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HIGH COURT OF JUSTICIARY
[2006] HCJ 4
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OPINION OF LADY
SMITH
in the cause
HER MAJESTY'S
ADVOCATE
Petitioner;
against
MICHAEL GEORGE
VOUDOURI
Respondent;
And
TRUST UNION LLC
Minuters:
ญญญญญญญญญญญญญญญญญ________________
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Petitioners:
Divers, AD; Crown Agent
Minuters: Targowski, QC, M Hughes;
Trainor Alston, Coatbridge
28 March 2006
[1] This
case concerns proceedings under section 9 of the Proceeds of Crime (Scotland) Act 1995 ("the 1995 Act"). It
came before me for a hearing in respect of the Minuters' Devolution Minute.
Background
[2] On 23 October 2001, the respondent appeared on petition charged with a
contravention of section 72(1) of the Value Added Tax Act 1994 ("the 1994 Act") and other offences. On 3 June 2003, a restraint order was issued in terms of 1995 Act
against the Minuters, a company based in Delaware. The restraint order interdicted the Minuters
from dealing with their realisable property in this jurisdiction, in particular,
a dwelling house at 34 Kenilworth Road, Bridge of Allan, title to which was
registered in the name of the Minuters on 12 April
2002.
Entry had been taken on 22 March 2002.
[3] On 11 May 2004, the respondent pled guilty to a contravention of
section 72(1) of the 1994 Act and was, on 8
June 2004, sentenced to four years imprisonment. That day, the advocate-depute lodged a
statement in terms of section 9 of the 1995 Act and moved the Court to make a
confiscation order. The house at 34 Kenilworth Road, Bridge of Allan was listed amongst the
respondent's realisable property. On 12 July 2004, the Minuters lodged answers to the Prosecutor's
Statement and subsequently lodged a Devolution Minute. Final determination of the confiscation
proceedings under the 1995 Act has been postponed to await the determination of
the issue raised in the Devolution Minute.
The Devolution
Minute
[4] It is
asserted in the minute that the Minuters' right to a fair hearing under and in
terms of Article 6 of the European Convention on Human Rights has been breached. The factual background against which that
assertion is made is as follows. On 17 February 2005, the procurator fiscal
presented a petition to the Sheriff at Alloa in which he craved the court to
grant search warrants to HM Customs and Excise. The basis upon which the warrant was sought
was that there were reasonable grounds for suspecting that the respondent's
father-in-law, who resided at 3 Clackmannan Road, Alloa had committed a
money laundering offence, as had his solicitor. It was stated that he was subject to a money
laundering investigation. The premises
covered by the search warrant included 3 Clackmannan Road and two addresses
which were offices of the Minuters' solicitors. Authority was sought to recover documents
which included documents relating to the Minuters. Warrants to search were granted to HM Customs
and Excise and they were granted authority "to seize and retain any material (other
than items subject to legal privilege) found ... which is likely to be of
substantial value (whether or not by itself) to said money laundering
investigation." [5] Helen Nisbet
of HM Customs and Excise had prepared a briefing paper for Customs officers
dated 1 February 2005. The paper was headed "Search warrants and
legal privilege" and sought to explain the principles of legal professional
privilege. Under reference to the
proposal to search the Minuters' solicitor's offices, the following instruction
was given:
"... At the initial stages we
should ask whether there is documents containing
matters covered by legal privilege on the premises. We should then ask where this data is. Bronze
1 and 2 should review the data and consider if it needs to be uplifted. If Bronze 1 or 2 feels that it does not fall
within the remit of legal privilege then it should be uplifted in the normal
way. If however they agree that it is
covered by legal privilege but the documents also contain evidence, which would
otherwise be required, these documents should be placed in envelopes. The envelopes should then be sealed and then
placed in a production bag in the normal manner. The case team will then discuss with Crown
Office regarding having the document independently examined and potentially
providing the case team with a copy redacted as appropriate."
[6] Searches
of the solicitor's offices were carried out on 18
February 2005 and a number of documents were placed in envelopes and
sealed as possibly being subject to privilege. Up until the date of the Devolution Minute
hearing on 2 March 2006, the Minuters'
assertion that there had been a breach of Article 6 extended to the recovery of
those documents. I had, accordingly,
prior to that hearing, examined each of them to determine whether or not they were
covered by legal privilege, as detailed in my report dated 10 January 2006 in respect of that examination. Some of the documents were covered by
privilege. Nothing now, however, turns
on that since, at the hearing, Mr Targowski, QC for
the Minuters indicated that he had no submission to make in respect of what
occurred at the solicitor's offices. His
submissions were based only on what had occurred at the Clackmannan Road address.
[7] As
regards the Clackmannan Road address, no separate briefing paper was issued. In response to a call made on behalf of the
Minuters, the Crown explain, at p.11-12 of the
pleadings, what occurred in respect of Clackmannan Road:
"Explained and averred that
the said premises at 3 Clackmannan Road, Alloa were
formerly the home address of Michael George Voudouri
and are now occupied by Nicos Savva,
his father-in-law. Admitted that an
explanation of legal privilege and the treatment of documents thought to be
legally privileged was not given at that address by the
officers to the occupants. Explained and
averred that the officers searching the premises had been briefed as to the
meaning and effect of legal privilege and were not obliged to explain it to the
occupants. Admitted that documents were
looked at by the officers to ascertain whether they were legally privileged or
not. Explained and averred that
following the search of the premises at 3 Clackmannan Road, Alloa the documents
recovered under Forbes/Grant 0001 and Forbes/Grant 0006 were sealed and have been
lodged in the hands of the Clerk of Justiciary. Said items have not been examined by any
person and their contents are not known and not admitted."
The case for the Minuters proceeded on the basis that
that was what had happened so far as 3 Clackmannan Road was concerned. Prior to the hearing, I had also examined the
documents recovered from 3 Clackmannan Road and found that some of them
were covered by privilege.
Submissions
for the Minuters
[8] Mr
Targowski submitted that legal professional privilege was a fundamental human
right, that the actions of HM Customs and Excise had breached that right, that that breach amounted to a breach of Article 6 and that,
therefore, the Minuters would be unable to have a fair hearing in the
confiscation proceedings. The restraint
order should, accordingly, be lifted.
[9] In
support of his submission that legal professional privilege was a fundamental
human right, Mr Targowski referred to Three
Rivers District Council &c v
Governor and Company of the Bank of England [2004] UKHL 48, R Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax and &c
[2003] 1 AC 563 and R v
Derby Magistrates Court, Ex parte B [1996] AC 487. He went on and submitted that the Minuters'
privilege was breached when the Customs officers looked at privileged documents
to decide whether they were privileged or not. HM Customs and Excise were aware that legal
professional privilege was an issue. The
procedure carried out in the solicitor's offices was appropriate because the Customs
officers had begun by explaining to the solicitor who was present what was
going to happen. They had referred to
the procedure set out in the briefing paper, to which I have referred, and
indicated that they intended to follow it.
On that basis, Mr Targowski accepted that there was no defect regarding
the documents recovered from the solicitor's offices. The circumstances at Clackmannan Road were different though. No explanation of the procedure that the
customs officers were intending to follow was given. No explanation of legal privilege was given to
Mr Savva or to his wife, both of whom were present at the time of the search. The Customs officers should have enquired as
to the position regarding whether there were any documents relating to the Minuters
at the house. In the circumstances,
there had been disclosure of confidential privileged material outwith the solicitor/client relationship, contrary to the
rules of privilege. As soon as a
document subject to legal privilege passed out of the hands of a person
entitled to assert it, there could not be a fair trial. Mr Targowski
specifically disavowed any intention of relying on Article 8. He stressed that his case was based solely on
there having been a breach of Article 6.
[10] Regarding
the position of the Crown, Mr Targowski founded on the fact that the Crown were aware of the application for the search warrants.
Submissions
for the Crown
[11] The
advocate-depute submitted that the Devolution Minute should be refused. There had been no breach of Article 6. The issue would only arise if the Crown
attempted to lead evidence of what was contained in the privileged
documentation relied on. The Crown had no intention of seeking to do so. The hearing on evidence in the confiscation
proceedings had not yet taken in place. Separately,
the advocate‑depute submitted that the Minuters' argument failed to
afford any recognition to the separation of functions as between the Lord
Advocate and HM Customs and Excise. Reference was made to McGibbon v Her Majesty's
Advocate 2004 SLT 588. Further, if there had been a breach of any
human right, though none was conceded, it would fall to be regarded as a breach
of the Article 8 right to privacy, not a breach of Article 6. It did not follow that there could not be a
fair trial.
[12] The
advocate- depute also drew attention to the fact that the argument presented
appeared to be a departure from the core assertion in the Minute which was to
be found at paragraph 24(iv) and was to the effect that mere possession of privileged
documents by HM Customs and Excise and by the Crown, meant that there could not
be a fair trial. He went on and
submitted that if the Minuters' approach was correct, it would give rise to
serious practical difficulties, particularly in cases where the execution of a
search warrant is a matter of urgency and premises are unoccupied so that there
is no-one present to whom the
explanations called for by the Minuters could be given. Further, even where explanations are able to
be given, it may be that a document, at first blush does not seem to be
privileged but once it is considered in context then a different view may be
taken.
Discussion
[13] I am in
no doubt that the Minute should be refused. On no view could it be said that there has
been breach of Article 6. Nothing is
advanced that leads me to conclude that there cannot be a fair trial of the
issues that arise as between the Minuters and the Crown.
[14] It is
clear that legal professional privilege is a fundamental human right
(see: e.g. Regina (Morgan Grenfell) per Lord Hoffman at paragraph 7) and that the courts
will be astute to uphold it as is evident from the authorities to which Mr Targowski referred. It
was not, however, disputed by the Crown that that was so nor was it disputed
that privileged documents had, as a matter of fact, been recovered by the Customs
officers who carried out the search. Those were not the issues. The circumstances are that officers of HM
Customs and Excise, duly authorised in terms of an ex facie valid search warrant, executed a search of the premises at
3 Clackmannan Road, Alloa. They looked at documents which were in the
premises and where they considered that they might be privileged, they put them
in sealed envelopes and bags. The seals
were broken by me in the presence of my clerk prior to carrying out the
examination of them that is referred to in my report. Upon my examination of the documents recovered
from Clackmannan Road, I found that some of them
attracted privilege. There was a single
manuscript sheet which, as is evident from my report, I did not include within
that category. Mr Targowski, having
subsequently been allowed access to that document, addressed me as to the
context in which the document was prepared and the purpose for which it was
used and I was persuaded that it too should be included in the privileged bundle.
It was an example of a document which
had to be considered in context before the issue of privilege could be fully
determined. It was only thereafter that the
non-privileged documents were returned to HM Customs and Excise. The privileged ones remained in the custody of
the court.
[15] There
was no suggestion that the Crown had looked at or examined the privileged
documents or that the Customs officers had looked at them other than for the
purpose of deciding whether they should be sealed up as possibly privileged or
not. There was no suggestion that there
had been any communication between any of those officers and the Crown as to
their content. There was no suggestion
that, had the Customs officers who attended at the house at 3 Clackmannan Road
explained the procedure that they intended to adopt, Mr or Mrs Savva would have
responded in any particular way nor, importantly, was there any suggestion that
either of them would have been in a position to assert privilege on behalf of
the Minuter. Ultimately, the thrust of
the Minuters' submission was that whenever a search warrant was being executed
in circumstances where there might be privileged documents in the premises,
those authorised to search would cause a breach of Article 6 if they did not
explain to any person at those premises, whether or not they were or had any
connection with the person whose privilege it was, the procedure that they
proposed to follow. I should add that,
contrary to what is stated in the Minute, it was not the Minuters' submission
that mere possession of the privileged material constituted a breach of Article
6. The point advanced seemed to be that
the breach was constituted by the Customs officers having looked at the
documents in circumstances where they had not first explained to persons at the
premises what procedure they intended to follow. If the Minuters are correct in that submission
then officers in the position of the Customs officers in this case who are
faced with unoccupied premises, are not entitled to execute a search, however
urgent the need, because they are unable to explain to anyone what they are
going to do in the event of their encountering documents which they consider
may be privileged. It would be very
surprising if that were correct but that would be the logical extension of the Minuters'
submission notwithstanding that if a procedure such as was in fact adopted at
Clackmannan Road were to be used that would seem to be reasonable and
responsible. Further, the Minuters'
approach does not seem understandable when account is taken of its position being
that no criticism was levelled at the procedures adopted at the solicitor's
offices: as is evident from the terms of
the briefing note to which I have referred, the procedure adopted there
involved the Customs officers "reviewing the data" to decide whether or not
they felt it was covered by legal privilege. In short, just as in the case of Clackmannan Road, it seems that they required
to look at the documents. The only
difference in the procedure adopted at Clackmannan Road was that the customs
officers did not explain to Mr and Mrs Savva what they were proposing to do.
[16] Against
that background, there cannot, in my view, be any question of there having been
a breach of Article 6. As the advocate-depute
submitted, no Article 6 issue would arise unless and until the Lord Advocate
sought to introduce privileged material into evidence. To date, the Lord Advocate has committed no
breach of any Article of the European Convention on Human Rights. It seems to me that the only human right that
could possibly fall to be considered at this stage is Article 8, the provisions
of which include:
"1. Everyone has the right to respect for
his private ... life.
2. There shall be no interference by a public
authority with the exercise of this right except such as is in accordance with
the law and is necessary in a democratic society in the interests of ... the prevention
of ... crime ...".
Accordingly, if the minimal extent to which the Customs
officers had had sight of the Minuters' privileged documents did engage Article
8, it may well be that, if the matter were put to the test, it would be found
that there had been no breach because the infringement of privacy was
proportionate when the interests of the state in the prevention of crime were
taken into account. However, in the
event that it was found that there had been a breach of Article 8, that would not have been an act of the Lord Advocate. It would have been an act of HM Customs and
Excise officers. The issue then would be,
as in the case of McGibbon, whether,
in seeking to rely on evidence gathered by another party in breach of Article 8,
the Lord Advocate would breach Article 6. If that question was answered in the affirmative,
he would not, of course, be entitled so to act, given the provisions of section
57(2) of the Scotland Act 1998. These
are, however, demonstrably not only issues that cannot be addressed at this
stage but are issues which have not arisen and may never arise.
Disposal
[17] In the
foregoing circumstances, I am satisfied that the Minuters' submissions are not
well founded and I will, accordingly, refuse the Devolution Minute. I will also refuse the motion made at the Bar
to lift the restraint order.
