Malik & Ors, R (on the application of) v Manchester and Salford Magistrates' Court & Ors

LORD JUSTICE BEAN: The first two claimants and the third claimant, a company of which the first claimant was a director, were being investigated by the Home Office in respect of allegations that they were fabricating offers of employment, or making false statements that certain individuals were employed by them, and doing so in return for payment.

The Home Office wished to progress the investigation by searching for evidence at the home and business premises of the claimants. Applications were made on 27 January and 1 February 2016 for the issue of warrants under section 8 of the Police and Criminal Evidence Act 1984. These warrants were executed on 2 February 2016 and a number of items were seized.

By a claim form issued in this court on 4 March 2016 the claimants challenged the issue and execution of the search warrants on a number of grounds. Permission was initially refused on the papers by Hickinbottom J (as he then was), but on a renewed application for permission of this court Gross LJ and Nicol J granted permission on one of the original grounds and on a further ground added by amendment.

The original ground on which permission was granted was that the warrants failed to comply with section 15(6)(b) of PACE, which requires that a search warrant shall identify so far as practicable the articles to be sought. The new ground was that in its application to the magistrates' court the Home Office failed to inform the courts that there were live businesses operating at the business premises and the employment documentation which might be found there might include genuine documents. Genuine employment documents could have included special procedure material, and a necessary condition for the grant of the search warrants by the magistrates' courts might not therefore have been satisfied. In a document headed "Grounds of concession and submissions as to relief from the third defendant" dated 13 July 2016 Mr Andrew Bird, who has appeared on behalf of the Home Secretary before us today, conceded that there was merit at least in the original ground on which permission was granted.

On 29 November 2016 this court, comprising Supperstone J and myself, made an order quashing the search warrants and making further provision as follows. By paragraph 2 of the order, the entries and searches effected under the warrants which had been quashed were declared unlawful pursuant to section 15(1) of PACE. Paragraph 3 provided:

The substantive judgment on that hearing was given by Supperstone J. It is published on the Bailii website: [2016] EWHC 3723 (Admin). It will be seen from that judgment that the area of dispute at the hearing was whether the Home Office should be permitted to retain the material in order to use it to inform the contents of an application to the Crown Court under section 59 of the 2001 Act, which is what Mr Bird contended and the order which this court in fact made, or whether on the other hand the material should have to be returned to the claimants or at least sealed, with the Home Office being required to make the section 59 application to the Crown Court, at least initially, without the benefit of the material, and then to seek permission from the Crown Court judge to inspect it.

We announced our decision and gave judgment on 29 November 2016. The order of the court was drawn up and sealed the following day, 30 November. On 24 January 2017 some but not all of the seized property was returned to the claimants. The next day the Government Legal Department filed an application under section 59 in the Crown Court by email without, at that stage, supporting evidence.

It will be observed that the application on 25 January was one day out of time. That is because time, in an order of this kind, runs from the date on which the order is pronounced, namely 29 November. The 56th day inclusive of the date on which judgment was pronounced was 23 January. The phrase "within 56 days of" takes one to the 57th day, namely 24 January. So the section 59 application should have been filed at the latest by 24 January. It is only by taking the date of sealing of the order as the start date, which is incorrect, that one could get to the 57th day (and thus the last date for filing the application) being 25 January.

The present claimants filed and served grounds of resistance in the Crown Court proceedings dated 6 February 2007. This document stated that they required an oral hearing of the application and continued as follows:

This succinct and understated document did not induce any sense of urgency, still less alarm, in those within the Government Legal Department who received it. It might have been otherwise if it had been accompanied by a letter asserting that the Secretary of State was now in contempt in retaining the property seized under the warrants. Some four and a half weeks went by until on 10 March 2017 the Government Legal Department lodged an application to this court for retrospective variation of the order announced on 29 November 2016 and sealed the following day. They did so without prior correspondence with the claimants' solicitors. They lodged an application notice with the Administrative Court Office. In answer to question 9, "Who should be served with this application?" They put "The claimants". This court received the notice with an accompanying witness statement of Alexander Smeeth of the Government Legal Department. The court gave notice of it by email to the claimants' solicitors but at a generic email address, info@khansolicitors.com, which was the address which the claimants' solicitors had given when originally lodging the claim in the present proceedings. The email read:

No such response was received. I am quite satisfied that both the court and the Government Legal Department assumed that the claimants' solicitors had received notice of the application, and had decided not to make any response. Accordingly the papers were placed before Supperstone J, lead judge of the Administrative Court, for him to make the order sought, paragraph 1 of which provided that the order of the Divisional Court should be varied by the substitution in paragraph 3 of the words "56 days" with the words "58 days".

I should record that the Government Legal Department accepted, as they have from start to finish, that they were at fault: indeed the draft order which they submitted, and which Supperstone J approved, provided that the third defendant should pay the claimant's costs, summarily assessed in the sum of £250.

Unfortunately, the email sent by the court to the generic address at the claimants' solicitors was either not received at all or at any rate not received by anyone with conduct of the matter. When the claimants' solicitors were notified of the order made by Supperstone J they promptly applied to set it aside by application notice sent to this court on 3 April 2017.

It is accepted by Mr Bird that it is appropriate for us today to approach the case as if Supperstone J's order had not been made and to place the onus on the third defendant to apply to us for variation of the order rather than the onus being on Mr Rupert Bowers QC, for the claimants, to seek to revoke the variation.

Mr Bowers resists the application for retrospective variation of the 56-day time limit in paragraph 3 of the order of 29 November. He submits that that order was a final order, not an interlocutory order, and that this is not to be treated as a relief from sanctions case or simply a case management issue. He relies among other authorities on the Panesar/Windsor case, to which I shall return in a moment, the decision of the Court of Appeal in Tibbles v SIG Plc [2012] 1 WLR 2591 and the decision of the Supreme Court in Thevarajah v Riordan [2016] 1 WLR 76.

Because the Panesar/Windsor case is concerned with search warrants it requires consideration in some detail, although in my view it is very different from the present case. On 5 December 2010 in the Crown Court at Bristol, HHJ Horton had issued a number of search warrants holding that there were reasonable grounds shown that offences had been committed. It is not necessary to go into the details of what those offences were. The next day at the Central Criminal Court, HHJ Hawkins QC granted restraint orders and receivership orders in the same overall investigation. On 8 February 2011 the Court of Appeal Criminal Division quashed the restraint orders but suspended the order for discharge to give the Crown an opportunity to make a further application to a judge for renewed relief. That came before Mackay J who held, as the Court of Appeal Criminal Division had done, that the evidence of the commission of offences was insufficient. He declined to renew or replace the restraint orders.

On 15 March 2011 this court, consisting of the President of the Queen's Bench Division and Kenneth Parker J, [2011] EWHC 842 (Admin), in a case reported as The Queen on the application of Panesar v (1) The Crown Court sitting at Bristol, and (2) The Commissioners for HM Revenue and Customs and others, quashed the search warrants granted by HHJ Horton. That is the background to the case on which Mr Bowers relied, the same litigation in effect but with a different lead claimant at the later stage, The Queen on the application of Windsor and others v (1) Bristol Crown Court, (2) Commissioners for HM Revenue and Customs, [2011] EWHC 1899 (Admin). That was an attempt by HMRC to vary or reopen on what was said to be new or better evidence the decision made by the first Divisional Court in the case reported under the name Panesar to quash the search warrants. The second Divisional Court, Laws LJ and Kenneth Parker J, declined to reopen the case. They said:

In Tibbles v SIG plc the claimant had brought a low-value personal injury claim which was allocated to the small claims track. On the claimant's application and with the consent of the defendant, the District Judge on 11 December 2008 made an order reallocating the claim to the fast track. The order contained no provision as to the costs of the litigation incurred up to that point. The claimant succeeded at trial and was awarded, after a deduction for contributory negligence, £750 in damages. When the case came to a detailed assessment of costs the claimant sought to recover costs of about £20,000 incurred prior to the date of the order reallocating the claim to the fast track. The defendant, or the defendant's insurers, naturally objected. The dispute went up to the Court of Appeal, who held that the jurisdiction of the court to vary or revoke its own order under CPR Rule 3.1(7), in this case the order allocating the claim to the small claims track, was:

In Thevarajah v Riordan, the defendants had failed to comply with an order for disclosure. When the matter came before Henderson J he ordered that unless disclosure was given by 1 July 2013 the defendants would be debarred from defending the claim. The defendant failed to comply with that order. The claimant applied for an order debarring the defendant from defending. Hildyard J granted the claimant's application and struck out the defence. Two months later, the defendants served a second application for relief from sanctions on the basis they were now in a position to disclose the required information. They were granted that relief by a deputy judge of the Chancery Division. The Court of Appeal allowed the appeal and restored the order striking out the defence. The Supreme Court agreed. They held that the second application for relief under CPR Rule 3.9 had in substance been an application under Rule 3.1(7) for the setting aside of the provisions of the previous order refusing relief. The belated compliance with the “unless” order could not amount to the material change of circumstances which the defendants would have to show in order to justify setting aside the previous order.

I do not think, with respect to Mr Bowers, that either of the two purely civil cases, Tibbles and Thevarajah, has much to do with the present case. Mr Bird's client has missed a time limit by one day. This case is far more a relief from sanctions case than either Tibbles or Thevarajah, where the party seeking relief was not merely late in complying with an order, but was trying in effect to rewind the litigation to a much earlier stage and have what was correctly described as a second bite at the cherry. In Tibbles, the entire case had been conducted up to the point of transfer to the fast track on the basis that it was in the small claims jurisdiction where no costs would be payable. It was much too late for the claimant's solicitors at the very end of the litigation to seek to go back on that. Similarly, in Thevarajah, the defendants had been in default of Henderson J's order. Hildyard J had refused them relief from sanctions and ordered that their defence be struck out. There had been no application for permission to appeal from Hildyard J 's order and it was, with respect, obviously wrong (as the Court of Appeal and Supreme Court held) for a deputy judge of the Chancery Division to have given the defendants yet a further bite at the cherry when a striking-out order had been made against them.

Nor do I think that the Panesar/Windsor litigation assists Mr Bowers. In that case, first the Court of Appeal Criminal Division and then Mackay J had held that the evidence before the court of grounds to suspect that offences had been committed had been inadequate at the time of the applications to Judge Horton, remained inadequate at the time of the hearing in the Court of Appeal and was still inadequate when the Crown were permitted a second attempt before Mackay J. That is a very long way indeed from the present case. When the present case was before this court on 29 November it was agreed that the warrants were to be quashed because of insufficient particularity in the evidence and because of the failure to alert the court to the fact that there might be special procedure material in the office building. It was also agreed on all sides that this was not a case of bad faith, and that the Secretary of State's officials would be allowed to retain the material pending a section 59 application to the Crown Court. The only real issue in dispute, as I have pointed out, was whether inspection should be permitted before the section 59 application rather than the material having to be returned and an application made de novo for inspection to the Crown Court. So I do not think that on a proper analysis the authorities support Mr Bowers’ case.

The Government Legal Department has nothing to be proud of in the conduct of this litigation. There has been a series of errors. The first was applying to the Crown Court under section 59 one day out of time and without supporting evidence. Even though the one day out of time results from a miscalculation it is lamentable that an application of this kind should be left to the very last day or, as it turned out, a day too late.

The next error was retaining the material unlawfully. Plainly to begin with this was inadvertent because when the section 59 application was made it was not realised that it was out of time. The notice from the claimants in response to the section 59 application dated 6 February 2017 did put the GLD on notice that the retention of the material was unlawful, but this was not accompanied by any letter of protest or letter threatening to take contempt proceedings. I am satisfied that the Government Legal Department’s failure to react to it was not out of wickedness nor even recklessness; Mr Smeeth simply did not notice the point made in paragraph 6 of the response document that the Third Defendant no longer had any lawful basis for retaining the material.

The next error was taking more than a month after that to apply to this court for a variation of the order, and the final error was applying to this court without notifying the claimants' solicitors. Again, I do not think there was anything deliberate in this. Mr Smeeth was still of the view - wrongly - that this was a very minor and routine matter, and relied on the court to effect service. They did so, but to the generic email address in the circumstances which I have set out. It would have been far better if a letter had been sent to the claimants' solicitors notifying them of the Third Defendant's intention to apply to the High Court for retrospective variation of the 56-day time limit, asking them whether they consented to it or opposed it, and if the latter, what arrangements should be made for a contested hearing.

None of that was done, but I am satisfied nevertheless that this is a case in which the relief that Mr Bird seeks should be granted. It remains my view now, as it was on 29 November, that it is much better for the section 59 application to the Crown Court to be conducted on the basis of the judge having before him or her a reasoned and particularised application made by the Home Office to which the claimants can respond and on which a decision can properly be made on the merits. It is obviously highly desirable (subject to counsel's holiday commitments and so forth) that such a hearing on the merits should be arranged without further significant delay.

MRS JUSTICE MCGOWAN: I agree.

MR BOWERS: The other matter - it always, my Lord, appears disrespectful in an application - I would ask for permission to appeal, really on the central point that the court has erred in approaching it in the way that it has in relation to this being an application for relief from sanction. Now it is something -- Mr Bird and I happen to be part-heard in another case and it is something that we have discussed. I know that Mr Bird may wish to take a jurisdictional point in relation to section 18 that there is not a route to the Court of Appeal because, uncontroversially, section 59 proceedings and search warrants in fact are criminal causes or matters. But my submission is this: one, that is wrong because this is a free-standing application to vary the terms of the final order, but notwithstanding that, what I would seek is permission to appeal on the substantive point, if I can put it that way, that the court has taken the wrong approach and that any argument in relation to jurisdiction can be taken in the Court of Appeal.

LORD JUSTICE BEAN: Well, just a minute. We cannot do it like that. If it is a criminal cause or matter then you have to show that it is a point of law of general importance and appeal can only be to the Supreme Court.

MR BOWERS: That is right.

LORD JUSTICE BEAN: If on the other hand it is not, then you have to show that the ordinary test for appeal to the Court of Appeal is satisfied, but you do not have to show a point of general public importance. I do not think one can just duck the jurisdiction point and leave it for later. It is pretty fundamental. If you are right and it is the Court of Appeal, it would be the Civil Division.

MR BOWERS: Yes, it would.

LORD JUSTICE BEAN: Yes. Well, how shall we deal with this?

MR BOWERS: Well, I can quite see the attraction of not dealing with it now and there being some further written submissions of it.

LORD JUSTICE BEAN: There could be further oral submissions. But I think we do need to resolve it and it is probably better resolved at some point today rather than waiting for a day when my Lady and I are sitting together again. If we do things in writing then at some point somebody will go on holiday and the thread will be broken. One possibility which occurs to me is that the long-suffering Mr Myerson has been waiting for his case to be heard, and I think it should be heard at 2.00 pm. But we could then deal with this fascinating point if you are not agreed on it after that.

MR BOWERS: We could, my Lord. I can foresee that we may not get much further than what I have just said, and that may be unsatisfactory both to my client and of course to my learned friend. All I can is this, that there was a somewhat similar position in relation to the Panesar litigation -- a slightly different incarnation than the one you have seen now as to whether section 59 was a criminal cause or matter. It went to the Court of Appeal for that to be effectively determined as a preliminary issue pending, of course, whether the substantive matter could be heard in that court, and perhaps it does not matter -- well, I suppose it does matter. It was decided that section 59 was a criminal court format.

LORD JUSTICE BEAN: Yes.

MR BOWERS: So, the reason I mention that is that there is at least precedent for the route that I invite the court to take of saying, yes, you can have permission on the matter that has been argued subject to the Court of Appeal deciding whether this is a free-standing application, as it were. So it is a different point. I am not asking for any re-determination of whether section 59 is a criminal court matter. What I say is that those proceedings, or this court, is very much functus officio in relation to that claim. This is the court's jurisdiction to police and interpret the terms of an order. It is a free-standing application and there is no reason that that would be a criminal cause or matter to which section 18 applies.

LORD JUSTICE BEAN: I have learned over the years this is a very technical topic. What one thinks instinctively is neither here nor there as to what is or is not a criminal cause or matter. We need a bit more on it than that.

MR BOWERS: My Lord, I can quite see that, and given the temperature in court - it seems to be rising by the minute - I would invite the court, if that is the court's view, to not deal with it this afternoon because I do not think that I will be able to assist the court a great deal more (Inaudible).

LORD JUSTICE BEAN: Well, if it is a criminal cause or matter then you have to persuade us that it is a point of law of general public importance. At the moment I think it is, unless you can point me to chapter and verse saying that it is not.

MR BOWERS: That it is of general public importance?

LORD JUSTICE BEAN: No, no, that it is a criminal cause or matter.

MR BOWERS: Oh, forgive me. Well, as I say, I cannot add to what I have just -- I could expand upon it, I have no doubt I could, in writing given the time. But as I stand here now, that is - and I have thought about it obviously - that is my thinking on it, that it is free-standing and independent of what formed -- the underlying facts that led to the order are not relevant to how the court polices compliance with it and what flows from it in terms of interpretation of that order, and that is what we have been dealing with. That is a free-standing application in a different jurisdiction.

LORD JUSTICE BEAN: Mr Bird?

MR BIRD: My Lord, the case is Panesar, where the Court of Appeal held that you look at the underlying subject matter. May I just give your Lordship -- it is reported, [2015] 1 WLR 2577. We may even have a copy in court. I have it electronically. I suspect my learned friend has too.

MR BOWERS: My Lord, I entirely agree with that, and I know what Panesar says. The point was in Panesar, it was deciding whether section 59 was a criminal cause or matter. That is pretty obvious. They are not always easy to determine one way or the other. But that was the point in Panesar. So yes, look at the underlying substance and what is the underlying substance here? It is not the (Inaudible) claim. This court is just policing the terms of the order, and the underlying facts do not matter. The very point under debate, whether this is a relief from sanctions case or an application demonstrate that it is nothing to do with the underlying facts. It is a matter of pure principle, which relates to that interpretative issue.

MR BIRD: But the issue - sorry, my Lord - is whether this is a decision in a criminal cause or matter, and the criminal cause or matter here is in fact the challenge to the search warrants, that is the judicial review, which is a criminal cause or matter just as the section 59 application is criminal cause or matter. In my submission the -- while (Inaudible) is right, directly on the point, the fact that we are talking about criminal investigations -- this was the ratio of the Court of Appeal's decision, these are all about criminal investigations, they are not about property rights. That was the argument of Mr Panesar in the Court of Appeal. That is all about property rights, therefore it is not criminal. Lord Justice Burnett held, together with the rest on the Court of Appeal, that no, it is all about criminal investigations, (Inaudible) a criminal cause or matter. So in my submission it is a straightforward jurisdictional point. The only route of appeal is to the Supreme Court directly, for which my learned friend would need to ask this court firstly to set aside the question, so you would have to phrase the question. Secondly, he would need leave from this court or from the Supreme Court.

LORD JUSTICE BEAN: Mr Bowers, what we will do is give you a short time to make submissions in writing. You can have until noon on Friday to persuade us either that this is not a criminal cause or matter and that we should grant permission to appeal to the Civil Division of the Court of Appeal or alternatively, if we are satisfied that it is a criminal cause or matter, that there is a point of law of general importance in the following terms which you invite us to certify for the purposes of an application to the Supreme Court.

MR BOWERS: My Lord, may I ask for a little longer, for these reasons? As my Lord knows, I am currently part-heard with Mr Bird, and I am due back before this court on an extradition matter on Friday which I have only just been instructed on, and in relation to the Supreme Court issue, (Inaudible) have a little longer than that. In any event I would -- but I am not going to complain about it.

LORD JUSTICE BEAN: You would. I am afraid we have to be hard-hearted about this, Mr Bowers, for a number of reasons: first of all my Lady is away until next week. Secondly, in applications to the Supreme Court, you get into all sorts of troubles with the time limits, given that we have made an order today. You are well seized of the case. This is a very narrow point. So I think we must ask you to let us have your submissions in writing by Friday morning. They do not have to be very long - this is a page and a half sort of point - if you would.

Right, what about costs?

MR BIRD: (Inaudible). What I propose is one, that the order of Mr Justice Supperstone be set aside, two, then to substitute, in effect, the order that Mr Justice Supperstone made in relation to variation and then I propose no order as to costs.

LORD JUSTICE BEAN: Paragraph 3? All the rest is unaltered, is it not?

MR BIRD: Yes, paragraph 3 of the divisional court's original order. So, vary to substitute 58 days for 56 days, and then bearing in mind your Lordship's observations we would submit no order for costs of the application today, and the £250 be set aside along with Mr Justice Supperstone's order.

MR BOWERS: I agree.

LORD JUSTICE BEAN: Very well. Mr Bird, would you kindly submit an order in those terms.

MR BIRD: Certainly.

LORD JUSTICE BEAN: Thank you both very much for your assistance.