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.