Intertrade Wholesale Ltd & Ors v Revenue & Customs & Anor

For an interim injunction against a public authority conducting a criminal investigation, the court applies the American Cyanamid principles. A serious issue to be tried may suffice, but the balance of convenience must account for the public interest in effective law enforcement and the risk of impeding a lawful investigation.

An alleged excess in executing a search warrant does not necessarily invalidate the whole search and seizure. The consequences may instead concern particular items and damages. A wide order restraining review, use, copying or transmission of all seized material is disproportionate where the alleged excess remains factually unresolved and legally privileged material can be protected by a workable procedure.

HMRC conducted a criminal investigation into suspected large-scale excise-duty evasion and money laundering. Search warrants were issued by Birmingham Magistrates’ Court and executed at the claimants’ premises on 20 June 2018, with assistance from French customs officers.

The claimants alleged that the searches exceeded the warrants and that material, including legally privileged material, might be shared with French authorities. Earlier judicial review proceedings concerning the warrants had been dismissed. The claimants sought an interim injunction restraining HMRC from reviewing, using, copying or transmitting all material seized pending determination of their private-law claim.

The issues were whether there was a serious question to be tried, whether damages were adequate, and where the balance of convenience lay.

1. Application dismissed. The claimants established a serious question to be tried, but only at the low threshold applicable to an interim injunction. The evidence raised factual questions about the use of material wider than the warrants and the seizure of items outside them. It did not presently demonstrate a systemic intention to disregard the warrants.
2. The court could not reopen the lawfulness of the warrants after the substantive judicial review had been dismissed. In any event, an excess in searching or seizure does not necessarily invalidate the entire entry, search and seizure. The reasoning in R v Chief Constable of Warwickshire, ex parte Fitzpatrick was qualified by ex parte Chaudhary: particular documents taken outside the warrant may have to be returned and may give rise to damages, without invalidating the whole operation.
3. Applying American Cyanamid v Ethicon, the court was doubtful whether damages would adequately compensate the claimants, but concluded that damages would not adequately compensate HMRC if an injunction wrongly impeded its investigation or prosecution of serious crime.
4. The balance of convenience was firmly in favour of HMRC. The proposed injunction covered all seized material, not merely identified items allegedly outside the warrants. It would substantially delay and impede a lawful and necessary criminal investigation. The public interest in thorough and speedy investigation outweighed the claimants’ private interest in preventing access to potentially incriminating material before trial. The risk that material might be shared with France did not alter that conclusion.
5. The parties’ arrangements, including independent counsel reviewing potentially privileged material, provided adequate protection for legal professional privilege. A blanket restraint was therefore too wide and disproportionate. The court did not determine the separate question whether a private-law injunction against HMRC was available under the Crown Proceedings Act 1947; an interim declaration might in principle have been relevant.