Friday Law Report: Procedure to determine questions of privilege

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12 November 1999

Regina v Inland Revenue Commissioners, ex parte Tamosius & Partners (a firm)

Queen's Bench Division, Divisional Court (Lord Justice Tuckey and Mr Justice Moses) 5 November 1999

THE PROCEDURE, instigated by HM Customs & Excise, by which counsel nominated by the Attorney General was instructed to determine issues of professional privilege during the execution of a search warrant, was also authorised under section 20C(3)(a) of the Taxes Management Act 1970 in relation to the execution of a search warrant by officers of the Board of Inland Revenue.

The Divisional Court dismissed an application for judicial review of the decision to issue search warrants authorising officers of the Inland Revenue to search the applicant's premises.

Mr Tamosius was a United States attorney practising in international legal practice in London under the name Tamosius & Partners. In August 1999 one of the firm's clients was committed for trial on two counts of cheating the Inland Revenue by diverting commission offshore.

The Revenue claimed to have reasonable grounds for suspecting that Mr Tamosius was involved in the arrangements for that diversion. They obtained search warrants under section 20C of the Taxes Management Act 1970, which authorised them to enter and search the firm's offices and, by virtue of section 20C(3), to seize and remove "any things whatsoever found there which [they had] reasonable cause to believe may be required as evidence . . ."

The Revenue executed those warrants, and various documents were seized and were examined at the firm's premises by counsel nominated by the Attorney General and instructed by the Revenue to act as independent counsel in relation to a search operation.

The firm applied for judicial review, and the following issues arose: whether the warrants were valid; and whether the process by which the material had been sifted and seized was lawful. The firm contended that the warrants failed properly to specify the nature and dates of the relevant offences under investigation; that the wording in section 20C(4) which prohibited the removal of documents in the possession of a legal adviser "with respect to which a claim to professional privilege could be maintained" meant a claim which was merely potentially valid; and that there was no legal authority for the presence of counsel to determine the issues of privilege during the search.

Patrick O'Connor QC and Peter Clarke (Dibb Lupton Alsop) for Mr Tamosius; Michael Worsley QC and Timothy Cray (Solicitor of Inland Revenue) for the commissioners.

Mr Justice Moses said that under the scheme of section 20C of the 1970 Act the validity of a warrant depended not upon its particularity, but upon there being reasonable ground for suspecting that an offence involving serious fraud in connection with tax was being, had been or was about to be committed; there being reasonable ground for suspecting that evidence of that offence was to be found on premises specified in the information; and the officer acting with the approval of the Board of Inland Revenue in relation to the particular case. Moreover, there was insuperable authority against the firm's proposition: see IRC v Rossminster Ltd [1980] 1 All ER 80.

Section 20C(4) plainly said "maintained" and not "made", and clearly related to documents which were properly the subject of professional privilege. The word "maintained" carried with it the implication of a successful claim, and not a claim designed, perhaps, to defeat any investigation as to whether documents were held for a criminal purpose.

The procedure for instructing counsel nominated by the Attorney General had apparently been instigated by HM Customs & Excise: see R v Customs & Excise Commissioners, ex p Popely (Law Report, 22 October 1999). Whilst there was a danger in transposing a procedure which might be lawful under another statute, namely the Police and Criminal Evidence Act 1984, to the different statutory provisions contained in the 1970 Act, section 20C(3)(a) did provide authority for officers of the Board to take counsel with them during the execution of a warrant.