Harts Australia Limited ACN 010 765 392 v Commissioner, Australian Federal Police

1 This matter has had an unfortunate history. The hearing of all outstanding issues went off on 24 March 2000 in circumstances in which the applicants applied for leave to join a large number of additional respondents. 2 On the application of the second respondent, an Australian Federal Police officer, a magistrate issued a search warrant on 6 September 1996 in respect of a number of premises occupied by the applicants. The warrant was issued in connection with a complex investigation into whether persons associated with the applicants were involved in offences of tax fraud. At an urgent hearing on 11 September 1996 before any application had been filed, undertakings were given by the now first and second respondents restricting their access to the mass of documents seized under the warrant on 9 and 10 September. It early became apparent that the applicants wished to challenge the lawfulness of the seizure of many thousands of documents. In theory at least, the Court can be required to make many individual determinations when the seizure of a very large number of documents is challenged. Cf Propend Finance Pty Ltd v Commissioner, Australian Federal Police (1995) 128 ALR 657; there the Full Court, proceeding on the basis that this Court has jurisdiction to review such decisions, upheld the learned primary judge's decision that the applicants had failed to discharge the onus of proof that rested on them to show, with respect to each document in contention impropriety on the part of the particular officer who seized that document. The Court, at 669, affirmed the learned primary judge's approach while acknowledging that this onus had to be discharged though "there were very many documents and many police officers engaged". 3 Accordingly, in September 1996 I agreed to hear argument limited to certain issues as to the formal validity of the warrant: if I held the warrant invalid, that would conclude the litigation. I later published my reasons for rejecting these particular attacks on it: see Harts Australia Ltd v Commissioner, Australian Federal Police (1996) 141 ALR 493. Later, in November 1996, I agreed to incorporate the outcome of that phase of the litigation in formal orders to permit the applicants to appeal my determination after the parties had agreed on a cataloguing process designed to ensure that they would continue to prepare the remaining issues for hearing, including the attacks on the allegedly excessive seizures, notwithstanding the pendency of the appeal. The Full Court upheld my orders in May 1997: see Harts Australia Ltd v Commissioner, Australian Federal Police (1998) 156 ALR 152. 4 The cataloguing process continued slowly though, during the course of it, the respondents acknowledged that overall, a considerable number of the seized documents should be returned to the applicants as not being within the warrant. Subsequently, the parties were also able to agree upon another range of documents as having been lawfully seized under the warrant. Nevertheless, there remained in contention a very large number of documents: about 4,500 documents and 66 disks containing the equivalent of about 200,000 or so documents are still held by the respondents in reliance on the warrant. I therefore gave directions in November 1998 requiring the parties, so far as was practicable, to confine the issue of excessive seizure to a determination on sample documents intended to represent the various classes into which the mass of remaining documents seized might be able to be divided. (On 23 March 2000, I was told that the sampling exercise took a very long while though it did achieve a degree of resolution of the dispute in so far as the respondent agreed to return a significant volume of the material initially seized. The sampling exercise, however, did not prove of any other use in so far as the parties were unable to agree upon a range of sampled documents in respect of which the determination could be made as to the lawfulness or otherwise of the sample seizures, which determination would resolve the whole dispute as to all the documents still in contention.) 5 The timetable set in November 1998 was not adhered to and amendments were made to it from time to time by consent. In accordance with the directions earlier given, the District Registrar ultimately fixed 23 March 2000 as the commencement of the hearing. During 1999, the Court was also informed that the parties had entered into discussions with a view to trying to settle the whole case. But settlement has not been achieved. 6 In December 1999, I convened a directions hearing in circumstances where the trial-preparation timetable and thus the hearing fixed for 23 March 2000 looked like being subject to further disruption; I gave directions requiring the applicants to identify all the issues yet to be determined in the action and to file all the evidence upon which they intended to rely in relation to those issues by 28 January 2000; similar directions were given with respect to material to be filed by the respondents. The hearing date was confirmed for 23 March 2000. 7 It became apparent early in the hearing on 23 March 2000, that, despite the directions I had given in December requiring the applicants to identify by late January all the issues they wished to have determined, no serious or at least no careful attempt was made to do that in the material filed on 28 January: counsel told me that they no longer wished to challenge any aspect of the validity of the warrant or the decision of the magistrate to issue the warrant. This was said, despite the fact that the applicants, in their statement of contentions identifying the issues yet to be determined (which was filed on 28 January 2000), dealt at some length with the validity of the issuing magistrate's decision; these contentions were repeated in the applicants' revised statement of facts and law on issues yet to be determined filed on 15 March 2000. Counsel also said that despite the attempts set out above made to avoid the need for a detailed inquiry into the execution of the warrant, the applicants had come to the view that it would be necessary, after all, for me to consider the lawfulness of the seizure of each document on a document by document basis and that there were thousands of them remaining in contention. Both these statements of contentions of 28 January and 15 March also dealt with the challenge the applicants wished to make to what was described as "the decisions and/or conduct of the First and Second Respondents in the course of executing the warrant … whereby the First and Second Respondents made decisions to, and seized, things whose seizure was unauthorised by the terms of the Warrant". In a refined form, that is the broad issue which alone the applicants still wish to pursue. 8 In the course of argument on 23 March 2000, it emerged that the case the applicants wished to make involved challenging the decisions of sixty-six police and Australian Taxation Office officers who assisted the second respondent, to whom the search warrant was primarily directed, in executing the warrant. (The second respondent did not attend at any of the premises at which the warrant was executed, though he had given instructions to the assisting constables in connection with its execution.) 9 The applicants acknowledged, as argument proceeded, that the lawfulness of the seizure of any particular document would involve an investigation into, among other things, the subjective state of mind of the officer who made the decision to seize that particular document in reliance on the warrant. Though the second respondent as the officer named in the warrant briefed the assisting officers before the warrant was exercised, the applicants made it clear that they intended to challenge the seizure of documents by reference to what the assisting officers did; their case will not be confined to attacking the seizures of the documents as having been effected under inappropriate instructions given beforehand by the second respondent which led to each conducting an indiscriminate search. The applicants ultimately accepted that that investigation could not effectively be conducted without the joinder of all the assisting officers, sixty-six in number. 10 In the course of further argument, applicants' counsel said that the applicants wanted to show that each of the assisting constables made their seizure decisions with respect to each document he or she seized without knowing whether the particular document came within the warrant, ie, without having held at the time of seizure the requisite belief. But, in explaining how the applicants intended to make out this case, counsel also said in effect that it would be unnecessary for the Court to examine every one of the many documents seized, because it was the applicants' intention to demonstrate the correctness of its contentions by reference to some only of the documents taken as evidencing the way each of the sixty-six assisting officers went about making the decisions to seize and as showing in an over-arching way that they were all involved in an indiscriminate or "negative search" process in determining what documents to seize when they purported to assist in executing the warrant. Senior counsel acknowledged this as a late change in direction, though one "for the better" in that it involved a departure from investigating the lawfulness of the seizure of each document on a document by document basis. Counsel also agreed that, by his submissions, the applicants had articulated for the first time a basis for challenging the execution of the warrant which may be sustainable and which does not involve the Court having to make a document by document evaluation. 11 It appears to be common ground that about 44 per cent of the totality of the documents seized under the warrants have now been returned to the applicants as not covered by the warrants. This is said to be some evidence of widespread excessive seizure. I have also had my attention directed by counsel for the applicants to evidence which he submitted pointed to widespread unauthorised conduct among the assisting officers in seizing documents. I have seen but a tiny portion of the documents seized and it no doubt contains some, at least, of the more blatantly unjustifiable seizures. As is pointed out in Propend, where the execution of a search warrant is challenged in circumstances like this, it is unlikely that the target of the warrant will be able to discharge the onus of proving excessive execution overall by pointing to only a relatively small number of documents plainly outside the warrant. But, at this stage, I am not prepared to hold that the case the applicants have now identified as that which they wish to run is plainly unarguable. 12 When the hearing resumed on 24 March 2000, the applicants sought leave to amend in accordance with the draft amended application for review that was then handed up to the Court. By this proposed amendment, the applicants abandoned all outstanding challenges to the decision of the magistrate who issued the warrant and to the form of the warrant. The applicants sought to join sixty new respondents who include not only members of the Australian Federal Police, but also members of the Australian Taxation Office who participated in the execution of the warrants. 13 The respondents, ie, the first and second respondents, objected to the applicants being given leave to embark on this new case. Counsel for the respondents, in opposing the amendment on 24 March, submitted that there could be problems on the respondents' side in so far as not all the proposed new respondents were still members of the Australian Federal Police or the Australian Taxation Office and some might not be contactable by the first and second respondents. Although understandably counsel could not give full details of particular difficulties, he instanced one or two examples of proposed new respondents who were no longer members of the Australian Federal Police. Counsel submitted: "To put it colloquially, we wouldn't at this stage have a clue where many of these people are, let alone what their state of memory is." 14 In answer to a submission of the applicants, the respondents put on evidence explaining that they had not interviewed most of the proposed sixty new respondents because, on the case run up to then, it had not appeared to them to be necessary to do that. They had, however, promptly arranged to proof the relatively small number of assisting officers whose conduct was the subject of comment in the affidavits filed early in the litigation on behalf of the applicants. The respondents' solicitor said that, in respect of most of the officers intended now to be joined, no previous allegation of improper conduct in the course of executing the warrants have been made by the applicants. I accept that there is good reason why the first and second respondents would not have previously proofed all sixty-six of the assisting officers, given the course the action took from November 1996 to March 2000. I accept that the respondents were not in default in failing to proof each of the sixty assisting officers prior to the question of amendment being raised in March 2000. 15 The respondents also put on evidence concerning the difficulties that amendment would impose on them in relation to the undertaking by one of the respondents' witnesses, Mr Leary, of a tour of duty in Cyprus. He is the officer of the Australian Federal Police who obtained a number of search warrants executed in New South Wales in September 1996 in connection with the investigation in relation to which the warrant under attack in these proceedings was issued. He was not, however, present during the execution of any of these warrants. It was said that a costs order against the applicants might not necessarily cure the problems with this particular witness' availability. I am not convinced given the nature of his involvement in the matter that difficulties created by his overseas posting will be insuperable at the hearing. 16 The existence of the common law action that has been brought by the applicants for return of the documents is no ground for refusing leave to amend since the applicants' object in the proceedings before me has always been to stop the respondents looking at the documents seized, something they will be able to achieve in this action if they are successful in view of the directions given restricting access by the respondents to the documents they still retain. 17 If the applicants are to be given leave to amend to join these sixty new respondents, it should, I think, be on terms that the applicants promptly serve them to the intent that the only persons to be joined as new respondents will be those who the applicants are able to quickly serve. If they can only serve, say, forty of the sixty, the applicants can still run their foreshadowed case of an indiscriminate search by all of them. What conclusions the Court reaches will depend upon the quality of the evidence at the end of the day about the conduct of those who have been able to be joined. In view of the way counsel for the applicants ultimately outlined the case intended to be made, leave to join additional parties on these terms, in my opinion, will strike an appropriate balance between the applicants' entitlement to a reasonable opportunity to run the case it has now decided it wishes to run and the prejudice to the respondents' side of the record flowing from the applicants' failure to identify that case much earlier than it has. I recognise that leave to amend on these terms will not necessarily overcome all prejudice to the respondents' case, given that what will be of importance is the subjective state of mind of each assisting officer at the time of seizure in September 1996 and given that memories fade with time, especially on matters about which contemporaneous written records are not made. But as applicants' counsel finally made clear, they now do not wish to challenge the validity of the seizure of every single document on a document by document basis, but rather to demonstrate by reference to some only of the documents that each of the sixty new respondents seized that that respondent adopted a wrong approach to determining what he or she should seize so that, if that is established with respect to enough of the documents, all documents taken by that particular respondent will be shown to have been unlawfully seized. 18 In The State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, the High Court affirmed the traditional view that the ultimate aim of the Court is the attainment of justice and that a party should be permitted to raise an arguable defence provided any prejudice to the other party could be compensated by costs. Though that decision was given in the context of commercial litigation, I think the principle is applicable to this case. 19 If the amendment is granted on the terms I propose, I do not think, in view of the long history of the litigation (to which the respondents, in part, have contributed) that it is likely that the respondents will suffer prejudice so substantial that it cannot be remedied by an order for the costs thrown away as a result of the course proceedings took on 23 and 24 March 2---. 20 There is a further matter that needs to be dealt with. Supplementary written submissions were provided by the parties on the question whether the decisions of the various assisting officers to seize individual documents were decisions "of an administrative character made … under an enactment" within s 3 the Administrative Decisions (Judicial Review) Act 1977 (Cth). 21 In Baker v Campbell (1982) 44 ALR 431, Keely J held that the decision of a constable acting under a search warrant issued under s 10 the Crimes Act 1914 (Cth) then in force to seize particular documents was neither a decision "of an administrative character" nor a decision "under an enactment" within the meaning of those terms in s 3 the ADJR Act and so was not a reviewable decision. 22 However, significant amendments have been made to the provisions of the Crimes Act dealing with search warrants since Baker v Campbell. In my decision in the Harts case reported at 141 ALR 493 at 502, I said that Pt 1AA the Crimes Act is significantly different from the old s 10 and, at 504, I said that the new s 3F(1)(c), rather than the warrant, was the source of the authority of the officer who executes a warrant issued under s 3E(1) to search for and seize material. For this reason, Baker v Campbell can no longer, in my respectful opinion, be regarded as authority for the proposition that the decision of an executing officer to seize a particular document under a search warrant issued under Pt 1AA the Crimes Act now in force is not reviewable on the ground that that decision is made under the authority of the warrant, not under the authority of any statute. What was said by the Full Court in Salerno v National Crime Authority (1997) 144 ALR 709 at 714 supports the proposition that the decision of the executing officer to seize a document is a "decision" sufficient for the purposes of s 3 the ADJR Act because it is a determination which materially affects the common law right of the applicant to possession of the document taken. 23 Nor am I prepared to hold that such a decision is not a decision "of an administrative character". The only authority directly in point to which I was referred was Baker v Campbell in which Keely J, in a brief comment at 438, reached that conclusion. However, subsequent to Baker v Campbell, this Court has assumed jurisdiction to review such decisions. See, eg, Parker v Churchill (1985) 63 ALR 326 where, at 330, Burchett J referred to the question of the jurisdiction of the Court to review the decisions of the officer executing a warrant to seize particular documents and went on to consider that issue. The matter went on appeal - see 65 ALR 107 - and though Burchett J's decision on the lawfulness of the conduct of the executing officers was the subject of appeal, the issue of jurisdiction was not there referred to. In Propend, the Full Court considered at length the decision of the primary judge who rejected challenges to the decisions of the executing officers to seize particular documents under a warrant in circumstances where the Court clearly assumed there was jurisdiction to review such decisions (although the application there in question sought review not only under the ADJR Act, but also under s 39B the Judiciary Act 1903 (Cth), upon which the applicants here also rely). See 128 ALR at 664, 683 - 684 and 693. 24 As Keely J pointed out in Baker v Campbell, that a decision is not of a legislative nor judicial character does not necessarily mean that it must be administrative in character. Authority indicates that whether a decision is "of an administrative character" within s 3 the ADJR Act "looks more to the nature or character of the decision itself than to the person or body making the decision", though the identity of the particular person or body "must be relevant": Hamblin v Duffy (1981) 50 FLR 308 at 314 and Evans v Friemann (1981) 53 FLR 229 at 237. In Evans, Fox ACJ said: