QB-2020-004171 - [2025] EWHC 2773 (KB)

It is claimed that there was misfeasance in public office by Mr Ansah and Mr Parkinson respectively in connection with the brewery licence applications. Mr Ansah’s role was a HMRC Higher Assurance Officer in the Customs, International Trade and Excise Department. He was not in the NRU which processed registration applications. He attended on 7 December 2012 at the request of the NRU, and this was the first time that he attended an application for a brewery licence. It was not personally his case.

The claim against him is that he acted unlawfully and maliciously: (i) in making requests for information (in the context of LFCP’s application) on 7 June, 27 July, 18 October and 2 December 2012, knowing that they were unlawfully excessive: see RRAmPoC para. 87f, and (ii) in refusing to progress the first application made by LFCP in May 2012 until outstanding VAT was paid: see RRAmPoC para. 87ff.

As regards the requests for information, there is no identified reason why an excessive request is alleged to be unlawful. Regulation 5(3) of Beer Regulations 1993 No.1228 provides:

“Save as the Commissioners may otherwise allow, each application shall contain the particulars specified in Schedule 1 and shall be in such form and manner as the Commissioners may prescribe in any notice published by them in pursuance of these Regulations and not withdrawn by a further notice.”

Schedule 1 para. 1 referred in particular to the name and status of the applicant, to the address of the premises to be registered, a plan of the premises, the date when the applicant began to produce beer, the bank details and the estimate of the quantity of beer to be produced each year. The requests for information of Mr Ansah and Mr Parkinson went beyond this. The request of Mr Ansah of 7 December 2012 included the outstanding duty on beer that had been produced, details of the account of the business, end of financial year accounts, a VAT number, current turnover, details about any lease and amounts paid, details about suppliers, the types of beer produced, details about staff, how the goods were transported, the cost of converting part of the premises into a bar, details of current stock, information relating to the beer and current stock and information relating to customers and the credit line advanced to them.

It has been pleaded in respect of Mr Ansah and that he knew that the requests for information were excessive, but there is no pleaded or any other basis for this assumption. The Claimants have submitted that the cross-examination in the criminal trial (identified at pp.457-459 of the application bundle) supports the existence of such knowledge. All that happened is that C1 was pressed and pressed on the inappropriateness of the questioning. That led to Mr Ansah saying that he was concerned to find out that the trader was compliant and he was intending to be very thorough in how he handled the case. In any event, the main issue was the VAT duty. Having been asked the same question a number of times, he said to Counsel that he might argue that it was over the top. That was not a recognition that he had done wrong, let alone a recognition that his questions were unlawful or that he knew that at the time.

It has also been pleaded that he was malicious in refusing to progress the first application made by LFCP in May 2012 until outstanding VAT was paid. It is stated at para. 87ff of the RRAmPoC that Mr Ansah admitted informing C1 of the same during the course of the 7 December visit, such that it is inferred that Mr Ansah in his role for the Defendant would have been aware of the framework and thus would have known that he was acting unlawfully. If it is the case that Mr Ansah acted unlawfully in requesting the payment of VAT, there is no pleaded basis for Mr Ansah knowing that he was acting unlawfully. There is nothing to indicate that knowledge that he was behaving unlawfully is more or even equally likely as ignorance or negligence.

In the circumstances, there is no case with a real prospect of success to the effect that Mr Ansah was acting with malice as alleged or at all. Further, the pleaded case is liable to be struck out in respect of the claim of malice because it discloses no reasonable cause of action based on malice.

Mr Parkinson’s role was, as noted above as an Alcohol Approval Officer in CITEX responsible for the grant of a licence to become a registered brewer of beer. This was his first case dealing with Beer Duty. The documents which he sought were standard documents for which he has asked in 27 years of compliance work. He said that he believed that he could refuse an application on the ground that the applicant was not a “fit and proper person.” He discussed with his manager, Genevieve Campbell, that he had the power to refuse an application for beer registration. He followed guidance from the criminal investigation team once that investigation commenced and was told in writing by his line manager to do so. He stated in his letter of 3 October 2014 that he was requesting information not only in respect of Beer Duty but also in respect underpaid VAT and PAYE and NIC.

The pleaded case of the Claimants was that Mr Parkinson had actual knowledge that the “fit and proper person” test was not applicable for a brewing licence that he had no power to refuse the Claimants’ beer licence application and yet refused it in any event. He was told about this by Ms McKirdy on 13 August 2014: see RRAmPoC para. 41 and RRAmD para.78. The case of HMRC is that whilst it is admitted that that formal test did not apply, Mr Parkinson was entitled to consider the Claimant’s suitability for registration, particularly in the context of the Beer/Excise Notice 226 (as amended from 31 October 2014 and applicable as at the date of the 2 December 2014 refusal) which, at para. 3.6, required the decision-maker to be satisfied that the business was suitable for registration. Further, reference was made to the apparently discretionary power to register an applicant under Regulation 6 of the Regulations which read “the Commissioners may register the applicant in respect of each of the premises in respect of which application is made…” (emphasis added). The reference to ‘fit and proper person’ reflects the suitability test, and non-compliance with revenue duties such as payment of VAT and PAYE was a reasonable basis for rejection on suitability grounds: see RRAmD para. 137. In referring to ‘fit and proper purpose’, it was to that suitability consideration. This made it appropriate to consider a wider assessment of the merits of the application including considerations of suitability of the controlling minds of the brewery: see RRAmD para.137h.

Mr Parkinson believed that the non-compliance with revenue duties such as VAT and PAYE provided reasonable grounds for refusing the application on suitability or fit and proper person grounds. It was denied in any event that Mr Parkinson knew or ought to have known that there was no power to refuse the Fourth Application on fit and proper person grounds or that he acted maliciously with a view to harming the Claimants.

The requests of Mr Parkinson 11 August 2014 included information as to the private addresses of the partners and other entities in which they were involved, the source of funds to start up the business, a business plan, the banking facilities, details about the storage of beers, their content, the bottling of the beers, other goods produced that may be subject to Excise duty, the relationship between LFCP and the partnership, the details as to ownership of all premises and leases, the assets of LFCP and the partnership and any other assets used in the business, information relating to production of business records, the names of accountants and solicitors, the number of employees and self-employed persons engaged and how they were paid, what checks were taken on in respect of new customers and what commercial insurance arrangements were in place.

There was further information sought by Mr Parkinson in a letter dated 19 November 2014 which was mainly about the same subjects but in some instances more specific information.

It is said that there was no power to ask for further information beyond Schedule 1 para. 1, but there is no reason given as to why there was no power. It is suggested that there was an inference that they or their managers wanted to prevent the Claimants from obtaining a registration.

There is no reason to find that it was unlawful to ask questions beyond those set out in the Schedule to the Beer Regulations. Even if it were excessive, that does not make the request unlawful. In any event, there is no basis to infer malice from a request to provide more information than was necessary to determine the application or from any unlawfulness or excess in the requests. There is no reason why any excess in the questions was not due to inadvertence or error, contrary to the bald assertion to opposite effect at para. 96A of the RRAmPoC. This being the first beer registration application that he had dealt with, there is no reason to infer that he had experience or knowledge of such applications and of any limitation in the questions which could be asked.

It is said also that there is a basis to infer malice from the fact that Mr Parkinson failed to decide the first three applications dated 15 May 2012, 11 August 2014 and 28 October 2014, which, it is said, were never formally withdrawn: see RRAmPoC paras. 87g-h and 90. There was no reason not to determine the matter by reference to the most recent application. Having refused the most recent application, there was no reason to consider the earlier applications. Even if the contrary were arguable, there is no reason to treat the failure so to do as anything higher than an administrative error. The same applies to the requirement of re-submission of applications when it was noted that there were apparent errors in the applications and also to any consequent delay in dealing with the applications. There was no reason any of this was unlawful or as giving rise to an inference of malice. Further, if and insofar as these officers delayed determination in order to coordinate with a criminal investigation, there is nothing to show that that was unlawful or a basis for inferring malice.

Further still, the Beer Notice was amended from 1 November 2014 so as to reflect the change in the Beer Regulations which required satisfaction of the due diligence condition, being “defined in section 35.1 of the notice as due diligence is the appropriate reasonable care a company exercises when entering into business relations or contracts with other companies, and how it responds in a deliberate reflexive manner to trading risks identified.” One of those risks identified at para 33e of the RRAmD was the risk of alcohol duty fraud. There is no sensible basis on which to infer that Mr Parkinson knew about this in advance or to infer that this was the reason for his refusals of the first three applications or consequent delay. Likewise, there is no sensible basis to infer that he knew that such delay was unlawful delay was wrong or unlawful. It follows that the mere fact that assertions are made to this effect does not justify a case going forward to that effect if there is no reasonable or legitimate basis for the assertions. It is usual in a claim in malice to identify a motive for a person acting in bad faith or for a collateral purpose, but to the extent that any has been claimed in this action, there is nothing which appears to have any real prospect of success or to indicate that if and insofar as there were errors, that they were actuated by malice.

The pleaded case is that on 19 November 2014, Mr Parkinson made a request to LFCP for further information which was said to be excessive. The Claimants’ case is that he ought to have known that he had no power to refuse the application (RRAmPoC para. 91) and that the amended notice did not confer any lawful basis upon which the application could be refused (RRAmPoC para. 93). It is also said that Mr Parkinson made factual errors (RRAmPoC para. 94-95), that he was motivated to close down the business instead of determining the application (RRAmPoC para. 96), in short that he was actuated by malice rather than that his conduct could be explained by error or negligence.

There is no real prospect of success in these allegations. The Claimants have no real prospect of being able to establish that the requests for information were unlawful. The information was arguably relevant to considering whether to raise a penalty and to LFCP’s suitability to be registered. Further, there is no real prospect in proving that Mr Parkinson knew that the refusal was unlawful. The refusal was upheld on review, as above stated, and there is no criticism of that review in the RRAmPoC. Even if, contrary to the foregoing, the requests were excessive, that did not make them unlawful.

As for malice, in addition to the foregoing, there were objectively based concerns about how LFCP was being run and about its poor compliance record with HMRC. There is no reasonable basis for inferring malice from requests for information relating to these concerns or gaps in information. The suggestion that the requests and concerns were based on malice is untenable in the context of withholding tax of over £727,000 for the non-Beer Duty taxes and about £1 million including the Beer Duty.

There is also no real prospect of being able to show that (i) there was no power to refuse the Fourth Application, or (ii) the Beer Notice was unlawful, let alone that Mr Parkinson was aware that there was no power or of the unlawfulness of the Beer Notice, or that he was not reasonably entitled to rely on the Beer Notice. As regards the allegation that the refusal was unlawful, as noted above, the refusal was upheld on review and an appeal to the First Tier Tribunal was withdrawn before the appeal was heard. The inability to prove the unlawfulness of the refusal is an insuperable barrier to the claim in misfeasance.

The analysis then moves on to malice, that is to say not just unlawfulness, but knowledge of the same. The fact that malice is pleaded does not mean that there must be a reasonable basis for it. There is so much to prove and nothing to go on other than supposition. There have been attempts particularly through the evidence of Mr Grover, exhibiting hundreds of pages of transcripts to show the way in the prosecution witnesses were challenged in the criminal trial. The intention has been to show that they were or might have been acting maliciously with intent to destroy the brewery business whether by procuring a search warrant or an arrest or a prosecution when they knew that it was wrong or unreasonable to do so or by unlawful and improper means. This forensic process, especially of considering a selective extracts from a long criminal trial, does not give rise to a reason to believe that there is a real prospect that malice, whether deliberate or reckless, will be established at trial. If there is anything in any of the criticisms of HMRC employees, it does not give rise to a basis to infer knowledge of unlawfulness or malice, but at highest errors which do not provide grounds for inferring malice.

For all these reasons, the claim in misfeasance discloses no reasonable cause of action and/or has no real prospect of success.