FMA's fears (un)warranted - High Court refuses to issue new search warrants to the FMA in Re Reid [2025] NZHC 2010

The New Zealand High Court refused to issue new search warrants to the FMA, where it wanted to specify the scope of searches permitted under search warrants already obtained. This follows a 2024 Court of Appeal decision which found the Serious Fraud Office (SFO) had overstepped by using overly broad and vague search warrants, making the collection of some evidence unlawful. We explore some key takeaways from her Honour Justice Anderson's decision in Re Reid [2025] NZHC 2020.

 

What you need to know

• The FMA had seized documents, devices, and cloud-based data from former Du Val Group personnel under search warrants issued in February and August 2024 (Initial Warrants). This is part of its ongoing investigation of Du Val for breaches of financial markets legislation.
• In August 2024, the Court of Appeal issued its decision in R v Pikia [2024] NZCA 408. It held that various search warrants issued to the SFO in that case were invalid - they lacked specificity, were overbroad, and amounted to general warrants. R v Pikia cast doubt on whether the FMA's intended searches of data extracted from the Du Val devices were lawful under the Initial Warrants.
• As a result, the FMA applied for five new search warrants relating to this data (New Warrants). The New Warrants were more specific about the evidential material the FMA was looking for and the suspected contraventions of legislation.
• The FMA argued the High Court had jurisdiction to issue the New Warrants because they were sought to search electronic data in its possession, as opposed to the act of seizing the data from the devices (which had already occurred). It argued that the possibility of successive warrants is contemplated under the Search and Surveillance Act 2012 (SSA).
• Anderson J dismissed the FMA's application for the New Warrants, because the search that would be authorised under the New Warrants - the search of the data from the devices seized - was already authorised under the Initial Warrants. Parliament did not intend that a second warrant would be available for material already held under an executed prior warrant under the SSA. The New Warrants only had utility if the Initial Warrants were invalid, and the SSA does not contemplate issuing a search warrant in these circumstances. The material subject of both warrants was the same, and they could not co-exist.
• The FMA maintained that the Initial Warrants were valid unless there was a ruling to the contrary. The parties agreed that the appropriate avenue to challenge a search warrant is after any charges have been laid, when a defendant can apply for a pre-trial ruling or contest during trial that evidence from search warrants should be excluded under s 30 of the Evidence Act 2006 on the basis it was improperly obtained.
• We think this decision serves as an important reminder of the crucial role the courts play in oversight of expansive regulatory power. This is timely given Parliament is currently considering expanding FMA powers to include warrantless searches. For more information, you can read about our submission on the FMC Amendment Bill here: DLA Piper submits against proposed FMA powers in FMC Amendment Bill | DLA Piper

 

R v Pikia

In R v Pikia, Mr Pikia applied for leave to bring an appeal regarding the admissibility of evidence gathered by the SFO. A key issue was whether the evidence was lawfully obtained by the SFO under ss 9 and 10 of the SFO Act, including under search warrants. The Court of Appeal allowed Mr Pikia's appeal in part because specific notices issued by the SFO under s 9 and search warrants were found to be unlawful.

The Court of Appeal cited the leading case on SFO search warrants in New Zealand, A Firm of Solicitors v District Court at Auckland [2006] 1 NZLR 586 (CA), which sets out that:

• A search warrant must be as specific as possible in the circumstances.
• The degree of specificity possible will depend on the particular circumstances of the case, including the nature of the suspected fraud.
• Irrelevant and privileged material should be excluded from the scope of the warrant wherever possible.
• The issuing judge must be given full information to enable a proper assessment of the specificity possible.

The Court of Appeal held that, in R v Pikia, the search warrants were overbroad and unlawful as they amounted to general warrants.

For example, one SFO warrant did not meet the basic requirements of A Firm of Solicitors because it did not specify “the investigation” under the warrant or what the “serious or complex fraud” referred to. Many of the listed categories in it were also extremely broad to an unnecessary degree, such as “[a]ll business records of [Mr] Pikia relating to any entity he is involved with”. The list of documents that could be searched also included items such as “[a]ll electronic media”. In A Firm of Solicitors, the Court said descriptions such as electronic media, handheld computers, or other electronic storage devices were too broad. There were also no conditions in the warrant addressing the treatment of irrelevant material.

 

Re Reid judgment

In Re Reid, Anderson J acknowledged that ‘seizure’ and ‘search’ can be discrete acts, but said that ‘search’ related to both searching for a device at a place and searching the material held on or accessed through that device. The FMA sought the New Warrants to have the latter search power over the data on the devices it had already obtained. Anderson J said this was already authorised by the Initial Warrants.

The FMA argued the SSA anticipates the possibility of successive warrants (in s 98(3)) and cited two cases which it argued establish that a warrant can be sought to search electronic material already in an investigating agency's possession. Anderson J did not agree. Her Honour said the purpose of s 98(3) was to prevent “forum shopping” for warrants and to ensure that there were not too many similar warrants issued with respect to the same place, vehicle, or thing - which actually implies that Parliament did not want a second warrant to be available for the same thing. The cases cited by the FMA were situations where an extension of a search power was required to search material on a device, which was not the case for the FMA.

If the Initial Warrants were valid, which the FMA maintained was the case, then the New Warrants would be redundant. But if the Initial Warrants were invalid, then the FMA had no power or right to access the data it now intends to search. Anderson J said that new warrants could not be issued where they only have utility if the material was seized unlawfully - this would be contrary to the purposes of the SSA and the Court risks being perceived as assisting a potentially invalid act by an investigator.

 

Further points of interest

It is clear the FMA was concerned about the R v Pikia judgment and sought to clarify whether the Initial Warrants were legal. Rachael Reed KC for the one of the former Du Val personnel, ‘Mr A’, argued that it was a “waste of judicial resources” for the FMA to bring the New Warrants application before charges had been brought, and not in the context of s 30 of the Evidence Act. Anderson J said that this is only the case for pre-charge reviews if charges are not laid, but considered that even in the context of s 30 there was “some force” in the argument against “entertaining pre-trial applications by an investigating agency for search powers already conferred, over evidential material already held, and where there are concerns about the breadth of the original warrants”.

Overall, the Court could not rescue the FMA from any legal risk that the Initial Warrants may pose. As Anderson J said, “it is not a proper exercise of the Court's jurisdiction under the SSA to seek to insulate an investigating agency from any deficiencies in previous search warrants”. This was especially the case in light of the FMA's (somewhat contradictory) position that the Initial Warrants were valid - it did not need rescuing.

The parties agreed it was appropriate to challenge a search warrant after charges have been laid, in a pre-trial application or contention at trial that the evidence obtained under it is inadmissible under s 30 (as it was in R v Pikia). It remains to be seen whether, down the track, the Du Val personnel will apply to have such evidence excluded. Anderson J refrained from commenting either way on the scope of the Initial Warrants for the purposes of s 30.