SMEC Holdings Pty Ltd v Commissioner of the Australian Federal Police [2018] FCA 827 | Case summary

The application in proceeding VID 342 of 2018 for leave to appeal to the Full Court from SMEC Holdings Pty Ltd v Commissioner of the Australian Federal Police [2018] FCA 609, being the refusal of a discovery application for search warrant affidavits, is to be heard on 17 August 2018.
The challenge to the issue of search warrants in this proceeding has been adjourned pending the Full Court hearing and determining the application for leave to appeal and any appeal.

BROMWICH J: 1 These are four related proceedings which challenge, by originating applications and statements of claim: (1) the validity of the issue of four search warrants by reason of there being insufficient material before the issuing officer to justify them being issued; (2) the validity of the search warrants on their face; and (3) the execution of the search warrants. 2 What follows are my reasons for refusing to vacate a hearing of the challenges to the validity of the search warrants on their face and to the execution of the search warrants, by reason of the challenge to the validity of the issue of the search warrants being adjourned until the Full Court of this Court hears an application for leave to appeal, and any appeal that may ensue, from my orders refusing discovery of the affidavits by which the search warrants were obtained: see SMEC Holdings Pty Ltd v Commissioner of the Australian Federal Police [2018] FCA 609 (SMEC Holdings No 1). 3 The following brief history explains how this issue arose: (1) on 19 April 2018, the search warrant challenges were set down for hearing on 15 June 2018 in Melbourne, with collateral orders made for any interlocutory applications to be heard on 27 April 2018; (2) on 27 April 2018, interlocutory applications filed by the applicants were heard for orders compelling discovery of the affidavits upon which the issue of the search warrants was based; (3) on 30 April 2018, orders were made refusing discovery of the search warrant affidavits; (4) on 4 May 2018, reasons for refusing discovery of the search warrant affidavits were published: SMEC Holdings No 1; (5) on 14 May 2018, one of the unsuccessful applicants to the interlocutory discovery applications, Mr Goodwin, applied for leave to appeal from SMEC Holdings No 1. That application has been referred to a Full Court and will be heard on 17 August 2018, including any appeal if leave is granted; (6) on 23 May 2018, the first respondent in all four proceedings, the Commissioner of the Australian Federal Police, filed interlocutory applications seeking a strike-out, or summary dismissal, of the challenge to the sufficiency of the material to justify the issue of the search warrants in all of the proceedings; (7) on 25 May 2018, my associate sent an email to the parties indicating that if the application for leave to appeal was referred to a Full Court (as subsequently happened), my preliminary view was that challenges to the validity of the search warrants on their face and to the execution of the search warrants should still be heard on 15 June 2018, but that I was open to being persuaded to a different view; (8) at the request of the parties, the matter was relisted for a case management hearing on 1 June 2018. The parties were directed to, and did, furnish one-page submissions as to why the hearing should not proceed on 15 May 2018 in accordance with the preliminary view expressed; (9) on 31 May 2018, written submissions were furnished by the applicants, by which they sought that the hearing on 15 June 2018 be vacated and the entirety of the proceedings be stood over until the Full Court's hearing and determination of Mr Goodwin's application for leave to appeal; (10) on 1 June 2018, the Commissioner furnished written submissions addressing certain other issues, but expressly did not make any submissions as to whether or not the hearing on 15 June 2018 should proceed. In particular, the Commissioner did not seek to persuade me to vacate the 15 June 2018 hearing, but also did not point to any particular reason why that should not occur, such as, for example, prejudice. 4 The written submissions in proceedings VID 340 of 2018 on behalf of the applicants, Messrs Wilcox and Findlay, were as follows: Secondly, it is not appropriate to split the hearing of the question of the validity of the search warrants between challenges to their 'face' (and 'execution') as distinct from 'issue', where the ultimate question to be determined is the fulfilment of the statutory conditions authorising their issue. The manner in which the sworn information and the terms of a warrant identify the object of a search may differ, but as stated in George v Rockett (1990) 170 CLR 104; [1990] HCA 26 at [16]-[19] it is by reference to the means of identification of the object of the search that the sufficiency of reasonable grounds for the statutory state of satisfaction must be judged. 5 The written submissions for the remaining applicants, which were prepared by counsel for Mr Goodwin and put on behalf of the remaining applicants but referred in the text only to Mr Goodwin, were as follows: 4. Mr Goodwin submits that the Court should not split the hearing of the grounds. 4.1 There will be some overlap in the arguments. The breadth of the warrants on their face is a matter that he will raise in contending that the material before the issuing officers was insufficient. 4.2 It is likely to increase costs unnecessarily to split the hearing. 6 At the case management hearing on 1 June 2018, I heard from counsel for Mr Goodwin, speaking on behalf of, or expressly or implicitly adopted by, the remaining parties, as to why the hearing on 15 June 2018 should be vacated. I decided that the hearing on 15 June 2018 should proceed, except as to the challenge to the sufficiency of material to justify the issue of the four search warrants, which it had been agreed should be stood over pending the hearing and determination of the application for leave to appeal by the Full Court and any appeal arising. Formal orders were made to that effect later that day. Counsel for the applicant in proceeding VID 341 of 2018, SMEC Holdings Pty Ltd, sought written reasons for that decision. The other applicants and the Commissioner did not express any contrary view. 7 At the 1 June 2018 case management hearing, counsel for Mr Goodwin relied upon his written submissions and further submitted orally: The matters are still proceeding to mediation on 5 June and, in my submission, it may not be conducive to those settlement discussions to have the matter part-heard on 15 June because that will require the parties to take steps to prepare for that proceeding which may have negative flow-on effects on the prospects of settlement on 5 June. 8 It was pointed out that it was not the experience of this Court that the presence of an impending hearing impeded mediated settlement of proceedings; quite the opposite. 9 No other applicant sought to put any different submission. Counsel for SMEC Holdings expressly adopted those additional oral submissions made by counsel for Mr Goodwin. 10 Counsel for Mr Goodwin accepted, in substance, that the three types of challenge are in the alternative. If the challenge to the issue of the warrants, the face of the warrants, or the entirety of the execution of the warrants succeeds, the applicants achieve their purpose. He submitted that there is a connection between the challenge to the issue of the warrants and the challenge to the face of the warrants, but accepted that success on a challenge to the issue of the warrants does not depend upon them being found to be invalid on their face. That acceptance was later qualified to suggest that "understanding the validity or appropriateness or otherwise of the breadth of the warrants, on their face, can inform the question of the sufficiency of the evidence". It was therefore submitted that it would be "more appropriate" for all of the challenge arguments to be "ventilated at the same time as opposed to almost treating the question of the validity of the warrants on their face as a preliminary question", in circumstances in which the Court had not been equipped to consider the various matters that "should be taken into account in considering whether to set down a separate or preliminary question". 11 Counsel for Mr Goodwin also accepted that if the application for leave to appeal from the decision as to discovery of the search warrant affidavits was either refused, or allowed but the appeal dismissed, there would be little left to the challenge to the issue of the warrants because the applicants needed the affidavits to be able to make any viable case. 12 The submissions to the effect that the balance of the search warrant challenges should not proceed for hearing on 15 June 2018 must be rejected for the following reasons: (1) The three categories of challenge are separate and distinct. It is incorrect to characterise hearing the challenge to the validity of the warrants on their face as constituting any separate or preliminary question to the challenge to the issue of the search warrants. No separate or preliminary question has been posed. This is more in the nature of a separation between liability and damages. (2) Even if hearing the challenges to the face of the search warrants and the challenges to the execution of those warrants was to be characterised as being somehow in the nature of a separate or preliminary question, in proceedings of this kind such a course is appropriate for the reasons that follow. (3) While it is not generally desirable to separate the different substantive challenges in this way, none of which are preliminary in nature, it is even less desirable to allow the application for leave to appeal to be sufficient reason for the entire proceedings to be put on hold for at least an additional two months, and perhaps considerably longer. If leave to appeal is granted and the ensuing appeal succeeds, there is likely to be further delay by reason of the almost inevitable claims of public interest immunity as to at least parts of the search warrant affidavits. The overall delay will then be substantial. (4) The challenge to the sufficiency of the material before the issuing officers to ground the issue of the search warrants is essentially a factual inquiry, but it is in a very narrow ambit. As SMEC Holdings No 1 indicates at [44], and the cases there cited and quoted, it is a difficult and exacting task to establish that a search warrant has been invalidly issued by reasons of insufficient material being before the issuing officer, especially given the low threshold required to be met before that can validly take place. The balance of the challenges made to the face of the search warrants and their execution should not be held up for what may turn out to be a challenge to their issue that may never proceed. (5) A challenge to the issue of a search warrant does not depend upon the warrant being valid or invalid on its face. The validity or otherwise of the warrants on their face has limited relevance to the question of the sufficiency of the evidence by which they came to be issued. In any event, if the challenges to the issue of the search warrants do proceed, that will be with the benefit of a finding as to their validity on their face. That will save time and costs in the determination of the validity of their issue. (6) The challenge to the execution of the search warrants effectively proceeds upon the basis that the search warrants are valid on their face, but have not been complied with according to their terms. If the challenge to the face of the search warrants is successful, or the challenge to the entirety of their execution is successful, then the challenge to their issue is moot unless such a decision is overturned. If such a decision is accepted, then the appeal proceedings from SMEC Holdings No 1 will not be necessary. (7) While any additional costs to be incurred by reason of separately hearing the challenge to the validity of the search warrants on their face and to their execution if SMEC Holdings No 1 is overturned and the challenge to the issue of the search warrants proceeds is regrettable, that is far from certain to occur and, in all the circumstances, is not a sufficient reason to delay the hearing on 15 June 2018. In any event, any duplication of costs is likely to be quite limited, especially as much of the ground work will have been done in addressing the other challenges. (8) It is undesirable to fracture or otherwise delay a criminal investigation any more than is absolutely necessary: see by analogy the decision of the Full Court in Chief Executive Officer of Customs v Jiang [2001] FCA 145; 111 FCR 395 at [6] to [10], and, in particular, the quote therein from Seymour v Attorney-General (Cth) (1984) 4 FCR 498 at 501 as to the reasonably obvious adverse consequences to the administration of criminal justice occasioned by delay. (9) In all the circumstances, and having regard to ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth), it is in the interests of justice that the hearing of the challenges to the validity of the search warrants on their face and to their execution proceed on 15 June 2018. No compelling reason to the contrary has been advanced. 13 For the foregoing reasons, the application to vacate the hearing on 15 June 2018 was refused. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich.

SMEC Holdings Pty Ltd v Commissioner of the Australian Federal Police

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