Okewood Pty Ltd v Commissioner of the Australian Federal Police

BANKS-SMITH J: 1 These reasons relate to an urgent application brought by the applicants which was heard on 21 September 2020. I will use the term 'applicants' to refer to the remaining applicants on the record for whom Bennett + Co are the solicitors on the record, but excluding the second applicant who (I was told) is in the process of discontinuing the proceedings. 2 It is necessary to provide a short background. 3 In 2012 search warrants issued under s 3E of the Crimes Act 1914 (Cth) were executed at certain premises. Electronic devices including computers and phones, together with some hard copy documents, were seized. 4 The warrants contained the usual provisos to the effect that they were issued in recognition that a claim for legal professional privilege (LPP) may be made. 5 The warrants that were issued affected the applicants and some of their advisors. 6 The applicants made blanket claims of LPP over the seized documents. 7 Two Federal Agents of the Australian Federal Police (AFP) provided an Undertaking (that later incorporated an Addendum) to Bennett + Co by which they agreed certain processes whereby the applicants could gain access to various data storage devices in order to identify documents the subject of a claim for LPP and otherwise as to the manner in which the documents were stored. 8 Various warrants were executed between 19 December 2012 and 5 February 2014. 9 On 5 April 2013 the applicants commenced these proceedings by originating process, seeking an order that the respondent is prohibited from inspecting any documents or copies of documents whether stored electronically or in hard copy seized by the AFP at the premises of the applicants pursuant to the search warrants dated 17 December [2012] until such time as the applicants have identified those documents which are the subject of LPP. 10 After a protracted process, some seven years later, on or about 10 September 2020 the applicants confirmed to the Court and to the respondent that they had prepared a schedule of documents that were seized under the warrants for which they assert a claim of LPP, and which includes a description of the document and the basis for the claim (LPP Schedule). Logically, it would follow that the AFP should now have access to those seized documents that are not the subject of a LPP claim pursuant to its rights under the Crimes Act. For ease of reference, and following the parties' protocol, I will refer to the documents over which no claim for LPP is made as the Non-LPP documents and to the documents over which a LPP claim is pursued as the LPP documents (noting there has been no determination as to whether or not LPP is established). I was told that LPP is claimed for some 3,844 documents by way of a 'standard' LPP claim and for 20,788 documents on the basis of 'illegibility'. 11 However, the applicants have not provided the LPP Schedule to the respondent. 12 Instead, they filed an application for orders seeking an extension of time for providing the LPP Schedule to the respondent to 25 September 2020 and preventing access to the Non-LPP documents until there could be conferral between the parties about certain matters they defined as 'Inspection Issues'. Relevantly, they sought orders that: The parties shall confer and seek to resolve matters, and agree any necessary orders, in respect of: (a) the process by which the documents (which have not been reviewed for LPP by the applicants as they have been identified by the respondent as not requiring review) held by the respondent and/or the Australian Government Solicitor (AGS) are to be returned to the applicants; and (b) identifying the persons acting for the respondent or on its behalf (if any) who the applicants contend should not be permitted to access any of the documents following the release of the documents to the respondent in accordance with the orders of 4 August 2020. 13 At this point it is necessary to address in more detail some of the events and orders made over the seven year period. I have previously published reasons in this matter which record to some extent the history: Okewood Pty Ltd v Commissioner of the Australian Federal Police [2018] FCA 1035. 14 On 6 September 2013 orders were made by Gilmour J with the intent that the AFP would utilise digital forensic software to automate a process to reduce the data that was potentially relevant to its inquiries, so that any LPP review would proceed over a smaller sub-set of documents (the applicants refer to these orders as the Okewood Orders). 15 That data reduction process commenced on a trial basis but due to difficulties with the trial, it was not completed. 16 Following certain disclosures made by the AFP, the applicants applied to the Court for orders requiring the respondent to provide disclosure as to the manner in which it had dealt with the seized documents pending the identification of the LPP documents. 17 On 23 March 2015 Gilmour J made orders requiring the AFP to file affidavit evidence addressing that issue as follows: … the Respondent provide further affidavit evidence naming each AFP investigator and digital forensic officer involved in the investigation from the date of the first LPP claim, 19 December 2012, and the names of any investigator or digital forensic officer, or other person, who may potentially have had access to any of the seized electronic or hard copy data over which LPP is claimed or any copy thereof in whole or in part, whether employed by the AFP or otherwise, and whether any of the persons named have accessed any data the subject of an unresolved claim of LPP, or any copy thereof in whole or in part, and if so, details of when and what data was accessed. 18 In total some 43 affidavits were filed by the respondent in response to Gilmour J's orders. 19 Based on those affidavits, the applicants' solicitors prepared submissions dated 9 September 2016 (in anticipation of a case management hearing) in which they identified in a schedule what they described as 'known breaches by the AFP of personal undertakings and court orders'. 20 Whether or not any breaches have occurred has not been determined and that is a matter that remains in dispute between the parties. Further, it is to be remembered that whether or not there are legitimate claims of LPP to any of the documents has still not been determined, and so whether or not there has been any impermissible viewing of any documents that are in fact the subject of established LPP claims has not and could not be determined. 21 I should add that orders were also made on 18 August 2015 which required all the seized documents to be held in secure storage by the AGS until further order. The AFP accordingly had no access to the documents from that time. 22 At a hearing on 18 August 2016 Gilmour J determined that issues relating to the alleged breaches of the Undertaking, Addendum and Okewood Orders should be put to the side whilst the parties pursued the central question of the process for document reduction and LPP review (the subject of an interlocutory application). 23 During September 2016 the applicants also filed three other interlocutory applications that they have referred to as the 'costs' application, the 'protection' application and the 'disclosure' application. I will refer to those three applications collectively as the September 2016 interlocutory applications. They were not progressed at that time. It is not necessary to say anything further at present about the costs application or the protection application. 24 As to the disclosure application, it sought further specific information: it did not seek orders that might have the effect of excluding Federal Officers from access to Non-LPP documents. The applicants submitted at the time (submissions dated 9 September 2016) that 'The applicants may ultimately seek orders requiring that any person who has accessed the Applicants' LPP Data must be quarantined from future involvement in the investigation and appropriate sanctions should be imposed'. It was submitted that the issue was 'one of principle, not evidence'. It was the position of the respondent as expressed in later written submissions (May 2018) that it had complied with the disclosure orders previously made by Gilmour J and that the disclosure orders sought, and the applicants' justifications for the proposed orders, relate to matters which fall outside the ambit and purpose of the proceedings relating to LPP. The respondent submitted that the claims made (in fact, the claims in all the September 2016 interlocutory applications) relate to or arise from past events and should not distract from the completion of the identification and making of any LPP claims over the documents. 25 On 23 September 2016 there was a substantive hearing before Gilmour J during which the parties attempted to formulate a new data reduction process. By the end of the hearing little appeared to remain in issue and Gilmour J adjourned the hearing so that the parties could complete discussions and formulate orders. 26 Regrettably, no revised data reduction process was agreed. 27 Time moved on. Justice Gilmour retired and I inherited the case management of what Mr Bennett for the applicants warned me was a 'large and ugly file'. 28 I called the matter on for an update in May 2018 and ultimately the data reduction process dispute was listed for further hearing on 26 June 2018, with the September 2016 interlocutory applications listed at the same time for directions. The published reasons to which I have referred above relate to the 26 June 2018 hearing. I referred in the reasons to the September 2016 interlocutory applications, noting they remained adjourned pending any further directions. Formal orders relating to the reasons were made by consent on 20 July 2018. The parties did not seek any orders relating to the September 2016 interlocutory applications and for all intents and purposes they have simply remained adjourned. 29 I also note that as is apparent from my earlier reasons, without resolving the question of breach or any juridical issue, the involvement of one particular identified Federal Agent in the data reduction process was curtailed, the respondent having admitted that the process could proceed without him and that the respondent would not be prejudiced by such step. 30 The data reduction process the subject of the 20 July 2018 orders proceeded although not without hiccups. It was initially anticipated that the process would be completed by 30 September 2018 so that the LPP Schedule could then be provided. The applicants made numerous applications for extensions of time, many of which were resolved by consent. There were further case management hearings. The progress of the matter was complicated by the withdrawal of Kupang Resources Limited from the proceedings and the terms of its discontinuance. One period of delay was caused by an issue with the data reduction process itself. I required the applicants to report as to the progress of the data reduction process. The date for the applicants to conduct the LPP review of documents was extended on a number of occasions from 30 September 2019, to 9 April 2020, to 31 July 2020. 31 As the data reduction process was still not complete, the matter came on before me again on 4 August 2020. The respondent provided a minute of proposed orders for the purpose of that hearing and at the hearing Mr Bennett addressed each of the proposed orders on behalf of the applicants. 32 Importantly, orders 2, 3, 6, 8 and 10 of my orders of 4 August 2020 provide as follows: 2. The time for the applicants to complete the review for LPP of the documents under order 8 of the orders of 12 June 2019 be extended to 31 August 2020. 3. By no later than 5.00 pm AWST on 14 September 2020 the applicants shall serve on the respondent a schedule listing all of the documents over which a claim for LPP is made by one or more of the applicants (LPP Schedule). … 6. To enable the respondent to access the electronic documents within the Non-LPP documents the following process will apply: (a) At the same time as serving the LPP Schedule the applicants will provide to the respondent a complete file listing (outlining MD5 Hash, X WAYS GUID and item path for each file) for each electronic document over which a claim for LPP has been made; (b) Upon receipt of the complete file listing a Digital Forensic Officer of the Australian Federal Police except DFO Michael Wheeler (AFP DFO) will be permitted to obtain the reduced data set from AGS and create another data set from the reduced data set with all the documents over which a claim for LPP has been made removed (the Non-LPP data set). Following completion of the creation of the Non-LPP data set the reduced data set is to be returned to AGS. At all times whilst the AFP DFO is taking these steps, the applicants' technical adviser will be entitled to attend and observe; (c) Following creation of the Non-LPP data set the AFP DFO will provide one copy of the Non-LPP data set to the applicants' technical adviser and one copy will be retained by the AFP DFO. The AFP will not access its copy of the Non-LPP data set until receipt of the confirmation to be provided under 6(d); (d) Within 4 business days of the receipt of the Non-LPP data set from the AFP DFO the applicants' technical adviser will confirm to the AFP DFO that all documents over which a claim for LPP has been made have been removed from the Non-LPP data set; (e) In the event that the applicants' technical adviser is unable to provide the required confirmation under order 6(c), the steps required under orders 6(b), 6(c) and 6(d) are to be repeated as necessary to enable that confirmation to be provided; and (f) Following receipt of the required confirmation under order 6(d), the respondent will be entitled to access all the documents in the Non-LPP data set. 8. Within 21 days of the respondent obtaining access to the documents in the Non-LPP data set under order 6 above, or such further time as may be agreed by the parties, the respondent is to serve on the applicants a response to the claims for LPP made in the LPP Schedule, indicating for each document whether or not the respondent accepts the LPP claim which has been made. … 10. The parties shall confer and seek to agree a process for resolving claims for LPP over any documents that are not accepted by the respondent within 7 days. If agreement is reached the parties are to provide to the Court a minute of consent orders. Absent agreement the matter may be re-listed. 33 Separately, an order was made by consent on 6 August 2020 relating to the hard copy documents. 34 Further, and as required by order 10, the parties consented to orders for a regime to resolve any disputes as to LPP. That process included an order to the effect that if the Court or independent counsel has determined (in accordance with the regime) that a document is not subject to LPP then the respondent will be entitled to access it 'forthwith'. 35 The reference in order 6(f) of the 4 August 2020 orders to access to 'all the documents in the Non-LPP data set' is an express reference to inspection. Mr Bennett did not oppose that proposed order. Therefore, the Court and the parties (apparently) proceeded on the basis that once the LPP documents were identified, there would be no restriction on access by the respondent to the Non-LPP documents obtained pursuant to the warrants (subject to procedural steps to facilitate the necessary separation of the LPP and Non-LPP documents). 36 I should add that during the hearing of 4 August 2020 the applicants did not refer to the September 2016 interlocutory applications other than to say they should be brought on after September 2020 for directions (that is, after the time it was anticipated that the respondent would have access to the Non-LPP documents). 37 The applicants did not comply with order 3 of the 4 August 2020 orders. They are in breach of that order. They did not provide the LPP Schedule to the respondent and have not subsequently done so. 38 On Friday 18 September 2020 the applicants filed the interlocutory application to which I have referred. A short case management hearing proceeded that day, listing the matter for an urgent hearing. 39 The application came on for urgent hearing before me on Monday 21 September 2020. I should add that in the interim the respondent had voluntarily provided an undertaking that it would not commence inspecting the Non-LPP documents until the hearing had proceeded. 40 Having heard the applicants' submissions, it is apparent to me that the applicants are in fact seeking to vary the orders that provided for inspection of the Non-LPP documents to proceed. 41 Whilst not expressed as an application to vary the orders, it was apparent that the applicants were seeking to defer inspection pending the conferral process that they identified. 42 Having regard to the affidavit evidence, the applicants purported to raise the following three matters in support of the application: (1) whether persons acting for the respondent should be prevented from accessing the Non-LPP documents because of the alleged breaches of the Undertaking, its Addendum, and/or the Okewood Orders; (2) how the respondent intends to determine ownership of so-called 'excluded documents' and destroy any copies that are held so that those documents can be returned either to Bennett + Co or the respective owners; and (3) the process for separating hard copy documents for which claims of LPP are made and securing those documents pending resolution of the LPP claims. 43 As to the second and third matters, I am not persuaded that those are matters which require judicial intervention. The parties are well equipped to make decisions as to the processes for deletion and return of the relevant excluded documents. Within correspondence attached to the affidavit evidence, the AGS has suggested what appear to me to be practical steps indicating that the AGS wished to facilitate the return of such documents. The only issues between the parties are practical. The issue is not tied to or dependent upon resolution of the issue relating to LPP or inspection of Non-LPP documents. 44 Similarly, I do not consider that judicial intervention is needed with respect to the appropriate steps that should be taken to remove hard copy documents for which a claim of LPP is made from the relevant files of hard copy documents. The parties surely can come to terms as to that process. 45 There is overarching liberty to apply should such matters not be resolved, but, importantly, those matters do not provide a basis for the applicants to continue to defer providing the LPP Schedule to the respondent. The LPP Schedule is to be provided forthwith. 46 The mere provision of the LPP Schedule to the respondent does not place the respondent in a position where it can access documents. There remains a process to be undertaken for separation of the LPP documents from the Non-LPP documents. That process should not be delayed. 47 The only issue of any substance between the parties is that of any power or reason to restrict access by the respondent to the Non-LPP documents. Simply making an order for conferral, as sought by the applicants, does not seem to me to progress that issue in any meaningful way. It is inevitable that the parties will not agree. 48 The appropriate course if the applicants wish to pursue some form of order restricting inspection is to bring a properly drafted application seeking to vary (in particular) order 6(f) of the 4 August 2020 orders. 49 The basis for any such application should be properly disclosed. That is, having regard to the powers under the Crimes Act, the applicants need to point to the basis upon which this Court can intervene in the respondent's investigation process by potentially preventing identified Federal Agents from any further involvement in the investigation that would involve any inspection of any Non-LPP documents. The applicants have the disclosure information resulting from the orders made by Gilmour J and ought to be in a position to identify clearly the relevant agent and the particular evidence relied upon for any assertion that such person ought not inspect Non-LPP documents. They need to explain why there is any connection between any alleged breach (many of which appear to be of an administrative nature) that would give rise at law to a basis for this Court to intervene. They need to make clear the basis upon which it is asserted that such persons have accessed documents that are the subject of LPP and why, if that is established, it should affect their right to inspect Non-LPP documents. Any application brought at this stage needs to take into account the fact that there has been no determination as to whether or not LPP claims are validly made. I do not suggest these matters for consideration are exclusive. 50 I will provide the applicants with the opportunity to bring a proper application to vary the orders. In so doing, I note they are not obliged to do so and I do not suggest whether or not any such application would succeed. It may be that upon review the applicants form the view that any application they wish to bring relating to alleged breaches is better raised at a later time. 51 I have considerable sympathy for the respondent's submission that the conduct on the part of the applicants is yet another basis for delaying the respondent in its attempts to pursue its investigations by inspecting Non-LPP documents it seized many years ago. I also share the respondent's frustration in that this issue of inspection could and should have been raised at the time that the orders for access were made on 4 August 2020 (if not before). However, in short, the question of 'quarantining' of Federal Agents as a result of alleged breaches has been foreshadowed by the applicants in the past. I must be cautious in foreclosing on that issue by declining to allow them the opportunity to bring an application to vary, should they choose to do so. 52 Nor should I deny that opportunity, despite the fact that the applicants' affidavit material relies on two unconvincing examples that allegedly indicate that a Federal Agent must have accessed seized documents in order to prepare the 2014 warrant and so has knowledge arising directly from a breach that may include knowledge of the content of LPP documents. Neither example is compelling. 53 First, it is asserted that a Federal Agent must have accessed documents seized pursuant to the execution of warrants in 2012 in order to describe with particularity certain alleged offences set out in the later warrant. The applicants rely on evidence by way of a report of a telephone conversation between Mr Bennett and his client in which it was suggested that the only way that the AFP could have known the balance of a particular loan account was by accessing confidential loan agreements. However, in response to that allegation, Federal Agent Perrot has sworn an affidavit in which he deposed to the basis upon which he described the relevant loan in the 2014 warrant. 54 It is not necessary to set out the evidence in detail, suffice to say that Agent Perrot received information that included Australian Transaction Reports and Analysis Centre (AUSTRAC) records. AUSTRAC is the Commonwealth Government financial intelligence agency which monitors financial transactions into and out of Australia, in addition to particular domestic transactions. The relevant AUSTRAC information to which he had regard included publically available information sourced from the ASX and more particularly AUSTRAC records which disclosed four loan transactions (each naming Okewood Pty Ltd). The sum of the four amounts identified accords with the amount referred to by Agent Perrot in the warrant. One detail is different, being a particular date, but as Agent Perrot's affidavit does not purport to be a comprehensive disclosure of all material in the relevant AUSTRAC records, I do not consider his evidence is compromised. 55 Second, it was asserted that the level of detail (down to dollars and cents) of a sum relating to a separate alleged offence led to an inference that the Agent must have had access to seized documents. However, that matter had previously been addressed in correspondence between the AGS and Bennett + Co and Agent Perrot had already disclosed that the source of the particular sum was a bank statement obtained from a financial institution as a result of an Australian Crime Commission notice to produce issued to that bank. 56 Further, and importantly, Agent Perrot deposes to the fact that 'I have never used any of the information obtained from the documents seized under the 2012 search warrants for the purpose of preparing 2014 search warrants'. 57 Therefore, to the extent the applicants seek to rely on such examples for a broader submission that they disclose that Agent Perrot must have accessed seized documents (and, implicitly, documents the subject of a LPP claim) it is not supported. I have not ignored the suggestion from Mr Bennett that there is a document said to be the subject of LPP that refers to a fixed and floating charge that relates in some way to the loan agreement that may have been accessed by another agent who gave information to Agent Perrot. However where the balances were clearly available separately, the suggestion of a second-hand use of privileged information is supposition and flies in the face of Agent Perrot's evidence that he did not use privileged information. 58 Although I have found the applicants' arguments with respect to those example to be unconvincing, their claim that there have been breaches is not limited to claims relating to Agent Perrot. Therefore, in fairness I am unable at this point to bar the applicants from bringing an application. 59 As the above reasons indicate, I am not prepared to make an open-ended order deferring access pending a conferral process which seems to be directed at a generalised and unparticularised claim that there has been access to documents the subject of an LPP claim that, in turn, in some unexplained manner, should lead to the respondent's agents being barred from any access to Non-LPP documents, a course which would potentially have serious ramifications for this long running investigation by the AFP. In short, if the applicants wish to pursue such an allegation they should bring an application properly formulated and supported, as I have addressed above. They should have seven days in which to do so. 60 At present, the orders anticipate that: (1) the LPP Schedule is to be provided; (2) the task of separating Non-LPP documents from the LPP documents is then to be undertaken; (3) the respondent will then obtain access to the Non-LPP documents; and (4) within 21 days after that time the respondent will then provide a response to the applicants' claims for LPP, initiating the process for any further determination of LPP disputes. 61 Therefore, as the orders presently stand, any application with respect to access to the Non-LPP documents has the flow-on effect of deferring resolution of the LPP claims. 62 Even if an application is filed by the applicants, there is no reason that steps (1) and (2) above cannot proceed (that is, orders 6(a) to (e) of the 4 August 2020 orders). However, I would propose to hear the parties as to whether the regime should be altered so that the LPP determination process (anticipated by order 8 of the 4 August 2020 orders and the orders of 21 August 2020) can continue concurrently with the progress of any application relating to inspection, rather than in effect being deferred pending its resolution. 63 If an application is not brought, the orders are otherwise to be complied with forthwith (together with the order relating to hard copies of 6 August 2020). 64 I make no orders with respect to the so-called 'hard copy' issue or the return of the 'excluded documents': those are matters that sensibly should be addressed by conferral between the parties but without any impact upon the provision of the LPP Schedule. 65 Finally, there is the issue of the voluntary undertaking provided by the respondent that it will not seek to access Non-LPP documents pending the determination of this application. It is sensible that the undertaking be extended until close of business on 30 September 2020 pending the filing of any application by the applicants. I have no doubt, in light of the respondent's cooperation to date, that the respondent will voluntarily agree to extend that undertaking for seven days. The AGS should immediately inform my chambers if there is any issue with that assumption and I will consider making any necessary order restraining access for that period. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.

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