Michael John Harvey, R (on the application of) v Luton and South Bedfordshire Magistrates' Court
[2024] EWHC 2832 (Admin)
Mileage Reclaim Limited (trading as Taxbuddi), R (on the application of) v North Somerset Magistrates' Court
19 June 2024
[2024] EWHC 1531 (Admin)
High Court
A tax company had its bank account frozen by mistake. They tried to get the freeze lifted in a lower court, but it was taking too long. They asked a higher court for help, but the higher court said the lower court should handle it because it was better equipped to deal with the situation, even though the higher court agreed mistakes were made.
Key Facts
- •Mileage Reclaim Limited (Taxbuddi) challenges a Magistrates' Court account freezing order (AFO) under the Proceeds of Crime Act 2002 (POCA).
- •The AFO, obtained by HMRC ex parte, froze two of the Claimant's bank accounts; one was administratively discharged, leaving one with Revolut.
- •HMRC's application was based on suspicion of fraud and money laundering, alleging that Taxbuddi fraudulently claimed tax rebates.
- •HMRC's application contained factual errors regarding the legality of expense claims by PAYE employees, which were later conceded.
- •Taxbuddi's application to set aside the AFO in Magistrates' Court faced significant delays.
- •Taxbuddi sought judicial review in the Administrative Court, alleging unlawful AFO due to errors of law and breaches of natural justice.
Legal Principles
Account freezing orders (AFOs) under POCA Part 5 require reasonable grounds for suspecting recoverable property.
POCA section 303Z1, 303Z3
Ex parte AFO applications require full and frank disclosure; the applicant must anticipate and disclose potentially undermining information.
National Crime Agency v Simkus [2016] 1 WLR 3481
Courts must scrutinize ex parte applications carefully; the power to grant AFOs is potent and can cause harm if misused.
Barnes v Eastenders Cash & Carry Plc [2015] AC 1
The right to apply to set aside an AFO is not a substitute for a fair initial hearing; the initial hearing must be fair.
Windsor v Crown Prosecution Service [2011] 2 Cr App R 7
Judicial review is a remedy of last resort; the court may refuse judicial review if a suitable alternative remedy exists.
R (Glencore Energy UK Ltd) v Revenue and Customs Commissioners [2017] 4 WLR 213
Outcomes
Permission for judicial review refused.
A suitable alternative remedy existed in the Magistrates' Court application to set aside the AFO; despite procedural failings, the Magistrates' Court was better equipped to handle the factual disputes and exercise discretion.
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