The Supreme Court ruled this week that warrants issued to fraud squad detectives to search the offices of law firm Appleby Spurling and Kempe were invalid.

Lawyer Delroy Duncan had argued that the warrants were ?fatally flawed?, contrary to the implicit requirements of Section 464 of the Criminal Code.

Last week he argued that the warrants were defective and should be quashed, citing also that no one had been charged in connection with the investigation.

The Police were investigating the alleged use of a bogus trust to allow a non-Bermudian to acquire a luxury home. They searched two AS&K offices, as well as the offices of Sterling Management in Hamilton and the home of businessman and tennis player Norberto Herrero last summer.

Detectives secured the search warrants from Magistrate Edward King after alleging the Labrador Trust was set up as a ?sham? vehicle to allow Mr. Herrero to acquire the home in Harbour Road, Paget, from former Mayor of Hamilton William Boyle, thus defrauding the taxpayer of $660,000 in land sale tax.

Mr. Duncan represented Mr. Herrero and his wife Kathleen Herrero, Mr. Boyle, and Bruce and Margaret Hern of Sterling Management, who are trustees of the Labrador Trust.

AS&K lawyer Scott Swainson, who was represented by lawyer David Kessaram, was also suspected of conspiring with them to defraud between 1995 and 2002.

In the judgment, Puisne Judge Ian Kawaley said it appeared it was the first time in Bermuda that Section 464 of the Criminal Code had been used in the provision of formal validity of a warrant.

Mr. Justice Kawaley said: ?While it may be correct in practical terms that Mr. Duncan?s truncated twofold analysis is sufficient for the purposes of the present case, it seems to me that the Solicitor General?s (Wilhelm Bourne) analysis, concurred with the Director of Public Prosecution (Kulandra Ratneser), of the crucial conditions for the granting of a warrant is more technically sound.?

He added that when a magistrate issues a warrant he must be satisfied on the following points; that there are reasonable grounds for suspecting that the items sought by the proposed warrant are located in a particular place; and that the items sought will afford evidence of an offence, which either has been committed or which there are reasonable grounds for suspecting has been committed.

Mr. Justice Kawaley added: ?In my view the warrants in the present case were defective in that they did not state on their face that the Magistrates were satisfied that the preconditions for issuing them pursuant to Section 464(1)(b) had been met.

?I accept the elegant submissions of Mr. Duncan with which Mr. Kessaram obviously agreed, on the formal invalidity of the warrants on their face and rule that they are liable to be quashed,? said Mr. Justice Kawaley.

?And so, while the man on the Bermudian omnibus hearing the facts set out in the informations might conclude that the Labrador Trust was ?a sham trust?, in my view the material placed before the magistrate objectively viewed did not provide reasonable grounds for suspecting that conspiracy to defraud the Bermuda Government had been committed.?

He added: ?This is because the alleged object of the conspiracy was to defraud the Government through the establishment of a trust, of a licence fee which would only be paid if a legitimate application to acquire the property was made and the property was not held by trust with Bermudian beneficiaries on terms that the relevant fee was admittedly not due.

?At the very least, an unequivocal allegation that if proved would be legally tenable must be made to justify the issue of a search warrant on suspicion of conspiracy to defraud.

?The applications are granted the relief sought in their summonses, namely orders of certiorari quashing the warrants and the mandamus ordering the return of the documents seized.?

Mr. Ratneser appeared last week representing the Police and Mr. Bourne appeared for Magistrate Edward King.