Qualter and Others v Crown Court at Preston, Cheshire West and Cheshire Council (Interested Party) and Others

Queen's Bench Division (Administrative Court) [2019] EWHC 906 (Admin), Lord Justice Hamblen and Mr Justice Stuart-Smith, 2; 11 April 2019

Judicial Review - Production Orders - Proceeds of Crime Act 2002 - Local Government Act 1972 - Localism Act 2011 - Police and Criminal Evidence Act 1984 - Money laundering investigation - True or predominant purpose.

Trading Standards North West ("TSNW") were conducting an investigation into the activities of a group of companies said to be ultimately controlled by AP, with assistance from MD, LQ and a fourth individual. The companies fell into two broad groups: (1) companies sourcing and supplying utility services to small businesses ("the BES companies"); and (2) companies undertaking telemarketing activities selling energy products to small businesses. It was alleged that in truth the telemarketing companies were a sales force for the BES companies, and that fraudulent representations were made by sales staff to secure sales of BES-supplied products. The companies all operated from two premises in the North West of England, but the small businesses to whom utility products were sold were located across the UK. Only two of 38 aggrieved customers whose evidence was relied on were located within the region covered by TSNW. TSNW conducted a money laundering investigation in parallel with the fraud investigation. It sought production orders under Proceeds of Crime Act 2002 ("POCA") against the claimants (LQ and the telemarketing companies). It was not disputed that material obtained under the production order was expected to be of use in both the money laundering investigation and the fraud investigation. Search warrants under Police and Criminal Evidence Act 1984 ("PACE") had been obtained some two years earlier, and evidence gathered under those warrants was relied on in the application for the production orders. The application was made on notice and the Crown Court judge heard oral evidence from officers of TSNW, who were cross-examined. The judge held that TSNW did have power to conduct the investigation and pursue a prosecution for both the fraud and money laundering offences, and that the application for production orders was not a device to circumvent the different requirements of PACE for a search warrant. Three of the four individuals and the two groups of companies applied for permission to seek judicial review of the decision to grant the production orders on the grounds that: (i) the application for production orders was outside the statutory powers of TSNW; and (ii) the true or dominant purpose of the application was secure evidence for the fraud investigation and thus the application should have been made under PACE, which TSNW was precluded by the statute from doing. Permission was refused on paper, on the claimants' renewed application for permission to seek judicial review.