Beneficial Finance Corporation Limited v Commissioner of Australian Federal Police

Federal Court of Australia|1997-12-24|Before: Moore J

This is an application by Malubel Pty Ltd ("Malubel") and Mr Jim Kyu Chung under the Administrative Decisions (Judicial Review) Act 1977 ("the ADJR Act") and s 39B of the Judiciary Act 1903 seeking to impugn a decision of the first respondent, Ms Wendy Elder, to issue two search warrants under s 3E of the Crimes Act 1914 and challenging related decisions and conduct. The warrants were executed on 28 October 1997 by the second and third respondents at premises at which Malubel operated its business of manufacturing and retailing sheep skin products and at the home of Mrs Yeong Chang who was a bookkeeper employed by Malubel. Documents were seized but they are the subject of an undertaking by the second and third respondents that they remain secure until these proceedings are concluded.

dealings between Malubel and the Australian Tax Office

The two warrants to which these proceedings directly relate were issued on 23 October 1997. The text of the warrant authorising the search of 49-51 Punchbowl Road Belfield ("the first warrant") should be set out in its entirety. It read: " (Search of Premises) COMMONWEALTH OF AUSTRALIA CRIMES ACT 1914: Section 3E SEARCH WARRANT To: Federal Agent Donald Whinfield a member of the Australian Federal Police, who is the executing officer in relation to this warrant; [point 1] AND TO any other Federal Agent whose name may be written on this warrant in accordance with section 3C(1) of the Crimes Act 1914, in which event that constable shall be the executing officer in relation to this warrant: [point 2] WHEREAS I Wendy ELDER an issuing officer within the meaning of section 3E of the Crimes Act 1914, am satisfied by information on oath that there are reasonable grounds for suspecting that there is at premises located at: Number 49-51 Punchbowl Road, Belfield, New South Wales. evidential material which satisfied all THREE of the following conditions, namely: First Condition: Things which are: - Full records of sales relative to the operation of the business of Malubel Pty Ltd for the period 1 July 1994 to 30 June 1996. - monies, originals and copies, including any stored on magnetic or electronic storage media of banking records and documents used for the recording of, or movement of monies suspected of being used in a money laundering or tax evasion process relative to the operation of Malubel Pty Ltd; [point 3] - All originals and copies including any stored on magnetic or electronic storage media of ledgers, cash receipt books, and accounting records relating the business operations of Malubel Pty Ltd. Second Condition: Things which relate to the following; - Malubel Pty Ltd, an Australian registered company No 003 923 760. Third Condition: Things to which there are reasonable grounds for suspecting that the same will afford evidence of the commission of the offence against a law of the Commonwealth: - An offence by Malubel Pty Ltd or the director/s of Malubel Pty Ltd against section 29D of the Commonwealth Crimes Act 1914 namely defrauding the Commonwealth of properly assessable and payable income tax between 1 July 1994 and 30 June 1996. I HEREBY AUTHORISE the executing officer, any person assisting who is a Federal Agent, and any other person who has been authorised by the executing officer to assist in executing this warrant, to do all of the following; [point 4] - to enter the said premises - to search the premises for any evidential material that satisfies ALL of the THREE conditions specified above and to seize any such evidential material that may be found; - to search and record fingerprints found at the premises and to take sample of things found at the premises for forensic purposes; - to seize any other thing found at the premises in the course of the search that the executing officer believes on reasonable grounds to be: - evidential material in relation to an offence to which this warrant relates; or - evidential material in relation to another offence that is an indictable offence; [point 5] if the executing officer or the person assisting believes on reasonable grounds that the seizure of the thing is necessary to prevent its concealment, loss or destruction or its use in committing an offence; and to seize any other thing found at the premises in the course of the search that the executing officer or the person assisting believes on reasonable grounds to be a thing that would present danger to a person or that could be used to assist a person to escape from lawful custody. ... AND, by virtue of division 2 of part 1AA of the Crimes Act 1914, in executing this warrant: - the executing officer may obtain such assistance as is necessary and reasonable in the circumstances; - the executing officer, and any person assisting who is a constable, may use such force against persons or things as is necessary and reasonable in the circumstances; and - any person who has been authorised by the executing officer to assist in the execution of this warrant, but who is not a constable, may use such force as is necessary and reasonable in the circumstances; and the executing officer and a person assisting may exercise such other of the powers available under Division 2 or Part 1AA of that Act as are appropriate in the circumstances of the case. THIS WARRANT MAY BE EXECUTED BETWEEN THE HOURS OF 6.00AM AND 6.00PM THIS WARRANT REMAINS IN FORCE FOR A PERIOD OF SEVEN DAYS FROM THE DATE OF ISSUE GIVEN under my hand at Sydney in the said State of New South Wales this 23 day of October 1997. [signed] A Justice of the Peace In and for the State of New South Wales" I have highlighted the parts of the first warrant about which submissions were made and, for ease of reference, I have given them a notation to which I will later refer. The other warrant concerned the search of premises at 30A Rochester Street Strathfield ("the second warrant"). The typed text of the second warrant is identical to the first warrant except for the address of the relevant premises. However in the second warrant the typed name at the beginning, "Donald Whinfield", was crossed out by a line through it. The words "Albert Gardiner 9.55AM 28/10 [signature]" appeared in handwriting above that line, and the name of Gardiner appeared immediately above the name of Whinfield. Having regard to a signature on an affidavit of the second respondent, it is his signature next to the handwritten entry. The two warrants were issued on an application made by the second respondent. In evidence is a copy of a draft of the application with some sections blacked out. The draft reflected the terms of the application used to obtain the first and second warrants with one qualification which is not presently relevant. The blacked out sections represented text which the second and third respondents indicated would attract public interest immunity. That issue was never addressed and the applicants were prepared to proceed on the edited version of the draft application. The second respondent identified himself in the application as: "a member of the Australian Federal Police (AFP), holding the rank of Federal Agent, currently seconded to the National Crime Authority, Sydney (NCA)". He also stated that he had not previously applied for a search warrant under s 3E of the Crimes Act 1914 in relation to any of the premises identified in the application. They were the Punchbowl Road, Belfield premises of Malubel and two premises in Rochester Street, Strathfield. The second respondent identified, in general terms, the source of the information set out in the application. He then stated: "5. By reason of the matters set out below an issuing officer may properly be satisfied that there are reasonable grounds for suspecting that there are at each of the premises specified above, things which satisfy the following three conditions;" There then appeared in the application the three conditions which are in the same terms as the text of the first warrant, save that the application contained, after the reference to each condition, the words "in relation to all premises". The application went on to describe an investigation conducted by the Authority between 15 September 1995 and 20 October 1995 which had been named "Operation Gordon". It was said to have been conducted under a reference to the Authority described as the "Limbic Money Laundering Reference". The application recounted that this investigation concerned the activities of a currency exchange and investment business conducted by Wall Street Exchange and Finance Pty Limited ("Wall Street") located in Kings Cross. Allegations had been made that directors of that company engaged in financial transactions designed to assist clients to systematically evade payment of income tax and/or launder the proceeds of crime. The application went on to assert that there was a relationship between Wall Street and Malubel involving large amounts of United States currency being exchanged for large amounts of Australian currency. The nature of the relationship is not entirely clear as it is explained at a point in the draft application where parts of the text have been obliterated. The application went on to note that on 19 October 1995 search warrants were executed by staff of the Authority at premises of Malubel in two locations in Strathfield. It was noted that a document was seized containing particulars of dates, US dollar amounts, exchange rates, Australian dollar amounts and figures in Australian dollars. This was said to be a form of comparison between US dollars and Australian dollar exchange rates available from both Wall Street and a commercial bank. The second respondent stated that, upon analysis, the figures contained in this document corresponded to amounts of currency Authority investigators believed had been exchanged by Malubel at Wall Street. He went on to note that other relevant records were seized which related to income derived from Malubel's business. He said: "Investigators located records of sales in the form of sales invoice books which appeared dedicated to both records of sales for customers introduced to the company by various tour operators and for general sales. The number of sales invoice books seized totalled approximately 65 with some covering periods from as early as 23 June 1993 and as late as 24 October 1994. However, at the time of the execution of the search warrant, Investigators were unable to locate documents, complete records or a complete set of sales invoice books relating to sales and income for Malubel Pty Ltd for the period 1 July 1994 to 30 June 1996, [sic] the period outline in the above conditions, and particularly for the period covered by the previously mentioned exchange transactions between Malubel Pty Ltd and Wall Street. Investigators were of the understanding that those records were unavailable at the time due to them then being in the possession of the company accountant, Mr Joseph CHOI for processing in accordance with normal accounting requirements. As is outlined in the following paragraph 6.(d), investigators have subsequently sought to access those records of sales and cash receipts by less intrusive means than by search warrant. The application then contains three subparagraphs setting out the steps taken to secure documents from Malubel. In view of the issues raised in these proceedings it is desirable to set out the text of those paragraphs: "6(d) As a result of the investigation of the exchange transactions apparently conducted between Malubel and Wall Street, Investigators of the Australian Taxation Office attached to the National Crime Authority for the purpose of investigating matters arising out of Operation Gordon commenced inquiries in relation to the apparently undeclared income reflected in those exchange transactions. As a result of those inquiries interviews were conducted on the 23 January 1996, the 16 May 1996, the 17 July 1996, the 27 September 1996 and the 8 December 1996 between Australian Taxation Office investigators and various representatives of Malubel Pty Ltd who appear to have information as to the financial operations of Malubel Pty Ltd. Attendees at those interviews included Jin Kyu CHUNG (company director of Malubel Pty Ltd) Joseph CHOI (Accountant engaged by Malubel) Jay KIM and In Sub LIM (employees of Malubel Pty Ltd). The purpose of those interviews was to satisfy the Australian Taxation Office investigators by way of a reconciliation of receipts of income to banking records, that the sums exchanged between Malubel Pty Ltd and Wall Street had in fact been declared as assessable income by Malubel Pty Ltd and/or its directors. Australian Taxation Office investigators sought the production of sales figures and the relevant sales invoice books for comparison with the banking records of Malubel Pty Ltd. None of those interviews have revealed that Malubel Pty Ltd banked or declared any of the monies reflected in the exchange transactions with Wall Street and the various representatives of the company have failed to produce the sales invoice books for the period relevant to the exchange transactions with Wall Street and have failed to produce the required documentation indicating the proper and full declaration of income for that period. 6(e) On the 20 December 1996 Notices under Section 264(1)(a) and (1)(b) of the Income Tax Assessment Act were issued by the Australian Taxation Office requiring Jin Kyu CHUNG to attend at the Australian Taxation Office on the 24 February 1997 to provide details requested and give evidence under oath. Jin Kyu CHUNG failed to attend on the required date. The Australian Taxation Office had received a letter from Giles Payne and Co (solicitors for Malubel Pty Ltd) dated the 7 February 1997 stating that the time given to respond to the notices under Section 264(1)(a) and (1)(b) was inadequate and requesting an extension of time until the 19 May, 1997 for production of the required documentation. The Australian Taxation Office refused this extension of time after submission from Australian Taxation Office investigators. The Australian Taxation Office has still not received any responses from Malubel to the Section 264(1)(a) and (1)(b) notices of the 20 December 1996. 6(f) On the 2 April 1997 The Australian Taxation Office issued a fresh section 264(1)(a) notice for the production of the relevant sales invoice books and records. The notice was to be complied with by the 30 April 1997. The response to that notice consisted of statements from Solicitors Giles Payne and Co that all money exchanged with Wall Street Pty Ltd were banked over time. The reconciliation of receipts of income to banking as requested by the Australian Taxation Office was not produced. The Australian Taxation Office is considering prosecuting Malubel Pty Ltd and its directors for failure to adequately respond to the Section 264(1)(a) and (1)(b) notices." The second respondent then said that based on this information he suspected Malubel and its directors had received substantial cash income, some of it which was reflected in the exchange transactions with Wall Street between 20 April 1995 and 9 October 1995, and that Malubel and its directors had failed to declare substantial cash income to the ATO. The second respondent said that it appeared to him that Malubel and/or its directors "are in the habit of keeping records of cash receipts and sales at least in the form of cash sales receipt books" and that records set out in the first condition do exist "as was indicated by the existence of other substantial and complete cash sales records located at the time of the search warrant of the Malubel premises on 19 October 1995". He went on to say that he suspected that Malubel and/or its directors Mr Gin Kyu Chung and Mr Cha Soon Chung were attempting to conceal those records or the contents of those records from investigators. He also stated that he suspected that the contents of those records would reveal a level of income which has not been disclosed to the Australian Taxation Office.

the execution of the 1997 warrants The manner in which the first and second warrants were executed on 28 November 1997 was the subject of evidence in three affidavits filed by the applicants, being affidavits of Mr Jay Kim of 4 and 10 November 1997 and of Mrs Yeong Chang of 4 November 1997. The evidence of Mr Jay Kim and Mrs Yeong Chang was not challenged. Neither was cross examined and no evidence was led by the second and third respondents putting in issue what they said about the way the warrants were executed. Mr Jay Kim's account was that he returned to the factory, which I infer was the premises at 49-51 Punchbowl Road, Belfield, when he was met by the second respondent who showed him a badge and a search warrant. The second respondent said he was from the Australian Federal Police and asked for co-operation to search the premises. The second respondent was accompanied by five other people including Mr Robert McNally who Mr Jay Kim knew to be an officer of the ATO at Parramatta. After an exchange with second respondent, Mr Jay Kim spoke to Mr McNally. Mr McNally and another of the people assisting in the execution of the warrant, told Mr Jay Kim that they wanted the daily sales records from 1994 to 1996. Mr Jay Kim replied by saying that it was necessary to get Mrs Chang, the bookkeeper in as she was then on annual leave. This occurred. There was another conversation with Mr McNally and the other person, in which Mr Jay Kim was told they wanted to see records including invoices and documents. Mr Jay Kim replied by saying such records were not kept. Mr Jay Kim's impression was that this request was made on several occasions. He ultimately raised with Mr McNally why he did not seek these documents from Malubel's solicitor, Mr Gilles. Mr McNally replied that Mr Gilles had not provided the documents which he needed. Mr Jay Kim responded that, as far as he knew, Mr McNally was still holding some of Malubel's documents which Mr Gilles had previously asked for so as to be able to provide Mr McNally with the documents he wanted. In his first affidavit Mr Jay Kim said he did not really understand what he was then being asked for because the documents did not exist. He went on to recount there was a further exchange to clarify what was being sought though Mr Jay Kim told them he did not keep records which were described to him as daily sales records. There was then a discussion about the banking done by Malubel, the frequency with which groups of tourists would be brought to their premises and the financial arrangements they had with tour operators. Mr Jay Kim then asked to ring his solicitor, Mr Gilles, which he endeavoured to do, though he could not contact him immediately. Contact was eventually made and Mr Gilles had a conversation with the second respondent. The second respondent informed Mr Jay Kim that another warrant was being executed at Homebush and then left the premises. Mr Jay Kim had a conversation with Mr McNally about obtaining copies of the documents that were being seized. There was also a discussion about being provided with a list of the documents. In his second affidavit Mr Jay Kim said, contrary to the evidence he gave in his first affidavit, that when the second respondent introduced himself he merely said that he was a member of the Authority. He did not identify himself as a member of the Australian Federal Police. Mrs Yeong Chang also gave an account of the execution of the warrant at the premises at 49-51 Punchbowl Road, Belfield. She attended there after receiving a phone call from Mr Jay Kim. She was asked to produce daily sales records but said no such records were kept. An attempt was made to clarify what was being sought by use of a Korean interpreter. Mrs Yeong Chang then went to her office and produced a document which she was told was not the document they were after. However the manilla folder in which that document had been filed was grabbed and Mrs Yeong Chang was told that various documents within the manilla folder were documents that were wanted. There was then an exchange concerning the provision of copies. Other documents were produced and money in a safe produced and counted. A conversation then took place between Mrs Yeong Chang and Mr McNally about other documents and the provision of a list of the documents being seized. Mrs Yeong Chang was given access to documents in boxes which had then been placed in the vehicles of those executing the warrants. Mrs Yeong Chang prepared a list of documents in the boxes or some of them. There was then a discussion about the production of documents for a period to 1 July 1994. In the result, documents relating to that period were removed from the boxes. Mrs Yeong Chang continued making the list which took more than an hour to do. After the list was finished Mrs Yeong Chang said to one or a number of the executing officers "thank you" which gave rise to a similar response. Mr McNally then said "see you next time" to which Mrs Yeong Chang responded "I don't want to see you next time". She then went up stairs and left the executing officers in the car park.

relevant LEGISLATION The following is the legislation that arises for consideration. The Crimes Act 1914 provides a mechanism in Part 1AA for the issue of search warrants relating to the investigation of offences against Commonwealth law or a law of a territory other than the Australian Capital Territory. Central to the operation of Part 1AA is s 3E. Sections 3E and 3F relevantly provide: "3E (1) An issuing officer may issue a warrant to search premises if the officer is satisfied by information on oath that there are reasonable grounds for suspecting that there is, or there will be within the next 72 hours, any evidential material at the premises. ... (4) If the person applying for the warrant is a member or special member of the Australian Federal Police and has, at any time previously, applied for a warrant relating to the same person or premises the person must state particulars of those applications and their outcome in the information. (5) If an issuing officer issues a warrant, the officer is to state in the warrant: (a) the offence to which the warrant relates; and (b) a description of the premises to which the warrant relates or the name of description of the person to whom it relates; and (c) the kinds of evidential material that are to be searched for under the warrant; and (d) the name of the constable who, unless he or she inserts the name of another constable in the warrant, is to be responsible for executing the warrant; and (e) the period for which the warrant remains in force, which must not be more than 7 days; and (f) whether the warrant may be executed at any time or only during particular hours. (6) The issuing officer is also to state, in a warrant relation to premises: (a) that the warrant authorises the seizure of a thing (other than evidential material of the kind referred to in paragraph (5)(c)) found at the premises in the course of the search that the executing officer or a constable assisting believes on reasonable grounds to be: (i) evidential material in relation to an offence to which the warrant relates; or (ii) a thing relevant to another offence that is an indictable offence; if the executing officer or constable assisting believes on reasonable grounds that seizure of the thing is necessary to prevent its concealment, loss or destruction or its use in committing an offence; and (b) whether the warrant authorises an ordinary search or a frisk search of a person who is at or near the premises when the warrant is executed if the executing officer or a constable assisting suspects on reasonable grounds that the person has any evidential material or seizable items in his or her possession. ... 3F (1) A warrant that is in force in relation to premises authorises the executing officer or a constable assisting: (a) ... (b) ... (c) to search the premises for the kinds of evidential material specified in the warrant, and to seize things of that kind found at the premises; and (d) to seize other things found at the premises in the course of the search that the executing officer or a constable assisting believes on reasonable grounds to be: (i) evidential material in relation to an offence to which the warrant relates; or (ii) evidential material in relation to another offence that is an indictable offence; if the executing officer or a constable assisting believes on reasonable grounds that seizure of the things is necessary to prevent their concealment, loss or destruction or their use in committing an offence; and (e) to seize other things found at the premises in the course of the search that the executing officer or a constable assisting believes on reasonable grounds to be seizable items; and (f) ..." Several of the terms used in s 3E are defined either in s 3C which forms part of Part 1AA, or in s 3 which is in Part 1, "Preliminary", of the Crimes Act 1914. The relevant definitions in s 3C are: ""constable assisting", in relation to a warrant, means: (a) a person who is a constable and who is assisting in executing the warrant; or (b) a person who is not a constable and who has been authorised by the relevant executing officer to assist in executing the warrant; ... "evidential material" means a thing relevant to an indictable offence or a thing relevant to a summary office, including such a thing in electronic form; "executing officer", in relation to a warrant, means: (a) the constable named in the warrant by the issuing officer as being responsible for executing the warrant; or (b) if that constable does not intend to be present at the execution of the warrant - another constable whose name has been written in the warrant by the constable so named; or (c) another constable whose name has been written in the warrant by the constable last named in the warrant; .... "issuing officer", in relation to search premises or a person or a warrant for arrest under this Part, means: (a) a magistrate; or (b) a justice of the peace or other person employed in a court of a State or Territory who is authorised to issue search warrants or warrants for arrest, as the case may be;" It can be seen that the definition of "executing officer" refers to a "constable" which is defined in s 3: ""constable" means a member or special member of the Australian Federal Police or a member of the police force or police service of a State or Territory;" The class of people who may assist an executing officer is defined in s 3C: ""constable assisting", in relation to a warrant, means: (a) a person who is a constable and who is assisting in executing the warrant; or (b) a person who is not a constable and who has been authorised by the relevant executing officer to assist in executing the warrant."

Other legislation is also relevant. The staff of the Authority can include seconded members. This is dealt with by s 49 of the National Crime Authority Act 1984, which provides: "49 In addition to the members of the staff referred to in sub-section 47(1) and person engaged under subsection 48(1), the Authority shall be assisted in the performance of its functions by: (a) members of the Australian Federal Police whose services are made available to the Authority; (b) officers and employees of authorities of the Commonwealth whose services are made available to the Authority; and (c) persons whose services are made available to the Authority pursuant to arrangements made under section 58." The secondment of members of the Australian Federal Police is provided for by s 33 of the Australian Federal Police Act 1979: "33(1)Subject to this section, the Commissioner may arrange for a member or staff member to be seconded for a specified period to: (a) the Police Force of a State of Territory or of a country other than Australia; or (b) any other body or organization (including an international body or organization) whether within or outside Australia. ... (5) The terms and conditions of service of a seconded member or staff member must be determined, in writing, by the Commissioner."

validity of the warrants on their face The applicants challenged the validity of the warrants on several grounds based on the text of the warrants themselves. The warrants were issued by a Justice of the Peace employed in a Court of the State of New South Wales in exercise of the authority conferred by s 3E of the Crimes Act 1914. The applicants first submitted that the warrants failed to disclose all jurisdictional matters founding their issue. The statutory scheme requires that the issuing officer be satisfied that there were reasonable grounds for suspecting there was evidential material at the relevant premises: see s 3E(1). It was submitted that the grounds upon which the suspicion was founded should be disclosed. Reference was made to Ex parte Lovell; Re Buckley (1938) 38 SR(NSW) 153 at 166 in which Jordan CJ discussed the material that must be apparent from the judgment of an inferior court recording a conviction for a criminal offence. However the issue in the present case is plainly a different one. Arguably the warrants should disclose whether the statutory preconditions for their issue had been satisfied. I say arguably because s 3E(5) and (6) identify what a warrant of the present type should state. The High Court has recently considered the validity of a warrant authorising the use of a listening device in Ousley v The Queen (1997) 71 ALJR 1548. Three of the judges who constituted the majority, Toohey, McHugh and Gummow JJ indicated that as the statutory scheme in question identified comprehensively what the warrant must state, it could not be implied there was an additional requirement to disclose jurisdiction on the face of the warrant: see per Toohey J at 1554, McHugh J at 1569 (but having regard to the fact that it was a listening device warrant) and Gummow J at 1579, notwithstanding a line of authority that jurisdiction must be apparent on the face of the warrant, at least in relation to warrants not issued by a superior court: see, for example, R v Tillett; Ex parte Newton (1969) 14 FLR 101. On that approach the identification in s 3E(5) and (6) of the matters that must be stated in the warrant might preclude a suggestion that the warrant must otherwise disclose jurisdiction on its face. However, and in any event, the first respondent did set out the elements identified in s 3E(1) as the statutory preconditions for the issue of the warrants including those imported into that subsection by the relevant definitions in section 3C. The applicants do not point to any particular matter that should have been stated in the warrants but was not. This ground of challenge is not made out. The next contention of the applicants concerned the description and status of the executing officer. It can be seen at point 1 in the first warrant the second respondent is described in several ways. He is described as a "Federal Agent" and also as "a member of the Australian Federal Police". Section 3E(5)(d) requires the issuing officer to identify "the name of the constable" who is to be responsible for executing the warrant. The scheme of Division 2 is a warrant is issued to "an executing officer" and confers a power to execute the warrant in the prescribed manner. As is apparent from the definition of executing officer, the officer must be a constable. Having regard to the definition of constable in s 3, that includes a member of the Australian Federal Police. The applicants point out that in the definition there is a reference to "a member or special member of the Australian Federal Police" and s 6 of the Australian Federal Police Act 1979 declares that the Australian Federal Police shall be constituted by, inter alia, commissioned and non-commissioned police officers and staff members who are not police officers. However in the Australian Federal Police Act 1979 a distinction, in terms, is drawn between members and staff members: see for example s 24, s 26C, s 26E, s 30, s 32, s32A, s 33, s 34, s34A, s 36, s36B, s 37, s 38, s 38B. The reference to a member in the definition in s 3 of the Crimes Act 1914 was intended to be a reference to a member of the Australian Federal Police but not including a staff member. The statutes are, in this respect, in pari materia: see Pearce DC & Geddes RS, Statutory Interpretation in Australia (Sydney: Butterworths, 1996), paras 3.20 - 3.21. The identification of the executing officer in the first warrant does two things. He is named, thus s 3E(5)(d) is satisfied. It also identifies his status as a member of the Australian Federal Police thus satisfying the statutory requirement that he be a constable. It is true that he is also identified as a Federal Agent but this is surplusage. The reference to the second respondent in the first warrant as a member of the Australian Federal Police was, in my opinion, in contradistinction to a staff member and was a reference confined to the class of member of the Australian Federal Police which falls within the definition of constable. The reference to Federal Agent does not alter, in any relevant legal sense, the fact that the issuing officer has, on the face of the warrant, made plain that it was issued to a person to execute of the type contemplated in the statutory scheme. A related issue raised by the applicants concerned the execution of the warrant by a substituted constable. The combined effect of the definition of executing officer in s 3C, and s 3E(5)(d), is that a constable named in the warrant as the executing officer may substitute the name of another constable. The constable so named is able to execute the warrant by virtue of being an executing officer as defined. The person whose name is substituted must be a constable. It can be seen from point 2 in the warrant that the class of people who may be substituted is not limited, expressly, to the prescribed class. There is reference to a Federal Agent. The title of Federal Agent arose from the promulgation of a general order under s 14 of the Australian Federal Police Act 1979 effective from 20 February 1996. The general order declared that the title Federal Agent will be used by a member of the Australian Federal Police performing duties other than in the ACT region (as distinct from the ACT geographic area). The general order also directed that where a reference is made in Commonwealth, State or Territory legislation to a particular rank or office, a member will apply that reference to mean his or her rank or office at that time. The boundaries of the legal effect of this order is unclear though it obliged a member of the Australian Federal Police to use the title Federal Agent. The use of that term at point 2 in the first warrant resulted in the issuing officer not limiting the class of people who might be substituted to those specified in the Crimes Act 1914 which, relevantly, are members of the Australian Federal Police. The existence of a requirement that members of the Australian Federal Police describe themselves as Federal Agents, does not result in anyone so described being a member of the Australian Federal Police. The second and third respondents submitted that the opening words of the warrant make clear that a Federal Agent is a member of the Australian Federal Police and thus a constable. This, in my opinion, does not follow. That a named individual is both a Federal Agent and a member of the Australian Federal Police does not establish that any Federal Agent is a member of the Australian Federal Police. That necessary connection is not apparent on the face of the warrant. However in relation to the first warrant a deficiency arising from the use of the title Federal Agent had no relevant legal effect in that no name was substituted. Accordingly that part of the warrant may be severed: see Beneficial Finance Corporation Limited v Commissioner of Australian Federal Police (1991) 31 FCR 523 at 545 per Burchett J (Sheppard J concurring). I do not accept, as was submitted by the applicants, that this element of the first warrant manifests a substantial defect which so enlarges the reach of the warrant as to make severance impossible. However different considerations arise in relation to the second warrant. It can be seen that the process of substitution was undertaken and the third respondent's name substituted for that of the second respondent. The authority of the second respondent to so do ultimately derived, impliedly, from the Crimes Act 1914 itself and not the warrant having regard to the definition of executing officer in s 3C. Even accepting that the issuing officer exceeded her statutory authority by stating that a Federal Agent may be substituted, that part of the second warrant may also be severed. The procedure that was followed and authorised by the statute had the result of identifying the substituted person as a member of the Australian Federal Police and thus as a constable as defined in s 3 of the Crimes Act 1914. The warrant in its amended form disclosed, on its face, that the executing officer was a constable for the purposes of Division 2. Accordingly, in my opinion, the second warrant was not invalid for this reason. The next basis of challenge to the warrants by the applicants concerned the class of in the Crimes Act 1914 people who may assist an executing officer in executing the warrant. That class is identified in the definition of "constable assisting" in s 3C. They may be a constable who is assisting or a person who is not a constable who has been authorised by the relevant executing officer to assist. It can be seen that at point 4 of the first warrant the issuing officer authorised not only the executing officer to execute the warrant but, in addition, authorised two other classes of people to assist. The first was a person assisting who "is a Federal Agent" and the other was a person who had been authorised by the executing officer to assist. Thus the warrant purportedly authorised a Federal Agent to assist even if that Federal Agent had not been authorised by the executing officer to assist. It authorised a class of person to assist which is not, on its face, a class identified in Division 2 even if, as a matter of fact, any Federal Agent assisting was a constable. I do not accept the submission that the words, "who has been authorised by the executing officer" at point 4 are intended to qualify the words "Federal Agent". To do so would be to ignore the comma after the word Agent: see Re Collins; Ex parte Hockings (1989) 167 CLR 522 at 525. However there is no evidence to suggest that any particular document has been or is likely to have seized by a person who is assisting because of the authorisation of Federal Agents to assist and accordingly this part of the warrant may be severed: see Beneficial Finance Corporation (supra) at 545. The warrants were also challenged having regard to the description of the material that could be seized. It can be seen at point 5 of the first warrant that it authorises the seizure of evidential material in relation to another offence that is an indictable offence. Section 3E(6)(a)(ii) requires the issuing officer to state in the warrant that it authorises the seizure of a thing that the executing officer or a constable assisting believes on reasonable grounds to be a thing relevant to another offence. The effect of the warrant is to authorise certain conduct. The relevant conduct that is authorised is identified in s 3F(1)(d)(ii), namely to seize other things which the executing officer or a constable assisting believes on reasonable grounds to be evidential material in relation to another offence that is an indictable offence. The deficiency in the warrant pointed to by the applicants is the failure to state that which is required by s 3E(6)(a)(ii) to be stated in the terms identified in sub-paragraph (ii). However the obligation imposed by that provision has to be read in the context of what the Crimes Act 1914 authorises to be done in consequence of the issue of a warrant which contains that statement. While there is plainly a difference in the language in s 3E(6)(a)(ii) and in s 3F(1)(d)(ii), both provisions, having regard to the definition of "evidential material", are intended to relate to the same thing. In my opinion, the warrant is not invalid because the issuing officer has used language that does not replicate the language of the statute given that, in substance, it identifies that which is authorised by the Act in the terms used in the Act itself. The next challenge to the warrants concerned the description of documents in the conditions. The first condition in the warrant identifies things that may be seized. It can be seen at point 3 that the things identified include documents used for the recording of, or movement of, monies suspected of being used in a money laundering or tax evasion process. It was submitted by the applicants that this description was defective in two respects. The first was that it depended on a suspicion of someone who was not identified or the criteria by reference to which the suspicion was to be formed. The second was that it referred to money laundering or tax evasion which are vague and uncertain notions. However this description has to be considered in the context of the first warrant as a whole and the purpose for which the warrant was being issued. The three conditions are intended to be cumulative. Thus the evidential material is things that may afford evidence of the commission of an under s 29D of the Crimes Act 1914. There is an identification of the relevant offence. Moreover, as was discussed at length by Burchett J (with whom Sheppard J agreed) in Beneficial Finance Corporation (supra) at 533 to 543, an overly technical view should not be taken of the description of the offence. As his Honour noted at 533: "The purpose of the statement of the offence in the warrant is not to define the issue for trial; but to set bounds to the area of search which the execution of the warrant will involve, as part of an investigation into a suspected crime. The appropriate contrast is not with the sort error which might vitiate an indictment, but with the failure to focus the statutory suspicion and belief upon any particular crime, with the result that a condition of the issue of the warrant is not fulfilled, and it purports to be a general warrant of the kind the law decisively rejected in the 18th century. There should be no going back on that rejection, which is an essential bulwark of respect for the integrity and liberties of the individual in a free society, but what the rule requires is identification (and so limitation) of an area of search by reference to a suspected offence, not the formulation of a pleading before the offence is capable of prosecution." His Honour concluded his discussion of this issue at 543: "In my opinion, the conclusion emerges clearly that there is no justification for an "exact object" test. The matter should be viewed broadly, having regard to the terms of the warrant in the circumstances of each. The question should not be answered by the bare application of a verbal formula, but in accordance with the principle that the warrant should disclose the nature of the offence so as to indicate the area of search. The precision required in a given case, in any particular respect, may vary with the nature of the offence, the other circumstances revealed, the particularity achieved in other respects, and what is disclosed by the warrant, read as a whole, and taken account of its recitals." In my view, the challenge this part of the first search warrant is not made out. Plainly the language used at point 3 must be read in the context of the warrant as a whole. The purpose of the warrant is to permit those executing it to seize documents which may afford evidence of conduct constituting defrauding the Commonwealth. This will involve an assessment to be made by those executing the warrant within the bounds created by the terms of the warrant and the general law. See also the observation of Lockhart, Beaumont and Hill JJ in Dunesky v Elder (1994) 54 FCR 541 at 556-7.

improper exercise of power The applicants submitted that the making of the decision to issue the first and second warrants was an improper exercise of power. They identified a range of matters that should have been taken into account and were not. They were particularised as the terms of the warrants executed in 1995, the nature of the documents seized on that occasion, the similarity between those documents and the documents which were to be the subject of the warrants issued in 1997, the fact that the documents seized in 1995 had been returned, the fact that no charges had been laid as a result of the seizure of documents in 1995, the fact that there had been the voluntary production of documents by Malubel in December 1995, that the warrants proposed to be issued did not sufficiently particularise the alleged offences, the things to be searched for or indicate on their face they were properly authorised and the fact that persons seeking the warrants were members of the staff of the Authority. The obligation of a person seeking the issue of a warrant concerning disclosure and the matters to be considered by a person issuing a warrant has recently been considered by a Full Court of this Court in Lego Australia Pty Ltd v Paraggio (1994) 52 FCR 542, and also in Dunesky v Elder. The present state of the law has more recently been conveniently summarised by Hill J in Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393 at 400. Hill J was a member of the Full Court in Lego and Dunesky v Elder. His Honour said in Puglisi: "So far as the submission is put that there was an obligation on the part of those seeking the warrant to make the issuing authority aware of the proceedings, the submission is foreclosed by the judgement of the Full Court of this court in Lego Australia Pty Ltd v Paraggio (1994) 52 FCR 542; 124 ALR 225. Prior to that case the law as stated by a Full Court of this court in Karina Fisheries Pty Ltd v Mitson (1990) 26 FCR 473; 96 ALR 629 was that there was an obligation upon those seeking a warrant to make to the issuing officer a full disclosure of all material facts which might be relevant to issuing that warrant. That view was dispelled in Lego. Following Lego it is now clear that failure to disclose a particular fact would not invalidate a warrant unless the failure was such as to warrant a conclusion that the decision to grant the warrant was induced by fraud: see per Beaumont and Whitlam JJ at FCR 555. In a separate judgment which differs from the majority only in emphasis rather than principle I put the matter in terms of good faith. The subsequent decision in Dunesky v Elder (1994) 54 FCR 540; 126 ALR 522 did not find it necessary to consider whether there was any significant difference between the majority view and the view which I had expressed. So far as it matters I can say that I did not intend there to be any real difference." I should, in this context, refer to one specific matter raised by the applicants. I can be seen from s 3E(4) that a member of the Australian Federal Police applying for a warrant must state particulars of applications made previously for a warrant relating to the same person or premises and the outcome. It was submitted by the applicants it was incumbent upon the second respondent to have stated not only that an application had been made in 1995 which led to the issue of the warrants but also to have stated the material facts upon which the application was based and the outcome of both the application for the warrants and their execution. Apart from the fact that the premises in 1995 were not the premises the subject of the first and second warrants, the submission misconceives, in my opinion, the purpose of s 3E(4). Its purpose is, as was submitted by the second and third respondents, to create a mechanism designed to ensure that an application for a warrant was not made to, and considered by, an issuing officer without knowing that an earlier application had been made and its fate. It is a provision intended to ensure that an issuing officer will not be called upon to issue a warrant in ignorance of the fact that another issuing officer has refused to do so or has done so in the same or substantially the same terms. That this is the purpose of s 3E(4) is evident, in my opinion, by the provision focusing on the application for a warrant rather than its issue. That is, on the fate of the application and not, if the application led to the issue of a warrant, the outcome of any search undertaken in execution of it. Even if I am wrong and s 3E(4) has a wider application, it can be seen from the summary and extracts of the draft application I earlier set out, the fact that an earlier application had been made was adverted to as was the result, namely that warrants issued and, in summary terms, the results of the ensuing search. Returning to the general question of whether matters were disclosed or not and taken into account or not, the proper approach is, in the language of Beaumont and Whitlam JJ in Lego at 555: "[t]he primary question here is not whether the [applicant] was under an obligation to disclose to the justice a particular fact, but whether the statements in the [application] were sufficient to satisfy the [statutory] requirements." In the present case there was ample material on which the issuing officer could have been satisfied of the matters referred to s 3E. They are contained in the summary of the application and the extracts from the application set out earlier in this judgment. I do not repeat them. Different considerations arise in relation to the submission of the applicants that matters were not disclosed or fully disclosed and should have been. This constituted, it was submitted, misrepresentation with the result that the issue of the warrants was induced by fraud: see Lego at 555 per Beaumont and Whitlam JJ. This is said to arise because of the failure of the second respondent to refer in the application to a range of matters including the voluntary production by Malubel of documents on or about 5 December 1995 in response to a written request by Mr McNally, that the solicitors for the applicants may have been raising questions about the validity of the s 264 notices issued on 20 December 1996 and were saying they needed time to comply, and that the solicitors for Malubel were raising, as a reasons for their inability to comply, the fact that some documents were held by the Authority itself. The failure to refer to these matters had to be considered with the statement of the second respondent in the application that it was suspected Malubel and its directors were attempting to conceal records. I accept that some of these matters were not referred to or referred to in great detail in the application though para 6(e), set out earlier, does advert to the claim that was being made by Malubel's solicitors that inadequate time had been provided for compliance with the s 264 notices issued on 20 December 1996. A fact that was not referred to at all, namely that documents had been voluntarily produced in December 1995, might have had a bearing on any view the issuing officer formed about the preparedness of Malubel to produce documents on request and the assertion in the application that it was suspected Malubel was attempting to conceal records. The second respondent gave evidence about his knowledge of this issue and he said: "And did Mr McNally tell you that he had himself obtained documents from the first applicant voluntarily pursuant to a letter he wrote he in December 1995? --- There was a mention of some form of response, I can't recall what that mention of a response to his request was." He gave other evidence to similar effect and that Mr McNally had told him that the information provided was insufficient for him to continue his investigations. In its written submissions in reply on another issue the applicants described the second respondent as a "cats paw" of Mr McNally. It was submitted that the Court could take into account material that was constructively before the decision maker as well as material actually before the decision maker and reference was made to Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155, Simonsz v Minister for Immigration (1995) 56 FCR 492 at 498 and Luu v Renevier (1989) 91 ALR 39 at 50. The extent to which the failure to disclose matters not known to the applicant for a search warrant might evidence fraud was considered by Wilcox J, who was the trial judge, in Lego: see (1993) 44 FCR 151 at 168 to 172. His Honour rejected the suggestion that knowledge of others within an organisation in which the applicant for a warrant worked or information in filed retained by that organisation should be imputed knowledge of the applicant for a warrant. His Honour concluded at 172: "I think that the better view, on the authorities, is that failure by an applicant to disclose material information that is in fact unknown to him/her at the time of seeking a search warrant invalidates the warrant only in a case where that information was previously known to the applicant but forgotten, or where the applicant's ignorance results from his/her wilful blindness or other bad faith." In the reasons for judgment on appeal, nothing was said by Beaumont and Whitlam JJ that, in my view, suggested these conclusions were wrong. Hill J addressed the matter at (1994) FCR 570 and likewise nothing his Honour said suggests that the approach of Wilcox J was incorrect. The second respondent's knowledge about the request for voluntary production was limited and his failure to disclose that documents were produced voluntarily can be explained on that basis. It has not otherwise been established that he ever knew of the other matters concerning the reasons why Malubel or its directors were not complying with the various notices under s 264 or that circumstances existed that should have reasonably led him to inquire. I am not satisfied that the failure of the second respondent to disclose the voluntary production of documents in 1995 together with his limited reference to the debate going on between Malubel's solicitors and the ATO about compliance with the s 264 notices evidences an intention on his part to deliberately mislead the issuing officer. A case of fraud has not been made out.

the issue of the warrants for an ulterior or collateral purpose

The applicant submitted that the warrants were issued for an ulterior collateral purpose, namely to assist in ongoing inquiries by the ATO with respect to the business of Malubel concerning its tax liabilities. The chronology of events earlier set out indicates that the application for the issue of the warrants in 1997 was not demonstrably separate from the activites of the ATO commencing in late 1995 directed to ascertaining tax payable by Malubel from its business activities. Indeed Mr McNally played a central role in those activities as well as the issuing and execution of the warrants in 1997. It was submitted that the ulterior or collateral purpose was established by a number of matters. They were that information sought by the execution of the 1995 warrants had already been obtained and handed back, information had been provided on a voluntary basis by Malubel on an earlier occasion and no charges had been laid as a consequence of the execution of the warrants in 1995. It is true that material seized or obtained voluntarily in 1995 was returned and no charges laid. However this could be explained, in part, by evidence given by Mr Garry Allen, the Sydney Office Regional Manager of the Authority, that the investigation that had resulted in the execution of the search warrants in 1995 went into abeyance for a period due to lack of funds. It was revived when, in May 1997, the Commonwealth provided additional funds to the Authority to conduct investigations into organised fraud on the Commonwealth and related criminal activity. I note, however, that in paragraph 6(d) of the draft application, interviews were conducted throughout 1996. Another matter said to evidence an ulterior purpose was that Mr McNally misrepresented to the second respondent the true position in relation to the issuing of and compliance with notices under s 264 and the voluntary response made by a director of Malubel to the request in December 1995 for documents. Even accepting that Mr McNally may not have disclosed to the second respondent all details of past dealings with Malubel, I fail to see how that fact establishes or tends to establish that the warrants were sought for an ulterior purpose and were not being sought for the stated purpose. Nor do I accept the submission that the evidence, viewed as a whole, indicates that the focus of attention of the Authority and those acting on its behalf was upon the current position, presumably for the purpose of ascertaining currect tax liabilities, and not matters relating to past conduct of Malubel and its officers. Those seeking and executing the warrants were interested in both. I accept the evidence establishes Mr McNally, when assisting in the execution of the first warrant in 1997, was interested in obtaining documents concerning the current financial position of Malubel in circumstances where he had earlier had access to many of Malubel's financial records. This was within the bounds established by the warrants and s 3F(1)(d). However as a matter of fact, in July 1997 he had become a member of a task force established by the Authority and a member of its staff. As a member of the task force he is likely to have been investigating Malubel's affairs from a different perspective. There is nothing inherently unusual about investigations simultaneously or sequentially being undertaken to ascertain the tax liability of a tax payer and the possible commission of an offence which involved defrauding the Commonwealth. The current position could well be relevant to both. In the present case I am not satisfied that the initiating and abiding purpose for which the warrants were sought and executed was to ascertain that taxation liability of Malubel and not to obtain evidential material concerning a defrauding of the Commonwealth: see Flanagan v Commissioner of the Australian Federal Police (1995) 60 FCR 149 at 203. The situation parallels, in some respects, that considered by the Full Court in Dunesky v Elder (1994) 54 FCR 540. As Lockhart, Beaumont and Hill JJ observed at 558: "The information stated that an investigation and tax audit had been carried out. Moreover, that facts alleged in the information and its attachments clearly conveyed the message that the authorities already held a substantial body of information and material. In other words, it was made plain to the justice that although a considerable amount of material alleged to support a case of "laundering" already was held, a search for other material was desired to supplement the existing information. There was nothing improper or even unusual in the authorities taking this course. On the contrary, it reasonably could be expected that they would wish to do so in order to check the position so far as possible before making a decision to prosecute or not to do so." In my opinion this ground is not made out.

The capacity of the second respondent to make application under section 3e The applicants submitted that it was not open to the second respondent to make application under s 3E of the Crimes Act 1914 given the special provisions in s 22 of the National Crime Authority Act 1984 concerning the issue of warrants and the fact that the applicant had not been seconded under s 33 of the Australian Federal Police Act 1979. The second respondent commenced as a senior investigator with the Authority in November 1993. At that time he received a letter signed by the then Chairman of the Authority confirming his appointment as a senior investigator. It appears from a statement from the bar table, though there is no direct evidence of the fact, that at this time the second respondent was a member of the New South Wales Police Force. The second respondent was sworn in as a detective sergeant in the Australian Federal Police in March 1995. His appointment to that position was for a period of five years. From November 1993 he has worked at and from the offices of the Authority undertaking investigative work on its behalf. The second respondent was not able to say if a document existed that determined his terms and conditions while on secondment from the Australian Federal Police. No evidence was led by the second or third respondents establishing affirmatively that such a document existed. It was submitted by the applicants that the second respondent had not been seconded because no document had been created of the type contemplated by s 33(5) of the Australian Federal Police Act 1979. In my opinion it has been not been demonstrated by the evidence of the second respondent and Mr Garry Allen that no such document exists. Nor is it established by the failure of the second and third respondents to produce such a document when called for having regard to the circumstances in which the call was made and answered. However, in my opinion, whether such a document exists and whether a determination under s 33(5) of the Australian Federal Police Act 1979 in a condition precedent to secondment are immaterial. As is apparent from Ryder v Morely (1996) 12 FCR 438 and on appeal at 16 FCR 257, the issue is whether the applicant for the warrant is a constable and able to invoke the provisions of the Crimes Act 1914. It was not submitted that any material difference arose from the fact that present warrants were issued under a different statutory scheme in the Crimes Act 1914 than that considered in Ryder v Morely. Section 26 of the Australian Federal Police Act 1979 authorises the appointment of persons as non-commissioned police officers. The second respondent was appointed under this section in March 1995. Section 26D provides that such an appointment can be for a term not exceeding the prescribed period. Section 26E deals with the termination of such an appointment. There is nothing to suggest that any of the events which bring about the termination of an appointment have occurred in relation to the second respondent. It follows that the second respondent was, at the time application was made for the issue of the warrants, a member of the Australian Federal Police. That status did not alter by virtue of a secondment, whether de jure or only de facto, to the Authority. He was thus a constable as defined and able to make application under s 3E of the Crimes Act 1914. To hold otherwise is inconsistent, in my opinion, with the judgment of Toohey J and the Full Court in Ryder v Morely (supra).

For the preceding reasons the applicants have failed to demonstrate the warrants were invalid, should be set aside having regard to the conduct of any of the respondents or the search and seizure was otherwise vitiated by reviewable error. I dismiss the application with costs. I certify that this and the preceding twenty-nine (29) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate: Dated: 24 December 1997 Counsel for the Applicants: Mr D B McGovern & Mr L J W Aitken

Solicitor for the Applicants: Giles Payne & Co

Counsel for the Second and Third Respondents: Mr D J Fagan SC & Mr M Wigney

Solicitor for the Second and Third Respondents: Australian Government Solicitor

Dates of Hearing: 11, 14 November & 5 December 1997

Written Submissions Completed: 17 December 1997

Date of Judgment: 24 December 1997

At a glance

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Judgment (20 paragraphs)

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Cases Cited (18)

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