Grollo & Ors v Peter Macauley, Commissioner of the Australian Federal Police & Ors; Re Peter Macauley Commissioner of the Australian Federal Police & Ors; Ex parte Grollo

[1993] HCATrans 266

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No Mll7 of 1993

B e t w e e n -

BRUNO GROLLO AND ORS

Plaintiffs

and

PETER MACAULEY, COMMISSIONER
OF THE AUSTRALIAN FEDERAL

POLICE AND ORS

Defendants

Office of the Registry

Melbourne	No Mll8 of 1993
In the matter of -

An application for a Writ of

Prohibition and Writ of

Certiorari against a JUDGE OR

Grollo 1 9/9/93

JUDGES OF THE FEDERAL COURT OF AUSTRALIA who have heard

and made orders granting

applications for the issue of

a warrant in respect of some

or all of the Prosecutors

pursuant to Part VI of the

Telecommunications

(Interception) Act 1979

First Respondent

and

ELIGIBLE JUDGES OF THE

FEDERAL COURT OF AUSTRALIA

within the meaning of Part VI

of the said Act

Second Respondent

and

PETER MACAULEY, Commissioner

of the Australian Federal

Police, and OTHERS

Third to Seventh Respondents

Ex parte -

BRUNO GROLLO and OTHERS

Prosecutors

DEANE J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 9 SEPTEMBER 1993, AT 11.58 AM

Copyright in the High Court of Australia

MR A.R. CASTAN, QC:  May it please Your Honour, I appear

with my learned friend, MR B.A. KEON-COHEN, for the

plaintiffs and for the prosecutor. (instructed by

Arnold Bloch Leibler)

MR D.F. JACKSON QC: If Your Honour pleases, I appear with my learned friend, MR A. PAGONE, for Mr Macauley,

the Director of Public Prosecutions - - -

HIS HONOUR:  I will see if I can find - the statement of claim will be the only thing with them all on it.

Grollo	2	9/9/93
MR JACKSON:	Yes, on the front of the writ.	It is

Mr Macauley, the Commissioner of the Australian

Federal Police and the Commonwealth Director of

Public Prosecutions and the Commonwealth of

Australia. Those are the parties for whom we

appear in each matter. (instructed by Peter Wood, Solicitor for the Director of Public Prosecutions)

HIS HONOUR:	So that is first, third and fifth?
MR JACKSON:	Yes, Your Honour.
HIS HONOUR:	Thank you, Mr Jackson.

MR G.A. FLICK: If Your Honour pleases, I appear for the

second defendant. (instructed by Ian Row,

Corporate Solicitor for Telstar Corporation Ltd)

HIS HONOUR:	Yes, Mr Castan?
MR CASTAN:	May it please Your Honour, I should indicate that service has not yet been effected on the
parties identified as judge or judges of the
Federal Court of Australia, the sixth defendant who
is identified in the schedule.
HIS HONOUR:	What about the fourth defendant?
MR CASTAN:	The position of the fourth defendant is that a

notice of discontinuance has been filed. That

defendant was served and as a result of

correspondence a notice of discontinuance was filed

so we are not proceeding in relation to the

Commissioner.

Your Honour, these applications and these

proceedings arise out of materials which became

known, information which became known, to the

plaintiffs as a result of proceedings in the

Federal Court of Australia relating to certain search warrants. In the course of the proceedings

relating to those search warrants information was

disclosed which led to the apprehension, and as we

would submit, the reasonable apprehension that

there were telephone intercepts on the telephones

of the plaintiffs.	Thus proceedings have
been - - -

HIS HONOUR: Let me just see who the plaintiffs are,

Mr Castan. How many of them are there?

MR CASTAN: Nineteen, Your Honour. There are two individual

plaintiffs and - - -

HIS HONOUR:  I have glanced at the evidence - or of the

affidavits. I have not seen anything that would

Grollo 3 9/9/93

obviously warrant an inference that there were

phone taps on the phones of all these plaintiffs.

MR CASTAN:  No, that is not suggested.

HIS HONOUR: That is what you said.

MR CASTAN: If I said that, I withdraw it.

HIS HONOUR: It is some of the plaintiffs.

MR CASTAN:  It is some of them and it is all of them who

fear that the phone taps on some of them will

prejudicially affect their position, they being

among the taxpayers whose affairs were being

investigated. I will briefly outline to

Your Honour the origins of the circumstances that gave rise to the proceedings in which the question of telephone intercepts was disclosed.

HIS HONOUR:  First of all, why are the proceedings before me

now?

MR CASTAN: Because, Your Honour, the matters which are

raised here go to the functions of the Federal

Court. The ways in which the claims are framed are

in effect - - -

HIS HONOUR:  Go to the functions or go to jurisdiction?

MR CASTAN:  Jurisdiction and functions. I can explain it

very briefly, Your Honour, for the purpose of

answering Your Honour's question.· The matter is

put in a series of ways. It is put that the

warrants themselves, properly construed, should be read as being subject to a limitation that ensures they do not interfere with legal professional

privilege: it is put that the Act, properly
construed, should be so read as not authorizing a
warrant which did not contain such a restriction

either on its face or impliedly; it is put that the

Federal Court judge, the judge who issued the

warrant, was a judge exercising the judicial power

of the Commonwealth and there was vested in him,

and improperly vested in him, an administrative or

executive function contrary to the provisions of

Chapter 3.

HIS HONOUR:	I follow all that but I have looked at the statement of claim.
MR CASTAN:	Yes. Well, the problem that arises is the

classic one that arises when a Boilermaker's case

type problem is raised, and that is to say that if

one was to go to a Federal Court judge, as one

might ordinarily do with a question of this kind,

that court having this jurisdiction, one is faced

Grollo 9/9/93

with the problem of seeking a prerogative writ

from - or interlocutory relief - a Federal Court

judge, from the Federal Court, directed to the

Federal Court, so to speak. One of the arguments

contends that the judge is the Federal Court and is

improperly exercising an administrative power,

which means that, in effect, the superior court -

to which one is applying for the purpose of

judicial review - is the same court that one is

seeking to review, and that creates the very
embarrassment that is the reason, as we would

contend, when one gets to the substance of it that

one has a Boilermaker's principle.

HIS HONOUR:  I can follow that you cannot very well attack

Hilton v Wells before the Federal Court.

MR CASTAN:	It is not just that, Your Honour, we do seek to attack Hilton v Wells. It is not just that, it is
the very process of going to a Federal Court judge, of going to the Federal Court, for the purpose of
the relief that we now seek creates its own
inherent problem of the exercise of the judicial
power by that court in exercising the supervisory
jurisdiction of a superior court.
HIS HONOUR:	You proceed in your way, I do not follow the

argument.

MR CASTAN:  Yes. The simple explanation, Your Honour, is

that it was seen to be an inappropriate invoking of the supervisory jurisdiction, for prerogative writ, of the Federal Court to be seeking to exercise it

over a Federal Court judge when one of the bases on

which it is contended is that the Federal Court

judge is part of the Federal Court. One is seeking

from the Federal Court a prerogative writ over the

Federal Court.

HIS HONOUR:  Can I ask you this: why would not proceedings

in the Federal Court for an injunction restraining

those people, you say are acting on writs you

allege to have been issued, from acting on them

cover all the matters involved in this case?

MR CASTAN:	Why would not an injunction so sought?
HIS HONOUR:	Yes.
MR CASTAN:	They would, subject to the necessity to - they

would in an interlocutory sense but one would be -

that would not - - -

HIS HONOUR:	Why would they not in a final sense?
MR CASTAN:	One would want to argue the whole of the range

of challenges to the validity of the warrants.

Grollo 5 9/9/93

HIS HONOUR: Well, I can see that, and I can see when the

proper work has been done, and the facts are
ascertained and reduced to a proper state, it may

well be that there are matters which would properly

be dealt with by this Court, but I simply cannot

see why these proceedings have been instituted at

this stage, in this Court, raising all the matters

that are sought to be raised?

MR CASTAN:  I can only indicate to Your Honour that it was

seen as appropriate to come to this Court because

of the oddity, or the embarrassment, if that is the

right term - - -

HIS HONOUR:  But that is only because those responsible for

framing the proceedings where, as I follow it, what

is involved is a challenge to the validity of

warrants that are said to have been issued, have

seen fit to try and join the judges of the Federal

Court as personal defendants, and one is led to

automatically ask is that some sort of device to

try and justify getting the matter into this Court

as a court of first instance.

MR CASTAN: 

No, Your Honour, it was rather that it was seen

as appropriate when challenging what is alleged to
be the improper exercise or improper vesting of the

judicial power, or improper vesting of
administrative or executive power in a judicial

officer that ordinarily what one would do would be

to seek a prerogative writ arguing that there has

been an excess of jurisdiction in the relevant

court, the relevant vesting. That would be

ordinarily the course one would take.

HIS HONOUR: 

But here, your claim is that the defendants, or the ones that Mr Jackson appears for, are acting on the basis of writs that you say are a nullity - - -

MR CASTAN: Warrants, yes, Your Honour.

HIS HONOUR: 

- - - warrants - that you say are a nullity are

valid warrants.

MR CASTAN:	Yes, Your Honour.
HIS HONOUR:	I really do not see why that needs this

extraordinary procedure of unnamed judges of the Federal Court being named as defendants. If you are frightened that somebody is going to issue

another warrant, then it could be, but one would

have thought that if you get an injunction on the

basis of existing warrants being nullities that

would probably be good enough, would it not?

MR CASTAN:  Yes. On the other hand, Your Honour, it rather

illustrates the mischief that perhaps is at the

Grollo 6 9/9/93

heart of the problem of separation of powers. The

administrative officer, assuming it is a purely
executive function, who went about the process of
issuing warrants - assume it was the chief of

police who also performed that function - would

ordinarily be named as a defendant. It is

precisely the person who one would name. It is

only because it happens to be of a Federal Court

judge, and it rather illustrates the point we seek

to make about the difficulty. Because it is a

Federal Court judge this becomes an extraordinary course.

What is extraordinary about it is that Federal Court judges have had this particular function in

the investigative and administrative aspects of

police work imposed upon them and, in due course,

that is what we would be wanting to argue. But

right at the outset, as Your Honour has correctly

pointed out, it raises an embarrassment. It is the very embarrassment that Justice Gaudron referred to in the dissenting judgment in Jones, I think it

was, which was the case where it was sought to

reopen Hilton v Wells.

HIS HONOUR:	Is there not a procedure for going to the Full Federal Court for the sort of order are you
seeking?
MR CASTAN:	I have to confess I have not looked at that,

Your Honour. It may be that is the way it would

happen, although that would still raise perhaps the

same question in a different way. But that is the

simple explanation, Your Honour, why we have done

it that way.	It is for that reason and we are
obviously in Your Honour's hands.	We are conscious

of the fact that ordinarily proceedings involving

this kind of relief would not be brought in this

Court.	We are conscious of the fact that the
Court can remit and we accept that.	We have done
it because we have seen there it being an inherent

problem in the very nature of the function that is
being performed or being invested in the

Federal Court judges. One can see the dramatic

difference between the situation where warrants,

such as the search warrants, which have been the
subject of lengthy proceedings in the
Federal Court, of course, are issued by
magistrates. There is no problem then in the

Federal Courts dealing with that in various ways.

There are challenges and review and the whole

matter is being dealt with by the Federal Court

which, of course, would be the appropriate tribunal

ordinarily to go to with a further step, or further

questions arising out of this whole chain of

events.

Grollo 7 9/9/93

HIS HONOUR:  Anyway, Mr Castan - - -

MR CASTAN: That is the answer, Your Honour.

HIS HONOUR:  Now, can I ask you this before you approach it

the way you want to? I presume there have been

discussions with Mr Jackson and Mr Flick. Is there

any agreement as to facts or - - -

MR CASTAN:  No, and in fact, Your Honour, I should mention

to Your Honour that in addition, if Your Honour has

had the opportunity, as you indicated, to look at

the material at least briefly, there has now been

an affidavit filed which I am not sure whether

Your Honour has had the opportunity to see - - -

HIS HONOUR: 

No, I have not.

MR CASTAN: 

- - - which was handed to us at about 11 o'clock or so, which is relevant and I should draw to

Your Honour's attention. It is an affidavit of

Mr Ridley, a police officer -

MR JACKSON: 

Your Honour, I understand that should be here,

but I have another copy in case Your Honour has
not - - -

HIS HONOUR: 

Yes, it is here.

MR CASTAN: 

Does Your Honour wish me to read it?

HIS HONOUR:  No, you sit down, Mr Castan. I will glance

through it.

MR CASTAN: There has not been any agreement on facts other

than the indication from the Commissioner of

Taxation who was a defendant yesterday, that they

knew nothing of any warrants, had nothing to do

with them, and it was totally outside their

knowledge. That was accepted as an indication, and

of course we discontinued. So far as the position

now arising, having been informed of these matters,

I should first of all say that we formed only a

preliminary view and we have not had an opportunity

to take instructions from the clients about what

might flow from this but I can indicate to

Your Honour that our preliminary view is that the

response does not meet the case in the

circumstances of this case.

That is to say, statements of the kind one

finds in paragraphs 10 and 11 are really quite

irrelevant in terms of a response as to telling us

whether or not there are warrants as we infer and

suspect because the reasons given are irrelevant to

this case, because manifestly, the material in this

case already discloses that not only an ongoing

Grollo 8 9/9/93

investigation but charges have been laid against

Mr Bruno Grollo, so the fact of investigation already underway, the fear or concern that there are warrants, and the inhibiting effect that is

having on communication with legal advisers is

already a reality. If, in fact, the position is

that there are no warrants and no intercepts,

saying so would not harm any of the interests that

are referred to here in this case. Granted there

may be cases where it would.

HIS HONOUR:  Mr Castan, as I read the material filed on

behalf of your client, you would argue, one, that

it discloses a significant likelihood that warrants

have been issued and utilized in relation to the

interception of telephone communications on at

least one telephone of one of the personal

plaintiffs?

MR CASTAN:	Yes, Your Honour.
HIS HONOUR:	Do the facts go any further, apart from the

fact that there are legal proceedings pending and

one of your clients has been charged with one or

more criminal offences?

MR CASTAN: There is a substantial body of legal proceedings

pending apart from those, and there is an ongoing necessity to confer with legal advisers but apart

from that, no, that would, I think properly be the

facts that we would seek to say are established.

HIS HONOUR:  They are the facts as you claim them, yes. In

a desire to work out what happens now - and I

should tell you remitting the matters to the

Federal Court is very much in the forefront of my

mind - Mr Jackson, is there anything that you would

want to say in relation to the proposition that,

for the purposes of today's proceedings and

acknowledging the perhaps necessarily

unsatisfactory nature of the evidence, I would be

justified in proceeding on the basis that there is

a significant likelihood to the effect that I

indicated to Mr Castan?

MR JACKSON:  I am sorry to say, Your Honour, we do submit

that the evidence does not show that. Indeed, what

it does show is that the only telephone tap which

is referred to in the material is the telephone tap

not on any of the plaintiffs, but in respect of

Mr Flanagan. We would seek to use that to

demonstrate in due course that there is not a

sufficiently arguable case factually, leaving aside

any other question, for the grant of any

interlocutory relief.

Grollo 9 9/9/93

HIS HONOUR:  I obviously accept the force of what you say in

terms of a final hearing. In the context of

today's proceedings and of the nature of the

question, it is not apparent to me that what you

say is correct. That being so, I think we might

start by addressing what the evidence is in

relation to that.

MR JACKSON:  Your Honour, I am happy to deal with that

aspect of it immediately, if Your Honour wants me

to.

HIS HONOUR:  Well I think I might get Mr Castan to indicate

what he sees as the evidence on that aspect of the

matter.

MR CASTAN:	The material to which we would - - -
HIS HONOUR:	Can I ask both counsel, in a possibly irregular

fashion - I have as I have indicated glanced

through the documents in the file; I do not want to

go through the procedure of making a note of every

affidavit and so on - has either side any objection

to my simply proceeding on the basis that both

sides can refer to whatever they want to?

MR JACKSON:  No, Your Honour.

MR CASTAN:  None, Your Honour. Can I just mention that

there is one aspect before turning to that

material. I should mention that some of the

material that has been put before the Court is the

subject of an order for confidentiality made by

His Honour Mr Justice Jenkinson, and there are two

particular items that I was going to take

Your Honour to that are subject to that order. It

was made by him. What we have brought before

Your Honour is material that was presented to him

on 23 August and he, in the course of those

proceedings, made appropriate orders.	I will draw
Your Honour's attention to the relevant documents,

but it suffices to commence - I will take

Your Honour to the affidavit of Mr Zwier and I do

not need to read the whole of it, Your Honour; I

can deal with it fairly briefly, I think.

It is sufficient to take Your Honour to

perhaps paragraph 6 of that affidavit, which

indicates that at

7.50pm on 13 August 1993 Mr Justice Sweeney

said he was prepared to make temporary
restraining orders to preserve the status quo

in relation to documents which had been seized

from Mr Grollo's office until 12 noon the

following Monday, 16 August 1993.

Grollo 10 9/9/93

Counsel ..... telephoned ..... an officer of the

Firstnamed Defendant.

And then at paragraph 7 indicates that around

9 o'clock the same night:

Mr Hadgkiss, ..... Mr Wood, ..... and

Messrs Weinberg ..... and Mr Coglin of Counsel,

arrived at Mr Justice Sweeney's home.

There is then reference to the fact of why the

documents that were then under review had been

seized and there is a reference at the foot of the

page to:

Mr Weinberg	also told His Honour that
Mr Flanagan	could only be held for

questioning	for a limited period of time.	Both
Counsel and	I remained present -

And then in paragraph 8:

In the course of the Firstnamed Defendant's

opposition to the making of any restraining orders in relation to documents seized from
Grollo premises Mr Weinberg informed

Mr Justice Sweeney, in my presence, that

Mr Flanagan had made an approach to bribe

Superintendent Farrell of the Australian

Federal Police "on behalf of Bruno Grollo"

which would be "of use to Grollo pending

litigation".

Then, in paragraph 9:

Mr Weinberg also referred to various meetings

between Mr Flanagan and Mr Farrell, which had

been audiotaped and video taped. Mr Weinberg

informed Mr Justice Sweeney, in my presence,

that there were telephone intercepts of

conversations between Messrs. Flanagan and

Grollo which, so he stated, "confirm and

implicate Bruno Grollo".

And he produces his notes.	And, in paragraph 10 he
says:

By reason of Mr Weinberg's submissions to

Mr Justice Sweeney on 13 August 1993, I formed

the clear view that intercepts had been placed

by or on behalf of the Australian Federal

Police upon Mr Grollo's telephones.

The notes I do not need to take you to; they are exactly the words that is there set out.	Then
in paragraph 13 he refers to an exhibit to
Mr Hadgkiss's affidavit, which is a summary of

Grollo 11 9/9/93

facts prepared by the Australian Federal Police in

relation to a corruption investigation, being one

of the investigations referred to in paragraph 8.

There are numerous references in the summary. That

summary, I think, Your Honour, is a document which

is subject to the confidentiality or in camera

order made by His Honour Mr Justice Jenkinson.

There are numerous references in the "Summary
of Facts" to interceptions by the Australian
Federal Police of telephone conversations

between Mr Flanagan and a male person
"believed to be Bruno Grollo." Further, on

page 16, reference is made to a telephone call

made at 8.51 pm on 30 June 1993 by Bruno

Grella on telephone number 480 3377 to

Flanagan. (I know telephone no. 480 3377 to

be Bruno Grollo's home telephone number.)

Then in paragraph 15, referring to a hearing in camera on 23 August, he says:

Mr Weinberg referred again a number of times

to tape recordings and to telephone

intercepts. I refer, for example, to page 32

of the transcript in confidence.

Mr Weinberg's statements reinforced the view

which I had formed during the hearing before

Mr Justice Sweeney on 13 August 1993, that

telephone intercepts had been placed upon

Mr Grollo's telephones.

Could I then take Your Honour to the exhibit which

is exhibit LZ3 to Mr Zwier's affidavit, part of

which is what is called a situation report. At

page 9, Your Honour - does Your Honour have - it is

marked at its commencement "NCH2 Situation" in a

heavy type.

HIS HONOUR:  You said exhibit LZ3?

MR CASTAN:  It is part of exhibit LZ3. LZ3 consists of an

affidavit of Mr Hadgkiss.

HIS HONOUR:	Yes, I have got that.
MR CASTAN:	Then at the end of that there is attached to it

the exhibits to the affidavit.

HIS HONOUR:	How many pages back from the end?
MR CASTAN:	It is marked as page 9 at the top of the

situation report, which is the last document - it

is not the last document but - - -

HIS HONOUR:  Does it begin with the word "Later"?

Grollo 12 9/9/93

MR CASTAN:	Yes.
HIS HONOUR:	Yes, I have that.

MR CASTAN: It is the second paragraph, and I will not read

it out loud, Your Honour, but I refer Your Honour

to the line and a half of that second paragraph.

Can I then take Your Honour to the next page and

the last sentence on the page. I draw Your

Honour's attention to the words "believed to be" in

that form; then to page 13, the third paragraph,

and I draw Your Honour's attention to the words

"believed to be", then to page 16, the bottom of

the page - it commences "Later that day" - and I

draw Your Honour's attention to the absence of the

words "believed to be", the fact that those words

are not there and the fact that the call is

identified as originating from 480-3377 in this

instance.

HIS HONOUR:	That being Mr Grollo's phone?
MR CASTAN:	That being already sworn by Mr Zwier to be

Mr Grollo's phone, and I draw to Your Honour's

attention the contrast between that reference and

the others, and on the other matter, could I take

Your Honour over to exhibit LZ4, which is a

transcript before His Honour Mr Justice Jenkinson

on 23 August. Does Your Honour have that?

HIS HONOUR:	Yes.
MR CASTAN:	Page 32, it is a transcript in confidence, but I

draw Your Honour's attention to line 10, and the

use of the plural. Now, there is reference to the

belief, which I have already to, of Mr Zwier, but

that is, in fact, the material which has led to the

state of belief and it is, as we would respectfully

submit, a reasonable and proper apprehension in the

circumstances.

HIS HONOUR:  Mr Jackson, is there anything you want to

say

MR JACKSON:  Yes, indeed, yes, Your Honour, and I should not

say "Yes, indeed" with enthusiasm. What I wanted

to say was this: if you look at the material, and

Your Honour has seen the material on which the

belief, such as it is, is said to be founded, what

it demonstrates, of course, is that there was a

telephone intercept on Flanagan's phone and nothing

more, and there is nothing at all more than that.

Now, Your Honour can go to each of the

references, and if I could just take you to that

situation - document again, if one goes to - - -

Grollo 13 9/9/93

HIS HONOUR:  What about the material identifying a call

being made from Mr Grollo's phone number?

MR JACKSON:  But it is to the number, Your Honour, that is

the subject of the - - -

HIS HONOUR: Well, I am very ignorant of these things. Does

a telephone intercept identify the number of a

telephone from which a call was made?

MR JACKSON: Well, can I say, Your Honour, without

attempting to give evidence about it myself, that

there is no evidence to suggest the contrary, and

the only evidence, if I can say this, about there

being any telephone intercept is the one concerning

Mr Flanagan.

HIS HONOUR:  I thought an intercept let you hear what was

being said on the line being intercepted. I would

need evidence if, on an interlocutory proceeding,

you wanted to maintain that an intercept on

telephone B allowed you to identify the phone

number of the telephone on which an incoming call

had been made.

MR JACKSON:  Your Honour, I am sorry, on my instructions the

number comes through, but we know the number. If

we have an intercept on phone A we know who calls

phone A. We know what number calls.

HIS HONOUR: 

So if you have an intercept on my telephone and

somebody rings me from London on direct dial, even
though I have no earthly way of knowing what the

telephone number in London is, you with your

intercept know that this is Whitehall such-and-such
calling.

MR JACKSON: 

Yes, Mr Major with the cricket results.

HIS HONOUR: 

Yes. 

MR JACKSON: 

Your Honour, certainly that is true in

Australia.

HIS HONOUR:  It indicates how ignorant I am of these things.

That surprises me.

MR JACKSON:  Your Honour, the point I am seeking to make

about it is this: it is our learned friend's

application for an injunction. The material that

appears is that there was one telephone intercept.

For obvious reasons that appear in the affidavit

that we filed, we do not want to be in the

position - unless the Court orders us, of
course - of being compelled to say we do or we do

not have intercepts on other phones.

Grollo 14 9/9/93

HIS HONOUR:	I certainly am not proposing to order you.
MR JACKSON:	No, I am sorry, Your Honour, all I am seeking

to say from that is this: that the material

demonstrates that there was a tap on one phone.

All the calls from which the inference is drawn are

calls to or from that telephone. One should not

take the further step of drawing the inference that
there must be a tap on some other phone or

requiring us to prove there is not, and if

necessary we can do so, but we should not be
required, with respect.

So I cannot take the point further. The point

we are simply seeking to make is that the evidence

does not establish that any of the plaintiffs'

telephones has been the subject of an intercept.

HIS HONOUR:  Having given consideration to the material and

evidence before me, I am prepared for the purposes

of this interlocutory proceeding to proceed while
the evidence remains in its present state on the
basis that there is a reasonable likelihood that a
warrant has issued authorizing the interception of

a telephone of one or other of the personal

plaintiffs. Where do we go from there, Mr Castan?

MR CASTAN:  Your Honour, in the circumstances, the relief we

seek is to - - -

DEANE J:  I should have made clear that that is solely for

what I hope are the brief proceedings before me as

of now, and what I said will not, for example,

carry over if there are any further proceedings

before me in relation to this matter when I

approach the matter afresh.

MR CASTAN: Quite, Your Honour. But, in our respectful

submission, the appropriate course, or direction,

which should be given are steps that procure the

production of the relevant documents that will

disclose the full facts, whether or not the

inference that has been indicated and sought to be

drawn is properly drawn. That is to say, either by

way of subpoena or by way of an order for

production pursuant to Order 32 of the rules of

this Court, appropriate orders should be made

directing the production by relevant persons of the

document which relate to the issue of warrants.

HIS HONOUR:  Why?

MR CASTAN: Because, in our respectful submission, this is a

case in which there is the appropriate inference,

as Your Honour has indicated and, in the

circumstances, the plaintiffs who brought the

proceedings, or the prosecutor who seeks to press

Grollo 15 9/9/93

for an order nisi, is entitled to discovery or alternatively, to call on a subpoena for the '

purpose of having the relevant material before the

Court which would disclose the full facts, disclose the - - -

HIS HONOUR:	What facts?
MR CASTAN:	The fact of the existence of a warrant, the

terms of a warrant and the material on which it was

sought so that the question of appropriate relief,

either interlocut0ry or ultimately final, can be

fully argued.

HIS HONOUR:	I can follow, if you make out a prima facie case of impropriety against somebody, that what you
say might be correct, but I do not follow why I
should order subpoenas issue on what may be no more
than a fishing expedition.

MR CASTAN: Well, that terminology is used in some of the

authorities in these sorts of circumstances but, in

our respectful submission, once one reaches that

first stage of drawing an inference that there are

intercepts on a telephone, in our respectful

submission, it is not a fishing expedition to seek

the material and to have the courts processes of discovering inspection - production -invoked for the purpose of producing evidence that is relevant

to the issues that are raised. Here we have a

circumstance where there are warrants. The

question, of course - if it be said, and I am not

sure if it is then said the material in

paragraph 12 of Mr Ridley's affidavit now, so to

speak, alleviates any concern of any impropriety or

any breach of legal professional privilege.

We would say, of course, that it simply does

not achieve that. It could by exhibiting

appropriate protocols, directions and outlines that

indicate precisely what happens so as to protect

legal professional privilege if there really is a

system for protecting it. In our respectful

submission, it is studiously avoided, really,

saying what happens and in those circumstances
there is not - the inference that flows from the

inference that there is a warrant and that there

has been an intercept is that it is not limited in

the ways that we say would be proper, that is to

say, to not interfere with legal professional

privilege. In those circumstances, it is

appropriate to invoke the ordinary processes of the

Court for production, discovery, inspection, in

order to find out what the precise circumstances

are.

Grollo 16 9/9/93

In so far as it is said, perhaps, by way of balance of convenience in terms of taking that

procedural step, that somehow it interferes with

the administration of police work, as is suggested

in the earlier paragraphs of that affidavit, we say

that that cannot be applicable here. Once they are

at the stage where they have already charged

Mr Grollo; they have already charged Mr Flanagan;

these things are known; this is not the

circumstance which may exist in some cases where

all this is happening unbeknownst to - - -

HIS HONOUR:  Mr Castan, I follow the point you are making.

Do you wish to develop a substantial argument in

relation to that point?

MR CASTAN:	I wish to develop it only to this extent, that I do seek to press that Your Honour should order that
subpoenas issue or alternatively order production of the warrants and material on which the warrants
were sought and obtained, and I refer Your Honour
in that context - and unfortunately we had not
copied the case and it was not on any list we
supplied, it only came to us relatively late - it is Paxus Services Ltd v People Bank Pty Ltd in the Federal Court, a judgment of His Honour Mr Justice
Burchett in (1990) 99 ALR 726. That was an
application for an order pursuant to order 15A rule
6 of the Federal Court Rules for discovery by the
respondents to the applicant, and it is what is sometimes called, "pretrial discovery" and there is
a special rule.  The High Court rules do not cover
that. They speak of "at any time". But, by
analogy we refer you to the rule provides that:

Where -

(a) there is reasonable cause to believe that
the applicant has or may have the right to

obtain relief in the Court from a person whose

description has been ascertained; (b) after making all reasonable inquiries, the	applicant has not sufficient information to
enable a decision to be made whether to
commence a proceeding in the Court to obtain
that relief; and
(c) there is reasonable cause to believe that
that person has or is likely to have
..... possession of any document relating to
the question whether the applicant has the
right to obtain the relief and that inspection
of the document by the applicant would assist
in making the decision -

Grollo 17 9/9/93

the Court may order that that person shall

make discovery ..... of any document -

At page 732 His Honour Mr Justice Burchett at

line 46 said:

In my opinion, the evidence does suggest

the inference that confidential information

has been improperly taken by the respondents

from the applicant. If the matter were fully

explored, this inference might be rebutted.

However, the matter has not been fully

explored, nor is the question posed by the

language of r 6 whether any cause of action

has actually been established. In raising an

inference on the more limited question which

the rule does pose, the applicant has not been

met by any denial from those best able to

throw light on whether the inference is just,

who are the respondents. The principle of

Jones v DunkelT12Sep9.C3 .... . is therefore

applicable. In my opinion it has at least

been shown that there is reasonable cause to
believe the applicant may have a cause of

action against the respondents arising out of

the misuse of confidential information.

It is no answer to the applicant's

application under r 6 to say that the

proceeding is in the nature of a fishing

expedition ..... Rule 6 is designed to enable an

applicant, in a situation where his proof can

rise no higher than the level the rule

describes, to ascertain whether he has a case

against the prospective respondent - that is,

to "fish" in the old sense -

And he refers to some older authorities.

It would be unfortunate if a rule

designed to amplify the court's power to	penetrate obscurities and uncertainties in the
interests of justice were to be weakened by
restrictive and unnecessary glosses. I think
the rule is of a beneficial kind within the meaning of the well known principle of
interpretation, and should be given the
fullest scope its language will reasonably
allow. The proper brake on any excesses in
its use is the discretion of the court, which is required to be exercised in the particular
circumstances of each case. One guide for
that discretion is provided by the reference
in r 6(b) to "all reasonable inquiries" -

That is to say, a plaintiff or prospective plaintiff must have made all reasonable inquiries.

Grollo 18 9/9/93

HIS HONOUR:  But even if there were, I just do not see the

relevence. I mean, what evidence do you say there is of impropriety or unlawfulness or anything else

on behalf of the defendants here?

MR CASTAN:  We say that the proper inference to be drawn is

that the conversations of Mr Grollo and his legal
advisers are being listened to; are being recorded;
they are being transcribed; they are being read and
they are being communicated, within the Federal

Police -

HIS HONOUR:	Yes.
MR CASTAN:	- - - and that that is in breach of the legal

professional privilege; it attaches to those

conversations and that that is wrongful. We say,

we cannot point to specific evidence of specific

conversations; we simply cannot do that. But we

say in the real world, Your Honour, it would be

manifestly foolish for the solicitors, acting today
or tomorrow, and for Mr Grollo to conduct

conversations on the telephone concerning the

handling of these proceedings.

HIS HONOUR: Well, I follow the way you put that and I might

say I can understand your desire to have that

question fully examined and the appropriate place

is the Federal Court. Well now, what else is

involved here today?

MR CASTAN:  If it is Your Honour's view that the matter

should be remitted, as Your Honour has

indicated -

HIS HONOUR:  My view is the matter should never have been

instituted in this Court.

MR CASTAN:  Yes, and Your Honour has indicated that. I can

only offer - - -

HIS HONOUR:  I follow, if I might say so, why the

proceedings seeking to challenge Hilton v Wells

were instituted in this Court. I cannot really

understand why it was thought that it was

appropriate to institute the proceedings, initiated

by statement of claim, in this Court. I understand

what is said about judges of the Federal Court

being made personal defendants. I do not

understand why it could not be readily seen that

that was not a proper basis for bringing

proceedings at first instance in this Court.

Well now, I am expressing myself rather

strongly, Mr Castan, because people just have to

realize that to institute inappropriate proceedings

in this Court - it does not matter about

Grollo 19 9/9/93

inconvenience from the point of view of the judges,

but it does matter that the lists are horribly

affected by it and other litigants suffer as a

result. I will not come back to it.

MR CASTAN:  On that issue I have nothing further that I

would want to put on that question of jurisdiction

and remittal. There is nothing else we would put.

HIS HONOUR:  I will ask Mr Jackson his views subsequently.

The other proceedings seeking, as I understand

them - the purpose of these is really solely to

challenge Hilton v Wells.

MR CASTAN:  They are cast in a broader form than that,

Your Honour. The prerogative writ proceedings are

cast so as to raise all of the questions of what we

say is absence of jurisdiction, that is to say the proper construction of the legislation, the Hilton

v Wells point looked at from two perspectives, and

a final point which raises a question of whether or not legal professional privilege should be regarded

as a kind of constitutional fundamental freedom.

We have raised all of those matters in the

prerogative writ application and we say that all of

those are appropriate, framed in that way.

HIS HONOUR: 

What if my view were that the appropriate

course at this stage is to remit the principal
matter to the Federal Court on the basis that, once
the factual matters are ironed out and the whole
case is at a proper stage, it may well be that
there could be a question which can be isolated for
consideration of the Full Court of this Court? Is

there anything you would want to say against the

whole of the matters being remitted to the Federal

Court?

MR CASTAN: 

I would only perhaps be able to offer the

alternative suggestion of retaining the application

for prerogative writ here - - -

HIS HONOUR:  I can follow that, except as between myself and

the Federal Court, I will of course - I am in no

better position in matters covered by decisions of
the Full Court than is the Federal Court. If a

challenge to Hilton v Wells was formulated in a

precise form, I would not grant an order nisi,

because I would regard myself as completely bound

by the Full Court. I could, though, no doubt be

persuaded to refer an application to the Full Court

if the appropriate stage had been reached.

MR CASTAN:	Yes.
HIS HONOUR:	Well now, having said that, I have landed you

with a lot of comments. Perhaps I might hear what

Grollo 20 9/9/93

Mr Jackson's approach is and we will then adjourn

until after lunch so you can have a chance of

finalizing your approach and deciding whether there

is anything you want to put arising out of the

matters I have put to you.

MR CASTAN:	I am indebted to Your Honour.
HIS HONOUR:	Mr Jackson, what is your attitude to that?
MR JACKSON:	Your Honour, both matters, in our submission, should be remitted to the Federal Court.
Your Honour, can I just say in that regard, first
in relation to the action: it is a case which is
potentially messy, in a sense.  What I mean by that
is that a question which must arise is whether the
Court would order us to say whether we have or have
not been doing it, in the end.  Now, Your Honour,
that is something which will depend on a judge
taking a view on various considerations raised
before him and it may not necessarily be able to be
dealt with simply by one court. That is the first
thing, that the case is one that should really go to the Federal Court.

As to the other proceedings, Your Honour,

there are several potential courses open. It would

be inappropriate, we would submit, for Your Honour

to grant an order nisi at this point because it is

a case which is, prima facie, governed by Hilton v

Wells.

HIS HONOUR:  Mr Jackson, there is no way, subject to some

surprising submission, that I could be persuaded to

disregard the decision of the Full Court in Hilton

v Wells.

MR JACKSON: That really leaves then three possibilities:

one is to allow the motion to be made to the Full

Court; the second is to dismiss the application;

and the third would be to remit the matter to the
Federal Court.	A difficulty arises, Your Honour,

as a practical matter in dismissing the

application, attractive though it might be to us,

because there can then be an appeal from what

Your Honour does to the Full Court which would mean

there would be six sitting rather than seven.

HIS HONOUR:  Which would have certain attractions, perhaps,

from your point of view.

MR JACKSON:	Maybe, Your Honour.
HIS HONOUR:	But of course, if that arose the first question for the Full Court would be whether it should
reopen Hilton v Wells.  It would be only beyond

Grollo 21 9/9/93

that question that personal views would become

relevant.

MR JACKSON:  Yes. Your Honour, if the matter does go the

Full Court of the Federal Court, then one has a situation where the Court is then able to see, in the light of the issues that have been dealt with by the Federal Court in both proceedings, whether

it be appropriate to grant special leave. Of

course, the possibility of removal always arises

too, but in reality the issue would be similar,

whichever be the procedure adopted. Your Honour,

the questions involved are ones on which, in our

submission, it would be appropriate to have the

views of the Full Court because the Act has changed

somewhat since Hilton v Wells, and also the issues

to which I adverted earlier are ones which

inevitably will arise, and there are major

construction issues on which the Court would have
the advantage of the decision of the Full Court of

the Federal Court.

HIS HONOUR:	Thank you, Mr Jackson.
MR CASTAN:	Your Honour, I think I may be able to save some

time. I do not know that there are any submissions

that we can make that would resist the suggestions
that have come from Your Honour, the way the matter

has developed. So that, I do not know that there

is anything we can put further. We have put the

reasons why we are here, and we have put what we

seek, and I do not think that the benefit of an

hour over lunch will mean that we will be able to

put it better. We may repeat it but that will not

assist Your Honour.

There is one other matter I should mention,

Your Honour, specifically, and that is that we are concerned that some of the documents that have been

referred to and that are in effect filed, in the

sense that they have become part of the material in

this Court, are not - we have a concern as to
whether the order made by His Honour

Mr Justice Jenkinson, as to their confidentiality, necessarily carries into this Court. He certainly

made the order, and we would ask that in relation

to the two documents, the transcript which was

exhibit LZ4 to Mr Zwier's affidavit, and LZ3, which

is the Hadgkiss material, both be the subject of an

order of - - -

HIS HONOUR:  Well, would there be any difficulty on the part

of any parties in my simply handing back to you

exhibits LZ3 and LZ4?

Grollo	22	9/9/93
MR CASTAN:	None at all.	The only concern we have is we do

not know whether copies become part of some file

that is otherwise accessible. We just have a - - -

MR JACKSON:  One way in which it might be done would be if

the matter is to be remitted to the Federal Court,

Your Honour has power to give directions about it

and Your Honour could direct that the relevant

documents be sealed up, not be made available to

any person except by an order of the Federal Court.

HIS HONOUR:  Well then, does that cover -

MR CASTAN: That would cover it.

HIS HONOUR:  Mr Flick, I owe you an apology.

MR FLICK: Certainly not, Your Honour.

HIS HONOUR:  You have sat there so silently, that I

overlooked you when I - - -

MR FLICK: No, Your Honour. If Your Honour called on me, I

would be adopting the submissions of Mr Jackson.

MR JACKSON:  Your Honour, can I say this: there is one

other thing I would like to say in relation to the

order. Your Honour has power, as I said a moment

ago, under section 44(1) to give directions.

Your Honour may prefer not to do it by direction

but perhaps by an intimation, but we would submit

that it is appropriate for Your Honour to express a

view that the matter should be dealt with

expeditiously, if possible, in the Federal Court.

HIS HONOUR: Well, I presume you join in that, Mr Castan?

MR CASTAN:	We certainly do.
HIS HONOUR:	Mr Flick?
MR FLICK: Yes, Your Honour.

HIS HONOUR: It is, of course, a matter for the Federal

Court whether expedition is given to this matter

after the order which I intend to make remitting

the matters to the Federal Court has been made.	I
would, however, indicate that had I been of the

view that the matters remain in this Court, I would
have taken steps to ensure that they were given

whatever expedition could be given to them in

conformity with the demands of other matters.	I
think that is as far as I can go, Mr Jackson.

MR JACKSON:  Yes, Your Honour.

Grollo 23 9/9/93

HIS HONOUR:  I propose to make an order, as I have

indicated, remitting these matters to the Federal

Court. I will adjourn now until 2 o'clock, or so

soon thereafter as the parties are ready, to give

the parties the opportunity of agreeing on the form

of order. The order, for my part, that I would be

inclined to make would be the standard form which,

if there is any difficulty about that, you will be

able to get a copy from the registrar, qualified in

the manner Mr Jackson has suggested, and that is:

by a direction that exhibits LZ3 and LZ4 to the

affidavit of Mr Leon Zwier be placed in a sealed

envelope and that access to them be not allowed
except subject to an order of a judge of the

Federal Court. Does that cover that aspect of it?

MR CASTAN: That would be good, Your Honour.

HIS HONOUR:	Mr Jackson?
MR JACKSON:	Yes, Your Honour.  The only other question

would be the question of costs.

HIS HONOUR:	In view of the way proceedings have advanced in the Court today, I do not really think anything has
been lost, and that being so, I would propose that
the ordinary order as to costs apply and that neither side be ordered to pay the costs of today's proceedings.
MR JACKSON:	Would Your Honour make costs costs in the

cause?

HIS HONOUR:  Yes. Now, finally, if any counsel have

commitments in so far as aeroplanes are concerned,

obviously there is no need for everybody to be

present at 2 o'clock.

AT 1.02 PM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

UPON RESUMING AT 2.02 PM:

MR JACKSON:  Your Honour, there is I think a copy of an

order that Your Honour has there.

HIS HONOUR: There is, Mr Jackson.

MR JACKSON: That is an order, if I could just say, which is

appropriate in the action. Could I just indicate,

when Your Honour has read that, the changes that

Grollo 24 9/9/93

would be appropriate in an order in the other

matter. Your Honour, in the other matter, in
paragraph 1 the word "action" would be

appropriately "matter"; and then in the paragraph

numbered 2, again "matter" where the word "action"

appears in the first and second lines; and then in

the last couple of lines of paragraph 2, as if

Melbourne had been stated in the application to be

the place of hearing.

HIS HONOUR:	Yes.
MR JACKSON:	In the last line where it relates to "costs of

this matter", rather than "costs of these actions".

HIS HONOUR:  And we will not need 4 in the second one, will

we?

MR JACKSON:  No.

HIS HONOUR: Well, is everyone content with those orders, or

if	not content, is everyone content with the form
of	those orders?

MR JACKSON:	Yes, Your Honour.
HIS HONOUR: Very well, I better formerly make them.	In

matter No M117 of 1993, I make the following

orders:

1. That the further proceedings in this action

be remitted to the Federal Court of Australia

at the Victorian District Registry.

2. That the action proceed in that Court as if

the steps already taken in the action in this

Court had been taken in that Court and as if

Melbourne had been stated in the Writs to be

the place of trial.

3. That the Registrar of this Court forward to

the proper officer of that Court photocopies

of all documents filed in this Court.

4. That exhibits marked LZ3 and LZ4 to the

affidavit of Leon Zwier sworn 6 September 1993

be placed in a sealed envelope and that access

not be allowed except by order of a judge of
the Federal Court.

And it is further ordered that the costs of these

actions to the date of remission including the costs of this order are to be according to the

scale applicable to proceedings in this Court and
thereafter according to the scale applicable in

that Court and be costs in the cause.

Grollo 25 9/9/93

In the other matter, that is matter No Mll8, r

make the following orders:

1. That the further proceedings in this matter
be remitted to the Federal Court of Australia

at the Victorian District Registry.

2. That the matter proceed in that Court as if

the steps already taken in the matter in this

Court had been taken in that Court and as if

Melbourne had been stated in the application

to be the place of hearing.

3. That the Registrar of this Court forward to

the proper officer of that Court photocopies

of all documents filed in this Court.

And is further ordered that the costs of this

matter to the date of remission including the costs
of this order are to be according to the scale

applicable to proceedings in this Court and

thereafter according to the scale applicable in

that Court and be costs of this matter.

The Registry will effect any verbal

alterations that might need to be made to the form

of those orders. Does that cover everything?

MR JACKSON:	Yes, Your Honour.
HIS HONOUR:	Very well, I will now adjourn.

AT 2.07 PM THE MATTER WAS ADJOURNED SINE DIE

Grollo 26 9/9/93