Price v Elder
[1999] FCA 1353
•1 OCTOBER 1999
FEDERAL COURT OF AUSTRALIA
Price v Elder [1999] FCA 1353
ADMINISTRATIVE LAW – SEARCH WARRANTS – execution of search warrants and seizure of a substantial quantity of documents – applications to quash decisions to issue warrants and for other consequential orders including that the police be restrained from examining the seized documents – whether the issuing officers improperly exercised their power – effect on decisions of the issuing officers where the true purpose of the warrants differed to the stated reason for their issue – relevance of the fact that the applicant had voluntarily assisted the Australian Taxation Office (ATO) by giving information about large scale tax avoidance in the computer industry – discussions between applicant and ATO not placed before the issuing officers – whether omission misleading, fraudulent or in bad faith – relevance of exculpatory material to issue of search warrants – issuing officer merely required to be satisfied that there is likely to be material at the identified premises relevant to an offence – no provision for any ordinary concept of due process in legislative scheme for the issue of warrants – need to disclose prior applications for some or similar warrants – validity of search warrant where information contains imprecision of the relevant offence
Judiciary Act 1903 (Cth), s 39B
Crimes Act 1914 (Cth), ss 3C(1), 3E(1), 3E(4), 3E(5)(e), 3ZT, 29, 86
Administrative Decisions (Judicial Review) Act 1977 (Cth)Buck v Bavone [1976] 135 CLR 110, referred to
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] 162 CLR 24, referred to
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] 185 CLR 259, appliedKarina Fisheries Pty Ltd v Mitson [1990] 26 FCR 473, applied
Beneficial Finance Corporation Ltd v Australian Federal Police [1991] 31 FCR 525, applied Lego Australia Pty Ltd v Paraggio [1993] 44 FCR 151, applied
Lego Australia Pty Ltd v Paraggio [1994] 52 FCR 542, referred to
Chu v Minister for Immigration & Ethnic Affairs [1997] 78 FCR 314, referred to
Barker v R [1994] 127 ALR 280, referred to
Puglisi v Australian Fisheries Management Authority [1997] 148 ALR 393, referred to
Saunders v Commissioner of the Australian Federal Police [1998] 52 ALD 484
Malubel v Elder (Federal Court of Australia, Full Court, unreported 16 October 1998), referred to
Scott v Commissioner of Police [1974] 3 All ER 1032, referred toJOHN JAMES PRICE v WENDY ELDER & ORS
NG 631 OF 1998
NG 651 OF 1998NG 678 OF 1998
THE HON JUSTICE MARCUS EINFELD AO
1 OCTOBER 1999
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 631 OF 1998
NG 651 OF 1998
NG 678 OF 1998
BETWEEN:
JOHN JAMES PRICE
ApplicantAND:
WENDY ELDER & ORS
RespondentsJUDGE:
THE HON JUSTICE MARCUS EINFELD AO
DATE OF ORDER:
1 OCTOBER 1999
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. the further amended application in NG 631/98 dated 14 August 1998, the amended application in NG 678/98 dated 14 August 1998 and the application in NG 651/98 dated 1 July 1998 of the applicant be dismissed with costs.
Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 631 OF 1998
NG 651 OF 1998
NG 678 OF 1998
BETWEEN:
JOHN JAMES PRICE
ApplicantAND:
WENDY ELDER & ORS
Respondents
JUDGE:
THE HON JUSTICE MARCUS EINFELD AO
DATE:
1 OCTOBER 1999
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Introduction
The applicant is a director of companies operating in the computer industry in respect of whom, amongst others, the Australian Federal Police applied for three search warrants, the first in Melbourne on 22 June 1998 and the second and third in Sydney on 23 June 1998. All the search warrants were issued, the Melbourne warrant by a stipendiary magistrate Julian Fitzgerald, the Sydney warrants by a Local Court officer Wendy Elder, and were executed on and after 24 June 1998 at a number of sites in Melbourne and Sydney. A substantial quantity of documents was seized. The applicant was one of seven persons named in the warrants. His companies were among many named.
Shortly thereafter the applicant issued these three proceedings by way of applications under the Administrative Decisions (Judicial Review) Act 1977 and section 39B of the Judiciary Act 1903 seeking orders quashing the warrants or the decisions of the officers who issued them and a range of consequential relief including orders to restrain the police from examining the documents seized. The applications were subsequently amended. Ms Elder and Mr Fitzgerald have submitted to such orders as the Court may make except as to costs. The other respondents (called herein the respondents) are police or taxation investigators all of whom gave undertakings early in the proceedings not to examine the seized documents pending the Court's determination.
Much time was taken by the parties in arguing issues of public interest immunity in respect of the applications for the warrants and a constitutional matter, both of which required separate judgments at an earlier time. Then some forensic and tactical byplay, especially by the respondents, took up valuable Court time and delayed the proceedings considerably such that the hearings on applications made in June 1998 were not completed until the end of March 1999.
The legislation
The relevant warrants were issued pursuant to section 3E(1) of the Commonwealth Crimes Act 1914 (the Act) which provides:
An issuing officer may issue a warrant to search premises if the officer is satisfied by information on oath that there are reasonable grounds for suspecting that there is, or there will be within the next 72 hours, any evidential material at the premises
Pursuant to section 3C(1), "evidential material" is anything relevant to an indictable or summary offence against a law of the Commonwealth. By section 3E(5)(e), the issuing officer must state the offence to which the issued warrant relates.
It is common ground for present purposes that Ms Elder and Mr Fitzgerald were "issuing officers", that the materials seized under their warrants are or are likely to be relevant to an offence against Commonwealth law, and that their decisions to issue the warrants because they were satisfied that there were reasonable grounds for suspecting that such materials were at the relevant premises are reviewable under the Judicial Review Act.
Grounds for relief
Apart from the constitutional matter which was resolved earlier, the applicant relied on three grounds in arguing, as opposed to simply pleading, his amended applications:
1.The issuing officers improperly exercised the power in question. This ground originally had 4 stated elements to which was later added another, but having regard to the way the matter was argued, there was in substance only one – that the affidavits used to obtain the warrants did not reveal all the prior dealings and “the history of the matter” between the applicant and the ATO, and that hence the issuing officers omitted relevant considerations, took into account irrelevant considerations, and failed to consider all the material before them.
2.The informants did not reveal to the issuing officers, contrary to statutory requirements, prior applications for the same or similar warrants.
3.The decisions were invalid because the warrants failed to disclose any indictable offences for which the material was sought. This attack was originally that the warrant requests related to offences against section 29D of the Act whereas their true purpose was to obtain evidence for a conspiracy under section 86 of the Act.
Relevant and irrelevant considerations and failure to consider all the material
The considerations relevant for reviewing administrative decisions are those to be found in the subject matter, scope and purpose of the statute and the factors to which the decision-maker may legitimately have regard: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] 162 CLR 24 at 39-40 (Mason J), Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] 185 CLR 259. The decision-maker must act in good faith : Buck v Bavone [1976] 135 CLR 110 at 118-9 (Gibbs J).
The applicant alleged in his affidavits of 25 and 26 June 1998 and 8 February 1999 that, in a number of discussions, he informed officers of the Australian Taxation Office (ATO) in 1994 and 1996 that various computer industry operators were in breach of their sales tax obligations and that he gave them information about his own business. He sought their assistance in enabling him to comply with his own sales tax obligations and had discussions with them about reform of the sales tax legislation as it affected his industry. He was told to keep trading as he was.
It is common ground that most of this material was not placed before the two issuing officers although they were informed in a summary way that the applicant had obtained professional advice on how he might comply with sales tax laws. It seems to me likely that an issuing officer might anyway assume that advice had been sought and taken. More importantly, however, it will in my opinion be rare that a reasonable suspicion otherwise arising from the evidentiary material presented on an application for a search warrant will be dispelled by other facts said by the object of the warrant to be exculpatory, if only because at this stage of proceedings, the truth of a defence is not in general terms a matter for examination: Saunders v Commissioner of the Australian Federal Police [1998] 52 ALD 484. I do not believe that any notion of “onus of proof” relating to guilt is relevant to the exercise being undertaken here. The issuing officer is merely required to be satisfied that there is likely to be material at the identified premises relevant to an offence. Discussions, even co-operation, between the suspect and the authorities are unlikely to provide evidence to undercut or dispose of the offence in question such that the relevant degree of satisfaction could not be reached. This result should not be surprising because this process is administrative only and the legislative scheme for the issue of warrants makes no provision for any ordinary concept of due process – the suspect has no entitlement to a hearing or to reasons, or even to all the material before the issuing officer because much is protected from disclosure by public interest immunity.
It is true that in Karina Fisheries Pty Ltd v Mitson [1990] 26 FCR 473 at 480, a Full Court of this Court (Sheppard, Foster and Hill JJ) held that an informant for a warrant is bound to bring to the notice of the issuing officer all the facts relevant to the decision to be made. It is also apposite that another Full Court (Burchett, Nicholson and Madgwick JJ) said in Malubel v Elder (unreported 16 October 1998) that these matters were not a “mere formality”. However, a considerable course of contact between the suspect and the authorities does not seem to me to be the type of information these Full Courts had in mind.
In Lego Australia Pty Ltd v Paraggio [1994] 52 FCR 542, yet another Full Court (Beaumont, Hill and Whitlam JJ) also examined the obligations of the issuing officer in the light, inter alia, of the requirement of section 3ZT of the Act that an applicant for a warrant not knowingly make a materially false and misleading statement to the issuing officer. At 555, Justices Beaumont and Whitlam said that a half truth may be misleading. At 569 Justice Hill said that not to mislead and ensuring that any omissions of relevant material were inadvertent are synonymous with acting in good faith. Also see Puglisi v Australian Fisheries Management Authority [1997] 148 ALR 393 at 400.
Lego also held that the decision to issue would be vitiated by the fraud of the applicant in the sense that the information gave a false or misleading impression. At first instance Justice Wilcox had held ([1993] 44 FCR 151 at 172) that non-disclosure will only invalidate a warrant where the information was “known to the applicant but forgotten, or when the applicant’s ignorance results from his or her wilful blindness or other bad faith”. Although there was no direct evidence in these cases as to the knowledge of the informant about the prior contacts between the applicant and the ATO, the circumstances suggested that he did at least know that some conversations had occurred. The question for determination is whether the fact that the failure to provide information on this subject to the issuing officers is enough to set aside the warrants on this basis.
The applicant conceded that there is no general duty of disclosure on the part of an informant for a warrant but argued that the reverse side of “good faith” was not “bad faith” in an administrative law scenario where all that was necessary was that relevant considerations were not taken into account. I accept that view in general terms in that if an information on its face did not provide what the majority in Lego at 557 called “an adequate basis to justify” the decision to issue, or omitted considerations rendered material by the statute, or if the decision was based on irrelevant considerations or was unreasonable in the “Wednesbury” sense, the decision to issue the warrant may be struck down.
I have carefully read the conversations which the applicant deposed to having held with officers of the ATO. There are a number of observations that arise from them. First, they took place long before the applications for the warrants so that whatever was said may not per se have any relevance to their issue. Second, the suspected offences were allegedly committed between March 1995 and October 1997. The alleged conversations occurred between late June and early November 1996. There is nothing to show how the situation in those 4½ months related to possible offences both earlier and later. Third, there is no evidence, and no reason for thinking, that when the ATO officers spoke to him, they had any reason for suspecting any offence by the applicant. Fourth, there is no basis for believing that the informant for the warrants knew the detail of what had been said in the conversations. Fifth, without a great deal of separate effort, there would be no way for the police to be able to establish, or the issuing officers to be satisfied as to, precisely what the ATO officers knew or believed about the applicant’s business activities or whether whatever he had told them was the truth. Sixth, the suspected offences concerned non-payment of sales tax, inter alia, by his companies. The conversations revealed by the applicant do not directly advert to this question and it could hardly be implied that whatever else they were saying, the ATO officers were approving or condoning a wholesale avoidance of sales tax. Yet the applicant’s submissions are tantamount to some such assertion. Seventh, even if that bizarre concept were accepted, it could not be relevant to the informant police officer’s assertion that he suspected criminal conduct from a range of facts and circumstances to which he deposed. Nor could it be fraudulent to omit the tax officers’ views from the materials supplied to the issuing officer. Finally, the informations advert to offences by seven persons including the applicant. Failure to disclose conversations with him could not bear on the appropriateness of the warrants as applicable to the others or to the applicant’s possible criminality in respect of or in conjunction with their activities.
In my view, it is thus not possible to regard the omission to detail these conversations or contacts as misleading, fraudulent or in bad faith. Nor, contrary to the applicant’s submissions, did Ms Elder in evidence give support to any suggestion that she may have been misled. Ms Elder did say in her evidence that she did not know, and that it would have been relevant to her decision, that the applicant had voluntarily assisted the ATO by giving information about large scale tax avoidance in the industry and had been told to keep trading as he was. She said that she would have taken these facts into account and may have sought further information about them. It is obvious that if she had been given other information of potential relevance, she would have taken it into consideration but the questions asked of her were general, did not identify the time discrepancies, and did not detail what was actually discussed. I have detected nothing in the conversations that could in the entire context have reasonably had any relevance to or influence on her decision to issue and without which she must be found to have received a misleading impression of the case for the warrants. I am also quite satisfied that both issuing officers considered all the material with which they were supplied.
Fraud, even in the limited sense used in this context, cannot be guessed at or implied from the answers to a series of hypothetical questions. There is no evidence that the informant deliberately or even accidentally omitted detailed communications of which at best he probably had only a very general knowledge. The “impression” sought to be given by the information was that there was material available at the various premises which was relevant to possible implication in offences against the Commonwealth by the applicant and the other six people named. That impression did not in my opinion attract a false or misleading quality by reason of the failure to disclose details of the alleged conversations between the applicant and officers of the ATO.
Prior applications
The applicant argued at the hearing, though not in the amended applications, that the warrant applications were invalid because of a breach of the requirements of section 3E(4) of the Act that previous warrant applications “relating to the same person or premises” and their result must be disclosed to the issuing officer. This submission must fail. There had apparently been either two earlier draft applications to Ms Elder for one of the warrants sought or one earlier draft for each warrant sought. Her response was to require them to be re-done as she would have refused the applications if they had been in the form of the drafts.
The applicant argued that each earlier draft was an application for a warrant which was not disclosed in the applications now under consideration. This contention was put alternatively as Ms Elder “tutoring the applicant for the warrant” and thereby surpassing or exceeding her statutory function. No authority was cited for these novel propositions which were not put to her in the witness box and which were really based upon the fact that the word DRAFT did not appear on the applications even though Ms Elder was told that they were drafts and neither was sworn. She did not make a decision on either application as she could not have done in the absence of sworn informations. In my view, they were not applications pursuant to the Act. Even if they were, they were withdrawn or not pursued. There is no statutory obligation to disclose any such event.
Failure to disclose indictable offence
The warrant applications allege offences by various companies and people in a scheme to defraud the Commonwealth contrary to section 29D of the Act by lodging false claims for refunds of sales tax. Although the applicant conceded that a charge of conspiracy might also be made, he claimed that there is no charge known to the law of the kind referred to in the application. This claim apparently substituted for the claims in the amended applications that the warrants were covertly intended to support a conspiracy charge under section 86 even though they were expressed as related to charges under section 29D.
The argument was not spelled out and was therefore quite vague. It appeared to be that proof of lodgment by the applicant of a false claim for a refund of sales tax to his company would not sustain a charge against him under section 29D because he himself did not gain a benefit. It was conceded that the company would be guilty of the offence so long as the applicant was its agent acting within the scope of his authority. But what the section is concerned with is causing injury to or imperilling the economic interests of the Commonwealth. Benefit to the accused or anyone else is not a necessary element of the offence : Scott v Commissioner of Police [1974] 3 All ER 1032; Barker v R [1994] 127 ALR 280 at 307-8. Although fraud by an individual which results in a benefit for the company may constitute an offence by the company itself under section 29D in certain circumstances, whether it is or not would not preclude the individual being also convicted. From all the available material, I believe that there was ample evidence to enable the issuing officers to be satisfied of the matters required by the statute for the warrants to issue.
In any event, a search warrant will not be invalid for imprecision in the statement of the relevant offence. So long as the general nature of the alleged criminal activity is stated with sufficient particularity to identify the appropriateness of the proposed search, the legal requirements have been met: see eg Beneficial Finance Corporation Ltd v Australian Federal Police [1991] 31 FCR 525 at 533-44. In my view these applications met this test quite adequately.
Use of unexpurgated editions of the information
The parties engaged in a strong but extraordinarily arid argument about whether the Court should have regard to the original informations in determining the questions for decision now. The unedited informations were examined at an earlier stage of the proceedings for the purpose of determining a claim by the respondents for public interest immunity. In accordance with the judgment given at the time, only edited versions have ever been made available to the applicant. The applicant does not seek to go behind this ruling to see the full versions now nor does he seek to make them exhibits. He merely asks the Court to look at them again for the purpose of ruling on the submissions now made for the invalidation of the warrants. The respondents seemed to object to this course although they did not say why except by the statement that the applications can be resolved without a need to read the full texts. Both parties refer to Chu v Minister for Immigration & Ethnic Affairs [1997] 78 FCR 314, a decision of a Full Court of this Court (Carr, Kiefel & Sundberg JJ), the applicant in support of his argument, the respondents to distinguish it from the present cases. In my view Chu has at best peripheral relevance to the present litigation.
Because of the conclusions I have reached, it is not necessary for me to resolve this argument. I am satisfied that I am entitled to have regard to the full texts of the informations and I have done so. The detailed consideration I was required to give them on the privilege claim, at the request of the parties, would have made it impossible for me to ignore or forget what I read then, especially in view of their contents, and I could not be party to any such pretence. Moreover, it seems odd if not worse that state authorities would want a matter such as this to be determined on a heavily sanitised clutch of evidence which taken by itself reveals very little indeed of the case they sought to make out to the issuing officers. In fact, to have limited myself only to what was supplied to the applicant would have rendered the judicial review process virtually worthless.
Conclusion
The amended applications will be dismissed with costs.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marcus Einfeld AO. Associate:
Dated: 1 October 1999
Counsel for the Applicant: Mr I. D. Temby QC and Mr L. J. Aitken Solicitor for the Applicant: Colbron & Associates Counsel for the first Respondent in NG 631/98 and NG 678/98: Mr P. I. Lakatos
Solicitor for the first Respondent in NG 631/98 and NG 678/98: State Crown Solicitor
Counsel for the first Respondent in NG 651/98: Mr J. Langmead
Solicitor for the first Respondent in NG 651/98: Victorian Government Solicitor
Counsel for the other Respondents in each case: Mr D. J. Fagan SC and Mr S. J. Gaegler
Solicitor for the other Respondents in each case: Commonwealth Director of Public Prosecutions
Dates of Hearing: 27 January and 29 March 1999 Date of Judgment: 1 October 1999
0
3