TLC Consulting Services Pty Ltd v White
[2002] QSC 434
•20 December 2002
SUPREME COURT OF QUEENSLAND
CITATION:
TLC Consulting Services Pty Ltd v White [2002] QSC 434
PARTIES:
TLC CONSULTING SERVICES PTY LTD
ACN 072 971 005
(applicant)
v
PAUL MICHAEL WHITE
(respondent)FILE NO:
S9760 of 2002
DIVISION:
Trial Division
PROCEEDING:
Application for a statutory order for review
DELIVERED ON:
20 December 2002
DELIVERED AT:
Brisbane
HEARING DATE:
25 November 2002
JUDGE:
Mullins J
ORDER:
1. The decision of the respondent to take and retain possession of the applicant’s Araid Computer Server N3511 (“the server”) on 17 October 2002 be set aside.
2. The respondent forthwith return the server to the applicant.CATCHWORDS:
TRADE AND COMMERCE – FAIR TRADING LEGISLATION – warrant to enter premises of an introduction agency as part of an investigation into alleged breaches of the Fair Trading Act 1989 (Q) – whether warrant valid on face – whether warrant should have specified the powers conferred on inspector in executing warrant – validity of warrant determined on the reading of s89 of the Act – the powers that can be exercised by inspector are conferred by the Act and not by the warrant – warrant valid on face
TRADE AND COMMERCE – FAIR TRADING LEGISLATION – warrant to enter premises of an introduction agency as part of an investigation into alleged breaches of the Fair Trading Act 1989 (Q) – computer server seized and removed – whether seizure and removal of server was authorised under s89(1)(e)(i) of Fair Trading Act 1989 (Q) – computer server not analogous to a hardcopy document and does not fall within description of records under that provision – seizure and removal of server not authorised
Acts Interpretation Act 1954
Fair Trading Act 1989
Ghani v Jones [1970] 1 QB 693
Inland Revenue Commissioners v Rossminster Ltd [1980] AC 952
MF1 v National Crime Authority (1991) 33 FCR 449
Ousley v The Queen (1997) 192 CLR 69
Parker v Churchill (1985) 9 FCR 316
Wright v Queensland Police Service [2002] 2 QdR 667COUNSEL:
R Richter QC and MO Plunkett for the applicant
JA Logan SC and B Thomas for the respondentSOLICITORS:
Shand Taylor for the applicant
CW Lohe, Crown Solicitor for the respondent
MULLINS J: TLC Consulting Services Pty Ltd (“the applicant”) seeks to review the decision of Mr Paul Michael White (“the respondent”), a senior investigations officer employed by the Queensland Office of Fair Trading (“OFT”), made on 17 October 2002 to take and retain possession of the applicant’s Araid Computer Server N3511 (“the server”).
Background
Prior to 17 October 2002 the OFT had, since 1996, received over 194 complaints concerning the applicant. The respondent was aware from the investigations of these complaints that the applicant operated an introduction agency. The respondent had spoken with many of the complainants and investigated their grievances and attended at the premises of the applicant in March 2000 and spoken with a former manager of the applicant.
The respondent deposed in his affidavit filed 21 November 2002 to his investigations into the various activities of the applicant being directed towards the potential for prosecutions of breaches of the Fair Trading Act 1989 (“FTA”) and also with possible injunctive proceedings under s 98 of the FTA and compensatory proceedings under s 100 of the FTA. The provisions of the FTA on which the respondent was considering that potential prosecutions or proceedings could be based were ss 38, 39, 40 and 48 of the FTA.
On 16 October 2002 the respondent printed out a list of 39 current or recent complainants from the records of the OFT.
In addition to the information received from the various complainants the respondent had also interviewed Ms Alicia Crampton, a former employee of the applicant who was employed for approximately 1 week commencing on Friday 27 September 2002. The respondent interviewed Ms Crampton on 10 October 2002 and obtained a statement from her dated 16 October 2002.
The respondent swore a complaint on 16 October 2002 in order to obtain the issue of a warrant pursuant to s 89(3) of the FTA. The warrant was issued on 16 October 2002 by Magistrate Mr MG O’Driscoll.
The warrant to enter was executed at the offices of the applicant at Level 2 Corporate Centre One, cnr Slatyer Avenue and Bundall Road, Bundall at about 12.25pm on Thursday 17 October 2002.
At the time of executing the warrant, the respondent considered that he was in possession of information which suggested to him there was contained within the server information and materials relating to his investigation of various breaches and contraventions of the FTA by the applicant.
While at the applicant’s premises on 17 October 2002 the respondent made inquiries of the applicant’s manager, Ms DM Wilson, about whether the applicant’s records were kept on a database. The respondent expressly informed Ms Wilson that he intended searching the premises for documentation and records in relation to the 39 complaints. Ms Wilson deposes to offering to print out information relating to the 39 complaints, subject to that course being approved by the solicitor whom Ms Wilson had summonsed to the premises to give advice. Ms Wilson states that on each occasion that she offered to print out the information relating to the 39 complaints, the respondent refused and stated his intention to seize and access the server.
The respondent spoke to the solicitor who physically attended at the premises during the execution of the warrant and also by telephone to the applicant’s Melbourne solicitor, Ms Tania Cirkovic. The respondent informed both solicitors that the OFT was conducting investigations in respect of 39 complaints.
Ms Wilson states that the applicant’s business of an introduction agency is conducted Australia wide and has in the order of 20,000 current members.
Ms Wilson deposes to the data on the server in relation to each client includes driver’s licence number, passport number, credit card details, key card details, telephone contact numbers, wage details, place of employment, education and qualifications, date of birth, nationality of member and parents, medicare number, names and ages of member’s children, names of members to whom the member has been introduced, email address and photographs.
Ms Wilson deposes to the server containing information in relation to the applicant’s staff including names and addresses of current and past staff, wage details, staff bank account details, annual and sick leave details, tax file numbers and superannuation information.
Ms Wilson also deposes to categories of other documents that are stored on the server including tax invoices, correspondence to clients, creditors, debtors, the Australian Taxation Office, solicitors, banks and the directors of the applicant, private correspondence and financial information pertaining to the director of the applicant and his wife, correspondence to and from Liquor Licensing, correspondence to accountants, staff references, staff employment contracts, client contracts, information regarding the applicant’s packages, workplace health and safety information, correspondence regarding advertising, email documents including external email and in-house email. The director of the applicant conducts a restaurant at Broadbeach and Ms Wilson deposes to the server containing information in relation to that business.
Ms Wilson also swears that the server contained a substantial number of documents and correspondence sent to and received from the applicant’s various legal advisers solely in relation to past and current legal matters of a confidential nature. No claim for legal professional privilege was made at the time the server was seized, but it is not suggested on behalf of the respondent that there has been any waiver of the right to claim legal professional privilege.
After the server was seized and removed from the applicant’s premises, solicitors for the applicant negotiated with an officer of the OFT that the OFT would not access the server until the close of business the next day. That undertaking was extended until the hearing of this application and during the course of the hearing of the this application the undertaking of the respondent not to access the server has been extended until judgment is given.
Although it does not appear that the respondent imparted to any representative of the applicant at the time of executing the warrant that his investigations may result in action being taken by the OFT which would not be limited, in effect, to the 39 complaints, the respondent in his affidavit filed on 21 November 2002 has referred to the fact that at the time he took possession of the server he did so on the basis that it contained within it electronically stored data also relevant “to possible future injunctive and compensatory proceedings to s. 98 and s.100 of that Act”. Presumably the respondent was contemplating an injunction pursuant to s 98(2) of the FTA directed at any conduct of the applicant of the same nature as that in respect of which the 39 complaints were made, if the court were able to be satisfied that the conduct constituted a contravention of a provision of the FTA.
Relevant statutory provisions
The functions of the OFT are set out in s 21(1) of the FTA. Relevantly, the functions of the OFT set out in paras (d) and (e) of s 21(1) of the FTA are:
“(d) to receive and consider complaints concerning matters affecting or likely to affect the interests of consumers or persons negotiating or considering the acquisition of goods or services as consumers and, if the commissioner is of the opinion that such action is warranted, to investigate the complaints and take such action in respect of the matter as seems proper to the commissioner; and
(e) to investigate fraudulent or deceptive practices in relation to matters that affect or are likely to affect the interests of consumers or persons negotiating or considering the acquisition of goods or services as consumers and to take such action in respect of the practices as seems proper to the commissioner;”
Section 89 of the FTA provides:
“89 (1) For the purpose of the discharge by the office of any of its functions under this Act, or for any other purposes of this Act, an inspector may at all reasonable times—
(a) enter any premises the inspector knows or reasonably suspects—
(i) are being used for the production, manufacture, assembly, preparation, storage or supply of goods or the supply of services; or
(ii) have been or are being or are likely to be used by any person in connection with a contravention of this Act; and
(b) enter any premises where the inspector knows or reasonably suspects that records are kept relating to the supply of goods or services or relating to a contravention of this Act; and
(c) enter any premises that the inspector knows or reasonably suspects to be used by any person for printing or as an office in connection with the trade or commerce of printing any newspaper or other publication, which the inspector knows or reasonably suspects to be associated with any contravention of this Act; and
(d) enter any commercial broadcasting or television station, which the inspector knows or reasonably suspects to be associated with any contravention of this Act; and
(e) in any premises entered by the inspector—
(i) search for, examine, take possession of or make copies of or extracts from records relating to goods or services supplied or to be supplied or relating to any matter the subject of an investigation under this Act; and
(ii) search for and examine goods found on the premises; and
(iii) exercise any power under this Act to seize goods without payment or take any goods found on the premises, on payment or tendering of a reasonable price for them; and
(iv) seize without payment any brochures, leaflets, books, writings, documents or other materials that the inspector knows or reasonably suspects have been, are being, or are
likely to be used to advertise, promote or make representations with respect to any matter in contravention of this Act; and
(v) open any room, place or container or package that the inspector knows or reasonably suspects to contain goods; and
(vi) question with respect to matters under this Act any person the inspector finds on the premises; and
(f) make such inquiry and examination as the inspector believes to be necessary or desirable to assist the discharge or exercise of any function or power under this Act or to ascertain whether any contravention of this Act has been, is being, or is likely to be
committed.
(1A) Subsection (1) does not authorise forcible entry by an inspector to any premises other than under the authority of a warrant obtained by the inspector under subsection (3).
(2) Before an inspector enters any part of premises which part is used as a dwelling the inspector shall, unless the inspector has the permission of the occupier of that part to the inspector’s entry, obtain from a justice a warrant to enter.
(3) A justice who is satisfied upon the complaint of an inspector that there is reasonable cause to suspect that any place has been or is being or is likely to be used in connection with a contravention of this Act or for the keeping of records relating to a contravention of this Act may issue the justice’s warrant directed to the inspector to enter the place specified in the warrant for the purpose of the inspector exercising in the premises the
powers conferred on an inspector by this Act.
(4) A warrant issued under this section shall be, for a period of 1 month from its issue, sufficient authority—
(a) to the inspector to whom it is directed and to all persons acting in aid of the inspector to enter the place specified in the warrant; and
(b) to the inspector to whom it is directed and to all persons acting in aid of the inspector to exercise in respect of the place specified in the warrant all the powers conferred on an inspector by this Act.
(5) For the purpose of gaining entry to any place, an inspector may call to the inspector’s aid such persons as the inspector considers necessary and such persons, while acting in aid of an inspector in the lawful exercise by the inspector of the inspector’s power of entry, shall have a like power of entry.
(6) Where an inspector has taken possession of records or of other property for the purposes of this Act the inspector may—
(a) in the case of any records—retain the same for so long as is necessary for those purposes, but the person otherwise entitled to possession of the records, if the person so requests it is entitled to be furnished as soon as practicable with a copy of the records
certified by the commissioner to be a true copy and such a certified copy shall be received in all courts and elsewhere as evidence of the matters contained in the copy as if it were the original; and
(b) in the case of other property—subject to the express provisions of this Act, retain the property for so long as is necessary for those purposes, and afterwards dispose of it as the commissioner directs.
There is a definition of “records” in s 5 of the FTA. It is defined to include “any record of information however compiled, recorded or stored and any books, documents or writings”.
Issues
Although the amended application for a statutory order of review sets out multiple grounds, two issues emerged as those on which prime reliance was placed by the applicant. The first issue is whether the warrant was invalid on its face. The second issue was whether s 89(1)(e)(i) of the FTA authorised the respondent to take possession of the server and remove it from the applicant’s premises.
Validity of warrant
The warrant is entitled with a reference to s 89 of the FTA. The operative parts of the warrant state:
“WHEREAS I, the undersigned Magistrate, am satisfied by the complaint on oath of Paul Michael White, an Inspector appointed pursuant to Section 19(1) of the Fair Trading Act 1989, that there is reasonable cause to suspect that:-
a place namely premises described as commercial premises situated at TLC Consultancy Services, Level 2, Corporate Centre One, Bundall Road, Bundall in the State of Queensland; (the place or ‘the premises’)
Has been, or is being or is likely to be used in connection with the contravention of or for the keeping of records relating to a contravention of the Fair Trading Act 1989, concerning Misleading or Deceptive Conduct, Unconscionable Conduct, False or misleading representations, and accepting payment for services without intending or being able to supply as ordered,
Therefore, I issue this Warrant directed to you to enter the place for the purpose of you exercising in the premises the powers conferred on an inspector by the Fair Trading Act 1989.
This warrant shall be, for a period of 1 month from the 16th day of October 2002, sufficient authority
(a)to you and to all persons acting in aid of you to enter the place; by force if necessary and
(b)to you to exercise in respect of the place all the powers conferred on an inspector by the Fair Trading Act 1989.”
The applicant’s arguments proceed on the basis that the warrant was the authority for the exercise of the powers by Mr White. The defects in the warrant which are relied on by the applicant can be summarised as:
(a)the warrant does not specify the particular purpose for which it has been issued;
(b)there is only a general reference to the types of contraventions of the FTA about which the issuing Magistrate had reasonable cause to suspect were being committed at the premises specified in the warrant without any identification of particular offences, the list of complainants, the alleged offender or the subject matter of the complaints or investigations;
(c)the warrant does not mention the basis of the reasonable suspicion that the premises have been or are being or are likely to be used by any person in connection with a contravention of the FTA.
The respondent contends, however, that the regime provided for in s 89 of the FTA is not one which depends upon the warrant conferring upon the inspector the right to exercise particular powers, but that the powers are conferred on an inspector by s 89(1) of the Act, subject to a warrant being obtained to permit forcible entry as required by s 89(1A) of the FTA.
The applicant relies on numerous authorities dealing with the form of warrants including Ousley v The Queen (1997) 192 CLR 69 and Parker v Churchill (1985) 9 FCR 316. The respondent draws an analogy between s 89 of the FTA and the statutory provision which was considered by the House of Lords in Inland Revenue Commissioners v Rossminster Ltd [1980] AC 952 (“Rossminster”) and the approach the majority of the House of Lords took to that statutory regime.
The starting point on whether the warrant was valid on its face is the construction of s 89 of the FTA. Section 89(1) of the FTA sets out the powers which an inspector can exercise at all reasonable times for the purpose of the discharge by the OFT of any of its functions under the FTA or for any other purposes of the FTA. Those powers set out in paras (a) to (d) include the power to enter specified premises in the circumstances provided for in each of those paragraphs. Paragraph (e) of s 89(1) sets out specific powers exercisable by the inspector who has entered into any such premises. Paragraph (f) of s 89(1) is a general inquiry and examination power. Sections 89(1A) and (2) of the FTA qualify the power of entry otherwise conferred on an inspector by s 89(1). Section 89(1A) makes it clear that subsection (1) does not authorise forcible entry unless the inspector has obtained a warrant under subsection (3). Section 89(2) deals with entry into a dwelling which also requires a warrant to be obtained.
Section 89(3) of the FTA specifies the process by which a justice may issue a warrant to an inspector to enter the place specified in the warrant “for the purpose of the inspector exercising in the premises the powers conferred on an inspector by this Act”. Section 89(3) therefore does not require the justice who issues the warrant to delineate which powers can be exercised by the inspector. This is reinforced by s 89(4) of the FTA which provides expressly what authority follows from a warrant issued under s 89 of the FTA.
The statutory provision under consideration in Rossminster was, relevantly, in the following terms:
“(1) If the appropriate judicial authority is satisfied on information on oath given by an officer of the board that-(a) there is reasonable ground for suspecting that an offence involving any form of fraud in connection with, or in relation to, tax has been committed and that evidence of it is to be found on premises specified in the information; and (b) … the authority may issue a warrant in writing authorising an officer of the board to enter the premises, if necessary by force, at any time within 14 days from the time of issue of the warrant, and search them . …. (3) On entering the premises with a warrant under section, the officer may seize and remove any things whatsoever found there which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence as is mentioned in subsection (1) above. …”.
The warrant that had been issued in Rossminster referred to information on oath being provided in accordance with the provisions of s 20C of the Taxes Management Act 1970 stating that there was reasonable ground for suspecting that an offence involving fraud in connection with or in relation to tax had been committed and that evidence of it was to be found on the subject premises and stated that the relevant officers of the Board of Inland Revenue were thereby authorised to enter those premises and search them and seize and remove any things which those officers had reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence.
It was held by the majority that the warrants were within the authority of the relevant statutory provision which did not require the occupants to be told what offences were alleged to have been committed, who were alleged to have committed them or the reasonable ground which the judge was satisfied existed for suspecting that an offence involving fraud relating to tax had been committed.
Viscount Dilhorne made reference at 1004 to the distinction that the warrant only authorised entry and search, but the power to seize and remove was given by s 20C(3). Lord Scarman stated at 1023:
“The only warrant required by the statute is one authorising entry and search. Clearly it must specify the premises to be entered and searched. But that is the limit of the authority given by the warrant. The judge’s warrant is not the authority for seizing and removing things found on the premises. That power is conferred by the statute, i.e., subsection (3). As the Divisional Court well said, the warrant is only the key of the door, it does not confer the power to seize and remove, although, until and unless it opens the door, the power to seize and remove does not arise.”
The structure of s 89 of the FTA reflects the type of statutory provision that was considered by the House of Lords in Rossminster. The language of s 89 of the FTA is clear and unambiguous in conferring powers on an inspector and a warrant is relevantly required when the inspector is proposing to exercise those powers in premises to which forcible entry may be necessary.
I consider the submission made on behalf of the respondent that it was the FTA and not the warrant which delineated the nature and extent of the powers that the respondent could exercise upon entering the premises on 17 October 2002 reflects the regime provided for in s 89 of the FTA. The warrant was necessary to enable the respondent and those accompanying him to obtain entry to the subject premises, but upon entry, the respondent was entitled to exercise the powers set out in s 89(1) of the FTA. Section 89 of the FTA did not require the warrant to specify which of the powers the inspector was authorised to exercise, as s 89 allowed the respondent to exercise all the powers conferred on him by the FTA. The other defects relied on by the applicant are not related to the requirements of s 89(3) of the FTA. The warrant has sufficient detail to comply with s 89(3) of the FTA.
The warrant was therefore valid on its face.
Whether the respondent authorised to seize the server
It is common ground between the parties that there are some records on the server which the respondent was entitled to seize and that there are some records on the server which the respondent was not entitled to seize. It was clear, however, that there was no consensus as to the extent of the records to which the respondent was entitled.
To the extent that the respondent was relying on the power conferred by s 89(1)(e)(i) of the FTA, it is necessary to determine by construction of that provision as to what records that authorised the respondent to take possession of. The critical wording is that the inspector may “take possession of … records relating to goods or services supplied or to be supplied or relating to any matter the subject of an investigation under this Act”.
Even allowing that the respondent was entitled to records that extended beyond those directly relating to the 39 complaints and could be relevant to investigation of generic practices which were indicated by the 39 complaints, it is apparent from the affidavit of Ms Wilson that the server contains material far beyond and irrelevant to the respondent’s investigation.
The issue that was argued was simply whether the server fitted the description of “records” of the type described in s 89(1)(e)(i) of the FTA.
The extended definition of “records” in s 5 of the FTA provides no assistance, as it merely is an expansive definition on what can be a record. It does not deal with the problem thrown up by this matter where what has been taken by the respondent is the server which physically contained records other than those strictly within the description of “records” in s 89(1)(e)(i) of the FTA and where access to those which fall strictly within the description of “records” cannot be achieved without possession of the server.
The submission was made on behalf of the applicant that the respondent did not have the power to take possession and retain the server, unless it was a record solely relating to services supplied or otherwise within the description of record within s 89(1)(e)(i) of the FTA.
The applicant argues that it is the server itself that is the record and, even if it does contain irrelevant material, the respondent is entitled to have the whole record, relying on MF1 v National Crime Authority (1991) 33 FCR 449, 461-462. That decision was concerned with a provision which authorised a member of the National Crime Authority to summons a person to appear at a hearing to produce such documents as were referred to in the summons. It was held by the Full Court of the Federal Court that “documents” in the relevant provision should be construed as referring to the whole of the paper which contains the writing having relevance to the matters the subject of investigation.
I have difficulty with the respondent’s reliance on an analogy between a document and a computer server. Where part of the document is relevant to an investigation, it is logical that the whole document must be produced, in order to look at the relevant part in context. A computer server is physically the repository electronically of numerous separate records, none of which necessarily have to be looked at in conjunction with another in order to give sense to any particular record.
The respondent sought to rely on the extended definition of “document” in s 36 of the Acts Interpretation Act 1954 which extends the definition of “document” to include any disc, tape or other article or any material from which sounds, images, writings or messages are capable of being produced or reproduced (with or without the aid of another article or device). That definition would not make the server a “document” for the purpose of the definition of “records” in s 5 of the FTA.
It may be that developments in technology have overtaken the terms in which the power of seizure was conferred by s 89(1)(e)(i) of the FTA. It is not appropriate to attempt to construe s 89(1)(e)(i) of the FTA by reference to current means of keeping records which would ignore the express terms of s 89(1)(e)(i) of the FTA. If the powers conferred on an inspector are to be expanded to allow for the seizure of a computer server where it keeps records other than those which relate to services supplied or to be supplied or to any matter the subject of an investigation under the FTA, that is a matter for the Legislature.
I have therefore concluded that, as a matter of construction of s 89(1)(e)(i) of the FTA, the respondent did not have power to take the server, because it is not a record or records that fall within the description of “records” in that provision.
There were other means by which the respondent could have chosen to obtain copies of the records from the server that were relating to the matter the subject of his investigation under the FTA, but the respondent did not do so.
It is argued on behalf of the respondent that even if s 89 of the FTA did not authorise the respondent to take the server into his possession, either its retention was warranted at common law, relying on Ghani v Jones [1970] 1 QB 693, or the court should exercise its discretion not to order that the server must be returned, in circumstances where there is an ongoing investigation.
Ghani v Jones was concerned with seizure and retention of documents without a warrant which were of evidential value in respect of the investigation of a serious offence. It does not appear to be relevant to the wrongful seizure of items pursuant to a warrant: cf Wright v Queensland Police Service [2002] 2 QdR 667, 680.
The basis on which it is submitted that the server should not be returned is that there is an ongoing investigation and the prospects of preservation of the information which the server contains might otherwise be moot. Section 90 of the FTA provides a means by which an inspector can obtain information or copies of any records in a person’s possession in relation to any matter relevant to the operation or enforcement of the FTA. Upon the server being returned, it is open to the respondent to immediately require records from the server that relate to the respondent’s investigation of the 39 complaints and any other possible contraventions of the FTA. In view of the preparedness of the applicant on 17 October 2002 to print out the files from the server relating to those 39 complaints, I am not able to conclude that the applicant has shown that the information to which it seeks access on the server is likely to be destroyed if the server is returned to the applicant.
Conclusion
It follows that as there was no power for the respondent to seize the server, the decision to take possession of and retain the server should be set aside. There is no reason not to order that the server be forthwith returned to the applicant by the respondent. The formal orders which I make are:
1. The decision of the respondent to take and retain possession of the applicant’s Araid Computer Server N3511 (“the server”) on 17 October 2002 be set aside.
2. The respondent forthwith return the server to the applicant.
I will hear submissions on costs.
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