The Dog (HMRC) Ate My Homework

How many times when a schoolboy at Bedford School did Michael Stainer use the excuse “the dog ate my homework”? We will never know, but we do know that he has been using a unique variant of this for several years. It goes like this, in its latest iteration:

• “Regrettably the files covering these agreements were taken by HMRC during its raid of July 23rd 2015”.

Basically, Stainer has been touting this excuse around the courts every time he is asked to produce evidence to substantiate one of his claims, especially in regard to his bankruptcy. This one relates to his inability to produce copies of licences and permissions that would allow him to use the eighteen flats he and his wife use as holiday lets. This was a requirement of the latest Tribunal decision allowing the court appointed manager of the residential parts of the Grand to revoke any such permissions.

But veteran Stainer watchers have heard all this before. Let Stainer tell the story in his own words:

Michael Stainer, 68, told the Herald how he and wife Doris, 53 were arrested at 7am on Thursday by Her Majesty’s Revenue and Customs (HMRC) officials.

They were held on suspicion of cheating the public revenue, which Mr Stainer denies.

The couple were released on bail at 4pm on Friday.

Mr Stainer claimed: “Twenty of them turned up at my house Thursday morning. They were like a lynch mob. They were banging outside and shouting to get in.“

HMRC released a statement claiming three people had been arrested in the Folkestone  and Barham area.

An HMRC spokesperson said:

• “HM Revenue and Customs have today arrested 3 individuals and searched a number of properties in the Folkestone and Barham areas of Kent. We are unable to comment further as this is a live investigation.“

The three people arrested were Micheal & Doris Stainer and Stainer’s henchman and gofer, Robert Richardson (pictured) General Manager of the Grand Folkestone.

HMRC removed, depending on whose version you believe, “bin loads” of files, documents, and computers relating to both the Stainers and the various companies that ended up in liquidation.

Fast forward the High Court in London on June 13th 2018 where Stainer was fighting to fend of the winding up of the bulk of his companies. However, he was compelled to admit that his conduct was still under investigation by the Crown Prosecution Service, as they still held vital papers he needed, including “hundreds of thousands of documents, some 100 years old.”

Under directions from Insolvency and Companies Judge Sally Barber, Mr Stainer was given the opportunity to liaise with HMRC to review what they held, to assist in his attempts to save his companies (and himself) from bankruptcy.

Finally, the Stainers were declared bankrupt in hearings that took place at the High Courts of Justice on Thursday, November 8th 2018, and also included the winding up of the other companies who featured in the original tax cases previously reported.

Still fighting, we now fast forward again to January 9th 2019. Appearing before Chief Bankruptcy Registrar Briggs, Stainer was trying to reverse the bankruptcy of November 8th 2018. However not to be deterred, and even after hearing the decision that rejected his appeal, Stainer protested to Chief Registrar Briggs that he had additional evidence to submit and that he was still being denied access to essential documents by HMRC. He should have remembered that he had repeatedly, during multiple previous adjournments, been given the invitation to attend at HMRC’s offices in Croydon to seek out these documents. It was his apparent repeated failure to do this that caused Judge Barber to finally lose patience with his prevarication, and to make reference to “the merry-go-round stopping” when she bankrupted him.

We now have seen what really happened in regard to these documents and files, once again thanks to Mr Stainer.

On September 17th 2018, the High Court made an order that Stainer:

• “By 8 October, inspect the documents held by HMRC’s Fraud Investigation Unit”,

……..and then:

• “By 15 October 2018 write to HMRC informing it whether any documents/records required to complete the VAT returns relevant to the petition debts are missing and, if so, identifying what those missing documents/records are and stating why they are required to complete those returns.”

One would have thought that after the June adjournment, Stainer would hotfoot it down to Croydon to find his files. In fact, it was just over three months later on October 8th, that Stainer arranged a visit to HMRC’s Fraud Investigation Services office (pictured), and he attended with one of his staff, Ewa Kobylarz, and Tom Graddon of M&M Solicitors.

Clearly not satisfied with his visit, on October 15th, Stainer wrote to HMRC claiming that access to original documents was not given, just photocopies, and printouts downloaded from his computers were not provided, so nothing was available to indicate where the required VAT papers might be.

HMRC weren’t having this. They wrote on October 29th that:

• “All the material available for viewing was listed on the Property Control Sheets, ENF 980’s, which contained all the material uplifted under the search warrants………..You were informed that whilst copies of the uplifted documentation were available at the meeting, the original exhibits were also available if required, and that you were offered on numerous occasions to inspect the original documentation, which you declined”.

A few days later, the Stainers were bankrupted.

The “dog ate my homework” defence next appears when Stainer was giving evidence in the May 5th 2020 hearing to revoke the permissions to use his flats as holiday lets. When asked where these consents were, he replied:

• “HMRC had been given these documents but appeared to have lost them.”

As, a result, the Tribunal ordered that:

• “Hallam Estates Ltd, Mr Michael Stainer and Mrs Doris Stainer shall by 4.00 pm on 26 June 2020 send to the Manager (by email or by post) particulars of all licences and consents previously granted in the above categories. If in writing, they should provide copies of those licences and consents (insofar as the same are within their possession or control).”

What he actually sent included this excuse, quoted at the start of this article:

• “Regrettably the files covering these agreements were taken by HMRC during its raid of July 23rd 2015”.

So, no licenses or permissions. There is however a reference to “The Stainer Trust” as a party to the licences and consents. This “Trust” has popped up repeatedly as the real owners of the Stainer flats, as they fight off repossession.

As an aside a Trust, according to Nicholas Shaxson is  “a very slippery, complicated and devious mechanism.”

In a trust, the person who pays the money is the owner, and they have to designate a certain goal for their fund. There’s also a professional manager called the trustee. Mr Stainer has never named the Trustee as far as we are aware.

The goal of a trust is that the money should be paid back to the owner or their relatives after some amount of time. The trustee is more often than not a professional lawyer.

HMRC can’t normally know who the owner is – they only know the registered trustee, who Stainer has not named and has not, as far as we are aware, passed onto HMRC or the Insolvency Service.

So, what do we know of the alleged “ Stainer Trust”? It appears to have originated in the will of Peter Stainer, father of Michael, who passed away in 1988. This will gave a life interest in his estate to his wife Gretl, who passed away around 1997 or 1998. On her death, any trust expired and there is no mention in the original will that the trust would continue thereafter. In fact, the will provides for the distribution of Peter Stainer’s estate on his wife’s demise. There is no extant evidence, despite, it appears, repeated requests from the Insolvency Service, as to whether there was any variation to the will or that any other trust was entered into following Mrs Stainer’s death.

Unless of course it’s buried in the vaults of the HMRC’s Fraud Investigation Services office in Croydon…….

So it’s back to the dog………

The Shepwayvox Team

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