To keep things simple implemented the functionality on the client side (considering it to be a presentation style of the UI).
We can also do it more server-driven - have the server return the whole structure of results (including folders) at a given level, however that's considerably more work for not that much gain. I think we can refactor at some point if really needed.
Added:
presentation of nested folders on the main page
a simple navigation panel showing where we are in the structure and allowing to move back easily
current folder is encoded in the the URL meaning these can be passed around and Back/Forward in browser work as expected
Added: