B v Australian Crime Commission

The Validity of s 4A of the ACC Act 6 In S v Australian Crime Commission [2005] FCA 1310 (S v ACC) also delivered today I have set out the legislative framework of the ACC Act. That matter was heard at the same time. The contentions as to the validity of s 4A of the ACC Act were the same. 7 For the reasons given in S v ACC, in my judgment s 4A is a valid enactment. This aspect of the application must therefore fail.

THE VALIDITY OF THE SUMMONS 8 Section 28 of the ACC Act outlines how examiners may summon persons for examination. It provides: '(1) An examiner may summon a person to appear before the examiner at an examination to give evidence and to produce such documents or other things (if any) as are referred to in the summons. (1A) Before issuing a summons under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the summons. (2) A summons under subsection (1) requiring a person to appear before an examiner at an examination must be accompanied by a copy of the determination of the Board that the intelligence operation is a special operation or that the investigation into matters relating to federally relevant criminal activity is a special investigation. (3) A summons under subsection (1) requiring a person to appear before an examiner at an examination shall, unless the examiner issuing the summons is satisfied that, in the particular circumstances of the special ACC operation/investigation to which the examination relates, it would prejudice the effectiveness of the special ACC operation/investigation for the summons to do so, set out, so far as is reasonably practicable, the general nature of the matters in relation to which the examiner intends to question the person, but nothing in this subsection prevents the examiner from questioning the person in relation to any matter that relates to a special ACC operation/investigation. . . . (7) The powers conferred by this section are not exercisable except for the purposes of a special ACC operation/investigation.' 9 The applicant challenges the validity of the summons on two fronts. The first challenge is on the basis that it does not comply with s 28(3) of the ACC Act. His submission is that the description of the matters about which he was to be examined is too broad as: (i) there are no time periods stipulated; (ii) other than tax avoidance schemes, there is no indication of what sorts of illegal activities in relation to which the named persons and corporate entities are being investigated. 10 The Determination was attached to the summons as required by s 28(2) of the ACC Act. The Determination thus provided some information to the applicant about the nature of the illegal activities to which the investigation relates (as required by s 7C(4)). The Determination itself does not give any direct indication to the applicant of the general nature of the matters about which applicant is to be examined. It is very widely expressed. When read with the summons, the Determination may enhance the witness' understanding of the purpose for which he or she has been summonsed. In this matter, as I have said, the Determination is very widely expressed. It only really provides any indication to the applicant of the illegal activities being inquired into by reason of its title. 11 In P v Australian Crime Commission [2005] FCA 55 (P v ACC), Finn J discussed the content and purpose of both s 28(2) and s 28(3). His Honour said: 'While the Act does not prescribe a form for summonses it imposes two stipulations in respect of them. The first is that it must be accompanied by a copy of the Board's special investigation determination: s28(2). . . .The second is that, subject to a proviso relating to prejudicing the effectiveness of the investigation, the summons shall set out so far as is reasonably practicable "the general nature of the matters in relation to which the examiner intends to question the persons [summonsed]:" 28(3) . . . Together these requirements serve in a general way to inform a witness of the general nature of the investigation being undertaken and, though not exhaustively, of what that witness might expect by way of questioning. As such they serve in some degree natural justice purposes. While the former specifies the scope of the investigation for the purposes of which the summons has been issued, neither, in my view, is intended to serve the purpose of stating the actual jurisdictional basis of a summons as such.' Finn J also discussed the necessary secrecy involved in these investigations, using that as justification for refusing to imply a right to be informed in the summons of its jurisdictional basis. His Honour said at [18]: 'There is a clear policy manifest in the Act to ensure the effectiveness of special investigations and to use generalised descriptions (s7C(4)(a)), non-disclosure (s28(3)) and imposed secrecy obligations to that end. Given the functions of the ACC, it is unsurprising that this is the case. However, it is that policy which tells strongly against any such implication as the applicant propounds.' 12 The obligation under s 28(3) to provide general information concerning the matters about which the person summonsed may be examined is clearly a conditional one. It is qualified by the need to ensure the effectiveness of special ACC investigations. It allows an examiner to decide not to provide any detail at all in the summons if the examiner is satisfied that providing such detail would prejudice the effectiveness of the relevant special ACC investigation. It recognises, in the public interest, that there are circumstances in which it is appropriate to quarantine information from a potential examinee as disclosure of the general matters in relation to which the examiner intends to question that examinee may well alter the course of and success of the investigation: see Harper v Costigan (1983) 72 FLR 140 at 154 (Harper v Costigan) and National Companies and Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 323-324. Unlike the facts in S v ACC, the examiner in respect of the summons to the applicant has not reached a stage of satisfaction that the provision of such information would prejudice the effectiveness of the special ACC investigation the subject of the Determination. 13 The issue, therefore, is whether it is shown that the summons does not set out, so far as reasonably practicable, the general nature of the matters in relation to which the examiner intends to question the applicant. 14 The formulation of s 28(3) illustrates how amorphous is the content of that disclosure obligation. It requires only the 'general nature' of the topics for examination to be notified. Moreover, that obligation extends only to the extent that it is reasonably practicable to meet it. The Determination refers to a wide range of alleged conduct which constitutes the federally relevant criminal activity. The contents of the summons refine the range of the Determination. They do so by directing the applicant's attention to his knowledge of and involvement with specified individuals, companies or other entities. They also do so by directing the applicant's attention to his knowledge of or involvement in tax avoidance schemes. 15 Without knowing the information available to the examiner, it is impossible to be satisfied that, so far as is reasonably practicable, the information in the summons does not meet the requirements of s 28(3) of the ACC Act. Consequently, I am not persuaded that the summons fails to comply with s 28(3) of the ACC Act. It gives the applicant a general indication of the matters about which he may be questioned. To paraphrase the words of Finn J in P v ACC at [16], the summons in a general way informs the applicant of the general nature of what the applicant might expect by way of questioning. Whether the questioning extends beyond those matters is for the examiner, but s 28(3) makes it plain that the applicant is nevertheless obliged to answer questions which relate to topics beyond those matters. 16 The second challenge to the summons made by the applicant is on the basis that it is contrary to s 28(7) of the ACC Act, which provides that the powers conferred upon an examiner under s 28 are not exercisable 'except for the purposes of a special ACC operation/investigation'. The examiner is said to have improperly exercised this power as it requires the applicant to give evidence in relation to his knowledge and/or involvement in 'tax avoidance schemes' when those schemes are not or may not be the subject of the special investigation. The basis of this submission is that tax avoidance schemes are regulated under the Victorian Duties Act 2000 (Vic) (Duties Act) and thus do not fall within the ambit of the special operation/investigation. 17 The expression 'tax avoidance schemes' in the summons is a general one. In my view, it is erroneous to import into and limit the expression to that used in the Duties Actand the definition of 'tax avoidance schemes' in s 69B of that Act. The expression as used in that Act relates to the avoidance of charges or duties on transactions involving, or instruments effecting, the transfer of property in Victoria. But the expression 'tax avoidance schemes' has a much more extensive and commonplace meaning than that. There are many cases concerning tax avoidance or tax avoidance schemes under the Income Tax Assessment Act 1936 (Cth), indicating the varied circumstances to which the description applies. See for example the recent cases of Calder v Commissioner of Taxation [2005] FCA 911; Pridecraft Pty Ltd v Commissioner of Taxation (2005) 213 ALR 450; Macquarie Finance Ltd v Commissioner of Taxation (2004) 210 ALR 508; Commissioner of Taxation v Sleight (2004) 136 FCR 211; Electricity Supply Industry Superannuation (QLD) Ltd v Deputy Commissioner of Taxation (2003) 199 ALR 339. There are offences for activities that would fall within the description of 'tax avoidance schemes' in the Financial Transactions Reports Act 1988 (Cth), and in the Crimes Act 1914 (Cth), and in the Criminal Code (Cth). The more general usage of the expression clearly includes reference to conduct which falls within a Commonwealth head of power. 18 The applicant is entitled to be represented at the examination. If the examiner pursues questions which do not relate to matters the subject of the Determination, or which clearly relate only to a matter which is peculiarly concerning a State offence where there could be no federal aspect, the applicant may consider declining to answer those questions. That course of action was referred to by Morling J in Harper v Costigan at 150. As his Honour there pointed out, however, the fact that a particular question or questions do not appear to relate to the matters the subject of a Determination does not necessarily mean that they do not do so. An examiner is entitled to approach an examination, including the format and sequence of questions as the examiner considers will best serve the investigation. The format or sequence of questions may be leading to a matter clearly relevant to the particular investigation, even though the relevance may emerge only after certain steps along that sequence of questions. 19 For those reasons, I consider that the attack upon the validity of the summons must fail.

ORDERS 20 The application is dismissed. The applicant is to pay to the respondent costs of the application. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate: Dated: 15 September 2005 Counsel for the Applicant: P Faris QC with A Thomas

Solicitor for the Applicant: Charlesworth Josem Partners Pty Ltd

Solicitor for the Respondent: Australian Crime Commission