Bes Commercial Electricity Limited & Ors. v Cheshire West and Chester Council

A claim in misfeasance in public office requires intentional wrongdoing. Negligence, gross negligence and objective recklessness are insufficient. Both targeted and untargeted forms require an unlawful act, although an intention to injure may itself make an otherwise lawful exercise of public power unlawful.

Applications for search warrants must be assessed by reference to the information available when the application was made. The applicant must make full and frank disclosure, including material adverse matters, and must consider whether less intrusive measures would suffice. Non-disclosure is material only if the omitted matter might reasonably have led the issuing judge to refuse the warrant.

Property seized during a complex investigation may be retained for as long as reasonably necessary in all the circumstances, taking account of volume, evidential integrity, resources and technological difficulty.

The claimants, non-domestic energy companies, sued a local authority in connection with an investigation into alleged fraudulent mis-selling by energy brokers associated with the claimants. They alleged misfeasance by an investigator, breaches of their Convention rights, unlawful procurement and execution of search warrants, excessive seizure, and unreasonable retention of servers, documents and legally privileged material.

Search warrants were obtained from Preston Crown Court under the Police and Criminal Evidence Act 1984 and executed by Lancashire Constabulary. The claim required the court to determine whether the investigator acted with the mental state required for misfeasance, whether the warrant application involved material non-disclosure or should have used less intrusive measures, whether the defendant was liable for execution by the police, and whether seized property was retained longer than reasonably necessary.

1. Misfeasance. The claim failed. The tort is intentional. The claimant must establish public office, exercise of public power, an unlawful act, the relevant form of malice, and loss. The unlawful element is required for both targeted and untargeted malice. An intention to injure may convert an otherwise lawful act into an unlawful abuse of power. Subjective knowledge or reckless disregard of unlawfulness is required for untargeted malice. Negligence or gross negligence is insufficient (paras [130]-[147]).
2. Mr Bourne acted improperly and unprofessionally in disclosing too much information about the investigation and maintaining an excessive relationship with informants. However, he did not intend to injure the claimants, did not know that his conduct was unlawful, and was not subjectively reckless as to unlawfulness or harm. His limited role in taking statements did not amount to delegation, fabrication or suppression of evidence. The misfeasance claim therefore failed (paras [168]-[205], [212]-[254]).
3. Search warrants. The applications were carefully prepared by experienced investigators and counsel. The duty of candour required full and accurate disclosure of material facts and adverse matters. The materiality question was whether the omitted matter might reasonably have led the issuing judge to refuse the warrant. The assessment was confined to information available at the time, together with the applicant’s contemporaneous response to criticisms; later-discovered evidence could not retrospectively justify an otherwise defective application (paras [272]-[284]).
4. The evidence of systemic alleged fraud, connections between the brokers and the claimants, and the risk that documents would be concealed or withheld supplied reasonable grounds for the warrants. Offers of cooperation, the Ofgem investigation, alleged campaign influence and inaccuracies in summaries did not amount to material non-disclosure. A production order or informal cooperation was not a reliable alternative in the circumstances. The warrants were properly obtained and were not excessively broad (paras [299]-[368]).
5. Execution and retention. Lancashire Constabulary executed the warrants and exercised the statutory seizure powers. The defendant was not the instigator or agent of the police at the execution stage and was not liable for the police’s acts. After transfer of property to the defendant, retention was lawful where reasonably necessary in all the circumstances. The volume and complexity of the evidence, the need to preserve originals and evidential integrity, available resources and technological difficulties justified the periods of retention. Legally privileged material was handled under an appropriate independent-counsel procedure (paras [389]-[409], [412]-[461]).
6. The claims, including the Human Rights Act claims and claims in trespass, conversion and concerning legally privileged material, were dismissed. The court expressly stated that its findings did not determine whether the alleged fraud had been proved in the criminal proceedings (paras [367]-[369], [472]).