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[2018] FCA 1035
Federal Court of Australia
2018-07-09
Gilmour J, Smith J
Original judgment source is linked above.
Background 1 The parties have been at a stalemate for some time as to the manner in which documents should be reviewed in order to protect potential claims for legal professional privilege (LPP). In essence, the directions I am requested to make are of a case management nature. In my view, it is necessary that both parties compromise in order to break the stalemate. 2 In December 2012 the Australian Federal Police (AFP) as lead agency of a joint-agency investigation task force executed various search warrants against the applicants, seizing, relevantly, hard copy documents and electronic devices containing documents relating to the applicants. 3 The applicants contend that amongst the documents seized are many which contain communications the subject of LPP.
The data reduction process 4 In order to protect claims for LPP, the applicants instituted proceedings in this Court in April 2013. The matter came before Gilmour J in September 2013 and his Honour made orders, effectively by consent, as to what the parties refer to as a 'data reduction process' (DRP). The object of the DRP is to reduce the data on the electronic devices seized by the AFP to a manageable quantity based on relevance, so that a review for the purpose of identifying privileged communications must be conducted of only the remaining files. 5 The DRP is technical and has been developed by specialists. The AFP has specialised data forensic officers trained in its use. The applicants have appointed an independent expert to assist them. It is not in issue that the process is time consuming and the exercise expensive, as the amount of data to be considered, to put matters simply, is huge. 6 The DRP involves the following steps: (a) forensic software is applied to each electronic device to expand the information, by expanding files such as ZIP files and emails (b) there is then a grouping process to collate fields by images, documents and other files; (c) that process results in a superset of documents; (d) a filter is then applied to the superset to capture relevant files such as those in a DOC or PDF format and to also limit documents to a date range; (e) the remaining files are then exported to disk media together with an index, with one copy to be provided to Bennett + Co (who then acted for all applicants), and one copy to be retained but uninspected by the AFP pending further orders. 7 It was agreed that the DRP would be carried out by digital forensic officers of the AFP (DFOs). The DRP is an automatic process and it was understood at the time of the orders that under the DRP no DFO is required to look at the content of the documents or examine them in order for the DRP to proceed. 8 Gilmour J also made orders programing the inspection regime for LPP. The processes with respect to claiming LPP over the hard copy documents and the electronic files were programmed to proceed concurrently. 9 I note from reviewing the transcript of the hearing before Gilmour J that concurrent inspection of the hard copies and the electronic files was favoured because of the potential for difficulty in establishing claims if the parties reviewed, for example, the hard copy documents first and in isolation. 10 In April 2014 further directions were made which were of an uncontentious nature and involved extending the involvement of the AFP in the data reduction process to include representatives of the Australian Securities and Investments Commission (ASIC). 11 Despite the agreed DRP, its facilitation fell apart during a trial run. The applicants made numerous claims of what they describe as breaches of the procedures agreed under the DRP. In summary, the applicants claim that documents or redactions were in fact viewed by the AFP and potentially made available for viewing by third parties. Both whether those breaches occurred as described and whether any disclosure was inadvertent is hotly contested by the parties, and it is not necessary for those disputes to be resolved in order to progress the matter (some 43 affidavits have been filed in that regard). However, that history is important because it is the reason for an identified lack of trust on the part of the applicants as to the involvement of certain persons in the DRP, a matter to which I will return. 12 Further orders were made on 18 August 2015 which required all the seized electronic and hard copy items and any copies to be held in secure storage by the Australian Government Solicitor (AGS) until further orders. I am told that all the data and hard copy documents have been held by the office of the AGS in accordance with those orders since then, and there has been no access to the material by the AFP. Accordingly, the DRP has not been progressed and no orders have since been made permitting the AFP access to those documents. 13 On 23 September 2016 there was a substantive hearing before Gilmour J during which the parties attempted to formulate a new DRP. Central to the hearing was a proposed modified program whereby a specified DFO (DFO Wheeler) would complete the reduction process for six only of the electronic devices and on particular terms. The AFP also addressed a concern raised by the applicant as to the potential for documents to be viewed on a computer screen while the software was running by proposing modifications to the system which ensured that a person who viewed a screen would see codified content only. 14 Having read the transcript of that hearing, it is apparent that the parties were close to agreement and that it appeared that the only outstanding issue to be resolved was that the applicants' solicitors should have an opportunity to discuss the revised DRP with their independent technical expert. 15 Gilmour J adjourned the hearing so that the parties could confer and finalise a set of proposed orders to encapsulate the matters that had been addressed at that hearing. 16 Regrettably, despite attempts at conferral no revised DRP was ever agreed between the parties and the documents have simply stayed in storage at the office of the AGS, and have not been accessed by any party.
The current application 17 The matter came before me for a case management hearing in May 2018 so that I could ascertain the status of the action. Perhaps prompted by that listing, the AFP proposed a further set of orders and I then programmed a further hearing in order to attempt to resolve the differences between the parties. 18 That hearing occurred on 21 June 2018. To be fair, the parties have now agreed many of the details of the proposed DRP. However, three particular matters remained in issue: (1) the involvement of DFO Wheeler; (2) the presence of the applicants' solicitor during the DRP (in this context a reference to the solicitors for the first to tenth and twelfth applicants); and (3) whether the applicants' review of the hard copy documents should commence now so that inspection is consecutive rather than concurrent.
Involvement of DFO Wheeler 19 DFO Wheeler is one of the DFOs involved in the DRP on behalf of the AFP to date. He clearly has a long history with the matter and on its face, it might seem that the DRP will be run most efficiently if he continues to be involved as the appointed DFO. 20 It is now proposed under the revised DRP that one DFO together with the applicants' technical expert be present in a particular room where the electronic devices will be located. The only person with a key to that room will be the applicants' technical adviser. The DFO will not be able to access the room other than with the applicants' technical expert. 21 Despite this level of oversight of the DFO, the applicants maintain an allegation that DFO Wheeler has been involved in previous unauthorised access to the documents and they object to his involvement. Ordinarily, taking into account the long history of this matter and the fact that whether or not there has been inappropriate access to the documents remains undetermined, I would not seek to direct the manner in which the AFP carries out its operations by requiring the removal of any particular person from the task. However, the AFP has not put on any evidence to indicate that there would be any particular interference or prejudice to it or the proposed process or the running of the investigation if DFO Wheeler did not personally undertake the DRP. In fact, counsel for the AFP was properly measured in his submission on the point, noting that if necessary there were other DFOs who could be allocated to the task and arrangements could be put in place to bring that into effect, although it clearly remains the AFP's preference that DFO Wheeler conduct the DRP. 22 I note that the applicants in fact sought a blanket order that no DFO who had previously been involved in the operation for the AFP and involved in any of the alleged breaches of procedure should be permitted to undertake the DRP. I am not prepared to make such an order as it seems to me to be an unnecessary intervention in the AFP's activities. The majority of the applicants' concerns as to the access has centred on DFO Wheeler. Taking into account those concerns and the ability for another DFO to carry out the DRP, and in all the circumstances, I am prepared to direct that the task be undertaken by a DFO other than DFO Wheeler. There will be liberty to apply to the parties and if that prohibition on the involvement of DFO Wheeler creates unanticipated issues it will be open to the AFP to invite me to revisit that issue. However, I would hope that in the circumstances the AFP will move quickly to identify and appoint a DFO with appropriate skills in place of DFO Wheeler for the purpose of this particular task. I should also add that this decision is made for pragmatic reasons and should not be seen as predetermining any of the unresolved allegations as to alleged breaches of the DRP procedures to date by DFO Wheeler. I also add that the limit I have placed on DFO Wheeler's involvement by these reasons extends only to his involvement in the running of the DRP the subject of the hearing and these reasons.
Supervision by the applicants' solicitors 23 Unsurprisingly, the idea that the DFO and applicants' technical expert should be supervised by a solicitor while the DRP software programme is run caused some consternation at the hearing, particularly due to the potential for delay and disruption during a process intended to be undertaken by technical experts fully briefed on the purpose, intent and restrictions of the DRP. 24 During the hearing, counsel for the applicants resiled from the contention that a solicitor should supervise or control the process and limited the request to one that a solicitor be present to observe if the process was on its face being undertaken in accordance with the Court approved DRP. 25 I am not at this stage prepared to direct that a solicitor be present for the entirety of the DRP exercise (anticipated to take some 2 months). However, bearing in mind that it is the applicants' common law right to LPP which is sought to be preserved, I have some sympathy for the view that a solicitor should be permitted to attend on the first day of the exercise in the role of observer so that significant issues that arise (if any) can be addressed prior to the exercise continuing. 26 I should add that if the result of my direction is that the AFP wishes also to have a solicitor present on the first day as an observer, then that should be facilitated. It is hoped that the technical experts will be left to undertake the task as efficiently as possible.
Dealing with the hard copies 27 The AFP is understandably keen to see matters progress in tandem. It would like to have the applicants review the hard copy documents now (and the number of hard copy documents is relatively manageable) and make their claims for LPP, so that access to at least some documents may be expedited. The applicants submit on the other hand, as was contended before Gilmour J initially, that the task of ascertaining whether there is a legitimate LPP claim to communications in a hard copy document may be informed by some of the electronic documents. I accept that submission. It seems to me that the saving in time in relative terms will not be great and the risk of an error being made as to a LPP claim compels a conservative approach. Accordingly, I consider the LPP regime should be planned for and conferral should proceed on the basis that the consideration of LPP claims over communications in the hard copy and electronic documents is concurrent.
Other matters 28 Directions programming the LPP process can be made in due course, absent agreement. 29 I should add that there are other outstanding interlocutory applications in this matter. I do not consider they need to be resolved in order to deal with the DRP issue. They remain adjourned pending further directions.
Conclusion 30 The parties should provide a minute that reflects these reasons within 10 days. The parties should take into account that the orders should in effect follow paragraphs 1 to 12 of the AFP's minute of proposed orders dated 15 May 2018, with variations that accommodate a DFO other than DFO Wheeler conducting the exercise, and also include orders as to the presence of a solicitor(s) as observer and conferral as to the LPP process upon the completion of the DRP. As already noted, there will be liberty to apply. I will reserve the costs of this application to be considered at the end of the DRP process. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Banks-Smith.
SCHEDULE OF PARTIES WAD 97 of 2013 Applicants Fourth Applicant: CAPE LAMBERT RSOURCES LTD Fifth Applicant: EGAS SUPERANNUATION FUND Sixth Applicant: GLOBAL STRATEGIC METALS NL Seventh Applicant: INTERNATIONAL PETROLEUM LTD Eighth Applicant: ANTHONY WILLIAM PAUL SAGE Ninth Applicant: VARESONA PARTICIPATION CORPORATION Tenth Applicant: ROBBY VALENTINO Eleventh Applicant: KUPANG RESOURCES LTD Twelfth Applicant: DRAGONFIRE PTE LTD
Okewood Pty Ltd
Commissioner of the Australian Federal Police