England and Wales High Court (Administrative Court) Decisions

1. MR JUSTICE JOWITT: This is an application for judicial review of the issue of search warrants pursuant to Section 8 of the Police and Criminal Evidence Act 1984 in relation to seven different properties and their execution. There are thirteen applicants. Nine of them, the fifth to thirteenth, are limited companies to which I refer, because of the links between them, as the Venture Group of companies. The first four applicants are connected with the management of one or more of the nine companies. Four of the search warrants related to the respective homes of these four applicants. Two related to commercial premises connected with certain of the applicant companies. These six search warrants were issued by the Magistrate on 11 4 97 and were executed three days later. The seventh warrant was issued on 15 4 97 in respect of Burnt Heath Farm, used as a document store by the 11th, 12th, & 13th applicants, Commercial Guarantee Ltd, Venture Guarantee Ltd and Venture Guarantee Group Holdings Ltd.

2. The warrants were obtained to assist in the investigation of what the police believed was a conspiracy to defraud.

3. The first respondent is the Chief Constable of Warwickshire whose officers were responsible for the application for and execution of the warrants.

4. The second respondent is the Mid Warwickshire Magistrates Court, it being a magistrate of that court who issued the warrants. The second respondent has not appeared but the magistrate has sworn an affidavit which has been filed.

5. Leave to move for judicial review was granted by Latham J. The applicants seek orders of certiorari quashing the issue of the warrants, declarations that the entry by police officers to the various premises and the removal of materials was unlawful and orders for their return and the delivery up to the applicants of any copies taken. The applicants also seek damages for trespass to land and goods.

6. Latham J ordered on 13 5 97 that this hearing be expedited and in these circumstances an application for interlocutory relief was by consent adjourned generally with liberty to restore.

7. The 11th to 13th applicants advertised that they were able to negotiate business loans. They underlined the effectiveness of the service they could offer by representing they had a successful track record of arranging loans running into many millions of dollars. Would be borrowers who responded to these advertisements, or who were introduced by third parties to these three applicants, paid a fee in return for the agreement of the company approached that it would try to negotiate the required loan. It was a condition of the contract with the company that a loan could be refused for any reason. Under the terms of the contract if the desired loan was not forthcoming the applicant for the loan was not entitled to any return of the fees which had been paid.

8. The allegation is that this business was fraudulent because, when fees were taken, there was no intention of obtaining a genuine offer of a loan which would meet the would be borrower's requirements. While this would not become apparent from isolated cases of disappointed seekers after loans the true picture is said to have emerged from the substantial number of complaints received. These allegedly fraudulent activities are said not to have involved only the 11th to 13th applicants. Status reports on the financial soundness of the would be borrowers were obtained. They were represented as being the reports of independent firms whereas in truth they were the work of other companies within the Venture Group.

9. The police were anxious to discover the full extent of the alleged conspiracy. This involved trying to obtain evidence about, for example, the following matters:

10. The view was taken by those conducting the police investigation that the records of companies within the Venture Group would be likely to provide material which would be of substantial value to their investigation and yield evidence which would be admissible in any future trial of a charge of conspiracy to defraud.

11. In late 1996 the Department of Trade and Industry (DTI) began winding up proceedings in the Chancery Division against the eleventh to thirteenth applicants. The winding up application was based on an allegation that the affairs of these three companies had been conducted without proper commercial probity.

12. The substantive hearing was fixed for 14 5 97. Commercial Guarantee Ltd. was by consent wound up, though without any admission as to any lack of probity in the conduct of its business activities.

13. The application was contested by Venture Group Ltd. and Venture Group Holdings Ltd. Proceedings against them were adjourned for them to file evidence. Subsequently, orders were made winding them up. The DTI's application was not contested but they were not consent orders and the judge made findings adverse to the two companies.

14. There had been co-operation between the Warwickshire police and the DTI but it is apparent from what I have said already that the scope of the police investigation was appreciably wider than that being conducted by the DTI. It was an independent investigation and not one conducted for the DTI.

15. The police decided to apply for search warrants in time for them to be able to execute them before any liquidator might step in and seize records. The validity of the reasoning which led to this decision has been questioned but it is irrelevant to the issues in these applications. If there were grounds for seeking search warrants the police were entitled to choose when to apply for them and when, within the time permitted by law, to execute them.

16. The focus of the challenge to the issue of the warrants has been the breadth of material for which they permitted a search to be made.

17. The first six warrants are in the same form in relation to what could be sought under them:

18. The 7th warrant, which related to the document store at Burnt Heath Farm, used a different form of words but their ambit was no less wide in relation to paper documentation:

19. In relation to the 7th warrant the documents which were stored at Burnt Heath Farm were those of 11th, 12th and 13th applicants. Mr Barnes QC for the applicants has not suggested that they have any concern about the seizures made upon the authority of this warrant. That being so, I for my part would dismiss the applications so far as they concern this warrant without finding it necessary to say any more on the subject.

20. Mr Barnes advanced seven propositions.

21. The warrants should have been restricted in their scope to those documents and other records of the 11th to 13th applicants which:

22. Further, although there is no statutory requirement that a warrant shall specify what offence is being investigated, some details of the offences should have been set out in this case as a means of identifying the material to be sought and of enabling the occupiers of the premises searched to know what the police were entitled to search for and seize.

23. Certain concessions were made on the applicant's behalf for the purpose of these applications. It is conceded there were reasonable grounds for believing that a serious arrestable offence, an advance fee fraud, had been committed and that the conditions precedent to the issue of warrants in support of an investigation of that offence were satisfied. It is conceded also that the warrants were in the proper form, save for the failure to comply with section 15(6)(b).

24. Most important, in the submission of Mr King QC, for the first respondent, is the concession that had the warrants been restricted to documents concerning the business documentation and financial records of the 11th to 13th applicants (the three companies involved in the winding up application) no objection could have been taken to them by way of judicial review.

25. I also regard this concession as important in relation to Mr Barnes' first submission. His concession does not call for any narrower restriction of the materials for which search could be made under the warrants than that they should have been those of the 11th to 13th applicants. Put another way, since these three companies were a proper subject of investigation with the assistance of search warrants the description of materials in them would not have involved any breach of section 15(6)(b) had that restriction been added. In my view it must follow from this that if other companies within the Venture Group were a proper subject of investigation in relation to the advance fee fraud with the assistance of search warrants it was not necessary to add this restriction and so, following from the concession, no complaint could be made about the failure to define more narrowly the materials covered by the warrants. At this point it is helpful to look at the magistrate's power to issue a search warrant contained in section 8 which, so far as is material, provides:

26. Section 8(4) defines relevant evidence as anything which would be admissible in evidence at a trial for the offence.

27. Mr Barnes complained that the warrants were directed against premises rather than companies. As warrants have to be in respect of named premises I do not see how this could be otherwise. Section 8 does not authorise a search for materials belonging to a named person or company wherever those materials may be found. This would be a much wider and more draconian power than the section provides.

28. It is important to note that paragraphs (b) & (c) do not require that the material to be sought shall belong to or be in the possession of someone who is suspected of having committed the offence. It is easy to envisage circumstances in which a person who is innocent of any offence has in his possession documents which are not his, in the sense of not being created by him, or which are his in that sense and which, in either case, provide evidence of the commission of an offence by another.

29. Implicit in the first submission are the unspoken and fallacious assumptions that the parties to the conspiracy being investigated cannot have included any natural person or any company other than those which received advance fees. A limited company can only act through a natural person. Further, it is often the case that in the acting out of a conspiracy different parties to it have different roles. There were the status reports, to which I have already referred, said to have been prepared by other members of the group. Moreover, it is apparent from the material placed before the magistrate, evidenced by a report produced to him, the note of the application made by the magistrates's clerk and the second affidavit of DC Wilson, who made the application, that there were reasonable grounds for believing other companies in the group were involved in the conspiracy and that the group structure was like a web with members of it changing their names and that the police wanted to discover what had happened to the money which was alleged to have been received fraudulently. An example of a name change has been given by the first applicant, Mr Fitzpatrick, in his first affidavit. The 13th applicant was originally named Venture Guarantee Limited. In February 1996 the 12th applicant was formed with the name Venture Guarantee Group Holdings Limited. When it began to trade in April of that year there were simultaneous exchanges of name so that the 12th and 13th applicants became respectively Venture Guarantee Limited and Venture Guarantee Group Holdings Limited, with their registered office at 7, The Parade, Leamington Spa, one of the premises in respect of which a search warrant was issued. It is clear from Mr Fitzpatrick's affidavit that through his share holdings and the positions he holds in the various companies within the Venture Group he is a guiding light in their activities and that they have close connections with one another.

30. The affidavit of the second applicant, Mr Ferguson, shows he is a director of the 10th applicant which trades principally from his home address (another of the premises in respect of which a search warrant was issued) and that finance to start this company was provided as a result of arrangements made by Mr Fitzpatrick.

31. The affidavit of the third applicant, Miss Stephens, shows her to be company secretary of a number of the companies in the group and to act on a day to day basis as coordinator for all the companies in which Mr Fitzpatrick is involved. The fact that the activities of the 5th to 13th applicants are coordinated provides, in my view, cogent evidence of the close connections which exist between them.

32. The affidavit of the fourth applicant, Mr Brown, shows him to be managing director of the fifth applicant which prepares reports and appraisals for, among others, Vengua Limited, the seventh applicant. His home was also one of the premises in respect of which a search warrant was issued.

33. The sixth warrant issued on 11 4 97 was in respect of The Manor, Haseley, Warwickshire. The premises consist of a series of office suites, the warrant being restricted to the Mary Tudor suite, used as office accommodation by Mr Fitzpatrick in relation to his business, the ninth applicant. For a period approaching two years until March 1997 the twelfth applicant occupied another suite of offices at this address. It can be seen, therefore, that the premises for which search warrants were issued on 11 4 97 were all either the home of one of the first four applicants or premises with which one or more of the 5th to 13th applicants were connected. There was in my view ample material on which the police were entitled to seek the assistance of search warrants for each of these premises to help in their investigation of the conspiracy to defraud and they had reasonable grounds for believing that offence had been committed.

34. The magistrate dealt with this matter at paragraph 8(b) of his affidavit.

35. As to the timescale point, the police were seeking to discover the extent of the fraud and to have set a beginning and an end date to the period to be investigated would not have been practicable. In advance of any search it could not be known when any conspiracy had begun or had ceased to be active. Nor was there any need to give details of the offence in the warrants in order to describe the materials which could be sought under them.

36. In my judgement there was ample material upon which the magistrate was entitled to find himself satisfied that the requirements of paragraphs (b) & (c) of section 8(1) had been made out. His decision to issue the warrants is one which can only be challenged on Wednesbury principles and no successful challenge has in my view been established.

37. I would therefore reject Mr Barnes' first and second submissions. His third submission seems to a large extent to be based on a misreading of DC Wilson's second affidavit and without finding it necessary to say more I would reject this submission also.

38. Nor am I able to accept Mr Barnes' fourth submission. His argument ignores two factors. First the warrants issued on 11 4 97 all contained the limiting words, "all relating to the stated offence". That the offence is not stated in the warrants is nothing to the point. It had been stated to the magistrate and the applicants accept for present purposes that there were reasonable grounds for believing that offence had been committed. Thus the warrants provided no authority for seizure of a document or other record simply because it was found on the premises searched and fell within one of the four numbered categories set out in them. It had to be related to the stated offence. Nor was this all. The power of seizure in the case of these warrants was that set out in section 8(2).

39. It follows from this that it was not sufficient that any material seized should fall simply within the terms of the warrant, including the words, "all relating to the stated offence". It had also to be something for which a search had been authorised under section 8(1). In other words, there had also to be reasonable grounds for believing it was likely to be of substantial value to the investigation and be evidence of the stated offence and not consist of or include special procedure material. (I shall return to special procedure material when I consider Mr Barnes' fifth submission.) The effect of section 8(1) and (2) is to limit what may be seized under a search warrant issued under section 8. The effect of a description in the warrant is potentially to limit further what may be seized. I say potentially because no doubt in practice, where this is practicable, the description in the warrant will accurately define that for which the warrant is intended to give a power to search and seize. However, those executing a search warrant issued under section 8 should not lose sight of the requirement that, even though material may fall within the description in the warrant its seizure still has to fall within what is permitted by section 8(1) & (2). This is the more important in a case in which there are limitations on the practicability of identifying with any precision the material to be sought.

40. Mr Barnes' fifth submission, save for what he says about special procedure material, is really an elaboration of his first submission. This is also true of his sixth submission. Leaving aside special procedure material, the reasons which lead me to reject his first submission lead me also to reject these two submissions.

41. Special procedure material is defined, so far as is relevant, by section 14(2)(b)(i) as being held subject "to an express or implied undertaking to hold it in confidence". So far as such material is concerned it is to be remembered that paragraph (d) of section 8(1) does not debar a magistrate from issuing a search warrant because there may be such material (or legally privileged or excluded material) on the premises to be searched. It is only if the material which is likely to be of substantial value to the investigation and be relevant evidence is both caught by paragraph (d) and is or forms part of the subject matter of the application that a warrant cannot be issued under section 8(1). Here the magistrate enquired about this. The point is dealt with in paragraphs 20 & 21 of DC Wilson's second affidavit.

42. The magistrate dealt with the subject in paragraph 8(d)ii of his affidavit.

43. Plainly would be borrowers must have expected that their borrowing requirements and details concerning them would be passed on to potential lenders. In my judgement, therefore, the magistrate was entitled to reach this conclusion and I do not consider it is open to challenge on Wednesbury principles. I would therefore reject also this part of Mr Barnes' fifth submission which relates to special procedure material.

44. I come now to Mr Barnes' seventh and last submission. Section 15(1) provides:

45. It follows that if in respect of any warrant there was a breach of section 16(8), as Mr Barnes submits there was, the entry, search and seizure under that warrant were unlawful.

46. It is clear from section 8(1) and (2) that a warrant issued under sub-section (1) authorises only a search for artifacts. Sections 15 and 16 refer to search warrants generally and not only to warrants issued under section 8. The references in section 15(6)(a)(iii) to the enactment under which the warrant is issued and in section 15(2)(c) and (6)(b) and section 16(9)(a) to persons sought make this clear.

47. I have said already that a warrant issued under section 8(1) authorises the search for and seizure of material which there are reasonable grounds for believing is likely to be:

48. Thus the criteria which have to be satisfied before material can be seized are that there are reasonable grounds for believing that something is likely to be so. A likelihood is less than a probability. Since the decision to seize or not to seize has to be made by the person executing the warrant it is he who has to decide whether the test has been satisfied. That calls for a judgement on his part and it is a judgement which he has to make in the circumstances in which he finds himself and on the basis of what is or should have been known to him. What should have been known to him may include information he should have been but was not given, for example by way of briefing, by others involved in the search and the decision to search. The investigation may be of a complex nature. There may be vast quantities of documents and other items which have to be looked at in order to discover whether they do or do not fall within the terms of the warrant. There may be time constraints - the warrants in this case permitted a search only on a single occasion. A search is an intrusion and it may be an embarrassment and inconvenience to those at the premises being searched and, while it lasts, may have a seriously disruptive effect on normal activities there. The circumstances, of which I have given some examples, may very well require decisions to be made at speed and without time for reflection or that opportunity to assess the significance of material which only becomes possible when it can be considered in the context of other material. These and such as these are important factors which the court must keep well in mind when the allegation is made that material has been seized for which the warrant gave no authority.

49. With these considerations in mind I turn to section 16(8):

50. Does this provision deal only with the method of search - the lifting of carpets, breaking down of partitions and so forth - as Mr King submits? At the other extreme does the seizure of a single document without lawful authority involve a breach of the sub-section? Mr King points out that it makes no mention of seizure. I derive no assistance from this point in construing the sub-section. It would be strange if it did refer to seizure, bearing in mind it is intended to deal not only with searches for articles but also for people. I do not accept that section 16(8) is as restricted in its meaning as Mr King suggests. It would be strange if, for example, the lawfulness of a search for stolen hi-fi equipment were left untouched by the seizure of furniture, carpets and curtains not covered by the warrant and not seized under the general power of seizure conferred by section 19. It is clear that sections 15 and 16 are intended to provide a statutory code by which the applications for, issue and execution of search warrants are to be governed. I do not accept that by an oversight Parliament has omitted to provide for the case in which articles have been seized for which the search warrant has provided no authority, leaving such a case to be dealt with by the common law. In my judgement section 16(8) does apply to such cases.

51. Subject to the de minimis principle, which common sense requires, I conclude that a search has exceeded the purpose for which the warrant was issued - namely the search for and seizure of material covered by the warrant in respect of which the criteria already referred to have been satisfied - when material which does not satisfy those criteria has been seized. But in deciding whether it has been shown that a particular seizure was unlawful it is necessary to take as a starting point the fact that one is examining the propriety of the judgement of the officer executing the warrant made in the circumstances in which he found himself and on the basis of what was or should have been known to him.

52. In considering whether there has been an unlawful seizure valuable assistance is to be had from passages in the judgements of the Court of Appeal in R -v- Commissioner of Police of the Metropolis [1985] QB 881. The court in that case was considering an appeal in a civil action, so that Wednesbury principles were not relevant as they are in a challenge by way of judicial review. It concerned the grant of a search warrant under section 16(1) of the Forgery Act 1913 which provided, so far as was material:

53. At page 890A he went on to say:

54. At page 896C Slade LJ set out the following principles:

55. At page 902G Purchas LJ had this to say:

56. These dicta seem to me to apply to a consideration of the decision of the person seizing a document in a case such as the present with three caveats. Firstly, the words might and reasonable suspicion do not form part of the relevant criteria. Secondly, as I have said already, the approach in a judicial review case to the decision has to be on Wednesbury principles. Lastly, the consequence of a breach of section 16(8) is to make the whole search unlawful so that there will have been a trespass to land as well as to goods.

57. It is necessary, therefore, to consider in respect of the execution of each of the six warrants on 14 4 97 whether, in the light of the foregoing considerations, a successful challenge has been made on Wednesbury principles to show that material has been seized beyond what can be seen as de minimis of which the person executing the warrant was not entitled to form the view that there were reasonable grounds for believing it was likely to be of substantial value to the investigation and be relevant evidence and did not consist of or include special procedure material.

58. I can deal briefly with the point in relation to special procedure material. Just as I consider the magistrate's decision about this is not open to challenge on Wednesbury principles, I do not consider that the allegation that special procedure material was seized can be sustained on Wednesbury

59. The affidavit evidence filed on behalf of the applicants complains that material was seized wholesale including a vast quantity which had nothing to do with any fraud but was concerned only with legitimate business. Broad assertions are made as to the nature of that material and of such business. On the other hand, Detective Inspector Varriale, who was in overall charge of the investigation, asserts in paragraph 7 of his affidavit that only documentation which the searching officers reasonably believed was likely to be evidence relating to the criminal investigation was seized. In paragraphs 8 & 9 he says that since the seizures officers have been analysing each document in detail to decide whether it can properly be regarded as relevant evidence and that it would not have been practicable to carry out such an exercise on the premises at the time of the searches. In paragraph 55 of his affidavit Detective Inspector Franklin, who as Detective Sergeant Franklin briefed the officers who were to take part in the searches, says,

60. DC Wilson, who was one of the search team of the Mary Tudor Suite said in paragraphs 43 to 45 of his second affidavit,

61. There are in my view a number of points to be borne in mind when considering the allegation that there was excessive seizure when the warrants were executed.

62. I have studied the seizure records and the lists of materials seized which are exhibited to the applicants' affidavits. There are clearly some items, eg a waistcoat and pens and some family photographs, which could not have been seen to fall within the permitted scope of the search but I would regard these, when seen in context, as de minimis. For the rest, save in relation to the seizure from the home of the second applicant, Mr Ferguson, of certain material, the descriptions of many documents and other records give a clue as to why they were seized. Descriptions, though, of many others give no sufficient clue about their contents to enable me to reach a conclusion about the lawfulness of seizure in accordance with Wednesbury principles faced, as I am, with the conflicts in the affidavit evidence.

63. Judicial review is not a fact finding exercise and it is an extremely unsatisfactory tool by which to determine, in any but the clearest of cases, whether there has been a seizure of material not permitted by a search warrant. In my judgement a person who complains of excessive seizure in breach of section 16(8) should not, save in such cases, seek his remedy by way of judicial review but should rely on his private law remedy when he will have a tribunal which will be able to hear evidence and make findings of fact unfettered by Wednesbury principles. In an appropriate case the court in a private law action is able to grant interlocutory relief on a speedy basis on well recognised principles so that in all but the clearest cases of a breach of section 16(8) judicial review has only disadvantages and no advantages when compared with the private law remedy.