Egglishaw v Australian Crime Commission

CORRESPONDENCE BETWEEN MR EGGLISHAW AND THE ACC 10 The following correspondence between Mr Egglishaw's solicitors, Browne & Co, and the ACC is central to the issues under consideration. 11 On 1 September 2005, Browne & Co sent an email to Mr Chris Bonnici of the ACC as follows: We refer to your conversation with Peter Faris QC today. Further to that conversation, we formally request that you supply us with a copy of the "Egglishaw Hard Drive" taken from his computer in February 2003. Would you kindly let us have your response to this request within 7 days. Failing your response or alternatively your denial of this request, we will have no alternative but to issue legal proceedings in the Federal Court to seek an Order to this effect. This letter will be produced on the question of costs. 12 On 12 September 2005, Browne & Co sent a fax to Mr Alistair Milroy, the CEO of ACC as follows: Please find enclosed copy of email sent to Mr Chris Bonnici on 1 September 2005. We note that to date we have had no response. We would be pleased if we could receive a response to this letter within the next 48 hours, failing which we will have no alternative but to issue legal proceedings to recover a copy of the hard drive. These letters will be used on the question of costs. 13 After several requests from Browne & Co for an answer, Mr Milroy advised on 27 September 2005, that the ACC had sought advice from external counsel. 14 On 28 September 2005, Browne & Co wrote to Mr Milroy as follows: We refer to Mr Bonnici's conversation with Mr David Galbally QC at the Australian Crime Commission office in La Trobe Street, Melbourne yesterday at approximately 2:30 pm regarding the provision by the Australian Crime Commission to Mr Egglishaw of a copy of the hard drive seized and copied pursuant to a section 3E Crimes Act Warrant on Saturday 14 February 2004. During that conversation:

1. Mr Galbally QC was informed that the Australian Crime Commission had briefed Ms McNicol to provide an advice as to whether or not it was obliged to supply a copy of the hard drive seized.
2. Mr Galbally QC was also advised by Mr Bonnici that Ms McNicol is currently overseas and will not be returning until 17 October 2005. We first wrote requesting a copy of the Egglishaw hard drive on 1 September 2005. We did not receive a reply until we sent a second letter to yourself enclosing a copy of the email sent to Mr Bonnici on 1 September 2005. We then received a reply form Mr John Dines requesting a 7 day extension. The extension was granted to Mr Dines by way of email and he replied:- "I undertake to make a full reply as soon as possible in any event within the next 7 days." We did not receive a response with the 7 day extension period and on 23 September 2005 we wrote to yourself requesting a response. Formal Request The computer was seized pursuant to a section 3E Crimes Act Warrant. We now make a formal request pursuant to section 3N that we be provided with a copy of the hard drive that was seized under the Warrant. The issue is not a complex one. We require it to be resolved as soon as possible as Mr Galbally QC is going overseas from 17 October 2005 until 3 November 2005. 15 On 30 September 2005, Mr Milroy wrote to Browne & Co advising that the ACC expected to be able to notify Browne & Co of the ACC's decision by 21 October 2005, once it had received Dr McNicol's advice. 16 On 12 October 2005, Browne & Co sent Mr Bonnici an email which indicated that the ACC had provided a copy of the image from a computer of one Anthony Stewart and that the ACC should adopt the same approach to the request of Mr Egglishaw. The email concluded: In these circumstances in accordance with the practice undertaken in respect of Anthony Stewart we would be pleased if you would now supply us immediately with a copy of the image of the hard disc drive referred to above. Please advise forthwith. If you fail to follow the practice adopted in the Anthony Stewart case and continue with the delay, we may have no other choice but to issue legal proceedings in the Federal Court and use his letter together with the circumstances of the Tony Stewart request on the question of indemnity costs. 17 On 14 October 2005, Mr Outram of the ACC replied stating that the circumstances in Stewart's situation were entirely different from those in Egglishaw's situation, and he reiterated that the ACC would respond with a decision when the legal advice was received. 18 On 1 November 2005, Mr Milroy wrote to Browne & Co as follows: I refer to the above matter, in particular your letter dated 28 September 2005. Upon receipt of legal advice, it is my view that the ACC is not obliged to supply a copy of the Egglishaw hard drive pursuant to s 3N of the Crimes Act1914.

THE ISSUE OF THE FIRST PROCEEDING AND FURTHER CORRESPONDENCE 19 On 21 December 2005 Mr Egglishaw filed an application in the Federal Court under ss 39B (1) and (1A) of the Judiciary Act 1903 (Cth) impugning the application for the warrant, the decision to issue the warrant, the warrant itself, the seizure under the warrant, the notice to produce the DVDs and the use of information obtained under the notice. 20 Mr Egglishaw sought relief in the form of declarations that the application for the warrant, the decision to issue the warrant, the warrant itself, the seizure, use and communication of materials obtained by the warrant, the notice, and the use and communication of materials obtained under the notice were unlawful. He also sought orders quashing or setting aside the application for the warrant, the issue of the warrant, the warrant and the notice. Additionally, he sought an injunction restraining the ACC from communicating, making use of or making a record of the documents and other information obtained by the warrant and the notice. Finally he sought "the delivery up of all documents and things (including copies thereof and extracts thereof)" obtained by the warrant and the notice. 21 Paragraph 13(b) of the Statement of Claim alleged: On 14 February 2004 and purporting to act pursuant to the Crimes Act 1914, the said Gail McClure and other members of staff of the ACC executed the warrant by: … (b) alternatively: (i) entering the Applicant's hotel room and moving the laptop to the offices of the Australian Crime Commission for pre-seizure examination and processing; and thereafter (ii) copying the contents of the laptop's hard-drive onto a storage device; and thereafter (iii) returning the laptop to the Applicant; and thereafter (iv) retaining the copy of the contents of the hard-drive. 22 Paragraph 13 of the defence of the ACC responded: Save that it admits that on 14 February 2004 Gail McClure engaged in the conduct referred to in sub-paragraph (b) of paragraph 13, and was validly authorised to do so by the search warrant and the Crimes Act 1914 (Cth), the First Respondent otherwise denies the allegations made in paragraph 13. 23 This admission led Browne & Co to write to Raelene Sharp at the ACC on 9 March 2006, as follows: We advise that on the 1 September 2005 we wrote to Mr Chris Bonnici of the Australian Crime Commission requesting a copy of the Egglishaw hard drive that the Australian Crime Commission had copied on 14 February 2004, the subject of the warrant proceedings. On 1 November 2005 we received a reply to our letter declining to provide the copy. The reply was signed by Alistair Milroy. We refer to paragraph 13 of your defence in particular where it is stated:- "Save that it admits that on 14 February 2004 Gail McClure engaged in the conduct referred to in sub-paragraph (b) of paragraph 13…" The admission places the Australian Crime Commission within section 3N of the Crime[s] Act where it is obliged to provide a copy to person from whom the computer file or storage device information was taken. Clearly now the Australian Crime Commission cannot rely on section 3N(2). We now formally request that you provide us with a copy of what was copied from the Egglishaw hard drive together with copies of the documents seized at the Sheraton Hotel on the 14 February 2004 pursuant to the search warrant. We would be pleased if you would respond to this request within 14 days hereof. 24 The ACC replied on 16 March 2006, so far as relevant as follows: We refer to your letter of 9 March 2006. We note that on 14 February 2004, your client's lap top was returned to him. In the circumstances, we repeat we are of the view that the ACC is not obliged to supply a copy of the Egglishaw hard drive pursuant to s 3N of the Crimes Act 1914.

THE FIRST FEDERAL COURT PROCEEDING 25 Before Sundberg J, Mr Egglishaw argued in relation to the procedure by which the computer was obtained that: · the computer was seized at the hotel under s 3F and consequently, the making of the forensic image at the ACC's offices was unlawful because it was not done in accordance with s 3L. · even if the computer was not seized at the hotel under s 3F: · it should not have been taken to the ACC offices but the ACC should have used the procedure provided in ss 3L(1) and (1A). · In any case, the ACC failed to comply with s 3K(2)(a)(i) when it moved the computer to its offices. 26 Sundberg J found (Egglishaw v ACC (2006) 230 ALR 254; [2006] FCA 819) that: · The computer was not seized at the hotel, but even if it was, s 3L was not engaged because the computer was not operated at the hotel and hence the taking of the forensic image was not unlawful. · The ACC was not bound to use the procedure provided in s 3L(1) and (1A) which involved operating the computer at the hotel and copying the information at the hotel by bringing equipment to the hotel. · The ACC had not failed to show that it was "significantly more practicable to [move the computer to the ACC offices] having regard to the timeliness and cost of examining … [the computer there] and the availability of expert assistance," in compliance with s 3K(2)(a)(i). 27 The remaining arguments related to the procedure by which the DVDs were obtained and turned on the terms of s 29 of the ACC Act which relevantly provides: (1) An examiner may, by notice in writing served on a person, require the person: (a) to attend, at a time and place specified in the notice, before a person specified in the notice, being the examiner or a member of the staff of the ACC; and (b) to produce at that time and place to the person so specified a document or thing specified in the notice, being a document or thing that is relevant to a special ACC operation/investigation. (1A) Before issuing a notice under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the notice. 28 Mr Egglishaw argued that the DVDs were never in his custody, possession and/or control, and could not therefore have been produced pursuant to the notice. His Honour rejected this argument on the basis that when the ACC gave the DVDs to Mr Egglishaw, he was in possession of them. 29 Finally, Mr Egglishaw argued that the ACC failed to show that the examiner who issued the notice was "satisfied that it [was] reasonable in all the circumstances to do so" as is required by s 29(1A). His Honour rejected this argument on the basis that the onus was on Mr Egglishaw to demonstrate non compliance with the section, and he had not done so. 30 Sundberg J also said that if he were wrong in his conclusions on the above issues he would refuse relief in the exercise of discretion. He said at [57]: In the present case, the warrant was issued on 13 February 2004 and executed the following day. The notice was issued and served on 19 February 2004. The application was filed on 21 December 2005: over 22 months after the events that gave rise to it occurred. The applicant has failed to explain his inordinate delay in commencing proceedings.

FURTHER CORRESPONDENCE 31 Following the delivery of judgment by Sundberg J, Browne & Co again wrote to Mr Milroy on 17 July 2006, as follows: [O]n 30 June 2006, his Honour Justice Sundberg delivered judgment in the matter of Egglishaw v Australian Crime Commission [2006] FCA 819. These proceedings related to the hard drive of a laptop computer owned by our client (the Egglishaw hard drive) seized pursuant to a Crimes Act 1914 (Cth) (the Act) search warrant executed on our client's hotel room by members of the staff of the ACC on 14 February 2004. During the course of his judgment, His Honour effectively confirms that the Egglishaw hard drive was seized pursuant to section 3K of the Act. Purusant to section 3N of the Act, this entitles our clients to be provided with a copy of the material seized. 32 On 3 August 2006, the ACC again refused to provide a copy of the hard drive. On 7 August 2006, Browne & Co sought a statement of reasons for the refusal, and the ACC refused this request in September 2006.

THE APPLICABLE PRINCIPLES 33 The applicable principles were not in contention. In Henderson v Henderson (1843) 3 Hare 100; 67 ER 313, Wigram VC said: Where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, for negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. 34 In Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, Gibbs CJ, Mason and Aickin JJ said at 602: [W]e would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. 35 In Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 (Wong), the Full Court of the Federal Court said at [36] -[39]: The doctrines of res judicata and issue estoppel are founded on the broad rules of public policy expressed in the maxims nemo debet bis vexari pro una et eadem causa (a person ought not to be vexed twice for one and the same cause) and interest reipublicae ut sit finis litium (it is in the interests of the State that there be an end to litigation). It would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court. Also, quite apart from any psychological detriment that might flow from an individual having to undertake litigation of the same issue a second time, the State has an interest in ensuring that, once an issue has been determined according to law and all rights of appeal have been exhausted, that should be an end of the matter. The resources of the community ought not to be expended in the litigation, more than once, of the same issue. A plea in bar may be raised in respect of an issue, not only if the Court in the earlier proceeding was actually required by the parties to form an opinion and pronounce a judgment, but also in relation to every issue that properly belonged to the subject of the earlier litigation and which the parties, exercising reasonable diligence, might have brought forward at the time of the earlier litigation: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598 and 602. Anshun estoppel arises where the issue, now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. In essence, where the issue was so relevant to the subject matter of the earlier action that it would be unreasonable not to have raised it at the time, it is an abuse of process to endeavour to raise that issue for the first time in a subsequent proceeding between the parties: Anshun at 602 Nevertheless, where an issue has not actually been litigated and decided before, there must be exceptions to that general rule (cf the operation of res judicata and issue estoppel where the action/issue has been determined on a final basis). As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding … However, the circumstances in which that would be permitted must, because of the principles referred to above, be exceptional, constituting "special circumstances": see BC v Minister for Immigration and Multicultural Affairs [2002] FCAFC 221 at [30]. What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle … [emphasis added] 36 These authorities require the Court to consider whether it was unreasonable for Mr Egglishaw not to have advanced his argument under s 3N of the Crimes Act during the course of the first proceeding before Sundberg J, and if unreasonable, whether there are special circumstances which would justify the Court allowing Mr Egglishaw to raise the argument in these proceedings.

Unreasonableness 37 On 1 September 2005, Browne & Co made a formal request for a copy of the hard drive and said if the request was denied it would have no alternative but to issue legal proceedings and to seek an order for the information. This request was pursued on 28 September 2005, when it was squarely based on s 3N. On 12 October 2005, Browne & Co further pursued the request by reference to the Stewart matter and, again, threatened legal proceedings. It stated that they might use the circumstances of the Stewart matter in support of a claim for indemnity costs. In response, on 1 November 2005, the ACC advised Browne & Co that, as a result of legal advice, it believed it was not obliged to supply a copy of the hard drive under s 3N. Within weeks, namely on 21 December 2005, Mr Egglishaw filed the first proceeding. He made no claim under s 3N. In par 13(b)(iv) of the statement of claim, Mr Egglishaw pleaded that the ACC had retained a copy of the contents of the hard drive. In par 13 of its defence, the ACC admitted this conduct and pleaded that it was validly done under the Crimes Act. The central practical relief sought by Mr Egglishaw was delivery up of the copies obtained as a result of the execution of the warrant. 38 Thus, before he filed the first proceeding, Mr Egglishaw knew there was a potentialclaim under s 3N, that his request for a copy of the hard drive had been refused and that his solicitors had threatened legal action to enforce the return of the contents of the hard drive. The facts relevant to the first proceeding were the basis for the current claim under s 3N. The only element missing from the first proceeding which was necessary for a claim under s 3N, was reference to the making of a request for a copy of the hard drive, and the refusal of that request by the ACC. This emerges particularly clearly if one compares facts pleaded in the statement of claim in the first proceeding with the facts set out in the initiating application in the present case. 39 Counsel for Mr Egglishaw relied on a number of factors said to demonstrate that it was not unreasonable that the s 3N claim was not included in the first proceeding. 40 It was contended that the decision which is challenged in the present action was made by the ACC on 3 August 2006, that is to say after Sundberg J had delivered judgment in the first proceeding. There is no substance in this argument because, although Mr Egglishaw seeks to fix the date of the decision as 3 August 2006, the decision to refuse to provide a copy of the hard drive was first communicated to Mr Egglishaw in a letter from the ACC on 1 November 2005. On 3 August 2006, the ACC reiterated the refusal made nine months earlier. There was no impediment by reference to the date of the refusal to Mr Egglishaw challenging the refusal in the first proceeding. 41 Then, it was contended that it was reasonable for Mr Egglishaw to wait until the validity of the warrant had been determined before challenging the refusal to provide a copy of the hard drive. If the challenge to the warrant had been successful, there would have been no occasion to pursue the s 3N argument. This contention is not accepted. A reasonable approach required Mr Egglishaw to formulate the first proceeding taking account of the possibility that the challenges to the warrant might fail. 42 Next, it was said that one of the reasons which underlies the Anshun principle is the avoidance of conflicting judgments. In the present circumstances a judgment on the s 3N argument would not conflict with the judgment of Sundberg J. This contention is correct and is a factor to be taken into account in favour of Mr Egglishaw. 43 Then, it was submitted that Mr Egglishaw's entitlement under s 3N to a copy of the information on the hard drive was so clear that there was simply no need to litigate the point. Furthermore, the handing of the two DVDs by the ACC to Mr Egglishaw was, so it was said, tantamount to an admission that he was entitled to the material and, hence, again, there was no need to make the claim in the first proceeding. These may be valid arguments were it not for the clear and repeated refusals of the ACC to provide the copies sought. Against those refusals, which were made in the face of threats of legal action, it was unreasonable for Mr Egglishaw not to place his argument under s 3N before the Court in the first proceeding. 44 Taking into account all of the above matters I conclude that Mr Egglishaw's claim based on s 3N properly belonged to the subject matter of the first proceeding and it was unreasonable for him not to have relied on it in that proceeding.

Special Circumstances 45 As referred to earlier in these reasons, the Full Court said in Wong at [38]: What will be sufficient to constitute special circumstances is by no means fixed and may involve consideration of a wide range of factors, all of which bear upon the general discretion of the Court where justice requires the non-application of the general principle: see BC v Minister for Immigration & Multicultural Affairs [2001] FCA 1669 (Sackville J) at [50] referring to Port of Melbourne Authority v Anshun (No 2)[1981] VR 81; see alsoBryant v Commonwealth Bank(1995) 57 FCR 287at 296,298-299, citing Yat Tung Investments Co Ltd v Dao Heng Bank Ltd[1975] AC 581. 46 An important factor relied upon by Mr Egglishaw to persuade the Court to exercise its discretion in favour of allowing the s 3N argument to be raised in this proceeding related to the circumstances in which the ACC acquired the information contained on the hard drive. 47 Counsel for Mr Egglishaw relied on an affidavit sworn by Ian Macdonald Andrew on 17 May 2006, and filed in the proceeding before Sundberg J. Mr Andrew was a staff member of the ACC and the team leader of the investigation into Mr Egglishaw. After the forensic image was taken, Mr Andrew asked Mr Freestone, the ACC computer expert, to do various key word searches to determine which parts of the forensic image fell within the terms of the warrant. After this search, he suspected that there would be information on the forensic image that would be relevant to the investigation being conducted into money laundering and tax fraud and which did not fall within the terms of the warrant. He, and the head of the investigation, wished to access the entire contents of the forensic image. In order to do so, he had a copy of the forensic image made on two DVDs. Then, he had the notice to produce under s 29 prepared. On 19 February 2004, Mr Egglishaw attended a hearing at the ACC. Mr Andrew explained what happened: During a break in the examination, I provided the Applicant with the forensic image DVDs. I then served the Notice to Produce on the Applicant. Pursuant to the Notice to Produce, the Applicant produced the forensic image DVDs that I had just returned to him. The Applicant's legal representatives (Mr David GALBALLY QC and Mr Michael CARR, solicitor) were present for the duration of my dealings with the Applicant in relation to the forensic image DVDs. They did not at any stage object to the procedure that I had adopted in relation to the DVDs and the Notice to Produce. 48 Counsel for Mr Egglishaw argued that the ACC obtained the copy of the hard drive by a device or trick to circumvent s 3N, namely, by using the notice to produce procedure under s 29. This, it was said, was inappropriate conduct and the Court should perform its traditional role of protecting the citizen against an abuse of power by the state. In response, counsel for the ACC said that the ACC did not rely on obtaining the copy of the hard drive under s 29 as an answer to the s 3N argument. Rather, the ACC relied on arguments concerning the construction of s 3N itself. It would argue that s 3N did not come into operation because the computer itself was returned to Mr Egglishaw at the ACC offices. Whilst the traditional role of the Court of protecting citizens against abuse of power by the State is undoubted, it is a role which does not arise in the use by the ACC of s 29 in the present case. Once the object seized had been returned, there was no room for the operation of s 3N. Also, at that time Mr Egglishaw had not made any request for the return of the hard drive. Furthermore, the lawfulness of the use of the s 29 process was considered and upheld by Sundberg J. 49 Then it was contended that the ACC had admitted Mr Egglishaw's right to receive a copy of the hard drive by handing the two DVDs to him on 19 February 2004. Presumably the suggestion was that the ACC thereby led Mr Egglishaw to believe that he did not need to pursue his rights by litigation. If that was the argument intended, it is unsustainable. At least by the time Mr Andrew swore his affidavit, it was made clear to Mr Egglishaw that the DVDs were handed to him, not in performance of an obligation under s 3N but as part of the process to obtain production under s 29. 50 Counsel for Mr Egglishaw also submitted that the ACC would suffer no prejudice from production of a copy of the hard drive, but that he would be prejudiced by not having a copy. This submission looks to the relevant prejudice to the parties which would flow from an outcome of the s 3N argument. It is doubtful whether consideration of that prejudice is relevant to the question whether the Anshun principle should apply. Rather, the question of prejudice must be directed to the prejudice which would result from the Court allowing the argument to be raised or not. In any event, I am not satisfied that Mr Egglishaw would be significantly prejudiced by not obtaining a copy of the hard drive. The evidence, such as it is, does not persuade me that he needs the material for his business. Further, if he needs it to defend criminal charges against him, if any, the prosecuting authorities can be required to make the information available to him at that time for that purpose. On the other hand, there is no evidence that satisfies me that the ACC would be prejudiced by having to provide Mr Egglishaw with a copy of the hard drive. Statements from the bar table by counsel for the ACC suggested that there would be prejudice to the ongoing criminal investigation if a copy of the hard drive were made available to Mr Egglishaw. In the absence of testimony on the question, this factor cannot be taken into account. 51 Next, it was said that the s 3N issue had not been determined in other cases and consequently this was a test case. It was in the public interest that the construction of s 3N be resolved and the law clarified. Whilst there is some merit in this consideration there are other countervailing factors in the application of the Anshun principle. First, the case is not a test case in the sense that there are other cases pending the determination of which would be resolved in a practical sense by a decision in this case. Second, the circumstances of this case are unusual and are not very likely to be repeated. Here, the computer was returned to Mr Egglishaw very soon after seizure and he was able to, and did, take his own copy of at least part of the hard drive. Had events stopped there, Mr Egglishaw may not have pursued the application against the ACC. It was because he lost the information from his copy that he needed to request a copy of the hard drive from the ACC. 52 I also accept that the Court should take care when contemplating a result that prevents a person litigating on the merits. However, this consideration cannot be a bar to the application of the Anshun principle because it applies in every case in which the principle operates: see BC v Minister for Immigration & Multicultural Affairs [2001] FCA 1669 per Sackville J at [55]. For the same reason, I have not considered it relevant to assess the contending arguments on the construction of s 3N advanced by the parties. 53 After consideration of all the above factors, I am of the view that Mr Egglishaw has not established special circumstances which would justify the non-application of the Anshun principle. Consequently, the application which was filed on 27 October 2006 is dismissed with costs. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North .

Associate: Dated: 22 June 2007 Counsel for the Applicant: Mr J Sher QC with Mr J O'Bryan

Solicitor for the Respondent: Australian Government Solicitor