Reasonable grounds for suspicion - the correct test
32 What must first be determined is the nature of the test the Court is required to apply in s 10A(5). What the Court is first required to do is to have regard to (a) the matters contained in the affidavit of the authorised officer, and (b) any evidence adduced by the person who is to be notified under sub-s (4). The Court is then required, having regard to those matters, to consider if there are reasonable grounds for the suspicion of the authorised officer. In that regard it is to be noted that each of paragraphs (a), (b) and (c) of sub-s (5) require the authorised officer to state "the grounds on which that suspicion is based".
33 It is those grounds to which the Court addresses its consideration of reasonableness. In other words, the officer is required to state the grounds for the suspicion that is held, and it is those grounds which must be seen to be reasonable.
34 In my opinion, the approach required by sub-s (5) was correctly set out by French CJ in International Finance at [47] where he was discussing what he envisaged if an application (now under s 10A) was made on notice. French CJ said:
If the application were made on notice, the affected party would be able to cross-examine the authorised officer on his or her affidavit with a view to demonstrating that he or she does not hold the requisite suspicion, or that there are parts of the affidavit which are so inherently unreliable as not to form reasonable grounds for that suspicion. Evidence in rebuttal could be directed to the same propositions. The party, if given notice, could also make submissions to the Court about the existence of the conditions upon the Court's powers under s 10.
35 The explanation of what is required as the basis for the suspicion is also set out in the judgment of Allsop P (with whom Beazley JA agreed) in the Court of Appeal's decision in International Finance Trust Company Limited & Anor v New South Wales Crime Commission [2008] NSWCA 291 at [23] in a passage, the force and validity of which have not been affected by the High Court's judgment:
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.
36 The test in sub-s (5) is not a wholly objective test. The enquiry is not whether the authorised officer behaved in a reasonable way, or made reasonable enquiry, or whether a reasonable person knowing all of the facts would have come to the view the authorised officer reached. The only objective aspect of the test is whether the grounds for the authorised officer holding the suspicion are reasonable grounds for the officer's holding of that suspicion on the material he had and with the knowledge he possessed.
37 The process adopted by Mr Spark in the present case would appear to have been approved by the Court of Appeal in New South Wales Crime Commission v Quoc Hoi Vu [2009] NSWCA 349 at [28] and [30]. The Court noted that the mere fact that the police charged somebody is not a basis for a suspicion of serious criminal activity and is not capable, of itself, of establishing that there is a proper basis for any suspicion. However, the ultimate source of information contained in the Facts Sheet is not required to be stated (see at [42]) but the extent of any failure to state the source will affect the determination of whether reasonable grounds for the suspicion have been made out (at [48]). Nothing said by the High Court in International Finance has diminished the standing of this decision.
38 It does not seem to me that the Defendant's attempts to resist the order on the basis of matters not disclosed or other matters which might be said to amount to illegality or lack of good faith can be brought into the exercise the Court is performing under s 10A(5). Although Mr Marr of counsel for the Defendant submitted that all of the matters referred to in s 10C(1) could be weighed up by the Court making an order under s 10A(5), I do not think that is correct.
39 First, all the Court can do is consider if there are reasonable grounds for the suspicion of the authorised officer. Secondly, the issue of illegality or lack of good faith only arise if an order has already been made and there is an application to set it aside. Certainly, s 10C(1) also envisages (by para (a)) revisiting the issue of whether there are reasonable grounds for the relevant suspicion but so much would be expected from what the majority judgments in the High Court said in International Finance if the legislation was to be valid in relation to a Ch III Court.
40 The question of non-disclosure (which might be thought to be either illegality or against good faith) is a non-disclosure by the authorised officer and/or the Commission when an ex parte order is obtained. It is not directed to what is contained in any Facts Sheet or factual information upon which the authorised officer bases his or her suspicion unless, to the knowledge of the authorised officer, there was such a non-disclosure.
41 On the other hand, if it could be shown by credible evidence that, for example, the whole of the factual material prepared by the investigating officer and presented to the authorised officer was false to the knowledge of the investigating officer but not the authorised officer, that would be an illegality which would justify overturning an order already made under s 10A. There is no such suggestion in the present case.
42 Although sub-s (5) envisages that the Court will have regard to evidence adduced by a defendant under sub-s (4), I do not consider that such a requirement alters the nature of the test the Court is required to apply. The enquiry remains the reasonableness of the grounds for the authorised officer's suspicion and not whether, for example, it was reasonable for the police officer to reach the view that an offence had been committed.
43 The reasonableness of the authorised officer's suspicion may be able to be attacked by pointing to obvious inconsistencies in the material upon which the authorised officer formed his or her suspicion. The officer's suspicion may be attacked by admissions that he or she had other information which would cause the officer to realise that some or all of the matter in the Facts Sheet was unreliable. If, however, the officer is found to hold the suspicion it will not be able to be shown that the officer does not have reasonable grounds for that suspicion because evidence can be brought to show that the factual material which the officer believed was true was not true or was otherwise unreliable, except for illegality as discussed above.