty in drafting a warrant when the scale of the investigation is very large. It is necessary to bear in mind the nature of the inquiry in the present case. The question of where the balance lies in an individual case will not be answered by reference to authority, since each case is likely to turn on particular facts.
71. Further authorities have been referred to: R (Anand) v HMRC [2012] EWHC 2989 (Admin), (at [14] to [26]); R (van der Pijl) v Crown Court at Kingston [2012] EWHC (Admin), (at [52] to [67]; R (Hoque and Das) v City of London Magistrates' Court [2013] EWHC 725 (Admin); R (Chatwani) v National Crime Agency [2015] EWHC 1283 (Admin).
72. Against that background, the Claimants allege that the following parts of the warrants fail to comply with s. 15(6)(b):

a) the words in the second line of the warrant "All material deemed relevant to the suspected fraud and investigation…". The occupiers to whom the warrants were presented under s. 16(5) could not know what the fraud and investigation was, nor how any individual item could be "deemed relevant" to such investigation. Reliance is placed on Hoque and Das (supra) where the warrant was held to be fatally defective on this ground. The warrant purported to delegate the scope of the permitted search and seizure to the officers authorised to conduct the search;

b) the words in the fourth line of the list "which may include…..:" do not limit the material which may be seized and which might be "deemed relevant": they encourage a searching officer to believe he is authorized to seize these things, especially computer equipment, even if he does not deem it to be relevant;

c) the specification of computers as opposed to their contents is not permissible, since it was practicable to specify the documentation required: see R (Cabot Global Ltd) v Barkingside Magistrates' Court [2015] EWHC 14(Admin) (at [51]);

d) the list of individuals and companies on the attached schedules is said to be "extraordinarily wide", containing 237 names.

73. As set out above, what is "practicable" depends on all the circumstances. Here what was under investigation was a wide-ranging and complex fraud.
74. I am not troubled by the matters identified in paragraphs 72 b) and c) above:

a) the words "which may include" do not extend the material that could be searched for. The items identified fell within the overarching requirement of (deemed) relevance. As was stated in Kent Pharmaceuticals (supra) (at [25]), the words of inclusivity "have to be treated in a restrictive manner";

b) the specification of computers as opposed to their contents is not objectionable: see R (Sharer) v City of London Magistrates' Court and HMRC [2016] EWHC 1412 (Admin) (at [54]) and, even more recently, R ((A) and (B)) v Central Criminal Court and another [2017] 1 WLR 3567 (at [73] to [85]) in particular.

75. But I am troubled by the matters identified in paragraphs 72 a) and d) above.
76. As set out above, the opening entry immediately after the authorisation to search reads as follows: "All material deemed relevant to the suspected fraud and investigation concerning the companies and individuals listed in the attached document, for the period 01/04/10 to present,…."
77. Of most significance is the objection to the fact that the warrants authorised not a search for relevant material, but rather material "deemed relevant". Mr Fletcher suggested that this was a reference to what the Justice, not HMRC, deemed relevant. This is an impossible construction. The authority granted was for HMRC to search for all material that its officers deemed relevant. The Justice was to play no part in the search exercise. Mr Fletcher also suggested that one could just ignore the word "deemed". But the word cannot be ignored: it is there on the face of the warrant.
78. I accept the submission for the Claimants that by the use of the word "deemed" the warrants impermissibly delegated the responsibility of applying the access criteria of s. 8 of PACE. This issue was addressed in R (Hoque and Das) v City of London Magistrates' Court and HMRC) (supra). The warrant in that case authorised a search for "any form of evidence deemed relevant to the offences under investigation…and any other material which appears to officers be of evidential value". Pitchford LJ stated (at [13]):

" …There is, it seem[s] to me, a further flaw in the warrants as issued. It is the responsibility of the justice of the peace to apply the access criteria of section 8(1)(a)-(e). Section 8 does not permit the justice of the peace to delegate to the constable the very responsibility which the justice of the peace is exercising under section 8(1). On the contrary, the evidence submitted by the constable should establish to the satisfaction of the justice of the peace reasonable grounds for believing that the articles to be identified in the warrant so far as practicable meet the access criteria in section 8(1). A constable's power to seize additional material beyond the scope of the warrant is governed by section 19 of [PACE] and section 50 of [the 2001 Act]. It seems to me…that to reflect the responsibility of making the judgment of relevance to the constable may have the effect of rendering the ambit of the warrant too wide, as in the present case I have concluded."

79. As Mr Jones QC for the Claimants pointed out, one consequence of the wording of the warrants would be that an officer who in fact seized irrelevant material would always be able to say in defence that he had nevertheless deemed the material to be relevant at the time.
80. On this basis alone I would allow ground 2.
81. But matters do not end there. Whilst it is true that the warrants limit the suspected fraud by time (albeit that the period in question spans more than 7 years) and by reference to the schedule or companies and individuals identified (albeit that that runs to 237 targets), there is no attempt whatsoever to identify the nature of the fraud or suspected offences. Mr Fletcher for HMRC suggested that the nature of the fraud could be ascertained from the final entry in the paragraph identifying the items to be searched which stated: "non UK duty paid Excise goods". Ignoring the presentational objections to this paragraph, addressed further below, it is unrealistic to suggest that a recipient of the warrants could reasonably have made the connection so as to conclude that the fraud arose out of alleged fraudulent evasion of excise duty and money laundering offences. And in any event there was nothing to put a recipient on notice that the fraud and investigation involved a fraud relating to the sale of illicit alcohol imported from the continent.
82. As for the schedule of 237 names of individuals and companies, that schedule is incorporated into the application through box 3. Its width may be explained readily by the large-scale nature of the alleged fraud. But whilst some of the individuals and companies in the schedule are referred in the narrative of the offences under investigation (as set out in box 2 of the application), as a cursory random check reveals, many of them are not mentioned at all. Mr Jones put the figure at 90% of the list. There is no explanation whatsoever as to why they are involved or in what way they are said to be linked to the alleged offenders. This is insufficient for the purposes of s. 8 of PACE, and in particular for the requirement that there must be reasonable grounds for believing that the material is likely to be relevant evidence. This is not to say that lengthy comments against each individual or company were required. But at least a brief explanation setting out the suspected involvement in or connection of each was required. Mr Fletcher sought to rely on the comments of Beatson LJ in R (Newcastle United Football Club Ltd and others) v HMRC and another [2017] EWHC 2402 (Admin)) (in particular at [67] and [69]). However, there the Court was dealing with the extent to which HMRC was obliged to supply the evidence relied on in support of an application, not the question of whether the case was adequately particularised in the first place.
83. The above flaws are compounded by the largely impenetrable lay-out of the paragraph setting out the search materials being identified. There is but a single-line spaced unbroken large paragraph. Ignoring the question of grammatical error, there is no attempt to break the areas of search down for the reader, for example by reference to the following categories: electronic media, business records, evidence pertaining to money laundering, documents relating to savings accounts, valuable jewellery and high value items, documents relating to the purchase or sale of property or assets in the UK and abroad, and travel documents.
84. In summary, whether by reason of the impermissible delegation of the application of the relevance criteria in s. 8 of PACE to HMRC alone, or by reason of a combination of all the matters identified under ground 2 above, I conclude that ground 2 is made out, albeit on a slightly extended or different basis than that advanced in the grounds of claim. In addition to the delegation error, the warrants were insufficiently precise or clear on their face. The application also failed to meet the requirements of s. 8 of PACE through the incorporation of a schedule of 237 names of individuals and organisations by reference to which the search authorised under the warrants was to be carried out, in that it included names of individuals and organisations as to which no proper particulars were provided.

Conclusion

85. For the reasons given in respect of Ground 2 and to such extent, I hold the warrants to be unlawful. This decision should not be seen as encouraging the pursuit of unmeritorious technical challenges to the relevant authorities' use of the relevant powers under PACE (or associated powers). The s. 8 procedure under PACE must be workable. Search and seizure warrants play a crucial role in the criminal justice system, and the requirements of ss. 8, 15 and 16 of PACE must be applied in a manner which takes careful account of the practical realities of running large-scale fraud investigations such as this. But the statutory safeguards provide an important constitutional check. As was observed in R (A) and (B)) v The Central Criminal Court and another (supra) (at [69]), PACE seeks to reconcile two very important and contrasting public interests: first the effective investigation and prosecution of crime; secondly, protecting the personal and property rights of citizens against infringement and invasion. The power of the judiciary to scrutinise independently the requests of officers of the executive to enter a person's premises, search his belongings and seize his goods is a vital part of the court's role in ensuring that any necessary invasion in the privacy of citizens is properly controlled.
86. On the particular facts of this case and the wording of these warrants, 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.
87. In the light of this conclusion it will be necessary to receive further submissions on the question of relief and the appropriate way forward. HMRC has already submitted that, in the event of a finding of unlawfulness, the Court should not make any order for the return of documents or copies made, alternatively that at least HMRC should first have the opportunity to make an application to the Crown Court pursuant to s. 59(5) of the 2001 Act.
88. GROSS LJ: I agree.