Golfrate Property Management Ltd & Anor, R (On the Application Of) v The Crown Court At Southwark & Anor

An applicant seeking a search and seizure warrant without notice must present a full, accurate and balanced account. The applicant must disclose anything which the affected person would wish to place before the judge.

For a warrant concerning complex financial transactions, the information must identify clear and objectively reasonable grounds for suspecting the specified offence. Vague associations, offshore structures and unexplained intelligence cannot substitute for analytical scrutiny of the alleged criminal conduct.

The judge must examine the evidence critically, satisfy himself or herself that every statutory condition is met, and give reasons. Any warrant must also define the permitted seizure with crystal clarity. Material placed before the judge may be withheld from the affected person only with the court’s sanction on public interest or other proper grounds.

The Metropolitan Police Service obtained warrants under sections 352 and 353 of the Proceeds of Crime Act 2002 to search nine premises associated with Dr Adam and Golfrate Property Management Ltd. The application alleged that funds connected with persons subject to Zimbabwe sanctions were being laundered through a London property portfolio. The warrants were granted after a 16-minute hearing at which the officer confirmed the written Information and the Crown Court judge gave no reasons.

Dr Adam and Golfrate brought separate judicial review claims, which were heard together. They alleged material non-disclosure and misrepresentation, an absence of reasonable grounds for suspicion, failure to satisfy the statutory access conditions, excessive breadth, failure to give reasons, and misuse of the bulk-seizure power under section 50 of the Criminal Justice and Police Act 2001.

The central issue was whether the Information, corrected and supplemented by the material which ought to have been disclosed, established objectively reasonable grounds for suspecting money laundering connected with breaches of the Zimbabwe sanctions regime.

1. The claims succeeded and the warrants were set aside. On examining the whole of the material as it should have been presented, the court held that the asserted grounds for suspicion could not withstand analytical scrutiny. The Information relied upon inaccurate financial figures, omitted material which weakened the suggested links with the Zimbabwean regime, and presented transactions and associations without adequately connecting them to a sanctions offence or criminal property.

2. An applicant for a without-notice warrant owes a duty of candour and full and frank disclosure. The applicant must consider what the affected person would wish to adduce or say and place that material before the judge. The question where disclosure failures occur is whether the errors and omissions would in fact have made a difference to the decision to grant the warrant. The court applied the principles summarised in R (Rawlinson & Hunter Trustees) v Central Criminal Court and the Serious Fraud Office [2012] EWHC 2254.

3. Applications involving complex financial transactions require a clear and analytical Information. The judge must bring independent, critical scrutiny to the evidence, personally determine whether reasonable grounds for suspicion exist, and explain the conclusion in full reasons. The associations with sanctioned persons, use of offshore companies and questions about business transactions did not establish reasonable grounds for suspecting that funds had entered or been dealt with in the United Kingdom in breach of the sanctions regime.

4. The statutory access conditions under section 353 of the Proceeds of Crime Act 2002 were also unlikely to have been satisfied given the absence of reasonable suspicion. The court did not need to reach a concluded view on that alternative ground.

5. Any proposed redaction of the Information or hearing transcript must be referred immediately to the court on proper evidential grounds. The decision to seek withholding should be taken personally by the Chief Constable, Commissioner or an authorised very senior officer. The police cannot unilaterally refuse disclosure of material placed before the warrant judge.

6. A search warrant must be crafted for the particular case and expressed with crystal clarity. The wording used here was ambiguous and should have confined seizure expressly to material potentially of substantial value to the specified money-laundering investigation. It was unnecessary to decide whether that ambiguity independently rendered the warrants unlawful.

7. The disputed evidence did not permit a final determination whether section 50 of the Criminal Justice and Police Act 2001 had been misused to conduct wholesale seizure. Any further proceedings under section 59 were to take place in the Crown Court.

• High Court (Administrative Court): The judicial review claims were allowed and the search and seizure warrants were set aside. Any further proceedings under section 59 of the Criminal Justice and Police Act 2001 were directed to take place in the Crown Court.
• Crown Court at Southwark: HH Judge Higgins granted the warrants on 20 July 2012. At a directions hearing on 10 August 2012, it was agreed that the disputed issues arising from the section 59 application should be resolved in the High Court.