Helidon Vuciterni Alsat UK Ltd, R (on the application of) v Brent Magistrates' Court & Anor [2012] EWHC 2140 (Admin)

Case No CO/5528/2011[2012] EWHC 2140 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
DIVISIONAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 25/07/2012
Before
LORD JUSTICE DAVISMR JUSTICE IRWIN
Between
THE QUEEN ON THE APPLICATION OFClaimantsHELIDON VUCITERNIClaimantALSAT UK LIMITEDClaimant(1) BRENT MAGISTRATES’ COURTDefendants(2) Brent and Harrow Trading Standards ServiceDefendant
MR MARTIN HOWE QC and MR ANDREW BODNAR (instructed by Lorrells LLP) for Claimants.MR JAMES MELLOR QC and MR ANTHONY HUCKLESBY (instructed by Brent and Harrow Trading Standards Service) for Second Defendant. for The First Defendant did not appear and was not represented.Hearing Hearing dates: 29 th& 30 th May 2012
Judgment

Introduction

[1]On 18 March 2011 the Brent Magistrates’ Court, by a District Judge, issued warrants pursuant to Regulation 22 of the Consumer Protection from Unfair Trading Regulations 2008 (“the 2008 Regulations”) authorising Brent and Harrow Trading Standards Service (the Second Defendant) to enter residential premises owned and occupied by Mr Vuciterni (the First Claimant) and his family and to inspect items there; and to enter commercial premises occupied by Alsat UK Limited (the Second Claimant), a company controlled by Mr Vuciterni, and to inspect items there. The warrants were executed on 22 March 2011. Various records and items were seized, as well as quantities of cash.[2]By claim form issued on 14 June 2011 the claimants challenge the grant of such warrants. They seek orders quashing the warrants; a declaration that the warrants were unlawfully executed; and an order for damages. The First Defendant has taken no part in these proceedings. The Claimants were represented before us by Mr Martin Howe QC and Mr Andrew Bodnar. The Second Defendant was represented by Mr James Mellor QC and Mr Anthony Hucklesby.

Background facts

[3]The underlying case involves disputes as to rights with regard to the screening of football matches. It also involves consideration of the ambit of certain provisions of the Copyright, Designs and Patents Act 1988 (as amended) as well as of certain of the 2008 Regulations themselves. I will have to come on to those provisions in due course.[4]Mr Vuciterni was born in Albania. He came to the United Kingdom and was granted citizenship in 2003. He lives with his family at an address in Wembley. He owns 99% of the shares in the Second Claimant (“Alsat”) and is its sole director. His wife owns the remaining 1% of the shares and is the company secretary. Its principal business was described as “retailing and wholesaling satellite products”: a product called a Spider HD box being a particularly successful product. For the year end February 2010 turnover was £698,945; for the year end February 2011 (which covered the World Cup year) it was £1,625,805. Profit after tax for that year was £171,593.[5]The activities of Alsat were, as is not disputed, in October 2010 drawn to the attention of the Second Defendant (“Trading Standards”) by a company called Media Protection Services Limited (“MPS”) which itself has close connections with Football Association Premier League Limited (“FAPL”) and BSkyB (“BSkyB”).[6]The essential concern raised by MPS was this. In Albania a company called Tring TV had (under licence from FAPL) the exclusive rights to broadcast live Premier League football matches being played in England and Wales. (BSkyB has a licence from FAPL for the UK). In part because of restrictions on the broadcasting of such matches (primarily Saturday afternoon games) live in the UK itself, and in part because of other commercial reasons, Tring TV had agreed with FAPL that its broadcasting be encrypted so that it cannot be viewed outside Albania. Decoder cards are accordingly, it is said, supplied in Albania by Tring TV on terms that they are authorised for use only in Albania and are for personal domestic use. Purchasers of the decoder cards are required to give their details and also to agree that such cards are not transferable.[7]The complaint of MPS to Trading Standards was that Alsat was openly marketing and selling such Tring decoder cards for use in the UK, notwithstanding that they were permitted only to be sold and used in Albania; and, by being used in conjunction with Spider Boxes, they were enabling purchasers – who also may not be using them simply for private domestic use – to view live in the UK relevant Premier League football matches. MPS, through a representative, conducted an undercover test purchase on 17 November 2010 at Alsat’s shop premises in Willesden Lane, London NW6. The representative stated that he wanted a Spider Box and Tring decoder card for use in his pub. He was, he said, told by Alsat’s staff that the card was for domestic use only: but the sale was made anyway. Subsequent analysis of the Spider Box and card so purchased showed that they enabled the user to view live Premier League football matches. Examination of Alsat’s website also indicated open advertising for the sale of Tring decoder cards to enable viewing of Premier League football matches. In the event the website was taken down in February 2011. In his witness statement Mr Vuciterni claimed that he did this because, although he considered Alsat’s business perfectly lawful, he had become aware of FAPL’s and BSkyB’s “aggressive campaign” (as he styled it) to prevent live reception of Premier League games and he wanted, so he claimed, to try and avoid an expensive fight with them.[8]Trading Standards took the view that, in the light of the information provided, it was appropriate to commence proceedings against Alsat and Mr Vuciterni. Amongst other things, it was considered that it was an offence to advertise for sale these decoder cards on the footing that it was being stated or otherwise that the impression was being given that they could be legally sold when they could not, contrary to certain provisions of the 2008 Regulations.[9]It seems clear that Trading Standards were reliant to a degree on the information supplied by MPS, who themselves were acting on behalf of FAPL and BSkyB. Mr Howe complains that in truth all these proceedings have been driven by FAPL (if not BSkyB also): it also seems to be the case that FAPL are indemnifying Trading Standards in this litigation. Mr Mellor himself has acted regularly for FAPL in other litigation raising issues of this very kind. But in my view none of this of itself bears on the lawfulness of Trading Standards’ actions.[10]Before applying for the issue of warrants, Mr Ashby on behalf of Trading Standards sought some guidance from a colleague in Leicestershire Trading Standards as to the 2008 Regulations, in an area with which Mr Ashby was not himself very familiar. As Mr Howe pointed out, Mr Ashby must have been briefed from some source as to the existence of s.297A of the 1988 Act. In his witness statement dated 30 June 2011 Mr Ashby says that his colleague at Leicestershire Trading Standards “confirmed” that Mr Ashby did not have the same powers as the police to obtain and execute warrants under s.296ZB and s.297A of the 1988 Act (which was correct advice) and pointed him towards Schedule 1 of the 2008 Regulations. Mr Ashby does not in his evidence explain what, if any, input MPS had in the application for the issue of the warrants.[11]In the result the application for warrants were made on 18 March 2011, by Mr Ashby on behalf of Trading Standards. The Information in support was in these terms, by its Grounds of Application:
“The Service is investigating a business named Alsat UK Limited, which trades as Atlas Satellite, and its sole director, one Helidon Vuciterni, whose date of birth is 13/02/71. The offences being investigated have been brought to the attention of this Service by an organisation, Media Protection Services Limited (MPS), which investigates infringements of the intellectual property rights of the Barclays sponsored football Premier League Limited. The Premier League Limited licence the broadcasting rights of their competition’s matches all over the world. The licences issued are normally specific to set territories. In Albania, the licensee is Tring TV. The decoder cards that Tring TV supply in Albania are for sale only within Albania, and therefore cannot be sold legally within the UK. Further, the Tring cards are only permitted for domestic use within Albania. A supply of the Tring TV cards within the UK would likely be a breach of banned practice number 9 of the Schedule 1 list of banned practices under the Consumer Protection from Unfair Trading Regulations 2008. The supply of these decoder cards within the UK also likely constitutes offences under s.297A of the Copyright, Designs and Patents Act 1988. MPS have received information that Alsat UK Limited have been supplying Tring cards widely within the UK, and have advised me that offending Tring TV cards are being used broadly within UK commercial premises. MPS have covertly test purchased a Tring TV decoder card from the Alsat UK Limited premises at 84 Willesden Lane, London, NW6 7TA. This card has been examined by a representative of BSkyB Limited, who are licensed within the UK to show Barclays Premier League football matches. The expert was able to use the Tring TV card to watch Barclays Premier League football matches. These included matches played during the UEFA closed viewing window, which comes into effect between 14.45 and 17.15 on Saturday match days, and is designed to protect the gates at UK lower league football matches which are also played at this time across the country. During this closed viewing period, the Barclays Premier League football matches are broadcast outside of the UK, but are not permitted, by any means, to be shown or broadcast within the UK. The Tring card and a decoder box cost the covert test purchaser £450. The Alsat website has also, until very recently, been advertising the Tring TV cards on its website, stating that the cards can be used to view Premier League football matches. Helidon Vuciterni resides at 16 Barnham Court, Barnham Close, Wembley, Middlesex, HA0 2EB. He has used this address on the Companies House paperwork relating to his directorship of Alsat UK Limited. The Brent council tax records also show him as the tax payer for the address. Further, a check of the Land Registry shows that Mr Vuciterni is the owner of the freehold in the property. In similar intellectual property infringing cases investigated by this Service, we have regularly found evidence of offending at the home of the suspects as well as at their business premises. This is the reason, therefore, that we desire to enter 16 Barnham Court, Barnham Close. It is the intention of this Service to execute two warrants simultaneously at the business address as well as at the home address of Mr Vuciterni on 22nd March 2011.”
[12]We were told that the hearing before the District Judge was relatively short. A few questions apparently were asked. It is a reasonable inference that the District Judge would not himself have had much familiarity with the 1988 Act or the relevant Regulations. In the result, the warrants were issued in the terms requested. Such warrants gave not only the right to enter the identified premises under Regulation 22 but also power to inspect under Regulation 21 on the basis that there were reasonable grounds to believe that there were on the premises “goods, books, documents, computers and equipment associated with the importation, distribution, sale or hire or offer or exposure for sale or hire of any unauthorised decoder or devices and services designed to circumvent technological measures which would infringe copyright, and that their inspection is likely to disclose evidence of a breach of Regulation 12 of the Consumer Protection from Unfair Trading Regulations 2008.”[13]The warrants were executed on the morning of 22 March 2011. A number of individuals attended Mr Vuciterni’s home at 7 a.m. when he was there with his family (wife and two young children). A full search of his house, outbuildings and car was undertaken. A computer, a number of cameras, satellite navigation devices, mobile phones and other items, and some cash, were removed for inspection. Later that morning stock comprising decoder boxes and decoder cards, and some £40,000 in cash, were removed from Alsat’s shop premises for inspection, Mr Vuciterni having in the meantime arranged for entry at those premises by Trading Standards. Quantities of documents were also taken and copied. We were told a number of the documents reveal sales to persons who are not individuals – that is, to pubs and clubs and so on. During the course of the latter inspection, Trading Standards became aware of another storage unit used by Alsat and, on further warrant obtained, those premises were inspected also. It is not disputed that expert representatives of MPS were present at those searches.[14]The effect on Alsat’s business – increased no doubt by publicity in the local media – has, according to Mr Vuciterni’s evidence, been profound. There has been lengthy and inconclusive correspondence between the respective lawyers. Certain interim relief was granted at an earlier stage in the proceedings by HHJ Thornton QC (sitting as a judge of the Administrative Court). It should also be noted that initially – and in my view unjustifiably - Trading Standards refused to divulge any details of the basis on which the warrants had been sought and obtained from the Magistrates’ Court.[15]In subsequent evidence, Mr Clark, an expert instructed by Trading Standards, has among other things indicated that of the seventeen Spider Box decoders that he investigated (obtained from the search of Mr Vuciterni’s premises) fourteen were modified to operate in a card-sharing system: three were configured as card-sharing servers and eleven were configured as card-sharing clients.

The legal framework

[16]It will be noted that the Grounds of Application as set out in the Information before the District Judge essentially rely on two grounds. The first was that the supply of Tring TV cards within the UK would “likely be” a breach of banned practice 9 of Schedule 1 to the 2008 Regulations. The second was that the supply of such cards within the UK also “likely constitutes offences” under s.297A of the 1988 Act.[17]Dealing first with the 1988 Act (as amended) s.297A provides as follows:
“Unauthorised decoders (1) A person commits an offence if he – a) Makes, imports, distributes, sells or lets for hire or offers or exposes for sale or hire any unauthorised decoder; b) He has in his possession for commercial purposes any unauthorised decoder; c) Instals, maintains or replaces for commercial purposes any unauthorised decoder; d) Advertises any unauthorised decoder for sale or hire or otherwise promotes any unauthorised decoder by means of commercial communications. 2) A person guilty of an offence under subsection (1) is liable: a) on summary conviction, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum, or both; b) on conviction or indictment, to imprisonment for a term not exceeding ten years, or to a fine, or both. 3) It is a defence to any prosecution for an offence under this section for the defendant to prove that he did not know, and had no reasonable ground for believing, that the decoder was an unauthorised decoder. 4) In this section – “apparatus” includes any device, component or electronic data (including software); “Conditional access technology” means any technical measure or arrangement whereby access to encrypted transmissions in an intelligible form is made conditional on prior individual authorisation; “decoder” means any apparatus which is designed or adapted to enable (whether on its own or with any other apparatus) an encrypted transmission to be decoded; “encrypted” includes subjected to scrambling or the operation of cryptographic envelopes, electronic locks, passwords or any other analogous application; “transmission” means – (a) any programme included in a broadcasting service which is provided from a place in the United Kingdom or any other member state; or (b) an information society service (within the meaning of Directive 98/34/EC of the European Parliament and of the Council of 22nd June 1998, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20th July 1998) which is provided from a place in the United Kingdom or any other member state; and “unauthorised”, in relation to a decoder, means that the decoder is designed or adapted to enable an encrypted transmission, or any service of which it forms part, to be accessed in an intelligible form without payment of the fee (however imposed) which the person making the transmission, or on whose behalf it is made, charges for accessing the transmission or service (whether by the circumvention of any conditional access technology related to the transmission or service or by any other means).”
Section 297A was (as is common ground) designed to give effect to provisions in EC Directive 90/84/EC, the Conditional Access Directive. a) Makes, imports, distributes, sells or lets for hire or offers or exposes for sale or hire any unauthorised decoder; b) He has in his possession for commercial purposes any unauthorised decoder; c) Instals, maintains or replaces for commercial purposes any unauthorised decoder; d) Advertises any unauthorised decoder for sale or hire or otherwise promotes any unauthorised decoder by means of commercial communications. a) on summary conviction, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum, or both; b) on conviction or indictment, to imprisonment for a term not exceeding ten years, or to a fine, or both. “apparatus” includes any device, component or electronic data (including software); “Conditional access technology” means any technical measure or arrangement whereby access to encrypted transmissions in an intelligible form is made conditional on prior individual authorisation; “decoder” means any apparatus which is designed or adapted to enable (whether on its own or with any other apparatus) an encrypted transmission to be decoded; “encrypted” includes subjected to scrambling or the operation of cryptographic envelopes, electronic locks, passwords or any other analogous application; “transmission” means – (a) any programme included in a broadcasting service which is provided from a place in the United Kingdom or any other member state; or (b) an information society service (within the meaning of Directive 98/34/EC of the European Parliament and of the Council of 22nd June 1998, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20th July 1998) which is provided from a place in the United Kingdom or any other member state; and “unauthorised”, in relation to a decoder, means that the decoder is designed or adapted to enable an encrypted transmission, or any service of which it forms part, to be accessed in an intelligible form without payment of the fee (however imposed) which the person making the transmission, or on whose behalf it is made, charges for accessing the transmission or service (whether by the circumvention of any conditional access technology related to the transmission or service or by any other means).”[18]Reference may also be made to s.298 of the 1988 Act which is in these terms: “Rights and remedies in respect of apparatus &c. for unauthorised reception of transmissions 1) A person who - a) makes charges for the reception of programmes included in a broadcasting service provided from a place in the United Kingdom or any other member State; b) sends encrypted transmissions of any other description from a place in the United Kingdom or any other member State; or c) provides conditional access services from a place in the United Kingdom or any other member State, is entitled to the following rights and remedies. 2) He has the same rights and remedies against a person – a) who – i) makes, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire, ii) has in his possession for commercial purposes, or iii) installs, maintains or replaces for commercial purposes any apparatus designed or adapted to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so, or (b) who publishes or otherwise promotes by means of commercial communications any information which is calculated to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so, as a copyright owner has in respect of an infringement of copyright. 3) Further, he has the same rights under section 99 or 100 (delivery up or seizure of certain articles) in relation to any such apparatus as a copyright owner has in relation to an infringing copy. 4) Section 72 of the Supreme Court Act 1981, section 15 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 and section 94A of the Judicature (Northern Ireland) Act 1978 (withdrawal of privilege against self-incrimination in certain proceedings relating to intellectual property) apply to proceedings under this section as to proceedings under Part 1 of this Act (copyright). 5) In section 97(1) (innocent infringement of copyright) as it applies to proceedings for infringement of the rights conferred by this section, the reference to the defendant not knowing or having reason to believe that copyright subsisted in the work shall be construed as a reference to his not knowing or having reason to believe that his acts infringed the rights conferred by this section. 6) Section 114 applies, with the necessary modifications, in relation to the disposal of anything delivered up or seized by virtue of subsection (3) above. 7) In this section “apparatus”, “conditional access technology” and “encrypted” have the same meanings as in section 297A, “transmission” includes transmissions as defined in that section and “conditional access services” means services comprising the provision of conditional access technology.” a) who – i) makes, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire, ii) has in his possession for commercial purposes, or iii) installs, maintains or replaces for commercial purposes any apparatus designed or adapted to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so, or (b) who publishes or otherwise promotes by means of commercial communications any information which is calculated to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so, as a copyright owner has in respect of an infringement of copyright.[19]The 2008 Regulations derive from, and substantially reproduce, the provisions of EC Directive 2005/29/EC. In the relevant respects, the 2008 Regulations provide as follows. “Commercial practice”, “consumer” and “product” are defined in Regulation 2 as follows:
“commercial practice means any act, omission, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product; “consumer” means any individual who in relation to a commercial practice is acting for purposes which are outside his business; ….. “product” means any goods or service and includes immovable property, rights and obligations.”
[20]Regulation 3(4) is to the effect that a commercial practice is unfair if (among other things) it is listed in Schedule 1. Regulation 12 provides that a trader (as defined) is guilty of an offence if he engages in a commercial practice set out in any of paragraphs 1 to 10, 12 to 27 and 29 to 31 of Schedule 1: the penalty being, by Regulation 13, on summary conviction a fine not exceeding the statutory maximum or, on conviction on indictment, a fine or imprisonment for a term not exceeding two years or both. Regulation 15 extends liability to officers of a company consenting to or conniving at a breach of the Regulations. Regulation 17 provides for a due diligence defence. Paragraph 9 of Schedule 1 is in these terms:
“9. Stating or otherwise creating the impression that a product can legally be sold when it cannot.”
Although not perhaps strictly admissible on the question of interpretation, we were referred to the OFT Guidance Notes on the 2008 Regulations. These suggest, as an example of a breach of paragraph 9 of Schedule 1, a trader offering goods for sale in circumstances in which the consumer cannot legally become the owner by buying them, for example because they would have been stolen and there is no legal title to pass on.[21]Also relevant – because the claimants complain not only of the fact of the warrants being obtained but also of the manner in which they were executed – are regulations contained in Part 4 of the 2008 Regulations relating to enforcement. In particular, Regulation 21, entitled “Power of investigation and entry etc”, provides, in the relevant respects, as follows:
“21. 1) A duly authorised officer of an enforcement authority may at all reasonable hours exercise the following powers- a) he may, for the purposes of ascertaining whether a breach of these Regulations has been committed, inspect any goods and enter any premises other than premises used only as a dwelling; b) if he has reasonable cause to suspect that a breach of these Regulations has been committed, he may, for the purpose of ascertaining whether it has been committed, require any trader to produce any documents relating to his business and may take copies of, or of any entry in, any such document; c) if he has reasonable cause to believe that a breach of these Regulations has been committed, he may seize and detain any goods for the purpose of ascertaining, by testing or otherwise, whether the breach has been committed; and d) he may seize and detain goods or documents which he has reason to believe may be required as evidence in proceedings for a breach of these Regulations. 2) If and to the extent that it is reasonably necessary to secure that the provisions of these Regulations are observed, the officer may for the purpose of exercising his powers under paragraphs (1)(c) and (d) to seize goods or documents – a) require any person having authority to do so to break open any container or open any vending machine; and b) himself open or break open any such container or open any vending machine where a requirement made under sub-paragraph (a) in relation to the container or vending machine has not been complied with. 3) An officer seizing any goods or documents in exercise of his powers under this regulation shall – a) inform the person from whom they are seized, and b) where goods are seized from a vending machine, inform – i) the person whose name and address are stated on the machine as being the proprietor’s; or ii) if there is no such name or address stated on the machine the occupier of the premises on which the machine stands or to which it is affixed, that the goods or documents have been seized.”
Regulation 22, headed “Power to enter premises with a warrant”, provides in the relevant respects as follows:
“22. 1) If a justice of the peace by any written information on oath is satisfied – a) that there are reasonable grounds for believing that Condition A or B is met, and b) that Condition C, D or E is met, that justice may by warrant under his hand authorise an officer of an enforcement authority to enter the premises at all reasonable times, if necessary by force. 2) Condition A is that there are on any premises goods or documents which a duly authorised officer of the enforcement authority has power under regulation 21(1) to inspect and that their inspection is likely to disclose evidence of a breach of these Regulations. 3) Condition B is that a breach of these Regulations has been, is being or is about to be committed on any premises. 4) Condition C is that the admission to the premises has been or is likely to be refused and that notice of intention to apply for a warrant under this regulation has been given to the occupier. 5) Condition D is that an application for admission, or the giving of a notice of intention to apply for a warrant, would defeat the object of the entry. 6) Condition E is that the premises are unoccupied or that the occupier is absent and it might defeat the object of the entry to await his return.”
Regulation 23(1) is in these terms:
“23. 1) Any person who – a) intentionally obstructs an officer of an enforcement authority acting in pursuance of these Regulations; b) intentionally fails to comply with any requirement properly made of him by such an officer under regulation 21, or c) without reasonable cause fails to give such an officer any other assistance or information which he may reasonably require of him for the purpose of the performance of his functions under these Regulations; is guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale.” that the goods or documents have been seized.”

The Grounds of Challenge

[22]Mr Howe, on behalf of the claimants, mounts a considerable number of grounds of challenge – some overlapping – to the issue and execution of the warrants. In summary, they are as follows: i) The District Judge (Magistrates’ Court) was misled by Trading Standards. ii) The District Judge could not, on the law, have been satisfied that there were reasonable grounds to suspect that inspection would disclose a breach of the 2008 Regulations. iii) If provided with the proper material, no tribunal could reasonably have concluded that the grant of a warrant (rather than the deployment of alternative means) was appropriate in this case. iv) The District Judge was not alerted to the very serious doubt whether the alleged conduct could amount to a criminal offence and the decision was flawed thereby. v) The application for the warrants was an abuse, having regard to the powers otherwise available under s.296ZC and s.297C of the 1988 Act. vi) The removal of items from the claimants’ premises was unlawful since the inspection and production required under the 2008 Regulations had not been exhausted and a power of seizure had not arisen. vii) In any event, the removal of such items was wholly disproportionate. viii) The grant of a warrant to enter the first claimant’s home, and the execution of that warrant, was unlawful. ix) The execution of both warrants was unlawful because they were treated as search warrants when all that was permitted was inspection. x) The warrant was exercised at the first claimant’s home at an unreasonable hour. Mr Howe also complained, as I have said, of the close involvement of FAPL and BSkyB at almost every stage. But it is not said that there has been any unlawful maintenance (to the extent that there is any life left in such doctrine); and FAPL and BSkyB had and have a clear commercial interest in the activities of the claimants. Nevertheless, it would, I accept (and speaking generally) be a matter of concern if Trading Standards departments were to take enforcement steps at the behest of, and financially assisted by, powerful and wealthy corporations which otherwise might not be taken. But that, in the present case and on the current evidence, does not bear on the outcome here. I also record that Mr Howe very fairly accepted that Mr Ashby himself, even if (on Mr Howe’s case) misinformed, acted in good faith.

The Legal Context

[23]As presented to the District Judge, the case was (relatively) straightforward on either ground as advanced to him. But on any view the position was in truth nothing like so straightforward.[24]The view in the past had been held in some quarters that in circumstances such as the present – where the satellite decoder cards had been imported into the UK for sale and use in the UK when it had been stipulated that they were for use only in Albania – such importation and sale would be unlawful. But such a position was explicitly rejected by the European Court in joined cases C-403/03 and C-429-03: Football Association Premier League Ltd & Ors v QC Leisure & Ors; and Karen Murphy v Music Protection Services Ltd: Mrs Murphy’s case, indeed receiving a good deal of publicity in the British press. The Court of Justice (Grand Chamber) held, among other things, that an “illicit device”, for the purposes of Directive 98/84/EC, was to be interpreted as not covering foreign decoder devices used, in disregard of the broadcaster’s will, outside the geographical area for which issued, or used in breach of a contractual limitation permitting their use only for private purposes. It further held, applying Article 56 TFEU, that member states were precluded from legislating so as to make unlawful the importation or sale or use of foreign decoding devices giving access to encrypted satellite broadcasting services from another member state that included subject matter protected by the legislation of the first state; and that was so whether or not the foreign decoding device had been “procured” with the intention of circumventing the territorial restrictions in question or by the fact that it was to be used for commercial purposes, even though contractually restricted to private use. It was further held that an exclusive contract containing such restrictions was prohibited under Article 101 of TFEU. That judgment was delivered on 4 October 2011 (after the warrants were obtained in this case). But the conclusions accorded – as is not infrequently the case – with the opinion previously expressed by an Advocate General: in this case Advocate General Kokott, whose opinion had been delivered on 3rd February 2011. MPS and FAPL were assuredly aware of such opinion. Mr Ashby and Trading Standards, it would seem, were not: they had not been told of it and had taken no expert outside legal advice on this whole area. It may be noted that specialist judges in the English courts, in directing a reference in those cases, had also previously expressed preliminary views to like effect as those subsequently reached by the European Court. Again, MPS and FAPL (but not Mr Ashby) would have known that.[25]In the light of those decisions, Mr Mellor conceded that reliance in this case on s.297A of the 1988 Act cannot be maintained. These decoder cards simply were not “unauthorised decoders” (in the sense used in the section, reflecting the provisions as to illicit devices set out in the Conditional Access Directive): they were not pirate cards as such but Tring TV cards imported from Albania. They were capable of being lawful parallel imports.[26]Some emphasis was placed before us on the cards being imported from Albania (that is, not a member state). That may be relevant so far as the conclusions in the QC Leisure and Murphy cases extended to rights and obligations between member states arising under TFEU. But, reflecting the Conditional Access Directive, the words “designed or adapted” cannot have one meaning in one context and a different meaning in another context. (Indeed in the QC Leisure case some of the imported satellite decoder cards in question were from North Africa.) I understood Mr Mellor to accept as much. He rightly accepted that although the QC Leisure and Murphy cases were cases involving s.298, the phrase “designed or adapted”, in the light of the European Court decision, must also have the same meaning in s.297A.[27]On the case presented to the District Judge by reference to the 2008 Regulations, it was represented that the decoder cards likely could not be sold “legally” within the UK. By reference to s.297A of the 1988 Act, as is now established, that is not so. Accordingly, to the extent that it is argued the cards could not be so sold, as being in breach of the contractual restrictions applicable in Albania (and of which Mr Vuciterni is to be presumed to have been aware), that connotes that paragraph 9 of Schedule 1 to the 2008 Regulations would need to be relied on to extend to conduct which was (ex hypothesi) in alleged breach of contract under civil law.

Disposition

[28]Given this background, and the view I take of the matter, I can, I think, deal with the position relatively shortly: and it is neither necessary nor appropriate to seek to hack through all the thickets of intellectual property law which this case is capable of throwing up. In my view, there was significant and material non-disclosure to the District Judge: and the decision to grant the warrants should be quashed on that basis.[29]The first point is to repeat that the supplying of the decoder cards, as is now established, did not constitute offences under s.297A of the 1988 Act; nor could it fairly be represented to the District Judge at the time that it was “likely” that they did, given the significant doubts which had previously been expressed by the English courts and by Advocate General Kokott. Mr Ashby may not himself have known of that. But plainly he had not been told of such doubts by MPS or anyone else; and he had not himself sought fully to research or take independent legal advice on the point. Given that an offence under s.297A carries a maximum of ten years’ imprisonment, the allegation in the grounds carried with it an inference of serious and barefaced illegality. At the least, the District Judge should have been alerted to the potential significant doubts as to the existence of any offence under s.297A.[30]Mr Mellor, realistically acknowledging that the second ground relied on in the grounds put before the District Judge had now fallen away, made two submissions. First, he submitted that reliance on s.297A before the District Judge was an alternative (and secondary) ground. Second, and more fundamentally, he submitted that if Trading Standards had gone before the District Judge with the case now advanced the District Judge would inevitably have granted the warrants in the same way in any event. He also emphasised that the recovery of card-sharing devices in Mr Vuciterni’s house (as commented on in the expert evidence of Mr Clark) was strongly indicative of criminal offending (see s.297ZB of the 1988 Act): and generally, he submitted, various explanations given by Mr Vuciterni for his conduct were thoroughly implausible and unconvincing. He also reminded us of the seemingly evasive and equivocal behaviour of the staff of Alsat at the time of the test purchase.[31]I would agree that, as matters stand, there are some unsatisfactory or unexplained features of the claimants’ behaviour and conduct which are called into question and which may well call for more detailed examination, in another forum, in due course. But for the purposes of the present case the position is by no means clear-cut on the current evidence. In any event I do not see how the (possible) existence of other offences or other unlawful conduct, arising from materials discovered by the searches, can of itself override the grave deficiencies in the information actually supplied to the District Judge in obtaining the warrants in the first place.[32]Mr Mellor nevertheless submitted that the reliance before the District Judge on the alleged breach of paragraph 9 of Schedule 1 to the 2008 Regulations (which he styled “the primary ground”) was of itself enough to justify the grant of the warrants.[33]I do not agree. As presented to the District Judge, this case connoted – and was intended to connote – criminal illegality. I find that difficult. Absent s.297A of the 1988 Act, the underlying relevant allegation in its essentials comes down to the claimants selling in the UK decoder cards which they knew were only authorised to be sold in Albania and were only authorised to be for domestic use. That scenario might or might not give rise to a civil liability. But, as at present advised, I think it very debatable as a matter of interpretation whether the word “legally” (by reference to what is “sold”) as used in paragraph 9 of Schedule 1 to the 2008 Regulations – reflecting the corresponding provision in Annex 1 to Directive 2005/29/EC – extends to such civil wrongdoing: the more so when, by Regulation 12, a criminal offence is capable of arising from breach of paragraph 9 of Schedule 1. As put to Mr Mellor in argument, if a shop owner is subject to a restrictive covenant in his lease not to sell, for example, meat and he, in breach of such covenant, knowingly proceeds to sell meat to customers is it really to be said that he is in breach of the 2008 Regulations, with a potential criminal sanction? Mr Mellor himself was disinclined to say that he would be. To the extent that he then sought to say that in the present case the purported sales to customers by Alsat were “nullities”, and so – he asserted – within paragraph 9 of Schedule 1, I also found that difficult. On the face of it, and whatever the contractual restrictions purporting to apply, Alsat had property and title in the acquired decoder cards (they were, for example, not stolen or counterfeit) which, on the face of it, it could transfer to buyers. At all events, nothing was addressed to the District Judge to indicate that, at the very least arguably, something other than criminality under the 2008 Regulations might be involved.[34]These points seem to highlight the reality of the position: that if criminality under s.297A was to be excluded (or at the least identified as a doubtful proposition) then – as matters stood before the District Judge – what was in dispute could be viewed in substance and commercial reality as a civil matter between FAPL and/or BSkyB and the claimants. If that had been identified, it is difficult not to think that matters may well have taken a different course: most obviously, for example, the District Judge may well have considered that some less draconian sanction than a warrant was appropriate and that the position should be left to be decided in civil proceedings (for example, possibly by reference to s.298(2)(b) of the 1988 Act); and that any appropriate interim injunctive relief – doubtless including cross-undertakings in damages – could have been granted (or not, as the case may be) by a specialist Chancery Division judge. But, given the way the matter was presented to the District Judge, that line of thinking inevitably would not have been addressed.[35]I am well aware of the frequent need for speed and robustness in this context, as in many other Trading Standards contexts. Moreover – speaking generally, not necessarily by reference to this case – prospective defendants in this area often have no inclination or intention to abide by the law, criminal or civil. But it must never be forgotten that the granting of a warrant (no less than the making of a search and seize, or Anton Piller, order) is a most extreme and invasive kind of order, not to be granted without great caution and dependent on appropriate full and accurate disclosure by the applicant. As stated by Latham LJ in Redknapp v Commissioner of the City of London Police [2008] EWHC 1177 (Admin); [2009] 1 WLR 2091 at para 13:
“The obtaining of a search warrant is never to be treated as a formality. It authorises the invasion of a person’s home. All the material necessary to justify the grant of the warrant should be contained in the information provided on the form…”
Reference also should be made to the observations of Kennedy LJ in R (Energy Financing Team Limited) v Bow Street Magistrates’ Court [2005] EWHC 1626 (Admin), [2006] 1 WLR 1316. Those not only stress the need for full disclosure but also, and importantly, stress the need to consider whether other, lesser, measures sufficient to do justice may be ordered.[36]In my view, in what would inevitably have been an application in a rather esoteric field for the District Judge, there was a very significant failure to give full disclosure or to draw attention to the potential difficulties in establishing criminal or unlawful conduct on the part of the claimants. I think that was causative of injustice. Mr Mellor’s suggestion that Trading Standards were not required “to place every conceivable contrary argument” before the District Judge grossly understates the position here. I also do not accept Mr Mellor’s submission that full disclosure would inevitably have resulted in the grant of the warrants anyway (which in any event is not necessarily a conclusive point): if anything, I think the probabilities are that the District Judge, if fully and properly informed, simply would not – and justifiably so – have taken so draconian a step as to grant these warrants.[37]It is also insufficient to assert that the searches in the result have potentially thrown up prima facie cases of different criminality (for example under s.297ZB of the 1988 Act). What happens after the event does not necessarily condone or justify what happens before the event. Mr Mellor in fact sought to say that the evidence indicates that there would be further offences on the part of buyers/users under s.297(1) of the 1988 Act. Perhaps; but that raises issues too. For one thing, paragraph 9 of Schedule 1 is directed at creating an impression that a product can legally be sold (when it cannot): that is not necessarily the same as creating an impression that a product can be legally used. As to s.297(1), Mr Mellor asserted that the claimants were encouraging or inciting buyers to engage in illegal use. That too raises issues, both factual and legal. The argument would also involve consideration as to the extent to which the principles of CBS Songs v Amstrad Consumer Electronics Ltd [1988] RPC 576 might come into play. But even more fundamentally, this is yet another way of seeking to justify the issue of the warrants by arguments and asserted facts which simply were never presented to the District Judge for his assessment.[38]Mr Mellor sought a reference to the Court of Justice on the issue of the interpretation of paragraph 9 of Schedule 1 to the 2008 Regulations. But, whatever my current reservations as to Mr Mellor’s submissions on that issue of interpretation, I do not decide this matter by reaching, or relying on, a final and concluded view as to the interpretation of the 2008 Regulations or on the meaning of the word “legally” there used. I do so on the issue of material non-disclosure: a decision which is specific to the circumstances of this case.[39]Taking the view, as I do, that this was serious and material non-disclosure, and rejecting, as I do, the argument that the District Judge would in any event inevitably have issued the warrants if properly informed, I would exercise discretion, having regard to all the circumstances, so as to quash the warrants.[40]The arguments and grounds on this aspect of the case were very detailed and elaborate and I am aware that I have not dealt with all of them. Indeed, as there are extant criminal proceedings, and potential further civil proceedings, it would be better not to. I think, however, that I have sufficiently identified the essential reasons why I would quash the warrants.[41]I should add that Mr Mellor did also submit that it would be “futile” to set aside the warrants. I totally disagree, given the circumstances.

The execution of the warrants

[42]Mr Howe also complained about the lawfulness of the execution of the warrants.[43]Criticism was made of the timing of the attendance at Mr Vuciterni’s house, the number of people attending, the manner of the searches and so on. I reject those criticisms. Clearly Trading Standards would wish to attend at a time when Mr Vuciterni himself would be present, even if (predictably) his wife and children also would be. Attendance at 7 a.m. was not unreasonable in the circumstances of this case. I also would reject the complaint as to lack of proportionality with regard to items seized, given the basis on which the warrants had been granted so far as Trading Standards were concerned.[44]Mr Howe, however, mounted two principal arguments as to the lawfulness of the execution of the warrants: i) First, he submitted that under the 2008 Regulations the warrants could only confer power to enter and inspect: not to search. ii) Second, he submitted that under the 2008 Regulations there was no power to enter a private dwelling at all and accordingly no power to issue a warrant for that purpose.[45]I emphatically disagree with both submissions.[46]The overall structure of Regulations 21 and 22 is clear enough. Regulation 21 permits entry without a warrant, in the specified circumstances, but does not extend to premises used only as a dwelling. Regulation 22 permits entry of any premises, in the specified circumstances, under the power conferred by a warrant.[47]The short point – though much elaborated – of Mr Howe is that neither Regulation sanctions more than entry and inspection: neither, he submits, sanctions a search. Further, he says, since intrusion into private property is involved, and since criminal sanctions may be imposed in respect of any obstruction under Regulation 23, and having regard to Article 8 of the Convention, these Regulations should be narrowly construed according to the wording actually used.[48]The powers given under Regulation 21(1)(a) – (d) and under Regulation 22 (2)(a) and (b) are disjunctive and separate. It is impossible to see how they could be effectively exercised if a power to search is not available: is an enforcement officer, having lawfully obtained entry, confined to standing in the hallway and looking around, by way of “inspection”, for what he can (or cannot) see? Plainly not. The powers conferred necessarily connote a power to, for example, search a desk or cabinet to see if there are relevant documents which may be required to be copied, if a breach has reasonably been suspected; they connote that an enforcement officer may, for example, go into backrooms and store rooms to see if there are goods that should be seized or detained, if there is reasonable cause to believe (not just suspect) a breach; and likewise may search for containers or vending machines. The powers to enter (and inspect) therefore plainly carry with them a power to search, as a matter of sensible construction. It must also not be overlooked that in this area of consumer protection very often thoroughly unscrupulous and disreputable people may be involved (I am again talking generally, not necessarily by reference to this case) and appropriately robust powers are to be expected to be available.[49]If confirmation be needed (and I doubt it is) it is to be found in the provisions of s.50 of the Criminal Justice and Police Act 2001. It is legitimate to refer to that statute as an aid to the interpretation of the 2008 Regulations, because paragraphs 63 and 64 of Schedule 2 to those Regulations incorporate reference to – and additions to – the provisions both of s.66(4) and section 50 of the 2001 Act. Thus, s.50 amongst other things says:
“(1) Where – (a) a person who is lawfully on any premises finds anything on those premises that he has reasonable grounds for believing may be or may contain something for which he is authorised to search the premises…”
The statutory provisions expressly refer to authority or power to “search”. Mr Howe’s faint attempt, by reference to the wording of paragraph 64 of Schedule 2, to limit this to instances of seizure, does not displace that clear indication of the Parliamentary intention: indeed if Mr Howe’s argument were right, s.50 could never come into play at all for the purposes of the 2008 Regulations because (on his argument) there is no power to search at all. (a) a person who is lawfully on any premises finds anything on those premises that he has reasonable grounds for believing may be or may contain something for which he is authorised to search the premises…”[50]Then Mr Howe sought to say that, in any event, the 2008 Regulations did not confer power to enter a dwelling house, even if a warrant had been obtained, at all. As I understood the argument, it is based on the proposition that “the premises” identified in Regulation 22(1) is referring back to the premises mentioned in Regulation 21(1) – that is, any premises other than premises used only as a dwelling house. Mr Howe also placed reliance on the fact that Regulation 22(2) – which sets out condition A – extends to goods and documents which an enforcement officer has power under Regulation 21(1) to inspect: Regulation 21(1), he reiterated, relating to premises other than premises used only as a dwelling.[51]However Regulation 22 is headed “Power to enter premises with a warrant”, without qualification. It is not subordinated to Regulation 21. Further, Regulation 22(2) and (3) expressly refer to “any premises” without qualification: and it is to those that Regulation 22(1) is referring. To interpret Regulation 22 as Mr Howe would interpret it not only goes against the obvious structure of the Regulations, and the natural meaning of Regulation 22, naturally read; it would also deprive Regulation 22 of much of its evident purpose. It also would serve as a charter and encouragement to the unscrupulous to store incriminating items or documents in their private homes. The careful requirements that either condition A or B is met and, in addition, that one of conditions C, D or E are met (to the satisfaction of the Magistrate) is in part to be explained precisely because entry to a private house is contemplated as being within the ambit of the Regulations.[52]I would also on this issue of execution reject, notwithstanding the view I have expressed above on the issue of material non-disclosure for the purposes of Regulation 22, Mr Howe’s suggestion that there were not reasonable grounds to suspect or believe, as the case may be, for the purposes of Regulation21. That, on the evidence, does not deal with the situation which arose by reference to warrants obtained under Regulation22. Mr Howe’s further suggestion that Trading Standards were, prior to searching or seizing, required first to ask the claimants to produce for copying their documents (on risk of prosecution under Regulation 23 if they did not) is neither mandated by the wording of the Regulations nor consistent with any kind of sense.[53]I further reject Mr Howe’s argument that the warrants (headed “Warrant to Enter”) had not in terms conferred power to search. Read as a whole (and given also the express reference on their face to Regulation 22), in my view they were sufficiently worded. Further, the accompanying PACE Code B Notices by reference to s.50 of the 2001 Act had – as will be gathered, correctly in my view – designated the seizures as being under a “search” warrant. To the extent that Mr Howe also complained that seizure of decoder cards or of the decoder boxes (in respect of which breach of s.297ZB is now being alleged), was not authorised, the wide wording of the warrants in my view covered that seizure.[54]Accordingly I reject the various arguments of Mr Howe on the interpretation of Regulations 21 and 22 and the ambit of the warrants issued. Where the required conditions are satisfied, enforcement officers may enter and inspect and for that purpose may search and seize under the 2008 Regulations (as augmented by the 2001 Act). Although I would set aside the warrants for material non-disclosure, I should make clear that my reasoning on this aspect of the case is not to be taken as obiter. The matter represents a live issue between the parties. (It also, I would add, have had profound implications for Trading Standards officials everywhere if Mr Howe were right). Further, given that in any subsequent criminal proceedings there may be issues as to whether evidence obtained by these searches should, in the court’s discretion, be excluded, those courts should know – for the purposes of the exercise of the discretion if the point arises – that this court (if Irwin J agrees with me) has not decided that the warrants were either obtained or executed unlawfully. Rather it has been decided that they should be set aside, and the decision to issue them quashed, on grounds of material non-disclosure.

Conclusion

[55]I would make an order quashing the warrants. I would refuse, however, to make a declaration, as sought, that the warrants were unlawfully executed. The parties should endeavour to reach agreement on the terms of an order giving effect to these conclusions, and on any other subsequent matters that may arise. If they cannot, the matter will have to be restored for further argument on any outstanding points.[56]I agree.

Cited in 1 later judgment