Boumelhem & Anor v NSW Crime Commission & Ors

New South Wales Crime Commission Act 1985 Business Franchise Licences (Tobacco) Act 1987 LEGISLATION CITED : Listening Devices Act Supreme Court Rules, Pt 13 r 5 Justices Act Uniform Civil Procedure Rules

Alstom Australia Limited v NAP Acoustics Pty Limited [2004] NSWSC 217 Bhattacharya v State of New South Wales [2002] NSWSC 361 Breheny v Cairncross [2002] NSWCA 69 General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125 Ha v State of New South Wales & Ors (1996-1997) 189 CLR 465 CASES CITED : Hope v Evered (1886-87) 17 QBD 338 Myer Stores Limited v Soo (1991) 2 VR 597 Ousley v The Queen (1997-1998) 192 CLR 69 R v Eid (1999) 46 NSWLR 116 Wickstead v Browne (1992) 30 NSWLR 1 Atiyah, Vicarious Liability in the Law of Torts Fleming, Law of Torts

Amin Boumelhem (1st Plaintiff) Leisure Coast Tobacconist & Gift Ware Pty Limited (2nd Plaintiff) NSW Crime Commission (1st Defendant) PARTIES : Michael Nibbs (2nd Defendant) Richard Moore (3rd Defendant) Robert East (4th Defendant) State of New South Wales (5th Defendant)

COUNSEL : R. Horsley (Plaintiffs) I. Temby QC (1st, 2nd, 4th, 5th Defendants)

SOLICITORS : Horowitz & Bilinsky (Plaintiffs) I.V. Knight (1st, 2nd, 4th, 5th Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20477/02 AMIN BOUMELHEM & ANOR v NSW CRIME COMMISSION & ORS

1 HIS HONOUR: There are two notices of motion presently before the Court:

(i) a notice of motion brought by the first defendant in which that defendant seeks the following orders: "(a) an order for dismissal of the plaintiffs' claim under Pt 13 r 13.4 of the Uniform Civil Procedure Rules; (b) alternatively, a stay of proceedings until security for costs is given."

(ii) a notice of motion brought by the first plaintiff seeking leave to amend his statement of claim. 2 The relief sought in each of the notices of motion identified is resisted.

The parties 3 The plaintiffs named in the statement of claim and in the proposed amended statement of claim are Amin Boumelhem (first plaintiff) and Leisure Coast Tobacconist and Gift Ware Pty Limited (second plaintiff). The second plaintiff is the subject of a winding-up order made on 28 October 2003. The liquidator of the company does not have available funds to continue the proceedings, but, on 24 August 2004, a deed of assignment was entered into as between the first plaintiff and the second plaintiff whereunder the second plaintiff assigned to the first plaintiff its right title and interest in the causes of action the subject of the proceedings presently for consideration. Hence these proceedings are now being pursued by the first plaintiff. 4 The defendants named in the statement of claim and in the proposed amended statement of claim are New South Wales Crime Commission (first defendant), Michael Nibbs (second defendant), Richard Moore (third defendant), Robert East (fourth defendant), and State of New South Wales (fifth defendant). The second and third defendants were at all material times officers in the New South Wales Police Service; the fourth defendant was at all material times an officer with the Office of State Treasury; and the fifth defendant is sued as being vicariously liable for the wrongs of the other defendants. The third defendant has filed no defence in the proceedings, and the Court was informed he has not been served with the statement of claim.

Seizure of tobacco products and the arrest of the first plaintiff 5 The application for summary dismissal is supported by an affidavit sworn by Michael Lulan on 8 March 2004. This witness was not required for cross examination and I draw on the content of his affidavit and the exhibits thereto to outline briefly what occurred to prompt the issue of the statement of claim. 6 In December 1995 pursuant to a reference under s 26(1)(a) of the New South Wales Crime Commission Act 1985 the first defendant became involved in investigations into what were understood to be schemes designed to avoid the payment of tobacco licence fees under the Business Franchise Licences (Tobacco) Act 1987. The assignment, called "Operation Norfolk", had these express objectives: "to arrest and interview suspects, execute search warrants, locate tobacco products, cash, computers, answering machines, faxes, mobile phones, passports, bank records and other documentation used in stock transfer schemes and to assist in the identification of assets" (Exhibit ML 4). 7 Pursuant to those investigations, on 25 October 1996 application was made to a justice for the issue of search warrants authorising the second defendant to enter the first plaintiff's home and the second plaintiff's business premises at two addresses. These warrants were executed on 28 October 1996 and tobacco products and records were seized. On the same date, the first plaintiff was arrested pursuant to a warrant for arrest issued by the same justice. He was charged with conspiracy to cheat and defraud the Office of State Revenue. The first plaintiff was subsequently detained in custody for a period before being released on bail. 8 The validity of provisions of the Business Franchise Licences (Tobacco) Act 1987 (NSW) was considered by the High Court in Ha v State of New South Wales & Ors (1996-1997) 189 CLR 465. The High Court determined that licence fees for which the statute made provision were duties of excise within s 90 of the Constitution and were therefore invalid. 9 Following the decision in Ha the conspiracy to defraud charges against the first plaintiff and other alleged conspirators were withdrawn and property seized was returned.

The pleading 10 The statement of claim recites the execution of the search warrants and the execution of the arrest warrant by the second and third defendants. 11 Damages are sought for the following:

(ii) false arrest and imprisonment. 12 Additionally, declaratory relief is sought in the proposed amended pleading. 13 The original pleading asserts that the seizure of the items constituted trespass to goods because the warrants pursuant to which they were seized were "null and void and invalid at the time of issue on 28 October 1996". It is further asserted that "the warrants were declared invalid by Court of Criminal Appeal on 29 March 1999 in 60303/98". It is further asserted that the imprisonment of the first plaintiff was wrongful. 14 There is a fundamental error in the statement of claim first filed: the warrants pursuant to which action was taken were not declared invalid by the Court of Criminal Appeal. What was declared to be invalid in R v Eid (1999) 46 NSWLR 116 was a warrant issued under the Listening Devices Act. No relevant declaration has been made in relation to the warrants identified in the plaintiffs' statement of claim. However, the plaintiffs would doubtless contend that the ratio decidendi in Eid would apply in this case. As I see it, this is to be found in the following passage in the judgment of Adams J (at p 122 [14]): "I am of the view that the effect of the decision of the High Court in Ha declaring the Act invalid meant that it was invalid at the time of the issue of the warrant. It follows that the warrant was sought to investigate activities which were not contrary to the law. The warrant was therefore not authorised by the Act." 15 His Honour was dealing there with a different warrant. However, it would be contended on behalf of the plaintiffs here that the reasoning applies equally to the warrants which were acted upon as against the plaintiffs. 16 This fundamental error was recognised by the first plaintiffs' solicitor, probably by December 2005, and certainly by February 2006. On 10 February 2006 the first defendant's notice of motion was listed before Hall J for the purpose of the allocation of a hearing date. On the application of the first plaintiff's solicitor, Hall J granted leave to the plaintiff to file an amended statement of claim within twenty-one days, that is by 3 March 2006. The hearing of the motion was set down for 5 July 2006. It did not proceed on that date for reasons that appear in my reasons for judgment bearing that date. On 5 July 2006 the solicitor for the first plaintiff for the first time put forward a proposed amended statement of claim and an order was made requiring the filing and service of a notice of motion returnable on 1 August 2006. It is the notice of motion filed pursuant to that order which is the first plaintiff's notice of motion identified earlier in this judgment. 17 In the proposed amended statement of claim, the fundamental error earlier identified was corrected, and other amendments to the pleading were made, including applications for declaratory relief: "20.(b) A declaration that search warrants referred to in paragraph 8 were invalid at the time of their issue. (c) A declaration that the notice under section 26(1)(a) of the New South Wales Crime Commission Act 1985 dated 1 December 1995 (reference code name 'DORRIGO') was invalid at the time of its referral."

The notices of motion 18 The motion for summary dismissal was brought only by the first defendant. However, Mr Temby appeared for all the defendants, (except the third defendant), when opposing the first plaintiff's motion for amendment. 19 I propose to deal firstly with the application of the first defendant for summary dismissal. In doing so, it is necessary to recognise that there are discrete claims which the first plaintiff seeks to advance against the first defendant:

(i) a claim based upon the alleged procuring of the commission of a tort;

These claims, and the merits of the summary dismissal application concerning each of them, require separate consideration. 20 At the outset, however, it is appropriate to record that the burden confronted by a defendant on an application pursuant to Pt 13 r 13.4 is, indeed, a formidable one, as Mr Temby acknowledged. The nature of the burden has been variously stated but there has been no dispute in this case about the governing principles which, of course, are well settled. I need do no more than to refer to the much cited dicta of Barwick CJ in General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130: "There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r. 18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same…" 21 The Chief Justice later said (at p 130): "…in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed."

(i) Procuring the commission of a tort 22 Mr Temby submitted that on an analysis of the pleadings both in the statement of claim and in the proposed amended statement of claim, the claim brought depends upon the plaintiffs proving:

(i) that the second and third defendants executed the search warrants and that such search warrants were issued by the first defendant;

(ii) the arrest of the first plaintiff and his being charged with an offence;

(iii) the later action by the second defendant to have the charge dismissed after the decision in Ha (supra);

(iv) an invalidity of the various warrants, applying the ratio in Eid (supra);

(v) the liability of the first defendant by reason of it having directed and procured the second and third defendants to seize the property and to arrest the first plaintiff. 23 Mr Temby submitted that the propositions (i) and (v) are unfounded. It was submitted that no search warrants were issued by the first defendant. The search warrants that were issued were introduced into evidence as Exhibit A. These warrants were issued on 25 October 1996 by a justice at the Central Local Court. The warrant acted upon to arrest the first plaintiff was also issued by the same justice. The assertion that the first defendant "directed and procured" the police officers to execute the search warrant and to seize property and then to arrest and detain the first plaintiff is not maintainable, Mr Temby submitted. He drew attention to the affidavit in support of the first defendant's notice of motion being the affidavit of Michael Lulan. Mr Lulan was not required for cross examination and his evidence was unchallenged. 24 Mr Horsley submitted that the application for summary dismissal was not maintainable because the first defendant was one of five defendants and evidence incriminating the first defendant might be given by one of the other defendants. Hence, the first defendant is not entitled to summary dismissal before trial, and Mr Horsley cited Wickstead v Browne (1992) 30 NSWLR 1 in support of that proposition. 25 In Wickstead one of fifteen defendants applied for and obtained an order pursuant to Pt 13 r 5 of the Supreme Court Rules for summary dismissal of the proceedings against him. The claim was pleaded by the plaintiff on a number of different bases. The appeal against the order for summary dismissal was allowed by the Court of Appeal as to some of the causes of action pleaded. It is unnecessary for present purposes to set out here on what particular grounds the Court of Appeal considered the plaintiff had an arguable case. What is significant for present purposes, and what is relied upon by Mr Horsley, are the expressions of principle to be found in the joint judgment of Handley JA and Cripps JA at 11-12: "The respondent submitted that the appellants had failed to adduce any evidence or any admissible evidence on a number of issues and that the appeals should therefore be dismissed. Again it seems to us that those submissions misconceived the nature of the court's jurisdiction to dismiss summarily a plaintiff's action. By launching such an application a defendant undertakes the burden of establishing that there is no triable issue. On such an application the defendant bears the onus of proof and where the facts are peculiarly within the defendant's knowledge the plaintiff's action should not be dismissed because of gaps in the case if the necessary evidence might be obtained as a result of discovery or interrogatories. However for another reason, which was first raised by the Court, the respondent as one of a number of defendants cannot be entitled to summary dismissal before trial because of evidentiary deficiencies in the plaintiff's case. If at the close of the plaintiff's case at the trial there was no evidence against this respondent he would not be entitled at that stage to judgment if any of the other defendants intended to go into evidence: see Menzies v Australian Iron & Steel Ltd (1952) 52 SR (NSW) 62; 69 WN (NSW) 68. The effect of this rule is now embodied in Supreme Court Rules Pt 34, r 7(6) and r 8(5). The reason for the rules is clear and was explained in the decision referred to. At the close of the plaintiff's case there may be evidence against some defendants but not against others. The court will not entertain a motion for judgment by some only of the defendants because any gaps in the plaintiff's case against those defendants may be filled when the other defendants go into evidence. In particular one or more of the defendants going into evidence may seek to exculpate themselves by inculpating defendants against whom the plaintiff had no admissible evidence at the close of his case. If the respondent would not be entitled to succeed on a no evidence point at the trial until all the evidence has been called, including that from other defendants, it is clear that there can be no such entitlement on an application by one of several defendants for summary dismissal." 26 The following important considerations emerge from the above passage:

(i) it is for the defendant on the application for summary dismissal to prove there is no triable issue and whether or not the plaintiff in resisting an application for summary dismissal has put on any evidence or not is immaterial;

(ii) one of several defendants cannot generally succeed on an application for summary dismissal because even after the plaintiff's case is closed, evidence may be introduced by one of the other defendants which inculpates the defendant who has made the application for summary judgment. This was recognised in Menzies (supra). 27 Mr Horsley drew attention to decisions in which Wickstead has been applied: see Bhattacharya v State of New South Wales [2002] NSWSC 361 and Alstom Australia Limited v NAP Acoustics Pty Limited [2004] NSWSC 217. 28 In Breheny v Cairncross [2002] NSWCA 69 the Court of Appeal applied Wickstead. In the course of his judgment, Meagher JA said of that decision: "That is an authority supported by ample earlier authority that in common law proceedings one of a number of defendants is not entitled to summary dismissal before trial because of evidentiary deficiencies in the plaintiff's case. It is not until after the main defendant has concluded its case that one can make a sensible judgment as to whether there is or is not a case against other defendants." 29 Breheny was a case in which the Court of Appeal determined that there had been error at first instance in acceding to an application for summary dismissal. The proceedings were in the nature of a medical negligence action and the successful applicants at first instance were two doctors who were sued. The third defendant was a hospital in the interests of which it was possible that evidence would be introduced against one or other or both of the doctors. Breheny was a very clear example for the recognition of the Menzies principle and the application of Wickstead. 30 In his judgment in Breheny, Hodgson JA recognised that there may be cases in which it may be possible to say before hearing that it is appropriate to dismiss a particular defendant. His Honour, after agreeing with the reasons of Meagher JA, went on to say: "However, I would say that there may be cases where, following compliance with directions for particulars and service of evidence, it may be possible to say, before a hearing, that the case of one defendant will certainly not implicate another defendant; and thus there may be circumstances in which one defendant may be dismissed from a case before the actual hearing. However, it is quite plain that that situation has not been arrived at in this case." 31 Mr Horsley next submitted that it is apparent from the evidence that emerges from Mr Lulan's affidavit that the first plaintiff was involved with the police in investigating the plaintiffs. A task force was appointed to assist the first plaintiff and although the police in the task force were under the control and direction of the Commissioner of Police: s 27A(2) of the New South Wales Crime Commission Act 1985, the Management Committee of the first defendant was empowered to give directions and to furnish guidelines both to the first defendant and to the Commissioner of Police for the purpose of coordinating the investigation. The search warrants were obtained under s 11 of the New South Wales Crime Commission Act, and pursuant to s 11(3)(c) the property seized was required to be delivered to the first defendant. Relevant operational orders identified in Mr Lulan's affidavit identified the solicitor for the first defendant, Mr Giorgiutti, as having a role in "command" of the operation. The "mission" in Operation Norfolk was described as including the arrest and interview of suspects and the execution of search warrants. 32 Mr Horsley submitted that the evidence indicated an involvement of the first defendant in the events leading up to the issue of the warrants such as supported the contention that is sought to be pleaded that the first defendant "wrongfully directed and procured" the execution of the search warrants and the further contention that the first defendant "wrongfully directed and procured" the arrest of the first plaintiff. 33 The principles which found expression in Wickstead are well settled. However, in responding to Mr Horsley, Mr Temby submitted that the present case is in an exceptional category. It is incontrovertible that the three search warrants were applied for by the solicitor for the first defendant but that it was a justice who issued them and it was a police officer or police officers who executed the search warrants. Indeed, the plaintiffs have pleaded in both the original statement of claim and the proposed amended statement of claim that it was the second and third defendants, each of whom were police officers, who executed the search warrants. Similarly, with the arrest of the first plaintiff, the authority for that arrest is to be found in Exhibit B, being the warrant issued by the justice, and, again, it is the plaintiff's case, as pleaded, that it was the second and third defendants, police officers, who carried out the arrest. It follows that any possible exposure to liability for the seizure and the arrest fell upon the police officers involved or the fifth defendant. 34 How then can an action be maintained against the first defendant based on the execution of the various warrants? 35 Mr Horsley submitted that the tort of procuring the commission of a tort, although well established in principle, is ill defined in practice. He cited a passage in Atiyah, Vicarious Liability in the Law of Torts concerning cases involving the issue of a writ of fi.fa. The passage cited is preceded by the following paragraph at 298: "In some cases a person may be held liable for the commission of a tort where it would be difficult to say that he has authorised or assisted its commission, and where liability rests on a causal basis. In these cases the defendant may be said to have caused or procured the commission of the tort." 36 The author went on to state, in the passage cited by Mr Horsley in his submissions: "The cases which best illustrate this principle are those in which a person issuing a writ of fi. fa . has been sued for the seizure of the wrong person's goods by the sheriff. A long line of cases holds that the person issuing the writ is liable not merely if he actually directs the sheriff to seize particular goods which turn out to belong to the wrong person, but also if he or his solicitor has given wrong or misleading information to the sheriff which has resulted in the sheriff seizing the wrong goods. In Rowles v Senior this liability was firmly rested on causal principles, Wightman J, saying: 'The only question here is whether the attorney caused the plaintiff's goods to be seized.'" 37 Mr Horsley submitted that the reasoning would apply to a person in the position of the first defendant which made application for the issue of the relevant warrants. 38 However, as Mr Temby submitted in his response, the passage from Atiyah cited is of no direct relevance here because no claim is being pursued against the person who issued the warrants. Mr Temby drew attention to a second passage in Atiyah where the author addressed the situation where a court is moved on the application of a defendant to issue process against a party and the court acts outside its jurisdiction so that the process is void. Referring to that situation, the author wrote (at 300): "In such circumstances the process is issued by the court on its own responsibility, and the person moving the court cannot be treated as procuring the ultimate result. In Cooper v Harding where the defendants had pressed a Bankruptcy Commissioner to issue a warrant for the plaintiff's arrest (and the warrant was invalid) the defendant was held not liable, Lord Denman CJ, saying: 'The ordering of a warrant by the Commissioner was a judicial act done on certain grounds… There was a judicial operation of his mind on the question before him… We often express ourselves, though perhaps we ought not, as granting a rule nisi in deference to the urgency of counsel. A Judge, by using such language, cannot divest himself of responsibility or of protection. And his act is a protection to those who have pressed for it: however strong may be the language they have used to obtain it, they are not liable for it as trespassers.'" 39 Mr Horsley cited Myer Stores Limited v Soo (1991) 2 VR 597 as authority for the proposition that where an informant misinforms police leading to a person's arrest, the informant may be liable for the wrongful imprisonment that follows even if the information was given in good faith. However, in Soo the court was dealing with a case in which police officers acted to detain the plaintiff on false information given by an employee of Myer and kept him in Myer's security office whilst they interviewed him. The detention did not follow the issue of a warrant for the arrest of the plaintiff. 40 In the course of his judgment, McDonald J said (at 629): "For a person to be liable at law for false imprisonment that imprisonment must be the act of that person or the act of his agent or someone for whose act he is liable. The notion of procuring in the sense referred to, although relevant to and applicable to the tort of malicious prosecution, is not a relevant consideration to the tort of false imprisonment." 41 His Honour proceeded to cite this passage from Fleming, Law of Torts, 7th ed. in which false imprisonment and malicious prosecution were distinguished: "Fleming, Law of Torts, 7th ed., distinguishing false imprisonment from malicious prosecution, at p. 29 writes: 'False imprisonment arising from an improper arrest of a suspect bears a resemblance to the tort of malicious prosecution, which consists in maliciously and without reasonable and probable cause instituting a groundless criminal prosecution. The distinction between them lies in whether the restraint on the plaintiffs liberty is directly imposed by the defendant himself, acting either personally or by his agent, or whether there is interposed the exercise of an independent discretion. A person who brings about an arrest by merely setting in motion the formal process of law, or by making a complaint before a justice of the peace or applying for a warrant, is not liable for false imprisonment, because courts of justice are not agents of the prosecutor or their acts are not imputable to him. He is liable, if at all, only for the misuse of legal process by procuring an arrest for an improper purpose for which the appropriate remedy is an action for malicious prosecution.'" 42 I do not consider that in this case it would be open to a court to conclude that the first defendant was liable to the first plaintiff by procuring the commission of a tort following the issue of the warrants by the justice. 43 I am persuaded by Mr Temby's submissions that this case is an exception to Wickstead, which is enlivened where one of a number of defendants may give evidence that will incriminate the applicant for summary judgment. In such a case, summary judgment will be refused. However, this is not such a case. There exists no possibility that the second, third, fourth or fifth defendants will incriminate the first defendant in relation to the execution of the warrants. 44 No doubt the solicitor for the first defendant applied for the search warrants in the expectation that the police involved in "Operation Norfolk" would execute these warrants. It may be assumed that the first defendant anticipated and approved of the arrest of the first plaintiff. It may be that evidence to that effect could be elicited at a hearing. However, each of the warrants was issued by a justice and each of the warrants was executed by a police officer who, according to the statute under which the operation was to be conducted, was to act "under the control and direction of the Commissioner of Police": s 27A(2) of the New South Wales Crime Commission Act. Not only is Mr Lulan's unchallenged evidence that the warrants were executed by police officers, but the plaintiffs have pleaded in both the statement of claim and the proposed amended pleading that the warrants were executed by the second and third defendants. Moreover, it is to be noted that in the defence filed by the second and fifth defendants, it is pleaded that the stock and records seized were seized with lawful authority pursuant to the terms of the search warrants which were issued and that the second defendant arrested the first plaintiff pursuant to an arrest warrant and with lawful authority. The second and fifth defendants have pleaded the seizure of property and the arrest and detention of the first plaintiff was lawful, and they deny that the first defendant wrongfully directed or procured the second and third defendants to obtain the search warrants or to arrest and detain the first plaintiff. In his pleading, the fourth defendant has stated he has no knowledge of the issues central to the plaintiffs' claim in tort. 45 Section 11 of the New South Wales Crime Commission Act required the justice who issued the search warrants to be satisfied that there were "reasonable grounds" for the issue. On the face of the warrants which were issued, the justice has expressed satisfaction that there were reasonable grounds for doing so, doubtless relying upon the evidence presented by Mr Giorgiutti. 46 The informant upon whose application the justice issued the arrest warrant is identified on the face of the warrant as having been a police officer, Det. Sgt Nolan. The warrant was granted at a time prior to the repeal of the Justices Act, and since it was a first instance warrant the justice was required to consider the information laid in writing, to be substantiated on oath: ss 22, 23 of the Justices Act. Exhibit B discloses that it was the police officer whose oath substantiated the information in this case. 47 It must be borne in mind that the plaintiffs' claim that the search warrants and the arrest warrant were invalid is based upon the decision in Ha, and the invalidity of the legislation determined in that case. If a person was to present a knowingly false application to a justice asserting reasonable grounds for the issue of a warrant, then action may, of course, lie against such a person: see Hope v Evered (1886-87) 17 QBD 338 and in particular the judgment of Lord Coleridge CJ at 340. However, this is not such a case, and it is not contended that it is. Further, even if it had been a knowingly false application, the cause of action would not have been the cause which the first plaintiff here pleads. The remedy would have been an action for malicious prosecution: see Soo (supra). 48 Mr Horsley's submission in essence was that the first defendant was involved in the operation and it was arguable that if the matter went to trial there may be room for a finding that its conduct determined the execution of the warrant. However, the authority for what was done by the second and third defendants was to be found in the warrants issued by the justice, and it is inescapable that this authority afforded the asserted justification for the seizure of the goods and the arrest of the first plaintiff. 49 The justice who issued the warrants was not the first defendant's agent and for the above reasons, I have come to the conclusion that the first plaintiff has no arguable case against the first defendant, whether based upon an assertion of vicarious liability or otherwise, for what the police officers did by way of execution of the warrants.

(ii) The claim in detinue 50 Mr Temby submitted that the plaintiff has not pleaded that the first defendant ever took possession of the items seized in the execution of the search warrants. Indeed, it is pleaded that: "16. The second and third defendants seized the items referred to in paragraph 8 and thereupon gave possession of the items to the custody and/or control of the fourth and fifth defendants…" 51 However, in paras 18 and 19, it is pleaded that there was demand made for the return of what was seized, and in para 19 it was pleaded that: "The first, second, third, fourth and fifth defendants have refused, failed and/or neglected to comply with the demand." 52 Mr Temby has referred to the affidavit sworn by Michael Lulan on 8 March 2004, which is generally relied upon by the first defendant in seeking the relief claimed in the notice of motion. Mr Temby has submitted that the Court is in a position to find or infer from the content of the affidavit the following matters: "(a) Items were seized pursuant to the warrants including records, tobacco products and cash; (b) the records were returned progressively on 13 January 1997, 29 April 1997, 22 August 1997, and 1 October 1997. There was never a claim for return of records by the second plaintiff. There was only ever one claim by the first plaintiff for the return of documents, namely on 6 August 1997 and thereafter any demands related only to tobacco products and cash; (c) the only party entitled to demand the return of the tobacco products was the second plaintiff; (d) the tobacco products and cash were returned (and therefore held) by the OSR (a part of the fifth defendant) and were not held or returned by the first defendant." 53 Mr Horsley submitted there is an arguable case against the first defendant in detinue notwithstanding the present omission in the pleading to assert possession in the first defendant. As to that omission, Mr Horsley proposes further amendment of the plaintiffs' pleading to rectify it. 54 Mr Horsley points to a number of matters in opposing summary dismissal of the claim in detinue. 55 Firstly, the search warrants upon which the second defendant and the third defendant acted, by the terms of their expression, required of the police officers that they carry out searches of the premises specified and that they "seize such things found in the premises and…deliver the things so seized to the Commission" (ie, to the first defendant). 56 Secondly, the various warrants were expressed consistently with the language of s 11 of the New South Wales Crime Commission Act 1985, and in particular with s 11(3) which provides: "(3) An authorised officer to whom an application is made under subsection (2) may, if satisfied that there are reasonable grounds for doing so, issue a search warrant authorising any member of the Police Force, or any other person, named in the warrant: (a) to enter the premises, (b) to search the premises for things of the relevant kind, and (c) to seize any things of the relevant kind found in or on the premises and deliver things so seized to the Commission ." (Emphasis added) 57 Thirdly, the fourth defendant in his defence denied that any item seized by the second and third defendants were placed in his possession and the second and fifth defendants have pleaded that any seized items were given to the first and fifth defendants. 58 Amongst the material exhibited to Mr Lulan's affidavit (Exhibit "ML-9") is correspondence that took place after the warrants had been executed. David's Limited wrote to the second defendant on 30 October 1996 claiming return of its stock which had been the subject of the seizure. That prompted the second defendant, on the letterhead of the first defendant, to write to the Office of State Revenue inviting that office to respond to the demand. However, on 10 December 1996 it was the second defendant, again on the first defendant's letterhead, who responded to David's Limited, stating: "1. I confirm that on 28 October 1996 a quantity of tobacco products were seized from a retail shop operated by 'Leisure Coast Tobacconist' at Shop 1 Dapto Mall, Dapto. This seizure was carried out in accordance with the Crime Commission Act 1985. 2. At this time it is not intended to return the products to 'Leisure Coast Tobacconist'. The question of property in the seized product and payment for it are matters which you should take up with the proprietors of 'Leisure Coast Tobacconist'. 3. Commission representatives have already conferred with your company's Mr Peter Rinehart (Director of Finance) and Mr Rudi Selles (Principal Legal Officer) in connection with these matters." 59 After the High Court decision in Ha, the first defendant wrote to the Office of the Director of Public Prosecutions on 7 August 1997 to inquire as to the Director's intention concerning pending prosecutions. The letter from the first defendant concluded: "The Commission has received several requests for return of exhibits including documents, cash and tobacco product and wish to respond to these requests at the earliest time." 60 One inference that may be drawn from this letter is that the first defendant was in possession of the items referred to in the letter. 61 On the day before that letter was written, there was a letter from Kell Heard McEwan addressed to the first defendant seeking "the return of all property seized from our client on or after his arrest on 28 October 1996 including all tobacco products and money." It was doubtless that letter that prompted the first defendant to write to the Office of the Director of Public Prosecutions on the following day. 62 On 16 September 1997 the present solicitors for the first plaintiff wrote to the first defendant following the dismissal of charges against the plaintiff that day seeking the return of what had been seized from the first plaintiff and the second plaintiff. Mr Lulan's affidavit evidences that the things other than tobacco products which had been seized were returned to Kell Heard McEwan, solicitors, progressively, on 13 January 1997, 29 April 1997, 22 August 1997 and 1 October 1997. Further, the affidavit evidences that on 18 September 1997 the tobacco products that were seized were returned to the first respondent and that he signed receipts acknowledging the return (see paras 31 and 32 of the affidavit of Michael Lulan). 63 However, it is plain from further correspondence that there is a dispute as to whether all that was seized was in fact returned. There is a statement from Chris Betsis (part of ML-9) which evidences the return of tobacco products to the first plaintiff, who it is claimed, signed receipts for them. However, the later correspondence in ML-9 between the first defendant and the solicitors for the first plaintiff reveals that the first plaintiff did not accept that all the tobacco products that had been seized were returned. There was a further letter of demand on 22 October 1997 and yet a further letter of demand on 13 November 1997. 64 I am not persuaded that the first plaintiff has no arguable case against the first defendant in detinue, and, indeed, since the second and fifth defendants have pleaded that what was seized was given to the first and fifth defendants, the expressions of principle to be found in Wickstead v Browne, cited at [24] above, have application. Since the second defendant has pleaded that what was seized was given to the first defendant, it cannot be assumed for the purpose of the present application that the second defendant will not give evidence to that effect at trial. Bearing in mind the various demands for return of what was seized and bearing in mind the dispute as to whether or not all that was seized has been returned, it seems to me that there is an arguable case against the first defendant in detinue. The application for summary judgment on that claim therefore fails.

The first plaintiff's notice of motion to amend the statement of claim 65 Having concluded that the first defendant is entitled to summary judgment other than on the claim in detinue, the first plaintiff's application to amend the statement of claim as against the first defendant is refused, except to the limited extent to which I will now refer. Until the Court directed attention to the claim in detinue on 20 November last, no point had been taken as to the omission of the assertion of possession in the statement of claim. Since I consider there is an arguable case in detinue, it seems to me that it is just to allow an amendment to plead possession as against the first defendant. 66 The plaintiff, of course, seeks leave to amend as against the remaining defendants by whom no application for summary judgment has been made. 67 Mr Temby submitted that the application to amend the pleading as against the second, fourth and fifth defendants should be refused. 68 Firstly, Mr Temby submitted that the proposed further amended statement of claim contains errors: in para 9(a) the search warrants are described as "issued by the first defendant"; in paras 17 and 18 there are references to "the seizure of items referred to paragraph 8"; and in para 20(b) there is a reference to "search warrants referred to in paragraph 8". Paragraph 8 makes no reference to these matters. 69 In response, Mr Horsley submitted that the reference to para 8 in the further amended statement of claim was plainly intended to be a reference to para 9. When para 9 is read in conjunction with paras 17, 18 and 20(b), the link between these paragraphs becomes apparent. I accept that this is so. Plainly, what the pleader intended was to refer to para 9. 70 It was next submitted by Mr Temby that the justice who issued the subject warrants was a necessary party, having regard to the challenge to the process, and even in the proposed amended statement of claim, the joinder of the justice is not contemplated. Mr Horsley submitted that it was not mandatory that the justice should be joined and there was no requirement that the plaintiff challenge the search warrants in administrative proceedings before bringing the present proceedings. Ousley v The Queen (1997-1998) 192 CLR 69 and R v Eid (supra) were cited in support of this submission. It would, of course, be for the first plaintiff to prove the invalidity of the warrants, and I consider that it is open to the plaintiff to seek an appropriate declaration such as is sought in para 20(b) of the proposed amended statement of claim. I do not consider that a declaration in the terms sought in para 20(c) would achieve any useful purpose, and hence I would not allow an amendment to the pleading to introduce an application for the relief sought in that subparagraph. 71 Mr Temby submitted that due regard had to be paid to the issue of delay in seeking to amend. That submission would have very considerable force had there been an arguable case to advance against the first defendant other than in detinue and had it become necessary to consider whether leave to amend in the respects proposed against the other defendants should have been granted as against the first defendant. 72 The delay in pursuing the application to amend following the orders of Hall J was significant and not satisfactorily explained. Put shortly, it appears to be the position that Mr Bilinsky informed the first plaintiff of the terms of the order made by Hall J but the first plaintiff did not put his solicitor in funds, and Mr Bilinsky did not find himself in a position to brief counsel to amend the pleading. The first plaintiff communicated with Mr Bilinsky either on the morning that the matter was fixed for hearing or on the day before, urging Mr Bilinsky to continue to act. Mr Bilinsky was persuaded to do so and he was the one who then prepared the proposed amended pleadings. The first plaintiff made no affidavit and offered to the Court no explanation concerning what, if any, steps he had taken to comply with the order made by Hall J or to seek to be excused for his non-compliance. 73 There are important points of distinction between the position of the first defendant and the positions of the remaining defendants when it comes to considering the question of delay:

(i) Mr Temby has not sought to argue that the claim against any one of the second, fourth and fifth defendants is manifestly groundless. No application has been pursued by any one of these defendants pursuant to Pt 13, r 13.4 of the Uniform Civil Procedure Rules;

(ii) Moreover, none of these defendants took any action such as prompted the order made by Hall J on 10 February 2006. That order was made because there was before his Honour the application of the first defendant for summary judgment, for which a hearing date was to be appointed. Mr Temby's appearance for parties other than the first defendant was in consequence of an order made by the court on 5 July 2006. 74 I consider justice requires that I give leave to the first plaintiff to amend the statement of claim as against the second, fourth and fifth defendants. The pleading to be filed should address the erroneous references to para 8 considered earlier. The declaratory relief to be sought ought not to include what is contained in para 20(c) of the proposed pleading which the Court has been called upon to consider on the present application.

Application for security for costs 75 The first defendant in its notice of motion made application for security for costs in the event that the summary dismissal application was unsuccessful. The other defendants have not joined in this application. 76 These proceedings are being pursued by the first plaintiff following on the deed of assignment referred to earlier ([3]). Part 42 r 21(1) is in these terms: "(1) If, in any proceedings, it appears to the court on the application of a defendant: (a) that a plaintiff is ordinarily resident outside New South Wales, or (b) that the address of a plaintiff is not stated or is mis-stated in his or her originating process, and there is reason to believe that the failure to state an address or the mis-statement of the address was made with intention to deceive, or (c) that, after the commencement of the proceedings, a plaintiff has changed his or her address, and there is reason to believe that the change was made by the plaintiff with a view to avoiding the consequences of the proceedings, or (d) that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, or (e) that a plaintiff is suing, not for his or her own benefit, but for the benefit of some other person and there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so, the court may order the plaintiff to give such security as the court thinks fit, in such manner as the court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given." 77 I am not satisfied here that Pt 42 r 21(1)(a), (b), (c), (d) or (e) applies. Mr Temby has submitted there is reason to believe that the first plaintiff is suing at least in part for the benefit of the second plaintiff, but I do not conclude that the first plaintiff's pursuit of this action is motivated by other than self interest. 78 It is conceded that the first plaintiff is not in funds. This of itself does not call for an order for security. Indeed, to make such an order in the terms sought, involving a stay of proceedings until security for costs is given, would bring the first plaintiff's claim against the first defendant to a halt. 79 Mr Temby very properly acknowledged that the strength and bona fides of the plaintiff's claim are relevant considerations on an application for security for costs. 80 It is not possible for me to determine the plaintiff's prospects of success against the first defendant but the claim is, to my mind, reasonably arguable, and I would not infer that it is not being brought in good faith. 81 In all the circumstances, I am not satisfied that security for costs should be ordered in favour of the first defendant.

Costs 82 On 5 July 2006 I made an order that the plaintiffs pay the first defendant's costs on the notice of motion for summary judgment incurred to that date on an indemnity basis. The costs on that basis are to be limited to costs on the notice of motion incurred up to 5 July 2006. The first defendant has succeeded in part on its application for summary dismissal but there is a case for trial as to the claim in detinue. As to that claim, the plaintiff's pleading requires the amendments identified earlier. 83 In the circumstances, I consider it appropriate that the costs on the first defendant's motion incurred since 5 July 2006 should be costs in the cause. 84 As to the costs of the defendants other than the first defendant referable to the plaintiffs' application to amend, the need for the amendment was brought about by a fundamental error in the statement of claim first filed. It seems to me in the circumstances it was not unreasonable for the first plaintiff's application to be opposed, and I consider that the appropriate order as to the costs of these defendants is that they should be defendants' costs in the cause.

Formal orders 85 1. Order that the proceedings as against the first defendant be dismissed other than on the claim in detinue.

In relation to the claim in detinue against the first defendant, leave granted to the first plaintiff to amend the statement of claim so as to assert possession in the first defendant.

Leave granted to the first plaintiff to file and serve upon the second, fourth and fifth defendants an amended statement of claim based upon the proposed pleading annexed to the first plaintiff's notice of motion, but reflecting matters addressed in this judgment.

The amended statement of claim is to be filed and served within twenty-eight days from today.

Order that the first plaintiff pay the first defendant's costs incurred on the first defendant's notice of motion up to 5 July 2006 on an indemnity basis; costs incurred on the first defendant's notice of motion after 5 July 2006 are to be costs in the cause.

Order that the costs of the first plaintiff's notice of motion to amend the statement of claim are to be defendants' costs in the cause. **********

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