Clough v Leahy

REASONS FOR JUDGMENT INTRODUCTION Jurg Bollag ("Bollag") and Alan Bond ("Bond") have issued proceedings in the Court seeking to restrain the examination, in Switzerland, of Bollag in relation to his dealings with Bond; and the further use of documents already obtained by the Swiss authorities for the purposes of that examination. The respondents to the proceedings are the Attorney-General of the Commonwealth of Australia ("the Attorney-General"), the Director of Public Prosecutions ("the DPP") and the Commissioner, Australian Federal Police who is, in substance, being sued as representing officers of the Australian Federal Police ("the AFP") who are engaged in the investigation of the dealings between Bollag and Bond. The examination is being conducted and the documents have been obtained by the relevant Swiss authorities as a result of two requests for assistance ("the requests") made by a delegate of the Attorney-General pursuant to s 10 of the Mutual Assistance in Criminal Matters Act 1987 (Cth) ("the Act"). The central issue in the proceeding relates to whether the requests are beyond the power conferred on the Attorney-General under the Act with the consequence, so it is said, that there is no lawful basis for the proposed examination of Bollag or the further use of the documents obtained in Switzerland. The issue raises questions concerning the power of the executive government to request, and obtain the benefit of, the use of coercive and other investigatory powers by foreign countries to aid the conduct of criminal investigations and proceedings in Australia. BACKGROUND On 16 September 1994 a delegate of the Attorney-General made a request for assistance to the competent authority of Switzerland pursuant to s 10 of the Act. The request, which was made on behalf of the DPP and the AFP, stated that it: "... has been framed in conformity with the Treaty between Australia and Switzerland on Mutual Assistance in Criminal Matters which came into force on 31 July 1994." The purpose of the request was stated as follows: "The request seeks the assistance of the Swiss authorities in: (i) obtaining bank records in relation to accounts held and operated at the Uberseebank, Zurich and the Zuger Kantonalbank; (ii) arranging the issue and execution of search warrants upon the premises of Jurg Bollag ("Bollag"), a Swiss national; (iii) summonsing Bollag for the purposes of having him examined on oath in relation to his dealings with Alan Bond, the Australian businessman to whom this request relates." More precise detail of the nature of the assistance sought was set out later in the request. The request recites that the assistance was sought in furtherance of an investigation which was described in the following terms: "The DPP and the AFP are responsible for the coordination of the investigation of Alan Bond for the alleged offence of perjury and other offences under the Bankruptcy Act 1966. Alan Bond was born in the United Kingdom on 22 April 1938 and migrated to Australia in 1950. He presently resides at 4 Hawkstone Street, Cottesloe in the State of Western Australia. On 14 April 1992, with debts totalling $A1,215,850,449, Bond was declared bankrupt. Mr Ramsay of Bird Cameron Partners, Chartered Accountants ("the Trustee"), was appointed as trustee of Bond's estate. Prior to his bankruptcy, Bond was a well known Australian business identity. As the result of enquiries conducted by officers of the AFP, Australian authorities have reason to believe that since 1978 Bond has caused his agents in Jersey and Switzerland to form, through a series of complex business arrangements, various corporate structures located in different parts of the world to act as conduits and repositories for his personal assets. It is believed that in 1987 control of these assets was transferred to Bollag, a Swiss national. The crux of the investigation is whether Bond had or has assets in Switzerland and Jersey which he either failed to disclose to his trustee in bankruptcy (which is an offence against the Bankruptcy Act 1966) or subsequently lied about when giving evidence on oath during an examination of his financial affairs by his trustee pursuant to the provisions of the Bankruptcy Act 1966 (which is an offence against the Crimes Act 1914)." After setting out the basis for the belief of the Australian authorities that Bond had misled his trustee in relation to his assets, the request recites the offences allegedly committed by Bond as follows: "The investigation to which this request relates concerns the alleged commission of the following offences by Alan Bond: (a) failing to the best of his knowledge and belief, to fully and truly disclose to the trustee all his property and its value, contrary to Section 265(1)(a) of the Bankruptcy Act 1966. (b) failing to the best of his knowledge and belief, to fully and truly disclose to the trustee such information about any of his conduct and examinable affairs as the trustee requires, contrary to Section 265(1)(ca) of the Bankruptcy Act 1966. (c) failing to tell the trustee where the books (including the books of his associated entities) relating to his examinable affairs may be found, contrary to Section 265(1)(d) of the Bankruptcy Act 1966. (d) Omitting material particulars from a statement relating to his examinable affairs, contrary to Section 265(1)(f) of the Bankruptcy Act 1966. (e) Concealing or removing any part of his property to the value of $20 or more after the presentation of a petition on which, or by virtue of the presentation of which, he becomes a bankrupt, namely, Section 265(4)(a) of the Bankruptcy Act 1966. (f) Knowingly giving false testimony in a judicial proceeding contrary to section 35 of the Crimes Act 1914. Each of the offences listed at paragraphs (a) to (e) are punishable upon conviction by imprisonment for a term of up to one year. The offence referred to in subparagraph (f) is punishable upon conviction by imprisonment for a term of up to five years." In relation to procedures to be followed the request states, inter alia, "As the investigation is ongoing and concerns a complicated series of transactions, it is requested that the Swiss authorities consent to direct liaising between the Swiss authorities responsible for executing the request and the officers in the AFP and the DPP responsible for the investigation. The liaising would extend to arranging the travel of officers from the AFP and the DPP to Switzerland for the purpose of assisting in the examination of Bollag and any other persons examined pursuant to this request." A supplementary request for mutual assistance was made by the delegate of the Attorney-General to the competent authority of Switzerland on 24 November 1994. The supplementary request, which substantially followed the form of the initial request, provided details of further requested assistance which was described as follows: "This supplementary request asks that the Swiss authorities, when executing the search warrants sought in the initial request, seize additional documents to those that were asked to be seized in the initial request." More precise detail of the assistance sought is set out in the supplementary request. The requests were duly accepted by Paul Kuhn ("Kuhn") a Public Prosecutor for the Canton of Zug, Bollag's place of residence. Pursuant to the requests orders were made by Kuhn for search warrants to be executed in relation to Bollag, for Bollag to attend for questioning before Kuhn and for documents to be produced by the Zuger Kantonalbank and the Uberseebank Zurich. The Zuger Kantonalbank voluntarily produced the documents sought from it but the Uberseebank did not have any of the documents sought. Thereafter Bollag and Bond issued numerous challenges in Switzerland to the exercise of coercive power in relation to the conduct of the investigation in Switzerland. The challenges were as follows: · Bollag appealed to the Swiss Federal Court against Kuhn's decision to execute the requests; that appeal was dismissed on 23 April 1995; · Bond applied to public prosecutor Kuhn for reconsideration of his decision to execute the requests on 1 June 1995; · following Kuhn's dismissal of that application on 20 July 1995, Bond appealed to the Justice Commission; · when the appeal to the Justice Commission was dismissed on 29 September 1995, Bond appealed to the Swiss Federal Court; · Bond's appeal to the Swiss Federal Court was dismissed on 10 January 1996; · Bollag appealed to the Justice Commission against Kuhn's order (dated 9 February 1996) that documents be transmitted to Australia, pursuant to the requests; · following the Justice Commission's dismissal of that appeal on 10 May 1996, Bollag appealed to the Swiss Federal Court; · on 29 August 1996, the Swiss Federal Court dismissed that appeal; · following Bollag's refusal to answer questions on 7 April 1997 and Kuhn's issue of a decree on 15 April 1997, Bollag appealed to the Justice Commission; · that appeal was dismissed on 3 June 1997. Bond challenged the validity of the requests in the Federal Court in a proceeding commenced by him on 22 June 1995. Bond claimed that the requests for assistance were ultra vires and an abuse of power and sought injunctions restraining the DPP and the Commissioner of the AFP from pursuing their investigation and the requests. In his amended statement of claim, Bond claimed that: "In the circumstances, the requests for assistance made by the Attorney General are not authorised by the Mutual Assistance in Criminal Matters Act and are ultra vires, unauthorised by law and an abuse of the powers of the Attorney General." The claim in the present proceedings is substantially the same and based on substantially the same facts although new grounds are now put forward in support of it. Two grounds were put forward in support of the original claim. The first was that the requests were not competent as a consequence of the annulment of Bond's bankruptcy on 27 February 1995. The second was that the alleged offences were not "criminal matters" within the meaning of the Act. The latter ground was not pursued at the final hearing. On 13 February 1996 Sundberg J dismissed Bond's application: see Bond v Rozenes (1996) 134 ALR 583. The Full Court dismissed Bond's appeal from the decision of Sundberg J on 13 June 1996: see Bond v Rozenes (1996) 67 FCR 122. The various proceedings resulted in substantial delay in the conduct of the investigation. Finally, a further summons was issued requiring Bollag to appear before Kuhn on 3 November 1997. However, in May 1997 counsel for Bollag and Bond informed counsel for the DPP and the AFP that this proceeding was being prepared. The proceeding was finally issued on 7 August 1997. THE MUTUAL ASSISTANCE ACT The parties are in agreement that the validity of the requests is to be determined on the basis of the Act prior to its amendment by the Mutual Assistance in Criminal Matters Legislation Amendment Act 1996 (Cth). Accordingly, all references are to the Act as it operated prior to the amending Act. Prior to the enactment of the Act, mutual assistance in criminal matters was rendered informally through Interpol and was limited to investigations: see Second Reading Speech of the Attorney-General, House of Representatives, Debates, 22 October 1986, Vol HR 151 at 2558. The Act was to provide a legislative framework for the provision and obtaining of international assistance in criminal matters. The Explanatory Memorandum to the Act stated that the Act will: "provide legislative authority for Australia to give effect to obligations which it will be undertaking with other countries in the area of mutual assistance. When Australia concludes arrangements with other countries those countries will be obliged under international law to render assistance at the request of Australia." Securing the performance of mutual treaty obligations was central to the Act's objects. In his Second Reading Speech at 2559 the Attorney-General said: "The Bill's real function is to provide a legislative basis for Australia to honour the obligations it will be assuming in treaties and arrangements, thereby ensuring that other countries will honour their obligations to Australia." The objects of the Act were set out in s 5: "5. The object of this Act is to facilitate the provision and obtaining by Australia of international assistance in criminal matters, including: (a) the obtaining of evidence, documents or other articles; (b) the provision of documents and other records; (c) the location and identification of witnesses or suspects; (d) the execution of requests for search and seizure; (e) the making of arrangements for persons to give evidence or assist investigations; (f) the forfeiture or confiscation of property in respect of offences; (g) the recovery of pecuniary penalties in respect of offences; (h) the restraining of dealings in property, or the freezing of assets, that may be forfeited or confiscated, or that may be needed to satisfy pecuniary penalties imposed, in respect of offences; (j) the location of property that may be forfeited, or that may be needed to satisfy pecuniary penalties imposed, in respect of offences; and (k) the service of documents." The Act was not to limit the provision or obtaining of mutual assistance by means other than those provided under the Act. Section 6 provided: "6. Nothing in this Act prevents the provision or obtaining of international assistance in criminal matters otherwise than as mentioned in this Act or otherwise than pursuant to a treaty or other arrangement between Australia and a foreign country." Regulations provided for the Act to apply to foreign countries subject to modification in accordance with treaty arrangements. Section 7 provided: "(1) The regulations may provide that this Act applies to a foreign country specified in the regulations. (2) The regulations may state that this Act applies in relation to a foreign country subject to limitations, conditions, exceptions or qualifications referred to in the regulations in accordance with subsections (2AA) and (2AB): (2AA) The limitations, conditions, exceptions or qualifications in relation to a foreign country may be referred to in the regulations as being any one or more of the following: (a) the limitations, conditions, exceptions or qualifications that are necessary to give effect to a bilateral mutual assistance treaty in relation to that country a copy of which is set out in the regulations; ....... (2AB) The limitations, conditions, exceptions or qualifications that are necessary to give effect to a treaty in relation to a foreign country may be expressed in the form that this Act applies to that country subject to that treaty. ... (3) Where the regulations state, or make provision to the effect, that this Act applies as mentioned in subsection (2) or (2A), or in both of those subsections, this Act applies accordingly." In explaining the Act's operation in respect of treaties the Explanatory Memorandum said in respect of s 7: "Assistance pursuant to the Act may only be granted if the Act has been applied to a foreign country by regulations (Part II of the Act is the exception). Sub-clause 2 permits the Act to be applied to foreign countries subject to modifications. Pursuant to paragraph (a), where there is a bilateral mutual assistance treaty, the Act can be applied in such a way as to give effect to that treaty." Section 10, which is relied upon by the respondents as the source of the power of the Attorney-General to make the requests, provides: "Requests by Australia for international assistance in criminal matters may be made by the Attorney-General." Section 40 authorises the delegation by the Attorney-General of his powers, inter alia, under s 10. The Explanatory Memorandum said, in respect of s 10: "This clause makes it clear that requests by Australia for assistance from foreign countries may be made by the Attorney-General. Requests can in fact be made by the Attorney-General's delegate pursuant to the delegation power in clause 40 of the Bill. A Central Office within the Attorney-General's Department will be established to process and monitor all requests made by and of Australia." Part II of the Act provides for assistance by or to Australia in relation to the taking of evidence and production of documents and other articles. Section 12 provides: "The Attorney-General may, in his or her discretion, request an appropriate authority of a foreign country to arrange for: (a) evidence to be taken in the foreign country; or (b) documents or other articles in the foreign country to be produced; for the purposes of a proceeding in relation to a criminal matter in Australia." A request under s 12 can only be made for "evidence" and "documents or other articles" for the purposes of a proceeding; it cannot be made for the purposes of an investigation. Section 3 provides, inter alia, that in the Act, subject to a contrary intention, "criminal matter" includes: "(a) a criminal matter relating to revenue (including taxation and customs duties); (b) a criminal matter relating to foreign exchange control; (c) a matter relating to the forfeiture or confiscation of property in respect of an offence; (d) a matter relating to the imposition or recovery of a pecuniary penalty in respect of an offence; and (e) a matter relating to the restraining of dealings in property, or the freezing of assets, that may be forfeited or confiscated, or that may be needed to satisfy a pecuniary penalty imposed, in respect of an offence; whether arising under Australian law or a law of a foreign country;" The definition is an inclusive one. The reference to the specific categories of criminal matters referred to in sub-paragraphs (a) to (e) removes the doubt that might otherwise exist as to whether those matters were criminal matters for the purposes of the Act. In doing so the definition overcomes the problem of determining whether certain regulatory and other offences might properly be described as "criminal matters": see Gapes v Commercial Bank of Australia Ltd (1979) 27 ALR 87 at 112 and Brown v Members of the Classification Review Board of the Office of Film & Literature (1997) 145 ALR 464 at 477. Accordingly, the definition expands, rather than limits, the meaning that might otherwise be given to the words "criminal matters". Contrary to the contentions of the applicants it is clear that the investigation the subject of the requests is in relation to criminal matters. Part III of the Act relates to assistance in relation to search and seizure. Section 14 provides: "(1) This section applies to a proceeding or investigation relating to a criminal matter involving a serious offence against an Australian law if there are reasonable grounds to believe that a thing relevant to the proceeding or investigation may be located in a foreign country to which this Act applies. (2) Where this section applies to a proceeding or investigation, the Attorney-General may, in his or her discretion, request an appropriate authority of the foreign country to obtain a warrant or other instrument authorising a search for a thing relevant to the proceeding or investigation and, if such a thing, or any other thing that is or may be relevant to the proceeding or investigation, as the case may be, is found pursuant to such a search, authorising the seizure of that thing. (3) A request shall be accompanies by an affidavit by a person verifying the grounds on which the request is made." An "offence" and a "serious offence" are defined in s 3 as follows: "offence" includes an offence against a law relating to taxation, customs duties or other revenue matters or relating to foreign exchange control;" "serious offence" means an offence with maximum penalty for which is death, or imprisonment for not less than 12 months;" As with the definition of a "criminal matter" the inclusive definition of "offence" is intended to expand, rather than limit, the category of conduct which might constitute an "offence" for the purposes of the Act. In doing so the definition ensures that revenue and regulatory offences are included within the purview of the Act and in particular s 14. Contrary to the contentions of the applicants it is clear that the investigation, the subject of the requests, is in relation to a criminal matter involving serious offences. In explaining the reason for limiting search and seizure requests to serious offences the Explanatory Memorandum states: "The clause is limited to serious offences since it is not considered appropriate to seek such assistance for minor offences." Notwithstanding the provisions of s 14 and that statement of legislative purpose it is significant that the Act does not prohibit such requests in respect of minor offences otherwise than under s 14 although, in practice, foreign countries may be reluctant to use coercive power without some specific legislative or treaty authorisation for its use. THE TREATY On 25 November 1991 the Treaty between Australia and Switzerland on Mutual Assistance in Criminal Matters ("the Treaty") was entered into. The Treaty came into force on 31 July 1994. Article 1 provides: "Article 1 Scope of Application