MM v Australian Crime Commission

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FEDERAL COURT OF AUSTRALIA

MM v Australian Crime Commission [2007] FCA 2026

LEGAL PROFESSIONAL PRIVILEGE – where notices requiring production of documents issued to persons or entities other than holder of the privilege – whether notices invalid – whether requirement to give holder of privilege a reasonable opportunity to assert legal professional privilege.

Australian Crime Commission Act 2002 (Cth) ss 28, 29, 30 and 59

Commissioner of Taxation v Citibank Limited (1989) 20 FCR 403 cited
May v Commissioner of Taxation (1999) 92 FCR 152 cited
Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 cited

MM AND ANOR v AUSTRALIAN CRIME COMMISSION AND ANOR

NSD1477 OF 2006

EMMETT J
19 DECEMBER 2007
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD1477 OF 2006

BETWEEN:

MM
First Applicant

DD
Second Applicant

AND:

AUSTRALIAN CRIME COMMISSION
First Respondent

CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CRIME COMMISSION
Second Respondent

JUDGE:

EMMETT J

DATE OF ORDER:

19 DECEMBER 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be dismissed.

2.The Applicants pay the Respondents’ costs of the proceeding.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD1477 OF 2006

BETWEEN:

MM
First Applicant

DD
Second Applicant

AND:

AUSTRALIAN CRIME COMMISSION
First Respondent

CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CRIME COMMISSION
Second Respondent

JUDGE:

EMMETT J

DATE:

19 DECEMBER 2007

PLACE:

SYDNEY

REASONS FOR JUDGMENT

  1. This proceeding is concerned with the validity of notices issued under the Australian Crime Commission Act 2002 (Cth) (the Act) requiring the production to the Australian Crime Commission (the Commission) of documents in respect of which there may be a claim for legal professional privilege.  The applicants claim to have legal professional privilege in relation to documents produced by third parties in response to such notices.  They claim the return of documents in respect of which legal professional privilege is asserted to exist. 

  2. The Court has conducted a final hearing on the basis of admissions made on the pleadings.  However, if the applicants succeed in their primary contentions, it will be necessary for there to be a further inquiry in order to identify relevant documents and to determine what consequences should flow if it be the fact that privileged documents have been produced to the Commission without the consent of the applicants.

  3. In order to put the issues raised in the proceeding in context, it is necessary to say something about the scheme of the Act. I shall then say something about the relevant facts arising from the pleadings.

    STATUTORY FRAMEWORK

  4. The Commission is established by s 7 of the Act. The Commission consists of the Chief Executive Officer of the Commission (the CEO), examiners appointed under s 46B(1) of the Act (Examiners) and the members of the staff of the Commission. The Board of the Commission is established by s 7B of the…

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Details
Case
[2007] FCA 2026
Decision Date

CaseChat Overview and Summary

The case of MM v Australian Crime Commission involved the applicants, MM and others, challenging the validity of notices issued by the Australian Crime Commission (ACC) under the Australian Crime Commission Act 2002. The applicants argued that the notices, which were issued to entities other than themselves in connection with the Wickenby Investigation, were invalid because they did not provide the applicants an opportunity to assert legal professional privilege over certain documents. The ACC argued that the notices were valid and that the applicants' failure to assert privilege did not render the notices invalid. The court had to decide whether the notices issued by the ACC were valid and if the applicants' lack of opportunity to assert legal professional privilege invalidated the notices.

The court examined the provisions of the Australian Crime Commission Act, particularly sections 29A and 29B, which were inserted to prevent the disclosure of the existence of processes issued by the Commission during investigations. The court noted that the purpose of these sections was to ensure that the subject of an investigation is not informed of the existence of a notice. The court further found that the Examiners who issued the notices did not fail to consider the applicants' potential entitlement to claim legal professional privilege, as the notices did not need to be issued to the applicants themselves. The court concluded that the notices were not invalid simply because the applicants were not given an opportunity to assert legal professional privilege, as the object of sections 29A and 29B was to prevent the disclosure of the existence of the notices to the applicants.

As a result, the court dismissed the proceeding and ordered that the applicants pay the ACC's costs. The court's decision was based on the understanding that the purpose of sections 29A and 29B was to maintain the confidentiality of the investigation process and to prevent suspects from being alerted, which could lead to the concealment or destruction of evidence. The court found that the applicants' lack of opportunity to assert privilege did not invalidate the notices issued by the ACC.

Orders

Orders of the court

1. The proceeding be dismissed.

2. The Applicants pay the Respondents’ costs of the proceeding.

Background

Background to the litigation

Under s 59(1), the Chair of the Board must keep the Minister informed of the general conduct of the Commission in the performance of the Commission’s functions. If the Minister requests the Chair to provide information concerning a specific matter relating to the Commission’s conduct in the performance of its functions, the Chair must comply with the request. Section 59(7) provides that the CEO may give to any law enforcement agency any information that is in the Commission’s possession that is relevant to the activities of that agency, if it appears to the CEO to be appropriate to do so and to do so would not be contrary to a law of the Commonwealth, a State or a Territory that would otherwise apply.THE RELEVANT FACTS AND CIRCUMSTANCES CONCERNING THE ISSUE OF NOTICES The Commission is conducting a special investigation known as the Wickenby Investigation. The Wickenby Investigation includes the investigation of the taxation affairs of the applicants, and entities associated with them, and involves complex questions of Australian and international taxation law. In connection with the Wickenby Investigation an Examiner made a decision to issue notices under s 29 of the Act to persons or entities other than the applicants. Pursuant to that decision, notices were issued to persons and entities other than the applicants, including advisers to the applicants who were accounting firms. Neither of the applicants was aware, and was not informed by the Commission, of the fact that notices had been issued to such persons and entities. Each of the notices sought the production by the recipient of the notice of documents to the Commission. At the time of the making of the decision to issue such notices, a possibility existed that a proposed recipient might be in possession of documents that might prove to be the subject of a claim for legal professional privilege held by one of the applicants. At the time of making the decision to issue the notices, the Examiner knew that:·the investigation into the applicants involved complex questions relating to Australian and international taxation law;·some of the advisers to the applicants to whom notices would be issued had probably advised the applicants in relation to such taxation questions; and·a third party had expressed concerns about documents that were the subject of a notice to that third party. The Examiner who decided to issue the notices did not take into account any entitlement of the applicants to make a claim for legal professional privilege in relation to documents that were the subject of the notices addressed to persons or entities other than the applicants. The Examiner who decided to issue the notices intended not to give to the applicants any prior opportunity to assert any claim for legal professional privilege over any documents that were the subject of notices issued to persons or entities other than the applicants. Each of the notices was endorsed with a notation under s 29A, which was relevantly in the following terms:“Pursuant to subsection 29A(1) of the Australian Crime Commission Act 2002, disclosure of information about this [notice], or any official matter connected with it, is prohibited except… where section 29B of the Act does not prevent such disclosure.”Each of the notices was accompanied by a written statement setting out the rights and obligations conferred or imposed by s 29B on the person who was given the notice. The statement satisfied the requirements of s 29A(3) and relevantly provided as follows:“(1)[Pursuant to section 29A of the Act] a notation is included in the notice to which this statement is annexed, prohibiting disclosure of information about the notice. In order to comply with the notation, you must not disclose the existence of this notice, or any information about it, or the existence of or any information about any official matter connected with this notice. Also, you must not disclose information from which a person could reasonably be expected to infer the existence of this notice or of any official matter connected with it.If you breach this requirement, you are liable to a penalty of 20 penalty units or imprisonment for one year.…(2)[Section 29B of the Act] provides that you may make a disclosure in the following circumstances:(a)in accordance with the circumstances, if any, specified in the notation on the notice; or(b)to a legal practitioner for the purposes of obtaining legal advice or representation relating to the notice or matter.…(3)The above restrictions no longer apply if the notation on the notice is cancelled by [section 29A(4) of the Act], in which case you will be notified by the Commission, or after five years from the issue of the notice, whichever is sooner.…”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

EMMETT J
That is the clear intent and purpose of ss 29A and 29B. However, the clear object of ss 29A and 29B is to ensure that, in some circumstances, the object of an investigation, such as persons in the position of the applicants, is not informed of the existence of a notice. The relevant Examiners did not fail to take into account a consideration that they were bound to take into account simply by reason of the fact that they did not have regard to the possibility that documents that were required to be produced by a notice might be the subject of legal professional privilege of a person other than the recipient. CONCLUSION No notice or summons issued in connection with the Wickenby Investigation was invalid simply by reason of the fact that the applicants themselves were not afforded the opportunity of asserting legal professional privilege in respect of documents required by the summons or notice to be produced. Nor was any such summons or notice invalid simply by reason of the fact that the Examiner who decided to issue it did not have regard to the possibility that a person other than the recipient of it may have legal professional privilege in respect of a document that was the subject of the summons or notice. It follows that the proceeding should be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by: EMMETT J

Division 2 of Part II of the Act, which consists of ss 24A to 36 inclusive, deals with examinations. Under s 24A an examiner may conduct an examination for the purposes of an investigation into matters relating to federally relevant criminal activity that the Commission is conducting (ACC Operation/Investigation). Section 25A deals with the conduct of such an examination. Under s 28(1) an Examiner may summon a person to give evidence and to produce such documents or other things, if any, as are referred to in the summons. However, under s 28(1A), before issuing such a summons, the Examiner must be satisfied that it is reasonable in all the circumstances to do so. The Examiner must also record in writing the reasons for the issue of the summons. Under s 28(4) an Examiner who is holding an examination may require a person appearing at the examination to produce a document or other thing. Under s 30(2)(c), a person appearing as a witness at an examination before an Examiner must not refuse or fail to produce a document or thing that he or she was required to produce by a summons under the Act served on him or her as prescribed. Section 29(1) of the Act provides that an Examiner may, by notice in writing served on a person, require the person to attend before an Examiner, or a member of the staff of the Commission, to produce a document or thing specified in the notice, being a document or thing that is relevant to a special ACC Operation/Investigation. However, before issuing such a notice, the Examiner must be satisfied that it is reasonable in all the circumstances to do so. The Examiner must also record in writing the reasons for the issue of the notice. Under s 29(3), a person must not refuse or fail to comply with a notice served on him or her under s 29. Section 30(3) relevantly provides that, where a legal practitioner is required to produce a document at an examination before an Examiner and the document contains a privileged communication made by or to the legal practitioner in his or her capacity as a legal practitioner, the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by whom the communication was made agrees to the legal practitioner complying with the requirement. Section 30(9) provides that s 30(3) does not affect the law relating to legal professional privilege. Under s 29(4), those provisions apply to a person who is required to produce a document or thing by notice served on him or her under s 29 in the same manner as they apply in relation to a person who is required to produce a document or thing at an examination before an Examiner. Sections 29A and 29B of the Act were inserted by the National Crime Authority Amendment Act 1991 (Cth) (the 1991 Amendment Act). On the second reading of the Bill for the 1991 Amendment Act, the Attorney-General said that the Bill contained several proposals that were designed to improve the efficiency and effectiveness of the operations of the National Crime Authority, the predecessor of the Commission. The Attorney-General said that the amendments would prevent the disclosure of the existence of processes issued by the Commission in the course of its investigations and would also prevent disclosure of any information about the reference, the investigation or any hearings or proceedings to which the process relates. The Attorney-General said that, previously, some recipients of summonses or notices, such as financial institutions, felt obliged to inform their clients of the receipt of such documents and that that resulted in suspects being alerted to investigations and concealing or destroying evidence or going into hiding. The Attorney-General said that the amendments would help to prevent that happening again and would clarify the legal position of such institutions. The effect of ss 29A and 29B, which are critical to the issues raised in this proceeding, must be understood against that background.