El-Kurd, R (on the application of) v Winchester Crown Court & Ors

This is a claim for judicial review of a decision by HH Judge Cutler CBE, sitting at the Winchester Crown Court, the Respondent, on 25 August 2010, to authorise the retention by the Serious Organised Crime Agency (“SOCA”), the Interested Party, of material seized by it pursuant to a warrant which, by reason of a technical defect on its face, was admitted by SOCA to be unlawful. The decision which is challenged was made pursuant to Section 59(6) of the Criminal Justice and Police Act 2001 (“the 2001 Act”) in response to an application by SOCA made under Section 59(5)(b) of the 2001 Act. The claim raises an important issue as to the scope of the power of the court to authorise retention under Section59(6) of the 2001 Act of property which has been unlawfully seized on the application of the party who has unlawfully seized it.

The Claimant was convicted in 1999 of conspiring to commit money laundering offences under either the Drug Trafficking Act 1994 or the Criminal Justice Act 1988 and sentenced to 14 years imprisonment. He appealed against conviction without success on the ground that such a charge was bad in law. However, following a reference by the Criminal Cases Review Commission, his conviction was quashed and a re-trial ordered. At the subsequent re-trial the Claimant was acquitted following a successful application to stay the indictment.

On 5 July 2010 SOCA obtained a warrant to search business premises at 146 Kensington Church Street, London W8 belonging to K.C. Service, Ltd. (“KCSL”). The Claimant is the Company Secretary of KCSL and his wife is listed as the director and sole share holder thereof. Its stated business activity is other monetary intermediation.

The warrant was obtained ex parte on the strength of information verified by a financial investigator of SOCA, Mr Anthony Breslin, and supplied to the Court in support of an application made by SOCA under Section 378 of the Proceeds of Crime Act 2002. According to that information a pro-active money laundering investigation conducted by SOCA indicated that substantial money laundering for organised crime groups was being facilitated via a money service bureau operated and controlled by the Claimant. There were reasonable grounds for suspecting that the Claimant had committed a money laundering offence and it was said to be necessary to establish evidence of his acquisition of criminal property and the use of corporate structures to facilitate his money laundering activities. The material sought, which was said to be likely to be of substantial value to the investigation in respect of which the application was made, constituted “all material relating to the affairs, financial or otherwise including travel documentation, communications, business documents, documents relating to any other premises or properties, vehicles and assets of KCSL and/or [the Claimant”].

On 6 July 2010 the warrant was executed and records were seized pursuant to it. The Claimant was arrested at the business premises of KCSL on suspicion of money laundering.

On 9 July 2010 on its own initiative SOCA reviewed the warrant which had been obtained and executed having been notified by the National Policing Improvement Agency of a defect in the template used for such warrants. The defect consisted of a failure to indicate on the face of the warrant the nature of the investigation which it was issued to facilitate, as required by Section 15(6)(a)(iii) of the Police and Criminal Evidence Act 1984 (PACE) as modified by the Proceeds of Crime Act 2002 (Application of Police and Criminal Evidence Act 1984 and Police and Criminal Evidence (Northern Ireland) Order 1980 Order 2003). Accordingly SOCA concluded that the warrant was unlawful having regard to S.15(1) of PACE.

On 13 July 2010 SOCA applied ex-parte and obtained from the Respondent a further search warrant authorising any officer of SOCA to search the KCSL premises at 146 Kensington Church Street and seize and retain material defined in the same way as the material identified in the 5 July 2010 warrant. Unlike the 5 July warrant the 13 July 2010 warrant identified the investigation in respect of which the application for the warrant was made and thus was designed to comply with Section 15(6)(a)(iii) of PACE. It has not been suggested by the Claimant that it did not comply with that section. The information verified by Mr. Breslin in support of the 13 July 2010 warrant set out for the court an explanation of the discovery by SOCA of the technical invalidity of the 5 July 2010 warrant. It was stated that following the identification of the deficiencies in the original warrant procedures had been adopted to ensure that those items seized under the authority of the defective warrant remained untouched within their original seals and that on 12 July 2010 a court listing had been sought at Winchester Crown Court to alert HH Judge Cutler to the deficiencies in the original application.

In a letter dated 16 July 2010 SOCA informed the Claimant’s solicitors of its discovery of the technical defect in the 5 July 2010 warrant and of the fact that on 13 July 2010 a fresh warrant had been applied for by SOCA and granted by HH Judge Cutler. The letter stated that all items seized on 6 July 2010 from the premises of Kensington Money Exchange, apparently the name by which the business premises of KCSL were known, under the authority of the 5 July 2010 warrant remained in secure storage sealed in tamper proof exhibit bags and had not been subject to any further interference or examinations.

The letter stated that it was proposed that without further delay arrangements should be made to return the items seized under the 5 July 2010 warrant to the Claimant at the premises of Kensington Money Exchange whereupon they would immediately be subject to seizure under the authority of the warrant granted on 13 July 2010.

On 20 July 2010 the Claimant through his solicitors declined SOCA’s invitation.

On 17 August 2010 SOCA applied to the Winchester Crown Court under Section 59(5)(b) of the 2001 Act for authority for the retention of property seized under the 5 July 2010 warrant. The information verified in support of the application stated that following the search conducted under authority of the 5 July 2010 warrant the following items were seized by SOCA: mobile phones and associated items, assorted documents, business records, computers, cheque books, two cash counting machines and a number of box files and contents. Additionally four files comprising a number of documents were seized under Section 50 of the 2001 Act for the purposes of being sifted subsequently.

The information also stated that a man named Charles Hart had been arrested having been observed visiting Kensington Money Exchange in circumstances which indicated that he had carried out a large cash transaction in furtherance of money laundering. A search of the vehicle occupied by him revealed €243,000 and £2,825. Mr. Hart was interviewed and was said to have admitted taking a large amount of sterling currency on behalf of other persons to Kensington Money Exchange where the Claimant exchanged it for euros. Mr. Hart was said to have believed the transaction to be unlawful as he believed the source of the sterling was criminal and that the Claimant made no proper record of the exchange. Mr. Hart was said to have subsequently pleaded guilty to money laundering and to be awaiting sentence at Southwark Crown Court.

It was recorded in the information that SOCA had received notice from the Claimant’s solicitors of an application to the Winchester Crown Court to rescind the 13 July 2010 warrant but that that warrant would have expired before the first available date for the hearing of the application on 23/24 August 2010.

In support of its application under Section 59(5)(b) it was stated that SOCA had taken all steps since becoming aware of the defect in the original warrant to regularise the situation in a transparent and proportionate way.

Section 59 of the 2001 Act appears in Part 2 which is headed: “Powers of Seizure”. Under the heading “Additional Powers of Seizure” Sections. 50 and 51 create new powers of seizure respectively from premises and from the person.

The powers of seizure conferred by Sections 50 and 51 are additional powers in the sense that they are exercisable where it is not reasonably practicable to determine on searched premises (Section 50) or at the time and place of the search of a person (Section 51) whether existing powers of search or seizure specified in Part 1 of Schedule 1 of the Act (Section 50) or Part 2 of Schedule 1 (Section 51) would entitle the person armed with the power to seize particular things found in the course of his search. The additional powers authorise the seizure of things found to enable it subsequently to be determined whether the specified powers extend to some or all of that material. The additional powers also permit removal of things which it is not reasonably practicable to separate from other things the seizure of which is authorised by one or other of the powers specified in Part 1 or Part 2 of Schedule 1.

Under the heading “Return or Retention of Seized Property” Section 53 provides for the examination and return of property seized under Section 50 or Section 51 if, upon initial examination, it is found not to fall within one or other of the three categories specified in Section 53(3)(a)–(c), that is to say property for which the person seizing it had power to search when he made the seizure and whose return is not required by the provisions relating to legal professional privilege set out in Section 54, property the retention of which is authorised by Section56 or property which in the circumstances it will not be reasonably practicable following the examination to separate from property falling within the first two categories.

Also under that heading Section 54 makes provision for the return as soon as reasonably practicable of items seized in exercise of a power of seizure to which the section applies, if it appears to the person having possession of them that they are or have comprised within them items subject to legal privilege. The section applies not only to powers of seizure conferred by Sections 50 and 51 but also to each of the powers of seizure specified in Parts 1 and 2 of Schedule 1 of the Act and to any other power of seizure conferred on a constable by any enactment including one passed after the 2001 Act.

Section 55 provides for the return as soon as reasonably practicable of property seized in exercise of a power to which the section applies if it appears to the person having possession of it that it is or has comprised in it excluded or special procedure material. Section 56 applies to each of the powers of seizure specified in Part 3 of Schedule 1 to the 2001 Act and thus creates obligations in respect of material seized pursuant to powers other than those conferred by Sections 50 and 51.

Under the same heading Section 56 authorises the retention of property seized on premises by a constable who is lawfully on the premises or by a relevant person who was on the premises accompanied by a constable and property seized by a constable carrying out a lawful search of any person if there are reasonable grounds for believing that it is property obtained in consequence of the commission of an offence or evidence in relation to any offence and that it is necessary for it to be retained in order to prevent its being concealed, lost, damaged, altered or destroyed.

Under the same heading Section 57 has effect in relation to various specified provisions in a series of statutes relating to the retention of items which have been seized. Section 57 provides that those relevant provisions shall apply in relation to any property seized in exercise of a power conferred by Sections 50 or 51 as if the property had been seized under the power of seizure by reference to which the power under that section was exercised in relation to that property.

Finally under that heading Section 58 provides that that where anything has been seized in exercise of any power of seizure and there is an obligation under Part 2 of the 2001 Act for the whole or any part of the seized property to be returned the obligation to return it shall be an obligation to return it to the person from whom it was seized or to the person appearing under the obligation to return it to have the best right to the thing in question.

Section 59 appears under the heading “Remedies and Safeguards”.

Part 1 of Schedule 1 to the 2001 Act lists the powers of seizure conferred by a series of statutes to which Section 50 of the Act applies. Part 2 of Schedule 1 specifies the powers of seizure conferred by various statutes to which Section 51 applies. Part 3 of Schedule 1 specifies the powers of seizure conferred by various statutes to which Section 55 applies.

The following provisions of the 2001 Act are relevant for the present purposes:

Additional powers of seizure from premisesE+W+S+N.I.

Where—

Where—

This section applies to each of the powers of seizure specified in Part 1 of Schedule 1. …..

Additional powers of seizure from the personE+W+S+N.I.

Where—

in all the circumstances it is not reasonably practicable for it to be determined, at the time and place of the search—

whether what he has found is something that he is entitled to seize, or

Where—

This section applies to each of the powers of seizure specified in Part 2 of Schedule 1. …..

If, at any time after a seizure of anything has been made in exercise of a power of seizure to which this section applies—

it appears to the person for the time being having possession of the seized property in consequence of the seizure that the property—

Property in which an item subject to legal privilege is comprised falls within this subsection if—

Property falls within this subsection to the extent that it is property for which the person seizing it had power to search when he made the seizure, but is not property which is required to be returned under this section or section 55.

This section applies—

Obligation to return excluded and special procedure materialE+W+S+N.I.

If, at any time after a seizure of anything has been made in exercise of a power to which this section applies—

Property in which any excluded material or special procedure material is comprised falls within this subsection if—

Property in which any excluded material or special procedure material is comprised falls within this subsection if—

This section applies (subject to subsection (5)) to each of the powers of seizure specified in Part 3 of Schedule 1.

The retention of—

Property falls within this subsection to the extent that there are reasonable grounds for believing—

Property falls within this subsection to the extent that there are reasonable grounds for believing—

Nothing in this section authorises the retention (except in pursuance of section 54(2)) of anything at any time when its return is required by section 54. …

In subsection (1)(b) the reference to a relevant person’s being on any premises accompanied by a constable is a reference only to a person who was so on the premises under the authority of—

This section has effect in relation to the following provisions (which are about the retention of items which have been seized and are referred to in this section as “the relevant provisions”)— ….

The relevant provisions shall apply in relation to any property seized in exercise of a power conferred by section 50 or 51 as if the property had been seized under the power of seizure by reference to which the power under that section was exercised in relation to that property. ….

This section applies where anything has been seized in exercise, or purported exercise, of a relevant power of seizure.

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.

Those grounds are—

Subject to subsection (6), the appropriate judicial authority, on an application under subsection (2), shall—

The appropriate judicial authority—

On any application under this section, the appropriate judicial authority may authorise the retention of any property which—

Those grounds are that (if the property were returned) it would immediately become appropriate—

Where any property which has been seized in exercise, or purported exercise, of a relevant power of seizure has parts (“part A” and “part B”) comprised in it such that—

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—

The relevant powers of seizure for the purposes of this section are—

References in this section to a person with a relevant interest in seized property are references to—

For the purposes of subsection (11)(b), the persons who have an interest in seized property shall, in the case of property which is or contains an item subject to legal privilege, be taken to include the person in whose favour that privilege is conferred. …..”

In resisting SOCA’s application the Claimant had submitted that Section 59(6) of the 2001 Act does not provide a free-standing power in the Court to order the retention of property seized under an admittedly unlawful warrant. Its function was limited to constituting a proviso to the general rule in Section 59(4) whereby on an application under Section 59(2) made by a person with a relevant interest in the seized property for its return in whole or part the Court shall either order its return or dismiss the application.

In rejecting the Claimant’s submissions HH Judge Cutler held that where SOCA makes an application under Section 59(5) the Court has a discretion under Section 59(6) to authorise the retention of property which has been unlawfully seized and would otherwise fall to be returned if satisfied that its retention is justified on grounds falling within Section 59(7). He accepted that in principle where the rights of an individual or a company are interfered with the Court must exercise care and ensure that there are safeguards. Scope for such an approach is provided by the discretion conferred on the Court by Section 59(6) and by the requirement of demonstrating that if the property were returned it would immediately become appropriate to issue, on the application of the person who is in possession of it at the time of the application under Section 59, a warrant in pursuance of which it would be lawful to seize it.

He recorded that in argument the Claimant’s counsel conceded that there was no great dispute on the merits. Having reviewed the evidence of Mr. Matthews, who confirmed the information which he gave in support of the application and which Mr. Breslin had given in his original information in support of the first warrant, he held that the condition set out in Section 59(7) was satisfied and that the requirements of Section 353(b) and (c) of the Proceeds of Crime Act 2002 were also satisfied in that it was in the public interest for the material to be obtained having regard to the benefit likely to accrue to the investigation if it was obtained and that it would not be appropriate to make a production order in respect of it. In particular he was satisfied that it would not be appropriate given the information before the court to make a production order because it would not be practicable to communicate with UEK as entry would not be granted.

The Claimant submitted that Section 59(5) – (7) of the 2001 Act, when read in its proper context, is intended to provide a mechanism for the resolution of issues concerning the return and retention of material seized under the extension to seizure powers conferred by Sections 50 and 51. Consequently subsections (5) to (7) do not provide a free-standing jurisdiction to permit the Court retrospectively to legitimise a seizure of property under an unlawful warrant. In any event applying the decision of this Court in R(Cook) v Serious Organised Crime Agency [2010] EWHC (Admin) 2119, even if Section 59(6) is capable of being read as founding the jurisdiction determined by the Judge to exist, it would drive a coach and horses through the protection laid down by statute if a law enforcement agency were permitted to ask a court retrospectively to legitimise an unlawful seizure of property by reference to what has been or may be found when that unlawfully seized property was or will be examined.

Reliance was placed on a number of authorities which show that the execution of a search warrant is a serious interference with the liberty and privacy of the subject so that the requirements for its application, issue and execution must be strictly complied with. See Williams v Somerfield [1972] 2QB 512 at 518, R v Crown Court at Lewes ex-parte Hill [1991] 93 CR APPR 60 at 65-67, R(C) v Chief Constable of A and Another [2006] EWHC 2352 (Admin) at Para 9, Bhatti and others v Croydon Magistrates Court and another [2010] EWHC 522 (Admin), [2010] 3 All ER 671 at 678-679 and R(Cook) v Serious Organised Crime Agency [2010] EWHC (Admin) 2119 at Para 13.

Reference was made to the statement in Cook by Leveson LJ that it is important that SOCA and those responsible for drafting search warrants appreciate the necessity of drafting such instruments with care. That statement was said to reflect the clear and unequivocal statement of Latham LJ in Redknapp and Redknapp v Commission of Police for the Metropolis and Others [2008] EWHC 1177 (Admin), [2008] 1 WLR 2091:

“13…. This Court has complained in the past of slip-shod completion of application forms such as this, the last occasion being the judgment of Underhill J in R(on the application of “C”) v the Chief Constable of “A” Police and Another [2006] EWHC 2352 (Admin). The obtaining of a search warrant is never to be treated as a formality.”

The Claimant submitted that that statement of principle should inform the construction of Section 59(5) - (7) of the 2001 Act.

The Claimant submitted that on its plain wording Section 59(6), taken together with Section 59(1) – (4) constitutes a proviso to the general rule in Section 59(4) under which the court has jurisdiction either to order the return of seized property or to dismiss an application under Section 59(2). Therefore it was submitted Section 59(6) does not provide a free-standing power in the Courts to order the retention of property seized under an admittedly unlawful warrant.

Section 59(5) makes no reference to Section 59(6) and (7). In contrast to Section 59(6), Section 59(5) does not empower the Court to “authorise” the retention of seized property but merely to “give……directions” as to its retention. Had it been intended that a law enforcement agency should be able to apply to the Court to “regularise” an unlawful seizure of property by making application under Section 59(5), the Claimant submitted that Parliament would have so provided and would not have limited the jurisdiction of the court in such circumstances to the giving of directions.

Reliance was placed on paragraph 176 of the Explanatory Notes to the Bill which became the 2001 Act. It was submitted that that paragraph indicated that the intention of the drafters of the legislation was that Section 59 would provide a mechanism whereby a person aggrieved at the seizure of his or her property could challenge that seizure and for the police or other law enforcement agency to invite the court to permit its retention of material notwithstanding that the return of that material would otherwise be justified on an application under Section 59(2). This was said to be another reason why Section 59(5) – (7) does not provide jurisdiction for a court retrospectively to legitimise the seizure of property seized under an unlawful warrant on a free-standing application by a law enforcement agency. The inference appeared to be an acceptance that the court does have such jurisdiction provided that it is exercised in the context of an application made by a person with an interest in the seized property under Section 59(2) as distinct from an application made by the person having possession of the material under Section 59(5)(b).

Paragraph 176 of the Explanatory Notes is in these terms:

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

Further it was submitted that the jurisdiction conferred on the Crown Court by Section 59 was intended to provide for a judicial mechanism to determine disputes which arise on the application of the power to remove and sift material under the earlier provisions of Part 2 of the 2001 Act. Since those provisions are to be found in Sections 50 and 51 the inference appeared to be that the power to make an order under Section 59(6) is confined to disputes arising out of the exercise or purported exercise of the new powers conferred by Sections 50 and 51.

Finally it was submitted that the construction contended for by SOCA would go a long way to removing the prior control of the exercise of the power to enter and search premises altogether. Taken to its logical conclusion that approach would obviate the need for a law enforcement agency to apply for a warrant before seizing property since it would in all cases be open to that agency to make an application under Section 59(5) – (7) retrospectively to regularise a plainly unlawful seizure.

In my judgment Section 59(6) of the 2001 Act plainly conferred on the judge a discretionary power to authorise the retention by SOCA of the property which had been seized by it pursuant to the 5 July 2010 warrant in purported exercise of the power of seizure conferred by Section 352 of the Proceeds of Crime Act 2002.

The starting point, as it seems to me, is that this conclusion follows from the clear language of Section 59(6). That language makes it clear that the discretion to authorise retention is conferred on “the appropriate judicial authority” (defined by Section 64(1)(a) to mean a judge of the Crown Court) “on any application under this section” in respect of property which has been seized in exercise or purported exercise of a relevant power of seizure and would otherwise fall to be returned if it is satisfied that retention of the property is justified on grounds falling within sub-section (7).

As to “on any application under this section” Section 59 makes provision for applications at the suit of three distinct categories of person. Under Section 59(2) any person with a relevant interest in the seized property may apply for the return of the whole or a part of the seized property. Under Section 59(5) the appropriate judicial authority may give directions on (a) an application under sub-section (2) (that is to say one made by a person with a relevant interest in the seized property), (b) 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) an application made by a person with a relevant interest in anything seized under Section 50 or S.51 and on the grounds that the requirement of Section 53(2) have not been or are not being complied with.

Thus one of the circumstances in which the discretionary power arises is on an application made by a person for the time being having possession of anything in consequence of its seizure under a relevant power of seizure (Section 59(5)(b)). The relevant powers of seizure for the purposes of Section 59 are defined by Section 59(10) as (a) the powers of seizure conferred by Sections 50 and 51 and (b) each of the powers of seizure specified in Parts 1 and 2 of Schedule 1. It is thus clear that applications falling within Section 59(5)(b) are not confined to those made by the person having possession of anything in consequence of its seizure under the powers of seizure conferred by Sections 50 and 51. They include applications made by a person having possession of anything in consequence of its seizure under any of the powers of seizure specified in Parts 1 and 2 of Schedule 1, including for present purposes the power of seizure conferred by Section 352(4) of the Proceeds of Crime Act 2002. It is thus clear that, contrary to the Claimant’s submissions, the discretionary power conferred by Section 59(6) is not confined to cases where property has been seized pursuant to Section 50 or 51 of the Act. Indeed this is demonstrably the case irrespective of whether the applicant is, as here, the person for the time being having possession of the material (subsection 5(b)) or a person with a relevant interest in the seized property (subsection (2)). In the latter case that follows from the fact that under Section 59(1) Section 59 applies where anything has been seized in exercise or purported exercise of a relevant power of seizure which under Section 59(10)(b) extends to powers of seizure other than those conferred by Sections 50 and 51. It also follows by inference from the contrast with applications made pursuant to Section 59(5)(c) which are expressly confined to persons with a relevant interest in anything seized under Sections 50 or 51.

It seems to me clear on the language of Section 59(6) that an application made under Section 59(5)(b) by a person for the time being having possession of anything in consequence of its seizure under a relevant power of seizure is “an application under this section” within the meaning of Section 59(6). The Claimant’s submission that that conclusion is wrong because Section 59(5) makes no reference to Section 59(6) and (7) and that Section 59(5), in contrast to Section 59(6) does not empower the court to authorise the retention of seized property but merely to give directions as to its retention, is in my judgment wrong. First it does not address the clear language of Section 59(6) to which I have referred above. Second it is in my view based on a non-sequitur. The fact that Section 59(5) provides that on an application made under Section 59(5)(b) the appropriate judicial authority may give directions as to, among other things, the retention of seized property is not in my view inconsistent with the conclusion that Section 59(6) confers on the appropriate judicial authority on such an application the power to authorise the retention of seized property in the particular circumstances specified in that sub-section.

Nor do I consider that it follows from the fact that Section 59(6) constitutes a proviso to the general rule in Section 59(4) under which the Court has jurisdiction on an application made under Section 59(2) either to order the return of the seized property or to dismiss the application that Section 59(6) does not also provide a free-standing power in the court to order the retention of property seized under an admittedly unlawful warrant. That submission appeared to be based on two propositions. The first was that because Section 59(6) constitutes a proviso to the general rule in Section 59(4) on an application made under Section 59(2) it cannot for that reason also confer a discretion on the appropriate judicial authority to be exercised on an application made under Section 59(5)(b) by a person having possession of anything in consequence of its seizure under a relevant power of seizure. That proposition seems to me logically flawed and in any event inconsistent with the clear words “on any application under this section” in Section 59(6) which, as described, include an application made under Section 59(5)(b).

The second proposition appeared to proceed from the premise that where property has been unlawfully seized the Court has power under Section 59(6) to order its retention in the context of an application for its return made under Section 59(2) by a person with an interest in it. Indeed it was expressly conceded in oral argument by Mr Bodnar who appeared on behalf of the Claimant that on an application under S.59(2) by a person with an interest in the seized property the appropriate judicial authority does indeed have a discretionary power under S.59(6) to order the retention of property seized under an admittedly unlawful warrant. That concession, in my view rightly and inevitably made undermines the submission that, whether as a matter of policy or of construing Section 59(6) by reference to the purpose for which it was enacted, Section 59(6) does not authorise the appropriate judicial authority to order, on an application made under Section 59(5)(b) by the person seized with the property, the retention of property which has been unlawfully seized. Once it is accepted that there is no necessary inconsistency between policy and/or the purpose for which Section 59(6) was enacted on the one hand and the creation of a power in the court to authorise retention of unlawfully seized property, it does not seem to me that such an inconsistency arises merely out of the fact that the order is made on an application by the person who has seized the property rather than on an application by the person who has an interest in it.

If SOCA in resisting an application by the Claimant under Section 59(2) for return of the property on the ground that it was unlawfully seized could invite the Court under Section 59(6) to order its retention on the ground that if the property were returned it would immediately become appropriate to issue a fresh warrant for its seizure, I can see no reason of policy or statutory purpose why the same result should not be permitted merely because the application is made by SOCA rather than by the Claimant. Apart from anything else where, as here, SOCA discovers that property has been unlawfully seized by it by a technical error in the form of the warrant pursuant to which property has been seized by it, it would in my view be anomalous if, in order to obtain an order under Section 59(6) for its retention it had to wait until the claimant made an application for the return of the property under Section 59(2), at which point it could, as the Claimant accepts, invite the court to make an order for retention of the property, rather than, as happened in this case, take the proper and responsible step of taking the initiative as soon as the error was discovered and seeking to regularise the position by making its own application under Section 59(6).

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

As to the requirement in Section 59(6) that the property must have been seized in exercise or purported exercise of “a relevant power of seizure”, for the reasons already mentioned, it seems to me clear beyond argument that it is satisfied not only in cases where property has been seized pursuant to the new powers conferred by Sections 50 and 51 but also where it has been seized pursuant to any of the large number of powers, existing and as yet un-enacted, specified in Parts 1, 2 and 3 of Schedule 1. The Claimant’s submission to the contrary is in my view untenable. That this is so follows from the definition of relevant powers of seizure in Section 59(10).

The Claimant sought to support his submission that the discretionary power conferred by Section 59(6) is confined to property seized pursuant to Sections 50 or 51 by reference to the purpose for which Part 2 of the 2001 Act was enacted and extracts from the explanatory notes which accompanied the Act. The Claimant submitted that Part 2 was enacted to address the problem identified by the Divisional Court in R v Chesterfield Justices and Chief Constable of Derbyshire ex-parte Bramley [2000] QB 576.

In Bramley the Divisional Court held that, where property is seized pursuant to a warrant issued under the Police and Criminal Evidence Act 1984 (PACE), if it subsequently turns out on examination that some of it falls outside the scope of the warrant there is no defence for the constable who executed the warrant in a subsequent action for trespass to goods based on unjustified seizure that he acted in good faith. PACE was held to contain no power on the part of a person executing a warrant issued under that Act to remove property from premises for the purposes of sifting through it to identify that property which is covered by the warrant and that which is not with a view to retaining the former and returning the latter.

The Divisional Court expressed the view that nothing short of primary legislation would entitle a constable to remove property for the purpose of sifting it as between property covered and not covered under the warrant.

“To put the matter in terms which would meet the requirements of the Convention it seems to me that if in a democratic society it is necessary for the prevention of crime to invade privacy to a greater extent than is spelled out in the Act of 1984, then the limits of the invasion must be spelled out in the statute or in some regulations or code made thereunder, and there must be a convenient forum available for dealing with disputes: cf Mienietz v Germany (1992) 16 E.H.R.R. 97. Meanwhile, in order to defend the right to privacy I see no escape from the proposition that the words of the statute should be strictly applied.” (per Kennedy LJ. 587 E-F).

“Like Kennedy LJ, therefore, I agree that further statutory power has to be provided to cover the situation which I have considered above. For my part, I doubt whether anything short of primary legislation would suffice to meet the stringency of the requirement of the European Convention for the Protection of Human Rights and Fundamental Freedoms. Having regard to the practical implications of the result in this case, it may be thought that the authorities should consider this matter with a degree of urgency.” (per Turner, J. at 591 A-B).

It is in my judgment clear that the new powers conferred by Sections 50 and 51 of the 2001 Act were enacted in response to the decision in Bramley with the purpose of enabling constables and others to remove property for the purposes of subsequent sifting. That is clear from the language of Sections 50 and 51. Were there ambiguity in that conclusion, which in my judgment there is not, it is clearly supported by the Explanatory Notes. Paragraphs 156 to 158 summarise the decision in Bramley and state that Kennedy LJ. said, “Common sense would suggest that a policeman executing a warrant should be able to do a preliminary sift of documents and then take all or a large part of them to sort out properly elsewhere.”

Paragraph 159 states: “Whilst Bramley concerned the police and PACE, the principle applies to the powers of seizure given to a range of law enforcement agencies. The difficulty facing the police and these other law enforcement agencies is that there are circumstances where it is not practicable to establish on the premises subject to the search which material can be seized and which cannot. This may be because of the simple bulk of the material. It may be because relevant material is contained within the same document or set of documents as material which is protected from seizure. The most difficult circumstances relate to material held on computer media. It may be impossible to establish which material is relevant and seizable without processing the data forensically. That may involve removing the computer and/or imaging the entire contents of its hard disk and/or removing CD Roms or floppy disks.”

Paragraph 160 states: “The new sections do two separate things. First they deal with the problem identified by Bramley. They give the police and other law enforcement agencies powers to remove material from premises so that they can examine it elsewhere, where it is not possible to examine it properly on the premises, due to constraints of time or technology. Second, they recognise the fact that with the advent of modern technology and the expansion in the use of computers, it is often important for investigators to be able to seize and forensically examine an entire disk or hard drive, in order to determine when individual documents have been created, amended and/or deleted. This inevitably means retaining all the material on the hard drive, including possibly legally privileged material. The new sections give the police and others the power to retain this inextricably linked material. The sections also provide for a number of safeguards to prevent abuse and to allow for a mechanism whereby an application can be made to a judge for the return of material seized. In certain circumstances there will be an obligation on the police and others to secure the material in question pending the determination of such an application.”

Paragraph 161 states: “Because the Bramley principle applies equally to all powers of seizure given to the police and other law enforcement agencies the new powers are free standing powers which can only be exercised where a person could have exercised an existing power of seizure. Schedule 1 to the sections lists all these existing powers. There are over 70 of them and in addition to those used by the police they include powers available to the Serious Fraud Office, the Financial Services Authority, the Inland Revenue, Customs & Excise, the Department of Trade and Industry and the Office of Fair Trading. The underlying policy is that whilst the police and others can use the new powers to remove material to examine elsewhere they are only able to retain material which they have power to seize under their existing powers. The only exception to that is the new power to retain inextricably linked material.”

On their face at first blush the last two sentences of paragraph 161 might seem to be inconsistent with a construction of Section 59(6) as conferring on the appropriate judicial authority a discretionary power to authorise the retention of property unlawfully seized in purported exercise of a relevant power of seizure. In my judgment there is no such inconsistency. It is plain on the wording of some of the sections in Part 2 of the Act that Part 2 is not confined to conferring and defining the new powers of sifting in Sections 50 and 51. Thus for example the duty to secure the return of legally privileged material imposed by Section 54 applies not only to the powers of seizure conferred by Sections 50 and 51 but also to each of the powers of each of the seizure specified in Parts 1 and 2 of Schedule 1 (see Section 54(4)). Similarly the duty to secure the return of excluded material or special procedure material imposed by Section 55 applies to the powers of seizure specified in Part 3 of Schedule 1. Nor is the authorisation by Section 56 of the retention of property seized by a constable lawfully on premises or by a relevant person who was on premises accompanied by a constable confined to property seized pursuant to Sections 50 or 51.

Further, and of particular relevance in the present context, as already explained the provisions made by Section 59 for applications to be made and directions and orders to be made apply not only to property seized pursuant to the powers of seizure conferred by Sections 50 and 51 but also to property seized pursuant to the powers of seizure specified in Parts 1 and 2 of Schedule 1.

It is thus clear in my view that Part 2 of the 2001 Act was enacted not solely for the purpose of providing new powers for removing material for the purpose of sifting but for additional purposes as well. In Bramley Kennedy, LJ. stated: (at 588 E-G)

“That leaves the problem of what is to be done if a difference of opinion persists as to whether an item seized was relevant (i.e. within the warrant) or was subject to legal professional privilege (as qualified by section 10(2)) and, if so, whether at the time of seizure the constable had reasonable grounds for believing the item to be subject to legal professional privilege. In my judgment as the law stands those issues can only be ventilated by means of an action for trespass to goods, or perhaps in some cases by means of proceedings for judicial review. The latter course is not usually satisfactory, and either course may tend to slow up a criminal investigation which should be proceeding as quickly as possible. So there would seem to be a need for a special inter partes procedure to bring the matter speedily before a circuit judge. Protocols of the type shown to us in draft could have a valuable role to play, not least in preserving the material in a suitable state until it has been adjudicated upon, but in the end they cannot provide a quick solution where there is a dispute.”

In my view the need for an inter partes procedure identified by Kennedy LJ. was not confined to cases where he considered that there should be a new power to remove property for the purpose of sifting. Be that as it may, although the statement in paragraph 160 of the Explanatory Notes that “the sections… allow for a mechanism whereby an application can be made to a judge for the return of material seized”, is made in the context of a discussion of the new powers of seizure under Sections 50 and 51 which might on its face suggest that Section 59 is confined to property seized under the new powers under Sections 50 or 51, the clear language of Section 59(10) makes it plain that that is not the case.

Moreover in my view paragraph 176 of the Explanatory Notes also supports this view. Thus it expresses the hope that Section 59 would provide a quick and easy mechanism for challenging not only the use of the new powers conferred by Part 2 of the Act but also in certain circumstances the exercise of existing powers. It further states: “Subsections (5)(b),(6) and (7) enable the police or other body in possession of the property to make an application to keep any material which they would otherwise be obliged to return if it were to immediately become appropriate to issue a warrant enabling them to seize that material or to demand its production in the circumstances set out in sub-section (7)(b). This means for example that the police would not have to return material which might be of value to them and then have to immediately obtain a warrant to seize it back.” (emphasis added).

In my view this makes it plain that the relevant provisions of Section 59 are not confined to property seized in the exercise or purported exercise of the powers conferred by Sections 50 or 51. It also in my view supports the proposition that the discretionary power to order retention of property seized in purported exercise of a relevant power extends to property which has been unlawfully seized. Such property is property which the police would otherwise be obliged to return and as made clear by paragraph 176 the purpose of the new discretionary power to order retention conferred by Section 59(6) is in an appropriate case to avoid the police having to return property which it is not otherwise entitled to retain if it would upon return be entitled to seize it pursuant to a fresh warrant.

In Cook v SOCA, SOCA seized documents pursuant to search warrants whose execution it subsequently conceded was unlawful because the warrants provided details of the premises to which they related only in a schedule and because proper schedules specifying the addresses had not been left at two of the searched premises.

SOCA argued that once the documents which had been unlawfully seized pursuant to admittedly defective warrants were in the police station it was entitled to seize them pursuant to Section 19 of PACE on the ground that the power of seizure under that section is exercisable by a constable who is lawfully on any premises and SOCA were lawfully on the premises to which the documents had been taken.

Leveson, LJ. held: “I readily accept that the words of Section 19 are, on their face, sufficient to justify the further seizure of the property seized during the course of the execution of search warrants which it is conceded was unlawful. That construction, however, is to deny the structure of the legislation and to fail entirely to have regard to the way in which the serious interference, which is the power to enter premises and seize property, is controlled. For my part I reject the proposition (which is the natural corollary of the power for which [counsel for SOCA] contends) that however unlawful the seizure of property, provided it ends up on premises at which the presence of a police officer is lawful, that officer can then convert what is unlawful possession into lawful possession.”

In my judgment Cook v SOCA does not assist the Claimant in his contention as to the need to construe Section 59(6) in such a way as to avoid the conclusion that the appropriate judicial authority on the application of a person in possession of unlawfully seized property may authorise its retention. The critical difference between the construction of Section 19 of PACE for which SOCA contended unsuccessfully in Cook and the construction of Section 59(6) of the 2001 Act for which it contends in this case is that the former allowed for no discretion on the part of the Court or appropriate judicial authority to refuse to allow retention of unlawfully seized property, whereas the latter does.

As the judge whose decision is challenged in this case pointed out, the judicial discretion built into the new scheme provided for by Section 59(6) of the 2001 Act provides a safeguard against abuse on the part of the police or other agencies or the watering down of the high importance attached in the judicial pronouncements referred to earlier in this judgment to the need for scrupulous care and attention in the drawing and execution of search warrants. The Claimant is in my view right to point to the undesirability of the police or other agencies regarding the new power to apply for the retention of unlawfully seized property as enabling them to adopt a more lax approach to complying with the strict requirements imposed in relation to the drawing up and execution of search warrants. However I have no doubt that in the exercise of the judicial discretion conferred by Section 59(6) any court or other appropriate judicial authority faced with an application for retention of unlawfully seized property will be astute to subject to the most rigorous examination the circumstances leading up to and surrounding the illegality of the initial seizure. Any suggestion of bad faith or even that the police or other agency adopted a less than rigorous and scrupulous approach to the drawing up and the execution of the initial warrant is likely to weigh heavily against the exercise of the discretion in favour of authorising retention.

As already mentioned, in this case there is no suggestion either of bad faith or of any lax approach on the part of SOCA to the drawing up and execution of the 5 July 2010 warrant. The illegality derived from a defect in the general template for such warrants to which the attention of SOCA was by chance drawn shortly after 5 July 2010. Immediately upon realising the defect and consequent illegality, SOCA acted responsibly in drawing this to the attention of the Claimant and seeking to draw up a fresh warrant. The Judge was entitled to conclude as he did that the conditions of Section 59(7) were met in this case. As Leveson, LJ. said in Cook v SOCA:

“Criminal litigation is not, however, a game. Although the police (or this case SOCA) cannot escape the consequence of the illegality of the warrant, there is no reason why they should be placed in a worse position than if the warrant had never been sought or, conversely, why those the subject of the warrant, (even if unlawful) should be in a better position to protect themselves from prosecution for unlawful conduct.” (Paragraph 16).

If the court did not have the power in this case to authorise the retention by SOCA of the seized material so that it had to be returned to the Claimant, there would inevitably be a risk that it would be destroyed. That would be to place the Claimant in a better position and SOCA in a worse position than if it had not issued and executed the 5 July 2010 warrant thereby putting the Claimant on notice of SOCA’s investigation and its intention of searching the premises of KCSL. The risk of destruction of the seized material is obvious.

For these reasons in my judgment the challenge to the decision of the Judge fails and this claim for judicial review should be dismissed.