McKinnon v Secretary Department of Treasury

The High Court of Australia considered an appeal by Mr McKinnon against a decision of the Secretary of the Department of Treasury. The dispute concerned the validity of a notice issued by the Secretary under section 16 of the *Financial Transaction Reports Act 1988* (Cth) (the Act), which required Mr McKinnon to provide information concerning certain financial transactions. Mr McKinnon contended that the notice was invalid.

The central legal issue before the High Court was whether the Secretary had the power to issue the notice under section 16 of the Act. Specifically, the Court had to determine if the conditions precedent for the exercise of that power had been met, namely whether the Secretary had reasonable grounds to suspect that the information sought was relevant to an investigation into a contravention of the Act or a related Commonwealth law.

The Court analysed the language of section 16 and the evidence before the Secretary. It was held that the Secretary's power to issue a notice under section 16 is not a discretionary power that can be exercised arbitrarily. Rather, it is a power that must be exercised on the basis of a genuine and reasonable suspicion. The Court found that the material before the Secretary at the time the notice was issued did not provide reasonable grounds for suspicion that the information sought was relevant to an investigation into a contravention of the Act or a related Commonwealth law. Consequently, the notice was deemed to be invalid.

The High Court allowed the appeal and ordered that the notice issued by the Secretary be quashed.