Panesar & Ors v The Central Criminal Court & Anor [2014] EWHC 2821 (Admin)

Case Nos: CO/1032/2014, CO/1462/2014 and CO/1494/2014

[2014] EWHC 2821 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

DIVISIONAL COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date Thursday 14 th August 2014

Before

THE LORD CHIEF JUSTICE OF ENGLAND AND WALES

MR JUSTICE FOSKETT

Between

THE QUEENClaimants

on the applications ofClaimant

(1) SANJAY PANESARClaimant

(2) ALEXANDER WINDSORClaimant

(3) AVTAR HAREClaimant

(4) KULWANT HAREClaimant

(5) LOREDAN ILLIESClaimant

(1) SARBJIT SINGH GILLClaimant

(2) SURAJ PRAKASH SINGH BRARClaimant

(3) BARRY DAVID CHAMBERSClaimant

(4) MICHAEL DAVID WELHAMClaimant

(5) AMARDEEP MARWAHAClaimant

(1) BRIJESH PATELClaimant

(2) GARETH TURNERClaimant

THE CENTRAL CRIMINAL COURTDefendant

THE COMMISSIONER FOR HER MAJESTY’S REVENUE AND CUSTOMSInterested Party

(Transcript of the Handed Down Judgment of

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Rupert Bowers and Marc Glover (instructed by Rainer Hughes Solicitors) for Claimants (Panesar to Illies)

Jamas Hodivala (instructed by Blackford LLP) for Claimants (Gill to Marwaha)

Andrew Bird (instructed by Solicitor’s Office, HM Revenue & Customs) for Interested Party

James Hodivala (instructed by Bivonas LLP) for Claimants (Patel and Turner)

for The Defendant did not appear and was not represented

Hearing Hearing date: 24 June 2014

Judgment

Foskett J (with whom Lord Thomas of Cwmgiedd, CJ joins in this judgment):

Introduction

[1]This application for permission to apply for judicial review, referred to a Divisional Court for consideration on a “rolled up basis” by Foskett J by order dated 19 May 2014, is a sequel to a number of cases to come before the Court of Appeal Criminal Division or this court. Those cases are R v Windsor and others

[2011] 2 Cr. App. R. 7

, R (Panesar and ors) v Bristol Crown Court and HMRC

[2011] EWHC 842 (Admin)

and Windsor and others v Bristol Crown Court

[2011] EWHC 1899 (Admin)

. Reference should be made to them for a detailed account of the substantive and procedural history. We grant permission in each case.

[2]In short, search warrants and restraint orders made by the Crown Court in relation to various of the Claimants were quashed subsequently at various times and the issue has arisen as to the extent to which the Interested Party (‘HMRC’) may retain copies of the material obtained pursuant to the warrants in the circumstances that obtain in this case.

[3]The question has arisen as to whether there is jurisdiction to permit an application to the Crown Court for the retention of such material pursuant to section 59(5)(b) of the Criminal Justice and Police Act 2001 (‘CJPA’). The Claimants contend that there is no such power. HMRC submits that there is.

[4]It is that question that falls to be determined in these proceedings. It is a pure jurisdiction issue. If there is jurisdiction to entertain the application, it will be for the Crown Court (at least initially) to consider how it is to be exercised.

[5]It is, as we shall observe, a question that could have been raised directly in a number of cases in recent years, but it has not been raised. That, of course, does not mean that it may not on full and proper analysis be a valid point, but the fact that it has not been advanced previously when it could have been immediately strikes a note of caution, a note that resonates when the practical implications of its acceptance are considered. We will return to these matters in due course.

How the issue comes before the court

[6]In 2010 HMRC was investigating what appeared to have been a very significant “diversion fraud” relating to alcoholic drink which, if it occurred, would have resulted in the evasion of excise duty and VAT in substantial amounts. Each of the Claimants was suspected of having played some part in the fraud. One of the Claimants was Mr Sanjay Panesar, a solicitor practising as Anami Law from offices at Griffin’s Wood House, Copped Hall Estate, Epping, premises owned by another claimant, Avtar Hare.

[7]On 2 December 2010 HMRC applied ex parte to His Honour Judge Horton at Bristol Crown Court for authorisation under section 8(1) of the Police and Criminal Evidence Act 1984 (‘PACE’) for 31 search warrants for premises of 11 businesses and 18 individuals including the Claimants in the present proceedings. A separate application was made under Schedule 1 of PACE relating to “special procedure material” at the premises referred to in paragraph 6 above.

Judge Horton authorised the issue of the warrants.

[9]Four days later, on 6 December 2010, the Crown Prosecution Service (‘CPS’) applied ex parte to His Honour Judge Hawkins QC at the Central Criminal Court for certain restraint and receivership orders in relation to three of the claimants in the present proceedings and two companies. The restraint and receivership orders arose from the same alleged fraudulent enterprise and were founded on the same, or substantially the same, evidence.

Judge Hawkins QC made the orders sought.

[11]The search warrants were executed on 7 December 2010. Judge Hawkins QC refused to discharge the orders at a subsequent inter partes hearing on 23 December 2010, giving his reasons on 4 January 2011.

[12]The orders made by Judge Hawkins QC were challenged by those affected in the Court of Appeal Criminal Division. Following a 3-day hearing, on 9 February 2011 the appeals were allowed and the orders were quashed: see the first case referred to in paragraph 1 above. The appellants included the claimants Alexander Windsor, Kulwant Hare and Avtar Hare. The court, however, suspended the order quashing the restraint and receivership orders to permit the CPS to make a speedy new application to the Crown Court with enhanced evidence. The new application was made to Mackay J at the Central Criminal Court. On 22 February 2011 he rejected the renewed application and, accordingly, the quashing order made by the Court of Appeal became effective.

[13]The challenge to the orders made by Judge Horton came before this court (Sir Anthony May P and Kenneth Parker J) on 15 March 2011. In a judgment handed down on 5 April 2011 the orders were quashed: see the second of the three cases referred to in paragraph 1 above. The consequential relief granted in the order made included(i) an order for the return of the material seized as the result of the execution of the warrants and

(ii) the continuation of certain injunctions made in December 2010 restraining “any examination or copying of any material taken from the Claimants’ premises on 7 December [2010] under the purported authority of warrants issued by the first defendant [the Crown Court at Bristol] on 2 December 2010, save by agreement with the Claimants.” The order for the return of material was made subject to the determination of any application under s.59 which HMRC made before 14 April.

[14]After the order of 5 April 2011 in the claims to which the order related, five further judicial review claims were made seeking the quashing of further warrants issued on 2 December 2010 by Judge Horton. In due course HMRC conceded that these claims should be allowed and the relevant search warrants were quashed.

[15]It should be noted that the grounds upon which the Court of Appeal Criminal Division quashed the warrants (subject to the further application to Mackay J) was that the criterion under section 40(2)(b) of the Proceeds of Crime Act 2002 required to justify the making of a restraint order (namely, that there is “reasonable cause to believe that the alleged offender has benefited from his criminal conduct”) had not been satisfied. In the subsequent proceedings in which this court considered whether to quash the warrants authorised by Judge Horton it was said(a) that “although section 40(2) of the 2002 Act is not identical with section 8(1)(a) of the 1984 Act, there is substantial overlap – reasonable cause to believe that there has been criminal conduct in the 2002 Act, and reasonable grounds for believing that an indictable offence has been committed in the 1984 Act”,

(b) that “the CACD and Mackay J both decided essentially the same issue in the restraint order proceedings as arises in these search order proceedings” and, accordingly,

(c) that Judge Horton “could not properly have reached the conclusion that he did and should not have issued the search warrants, which this court will quash.” It follows that the basis upon which the warrants were quashed was that there were no reasonable grounds to believe that an indictable offence had been committed. It is that deficiency that, in consequence, infected all the warrants and led, in the manner indicated above, to the quashing of all the warrants made on 2 December 2010.

[16]On 14 April 2011 HMRC issued an application under section 59 of CJPA. On 7 June 2011 HMRC issued an application to vary the order of 5 April 2011 to enable it to examine, use or copy the material seized for the purposes of making an application under section 59 of CJPA. This application was rejected by this court (Laws LJ and Kenneth Parker J) in a judgment handed down on 27 July 2011: see the third of the three cases referred to in paragraph 1 above.

[17]The background to the issue raised in the present proceedings can be seen from that judgment at paragraphs 23-39. At paragraph 23 the court recorded the position as follows:

“HMRC accepts that all original material seized should be returned to the respective Claimants. However, HMRC invites the Court to suspend the operation of that obligation pending the outcome of an application under section 59 of the 2001 Act. The Claimants contend that section 59 has no application to the present circumstances and no suspension of the obligation to return is justified. HMRC also invites the Court, in the exercise of its discretion, to permit HMRC to take copies of, and generally make use of such copies, both to support any section 59 application and in furtherance of the (continuing) criminal investigation. The Court, therefore, heard argument in respect of the Crown Court’s jurisdiction under section 59 and in relation to the appropriate form of discretionary relief in these claims.”

[18]In relation to the argument concerning section 59 the decision of the court on 5 April 2011 had been “to suspend the operation of HMRC’s obligations under the order, so as to allow HMRC the opportunity to make an application under section 59, without prejudice to the right of the original Claimants to contend in the Crown Court as they have now in fact contended, that section 59 has no application” (paragraph 26). The court also said that “HMRC should have a similar opportunity in respect of the present claims, and the final order in the present claims should be in similar appropriate terms, unless it is plain that the Crown Court has no jurisdiction and any such application would be obviously futile.” Having considered relatively brief arguments the court decided that “the interpretation of section 59 put forward by the Claimants [was] far from obvious, and the terms of the final order in the present claims, as in the original claims, should allow HMRC to make an appropriate application under section 59 of the 2001 Act” (see paragraph 32).

[19]In relation to the question of whether HMRC should be obliged to destroy copies that it had already made of seized material or not to use information derived from such copies, the court decided that it would not be proportionate so to order for the reasons given in paragraph 38 of the judgment which included the factor that “if criminal proceedings were at some point brought against any of the Claimants, the admissibility of evidence arising from documents that had been unlawfully seized would be subject to the safeguards contained in section 78 PACE.”

[20]The final form of the order giving effect to this decision was not concluded until November 2011, but it effectively directed the return of all material seized under the quashed warrants subject to the outcome of the proposed application under section 59 which, provided it was instituted within a certain timescale, would operate to suspend the obligation to return the material pending the outcome of the application.

[21]The hearing of the application under section 59 was much delayed. It did not take place until 22 January 2014 before His Honour Judge Nicholas Cooke QC sitting at the Central Criminal Court. It is extremely regrettable, indeed inexcusable, that it should have been so delayed. Judge Cooke made reference to the circumstances at the beginning of the oral ruling he gave on 6 February:

“There has been significant delay ... in terms of [this application] being listed and dealt with timeously. This has been the result of a difficulty in identifying a judge [who is] suitable and willing to take this case and the general pressure of work at the Central Criminal Court. I am afraid that the unfamiliarity of the listing office with an application of this nature has also played its part. Despite my making every effort to try to improve matters in terms of being able to provide a suitable slot, I feel that I should record that whilst dealing with this matter I have had to deal with a number of other cases including a breach of a suspended sentence order, sentencing in a diminished responsibility manslaughter and trying an historic rape allegation. I have also had to comply with a commitment with the Judicial College. I am only able to deal with this case at all today because the rape [case] to which I have referred is only [to be heard] for three days this week for medical reasons. I mention all of this because even at this stage the parties are facing significant inconvenience as a result of the pressure of work which I face, which I regret ….”

[22]His ruling on the competing submissions on the substantive issue resulted in his conclusion there was jurisdiction to entertain the application. It is the Claimants’ challenge to that ruling that forms the subject of the current proceedings. It is clear that the judge saw his conclusion as a preliminary ruling that might be the subject of challenge. However, a hearing of the substantive application has been fixed to commence on 8 September 2014. It is that fact that has led to the expedition of the hearing of this application.

[23]Before turning to the competing arguments, the relevant statutory provisions should be recorded.

The relevant statutory provisions

[24]In the light of the arguments, it is necessary and convenient to set out section 59 of the CJPA in full: “(1) This section applies where anything has been seized in exercise, or purported exercise, of a relevant power of seizure. (2) Any person with a relevant interest in the seized property may apply to the appropriate judicial authority, on one or more of the grounds mentioned in subsection (3), for the return of the whole or a part of the seized property. (3) Those grounds are—(a) that there was no power to make the seizure;

(b) that the seized property is or contains an item subject to legal privilege that is not comprised in property falling within section 54(2);

(c) that the seized property is or contains any excluded material or special procedure material which— (i) has been seized under a power to which section 55 applies; (ii) is not comprised in property falling within section 55(2) or (3); and (iii) is not property the retention of which is authorised by section 56;

(d) that the seized property is or contains something seized under section 50 or 51 which does not fall within section 53(3); and subsections (5) and (6) of section 55 shall apply for the purposes of paragraph (c) as they apply for the purposes of that section. (4) Subject to subsection (6), the appropriate judicial authority, on an application under subsection (2), shall— (a) if satisfied as to any of the matters mentioned in subsection (3), order the return of so much of the seized property as is property in relation to which the authority is so satisfied; and (b) to the extent that that authority is not so satisfied, dismiss the application. (5) The appropriate judicial authority— (a) on an application under subsection (2), (b) on an application made by the person for the time being having possession of anything in consequence of its seizure under a relevant power of seizure, or (c) on an application made— (i) by a person with a relevant interest in anything seized under section 50 or 51, and (ii) on the grounds that the requirements of section 53(2) have not been or are not being complied with, may give such directions as the authority thinks fit as to the examination, retention, separation or return of the whole or any part of the seized property. (6) On any application under this section, the appropriate judicial authority may authorise the retention of any property which— (a) has been seized in exercise, or purported exercise, of a relevant power of seizure, and (b) would otherwise fall to be returned, if that authority is satisfied that the retention of the property is justified on grounds falling within subsection (7). (7) Those grounds are that (if the property were returned) it would immediately become appropriate— (a) to issue, on the application of the person who is in possession of the property at the time of the application under this section, a warrant in pursuance of which, or of the exercise of which, it would be lawful to seize the property; or (b) to make an order under— (i) paragraph 4 of Schedule 1 to the 1984 Act, (ii) paragraph 4 of Schedule 1 to the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989 1341 (N.I. 12)), (iii) section 20BA of the Taxes Management Act 1970 (c. 9), or (iv) paragraph 5 of Schedule 5 to the Terrorism Act 2000 (c. 11), under which the property would fall to be delivered up or produced to the person mentioned in paragraph (a). (8) Where any property which has been seized in exercise, or purported exercise, of a relevant power of seizure has parts (“part A” and “part B”) comprised in it such that— (a) it would be inappropriate, if the property were returned, to take any action such as is mentioned in subsection (7) in relation to part A, (b) it would (or would but for the facts mentioned in paragraph (a)) be appropriate, if the property were returned, to take such action in relation to part B, and (c) in all the circumstances, it is not reasonably practicable to separate part A from part B without prejudicing the use of part B for purposes for which it is lawful to use property seized under the power in question, the facts mentioned in paragraph (a) shall not be taken into account by the appropriate judicial authority in deciding whether the retention of the property is justified on grounds falling within subsection (7). (9) If a person fails to comply with any order or direction made or given by a judge of the Crown Court in exercise of any jurisdiction under this section— (a) the authority may deal with him as if he had committed a contempt of the Crown Court; and (b) any enactment relating to contempt of the Crown Court shall have effect in relation to the failure as if it were such a contempt. (10) The relevant powers of seizure for the purposes of this section are— (a) the powers of seizure conferred by sections 50 and 51; (b) each of the powers of seizure specified in Parts 1 and 2 of Schedule 1; and (c) any power of seizure (not falling within paragraph (a) or (b)) conferred on a constable by or under any enactment, including an enactment passed after this Act. (11) References in this section to a person with a relevant interest in seized property are references to— (a) the person from whom it was seized; (b) any person with an interest in the property; or (c) any person, not falling within paragraph (a) or (b), who had custody or control of the property immediately before the seizure. (12) For the purposes of subsection (11)(b), the persons who have an interest in seized property shall, in the case of property which is or contains an item subject to legal privilege, be taken to include the person in whose favour that privilege is conferred.” (i) has been seized under a power to which section 55 applies; (ii) is not comprised in property falling within section 55(2) or (3); and (iii) is not property the retention of which is authorised by section 56; (i) by a person with a relevant interest in anything seized under section 50 or 51, and (ii) on the grounds that the requirements of section 53(2) have not been or are not being complied with, (i) paragraph 4 of Schedule 1 to the 1984 Act, (ii) paragraph 4 of Schedule 1 to the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989 1341 (N.I. 12)), (iii) section 20BA of the Taxes Management Act 1970 (c. 9), or (iv) paragraph 5 of Schedule 5 to the Terrorism Act 2000 (c. 11),

[25]Section 63 makes section 59 applicable to “copies”:

“(1) Subject to subsection (3)— (a) in this Part, “seize” includes “take a copy of”, and cognate expressions shall be construed accordingly; (b) this Part shall apply as if any copy taken under any power to which any provision of this Part applies were the original of that of which it is a copy; and (c) for the purposes of this Part, except sections 50 and 51, the powers mentioned in subsection (2) (which are powers to obtain hard copies etc. of information which is stored in electronic form) shall be treated as powers of seizure, and references to seizure and to seized property shall be construed accordingly ….”

The legislative history of section 59 and the arguments advanced

[26]It is well-recognised that the decision in R v Chesterfield Justices, ex parte Bramley

[2000] QB 576

forms at least part of the backdrop to the passing of sections 50-60 and Schedules 1 and 2 of the CJPA. Mr Rupert Bowers, for some of the Claimants, submits that this affords a substantial basis for the argument that Parliament did not intend to confer the power under section 59 contended for by HMRC. He suggests that that Part 2 of the CJPA was the “legislative response” to the issues raised by the Chesterfield Justices case and that section 59 was not intended to create a free-standing power to authorise the retention of property which had been unlawfully seized.

[27]As we have indicated, we do not doubt that the provisions of Part 2 were intended to deal with the issues raised in the Chesterfield Justices case, but it does not necessarily follow that they were the only issues addressed by Part 2.

The Explanatory Note

[28]This was recognized in R (El Kurd) v Winchester Crown Court and SOCA

[2011] EWHC 1853 (Admin)

, where this court (Laws LJ and Stadlen J) referred to the terms of a number of the paragraphs in the Explanatory Notes, including the paragraph referable to section 59. Such notes can, of course, be referred to in order to see the “contextual scene in which the Act is set”: see Flora (Tarlochan Singh) v Wakom (Heathrow) Ltd

[2006] EWCA Civ 1103

at [15-17]. The Notes relating to section 59 read as follows:

“Section 59: Application to appropriate judicial authority 176. This gives anyone with a relevant interest in the seized property the right to apply to the appropriate judicial authority (as defined in section 64) for its return. It is hoped this will provide a quick and easy mechanism for challenging both the use of the new powers and, in certain circumstances, the exercise of existing powers. Subsection (3) sets out the grounds on which an application for the return of the property can be made. On such an application the Court can order the return of material or, amongst other things, order that it be examined, for example, by an independent third party. Subsections (5)(b), (6) and (7) enable the police or other body in possession of the property to make an application to keep any material which they would otherwise be obliged to return if it would immediately become appropriate to issue a warrant enabling them to seize that material or to demand its production in the circumstances set out in subsection (7)(b). This means, for example, that the police will not have to return material which might be of value to them and then have to immediately obtain a warrant to seize it back. Subsection (8) means that the Court can also authorise the retention of not just what the police or others could seize under a warrant but also any material which is inextricably linked to it.”

[29]Simply stopping at that point and looking no further, it is, therefore, said specifically in the Note that subsection 5(b) is designed toenable the police (or other body in possession of the property) to make an application to retain anything that would otherwise need to be returned “if it would immediately become appropriate to issue a warrant enabling them to seize that material or to demand its production” in the circumstances set out in subsection (7)(b) of the Act. Whatever those notes may say, Mr Bowers on behalf the Claimants submits that “it must have been envisaged that the jurisdiction under section 59 would be invoked on application by the person from whom property had been taken …” and relies upon subsection (2) in support of that proposition.

The decision in R (El Kurd) v Winchester Crown Court and SOCA

[30]The provisions of sections 50-59 were reviewed extensively in El Kurd and we see no need to repeat that extensive analysis. The point precisely in issue in the present case was not considered directly in that case, but the general analysis carried out does helpfully inform the point in question. In the first place, there was a clear recognition that these sections (together with the associated schedules) went further than simply addressing the difficulties identified in the Chesterfield Justices case. In relation to the Explanatory Notes, the following paragraph (paragraph 160), which dealt with the new sections introduced by the Act under the heading ‘Outline of proposals’, was also noted by the court in El Kurd: “The new sections do two separate things. First they deal with the problem identified by Bramley. They give the police and other law enforcement agencies, powers to remove material from premises so that they can examine it elsewhere, where it is not possible to examine it properly on the premises, due to constraints of time or technology. Second, they recognise the fact that with the advent of modern technology and the expansion in the use of computers, it is often important for investigators to be able to seize and forensically examine an entire disk or hard drive, in order to determine when individual documents have been created, amended and/or deleted. This inevitably means retaining all the material on the hard drive, including possibly legally privileged material. The new sections give the police and others the power to retain this inextricably linked material. The sections also provide for a number of safeguards to prevent abuse and to allow for a mechanism whereby an application can be made to a Judge for the return of material seized. In certain circumstances there will be an obligation on the police and others to secure the material in question pending the determination of such an application.” (Our emphasis.)

[31]In El Kurd Stadlen J (with whom Laws LJ agreed), said (at paragraph 56) that “the provisions made by Section 59 for applications to be made and directions and orders to be made apply not only to property seized pursuant to the powers of seizure conferred by Sections 50 and 51 but also to property seized pursuant to the powers of seizure specified in Parts 1 and 2 of Schedule 1” and continued (at paragraph 57) by saying that “[it] is thus clear … that Part 2 … was enacted not solely for the purpose of providing new powers for removing material for the purpose of sifting but for additional purposes as well.” (Our emphasis.) His overall conclusion on this part of the new legislative scheme, having referred to paragraph 176 of the Explanatory Notes, was as follows (at paragraph 60): “In my view this makes it plain that the relevant provisions of Section 59 are not confined to property seized in the exercise or purported exercise of the powers conferred by Sections 50 or 51. It also in my view supports the proposition that the discretionary power to order retention of property seized in purported exercise of a relevant power extends to property which has been unlawfully seized. Such property is property which the police would otherwise be obliged to return and as made clear by paragraph 176 the purpose of the new discretionary power to order retention conferred by Section 59(6) is in an appropriate case to avoid the police having to return property which it is not otherwise entitled to retain if it would upon return be entitled to seize it pursuant to a fresh warrant.” (Our emphasis.)

[32]We recognise that, strictly speaking, the passage in that observation (to which we have added emphasis) was obiter because it was not necessary for the decision in that case. It is, nonetheless a persuasive dictum and we consider it right to attach significance to it.

Our approach

[33]However, we have examined the matter entirely afresh in the light of the submissions presented to us by the Claimants and HMRC and have reached the same conclusion.

[34]First, we have set out the intention of Parliament as is to be gleaned from the language of the Act and the Explanatory Notes.

[35]Second, the consequence of the construction advanced by the Claimants would be that those suspected of crime would be put in a far better position as a result of the action of the investigating authority in obtaining warrants than they would have been before the warrants were issued. Those suspected of crime would know that the investigating authorities were interested in materials that had been enumerated in the warrants and seized. If the materials had to be returned before a fresh warrant was issued, those suspected would then be in a position to destroy the materials before the fresh warrant could be executed. Parliament could never have intended to give that advantage to those suspected of crime.

[36]Third, the procedure under which the investigating authority can apply to the court not only protects the investigating authority from the risk that the material might be destroyed, but it also protects those suspected, as the investigating authority has to prove it would be entitled to the issue of a warrant.

[37]Fourth, as we have already noted at paragraph 5 above, the point advanced in this case has not been taken in other cases, despite the distinguished representation and hard-fought nature of those cases. i) El Kurd was, of course, a case in which the application under section 59(5)(b) for authority for the retention of property seized under the defective warrant was made by the party that obtained (wrongfully) the warrant, namely, SOCA. It is one of the cases where the point raised in the present case could have been raised, but was not. ii) In R (Rawlinson & Hunter) v Central Criminal Court and SFO

[2013] 1 WLR 1634

the Divisional Court (Sir John Thomas P and Silber J) decided that, on the grounds of the serious non-disclosure, it should quash the search warrants that had been granted on the application of the SFO. The court was invited to conclude that if other material then available had been provided to the judge who granted the warrants, then the warrants would have been granted and, accordingly, the Divisional Court should not set them aside. For the reasons given in paragraphs 175-178 the court rejected that argument, but concluded its observations as follows at paragraph 179:

“That is however not to say that the public interest should not be protected. As the court observed in R (Cook) v SOCA [2011] 1 WLR 144 at paragraph 16, there is the public interest to consider criminal justice. That public interest can be protected. If the SFO considers that the documents should not be returned, it can utilise the statutory procedure available under s.59 of the Criminal Justice and Police Act 2001 which we consider at paragraphs 276 and following.”

No point was taken in argument that the use of section 59 was not the obviously correct procedure by any of the experienced and distinguished advocates appearing. iii) In R (Van der Pijl) v Kingston Crown Court

[2013] 1 WLR 2706

, the Metropolitan Police Service (‘MPS’) applied to the Crown Court pursuant to section 9(1) and Schedule 1 of PACE for, and obtained, authorisation for a search warrant which was then executed. The MPS then sought orders under section 59(6) of the CJPA to permit its retention of material seized purportedly pursuant to the search warrant. Both the warrant and the orders were challenged in this court (Sir John Thomas P, as he then was, and Wilkie J). The search warrant was held not to comply with section 15 of PACE because the names of the suspects were omitted. It was, accordingly, quashed. Since the orders under section 59(6) had been obtained on the basis that there was a valid search warrant in existence, they too fell to be quashed: see paragraphs 67 and 68. The question arose of what should happen as a result of the warrant and the orders being quashed. Wilkie J (with whom Sir John Thomas P agreed) dealt with the position in the following paragraphs:

“85. The claimants seek an order that the MPS return the material and any copies which have been taken of such material which is in their possession to the claimants on the basis that there is no lawful authority for its continued retention. 86. In my judgment, on the face of it, that must be the appropriate order. However, as Mr Lewis QC has pointed out it is open to the MPS to make an application under s.59(5) in respect of material which is in their possession which has been seized in purported exercise of a relevant power of seizure, which includes seizure pursuant to Schedule 1 of the 1984 Act. In my judgment the property which was seized, under the, now known to be, unlawful search warrant, would, even in the light of its being quashed by this court, have been seized in purported exercise of the Schedule 1 power. In those circumstances, it would be open to the MPS to make an application to the Crown Court, pursuant to s.59(5), for an order under s.59(6) for retention of the property, which would otherwise fall to be returned, on the basis that s.59(7) applies namely: that if the property were returned it would immediately become appropriate to issue an application for a warrant in pursuance of which it would be lawful to seize the property. 87. This might be on the basis that the defect with the search warrant, which has resulted in my conclusion that it must be quashed, was one which could have been remedied by the insertion into the warrant of the identity of “the suspects” in the five categories of property where, in the warrant granted, they were unidentified. 88. In my judgment, it would not be just to quash the orders on terms which would preclude the ability of the MPS to make an application to the Crown Court pursuant to section 59, if so advised and provided they did so with due expedition. Therefore, I would make an order, ancillary to quashing the orders [made under section 59(6)], that the MPS be ordered to return all property and any copies which have been taken of such material, currently in its possession, seized, pursuant to the warrant … and/or retained pursuant to the orders … within 14 days of the making of the order unless, in the meantime, the MPS has made an application to the Crown Court at Kingston pursuant to s.59(5) for the retention of the material pursuant to s.59(6) on the grounds that the conditions in s.59(7) are satisfied.”

Mr Alun Jones QC, for the Claimant, did not challenge the approach taken by MrJames Lewis QC for the MPS or submit that an order in the terms set out in paragraph 88 of Wilkie J’s judgment should not be made.

[38]It follows that in each of the foregoing cases the jurisdiction of the Crown Court to entertain an application under section 59 by the police or other investigating authority to retain material seized pursuant to a warrant that was either acknowledged to be invalid or was quashed by the court was recognised and accepted.

[39]Since this approach accords for the reasons we have given with what was the intention of Parliament, how is it that it is challenged in these proceedings? In short the challenge is made on narrow linguistic grounds.

The argument advanced on behalf of the Claimants

[40]Although Mr Bowers (supported by Mr Marc Glover) and Mr Hodivala for the Claimants place a different emphasis on certain parts of the argument, they are at one with two propositions: i) Since a search warrant represents a serious invasion of the liberty of the subject and that fundamental rights cannot be overridden by general or ambiguous words, the drafting of section 59 is insufficiently precise to give rise to the jurisdiction for which HMRC contends. ii) The absence of the expression “purported exercise of a relevant power of seizure” from section 59(5)(b) demonstrates Parliament’s intention that if the “relevant power of seizure” has been quashed, then the material has not been seized pursuant to that power with the result that no application may be made to retain the unlawfully seized material pursuant to that provision. There is, it may be thought, a tension between those two propositions because if the second proposition is correct, the first does not truly arise.

[41]The starting point, of course, is that the statute, and in particular the provisions of Part 2, have to be considered as a whole. Section 59(1) provides clearly that section 59 is intended to apply “where anything has been seized in exercise, or purported exercise, of a relevant power of seizure” (emphasis added). The argument of HMRC (advanced by Mr Andrew Bird) is that the jurisdiction to grant relief under any part of section 59 is dependent only upon property having been seized in exercise or purported exercise of a relevant power of seizure and what happens later is irrelevant to the question of jurisdiction, although it may go to the exercise of the discretion given to the Crown Court when invited to exercise its powers. That, in our judgment is the essential premise to be derived from section 59(1) for the deployment of the powers set out in the rest of section 59.

[42]However, the issue is whether the omission of the words in section 59(5)(b) to which we have drawn attention as the foundation of the Claimants’ argument in sub-paragraph (ii) of paragraph 40 above has the effect for which the Claimants contend.

[43]Mr Hodivala submits, echoing Mr Bowers’ submission, that the reason for the drafting of section 59(1) is that section 59 as a whole was intended to provide a cheap and speedy mechanism by which an individual may claim the return of property in the circumstances set out in section 59(3), including those where the appropriate “judicial authority” decides that there was “no power to make the seizure” (see section 59(3)(a)). As the Crown Court does not have the power to quash a search warrant, that can, he submits, only be a reference to a situation where property has been seized outside the scope of a valid warrant. The reference to a “purported exercise” of a relevant power of seizure is, accordingly, referable to a finding by the appropriate judicial authority that there was, in fact, “no power to make the seizure” and that section 59 should be read accordingly. He submits that HMRC’s construction of the statutory scheme involves what he asserts to be “an extraordinary extension of the State’s powers.” He submits that, as a matter of plain statutory construction, an extension of the powers to permit retention of seized property when there was no valid power of seizure would have been expressly provided for by Parliament.

Our consideration of the Claimants’ arguments

[44]Whilst we understand the linguistic basis advanced in support of this argument, and whilst the section could have been more felicitously drafted, the wording of the section read as a whole and the plain intention of Parliament cannot lend any support to the Claimants’ arguments.

[45]In the first place, the question arises as to the meaning of “purported exercise of a power” and whether the omission of that expression in section 59(5) is of significance. Judge Cooke raised the question of what impact the omission of this expression should have; he felt obliged to give the omission meaning even though not in the way contended for by the Claimants. HMRC submits that a “purported exercise of a power of seizure” means exercising a power of seizure which did not in fact exist at the time it was exercised. The expression does not, Mr Bird submits, distinguish between the various reasons why a power of seizure may not have existed, nor between substantive or procedural factors giving rise to the invalidity of the warrant under which the seizure was effected. It may, for example, have simply been that the warrant was not signed or that it was valid, but for the wrong premises. He submits that where a warrant has been quashed for whatever reason, the power of seizure may nevertheless be said to have been “exercised”. Where there was in fact or in law no power to have executed the warrant, there would have been a “purported exercise” of the power. The scheme of section 59, he submits, is that it does not matter whether the officers engaged in the search pursuant to the existence of a warrant were, when seizing property, acting in exercise of a power conferred by the warrant or whether they were acting in purported exercise of it, the jurisdiction afforded by the section arises in either event. Any suggested retrospective dimension involved when a warrant is quashed does not make any difference.

[46]This does, in our view, represent the natural meaning and effect of the words in the section. Any alternative meaning would result in a strained interpretation that cannot, in our judgment, have reflected the true Parliamentary intention. It would lead to the highly undesirable consequence that documents that might yield evidence of serious criminality must be returned (or returned without copies being made) to those with potentially a clear interest in their destruction before the investigating authority has had an opportunity to apply for and obtain a warrant free from the deficiencies that infected the first warrant. The analysis in El Kurd on the absence of the word “purported” in section 59(5)(b) is, in our view, correct. Stadlen J said this at paragraph 46:

“It is right to point out that different language is used in Section 59(5)(b) and Section 59(6)(a) in relation to the power under which the property sought to be retained was seized. The former refers to an application made by the person for the time being having possession of anything in consequence of its seizure under a relevant power of seizure. The latter enables the appropriate judicial authority to authorise the retention of any property which has been seized in exercise, or purported exercise of a relevant power of seizure. Notwithstanding that difference of language, it seems to me that the former should be construed as including an application made by the person for the time being having possession of anything in consequence of its seizure under the purported exercise of a relevant power of seizure. That construction is in my view necessary to make sense of the power conferred by Section 59(6), and follows from the fact that one of the circumstances in which the latter power is exercisable is where (i) an application has been made under Section 59(5)(b) (which is “an application under this section”) and (ii) property has been seized in purported exercise (as distinct from actual exercise) of a relevant power of seizure.” (Emphasis as in original.)

[47]In our judgment, HMRC was right to contend that acceptance of the arguments advanced on behalf of the Claimants would mean that where a warrant is quashed a third party or custodian of the material seized would be unable to seek directions under section 59. For example, a laboratory independent of the investigating authority to which some material had already been submitted for forensic analysis may find itself the subject of conflicting claims to the return of the material when the defect in the warrant under which the material had been seized is identified. If the Claimants’ arguments are correct, the laboratory would not be able to seek the assistance of the court in determining what to do in circumstances where it was concerned that returning the material to the party from whom it was seized might destroy it.

Conclusion

[48]In our judgment, notwithstanding the arguably infelicitous drafting of section 59, its meaning and intent is plain. Any other construction would confer a very serious advantage on those suspected of crime as we have set out at paragraph 35 above. It is plain that Parliament can never have intended that advantage to be given to those suspected of crime and those investigating it to be disadvantaged. The process under section 59, as it should, in our view, be construed, protects the interests of both. The Crown Court has, in our clear view, jurisdiction to entertain an application by HMRC under section 59.

[49]The hearing fixed for 8 September 2014 must therefore proceed, as the Court has the jurisdiction to determine the application. We would make two observations which arise out of the inordinate delay in respect of the determination of the proceedings under section 59 relating to the issue of the warrants and their setting aside: first the Central Criminal Court must accord the application and any further proceedings the highest priority in terms of listing and time for consideration by the judge. Second those conducting the proceedings must work together to ensure a more orderly presentation of the evidence and the arguments than occurred before us.