Hart & Ors, R (on the application of) v The Crown Court at Blackfriars & Anor

When applying for a search warrant, the investigator must provide the issuing judge with a full, fair and accurate account of material facts, including matters that may make a warrant inappropriate. The judge must be satisfied personally that the statutory conditions for a warrant are met, including the additional protection applicable where notice of a production order may prejudice the investigation.

On judicial review, the warrant should be quashed if information that ought to have been disclosed might reasonably have led the judge to refuse it. Reluctance or delay in answering enquiries does not, without more, justify alleging that notice of a production order may lead to concealment or destruction of evidence. The court may quash the warrant and declare the search unlawful while allowing the prosecuting authority to seek retention of seized material under Criminal Justice and Police Act 2001.

HMRC investigated a business model involving limited companies and limited liability partnerships. It suspected that the model involved false representations and tax evasion. A Circuit Judge issued search warrants under section 9 and Schedule 1 to the Police and Criminal Evidence Act 1984 for premises connected with the claimants.

The claimants sought judicial review, alleging that HMRC had misstated the law and facts, failed to disclose material matters, and had not established why a less intrusive production order would be ineffective or prejudicial to the investigation. The central issues were whether the application materially misrepresented the position and whether the omissions might reasonably have affected the judge’s decision.

1. Warrants quashed. The court granted judicial review, quashed the search warrants and declared the searches unlawful. The claimants succeeded on a narrow basis concerning the justification for using search warrants rather than a less intrusive production order.
2. The judge was not misled as to the applicable tax law. HMRC’s case was that, whatever the model’s theoretical tax consequences, the evidence gave reasonable grounds for believing that the arrangements were not genuine and that workers continued to perform the same roles without genuine participation in the LLPs. The court expressed no concluded view on the model’s tax merits or any eventual criminal liability.
3. The court accepted the principles governing applications under Schedule 1 to the Police and Criminal Evidence Act 1984. The investigator’s belief that other methods were bound to fail had to be held at the time of application and supported by cogent grounds. The further condition in paragraph 14(d), concerning serious prejudice from notice of a production-order application, provided an additional judicial safeguard.
4. HMRC had made an unjustified and overstated case that the claimants had failed to cooperate and that notice might result in destruction or concealment of evidence, or improper influence on witnesses. The application omitted the fuller history of correspondence, the claimants’ offer to meet HMRC, and the April 2016 meeting. The judge therefore lacked information necessary to assess whether a search warrant, rather than a production order, was necessary.
5. Applying [2013] 1 WLR 220 and [2015] 1 WLR 219, the question was whether the omitted or inaccurate information might reasonably have led the judge to refuse the warrants. That threshold was met. HMRC could seek retention of seized material under section 59 of the Criminal Justice and Police Act 2001.
6. The parties agreed that the claimants should receive two-thirds of their costs, reflecting success on the relief sought but failure on the central tax-technical arguments.