Hyder v Commonwealth of Australia

Judgment 1McCOLL JA: The applicant, Mr Nazmul Hyder, brought proceedings in the District Court against the Commonwealth of Australia alleging that a Federal Police Agent, Mr Christopher Gaggin, had arrested him without lawful justification and thereby falsely imprisoned him. He contended that the respondent was vicariously liable for Mr Gaggin's conduct. 2Mr Gaggin arrested the applicant without a warrant to do so acting pursuant to the discretion to so act provided by s 3W(1)(a) of the Crimes Act 1914 (Cth). Sub-section 1(a) of s 3W which is at issue in this appeal relevantly provided that "[a] constable may, without warrant, arrest a person for an offence if the constable believes on reasonable grounds that: (a) the person has committed or is committing the offence ... ". 3The respondent's case was that Mr Gaggin arrested the applicant in the belief, which he had formed on reasonable grounds, that the applicant and a person identified as Nazmul Haider were "one and the same person" and, further, that that person had committed offences under s 134.2 and s 400.6 of the Criminal Code Act 1995 (Cth). After his arrest, the applicant was charged with dealing with the proceeds of crime in contravention of s 400.6, but the charges were withdrawn following representations by his solicitors. 4The applicant accepts that at the time of his arrest, Mr Gaggin honestly believed that he was "Nazmul Haider" and had committed an offence as defined for the purposes of s 3W (see s 3C of the Crimes Act). It was common ground that the burden of proving that the arrest was lawful lay on the respondent: see Liversidge v Anderson [1942] AC 206 (at 245) per Lord Atkin; Zaravinos v State of New South Wales [2004] NSWCA 320; (2004) 62 NSWLR 58 (at [12], [37], [38]) per Bryson JA (Santow JA and Adams J agreeing). 5The critical issue on liability at trial was whether Mr Gaggin held his honest belief "on reasonable grounds" as required by s 3W(1), thus providing a lawful justification for the arrest. Murrell SC DCJ found in favour of the Commonwealth on this issue: Nazmul Hyder v Commonwealth of Australia [2011] NSWDC 80. In the event she was in error, her Honour assessed damages in the amount of $40,400. 6This is the concurrent hearing of applicant's application for leave to appeal and, if leave is granted, the hearing of his appeal against the primary judge's decision. The appeal is brought pursuant to the right to appeal contained in s 127 of the District Court Act 1973. Leave to appeal is required because the amount in issue is less than $100,000: s 127(2)(c)(i), District Court Act 1973. 7For the reasons which follow, I am of the view that leave to appeal should be granted, but that the appeal should be dismissed.

Statement of the case 8The applicant was arrested as part of an investigation codenamed "Operation Starfish" conducted by the Australian Taxation Office into widespread fraud. Fraudulent tax returns had resulted in the payment of substantial tax rebates into fraudulent bank accounts, six of which were in the name "Nazmul Haider". It was common ground at trial and on appeal that, as the appellant accepted in his written submissions, the bank accounts and by implication, the person(s) who opened and operated them, were connected to the fraud. 9The primary judge recounted the factual background as follows: "1 'Operation Starfish' was an Australian Taxation Office investigation into widespread fraud. Fraudulent tax returns had resulted in the payment of substantial tax rebates into fraudulent bank accounts. Six fraudulent accounts were in the name Nazmul Haider. 2 The plaintiff, Nazmul Hyder is a Bangladesh citizen who resides in Australia. On 28 October 2009, Mr Anderson, a senior investigator with the ATO, swore affidavits in support of a warrant to search the plaintiff and his premises, and the warrants were issued. The Australian Federal Police were briefed with the affidavits and other material, and were asked to execute the warrants on behalf of the ATO. On 29 October 2009, Federal agents attended the plaintiff's premises and executed the warrants. Federal Agent Gaggan [sic, Gaggin] (the officer) arrested the plaintiff. The plaintiff was charged with dealing with the proceeds of crime contrary to section 400.6 (1) of the Criminal Code Act 1995 and released on bail. 3 In January 2010, the charge was withdrawn. In relation to the establishment of the six fraudulent bank accounts, the plaintiff had been the victim of 'identity theft'. ... 8 The officer's belief was based on information obtained in the course of the briefing on 28 October 2009. During the briefing, another Federal agent told the officer that 'Nazmul Haider' was also known as 'Nazmul Hyder'; that they were one and the same person. The officer read affidavits sworn by Mr Anderson in support of the search warrant applications. He read the 'statement of facts' prepared by Mr Anderson. Inter alia, the affidavits stated: '6. ATO records show that the taxpayer Nazmul Hyder is linked to the following bank accounts nominated to receive 2008 refunds of income tax ... u. Seized bank records for the above accounts [see above paragraph 6(n)] show that the bank accounts were established in the name of Nazmul Haider and not Nazmul Hyder. Identity documents produced at the time of the establishment of these bank accounts reveal they are one and the same person. v. ... NSW Learners D/L 15699718 in the name of in the name of Nazmul Hyder, Bangladesh D/L DK0059950L in the name of Nazmul Haider and Bangladesh passport B0742681 in the name of Nazmul Haider were produced to establish these accounts.' 9 The 'Statement of facts' asserted that 'the Defendant' had opened each of the fraudulent bank accounts, had withdrawn the proceeds of the false refund applications from the accounts, and had dealt with those proceeds. In fact, as the brief of evidence served on 10 December 2009 (Exhibit A) showed, while there were significant similarities between the false identity documents produced at the time that the bank accounts were established (similar name, same date of birth, same father's name), there were very substantial differences (differences in dates, addresses and identity numbers) between the false documents and the plaintiff's genuine documents (Exhibit A, tab 12). 10 The plaintiff contended (par 15 of the statement of claim) that there was no factual basis capable of founding a reasonable belief that he was the offender who opened the fraudulent accounts. The plaintiff argued that, as 'Operation Starfish' was an investigation into fraud committed through 'stolen identities', it was incumbent on the officer to reasonably eliminate the possibility that the plaintiff's identity had been 'stolen' before the officer arrested the plaintiff." (Emphasis added) I will refer to the sentence emphasised at [8] of the primary judgment as the "critical sentence". 10After referring to authorities to which I will return, the primary judge concluded: "17 In Hussein, Castorina, O'Hara and Rondo, the courts determined that hearsay material could be considered when a decision maker was forming a 'reasonable suspicion' (rather than a 'reasonable belief'). Although reasonable belief is a more definite state of mind than a reasonable suspicion and, consequently, must rest on a firmer foundation than that required for a reasonable suspicion, there is no logical basis to distinguish the categories of material that may found a reasonable belief from the categories that may found a reasonable suspicion. In either case, the state of mind may be based on hearsay material. It will be necessary for the decision maker to determine whether the particular hearsay material is sufficiently pertinent and reliable to found the requisite state of mind. 18 In this case, the officer formed his belief on the basis of a sworn affidavit and a 'statement of facts' provided by a senior investigator with the ATO, the body responsible for investigating 'Operation Starfish'. In effect, the affidavit asserted that specific identity documents had been produced when the fraudulent accounts were opened, and that an examination of those identity documents established that it was the plaintiff who had opened the accounts. Had the officer examined the identity documents produced to the banks and compared them with the plaintiff's genuine documents and known circumstances, he may well have decided that the documents produced to the banks were not authentic and provided no evidence that the plaintiff was the offender. However, he was not obliged to involve himself in the investigation. The officer was entitled to treat apparently reliable hearsay material as providing 'reasonable grounds' for a belief that the plaintiff was the offender who had opened the accounts, and to arrest the plaintiff."

Issues on appeal 11The notice of appeal raised the following grounds of appeal: (1)Her Honour erred in the application of section 3W(1) of the Crimes Act 1914 (Cth). (2)Her Honour erred in finding that the respondent had established that the arresting officer's belief was held on "reasonable grounds". (3)Her Honour erred in failing to apply the correct test required by section 3W of the Crimes Act 1914 (Cth) in relation to the term "believes on reasonable grounds". (4)Her Honour erred in finding that the respondent had established lawful justification for the arrest of the applicant.

Legal propositions 12Before turning to the submissions, the following legal propositions should be noted. 13Because the law places a high value on personal liberty, a statute which authorises the detention of a person must be strictly construed: Zaravinos v State of New South Wales (at [23]) per Bryson JA (Santow JA and Adams J agreeing), citing Williams v The Queen [1986] HCA 88; (1986) 161 CLR 278 (at 292 and 296) and Smith v Corrective Services Commission (NSW) [1980] HCA 49; (1980) 147 CLR 134 (at 139); see also George v Rockett [1990] HCA 26; (1990) 170 CLR 104 (at 110 - 111); State of New South Wales v Corbett [2007] HCA 32; (2007) 230 CLR 606 (at [87]) per Callinan and Crennan JJ (Gleeson CJ and Gummow J generally agreeing); (at [16] ff) per Kirby J. The protection of the subject lies in the nature of the test which has to be applied in order to determine whether, in a case of arrest without warrant, the requirement that there be reasonable grounds for the suspicion (or, I would add, the belief) said to justify the arrest is satisfied: O'Hara v Chief Constable of Royal Ulster Constabulary [1997] AC 286 (at 296) per Lord Hope; see also Lord Steyn (at 291) (Lords Goff, Mustill, and Hoffmann agreed with both). 14It also has to be borne in mind that there is a public interest in the detection of crime and bringing those who commit it to justice: Holgate-Mohammed v Duke [1984] AC 437 (at 445) per Lord Diplock. Thus, while it is "desirable as a general rule that an arrest should not be made until the case is complete ... if arrest before that were forbidden, it could seriously hamper the police": Shaaban Bin Hussien v Chong Fook Kam [1970] AC 942 (at 948) (Privy Council). In determining whether the arresting officer had the relevant state of mind (be it suspicion or belief), the court is considering a preliminary stage of the investigation, rather than one requiring evidence amounting to prima facie proof: O'Hara v Chief Constable of Royal Ulster Constabulary (at 293) per Lord Steyn, citing Shaaban Bin Hussien v Chong Fook Kam (at 949). 15The following propositions, adapted by reference to s 3W, can be extracted from decisions considering how a person required to have reasonable grounds either to suspect or believe certain matters for the purposes of issuing a search warrant or arresting a person might properly form that state of mind: (1) When a statute prescribes that there must be "reasonable grounds" for a belief, it requires facts which are sufficient to induce that state of mind in a reasonable person: George v Rockett (at 112); (2) The state of mind that the reasonable grounds for the relevant suspicion and belief exist must be formed by the person identified in s 3W (the "arresting officer"); the arresting officer may not "discharge the ... duty [of forming the relevant opinion] parrot-like, upon the bald assertion of the informant": George v Rockett (at 112), quoting R v Tillett; Ex parte Newton (1969) 14 FLR 101 (at 106) per Fox J; (3) The proposition that it must be the arresting officer who has reasonable grounds to suspect (or believe) the alleged suspect to be guilty of an arrestable offence is intended to ensure that "[t]he arresting officer is held accountable ... [and] is the compromise between the values of individual liberty and public order": O'Hara v Chief Constable of Royal Ulster Constabulary (at 291) per Lord Steyn (Lords Goff, Mustill and Hoffmann agreeing); (4) There must be some factual basis for either the suspicion or the belief: George v Rockett (at 112); the state of mind may be based on hearsay material or materials which may be inadmissible in evidence; the materials must have some probative value: R v Rondo [2001] NSWCCA 540; (2001) 126 A Crim R 562 (at 53) per Smart AJ (Spigelman CJ and Simpson J agreeing); Shaaban Bin Hussien v Chong Fook Kam (at 949); O'Hara v Chief Constable of Royal Ulster Constabulary (at 293) per Lord Steyn; (5) "The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof": George v Rockett (at 116); (6) "Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture": George v Rockett (at 116); (7) What constitutes reasonable grounds for forming a suspicion or a belief must be judged against "what was known or reasonably capable of being known at the relevant time": Ruddock v Taylor [2005] HCA 48; (2005) 222 CLR 612 (at [40]) per Gleeson CJ, Gummow, Hayne and Heydon JJ; whether the relevant person had reasonable grounds for forming a suspicion or a belief must be determined not according to the subjective beliefs of the police at the time but according to an objective criterion: Anderson v Judges of the District Court of New South Wales (1992) 27 NSWLR 701 (at 714) per Kirby P (Meagher and Sheller JJA agreeing); see also O'Hara v Chief Constable of Royal Ulster Constabulary (at 298) per Lord Hope; (8) The information acted on by the arresting officer need not be based on his own observations; he or she is entitled to form a belief based on what they have been told. The reasonable belief may be based on information which has been given anonymously or on information which turns out to be wrong. The question whether information considered by the arresting officer provided reasonable grounds for the belief depends on the source of the information and its context, seen in the light of the whole of the surrounding circumstances and, having regard to the source of that information, drawing inferences as to what a reasonable person in the position of the independent observer would make of it: O'Hara v Chief Constable of Royal Ulster Constabulary (at 298, 301, 303) per Lord Hope. (O'Hara concerned the formation of a suspicion, but the proposition Lord Hope stated is equally applicable to the formation of a belief); it is "[t]he character of the circumstances [which have] to be decided: were they such as to lead to the specified inference?": Queensland Bacon Pty Ltd v Rees [1966] HCA 21; (1966) 115 CLR 266 (at 303) per Kitto J; (9) "The identification of a particular source, who is reasonably likely to have knowledge of the relevant fact, will ordinarily be sufficient to permit the Court to assess the weight to be given to the basis of the expressed [state of mind] and, therefore, to determine that reasonable grounds for [it] exist": New South Wales Crime Commission v Vu [2009] NSWCA 349 (at [46]) per Spigelman CJ (Allsop P and Hodgson JA agreeing); see also International Finance Trust Co Ltd v New South Wales Crime Commission [2008] NSWCA 291; (2008) 189 A Crim R 559 (at [134] - [135]), per McClellan CJ at CL. Although McClellan CJ at CL was in dissent, Allsop P (with whom Beazley JA agreed) (at [51]) would have agreed with McClellan CJ at CL's conclusion in this respect subject to qualifications none of which are in issue in the present case. International Finance Trust Co Ltd v New South Wales Crime Commission was overturned in the High Court insofar as it concerned the constitutional validity of s 10 of the Criminal Assets Recovery Act 1990, but not in a manner which affects the statements concerning the reasonable grounds issue: International Finance Trust Co Ltd v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319; (10) In Holgate-Mohammed v Duke (at 443), Lord Diplock held that the words "may arrest without warrant" conferred on a public official "an executive discretion" whether or not to arrest and that the lawfulness of the way in which the discretion was exercised in a particular case could not be questioned in any court of law except upon the principles Lord Greene MR enunciated in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. That aspect of Lord Diplock's reasoning was applied in Zaravinos v State of New South Wales (at [28]) where Bryson JA (Santow JA and Adams J agreeing) held that that the validity of an exercise of the statutory power to arrest, in that case under s 352(2) of the Crimes Act 1900 (which provided that "[a]ny constable or other person may without warrant apprehend"), was "not established conclusively by showing that the circumstances in s 352(2)(a) exist[ed], and that the validity of the decision to arrest and the lawfulness of the arrest also depend on the effective exercise of the discretion alluded to by the word 'may' "; see also Bales v Parmeter (1935) 35 SR (NSW) 182 (at 188) per Jordan CJ. Holgate-Mohammed v Duke has not been followed in Australia to the extent that Lord Diplock held that an arrest for the purpose of asking questions was lawful: see Zaravinos v State of New South Wales (at [31] - [33]); Williams v The Queen (at 299) per Mason and Brennan JJ. 16The primary judge referred (at [15]) with apparent approval to a statement in Purchas LJ's reasons in Castorina v Chief Constable of Surrey [1988] NLJR 180; Times, 15 June 1988, to the effect that "courses of inquiry which may or may not be taken by an investigating police officer before arrest are not relevant to the consideration whether on the information available at the time of the arrest he had reasonable cause for suspicion." 17It is not apparent that Purchas LJ's proposition is consistent with the statement in George v Rockett (at 112, see 15 above) to the effect that the arresting officer may not merely act as a cipher, or with the plurality's reasons in Ruddock v Taylor (at [40], see 15 above) that what constitutes reasonable grounds for forming a suspicion or a belief must be judged, inter alia, against what was "reasonably capable of being known at the relevant time". Prima facie, in my view, it will be a matter of fact in each case as to whether the materials the relevant person was considering were such as to prompt other inquiries before the relevant state of mind could be formed. This question was not argued and need not be finally decided. 18The point made in 15 above deserves some elucidation in the context of the appellant's complaints. As Lord Hope pointed out in O'Hara v Chief Constable of Royal Ulster Constabulary (at 301 - 302), it is frequently the case that: "[an arresting officer's] action is the culmination of various steps taken by other police officers, perhaps over a long period and perhaps also involving officers from other police forces. For obvious practical reasons police officers must be able to rely upon each other in taking decisions as to whom to arrest or where to search and in what circumstances. The statutory power does not require that the constable who exercises the power must be in possession of all the information which has led to a decision, perhaps taken by others, that the time has come for it to be exercised. What it does require is that the constable who exercises the power must first have equipped himself with sufficient information so that he has reasonable cause to suspect before the power is exercised." 19Lord Hope's remarks emphasise that the question of identifying the material sufficient to support an objective finding that, for relevant purposes, an arresting officer had reasonable grounds for his or her belief has to be approached with practical considerations as to the nature of criminal investigations in mind. 20Insofar as the propositions in 15 are concerned, the appellant did not contend that if Mr Gaggin held his belief on reasonable grounds, he had impermissibly exercised his discretion to arrest the appellant. No doubt that was because Mr Gaggin's affidavit explained why he believed proceeding by way of Summons would not, in the circumstances set out, achieve the purpose of ensuring the appellant's appearance before a court in respect of the offence: see s 3W(1)(b)(i).

Submissions 21Mr J Raine of counsel, who appeared for the appellant, refined the grounds of appeal into two issues. First, whether there was any factual basis for Mr Gaggin's belief that the applicant had committed an offence for which he was arrested. Secondly, whether, viewed objectively, the material on which Mr Gaggin relied afforded "reasonable grounds" for the belief he formed. 22The argument on the first issue can be briefly stated. Relying on the proposition that there "must be a some factual basis for the belief" (see 15 above), Mr Raine submitted that the statement in the critical sentence to the effect that something was "revealed" by a document was not a statement of fact but, rather, a conclusion drawn by Mr Anderson on his interpretation of the documents in question and failed to disclose any underlying reasoning process. 23Insofar as the second issue is concerned, Mr Raine complained that the primary judge erred (primary judgment at [18]) in focusing upon whether Mr Gaggin was entitled to rely on hearsay material, a matter he contends was not in dispute. He submitted that her Honour's reasoning was flawed in that it presupposed the hearsay material was "apparently reliable" without addressing why that was so, that it equated Mr Gaggin's assessment of the reasonableness of the material as the basis for his belief with an objective assessment of the reasonableness of the material to found such a belief and, finally, that it failed to assess the reasonableness of the material objectively. 24Next Mr Raine submitted that her Honour placed too much weight on the source, and not enough on the content, context and circumstances surrounding the information. He contended that when the context and circumstances in which the critical sentence appeared were examined objectively (see 15 above), the matters the primary judge recorded (at [8] - [9]) and the evidence to which I refer below demonstrated that Mr Gaggin lacked a factual basis as well as any "reasonable grounds" for his s 3W(1) belief. 25Turning to the evidence, in cross-examination Mr Gaggin accepted that he had no reason to believe the other Federal Agent had any more information beyond that which he had received. Accordingly, Mr Raine submitted, and the respondent did not dispute, Mr Gaggin's belief was based solely on the matters to which Mr Anderson had deposed. 26Mr Gaggin said he formed his belief on the basis of reading the entire document prepared by Mr Anderson. Insofar as he believed that the appellant was the person who opened the relevant bank accounts, Mr Gaggin accepted that that belief was based on the critical sentence. Mr Raine submitted that the significance of that sentence was that it was the only suggestion in the materials Mr Gaggin perused prior to the arrest that implicated the appellant as a person involved in the fraud. Accordingly, unless there were reasonable grounds for Mr Gaggin's belief that the appellant and Mr Haider were "one and the same person", he argued that Mr Gaggin could not have had reasonable grounds for believing the appellant had committed any offence. 27Next, Mr Raine contended that concessions made by Mr Gaggin at trial on being taken to the Anderson affidavit demonstrated that he should have doubted the accuracy of the critical sentence and that, had he had regard to the surrounding circumstances, he should have assessed the critical sentence with an "open and critical mind". Those surrounding circumstances were, in substance, that bank accounts used in the fraud were often accounts of foreign nationals who had departed Australia and whose accounts had been taken over and were being operated by those perpetrating the fraud. Secondly, that, as false identity papers were being used by the perpetrators of the fraud to open and operate some bank accounts (and post office boxes linked to the bank accounts), it was possible that any or all of the bank accounts linked to the fraud were opened using false identity papers. Accordingly, no identity papers used to open any bank account (or post office box) said to be linked to the fraud could be accepted at face value as truly recording the identity of the person opening that account. In such circumstances, he contended, the only reasonable conclusion available to Mr Gaggin was that all identity papers used to open bank accounts linked to the fraud were of questionable reliability and that a reasonable person in his position should have drawn that conclusion. That being the case, he contended, Mr Gaggin should have formed the view that Mr Anderson's identification of Mr Haider and Mr Hyder as "one and the same person" was unreliable and, accordingly, he could not form the necessary s 3W(1) belief on reasonable grounds. 28Mr Raine also pointed out that although, during his cross-examination, Mr Gaggin had emphatically rejected the proposition that he would have accepted anything Mr Anderson told him, he also gave the following evidence: "A. ... Once again that comes down to the premise that I have [to] trust and believe, on face value, what Mr Anderson tells me, the investigations that Mr Anderson and the tax office have conducted, the same information taken to the courts and sworn before the courts and then brought to the federal police. So whatever is written in these affidavits by Mr Anderson and the tax office, I believe, so when he says that 'identity documents produced at the time of the establishment of these bank accounts reveal they are one and the same person', I believe that. [trial transcript 34.02 - 34.09] ... Q. ... you were prepared to accept that conclusion stated in that sentence without understanding how Mr Anderson drew that conclusion? A. If Mr Anderson is prepared to come to that conclusion from his investigations and then swear it to a court and bring it to me at the federal police, yes, I am. [trial transcript 34.44 - 34.49] ... Q. ... you'd agree with me that that's Mr Anderson's conclusion from his analysis of the documents, you'd accept that, wouldn't you? A. Yes. Q. Mr Anderson's not stating any fact about the document that supports that conclusion, he's only stating his conclusion, isn't he? A. Yes." [trial transcript 35.05 - 35.11] 29Mr D J Brogan, who appeared for the respondent, submitted that Mr Raine's submission concerning the necessity that there be a factual basis for the relevant state of mind took the relevant passage in R v Rondo (at 53, see 15 above) out of context. He argued that, after stating the proposition for which the appellant contended, Smart AJ accepted that hearsay material or materials inadmissible in evidence could be relied upon as long as they had some probative value. He argued that such materials were attached to, and/or referred to in, Mr Anderson's affidavit. In any event, he submitted that the authorities (see below) support the proposition that Mr Gaggin was entitled to rely upon another person's state of mind when, as here, the basis for it was disclosed. That gave Mr Anderson's opinion probative value. 30As to the second issue, Mr Brogan submitted, on the basis of New South Wales Crime Commission v Vu (see 15) above, that Mr Gaggin was entitled to form a belief on reasonable grounds based upon the materials contained in Mr Anderson's affidavit as the source of the material relied upon was established and he had sworn on the basis of ATO records, seized bank records and identity documents that he suspected the appellant had committed the relevant offences. He emphasised that the ATO, and by inference Mr Anderson, was "an apparently reliable source". 31Secondly, Mr Brogan submitted that there was nothing in Mr Anderson's affidavit or its annexures which imposed any obligation on a reasonable person in Mr Gaggin's position, before arresting the appellant without warrant, to inquire further into, or corroborate for himself, whether Mr Anderson's affidavit as a whole, or the seized bank records or identity documents in particular, showed that the perpetrator of the fraud and the appellant were "one and the same person". 32Thirdly, Mr Brogan submitted that the surrounding circumstances upon which the appellant relied as casting doubt on the critical sentence did not weigh either for or against the belief that the appellant had committed an offence. He argued that when the information the primary judge set out (at [8]), which went beyond the critical sentence in identifying the appellant as implicated in the fraudulent tax return scheme, was considered, Mr Anderson's suspicion as to the appellant's involvement in the offences was explicable. He pointed out that Mr Anderson identified the relevant documents and how each was relevant to the link in his chain of reasoning leading to his belief that the appellant had committed the offences and that Mr Anderson had precisely identified the offences he suspected the appellant had committed. He referred to Mr Gaggin's evidence that he relied upon all the material provided to him arising out of the ATO investigation, which included Mr Anderson's work. He submitted that it was apparent that the primary judge reached her conclusion (at [18]) on the basis of a consideration of the whole of the material Mr Gaggin relied upon. 33Fourthly, Mr Brogan submitted that Mr Gaggin's belief that the appellant was implicated in the fraudulent tax return scheme the ATO had been investigating was confirmed in his mind, in part, by the fact that the numbers of the various identification documents attached to Mr Anderson's affidavit, which were in a name similar to the appellant's, differed from those associated with the appellant. He argued that Mr Gaggin was entitled to accept Mr Anderson's conclusion that that disconformity demonstrated the appellant had used false documents to open accounts which were in a name similar to his. 34Fifthly, Mr Brogan contended that Mr Anderson's affidavit did not contain any "unclarity or ambiguity" having regard to the specificity with which the relevant documents were described and identified as links in the chain of Mr Anderson's reasoning leading to his suspicion that the appellant had committed the offences. 35Finally, Mr Brogan submitted that the appellant's submission that, because all identity documents must be presumed to be unreliable, Mr Gaggin should have regarded Mr Anderson's identification of the appellant as being implicated in the offences as unreliable, should be rejected. He contended that this submission ignored the fact that Mr Gaggin relied not only upon the statement about the identity documents as a source of reliability but, also, upon the fact that the ATO investigation had been undertaken by a senior ATO investigator who had sourced his information and sworn that it was correct. He reiterated that Mr Gaggin was entitled to rely upon the ATO's investigations, whether or not they involved a "syndicated fraud using false documentation".

Consideration 36In my view the appellant's submissions take the critical sentence out of context and, as the respondent submitted, fail to give any, or any adequate weight to the source of the information Mr Gaggin relied upon, its context and the surrounding circumstances. 37This narrow approach is exemplified in the appellant's submissions concerning the first issue. The critical sentence was but one part of Mr Anderson's extensive affidavit in which he explained in detail the complexity of the fraudulent tax return scheme, the sources of his information, the modus operandi of those suspected of being involved in the scheme and the strategy the ATO had developed to investigate the offences those involved had committed. That strategy included executing a large number of search warrants on bank premises and seizing bank records in respect of bank accounts identified as receiving the proceeds of suspected false income taxation returns that were identified as part of Operation Starfish. Of the identified bank accounts a number of persons operating those accounts were in Australia, one of whom Mr Anderson asserted was the appellant. 38Mr Anderson's affidavit identified a number of primary records said to reveal relevant facts concerning the appellant. Those documents were sourced to the Department of Immigration and Citizenship, the ATO and the New South Wales Roads and Traffic Authority. The ATO's records were said to show that the appellant was "linked to" bank accounts nominated to receive the fraudulent income tax refunds. The bank accounts so nominated were in the name of "Nazmul Haider", as paragraph 6(u) of Mr Anderson's affidavit recorded, not "Nazmul Hyder": see primary judgment (at [8]). Mr Anderson sought to explain the apparent discrepancy by making the assertion contained in the critical sentence and pointing out in the next paragraph (6(v)) that those documents were a learner's driver's licence in the name of "Nazmul Hyder" and two Bangladesh documents in the name of "Nazmul Haider". In subsequent paragraphs Mr Anderson referred to "Nazmul Haider (aka Nazmul Hyder)" and the fact that he suspected tax returns issuing into that person's bank accounts were "false income tax returns lodged by him to receive refunds of income tax not otherwise payable" and that that person had dealt "with the proceeds of these fraudulent refunds of income tax." 39Mr Anderson's affidavit also detailed common links he said he had identified between other persons identified during the ATO investigation and "Nazmul Haider". Those "common links" were as to "false employers, similar methodology of false data provided, similar false medical expenditure, common use of Surry Hills post office boxes, common cultural and ethnic backgrounds and geographic proximity of their residences". On that basis, Mr Anderson said that he suspected those men, including "Nazmul Haider", were "members of the same criminal fraud syndicate and are involved in both tax and internet bank fraud." 40This short narrative of Mr Anderson's affidavit cannot do justice to the detail contained in the affidavit. It suffices, however, to demonstrate in my view that the affidavit revealed a complex fraud and a detailed investigation undertaken to attempt to unravel its many details to identify the perpetrators. 41Further, it is by no means apparent that the critical sentence is not a statement of fact. Whether a statement is one of fact or is conclusory, such that it might be described as a comment, has to be determined by reference to the language and context in which the statement appears: State of New South Wales v IG Index plc [2007] VSCA 212; (2007) 17 VR 87 (at [48], [51]) per Nettle JA. In my view, the critical sentence is capable of being understood as a statement of fact (ie that it is the fact that "identity documents" reveal that "Nazmul Haider" and "Nazmul Hyder" are "one and the same person") having regard to the context in which it appears. It is also, as Mr Gaggin accepted in cross-examination, capable of being understood as a conclusion. However, in my view, even if that was the proper characterisation of the critical sentence, there is nothing which dictated that a reasonable person in Mr Gaggin's position was either required to reject it as a basis for the formation of his state of mind or make his own inquiries to substantiate the accuracy of that conclusion. This is because, in context, it was a conclusion based on the identity documents referred to in 6(v) and Mr Anderson's examination of the bank account records. 42Turning to the second issue, it might be accepted, as Mr Gaggin agreed at trial, that the nature of the fraudulent tax return scheme was such as to raise doubt about the reliability of many documents purporting to be identity papers. In my view, however, a reasonable person in Mr Gaggin's position was entitled to take into account the apparent thoroughness of the ATO investigation revealed by Mr Anderson's affidavit. As I have said, it was apparent from Mr Anderson's affidavit that the ATO had obtained, examined and analysed a significant number of primary records relating to the scheme. Those records included records in the name of "Nazmul Haider" as well as "Nazmul Hyder". A reasonable person in Mr Gaggin's position was also entitled to take into account that Mr Anderson had sworn his affidavit in support of the application for the search warrant which the ATO was asking the Australian Federal Police to execute: see New South Wales Crime Commission v Vu (at [51]). 43It is important in this, as in other fields of legal discourse, to be careful not to judge the "reasonable grounds" issue with the benefit of hindsight. As I have earlier explained (see 15), a reasonable belief may be based on information which turns out to be wrong. That much was accepted in the appellant's case when the charges against him were withdrawn. However a court must be careful not to assess the question whether the arresting officer had reasonable grounds for his or her suspicion or belief prior to the arrest through the prism of ipso facto acquired knowledge. 44Viewed in that light, in my view, a reasonable person in Mr Gaggin's position, although having to assess information in the light of a scheme where there were many fraudulent documents, was entitled to conclude that there were reasonable grounds for believing that Mr Anderson had correctly identified "Nazmul Haider" and "Nazmul Hyder" as "one and the same person" and that it was the appellant who had committed the offences referred to in Mr Anderson's affidavit. 45In my view, there was nothing in Mr Anderson's analysis of the primary documents which, viewed objectively, required that his conclusion as to the appellant's alleged involvement in the fraudulent tax return scheme be rejected. It must be recalled (see 15) that the grounds that can reasonably induce an inclination towards belief may "leave something to surmise or conjecture". Mr Raine's submission that, having regard to the nature of the scheme "all identity documents should be presumed to be unreliable", should be rejected. Even if such a "surmise or conjecture" formed part of a reasonable arresting officer's reasoning process, he or she was entitled to reject it in light of the strength of the materials assembled in Mr Anderson's affidavit. 46In my view the primary judge did not err in concluding that Mr Gaggin had reasonable grounds for his belief for the purposes of s 3W(1) of the Crimes Act. 47I propose the following orders:

1. Grant leave to appeal.
2. Appellant to file the notice of appeal in the form of the draft in White Book within seven days.
3. Appeal dismissed with costs. 48BASTEN JA: On 29 October 2009 the applicant, Mr Nazmul Hyder, was arrested by one Christopher Gaggin on the basis that he, Gaggin, reasonably suspected that Mr Hyder had lodged fraudulent income tax returns and had dealt with the proceeds of crime, contrary to s 400.6 of the Criminal Code Act 1995 (Cth). The applicant was in fact charged with such an offence and released on bail. In January 2010 the charge was withdrawn. 49On 8 October 2010 the applicant commenced proceedings in the District Court against the Commonwealth of Australia seeking damages for the tort of false imprisonment. The factual premise underlying the claim was that Mr Gaggin did not have reasonable grounds to believe that the applicant had committed the offence for which he was arrested and hence the arrest was without lawful justification. 50In the course of the proceedings, Mr Gaggin was referred to as "Federal Agent Gaggin". The source of this epithet was not explained. Without explanation, it is apt to mislead, because it does not identify either the capacity in which Mr Gaggin arrested the applicant nor any statutory basis for his authority. 51It appears that Mr Gaggin was a member of the Australian Federal Police and therefore fell within the references in the Australian Federal Police Act 1979 (Cth) ("the AFP Act") to a "member": s 4(1). Whether or not he was also a "protective service officer" is not clear, but he does not appear to have been conducting the functions of such an officer in arresting the applicant. Mr Gaggin was not named as a party to the proceedings for damages brought against the Commonwealth. Rather, the applicant sued the Commonwealth as being liable pursuant to s 64B(1) of the AFP Act, which, so far as relevant, provides: "64B Liability for wrongful acts of members (1) The Commonwealth is liable in respect of a tort committed by a member ... in the performance or purported performance of his or her duties as such a member ... in like manner as a person is liable in respect of a tort committed by his or her employee in the course of his or her employment, and shall, in respect of such a tort, be treated for all purposes as a joint tortfeasor with the member .... ... (3) The liability of the Commonwealth under subsection (1) does not extend to a liability to pay damages in the nature of punitive damages." 52The source of Mr Gaggin's powers flowed from two statutory provisions. First, s 9 of the AFP Act provides: "9 Laws conferring powers on members (1) In addition to any other powers and duties, a member has: (a) the powers and duties that are conferred or imposed by or under a law of the Commonwealth on: (i) a constable ...." 53There are other sources of powers referred to in s 9, but the provision set out above appears to be sufficient for present purposes because it engaged with s 3W of the Crimes Act 1914 (Cth), which relevantly provides: "3W Power of arrest without warrant by constables (1) A constable may, without warrant, arrest a person for an offence if the constable believes on reasonable grounds that: (a) the person has committed ... the offence ..." 54The principles relevant to the construction of a provision such as s 3W may be derived from the opinions delivered by a unanimous House of Lords in O'Hara v Chief Constable of the Royal Ulster Constabulary [1997] AC 286. Lord Goff of Chieveley, Lord Mustill and Lord Hoffmann each agreed with the speeches delivered by Lord Steyn and Lord Hope of Craighead. Although s 12 of the Prevention of Terrorism (Temporary Provisions) Act 1984 (UK) referred to suspicion rather than belief (which is arguably a higher hurdle than suspicion), that variation is irrelevant to the nature of the assessment of reasonable grounds. 55Lord Steyn noted that the case could be disposed of on a short factual point, neither party having sought to elicit any significant detail as to the information provided by the officer who conducted a briefing of the arresting officer and his colleagues: at 290B-C; see also at 295F (Lord Hope). However, Lord Steyn expressed the correct approach in terms of principle in the following terms, at 291-292: "Section 12(1) authorises an arrest without warrant only where the constable 'has reasonable grounds for' suspicion. An arrest is therefore not lawful if the arresting officer honestly but erroneously believes that he has reasonable grounds for arrest but there are unknown to him in fact in existence reasonable grounds for the necessary suspicion, eg because another officer has information pointing to the guilt of the suspect. It would be difficult without doing violence to the wording of the statute to read it in any other way. A strong argument can be made that in arresting a suspect without warrant a constable ought to be able to rely on information in the possession of another officer and not communicated to him.... Arguably that ought as a matter of policy to provide him with a defence to a claim for wrongful arrest. ... ... But section 12(1), and similar provisions, cannot be approached in this way: they categorise as reasonable grounds for suspicion only matters present in the mind of the constable." 56Lord Hope expressed the principle in three passages. The first, at 298 stated: "My Lords, the test which section 12(1) ... has laid down is a simple but practical one. It relates entirely to what is in the mind of the arresting officer when the power is exercised. In part it is a subjective test, because he must have formed a genuine suspicion in his own mind that the person has been concerned in acts of terrorism. In part also it is an objective one, because there must also be reasonable grounds for the suspicion which he has formed. But the application of the objective test does not require the court to look beyond what was in the mind of the arresting officer. It is the grounds which were in his mind at the time which must be found to be reasonable grounds for the suspicion which he has formed. All that the objective test requires is that these grounds be examined objectively and that they be judged at the time when the power was exercised." 57In a second passage at 301-302, Lord Hope stated: "Many other examples may be cited of cases where the action of the constable who exercises a statutory power of arrest or of search is a member of a team of police officers, or where his action is the culmination of various steps taken by other police officers, perhaps over a long period and perhaps also involving officers from other police forces. For obvious practical reasons police officers must be able to rely upon each other in taking decisions as to whom to arrest or where to search and in what circumstances. The statutory power does not require that the constable who exercises the power must be in possession of all the information which has led to a decision, perhaps taken by others, that the time has come for it to be exercised. What it does require is that the constable who exercises the power must first have equipped himself with sufficient information so that he has reasonable cause to suspect before the power is exercised." 58Thirdly, Lord Hope noted at 302H: "What Parliament has enacted in section 12(1)(b) ... is that the reasonable suspicion has to be in the mind of the arresting officer. So it is the facts known by or the information given to the officer who effects the arrest or detention to which the mind of the independent observer must be applied. It is this objective test, applying the criterion of what may be regarded as reasonable, which provides the safeguard against arbitrary arrest and detention. The arrest and detention will be unlawful unless this criterion is satisfied." 59Four propositions should be accepted in respect of s 3W, namely: (a) the constable carrying out the arrest must honestly believe that the person being arrested had committed the specified offence; (b) the constable carrying out the arrest must have reasonable grounds for that belief, as objectively determined by the court; (c) with respect to both elements noted above, the inquiry must be determined by reference to matters known to the constable at the time of carrying out the arrest, and (d) a belief that another member or other responsible officer of the Commonwealth had reasonable grounds for holding such a belief would not be sufficient, unless the arresting officer actually knew of those grounds. 60In the result, the applicant's claim depended on whether the respondent could satisfy the Court that the information available to Mr Gaggin at the time of the arrest provided reasonable grounds for Mr Gaggin to believe that the applicant had committed the offence for which he was arrested. It was for the Court to carry out the factual assessment of the material available to Mr Gaggin. If the material presented to him was inadequate or deficient in any respect, the possibility that further information might have been obtained on inquiry which would have justified a reasonable belief as to the commission of the particular offence will not avail the Commonwealth. 61Mr Gaggin relied entirely upon an operational briefing conducted by a member of the AFP, Mr McTiernan. Mr McTiernan provided a number of documents, including two affidavits supplied by Mr Paul Anderson, a senior investigator with the Australian Taxation Office, which had been sworn for the purpose of applying for two warrants, one to search the applicant and one to search the applicant's premises. For present purposes, it is sufficient to refer to the first affidavit. Mr Gaggin was also supplied with copies of the warrants and a document referred to as "Referral to the AFP", but no additional information was said to flow from these documents. Finally, there was a "statement of facts" prepared by Mr Anderson. It provided an incomplete summary of the information contained in the affidavits, in conclusory form, expressing opinions largely without reference to the underlying information. It is clear that a reasonable person reviewing this material would, as Mr Gaggin clearly did, give primary attention to the affidavits. 62Mr Gaggin was entitled to rely on the information supplied in the affidavits in order to form his own belief. The fact that other officers may have held similar beliefs could not provide reasonable grounds for his belief if the grounds of their beliefs were not available to him. 63That, of course, does not mean that Mr Gaggin was not entitled to accept at face value the information provided to him. For example, he did not need to see the passport allegedly used to open a particular account in order to identify its number: he was entitled to rely, in the absence of reason to doubt its accuracy, on the information supplied by Mr Anderson, which included the passport number. However, if further information, not contained in the affidavit, were necessary to provide reasonable grounds for a belief, Mr Anderson's unsupported expression of his belief could not fill the gap. 64Accordingly, it is necessary to turn to the material supplied to him by the investigator with the Australian Tax Office, Mr Anderson. Except to identify the information available to him at the relevant time, Mr Gaggin's evidence is entirely irrelevant as to the objective test. What he thought or accepted, or did not accept, is relevant to his subjective state of mind, but otherwise should be disregarded. The only relevant evidence he gave (for the assessment of the objective test) was that he had no information other than that supplied by Mr Anderson. 65The affidavit, to which primary attention must be given, ran to some 28 pages. However, Mr Gaggin said that he also had before him a "statement of facts" which set out a number of conclusions in 16 short paragraphs, covering less than two pages. It may fairly be described as an incomplete summary of the conclusions sought to be drawn from the affidavit. For example, it contained the following statement with respect to a Westpac bank account: "3. On 4 June 2008 the defendant opened a bank account with Westpac Banking Corporation at their Surry Hills branch. He supplied Bangladesh passport B0 ...81, a foreign drivers licence and an electricity account statement to establish the account. He nominated his mobile telephone service number as a contact number." 66That information is empty of supportive detail except in respect of the Bangladeshi passport, which bears the number of that identified in the affidavit as being issued in the name of Nazmul Haider (at par 6v of the affidavit) and not the one identified as the passport of the applicant. The address for the electricity account is not identified and the foreign driver licence is presumably in the name of Nazmul Haider, as none is recorded in the affidavit with respect to the applicant. The mobile telephone service number is not identified. A careful reader of both documents would have realised that the assertions in the brief statement of facts in respect of the three bank accounts referred to (as opposed to the four identified in the affidavit) provided less information and were capable of being misleading if taken at face value. 67The text of the affidavit must be approached bearing in mind the purpose for which it was prepared, namely the issue of a search warrant in relation to two persons, one of whom was identified as "Nazmul Haider (aka Nazmul Hyder)": paragraph 2. (Even for that purpose, significant parts of the affidavit appear to have been irrelevant.) Paragraphs 4 and 5, omitting presently irrelevant material, were as follows: "4. The information set out below has been obtained by me in the course of my official duties from my own inquiries and from those made by other officers of the ATO. The sources of the information are set out below. I believe that the information is true and correct. ...

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 October 2012