The Commissioner of the Australian Federal Police v Mazzco Investments Pty Ltd & Ors.

Supreme Court of NSW|2023-04-20|Before: Chen J

Introduction

Despina Mavris ('the applicant'), seeks an order, by notice of motion filed 2 September 2022, pursuant to r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW) ('the UCPR'), that the Commissioner of the Australian Federal Police ('the Commissioner' or 'the AFP') - give discovery in relation to the purpose of the AFP obtaining, or the purpose of the AFP making application to obtain, 17 production orders made in the period October 2018 to July 2019 by Local Court magistrates pursuant to s 202 of the Proceeds of Crime Act 2002 (Cth) ('the POCA').
In the alternate, the applicant relies upon ss 61 and 68 of the Civil Procedure Act 2005 (NSW) ('the CPA').
The Commissioner opposes the relief sought.

Background

The competing positions adopted by the parties - including the submissions advanced for, and against, the orders sought - and general "case management" considerations relevant to whether an order for discovery should be made necessitate some detailed reference to the background facts. They are divided into five parts. I will cover them essentially arranged by reference to the pleadings (or the applications) that have been filed, and they reflect my findings.

The summons filed by the Commissioner on 19 July 2018 (the substantive proceedings)

On 19 July 2018, the Commissioner filed a summons in this Court against four defendants: Mazzco Investments Pty Ltd, the Late Dimitrios (Jim) Mavris, Administrator of the Estate of the Late Dimitrios (Jim) Mavris, and Despina Mavris. By that summons, the Commissioner sought a number of restraining, custody and control, and forfeiture orders under the POCA over properties which were owned by Mr Mavris and/or the applicant - those properties are grouped and referred to as the 'Pyrmont Properties' and the 'Woolloomooloo Properties' (summons, pars 3-7, 15-16). The summons also sought the imposition of a pecuniary penalty order pursuant to s 116(1) of the POCA against the first to third defendants (summons, par 17).
Precipitating the filing of that summons were events occurring in May 2018. On 23 May 2018 Mr Mavris was arrested by AFP members, and on 24 May 2018 he was charged with an offence contrary to s 307.1 of the Criminal Code 1995 (Cth), being import a commercial quantity of a border controlled drug. On 25 May 2018, Mr Mavris was found dead, in an apparent hanging suicide, in his cell whilst he was on remand. At the time of his death, Mr Mavris was the sole director, secretary and shareholder of the first defendant, Mazzco Investments Pty Ltd.
On 30 May 2018, the charges against Mr Mavris were withdrawn.
As at 20 July 2018, Mazzco Investments Pty Ltd was the registered proprietor of the six Pyrmont Properties. The applicant is the registered proprietor of the two Woolloomooloo Properties.
Orders were sought against the Woolloomooloo Properties on the basis that the Commissioner suspected that they were the "property of and/or subject to the effective control" of Mr Mavris - rather than the applicant - and that the properties constituted the proceeds and/or instruments of an offence, being money laundering. Similarly, orders were sought against the Pyrmont Properties on the basis that the Commissioner suspected they were the property and/or subject to the effective control of Mazzco Investments Pty Ltd and Mr Mavris, and the proceeds and/or instruments of an offence, being money laundering.
On 19 July 2018, Schmidt J made nineteen orders pursuant to the Commissioner's summons, including restraining orders under ss 18 and 19 of the POCA in connection with the Pyrmont Properties and the Woolloomooloo Properties.
The Pyrmont Properties are the following items of real property (these properties have since, with the Commissioner's consent, been sold and the proceeds are currently restrained pending resolution of the proceedings): 1. Shop 1, 135 Murray Street, Pyrmont NSW being Lot 1 in Strata Plan 95601; 2. Unit 1, 135 Murray Street, Pyrmont, NSW being Lot 2 in Strata Plan 95601; 3. Unit 3, 135 Murray Street, Pyrmont, NSW being Lot 4 in Strata Plan 95601; 4. Unit 4, 135 Murray Street, Pyrmont, NSW being Lot 5 in Strata Plan 95601; 5. Unit 5, 135 Murray Street, Pyrmont, NSW being Lot 6 in Strata Plan 95601; and 6. Unit 6, 135 Murray Street, Pyrmont, NSW being Lot 7 in Strata Plan 95601.
The Woolloomooloo Properties are the following items of real property: 1. Unit 90, 60-70 William Street, Woolloomooloo, NSW being Lot 90 in Strata Plan 75152; and 2. Unit 91, 60-70 William Street, Woolloomooloo, NSW being Lot 91 in Strata Plan 75152.

The revocation and exclusion motion filed by the applicant on 17 August 2018

On 17 August 2018 the applicant filed a notice of motion ('the revocation and exclusion motion') seeking the following orders: 1 Pursuant to section 42(5) of the Proceeds of Crime Act 2002 (Cth), orders 3 - 7 of the orders made in the proceedings on 19 July 2018 be revoked. 2 Further or alternatively, pursuant to sections 29/31 of the Proceeds of Crime Act (Cth), the property listed in schedules 1 and 2 of the orders made in the proceedings on 19 July 2018 be excluded from the operation of the orders. 3 Set aside orders 8 - 16 made in the proceedings on 19 July 2018. 4 …
The applicant identified the grounds for revocation of the orders made in a letter dated 25 September 2018 (which was annexed to a document subsequently filed on 9 October 2018). Relevantly, those grounds are: 1. The Woolloomooloo Properties were neither property of Mr Mavris, nor were they under the effective control of Mr Mavris; 2. The Pyrmont Properties were neither property of Mr Mavris nor were they under the effective control of Mr Mavris; and 3. The applicant relies on s 42(5)(b) of the POCA, as an alternative to s 42(5)(a) of the POCA.
The revocation and exclusion motion has not yet been listed for final hearing. Nevertheless, orders were made for the service of evidence.
On 20 November 2019, the Commissioner served it is evidence in opposition to the revocation and exclusion motion.

The Amended Cross Summons filed by Ms Mavris on 31 August 2020

The applicant filed an amended cross summons on 31 August 2020 seeking declaratory and injunctive relief on the basis that the use by the Commissioner of the information gathering powers under the POCA after the commencement of the proceedings "for the sole or dominant purpose of adducing evidence in the proceedings was not authorised by the Act", or in the alternate if it was authorised, that it nevertheless constituted an excess of power and was unlawful or an abuse of process, where it had a "real risk of, or involves a tendency to interfere with, the administration of justice and the exercise of judicial power in federal jurisdiction by conferring an advantage on the Plaintiff not available under the Court's processes" (amended cross summons, relief claimed, par 1).
Two matters should presently be noted. The first is that the application for discovery is to require the Commissioner to discover material that would establish what is alleged to be the "purpose". The second is that discovery is sought in connection with seventeen production orders that occurred after the AFP commenced proceedings - commencing with the production order made on 24 October 2018 and ending with the production order made on 19 July 2019.
By the cross summons, the applicant also seeks orders restraining the plaintiff/respondent from "in any way using, or relying on, as evidence or otherwise" any documents obtained by the Commissioner by the issue of the production orders (amended cross summons, relief claimed, par 2), and that the plaintiff/respondent is required to "identify, deliver up, and then destroy" such documents (amended cross summons, relief claimed, par 3).
The amended cross summons does not have a final hearing date. It has previously been set down for hearing - on 14 October 2021 - however, it was vacated because (inter alia) the Commissioner submitted that this Court did not have jurisdiction to determine the claim other than under the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth).

The applicant's discovery motion filed 17 November 2020

By notice of motion filed 17 November 2020, the applicant sought an order that the Commissioner give discovery of, inter alia, the documents obtained by the Commissioner from third parties during the course of the proceedings, and the methods used to obtain those documents.
The applicant filed that notice of motion because, following the Commissioner serving its evidence in the revocation and exclusion motion, "it became apparent that the AFP was using its statutory information gathering powers … to gather evidence for these proceedings" (applicant's submissions filed 10 September 2021, par 41). Put simply, this inference was drawn because the Commissioner's evidence contained documents from third parties, but no subpoenas had been served by the Commissioner in the proceedings. Thereafter, the applicant pursued, by correspondence, information from the Commissioner about the material that it had secured, and the steps taken to secure it.
The discovery motion was listed for hearing on 8 April 2021, and was resolved by agreement of the parties.
By that agreement, the Commissioner agreed to: (1) produce the documents it had obtained since the summons was filed, but which were not served in November 2019 (being the date the Commissioner served his evidence in opposition to the revocation and exclusion motion); and (2) particularise the powers used to obtain those documents (applicant's submissions filed 10 September 2021, par 12).

The alleged misuse of the s 202 power

In connection with the production orders made, broadly they were directed to two classes: financial institutions and lawyers/conveyancers.
The applicant for the production orders was the same AFP officer.
Given the AFP's position (and its arguments against making the order for discovery), it is relevant to note, in written submissions that the applicant filed on 10 September 2021, the following matters were alleged: 1. On 20 November 2019, from an examination of the evidence served by the Commissioner, "it became apparent that the AFP was using his statutory information gathering powers" and that, prior to the service of his evidence, neither the applicant nor the Court were "informed that the AFP was using its statutory information gathering powers under the POCA" to obtain material for the purpose of completing his evidence (applicant's written submissions dated 10 September 2021, pars 8-9; par 35). 2. It was "now clear" to the applicant that "from the commencement of the proceedings, the AFP used his powers under s 202 of the POCA to obtain thousands of pages of documents from at least 18 third parties. It is also clear that the AFP was selective (sic) choosing from these documents what to serve as part of its evidence in November 2019 in order to expand the issues in dispute. Not all third parties were mentioned in the AFP's evidence. Further the AFP obtained documents from all firms which are potentially subject to legal professional privilege, none of which have been produced to" the applicant (applicant's written submissions dated 10 September 2021, par 13). Later it was said that, after the AFP served its evidence on the revocation and exclusion motion "it became apparent that the AFP was using its statutory information gathering powers, presumably under the POCA, to gather evidence for these proceedings" (applicant's written submissions dated 10 September 2021, par 41). 3. The applicant submitted for "the reasons that follow, the Court should declare that the use by the AFP of the power in s 202 of the POCA, after the commencement of the proceedings, for the sole or dominant purpose of adducing evidence in the proceedings was not authorised by the POCA" (applicant's written submissions dated 10 September 2021, par 16). 4. That, by letter dated 31 July 2020, the "AFP has confirmed that the information gathering powers available under the POCA were utilised to obtain documents to assist, or potentially assist, in this proceeding" (applicant's written submissions dated 10 September 2021, par 49). 5. Notwithstanding the communications between the applicant and the AFP, the applicant's position was that a discovery motion was required in order to determine which information gathering powers were used to obtain documents from third parties (applicant submissions dated 10 September 2021, par 50). Note: it is clear from what is set out in [27(2)], above, that the applicant is aware that the power utilised by the Commissioner was under s 202 of the POCA. 6. On 6 May 2021, the AFP provided the applicant with a table containing details of the requests made to, and the documents produced by, all third parties in connection with the AFP's use of the power under s 202 since the proceedings were commenced: the letter also confirmed that, apart from s 202 of the POCA, "no other information gathering powers were used under the POCA since 19 July 2018" (applicant's written submissions dated 10 September 2021, pars 56-57). 7. The applicant submitted that "the AFP's purpose was to use the production order power to obtain information for use in these proceedings in a manner that gives it an advantage beyond what is permitted to a litigant by the rules of court" and that, during the course of these proceedings, the AFP used the power in s 202 "to obtain thousands of pages of material from 25 third parties in circumstances where there was no other purpose to use the production order process other than for the sole dominant purpose of obtaining evidence to be used in these proceedings" (applicant's written submissions dated 10 September 2021, par 103). 8. The applicant submitted that the AFP used the power in s 202 "for no purpose other than to gather evidence in the proceedings before this Court" (applicant's written submissions dated 10 September 2021, par 106).

The power to order discovery

Rule 21.2 of the UCPR relevantly provides: (1) The court may order that party B must give discovery to party A of-- (a) documents within a class or classes specified in the order, or (b) one or more samples (selected in such manner as the court may specify) of documents within such a class. (2) A class of documents must not be specified in more general terms than the court considers to be justified in the circumstances. (3) Subject to subrule (2), a class of documents may be specified-- (a) by relevance to one or more facts in issue, or (b) by description of the nature of the documents and the period within which they were brought into existence, or (c) in such other manner as the court considers appropriate in the circumstances. (4) An order for discovery may not be made in respect of a document unless the document is relevant to a fact in issue.
In addition to r 21.2 of the UCPR, the applicant relied upon ss 61 and 68 of the CPA as a source of the power to make the order that is sought. Those provisions relevantly provide: 61 Directions as to practice and procedure generally (1) The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings. (2) In particular, the court may, by order, do any one or more of the following - (a) it may direct any party to proceedings to take specified steps in relation to the proceedings, (b) it may direct the parties to proceedings as to the time within which specified steps in the proceedings must be completed, (c) it may give such other directions with respect to the conduct of proceedings as it considers appropriate. (3) If a party to whom such a direction has been given fails to comply with the direction, the court may, by order, do any one or more of the following - (a) it may dismiss the proceedings, whether generally, in relation to a particular cause of action or in relation to the whole or part of a particular claim, (b) it may strike out or limit any claim made by a plaintiff, (c) it may strike out any defence filed by a defendant, and give judgment accordingly, (d) it may strike out or amend any document filed by the party, either in whole or in part, (e) it may strike out, disallow or reject any evidence that the party has adduced or seeks to adduce, (f) it may direct the party to pay the whole or part of the costs of another party, (g) it may make such other order or give such other direction as it considers appropriate. (4) Subsection (3) does not limit any other power the court may have to take action of the kind referred to in that subsection or to take any other action that the court is empowered to take in relation to a failure to comply with a direction given by the court. 68 Attendance at court and production of documents and things to court Subject to rules of court, the court may, by subpoena or otherwise, order any person to do either or both of the following - (a) to attend court to be examined as a witness, (b) to produce any document or thing to the court.
During submissions, the applicant confined its application to one under r 21.2 of the UCPR.

Further principles

Before an order for discovery is made, the Court must be satisfied that the documents of which discovery is sought are relevant to a fact in issue: rr 21.2(1) and (4) of the UCPR. A document is taken to be relevant to a fact in issue if it could, or contains material that could, "rationally affect the assessment of the probability of the existence of that fact, regardless of whether the document … would be admissible in evidence": r 21.1(2).
In Hunter New England Local Health District v Munters Pty Limited [2018] NSWSC 788 at [19], Bellew J set out a convenient summary of the principles which apply to an order for discovery. Two are of present relevance. The first is that as discovery cannot be ordered other than in connection with documents that are relevant to a fact in issue, it is "necessary to demonstrate a connection between the class of documents of which discovery is sought, and a fact or facts in issue" (at 19). The second was that "the facts in issue will be primarily identified by an examination of the pleadings" (at 19).
Although r 21.2 contains no requirement for a party seeking an order for discovery to demonstrate that an order is "necessary" - the position may be contrasted to an application for the administration of interrogatories where there is such a requirement: see r 22.1(4) of the UCPR - the parties nevertheless argued the application, at least partly, by reference to that concept. Given the order sought by the applicant is ultimately discretionary, a consideration of necessity is not unhelpful, in my view.
The concept of necessity focusses upon the need for disclosure: "the accepted test of necessity is what is reasonably necessary for the disposing fairly of the matter or necessary in the interests of a fair trial": Gerard Cassegrain & Co Pty Ltd [2011] NSWSC 241 at [23] ('Gerard Cassegrain'); Chong v Nguyen [2005] NSWSC 588 at [12]-[16]. Necessity does not mean essential, but is to be understood as referring to what was reasonably required for the achievement of a fair trial: Gerard Cassegrain at [22]; Leighton International v Hodges [2012] NSWSC 458 at [21]-[22].

Introduction

As I have earlier noted, the applicant seeks an order that the AFP give discovery in relation to the purpose of it obtaining, or the purpose of it making application to obtain, 17 production orders made by Local Court magistrates pursuant to s 202 of the POCA: discovery is sought in connection with production orders that were made after the commencement of the proceedings in this Court - that is, commencing with a production order made on 24 October 2018 and ending with the production order made on 19 July 2019. The applicant argues that this material is required, and is necessary, in order to prove the purpose for which the production orders were obtained - in line with the case the applicant seeks to make (applicant's submissions filed 17 February 2023, par 3).
I will next explain the respective cases in some more detail, in order to put the respective arguments on "necessity" into context.

The applicant's argument

The applicant submitted that the material is necessary because, although the AFP has admitted into open correspondence that "a purpose of the AFP of obtaining the production orders … was to obtain documents through that separate procedure" for use in the current proceedings, the applicant "seeks to prove as a fact that the, or the sole or dominant purpose, of the AFP obtaining the Production Orders under s 202 of the POCA" was to obtain an improper advantage and act in excess of power (applicant's submissions filed 17 February 2023, pars 3-4 (emphasis in original)).
The applicant's case (on the amended cross summons) relies upon a line of authority essentially to the effect that legislation of a similar kind, on its proper construction, will not authorise the continuation of investigations after a proceeding has been commenced and, further, relies upon authorities that are said to establish that the power to obtain documents by compulsion by statute should not be exercised for the sole or dominant purpose of gathering evidence in current proceedings.
The applicant - consistent with what was set out in her written submissions filed 10 September 2021 - contends that the production orders "were obtained for the sole or dominant purpose of gathering evidence that could be deployed in this proceeding. That inference is open on the evidence" (applicant's submissions filed 17 February 2023, par 5). However, it is said that the AFP now disputes that (albeit that he has not served any evidence in support of that position), and has adopted the position that "a purpose" of applying for the production orders was to gather evidence in the proceedings (applicant's submissions filed 17 February 2023, par 6).
Thus, the applicant essentially argues that discovery is necessary in these two ways: in line with the legal argument she wishes to advance and, relatedly, because although there is a case on the material, presently available, about what inferences can be drawn about the purpose of the AFP in pursuing production orders following the commencement of these proceedings, the AFP has squarely contested this by the service of a notice disputing facts on 30 September 2021, and presumably will adopt such a position at trial.

The AFP's argument

The AFP's general response to what is alleged by the applicant is that it was entitled to use the information gathering powers in the POCA, including that in s 202, "after these proceedings had been commenced to obtain material upon which he could rely to oppose the applicant's revocation/exclusion motion" and, furthermore, the use of such material "does not constitute an abuse of process or contempt of court and the Commissioner should not be restrained from using such material" (AFP's submissions dated 10 March 2023, par 21).
More specifically, in connection with the identification of the "issue" about purpose raised by the applicant, the AFP has argued that the use of the information gathering powers, including that in s 202, raises, consistent with the approach of Austin J in ASIC v Elm Financial Services [2004] NSWSC 859 at [34] and [44] ('Elm'), two questions: … namely the question of construction of the statutory provisions conferring investigatory power, and the question whether the use or purported use of those powers constitutes a contempt of court. His Honour's observations show that contempt of court may be an issue not only where (as in Brambles) the public authority purports to exercise the powers when, as a matter of construction, they are not available, but also where the powers are available and the question is whether their use was intended to, or would in the circumstances, interfere with the course of justice. … It seems to me, in light of these authorities, that I must consider two questions in this case: first, whether, as a matter of statutory construction, ASIC's power to employ ss 19 and 32A was extinguished once the proceeding (which is, in part, a civil penalty proceeding) was commenced, so that it would be a contempt of court for it to attempt to achieve advantages by using or threatening to use powers that are not available; and secondly, if ASIC has the power to proceed with the notices, it should be restrained from doing so because its purpose is to use its powers to obtain information for use in a proceeding to which it is a party, in a manner that will give it an advantage beyond what is permitted to a litigant by the rules of court, and therefore in contempt of court, or there is a real risk that the continuing use its powers will have that affect.
The AFP thus argues until the question of statutory construction in the amended cross summons is determined, any question, or issue about, any subjective intention of the Commissioner through his officers is not relevant to a fact in issue (AFP's submissions dated 10 March 2023, par 26). Put another way, the AFP argues that, consistent with the above authority, the first question to determine on the amended cross summons is whether the AFP was entitled to use the information gathering powers - including those in s 202 of the POCA - after proceedings have been commenced for the purpose of obtaining evidence to be used in the proceedings (AFP's submissions dated 10 March 2023, par 40). The import of this submission invites consideration of the substance of what the applicant alleges in the amended cross summons, as well as a discretionary consideration relating to the timing of the order.
The AFP submits, in those circumstances, that the documents sought in the applicant's discovery motion are not relevant to any fact in issue in the proceedings (AFP's submissions dated 10 March 2023, par 64).

Discussion and consideration

The foundation of the applicant's legal argument, as explained during the hearing by Mr McInerney SC, derives from what was said by Austin J in Elm at [44] (set out above) and [77], which is in the following terms: The evidence before me does not support a finding that ASIC wishes to continue its investigations for the dominant purpose of gathering evidence to be used against the defendants in the proceeding. It does not support a finding that ASIC wishes to continue with the investigation for any purpose of gaining an advantage in respect of the proceeding that would not be available to it under the rules of court. When I speak of "dominant purpose" I have in mind both the idea of "initiating and abiding purpose" (Flanagan v Commissioner of Australian Federal Police (1996) 60 FCR 149, 203), and the idea of a substantial purpose in the sense that the decision to continue the investigation and issue the notices would not have been made but for its presence (Warringah Shire Council v Pittwater Provisional Council (1992) 26 NSWLR 491, 509).
In that case, Austin J appears to have accepted that there may have been a contempt of court if a statutory power had been exercised for the dominant purpose of gathering evidence to be used against the defendants in the proceeding, in a manner that would give it an advantage beyond what is permitted to a litigant by the rules of court.
That approach was followed in Authorised Officer Christine Tumney (NSW Food Authority) v Nutricia Australia Pty Limited [2007] NSWSC 1215 at [90] ('Nutricia'). In that case, James J, after referring to the analysis undertaken by Austin J in Elm (to which reference has been made), said the following: I consider that I should accept that, if a statutory power conferred in general terms is sought to be exercised by a party to pending court proceedings for the sole purpose or a dominant purpose of obtaining evidence to be used in the pending proceedings and in such a way as to obtain an advantage which could not be obtained under the procedural rules of the court in which the proceedings are pending, then there would be a contempt of the court in which the proceedings are pending; and, if the statutory power is conferred only in general terms and does not clearly authorise such an exercise, the statutory power will be construed so as not to authorise such a purported exercise of the power. Alternatively, such a purported exercise of the statutory power will amount to a contempt or an abuse of process, which the court in which the proceedings have been brought will restrain or, at least, not facilitate.
Mr McInerney SC also drew attention to, and relied upon, NSW Food Authority v Nutricia Australia Pty Ltd (2008) 72 NSWLR 456; [2008] NSWCCA 252 at [88]-[92] and [195]-[198] which was submitted to be essentially to the same effect, and supportive of the applicant's principal contention on the amended cross summons.
The applicant accepted, as the AFP has argued, that a question raised on the amended cross summons is whether the AFP is entitled to use the information gathering powers in Chapter 3 of the POCA after the commencement of these proceedings for the purpose of obtaining evidence to be used in those proceedings. Nevertheless, the applicant argued that, there is a further issue raised for determination (essentially, an implied limitation on the power in s 202): namely, that s 202 does not authorise the seeking of a production order, following the commencement of proceedings, for the sole or dominant purpose of obtaining material to assist in the proceeding where the production order has the effect of giving the AFP an unfair advantage not available to it by the normal procedures of the Court.
Although the AFP was dismissive of this argument, it nevertheless argued that it was inappropriate for the constructional question raised to be determined on this application.
Mr McInerney SC submitted that in those circumstances - having regard to the principles in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 128-129; [1964] HCA 69 - the applicant's argument should be assessed as being sufficiently arguable based upon the evidence (essentially, the filing of the summons in this Court and the dates of the production orders made after that time) and the authorities to which reference has been made. I accept that submission: I am satisfied, in an appropriately preliminary way, of the viability of that argument for the purposes of the present application. I am also satisfied that the issue that is argued by the applicant is clearly raised as an issue on the amended cross summons and explained in the written submissions the applicant filed on 10 September 2021 to which reference has been made; indeed, at least to a degree, the AFP's submissions assume as much.
To the extent that the AFP submitted that the issue raised by the applicant could not arise as an issue in the proceedings unless and until the Court resolved the question favourably to the applicant, I do not accept that could possibly be so: the assessment of "necessity" is determined by what is alleged in the pleadings, not by reference to what the Court - ultimately - determines: see the authorities referred to in [34]-[36], above.
The AFP next argued that, in any event, the order for discovery should be refused because the applicant had not demonstrated that the order was "necessary" in an evidential sense. The argument advanced was that par 6.9, of the affidavit of Alexander Drummond sworn 24 October 2018 was sufficient to demonstrate whatever purpose the applicant desired to prove. That affidavit was prepared in support of the application for production orders directed to the six entities referred to in pars 1(a)(i)-(vi) of the applicant's notice of motion - orders that were made on 24 October 2018.
The affidavit, after noting the restraining orders made by Schmidt J on 20 July 2018 in connection with the Woolloomooloo Properties and Pyrmont Properties, then stated the following: The property tracking documents requested herein, will provide evidence as to the unlawful accumulation of wealth by MAVRIS in support of the ultimate forfeiture of property restrained in the orders made by Justice Schmidt.
The AFP also drew attention to an identically worded paragraph (par 6.9) contained in the affidavit of Alexander Drummond sworn 22 November 2018.
I do not accept the AFP's submission. If it were the case that that material demonstrated the purpose the applicant desired to prove, then it is difficult to understand why the AFP has served a Notice Disputing Facts in the terms that it did. Furthermore, it is difficult to understand why the AFP has couched its correspondence in the measured way that it has. For example, when serving the Notice Disputing Facts, the AFP, in a letter dated 30 September 2021, said: "For completeness, we confirm that the Commissioner accepts that a purpose of applying for the production orders ultimately issued to the entities listed in the Notice to Admit Facts dated 17 September 2021 was to gather evidence in the proceedings" (underlining added). Again, if that evidence were decisive of the issue that the applicant desires to prove, then it is difficult to understand why it would not be admitted. To that end, when this issue was the subject of submissions, Mr Moses SC argued that the evidence referred to in par 6.9 of the affidavits of Alexander Drummond, had the effect that the "legal necessity to get this material" (T27.30) was absent (T32.15 and 32.31): Now, having said that, your Honour, in terms of trying to deal with this on a pragmatic basis, paragraph 6.9 of the affidavits that your Honour has referred to, I mean, I put this submission your Honour, would be sufficient as a matter of law, in order for there to be a submission put by the applicant that the dominant purpose in obtaining the orders is the ruling prevailing almost influential purpose, was the purpose of obtaining evidence for the purpose of the proceedings. … I think what I can say is that if the position is put by the application on the motion that the most influential purpose in obtaining the orders under s 202 is to gather evidence for the purposes of these proceedings, then that is not something that would be in dispute on the argument to be had in respect of their amended cross‑summons.
I accept, of course, that is not incumbent upon the AFP to concede this issue. In my view, however, the matters that I have referred to stand against accepting the AFP's submissions that the applicant had no "need" for these documents. In any event, ultimately the manner in which the applicant desires to prove this issue is for the forensic judgment of the applicant, and her legal representatives. The applicant is not obliged to accept, particularly given the Notice Disputing Facts that the AFP has served, and the correspondence that the AFP has sent, the limited form of concession that was made during the course of the hearing.
In my view, there is the required "connection" between the class of documents of which discovery is sought, and a fact in issue. Further, the documents would, I am satisfied, be reasonably required for the achievement of a fair trial.

Discretionary matters

The AFP argued that the application should be refused because, at least as a matter of practice, the applicant should have pursued access to this material by subpoenas or notices to produce, and the fact that the applicant did not do so told against the making of the order. I do not accept that submission.
I accept that, generally speaking, steps should be taken to acquire the material in the way that the AFP submitted: Commonwealth Bank of Australia v Goater [2016] NSWSC 710 at [31]. In this case, however, I do not think the fact they were not, is disentitling. That is for the following reasons: 1. First, I have no doubt, as Mr McInerney SC submitted, that if a notice to produce (or subpoena) issued for the production of material that is sought by way of discovery, the AFP would inevitably have opposed production on the very same grounds (or substantially the same grounds) taken here. 2. Secondly, the applicant has, at least, tried to shortcut the necessity for any form of production of material by seeking an admission from the AFP in connection with this issue. The applicant did this by serving a Notice to Admit Facts dated 17 September 2021 - but the AFP disputed that issue by serving a Notice Disputing Facts dated 30 September 2021. 3. Thirdly, given the parties had previously agreed upon orders for discovery that resolved the applicant's earlier application for discovery, recorded in a document described as: 'Heads of Agreement' dated 8 April 2021, it is difficult to see why, at this point, the applicant should be refused relief in adopting a similar course to securing access to material. That is particularly so in circumstances where, as part of the resolution of that earlier application, the Court noted: "The [applicant] is not precluded from filing any further motion for discovery on similar or identical terms to the notice of motion filed on 17 November 2020 in these proceedings". Although, of course, the present motion for discovery is not "on similar or identical terms" to the earlier discovery application, what it emphasises, in my view, is that the parties had in their contemplation that the applicant might pursue further applications for discovery, including further applications in connection with the subject matter of the earlier discovery application.
It is, of course, important to have regard to the burden and cost of providing discovery. The applicant argued that as the AFP did not put on any evidence directed to establishing that providing discovery would be unduly burdensome or costly, and having regard to the fact that the applicant for the production orders was the same AFP officer on each occasion, it should be inferred that any order for discovery would not be unduly burdensome or costly. Although no evidence was directed to this issue by the AFP, nor any submissions made about it, it remains an important consideration under ss 56-58 of the CPA. As was pointed out in Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264 at [101], that is because: [d]iscovery (and its uncontrolled use) always contains (and contain) the risk of abuse and oppression. Discovery can be a highly expensive exercise … Even when all parties are well resourced, over-enthusiastic and unnecessary use of discovery impedes the due administration of justice and undermines confidence in the court system's ability to resolve disputes justly, quickly and cheaply …
Given that the conclusion that I have reached, it is necessary to return to this consideration later in these reasons.
The applicant also argued that, as the AFP made no submissions about the form of the orders proposed by the applicant, it should be accepted that they are not unnecessarily wide or otherwise expressed in more general terms than is justified in the circumstances (r 21.2(2) of the UCPR). Again, that may well be because the applicant for the production orders was the same AFP officer on each occasion. In those circumstances it is unnecessary to dwell upon this further. I am prepared to accept, in the absence of submissions to the contrary, that there is no particular issue about the breadth or form of the orders the applicant seeks in the notice of motion.
The AFP, during submissions, raised a suggestion that by making an order for discovery there "then is potentially a collateral attack being made in relation to the orders made by the judicial officers, who made the orders based on material that was before them. That's in effect, going behind the material that was there" (T32.8). My attention was not drawn to any authorities on this issue, and the submission was not developed, nor referred to in the written submissions. (There is a question about whether this is the correct characterisation of what the applicant seeks to do, which is unnecessary to resolve).
The principles relating to the confined manner in which the validity of a warrant may be permissibly challenged (the challenge is confined to what is disclosed on the face of the warrant itself) are well-established. The authorities are reviewed, and the principles discussed and identified, in Gould v Director of Public Prosecutions (Cth) (2018) 359 ALR 142; [2018] NSWCCA 109 at [33]-[52] ('Gould'). It is also the case that these principles are of general application, "relevant to collateral review of statutory warrants generally": R v Cranston (No 3) [2020] NSWSC 1103 at [28]. Nevertheless, the application of those principles to the exercise of the power under s 202 I would not, in the absence of full submissions, regard as axiomatic. Furthermore, there is a large question, not the subject of submissions, about whether, in substance, the applicant's position is of the kind discussed in Gould at [54] and [56]. In the circumstances, I am not prepared to hold that the discovery application is itself seeking to mount an impermissible attack on the production orders.
Although I have accepted that discovery is necessary, I am reluctant to make an order at the present time. I will explain why.
The proceedings have been long delayed. As I have earlier noted, the summons was filed by the Commissioner nearly five years ago. Having regard to the history of the matter, and the nature of the "construction issue" raised in the amended cross summons, there is a recognisable prospect that this process might itself be entirely unnecessary and be productive of unnecessary cost and further delay. (The evidence before me establishes that there has been an extensive and protracted dispute in connection with, and following, the earlier discovery motion - and indeed that was said to account for at least some of the delay in the progress of the matters). The mandatory considerations in ss 56-58 of the CPA loom large in the resolution of this application, in my view.
As the AFP submitted, the essential question raised by ground 1 of the amended cross summons is a question of statutory construction. That characterisation remains notwithstanding the applicant's "implied limitation" argument. As Mr Moses SC essentially put during argument, the determination of the legal question raised by the amended cross summons is critical in a number of ways: if the AFP is correct, then none of the discovered material would be relevant and it was only if the Court reached a contrary view could be it then be so. Mr Moses SC also submitted that, in practical terms, the determination of that issue was critical because the parties would be obliged to prepare potentially quite significant amounts of evidence to deal with an issue that simply may not arise, and in doing so occupy, unnecessarily, court time and involve great expense for both parties. Also, it may be necessary for, depending upon the outcome, one or other party seeking to prove issues in their case by reference to material that was not sourced to the production orders.
In my view, there is considerable force in these submissions. But having been raised, the only mechanism to give effect to them is to order that the constructional question raised (essentially, ground 1 of the amended cross summons) be separately tried, and in advance of any hearing of the revocation and exclusion motion and the substantive proceedings. Yet no party has, to this point, sought to have the matter progress in this way; indeed, as I have earlier noted, the amended cross summons was listed for hearing, but adjourned, on an earlier occasion. Nevertheless, Mr Moses SC indicated that if the applicant persisted in her application and to have all issues decided in the one hearing, then he would wish to seek instructions about making such application (T25.35).
There is a well-established reluctance to order that issues be separately determined, quite often because it is thought that the proposed separate determination may well not yield the advantage of saving time and cost: Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 at [168]-[170]. Nevertheless, I am, at least based upon the submissions received so far, sufficiently satisfied - albeit in a preliminary way only - that these issues can be separately determined and that in doing so it would avoid significant additional expense and further delay. In my view, having that issue separately determined would promote and facilitate the just resolution of the dispute as quickly, inexpensively and efficiently as possible, and it would be antithetical to the overriding purpose (s 56), the management of the matter having regard to the overriding purpose (s 57) and the dictates of justice (s 58) for the parties not to be given an opportunity to seek an order for separate determination under r 28.2 of the UCPR.
To sum up: although I am satisfied that an order for discovery is necessary, I am presently yet to be satisfied about the timing of any order. In those circumstances I propose to direct that any application be made for a separate determination be filed and served within 21 days, failing which I will make the orders sought.

Orders

For the above reasons, I make the following orders: 1. Order that any application for a separate determination be filed and served by 17 May 2023. 2. List the matter, including the current notice of motion and any application for separate determination, for directions before Chen J on 19 May 2023.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 April 2023

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