Strand, London, WC2A 2LL .
B e f o r e :
MR JUSTICE CRANE
| Energy Financing Team Ltd & ors
| - and -
|The Director of the Serious Fraud Office
Khawar Qureshi (instructed by Treasury Solicitors) for the Respondent Marc Beaumont (instructed by Peters & Peters) for an interested party.
Hearing dates: 30th June & 1st July 2005
Crown Copyright ©
Lord Justice Kennedy:
'"(1) This section and section 16 below (which relates to execution) have effect in relation to the issue to constables· under any enactment, including an enactment contained in an Act passed after this Act, of warrants to enter and search premises; and an entry on or search of premises under a warrant is unlawful unless it complies with this section and section 16 below.
(2) Where a constable applies for any such warrant it shall be his duty -
(c) to identify, so far as is practicable, the articles or persons to be sought.
(6) a warrant -
(b) shall identify, so far as is practicable, the articles or persons to be sought."
The Criminal Justice Act 1987 set up the Serious Fraud Office and section 1(3) of that Act empowered the Director of the SFO to "investigate .... Fraud". Section 2 of the Act defined the Director's investigative powers. That section was amended by the Crime (International Co-operation) Act 1990. to take account of a situation such as that which arises in this case, where an authority abroad seeks the assistance of the Secretary of State who, pursuant to section 4(2A) of the 1990. Act, because the request involves serious or complex fraud, refers the request to the Director of the SFO "for him to obtain such of the evidence to which the request .... relates as may appear to the Director to be appropriate for giving effect to the request ..... " In this case there is no issue before us as to the legality of the original requests, or as to the propriety of . the reference by the Secretary of State to the Director. The Director was then in a position to exercise his investigative powers under section 2 as amended, if it appeared to him that there was good reason to do so for the purpose of investigating the affairs, or any aspect of the affairs of any person (see subsection 1) and it appeared to him that the offence in respect of which he had been requested to obtain evidence involved serious or complex fraud (see subsection 1B). In the present case it is not contended that the Director was not entitled to be satisfied in relation to those. matters but, as Mr Downes points out, the statutory provisions do demonstrate that the Director is required to exercise an independent judgment. Section 2(2) enables the Director to require that information be given to him, and that is not a power with which we are now directly concerned in this case, but the next three subsections, so far as relevant, read as follows-
(3) The Director may by notice in writing require the person under investigation or any other person to produce ... any specified documents which appear to the Director to relate to any matter relevant to the investigation or any documents of a specified description which appear to him so to relate; ...
(4) Where, on information on oath laid by a member of the Serious Fraud Office, a justice of the peace is satisfied in relation to any documents, that there are reasonable grounds for believing -
(ii) it is not practicable to serve a notice under subsection (3) above in relation to them; or
(iii) the service of such a notice in relation to them might seriously prejudice the investigation; and
(b) that they are on premises specified in the information, he may issue such a warrant as is mentioned in subsection (5) below.
(5) The warrant referred to above is a warrant authorising any constable - .
( a) to enter .... and
(b) to take possession of any documents appearing to be documents of the description specified in the information ...
Submissions as to the Law.
. assistance is being given to an authority abroad in relation to an on-going investigation both the letter of request and the draft warrant are likely of necessity to be drawn in wide terms. The objections as to the width of the warrant taken in the present case are, Mr Qureshi submits, broadly similar to those taken by the applicants in R v Secretary of State ex parte Fininvest SpA  1 WLR 743. In that case at 752E Simon Brown LJ said that the 1990 Act -
"Created a wholly new scheme for mutual assistance with regard to criminal investigations, a scheme under which it would plainly be necessary to examine altogether more material than would ultimately constitute evidence at any trial."
At 752H he continued -
"What is under investigation here is, after all, as the respondents point out, a wide-ranging, multi-faceted, international fraud involving far-reaching allegations against a large number of individuals in connection with an even larger number of companies. Considering, moreover, that it is at the investigative stage, one can hardly look to greater particularisation of the offences than is contained in the letter of request. So far from this being a fishing expedition, specific allegations of fact are made concerning the. setting up of an elaborate network of overseas companies and the various ways in which. the false accounting has been committed. The
. documentation which it is believed will establish or support these allegations is or rather was with C.M.M. Ltd and Mr Mills. In short the request for assistance here is not, as the applicants contend, vague and speculative; rather it is as precise and focussed as such a. request could sensibly be in these circumstances. "
"Shall to the extent requested use their best endeavours to keep confidential a request and its contents".
Counsel for the applicants conceded that in the light of the treaty there could be no general obligation to disclose the existence of the letter of request or its contents, but submitted that in the instant case fairness demanded disclosure, even though the applicants had been able to make submissions addressing what they believed to be the contents of the letter of request. Tuckey LJ giving the judgment of the court, rejected the allegations of procedural unfairness. In paragraph 17 the court assumed without deciding that Article 8 of the European Convention might be relevant, and continued -
"We bear in mind also two general points. First, as Lord Bingham said (in Zadari 11th March 1998 unreported) the section 4 process is not a trial. It leads only to the transmission of evidence to the requesting State where, if it is to be used, one can assume that the criminal defendant will have the opportunity of answering it. Secondly, such requests are made by friendly, foreign countries with whom we have treaty or similar obligations of mutual co-operation. The expectation must therefore be that we will comply with the request unless there are compelling reasons for not doing so and that we will do so as quickly as possible~ Any requirement for procedural fairness must be fashioned with those considerations firmly in mind. "
In paragraph 18 Tuckey LJ turned to the facts of the instant case saying-
"One can infer that the request did contain confidential information from its redacted form, so there was a good reason for not disclosing it to the claimants. More importantly however, the claimants knew which transactions the Nigerian authorities were investigating and were able to make a prompt response to put their case. It does not seem to us that they suffered any real prejudice by not seeing the request and by not seeing the FGN's actual responses to their representations, the substance of which they were given by the Treasury Solicitor. The exercise which the Secretary of State has to perform should be simple. He is not required to conduct a criminal trial on paper or to decide disputed questions of foreign law before making his decision."·
"Having regard to the treaty obligations it is right to start from the position that the letter of request is not a disclosable document, but justice must be done to those who are the subject of a section 2 notice pursuant to a letter of request and the consequential request from the Secretary of State to the Director of the SFO pursuant to section 4(2A) of the Act. The needs of justice can normally be met, as in· this case, if when a request is made for disclosure of the letter of request information is given as to the nature of the criminal investigation, but in some cases the requirements of justice may require more."
That still seems to me to be the right approach. The second issue raised in Evans and Lord was the extent of the Director's powers when dealing with a request for mutual legal assistance referred to the Director by the Secretary of State. As to that the court adopted what had been said by Simon Brown LJ at page 754 in Fininvest, namely that those powers, draconian as they may be, in particular in section 2, are no narrower with regard to requests for mutual assistance in overseas investigation cases than they are in a domestic context.
"an interference with property must not only be in the public or general interest, but must also satisfy the requirement of proportionality, that is, that there is a reasonable relationship with proportionality between the means employed and the aims sought to be realised."
That passage was cited with approval by Simon Brown LJ in International Transport Roth Gmb H v Secretary of State  2 QB 728 at paragraph 50, but it seems to me to be of limited assistance in this case. Having regard to the serious and extensive nature of the inquiry going on abroad if it was not practicable to obtain the documents required by other means the use of a warrant could not be said to be disproportionate.
"The structure of section 2 is clear. It is intended that the powers that are given to the Director under subsection (3) should be used to obtain documents, if it is appropriate to do so, and it is only in cases that do not lend themselves to being dealt with under subsection (3) that the powers contained in subsections (4) and (5), which were those used here by the SFO, in entering the premises in question, can be used."
The court did not have to address the argument that a warrant could not properly be . obtained for documents not sufficiently specified to have been the subject of a notice under subsection (3), but the terms of a typical warrant are set out in paragraph 33 of the judgment and, as Mr Qureshi points out, they are wide, and in many ways comparable with those with which we are concerned in this case ... They were found to comply with section 15 of the 1984 Act.
had not given reasons, but in a very full acknowledgement of service it was indicated by the Director that the District Judge had given reasons which complied with the requirements not only of the domestic legislation but also of Articles 6 and 8 of the European Convention. For the purposes of the application for permission to apply for judicial review that was accepted, but no one seems to have even suggested that it was unnecessary for reasons to be given.
"In what I have said so far I have had fully in mind the fact that on any showing there is an intrusion into the protection provided by Article 8(1) where searches of the sort that took place in this case, and the removal of material as happened here, occur. However, Article 8(1) does not stand by itself; it stands subject to Article 8(2). It is my view that in drawing the legislation contained in PACE in the terms that it has, parliament is endeavouring to give statutory effect to the same principles which Article 8 is designed to protect .. The need to consider Article 8 only arises if sections 15 and 16 do not provide sufficient protection in themselves. In my judgment they do. Article 8 in a case of this sort does not add anything to what has been the position hitherto."
(1) the grant and execution of a warrant to search and seize is a serious infringement of the liberty of the subject, which needs to be clearly justified, and before seeking or granting a warrant it is always necessary to consider whether some lesser measure, such as a notice under section 2(3) of the 1987 Act, will suffice.
(2) If such a notice will not suffice, for example because the documents may be destroyed, consideration should be given to the possibility of obtaining the documents from an alternative untainted source, such as a bank, but where, that would involve many enquiries of many institutions which might or might not be willing and able to produce the information required, the need to assist the investigating authority to make progress with its overall investigation may well, as in this case, render resort to alternative sources impracticable.
(3) If an application is to be made for a warrant it is the duty of the applicant to give full assistance to the District Judge, and that includes drawing to' his or her attention' anything that militates against the issue of a warrant.. On the material now before us, and bearing in mind the experience of the' District Judge, which is clear from the authorities, I see no reason to conclude that the matter was not properly presented in this case.
(4) It is clear from the terms of the 1990 Act and the 1987 Act that when the Director of the SFO is seeking a warrant pursuant to a request for mutual legal assistance the warrant does not need to reflect precisely the wording of the letter or letters of request. The Director has a duty to decide for himself how best to give effect to the request in furtherance of the overall investigation, and if that means going further than the letter of request he is entitled to do so,. despite Mr Beaumont's submission to the contrary.
(5) When there is an ongoing investigation into, for example, the affairs of a company such as EPRS, which appears to have been at the centre of a fraud, it will always be difficult to say precisely what documentation of value to the inquiry may be recovered from those who are justifiably suspected of being in contact with the main target company, but nevertheless the warrant needs to be drafted with sufficient precision to enable both those who execute it and those
. whose property is affected by it to know whether any individual document or class of documents falls within it. If that is done it seems to me that the specificity required will be no less than would be required for a notice under section 2(3) were it practicable to serve such a notice, and although the terms of the warrant may be wide it will not simply be fishing if it is directed to support an investigation
which has apparent merit.
(6) For practical reasons, to make the best use of court time, it is obviously desirable to give a District Judge from whom a warrant is being sought time to pre-read the material relied upon, namely the sworn information, usually supported by the letter(s) of request and the draft warrant. It is important for the purposes of any subsequent review for the Director or his representative to be able, as in this case, to say whether that was done.
(7) If there has been an opportunity for pre-reading the hearing itself may. be very short. If the applicant supplements the material already provided, possibly in response to questions from the District Judge, that should be noted, and the same applies to the decision of the District Judge, which should be briefly reasoned. It seems that sometimes proceedings before the District Judge are tape-recorded, and if that can be arranged that is clearly the best form of record, but if that is impracticable the party applying for a warrant must prepare a note which can be submitted to the judge for approval if any issue arises as to the way in which the warrant was obtained. That is what seems to have happened in this case, save that the file note, which was circulated to Bow Street Magistrates Court ends with the brief assertion that "the judge granted the warrants and initialled the schedules attached." If he gave reasons they. are not spelt out.
(8) Mr Downes submitted that where a warrant is granted it should be upon the basis that the party affected by it can go to the District Judge, after it has been executed and after the property has been secured, to invite the District Judge to reconsider his decision to grant the warrant either at all or in that form. No one suggested that a District Judge has any statutory jurisdiction to reconsider his decision to grant an application for a warrant after the warrant has been executed, and I am not persuaded of the existence of any inherent jurisdiction to that effect. Whether such a jurisdiction should now be granted to a District Judge by statute is a matter for parliament not for this court. There are plainly arguments in favour of a further hearing at that level rather than by seeking relief in the High court.
(9) The remedy which is available to a person or persons affected by a warrant is to seek judicial review. It is an adequate remedy because the statutory provisions have to be read in the light of those Articles of the European Convention which are now part of English law. In fact, as was said by the Lord Chief Justice in the Kent case if the statutory provisions are satisfied the requirements of Article 8 of the Convention will also be satisfied, and at least since the implementation of the Human Rights Act an application . for judicial review is not bound to fail if, for example, the applicant cannot show that the Director's decision to seek a warrant in a particular form was irrational, but in deciding whether to grant permission to apply for judicial review the High Court will always bear in mind that the seizure of documents pursuant to a warrant is an investigative step, perhaps best reconsidered either at or even after the trial.
(10) Often it may not be appropriate even after the warrant
has been executed, to disclose to the person affected or his legal representatives all of the material laid before the District Judge because to do so might alert others or frustrate the purposes of the overall enquiry, but the person affected has a right to be satisfied as to the legality of the procedure which led to the execution. of the warrant, and if he or his representatives do ask to see what was laid before the District Judge and to be told about what happened at the hearing, there should, so far as possible, be . an accommodating response to that request. It is not sufficient to say that the applicant has been adequately protected because discretion has been exercised first by the Director and then by the District Judge. In order to respond to the request of an applicant it may be that permission for disclosure has to be sought from an investigating authority abroad, and/or that what was produced or said to the District Judge can only be disclosed in an edited form, but judicial control by way of judicial review cannot operate effectively unless the person or persons affected are put in a position to take meaningful advice, 'and if so advised to seek relief from the court. Furthermore it is no answer to say that there is no general duty of disclosure III proceedings for judicial review.
In this Case.
premises of EFT on 18th May 2004. For convenience a copy of that warrant is 'attached to this judgment. It does not simply reflect the terms of the letters of request, the first and fullest of which, after describing the investigation, contains this paragraph under the heading "Requested Assistance" -
"1. All mandates, books of account, bank statements (between 1998-2003), paid cheques, vouchers, transfer slips, agreements, correspondence, attendance notes, internal memoranda,' and reports and other documents relating to:
-a/c no: 53675099 - a/c holder: Energy Financing Team Limited and any other related account held in the name of, or on behalf of the company;
-all accounts held at your branch of the Bank to which Vuk Hamovic is or was a party or signatory;
-all accounts held in the name of, or on behalf of the following companies:
GML (Holdings) Ltd
GML International Ltd
10 Wadham Gardens Ltd
JMDP Elektropriveda Republika Srpeska
2 All documents relating to the attached Barclays Bank guarantee eng 1 4592010 (and any other guarantee or facility) for .JMDP Elektropriveda Republika Srpeska"
Then under the heading "Documents" the letter states -
"In England and Wales production of all documents including statements of account, payment advices evidencing deposits to. and withdrawals from accounts in the names of or under the control or disposal of the companies and individuals under investigation. "
Premises to. be searched are then identified. They include the premises of EFT at Wigmare Street and two. premises of GML. Appendix one. to. the letter identifies companies and the persons under investigation. They include EFT, GML and three individuals - Hamavic, Nye and Bestner. For present purposes it is unnecessary to. dwell an the contents of the second and third letters of request,. which were supplementary.
Mr Justice Crane:
Office he is acting under section 4(2A) of the Criminal Justice (International Cooperation) Act 1990, which in part reads:
" ... he may, if he thinks fit, refer the request or any part of the request to the Director of the Serious Fraud Office for him to obtain such of the evidence to which the request or part referred relates as may appear to the Director to be appropriate for giving effect to the request of part referred".
"All documents ... which appear to relate to any matter relevant to the investigation of the affairs of [EPRS] between January 1999 and June 2003 which include the documents referred to in and between the persons and entities described in the schedule or any of them including information recorded in any form concerning the purchase, sale, transit or exchange of energy with [EPRS]".
which appears to relate to any matter relevant to the investigation into the production, supply and pricing of penicillin-based antibiotics". The entities relevant to that investigation were set out in an Appendix. Thus in that case the nature of the investigation was described.