Ange v Kraus

[2008] NSWSC 86

CITATION:	Ange v Kraus [2008] NSWSC 86 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	29 November 2007
JUDGMENT DATE :	15 February 2008
JUDGMENT OF:	Fullerton J
DECISION:	(1) The relief sought by summons is refused. (2) The first and second plaintiffs are to pay the first defendant’s costs.
CATCHWORDS:	Search warrants - Validity - Night warrants - Validity of seizure - Summons under s 56(2) of the Classification (Publications, Films and Computer Games) Enforcement Act 1995 - Forfeiture - Obligation to report
LEGISLATION CITED:	Classification (Publications, Films and Computer Games) Enforcement Act 1995 Law Enforcement (Powers and Responsibilities) Act 2002 Search Warrants Act 1985
CASES CITED:	Ballis v Randall [2007] NSWSC 422 Way Out West Adult Shop Pty Ltd v Senior Constable Phillip Kraus & Ors [2008] NSWSC 87
PARTIES:	Mimi Ange (First plaintiff) Con Ange (Second plaintiff) Kevin Monaghan (Third plaintiff) Senior Constable Philip Kraus (First defendant) Peter Shiels (Second defendant) Ian McRae LCM (Third defendant)
FILE NUMBER(S):	SC SC 2007/30036
COUNSEL:	G Thomas (Plaintiffs) G Craddock SC (First defendant)
SOLICITORS:	Malcolm McDonald and Co (Plaintiffs) Crown Solicitor's Office (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

FULLERTON J

15 FEBRUARY 2008

2007/30036 MIMI ANGE & ORS v SENIOR CONSTABLE PHILIP KRAUS & ORS

JUDGMENT

HER HONOUR:

1 By an amended summons filed on 19 June 2007 the plaintiffs seek declaratory relief with respect to a search warrant executed over premises located at 1/437 High Street Penrith.

2 As at 20 July 2005 the premises were the subject of a commercial lease to the first plaintiff and her husband, the second plaintiff. The plaintiffs operated a business from premises known as “Everything Adult”. The third plaintiff was employed by the business to manage its retail operations.

3 The premises comprised a retail shop where pornographic DVDs and videos were displayed and available for sale or hire to the public. The shop also sold sex toys and other accessories. It was not in dispute that a storeroom associated with the leased premises and used to store excess stock of various kinds was susceptible to being searched under the authority of the warrant.

4 On 19 July 2005, the first defendant, Senior Constable Kraus, applied for and was granted a search warrant pursuant to s 55 of the Classification (Publications, Films and Computer Games) Enforcement Act 1995 (“the Classification Act”) to search the premises. Section 55(3) of that Act invoked the provisions of Part 3 of the Search Warrants Act 1985 (since repealed). Part 3 of the Search Warrants Act provided a statutory scheme for the issue and execution of search warrants. The Law Enforcement (Powers and Responsibilities) Act 2002, which repealed the Search Warrants Act, and which enacted similar provisions, did not come into operation until 1 December 2005.

5 On 20 July 2005, police executed the warrant and seized what are described as thousands of DVDs and VHS films that were, or appeared to be offered for sale, or kept for the purposes of sale, contrary to Part 2 of the Classification Act, because they either did not display any classification markings or were classified X18+ or RC (refused classification).

6 The amended summons seeks declaratory relief of various kinds however, as Mr Thomas developed his submissions on the plaintiffs’ behalf, the range of relief sought narrowed considerably. In the result, the challenge to the issue of the warrant was limited to a claim that it was endorsed for execution by night contrary to the provisions of s 19 of the Search Warrants Act, and that this invalidated the warrant at the point of issue. The challenge to the execution of the warrant was limited to the validity of the seizure of some only of the VHS films in the storeroom associated with the premises on the basis that this particular material was designated to be returned to the supplier and, accordingly, was not being kept or offered for the purposes of sale as proscribed in Part 2 of the Classification Act.

7 There was an additional challenge to the validity of a summons issued to the plaintiffs under s 56(2) of the Classification Act to show cause why the material seized under the warrant should not be forfeited to the Crown. It is the plaintiffs’ case that there is no evidence that the summons issued consequent upon the police reporting the results of the seizure to a Magistrate as provided for under s 56(1)(b) of the Classification Act. In the alternative, if the summons issued at the Magistrate’s direction it was issued without jurisdiction as the police failed to comply with their statutory reporting obligations under Part 7 of the Classification Act to report the seizure to a Magistrate within the meaning of s 56(1)(b) of the Classification Act. They claimed to be entitled to a declaration that the summons was issued contrary to the Classification Act and an order that it be set aside and the items seized be returned to the premises as provided for in s 56(1).

8 Submitting appearances were filed by the authorised officer who issued the warrant and the Magistrate to whom the police reported as provided for under Part 7 of the Classification Act and under whose authority the summons to show cause was issued.

The proceedings in this Court

9 The evidence before me comprised affidavits from the first plaintiff and the first and second defendants, respectively the police officer in charge of the investigation and the police officer who applied for and executed the warrant. An affidavit from Ms Gahan, a deputy Registrar at the Penrith Local Court, was also relied upon by the defendants. Penrith Local Court was the Court to which the report under s 56 of the Classification Act was sent for the attention of a Magistrate as provided for in s 55(1)(b). The affidavits from the first and second defendants variously had exhibited to them the application for the search warrant and the warrant itself, together with various documents generated in the course of the warrant being executed. The report that was purportedly prepared and forwarded to Penrith Local Court in accordance with s 56 of the Classification Act was also exhibited. A videotape of the search was tendered, however I was only asked to view that portion of it which concerned the search of the storeroom since it was only this aspect of the process of execution that was contentious.

10 The second plaintiff, Mr Con Ange, was cross-examined by Mr Craddock SC for the defendants. The first and second defendants and Ms Gahan were cross-examined by Mr Thomas. From the evidence the following facts are established.

The warrant is applied for

11 On 30 June 2005, Senior Constable Philip Kraus went to the plaintiffs’ premises in plain clothes. He followed signs displaying the words, “Everything Adult”, on the door at street level, above the door and hanging above the footpath. As he entered the shop he saw what he described as several thousand films in either DVD or VHS format on display. The films were displayed both on walls lined with shelving and stands on the floor area. He also observed viewing booths on opposite sides of the shop and, through an open door, an adjacent room where VHS films were on display. He noted that none of the VHS or DVD films either for sale or exchange seemed to bear an official classification sticker from the Office of Film and Literature Classification. He also noted that some showed an unofficial “X” or “XXX” on the covers.

12 On 15 July 2005, Senior Constable Kraus returned to the plaintiffs’ premises. On that occasion he recorded a number of titles of films for sale or exchange which he later confirmed, by reference to the online classification database of the Office of Film and Literature Classification, to be either “X 18+” or unclassified film products.

13 On 19 July 2005, he prepared an application for a search warrant, a draft search warrant and an occupier’s notice in respect of the plaintiffs’ premises. Later that day, together with Senior Constable Sperotto, he attended the registry of the Penrith Local Court where the application for an issue of the search warrant was made in accordance with s 55 of the Classification Act.

14 The application recited the fact that Senior Constable Kraus had attended the premises on both 30 June 2005 and 15 July 2005 and the observations he made on those occasions. In the application he sought the power under warrant to seize and retain any films in any format that appeared to be classified “X18+”, “RC”, or unclassified and their packaging, whether the films were exhibited on display or appeared to be kept for the purposes of sale on stands, behind the counter, or any other storage area, receptacle, or room on the premises.

The warrant is granted

15 The warrant was issued by Registrar Shiels on the afternoon of 19 July 2005 and was noted as due to expire at 2:45pm on 22 July 2005. The warrant recited the fact that the police officers were authorised to enter the plaintiffs’ premises between the hours of 6:00am and midnight and to seize and retain any films of the kind to which Senior Constable Kraus directed attention in his application. Senior Constable Sperotto gave evidence that while he did not recall either himself or Senior Constable Kraus informing the Registrar that the cataloguing of items may take an extended time because of their great number and that for that reason a night warrant should be granted, he did recall that there was general conversation about the time it would likely take to book and package the items. It is clear, however, from Registrar Shiels’ handwritten record of the application that by reason of the extensive number of items likely to be seized he was satisfied that the execution of the warrant might take some considerable time, particularly by reference to what he refers to as a need to “catalogue and complete” and that it was for this reason that he endorsed the warrant for execution between the hours of 6:00am and midnight (thereby extending the time frame provided for in section 19 of the Search Warrants Act by three hours).

16 On 20 July 2005 at around 9:00am, Senior Constable Sperotto attended the Penrith police station where Senior Constable Kraus conducted a briefing with police in relation to executing the search warrant over the plaintiffs’ premises. The briefing also concerned a warrant scheduled to be executed that same day over other premises which also operated as an adult sex shop at 438 High Street, Penrith. The business operating from those premises was known as “Way Out West”.

The premises are searched

17 At around 9:30am, Senior Constable Sperotto together with six named police officers, attended the plaintiffs’ premises for the purpose of executing the warrant. Senior Constable Sperotto’s role, as the officer in whose name the warrant was issued, was to complete the formalities of execution, inclusive of explaining the search warrant to those in occupation, and supervising police as the search was undertaken. It does not appear to be a matter of any controversy in the proceedings before me that the great bulk of film, whether in VHS or DVD format, was offered for sale or exchange contrary to Part 2 of the Classification Act.

18 The evidence makes it abundantly clear that it was the intention of the searching officers to systematically move through the various parts of the retail premises and take from the shelves or stands only those films which fell within the ambit of the warrant. This is reflected in the way in which the property seizure/exhibit forms were originally prepared in that between about 10:15am and 10:58am almost 184 separately titled films were seized from what is described as room one and were individually listed. At about 11:00 am the system changed such that individual videos (or DVDs) in room one or the main room were counted and then boxed and labelled with a police number from AA2 through to AA59. Each of those boxes was identified as containing “unclassified videos”. The total number of videos in each box was something in the order of about 105. The same cataloguing system for boxes BB1 through to BB74 was then adopted for the balance of the search. In respect of those boxes which contained “unclassified” DVDs, the total of DVD cases was around 270 per box. A greater or lesser number of DVDs were packed into boxes when retrieved from various locations around the counter area.

19 At 7:10pm the search of the storeroom commenced. By reference to the property seizure exhibit forms, box number AA60 through to AA101 comprised the boxes of films seized from the storeroom area. Some of these boxes were marked “Not Ordered – Returned to Canberra”. These boxes are the subject of the plaintiffs’ challenge to the execution of the warrant, it being submitted that by that nomination these boxes neither were nor appeared to be kept for the purposes of sale or kept in any other storage area, receptacle, or room on the premises for that purpose.

20 The search concluded at 9:10pm. The boxes of seized films were loaded into a truck and entered as exhibits at the Springwood police station. Senior Constable Kraus gave evidence that the boxes and their contents (including the boxes marked “Not Ordered – Returned to Canberra”) remain in the condition in which they were seized.

Reports after search

21 On 28 July 2005, Senior Constable Kraus prepared a report for Registrar Shiels pursuant to his obligations under s 21 of the Search Warrants Act. In that report he detailed the fact that:

“Thousands of VHS and DVD films seized (see attached receipt forms), all of which seem to breach the mentioned (sic) legislation, being either Rated X 18+, or Unclassified, many of which would be Refused Classification. (He went on to advise the Registrar that) films are being classified prior to summons being laid and … the Adult Industry Copyright Organisation are also to view the material for possible breaches of copyright.”

22 On 18 October 2005, having taken a sample of six films (three in VHS format and three in DVD format) from differently numbered boxes of items seized from the counter area, the main area and the store room of the plaintiffs’ premises, Senior Constable Kraus prepared a report for the purposes of invoking the operation of s 56(1)(b) of the Classification Act and inviting a Magistrate to issue a summons to show cause under s 56(2) why the items seized should not be forfeited to the Crown.

23 The report is addressed to Magistrate McRae and is headed “Report of seizure of Property from Search Warrant 05/77, executed 20 July, 2005 at Everything Adult, 1/437 High St, Penrith”. It is further identified as being drawn in accordance with s 56(1)(b) of the Classification Act, that a summons (to show cause) is requested in accordance with s 56(2) of the Act and that police will ultimately seek an order for forfeiture of the items seized in accordance with s 56(3) and s 56(4). It recited the fact that police executed a warrant at the nominated premises in relation to suspected breaches of the Classification Act and that “thousands of films (DVD, VHS and CD format) and their covers were seized…“. It also directed the Magistrate to what is described as a ‘Report to Magistrate (attached) of the Search Warrant for full listing of the property’. The evidence reveals that this later report was in fact a reference to the report under s 21 of the Search Warrants Act made to Registrar Shiels at Penrith Local Court on 28 July 2005 in his capacity as the authorised justice who issued the search warrant. I am satisfied that this report had annexed to it the property seizure records prepared as part of the execution process. While this document was in evidence before me, it did not form part of the documents sent by fax to Penrith Local Court on 18 October 2005 and so did not in that sense form part of the report under the Classification Act.

24 On the same day that the report was forwarded by facsimile transmission to Julia Gahan, the Registrar of Penrith Local Court, for the attention of Magistrate McRae, a report drawn in substantially the same terms, but in respect of the premises from which Way Out West Pty Ltd was operating, was also forwarded to Magistrate McRae for his attention. The reports were forwarded under the same fax header sheet. It contained the following message:

“Hi Julia, Attached as discussed. Perhaps could you ensure that Mr MCRAE receives it today and is ‘date stamped’ with todays date.
Thanks,
Phil KRAUS”

25 This is consistent with Senior Constable Kraus’ evidence that he forwarded the reports after first speaking with Ms Gahan and alerting her to the fact that what he described as ‘the report for classification purposes’ was due to be sent by facsimile transmission. Ms Gahan gave evidence that upon receipt of the fax from Senior Constable Kraus, she placed the documentation, together with a copy of the relevant legislation in loose form, in Magistrate McRae’s in-tray for his attention and adjudication. She also recalled that either on that day or some time later she informed the Magistrate that she had put something in his tray with legislation attached.

26 The evidence is silent as to when the report the subject of these proceedings came to Magistrate McRae’s attention and what, if any, adjudication or direction he gave upon its receipt. This is to be contrasted with the report in respect of the warrant executed at the premises of Way Out West Pty Ltd which bears the Magistrate’s handwritten notation in the following terms:

“I direct that a summons be issued pursuant to s 56(2) to show cause
signature 26/10/05.”

27 In March 2006, the Penrith Local Court Registry issued an application notice for an order disposing of seized goods under the Search Warrants Act 1985. This application was later withdrawn, it apparently having been drawn to the attention of the prosecuting authorities that this was not the summons to show cause sought by Senior Constable Kraus on forwarding the report under s 56(1)(b) of the Classification Act.

28 In October 2006, Senior Constable Kraus again requested the Penrith Local Court Registry to issue a summons and, on 12 October 2006, a summons to show cause issued against each of the plaintiffs.

Was the warrant validly issued?

29 Section 19 of the Search Warrants Act provides:

“(1) A search warrant may be executed by day, but shall not be executed by night unless the authorised officer, by the warrant, authorises its execution by night.

(1A) An authorised officer is not to authorise the execution of a warrant by night unless satisfied that there are reasonable grounds for doing so. Those grounds include (but are not limited to) the following:
(a) the execution of the warrant by day is unlikely to be successful because, for example, it is issued to search for a thing that is likely to be on the premises only at night or other relevant circumstances will only exist at night,
(b) there is likely to be less risk to the safety of any person if it is executed by night,
(c) an occupier is likely to be on the premises only at night to allow entry without the use of force.
(3) In this section:
"by day" means during the period between 6 am and 9 pm on any day.
"by night" means during the period between 9 pm on any day and 6 am on the following day.”

30 The plaintiffs complained that in issuing the night warrant, Registrar Shiels’ discretion under s 19 miscarried because he did not have sufficient information before him in the written application prepared by Senior Constable Kraus to authorise its execution other than by day. I am not satisfied that this challenge has been made out. While there is a requirement that the application for a search warrant, other than a telephone warrant, conform with the requirements of Division 3 of the Search Warrants Act (see in that regard s 11 of the Act which provides that an application must be in writing and made by the applicant in person, together with a further requirement in s 13 that the authorised justice records the proceedings before issuing the warrant), there is nothing in the Act that prevented the authorised justice from endorsing the warrant for execution by night under s 19 unless the application for so doing is in writing. Moreover, there is nothing in s 19 which provided that the basis for the issue of the night warrant must be raised by police, as distinct from something the authorised justice arrives at either independently or in consultation with police when the application is being considered. What is essential is that the authorised justice is satisfied that there are reasonable grounds for endorsing the warrant for execution by night.

31 I am satisfied on the evidence that there was an entirely proper exchange between the police and the Registrar when the warrant was applied for as to whether the time between 6am and 9pm would be sufficient to execute the warrant, in circumstances where he was told that thousands of films were likely to be seized and where it was thought that the cataloguing of the items individually might take an extended time. These concerns provided an entirely sustainable and sensible basis for the Registrar to extend the time for execution as a precaution against the need for police to leave the premises at 9pm and resume the searching the following day, or to seek an extension of time within which to complete the task.

32 The fact that the police completed the task of executing the warrant at 9:10pm and departed soon thereafter is wholly irrelevant to the plaintiffs’ challenge to the issue of the warrant. It is equally irrelevant to any challenge the plaintiffs make to the execution process that the system of cataloguing the items changed in the course of the warrant being executed when it was fully appreciated that it was not practical to list each film individually due to the vast number of items that were to be seized. The system adopted in substitution, namely the packing of a specific number of films in sequentially numbered and marked boxes which were then recorded by number and generically described was a logical and practical alternative. No case has been made out that this system was otherwise than in compliance with the general obligation of police to identify with reasonable particularity the property that it seized under a search warrant, or that it failed to meet any additional requirements that may attach to a warrant issued pursuant to s 55 of the Classification Act in circumstances where a report may be made to a Magistrate under s 56 of the Act.

Was the warrant validly executed?

33 The plaintiffs submitted that there was no justification for the police to seize those of the boxes in the storeroom that were marked “Not Ordered – Returned to Canberra”. They sought an order that those boxes and their contents be returned. I have already dealt with the complaints the plaintiffs make about the process by which the items seized were identified and documented. The plaintiffs advanced no challenge to any other aspect of the process by which the warrant was executed. I am not satisfied that this ground, even in its limited terms, has been made out. Were it not for the practical concession by the defendant in the course of the proceedings that the challenge to the execution of the warrant can be severed from the other relief the plaintiff sought under summons without fragmenting the criminal process, I would have likely refused to have considered the argument at all.

34 That not being the case, I propose to rule upon it. This should not be taken as any encouragement to others minded to take a collateral challenge to the execution of a warrant because of some perceived dissatisfaction with the way it was executed, whether or not that be in part only or affecting one category of item seized, as is the case here. The proper forum for a challenge of that kind is in the substantive proceedings. In other than those cases where it can be shown to be appropriate (see Ballis v Randall [2007] NSWSC 422 at [73]) this Court is entitled to refuse to exercise its discretion to entertain an action which will have the effect of fragmenting the criminal process.

35 The terms of the warrant permitted police to seize what appeared to be items of the given description, and which appeared to be kept for the purposes of sale on stands, behind the counter, or any other storage area, receptacle, or room on the premises. Whatever may ultimately be the case the plaintiffs bring concerning these boxes and the reason for them being marked and stored as they were in the proceedings pending in the Local Court, the question before me is simply whether there was a proper basis for the police to seize them at all. The plaintiffs have failed to persuade me that there was not. Senior Constable Kraus gave evidence that he made the comparison between the labelling on the spine of some of the videos and DVDs in the boxes apparently marked for return to the supplier with catalogued titles of bestiality films retained at the counter. He said that this satisfied him that that there was a connection or sufficient connection between the plaintiffs’ business and the subject items. While it is true he was not the officer who seized or who supervised the seizing of these items (that task falling to others) he gave evidence that he discussed his views with the officers in the field.

36 The plaintiffs’ claim for relief in respect of these boxes is refused.

Was the summons to show cause validly issued?

37 Where Part 2 of the Classification Act provides criminal sanction for the sale, delivery or public exhibition of a film classified RC or X18+ or unclassified films, Part 7 of the Act provides a procedure for the forfeiture of items seized under warrant in circumstances where the person from whom the items were seized fails to satisfy the Local Court that the item is not in any way connected with an offence under the Act. The jurisdiction of the Court to both issue the summons and to order forfeiture is dependent upon the police reporting the seizure to a Magistrate as provided for in s 56(1)(b).

38 Section 56 provides as follows:

56 Forfeiture following seizure
(1) A thing that has been seized pursuant to a search warrant issued under section 55 must be returned to the premises in or on which it was seized unless, not later than 90 days after the seizure:
(a) proceedings are brought against a person for an offence under this Act in connection with the thing, or
(b) a police officer reports the seizure to a Magistrate.

(2) If such a report is made, the Magistrate is to issue a summons calling on the person who, at the time of the seizure of the thing, was occupying or using the premises entered under the authority of the search warrant to appear before a Local Court to show cause why the thing or other things seized should not be forfeited to the Crown.

(3) If the person summoned (or some other person) claims any of the things to which the summons relates, the person must, in order for the thing to be returned to the person, satisfy the Local Court that the thing is not in any way connected with an offence under this Act.

(4) The Local Court before which the summons is returned may order that there be forfeited to the Crown:
(a) such of the things to which the summons relates as are not claimed by the person summoned or by some other person, or
(b) such of the things as, in the opinion of the Court, should be so forfeited.

(5) A Local Court is to order the return of a thing seized pursuant to a search warrant issued under section 55:
(a) if the Court dismisses the proceedings for an offence under this Act with respect to the thing, or
(b) if, on the return before it of a summons issued under this section with respect to the thing, it does not form the opinion referred to in subsection (4)(b).

39 It is clear that the jurisdiction to both issue the summons and to order forfeiture of the seized items is dependent upon a police officer reporting the seizure to a Magistrate within 90 days. Since the Act does not prescribe the form or content of any such report, it is necessary to consider whether the document forwarded by fax to Magistrate McRae on 18 October 2005 by Senior Constable Kraus was a “report” by reference to the relevant principles of statutory construction in the context of the statutory purposes to which the making of a report are directed.

40 For the reasons articulated by me in Way Out West Adult Shop Pty Ltd v Senior Constable Philip Kraus & Ors [2008] NSWSC 87 at [32]-[40], I am satisfied that it is. I am confidently of that view given that the report in the present case and the report in the related case of Way Out West Pty Ltd are in all but identical terms. I should also note that Mr Thomas was aware that full argument had been directed to the question of whether the report sent on 18 October 2005 complied with s 56 of the Classification Act the day before the proceedings in this matter were heard. He did not wish to advance any other or further submissions on the question.

41 I am also satisfied that despite there being no notation on the report in the Magistrate’s hand to the effect that he directed that a summons should issue against the present plaintiffs (as was the case in respect of the report for the search at the premises of Way Out West Pty Ltd), or evidence that he had otherwise considered the contents of the report, the weight of the surrounding circumstances to my mind compels the conclusion that the summons that issued in October 2006 was in consequence of the exercise of the Magistrate’s jurisdiction under s 56(2). Those facts include the evidence of Senior Constable Kraus and Ms Gahan that the reports were sent to the Magistrate together and dealt with by her without differentiating between them. It is also of significance that both reports were subject to the same administrative error when process under the wrong Act was initiated contrary to the Magistrate’s direction, an error which was corrected when a summons to show cause under s 56(2) of the Classification Act ultimately issued against both the plaintiffs in these proceedings and the relevant party in the related proceedings.

42 Accordingly, the orders I make are as follows:

(1) The relief sought by summons is refused.
(2) The first and second plaintiffs are to pay the first defendant’s costs.

09/04/2010 - Second order amended pursuant to r 36.17 of the UCPR - Paragraph(s) Coversheet and [42]