Mallik & Ors, R (On the Application Of) v Manchester And Salford Magistrates' Court [2016] EWHC 3723 (Admin)

Case No CO/1220/2016

[2016] EWHC 3723 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

DIVISIONAL COURT

Venue Royal Courts of Justice, Strand London WC2A 2LL

Date Tuesday, 29 November 2016

Before

LORD JUSTICE BEAN

MR JUSTICE SUPPERSTONE

Between

THE QUEEN ON THE APPLICATION OF MALLIK & ORSAppellant

MANCHESTER AND SALFORD MAGISTRATES' COURTRespondent

Computer-Aided Transcript of the Stenograph Notes of

WordWave International Limited

Trading as DTI

8th Floor, 165 Fleet Street, London EC4A 2DY

Tel No: 020 7404 1400 Fax No: 020 7404 1424

(Official Shorthand Writers to the Court)

Mr R Bowers (instructed by Khans ) appeared for Appellant

Mr A Bird (instructed by the Government Legal Department) appeared for Respondent

J U D G M E N T (Approved)

[1]MR JUSTICE SUPPERSTONE: In this claim, the claimants challenge the issue and execution of three search warrants. The outstanding issue between the parties to be determined at this hearing concerns the terms for the disposal of the proceedings.

[2]The factual background is that the third defendant was conducting a criminal investigation into suspected offences of conspiracy to facilitate a breach of Immigration Law and conspiracy to rob.

[3]The third claimant, and its associated companies, which include DM Digital Television Limited, which I shall refer to as "DM Digital", provide broadcasting services.

[4]The first claimant is a director of DM Digital. The second claimant is the son of the first claimant and the signatory to a bank account of DM Tradex Limited, who I shall refer to as "DM Tradex".

[5]One route by which non-EU nationals may apply for leave to remain in the UK is by the Tier 2 visa system. Under this system, a UK based employer may issue a certificate of sponsorship which states it will provide employment to the applicant for the visa.

[6]The allegation being investigated is that the first claimant and his company, DM Digital, whose business address was 20 Lord Street, Cheetham Hill, Manchester, were fabricating offers of employment or making statements that visa applicants were employed by them and were receiving payment from the applicants in return. The second defendant's company, DM Tradex, was one of the methods by which payments were received and distributed.

[7]On 29 July 2014, the Home Office Sponsor Licence Unit made a compliance visit to DM Digital and identified that 48 individuals, for whom that company had purportedly been the sponsor, were not in fact employed by it.

[8]In order to progress the investigation with a view to potential criminal proceedings the third defendant wished to search for evidence at the home and business premises of the claimants and to arrest and interview the first and second claimants.

[9]On 27 January 2016, DC Ellaby, a constable in the service of Greater Manchester Police, but seconded to the third defendant, made an application to the first defendant for the issue of a warrant under Section 8 of the Police and Criminal Evidence Act 1984 to search 5 Silverton Grove, Middleton, where the second claimant resided and any vehicles associated to the address.

[10]On 1 February 2016, two further applications for Section 8 warrants were made to the second defendant by Investigating Officer Ratcliffe. The second and third warrants related respectively to the the premises at Yasmeen House, Chadwick Hall Road, Rochdale, the home address of the first claimant; and at 20 Lord Street, the business premises of the third claimant.

[11]All three warrants were executed on the morning of 2 February 2016. A variety of items were seized. During the search at 20 Lord Street the executing officers also (and inadvertently) entered the adjoining set of premises at 30 Stock Street, also occupied by the first and second claimants and other companies of which they are directors.

[12]In a claim form dated 4 March 2016, the claimant sought to challenge the issue and execution of the search warrants on four grounds. Permission was refused by Hickinbottom J on paper on all grounds.

[13]On 26 August, on a renewed application for permission this court, Gross LJ and Nicol J, granted permission on Ground 2 and a newly added Ground 5 as re-cast by the court. Permission was refused in respect of Grounds 1, 3 and 4.

[14]The court recognised that Ground 2 and Ground 5 were related and indeed, as the claimants contend, they are really two aspects of the same issue. Ground 2 is that the warrants failed to comply with 15(6)(b) of PACE which requires that a search warrant shall identify, so far as is practicable, the articles to be sought.

[15]Permission for the claimants to argue Ground 5 was granted in the following terms:

"The third defendant unlawfully failed to inform the first and second defendants that there were live businesses operating at 20 Lord Street and the ‘employment documentation’ which might be found there, and at the other premises for which search warrants were sought might include genuine documents. Had they done so there was a real possibility that the first and second defendants would not have been able to conclude that there were no reasonable grounds to believe that employment documents would include special procedure material and a necessary condition for the grant of the search warrants might not therefore have been satisfied."

[16]In a document headed "Grounds of Concession and Submissions as to Relief from the third defendant”, dated 13 July 2016, Mr Andrew Bird, who appears on behalf of the third defendant, records that during a review of the case operational orders were brought to the attention of the third defendant's legal advisers for the first time; as was the fact that the ‘employment material’ sought under the warrants in fact was material relating only to the 48 identifiable, by name, persons for whom the first claimant and his company, DM Digital, had sponsored employment visas.

[17]As a result of that review the third defendant recognised that there is merit in Ground 2. The expression "employment documentation" is now accepted by the third defendant to have been too wide and insufficiently particularised.

[18]Ground 5 is not in its terms conceded but it is conceded that there was a failure to inform the court that there were live businesses operating at 20 Lord Street and that if this point had been raised then the distinction between current and past employment documents would have been identified. The probability, Mr Bird states, is that the search warrants would have been required to be amended or redrafted to exclude documents relating to the live businesses in which the third defendant had no interest and the scope of the warrants restricted to documents restricted to documents relating to the 48 named persons sponsored for visas.

[19]As a consequence of these concessions, the third defendant accepts that the warrants are likely to be quashed and the entries, searches and seizures declared to be unlawful.

[20]Once the warrants are quashed and/or declared to be unlawful, and so the properly seized “falls to be returned”, then the third defendant intends to seek relief from the Crown Court under the statutory procedure provided for by section 59 of the Criminal Justice and Police Act 2001, ("the 2001 Act").

[21]The practical problem that arises that has required the present hearing is that the third defendant contends that she cannot make that application in advance of the determination of the judicial review, since an assurance was given on 24 February 2016 to the claimants that she would not look at the material seized pending the outcome of the judicial review.

[22]It is therefore not possible to say whether the application would relate to all the items seized or just some of them, and how the submissions as to relevance and materiality would be formulated.

[23]The claimants have been invited to relax that requirement so that the material can now be inspected and copied for the purpose of making the intended section 59 application. They have refused to agree to such a relaxation. They contend that it is for the judge of the Crown Court to decide how the material should be sifted once the third defendant has made an application under section 59(2).

[24]The relief sought by the claimants in the claim form is for immediate delivery up of all materials seized and for a prohibition upon any derivative use. The third defendant seeks a direction from the court that any order to return the material seized under the searches pursuant to the warrants should be postponed to, and subject to any further directions made in the section 59 application, and that such material or copies may be used for the purposes of the section 59 application.

[25]Section 59 of the Criminal

Justice and Police Act 2001 provides, so far as relevant to this claim:

"59. Application to the appropriate judicial authority. (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. [...] (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 Act2000 (c. 11) under which the property would fall to be delivered up or produced to the person mentioned in paragraph(a). [...] (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."

[26]Mr Bird, in a document headed "Final Submissions as to Relief by the Third Defendant" dated 20 November 2016, helpfully brings to the attention of the court the case law relevant for the purposes of a section 59 application.

[27]He notes that it all predates the more onerous requirements as to the content of a section 59 application that had been in force since 4 April 2016.

[28]In the recent decision of R (on the application of) Chatwani & Ors v The National Crime Agency & Anor

[2015] EWHC 1283 (Admin)

the Divisional Court reviewed the relevant case law. Hickinbottom J, in a judgment with which Davis LJ agreed, noted at paragraph 134 that:

"Thus, Parliament has permitted the retention of documents obtained from an unlawful search, under certain circumstances, and subject to the agency holding the seized documents persuading a Crown Court judge that(i)he would now grant a notional application for a warrant that would result in the seizure of those documents, and(ii)he should exercise his discretion to allow retention."

[29]Hickinbottom J further observed at paragraph 136 that: [...] despite an application under section 59 being the norm, there may be circumstances in which it is appropriate for this court to deny an agency any benefit from its wrongdoing – including the benefit of having the seized material(and work product from it) available for the pursuit of a section 59 application – by ordering the return and/or destruction of such material."

[30]In each case, the question is whether the conduct of the agency is such that it should be relieved of any benefit of the unlawful searches. Davis LJ was of the view that in Chatwani:

"151. The conduct of the NCA both in the manner of obtaining and in the manner of executing the warrants was sufficiently egregious, albeit falling short of bad faith, as to justify depriving it of any advantage or benefit whatsoever derived from such warrants."

[31]Hickinbottom J observed that an agency's conduct in obtaining and/or executing the warrant or their subsequent conduct may drive this court to give the subjects of the warrants relief to deny the agency of all benefit of the unlawful search. Each case will be fact-dependent. However, he stressed that the circumstances in which the court is likely to make such a finding "will be rare" (paragraph 139).

[32]In his final submissions, Mr Bird submits that this is a “normal” case. The conduct of the third defendant was not so egregious that should disable her from taking up the opportunity provided for by Parliament. There is no allegation of bad faith in the present case, nor, in my view, can the conduct of the third defendant be described as was the case in Chatwani(supra) as amounting to, as per Hickinbottom J:

"141. [...] an egregious disregard for, or indifference to, the constitutional safeguards within the statutory scheme with which they are operating."

[33]On the basis of the conceded breaches of section 15(6)(b) of the Police and Criminal Evidence Act 1984, and the expression "employment documentation” being too wide and insufficiently particularised, and that there was a failure to inform the court that there were live businesses operating at 20 Lord Street, the warrants were unlawful.

[34]However, I do not consider that the claimants have identified any conduct on the third defendant's part that takes the present case outside the norm so as to effectively disable her from making a Section 59 application.

[35]Mr Rupert Bowers QC, who appears for the claimants, does not argue to the contrary. The claimants accept that the circumstances of this case are such that the court would permit the third defendant an opportunity to remedy her unlawful possession of the seized material by making an application under section 59.

[36]Mr Bowers says that what is between the parties is what should take place prior to that application being made, the default position being that if the application is not made in time the material must be returned.

[37]The third defendant wishes to examine the material she holds prior to making the application. The claimants contend that any examination of the material should be the subject of directions once the application has been made. Any application by the third defendant will be made pursuant to sections 59(5)(b)and 7(a).

[38]Pursuant to section 59(5)(b) the court:

"may give such directions as the authority think fit as to the examination, retention, separation or return of the whole or any part of the seized property."

[39]Mr Bowers submits that Parliament has specifically given the discretion under section 59(5) to the judge of the Crown Court. That being so, it would cut across that jurisdiction for this court to effectively predetermine any issue relating to how the material should be examined when deciding what relief should be given.

[40]Mr Bowers submits that all the third defendant needs to do is to set out with particularity what it is that she seeks, which the claimants suggest in their letter of 8 September 2016 seems clear: it is material relating to the 48 individuals. That being so, the third defendant can make the application straight away and the matter can be listed for a directions hearing as soon as the court can accommodate it.

[41]However, Mr Bird points out that since 4 April 2016, a new rule, 47.38 of the Criminal Procedural Rules 2015 has applied to applications under section 59.

[42]The relevant parts are as follows:

"Application for an order under section 59 of the Criminal Justice and Police Act 2001. 47.38. — (1) This rule applies where an applicant wants the court to make an order to which rule 47.35(1)(b) refers. (2) The applicant must apply in writing and serve the application on — (a) the court officer; and (b) as appropriate — (i) the person who for the time being has the seized property (ii)each person whom the applicant knows or believes to have a relevant interest in the Property. (3) In each case, the application must — (a) explain the applicant’s interest in the property (either as a person with a relevant interest or as possessor of the property in consequence of its seizure, as appropriate); (b) explain the circumstances of the seizure of the property and identify the power that was exercised to seize it (or which the person seizing it purported to exercise, as appropriate); And (c) include or attach a list of those on whom the applicant has served the application. [...] (5) On an application for an order for the examination, retention, separation or return of property. Under section 59(5) of the 2001 Act, the application must — (a) specify the direction that the applicant wants the court to make, and explain why; (b) if applicable, specify each requirement of section 53(2) of the Act (examination and return of property) which is not being complied with; (c) if applicable, explain why the retention of the property by the person who now has it would be justified on the grounds that, even if it were returned, it would immediately become appropriate for that person to get it back under — (i) a warrant for its seizure, or.

(d) "

[43]Mr Bird submits that in order to comply with this rule which requires a focused approach the third defendant will need, at the very least, to itemise in the schedule the material in respect of which relief under Section 59 is sought and to identify which grounds for retention apply to which items of property.

[44]In a simple case, where only a few items were seized and could clearly be described or the contents were self-evident, it would be possible for a Section 59 application to be made without first examining the material.

[45]However, in this case, 108 exhibits were seized from three separate premises. Many of the exhibits consist of multiple documents and the descriptions are often in general terms.

[46]The current list, reflecting the brief descriptions accorded by officers in the course of the searches, would, Mr Bird submits, be only of limited assistance to the Crown Court judge.

[47]The only case that is of assistance in relation to this specific issue is HMRC v Cheema (Nottinghamshire County Court) case number T201444 of 17 January 2014.

[48]In that case the judicial review claim relating to the issue and execution of search warrants was heard by a Divisional Court comprising Treacy LJ and King J on 15 November 2015, and immediately following that hearing a section 59 application came on before King J sitting as a judge of the Crown Court.

[49]Mr Bowers submits that the process King J undertook was entirely consistent with the claimant's position. However, King J noted at paragraph 19 of his judgment that the difficulty he found himself in when considering the application was that it failed to set out in any legible form the property which had been seized and for which retention was sought.

[50]The judge further noted that an application made after seizure is in respect of known articles which must mean that the onus is on the applicant to show that the sub-section 8(1)PACE criteria for the grant of a warrant is satisfied in relation to the known contents or characteristics of each particular article (paragraph 20).

[51]King J was of the view that it must follow that in order to begin to make out its application for the retention of any particular item seized, the applicant must first examine its contents which requires relaxation of the order made against examination (paragraph 21).

[52]Mr Bird submits that it is necessary in the present case for the purposes of launching the section 59 application that the third defendant examine all the material. I accept Mr Bird's submission that those observations of King J in Cheema(supra) apply equally to the present case.

[53]It seems to me that the only remaining question is whether an order to this effect is made by this court or whether it must be made by a judge of the Crown Court once the section 59 application has been made.

[54]If a judge of the Crown Court would necessarily have to make such an order, which in my view he would, I can see no reason why this court (or I, sitting for this purpose as a judge of the Crown Court), should not make the order and the claimants can then make an application to the Crown Court for directions thereafter, if they choose to do so. For the reasons I have given I would in principle make an order in the terms sought by the third defendant.

[55]With regard to the defendant's proposed order for disposal, revised 20 November 2016, paragraphs 1 to 4 of the order, I agree. Paragraph 5, I would amend to add the word "only" in the second line after the word "purposes" and in the third line insert the word "and" after "2001".

[56]As for paragraph 6, I would add that:

"no such property or copies may be retained or used by the third defendant for any other purposes save to the extent that the judge so orders in the section 59 proceedings and any material in respect of which the judge refuses to authorise its retention shall be returned to the claimants or in the case of copies destroyed."

LORD JUSTICE BEAN: I agree.

[58]Mr Bowers and Mr Bird, did you get my Lord's wording of paragraph 6?

MR JUSTICE SUPPERSTONE: I will happily read that out again.

[60]MR BIRD: Would you, my Lord?

MR JUSTICE SUPPERSTONE: Most certainly.

[62]MR BIRD: I got the first bit but not the second, thank you.

MR JUSTICE SUPPERSTONE: Yes.

[64]Paragraph 6. What I said was, paragraph 6 presently reads:

"Any further use of copies and/or originals is to be determined by the judge in the section 59 proceedings."

[65]I would add that:

"No such property or copies may be retained or used by the third defendant for any other purposes save to the extent that the judge so orders in the section 59 proceedings and any material in respect of which the judge refuses to authorise its retention shall be returned to the claimants or in the case of copies destroyed."

[66]MR BIRD: Thank you, my Lord.

LORD JUSTICE BEAN: Are there any other matters?

[68]MR BOWERS: My Lord, there is costs, both in general and of today. We are, I think, largely agreed. My learned friend prefers detailed assessment of the costs, accepting costs in principle save for what he may have to say about today. I am not going to argue against that.

[69]In relation to damages, just so the court knows, we are again agreed that the question of that should be transferred both in principle and in quantum to the Central County Court.

LORD JUSTICE BEAN: So we can delete "Queen's Bench Division". Paragraph 9?

MR JUSTICE SUPPERSTONE: Paragraph 9.

LORD JUSTICE BEAN: Transfer to the Central London County Court and paragraph 10 provides for costs.

[73]MR BOWERS: Yes, and then in relation to the costs of today, in my submission there should be no order for costs, given that the issue has largely fallen on the consideration of the facts of this case.

[74]MR BIRD: My Lords, I would submit that there should be no order of costs for today but probably that should go backwards a little bit in time to include a preparation for today.

[75]Perhaps paragraph 10 should read that:

"The third defendant should pay the claimant's costs of the judicial review proceedings up to [if we were for example to give a date, say in October, when the issue got clarified between us, those could be] the subject of a detailed assessment."

LORD JUSTICE BEAN: There should be no order as to the costs of the hearing nor as to the costs of the final skeleton arguments for the hearing.

[77]MR BIRD: So be it.

LORD JUSTICE BEAN: But I think you accept you must pay before that.

[79]MR BIRD: Yes.

[80]MR BOWERS: Thank you.

LORD JUSTICE BEAN: Thank you both very much.

[82]MR BIRD: May I thank the court for sitting early to accommodate me.