The Hon. Mr. Justice Stadlen :
- There are before the Court renewed applications for permission to proceed with claims for judicial review. They arise out of the same factual background. The Claimants in both applications are the same and some of the issues raised overlap. Accordingly they were heard together at one oral hearing, both applications having been dealt with on different dates on the papers by Mitting J.
- In claim No. 5723 ("the search warrant claim") the Claimants applied for permission to challenge a decision of the Serious Fraud Office ("the SFO") to apply for and the City of Westminster Magistrates' Court to issue search warrants. The SFO and the Magistrates Court are the Defendants in that claim and the Interested parties in it include the Commissioner of Police for the Metropolis and the Chief Constables of Leicestershire and Staffordshire Police, officers from whose police forces executed the warrants.
- In Claim No. 6227 ("the arrest claim") the Claimants challenge decisions of the Commissioner of Police for the Metropolis and the Chief Constable of Leicestershire Police, the Defendants in that Claim, to arrest them and the decision of the Commissioner of Police of the Metropolis to bail the first Claimant. The SFO is one of the interested parties in that claim.
Background
- The SFO is currently conducting an investigation into suspected offences of bribery, corruption, false accounting and money laundering. The investigation is focused on the activities of several individuals and a number of corporate entities within the Alstom Group of Companies ("Alstom"). Alstom has its base in Paris but a number of corporate entities within Alstom are companies incorporated in the United Kingdom with a trading presence in England. According to the Information laid before the City of Westminster Magistrates' Court on the basis of which the search warrants were issued the matter came to the attention of the SFO in June 2009 on receipt of information from the Office of the Attorney General ("the OAG") in Switzerland. Letters of Request were received by the SFO from the OAG requesting assistance in criminal investigations being conducted by the OAG into the conduct of Bruno Kalin the former Compliance Manager for Alstom, and persons unknown on the strong suspicion of aggravated money laundering, bribery of foreign public officials and misconduct in the execution of administrative duties.
- It appeared to the Director of the SFO based on information received from the OAG that there were reasonable grounds to suspect that offences amounting to serious or complex fraud had been and were continuing to be committed. As a result he authorised an investigation into the suspected corruption of officials and others, money laundering and other offences by Alstom and other companies in the UK and overseas. The SFO is working closely together with the OAG both in assisting it in its investigations and in the conduct of the SFO's investigation.
- Alstom has approximately 80,000 employees worldwide and annual sales in 2009 totalling 18.73 billion. The Swiss investigation commenced in October 2007 and initially focused on the activities of Bruno Kalin and Alstom Prom AG ("Prom"). Mr Kalin was arrested and searches were made at the premises of Alstom (Switzerland) AG and Prom in Switzerland on 22 August 2008. In September 2008 Prom changed its name.
- Alstom has about 30 trading locations in the UK employing over 4,000 people. The registered address of a large number of the Alstom companies in the UK is Newbold Road, Rugby, Warwickshire, but its flagship headquarters office in London is on the 8th floor, The Place, 175 High Holborn in London. Information obtained from financial institutions in the UK suggested to the SFO that despite searches having been carried out at Alstom premises in France in 2007 and Switzerland in 2008 corrupt payments were continuing to be made in the UK. One of the companies trading from the Newbold Road site in Rugby was Alstom Network UK Ltd ("Network UK") (previously Alstom International Ltd (Network UK)).
- Enquiries established that Alstom operated over 600 bank accounts in the UK since the 1990s but the SFO was unable to find one in the names of Network UK or Alstom International Ltd. However analysis of bank statements for three accounts held in the names of Alstom UK or Alsltom Ltd at Lloyds TSB up to 2004, ABN Amro between 2004 and 2006 and Barclays from 2006 to March 2010 revealed that over 90 million was received from other Alstom companies (mostly overseas) and subsequently remitted under the reference of Network UK or Alstom Interational to companies suspected of having acted as consultants. Many of those payments refer to consultancy agreements or have consultancy agreement reference numbers.
- According to its annual accounts Network UK purports to be an undisclosed agent for Alstom Ltd which receives all of Network UK's income and pays all of its expenditure. Those accounts show turnover for 2008 and 2009 as £46,881 and £50,724 respectively. From an analysis from one of the Alstom Ltd bank accounts, the SFO identified payments totalling 16.3 million in 2008 and 12.2 million in 2009 in the names of Network UK or Alstom International. Enquiries revealed that the three banks referred to which managed the Alstom accounts were used to receive funds from Alstom companies and remit them to suspect consultants and that between 2000 and 2010 they always corresponded with the company at Newbold Road, Rugby. The bank statements for those accounts were always addressed to those premises although various different people were the named recipients. Officials from the banks made a number of visits to discuss the operation of the accounts and the meetings always took place at Newbold Road. The majority of visits by HMRC to the Alstom Group were made to the Newbold Road premises which were considered by HMRC to be the office where most of the company administration including finance was conducted. Bruno Kalin, the main subject of the OAG investigation, who was arrested in Switzerland was a Director of Network UK between 1 January 2001 and 31 December 2005.
- The Company Secretary of Network UK as at the date when the Information in support of the search warrants was laid before the Magistrates' Court was Alton Cledwyn-Davies, who was appointed to the Board on 3 November 2000. He signed off all Directors' reports and financial statements from 2001 until the date of the Information. The first Claimant, Stephen Burgin was listed at Companies House as a current Director of Network UK and as having given his occupation as Country President. He became a Director of Alstom Ltd, Alstom UK Holdings Ltd, Alstom Power Ltd and Alstom Interational Ltd (which changed to Network UK on 5 June 2008) on 8 January 2008. He was described in the Information as the "figurehead" for the Alstom Group in the UK and was included in the list of Directors who attended a board meeting to approve the 2009 annual accounts of Network UK referred to above.
- The second Claimant, Robert Purcell was listed as a current Director of Network UK at Companies House, where he gave his occupation as Finance Director. He joined the Board of Alstom Ltd, Alstom UK Holdings Ltd, Alstom Power Ltd and other Alstom companies on 1 October 2008 and was appointed to the Board of Network UK on 27 March 2009. He signed off the annual accounts for Network UK in April 2009 and remained as Finance Director at the time the Information was laid before the Magistrates' Court.
- During its investigations the SFO identified ten UK Alstom companies as having made payments through Prom to consultants. The SFO suspected that those payments were solely for the purpose of paying bribes. Of those four, Alstom Power Ltd., Alstom Power UK Ltd., Alstom TND Ltd., and Alstom Power Plants Ltd., were believed to be continuing to trade, three were placed into voluntary liquidation and dissolved in 2008, an eighth was placed into voluntary liquidation and dissolved in 2005 and two were taken over by a company not a subject of the investigation respectively in 2004 and 2008.
- On 18 March 2010 District Judge Evans issued a total of nine search warrants in respect of premises said to be connected to the SFO investigation. They were issued under Section 2(4) of the Criminal Justice Act 1987 ("the 1987 Act"). The warrants were issued on the basis of the Information which had been delivered to the Court on 16 March 2010 in support of the SFO's application for the warrants. The contents of the Information were affirmed as true by Martin Greening, an employee of the SFO who was the case manager for the investigation.
- In the Information Mr Greening said that he was satisfied, having carefully considered information obtained by the SFO, including information obtained by the OAG, that there were reasonable grounds to believe that the service of a notice under Section 2(3) of the 1987 Act on the individuals and companies referred to in the Information might seriously prejudice the SFO investigation. The basis on which he considered it necessary to apply for search warrants under Section 2(4) of the 1987 Act, rather than serve notices requiring production of documents under Section 2(3), was that he believed that the individuals whose premises were to be searched and individuals employed by the companies whose premises were to be searched were implicated in suspected offences of bribery and corruption, contrary to Section 1 of the Prevention of Corruption Act 1906, conspiracy to make payments in the form of bribes, false accounting contrary to Section 17 of the Theft Act 1968 and money laundering contrary to Sections 327, 328 and 329 of Proceeds of Crime Act 2002. Given the roles and responsibilities of those individuals, the scale of the transactions under investigation and the sums involved, he believed that the individuals in question would fail to comply with a notice to produce documents and that documents relevant to the investigation might then be concealed, destroyed or removed. The SFO had frequently found that the execution of search warrants has unearthed relevant material which would not or is unlikely to have been produced in response to a notice to produce documents under S.2 of the 1987 Act. Experience had shown that despite many years between commencement of the fraudulent activity and the date of the search such material is often retained by those who are implicated in the investigation, even where, as in this case, they might be aware that the activities of the Company were under investigation.
- The premises to be searched included the High Holborn address, said to be used as the City office for three UK Alstom companies and to be the office of the UK Country President of Alstom, Mr Burgin, the Newbold Road, Rugby premises, the registered address of a number of UK Alstom companies including Network UK, three addresses in respectively Ashby de la Zouch, Derby and Knutsford from where payments from three UK Alstom companies were said to have been traced. In addition they included the home addresses of Mr. Purcell, Mr. Burgin and Mr. Cledwyn-Davies respectively in Leicestershire, Staffordshire and Shropshire and a flat in London E.C.1 of which Mr. Burgin and his wife became registered owners in July 2008. olbornHooohhhHolbjhsjklfsajdflHioHiugh
- The claim for judicial review in the search warrant claim is directed at the decision of the SFO to apply for and the City of Westminster Magistrates' Court to issue the warrants issued in relation to the Claimants' two home addresses and the address in London of which Mr. and Mrs. Burgin were the registered owners. Both decisions are said to have been unlawful.
- The search warrants were executed by police officers from five police forces, including the Metropolitan Police and Leicestershire Police with the assistance of members of the SFO on 24 March 2010 at 7am. During the searches of their respective residential addresses the Claimants were arrested respectively by a constable of the Metropolitan and Leicestershire Police on suspicion of bribery, corruption and other offences. Thereafter each Claimant was placed on police bail. In the arrest claim both Claimants challenge the legality of the decision to arrest them and Mr. Burgin in addition challenges the decision to bail him.
The grounds of challenge
- In the search warrant claim the Claimants contend that:
i) The statutory pre-conditions for the grant of the warrants in relation to their residential premises were not made out. As to that (a) there was no record of which (if any) of the three access conditions listed in Section 2(4)(a) of the 2007 Act were made out to the satisfaction of the Court and if the Court was satisfied that any access condition was met there was no record of its reasons for so finding. (b) The Information put before the Court by the SFO in support of the application for warrants did not in any event contain any reasonable grounds for believing that any of the access conditions contained in Section 2(4)(a) was met. (c) The SFO failed to put all relevant information pertaining to the Section 2(4)(a) (access conditions) before the Court but did put some irrelevant information for it: in circumstances where no reasons for the decision to issue the warrant were given, and/or recorded it is impossible to be confident that the Court did not act on the basis of irrelevant considerations.
ii) The warrants are over broad and non-specific; they impermissibly seek any document which evidences possible money laundering offences under the Proceeds of Crime Act 2002.
- In the arrest claim the Claimants contend that:
i) In each case the arresting officer did not have reasonable grounds to suspect the Claimant of the offence for which he sought to arrest him, as required by Section 24(4)(sic) of the Police and Criminal Evidence Act 1984 ("PACE"). Further or alternatively, there was no basis on which the Claimants' arrests could be said to be "necessary", as required by Section 24(4) of PACE.
ii) The arrests were therefore unlawful and a violation of Article 5 ECHR.
iii) It was not necessary or proportionate to place the first Claimant on police bail, which has had serious consequences for him and his ability to conduct business. The decision to bail was therefore unlawful and violated the first Claimant's Article 8 ECHR rights.
Procedural history
- The claim for judicial review in the search warrant claim was filed on 17 May 2010. On 24 May 2010 Simon J. granted interim relief prohibiting the SFO from examining the seized material or any copies thereof and from passing such material to any third party. On 3 December 2010 Mitting J. refused permission for the following reasons:
i) "For the reasons set out in the first Defendant's summary grounds of defence there were ample grounds to satisfy the District Judge that a warrant should be issued under Section 2(4) Criminal Justice Act 1987.
ii) The warrant issued was not excessively broad.
iii) Although the District Judge should have given reasons for his decision the lack of reasons does not invalidate the decision or the warrant."
- The claim for judicial review in the arrest claim was issued on 1 June 2010. On 4 October 2010 the Claimants lodged amended grounds of claim. On 19 October 2010 Dobbs J. gave permission to amend and directed that permission in both claims be decided together. This was not done. On 26 November 2010 Mitting J. granted permission in relation to some of the grounds as follows: "On the substantially undisputed facts, it is arguable that the arresting police offers did not have reasonable grounds for believing that for the reasons mentioned in Section 24(5) of the Police and Criminal Evidence Act 1984 it was necessary to arrest the Claimants; and that, in consequence their arrest, and so the subsequent grant of bail, were unlawful." He refused permission on the following part of the claim: " For the reasons set out in the acknowledgement of service it is not reasonably arguable that the arresting constables did not have reasonable grounds for suspecting that offences had been committed and that the Claimants were guilty of them under Section 24(2)"
Relevant Legislation
- Section 2 of the Criminal Justice Act 1987 provides so far as is relevant for present purposes:
"(1)The powers of the Director under this section shall be exercisable, but only for the purposes of an investigation under Section 1 above, in any case in which it appears to him that there is good reason to do so for the purposes of investigating the affairs, or any aspect of the affairs, of any person ...
(3)The Director may by notice in writing require the person under investigation or any other person to produce at such place as may be specified in the notice and either forthwith or at such time as may be so specified any specified documents which appear to the Director to relate to any matter relevant to the investigation or any documents of a specified description which appear to him so to relate; and -
(a)if any such documents are produced, the Director may -
(i) take copies or extracts from them;
(ii)require the person producing them to provide an explanation of any of them;
(b)if any such documents are not produced, the Director may require the person who was required to produce them to state to the best of his knowledge and belief where they are.
(4)Where on information of oath laid by a member of the Serious Fraud Office, a Justice of the Peace is satisfied, in relation to any documents, that there are reasonable grounds for believing
(a)that
(i)a person has failed to comply with an obligation under this section to produce them;
(ii)it is not practicable to serve a notice under sub-section (3) above in relation to them; or
(iii)the service of such a notice in relation to them might seriously prejudice the investigation; and
(b)that they are on premises specified in the Information,
he may issue such a warrant as is mentioned in sub-section (5) below.
(5) The warrant referred to above is a warrant authorising any constable -
(a)to enter (using such force as is reasonably necessary for the purposes) and search the premises; and
(b)to take possession of any documents appearing to be documents of the description specified in the information or to take in relation to any document so appearing any other steps which may appear to be necessary for preserving them and preventing interference with them.
- Section 24 of PACE as amended by Section 110 of the Serious Organised Crime and Police Act 2005 provides, so far as relevant for present purposes:
"(2) If a constable has reasonable grounds for suspecting that an offence has been committed, he may arrest without a warrant anyone whom he has reasonable grounds to suspect of being guilty of it.
.
(4)But the power of summary arrest conferred by subsection (1), (2) or (3) is exercisable only if the constable has reasonable grounds for believing that for any of the reasons mentioned in sub-section (5) it is necessary to arrest the person in question.
(5)The reasons are -
(e)to allow the prompt and effective investigation of the offence or of the conduct of the person in question
"
The search warrant claim
The absence of reasons challenge
- The first ground of challenge to the validity of the search warrants issued in respect of the Claimants' premises is based on the absence of reasons. It is accepted by the SFO that the District Judge gave no reasons at all for the issuing of the search warrants. Each warrant itself refers to the fact that an application was made on 18 March 2010 supported by an Information on oath made by Mr. Greening for the issue of warrants under Section 2(4) of the 1987 Act authorising any constable to enter the relevant premises and search for documents specified in the attached appendices. However it does not refer to any reasons for the issue of the warrant.
- The Claimants submit that in the particular circumstances of this case the failure to give reasons for the granting of the warrants is of itself enough to invalidate them. It is submitted that the critical importance of giving contemporaneous reasons for a decision to issue a warrant has been stressed repeatedly by reviewing courts. Thus the Divisional Court in R (Wood) v Avon Magistrates' Court [2009] EWHC 3614 (Admin) stated that:
."Freedom from interference with [the affected person's] premises can only be properly safeguarded if the reasons for being satisfied of the statutory criteria are recorded at the time."
- Reliance is placed on the following dicta of Watkins LJ sitting in the Divisional Court in R v Southampton Crown Court ex parte JP (21 December 1992, un- reported), as supporting the proposition that there is an irreducible minimum content of such reasons: "Reasons need not be elaborate, but they should be recorded and be sufficient to identify the substance of any relevant information or representation put before the Judge in addition to the written Information. They should set out what inferences he has drawn from the material relevant to the statutory conditions governing the content and form of the order or warrant sought." (at page 22). The Claimants further submitted that the Divisional Court in R v Lewes Crown Court ex parte Weller (un-reported 12 May 1999), applying Watkin's LJ dicta in R v Southampton held that the following are fundamental to the legality of a decision to grant a warrant:
(1) The person or persons against whom an order has been made are entitled to know why it is made:
(2) The requirement to give reasons should help to ensure that a judge does, as he must, address each of the statutory requirements before making the order, and
(3) If it is necessary to review an order in this Court reasons will be of great assistance. We will know why the Judge decided as he did" (per Kennedy LJ at Page 8).
- Reliance is placed on dicta of Latham LJ sitting in the Divisional Court in R (Redknapp) v Commissioner of the City of London Police [2009] 1WLR 2091 at paras 13 and 16 that where a magistrate or judge considering an application for a search warrant requires further information to satisfy himself that the warrant is justified a note should be made of the additional information so that there is a proper record of the full basis upon which the warrant has been granted. The purpose, it is submitted, of insisting on the creation and retention of such a record is to enable the affected persons and the reviewing court later to assess the adequacy of the reasons which were given at the time for granting the warrants. There is little point to such an obligation it is submitted unless it is accompanied by a concomitant duty to give reasons.
- On the facts of this case the Claimants submit that in an investigation of this complexity it is impossible to conclude after the event from the Information alone on what basis the District Judge was satisfied that Section 2(4) of the 1987 Act was made out. Nor can the Claimants or a Reviewing Court have any confidence that the District Judge even addressed each or any of the statutory requirements. That it is submitted is not only because of the failure of the District Judge to give and/or record the reasons for his decisions: it is also because on the basis of the oral and written information put before him by the SFO there were no rational grounds for finding that any access condition contained in Section 2(4)(a) of the 1987 Act was indeed fulfilled.
- There is in the latter submission an implicit acknowledgement that where it is possible to infer from the content of the Information placed before the issuing Court and/or any evidence as to what occurred on the application (i) which of the conditions set out in Section 2(4)(a) of the 1987 Act was made out to the satisfaction of the issuing court and (ii) that there was within the Information material on the basis of which a reasonable Court could be satisfied that the requirements were met, the failure to give reasons is not necessarily or automatically fatal to the validity of the warrant. Indeed in oral argument Ms Montgomery, Q.C. for the Claimants accepted that if the actual reasons for the issue of the warrant are clearly discernable a decision to issue a warrant need not necessarily be quashed despite the failure to give reasons. In my judgment the authorities relied on by the Claimants show that that concession was realistically and sensibly made.
- There is no doubt that the Courts have consistently emphasised the importance of the issuing judge or magistrate giving reasons for the decision to issue a search warrant. There are obvious policy and practical reasons for this which have been spelled out in the authorities. The issuing of search warrants constitutes an intrusion into the property and privacy of affected persons and the purpose of interposing a judge between those seeking a search warrant on the one hand and those whose rights are intruded into on the other is to ensure that the stringent requirement laid down by Parliament before warrants may lawfully be issued are in every case complied with. In addition it is important both for those affected and for a reviewing court to be able to identify the reasons for a decision to issue a warrant so that the legality of the decision can be assessed.
- The importance of this was emphasised by Keene LJ in the Divisional Court in R (Faisaltex, Ltd) v The Crown Court at Preston (DC) [2009] 1WLR1697 at paragraphs 29 and 30 and in the authorities cited by him:
"(29) The requirements which have to be met for the issue of a search warrant, whether under section 8 of PACE or under Schedule 1 thereto may seem numerous and onerous. But, as the courts have repeatedly emphasised, that is only to be expected when a police officer is seeking authority to enter a person's home or other premises without that person's consent and to search for and seize items present there. It has rightly been described as a draconian power (see R v Guildford Magistrates' Court, Ex p Primlaks Holdings Co (Panama) Inc [1990] 1QB 261, 271), and as Latham LJ put it in Redknapp v Commissioner of Police for City of London [2009] 1All ER 229, para 13: "The obtaining of a search warrant is never to be treated as a formality. It authorises the invasion of a person's home." It was said by Bingham LJ in R v Lewes Crown Court Ex p Hill (1990) 93 Cr App R 60, 66 a special procedure case, that
"The 1984 Act seeks to effect a carefully judged balance between these interests and that is why it is a detailed and complex Act. If the scheme intended by Parliament is to be implemented, it is important that the provisions laid down in the Act should be fully and fairly enforced. It would be quite wrong to approach the Act with any preconception as to how these provisions should be operated save in so far as such preconception is derived from the legislation itself. It is, in my judgment, clear that the courts must try to avoid any interpretation which would distort the parliamentary scheme and so upset the intended balance. In the present field, the primary duty to give effect to the parliamentary schemes rests on circuit judges. It seems plain that they are required to exercise those powers with great care and caution. I would refer to the observation of Lloyd LJ in R v Maidstone Crown Court, Ex p Waitt [1998] Crim LR 384 where he said: 'The special procedure under section 9 and Schedule 1 is a serious inroad upon the liberty of the subject. The responsibility for ensuring that the procedure is not abused lies with circuit judges. It is of cardinal importance that circuit judges should be scrupulous.'"
(30) These and other authorities emphasise the vital importance of the role of the judge who is being asked to issue a search warrant. It is his task to be satisfied that the statutory requirements have been met. In the words of Judge LJ in R (Bright) v Central Criminal Court [2001] 1WLR 662, 667:
"It is clear that the judge personally must be satisfied that the statutory requirements have been established. He is not simply asking himself whether the decision of the constable making the application was reasonable, nor whether it would be susceptible to judicial review on Wednesbury gounds (see Associated Provincial Picture Houses, Ltd v Wednesbury Corporation [1948] 1KB 223). This follows from the express wording of the statute, 'If
a circuit judge is satisfied that one
of the sets of access conditions is fulfilled'. The purpose of this provision is to interpose between the opinion of the police officer seeking the order and the consequences to the individual or organisation to whom the order is addressed the safeguard of a judgment and decision of a circuit judge."
Although Faisaltex was concerned with the issue of a search warrant under Section 8 of PACE or Schedule 1 thereto, the principles set out are in my view of equal application to the issue of a warrant under the 1987 Act.
- To like effect are the following observations of Watkins LJ in R v Southampton Crown Court ex parte J & P (21 December 1992 unreported): "Police, in making an application, and a circuit judge in considering it, must necessarily give close attention to each of the applicable access conditions in Schedule 1.
The Circuit Judge must, of course, satisfy himself in relation to each item or category of items of material to which access is sought that he has sufficient information to justify their inclusion in the order or warrant. At no time is that more important than when he is considering an ex parte application for a warrant. In some cases it may be appropriate for him to issue a warrant in respect of part only of the material to which access is sought and require the police to apply on notice to the keeper of the relevant documents for an order in relation to the remainder.
. The Criminal Evidence Act 1984 does not require a Circuit Judge to give reasons when making an order inter partes or issuing a warrant ex parte for access to special procedure material. However challenges to decisions of Circuit Judges which have come before this Court demonstrate, in my opinion, especially as to ex parte applications, the need for this to be done.
These requirements may seem onerous for the exercise of a power to which the police often seek recourse as a matter of urgency. But a Circuit Judge has a responsibility not only to assist the effective investigation of crime, but also to protect as needs be the holder of and the person in respect of whom he holds material in confidence from unjustified intrusion into their private affairs." (pp 21-22). See also the observations of Kennedy LJ in R v Lewes Crown Court cited above.
- In R (Wood) Moses LJ said: "These Courts have, on innumerable occasions, underlined the importance of the rigorous application of the statutory criteria. Only by being satisfied of those criteria can citizens be safeguarded against the unlawful invasion of their premises." He emphasised that freedom of interference in the premises can only be properly safeguarded if the reasons for being satisfied of the statutory criteria are recorded at the time (para 26).
- It is on the other hand in my view established that there is no rule of law which requires as an automatic consequence of the failure of the issuing Court to give reasons for the decision to issue a search warrant that the search warrant is to be treated as invalid and that the decision to issue it must be quashed for that reason.
- In R v Lewes Crown Court, Kennedy LJ, having emphasised the importance of reasons being given, nonetheless said: "I accept that if, despite the lack of reasons, this Court is able to discern adequate reasons for the Judge's decision the appeal may not succeed and I also accept that it is not always easy for a hard-pressed Circuit Judge to remember to give reasons when he has no more assistance than can be provided by a police officer on his own making what the officer no doubt regards as a formal ex parte application
" (para 6). In R (Faisaltex, Ltd) the Divisional Court held that, although the issuing Judge merely expressed his satisfaction, having read the Information, that it was appropriate to issue a warrant, he was to be taken to have accepted and endorsed such reasoning as there was in the Information. That was to the effect that a production order might alert the owners of the material to the investigation into their affairs and so put at risk any material sought. The Court held that the issuing Judge was entitled to accept the assessment of the police and HMRC that notice of an application for an order might seriously prejudice the investigation. (Paras 55 and 57). In R (Wood) the Court held that there was evidence contained in the Information before the magistrate which would form the basis of any satisfaction of the conditions in Section 8(1) of PACE by a magistrate. There was also evidence that the magistrate was satisfied of those matters before he issued the warrant. He initialled the Information before doing so. In those circumstances Moses LJ held that he was prepared to accept that the form that purported to give the reasons for the decision did not accurately or fully record those reasons. Nor was he prepared to disbelieve the evidence of the police officer as to the procedure he adopted before the magistrate or the evidence of the legal adviser that the magistrate did indeed satisfy himself of the requirements of Section 8 of PACE. Thus notwithstanding his recording of his dissatisfaction with the process adopted he rejected the challenge to the decision of the magistrate based on the submission that he failed to consider whether the statutory conditions in Section 8 of PACE were satisfied and failed to record his reasons for being so satisfied.
- In R (Da Costa) v Thames Magistrates' Court [2002] EWHC 40 (Admin) Kennedy LJ sitting in the Divisional Court said: "In my judgment the complaints in relation to the width of the warrants are misconceived. Of necessity the warrant does not set out in detail why the Deputy District Judge was satisfied that there were reasonable grounds for suspecting that a fraud offence of a serious nature (which in an indictment might be charged as more than one offence) had been committed. That detail was in the Information, but it was with that in mind that he authorised [the officers] to enter the specified premises and search them for evidence relating to the commission of this offence, including the items set out in the four lettered paragraphs of which complaint is made."
Although principally directed at the challenge to the width of the warrants, in my view Kennedy LJ's observations are a further example of the court being prepared in an appropriate case to draw an inference from the contents of the Information relied on in support of an application for a search warrant that the reasons why the issuing judge decided to issue it were that he was satisfied that on particular evidence contained in the Information identified grounds entitling the applicant to the issue of a warrant were satisfied.
- Lest it be thought that, because in an appropriate case the reviewing court may be prepared to infer what reasons lay behind the decision to issue a warrant, there is no practical sanction in the event of a failure to give and record reasons, the decision in R (Lewes Crown Court) provides a salutary example of a case in which the court was not prepared to infer from the background information the existence of adequate reasons justifying the issue of the warrant. The many statements in the authorities to the effect that the need to give reasons is not a formality reflect the fact that where reasons are not given the reviewing court will subject to particularly anxious scrutiny any submission that the reasons may be discerned from the Information and/or other background material and will be astute to quash any decision to issue a warrant where the reasons cannot clearly be inferred.
- I turn to consider what occurred in this case. In paragraph 32 of the Information Mr. Greening stated that he was satisfied that there were reasonable grounds to believe that documents specified in the list attached to the Information would be found at the premises sought to be searched. In paragraph 33 under the heading "grounds for application" he stated that having carefully considered information obtained by the SFO including information obtained by the OAG he was satisfied that there were reasonable grounds to believe that service of notice under Section 2 of the 1987 Act on the individuals and companies referred to in the Information might seriously prejudice the SFO investigation. He stated that the basis on which he considered it necessary to apply for search warrants under Section 2(4) of the Act rather than serve notices requiring the production of documents was that he believed that the individuals whose premises were to be searched and individuals employed by the company whose premises were to be searched are implicated in suspected offences of bribery, corruption, conspiracy to make payments in the form of bribes false accounting and money-laundering. Given the roles and responsibilities of those individuals the scale of the transactions under investigation and the sums involved he believed that they would fail to comply with a notice to produce documents and that documents relevant to the investigation might then be concealed, destroyed or removed.
- There was before the Court a file note of the hearing in front of District Judge Evans prepared by an SFO lawyer, Chris Walker. We were told that the SFO had received confirmation that the file note is agreed to be accurate by the District Judge.
- The file note records that Mr. Walker had delivered the Information in support of the application for the search warrants to the court two days before the hearing on 16 March 2010. Mr. Greening was asked to produce identification by the legal adviser to the District Judge and then affirmed that the contents of the Information were true. The file note records that Mr. Walker made a contemporaneous note of what was said between the District Judge and Mr Greening. The District Judge said that he had read the Information which was unsigned. Mr. Walker handed him a copy of the Information signed by Mr. Greening and confirmed that it was a true copy of the Information left with the Court two days earlier. The District Judge asked Mr. Greening whether the signed Information was the same as the Information left with the Court or whether there had been any amendments. Mr. Greening confirmed that it was identical save that the amount of 90 million in alleged corrupt payments might have increased.
- The file note records that the District Judge pointed to the first paragraph in Appendix A to the Information and asked Mr. Greening what documents he thought would be recovered in relation to the searches in France and Switzerland three years earlier. Mr. Greening said he thought there must have been some discussion between the board when searches were carried out in France and Switzerland and that the board members would have taken some steps to ensure that the making of corrupt payments did not continue. The file note records the District Judge then asking Mr. Greening to tell him more about the individual addresses and Mr. Greening saying in response that there must have been board meetings after the arrests and searches took place and that High Holborn is the Headquarters for Alstom UK so that he believed that records of meetings would be there.
- The file note records the District Judge then asking Mr. Greening to go through each address referring to each address in turn by reading from each warrant. Mr. Greening is recorded as having responded by giving an explanation of why each address was being searched, explaining who lived or worked at the address and why it was necessary for the premises to be searched. The District Judge is then recorded as having signed each warrant and two copies and as having pointed out that the copies were not dated whereupon Mr. Walker gave an undertaking that he would insert the date on each copy if that was acceptable. The District Judge is recorded as saying that that would be acceptable provided it was done immediately after the application.
- The SFO submit that the file note shows the District Judge asking pertinent and probing questions about the basis for the application and that in particular it shows him considering the nature of the premises to be searched and their connection to the offences under investigation. It is therefore clear, submit the SFO, that he was well aware that these were residential rather than business premises. The inference to be drawn from the combination of the Information, the file note and the issuing of the warrants is that the District Judge was satisfied that the application for the warrants was properly made and that the statutory basis for issuing the warrants had been met, the District Judge having been satisfied that there were reasonable grounds for believing that the service of notice pursuant to Section 2(3) might seriously prejudice the investigations.
- In my judgment that submission is well founded. The Information clearly identified the grounds for the application. In particular it was plain that reliance was placed on Section 2(4)(a)(iii) of the 1987 Act that there were reasonable grounds for believing that the service of a notice to produce under Section 2(3) might seriously prejudice the investigation because the individuals in question were implicated in suspected offences and would thus fail to comply with a notice to produce documents so that documents relevant to the investigation might then be concealed, destroyed or removed. It is also in my view plain that it identified that reliance was placed on Section 2(4)(b) namely reasonable grounds for believing that the documents sought were on the premises specified in the Information, including the Claimants' residential addresses, because it was likely by virtue of their implication in the offences under investigation that the Claimants would have documents sought in the search warrants applied for in their home premises. It is clear that the District Judge had not only read but studied the Information with sufficient care to identify particular matters on which he required clarification. The Information in my view set out in a clear and readily intelligible way not only the evidence relied on by the SFO as constituting the reasonable grounds for believing that service of notice to produce documents might seriously prejudice the investigation and that the documents sought were on the premises named in the Information, including the Claimants' private addresses, but also the chain of reasoning as to why the evidence constituted such reasonable grounds. In particular it set out the evidence said to constitute reasonable grounds for believing that offences had been committed, that the Claimants were guilty of and/or aware of the commission of such offences, that they would be likely to have documents at their private addresses and that they would, if alerted to the existence of an investigation, seek to destroy, conceal or remove such documents. To adopt the language used in Faisaltex, in my view the District Judge is to be taken as having accepted and endorsed the reasoning set out in the Information supplemented as it was by the answers given by Mr Greening to his questions at the oral hearing.
- For these reasons, although it is a matter of regret that the District Judge did not give express reasons for issuing the search warrants as well established authority plainly requires him to have done, in my judgment the challenge based on the lack of reasons is not arguable and Mitting J was correct to refuse permission to pursue a claim for Judicial Review on that ground.
The lack of reasonable grounds challenge
- The second ground of challenge to the validity of the search warrants is based on a submission that there were no reasonable grounds for believing that any of the access conditions contained in Section2(4)(a) of the 1987 Act was met such as to justify the application by the SFO and the issue by the District Judge of the search warrants. The Claimants submit that the nature and seriousness of the offences under investigation are in themselves insufficient to justify the issue of the warrants. Since the warrants were issued against the Claimants' personal residential addresses, unless there was a basis to suspect them personally of involvement in the companies' suspected wrong doing, the serious nature of that wrong doing was not sufficient for anyone to conclude that there was a risk that they would destroy material if a notice to produce was served on them. As to that the Claimants submit that there was no proper basis for suspecting them of any wrong doing.
- At its highest the Claimants submit that the SFO's case is that their "roles and responsibilities" which it was said derived merely from the fact of the status of each Claimant as a director within a group of companies necessarily meant that they were properly suspected of involvement in the transactions under investigation. The only example of a corrupt arrangement which was in any way particularised within the Information was said to date back to the period between 1998 and 2000, but the Information did not state that either Claimant was personally aware of or involved in that arrangement. Despite being in possession of extensive evidence obtained by the Swiss authorities the SFO, it is said, could not direct the Court to a single piece of information which suggested that either Claimant was personally cognisant of any corrupt payment.
- As to the SFO's reliance on assertions that previous searches of business premises conducted by the Swiss police might have been obstructed by employees of Alstom companies in Switzerland the Claimants submit that there was no evidence that either of them was personally cognisant of (let alone condoned) any impediment of any overseas investigation.
- Further the Claimants placed positive reliance on the Swiss evidence in that despite the substantial amounts of material seized by the authorities in Switzerland in 2008 the SFO was not in a position to identify in the Information any specific evidence on which a suspicion that these Claimants might destroy material could be reasonably be based. Thus it is said there was nothing to link them to the alleged events in Switzerland. Accordingly it is submitted that the only evidence on which the necessary suspicion of the Claimants' involvement in the offences under investigation was based is their mere formal association with the companies under investigation, which is said to be incapable of being enough. The question whether a company director's home is liable to be searched merely by virtue of the director's position within a company under investigation for fraud/corruption was said to be a matter of considerable wider public importance.
- In my judgment the evidence does not support the Claimants' submissions. This case does not in my view raise a general issue of wide importance as to whether the mere fact of being a director of a company of itself necessarily demonstrates the existence of reasonable grounds for believing that he is involved or aware of unlawful practises conducted by or within the company. The evidence relied on by the SFO as supporting the existence of reasonable grounds to suspect that the Claimants were involved in and/or aware of unlawful conduct such as to give rise to a reasonable ground for believing that they might seriously prejudice the investigation of the SFO by destroying documents if served with a Section 2(3) notice to produce document goes well beyond that.
- The Information revealed the following relevant information. It appeared to the Director of SFO that based on the information received from the OAG there were reasonable grounds to suspect that offences amounting to serious or complex fraud had been and were continuing to be committed. From analysis of material obtained during its investigations and interviews of suspects and witnesses the OAG believed that Prom and Network UK were cells within Alstom which were used as vehicles to arrange and administer consultancy agreements between Alstom companies and third parties for the purpose of concealing the payment of bribes to secure the award of State contracts in power, transport and other markets across the world. The AOG and Swiss Federal police had interviewed at least twenty individuals who had acted as consultants. Two had admitted that they received money for acting as a consultant in relation to a project for which they had provided no service and having acted solely as an intermediary to transmit the funds. One admitted they had received a template from Alstom to enable them to create a bogus invoice for services provided for the purpose of securing payment. In at least one instance, the consultant withdrew cash from his account and handed it over to a recipient in another country. Further recent enquiries had revealed that there might also be a third cell in Paris, Alstom International SA.
- The OAG had provided information which revealed that there were a minimum of three parties to each consultancy agreement: the consultant, the Alstom cell, e.g. Network UK, and the Alstom company awarded the contract there could be more than one Alstom company per consultancy agreement. The OAG and SFO suspected that the vast majority of consultancy agreements created by Prom and Network UK were for the sole purpose of paying bribes. From the Swiss investigation in the Power sector it was estimated that Alstom paid nine times as much commission in the Middle East and Africa as it did in Europe and eight times as much in the Asia/Pacific region. The AOG investigation had revealed that Prom was a stand alone company which operated on a separate IT platform from the rest of the group, in fact working as an "isolated cell". The OAG believed that the UK business would be set up in a similar way.
- Searches had been carried out at a number of premises in France prior to searches being carried out in Switzerland. When the offices of Alstom (Switzerland) AG and Prom had been searched in August 2008, several hundred files containing contracts, bank and accounting documents had been seized. These files included more than 200 folders containing Group documents from France. It was suspected that in the aftermath of initial searches by the French authorities, these files had been moved from the Group headquarters in Paris to the headquarters of Alstom (Switzerland) AG in Baden, apparently to evade their seizure by the French authorities. The seized material included documents concerning Alstom in Paris, and related to a 15 year period ending in 2008.
- During a recent meeting with the OAG and Swiss Federal Police the SFO had been informed that when search warrants were executed at the Alstom premises in Switzerland, the OAG and Swiss Federal Police had difficulty in gaining access to the premises quickly; they believed that they were delayed by staff deliberately to impede the premises being searched and suspected that some staff had pre-arranged instructions on what action to take in the event that police attended the premises.
- Since the commencement of this investigation the SFO had gathered a considerable quantity of material from numerous financial institutions and had worked closely with Her Majesty's Revenue and Customs and various police forces to identify the individuals in positions of responsibility in (1) the "cell" trading as Alstom (Network UK Ltd) previously Alstom International Ltd (Network UK), from the Newbold Road site in Rugby, (2) Alstom companies at various locations across the UK, and (3) companies or individuals who had been identified as having acted as a consultant in relation to one or more Alstom contracts.
- I have referred above to the revelation as a result of the enquiries that over 90 million was found to have been received in bank accounts held in the names of Alstom UK or Alstom Ltd from other mostly overseas Alstom companies and subsequently remitted under the reference of Alstom Network UK or Alstom International to companies which were suspected of having acted as consultants and that of the 124 different recipients of those funds identified to date 90 had featured in the material the Swiss seized in the Swiss investigation as companies acting as consultants. The Swiss investigation team led by the Federal Attorney from the OAG believed that the majority of those "consultants" were used for the purpose of facilitating the payment of funds and would have provided no legitimate consultancy service for the money they received. I have also referred to the reference in the Information to the fact that according to its annual accounts Network UK purports to be an undisclosed agent for Alstom Ltd which receives all of Network UK's income and pays all of its expenditure. Those accounts show turnover for 2008 and 2009 of £46,881 and £50,724. That is to be contrasted with payments identified by the SFO from an analysis from one of the Alstom bank accounts totalling 16.3 million in 2008 and 12.2 million in 2009 in the names of Alstom Network UK or Alstom International.
- Information obtained from financial institutions in the UK suggested to the SFO that despite searches having been carried out at Alstom premises in France in 2007 and Switzerland in 2008 corrupt payments were continuing to be made in the UK.
- I have also referred to the reference in the Information to the fact that three financial institutions which managed the Alstom accounts used to receive funds from Alstom companies and remit them to suspect consultants between 2000 and 2010 and that the bank statements for those accounts have always been addressed to the company premises at Newbold Road, Rugby and that officials from the financial institutions made a number of visits to discuss the operation of the accounts and the meetings always took place at Newbold Road, Rugby.
- I have also already referred to the fact that according to the Information the first Claimant became a Director not only of Alstom International Ltd, which changed its name to Network UK on 5 June 2008, but also of Alstom Ltd, Alstom UK Holdings Ltd and Alstom Power Ltd on 8 January 2008. He was said to be the figure-head for the Alstom Group in the UK and was included in the list of directors who attended a board meeting to approve the 2009 annual accounts of Network UK. The second Claimant also joined the Board of Alstom Ltd, Alstom UK Holdings Ltd, Alstom Power Ltd and other Alstom companies on 1 October 2008 and was appointed to the Board of Network UK on 27 March 2009. He signed off the annual accounts for Network UK in April 2009 and remained as Finance Director at the time of the information. He was also the Finance Director of other Alstom companies some of which were said in the Information to be suspected of making payments via Prom to consultants. He had been the main representative for the Alstom Group in meetings with HMRC since Summer 2009.
- According to the Information, from information provided to the SFO by the OAG, ten UK Alstom companies had been identified as having made payments through Prom to consultants. It was suspected that those payments were solely for the purpose of paying bribes. Of the companies still active at Companies House and believed to be continuing to trade, one, Alstom Power Ltd was a company of which both Claimants were directors at the time of the Information. The OAG believed that the list of payments from UK companies to Prom and onwards to suspect consultants on a spread sheet provided to the SFO formed only part of the total number of payments. In respect of one company the spreadsheet only identified one payment of £47,500 in September 2007 but a recent check by the Swiss Federal Police of other material held in relation to that consultancy agreement revealed that a total remuneration of £475,000 was due to have been paid over forty one months.
- The Information stated that specific information about the involvement in bribery and knowledge of persons in the Alstom Group in the UK had been included in information supplied by the Swiss in June 2009. This referred to events in 1999 and 2000. Also found in electronic materials seized in Switzerland was a copy of an e mail dated around 27 May 2003 from solicitors acting on behalf of Alstom to senior members of the Alstom Boards in France and the UK including Mr. Cledwyn-Davies. It specifically praised him for the hard work he did in obtaining documentary and testimonial evidence which contributed significantly to the successful result. The email referred to false consultancy agreements which were used to camouflage the true purpose of payments. It was said to be plain from the email that the consultancy agreements were a sham. It also stated that the contracts were "contra bones mores" (sic). Mr. Cledwyn-Davies was said to have forwarded that email to Graham Hill, a British National who was a director of Alstom International Ltd (Network UK) between January 2001 and April 2002.
- I have set out some of the contents of Information in some detail because they seem to me clearly to demonstrate that the basis for the suspicion that the Claimants were involved in or aware of wrong doing was not confined, as they submit, merely to their formal association with the companies under investigation. The material referred to in the Information in my view justified reasonable grounds to suspect that offences amounting to serious or complex fraud had been and were continuing to be committed. It also justified reasonable grounds to suspect that Network UK (previously Alstom International Ltd) of which both Claimants were directors, had played a central role in the unlawful activities. The central role of Network UK, the disparity between the very modest turnover of Network UK for 2008 and 2009 and the massive value of payments in the names of Network UK or Alstom International in those years, evidence that allegedly corrupt payments were allegedly continuing to be made in the UK at the time of the Information evidence that up to the date of the Information millions of euros had been remitted under the reference of Network UK or Alstom International to companies suspected of having acted as consultants, the belief of the Swiss investigation team that the majority of those consultants were used for the purpose of facilitating the payment of funds and would have provided no legitimate consultancy service for the money they received, and the fact that ten UK Alstom companies had been identified as having made payments through Prom to consultants which were suspected to have been made solely for the purpose of paying bribes in my view renders unarguable the submission advanced on behalf of the Claimants that the sole basis revealed by the Information for supporting a conclusion that there were reasonable grounds to suspect the Claimants of involvement in or at least knowledge of unlawful conduct was the mere fact that they were Directors of a company under investigation.
- This was very far from the hypothetical case of a minor offence on a small scale committed on one occasion by a single employee of a large multi-national company where it could be said that it would be unreasonable to believe that the offence must have been known to and/or connived in by a director merely by virtue of the nature of his office. The chain of reasoning in the Information was fact specific and proceeded on what I consider to be reasonable inferences to be drawn from very detailed evidence as to the nature, scale and longevity of the alleged underlying fraud and the actual involvement and central role in the alleged fraud of Network UK and Alstom International as well as the role of Alstom Power Ltd of which the Claimants were also directors.
- Once it is accepted that there was sufficient information to constitute reasonable grounds for suspecting that the Claimants were involved and/or aware of the serious and complex and international fraud under investigation, it seems to me on the facts of this case to follow that there were reasonable grounds to believe that if the Claimants were alerted to the existence of the SFO and OAG investigations by the service of a notice to produce documents under Section 2(3) of the 1987 Act they might seriously prejudice the investigation by seeking to conceal, remove or destroy documents. This conclusion is further supported by the evidence in the Information of the discovery among the files seized by the Swiss authorities when the offices of Alstom Switzerland (AG and Prom) were searched in August 2008 of more than two hundred folders containing Alstom documents from France and the suspicion that in the aftermath of initial searches by the French authorities those files had been moved from the group headquarters in Paris to the headquarters of Alstom Switzerland AG in Baden apparently to evade their seizure by the French authorities. Those factors and the fact that the seized material including documents relating to Alstom in Paris relating to a fifteen year period ending in 2008 in my view lent considerable support to the reasonableness of a suspicion that any of those suspected of involvement in the fraudulent and unlawful activities of Alstom in whatever country they were based might seek to destroy or interfere with documents that were or were thought to be incriminating if alerted to the fact of an investigation. Given the apparently central role of Network UK in the suspected frauds and the positions of the Claimants as directors of Network UK and in the case of the first Claimant as the figure-head for the Alstom Group in the UK and the second Claimant as the Finance Director of Network UK and the main representative for Alstom in meetings with HMRC since Summer 2009 this would apply in my view in particular to the Claimants.
- For these reasons in my view the second ground of challenge to the decision to apply for and issue the search warrants is also unarguable.
The omission of relevant information challenge
- The next ground of challenge is that the SFO failed to but should have informed the Magistrates' Court that both Claimants are men of good character who have never been in trouble with any law enforcement agency in the past, that the first Claimant is the Chair of the governing board of Staffordshire University, a Commissioner of the British Chamber of Commerce Business Infrastructure Commission and a member of the government established engineering construction forum and that the second Claimant is a Fellow of the Chartered Association of Certified Accountants. If the SFO had no actual knowledge of any or all of those matters the Claimants submit that it should have done since it was very readily available to it and should have been obtained. Information about the Claimants' characters should have been treated by the SFO as relevant to any assessment of the risk of prejudice involved in serving Section 2(3) notices to produce documents. The Claimants submit that it cannot be said with any certainty that the District Judge would have reached the same conclusion had he been properly apprised of these matters. This submission appeared to be founded on the premise, which I have rejected, that the SFO was relying on nothing more than the Claimants' formal positions within a group of companies to justify suspicion of their knowing involvement in wrong doing. Had that been the case the Claimants submit that the District Judge might well have found their good characters to be a highly significant factor.
- Reliance was placed on the following dicta in support of the proposition that the failure to place the Court in possession of all the information which might militate against the grant of an application is particularly egregious in the context of an ex parte procedure and that a search warrant can be quashed for that reason alone. "[The] Judge should be told anything to the knowledge of the party applying which might weigh against the making of the order." (per Bingham LJ in R v Lewes Crown Court ex parte Hill (1991) 93 CR App R 60, 69. The duty on the applicant includes "drawing to [the judge's] attention anything which might militate against the issue of a warrant" (per Kennedy LJ in R (Energy Financing, Ltd) v Bow Street Magistrates' Court [2006] 1 WLR 1316 at 1325 B para 24(3)). "It is well established, that even if the Judge's decision is in itself unimpeachable, I can quash the warrants if [the applicant] mis-led the Court either by positive mis-statements or by failing to draw its attention to material matters." (per Underhill J in R (Mercury Tax Group) v HMRC [2008] EWHC 2721 at para 48.)
- R (Wood) v North Avon Magistrates' Court and R (Faiseltex, Ltd) v Crown Court at Preston are examples of cases where the Divisional Court has refused to quash warrants on the ground of non-disclosure of material on the basis that the failures were inadvertent and would not have made any difference to the decision had the material been disclosed to the court which issued the warrant. In R (Wood) Moses LJ said: "Had I thought that the concealment of the earlier visit by Dorset Police was deliberate or that non-disclosure indicated bad faith, I, for my part would have quashed the warrant on that ground alone whether the information made any difference or not. Since I am satisfied that it was an error and not as a result of bad faith, I go on to consider the further question as to whether the non-disclosure made a difference. In my judgment it did not.
In short the non-disclosure of the visit of the Dorset Police does not in my judgment undermine the magistrates' satisfaction of the relevant statutory criteria." (paras 35, 37). The Court declined to quash the search warrant on the ground of non-disclosure.
- In R (Faiseltex Ltd) Keene LJ dismissed complaints as to a failure to inform the District Judge of relevant facts on the basis that "It seems to us that it is inconceivable that it would have made any difference to his decision to issue these warrants had the true position been emphasised to him." (para 81).
- In R (Mercury Tax Group) v HMRC complaint was made that the court should have been told not only, as it was, that the person suspected was a solicitor but that "he had an unblemished practicing record and was of good character." Underhill J said that he did not believe that was a fact of sufficient materiality to require to be drawn to the court's attention. It could at most be of marginal significance in deciding whether there were reasonable grounds to suspect dishonesty. The judge was not being asked to make any kind of final adjudication. (para 54).
- I do not consider that it is unarguable that the fact of the good character of both Claimants was a relevant matter which should have been drawn to the attention of the District Judge. It could be arguably relevant both to an assessment of whether there were reasonable grounds to suspect the Claimants of involvement in or knowledge of the fraud and illegality under investigation and to an assessment as to whether either of them might seek to interfere with or destroy documents if they were alerted by a notice to produce documents under Section 2(3). However in my judgment it is not arguable that had their good character been drawn to the attention of the District Judge it would have made a difference to his decision to issue the warrants in the terms in which he did or at all. The evidence both as to their involvement in and/or knowledge of the fraud and illegality and as to the elaborate steps previously taken to transfer documents from one part of the group to another in response to searches by the police was in my view sufficiently compelling to make it unarguable that the District Judge would have declined to issue the warrants in the terms in which he did or at all had he been informed of the Claimants' good character. As Underhill J said in R (Mercury Tax Group) the District Judge was not being asked to make any kind of final adjudication. He was being asked to assess the risk of documents being destroyed in the event of the Claimants being alerted to the existence of an investigation. Against the weight of the evidence to which I have referred, I do not consider it realistic to suppose that had he known of the Claimants' good character the District Judge would have assessed that risk so differently as to conclude that there were no reasonable grounds to suppose that the Claimants or either of them might seriously prejudice the investigation by concealing, removing or destroying documents if alerted by a Section 2(3) notice to produce.
The inclusion of irrelevant information challenge
- The Claimants also challenge the decision to issue the search warrant on the ground that the irrational nature of the SFO's assertion of a risk of prejudice to the investigation is demonstrated by the reference to the SFO's past experience in other investigations: "The SFO has frequently found that the execution of search warrants has unearthed relevant material which would not or is unlikely to have been produced in response to a notice to produce documents under Section 2 of the CJA 1987". The claimants submit that as a bold assertion that factor is plainly irrelevant since it would otherwise amount to a blanket reason for the grant of a warrant in every investigation. It is impossible they submit to assess the significance in relation to this case of the SFO's historic experience in other investigations without any or any detailed knowledge of the circumstances of each and every event to which this refers. It is impossible for them to have any confidence that this irrelevant statement made by the SFO was not the basis or even the sole basis for the Court's finding that such a risk existed and, in turn, for the issue of the warrant to enter and search their premises.
- In my judgment this is a fanciful suggestion. The sentence complained of comes in the Information after Mr. Greening's statement of belief that the Claimants would fail to comply with a notice to produce documents and that documents relevant to the investigation might then be concealed, destroyed or removed "given the roles and responsibility of these individuals, the scale of the transactions under investigation and the sums involved." It also comes immediately before the following sentence: "Experience has also shown that despite many years between commencement of the fraudulent activity and the date of the search such material is often retained by those who are implicated in the investigation, even where, as in this case, they may be aware that the activities of the company are under investigation."
- The sentence complained of amounts to no more than a statement to the effect that the SFO has frequently found that search warrants have unearthed relevant material which would or is likely to have been destroyed, removed or concealed by those under investigation for serious fraud had they been alerted to the existence of an investigation by the service of a notice to produce documents under Section 2(3). The suggestion that the District Judge might have been unpersuaded as to the risk of concealment, removal or destruction of documents by these Claimants on the basis of the specific evidence referable to these alleged frauds and the circumstances of these individual Claimants, but might nonetheless have been satisfied that such a risk existed by reason of the SFO's general past experience is in my view wholly unrealistic. The sentence complained of is in my view no more than a background statement of what one would expect. It is not in my view arguable that it was either intended to serve or was understood by the District Judge as serving as the evidential basis relied on by the SFO in support of its application for the issue of search warrants.
The overbroad and non-specific warrant challenge
- The final challenge to the decisions to apply for and to issue the search warrants is the submission that the warrants are over broad and non-specific in that they impermissibly seek "any documents which evidence possible money- laundering offences under the Proceeds of Crime Act 2002".
- The Appendix to each of the warrants contained a list of documents sought. This list identified four categories of documents which may be summarised as follows:
(i)Any documents relating to the arrests and searches in Switzerland and France in 2007 and 2008.
(ii)Documents relating to all consultancy agreements entered into by any Alstom company and any apparent third party consultant dating from 2000.
(iii)Any document relating to a consultancy agreement between Alstom TD Power Electronic Systems Ltd, and Linisfare Holdings Ltd in connection with a contract with the state owned Power Grid Corporation (PGC) of India for the Sasaram project in India; and
(iv)any document which evidences possible money laundering offences under the Proceeds of Crime Act 2002.
- The Claimants' challenge is principally addressed to the fourth category on the basis that the warrants purport to permit search for and seizure of unspecified material and are over broad. However, for reasons which I find hard to understand, the Claimants also submit that because the SFO does not seek to contend that the fourth category can be separated from the other three more specific categories of documents sought in the warrants and seeks to rely upon the warrants read as a whole, if the challenge to the width of the search warrants succeeds it follows that the search warrants are unlawful in their entirety.
- Reliance is placed on Section 15(6)(b) of PACE which provides that a search warrant "shall identity, as far as practical, the articles or persons to be sought", and S.15(1) which provides that S.15 is to apply to warrants issued to constables under any enactment. The Claimants submit that the fourth category of documents does not comply with the requirement that the documents authorised to be searched for and if found seized should be sufficiently specifically identifiable to enable the citizen to know at the moment of seizure whether any particular item falls within or outwith the terms of the warrant and to prevent the authorities from having an unlimited power of seizure. It is further submitted that granting warrants which purportedly permitted the police the power to seize unspecified property from residential premises was plainly disproportionate and did not comply with Article 8(2) of the ECHR.
- Reliance is placed on the following dicta of Kennedy LJ in R (Energy Financing Team, Ltd) v Bow Street Magistrates' Court and others [2006] 1WLR 1316 at 1325 D and 1328 D E, paras 24(5) and 34) :
"A warrant [under Section 2 CJA 1987] 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 fall within it.
.I consider that there are in principle objections to the specifying of the documents by reference to an 'investigation'. The scope of the investigation will be described, as apparently it was in this case, in the Information, and may be clarified as it was here, by the terms of the request to the Director. However, the Information and the request will not necessarily have been seen by all those executing the search and certainly not by the person whose premises are being searched. How are they to understand whether a particular document was relevant to the investigation?
A warrant should be capable of being understood by those carrying out the search and by those whose premises are being searched without reference to any other document."
- There can in my view be no legitimate complaint as to the description or width of the first three categories of documents. Each is directed at specific categories of documents the description of which would in my view be readily understandable both to the Claimants and to any police officers executing the warrants. Further detail is provided in relation to the first two categories in the way of particulars of documents included within the category. Given that the challenge under this ground is confined to the alleged width of the warrant it is not necessary, in the context of this ground, to address the question whether the Information disclosed the existence of reasonable grounds to suspect that documents within these categories were likely to be found in the home premises of the Claimants. I would, however, add for the sake of completeness that in my view it did.
- It was made clear by the Information that those carrying out the searches in France and Switzerland had encountered obstruction which was indicative of pre-arranged instructions and that there was evidence of documentation being transferred from one location to another in order to frustrate the searches. Given the central role of Alstom companies based in the United Kingdom in the commission of the offences under investigation it was in my view reasonable to anticipate that evidence in that regard would be encountered at the locations in relation to which the warrants were issued. The Information also referred to information obtained from financial institutions suggesting that corrupt payments continued to be made from the United Kingdom even after the searches had been carried out in Switzerland and France. It was in my view reasonable to anticipate in the circumstances that those searches would have been the subject of consideration by the Claimants who were directors of Network UK which was itself identified as central to the alleged frauds under investigation. As to the consultancy agreements they were integral to the alleged offences under investigation.
- I turn to the fourth category. In R (Energy Financing, Ltd) the dicta of Kennedy LJ relied on by the Claimants form part of a longer passage in which he set out a general conclusion as to the approach to the permissible width of search warrants which he derived from the authorities:
"(5) When there is an ongoing investigation into, for example the affairs of a company such as EPRS, which appears to have been at the centre of a fraud, it will always be difficult to say precisely what documentation of value to the enquiry may be recovered from those who are justifiably suspected of being in contact with the main target company, but nevertheless the warrant needs to be drafted with sufficient precision to enable both those who execute it and those whose property is affected by it to know whether any individual document, or class of documents falls within it. If that is done it seems to me that the specificity required will be no less than would be required for a notice under Section 2(3) were it practicable to serve such a notice, and although the terms of the warrant may be wide it will not simply be fishing if it is directed to support an investigation which has apparent merit." (1325 D - E at para 24(5)).
- In Kent Pharmaceuticals, Ltd v Director of the Serious Fraud Office [2002] EWHC 3023 (Admin) Lord Woolf CJ said: "There is clearly difficulty in drafting a warrant when the scale of the investigation is of the nature of that in which the SFO is at present engaged
a document of this nature has to be approached with a sense of proportion to the type of issues which are embraced by an investigation of this scale" He also emphasised that it is necessary to read the warrant as a whole (para 24). In R (Da Costa & Co (a firm)) and Stewart Collins v Thames Magistrates' Court and HM Commissioners of Customs and Excise [2002] EWHC 40 (Admin) complaint was made that the warrant in issue identified the material to be seized in four generic paragraphs and was invalid by reason of its width. The Court rejected that complaint on the basis that items that could be seized pursuant to the warrant were defined not only by the four paragraphs but by the offences in relation to the investigation for which the warrant had been issued.
- Kennedy LJ in his judgment set out the introductory words on the warrant which recorded that the District Judge was satisfied "that there are reasonable grounds for suspecting that a fraud offence which appears to be of a serious nature, being an offence under any provision of Section 72(1) to (8) of the Value Added Tax Act 1994, has been committed, or is currently being committed on (the premises of the main office) or that evidence of the commission of such an offence is to be found there." He recorded that the warrant went on to authorise the officers of Customs and Excise to enter the premises and "search them for evidence relating to the commission of this offence including;
(a) any documentation and correspondence relating to the VAT registered businesses suspecting of being involved in VAT fraud offences.
(b) Any records relating to bank building society or any other financial institution accounts controlled or operated by Paul Dacosta & Co, any of the individual partners of Paul Dacosta & Co, PDC Management Ltd and/or any other business believed to be controlled by any of the individual partners of Paul Dacosta & Co.
(c) Any computer equipment, computer discs and any of the specified information held on any form of computer storage medium.
(d) Any other items or information which reasonably appears to the officers to be evidence in relation to suspected VAT fraud offences which appear to be of a serious nature."
The warrant stated that any officer who entered the premises under its authority: "may seize and remove any documents or other things whatsoever found on the premises which he or she has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of a Value Added Tax fraud offence which appears to him or her to be of a serious nature". (Paragraph 7)
- Kennedy LJ held:
"In my judgment the complaints in relation to the width of the warrants are misconceived. Of necessity the warrant does not set out in detail why the Deputy District Judge was satisfied that there were reasonable grounds for suspecting that a fraud offence of a serious nature (which in an indictment might be charged as more than one offence) had been committed. That detail was in the Information, but it was with that in mind that he authorised Mr. Dougal and other officers to enter the specified premises and search them "for evidence relating to the commission of this offence" including the items set out in the four lettered paragraphs of which complaint is made. They are all introduced and governed by the words which I have emphasised, so, for example, to any officer who was properly briefed, there would be no doubt as to the identity of the VAT registered businesses suspected of being involved in VAT fraud offences, and not all documentation and correspondence relating to those businesses could be searched, only that capable of constituting evidence relating to the commission of the suspected offence. The same limitation applied to all four lettered paragraphs, and because of the limited life of PDC Management Ltd it provided a relatively short time frame which did not need to be otherwise specified." (Paragraph 18)
- There is perhaps some tension between Kennedy LJ's statement in R (Energy Financing Ltd) that a warrant should be capable of being understood by those carrying out the search and by those whose premises are being searched without reference to any other document on the one hand and his statement in DaCosta that "to any officer who was properly briefed" there would be no doubt as to the identity of the VAT registered businesses suspected of being involved in VAT fraud offences. However in my view what emerges from the authorities is that in the words of Lord Woolf it is necessary to approach search warrants in a case such as this with a sense of proportion to the type of issues which are embraced by an investigation of this scale. It is also legitimate when considering an apparently general category of documents such as the fourth category in this case to have regard to the whole warrant. The fourth category referred to money laundering offences and although the three offences referred to paragraph 33 of the Information were not identified in the warrant, the first three categories of documents condescended to a considerable degree of detail and particularity. In my view both the Claimants and those executing the warrants would be able to know whether any individual document or class of documents fell within the terms of the warrant. Accordingly in my view this ground of challenge to the search warrant claim is also unarguable.
The arrest claim
The law
- There was no material dispute as to the applicable legal principles. In essence where an arrest has been made purportedly pursuant to S.24(2) of PACE as amended by Section 110 of the Serious Organised Crime and Police Act 2005 the following are necessary (but not sufficient) conditions for showing that the arrest was lawful:
(1)It must be shown that the arresting officer suspected that the person arrested was guilty of an offence.
(2)It must be shown that there were reasonable grounds for that suspicion.
The question whether the first condition is satisfied turns on a subjective enquiry into the state of mind of the arresting officer. The question whether the second condition is satisfied turns on an objective enquiry as to the reasonableness of the grounds which were in the mind of the arresting officer at the time of arrest.
- These principles derive from the following authorities. In O'Hara v Chief Constable of the Royal Ulster Constabulary [1997] AC 286 Lord Hope analysed the nature of the suspicion necessary to ground a valid arrest under Section 12(1) of the Prevention of Terrorism (Temporary Provisions) Act 1984. He said:
"
the test which Section 12(1) of the Act of 1974 laid down is a simple but practical one. It relates entirely to what is in the mind of the arresting officer when the power is exercised. In part it is a subjective test because he must have formed a genuine suspicion in his own mind that the person has been concerned in acts of terrorism. In part also it is an objective one, because there must also be reasonable grounds for the suspicion which he has formed. But the application of the objective test does not require the court to look beyond what was in the mind of the arresting officer. It is the grounds which were in his mind at the time which must be found to be reasonable grounds for the suspicion which he has formed. All that the objective test requires is that these grounds be examined objectively and that they be judged at the time when the power was exercised.
This means that the point does not depend on whether the arresting officer himself thought at that time that they were reasonable. The question is whether a reasonable man would be of that opinion, having regard to the information which was in the mind of the arresting officer. It is the arresting officer's own account of the information which he had which matters, not what was observed or known to anyone else. The information acted on by the arresting officer need not be based on his own observations, as he is entitled to form a suspicion based on what he has been told. His reasonable suspicion may be based on information which has been given to him anonymously or it may be based on information, perhaps in the course of an emergency, which turns out later to be wrong. As it is the information which is in his mind alone which is relevant however, it is not necessary to go on to prove what was know to his informant or that any facts upon which he based his suspicion were in fact true. The question whether it provided reasonable grounds for the suspicion depends on the source of his information and its context, seen in the light of the whole surrounding circumstances." (298 A-E).
- Lord Hope added:
"Many other examples may be cited of cases where the action of the constable who exercises the statutory power of arrest or of search is a member of a team of police officers, or where his action is a culmination of various steps taken by other police officers, perhaps over a long period and perhaps also involving officers from other police forces. For obvious practical reasons police officers must be able to rely on each other in taking decisions as to whom to arrest or where to search and in what circumstances. The statutory power does not require that the constable who exercises the power must be in possession of all the information which has led to a decision, perhaps taken by others, that the time has come for it to be exercised. What it does require is that the constable who exercises the power must first have equipped himself with sufficient information so that he has reasonable cause to suspect before the power is exercised." (301G 302 A).
- The same approach to the question whether an arresting officer had reasonable grounds for suspicion at the time of the arrest was adopted by the Court of Appeal in Castorina v Chief Constable of Surrey [1996] LGR 241 at 249 in the context of Section 24(6) of PACE in its un-amended form, which provided: "Where a constable has reasonable grounds for suspecting that an arrestable offence has been committed, he may arrest without warrant anyone whom he has reasonable grounds for suspecting to be guilty of the offence." Woolf LJ stated:
"
I suggest that in a case where it is alleged that there has been an un- lawful arrest there are three questions to be answered:
(1) Did the arresting officers suspect that the person who was arrested was guilty of the offence? The answer to this question depends entirely on the findings of fact as to the officer's state of mind.
(2) Assuming the officer had the necessary suspicion, was there reasonable cause for that suspicion? This is a purely objective requirement to be determined by the judge if necessary on facts found by the jury.
(3) If the answer to the two previous questions is in the affirmative, then the officer has a discretion which entitles him to make an arrest and in relation to that discretion has being exercised in accordance with the principles laid down by Lord Greene, MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1.K.B. 223 (pages 20-21 of the transcript)."
- In Commissioner of Police for the Metropolis v Raissi [2008] EWCA Civ 1237 Sir Anthony Clarke, MR, as he then was, delivering the judgment of the Court, stated that in O'Hara "Lord Hope was focusing on the first question in Castorina, namely what the arresting officer in fact suspected, and stressing that (as the judge put it) it was the information actually in the possession of the officer upon which the question of whether he had reasonable grounds for suspicion must be judged. We also agree with the judge at [37] that it does not avail the officer to say that his superior probably had other information to justify arrest but he did not tell him what it was".
- The Court of Appeal was thus emphasising that in assessing whether the second condition laid down by Lord Hope in O'Hara is satisfied, the focus of enquiry is on the information actually in the possession of the arresting officer as distinct from information known to other, possibly superior and possibly better informed officers.
- On the other hand Sir Anthony Clarke M.R. also emphasised that "The threshold for the existence of reasonable grounds for suspicion is low: see e.g. Dumbell v Roberts [1944] 1 All ER 326 per Scott LJ where he said at page 329 A B "the requirement is very limited"; Hussien per Lord Devlin at pages 948G to 949A; and O'Hara per Lord Steyn at page 293C and per Lord Hope at page 296 D - E."
- The passages in the speeches of Lords Steyn and Hope referred to by Sir Anthony Clarke MR were as follows: "In order to have a reasonable suspicion the constable need not have evidence amounting to a prima facie case. Ex hypothesi one is considering a preliminary stage of the investigation and information from an informer or a tip-off from a member of the public may be enough: Hussien v Chong Fook Kam [1970] AC 942, 949. Hearsay information may therefore afford a constable reasonable grounds to arrest. Such information may come from other officers: Hussien's case (per Lord Steyn 293 C). " ... Mr. Kennedy accepted that it was not necessary for a prima facie case to be established, nor was it necessary for the evidence about the grounds for the suspicion to disclose the sources of that evidence. He accepted that the police were entitled to proceed upon hearsay evidence, and that evidence that could give rise to reasonable suspicion might turn out later to be wrong." (per Lord Hope 296C D - E).
- A similar point was made by Auld LJ in Al Fayed v Commissioner of the Metropolitan Police [2004] EWCH civ 1579 at para 50: "As to the law, it is important not to lose sight of the distinction between availability of evidence and information amounting to prima facie proof and information, may be falling short of a admissible evidence, capable of amounting to reasonable grounds for suspicion for the purpose of Section 24(6)."
The challenge
- In their skeleton argument the Claimants concentrated most of their fire at the SFO's Information, arguing that there was no material in it capable of amounting to reasonable grounds for suspecting either of the Claimants of being guilty of having committed an offence. In particular the same point was emphasised as in the challenge to the search warrant claim, namely that the only basis to suspect wrongdoing by the Claimants personally disclosed in the Information arose merely by reason of their former association with the companies under investigation. Although it was acknowledged that in paragraph 33 of the Information Mr. Greening stated that he believed that the individuals whose premises were to be searched including the Claimants and individuals employed by the companies whose premises were to be searched were implicated in suspected offences of bribery and corruption, it was submitted that that merely referred to the fact that the Claimants were suspects but did not explain why they were suspects.
- I have already explained in giving my reasons for rejecting the challenge to the validity of the search warrant why I do not consider there to be any substance in these submissions which broadly overlap with those advanced in the search warrant claim. In my judgment the submissions ignore the reasonable inferences capable of being drawn from all the circumstances disclosed in the Information, in particular the inference that the central role of Network UK in the alleged fraud, the scale of the fraud, the nature of the allegedly bogus consultancy agreements and the disparity between Network UK's turnover as disclosed in its accounts and the huge payments made in its name and the name of Alstom International were individually and together such that it was reasonable to suspect that the directors of Network UK, and in particular the Finance Director and the director described as the figurehead of the Alstom Group in the UK, must have known of and thus been at least complicit in if not actively involved the fraud. I refer generally to my account of the contents of and inferences to be drawn from the Information. The threshold for the existence of reasonable grounds for suspicion is, as Sir Anthony Clarke M.R. emphasised in Raissi, low and I do not consider it arguable that the information in the Information did not cross it. I do not consider it arguable that the information summarised in the Information did not constitute reasonable grounds for suspecting that the Claimants were guilty of the offences for which they were arrested. That is of course not necessarily determinative of the challenge to the validity of the arrests which falls to be tested by reference to a consideration of the reasonableness of the grounds for the suspicions which the arresting officers formed which were in their minds at the time of arrest
- At the oral hearing particular attention was focused on the evidence of what information was known to the arresting officers. The first Claimant was arrested on 24 March 2010 at about 8.05am by PC Conisbee of the Metropolitan Police in company with other Metropolitan Police officers and officers of the SFO. The second Claimant was arrested at about 8.25am on 24 March 2010 by DC Coggins of the Leicestershire Police in the company of DC Bates of the Leicestershire police. Both arrests took place in the course of the execution of the respective search warrants which covered their residential premises.
- In a witness statement served in response to that part of the Claimants' application for Judicial Review in respect of which limited permission was granted by Mitting J, principally on the issue whether it was necessary to arrest the Claimants, Mr. Greening set out details of briefings which were given by the SFO to members of the Metropolitan and Leicestershire Police. He stated that on 22 March 2010 he gave a detailed briefing at the SFO about the SFO's investigation and the proposed co-ordinated plan to execute the search warrants to SFO staff and site Commanders of the Metropolitan Police (who did not include the arresting officers). Exhibited to his statement were the slides shown to those who attended the briefings and the speaking notes which he used.
- The slides set out the background to the investigation and identified the offences which it was suspected had taken place. They gave details about Alstom, referred to the arrest of Bruno Kalin, and estimated that suspected bribery involving an Alstom "cell" in the UK between 2003 and 2009 was in excess of 90 million and that suspect payments had been identified from UK Alstom companies made by a Swiss cell in the amount of approximately 1.7 million. They stated that Alstom International/Alstom Network UK Ltd, the UK cell, was suspected of receiving money from Alstom company was either in the UK or overseas and paying consultants for onward bribes. UK based Alstom companies were said to be suspected of paying monies through Alstom Prom or France as bribes through consultants. The Claimants and Mr. Cledwyn-Davies were referred to as suspects who were to be arrested and interviewed under PACE. However no details were given as to their alleged involvement in the offences under investigation.
- Although in his witness statement Mr. Greening said that he believed that all three men would have been aware of the true nature of payments through the Alstom businesses under investigation because of their roles within the companies and that, because they were all in positions of authority in Alstom companies, he believed that they would have been aware that Alstom was under investigation in Switzerland and France on suspicion of bribery and corruption so that they would have made thorough checks on the company's business activities in the UK and that he believed that they would not wish administrative staff at Alstom to be aware of the true nature of the payments and that material relevant to the investigation such as computers, laptops, mobile phones or digital media would be retained at their home addresses, this was not referred to in the slides or speaking notes.
- Mr. Greening stated that at the 22 March 2010 briefing he gave the SFO Bronze Commanders instructions to provide "a full briefing" to the Police Commanders for each site on 23 March 2010, which they did. He stated that at the briefing on the 22 March 2010 all SFO Bronze Commanders were given two briefing packs, one for themselves and another for the lead police officer for the sites where they were going to be deployed. Since two officers from the Metropolitan Police attended the briefing they were given a briefing pack at the end of his presentation. Each briefing pack contained three copies of a briefing document which was drawn from the Information laid before the Magistrates' Court. It reproduced virtually all the contents thereof so far as material save for the paragraph in which the grounds for the application for the search warrants were set out. Thus it did not include the statement that given the roles and responsibilities of the Claimants, Mr. Greening believed that they would fail to comply with the notice to produce documents and that documents relevant to the investigation might then be concealed, destroyed or removed. It did however include the details as to their directorships and connection with Alstom companies as referred to earlier in this judgment.
- Also included in the briefing packs and exhibited to Mr. Greening's witness statement was a copy of an "Operational Order". This was a detailed document referring to arrests on suspicion of bribery of an agent contrary to Section 1 of the Prevention of Corruption Act 1906, conspiracy to pay bribes, contrary to Section 1 of the Criminal Law Act 1977, money laundering offences contrary to the Criminal Justice Act 1988 and POCA 2002, and false accounting contrary to the Theft Act 1968. It set out further background to the investigation and stated that the SFO had gathered a considerable quantity of material from numerous financial institutions and worked closely with HMRC and various police forces to identify the individuals and positions of responsibility in the cell trading as Network UK, Alstom companies at various locations across the UK and companies or individuals who had been identified as having acted as a consultant in relation to one or more Alstom contracts. The arrest and search warrant were said to be focused on the activities of the first two categories. It was said that it was the intention to arrest the Claimants and Mr. Cledwyn-Davies on suspicion of bribery, conspiracy to pay bribes, money-laundering and false accounting and to interview them under caution. It was said that information provided by the OAG had been substantiated by numerous enquiries with financial institutions in the UK which had identified individuals in positions of responsibility in relation to bank accounts used to transmit the alleged bribes and premises where it was believed records of relevance to the investigation would be maintained. Enquiries had been made at Companies House and HMRC to identify individuals' company appointments, places of employment and addresses of the suspects.
- Mr. Greening stated that he was fully aware that any decision by a police officer concerning whether to place an individual under arrest could only be made by the individual police officer who makes the arrest albeit in connection with the investigation being conducted by the SFO. He was aware that he could request police officers to place either of the Claimants or Mr. Cledwyn-Davies under arrest but that he could not direct them to do so. He stated that it was his intention to provide those police officers who were assisting the SFO with sufficient information to enable them to make a decision as to whether it was appropriate to place the Claimants and Mr. Cledwyn-Davies under arrest. He further stated that in the information given to the police in the draft Operational Orders and a briefing he gave on 22 March 2010 he made it clear that it was his intention that both of the Claimants and Mr. Cledwyn-Davies would be arrested when the search warrants were executed and that none of the Police Commanders demurred when they received information from members of his case team from 5 March 2010 onwards, when they received the Operational Order, at the briefings or subsequently from the stated intention to place them all under arrest.
- Mr. Greening exhibited to his witness statement copies of two briefing documents prepared by the SFO which he said set out the basis on which he considered it was necessary to place the Claimants under arrest. The document relating to the first Claimant he said was sent by email to PS Wiggins of the Metropolitan police on 23 March 2010. The document relating to the second Claimant was sent by email to Acting Detective Inspector Bhakta of Leicestershire Police on 23 March 2010. These are important documents. The documents were in identical form save in relation to the details of each Claimant. Each document set out the relevant requirements under Section 24(2), 24(4) and 24(5) of PACE in relation to the power of arrest and what were described as "grounds for arrest". The documents stated:
"POWER OF ARREST
Section 24 of the Police and Criminal Evidence Act 1984 (as substituted by section 110 of the Serious Organised Crime and Police Act 2005) provides the statutory power of arrest (see also PACE Code G)
If a constable has reasonable grounds for suspecting that an offence has been committed, he may arrest without warrant anyone who has reasonable grounds to suspect of being guilty of it (section 24 (2) PACE).
This power of arrest is exercisable of all only if the constable has reasonable grounds for believing that for any of the reasons mentioned in sub section (5) (see below) it is necessary to arrest the person.
The reason why it is necessary to arrest [Mr. Stephen Rex Burgin/Mr. Robert Michael Purcell] is to allow the prompt and effective investigation of the offences because it is necessary to obtain evidence by questioning them. It is also believed that [Mr. Stephen Rex Burgin/Mr. Robert Michael Purcell] may contact co-suspects or conspirators, or contact witnesses or destroyed evidence.
GROUNDS FOR ARREST
The Serious Fraud Office and the Office of the Attorney General in Switzerland are investigating a group of companies known as the Alstom group. Each authority is investigating allegations of wide-scale bribery of public officials across the world by company officials and employees of the ALSTOM group. It is suspected that ALSTOM Network UK Ltd, a UK company, has made illicit payments by means of bogus consultancy agreements solely for the purpose of bribing public officials overseas to win contracts. It is believed that numerous agreements were negotiated by senior sales personnel in the power, transport and other sectors of the ALSTOM group. Enquires have established that the ALSTOM group has operated over 600 bank accounts. Payments totaling £81 million has been traced through 3 of those accounts since 2003, two companies which are suspected of having acted as bogus consultants."
- The document relating to the first Claimant then continued:
"Mr. Stephen Rex Burgin is the UK Company President of Alstom UK Ltd, and has been since 8 January 2008/5 June 2008. In records obtained from Companies House Mr. Burgin is shown to be Country President of various other Alstom companies. He is the "figurehead" for the Alstom group in the UK and is included in the list of Directors who attended a board meeting to approve the 2009 annual accounts of Alstom Network UK Ltd.
Given his role and responsibilities in the company it is believed he is implicated in suspected offences of bribery and corruption contrary to S.1 Prevention of Corruption Act 1906 conspiracy to make payments in the form of bribes, and false accounting contrary S.17 Theft Act 1968, money laundering contrary to S.327, 328 and 329 Proceeds of Crime Act 2002."
- The document relating to the second claimant continued:
"Mr. Robert Michael Purcell is the Finance Director of Alstom Network UK Ltd and was appointed on 27 March 2009. In records obtained from Companies House Mr. Purcell is shown to have been a Finance Director of various other Alstom entities since 1 October 2008. He has signed off the annual accounts of Alstom Network UK Ltd in April 2009". It then continued in the same way as the document relating to the first Claimant.
- Exhibited to Mr.Greening's witness statement were brief witness statements made by, among others, the two arresting officers PC Conisbee of the Metropolitan Police and DC Coggins of the Leicestershire Police. Both were made on 24 March 2010 the day on which the Claimants were arrested.
- PC Conisbee stated that on 24 March 2010 he was on duty with other police officers and officers from the SFO to execute the search warrant on premises in London E.C.1. Registered in the name of the first Claimant, whom he described as the UK company President of Alstom UK Ltd. He stated, "Mr. Burgin has been implicated in a number of fraud offences to be dealt with and investigated by officers from the Serious Fraud Office." He described his colleague PC Mackin forcing entry into the first Claimant's flat and discovering no one present. He stated that officers from the SFO then made contact with the first Claimant who agreed to return to the address. At approximately 8.05am the first Claimant entered the property. PC Consibee said that he then took the first Claimant into the kitchen area and "read the following brief which I had received from officers of the SFO." In his witness statement he then set out verbatim the briefing document prepared by the SFO which had been emailed to PS Wiggins the day before by the SFO to which I have referred above. In his statement he continued: "for that reason I am arresting you."
- In a letter written by the Metropolitan Police in response to a pre-action protocol letter written by the first Claimant's solicitors it was stated that PC Conisbee was one of a number of Metropolitan Police officers including PS Wiggins who attended the SFO on 23 March 2010 for an extensive briefing in relation to this matter. It was stated that as Metropolitan Police officers had not been involved in the investigation they were reliant on the SFO for the information they were given. It was said that the officers were given the following information by the SFO:
(i)the SFO and the Office of the Attorney General in Switzerland were investigating a group of companies known as the Alstom group;
(ii)The investigation involved allegations of wide-skill bribery of public officials across the world by company officials and employees of the Alsltom group;
(iii)It was suspected that Alstom Network UK Ltd had made illicit payments by means of bogus consultancy arrangements solely for the purpose of bribing public officials overseas to win contracts;
(iv)It was believed that numerous agreements were negotiated by senior sales personnel in the power, transport and other sectors of the Alstom group;
(v)Enquiries had established that the Alstom group had operated over 600 bank accounts and that payments totaling £81 million had been traced through three of those accounts since 2003 to companies which were suspected of having acted as bogus consultants;
(vi)Mr. Stephen Rex Burgin was the UK Company President at Alstom UK Ltd and was the figurehead for the Alstom group in the UK;
(vii)In the light of Mr. Burgin's role and responsibilities in the company it was believed that he was implicated in suspected offences of
(a)bribery and corruption contrary to section 1 of the Prevention of Corruption Act 1996;
(b)conspiracy to make payments in the form of bribes;
(c) false accounting contrary to section 17 of the Theft act 1968;
(d)money laundering contrary to sections 327, 328 and 329 of the Proceeds of Crime Act 2002;
(viii)It was considered by the SFO that it was necessary to arrest Mr. Burgin in order to allow the prompt and effective investigation of the offence because it was necessary to obtain evidence by questioning him and because it was believed that he might contact co-suspects or conspirators, or contact witnesses or destroy evidence;
(ix)The SFO would review the case following Mr. Burgin's interview. The investigation was complex, involving numerous companies both within and outside the United Kingdom and tracing payments through over 600 bank accounts. It was likely that the investigation would be protracted. Accordingly, it would be appropriate to release Mr. Burgin on police bail to return to a police station on 22 September 2010 (i.e. approximately 6 months after his arrest and interview).
- In a letter also dated 26 May 2010 to the second Claimant's solicitors the solicitors for the Chief Constable of Leicestershire Police stated that officers from the Leicestershire police received an oral briefing from the SFO on the 23 March 2010 which was accompanied by a written briefing which was supplied to the arresting officer DC Coggins also on 23 March 2010. It was not stated that DC Coggins was one of those who attended the oral briefing from the SFO. It was stated that Leicestershire officers were given information as to the investigation which corresponded to the written briefing and the details as to Mr. Purcell contained in that document were referred to. It was stated that it was believed that the role and responsibility of the second Claimant in the companies meant that he was implicated in the offences to which I have referred to above. In summary therefore it was stated that the SFO informed Leicestershire Police that Alstom companies including Network UK were bribing public officials overseas to win contracts, those payments were being passed through accounts as consultancy payments and Mr. Purcell was suspected of being implicated in that criminal activity because of his role as Finance Director.
- In applying the two stage subjective/objective test it is necessary to consider the information known to the arresting officers as distinct from the SFO and/or other officers within the relevant police forces. There is no evidence that the Information laid before the Magistrates' Court was received or read by either of the arresting officers. So far as PC Conisbee is concerned, it is clear from his witness statement that he received the briefing document from the SFO to which I have referred. It is also in my view clear from his statement that the first Claimant "had been implicated in a number of fraud offences to be dealt with and investigated by officers of the SFO" and by his statement that he was arresting the first Claimant because of the matters set out in the briefing document which he read that PC Conisbee did indeed suspect that the first Claimant had committed criminal offences listed in the briefing document which were being investigated by the SFO.
- In O'Hara Lord Steyn was persuaded that the judge was entitled on the sparse material before him to infer the existence of reasonable grounds for suspicion. He pointed out that counsel for the Plaintiff had taken the tactical decision not to cross-examine the constable about the details of the briefing by a superior officer on which he had said in evidence that his reasonable grounds for suspecting the Plaintiff were based. The trial judge had described the evidence as scanty but inferred that the briefing afforded reasonable grounds for the necessary suspicion. "In other words the judge inferred that some further details must have been given in the briefing" beyond the fact that, as the constable said, he had been told that the Plaintiff had been involved in the murder, (290 A). Lord Hope also described the evidence about the matters disclosed at the briefing session to the arresting officer as "indeed scanty". However he held that the trial judge was entitled to weigh up that evidence in the light of the surrounding circumstances and, having regard to the source of that information, to draw inferences as to what a reasonable man, in the position of the independent observer, would make of it." Thus the House of Lords indicated that inferences can where appropriate be drawn from all the surrounding circumstances both as to what information was in fact received by the arresting officer and as to what a reasonable independent observer would make of it.
- Were it necessary to do so I would be prepared to infer that PC Conisbee learned more information than appears in the briefing document which was emailed to DS Wiggins and whose contents PC Conisbee set out in his witness statement and the information which it was said that he along with DS Wiggins and other officers was given at the briefing on 23 March 2010 at the SFO, at which Mr. Greening said that the police commanders for each site were given a full briefing, whose contents were summarised in the letter referred to above. PS Wiggins who attended that briefing with PC Conisbee was given a briefing pack including the much fuller briefing document taken from the Information laid before the Magistrates' Courts and the Operational Order both of whose contents I have referred to above. I would also be prepared to infer that PC Conisbee was at least aware that those documents had been supplied by the SFO to his colleagues and that they contained more detail supporting the summaries of evidence and conclusions contained in the briefing document and oral briefing which he did read and hear. However in my view it is not for present purposes necessary to draw that inference. The information contained in the shorter briefing document which was emailed to PS Wiggins on 23 March 2010 and read out by PC Conisbee to the second Claimant in my view contained enough information, set against the background in which it was sent by the SF0 to the Leicestershire Police, to render un-arguable the proposition that it did not constitute reasonable grounds for suspecting that he had committed offences being investigated.
- The second Claimant was referred to in the shorter briefing as a co-suspect or conspirator whom it was believed might contact co-suspects or conspirators or contact witnesses or destroy evidence. Emphasis was placed in the document on the need for reasonable grounds for suspecting that an offence had been committed and it was stated that having regard to his position within Alstom given his role and responsibilities in Network UK it was believed that he was implicated in suspected offences of bribery, corruption, conspiracy to make payments in the form of bribes, false accounting and money-laundering. Given the scale of the alleged fraud summarised in the document and the role of Network UK in the fraud it is not in my view arguable that the document did not disclose reasonable grounds for suspicion that the first Claimant had been guilty of the offences under investigation. The briefing document was in effect a shorter summary of the material set out in the Information which had been placed before the Magistrates' Court and in addition to the contents of the briefing document, which in my view in themselves gave rise to reasonable grounds to suspect that the first Claimant was guilty of the offences set out in it, PC Conisbee was entitled to draw the inference that those contents were likely to be a summary of more detailed information compiled by the OAG and SFO which supported their reliability. That is all the more the case given that the briefing documents were supplemented by the oral briefing on 23 March 2010.
- As to DC Coggins he too received the shorter briefing document. Even if he was not one of the Leicestershire police officers present at the oral briefing on 23 March 2010, for the reasons given above but having regard to the description of the second Claimant's role within Network UK, as distinct from that of the first Claimant, in my judgment it is not arguable that he did not suspect that the second Claimant was guilty of the offences set out in the document or that he did not have reasonable grounds for that suspicion. Although in his statement DC Coggins made no reference to why he arrested the second Claimant beyond saying that he arrested him for bribery of an agent, conspiracy, paying bribes, money laundry and false accounting, it is in my view to be inferred from the briefing document which he received against the background circumstances to which I have referred both that he did suspect him of having committed the offences referred to in the briefing document and that there were reasonable grounds for that suspicion.
- Accordingly in my view the challenge to the validity of the arrest warrants is not reasonably arguable.
Additional defences raised by the Commissioner and the Chief Constable
- Additional defences were raised by the Commissioner of Police for the Metropolis and the Chief Constable of Leicestershire police which only required to be considered if it were held that the other challenges to the legality of the decision to issue the search warrants were sufficiently arguable to justify the grant of permission to seek judicial review. Since I have concluded that they are not it is not necessary to address those additional defences.
Conclusion
- For the reasons given above in my judgment the challenges to the legality of the decisions to apply for and issue the search warrants in the search warrant claim and the challenge to the legality of the decisions to arrest the Claimants on the ground that there were no reasonable grounds to suspect them of having committed offences are not reasonably arguable and permission to pursue those challenges should be refused.
The Rt. Hon Lord Justice Laws:
I agree
