Caratti v Commissioner of the Australian Federal Police - [2017] FCAFC 177 - FCAFC 2017 case summary — Zoe

CTHFCAFC

Caratti v Commissioner of the Australian Federal Police

[2017] FCAFC 177

Federal Court of Australia (Full Court)|2017-11-10|Before: Bromwich JJ

View original source

At a glance

Source facts

Court

Federal Court of Australia (Full Court)

Decision date

2017-11-10

Before

Bromwich JJ

Source

Original judgment source is linked above.

Judgment (51 paragraphs)

[1]

Introduction 1 This is an appeal from orders of a judge of this Court by which a challenge to the validity of search warrants issued under s 3E of the Crimes Act 1914 (Cth) and their execution mostly failed. The challenge was brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth). The parts by which limited success was achieved by the appellant are not the subject of any cross-appeal. 2 The introduction to the primary judge's reasons succinctly encapsulated the nature and difficulty of the case confronting his Honour as follows: 1 This matter concerns a scenario that is all too frequently encountered when search warrants are employed to facilitate the investigation of complex commercial or tax-related criminal offences. That scenario involves three potentially problematic features. The first feature is the issue and utilisation of so called "three condition" search warrants which define the object of the search in a broad, non-specific fashion. The warrants are often lengthy, overly complex and, regrettably, sometimes poorly drafted. The second feature is that the execution of the warrants is frequently, and unavoidably, carried out by teams of officers, many of whom have had little or no past involvement in the relevant investigation. The officers accordingly have little or no background knowledge or experience to assist them in the often complex and difficult task of executing the warrants. That frequently results in the execution of the warrants in a manner which is apt to create the perception, at least, that the officers do not really know what they should be searching for or seizing, and are instead simply seizing anything that looks even remotely like it might be relevant to the investigation. The third feature is that the execution of the warrants these days almost invariably involves the search and seizure of computer equipment and electronic data storage devices. [Those] circumstances [require] the executing officers, or forensic officers who are assisting them, to navigate the labyrinthine statutory provisions that deal with the search and seizure of such items. 2 The confluence of these three features often results in a judicial review challenge, by the occupier of the premises that were the subject of the warrants, or persons otherwise affected by the execution of the warrants (usually the target of the criminal investigation), to both the issue and execution of the warrants in question. Orders are generally sought for the return of the items said to have been unlawfully seized. Frequently that comprises a vast quantity of material. 3 That is what has occurred in this matter.

[2]

Overview 3 On 27 January 2015, search warrants in respect of six premises and two motor vehicles were obtained by officers of the Australian Federal Police (AFP) in aid of a joint tax fraud investigation being conducted with officers of the Australian Taxation Office (ATO) in Western Australia. The search warrants were issued by a magistrate in Perth, acting administratively as an "issuing officer", upon the basis of an affidavit sworn by one of the AFP officers on 23 January 2015. Execution of those search warrants commenced on 28 January 2015. A significant quantity of material was seized over the course of three days. A further search warrant was later issued on 4 March 2017, based upon an affidavit which annexed the prior affidavit and provided additional information. That further search warrant was executed on 5 March 2017. 4 On 4 February 2015, the principal natural person who was the target of the investigation, Allen Caratti, commenced judicial review proceedings in this Court against the Commissioner of the AFP, challenging the lawfulness of the issue of the search warrants, their validity on their face, and their execution. The Court was informed by counsel for the Commissioner that the seized material has not been examined pursuant to an undertaking given to Mr Caratti. Accordingly, this aspect of the investigation has stalled pending the outcome of these proceedings, giving rise to a delay of well over two and a half years. 5 Following an extended trial over six days before the primary judge, involving numerous witnesses and detailed submissions from the parties, the primary judge reserved and subsequently delivered a lengthy and detailed judgment. Although no adverse findings were made by his Honour as to the honesty or moral propriety of the officers involved, substantial criticisms were levelled against the poor drafting of the search warrants, going well beyond the introductory comments by his Honour reproduced above. 6 Despite the criticisms of the primary judge, Mr Caratti's application mostly failed. Only limited findings were made as to the unlawfulness of seizure of certain items of electronic equipment. This reflected a failure by the AFP to comply with the legislative scheme, which mandates a particular process for copying and examining data on electronic equipment, and special conditions for seizure of the equipment itself where copying is impracticable. Although orders were made for the return of the relevant electronic devices, his Honour also made ancillary orders permitting the data on the hardware to be copied before that equipment was returned, and for the copied data to be examined and potentially used by the AFP, in the manner contemplated by the legislative scheme, for the purposes of the investigation. The declarations and orders made by his Honour are reproduced below. 7 The conclusions reached by the primary judge leading to the dismissal of most of the judicial review challenge were conveniently summarised at the end of his Honour's comprehensive reasons as follows: SUMMARY OF FINDINGS AND CONCLUSIONS 481 Following is a brief summary of the findings and conclusions relevant to Mr Caratti's challenge to the issue and execution of the search warrants. 482 The search warrants were validly issued. The information before the issuing officer was sufficient to support a finding that there were reasonable grounds for suspecting that there was, at the relevant premises, things with respect to which there were reasonable grounds for suspecting that they would afford evidence as to the commission of the offences set out in the third condition of the warrants. Mr Caratti has not proved otherwise. The search permitted by the warrants did not exceed what was justified by the material before the issuing officer. These findings are subject to the finding in relation to the storage medium paragraph. 483 The search warrants were valid on their face. The warrants sufficiently specified the perimeters within which materials were able to be searched for and seized. They were capable of sufficiently informing the occupiers of the relevant premises of the authorised area of search and seizure. While the descriptions of the offences to which the warrants related, in the third condition of the warrants, were poorly drafted and, to a certain extent, lacked clarity and particularity, they were nonetheless sufficient for the purposes of a search warrant under s 3E of the Crimes Act. These findings are also subject to the finding in relation to the storage medium paragraph. 484 The storage medium paragraph in the warrants (the three lines after the third condition) was invalid. It purported to authorise the seizure of electronic devices (as opposed to the data stored on them) that did not comprise evidential material and in circumstances where the condition in s 3L(3)(a) was not satisfied. The storage medium paragraph is, however, able to be severed from the warrants. That paragraph did not form part of an inseparable context and, if the paragraph was severed, the warrants would not operate differently or produce different results from that which was intended. To the extent that any items may have been seized in reliance on this paragraph, the seizure of those items was appropriately dealt with in the context of Mr Caratti's specific challenge to the seizure of those items. 485 The warrants as a whole were lawfully executed in accordance with their terms. They were not unreasonably or excessively executed by the executing officers or constables assisting. These findings are subject to the findings concerning the seizure of individual items comprising computers or electronic storage devices or equipment. 486 A number of items of electronic equipment were unlawfully seized. Those items were the Compaq and Toshiba laptops seized at the Cornish Turn premises; the external hard drives seized by Mr Khan at the Wickham Street premises; the Seagate and Imation storage devices seized by Mr Ilett at the Wickham Street premises; and the Strontium and TDK storage devices seized at the Duncraig Road premises. Those items (as opposed to the data stored on them) did not constitute evidential material as specified in the warrants. There were no reasonable grounds for suspecting that the items (as opposed to the data stored on them) would afford evidence of the offences specified in the warrants. No seizing officer formed the view that there were such reasonable grounds. Seizure was therefore not authorised by s 3F(1)(c) of the Act. Nor were the items able to be seized under s 3L(2)(a) because the condition or circumstances in s 3L(3)(a) was not satisfied. There was nothing to suggest that it was not practicable to copy the data on these devices. No seizing officer formed the view that it was impracticable to copy the data. 487 The Court should not, in the exercise of its discretion, order the return of the items of electronic equipment that have been found to have been unlawfully seized until the Commissioner, through his officers, is given an opportunity to further inspect and, if satisfied in terms of s 3L(1A), copy the data pursuant to s 3L(1A)(a) of the Act. The items should then be returned. The further inspection and copying of the data should occur within a reasonable time and (if Mr Caratti so requests) in the presence of Mr Caratti or his representatives. The parties should have leave to have the matter relisted if any dispute arises in relation to the further inspection of the equipment and the copying of the data. 8 The final declarations and orders made by the primary judge on 23 November 2016 were as follows (omitting definitions and explanatory notes): THE COURT DECLARES THAT: 1. The words which appear immediately after the third condition of the warrants which read "Together with any storage medium or storage device which contains any of the above things and any manual, instruction, password or other thing which is needed to gain access to or interpret or decode any of the above things" (the storage medium paragraph) are invalid. 2. The storage medium paragraph is severable from the balance of the warrants. 3. The electronic devices listed in Annexure A to these orders (the electronic devices) were not lawfully seized pursuant to either s 3F or s 3L of the Crimes Act 1914 (Cth) (the Act) on the execution of the warrants. THE COURT ORDERS THAT: 1. The first respondent (or an officer or officers authorised to do so on his behalf) may inspect the copies made, subsequent to the execution of the warrants, of the data contained on the respective electronic devices identified in paragraphs 1-4 of Annexure A to these orders and, if he or she suspects on reasonable grounds that any data within any of the respective copies satisfies the three conditions of the warrants, retain the copied data from the respective electronic device. 2. The further inspection of the data pursuant to order 1 above should (unless otherwise ordered) occur within 28 days of the date of these orders (unless another period is agreed between the parties) and in the presence of the applicant or his or her authorised representative (if the applicant so requests). For this purpose, the first respondent (or an officer authorised to do so on his behalf) shall liaise with the applicant to determine a mutually convenient time (or times) within the period of 28 days from the date of these orders. 3. Upon completion of the steps set out in orders 1 - 2 above: 3.1 the electronic devices referred to in paragraphs 1-3 of Annexure A be returned to the occupier of the premises from which the electronic devices were seized; and 3.2 unless the first respondent is entitled to retain the copied data as set out in order 1 above, the copied data shall be removed from any device in the control of the Australian Federal Police and destroyed as soon as practicable. 4. If the first respondent is satisfied that the data retained as provided in order 1 above is not required (or is no longer required) for a purpose mentioned in section 3ZQU of the Act or for other judicial or administrative review proceedings, the first respondent must arrange for: 4.1 the removal of the data from any device in the control of the Australian Federal Police; and 4.2 the destruction of any other reproduction of the data in the control of the Australian Federal Police. 5. Leave is granted to the parties to have the matter relisted on 24 hours' notice if any dispute arises in relation to the matters provided for in orders 1-4 above. 6. The applicant's Second Further Amended Originating Application and the claims in the Applicant's Further Amended Points of Claim are otherwise dismissed. 7. The applicant pay 75% of the first respondent's costs as agreed or assessed on an ordinary basis. 8. The applicant pay the third respondent's costs as agreed or assessed on an ordinary basis. 9 On 2 December 2016, Mr Caratti appealed from the orders made by the primary judge, including in respect of his Honour's declaration as to the severability of a portion of the warrant, and as to the orders permitting copying and inspection of the data on the electronic devices found to be unlawfully seized. He sought, as he did in the Court below, to have the search warrants set aside and all of the seized material returned. Even if the outcome of the appeal were to result in findings only of partial invalidity, he contended that this should not result in severance and that all of the seized material should be returned. As a final alternative, he contended that the use of any material permitted to be retained should be restricted. The Commissioner defended the primary judge's reasons and conclusions without qualification. In doing so, the criticisms and adverse conclusions as to the search process were not challenged. 10 In substance, Mr Caratti revisited the case as was ultimately run in the Court below, with a number of key initial grounds having been abandoned before the primary judge. He asserted error in relation to the key findings of the primary judge on the grounds that were litigated to conclusion. In those circumstances, it is important to keep in mind that while this appeal was a rehearing, the finding of error on the part of his Honour was indispensable. It is not enough that this Full Court would have reached a different conclusion on any topic that was fairly open to his Honour: see the restatement of the rehearing principles in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [44]-[56], especially at [50]. 11 Mr Caratti advanced five grounds of appeal, the full text of which is reproduced as each is considered below, asserting that the primary judge erred in: (1) concluding that the "perimeters" of the search areas specified in the warrants were sufficiently precise, an argument that turned on the description given to the suspected offences in the search warrants; (2) finding that the search perimeters permitted by the warrants did not exceed what was reasonably justified by the material before the issuing officer, again turning on the offence description as compared to the information in the affidavit relied upon to obtain the search warrants; (3) considering that an offence in the third condition of the warrants might be severable; (4) finding that the warrants were lawfully executed; and (5) permitting the further copying and examination of data copied from electronic equipment that was found to have been unlawfully seized. 12 For the reasons that follow, each ground of appeal should fail and, accordingly, the appeal should be dismissed. The conclusions by which the primary judge arrived at the declarations and orders reproduced at [8] above, while being far from inevitable, were fairly available to his Honour. The necessary error has not been established in any respect. That conclusion is reached having regard to: (1) the terms of the search warrants and supporting affidavit construed by his Honour in the confined manner required for the purposes of judicial review of administrative action; (2) the evidence before his Honour, including significant cross-examination and involving credit assessments, having regard also to the onus on the appellant; (3) the terms of the legislation, properly interpreted; and (4) the substantial body of authority guiding the determination of the various challenges made. 13 The ultimate success of the Commissioner in this litigation is cause for sober reflection, rather than complacent satisfaction. The primary judge's criticisms as to the drafting of the search warrants have been endorsed and enlarged upon at the conclusion of these reasons, with further views expressed as to the steps that might be taken in the future to avoid the delays, problems and issues in this case that have been caused or compounded by the deficiencies in the process.

[3]

Legislative scheme - Part 1AA of the Crimes Act 1914 (Cth) 14 The relevant power to issue a search warrant under the Crimes Act arises from s 3E, although it is to be read in light of several collateral provisions. In summary terms, under s 3E(1) it is open to an issuing officer to issue a search warrant if the information provided on oath or affirmation is capable of satisfying him or her of the substance of the two limbs required, namely, that: (1) there are reasonable grounds for suspecting that there is, or there will be within the next 72 hours, at the relevant premises; (2) anything with respect to which there are reasonable grounds for suspecting that it will afford evidence as to the commission of the offence or offences to which the warrant relates. 15 The details in the legislation leading to the above summary overview require more detailed exposition. The provisions reproduced below provide a comprehensive regime for the application for a search warrant, its issue, and the powers it bestows, including additional powers granted by statute collateral to a valid warrant's express scope. 16 Sections 3E(1), (5) and (6) of the Crimes Act are in the following terms: 3E When search warrants can be issued (1) An issuing officer may issue a warrant to search premises if the officer is satisfied, by information on oath or affirmation, 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. … (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 or 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 time at which the warrant expires (see subsection (5A)); 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 in 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; or (iii) evidential material (within the meaning of the Proceeds of Crime Act 2002) or tainted property (within the meaning of that Act); if the executing officer or a constable assisting believes on reasonable grounds that seizure of the thing is necessary to prevents 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. … 17 The expression "evidential material" used in various parts of s 3E is defined in s 3C as meaning "a thing relevant to an indictable offence or a thing relevant to a summary offence, including such a thing in electronic form". The expression "thing relevant to an indictable offence" is further defined in s 3 as follows: thing relevant to a summary offence means: (a) either of the following: (i) anything with respect to which a summary offence against any law of the Commonwealth or of a Territory has been committed or is suspected, on reasonable grounds, to have been committed; (ii) anything with respect to which a State offence that has a federal aspect, and that is a summary or simple offence against the law of that State, has been committed or is suspected, on reasonable grounds, to have been committed; or (b) anything as to which there are reasonable grounds for suspecting that it will afford evidence as to the commission of any such offence; or (c) anything as to which there are reasonable grounds for suspecting that it is intended to be used for the purpose of committing any such offence. 18 The scope of the authorisation conferred by a search warrant issued under s 3E is relevantly set out in s 3F of the Crimes Act as follows: 3F The things that are authorised by a search warrant (1) A warrant that is in force in relation to premises authorises the executing officer or a constable assisting: (a) to enter the warrant premises and, if the premises are a conveyance, to enter the conveyance, wherever it is; and (b) to search for and record fingerprints found at the premises and to take samples of things found at the premises for forensic purposes; and (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; or (iii) evidential material (within the meaning of the Proceeds of Crime Act 2002) or tainted property (within the meaning of that Act); 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) if the warrant so allows - to conduct an ordinary search or a frisk search of a person at or near the premises 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. … 19 The phrase "seizable items" is used in numerous places in the provisions quoted above, but has no application to this case as it is defined in s 3C to be "anything that would present a danger to a person of that could be used to assist a person to escape from lawful custody". 20 Section 3L of the Crimes Act provides for the use of electronic equipment that is at premises being searched, or has been brought onto premises by those executing a search warrant or assisting in its execution. It also provides restrictive criteria by which such equipment found at premises may be seized. Importantly, and of particular relevance to this appeal, s 3L(3) provides that such equipment may only be seized if it is not practicable to copy the data on the equipment in accordance with s 3L(1A) or if possession of the equipment could constitute an offence. Section 3L(1A) is relevant to the decision that was taken to seize computer equipment from certain of the premises, conduct that the primary judge found to be unlawful, a conclusion that is not challenged by the Commissioner. Section 3L(1A) is also relevant to the formulation of the remedy for this situation arrived at by his Honour. It provides as follows: If the executing officer or constable assisting suspects on reasonable grounds that any data accessed by operating the electronic equipment constitutes evidential material, he or she may: (a) copy any or all of the data accessed by operating the electronic equipment to a disk, tape or other associated device brought to the premises; or (b) if the occupier of the premises agrees in writing - copy any or all of the data accessed by operating the electronic equipment to a disk, tape or other associated device at the premises; and take the device from the premises.

[4]

General principles 21 Statutes providing for the issue and execution of search warrants generally reflect a balance struck by legislatures between the need to protect the individual from arbitrary invasions of privacy and property, and the public interest in an effective criminal justice system: George v Rocket (1990) 170 CLR 104 at 110.3. The proper issue and execution of search warrants plays a vitally important role in an effective criminal justice system by facilitating the gathering of evidence that can, in appropriate cases, lead to the apprehension, prosecution, conviction and punishment of those who have broken the criminal law. 22 By authorising an overriding of such private interests in certain circumstances, search warrant legislation gives primacy to the public interest in the administration of criminal justice while also recognising the need for appropriate but limited protection of individual rights through the imposition of statutory conditions for the issue of a valid warrant. Strict compliance with those conditions is therefore required in order to give effect to that statutory purpose: George v Rocket at 110-111. However, in construing the statutory requirements for the issue of a search warrant, the Court should be careful to give effect to the legislation by its terms, and not approach its task armed with a prima facie hostility to the invasion of privacy that is necessarily involved in the exercise of investigative powers: Hart v Commissioner of Australian Federal Police [2002] FCAFC 392; 124 FCR 384 at [68]. Construction of statutes that authorise the search of premises and the seizure of things from them must begin with "the ordinary meaning of the words considered according to their context and the legislative purpose": Hart at [64]. 23 Importantly, the search and seizure provisions of the Crimes Act are not punitive and are therefore not to be treated as penal provisions for the purposes of statutory construction: Hart at [67]. Rather, it is appropriate to see those provisions as subject to the general principle that, in the absence of unmistakeable and unambiguous language, it is to be presumed that the legislature has not intended to interfere with basic rights, freedoms and immunities: see, e.g., Hart at [67] and the cases there cited. For example, in Coco v The Queen (1994) 179 CLR 427, the High Court considered that, in the absence of a clearly manifested intention to do so, the relevant legislation authorising the issue of a warrant to use a listening device did not also authorise such use where installation of such a device would otherwise constitute a trespass: see, in particular, Coco at 437-8. 24 For modern search warrant legislation, the same strict compliance with the relevant statutory requirements may generally be seen to apply, but no further. Additional rights or requirements going beyond those spelt out are not easily to be inferred. As was pointed out in Hart at [65], "effect must be given to importance attached by the legislature to the use of search warrants as an important and legitimate tool in the detection and prosecution of criminal offences", such that a construction giving effect to "operational realities" is to be preferred to "fine legal judgments in the issue and/or execution" of search warrants. 25 In Lee v New South Wales Crime Commission [2013] HCA 39; 251 CLR 196 at [312]-[314], the High Court considered the principle affirmed in Coco that a court will not impute to Parliament an intention to abrogate basic rights, freedoms and immunities unless such an intention is clearly manifested by unmistakeable and unambiguous language. In the context of examination powers in aid of the confiscation of criminally-obtained assets, but applicable also in the search warrant context, the High Court observed: 312 More recent statements of the principle in this Court do not detract from the rationale identified in Potter, Bropho and Coco but rather reinforce that rationale (541). That rationale not only has deep historical roots; it serves important contemporary ends. It respects the distinct contemporary functions, enhances the distinct contemporary processes, and fulfils the shared contemporary expectations of the legislative and the judicial branches of government. As put by Gleeson CJ in Electrolux Home Products Pty Ltd v Australian Workers' Union (542), in terms often since quoted with approval (543), the principle "is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted". Gleeson CJ pointed out that the principle is to be applied against the background that "modern legislatures regularly enact laws that take away or modify common law rights" and that the assistance to be gained from the principle "will vary with the context in which it is applied" (544). 313 Application of the principle of construction is not confined to the protection of rights, freedoms or immunities that are hard-edged, of long standing or recognised and enforceable or otherwise protected at common law. The principle extends to the protection of fundamental principles and systemic values. The principle ought not, however, to be extended beyond its rationale: it exists to protect from inadvertent and collateral alteration rights, freedoms, immunities, principles and values that are important within our system of representative and responsible government under the rule of law; it does not exist to shield those rights, freedoms, immunities, principles and values from being specifically affected in the pursuit of clearly identified legislative objects by means within the constitutional competence of the enacting legislature. 314 The principle of construction is fulfilled in accordance with its rationale where the objects or terms or context of legislation make plain that the legislature has directed its attention to the question of the abrogation or curtailment of the right, freedom or immunity in question and has made a legislative determination that the right, freedom or immunity is to be abrogated or curtailed. The principle at most can have limited application to the construction of legislation which has amongst its objects the abrogation or curtailment of the particular right, freedom or immunity in respect of which the principle is sought to be invoked. The simple reason is that "[i]t is of little assistance, in endeavouring to work out the meaning of parts of [a legislative] scheme, to invoke a general presumption against the very thing which the legislation sets out to achieve" (545). (541) See Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [20]-[21]; Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19]-[20]; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 134-136 [28]-[32]. (542) (2004) 221 CLR 309 at 329 [21]. (543) See, eg, Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 259 [15]; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 135 [30]. (544) See Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 328 [19], citing Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269 at 284 [36]. (545) Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 340 [43]. 26 In the case of the provisions presently under consideration, the balance between the competing public and private interests may be seen to have shifted to afford even greater primacy to the needs of the criminal justice system, having regard to the legislative enlargement of the relevant investigative powers reflected in Part 1AA of the Crimes Act. A number of features of that detailed regime, stretching over some 100 pages, warrant particular mention: (1) the power to seize things is no longer confined to the ambit of the warrant itself, because, pursuant to s 3F(1)(d), a valid search warrant permits, on certain conditions, the seizure of evidential material beyond the scope of the warrant if that material relates to an indictable offence or constitutes evidential material within the meaning of the Proceeds of Crime Act 2002 (Cth) - this provision may be regarded as a statutory version of the principle stated in Chic Fashions (West Wales) Ltd v Jones [1968] 2 QB 299 at 313, concerning the seizure of material going beyond the scope of a search warrant; see also Ghani v Jones [1970] 1 QB 693 at 706; (2) other invasive acts further to the search for and seizure of material within the express scope of the warrant are also authorised by s 3F, but are required by s 3E(6) to be stated in the search warrant, including: (a) searching for and recording fingerprints and taking samples for forensic purposes: s 3F(2)(b); (b) seizing other things found if there is a belief on reasonable grounds that it is a "seizable item", defined in s 3C(1) as "anything that would present a danger to a person or that could be used to assist a person to escape from lawful custody": s 3F(1)(e); and (c) if provided for in the warrant (which must say so either way), a "frisk search" or "ordinary search" (as defined in s 3C(1)), being a search of a person at or near the premises suspected on reasonable grounds to have any evidential material (not apparently confined to evidential material of the kind described in the warrant) or "seizable items"; (3) if there are reasonable grounds for suspecting that data on electronic equipment constitutes evidential material, the executing officer may copy all of the data for later examination or, if that is impracticable, seize the electronic equipment: s 3L. 27 The authorisation conferred by s 3F(1)(d) in particular meets and exceeds the common law power to seize and retain material found that is beyond the scope of a search warrant or any other lawful basis for being on premises and obtaining such material: see again Chic Fashions at 313 and the discussion in Ghani v Jones at 708-9. Before the enactment of s 3F(1)(d), it may have been in doubt that the search warrant provision in the former s 10 of the Crimes Act bestowed any common law power to seize material lawfully beyond the express terms of a search warrant. 28 The presence and comfort of s 3F(1)(d) should give an incentive to police to obtain search warrants that are tightly focussed on the investigation at hand and relying upon suspicions firmly grounded on what is already known or inferred, including as to the nature of the "evidential material" suspected of being present (or to be present in the next 72 hours) that will be likely to advance the investigation. This will provide discipline and real assistance to those responsible for the execution of a search warrant and clear guidance for occupiers to enable them to ensure that any seizure is appropriately confined either to the search warrant itself, or to the terms of s 3F(1)(d) and (e). 29 Section 3F(1)(d) and (e) provide ample scope for seizing sufficiently probative but unexpected evidence for indictable offences beyond those described in the search warrant. In such cases, the decision to seize the material may be made by reference to the character of the material found, including any apparent evidential value for the suspected offence(s) or another indictable offence, without the risks attendant upon relying on a wide and imprecise search warrant. The mere possibility of finding unexpected evidence should not distract police and other investigators from the proper focus on the express purpose of a search warrant, anchored in the suspicions that gave rise to its issue in the first place. 30 These additional provisions and, indeed, the other extensions of power in Part 1AA, do not lower the need for strict compliance with the statutory regime, but they do inform the evaluative exercise as to what constitutes strict compliance. Indeed, while the balance must be seen to have tipped further in favour of law enforcement over privacy and property interests, careful attention to the conditions governing the issue and execution of a search warrant remains necessary to give effect to the statutory balance as struck. It is only a valid warrant that gives rise to the existence of the extended powers in ss 3F and 3L in a given case.

[5]

Principles concerning the validity of issue of a search warrant 31 The issue of search warrants may be subject to challenge in a number of different ways according to the process adopted and the statutory regime in question. The two ways that have been the subject of detailed judicial consideration are where the information relied upon for issue of the warrant is said in some way to be incomplete, and where the information is in some way said to be inadequate. Only the latter - asserted inadequate information - is in issue in this case. It is, however, worth mentioning the former briefly, because the principles involved serve to demonstrate further the nature of the administrative process and the limitations on judicial review. 32 For a relatively short time, a Full Court decision in Karina Fisheries Pty Ltd v Mitson (1990) 26 FCR 473 at 481 equated, by obiter dicta, a search warrant application with an ex parte curial application, giving rise to a duty of utmost good faith (uberrima fides) to disclose all material facts to the decision-maker, being a duty of the kind stated in Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 682. That heresy by way of false equivalence between executive and judicial processes was firmly displaced by a subsequent Full Court decision in Lego Australia Pty Ltd v Paraggio (1994) 52 FCR 542 at 555-6, 566D-E. The only judge who sat on both appeals, Hill J, observed that the existence of an obligation to make full disclosure was not the subject of any argument in the appeal in Karina Fisheries, nor was it essential for the decision: see Lego at 564F. 33 As decided in Lego, where there has been an omission of relevant material by a person seeking the issue of a search warrant, the test is whether the material that was before the decision-maker was sufficient to meet the statutory conditions for the grant of the search warrant. George v Rockett involved such a finding as to the insufficiency of material before the issuing officer, turning on the particular and unusual circumstances in that case. As with other administrative decisions, however, the issue of a search warrant may also be rendered invalid where fraud or misrepresentation has induced the grant of the warrant, such that the warrant would not have issued but for the misstatement: Lego at 555-6, 569A. It was considered by Hill J, in a separate judgment, that an actionable deficiency may also be established by want of good faith, but inadvertent omission will not suffice unless sufficiently material: Lego at 570F. None of those factors were present in this case. 34 In all challenges to the validity of the issue of a search warrant, the usual restraints on judicial review intervention will apply. This includes, most importantly, the principle that the decision manifested in the search warrant issued must be read beneficially, and not with an eye keenly attuned to the perception of error: Minister for Immigration And Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-2. However, application of that principle must accommodate the purposes of a search warrant in informing both those executing it and occupiers as to the scope of the search that is authorised. The scope of a search warrant may be far from precise given that it is issued for an investigative purpose, based upon the low threshold of "suspicion" being met. All that really means is that an error or misdescription must be shown to be material to the purposes of a search warrant. However when it comes to mismatches between the information and the search warrant, that feature must not be approached with undue technicality or any requirement for excessive precision. Practical considerations must always be kept steadily in mind: Baker v Campbell (1983) 153 CLR 52 at 83.

[6]

Principles concerning invalidity on the face of a search warrant 35 Some of the leading and authoritative statements on sufficiency on the face of a search warrant, focussing, as is so often the case, on the description of the suspected offence, are to be found in Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523, a decision of the Full Court, with the main judgment being that of Burchett J. Sheppard J agreed with Burchett J, while Pincus J only relevantly disagreed to the extent that his Honour would have preferred an even less stringent test for a sufficient offence description than that outlined below. 36 While Beneficial Finance dealt with the much simpler search warrant provision in the former s 10 of the Crimes Act, it nonetheless contains a number of principles that are of continuing application. Before turning to those passages, it should be observed by way of context that Burchett J considered a range of authority, some of which suggested that a search warrant needed to meet a test purportedly derived from Canadian cases in which it had been held that the "exact object of the search" had to be disclosed. Such a stringent test was rejected, including by reference to Canadian cases that suggested no such stringency. This analysis required the statement to that effect by Jackson J in Parker v Churchill (1986) 9 FCR 334 at 348 to be either read down or discarded. Burchett J also rejected technical arguments based on a strict application of the formal operation of taxation law provisions in a search warrant context, an approach with some resonance to this case, as the primary judge was evidently well aware. 37 A number of the key principles to emerge from Beneficial Finance are as follows (with some modernisation of language to fit with that in the current provisions): (1) Burchett J said at 533.6 (although the change to a dual suspicion test in s 3E should be noted): The authorities make it clear that the statement of the offence in a search warrant need not be made with the precision of an indictment. That would be impossible, and indeed to attempt it would be irrational, bearing in mind the stage of the investigation at which a search warrant may issue. The purpose of the statement of the offence in the warrant is not to define the issues 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 of 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. … The above passage was quoted with approval by the High Court in State of New South Wales v Corbett [2007] HCA 32; 230 CLR 606 at [99], applying the same reasoning to the State search warrant provision that was under consideration in that case. (2) Of necessity, the line as to what may and may not be seized cannot be precisely drawn, since a search warrant is not concerned with what is known, but with what there is reasonable grounds for suspecting: Beneficial Finance at 534.3, quoting from his Honour's prior judgment at first instance in Parker v Churchill, (1985) 9 FCR 316 at 319; (3) the requirement of particularity in an offence description is directed to ensuring that the occupier knows the object of the search and can therefore make "some assessment of the material likely to prove relevant", because it is unacceptable otherwise to leave an occupier "in the dark": Beneficial Finance at 539.3, quoting Toohey J, when a member of this Court in Quartermaine v Netto (unreported, 14 December 1984) - the offence description upheld in Quartermaine was considerably more vague than the offence descriptions in this case, insofar as no date for the suspected offences was identified at all; (4) given the stage at which a search warrant is granted, it may not be known what particular offences may have been committed, such that it is sufficient that the warrant specifies the suspected offences in such a way as to enable the executing officer and those assisting to decide if the things seized come within the terms of the warrant: Beneficial Finance at 539.5, reproducing the quotation relied on by Toohey J in Quartermaine from Coward v Allen (1984) 52 ALR 320 at 332; (5) the question of the sufficiency of an offence description should be viewed broadly, having regard to the terms of the warrant in the circumstances of each case, and not answered by the bare application of a verbal formula but, rather, in accordance with the principle that a search warrant should disclose the nature of the offence so as to indicate the area of search, with the precision required varying from case to case: Beneficial Finance at 543.7. 38 In Beneficial Finance, Burchett J rejected a submission that the search warrants in that case were bad for generality, stating at 544 that: They limit the area of search by reference (inter alia) to offences sufficiently described to enable an ordinary reader to understand what are the subjects of the reasonable grounds for suspicion and belief that are recited. The language may not be elegant. It may do some violence to a fine appreciation of how the law expressed in s 57AF of the Income Tax Assessment Act should be classified. 39 A number of key passages from Beneficial Finance were quoted with approval by the High Court in Corbett, giving the Full Court's views additional weight. In particular, approval was given in Corbett at [103] to the conclusion that the question of the sufficiency of the offence description should not be answered by the application of verbal formula. At [106] in Corbett it was stated that it is the nature of the offence that is critical, which had to be "stated sufficiently to enable the issuing justice to understand the object of the search and to appreciate the boundaries of the authorisation to enter, search and seize". 40 What emerges from Beneficial Finance and the many cases since that have followed, applied or approved it, including Corbett in particular, is a test of sufficiency to indicate the area of search, not precision or particular accuracy. There is no legal principle creating an abstract test by which the nature and degree of precision in the statement of a suspected offence in a search warrant will be inadequate, such as the term used in submissions of law made on behalf of Mr Caratti of "intolerable ambiguity". Whether an offence description is adequate or sufficient - or not - is a matter for assessment in all the circumstances of the case at hand. It is largely a factual and practical evaluation, which may be affected to a significant degree by context and nuance. It is substantially a trial determination, rather than an appeal determination, as the subjective nature of the determination will seldom lend itself to being a conclusion that was not open to a primary judge, even if members of an appeal court might have reached a different conclusion. The above principles make appellate intervention, which is already difficult in many cases, often very hard to achieve in search warrant cases. That is all the more so when there has been oral evidence, cross-examination, credit assessments and the drawing of inferences. Those difficulties are compounded by the discretionary nature of the relief that may be granted or refused. 41 In the Full Court decision in Dunesky v Elder (1994) 54 FCR 540, four out of five judges upheld the validity of the search warrants under challenge. The plurality (Lockhart, Beaumont and Hill JJ), with whom Lindgren J agreed (also making further observations on topics not applicable to this case), said at 555E that in was "not impermissible to describe the object of the search in a broad, or non-specific fashion", and at 557C that the "real object of the third condition is the identification of the kind of offences alleged". However, those broad and otherwise useful principles are undermined in this case by the lack of discipline in the drafting of the first two conditions in the present search warrants, placing a heavier burden on the third condition. Nonetheless, the role of the third condition remains an identification of the kind of offence being investigated. There is nothing inherently wrong with a search warrant that confines the search to only part of a suspected offence period, or conduct that only relates to a part of the suspected offending. 42 Applying the above principles to cases of the present kind, it may be observed that, conceptually, the investigation and prosecution of an alleged fraud of some kind (using that term in a generic way that includes offences of the kind suspected in this case) commonly requires evidence and proof of what the impugned party represented to be the position, what the true position was, and what difference it made, including questions of deceit or dishonesty in departing from the true position. In the case of such suspected offences, there will often be material held by the party said to have been defrauded in some way, such as representations made, and what took place as a result of such representations, such as money being paid, or not being required to be paid. What will be lacking is evidence of what the true position is. There is nothing wrong with a search warrant that focusses on obtaining evidence as to what is merely suspected to exist for the purposes of contrasting it with what was already known and what had already happened in terms of suspected fraudulent loss. That may cause the search warrant to be focussed on a particular aspect of the conduct under investigation, including a particular point in time.

[7]

Principles concerning the invalid execution of a search warrant 43 In Dunesky v Commonwealth (1996) 33 ATR 491, Lockhart J was considering a challenge to the execution of the search warrants under challenge, following the upholding of their validity by another primary judge and the Full Court (by a 4-1 majority) and the subsequent refusal of special leave to appeal by the High Court: see Dunesky v Elder in the Full Court for the final resting place of that unsuccessful challenge, as referred to above. Lockhart J noted at 500: A search warrant is a severe intrusion into a person's privacy, home or place of business. The law takes care to ensure that the powers of police officers entrusted with the task of executing a search warrant are not exceeded; but at the same time it must be borne in mind that execution of a search warrant is a practical exercise carried out by police officers who, though trained in their task of law enforcement, are generally not qualified lawyers. Just as a person's privacy must be respected so must the investigation of criminal offences not be unreasonably impeded. 44 After citing a range of authority, including from the High Court, on the need to focus on the practical aspects of search warrant execution, Lockhart J observed at 501: The obligation of police officers executing warrants is to act reasonably in all the circumstances of the case: Crowley v Murphy at FLR 152-5; Bartlett v Weir at A Crim R 518. The warrant must be executed according to its terms and in accordance with the requirements of s 10 [now s 3E]: Dunesky at FCR 556. Consideration can be given to what is contained in the information in order to decide whether or not documents fall within the scope of the warrants. In the present case there was a briefing of the relevant police officers prior to the search; the information together with its attachments was available to the police officers; and the police officers had advice from ATO officers who had been involved in the preceding lengthy audit and who understood the issues. His Honour further observed at 501-2: It is to be remembered in this case, where the classes of documents which may be seized pursuant to the terms of the warrant are wide indeed, that documents will not fail to satisfy the three conditions contained in the warrant merely because (a) they bear dates outside the period of the commission of the alleged offences specified in the warrant; (b) they relate also to persons other than persons revealed by the warrant as being suspected of committing the offences; or (c) they relate to some subject distinct from the matter under investigation. Documents may meet all three conditions notwithstanding those matters. 45 In order for Mr Caratti to succeed on the aspect of his appeal concerning the execution of the search warrants, he needed to demonstrate that the primary judge strayed impermissibly from the broad evaluative exercise that his Honour was entitled to carry out.

[8]

Principles concerning severance 46 The relevant principles were helpfully and comprehensively summarised by the primary judge as follows, there being no suggestion of any error in his Honour's survey of the law: Severance 227 In Parker v Churchill, Jackson J found that significant parts of a search warrant that purported to describe the offences to which the warrant related were invalid. His Honour declared those parts of the warrant to be invalid, but ordered that the invalid parts could be severed from the warrants. His Honour declared the warrants to be otherwise valid. His Honour said (at 350): There is no reason why a search warrant granted under s 10 may not include in respect of the same place a number of quite different matters and there is nothing in the section itself to suggest that if one of the matters so included exceeds the powers conferred by s 10, the warrant necessarily fails as to the other matters. It is possible, of course, that the good and bad parts of the warrants may be so interlinked that one cannot stand without the other but that would usually mean no more than that the parts, as a matter of construction of the warrant, were not truly separate. Further, as the primary judge said, the authorities suggest that a search warrant, being an order of a justice is divisible and when good in part and bad in part, the good may be divided from the bad, and the good affirmed and the bad quashed: see R v Johnson & Franklin Wholesale Distributors Ltd (1971) 3 CCC (2d) 484; Adler v Attorney-General of Alberta (supra) at 139-140; Abou-Assale v Bourden JSP (1978) I CR (3d) 213 at 231; Coward v Allen (1984) 52 ALR 320 and Brewer v Castles (No 3) (1984) 52 ALR 581. 228 Bowen CJ and Lockhart J agreed with Jackson J, other than in respect of one part of the warrant that Jackson J had declared invalid. It is readily apparent that Bowen CJ and Lockhart J agreed with Jackson J in relation to the question of severance. They declared that certain parts of the warrant were invalid, but that the warrants were otherwise valid. 229 In Beneficial Finance, Burchett J (with whom Sheppard J agreed at 525) considered that it was open to sever parts of a warrant which incorrectly recited the language of the former s 10(1)(a) of the Crimes Act. His Honour said (at 545). The severability of a search warrant has some importance for the present case because of the argument, further consideration of which I deferred earlier in these reasons, that the warrants contain an inaccurate reproduction of the language of s 10(1)(a) of the Crimes Act, and thus purport to authorise inappropriately the seizure of things "in respect to which there are reasonable grounds for suspecting that [the suspected offences] have been committed". In my opinion, if this portion of the warrants is invalid, it is readily severable. As there has been no suggestion that any particular document has been, or is likely to have been, seized in reliance upon this portion of either of the warrants, it is unnecessary to decide whether the failure to follow precisely the wording of the statute did have any vitiating effect. I am unable to imagine anything in this case which could be a thing "in respect to which" the offence had been committed, yet would not fall within the terms of that part of the warrant which accurately reflects s 10(1)(b). That has already been made clear in the discussion of the true meaning of the word "and" in this very special context. The reflection of s 10(1)(a) in the drafting of the document cannot, in the circumstances, have made any practical difference to the search or the seizure. It would be an apotheosis of pedantry to refuse to sever the warrant, and to invalidate it on this ground. 230 Pincus J agreed "substantially" with the reasons of Burchett J, including that severance of invalid portions of a warrant is appropriate in some circumstances. His Honour took issue, however, with Burchett J's view that it was relevant, in the context of severance, that there had been no suggestion that documents had been seized in reliance on the invalid parts. Pincus J expressed the view (at 526) that it "cannot be incumbent upon the party challenging an executed warrant to show which documents were seized in reliance on particular parts of it". 231 In Peters v Attorney-General for New South Wales (1988) 16 NSWLR 24, McHugh JA followed Parker v Churchill and held that the doctrine of severability applied to warrants that were issued in excess of power. His Honour noted (at 41D-E), however, that "it is not possible to sever a warrant where the invalid provision forms part of an inseparable context, or would operate differently or produce a different result from that which was intended". Perhaps even more importantly, his Honour found that, because warrants are instruments for the purposes of provisions such as s 32 of the Interpretation Act 1987 (NSW), they are to be read and construed to the extent that they can be read as valid instruments. The result was to throw the burden upon the person attacking an entire warrant to prove, in effect, that if the invalid part of the warrant was severed, the warrant would have operated differently, or would have produced a different result to that intended. 47 It follows that the key issue in determining whether severance can take place is whether the invalid part of the search warrant can be separated from the valid parts remaining. That is a largely a question of fact. For Mr Caratti to succeed on this ground of appeal, he must show that the severance conclusion reached by the primary judge was not open to his Honour. 48 The Commissioner's written submissions also rely upon the terms of s 46(2) of the Acts Interpretation Act 1901 (Cth), which provide, in relation to instruments other than legislative instruments, notifiable instruments or rules of court: If any instrument so made would, but for this subsection, be construed as being in excess of the authority's power, it is to be taken to be a valid instrument to the extent to which it is not in excess of that power. 49 While s 46(2) tends to reinforce the principles in the cases considered by the primary judge above, it does not gainsay the need for the evaluative exercise as to whether severance is possible.

[9]

The terms of the search warrants and affidavits in support 50 The relevant search warrants were obtained by way of an affidavit of Federal Agent Gary Szolnoki, which was provided on or about 23 January 2015 to a magistrate of the Perth Magistrates Court, acting administratively rather than judicially. The search warrants sought concerned premises associated with Mr Caratti and Ms Tina Bazzo, his de-facto partner. The supporting affidavit deposed to a suspicion that Mr Caratti (together, in one instance, with Ms Bazzo) may have committed five tax-related offences through various corporate entities of either obtaining a financial advantage by deception from a Commonwealth entity, or dishonestly causing a loss to a Commonwealth entity, in contravention of ss 134.2(1) or 135.1(3) respectively of the Criminal Code (Cth) (which is in the Schedule to the Criminal Code Act 1995 (Cth)). Both offences rely upon a Commonwealth entity having been adversely affected by the conduct. The Commonwealth entity was erroneously described in the offence descriptions as the Australian Taxation Office: see Different Solutions Pty Ltd v Commissioner, Australian Federal Police (No 2) [2008] FCA 1686; 190 A Crim R 265 at [125]-[128]. However, the primary judge was correct to conclude that nothing of substance turned on this error. 51 Mr Szolnoki's affidavit advanced the following general narrative before turning to the material relied upon in respect of each of the five offences under investigation (noting that certain parts of the affidavit were redacted by reason of public interest immunity claims, accompanied by a concession by the Commissioner that the content of those passages could not change the result): 6.1 In 2008, the Australian Taxation Office (ATO) commenced Project CABALLUS to identify risks associated with the principal individuals of the "CARATTI Group": Allen Bruce CARATTI, born 24 February 1956 (A.CARATTI), his de-facto partner Tina BAZZO, born 24 February 1966 (BAZZO) and his brother John CARATTI (J.CARATTI). The CARATTI Group are prominent members of the Western Australian business community, primarily concerned with land development and investment. The ATO estimates that the CARATTTI Group holds equity in commercial and residential property to the value of $726,000,000. Land holdings by associate companies are estimated to be the largest in the State. 6.2 The CARATTI family has a history of non-compliance with the ATO dating back to the 1970's. The ATO describe the CARATTI Group as being one of the most difficult syndicates they have investigated due to their wealth, use of numerous privately owned businesses, and intimate knowledge of ATO processes and tax law. Despite continued scrutiny and repeated ATO audits, A.CARATTI and BAZZO continue to operate in a highly non-compliant manner with respect to their taxation obligations. 6.3 In 1991, the ATO referred information to the AFP where it was alleged that A.CARATTI, J.CARATTI and their mother, Madeleine CARATTI (M.CARATTI) were engaged in large scale taxation fraud. Following a joint AFP/ATO investigation, A.CARATTI, J.CARATTI and M.CARATTI were charged with conspiracy to defraud the Commonwealth of $5.8 million. In June 1999, J.CARATTI was found guilty and sentenced to four and a half years imprisonment. A.CARATTI and M.CARATTI were found not guilty. 6.4 The ATO have advised that between 2000 and 2014, A.CARATTI has been linked with approximately 222 entities (businesses), whether as a Director, some form of office bearer or other connection, and that entities associated with him and BAZZO continue to accumulate considerable wealth even though many report financial losses each financial year. 6.5 Since commencing Project CABALLUS, the ATO has issued assessments for outstanding tax liabilities totalling approximately $93,000,000.00 in relation to the non-declaration of income and Goods and Services Tax (GST) by entities controlled by A.CARATTI and BAZZO. 6.6 Between May and December 2013, the ATO referred 11 matters to the AFP for investigation alleging that A.CARATTI and BAZZO were committing fraud against the ATO. 6.7 Operation CABALLUS is a joint AFP/ATO investigation focusing on four of 11 incidents referred to the AFP by the ATO alleging tax evasion and forgery by A.CARATTI and BAZZO related entities, specifically the alleged avoidance of lawful taxation in relation to land developments by Starbrake Pty Ltd (STARBRAKE), Westend Assets Pty Ltd (WESTEND), Forrest Hope Pty Ltd (FORREST HOPE) and Whitby Land Company (WHITBY). 52 The affidavit then turned to the conduct that was said to ground the requisite suspicion in relation to each offence. That material has been considered further below. 53 On 27 January 2015, on the basis of the evidence provided by Federal Agent Sznolnoki, the Magistrate, acting administratively, issued search warrants in respect of the premises at the following identified addresses (the street numbers do not need to be reproduced again here): (1) Wickham Street, East Perth, being the registered business address of Gucce Holdings and Mammoth Nominees; (2) Duncraig Road, Applecross, Western Australia, being Mr Caratti's residential premises and the registered office of Whitby Land Company; (3) Cornish Turn, Baldivis, Western Australia, being the residential address of Mr Schokker, Mr Caratti's accountant or tax adviser; (4) Great Eastern Highway, Redcliffe, Western Australia, being the registered business address of Mammoth Investments; (5) A unit in Irvin Street, Perth, Western Australia, being the officers of a firm of solicitors that acted for Starbrake in relation to the purchase of the Calloway Street property; (6) A unit in Main Street, Osborne Park, Western Australia, being the offices of Mr Catanecci, the accountant or tax agent that provided accounting services for Starbrake; and (7) Two motor vehicles apparently associated with Mr Caratti and Ms Bazzo. 54 A further search warrant was obtained for premises at Wright Road, Harrisdale Western Australia by an affidavit sworn on 4 March 2015, which annexed a copy of the prior affidavit, and contained additional information. 55 The search warrants issued were in substantially the same terms, except that the warrant for the premises at Wright Road omitted the first two suspected offences from the third condition. As was the case before the primary judge, differences in the list of persons or companies referred to in the second condition of each warrant do not bear in any material way on the issues raised by Mr Caratti. It is sufficient to reproduce below, by way of example, the relevant parts of the search warrant executed at Mr Caratti's residential premises in Applecross, Perth, which was relied on by the primary judge as sufficiently representative for determination of Mr Caratti's challenges to the warrants generally. 56 The first condition of the representative search warrant was as follows: FIRST CONDITION things which are: • Personal or laptop computers and peripheral devices; • Mobile telephones, Subscriber Identity Module (SIM) Cards, computer hard drives and equipment, faxes or any other electronic storage medium; • Identification documents; and • Emails, email addresses, user names and passwords. originals or copies of any one or more of the following, including any of them which are stored on a computer, or on a computer storage device, or on any other type of storage medium or storage device: • Business records including general correspondence, invoice books, receipts, purchase orders, confirmation of orders, balance sheets, journals, ledgers, cash books, cash payment books, books of accounts, contracts, agreements, diaries, notes including handwritten notes, facsimile communications, address books, working papers, price lists, quotations, orders, invoices, commercial invoices, tax invoices, business cards, payment records, purchase records, sales records, sales orders, catalogues, delivery dockets, accounts payable, accounts receivable, minutes, telephone records, desk calendars and blotters, single transaction permissions, continuing permissions, computer files or records, electronic mail records and other records; • Banking and other financial institution records including bank statements, bank books, deposit books, bank vouchers, deposit and withdrawal slips, cheque books, cheque butts, or other correspondence with financial institutions; • Taxation records, including documents concerning the preparation and completion of business activity statements and taxation returns; • Notebooks, diaries, telephone numbers, handwritten notes; • Conveyancing files, including but not limited to contracts of sale, copies of payments, file notes, correspondence with vendor and purchaser, invoices and receipts detailing payments into solicitors trust accounts; • Trust documents and deeds; • Trust files; and • Land title documents. 57 It may be observed that the above list of items said to be the subject of the requisite suspicion and to be the material sought to be seized is extremely wide and does not, of itself, meaningfully limit the scope of the search warrant. 58 The second condition of the representative search warrant was as follows: SECOND CONDITION and which relate to any one or more of the following: • Allen Bruce CARATTI; • Tina Michelle BAZZO; • Christina Marcia CARATTI; • Liang Ll; • Josephine Lynette BAZZO; • Rocla Pty Ltd; • Mammoth Nominees Pty Ltd ACN 101 717 177; • Mammoth Investments Pty Ltd ACN 008 735 797; • Joseph Catenacci Pty Ltd ACN 009 025 405; • Joseph CATENACCI; • Nicholas CHANDLER; • Stuart MACKINNON; • Andy LIU; • Nancy MUSGRAVE; • Ewing Consulting Engineers Pty Ltd; • Isaac Meyer ELLISON; • Henricus (Hank) SCHOKKER; • Bendigo Bank account number: [NUMBER REDACTED]; • Bendigo Bank account number: [NUMBER REDACTED] ; • National Australia Bank; • Suncorp Metway Bank; • Bank of Western Australia (Bank West); • Gucce Holdings Pty Ltd ACN 099 191 714; • Whitby Land Company Pty Ltd ACN 115 233 193; • Westend Asset Pty Ltd ACN 106 132 790; • Forrest Hope Pty Ltd ACN 122 459 554; • Starbrake Pty Ltd ACN 107 942 058; • Ashford Taxation; • Clayton Utz Commercial Law Firm; • Herbert Smith Freehills; • Wilson and Atkinson Law Firm; • I.M.E Nominees Pty Ltd; • allen@mammothgroup.com.au; • Gucce Group; • Admin4@mammothgroup.com.au; • catenacci@bigpond.com.au; • lsaac@guccegroup.com.au; • Nicholas CHANDLER; • Dfts99@gmail.com; • [TELEPHONE NUMBER REDACTED] • [TELEPHONE NUMBER REDACTED]; • Lot 3, Diagram 15871, Certificate of Title Volume 1267, Folio 569; • Lot 9029 Broadway, Aveley Western Australia 6069; • SLS Accounting; • 293 Nicholson Road, Forrestdale Western Australia 6112; and • 52 Callaway Street, Wangara, Western Australia 6065. 59 Again, it may be observed that the above list not only contains a long list of names, but also a number of other entities and addresses, including law firms. As with the list in the first condition, this does not, of itself, in a practical sense substantially limit the scope of the search warrant, although it does confine to some degree the ambit of the matters to which the investigation relates. 60 The third condition of the representative search warrant was as follows: THIRD CONDITION and as to which there are reasonable grounds for suspecting that they will afford evidence as to the commission of the following indictable offence(s) against the laws of the Commonwealth: In 2008 at Perth in Western Australia, Allen CARATTI by a deception, in that he reclassified royalty income paid to Starbrake Pty Ltd into a loan from Mammoth Nominees Pty Ltd, dishonestly obtained a financial advantage by not paying income tax, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Section 134.2(1) of the Criminal Code 1995 [sic] (Cth). In 2008 at Perth in Western Australia, Allen CARATTI did fail to pass on Goods and Services Tax collected by Starbrake Pty Ltd to the Australian Taxation Office, with the intention of dishonestly causing a loss to another person, namely Australian Taxation Office, which is a Commonwealth entity, contrary to Section 135.1(3) of the Criminal Code 1995 [sic] (Cth). In 2008 at Perth in Western Australia, Allen CARATTI by a deception, in that he falsified costs incurred by Westend Asset Ply Ltd, attempted to dishonestly obtain a financial advantage by not paying income tax, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Sections 11.1 and 134.2(1) of the Criminal Code 1995 [sic] (Cth). Between 1 July 2010 and 31 December 2013 at Perth in Western Australia, Allen CARATTI by a deception, in that he caused the Whitby Land Company Pty Ltd to withhold Goods and Services Tax, dishonestly obtained a financial advantage from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Section 134.2(1) of the Criminal Code 1995 [sic] (Cth). In December 2011 at Perth in Western Australia, Allen CARATTI and Tina BAZZO, by a deception, in that they falsified costs incurred by Gucce Holdings Pty Ltd, attempted to dishonestly obtain a financial advantage by overstating Goods and Services Tax input credits, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Sections 11.1 and 134.2(1) of the Criminal Code 1995 [sic] (Cth). Together with any storage medium or storage device which contains any of the above things and any manual, instruction, password or other thing which is needed to gain access to or interpret or decode any of the above things. 61 The list of offences in the third condition above is reasonably confined, although subject to challenge as to the manner in which each was expressed, as detailed below. The third condition was therefore the main means by which the ambit of the search was confined, avoiding at least the vice of being a general warrant necessarily beyond the scope of s 3E of the Crimes Act. General warrants have been considered to be unlawful in the absence of clear statutory authority since at least the eighteenth century: see Entick v Carrington (1765) 19 State Tr 1029, cited in Ghani v Jones at first instance, [1970] 1 QB 693 at 696. 62 It should be observed that all of the search warrants adopted the above three-condition format. That format was approved by the Full Court in Dunesky v Elder at 557C, and ordinarily operates to confine the ambit of the warrant by reference to the types of things sought, the persons or other entities to which such things relate, and the offences which such things meeting both prior conditions as suspected would afford evidence. The three-condition format may be thought of visually as a Venn diagram comprising three overlapping circles, each representing the limitations imposed by one of the conditions. The search warrant only authorises the seizure of those items in the single portion common to all three circles. As noted above, however, the effective authority conferred by a s 3E search warrant is considerably wider than its search terms, having regard to the incidental seizures that are permitted by s 3F(1)(d) and (e). This means that there is little basis for concern that a suitably tight and confined warrant will lead to having to leave material behind that is probative either of the offence under investigation or other indictable offences. 63 The three-condition format is used to address the difficulty identified by the High Court in George v Rockett that the easier it might be to establish reasonable grounds for a suspicion that a particular thing is at given premises, the harder it would be to establish reasonable grounds for a belief that such a thing, if found, would afford evidence of the commission of an offence, and vice versa. It should be noted that the provision under consideration in George v Rockett was expressed in terms of suspicion as to specified types of things being present, and belief as to such things affording evidence of an offence, in contrast to the dual suspicion test in s 3E of the Crimes Act, considered further below. The decision in George v Rockett at 115 is often cited and quoted as to the meaning of suspicion and belief, derived from the prior Privy Council decision concerning false imprisonment in Hussien v Chong Fook Kam [1970] AC 942 at 948 and from the High Court bankruptcy case of Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 at 303. Belief is a clearly higher and more demanding state of mind. 64 The High Court in George v Rockett addressed the stress between the state of mind as to suspicion that an item will be present at premises, and the state of mind as to belief that such an item, if found, will afford evidence of the commission of an offence as follows at 117: … It is by reference to the means of identification of the object of the search that the sufficiency of both reasonable grounds for suspecting and reasonable grounds for believing must be judged. Where a specific object is identified, the question whether there are reasonable grounds for believing that, if it exists and is found, it will afford evidence as to the commission of an offence is a discrete question to be answered according to the facts set out in the complaint. Where the object is identified by description, the broader and less specific the description, the more difficult it is likely to be to satisfy the requirement of reasonable grounds for believing that a thing answering the description will afford evidence of the commission of an offence. Conversely, the narrower and more specific the description, the more difficult it may be to satisfy the requirement of reasonable grounds for suspecting that the designated object is in the particular location. … 65 Relevantly, and in contrast to the situation that existed in the legislation under consideration in George v Rockett, s 3E of the Crimes Act does not require "belief", but rather "suspicion" of the matters stipulated under both of the two limbs of the test. This is a less advanced or substantial state of mind than belief, and may be established by the existence of "conjecture or surmise": George v Rockett at 115-6. The test is dual in nature because s 3E requires that the necessary "suspicion", and the existence of reasonable grounds to induce that state of mind, be demonstrated in respect of both the likelihood that particular items will be present at the subject premises, and the likelihood that those items, if found, will afford evidence, in the sense of being potentially probative in some way, of a named offence. 66 The three-condition structure approved in Dunesky v Elder and used in the present case works best when a measure of discipline is applied to the ambit of all three parameters, rather than simply including every conceivable type of thing that might be found, and every conceivable entity that might be connected to the matters under investigation in any way, no matter how obscure or improbable. If the investigation until the point at which a search warrant is obtained permits some precision, it is highly desirable for that to be reflected in the drafting of the search warrant. It involves writing less, rather than more, albeit with perhaps greater care in the choice of what is listed and what is not. If the checklist which each condition facilitates is to be of much practical use at the time of execution, the list must be of a workable and sensible length and detail for all three conditions to operate together in an optimal way to address the stress identified in George v Rockett. In combination, the three conditions should operate to make the assessment of what should and should not be seized easier and quicker. 67 In the present case, however, a disciplined approach was not observed in framing the first two conditions of the search warrants, as their terms reproduced above make clear. Instead, a wide "shopping list" approach was taken, with the evident purpose being to make each as wide and general as possible. That approach is contrary to the purpose of having the first two conditions to enable the things realistically suspected of being present and relevant listed, but not confined to things that will necessarily afford evidence of the commission of the suspected offences. Accordingly, those first two conditions were cast in very wide terms, reflecting no real attempt to confine the ambit of the search or contribute in any useful way to informing the relevant occupiers or those executing the search warrants as to the parameters of the search. All the narrowing or culling work was left to the third condition. The effect of this, as demonstrated by the nature of the ultimate challenges to the warrants that ensued, was that the burden of adequately defining the ambit of the search authorised by the warrants fell substantially on the description of the suspected offences. 68 If that was a deliberate or strategic choice, it was a very high risk approach to take. It made the validity of the search warrants more vulnerable to challenge, and their execution more difficult to defend. In this case, it led to seizures that might have resulted in evidence being ordered to be returned. Persisting with such an approach could easily lead to that result in a future case and, indeed, risks invalidity and the consequent grounding of causes of action for torts such as trespass and detinue. If any of the extended frisk powers are used, that could extend to grounding the tort of battery (and perhaps even assault), as the legal substratum authorising such a search would be absent. 69 In this case, the drafting approach also opened up many different avenues of challenge and required reliance on what had taken place prior to the execution of the warrant and in the course of that investigation, rather than the warrant itself being able to do most of the work. That, in turn, required more witnesses to be called and a protracted hearing to take place, testing to an extent the detail of what had taken place. Not much of that detail was revisited in the appeal, in part because initial allegations of an improper or unlawful purpose in obtaining the search warrants were not pursued before the primary judge, apparently once the evidence filed for the Commissioner made that approach untenable. The case ultimately pursued before the primary judge and on appeal relied more heavily on the defects in drafting, although the execution of the search warrants remained an active ground of review on appeal. 70 Given the focus in this appeal on the written word, it is convenient to outline the material advanced in the supporting affidavit by separate reference to each of the five offences, save for the first and second offences, which are dealt with together, and the primary judge's views on what was deposed to.

[12]

Affidavit material for the first and second suspected offences (Starbrake allegations) 72 The relevant parts of Federal Agent Szolnoki's affidavit concerning the first and second offences were as follows: 6.8 Australian Securities and Investments Commission (ASIC) records indicate that STARBRAKE was registered as an Australian proprietary company on 11 February 2004. A.CARATTI was recorded as an office bearer of STARBRAKE and held the following positions within the company … 6.9 STARBRAKE has an issued share capital of $2.00 comprising two ordinary shares which are beneficially owned by A.CARATTI. … 6.11 Western Australian Government Lands Title Office (Landgate) records indicate that in December 2004, STARBRAKE purchased land identified as Lot 3 on Diagram 15871, certificate of title Volume 1267 and folio 569, located at 52 CALLAWAY Street, Wangara, WA, 6065 (CALLAWAY STREET), through a loan acquired via the Suncorp Bank. … 6.20 On 8 June 2006, Ray White Valuers provided an initial valuation of the unimproved property located at CALLAWAY STREET. The valuation states that STARBRAKE is the registered owner of the land, within the valuation it states that Rocla Pty Ltd (ROCLA) have agreed to extract sand at a royalty of $2 per cubic metre with all extraction costs to be paid by ROCLA. The land valuation was sent to Suncorp Bank, titled Mortgage Finance Valuation by Ray White. 6.21 In 2008, STARBRAKE acquired the services of Clayton Utz Commercial Law Firm to prepare a lease agreement with ROCLA. On 1 July 2008, STARBRAKE granted ROCLA a lease over the land at CALLAWAY STREET and an exclusive licence to carry out extraction of sand on the land. This lease was signed by A.CARATTI in his capacity as Director of STARBRAKE. On 1 July 2008 (2009 income year), ROCLA paid a royalty of $7,700,000.00 (inclusive of $700,000.00 of GST) to STARBRAKE for the grant of the licence. This money was paid into a Bendigo Bank Account in the name of STARBRAKE, account number 633000-0016132912. 6.22 On 3 July 2008, $7,200,000.00 was transferred from the above named STARBRAKE account to a second Bendigo Bank account, in the name of MAMMOTH, account number 633000-117556654. The transfer was described as "Loan / Starbrake P/L". 6.23 At the time of the signing of the lease, STARBRAKE acquired the services of Herbert Smith Freehills lawyers to draft a side deed, between ROCLA, STARBRAKE and Bank of Western Australia (BANK WEST). Clause 5.1(a)(10) of the deed states that STARBRAKE has received payment of the royalty as prepayment for the contract quality of sand. 6.24 On 17 October 2008, STARBRAKE lodged its Business Activity Statement (BAS) for the period of 1 July 2008 to 30 September 2008. The BAS did not include the $700,000.00 of GST, payable to the ATO, relative to the royalty they had received from ROCLA. At this time of this lodgment, A.CARATTI was the Director of STARBRAKE. 6.25 In February 2012, STARBRAKE lodged its income tax return for the 2009 income year. The income tax return did not include the royalty of $7,000,000.00 (excluding the $700,000.00 GST) it had received from ROCLA as part of its assessable income. At this time of this lodgment, A.CARATTI was the Director of STARBRAKE. 6.26 An ATO audit of the financial records of STARBRAKE, being the general ledger, disclosed that the $7,700,000.00 royalty received from ROCLA was recorded as a loan from Mammoth Nominees Pty Ltd (MAMMOTH), an entity related to STARBRAKE by virtue of common directors and shareholdings. However, financial records of MAMMOTH, obtained by the ATO, did not disclose a loan made to STARBRAKE. 6.27 ASIC records indicate that MAMMOTH was registered as an Australian proprietary company on 15 August 2002. A.CARATTI is recorded as the Director and Secretary of the company. The registered office is located at 2 Duncraig Road Applecross, WA, 6153, the home address of A.CARATTI. … 6.29 The applicant suspects that A.CARATTI directed the reclassification of the royalty received from ROCLA to a loan from MAMMOTH so as to obtain a financial advantage by understating STARBRAKE's taxable income for the 2009 income tax year. This resulted in STARBRAKE not paying an estimated $1,800,000 in income tax on the $7,000,000 royalty from ROCLA nor the associated $700,000 GST. 73 Thus the allegations under investigation were that in the September quarter of the 2008-2009 financial year, Mr Caratti, in his capacity as the sole director of Starbrake Pty Ltd, directed that $7.7 million received from Rocla Pty Ltd be reclassified as a loan to obtain a financial benefit dishonestly. The benefit was alleged to have been realised in two ways. First, the $700,000 payable in Goods and Services Tax (GST) was not declared and remitted as part of Starbrakes's September 2008 business activity statement. Secondly, the income of $7 million (net of GST) was not declared in Starbrake's 2008-2009 tax return. The two suspected offences focused on the aspect of the 2008 reclassification of the $7.7 million payment, at Mr Caratti's direction, that gave rise to these two alleged fraudulent tax benefits, rather than upon when documents were lodged with the ATO. As the primary judge explained: The Starbrake allegations 21 The first group of allegations concerned a company called Starbrake Pty Ltd. At the relevant time Mr Caratti was a director of Starbrake and beneficially owned all of its shares. In late 2004 Starbrake purchased land at 52 Callaway Street, Wangara, Western Australia. In July 2008, Starbrake granted a company called Rocla Pty Ltd a lease and exclusive licence to extract sand from the Callaway Street property. Rocla allegedly paid Starbrake $7,700,000 (inclusive of GST of $700,000) as either a royalty payment, payment for the grant of the licence, or as a prepayment for sand to be extracted from the land. 22 On 17 October 2008 Starbrake lodged a Business Activity Statement (BAS) for the purposes of A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act). The BAS was referrable to the period 1 July 2008 to 30 September 2008. Starbrake did not declare, or otherwise bring to account in the BAS, the $700,000 portion of the payment received by it which represented the GST collected in relation to its supply of the licence (or extracted sand) to Rocla. 23 In February 2012 Starbrake lodged its income tax return for the year ending 30 June 2009. The income declared or disclosed in the return did not include the $7,000,000 payment (excluding GST) received from Rocla. 24 The ATO conducted an audit of Starbrake. In the course of that audit, the ATO ascertained that Starbrake's general ledger recorded the $7,700,000 receipt by Starbrake as a loan from Mammoth Nominees Pty Ltd. Mr Caratti was a director and sectary of Mammoth Nominees. The registered office of Mammoth Nominees was Mr Caratti's home address. The ATO also obtained copies of emails sent to and received by Mr Joseph Catenacci, an accountant or tax agent who appears to have been retained by Starbrake. Those emails suggested that the accounting classification of the $7,700,000 receipt by Starbrake was changed in about December 2011. It was originally classified as income, however in December 2011 Mr Catenacci was allegedly instructed to classify the receipt as a loan from Mammoth Nominees. 25 The allegation being investigated was that Mr Caratti, as sole director of Starbrake, directed the reclassification of the receipt from Rocla so as to obtain a financial benefit. That financial benefit was said to be the understatement of Starbrake's income for the year ending 30 June 2009, as well as the non-remittance to the ATO of the GST collected by Starbrake (the GST portion of the payment) in relation to its supply to Rocla. That remittance should have been included as part of the BAS for the quarter ending 30 September 2008.

[14]

Affidavit material for the third suspected offence 75 The relevant parts of Federal Agent Szolnoki's affidavit concerning the third suspected offence were as follows: 6.47 In 2009, the ATO identified that between September 2003 and December 2008, WESTEND, a company controlled by A.CARATTI, had not reported significant sales of land in Darch, Western Australia that should have been reported as before tax profits. The ATO commenced an audit and requested information from WESTEND in relation to the discovered land sales. In response, WESTEND produced tax invoices from MAMMOTH for the development work on the land in Darch (known as the Ashdale Mews Estate) and reported that the works were undertaken on behalf of MAMMOTH by Mammoth Investments Pty Ltd. The tax invoices totalled $5,400,000. 6.48 ASIC records indicate that WESTEND was registered as an Australian proprietary company on 29 August 2003 and that its registered office is located at 21 Genevieve Court, Halls Head WA 6210. Josephine BAZZO (J.BAZZO), the mother of BAZZO, is the office bearer of WESTEND and holds the following positions in the company: [Director and Secretary since 1 September 2003]. 6.49 Landgate records indicate that in 2002, WESTEND purchased several allotments of land in Darch to undertake a residential housing development. This land was purchased for $7,600,000 through a loan agreement with Suncorp Bank. 6.50 On 28 January 2010, the ATO conducted an interview with A.CARATTI in regards to WESTEND's Ashdale Mews Estate development and the discovered land sales. Also in attendance at this meeting was Hendricus (Hank) SCHOKKER (SCHOKKER) born 25 March 1950, a taxation consultant for A.CARATTI. At the interview, A.CARATTI advised the ATO that he had full authority to represent J.BAZZO and to deal with matters pertaining to WESTEND. 6.51 During this interview, A.CARATTI and SCHOKKER informed the ATO that most of the works relating to the Ashdale Mews Estate development at this location were done by Mammoth Investments, as per invoices previously provided to the ATO in 2009 at the commencement of the audit. 6.52 The development works undertaken on the Ashdale Mews Estate was supervised by Ewings, an external civil engineering company. Ewings' role was to ensure that work was satisfactorily completed and also issue payment certificates to WESTEND. 6.53 The ATO's discussions with Ewings revealed that in 2004, WESTEND awarded Mammoth Investments a contract to provide subdivision works on the Ashdale Mews Estate. Ewings also informed the ATO that, subsequent to this initial development work by Mammoth Investments, an external company Works Infrastructure Pty Ltd (Works Infrastructure) was engaged to complete site works to the value of $1,978,000. 6.54 As a result of audit activity with WESTEND and Ewings, the ATO have estimated that the total of all initial site works (Mammoth Investments, Works Infrastructure and other subcontractors) was approximately $2,400,000, with the total cost of the initial bulk earthworks by Mammoth Investments on the site being to the value of only $213,642; significantly under the value of invoices produced by WESTEND. 6.55 Analysis of WESTEND's financial reporting by ATO revealed that the $213,642 of bulk earthworks conducted by Mammoth Investments was invoiced multiple times on different versions of the same tax invoice naming MAMMOTH or Mammoth Investments as the entity performing the work. These invoices formed part of the $5,400,000 expenses claimed by WESTEND. 6.56 Further to this, analysis of financial reports by the ATO revealed that WESTEND did not make payments totalling $5,400,000.00 for work conducted by Mammoth Investments, with the invoices from Mammoth Investments treated as a loan expense by WESTEND. No loan repayments from WESTEND to Mammoth Investments have been evidenced to date. 6.57 ASIC records identify that J.CARATTI is a current office bearer of Mammoth Investments [director]… Other Directors of Mammoth Investments include M.CARATTI (since 12 December 1997), Aaron CARATTI (since 14 May 2002) and Nicole CARATTI (since 14 May 2002). A.CARATTI held the position of Director of this company between 14 May 2002 and 09 October 2012. 6.58 In an interview between the ATO and J.CARATTI, he stated that the invoices totalling $5,400,000.00 from Mammoth Investments for the work conducted on the Ashdale Mews Estate for WESTEND were false and that A.CARATTI had created them. 6.59 ATO analysis of MYOB transactions, provided to the ATO by A.CARATTI and SCHOKKER during their interviews, reveals that the $5,400,000.00 of development expenses invoiced from Mammoth Investments were created in MYOB on 15 June 2009 - after the ATO audit had begun. 6.60 The applicant suspects that A.CARATTI falsified $5,400,000 worth of invoices from Mammoth Investments, for development works already undertaken by Works Infrastructure, for the purpose of inflating expenses for the benefit of WESTEND to avoid his taxation responsibilities. 76 Thus the allegation under investigation, spelt out in some detail, was that invoices created by Mr Caratti totalling $5.4 million were false, with the true cost of work done being closer to half that sum. The full amount of the invoices totalling $5.4 million were suspected of having been treated as an expense to reduce the tax payable on the profits of Westend Asset Pty Ltd from unreported land sales. The suspected offence focused on the creation of the alleged false invoices, alleged to have taken place in 2008, rather than upon the point at which documents were lodged with the ATO. As the primary judge explained: The Westend allegations 26 The second group of allegations concerned a company called Westend Asset Pty Ltd. The sole director of Westend was Ms Bazzo's mother, Ms Josephine Bazzo. Beyond that somewhat indirect connection, there was apparently no evidence to suggest that Mr Caratti had any direct or indirect interest in Westend. Despite this, it appears that the AFP alleged that Westend was controlled by Mr Caratti. 27 In 2002, Westend purchased land in Darch, Western Australia, for the purposes of undertaking a residential housing development. It would appear that the land cost somewhere in the order of $7,600,000. The residential development became known as the Ashdale Mews Estate development. The development apparently proceeded and in due course Westend sold the developed parcels of land. Those sales were said to have occurred between September 2003 and December 2008. 28 The ATO commenced an audit of Westend in 2009. In the course of that audit it was ascertained that Westend had not reported or declared the land sales as part of its business operations for tax purposes. It had not declared any before tax profits made from its sales of the developed land. 29 In the course of the audit, Westend provided the ATO with copies of tax invoices from Mammoth Nominees addressed to Westend for work supposedly carried out in relation to the development. Those tax invoices totalled $5,400,000. Presumably the invoices were provided for the purpose of demonstrating that the expenses reflected in the invoices reduced any pre-tax profit made by Westend from the development. 30 During an interview conducted by the ATO in January 2010, Mr Caratti and his tax agent, Mr Hendricus Schokker, told the ATO that the development work reflected in the invoices was in fact carried out by a company called Mammoth Investments Pty Ltd, supposedly on behalf of Mammoth Nominees. Mr Caratti and various members of his family were directors of Mammoth Investments. 31 The allegation being investigated as part of operation Caballus was that the invoices totalling $5,400,000 were false. An analysis conducted by the ATO from financial records and other information revealed that the cost of any work carried out by Mammoth Investments totalled just over $2,000,000; that Westend never paid Mammoth Investments (or Mammoth Nominees) $5,400,000 in respect of any works, but that the invoices were nevertheless treated as a loan expense; and that the invoices were created in June 2009, after the ATO's audit had commenced. Mr Caratti's brother, Mr John Caratti, told the ATO in the course of an interview that the invoices were false and were created by Mr Caratti. 32 It was alleged, in short, that Mr Caratti created the false invoices to inflate Westend's expenses in relation to the development and therefore reduce any tax liability in respect of profits earned by Westend from the development.

[17]

Affidavit material for the fourth suspected offence 78 The relevant parts of Federal Agent Szolnoki's affidavit concerning the fourth suspected offence were as follows: 6.76 ASIC records indicate that WHITBY was registered as an Australian proprietary company on 11 July 2005 and that its registered office is located at 2 Duncraig Road, Applecross, WA 6153. 6.77 ASIC records identify that A.CARATTI is a current office bearer of Whitby… 6.78 Other directors of WHITBY include Liang LI (LI) (since 14 March 2011) and Christina CARATTI (C.CARATTI) (since 01 January 2013), A.CARATTI's daughter. 6.79 Landgate records indicate that in January 2008, WHITBY acquired land identified as Lot 22 on Diagram 4515, certificate of volume 1353 and folio 245, located at 293 Nicholson Road, Forrestdale, WA 6112. … 6.83 In 2012, an ATO audit of WHITBY, obtaining financial and business records, revealed the land at Lot 22, Nicholson Road, Forrestdale, is being developed and subdivided into residential lots. Financial records analysed by the ATO have revealed that between 2011 and 2012, WHITBY sold 113 residential lots as part of this development, resulting in approximately $23,766,818 in sales. The ATO has deemed this as assessable income. 6.84 The ATO have advised the AFP that WHITBY did not register with the ATO for a Tax File Number (TFN), Australian Business Number (ABN) or GST when it was registered as a company in 2005. WHITBY remained unregistered for taxation purposes until the ATO registered it for a TFN on 6 October 2012 and an ABN and GST on 3 November 2012. The applicant suspects that by failing to register WHITBY for tax purposes, A.CARATTI was attempting to conceal potential income and avoid his taxation responsibilities. 6.85 On 24 March 2010, Wilson and Atkinson Law Firm oversaw the production of documents produced by A.CARATTI to ATO auditors. Within these documents was a deed of trust in relation to WHITBY. It was executed as a deed and signed by A.CARATTI on 15 November 2007. MAMMOTH of 2 Duncraig Rd, Applecross was listed as the beneficiary in relation to the property described as Lot 22, 293, Nicholson Rd, Forestdale. This document was witness by SCHOKKER. 6.86 The ATO estimate that for the 2011 and 2012 taxation years, the land development undertaken by WHITBY has resulted in net taxable income of approximately $8,161,390. The ATO assessed a GST liability of approximately $1,425,497. 6.87 The ATO have advised that even though WHITBY has not advised sales of land or declared income in relation to its development for the 2012 financial year, MAMMOTH submitted claims to the ATO for income tax deductions in that year with respect to the development of land being undertaken by WHITBY at 293 Nicholson Road, Forrestdale, WA. 6.88 ATO analysis of documents obtained from WHITBY accountants, Macri Partners (MACRI) with regard to MAMMOTH's claim for income tax deductions identify that MAMMOTH are claiming approximately $50,000,000 attributable to the development of the Nicholson Road land. 6.89 About 27 to 29 November 2012, WHITBY lodged BAS statements to the ATO covering 2011/12 financial year for WHITBY through their accountants MACRI. These statements were rejected as the ATO was in the process of issuing assessments with respect to WHITBY's taxation liability. The applicant suspects that the BAS statements were only lodged in response to ATO audit activity in an attempt to a taxation debt. … 79 The allegation under investigation was therefore that Whitby Land Company Pty Ltd, at Mr Caratti's instigation, sold land worth almost $24 million, but that the goods and services tax (GST) due on that sum of about $1.5 million was never reported or remitted as required. The allegation is that Mr Caratti deliberately and dishonestly brought that about in the period between the middle of 2010 and the end of 2013. As the primary judge explained: Whitby Land Company allegations 33 The third group of allegations concerned a company called Whitby Land Company Pty Ltd. Mr Caratti was a director of Whitby Land Company. 34 In January 2008, Whitby Land Company acquired land at 293 Nicholson Road, Forrestdale, Western Australia. It would appear that Whitby Land Company subdivided and developed the Nicholson Road land into residential lots. The lots were subsequently sold for a total amount of about $24,000,000. Those sales appear to have occurred during 2011 and 2012. 35 Despite its involvement in the enterprise responsible for the development and sale of the Nicholson Road land, Whitby Land Company was never registered under the GST Act. It follows that it never reported or remitted any GST payable and collected by it in respect of its supply of the developed lots. The ATO assessed Whitby Land Company's GST liability as being in the order of $1.5 million. 36 The allegation being investigated was that Mr Caratti, as a director of Whitby Land Company, deliberately failed to register Whitby Land Company for GST and deliberately failed to remit the GST portion of the consideration it received from the land sales.

[20]

Affidavit material in relation to the fifth suspected offence 81 The relevant parts of Federal Agent Szolnoki's affidavit concerning the fifth suspected offence were as follows: 6.110 ASIC records indicate that FOREST HOPE was registered as an Australian proprietary company on 31 October 2006 and that its principal place of business is 48 Wickham Street, East Perth, WA 6004. 6.111 ASIC records identify that BAZZO is the current director of the company, appointed 27 July 2011, recorded against 2 Duncraig Road, Applecross, WA 6153. A.CARATTI has also been an office holder of FOREST HOPE holding the following position: [Director: 31/10/2006 - 27/07/2011] 6.112 ASIC records indicate that Gucce Holdings Pty Ltd (GUCCE) was registered as an Australian proprietary company on 7 January 2002 and that its registered office is 48 Wickham Street, East Perth, WA 6004… 6.113 ASIC records indicate that BAZZO is the current sole director and secretary of GUCCE. BAZZO is recorded against 2 Duncraig Road, Applecross, WA 6153. A.CARATTI is recorded as a previous director of GUCCE, between the dates 17 January 2002 and 01 February 2002, A.CARATTI is recorded against 517 Great Eastern Highway, Redcliffe, WA 6104. 6.114 In December 2009, a Joint Venture (JV) agreement between GUCCE and FOREST HOPE. The joint venture was a land subdivision of Lot 9029 Broadway, Aveley, WA 6069 (known as Aveley Green), of which GUCCE owned a fifty percent share. 6.115 Between 28 July 2011 and 16 November 2012, works were undertaken as per the terms of the JV. As part of the works, civil and earth works were undertaken in the process of subdividing the land. MAMMOTH were hired by GUCCE to complete these works. During the process of the subdivision, MAMMOTH issued 40 invoices to GUCCE and FORREST HOPE for the works completed, as per the terms of the JV. 6.116 The 40 invoices, contained invoice numbers, total cost including GST, works completed and what stage of the project the invoice related to. Each invoice was signed by an independent site supervisor, who confirmed the costs charged for each invoice. 6.117 The total cost for works completed, as signed on the 40 invoices by the independent site supervisor was $15,040,672.14, including GST of $1,367,344. 6.118 Between 17 August 2011 and 31 December 2012, GUCCE paid $14,153,499.33 for the works undertaken by MAMMOTH. 6.119 In May 2013, the ATO commenced an audit of GUCCE after it was identified that GUCCE had incorrectly reported income to the ATO. 6.120 As a result of the ATO audit, it was identified that GUCCE, in relation to the JV, had claimed GST input credits totalling $2,218,953.22. To support this claim, GUCCE provided the ATO with stage by stage reconciliation of initial costs, per developed lot, completed through SLS Accounting. This included invoices for works undertaken by MAMMOTH, relating to the JV, totalling $22,847,181.25. 6.121 ATO analysis of the cost breakdown schedules and [redacted citing public interest immunity] that the transaction amounts are higher than the certified work, including higher contract prices, added work items and higher unit prices. 6.122 As works totalling $15,040,672.14 had been verified by the independent site supervisor, the applicant suspects that BAZZO and A.CARATTI on behalf of GUCCE and MAMMOTH, have colluded to create false invoices for the works undertaken, in order to claim GST input credits and reduce taxable income, resulting in GUCCE / MAMMOTH obtaining a financial advantage. The income reported by MAMMOTH to the ATO, did not match the expenses listed by GUCCE. 6.123 The applicant suspects that GUCCE deliberately overstated GST credits in relation to FOREST HOPE, by forming an agreement with MAMMOTH, which resulted in the creation of invoices, in order to dishonestly obtain a benefit from the ATO. 6.124 Inquiries with ASIC reveal that MAMMOTH is registered at 2 Duncraig Road, Applecross WA 6153 with Allen Bruce CARATTI as Director and Secretary, A.CARATTI is recorded against 517 Great Eastern Highway WA 6104. … 82 The allegation under investigation is that the claiming of input tax credits was brought about by Mr Caratti and supported by Ms Bazzo by the provision of false invoices, with the focus being on when the false documents were alleged to have been created. As the primary judge explained: The Gucce Holdings allegations 37 The fourth group of allegations concerned two companies: Gucce Holdings Pty Ltd and Forest Hope Pty Ltd. Ms Bazzo was a director of both companies. Mr Caratti had been a director of Gucce Holdings, though at a time well before the events the subject of the relevant allegations. He was a director of Forest Hope up to a time just before the most significant events the subject of the investigation. 38 In December 2009, Gucce Holdings and Forrest Hope entered into a joint venture agreement in relation to the subdivision of land in Avery, Western Australia. Gucce had a 50% interest in that land. 39 Gucce Holdings retained Mammoth Nominees to do civil and earth works in relation to the subdivision. Mammoth Nominees issued forty invoices to Gucce Holdings and Forest Hope in relation to the works. The invoices totalled $15,040,672.14, including GST of $1,367,344. Each of the invoices was signed-off by an independent site supervisor. Between August 2011 and December 2012, Gucce Holdings paid $14,153,499.33 to Mammoth in respect of the work. 40 In May 2013, the ATO commenced an audit of Gucce Holdings. During the audit it was ascertained that Gucce Holdings had claimed input tax credits under the GST Act in respect of the works carried out by Mammoth Nominees. The input tax credits claimed by Gucce Holdings totalled $2,218,953.22. In simple terms, the amount of the input tax credits to which Gucce Holdings was legitimately entitled to claim equalled the amount of the GST it paid in respect of Mammoth Nominee's supplies: see s 11-25 and s 17-5 of the GST Act. It appeared that Gucce Holdings had claimed more input tax credits than it was legitimately able to claim. 41 In the course of the audit, Gucce Holdings endeavoured to support its entitlement to claim input tax credits referable to the supplies by Mammoth Nominees by providing detailed information, including invoices, suggesting that Gucce had in fact paid $22,847,181 to Mammoth Nominees for the works. That was a considerably larger amount than the amount reflected in the 40 invoices signed off by the independent site supervisor. 42 The allegation being investigated was that Mr Caratti and Ms Bazzo colluded to overstate the input tax credits which Gucce was entitled to claim and created false invoices to substantiate that claim.

[21]

The execution of the search warrants 83 The execution of the search warrants was carried out over three days between 28 and 30 January 2015, resulting in the seizure of a large number of documents and other items, mainly computers and electronic storage devices. Several features of the process of execution, as recorded in the primary judge's findings, should be noted: (1) Prior to the execution of the search warrants, it was decided by Federal Agent Nicholson that it would be beneficial to have the assistance of tax officers with some background knowledge of the business and tax affairs of Mr Caratti and Ms Bazzo. (2) On 22 January 2015, Federal Agent Nicholson distributed a draft Standard Tactical Plan to Federal Agents who were rostered to participate in the execution of the search warrants. That document included background information concerning Mr Caratti and Ms Bazzo and details of the offences in terms relevantly identical to the terms of the third condition of the warrants. (3) On 27 January 2015, Federal Agent Nicholson delivered a briefing to the Federal Agents and tax officers who were expected to be involved in the execution of the warrants. (4) Prior to execution, some "premises-specific" briefings were also conducted by certain "Team Leaders", although it appears that this involved little more than the team leaders reading out the third condition offences. (5) A large number of tax officers ultimately assisted in the execution of the warrants, acting as "constables assisting" for the purposes of Part IAA of the Crimes Act. (6) Tax officers - Mr Peter Irvin and Ms Amanda Milner - assisted in the execution of the warrants at the premises at Wickham Street, East Perth. Mr Irvin's involvement with the execution at those premises relevantly included distributing to at least some of the officers assisting a document intended to aid searches by informing them of some of the background to the allegations that were the subject of the warrant (Search Relevances document).

[26]

First and second appeal grounds as pleaded 86 Mr Caratti's first ground of appeal is stated as follows: His Honour erred in finding that the Warrants were valid on their face, in finding that they sufficiently specified the perimeters within which materials were able to be searched for and seized and that they were capable of sufficiently informing the occupiers of the relevant premises of the authorised area of the search and seizure: [162], [238], [483]. Particulars as to [alleged erroneous] conclusions on each offence in the Third Condition of the Warrants (i) The description of the first offence in the Third Condition, which related to Starbrake Pty Limited, was sufficient to enable an occupier to discern a search perimeter relevant to the offence: [133]. (ii) When read in conjunction with the first offence, it would have been tolerably clear to the reader of the second offence in the Third Condition that the alleged GST liability in the description of that offence related to the royalty income received Starbrake Pty Limited, and that the dishonesty arose from the alleged reclassification of that income. The gist or substance of the key factual allegations that underlay the second offence were sufficiently apparent to identify the object or area of the search: [139]-[140], [145]. (iii) The third offence, which related to Westend Asset Pty Limited, was particularised such that the gist or substance of the key factual allegations that underlay the offence were sufficiently apparent to identify the object or area of the search: [145]. (iv) The description of the fourth offence related to Whitby Land Company Pty Limited was sufficient to satisfy the requirement that it define or provide a meaningful or intelligible search perimeter: [152]. (v) On balance there is sufficient particularity and clarity in the description of the fifth offence in the Third Condition, related to Gucce Holdings Pty Limited, to indicate the area of search permitted by the warrants: [159]. 87 Mr Caratti's second ground of appeal is stated as follows: His Honour erred in finding that the search perimeter permitted by the Warrants did not exceed what was reasonably justified by the material before the issuing officer: [175], [189]-[193], [199], [238], [482].

[27]

Findings of the primary judge relevant to the first and second appeal grounds (offence descriptions) 88 In relation to ground 1B below, which is revisited as the first ground of appeal, the primary judge considered that the description of each of the suspected offences in the third condition of the warrants was sufficient to define adequately the area of search. This conclusion was reached notwithstanding a number of issues his Honour identified with the drafting of the descriptions. In particular, those descriptions were considered to be "ambiguous or unclear" in places and showed a very poor appreciation of the terms of the underlying tax legislation, demonstrated by repeated erroneous reference to the Australian Taxation Office as the relevant legal entity, ambiguity in the particularisation of the date on which some of the alleged conduct was said to have occurred, and the description of several offences in terms of "withholding" or failing to pass on GST, the meaning of which was not readily clear or consistent with any concept in the GST legislation. 89 Despite these and other concerns about the drafting of the warrants, his Honour concluded that the suspected offences were sufficiently disclosed to avoid invalidity. His Honour emphasised that the Court's role was to approach the descriptions broadly and without overzealous technicality, and to consider the descriptions fairly and in the context of each warrant as a whole. In respect of each suspected offence, his Honour placed weight on the fact that the descriptions included the name or names of the persons accused of the offences, the relevant offence provision, some temporal particularisation, and the general "gist" of the offending conduct. In other words, the focus was on the substantive conduct being investigated, even if it did not conform accurately or precisely to the legal incidence or effect of what was said to have occurred. 90 Because the paragraphs cited in the second appeal ground make clear why this particular aspect of review ground 1B before the primary judge failed, and because the appeal in this respect turns on the conclusions his Honour reached, it is necessary to examine the text of each paragraph of his Honour's reasons. For each, Mr Caratti must show not merely that a different conclusion was open, but that the conclusion reached was wrong and therefore not available to his Honour. 91 The particular paragraphs of the primary judge's reasons complained of in the second ground of appeal do not need to be reproduced, but can be summarised as follows: (1) At [175], his Honour rejected Mr Caratti's characterisation of the offences in the third condition as "discrete transactions" as being neither fair nor accurate, describing them instead as four allegations involving relatively complex facts and conduct extending over a period of time - his Honour therefore concluded that there was no need to limit the issue of warrants to discrete transactions. (2) At [189]-[190], his Honour considered the first two "Starbrake" offences in the third condition and concluded that, while a technical approach might lead to a conclusion that the focus on 2008 was erroneous and that different dates might have been fixed upon, that date was when the conduct giving rise to the alleged fraud took place. Accordingly, at least some of the factual or legal elements of each offence took place in 2008 and there was no error in focussing on that date, even if other dates might have been used because aspects of the fraud alleged took place later in time. (3) At [191]-[193], his Honour considered the third "Westend" offence in the third condition, and similarly concluded that while dates other than 2008 might have been relied upon, again at least part of that offence was referrable to that year. (4) At [199], his Honour made the point that while the offences in the third condition could have been drafted in narrower terms or with different dates or date ranges, and that the words and dates used lacked clarity and particularity, the information before the issuing officer was capable of satisfying the criteria for the issue of the search warrants. (5) At [238], as relevant to this appeal ground, his Honour summarised an aspect of the conclusions reached to the effect that the search warrants were not invalid on the basis that it was not open to the issuing officer to be satisfied that there were reasonable grounds to suspect that evidential material referrable to the third condition would be at the premises. (6) At [482], as relevant to this appeal ground, his Honour again stated the conclusion that the information before the issuing officer was sufficient to support a finding that there were reasonable grounds for suspecting that there was, at the relevant premises, things with respect to which there were reasonable grounds for suspecting they would afford evidence of the commission of the offences in the third condition, and that Mr Caratti had not proved otherwise. Subject to a severance finding as to a paragraph making an invalid reference to seizure of "any storage medium", the search permitted did not exceed what was justified by the material before the issuing officer. 92 In relation to ground 1A below, which is revisited as the second ground of appeal, the primary judge rejected the contention made by Mr Caratti that the search area identified by the warrants was broader than what was reasonably justified by the material before the issuing officer. In advancing that argument, Mr Caratti placed considerable reliance on the obiter dicta of Fox J in R v Tillett; Ex parte Newton (1969) 14 FLR 101 at 125, where his Honour, having concluded that the relevant search warrants were invalid by reason of certain defects, proceeded to make the following observations: As to the area of the search, I believe that the requirements are flexible. If, as is now likely to be the case, the issue of the warrant rests on statutory authority, the content of the warrant is governed by the statute and must not only comply with the more specific requirements thereof, but it should not be wider than is necessary to carry out the manifest legislative purpose. In a case under s 10(b), for example, it would be wrong to issue a warrant which authorized a general search of bank premises, when the information pointed to one forged cheque. Even a search for all documents relating to a particular account may be too wide. There should be no limitation on an adequate search, but it is a function of the information to show how wide that search may have to be, and the function of the justice to ensure that his warrant does not authorize anything wider. Each case must depend upon its own facts. 93 The primary judge did not accept that Fox J was intending to lay down a rigid test concerning the permitted area of search and seizure of a warrant. His Honour stated: 171 It should be noted that the search warrant in question in Tillett purported to permit the search of bank premises and the seizure of "books, papers, documents or other things" as to which there were "reasonable grounds for believing that the same will afford evidence of the commission of an offence against the Commonwealth Crimes Act". No specific offence was specified. There was effectively no limitation on the books, papers, documents and things that could be searched for and seized. It is not surprising, in those circumstances, that the warrant was found to be defective. The observations of Fox J should be considered in that context. 172 It is readily apparent that Fox J was not intending to lay down any rigid test concerning the issue of search warrants or the permitted area of search and seizure. As his Honour said, the "requirements are flexible", the "content of the warrant is governed by the statute" in question and that "each case must be governed by its own facts". His Honour's reference to the warrant not being "wider than necessary", and the issuing officer's function being to ensure that the warrant does not authorise "anything wider", must be read as meaning anything wider than permitted under the relevant statutory provision, properly construed. Contrary to Mr Caratti's submission, Tillet is not authority for the much broader proposition that the offence specified in a search warrant must be particularised in the narrowest possible terms supported by the information before the issuing officer. 94 His Honour considered that the relevant question was whether the information before the issuing officer was capable of satisfying the officer, in simplified terms, that there were reasonable grounds to suspect that there were things at the premises that would afford evidence of the commission of the offences specified in the warrants. It was accepted that, as considered in George v Rockett at 117, the more broadly a warrant describes the kinds of evidential material to be searched for, the more difficult it might be for the information before the issuing officer to satisfy this requirement. However, his Honour held that it would not be impermissible to describe the object of the search in a broad, non-specific fashion, citing Dunesky v Elder at 555E-F.

[28]

Appellant's submissions on the first and second appeal grounds (offence descriptions) 95 The central contention advanced by Mr Caratti on his first ground of appeal was that the descriptions of the suspected offences in the warrants give rise to "intolerable ambiguity" because they are capable of two different meanings and of defining two different search areas. Accordingly, it was submitted that the primary judge erred in concluding that the statement of the offences was sufficient to meet the requirement expressed in Zhang v Commissioner, Australian Federal Police [2009] FCA 1170; 260 ALR 580; 111 ALD 123; 77 ATR 713 at [13] that the descriptions provide "real and meaningful perimeters to the 'area of search'". That view was in part drawn from Beneficial Finance at 543. In the present case, it was submitted that the use of the "three-condition" search warrant as a drafting device gave rise to a greater need for particularisation, having regard to the broadly drafted first and second conditions of the search warrant. 96 In support of the contention that the warrants gave rise to "intolerable" ambiguity, counsel drew a distinction between language that is "infelicitous" or "inelegant" and language that is "unintelligible" or "ambiguous". Ambiguity, it was submitted, would render a warrant invalid, citing the statement in Ousley v The Queen (1997) 192 CLR 69 at 107 that a warrant will be "bad" if it is "so vaguely worded that a person affected by it cannot know the object of the search". Reliance was also placed on Williams v Keelty [2001] FCA 1301; 111 FCR 175 at [156], Parker v Churchill (in the Full Court) at 340.8 and Corbett at [106]. 97 In oral submissions, counsel for Mr Caratti addressed the principle espoused by Burchett J in Beneficial Finance that a legally incorrect formulation in a search warrant will not necessarily invalidate the warrant. It was submitted that this principle is qualified by a requirement that the warrant be plainly comprehensible, as expressed at 543, where his Honour stated (emphasis added): … If the courts were to insist upon the invalidation of a warrant for a legally incorrect formulation of an offence, although the substance of the offence could plainly be understood, they would not be interpreting the will of the Parliament but subverting it. 98 The main species of ambiguity said to affect the search area of the warrants in the present case arises primarily from the imprecision of the time periods specified for some of the suspected offences. In this regard, the force of the appellant's submissions was directed towards the first and second offences, which were described in the warrants as having occurred "in 2008" and concern Mr Caratti's suspected reclassification of royalty income as a loan to avoid paying income tax and the suspected failure of his company Starbrake "to pass on" GST. The relevant asserted ambiguity, as identified by the primary judge, is said to arise in the following manner: (1) In relation to the first offence, it is unclear whether the particularised date of 2008 refers to the date on which the alleged deceptive conduct occurred (either the accounting reclassification of the royalty payment, or perhaps the lodging of a false tax return that did not declare the royalty income), or the date on which the financial advantage was allegedly obtained. That date would be the date on which the tax would, but for the deception, have been assessed as payable. (2) In relation to the second offence, the description of the contravening conduct as a failure to "pass on" GST gives rise to similar difficulties in ascertaining what conduct is in fact being referred to, noting that the GST legislation does not refer to GST being "collected", nor does it create or refer to an obligation to "pass on" GST. On appeal, Mr Caratti submits that this imprecision means that there are multiple interpretations possible as to what the time period "in 2008" refers to. 99 Counsel for Mr Caratti directed the Court to the primary judge's reasons at [131], where, having identified the relevant ambiguities, his Honour emphasised that: … the question of the sufficiency of the description of the offences in the warrant is not to be approached as if the warrant was an indictment and the issue was the legal sufficiency of the pleading. The exercise involved in determining whether the description of the offences in a search warrant is sufficient is not to be approached as if it was a demurrer. Nor is it a counsel of perfection. Rather, as already indicated, the question is whether, viewed broadly and not perversely or with undue technicality, the general nature of the offences is sufficiently disclosed so as to indicate the authorised area of search. 100 The vice said to be disclosed in the approach adopted above is that the primary judge was said to have committed an error of principle in dealing with the issue as a question of the sufficiency of the particulars supplied, instead of grappling with the proper question of whether the descriptions were impermissibly ambiguous. In oral submissions, counsel for Mr Caratti submitted that the test of "adequacy" involves two parts: first, whether there is sufficiency of particularity; and second, whether the warrant is free from ambiguity, in the sense of the warrant having two meanings. Accordingly, it is said that although the primary judge identified ambiguity in the warrants, his Honour failed to recognise that such ambiguity might "intolerably" give rise to two different meanings and two different areas of search. Further error is also said to have been disclosed by the primary judge in finding that a reader of the warrants would perceive a connection between the first and second offences. 101 Reliance was also placed on asserted ambiguities in the balance of the offences as follows: (1) In relation to the third offence concerning a suspected failure by Westend Asset Pty Ltd to pay income tax, it was asserted that the primary judge erred in concluding that the gist or substance of the key factual allegations that underlay the offence was sufficiently clear, in circumstances where his Honour considered that, if the offence were an indictment, the prosecution would be required to clarify exactly what was alleged to have occurred in 2008: whether it was the falsification of the costs, or the lodgement of the relevant income tax return, or whether 2008 simply referred to the relevant income. (2) In relation to the fourth offence concerning a suspected "withholding" of GST by Whitby Land Company Pty Ltd, it is asserted that intolerable ambiguity arises because it is unclear what is meant by "withholding" GST, an expression which does not readily accord with any concept in the GST legislation. It was further submitted that this formulation gives rise to temporal ambiguity, in that it is not clear whether the period "between 1 July 2010 and 31 December 2013" refers to, for example, the period of failure to register GST, GST tax periods, or the dates when the BAS were due to be lodged and net amounts due to be paid. (3) In relation to the fifth offence concerning an alleged overstatement of GST input credits by Gucce Holdings Pty Ltd "in December 2011", it is asserted that the description is ambiguous as to what occurred in that time period. For example, the offence might refer to when it was agreed that costs be falsified, the actual falsification of costs, the GST tax period to which the falsified costs relate, the date when BAS were due to be lodged and net amounts due to be paid, or the date when BAS were in fact lodged. 102 In his second ground of appeal, Mr Caratti also asserted error in the primary judge's conclusion that the search area permitted by the warrants did not exceed what was reasonably justified by the material before the issuing officer. In support of that assertion, it was said that, applying the reasoning in George v Rockett at 116.4 - 119.2 to the statutory language of the Crimes Act, a warrant is "unjustifiably wide" if, in respect of the evidential material to be searched for, the supporting affidavit material did not provide reasonable grounds for suspecting that the material would be at the relevant premises nor reasonable grounds for suspecting that the material would afford evidence as to the commission of the offence. It was noted that the statutory language of "will afford" in s 3E of the Crimes Act echoes the provisions that were considered in George v Rockett. In this regard, it was emphasised that the more broadly a warrant describes the kinds of evidential material to be searched for, the more difficult it might be to meet this requirement. 103 It was suggested that a search area might be broader than justified by the material before the issuing officer in two circumstances. First, where the offence defines a search perimeter that is different from what was intended or supported; and secondly, where the lack of particularity in the language of the offence results in a failure to confine the search area to what was justified. 104 The area covered by the search warrants in the present case was (again) said to be broader than justified by the affidavit material before the issuing officer as follows: (1) The first suspected offence should not have referred to 2008 as the date of reclassification of royalty income, in circumstances where the material before the issuing officer justified a charge founded on that reclassification occurring in late 2011 or early 2012, albeit in respect of tax liability arising in 2008. Moreover, the material before the issuing officer suggested that the offence constituted a single, discrete royalty transaction, while the offence description did not refer to or confine itself to any transaction. (2) The second suspected offence similarly did not refer and was not confined to the royalty transaction that was the subject of the affidavit material. Likewise, the date of the offence should not have been stated as the calendar year "2008" in circumstances where the affidavit material (which suggested a failure to report income at the end of the relevant financial year) did not support an offence occurring prior to 1 July 2008. (3) The third suspected offence should not have referred, without proper confinement, to "withholding" GST, in circumstances where the subject of the affidavit material was a single transaction, being the falsification of costs from Mammoth Pty Ltd totalling $5.4 million. Accordingly, it was said that the primary judge erred at [179] in concluding that "the offence also involved other conduct and circumstances that provided necessary context and background to the alleged falsification of costs". (4) The fourth suspected offence referred, without proper confinement, to "withholding" GST, in circumstances where the affidavit material suggested a contravention constituted by a single transaction, being the failure to register GST payable to the ATO. Moreover, the offence was also broader than justified having regard to the deficiency in the particulars of the factual allegations, which did not provide, as noted by the primary judge at [153], "any, or any meaningful, particulars of how Whitby Land Company's GST liability arose and why Mr Caratti's withholding of amounts payable by Whitby Land Company was deceptive and dishonest". (5) The fifth suspected offence referred, without proper confinement, to "withholding" GST, in circumstances where the affidavit material concerned falsified costs that could be confined to a particular project and particular invoices.

[29]

Respondent's submissions on the first and second appeal grounds (offence descriptions) 105 In relation to the first appeal ground, the Commissioner submitted that the statement of an offence in a warrant need not meet a high bar. The required approach is instead "broad" and "practical": Beneficial Finance at 538. The approach "eschews overzealous technicality": Beneficial Finance at 543. The question is one of substance, even if the offence is given a legally incorrect formulation: Beneficial Finance at 533-535; Corbett at [1]. The true principle is that the warrant "should disclose the nature of the offence" sufficiently. 106 The Commissioner made a number of submissions in turn about the sufficiency of the description of each offence in the warrants. Generally, the Commissioner emphasised that the warrants were to be read as a whole and in a practical way. It was said that language is inherently ambiguous, and the test for validity of a warrant is not and has never been that the offence relied upon is identified without any ambiguity. 107 In respect of each offence, the Commissioner reiterated the primary judge's findings that the warrants identified some temporal range, the person suspected of committing the offence, the relevant provisions said to have been contravened, and the "gist" or nature of the relevant course of conduct. 108 Specific submissions in respect of the description of each of the offences were advanced on behalf of the Commissioner as follows: (1) In relation to the first and second suspected offences, it was submitted that it was not necessary for the warrants to specify with precision what was relied on as having occurred in 2008, as the matter was at an investigation stage and precisely what had occurred could not have been known. It was further submitted that the warrants sufficiently directed searchers to look for material from, in, or around 2008 connected to the reclassification of royalty income paid to Starbrake Pty Ltd. (2) In relation to the third suspected offence, it was emphasised that invalidity is especially unlikely to arise by reason of the ambiguities identified, where the subject matter of the offence is otherwise clearly identified, being the falsification of costs by a named entity and failure to pay tax. (3) In relation to the fourth and fifth suspected offences, it was submitted that any reasonable reader of the warrants would have understood the reference to "withholding" GST to refer to a failure to pay GST to the ATO. No real ambiguity was said to arise from this natural reading. 109 As to the second ground of appeal, the Commissioner submitted that the warrant affidavits provided a sufficient basis for the issuing officer to issue the warrants, setting out material from which it was open to conclude that there were reasonable grounds for the suspicion that Mr Caratti had engaged in the various contraventions. It was further submitted that the primary judge asked the very question which the appellant says should have been asked, namely, whether the offences stated in the warrants were "broader than justified by the information". The reason why his Honour addressed ambiguities in the drafting of the warrants when considering this issue was because of the way Mr Caratti put his case. 110 It was also submitted that Mr Caratti's reliance on the words "will afford" used in George v Rockett is misplaced. It was said that the issuing officer may only issue a warrant if there are reasonable grounds for suspecting that there is or will be "evidential material" at the premises, as the expression does not call for precise correspondence between evidential material that the issuing officer suspects will be at the relevant premises and the offence specified in the warrant. 111 The submissions for the Commissioner are correct as far as they go, but they do not properly grapple with the substance of the complaint being made, or with the solution to that complaint arrived at by the primary judge, or with the limited nature of appeals by way of rehearing, and the requirement for error to be established. That is largely left to reliance on his Honour's reasoning.

[30]

Consideration of the first and second appeal grounds (offence descriptions) 112 An immediate point to be made about the submissions made on behalf of Mr Caratti is that they amount to little more than pointing to the conclusions that the primary judge might have reached, but did not, if the focus in the drafting of the third condition had been clearer on the technical aspects of the offences as they would need to be proved and therefore might ultimately be charged. That approach, in substance, although disavowed in form, of requiring search warrant offences to comply with the formal and exacting characteristics of criminal charges or indictments (here in the context of the law of taxation) has been repeatedly rejected as the authorities summarised above make clear. 113 This approach also did not properly grapple with the central part of his Honour's reasoning, which was to look at the breadth of material before the issuing officer and to note that the conduct in question had a number of different facets stretching over a period of time, with the offence descriptions focusing more on an aspect of the conduct rather than its totality. His Honour effectively concluded that it was open to have a search warrant that focused on a part of the period in which material conduct contributing to the commission of an offence was suspected to have taken place. No error in that approach has been demonstrated. That is particularly so when regard is had to the nature of the conduct under investigation, as spelt out in the affidavit used to obtain the search warrants, key parts of which are reproduced above. 114 Neither the affidavit nor the search warrants, while not highly detailed, exact or precise in the manner of Mr Caratti's complaint, were required to meet such an exacting standard. Rather, they were to be read beneficially, and without overzealous technicality. While greater clarity doubtless would have been better for all concerned, including this Court both at first instance and on appeal, it is important not to lose sight of the fact that the search warrants were in aid of a criminal investigation being conducted by police officers assisted by tax officers, not a curial process conducted by lawyers. What was required was sufficient material giving rise to conjecture or surmise that material would be found that would afford evidence of the commission of each of the named offences, and that the suspected offences stated in the search warrants sufficiently identified what was being investigated to limit the ambit of the search and any seizure that might follow. It is general warrants that must be avoided, not warrants that lack the precision of, for example, curial processes, either civil or criminal. 115 The primary judge was correct to conclude that the necessary bar for validity had been met both as to the sufficiency of the material before the issuing officer and in the adequacy of the offence descriptions contained in the search warrants that were issued. This was a difficult value judgment that was open for his Honour to make, especially as his Honour, at [246], correctly rejected the submission made on behalf of the Commissioner that s 3E created only a "low bar" for the issue of a valid search warrant. 116 The primary judge properly expressed concern at the poor quality of the drafting and the problems that had resulted, including the need for detailed consideration and analysis by his Honour of a kind that should not have been necessary. His Honour did not lightly come to the conclusion that the search warrants were sufficiently supported by the material in the affidavit, nor to the conclusion that the offence descriptions in the search warrants were adequate, if not ideal. Those conclusions were fairly open to his Honour. 117 In particular, it was open to the primary judge to conclude that the offence descriptions sufficiently disclosed the substance and nature of the suspected offences, notwithstanding the lack of clarity arising by reason of reference to "withholding" or failing to pass on GST, expressions which were not consistent with any concept in the GST legislation. Again, the submissions on behalf of Mr Caratti did not go further than suggesting that the primary judge did not reach the preferable conclusion. Accordingly, no error on his Honour's part has been identified. It should be emphasised that, as was observed by the primary judge, the statement of the offence in a search warrant need not be made with the precision of an indictment. The standard required is to be informed by the real object of the third condition of the warrants, namely, to identify the kind of offences alleged: Dunesky v Elder at 557C. 118 Similarly, the continued insistence on behalf of Mr Caratti that dates of the kind that might be found in a criminal charge or indictment were required misses the point of having an offence description which generally, but sufficiently, describes the conduct under investigation, so as to frame and confine the area of the search and any seizure. None of the offence descriptions took the search inquiry beyond the conduct being investigated and the supporting affidavit material. To the contrary, the focus was perhaps more on the time at which key aspects of the conduct took place than on the time of legal incidence of fraud to which the suspected offences related. Viewed in this way, the offence descriptions were narrower in time than might validly have been used. 119 There could have been no complaint if the date range for each of the suspected offences had started from the earliest possible date and ended at the latest possible date, perhaps qualified by "about" to make it clear that, at the investigative stage at least, such precision was neither possible nor necessary. It is worth observing in that regard that approximate dates or date ranges, rather than precise dates, are often used in criminal charges and indictments, although sometimes greater precision is possible and may be indispensable. The search ambit cannot be said to have been misstated in any material way by being expressed in narrower terms by date than it had to be, leaving any wider material found to be potentially seized by the exercise of the power bestowed by s 3F(1)(d)(i). For the same reason, the area of search defined by the search warrants cannot be said to be any broader than was justified by the supporting affidavit material. 120 In Dunesky v Elder, the Full Court relevantly considered on appeal a challenge to the validity of search warrants on the basis that certain particulars in the offence descriptions did not identify an offence known to law. In that case, the offence stated in the search warrants was defrauding the Commonwealth contrary to s 29D of the Crimes Act. The complaint was that the particulars for the offence, referring to a failure to disclose "assessable income", were inconsistent with s 161(1) of the Income Tax Assessment Act 1936 (Cth). In that regard, it was submitted by the unsuccessful appellant that s 161(1) was directed to an obligation to report "total income", encompassing capital gains or profits, which are not embraced within the ordinary understanding of the word "income". On that basis, it was said that the warrants failed to disclose a relevant alleged offence. The Full Court did not accept the appellant's argument, considering that the expression "assessable income" means simply all of the income received which may be assessable income under the legislation. The Full Court further considered, at 558A, that the particularisation of the offence by reference to the omission of "assessable" income was not only not misleading, but "actually assists the reader of the warrants to understand better the nature of the offence alleged than if the matter had rested with a general statement of the offence in the language of s 29D". In a similar way, focusing on a portion of a suspected offending period may well assist by making the directly authorised ambit of search narrower or more comprehensible. That is to say that the inclusion of an approximate date or limited date range, while perhaps not being precise to the standard of an indictment, may be more helpful than not doing so in a search warrant. 121 It follows that the search warrant offence descriptions were not beyond the scope of the affidavit by which each warrant was obtained, and there was no fatal departure from the information that was before the issuing officer. 122 It should be added that the criticisms made by the primary judge of the drafting of the search warrants were well observed and soundly reasoned. However, as his Honour concluded, the search warrants were sufficient for the statutory purpose of confining the object of the search that was authorised and provided sufficient guidance as to what was and was not permitted to be seized. 123 There was no error demonstrated in the conclusion reached by the primary judge. Both of these grounds of appeal should therefore fail.

[39]

Findings of the primary judge on the fourth appeal ground 132 In considering Mr Caratti's challenges at first instance to the execution of the search warrants, the primary judge recorded some general impressions and findings concerning the evidence of the execution of the warrants as a whole. It is convenient to reproduce those findings below: 283 The execution of the search warrants was an extremely large and complex logistical and operational exercise. The execution of the warrant at the Wickham Street premises occurred over three days. It involved upwards of 70 AFP and tax officers. The Duncraig Road warrant involved more than 20 officers. The execution of the Irvin Street, Cornish Turn and Harrisdale warrants were smaller exercises, but even so they involved a relatively large number of officers: eight in the case of the Irvin Street premises; fifteen in the case of the Cornish Turn premises; and twelve in the case of the Wright Road premises. Mr Caratti's contentions concerning certain aspects of the execution of the warrants must be considered in the context of the size and complexity of the overall operation. 284 This large and complex operation was overseen by Federal Agent Nicholson. He delivered the main operational briefing that was the subject of one of Mr Caratti's complaints. Federal Agent Nicholson was an impressive and credible witness. There is no reason whatsoever to doubt that Federal Agent Nicholson genuinely intended to ensure that all warrants were executed fairly and in accordance with their terms and the relevant provisions of the Crimes Act. There is also no reason whatsoever to doubt the he did what he considered was necessary and desirable to ensure, as best he could, that the warrants were properly and reasonably executed. 285 One of the operational difficulties faced by Federal Agent Nicholson was that, given the size and complexity of the operation, it was necessary for him to engage the services of a large number of Federal Agents who had not had any, or any significant, prior involvement in Operation Caballus or the investigation into the offences allegedly committed by Mr Caratti and Ms Bazzo. That difficulty was compounded by at least two other matters. 286 First, the investigation and the warrants concerned matters of considerable factual and legal complexity. In short terms, the offences to which the warrants related involved allegations concerning the income tax and GST affairs of several companies over a number of years. It might reasonably be inferred that a number of the Federal Agents involved in the execution of the warrants were not particularly well-versed in the fine detail of the tax legislation that underlay the various alleged offences. 287 Second, as has already been pointed out at length, the search warrants were drafted in terms that did not make the task faced by the officers who were to execute the warrants any easier. For the reasons already given, the warrants were validly issued and complied with the requirements of the Crimes Act. They were, however, in a number of respects poorly drafted and difficult to understand. In practical terms, it was always going to be difficult for Federal Agents who had no previous involvement in the relevant investigation, or who had no significant knowledge or experience in tax related matters, to make the required search and seizure decisions without some assistance. 288 Federal Agent Nicholson sought to deal with those operational difficulties in two ways. First, he distributed a detailed tactical plan and conducted a briefing in relation to the execution of the warrants. Second, he arranged to have a large number of tax officers, including some with direct knowledge and involvement in the tax affairs of Mr Caratti and companies associated with him, to assist in the execution of the warrants. 133 Mr Caratti's challenges to the execution of the search warrants at trial were dealt with by the primary judge in five key parts. 134 First, it was contended that the briefing conducted by Federal Agent Nicholson was insufficient to ensure that the relevant officers had a proper understanding of the warrants, and that, in any event, not all of the executing officers attended the briefing, or received the tactical plan, and no record was kept of the attendees. The primary judge rejected these contentions, considering that the evidence demonstrated that the briefing was adequate in all the circumstances, or at least was not inadequate. His Honour took care to stress that while the briefings may have been important having regard to the complexity of the warrants, the primary focus of the inquiry into the reasonableness of the execution of the warrants should be the decisions made and actions taken. It would only be if deficiencies of the briefing fed through into the actual execution of the warrants that the briefings would be of any particular significance. 135 Secondly, Mr Caratti contended that the evidence revealed that the Federal Agents who were involved in executing the warrants misunderstood and had inconsistent understandings of the terms of the warrants, particularly in relation to the third condition. This was said to be demonstrated, for example, by evidence that suggested discrepancies in the understandings of certain Federal Agents as to whether references in the first, second and third offences to 2008 referred to the 2008 income year or calendar year. In rejecting this contention, the primary judge found that it could not be inferred that all or even a majority of the 50 Federal Agents involved had an imperfect or incomplete understanding of the offences. Furthermore, it could not be concluded that an imperfect understanding or appreciation of the dates would necessarily lead to seizure of documents not properly seizable under the warrants, nor could it be said that any confusion as to dates meant that the search and seizure was effectively "unlimited as to time". 136 Thirdly, Mr Caratti made a number of distinct contentions about the involvement of tax officers in the execution of the warrants. Perhaps most significantly, it was said that the Federal Agents had improperly deferred to advice given by tax officers in the course of executing the warrants. This submission was rejected by the primary judge on the basis that it could not be concluded that the executing officers simply followed the directions of the tax officers and did not turn their minds to whether a document properly satisfied the conditions in the warrant. Moreover, his Honour considered that it was both permissible and reasonable for Federal Agent Nicholson to request the assistance of tax officers in executing warrants, noting the rhetorical comment of Lockhart J in Dunesky v Commonwealth at 502: "Who better to assist in the identification of relevant documents … than the tax officers who are intimately conversant with the subject matter of their audits?" 137 Fourthly, Mr Caratti contended that advice given by tax officers during the execution of the warrants concerning the seizure of documents was based on a "misguided" understanding of the offences to which the warrants related. Having regard to a lack of evidential foundation for the appellant's challenges, his Honour rejected the contention that certain tax officers - Mr Irvin, Mr Crawshaw, and Ms Milner - were variously not aware of the warrants, did not base their advice on the warrant conditions and conflated or confused the audit and referral information with the warrant offences. 138 Fifthly, Mr Caratti contended that the distribution of a "Search Relevances" document - prepared by Mr Irvin to provide more detail concerning the allegations that were the basis of the offences - meant that the warrants were unreasonably or excessively executed. Notwithstanding some concern about the inherent risk that such a document will be given undue prominence and perhaps even become a surrogate for the warrant itself, the primary judge rejected the appellant's contention. His Honour did not accept that the document was given any undue prominence, nor could any direct causal connection be established between the use of the document and the seizure of any item.

[40]

Appellant's submissions on the fourth appeal ground 139 Mr Caratti challenged the primary judge's conclusions in three key respects. 140 First, it was said that the primary judge should have held that the patent "ambiguity" and "lack of clarity" of the offences in the third condition meant that a significant number of the 50 officers involved in executing the warrants had an imperfect or incomplete understanding of the nature of the offences, resulting in improper seizures. Again, such was said to be demonstrated by evidence that Federal Agent van Tooren and Federal Agent Szolnoki had differing understandings as to whether the reference to "2008" in the offences referred to an income year or calendar year. It was submitted further that, contrary to the findings of the primary judge, an inference should be drawn that a sufficient number of the executing officers had an imperfect understanding of the offences, and that it should not be incumbent on the appellant to call every officer to give evidence of their understanding. 141 Secondly, it was contended that, contrary to the primary judge's conclusion, execution of the search warrants miscarried by reason of advice given by Mr Irvin in the course of the process. Mr Caratti submitted that Mr Irvin had not read or even seen the warrants prior to execution, and that his advice to officers was based on his background knowledge of the ATO audit and referral, giving rise to a "material disjunct" between his understanding of the offences and the terms of the warrants themselves. This disjunct is said to have infected the execution of the warrants by reason of Mr Irvin's authority and ostensible influence over the process. 142 Finally, it was contended that inclusion of Mr Irvin's Search Relevances document in packs distributed to some of those involved in the execution of the warrants resulted in the warrants being unreasonably or excessively executed. The Search Relevances document, prepared by Mr Irvin without having read the warrants, is said to disclose on its face a similar disjunct between his understanding of the offences and the terms of the warrants themselves. By way of illustration, it was pointed out that the document confusingly named persons and entities that were not included in the second condition of the warrants, which Mr Irvin suggested in cross-examination was for the purpose of giving examples of what was excluded from the search. Further, it was said that those executing the warrants could also easily have misinterpreted a dot point in item 4 of the document stating "Gucce failed to report all sales on BAS - NON-COMPLIANT", which was conceded to be unclear by Mr Irvin in cross-examination before the primary judge.

[42]

Consideration of the fourth appeal ground 146 Mr Caratti faces a substantial hurdle, both legal and factual, in advancing this appeal ground. The legal hurdle is that, as already discussed, the primary judge's conclusions as to the clarity of the search warrant offence provisions being sufficient for their purpose reached should be upheld on appeal. The factual hurdle is the difficult task of demonstrating that the factual findings and conclusions reached by reference to evidence, including oral evidence, were not open to the primary judge, as opposed merely to being less preferable in some way to those that Mr Caratti asserts should have been made. 147 The conclusions reached by the primary judge turned not just on the documentary and affidavit evidence before his Honour, but also on cross-examination. His Honour's conclusions, many of a value judgment or inferential nature, were interwoven with character and credit findings which this Court is in no position to gainsay on appeal. That is especially so when no attempt was made to take the Court, orally or in writing, to any specific conclusions to point, with precision, to error. In those circumstances, error has not been demonstrated. It is therefore appropriate to proceed upon the basis that the factual findings by his Honour are correct, in the sense of being open or available to be made. 148 In particular, the primary judge concluded that the ATO officers, while doubtless a source of valuable guidance and advice, did not ultimately dictate what would or would not be seized. His Honour illustrated this by reference to ATO views being overruled when they entailed a departure from consideration and comparison with the terms of the relevant search warrant. 149 Given that no attempt was made to demonstrate error by reference to any physical item seized, admittedly a difficult path to impugning the whole process, the findings of the primary judge must be viewed as compelling. No proper basis has been demonstrated for departing from them, let alone for concluding that they entail error.

[46]

Findings of the primary judge relevant to the fifth appeal ground 152 The primary judge concluded that a number of items of electronic equipment had been unlawfully seized. Generally, those findings reflected a failure by the AFP to copy the data or files contained on the equipment at the premises, or to consider whether that course of action was impracticable, instead of seizing the equipment itself without first taking those steps. As a matter of the Court's discretion, however, his Honour made orders permitting the Commissioner to inspect the items seized and, if satisfied in terms of s 3 (1A) of the Crimes Act, copy the data in the manner permitted by s 3L(1A)(a). In adopting this approach, his Honour rejected a submission made by Mr Caratti that the Court's discretion not to order the return of unlawfully seized items was, as a matter apparently of implicit principle, confined to the circumstances where criminal proceedings were already on foot or it had been shown that the items seized might afford relevant evidence of the commission of the alleged offence. No proper basis for that principle was evident upon his Honour's examination of the decisions in Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393, Cassaniti v Croucher (1997) 37 ATR 269 and Wright v Queensland Police Service [2002] QSC 46; [2002] 2 Qd R 667. Similarly, his Honour considered that the decision of CC v Rayney [2012] WASC 56; 42 WAR 498, relied on by Mr Carrati, did not provide any assistance to his case. 153 The relevant question, the primary judge held, was whether the desirability of allowing the police to retain the illegally seized items outweighed the undesirability of permitting the police to retain the items, having regard to the way in which they were obtained. In this regard, his Honour did not consider that the circumstances of the seizures were "deliberate, contumelious or even reckless", but rather the product of an inadequate understanding, or perhaps misunderstanding, of the circumstances in which an electronic storage device can be seized. Taking into account the potential relevance the material might have to the decision to institute criminal proceedings, his Honour was prepared to allow the Commissioner to copy or take an image of the relevant data or files on the unlawfully seized devices. This, it was said, would be to permit the AFP to do what they should have done in the first place.

[49]

Consideration of the fifth appeal ground 158 Once the determination was made that the computer hardware had been unlawfully seized, it was a matter of discretion as to whether the return of those items should be ordered. The principles in that regard were set out by Hill J in Puglisi at 403-405. Those principles do not need to be spelt out or repeated. The primary judge plainly exercised his Honour's discretion by reference to those principles, applying a careful and reasoned process. It is worth noting in that regard that in Puglisi, all of the material seized had been obtained by way of a wholly invalid search warrant. In an attempt to remedy that problem, a fresh search warrant was obtained, to be relied on as a basis to reseize the material immediately upon its return. The process of return, however, was not completed, such that no valid seizure could take place. As a consequence, the ongoing retention of the material continued to rely upon the prior invalid seizure. In considering those circumstances, Hill J nonetheless declined to order that the seized material be returned. His Honour regarded that use of the material was a matter best left to the criminal courts in the exercise of discretion as to the admissibility of illegally obtained evidence. The outcome arrived at by the primary judge in this case was more nuanced than in Puglisi, dealing, as his Honour was, with electronic evidence and not just physical documents. 159 Once it is appreciated that it was open to the primary judge, in the exercise of the discretion discussed in Puglisi, not to make any order to return any of the illegally seized items, much of Mr Caratti's case falls away. That is especially so when issue is taken with orders which were, at least technically, more narrow than was open to his Honour to make. In particular, his Honour arrived at a solution that mirrored the legislative scheme by allowing the data on the illegally seized electronic equipment to be copied before requiring the physical items to be returned. The copied data could then be examined and then either seized or destroyed. This reflected what should have happened in the first place. 160 The characterisation of the approach of the primary judge as improperly applying the provisions of s 3L(1A) of the Crimes Act is therefore misconceived. It is clear that his Honour did not purport to permit the powers under s 3L(1A) to be exercised by the Commissioner per se. Rather, his Honour's approach was to make discretionary orders in terms guided by that provision. That course was plainly available to his Honour, given the wide powers to tailor such relief to the circumstances at hand. 161 Mr Caratti's case also depends on challenging the primary judge's exercise of discretion upon the basis that a different outcome should have been reached, without meeting the necessary hurdle of showing that the conclusion arrived at, even if not preferable, was not open to his Honour. Faced with what might have been a binary choice between permitting unqualified retention and ordering unqualified return, his Honour was doing no more than using the legislative provisions as a guide to a compromise position in the discretionary exercise of wide remedial powers. In that way, the legislative intent, which permitted examination of data prior to any formal seizure, could ultimately be achieved, albeit not in the manner or timeframe envisaged. 162 This was not a case of ignoring the constraints in the legislative regime, but rather of using it as a principled and rational guide to the exercise of discretion. The alternative was either to revert to the binary choice or to make orders without guidance. If forced to the binary choice, the appropriate stance on the part of the primary judge may have been to allow for retention, and to leave the question of what use may be permitted in the event of prosecution taking place to be determined by a court exercising federal criminal jurisdiction, as happened in Puglisi. In any event, on the authority of Puglisi, the correctness of which has not been questioned, that was a course available to his Honour. The alternative course taken cannot be said to be one that was not available. 163 The fifth ground of appeal is therefore without merit and should be dismissed.

[50]

Comment on the Commissioner of the AFP obtaining proper legal advice 164 Search warrants are a highly invasive process by which fundamental rights are encroached upon. However, they continue to be a vital part of effective criminal investigation and prosecution. That is unlikely to change. To the contrary, the relevance of search warrants may even increase, as the vast array of material and information stored digitally continues to expand. Appropriate balancing of the competing considerations is best achieved by careful attention to the quality of the process, especially in complex "white collar" cases. 165 The primary judge made the following observations about the inadequacies in the search warrants, criticising the quality of the process in this case, and noting what had been done in the past to avoid this occurring: 242 There appears to be an unfortunate tendency, in the drafting of three condition warrants, to draft the first condition in such broad terms that it provides no effective filter or guide to the search. The warrants in this case are a good example of this tendency. Often the first condition contains an extensive and broadly drafted list of just about every type of document or electronic device that could possibly exist. When it comes to executing a warrant drafted in such terms, there would be little point in executing officers having regard to the first condition when making search and seizure decisions. That is because, whatever item is located, it will almost inevitably fall within the extensive list in the first condition. 243 Equally, there is a tendency to draft the second condition so as to include the longest possible list of persons, entities, addresses, email addresses, telephone numbers and bank accounts that it is possible to compile. "Things" will meet the condition if they "relate to" any one or more of the persons or entities or address included in that long list. As already indicated, the expression "relate to" in this context is not only extremely wide, but also potentially vague and indefinite: Williams v Keelty at 211-212 [158]. It follows that often the second condition is also not a particularly effective filter or guide to what may constitute evidential material. In most cases, just about everything located at the subject premises is likely to relate to one or more of the persons, entities or other things listed in the second condition. 244 What that means is that frequently the third condition of the warrant is the only effective filter in the warrant. That may not be a problem in circumstances were the third condition is drafted with care and the greatest degree of precision and particularity that is possible at the stage that the investigation may be at. In the past, the AFP frequently sought the advice and assistance of experienced lawyers and prosecutors at the Office of the Commonwealth Director of Public Prosecutions in relation to the drafting of search warrants in complex matters. Regrettably that no longer seems to be the case. It does not appear to have happened in this case. If it had, many of the issues that have arisen in relation to the issue and form of the warrants in question would probably not have arisen. 245 If appropriate care is not taken in the drafting of the third condition in a warrant, one likely result is a challenge to the warrant, similar to the challenge that has occurred in this case. While the warrants in question in this case have been found to be valid (other than the one severed paragraph), for the reasons already given, the third condition offences were very poorly drafted. Mr Caratti's complaints concerning the drafting of the warrants were by no means frivolous or entirely baseless. 246 Throughout the proceedings the Commissioner maintained a stoic and somewhat blinkered position that there was no problem with the drafting of the third condition in the warrants. Mr Caratti's complaints concerning the third condition were met by the constant refrain that the statement of the offence in a warrant need not meet a "high bar". The Commissioner's suggestion that there was no problem with the drafting of the warrants was unrealistic, if not fanciful. While a warrant must be approached in a practical and common sense way, and not with overzealous technicality, that does not mean, as the Commissioner effectively suggested, that s 3E created only a "low bar". 247 Poorly drafted three condition warrants serve only to invite controversy and judicial review challenges. As these proceedings show, such challenges can end up being long, complex and drawn out affairs. They result in an unfortunate fragmentation and delay of criminal investigations. 248 The second likely result of poorly drafted warrants is that the execution of the warrants is almost invariably rendered more difficult. To determine if an item is able to be seized, executing officers are required to consider and comprehend the offences listed in the third condition of the warrant. As executing officers and constables assisting are unlikely to be legally trained, that may not always be an easy task, particularly where the offences relate to complex commercial or tax-related affairs. The task is rendered even more difficult where, as is often the case, the executing officers and persons assisting have not had any or any extensive involvement in the relevant investigation. The task is rendered more difficult still where the third condition offences are not drafted with appropriate care, precision and particularity. 249 There was some evidence that suggested that some of the officers involved in the execution of the warrants may have had an imperfect appreciation of the meaning and scope of the search warrants. Perhaps not surprisingly, Federal Agents who had not been involved in the investigation appeared to have sought the assistance of tax officers and, in some instances, appeared to use extrinsic aids to assist them to make appropriate search and seizure decisions. … The evidence of what occurred during the execution of the warrants is not relevant or admissible in relation to Mr Caratti's challenge to the validity of the warrants: Williams v Keelty at 211 [157]. Nevertheless, the evidence concerning the execution of the warrants in issue in this matter serves to illustrate the difficulties and complexities that may arise where warrants concerning complex investigations are not drafted with sufficient care and precision. 166 Those sentiments should be endorsed and enlarged upon. 167 The consequences of the approach taken to the drafting of the search warrants were made clear by this case. In addition to raising questions of validity of the search warrants, the lack of clarity in the drafting gave rise to further risks in the execution of those warrants. As was noted by the primary judge, the lead investigator is to be acknowledged for the practical steps he took to ameliorate those difficulties. That remedial approach might well have failed, especially if the drafting had crossed the line from being merely poor to legally insufficient. 168 It should be observed also that the last two appeal grounds turned on the primary judge's remedial approach to the problems created by way of severance and by way of orders to facilitate steps being taken that should have taken place at the time of execution of the search warrants. That, again, was only necessary because of the deficiencies in the drafting. 169 It follows that, in one way or another, the drafting of the search warrants was the direct, or substantial indirect, source of all of the issues and problems in this case. This was an ultimately expensive and time-consuming way to conduct an investigation. The time that might have been saved by inadequate drafting has been lost many times over. 170 The consequence of an overall investigative approach to risk management characterised by insufficient resourcing and attention to the importance of rudimentary search warrant drafting was not just the commencement of this litigation, but also the protracted delay in resolving the many difficult issues confronted by the primary judge and by this Court on appeal. Such delay in carrying out and concluding a criminal investigation is highly undesirable for all concerned. 171 When proper regard is had to the importance of the efficient, effective and fair obtaining and execution of search warrants, and the delay, fragmentation of the criminal investigation process, cost, time of the parties and the use of scarce court time when challenged, the obtaining of proper independent legal advice by a criminal law expert would seem to be a wise investment for the Commissioner. Taking that step has the prospect of an uncommonly high return on outlay. In complex fraud investigations in particular, or in like investigations concerning other forms of alleged higher level "white collar" offending, careful independent consideration and legal advice as to the terms of the search warrants sought to be obtained, and perhaps as to the content of the affidavit by which they are sought, including the alignment between the two, would improve the process for all concerned, most particularly at the point of execution of any search warrant that is issued. The time and cost would pale into insignificance when regard is had to the history of these proceedings. 172 In particular, as has happened in the past, obtaining advice from experienced solicitors with the Office of the Commonwealth Director of Public Prosecutions, perhaps supplemented by the private Bar, may save everyone concerned considerable trouble and expense. This is an area in which practical criminal law experience is of greatest assistance. At the very least, that would help to ensure that judicial review challenges are able to be focussed on matters of substance, rather than form, and are thereby able to be heard and determined, either way, much more quickly.

Caratti v Commissioner of the Australian Federal Police

At a glance

Court

Decision date

Before

Source

Judgment (51 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (35)

Cited By (17)