Leila Eslami v North Tyneside Magistrates’ Court

An application to vary an account freezing order for reasonable living expenses requires a structured evaluation under Proceeds of Crime Act 2002. The court must consider whether the expenses are reasonable, whether other available assets exist or there are specific grounds for suspicion that assets have not been disclosed, and whether the exclusion would cause undue prejudice to forfeiture. It must then decide whether permitting use of the frozen funds is just. The applicant bears the burden on the need and reasonableness of expenses, while the enforcement authority bears the burden concerning alternative assets or specific grounds for suspicion, subject to full disclosure by the applicant. A decision refusing the application must give reasons sufficient to identify the critical issues, factual findings and legal approach. Bare reasons that merely state that the application is not in the interests of justice are unlawful.

The claimant sought judicial review of the refusal by North Tyneside Magistrates’ Court to vary an account freezing order under sections 303Z4 and 303Z5 of the Proceeds of Crime Act 2002. She sought access to frozen funds for rent and essential living expenses. HMRC opposed the application, relying on alleged non-disclosure of assets, unexplained payments and the absence of a statement of assets in the form contemplated by the High Court Practice Direction on Civil Recovery Proceedings.

HMRC also applied to set aside the grant of permission because its acknowledgment of service and summary grounds had been filed before the directed deadline but were not before the judge who granted permission. The central issues were whether permission should stand and whether the Magistrates’ Court had given legally adequate reasons for refusing the variation.

1. Permission and claim. HMRC’s application to set aside the permission decision was allowed under the court’s inherent jurisdiction. Permission was then granted at the rolled-up hearing, the claim succeeded on Ground 3, and the Magistrates’ Court’s decision was quashed. The application was remitted urgently to a different bench of justices or judge. HMRC was ordered to pay the claimant’s costs.
2. Reasons. A Magistrates’ Court determining an application under section 303Z5 of the Proceeds of Crime Act 2002 must give reasons sufficient to explain why the application was granted or refused. The reasons must identify the issues critical to the decision and explain how they were resolved. They need not be lengthy, but they must enable the parties and any appellate or reviewing court to understand why one side succeeded.
3. The reasons given here did not disclose whether the Magistrates considered the three statutory criteria: the reasonableness of the expenses; the existence of other available assets or specific grounds for suspicion of non-disclosure; and undue prejudice to forfeiture or recovery proceedings. They also did not disclose the burden or standard of proof applied, or any findings on contentious matters relied on by HMRC.
4. The court stated that an applicant must make full disclosure of available assets, although the precise form of that disclosure may not be material. It did not finally determine whether the statement of assets contemplated by paragraph 7.3(3) of the High Court Practice Direction was required for an application under rule 4 of the 2017 Rules.
5. The court rejected the submission that the Magistrates’ Court could now supplement its reasons. Ex post facto reasons that introduce wholly new reasons, rather than elucidating the original reasons, are generally inadmissible. It also rejected the submission that relief should be refused because the original decision was probably right: the court could not assess the counterfactual outcome without knowing the legal directions, factual findings and reasoning actually adopted.
6. Grounds 1 and 2 were not determined because the reasons ground was sufficient to dispose of the claim.

The judgment itself describes the following procedural history:

• High Court (Administrative Court): the claim was allowed on the inadequate-reasons ground. The decision of North Tyneside Magistrates’ Court was quashed and the matter remitted urgently for reconsideration by a different bench or judge.
• Permission stage: permission had been granted by Coppel J on 27 January 2026. That decision was set aside on HMRC’s application because the relevant acknowledgment of service and summary grounds had not been before the judge. Permission was re-granted at the rolled-up hearing.