Mileage Reclaim Limited (trading as Taxbuddi), R (on the application of) v North Somerset Magistrates' Court

Judicial review is ordinarily a remedy of last resort where Parliament has provided a suitable statutory remedy. An application under section 303 Z4 of the Proceeds of Crime Act 2002 is intended to address challenges to an account freezing order, including whether the statutory threshold was met, procedural failings in obtaining the order, and wider fairness considerations.

The Administrative Court may intervene despite an alternative remedy where the public authority is acting in defiance of the rule of law or the statutory remedy is genuinely unsuitable. Delay alone will not make the alternative remedy unsuitable where an effective hearing is listed shortly and the statutory court can assess the evidence and make flexible orders. The claim for judicial review was therefore refused permission.

HMRC obtained an account freezing order against Mileage Reclaim Limited under section 303 Z3 of the Proceeds of Crime Act 2002. The order was based on an HMRC officer’s assertion that PAYE employees could not legitimately claim certain employment expenses. That assertion was later conceded to be legally wrong.

The claimant applied to the Magistrates’ Court under section 303 Z4 to set aside the order. It also sought judicial review, alleging error of law and procedural unfairness. HMRC conceded both grounds, but argued that permission should be refused because the statutory application to set aside was a suitable alternative remedy. The central issue was whether the Administrative Court should intervene before the listed Magistrates’ Court hearing.

1. Permission refused. The claim was not determined on its merits. The court expressed no view on the underlying fraud allegations or the likely outcome of the application to set aside.
2. The account-freezing regime provides a statutory route under section 303 Z4 of the Proceeds of Crime Act 2002 for an affected person to seek variation or discharge. That procedure permits the Magistrates’ Court to examine whether the reasonable-grounds-to-suspect threshold was satisfied and to consider the circumstances in which the order was made, including misleading evidence, procedural unfairness and other public law considerations.
3. The statutory remedy was suitable in this case. The Magistrates’ Court could consider all the evidence, undertake the necessary fact-finding and make more flexible orders balancing the claimant’s interests against the public interest. The fact that the original application was legally erroneous and procedurally unfair did not itself justify judicial review.
4. The court accepted that the delay in listing the application had caused serious commercial and reputational harm. However, a District Judge had been assigned, a reading day had been arranged and a hearing was listed for 27 June 2024. On the evidence, the court was entitled to proceed on the basis that the hearing would be effective.
5. The case did not raise unresolved issues of principle or systemic failings requiring Administrative Court intervention. The applicable rules were established in the Proceeds of Crime Act 2002 and the authorities, but had not been applied in this particular case. The claim was fact-sensitive and fell within the type of dispute Parliament intended the Magistrates’ Court to determine.
6. Intervention would determine the issue only three weeks earlier, on a narrower basis, and might release funds which were presently identifiable in one account. That practical consequence further supported allowing the statutory process to proceed.

The judgment itself does not state an earlier appellate decision in the same litigation. It concerns an application for permission to claim judicial review of the North Somerset Magistrates’ Court’s account freezing order.