R (Cth) v Petroulias

R (Cth) v Petroulias - [2006] NSWSC 1155 - NSWSC 2006 case summary — Zoe

[61]

The Decision of Sully J of 4 March 2005 18 As observed earlier, the submissions made to Sully J prior to the first trial were along the same lines as those advanced to me on this application. His Honour concluded that, as a matter of statutory construction, it was not necessary that the warrant contain the additional material as contended by the Accused. His Honour formed that view without reliance on the decision of the Full Federal Court in Flanagan, but observed that the conclusion was fortified by the reasoning in Flanagan (pages 6-8, Judgment, 4 March 2005). 19 In a passage which attracted submissions before me, Sully J said (page 5): "The argument that is raised in support of the present application is completely clear and straightforward. It is that a warrant issued pursuant to the Act must not only name a class 2 offence in the sense of pointing to some offence creating legislative provision, but it must provide, as well, particulars of that part or parts of section 5D(2)(b) that are seen by the person issuing the warrant as relevant to the particular case. If that argument be correct, then plainly the warrant with which this ruling is concerned falls short of what is required. It is submitted, and I accept, that the question is essentially one of statutory construction." 20 Mr Lasry QC submits that Sully J erred in stating that the particulars to be inserted were those considered by the issuing person to be "relevant to the particular case". He submits that s.49(7) TI Act required the words to be inserted, and this did not depend upon any assessment of relevance by the issuing person. 21 The Accused submits further that Sully J erred in applying Flanagan which, in a significant respect, was said to be distinguishable from the present case. 22 Mr Lasry QC submits that it was not correct to state that a question of statutory construction was involved in the present case or, for that matter, in Flanagan. He submits that the requirements of the TI Act were clear and that what is involved is an examination of the face of the warrant to determine whether the mandatory requirements concerning the form and content of a TI Act warrant were satisfied.

[64]

In the final analysis, the question for determination is one of statutory interpretation. For this purpose, it is legitimate and appropriate to look, not only at the TI Act, but also at the TI Regulations, not to construe an overall scheme or to throw light on ambiguity in the statutory provision, but 'to ascertain what the [legislative] scheme is' (per Mason J in Brayson Motors Pty Ltd (in liq) v FCT (1985) 156 CLR 651 at 652; 59 ALR 265. When the TI Act and the TI Regulations are read together, it appears to us that what is required by s 49(7) is a statement of particulars which identify the alleged or suspected offences in a conceptual sense, in contrast to particulars of the essential factual ingredients of those offences in the particular case, such as those which an accused is entitled to have to enable him to prepare his defence: see, eg John B Bishop, Criminal Procedure 1983, pp 145-8. In our opinion, the requirements of s 49(7), as we construe them, were satisfied here. In particular, it was not necessary, in our view, that the TI warrant set out, as was suggested, 'particulars' of parties to the suspected conspiracy, the agreement alleged and its subject matter, even if, on a trial, an accused would be entitled to be informed of such matters." 27 The Full Federal Court paid particular regard to the complete legislative scheme, including the TI Regulations and the form of TI warrant prescribed by the Regulations. Their Honours said at 197: "It will be recalled from our earlier discussion of the legislative scheme that s 46(1) provides that the eligible Judge may issue a TI warrant where, on the basis of the information given to him or her under Pt VI, the Judge is satisfied, amongst other things, that: '(d) information that would be likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist in connection with the investigation by the agency of a class 2 offence … in which the person is involved … [Emphasis added.]'

[65]

In this regard it will be remembered that the form of TI warrant prescribed by the Regulations requires the recital of the eligible Judge's satisfaction of the matters stipulated in para (d) to be followed by 'short particulars' to be provided in the following context: '… the investigation … of the following class 2 offence/offences/ in which that person is involved, namely (set out short particulars of the class 2 offence/offences ) … [Emphasis added.]' 28 Their Honours stated at 198-199: "A requirement of conceptual identification of the suggested offence or offences is distinct from and falls far short of a requirement that the eligible Judge set out in the TI warrant the essential factual ingredients of each offence which the person has committed, is committing or is suspected on reasonable grounds of having committed or being likely to commit. Whether the matter is considered literally or purposively, there is no sound basis for adopting the latter construction. For one thing, there is no practical way in which the eligible Judge, who has no inquisitorial function in this regard, could embark upon that exercise independently; further, there is no obligation imposed upon the AFP by the TI Act to provide information to the Judge to enable him or her to do so. But, in any event, such an exercise is inappropriate as a condition of the exercise of a power to facilitate the gathering of information likely to assist in connection with the investigation (as defined in s 6A(1)) of a class 2 offence. Entirely different considerations create the need for more extensive particulars at or after the laying of charges which marks the beginning of the trial process. Those differences are emphasised when it is recalled that the 'short particulars' contemplated by s 49(7) may be of an offence as to which the judge is satisfied only that the subject person is suspected on reasonable grounds of being likely to commit it. The Judge may well obtain that degree of satisfaction without being able to give particulars of the kind for which the applicants contend indicating the essential ingredients of the offence.

[68]

Is the Subject Warrant Bad on its Face? 29 Mr Lasry QC submitted that the Full Federal Court had confined attention to the absence on the face of the warrant of any reference to the particulars of the alleged conspiracy or fraud, rather than the absence of any reference to the seriousness of the fraud alleged. In this way, Mr Lasry QC sought to distinguish Flanagan from the present case. He submitted that the precise argument advanced here by reference to the second essential ingredient of a "class 2 offence" was not advanced in Flanagan. 30 I do not accept this submission. It is apparent in the course of the detailed analysis in Flanagan (at 197) that the Court made express reference, with emphasis, to the "serious fraud" and "serious loss of revenue to the Commonwealth" elements of the definition of a "class 2 offence". I am satisfied that the Full Federal Court in Flanagan held that it was not necessary to include these express matters on the face of the warrant to satisfy the requirements of s.49(7) of the Act. I agree with the conclusion of the Full Federal Court and Sully J that a question of statutory construction is involved. That question is the proper construction of the term "short particulars" in s.49(7) TI Act, viewing that term in the statutory scheme erected by the TI Act and TI Regulations. 31 I am satisfied that the subject warrant satisfied the requirements of s.49(7) TI Act. This was the conclusion of the Full Federal Court in Flanagan when considering a warrant in terms indistinguishable from the subject warrant. I have reached this conclusion as a result of my own independent assessment of the question falling for determination on the present application. Having regard to the principle of comity referred to at paragraph 17(d) above, I would have reached a similar conclusion unless satisfied that the interpretation adopted by the Full Federal Court in Flanagan was plainly wrong. As it happens, and with respect, I am satisfied that the interpretation adopted in Flanagan is correct. Sully J reached the same conclusion in the judgment of 4 March 2005. 32 Accordingly, I am not satisfied that the warrant is bad on its face and is, therefore, invalid.

[69]

The s. 75 TI Act Discretion 33 Had I determined that the warrant was defective or irregular in the manner alleged, it would have been necessary for me to consider whether information obtained pursuant to the warrant ought be admitted into evidence under s.75 TI Act. As short submissions were made on this point, I should express my tentative view on one aspect of the argument. It is inappropriate, in any event, that I express a concluded view concerning this hypothetical question, given that submissions on factual matters may have been advanced by the parties which would be capable of bearing upon any discretionary decision to be made. 34 On a s.75 argument, it would be necessary to consider whether any defect or irregularity of the type alleged here was "substantial": NSW Crime Commission v Vuletic at 314-317. 35 The warrant does not recite a conclusion that the particular conduct constituting the offence involved serious fraud or a serious loss to the revenue of the Commonwealth. Unsurprisingly, the term "serious fraud" is not defined in the TI Act. The word "serious" should be given its ordinary meaning. It is a word which by its very nature imports a sense of degree and probably imports a range: Meyer v Bright (1993) 110 DLR (4th) 354 at 364-365. The meaning of 'serious" includes "weighty or important": Macquarie Dictionary; Chen v Minister for Immigration and Ethnic Affairs (1994) 51 FCR 322 at 327. Where a statute prohibited behaviour which would be likely to cause reasonable persons to be "seriously alarmed or seriously affronted", Samuels JA (Moffitt P and Hope JA agreeing) observed that the use of the word "seriously" is "sufficient to indicate that it is not behaviour of a trivial kind which is in contemplation": Lake v Dobson (Court of Appeal, 19 December 1980) 5 Petty Sessions Review 2221 at 2222. 36 It will be recalled that the nominated AAT member, in deciding to issue the warrant, had regard to the "gravity of the conduct constituting the offences being investigated" (paragraph (d)(ii) of the subject warrant). In R v Petroulias (No. 1), I observed at paragraph 318: "In Wills v Petroulias (No. 2 ) [(2003) 58 NSWLR 618] , Spigelman CJ at 626 [49] observed that 'important public interests are involved in these prosecutions'. The allegations are serious involving, as they do, a claim of serious misconduct on the part of a person holding a very senior rank within the ATO". 37 The requirement of "serious fraud" in s.5D(2)(b)(v) may be satisfied by reference to factors apart from the level of financial loss which is said to have occurred. The concept of "serious loss to the revenue" is to be found in a separate subparagraph within the definition. 38 In my view, it would be relevant to an assessment of whether the particular conduct constituting the alleged offence involved "serious fraud" to consider that the conduct alleged was said to have been committed by a senior officer within the Australian Tax Office in the course of his official duties. It would be relevant to any discretionary exercise under s.75 to note that the nominated AAT member had regard to "the gravity of the conduct constituting the offences being investigated" before determining to issue the warrant. 39 Had the point been reached on the present application, subject to any further argument which the parties sought to advance on the question, a basis may have existed for a finding that any defect was not substantial and for a discretionary ruling under s.75 TI Act allowing information obtained under the warrant to be admitted into evidence in the proceedings. In the result, that point has not been reached, given my ruling that the warrant is good on its face and is valid.

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