4.1 The "suspects" points
54 As noted, the applicants' primary contentions of invalidity are founded upon the propositions that the s 246 orders wrongly asserted the recipients were reasonably suspected of having committed an offence and the search warrants wrongly identified numerous individuals as "suspects". According to the applicants, as a result of these matters, the s 246 orders and search warrants are bad on their face as they show the second and third respondents addressed the wrong question, and the decisions to issue the s 246 orders and search warrants should be vitiated for error of law as those decisions: - (i) were based on facts which did not exist, (ii) disclose a failure of any consideration of the statutory conditions for the issue of the s 246 orders and search warrants, (iii) disclose the taking into account of an irrelevant consideration, and (iv) were so unreasonable that no reasonable person could have made the decisions.
55 The AFP answered the applicants' primary contentions in a number of ways.
56 The AFP submitted that while the s 246 orders contained a clear clerical error (the statement that "[y]ou are reasonably suspected of having committed the offence stated in the relevant warrant"), the same could not be said of the search warrants. The second condition in the search warrants involves three alternatives - suspects, entities or other matters that are the subject of the investigation. Some of the items appearing in the list are plainly not capable of being "suspects" (for example, the item the "Mercedes CORBY Exclusive Agreement"). It is not tenable, according to the AFP, to construe "entities" and "other matters" as excluding natural persons as to do so would "suggest that individuals who were not suspects were intended to be excluded from the Second Condition (in circumstances where non-suspect entities were included". As the AFP put it:
An ordinary reading of the three categories together, along with the statutory context, makes clear than an individual who is not a suspect may nonetheless be listed in the Second Condition.
57 The AFP said also:
…the warrant makes plain that the only relevant offence is the offence for which Schapelle Corby was convicted. It is abundantly clear that, other than Schapelle Corby, no person, entity or thing on the list could even conceivably be regarded as a "suspect" in the commission of an offence.
58 It may be accepted that the search warrants identify Schapelle Corby as having committed an offence. However, the second condition of the warrants also identifies "suspects, entities or other matters that are the subject of the investigation". I do not accept the submission that a natural person may fall within the descriptions "entities or other matters". The natural and ordinary reading of the second condition is that all of the individuals named in the list are "suspects… that are the subject of the investigation". The ordinary meaning of a "suspect", in the context of a search warrant, is a person suspected of having committed an offence.
59 The AFP's submission that no person in the list "could even conceivably be regarded as a "suspect" in the commission of an offence" ignores the terms of the second condition. The submission also assumes both knowledge of the PoC Act (specifically that, despite its title, the Act provides a civil scheme for the recovery of literary proceeds and does not create any offence in connection with the payment of funds which might be recovered as literary proceeds) and that such knowledge would trump the plain words of the second condition. Neither assumption is justified. The AFP called no evidence explaining what occurred before the second and third respondents. No inference may be drawn in the AFP's favour that the second and third respondents knew about the scheme of the POC Act insofar as it applies to literary proceeds or, if they held that knowledge, that it meant they did not give the search warrant its natural and ordinary meaning that each of the individuals appearing in the list under the second condition were "suspects … that are the subject of the investigation".
60 It is convenient to state here in the form of conclusions (and explain subsequently) that I am satisfied that there are a limited range of possible ways in which these search warrants and s 246 orders were issued. Either:
(1) the second and third respondents did not consider the terms of the orders and warrants; or
(2) the second and third respondents knew about the scheme of the PoC Act in respect of the recovery of literary proceeds and that the scheme did not create any offence or other wrong by those paying for an interview or facilitating that payment, in which event the second and third respondents could not have issued the s 246 orders stating that "[y]ou are reasonably suspected of having committed the offence stated in the relevant warrant" or the search warrants identifying numerous individuals as "suspects" on any rational basis, had they considered the terms of the orders and warrants; or
(3) the second and third respondents did not know about the scheme of the PoC Act in respect of the recovery of literary proceeds and, had they considered the terms of the orders and warrants, wrongly assumed that the scheme did create an offence or other wrong by those paying for an interview or facilitating that payment, in which event the s 246 orders and search warrants were issued on a fundamentally false premise induced (wrongly, but innocently) by the AFP by reason of the erroneous statements and other material placed before the second and third respondents.
61 As explained below, whichever possibility is correct (and, as will become apparent, the last possibility seems the most likely), the decisions to issue the s 246 orders and search warrants are materially affected by legal error and should be quashed. I return later to these matters.
62 In addition to the submission that the search warrants did not contain any clerical error (which I have rejected above), the AFP submitted that it could not be inferred that the acknowledged error in the s 246 orders affected the search warrants. As the AFP put it, there was no evidence that the second respondent considered the s 246 orders before considering the search warrants on 17 February 2014 and the third respondent did not issue any s 246 orders. The submission makes no allowance for the ordinary process of the drawing of inferences. In particular, insofar as the second respondent is concerned, it is known that the applications for all the search warrants and s 246 orders were supported by a single affidavit. It is known that the affidavit was sworn before the second respondent with the second respondent acting as witness. It is known that the search warrants and s 246 orders bear file references running sequentially from CM 14/035 to CM 14/044. It is an agreed fact that the search warrants and s 246 orders were all issued at about 3.55 pm on 17 February 2014. In these circumstances, the notion that the second respondent did not have in mind the s 246 orders when he issued the search warrants and, conversely, did not have in mind the search warrants when he issued the s 246 orders is unrealistic. It does not matter that there is no evidence that the second respondent looked at the s 246 orders before issuing the search warrants. The proper inference to be drawn in the circumstances is that in deciding to issue each search warrant and each s 246 order the second respondent had in mind the whole of the material placed before him including all of the s 246 orders and all of the search warrants.
63 Two other general submissions the AFP made may be accepted but neither leads to the ultimate conclusion for which the AFP contends, that the errors in the s 246 orders and search warrants were immaterial. It is true that "[w]hether or not a particular document records what in fact were the decision-maker's reasons for the decision is a question of fact" (Rashid v Minister for Immigration and Citizenship [2007] FCAFC 25 at [17]). It is also true that the applicants bear the onus of establishing error on the part of the second and third respondents (Hu v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 63 at [19]). The AFP's submissions, however, gloss over the fundamental facts that, in issuing the s 246 orders under his signature, the second respondenteffectively certified that he was satisfied that the recipients were reasonably suspected of having committed an offence stated in the relevant warrant and, further, in issuing the search warrants, the second and third respondents each effectively certified that they were satisfied that the individuals nominated in the second condition were "suspects…that are that are the subject of the investigation".
64 Accordingly, the AFP's conclusion that "a state of satisfaction as to a reasonable suspicion that the addressees had committed an offence was no part of the Second Respondent's reasoning process" can be accepted only if it is also inferred that the second respondent did not consider the statements in the s 246 orders and search warrants at all. The five reasons given by the AFP in support of its conclusion, as explained below, are unpersuasive.
65 First, the AFP said that the statutory criteria to which the second respondent was required to have regard do not include the existence of a reasonable suspicion of the commission of an offence. This is true but, as noted, the s 246 orders expressly refer to the second respondent being satisfied as to the existence of such a suspicion and the search warrants refer to the named individuals as suspects the subject of an investigation. Further, the investigation is described in the affidavit of Mr Kokles (and Mr Phun) as relating to property and action which has been or could be taken as follows:
On 27 May 2005, in Denpasar, Indonesia, CORBY was convicted of an offence, being a foreign indictable offence within the meaning of the Proceeds of Crime Act 2002, deriving Literary Proceeds as defined under section 153, Proceeds of Crime Act 2002.
Proceeds of Crime action could be taken to apply for a Literary Proceeds order under section 152 of the Proceeds of Crime Act 2002 in respect of all Literary Proceeds, as defined under section 153 Proceeds of Crime Act 2002, derived by CORBY in respect to any and all agreements entered into with Seven West Media Limited and related media representative entities by CORBY or on her behalf.
66 These paragraphs are dense to say the least. The first paragraph, moreover, arguably suggests that a part of the offence Schapelle Corby committed in Denpasar in 2005 included deriving literary proceeds within the meaning of the PoC Act. Accordingly, although it formed no part of the conditions precedent to the issue of a s 246 order and/or search warrant under the PoC Act, the material before the second and third respondents either (in the s 246 orders before the second respondent) expressly identified the recipients as being reasonably suspected of having committed "the offence stated in the relevant warrant" or (in the search warrants before the second and third respondents) expressly identified many individuals, including the recipients, as suspects in the investigation and (in the affidavits before the second and third respondents) identified the investigation in ambiguous terms which did not make clear that neither the deriving of literary proceeds nor the payment or facilitation of a payment which might give rise to a literary proceeds order is, in itself, an offence.
67 In these circumstances, the fact that the statutory criteria to which the second and third respondents were required to have regard do not include the existence of a reasonable suspicion of the commission of an offence is not indicative of the immateriality of the material before them which expressly stated that the recipients of the s 246 orders and warrants were reasonably suspected of having committed an offence or were suspects in an investigation. To the contrary, that fact is indicative of the statutory powers vested in the second and third respondents having miscarried by reason of the errors in the s 246 orders and search warrants and, possibly, also by the lack of explanation about the operation of the PoC Act in the supporting affidavits of Mr Kokles and Mr Phun.
68 Second, the AFP said that the references in the s 246 orders to the recipients being "reasonably suspected of having committed the offence stated in the relevant warrant" disclosed that the statements were in obvious error because the only offence identified in the warrant is that of Schapelle Corby for which she was convicted, and the warrants do not identify any offence committed or suspected of having been committed by any other person. Accordingly, the AFP submitted:
The Applicants thus ask the Court to attribute to the Second Respondent a nonsensical or meaningless statement. The Court would not readily infer that the Second Respondent was satisfied of an unspecified matter. In the absence of any relevant offence being specified in the warrant, the Court would thus infer that the language in the Section 246 Order upon which the Applicants rely was a mere clerical error.
69 When this submission is unpicked, it is apparent that it conflates several considerations. The fact that the statements in the s 246 orders were the result of "clerical error" may be accepted. It is not part of the applicants' case that the AFP wrongly believed the recipients of the s 246 orders to be suspects in the commission of any offence or that the AFP intentionally misled the second respondent by including knowingly false statements in the s 246 orders. However, the characterisation of the clerical error as "mere" is more difficult to accept if by "mere" it is meant to suggest the error was trivial or insignificant. The statements are not immaterial typographical errors or errors of detail. The statements are of the most serious kind and the second respondent, by his signature, affirmed he was satisfied they were true. The second respondent did so in the context of a warrant which identifies in the second condition numerous individuals as "suspects…that are the subject of the investigation" and in the third condition describes the suspicions as relating to evidence that Schapelle Corby "was convicted of an offence, being a foreign indictable offence within the meaning of the Proceeds of Crime Act 2002, deriving Literary Proceeds as defined under section 153, Proceeds of Crime Act 2002". As noted, it is by no means clear from the warrant that deriving literary proceeds is not itself some form of offence. Accordingly, it cannot be said that the second respondent made a meaningless or nonsensical statement in the s 246 orders by stating his satisfaction that the recipients were reasonably suspected of having committed an offence stated in the warrant. Nor can it be said, for the same reason, that the second respondent was stating he was satisfied as to an unspecified matter. The statement was wrong, but that is a different matter.
70 It is this context which leads to the three possible explanations identified above for what occurred and, if it is necessary to express any conclusion in this regard (which I do not consider it is), makes the third of those possibilities most likely.
71 A number of factors support this inference.
72 For one thing, there is no reason to assume that the second and third respondents were familiar with the scheme of the PoC Act in respect of literary proceeds. There was no cogent explanation of the scheme in the material made available by the AFP to the second or third respondents and, as explained above, the erroneous and ambiguous statements in that material, if taken at face value, arguably suggested that there was an offence in respect of deriving literary proceeds.
73 For another thing, the second and third respondents issued the s 246 orders and search warrants on an urgent basis, as disclosed by the fact that the supporting affidavits were sworn in front of the second and third respondents. It is unlikely that either would have had the time to analyse the provisions of the PoC Act given the length and complexity of that legislation. In the ordinary course, both would have been relying on the AFP to explain the statutory scheme, preferably in a cogent manner in writing in the affidavit. The affidavit, as discussed, does not provide a cogent explanation of the statutory scheme for literary proceeds.
74 Moreover, insofar as oral explanations might have been given, neither of the officers who swore the affidavits, Mr Kokles and Mr Phun, have been called to give evidence in respect of what the second and third respondents were told about the PoC Act and the circumstances calling for the issue of the s 246 orders and search warrants.
75 Further, and most importantly, the second respondent issued the s 246 orders and search warrants and the third respondent issued the search warrant in terms which contain the erroneous statements - as to the existence of the reasonable suspicion and the individuals being suspects - as identified. The issue of a search warrant and a s 246 order are solemn acts issued under the hand of the individual magistrate. They authorise actions which would otherwise constitute trespass and, insofar as searches of the person are concerned, an assault. They represent serious intrusions into private and property rights of which the common law "has long been jealous" (George v Rockett (1990) 170 CLR 104 at 110). Accordingly, the orders and warrants would not have been issued lightly by the second and third respondents.
76 These circumstances make it exceedingly unlikely that the second and third respondents failed to consider the terms of what they were issuing (the first possible explanation). It is equally exceedingly unlikely that the second and third respondents considered the terms of what they were issuing and, because they knew the scheme of the PoC Act, knew also that the terms included errors involving accusing numerous people of being suspected of having committed an offence or being suspects in an investigation when there is no offence under the PoC Act, and yet dismissed those matters as "mere clerical errors" and decided to issue the orders and warrants in any event (the second possible explanation). If that was the decision-making process, then it was so unreasonable that no reasonable magistrate could have made the decisions. Yet, accepting this last proposition - attributing to the second and third respondents manifest unreasonableness - is what the AFP's submissions necessarily involve, once properly analysed. How else can it be said that the erroneous statements - such a prominent part of the s 246 orders and plainly disclosed in the search warrants - played no part in the second respondent's reasoning process, as the AFP would have it?
77 Against these extremely unlikely possibilities is the third possibility identified - that the erroneous and ambiguous statements in the AFP's material were considered by the second and third respondents as part of a proper consideration of the material as a whole and, in the circumstances of urgency and a lack of any cogent explanation in the material of how the PoC Act operated in respect of literary proceeds, led the second and third respondents to assume the AFP's statements were correct and that there thus was some offence relating to literary proceeds in the PoC Act, thereby justifying the issue of the s 246 orders and warrants.
78 While I have said it is not necessary to make a finding as to which of the three possibilities is correct because each involves legal error sufficient to quash the s 246 orders and search warrants, I have considered these matters because of the way in which the hearing proceeded. In short, the AFP was critical of the applicants for identifying the alternative ways in which they asserted there must have been legal error by the second and third respondents. What the AFP did not acknowledge was that, when analysed, its own submissions - that the second and third respondents must be taken to have considered what was before them and treated the statements in issue as "mere clerical errors" - would have the second and third respondents acting in a manner in which no reasonable magistrate could have acted (that is, by issuing solemn documents identifying people as suspected of having committed and offence and as suspects, who could not be suspects or suspected of any offence given the terms of the legislation on the basis that those statements were a "mere clerical error"). Nor did the AFP acknowledge the fact that, had the second and third respondents done exactly what they could be expected to have done in the circumstances - that is, rely on the AFP to provide cogent and accurate information about the investigation in terms of the scheme in the PoC Act - it is not at all difficult to see how and why the second and third respondents were led into error by the AFP.
79 Third, the AFP said that no evidence was placed before the second or third respondents relevant to the commission of any offence by any person other than Schapelle Corby. As discussed above, the material placed before the second and third respondents did identify that Schapelle Corby had committed an offence. However, the problem is the combination of the erroneous statements and what the material did not say. The material did not explain that the PoC Act created no offence in respect of the derivation of literary proceeds, whether by Schapelle Corby in deriving such proceeds or by another person in facilitating that derivation. The material did not explain that a literary proceeds order is not founded upon any such offence, the scheme created by the PoC Act being a civil, rather than criminal, regime. The material did not do these things in the face of statements that the recipients of the s 146 orders were reasonably suspected of having committed an offence and the individuals listed in the third condition of the search warrants were suspects the subject of the investigation. In these circumstances, the fact that the material did not identify the commission of any offence by any person other than Schapelle Corby does not support the AFP's submission that the erroneous statements played no part in the reasoning process of the second (or, for that matter, the third) respondent.
80 Fourth, the AFP said that the erroneous statement appears in each and every one of the s 246 orders and it is "highly improbable" that the second respondent was declaring himself satisfied that each recipient was reasonably suspected of committing an offence. I disagree. The submission assumes that the second respondent, despite the urgent circumstances, the errors and ambiguities in the AFP's material, and the lack of any cogent explanation in the affidavit as to how the PoC Act operated, knew that the PoC Act did not create any offence relating to the derivation of literary proceeds yet issued orders and warrants asserting that numerous people connected with the Corby family perhaps deriving literary proceeds were suspected of having committed an offence. It is that assumption which is highly improbable. What is not highly improbable is that the second respondent was misled by the AFP, albeit by innocent errors, and wrongly assumed that there was an offence relating to the derivation of literary proceeds and that those involved in facilitating that derivation, accordingly, were reasonably suspected of having committed an offence and were suspects in the investigation.
81 Fifth, the AFP said that the manner in which the s 246 orders were addressed (such as to "a named company or individual or any other employee of a specified entity") made it implausible that the second respondent was declaring himself satisfied that the recipients were reasonably suspected of having committed an offence. As the AFP put it:
It cannot seriously be suggested that the Second Respondent was purporting to be satisfied that every employee of the specified entities were reasonably suspected of having committed an offence. That, however, is the necessary consequence of the Applicant's submission.
82 This submission has to be assessed in the overall context. The references to "or any other employee" in two of the s 246 orders and to "any other resident" in another follows the identification, in capital letters, of the primary recipient of the order. In these circumstances it is not difficult to infer that the "you" in the statements of satisfaction is the person or entity appearing in capital letters at the commencement of the orders. Once that it is accepted, it is also not difficult to accept, for the reasons already given, that the second respondent was declaring that he was satisfied that each first named recipient of the orders was reasonably suspected of having committed an offence.
83 Another point should be made. The AFP, in its written and oral submissions, emphasised that the s 246 orders and search warrants should not be scrutinised "minutely and finely with an eye keenly attuned to the perception of error", citing Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6 at 272. However, and as the applicants submitted, this observation concerns the reasons for an administrative decision-maker's decision. The s 246 orders and search warrants are not the reasons for the decision. They are the instruments authorising acts that otherwise would be unlawful. Reasons may not be obtained for a decision to issue a search warrant (s 13 and Sch 2 para (e)(iii) of the ADJR Act). Moreover, the law in relation to search warrants is established in George v Rockett. In particular, "strict compliance with the statutory conditions governing the issue of search warrants" was said by the High Court to "give effect to the purpose of the legislation" (at 111), in that case the Criminal Code Act 1899 (Qld), but the same conclusion applies in the present case. Further, there is imposed on the justice issuing the search warrant a duty to be satisfied that the conditions of the issue of the warrant are fulfilled and "the warrant should express the justice's satisfaction that there are reasonable grounds for the suspicion and relief" (also at 111). Accordingly, there is no scope for the operation of the principles which inform the construction of reasons for administrative decisions in the review of a search warrant. Even if there were, the error in each of the s 246 orders is egregious and that in the search warrants only slightly less so. Neither error, to a person properly informed about the operation of the PoC Act, is to be found only by an eye keenly attuned to the perception of error.
84 For these reasons, the AFP's submission that the applicants' case is based on a false premise, being the premise that the erroneous statements in question were central to the decisions of the second and third respondent when according to the AFP those statements should be inferred to have played no part in the second and third respondent's reasoning processes, cannot be accepted. The erroneous statements must be inferred to have been a central, indeed fundamental, matter which the second and third respondents considered when deciding to exercise their discretion to issue the s 246 orders and search warrants. The exercise of the discretion thus miscarried. If it is necessary to label how it miscarried it is sufficient to say that I accept that it is possible it could have been in any one of the three ways I identified above, although I consider it most likely that the second and third respondents were simply led into error by the material the AFP placed before them and assumed a critical fact - that the PoC Act created an offence relating to the derivation of literary proceeds - when there is no such offence. In any event, as I have said, whatever possibility represents the true position, be it a failure of consideration or manifest unreasonableness or an incorrect belief as to the existence of an offence, there is material error requiring intervention. The s 246 orders and search warrants, accordingly, must be quashed.
85 To the extent it is necessary to say more about these issues by reason of particular submissions, I do so in an abbreviated form.
86 While the grounds in ss 5(1)(h) and 5(3)(b) of the ADJR Act (no evidence and decision based on fact which did not exist) are confined in their scope (Minister for Immigration and Multicultural Affairs v Rajamannikam (2002) 210 CLR 222; [2002] HCA 32 at [58]), the grounds in s 5(1)(e) (improper exercise of the power) and s 5(1)(j) (decision was otherwise contrary to law) of the ADJR Act, also pleaded by the applicants, are not so confined. Nor is the jurisdiction under s 39B of the Judiciary Act. Even if consideration is limited to the grounds in ss 5(1)(h) and 5(3)(b) of the ADJR Act, on the third possibility as to what occurred, the test in Rajamannikam at [58], that the decision would not have been made but for the finding, would be satisfied. To explain, if the second and third respondents had been misled into believing the PoC Act created an offence relating to deriving literary proceeds then, given the terms of the s 246 orders and search warrants including the erroneous statements, it should be inferred that unless satisfied the individuals were reasonably suspected of having committed the offence or were suspects in the investigation, the second and third respondent would not have made the decisions under challenge. Otherwise, the first and second possibilities engage s ss 5(1)(e) and (j) of the ADJR Act.
87 I do not accept the applicants' submission that a magistrate is precluded from taking into consideration anything not expressly stated in s 246(2) of the PoC Act in deciding whether or not to issue an order under s 246(1). That would be to ignore the discretion which exists even if the magistrate is satisfied as to the required matters in s 246(2). In terms of the exercise of discretion, the law remains that relevant and irrelevant considerations, if not expressly identified, are to be determined from the "subject-matter, scope and purpose of the Act" (Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40 at 40). I cannot see anything which would limit the discretion in s 246(2) to the matters specified in s 246(a) - (c). For this reason, the label of taking into account an irrelevant consideration is inapt. The problem is not that s 246(2) prohibited the second and third respondents from considering that the various recipients and listed individuals were suspected of having committed an offence. The problem is that, despite the assertions to the contrary in the s 246 orders and search warrants, there is no offence known to law which the various recipients and listed individuals could have committed.
88 I do not accept the AFPs submission that the s 246 orders and search warrants should not be considered together. As explained, I infer that is how the second respondent dealt with them and thus the errors in the one affected, and infected, the other. Further, the same error operated in respect of the search warrant issued by the third respondent on 18 February 2014. Although the third respondent cannot be inferred to have had the s 246 orders before him, the search warrant contained the second condition in the same terms (listing numerous individuals as suspects the subject of the investigation) which, in and of itself, gives rise to the same three possibilities of error identified above.
89 For these reasons, I consider the s 246 orders and search warrants to be affected by material legal error. The AFP did not make any submission that relief should be withheld in the exercise of discretion. Nor is any basis for withholding relief apparent. The legal errors are material, go to the heart of the decisions to issue the s 246 orders and search warrants, and the decisions infected by those errors should be quashed.
90 The other arguments which the applicants put may also be considered in an abbreviated form.