…
(3) In a civil proceeding, the court may order that any one or more of the provisions mentioned in subsection (1) do not apply in relation to evidence if:
(a) the matter to which the evidence relates is not genuinely in dispute, or
(b) the application of those provisions would cause or involve unnecessary expense or delay.
17 The manner of giving evidence in interlocutory proceedings has traditionally been by identifying the source, eg, "I am informed by", and stating a belief in its truth. The wisdom of such a course under s 75 can be seen in Chapmans Ltd v Davey (unreported, Supreme Court of NSW, Bryson J, 27 April 1998); though see Heydon JD Cross on Evidence (7th Australian Edition) at 1253-1254 [35595].
18 In circumstances of the kind referred to by McLelland J in Geoffrey W Hill v King, the Evidence Act, s 9(2)(c) would permit a court to dispense with a rule of evidence. In circumstances where the application of the rules of evidence referred to in the Evidence Act, s 190(1) would involve unnecessary expense or delay, s 190(3) would enable the Court to order them not to apply. Such powers give flexibility to the Court, on application, to accommodate temporal and other exigencies that may arise in any application under s 10.
19 No such application was made here. Therefore, the evidence led before the primary judge must be assessed by reference to the Evidence Act, including s 75.
20 Given the place of the requirement of admissible evidence and given the absence of the affected party, there is no reason not to apply the rules of evidence straightforwardly and according to their terms. If part of an affidavit is inadmissible, it should be rejected, unless, of course, an application is made under or by reference to the Evidence Act s 9 or s 190, and that application is acceded to.
21 Subsections 10(3) and (3A) require affidavits "stating" certain things. The authorised officer must state (a) the relevant suspicion that he or she holds and (b) the grounds on which that suspicion is based.
22 The admissibility of the first statement will cause little difficulty. The suspicion is of the deponent. He or she only has to state it. Issues may arise, as they did in Hadjigeorgiou, and as they do here, as to whether the suspicion is stated with sufficient particularity to enable an assessment to be made as to the reasonableness of the grounds. That is another issue, and is not a question of admissibility.
23 The statement of the grounds needs to be approached with a recognition as to what is being stated. The statement does not require expression of, and admissible evidence to prove, the underlying facts constituting the elements of the serious crime related activity or as to the derivation of the property. What must be stated can be discerned from George v Rockett (1990) 170 CLR 104 at 112 and Queensland Bacon Proprietary Ltd v Rees (1966) 115 CLR 266 at 303. The facts that induce the state of mind of the person must be stated. Such facts are not necessarily the underlying facts which constitute the criminal conduct or the relevant derivation of property; they are the matters that have led to, or induced, the authorised officer to the "positive feeling of actual apprehension or mistrust amounting to a slight opinion … more than a reason to consider or look into the possibility of its existence": Queensland Bacon at 115-116. In other words, the deponent must state why he or she has the suspicion that, for instance, the person in question has engaged in serious criminal activity.
24 What needs to be deposed to will depend upon why the suspicion is held. It may be held because of information received from a third party; it may be held because of what a colleague has said; it may be held because of observations that have been made by the deponent. There is no particular complexity or difficulty about this. However, a deponent does not state the grounds of a suspicion that x has engaged in serious criminal conduct by merely asserting that x has engaged in serious criminal misconduct. Thus, if the deponent says in paragraph 1 of the affidavit "x murdered y"; then in paragraph 2 says "I suspect x murdered y"; then in paragraph 3 says "the suspicion in paragraph 2 is based on the matters in paragraph 1", he has not stated the grounds of his suspicion. Paragraph 1 is both inadmissible and irrelevant. The bare assertion by the deponent that x murdered y is a conclusionary assertion without foundation in personal knowledge or observation. It is not saved by the Evidence Act, s 75. Nor is it relevant evidence for the purpose of the Evidence Act, s 55 because it does not explain why the suspicion is held. It is not the fact or circumstance that induced the suspicion.
25 With these comments by way of introduction, it is necessary to examine the evidence here. McClellan CJ at CL has set out [2]-[22] of Mr Moerman's affidavit. The suspicions deposed to in [17] and [19] were stated, in effect, to be based on the contents of [2]-[14]. Mr Moerman deposed:
Having regard to the matters in 2 to 14 above, I suspect that …
26 The appellant submitted that most of these paragraphs were inadmissible. I will only deal with the paragraphs attacked.
27 By way of introduction, the following should be noted. Mr Moerman was the officer who arrested Mr Agius (see [3]). There has been a joint task force investigation between the Australian Federal Police and the Australian Tax Office. Mr Moerman gave no evidence in his affidavit about whether he has taken any part in the investigation, beyond the fact that he arrested Mr Agius. Mr Moerman gives no evidence as to the source of any knowledge as to the matters deposed to in the affidavit.
28 As to [4] of the affidavit, objection is taken to the passage in bold below:
Agius was arrested and charged following a joint task force investigation between the AFP and the ATO ("the joint investigation") into an overseas money laundering scheme ("the Scheme"). Agius is the promoter of the Scheme.
29 The basis for the characterisation of the "Scheme" is not given. Nor is any foundation provided for the assertion that Mr Agius was the "promoter".
30 The paragraph contains mere assertions of fact, without any basis in personal knowledge or knowledge from material gained in any investigation.
31 Paragraphs 5, 6, 7, 8, 9, 11 and 14 are all assertions of fact. No basis for Ms Moerman's knowledge about them is given. No attempt is made to identify how Ms Moerman comes to know of these matters: that is, no information is given as to how the information about these matters can be seen to ground his suspicion.
32 Paragraphs 10, 12 and 13 are in a slightly different category. In these paragraphs, he asserts that the joint investigation has revealed certain things. Nowhere, however, is the source of any such knowledge disclosed. The paragraphs are therefore in the same category as [5]-[9], [11] and [14].
33 In my view, none of [4] (to the extent it was objected to) and [5]-[14] contains admissible evidence to prove the grounds of the suspicion in [17] and [19] of the affidavit.
34 The above conclusions and the reasons for it are not inconsistent with Hadjigeorgiou. In that case, Giles JA said at 130 [23]:
Statement of grounds is less than proof of facts.
35 That statement should be read in context. His Honour was dealing with an affidavit in a particular form which can be seen in Hadjigeorgiou at 128-129 [13]-[17]. The method of proof of the grounds was clearly admissible in that case. The evidence went directly to explaining by reference to particular documents what it was that led the deponent to have the suspicion. Giles JA was making the point that proof is not required of underlying facts as to criminality; what is relevant is proof as to what it was that the person's suspicion was based on.
36 That being so, the only ground that was proved for the relevant suspicions was the material in [1]-[3] and [4] (to the extent it was not the subject of objection).
37 The Crimes Act 1900 (NSW), ss 176, 176A and 178BA, being the sections of State legislation to which the suspicion was directed in [17] of Mr Moerman's affidavit are set out in the reasons of McClellan CJ at CL.
38 The fact (without more) that Mr Moerman arrested Mr Agius on a first instance warrant on the Commonwealth charges set out in [3] of his affidavit does not provide reasonable grounds for the suspicions in [17] and [19] of his affidavit. No submission was put by the respondent that it did.
39 These reasons are sufficient for me to conclude that the primary judge erred by making the orders in circumstances where there was no admissible evidence before him on which he could conclude that any of the suspicions held by Mr Moerman were based on reasonable grounds.
40 Regrettably, I also disagree with McClellan CJ at CL on another matter, the giving of reasons.
41 It has not been the practice of the Judges of the Common Law Division to give reasons. The primary judge followed that practice. What follows is not intended, in the slightest, as a criticism of the primary judge. My view, however, is that the subject matter of the Act, the nature of the application, including its judicial character, the consequences to the person of a successful ex parte application by the Commission, the lack of an inter-partes interlocutory hearing, the existence of the supervisory appeal and the character of the assessment to be made by the Judge all point to, or are consistent with, the obligation by the Court to provide reasons.
42 I have no disagreement with the relevant statement of principles as discussed in the reasons of McClellan CJ at CL. The giving of reasons is not always an incident of the exercise of judicial power: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Limited [1983] 3 NSWLR 378 at 386. As Mahoney JA said in Tatmar at 386:
In determining whether, in a particular case, there is a duty to give reasons and the extent of it, regard should, in my opinion, be had to the function to be served by the giving of reasons. Thus, the statement of reasons may be necessary to enable a party to exercise his right of appeal or such other rights as he may have to contest the decision: this is one of the conventional functions of the requirement: see Pettit v Dunkley (at 387, 388). But in my opinion, the requirement that reasons be given should not be limited to cases where there is an appeal. There is as yet no finally authoritative decision on this question. I think that the requirement should be seen as an incident of the judicial process. However, the fact that the function of the requirement is, at least in part, to allow a party to exercise appeal rights is of significance in determining the extent of the duty and what will be a discharge of it. Thus, in some case where ordinarily an appeal is not contemplated, there may not be a need for reasons. Thus, in England, it has been said that reasons need not be given in certain procedural applications: see Capital and Suburban Properties Ltd v Swycher [1976] Ch 319, at 325, 326. In such cases, and in cases of, eg, applications for leave, where the considerations of fact and law are clear, reasons need not ordinarily be given.
43 Tatmar should now, however, be viewed in the light of what was said in Roy Morgan Research Centre Pty Limited v Commissioner of State Revenue [2001] HCA 49; 207 CLR 72 at 83-84 [24]-[26] and 85-86 [32]-[33].
44 The giving of reasons is a normal incident of the judicial process, especially when the order is subject to appeal: Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667; Pettit v Dunkley [1971] 1 NSWLR 376; and see the discussion in Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 277-278.
45 Of particular importance in the judicial process is the foundation of the duty to give reasons: "the principle that justice must not only be done but … be seen to be done": Soulemezis at 278 (per McHugh JA) and see Roy Morgan at 85-86 [33].
46 Here, the Act deals with the restraint and later forfeiture of the property of individuals. The operation of the Act is of the utmost gravity. The power being exercised is judicial. It is not the approval of a search warrant or a listening device; it is the making of an order, in the absence of the relevant party, for the freezing of property for, potentially, a significant period of time. There is no review at first instance: Ollis; only an appeal. Confidence in the judicial system and ensuring that justice is seen to be done between State and subject require in my view an explanation of the exercise of such a drastic power. That explanation is the giving of reasons.
47 Such reasons need not be elaborate: see Roy Morgan at 84 [26]. It is true, as McClellan CJ at CL points out, there is one ultimate issue for the Judge: the reasonableness of the grounds for the suspicion. In many cases, that will be a straightforward analysis. This will be especially so if the affidavit is clear, specific and admissible. That may not be the case. It was not the case in Hadjigeorgiou. It is not the case here. Though in one sense a simple evaluative task, the assessment of the reasonableness of the stated grounds may require some explanation. Thus, the extent of any reasons will or may vary from case to case. It may be enough to state with economy and conciseness why the suspicion is reasonably grounded. In other cases, if the affidavit is unclear in the possible relationship between the grounds and the suspicion more explanation might be required. A reading of Hadjigeorgiou reveals the difficulties that can be provoked in some cases.
48 Even if the task is straightforward and short (as it may well be in many cases) someone who has had all his or her property frozen indefinitely without notice by an order of the judicial branch of government at the request of the Executive branch of government and without an opportunity to be heard and without an opportunity to persuade the judge to the contrary on a review after the event is entitled to a statement by the judicial branch as to why this has happened and how it can happen in accordance with law.
49 That said, the unitary character of the question on appeal and the existence of an affidavit will rarely, if ever, mean that the Court of Appeal cannot decide the matter for itself. In that respect, the Court of Appeal can exercise its appellate functions without reasons. But that is the case with respect to many issues. If the Court of Appeal has the benefit of the primary judge's views as to why the grounds are reasonable for the foundation of a suspicion it will be in the position of being able to identify any error.
50 In my view, reasons were required. Nothing in these reasons is directed, or should be taken as relevant, to the usual practice in dealing with urgent ex parte applications for relief in civil proceedings where the defendant will be brought before the Court for an inter-partes interlocutory hearing promptly.
51 If I am wrong about the inadmissibility of evidence, and if Mr Moerman's knowledge can be understood as sourced in the way McClellan CJ at CL does, I would agree with the conclusions reached by his Honour about the reasonableness of the grounds for suspicion.
52 Whilst I have earlier expressed my agreement with McClellan CJ at CL's views on Kable, if it were to be concluded (though it was not argued here) that the character of the task was administrative and not judicial, the applicability of Kable might arise. Also, if it were to be considered that a Judge should not, or must not, give reasons (though, clearly, the legislation in its current form does not say so) the applicability of Kable might also arise.
53 Various orders were made by the Court: On 13 May 2008 the Court made orders pursuant to the Act, s 10. On 16 May 2008 the Court made orders pursuant to the Act s 12 for the examination on oath of eight people. An order under s 12 can only be made when a restraining order is or has been made. Given my view that the restraining order should be set aside the orders for examination should likewise be set aside. Also on 16 May 2008, the Court made orders joining the beneficial owners of various bank and shared trading accounts (without naming them) to the proceedings and orders under s 10 in relation to property of the kind made on 13 May 2008 against them. There is no reason why the order for joinder should not be made but the balance of the orders under s 10 should be set aside. Also orders were made on 16 May 2008 relating to the Public Trustee, requiring production of documents by the Commonwealth Bank and by Commonwealth Securities Limited. The orders for the production of documents made on 16 May pursuant to s 12 should be set aside. The order made under s 33(2) of the Act against the Commonwealth Bank of Australia on 16 May 2008 should not by reason of these reasons be set aside. Likewise the order under s 33(2) against Commonwealth Securities Limited. On 20 May 2008 an order was made varying the orders made on 13 May 2008. This order should be set aside. On 27 May 2008 an order was made for the examination of Mr Agius. This order was made under s12. For the same reason that the first order of 16 May 2008 should be set aside so should this be. There may be aspects of any order on appeal dealing with the existing orders that require argument. For this reason I would permit liberty to apply in relation to the order setting aside the orders below.
54 The notice of appeal sought that proceedings in the court below be dismissed. Given my views expressed above I do not see a basis for making that order.
55 In the circumstances in my view the orders of the Court should be:
1. Appeal allowed.