Jules Whiteway Wilkinson & Ors v The Commissioners for HMRC

Summary judgment or strike out is appropriate where the pleaded case has no realistic prospect of establishing the legal ingredients of the torts relied upon. In malicious prosecution, the claimant must show that the defendant was the prosecutor, that the prosecution lacked reasonable and probable cause, and that it was malicious. The reasonable and probable cause inquiry concerns the prosecutor’s honest belief that there was a proper case to place before the court and whether that belief was objectively reasonable. The higher Full Code Test is not the measure of reasonable and probable cause.

Public authorities do not owe a common-law duty of care merely because they exercise statutory powers. An assumption of responsibility requires sufficiently compelling circumstances and cannot create duties inconsistent with the statutory scheme or alternative public-law remedies. Errors, delay, negligence or incompetence do not, without evidence of bad faith, establish malice or misfeasance in public office.

HMRC applied for summary judgment or strike out of claims brought by Jules and Rosie Whiteway Wilkinson and London Fields Brewery. The claims arose from HMRC’s handling of brewery registration applications, the seizure of beer, an application for a search warrant, C1’s arrest, and criminal proceedings concerning alleged evasion of VAT, PAYE, National Insurance contributions, student-loan deductions and income tax.

The criminal prosecution was conducted by the CPS. C2’s case was dismissed at half time for no case to answer, and C1 was acquitted by a majority jury verdict. The claimants alleged malicious prosecution, malicious procurement of a search warrant, misfeasance in public office and negligence. The central issues were whether HMRC was legally the prosecutor, whether the relevant proceedings lacked reasonable and probable cause or were malicious, and whether HMRC owed actionable duties of care.

1. Disposition. The claims were struck out and, alternatively, summary judgment was entered for HMRC. There was no real prospect of success and no compelling reason for a trial.
2. Malicious prosecution. The CPS remained the prosecutor. The evidence did not show that HMRC deliberately manipulated, overbore or perverted the CPS’s independent judgment. The exceptional circumstances identified in Mahon v Rahn, H v B and Rees were absent. The fact that material was disclosed after charge did not establish that it had been deliberately withheld or that it would have prevented prosecution.
3. Reasonable and probable cause has subjective and objective elements. The prosecutor must honestly believe that there is a proper case to lay before the court, and that belief must have an objectively reasonable basis. The test is not whether the prosecutor believes conviction is probable or whether the Full Code Test is satisfied. Prima facie admissible evidence of each element of the offence is sufficient at the charging stage. The prosecution concerned substantial alleged non-payment of VAT and other taxes, not merely Beer Duty. The evidence afforded both subjective and objective reasonable and probable cause.
4. Malice requires an improper predominant purpose or a deliberate misuse of the court’s process. Mere incompetence, negligence, error or omission is insufficient. The pleaded non-disclosure and alleged regulatory errors did not provide a real prospect of proving malice.
5. Search warrant and misfeasance. The warrant application concerned suspected VAT fraud. Background matters concerning Beer Duty, the confiscation order and licensing did not undermine reasonable and probable cause for the VAT investigation. There was no real prospect of proving that the officers acted dishonestly, in bad faith, with targeted malice, or with the necessary reckless indifference. The same conclusion applied to both misfeasance claims.
6. Negligence. A public authority does not owe a duty of care merely because it has statutory powers or duties. Any assumption of responsibility had to be sufficiently specific and could not impose duties conflicting with the statutory licensing, taxation and enforcement schemes. The alleged oral permissions and general assurances could not reasonably be treated as responsibility for years of continued trading, non-payment of taxes, or immunity from criminal enforcement. Public-law and statutory remedies were the appropriate routes for complaints about licensing decisions or delay.
7. The limitation issues did not require determination. The assignment point also did not need to be decided. A further amendment would not save the claims.

First-instance decision. No prior appellate decision was stated in the judgment.