Peter Joseph Power-Hynes & Anor v Norwich Magistrates' Court & Anor

On 12 June 2009 we heard this application for permission to apply for judicial review and, if permission was granted, for judicial review of the decision of District Judge Browning sitting in Norwich Magistrates’ Court made on 25 February 2009 to issue a search warrant for the search of “9 Marryat Square, Wyfold Road, London SW6 6UA (also known as 16 The Coda Centre, London SW6 6AW)”. At the conclusion of the hearing we informed the parties of our decision to grant permission and to quash the search warrant. We said that we would give the reasons for our decision in writing. These are my reasons for the order made by the Court.

The Claimants’ grounds for quashing the warrant are:

We heard counsels’ submissions on grounds (ii) and (iii); having done so, it was unnecessary to consider the Claimants’ other grounds.

Mr Power-Hynes is an accountant. He is a member of the Institute of Financial Accountants and the Association of International Accountants. He acts for a large number of companies, offering tax, accounting and corporate services. He calls his business Power-Hynes Associates. His office is at 16 the Coda Centre. The Second Claimant, who is described as his romantic partner, lives with her son at the adjacent residential premises, 9 Marryat Square.

Mr Power-Hynes is the company secretary of Humanitarian Coalition Aid Foundation Ltd, referred to as “HCAF”. His office is its registered office. Its grandiloquent title, indicating charitable activities, was misleading, doubtless deliberately so. It had been struck off the charities register in mid-2008 for financial irregularities in 2004.

The police had been investigating one Alan Hunt, who is or was a director of HCAF. They suspected that he was using the company as a vehicle for serious fraud, of the kind known as prime bank guarantee frauds. One victim of the frauds lost over £11 million.

Mr Power-Hynes played no part in the management of the company, but that was not known to the police.

In November 2008 DC Christopher Gay, a member of the Economic Crime Unit of Norfolk Constabulary, carried out a search on HCAF. In his witness statement he describes the search as a check carried out at Companies House, but the exhibit to his witness statement shows it to have been with Dun and Bradstreet. It showed that 16 the Coda Centre was its registered address and the main trading address. Its directors were shown as Judith Thomsen, Rupert Harris and Hunt. The search identified 15 other companies with which Hunt was associated, and stated that he had other associations. Mr Power-Hynes was named as company secretary; his address was given as 9 Marryat Square; he had been appointed on 31 December 2005; and he was described as an accountant. The report identified 15 other companies with which he was identified, and stated that he had other associations. Of those 15 other identified companies with which he was associated two (Water for Life Ltd and Influcare (Europe) Ltd)) were also in the list of companies with which Hunt was associated. DC Gay also checked Quick Address, and found two entities listed at 16 The Coda Centre, namely Clocktower Designers Centre and ICICS Plc. The latter, but not the former, was on the list of companies associated with Hunt.

On 6 February 2009 DC Gay went to Fulham to find 16 the Coda Centre. He located the Coda Centre, but saw no unit identified as number 16. His enquiries indicated that number 16 was partly residential and partly office accommodation. He saw nothing to indicate that an accountancy practice was being carried on. On returning to his office, he carried out an address search on 9 Marryat Square, which showed that Mr Power-Hynes owned that property, but no one living there. Mr Power-Hynes’s background was not investigated. According to his witness statement, DC Gay did not know that he was an accountant or that he operated an accountancy practice at 16 the Coda Centre. DC Gay says that if he had thought it appropriate, which he did not, he would have made an application under section 9.

On 25 February 2009, DC Gay applied to District Judge Browning for a search warrant under section 8 of the Police and Criminal Evidence Act 1984. He made no note of what he told the judge. We have the following note from the court:

The district judge was given details of an alleged wide-reaching fraud of £9.7 million relating to a well-known Norwich businessman. Nine sets of premises were identified at addresses in different parts of the country. No challenge to the warrant has been made in respect of any of the other premises subject to search. In relation to the specific grounds in this claim:

1.

The judge was informed that 9 Marryat Square was also known as 16 The Coda Centre and the postcodes of both were cited in the application as being the same.

2.

The application specifically excluded items subject to legally privileged, excluded material or special procedure material.

3.

The extent of the warrant was justified having regard to the nature and sophistication of the alleged offence.

4.

The judge was satisfied that had notice of the police intention been given, it was unlikely that incriminating material would have been retained or surrendered.

5.

The judge was satisfied that the complainant had suffered a substantial loss and that an indictable offence had been committed.

6.

Having heard directly from the officer in the case, the judge was satisfied that he had received adequate information about the alleged offence and the police inquiry to issue the warrant.

The material text of the warrant was as follows:

“… an application was made by DC 616 Christopher Gay for the issue of a warrant under section 8 of the Police and Criminal Evidence Act 1984 to enter the premises described in the attached schedule [to] search for

Documents and records (Electronic or otherwise) relating to high value financial transactions.

Authority is hereby given for any constable …. to enter the said premises …. to search for the material in respect of which the application is made.”

The briefing pack prepared by DC Gay for the officers carrying out the search stated, so far as relevant:

“Met Police have no entries on their intelligence system for the address or the occupant.

…

The purpose of this search is to obtain evidence of [HCAF] its involvement in this matter, Hunt’s links to this company and other individuals under investigation, and identify bank accounts, assets and details of financial transactions he or the company have been involved in.

This company is believed to be a vehicle for fraud and it is envisaged that any documents or records held for this company at the address should be seized.”

When on 4 March 2009 the search was carried out, the officers carrying out the search removed all the client files, relating to Mr Power-Hynes’s many clients of his accountancy practice who were totally unconnected with Hunt or HCAF, as were Mr Power-Hynes’s computers. It is not disputed that the material removed included special procedure material within the statutory definition that was unconnected with Hunt or HCAF. At the date of the issue of these proceedings, on 28 April 2009, one of the computers and documents required by Mr Power-Hynes for his business had not been returned.

Sections 8, 9, 14 and 15 of PACE as amended are so far as relevant as follows:

8 Power of justice of the peace to authorise entry and search of premises

(1)

If on an application made by a constable a justice of the peace is satisfied that there are reasonable grounds for believing—

(a)

that an indictable offence has been committed; and

(b)

that there is material on premises mentioned in subsection (1A) below which is likely to be of substantial value (whether by itself or together with other material) to the investigation of the offence; and

(c)

that the material is likely to be relevant evidence; and

(d)

that it does not consist of or include items subject to legal privilege, excluded material or special procedure material; and

(e)

that any of the conditions specified in subsection (3) below applies in relation to each set of premises specified in the application,

he may issue a warrant authorising a constable to enter and search the premises.

(1A)     The premises referred to in subsection (1)(b) above are—

(a)

one or more sets of premises specified in the application (in which case the application is for a “specific premises warrant”); or

…

(1B)     …

[(1C)     …

(1D)     …

(2)

A constable may seize and retain anything for which a search has been authorised under subsection (1) above.

(3)

The conditions mentioned in subsection (1)(e) above are—

(a)

that it is not practicable to communicate with any person entitled to grant entry to the premises;

(b)

that it is practicable to communicate with a person entitled to grant entry to the premises but it is not practicable to communicate with any person entitled to grant access to the evidence;

(c)

that entry to the premises will not be granted unless a warrant is produced;

(d)

that the purpose of a search may be frustrated or seriously prejudiced unless a constable arriving at the premises can secure immediate entry to them.

(4)

In this Act “relevant evidence”, in relation to an offence, means anything that would be admissible in evidence at a trial for the offence.

(5)

The power to issue a warrant conferred by this section is in addition to any such power otherwise conferred.

…

Special provisions as to access.

9.

—(1) A constable may obtain access to excluded material or special procedure material for the purposes of a criminal investigation by making an application under Schedule 1 below and in accordance with that Schedule.

…..

Meaning of ‘special procedure material’.

14.

—(1) In this Act ‘special procedure material’ means—

(a) material to which subsection (2) below applies; and

(b) journalistic material, other than excluded material.

(2)

Subject to the following provisions of this section, this subsection applies to material, other than items subject to legal privilege and excluded material, in the possession of a person who—

(a) acquired or created it in the course of any trade, business, profession or other occupation or for the purpose of any paid or unpaid office; and

(b) holds it subject—

(i)

to an express or implied undertaking to hold it in confidence; or

(ii)

to a restriction or obligation such as is mentioned in section 11(2)(b) above.

…

15Search warrants—safeguards

(1)

This section and section 16 below 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—

(a)

to state—

(i)

the ground on which he makes the application; . . .

(ii)

the enactment under which the warrant would be issued; and

(iii)

…

(b)

…

(c)

to identify, so far as is practicable, the articles or persons to be sought.

(2A)     …

(3)

An application for such a warrant shall be made ex parte and supported by an information in writing.

(4)

The constable shall answer on oath any question that the justice of the peace or judge hearing the application asks him.

(5)

…

(5A)     …

(6)

A warrant—

(a)

..

(b)

shall identify, so far as is practicable, the articles or persons to be sought.

…

For the Claimants, no issue was raised as to the requirements of section 8(1)(a) and (c) so far as documents relating to Hunt and/or HCAF were concerned; and no issue was raised as to paragraph (b) of the subsection in so far as the office premises known as 16 The Coda Centre were concerned. However, it was submitted that the description of the material to be seized under the warrant was too vague, and extended to material that had no connection with Hunt or HCAF; that it extended to special procedure material, the search for which cannot be justified by a section 8 warrant; and that the police had failed to make reasonable enquiries to establish if anything was known about Mr Power-Hynes, as the occupier of the premises to be searched, as required by paragraph B3.3 of the Code of Practice for Searches of Premises by Police Officers.

For the Norfolk Constabulary, Mr Clemens submitted that the description of the material to be seized was adequate and related directly to the frauds committed by Hunt and HCAF; that it was such material that was to be seized would have been ascertainable from the information given to the District Judge; that DC Gay made reasonable enquiries on the basis of which there was no sufficient reason to believe that the search related to special procedure material; and therefore that the warrant was lawfully obtained and should not be quashed. He did not pursue the contention advanced in the Second Defendant’s grounds that the Claimants had a more suitable alternative remedy under Part 2 of the Criminal Justice and Police Act 2001, which they should have pursued, so that the Court should in any event refuse permission or substantive relief in the exercise of its discretion.

In a case such as the present, the Court is faced with two competing interests. The first is the public interest in prosecuting and preventing crime. That interest requires the Court to be sympathetic to the position of police officers applying for a search warrant, particularly in a case involving financial fraud, and to be realistic in its assessment of the compliance of the police with the obligations imposed by Parliament and set out in the provisions of PACE to which I have referred. The Court should not impose unrealistic or impracticable obligations on police officers seeking a search warrant or on the justice of the peace or district or circuit judge to whom application is made for the warrant.

The second interest is that of the person or persons whose home or office or other business premises may be the subject of a search. A police search for materials is a very real and serious intrusion into the private life of those whose premises are searched, and may be very distressing for them, and if it is to be justified the officers seeking the warrant must take diligent steps to ensure that the statutory requirements are satisfied. In addition, they must make full and frank disclosure to the justice of the peace or district or circuit judge of the facts justifying the application, which will include the justification for applying for a search warrant rather than another remedy, in the present case a production order under section 9 and Schedule 1 of PACE.

I approach the parties’ respective submissions with these considerations in mind. I have no doubt that the description in the warrant of the articles to be sought was too vague, and did not identify so far as practicable the articles to be sought, as required by section 15(6)(b) of PACE. What is one person’s high value financial transaction is another person’s low value transaction. Is a transaction involving £10,000 high value or not? In the context of a fraud involving a loss of £11 million, it is not high value. For a person living on an income of £20,000 or £30,000 a year, it is. Moreover, there was a simple means of identifying the articles to be sought, which was in fact used in the briefing note for the officers conducting the search, namely “documents or records relating to Alan Hunt or HCAF”. That description would have been sufficient. The vice of the description used in the warrant was that it was apt to include documents and records that had nothing to do with either Hunt or HCAF.

Furthermore, DC Gay should have known that Mr Power-Hynes was a professional accountant: he was so described in the search he had made. He also should have been aware that Mr Power-Hynes was associated with companies that, so far as DC Gay was aware and in fact, had no connection with either Hunt or HCAF, namely those companies (other than Water for Life Ltd and Influcare (Europe) Ltd.) named in the search as companies with which Mr Power-Hynes was associated. In addition, in the three months or so between DC Gay making his search against HCAF and his application for the search warrant, he had more than adequate time to search the Companies Register to find out more about Mr Power-Hynes’s associations and appointments. Had he done so, he would have discovered that he is the company secretary of 20 companies the registered offices of which are 16 The Coda Centre and that that address is the registered office of over 50 companies. This enhanced the need to restrict the search warrant to articles relating to Hunt and/or HCAF. DC Gay could also, but did not, inquired of the accountants’ professional bodies, including the Institute of Chartered Accountants of England and Wales and the Institute of Financial Accountants, to ascertain whether Mr Power-Hynes was a member of any of them. The register of members of the latter is available on the Internet and Mr Power-Hynes’s name is on it.

Mr Clemens submitted that in assessing whether the warrant complied with section 15(6)(b) of PACE it is appropriate to consider the information given to the district judge, from which it was clear that the warrant was directed at material relating to Hunt and HCAF. In support of this submission, he cited the decision of this Court in R (Fitzpatrick) v Chief Constable of Warwickshire [1999] 1 WLR 564. In that case, the warrant sought documentation and information “relating to the stated offence”. The offence, advance fee fraud, had been stated to the magistrate but was not identified in the warrant. The Court held that the warrant complied with section 15(6)(b), since the authority it conferred was restricted to material relating to that offence and to material that there were reasonable grounds to believe 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: see the judgment of Jowitt J, with whom Rose LJ agreed, at 572-3.

In my judgment, the decision in Fitzpatrick does not assist the Second Defendant. The warrant in that case contained an express limitation, and it was open to a person to whom it was presented to inquire of the police officers effecting the search what was the stated offence. There is no such limitation or reference in the present case. Mr Clemens’s submission ignores the express wording of section 15(6)(b), which requires that, so far as is practicable, the articles to be sought must be specified in the warrant itself. The reason for this is obvious. It is necessary that the persons who are in the premises searched can ascertain from the warrant itself, when it is presented to them, to what material it relates. It is as necessary that they can see, so far as practicable, what is the scope of the warrant as can the police officers effecting the search. Both the statute and principle require the warrant to be a self-contained statement of the articles for which the search is authorised. As Kennedy LJ said in Energy Financing Team Ltd v The Director of the Serious Fraud Office [2005] EWHC 1626 (Admin) at [24], “… 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.” This is in part because the person whose property is affected by the search has no right to the information provided to the justice of the peace when the warrant was sought, although, as Kennedy LJ mentioned at subparagraph (10), it may be appropriate to provide some or all of that information if the legality of the warrant is challenged, if that can be done without compromising the criminal investigation.

Indeed, it is not possible to distinguish the present case from R (AJD Holdings) v Central Criminal Court [1992] Crim LR 669. The Divisional Court in that case again included Jowitt LJ. In his judgment, Nolan LJ said:

“There was a discrepancy between the information sworn by the officer and the warrant issued by the judge. The information referred to “all records of business details relating to the finances of [the company], namely letters, notes…,” whereas the warrant referred to letters and notes but omitted to identify them as records of financial business details of the company. That was a crucial omission because the warrant purported to give the holder a free hand to seek and seize all documents of the kind described irrespective of whether they fell within the scope of the investigation to which the information related. For this reason alone it failed to comply with section 15 (6) (b) and was invalid.”

The present case demonstrates the importance of the statutory requirements. The material seized from Mr Power-Hynes was not confined to articles relating to Hunt or HCAF, but included his computers and files relating to his other clients, of whom he had about 100, even though the clients’ names were marked on the files. They had no connection with Hunt or HCAF or the alleged frauds. Mr Power-Hynes’s practice was severely disrupted.

Finally, once DC Gay was aware that Mr Power-Hynes was an accountant and the company secretary of HCAF, the possibility arose that the documents in his possession included special procedure material. Once the warrant was issued without limiting the search to documents relating to Hunt and HCAF, that possibility became a likelihood, even if one confines oneself to the companies listed in DC Gay’s search as associated with Mr Power-Hynes. It follows that the requirement of section 8(1)(d) of PACE was not satisfied, a justice of the peace had no authority to issue the warrant and application for it should have been made under section 9. The statement by the Magistrates’ Court that the application specifically excluded special procedure material is nothing to the point; the warrant included no such exclusion; and in fact the material seized and removed by the police included such material unconnected with Hunt or HCAF.

For all these reasons, the warrant was unlawful and was quashed. In these circumstances, it was unnecessary to consider whether the police should have sought the less intrusive measure of a production order instead of a search warrant.

I agree.