Woodroffe v National Crime Authority
[2000] FCA 1052
•2 AUGUST 2000
FEDERAL COURT OF AUSTRALIA
Woodroffe v National Crime Authority [2000] FCA 1052
JENNIFER JEAN WOODROFFE and JAJ HOTELS PTY LTD v
NATIONAL CRIME AUTHORITY, DEPUTY COMMISSIONER OF TAXATION,
CHARLES MARK WILLIAMS and DAVID CYRIL GURRYS 24 OF 1999
MANSFIELD J
2 AUGUST 2000
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
S 24 OF 1999
BETWEEN:
JENNIFER JEAN WOODROFFE
FIRST APPLICANTJAJ HOTELS PTY LTD
SECOND APPLICANTAND:
NATIONAL CRIME AUTHORITY
FIRST RESPONDENTDEPUTY COMMISSIONER OF TAXATION
SECOND RESPONDENTCHARLES MARK WILLIAMS
THIRD RESPONDENTDAVID CYRIL GURRY
FOURTH RESPONDENTJUDGE:
MANSFIELD J
DATE OF ORDER:
2 AUGUST 2000
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.Paragraphs 4 - 7 of the amended consolidated application dated 7 April 2000 be struck out.
2.The consolidated statement of claim dated 7 April 2000 be struck out.
3.The applicants have leave to file and serve a fresh amended application and a fresh amended consolidated statement of claim in such terms as they may be advised by a time to be fixed by the Court.
4.The notices of motion of the first and third respondents dated 23 February 2000 and of the second respondent dated 24 February 2000 be adjourned to a date to be fixed, with liberty to call on those notices of motion or either of them on reasonable notice.
5.The applicants pay to the first and third respondents their costs to date of and incidental to their notice of motion dated 23 February 2000.
6.The applicants pay to the second respondent his costs to date of and incidental to his notice of motion dated 24 February 2000.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
S 24 OF 1999
BETWEEN:
JENNIFER JEAN WOODROFFE
FIRST APPLICANTJAJ HOTELS PTY LTD
SECOND APPLICANTAND:
NATIONAL CRIME AUTHORITY
FIRST RESPONDENTDEPUTY COMMISSIONER OF TAXATION
SECOND RESPONDENTCHARLES MARK WILLIAMS
THIRD RESPONDENTDAVID CYRIL GURRY
FOURTH RESPONDENTJUDGE:
MANSFIELD J
DATE:
2 AUGUST 2000
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
This action has not followed a routine path.
The initial claims
On 1 April 1999, the first applicant (“Ms Woodroffe”) applied for injunctions against the first respondent (“the NCA”) and the second respondent (“the DCT”) under s 39B of the Judiciary Act 1903 (Cth) (“the Judiciary Act”) to restrain them from using or disseminating any documents, or information contained in any documents, obtained upon the execution on 25 May 1998 of a search warrant dated 22 May 1998 (“the warrant”). I shall call the information then obtained “the warrant material”. She also sought to restrain the NCA and the DCT from using or disseminating any documents, or information contained in any documents, relating to her financial affairs obtained from the Police Credit Union (“the Credit Union information”). She further claimed declarations against the NCA and the DCT that they had no proper powers to procure, or grounds for procuring, the issue of the warrant under the Crimes Act 1914 (Cth) (“the Crimes Act”). The warrant itself was claimed to be invalid, so that the warrant material was illegally obtained. She claimed orders setting aside the warrant, and setting aside decisions
·by the NCA on about 11 December 1998 to seek to interview Ms Woodroffe,
·by the NCA on or about 17 December 1998 to refuse to provide certain information to Ms Woodroffe,
·by the NCA on or about 25 March 1999 not to provide certain information to Ms Woodroffe, and
·by the DCT “to amend assessments”.
The application was supported by affidavit: O 4 r 6 of the Federal Court Rules (“the Rules”). Two solicitors who attended during the execution of the warrant described that process. They indicated that a copy of the warrant was made available to Ms Woodroffe’s legal advisers at the time. The warrant was issued under s 3E of the Crimes Act, as the issuing magistrate (who was later the subject of separate proceedings referred to below) (“the magistrate”) was satisfied that there were at the premises proposed to be searched certain documents relating to the affairs of Ms Woodroffe (and others including JAJ Hotels Pty Ltd (“JAJ Hotels”)) as to which there were reasonable grounds for suspecting that they would afford evidence of the commission of certain offences against the laws of the Commonwealth. The identified offences were that Ms Woodroffe and/or another person had defrauded the Commonwealth contrary to s 29D of the Crimes Act by evading tax, or that she or they had imposed upon the Commonwealth by untrue representations to the Australian Taxation Office with a view to gaining a benefit or advantage, contrary to s 29B of the Crimes Act. I shall call those two alleged offences “the tax offences”. As is customary, the warrant contained a note which asserted that it had attached to it a document entitled “Claims for Legal Professional Privilege: Premises other than those of a Lawyer, Law Society or Like Institution” (“the privilege notice”). The affidavits asserted that the privilege notice was not attached to the copy warrant provided to Ms Woodroffe’s advisers.
Ms Woodroffe’s affidavit stated that on 25 May 1998 she was asked by Mark Williams (“Mr Williams”) as a member of the NCA to return to the premises while they were searched, and that she was present whilst the warrant was executed. Mr Williams later became the third respondent. She later saw the privilege notice, apparently left on a table at those premises. She denied the tax offences. The affidavits also show that the DCT has received from the NCA, and used, certain of the warrant information in considering whether to issue amended taxation assessments to Ms Woodroffe and to JAJ Hotels.
It is not now necessary to refer to the contents of the affidavits concerning communications in December 1998 or March 1999, as the claim to set aside those decisions is no longer pursued.
The NCA applied for the action to be summarily dismissed. On 29 April 1999, I refused that application. As my reasons for decision indicate, the matters upon which Ms Woodroffe succeeded in showing a triable issue were threefold:
(1)The warrant may have been invalidly procured because it did not relate to a “relevant offence” under the National Crime Authority Act 1984 (Cth) (“the NCA Act”), so there may have been a misuse of the power to seek the issue of a warrant under s 3E of the Crimes Act. That was because Mr Williams, who applied for the warrant, may not have been a member of the staff of the NCA or because the NCA may not have been fulfilling its functions in respect of “relevant criminal activities” under the NCA Act.
(2)The execution of the warrant may have been defective because it did not have the privilege notice attached to it.
(3)The provision to the DCT of the warrant information by the NCA may not have been authorised by the NCA Act as the DCT may not be a “law enforcement agency” under the NCA Act or because the release of the warrant information may have been premature.
At that stage, I directed that there be listed for separate and final hearing the question whether, whatever the circumstances in which the NCA procured and disseminated the warrant material to the DCT, the DCT was entitled (and obliged) to have regard to it in considering whether to issue amended taxation assessments by reason of s 166 of the Income Tax Assessment Act 1936 (“the ITA Act”). It was initially proposed by the parties that that question could be resolved without the need for any evidence. I subsequently recalled that direction when it appeared in the course of submissions that Ms Woodroffe was alleging not simply that the DCT was the innocent recipient of the warrant material but was somehow complicit in the alleged improper conduct of the NCA in procuring and disseminating it. It appeared to me that it might be relevant to the issue to make findings about the extent of any role of the DCT in that regard to determine that question.
On 21 May 1999, Mr Williams was joined as the third respondent on the application of the applicants. JAJ Hotels had been joined as the second applicant. I directed the parties to exchange points of claim and points of defence. I made an order for limited discovery by the respondents. I made further directions, including the filing of affidavits of proposed evidence, with a view to preparing the matter for trial.
The amended claims
In accordance with the leave then given, on 25 May 1999 the applicants filed an amended application on 27 May 1999 (“the amended application”). It was accompanied by their points of claim. The amended application significantly expanded the nature of the claims and their foundation. The relief claimed was widely expressed. It sought injunctions under s 39B of the Judiciary Act and under the Administrative Decisions (Judicial Review) Act 1976 (Cth) (“the ADJR Act”) restraining each of the respondents from using or disseminating the warrant material, or from using or disseminating the Credit Union information. In terms similar to those in the initial application, it also sought declarations (against the NCA and Mr Williams) that the warrant was invalid because there were no reasonable grounds for applying for the warrant for the following reasons:
·they knew or ought to have known that the applicants had not committed the taxation offences,
·they had not provided full and proper information to the magistrate when applying for the warrant,
·the warrant “on its face and in its terms” goes beyond what s 3E of the Crimes Act permits, and
·the warrant did not adequately safeguard their entitlement to claim legal professional privilege in respect of certain of the warrant information.
They also claimed declarations that the execution of the warrant was illegal, and that the warrant information was illegally obtained and could not be used by them. They further claimed declarations that the NCA and Mr Williams were abusing their powers in procuring the issue of the warrant and in its execution, and in disseminating the warrant information. The DCT was the subject of claims for declarations that he was not entitled to use any of the warrant material, and that the issue of amended taxation assessments was “an improper exercise of power”. It also added fresh claims for declarations against the DCT that he was bound, in various ways, not to use the warrant material, in part because he knew it had been improperly or unlawfully obtained. The orders sought were as previously expressed, that is setting aside the warrant and the decisions of 17 December 1998 and 25 March 1999. It also sought orders to have set aside the decision of the DCT to amend certain taxation assessments. It also claimed orders setting aside “acts based upon any illegal or invalid conduct” of any of the respondents and setting aside any amended assessments based in any way upon any of the warrant information “or which were biased by reason of communications or involvement with” the NCA or Mr Williams. Finally it claimed damages and “mandatory injunctions to provide appropriate relief with respect to all illegal conduct of the Respondents.” That description of the claims in the amended application is sufficient to bespeak its unsatisfactory generality.
The points of claim were similarly general. They asserted:
·In late 1996, the NCA and Mr Williams, “without a valid reference, lawful authority or proper reason and for improper motives and/or purposes obtained access to the” Credit Union information
·In November 1997, “without proper reason or authority”, the NCA sought a reference to investigate Ms Woodroffe and others
·In February 1998, “improperly and unlawfully”, the NCA obtained a reference to investigate Ms Woodroffe and others.
The reference was not valid, and was obtained for improper purposes and improperly obtained because (they asserted) the applicants (either alone or with others) had not engaged in relevant criminal activities and had no information about relevant criminal activities capable of being acquired under the reference, and because there was no reason to suspect either of those things.
·On 22 May 1998, Mr Williams “without any proper suspicion or reasonable grounds for doing so” procured the issue of the warrant. It was obtained improperly or invalidly for the same reasons, namely that the applicants had not engaged in any relevant criminal activity, and that Mr Williams had no proper suspicion or reasonable grounds for suspecting the matters upon which the warrant was based. Indeed, it is claimed that full disclosure by him to the magistrate would have militated against the issue of the warrant. They added, additionally and without further particularity, that Mr Williams was acting improperly and in excess of his powers and duties in procuring the issue of the warrant.
The consequence of those matters was said to be that the warrant was invalid.
The execution of the warrant on 25 May 1998 is then attacked. They claimed that its execution
·did not satisfy the conditions of the warrant
·involved actions beyond the terms of reference of the NCA
·involved actions in excess of powers and duties.
No particulars are given. All the prior allegations are then said to result in the NCA and Mr Williams having been unlawfully on the premises where the warrant was executed, and having unlawfully taken the warrant material. As well, they asserted also that those acts amounted to trespasses to land and to chattels.
The third step in the points of claim is the attack on the dissemination of the Credit Union information and the warrant material to the DCT and his officers. That was said to have been done unlawfully and in contravention of the NCA Act. The use of that information by the DCT is also said to be unlawful and in contravention of the NCA Act, the ITA Act and other Acts. That material is claimed to be confidential and privileged.
The points of claim then allege that on 4 December 1998, the NCA required Ms Woodroffe to attend for interview. On 17 December 1998, the NCA indicated that its inquiries were only to investigate an offence. Therefore (it is alleged, although it is a non-sequitur) no relevant offence and no relevant criminal activity was known or reasonably suspected by either the NCA or its Chairperson or Mr Williams when the warrant material was disseminated to the DCT. They identify ss 51 and 59 of the NCA Act as having been contravened by that dissemination, but no provisions of the ITA Act or other Acts are referred to.
The next allegations relate to February 1999. The DCT then issued notices of assessment and reassessment to JAJ Hotels. It is claimed that they were
·motivated by improper purposes and objectives, and
·for amounts grossly in excess of any reasonable or proper assessment of any proper taxation liability. No facts are otherwise pleaded as to those allegations.
The points of claim then move further forward to December 1998, January 1999 and March 1999. It is alleged that the applicant’s solicitors had informed the respondents that the applicants alleged that the DCT could not lawfully use the warrant material as the warrant had been unlawfully procured and executed. It is further alleged that the respondents improperly, illegally and oppressively and with improper purposes proceeded to use the warrant material. One fact pleaded is that the DCT alleged to the applicants’ accountant in December 1998 that the applicants had engaged in tax fraud, and that the DCT issued the notices of assessment and reassessment, and took other recovery action. Again, no other primary facts are pleaded to support those conclusional allegations.
The claims then expressed against the respondents were that they have each
·trespassed on land and to goods
·illegally disseminated and used the warrant material
·exceeded their “respective mandated statutory powers and duties”
·abused their statutory powers
·in the case of the DCT (personally and by his officers) committed misfeasances in public office
·acted collusively and oppressively for improper motives and/or purposes
·respectively and/or in collusion acted in contravention of provisions of the NCA Act, the ITA Act, the Fringe Benefits Tax Assessment Act 1986 (Cth) (“the FBTA Act”) and the Taxation Administration Act 1953 (Cth) (“the TA Act”).
The relief claimed is that referred to in the application.
Despite the unsatisfactory nature of the points of claim and the amended application, the respondents filed points of defence in accordance with the directions given on 21 May 1999.
Both the applicants and the respondents, also in accordance with directions given on 21 May 1999, filed affidavits of proposed evidence in anticipation of the trial in July 1999.
Procedural issues and further amendments
The respondents also filed and served lists of documents in accordance with those directions. Those directions limited the documents to be discovered to certain categories of documents. The NCA claimed that certain discovered documents were privileged from inspection on the ground of public interest immunity.
The applicants also applied for an order for further discovery from the DCT. They also sought to strike out certain of the points of defence of the DCT.
The need to fairly determine that issue of privilege, and the procedural steps referred to below led to the proposed trial date being vacated. On 20 August 1999, I ruled that the claim for public interest immunity should be upheld, except in respect of a limited category of documents. I refused the applicants’ application for further discovery. I refused to strike out any parts of the DCT’s points of defence.
An application for leave to appeal to the Full Court from those decisions was instituted. On 3 December 1999, the Full Court refused to grant leave to appeal in respect of any of those decisions. The applicants sought special leave to appeal from the High Court from that decision. The application was listed for hearing on 11 May 2000. It was discontinued on 10 May 2000.
On 1 July 1999, the applicants, pursuant to leave, filed and served further amended points of claim. They asserted that it was necessary to do so in the light of further information disclosed by the affidavits of the proposed evidence of the respondents. The matter then stood still, in one sense, whilst the application for leave to appeal was pursued.
In the meantime, in separate proceedings, the applicants brought separate proceedings against the magistrate on 23 July 1999 for judicial review of the decision to issue the warrant. Those proceedings were simply adjourned from time to time. On 22 March 2000, I ordered that those proceedings be consolidated with the principal action. The magistrate became the fourth respondent in the consolidated proceedings. He has indicated that he will abide any order of the Court.
The amended points of claim filed on 1 July 1999 added new allegations, in addition to preserving those previously made. The additions apparently arose from the respondents’ proposed evidence.
It was alleged that Mr Williams was seconded to the NCA pursuant to s 19B(3) of the Police Act 1952 (SA) or s 67(3) of the Police Act 1998 (SA). He was a police officer in the South Australian Police Force. By virtue of his secondment, his powers and authorities under the Police Act 1952, or under the Crimes Act, were suspended. By virtue of his secondment to the NCA, be became bound to act in accordance with the NCA Act.
It was further alleged that the DCT was obliged by s 3C of the TA Act to keep confidential all information available to him, and to use it only for the purposes of the TA Act. He is precluded from providing to, or receiving from, the NCA information other than under s 3D of the TA Act.
It was further alleged that there was established in September 1997 a joint task force known as “Swordfish” under s 11(1)(c) of the NCA Act, to investigate the affairs of Ms Woodroffe and others. It included officers of the DCT, who were bound by ss 3C and 3D of the TA Act. It is claimed (for reasons which are not specified) that neither the NCA nor the DCT had power or authority to form that joint task force, or to permit persons who acquired information in the course of the work of the joint task force using it for the purposes of the TA Act. The members of the joint task force also became bound by the NCA Act. They could not use information obtained in the course of the work of the joint task force for the purposes of the NCA Act, or for any other purpose, nor could the DCT receive or use any such information.
It was next alleged that from September 1997, both the NCA and the DCT through their officers shared information obtained through the joint task force in contravention of ss 3C and 3D of the TA Act and ss 51 and 59 of the NCA Act.
Mr Williams is alleged to have acted unlawfully and in misfeasance of his office as an investigator of the NCA in applying for the warrant because he was not then
·a constable, as defined under the Crimes Act, because he was neither a member of the Australian Federal Police or of the South Australian Police Force, and
·entitled under ss 3C, 3E(5), 3E(6), 3E(7), 3F, 3G, 3H, 3J or 3N of the Crimes Act to exercise those powers under those sections.
A further allegation was that the warrant was improperly and illegally obtained by the NCA and by Mr Williams, and “on its face” was outside the provisions of the Crimes Act
·because it had been issued on the application of Mr Williams who had no authority or power to do so,
·because Mr Williams obscured on at least one copy of the warrant the name of the magistrate, and
·because it did not contain the name of a constable under s 3C of the Crimes Act.
It is also said that because the Magistrates Court is a Court of Record, and no record was kept by the Court of the issue of the warrant, it was beyond the jurisdiction of that court to have issued it.
The document then alleged that, from 22 September 1997, the DCT by two named officers who were part of the joint task force had knowledge of the lack of authority or power of Mr Williams to apply for the warrant.
Fresh allegations were made that the execution of the warrant was improper because
·Mr Williams acted in contravention of s 27 of the Police Act 1952 (SA) by representing himself as a member of the South Australian Police Force when his powers and authority were suspended by s 19B(3) of the Police Act 1952 (SA), and
·Mr Williams acted in contravention of s 3H of the Crimes Act by identifying himself as the executing officer when he had no such authority, and by failing to provide a copy of the warrant because the name of the magistrate was obscured and it did not have the privilege notice attached to it.
The combination of the new allegations was said to amount to the DCT knowing, or being recklessly indifferent to, or being a person who ought to have known, that
·Mr Williams had no power or authority to apply for the warrant under the Crimes Act
·Mr Williams on 22 May 1998 chose to apply for the warrant under the Crimes Act rather than the NCA Act
·the magistrate erred in issuing the warrant
·the execution of the warrant was unlawful due to Mr Williams’ lack of authority, his wrongful use of his South Australian Police Force identification at the time, and by the alterations he made to the warrant by deletions of his (Mr Williams) name and substituting other names on the warrant
·the provision to, and use of the warrant material by, the DCT from the NCA was in contravention of the Crimes Act, the Police Act, the TA Act and was achieved only by unlawful entry on to land, theft and trespass, and
·was done without “due process” under the NCA Act.
It was also asserted that the warrant material used by the DCT to make the assessments was not “information” for the purposes of s 166 of the ITA Act or otherwise information available for the purposes of the ITA Act or for the making of assessments under ss 72 - 74 of the FBTA Act or, as a matter of public policy, was not information which should have been used by the DCT. Consequently, it is claimed, any assessment made by the DCT using the warrant material was invalid and of no force or effect.
These amended points of claim seek additional declarations that assessments made by the DCT from December 1998 were made using information which had been illegally and improperly obtained and were invalid.
The claim was also made for an extension of time, if necessary, under s 57 of the NCA Act or the ADJR Act because
·the applicants requested the NCA “to provide reasons and review its own actions” by letters dated 16 December 1998 and 30 March 1998 (sic, 1999) but received no response
·the proceedings were commenced as soon as reasonably practicable after inquiries wee made of the magistrate
·the DCT has served on JAJ Hotels a statutory demand under s 459E of the Corporations Law which “necessitated” the joinder of JAJ Hotels as an applicant.
It may be observed that the pleading process thus far had not enabled any clear picture to emerge of the material facts relied upon by the applicants upon which they pressed their claims, or of the way in which the facts alleged by the applicants gave rise to the claims which were being pursued. There were some material facts pleaded, and a number of conclusions which were not readily attached to the facts which had been pleaded. The purposes of pleading, namely to define the issues so that the trial could proceed efficiently, and to put the respondents on notice of the case they had to meet, were not being satisfied.
The consolidated claims
On 25 January 2000 the applicants were given leave to file and serve a further amended application and to file and serve their second amended points of claim.
The respondents each brought motions for summary judgment in respect of parts of the further amended application, and to strike out the second amended points of claim either totally or in significant respects. The motions were supported by affidavit. They were listed for hearing on 22 March 2000.
On 17 March 2000, the applicants sought to have the hearing of those motions adjourned. They did not seek to support the further amended application or the second amended points of claim, but sought further time to consider the matters raised by the respondents in their outlines of contention filed and served in support of their respective notices of motion Those matters had been foreshadowed previously in correspondence and in submissions at directions hearings. I refused that application. On 22 March 2000, without opposition I struck out the second amended points of claim and I determined that the amended application was deficient. The applicants were given leave to file and serve yet a further amended application which is called the consolidated application and their further amended points of claim, which is called the consolidated statement of claim. The notices of motion were adjourned to 17 April 2000, in case those further documents were, in the view of the respondents, still inadequate. That proved to be the case. Hence the present issues.
The respondents attack the consolidated application (now replaced by an amended consolidated application dated 7 April 2000) and the consolidated statement of claim also dated 7 April 2000. In accordance with a direction made on 17 April 2000, the amended consolidated application contains certain matters of clarification proffered orally by counsel for the applicants on that date.
Counsel also confirmed that Pt 1 pars 1, 3 and 7 of the claims are made pursuant to s 5 of the ADJR Act and Pt 1 pars 2 and 6 pursuant to s 7 of that Act. The claims for relief in Pt I are made under s 16 of that Act. It has also been confirmed that the orders sought against Mr Williams in Pt II of the amended consolidated application are:
“A.An order that the Third Respondent be required and a mandatory injunction be hereby granted requiring that he:
A.1As directed by the Court, deliver up any originals and/or copies or derivations of originals or copies, of documents, seized and/or otherwise obtained from the premises on or about 25 and 26 May 1998 in the purported execution of the said warrant.
A.2Further and in the alternative, as directed by the Court, destroy and/or obliterate all secondary or derivative records of any originals or copies of the documents referred to at 2.1, however and wheresoever they may be kept, stored or retained.
2.An order that the Third Respondent, whether by himself or his agent, directly or indirectly or by any means whatsoever, be restrained and an injunction hereby granted that he not take any further action pursuant to the said warrant or use any information obtained by its execution.”
Finally, it has also been confirmed that the claim for equitable damages for breach of confidence in Pt III of the amended consolidated application has no statutory foundation, but relies upon the facts alleged in par 1.4 of the consolidated statement of claim. Those matters, now confirmed in writing, are not in the amended consolidated application. I shall treat them as if they were, so that the matter may be proceeded with.
The amended consolidated application
The amended consolidated application (which I shall now call “the application”) is divided into three parts. The parts relate to
·the applications for review under the ADJR Act (and, as against the NCA under the NCA Act “in so far as it adopts the ADJR Act”)
·the applications for review under the Judiciary Act
·the tortious and equitable claims.
Under the ADJR Act, the applicants seek to review
(1)the decision of the magistrate to issue the warrant to Mr Williams under s 3E of the Crimes Act (par I.1 of the application);
(2)the failure of the DCT to make a decision as to whether the information requested by the NCA was information which the DCT was authorised to be communicated under ss 3C or 3D of the TA Act (par I.2 of the application)
or
(3)the decision of the DCT that the information requested by the NCA was information which the DCT was authorised to be communicated under ss 3C or 3D of the TA Act (par I.3 of the application)
(4)the failure of the NCA to make a decision as to whether there had been an offence for the purposes of s 59(8) of the [NCA Act] “so as to allow the dissemination of certain information"” (par I.6 of the application)
or
(5)the decision of the NCA that there had been an offence for the purposes of s 59(8) of the NCA Act “so as to allow the dissemination of certain information” (par I.7 of the application).
Under the Judiciary Act, the applicants seek to review
(6)the failure of the DCT to make a decision as to whether a certain joint task force was a tax related investigation for the purposes of s 3D of the TA Act as a prerequisite to the communication of certain information (par II.1 of the application)
or
(7)the decision of the DCT that a certain task force was a tax related investigation for the purposes of s 3D of the TA Act as a prerequisite to the communication of certain information (par II.1 of the application); and
(8)the decision of Mr Williams to apply for the warrant under the Crimes Act (par II.2 of the application).
At common law, the applicants claim against
(9)the DCT and Mr Williams, damages for misfeasance in public office (par III.1 of the application)
(10)the NCA, the DCT and Mr Williams damages for trespass to the persons, trespass to goods, and trespass to land; (par III.2 of the application)
and
(11)the NCA, the DCT and Mr Williams equitable damages for “breach of confidence” plus injunctions to “return all documents and copies or derivations” of all documents and to restrain any use of any such documents, as well as “orders setting aside any purported assessment that relies on any breach of confidence” (presumably, only against the DCT).
Consideration of the applications
The NCA and Mr Williams submit that the claims made against the NCA and the ADJR Act should be struck out (claims (4) and (5) set out above). They contend that s 59(8) of the NCA Act provides only one means for information procured by the NCA in the course of an investigation to be made available to other persons or entities (see eg. ss 11 and 12). They further contend that s 59(8) is a power exercisable by the Chairperson of the NCA rather than by the NCA itself, so that the claim against the NCA cannot be maintainable, and that the power is a discretionary one so that it is not required to be made under an enactment nor is it made by a person who has a duty to make it (ss 3(1) and 7(1)(a) of the ADJR Act). If there has been a failure by the Chairperson to make that decision, there is no basis alleged for claiming that there has been an unreasonable delay in making that decision: s 7(1)(a) of the ADJR Act.
The applicants’ main complaint is that information held by the NCA has been provided to the DCT without authority, and contrary to the Act. They wish to have determined that there has been an illegal dissemination of information by the NCA to the DCT. The grounds specified for these claims are that there has been such illegal dissemination, and that their “rights have been illegally violated” by the NCA (or the Chairperson of the NCA) having failed to decide to release that information to the DCT, or by having decided to do so. The consolidated statement of claim contains no allegations concerning any decision made by the Chairperson of the NCA under s 59(8) of the NCA Act, or of facts which might give rise to the Chairperson having been required to have made a decision under that Act. In reality, I perceive that it is the applicants’ case that the Chairperson made no such decision in respect of the warrant material or the Credit Union information.
The summary disposal of a claim under O 20 r 2 of the Federal Court Rules is a power which must be exercised with exceptional caution: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99; Webster v Lampard (1993) 177 CLR 598.
In this matter, I am satisfied that there is simply no prospect of the applicants succeeding in respect of these two claims as they are presently expressed. Given the terms of s 59(8) of the NCA Act, it is clear that the relevant decision-maker is the Chairperson of the NCA rather than the NCA itself. If any decision under that provision is to be reviewed under the ADJR Act, the relevant respondent is the Chairperson and not the NCA. Moreover, in the light of the allegations in the consolidated statement of claim, it is apparent that the applicants do not really allege that any such decision was made by the Chairperson. If later it emerges, by the NCA asserting in any defence to the consolidated statement of claim that any such decision was made (as it would be necessary to do if the NCA relied upon any such decision: see O 11 r 10 of the Federal Court Rules), the Court could entertain an application to amend the application and other pleadings appropriately. In its defence as presently expressed the NCA makes no such assertion. Section 3(1) of the ADJR Act relevantly defines a decision to which that Act applies as being one made or required to be made under an enactment. I have reached the conclusion that there is no triable issue that the Chairperson made a decision relevant to these proceedings under s 59(8) of the NCA Act. As that power is a discretionary one, to be exercised by the Chairperson of the NCA, rather than by the NCA, and as the Chairperson is not alleged to have been under a duty to have made a decision under s 59(8) of the NCA Act, I do not consider that the claim as presently expressed is one which should be allowed to stand. I do not consider that it can succeed.
Accordingly, in my judgment, pars 4 - 7 of the application should be struck out. I do not intend, by that ruling, to preclude the applicants from maintaining their claim that the NCA wrongly provided to the DCT the warrant material or the Credit Union information. I am not persuaded that the applicants have no prospect of success in maintaining that claim. In my reasons for decision given on 6 May 1999, I ruled that the claim of the applicants, based upon the allegation that the warrant itself was incorrectly procured under s 3E of the Crimes Act, or upon the circumstances in which the warrant was executed, or upon the claim that the warrant material or the Credit Union information should not have been provided to the DCT, should not then be struck out. As the history of pleadings set out above demonstrates, the applicants’ allegations have broadened, to attack the establishment of the Joint Task Force “Fizz” and to allege “bad faith” (to use a generic term) on the part of officers of the NCA, Mr Williams and the DCT (apparently in a personal capacity) in relation to that process. It may be that the applicants may wish to amend the application to identify some different foundation for the claim they are seeking to make. For reasons set out below, I propose to give them one final opportunity to do so.
The NCA and Mr Williams also contend that claim (8) in the application as set out above should be struck out. It is made under s 39B of the Judiciary Act. I am not persuaded to the necessary degree that that claim should be struck out as, in effect, being untenable. As appears later in these reasons, I regard the consolidated statement of claim as deficient in many respects. However, within its allegations, one can discern at least the claims that
·the Joint Task Force “Fizz” was improperly formed and that Mr Williams was a party to and aware of that impropriety
·the warrant was improperly procured, by reason of Mr Williams’ lack of authority to apply for it and by reason of his withholding of information material to the magistrate’s decision to issue the warrant, and
·the provision of the warrant material to the DCT was wrongful by reason of those earlier matters, again to the knowledge of Mr Williams (and others).
I am not prepared to conclude on this application that the applicants, provided their claims are properly pleaded, have no real prospect of establishing those matters. I am not, of course, to be taken as having formed any view that they have any significant prospects of so doing; that is not the relevant test to determine the fate of the application. If the applicants were to make out those matters, I am not prepared to conclude that the applicants have no real prospect of establishing an entitlement to relief under s 39B of the Judiciary Act. The question may, however, need to be revisited when the applicants have filed a further consolidated statement of claim (a course of action which I propose to allow) and in the light of the material facts then pleaded.
I also do not accede to the application by the NCA and Mr Williams that the claims in the application numbered (9) and (10) as listed above should be stayed or dismissed. There are, as the submission of the NCA and Mr Williams indicates, significant shortcomings in the consolidated statement of claim on those matters. I have indicated below my reasons for accepting those submissions. It may be that the applicants, upon reflection, will not pursue these claims or at least will not do so in all respects. That is a matter for them. The application of the NCA and Mr Williams may be renewed in the light of the material facts pleaded in the amended consolidated statement of claim. I propose therefore to adjourn the notice of motion of the NCA and Mr Williams to provide them with the opportunity of doing so, if so advised, at a later date.
The DCT seeks orders staying or dismissing the claims (2) and (3) referred to above, made against the DCT under the ADJR Act. At present, I do not see how those claims can be maintained in the light of the consolidated statement of claim. They relate to the release of unspecified information by the DCT to the NCA. There are no, or insufficient, material facts pleaded to really understand the foundation for these claims; so far as the consolidated statement of claim touches upon the issues, it is no more than assertions of conclusions. It does not attempt to identify with any precision the date of the decision, the circumstances giving rise to the obligation to make the decision under an enactment, the terms of the decision, nor clearly why the decision should be reviewable under a provision or provisions of the ADJR Act. The DCT also submits that the consolidated statement of claim does not explain adequately why the application should be entertained, as it has been made so belatedly. If I were not to grant the applicants leave to file and serve an amended consolidated statement of claim, I would dismiss this part of the application.
However, for reasons set out below I propose to grant that leave. Again, it may be that these claims against the DCT may not be pursued, or at least not all be pursued. It is not clear to me what remedy the applicants’ claim in this respect other than declaratory relief, even if they make out their claims. I understand their ultimate concern is the flow of the warrant material (and perhaps the Credit Union information) to the DCT and its use by the DCT for the purpose of issuing assessments or amended assessments of taxation in respect of the applicants. It does not presently emerge how these claims, even if the applicants succeed in them, will assist the applicants in that regard.
The DCT also seeks that the claims against him numbered (6), (7), (9) and (10) as listed above be struck out. I suspect that there is considerable substance in the DCT’s application. However, for the same reasons as I have declined at present to dismiss the comparable claims against the NCA and Mr Williams at this stage, I decline to dismiss those claims against the DCT at this point. I propose to adjourn the notice of motion of the DCT to enable the DCT to renew his application, if so advised, in the light of the amended consolidated statement of claim and any amended application. I observe that, at present, it is difficult to see how the facts which the applicants have asserted to date could amount to trespass to the person by the DCT, or to trespass to land by the DCT.
The DCT also submitted that the Court does not have jurisdiction to hear and determine the claims against him for damages for misfeasance in public office or for trespass (variously). I am not persuaded that the Court does not have such jurisdiction. I consider that those claims fall within the accrued jurisdiction of the Court (see Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261; Edensor Nominees Pty Ltd v Australian Securities and Investment Commission (1999) 168 ALR 676 at 681 - 682). In my judgment, there is a common substratum of fact which encompasses all the applicants’ claims, so that the determination of these claims against the DCT is part of the whole “matter”.
At present, therefore, I do not accede to the DCT’s application to dismiss or stay the claims in the application made against him.
It is necessary to consider the terms of the consolidated statement of claim in some detail. It is broken into sections, with headings and subheadings. I will deal with each in turn:
The Applicants (par 1)
Woodroffe
JAJ
Applicants’ Confidential InformationThe First Respondent (par 2)
Confidentiality/Use of Information (par 2.6 - 2.10)
Obtaining of Warrant (par 2.11)The Second Respondent (par 3)
Confidentiality/Use of Information (par 3.7 - 3.11)
The Third Respondent (par 4)
Confidentiality/Use of Information (par 4.5 - 4.6)
Joint Task Force/Search Warrant (par 4.7 - 4.10)The Fourth Respondent (par 5)
The Formation of the Task Force “Fizz” (pars 6 - 7)
The Illegal Dissemination of Information
DCT (par 8)
NCA (par 9)
Illegal disseminations (pars 10 - 12)Invalid Assessments (par 13 - 15)
Breach of Confidence (par 16)
Illegal Obtaining of Warrants by Williams as part of the Operations of Fizz and the Granting of the Warrants (pars 17 - 21)
Illegal Execution of the Warrant by Williams and Members of Fizz (pars 22 - 27)
Trespass (pars 28 - 29)
Misfeasance in Public Office by Williams (pars 30 - 31)
Misfeasance in Public Office by DCT (pars 32 - 41)
Extension of Time (par 43).
In an endeavour to keep these reasons as brief as possible, I will refer to the consolidated statement of claim by paragraph numbers only. They can be tied to the headings from the above list. I will also endeavour to restrict my observations about that document to a minimum.
Paragraph 2.11 alleges the NCA was not authorised to obtain warrants under the Crimes Act. It refers then to pars 17 - 21. Paragraphs 17 - 21 relate to Mr Williams’ authority to obtain the warrant (or some other warrants). It is unclear if par 2.11 has any operation beyond the allegations made against Mr Williams. If it is intended to do so, it does not plead facts material to that claim. It may simply seek to say that Mr Williams’ knowledge is the knowledge of the NCA. If that is what is intended to be pleaded, it is unclear. If something more is intended, there are no clearly pleaded material facts to make out that claim.
Paragraphs 3.8, 3.9 and 3.11 plead obligations of the DCT as conclusions only. If they are based on material facts, the facts should be pleaded. If they are based on some legislative provisions, those provisions should be specified. It is unclear what is sought to be pleaded, or the different significance of pars 3.8, 3.9 and 3.11, including having regard to par 3.7.
Paragraph 4.8 pleads obligations of Mr Williams as a conclusion only. The general comments in the preceding paragraph apply, including having regard to pars 4.5 and 4.6.
Paragraph 4.9 incorporates, by reference to affidavits, particulars of the Joint Task Force “Fizz” (“the JTF”). It is not clear what facts are drawn from the nominated affidavits. As the validity of the formation of the JTF is also challenged, facts material to that claim and to Mr Williams’ role in its formation should be pleaded. If his membership of the JTF has some other significance to the applicants’ case, facts material to that issue are not pleaded.
Paragraph 4.10 contains a conclusion, with “particulars” of matters said to support that conclusion. In so far as those particulars are incorporated by reference to affidavits, the matters relied on are not clear. In a matter such as the present, especially where grave allegations are made against Mr Williams, the material facts which are sought to be proved should be clear. So too should the necessary particulars of those material facts. It is unclear whether the matters in subpars (1) - (3) are additional particulars to some unidentified facts, or are a summary of them. To a degree, those matters also are conclusions based upon some unexpressed facts; I suspect those facts relate to Mr Williams’ status as a member of the South Australian Police Force and his secondment to the NCA. It is unclear why par 4.10 appears at this point in the consolidated statement of claim at all, including whether it has any additional significance beyond the facts pleaded in pars 17 - 21. The same comment may be made about par 5.4.
Paragraph 6 is unsatisfactory. It does not allege when, or by whom, the JTF was formed. That is a critical matter, as the motives of those who formed the JTF are impugned. The wrongful purpose attributed to someone (unspecified) is said to be derived by inference from certain affidavits. That is, in the circumstances of this matter, an inappropriate reference. The facts and matters relied upon the applicants should be pleaded. The applicants will have to address the matters referred to in O 12 rr 2 and 3 of the Federal Court Rules.
It is probably the case that the applicants allege that the NCA and the DCT were parties to the alleged wrongful purpose, but that is not clear. The allegation of “reckless disregard” for the applicants’ rights in the formation of the JTF attracts similar observations. Moreover, it is not an alternative plea. It is also unclear what the applicants say is the consequence of par 6.5: is it a necessary fact for them to establish? If so, why? If not, why is it there? Is it an alternative plea? If so, are there any facts beyond reckless disregard which give rise to a cause of action? What is the cause of action?
It is also unclear to what extent, if at all, par 7 overlaps with par 6. What is the significance, for example of pars 7(2), (3) and (5), beyond the facts alleged in par 6. Is the intention alleged in par 7(1) different from that alleged in par 6(4)? If so, what is the significance of the difference? What are the facts relied upon in respect of those different alleged purposes?
Paragraph 7 is also inadequately pleaded. It does not contain proper particulars, as they are given only by reference to an affidavit. It does not identify whose intention or state of mind is alleged. Is the intention not to comply with s 59 of the NCA Act (as alleged) a specific intention, so as to provide a way to avoid the Chairperson being invited to consider s 59, or is it alleged that there was a belief that s 59 would simply not apply, or is it some other intention? The need to comply with O 12 rr 2 and 3 as appropriate is evident. What “lack of power” is referred to in par 7(5)? Is that different from the wrongful intention or purpose alleged in pars 6 and 7, or is it a consequence of that wrongful intention or purpose? The significance of the functions, and separately the purposes, of the JTF being contrary to law is unclear. Is the allegation of the JTF being unauthorised based on some different factors? If so, the factors are unclear.
Paragraph 8.5 and par 8.6 are matters which, in my view, should probably be struck out. I have dealt with that aspect in my reasons dealing with the application. At present, I do not think there is any real basis for them. As I have indicated, however, I am not presently disposed to make that order. If the applicants wish to maintain those paragraphs of the consolidated statement of claim, the facts necessary to maintain the claim against the DCT will have to be properly pleaded. That includes facts giving rise to the duty to make the decision by the DCT pleaded in par 8.5, any facts upon which an extension of time is sought to make and maintain the application, the time when and the circumstances in which the duty to make the decision arose, the facts upon which it is claimed that the alleged failure to make the decision was wrongful or untimely, and the facts upon which it is claimed that procedures which ought to have been followed were not followed. The pleading in par 8.7 is unsatisfactory; even if pars 6 and 7 were properly pleaded, it does not identify whether it is simply repetitive (in which case it is otiose) or whether it seeks to add some further dimension to the claim against the DCT.
Paragraphs 9.2, 9.3 and 9.4 attract similar comments to those concerning pars 8.5 and 8.6.
Paragraph 9.5 is unclear. To whom was the information given? If that was unlawful, is that simply because of the matter referred to in the first three lines of par 9, or for some other reasons? What facts lead to the proposition that Mr Williams wrongly obtained information? Why did him doing so contravene the TAA Act, or the general law? What other officers of the NCA are referred to? Why are they bound by the TAA? Why did their conduct contravene the general law?
Paragraph 9.6 does not plead material facts.
Paragraph 9.7 is either otiose or unclear.
It is likely par 10 will become clearer once the preceding allegations are properly specified, although the blanket reference to pars 6 - 9 may well be too wide and it may also be necessary or desirable to separately address the position of the respondents.
Paragraph 11 is inadequate. I suspect it is not meant to plead further causes of action, but to be repetitive. If it is merely repetitive, it is otiose. If it is intended to add further allegations to the facts already pleaded, those fresh allegations are not properly pleaded. My comments about incorporating allegations by reference to affidavits, or to the reference to earlier paragraphs of the consolidated statement of claim apply in this instance also.
It should be clear, by now, that I regard the consolidated statement of claim is defective. I do not think much purpose is served by continuing the litany. I consider that similar observations can be made about pars 12 - 16, although I suspect that much of the vagueness and repetition can be eliminated when attention is given to the earlier paragraphs of the consolidated amended statement of claim.
The allegations in par 17, and in subsequent paragraphs are also, in my judgment, defective. Paragraph 17 contains general conclusions, but it is necessary to seek the material facts elsewhere. Paragraph 19 has the same deficiency. In addition, pars 19.1(a) - (g) must (it is assumed) each have a different significance; that significance is not apparent. Paragraphs 19(2) and (3) are also merely general allegations. Paragraph 19.5 is not properly pleaded or particularised: what was known to Mr Williams which was not disclosed? The particulars of “intentions and/or reckless disregard” do not provide particulars of non-disclosure; they might (if properly pleaded, and if relevant) provided particulars of motive for non-disclosure. For example, if the alleged non-disclosure related only to the matters in par 19.5(2)(a) or (b), it is difficult to know why the proposed search procedures were matters which ought to have been disclosed to the magistrate, or why they relate to Mr Williams’ alleged lack of authority to apply for the warrant. Similar comments may be made about a number of the subclauses of par 19.5(2). If each of subclauses (a) - (w) of par 19.5(2) is, in some way, said to be material which Mr Williams ought to have disclosed to the magistrate when applying for the warrant, it is necessary that material facts be pleaded to explain why each was a matter which required disclosure as well as pleading its non-disclosure, and the consequences of its non-disclosure. I hold similar views about most of the subclauses of par 19.5(3).
The allegations in pars 20.1 and 20.2(a) are conclusions without material facts being pleaded to support them. If they are simply repetitive, they are otiose.
The allegations in par 24 are not particularised.
It is not clear whether the applicants’ claim that the alleged unlawful disclosure of information to the valuer Mr Robinson has any legal consequence of itself (par 27). If the applicants allege that such disclosure is sufficient to entitle them to relief, that should be made clear. How such relief could extend to relief against the DCT is also not clear. If it is confined to relief against Mr Williams, the nature of the relief from that alleged conduct should also be spelled out.
The claims of trespass in pars 28 and 29 are too broadly expressed, and no separate claims for damages are properly pleaded or indeed at all. The re-pleading of the earlier provisions of the consolidated statement of claim, and appropriate attention to the material facts relevant to each separate cause of action together with the details of the loss claimed in respect of each, is likely to resolve those difficulties. I also anticipate that the serious claims of misfeasance in public office will be able to be expressed clearly by reference to earlier paragraphs of the consolidated amended statement of claim when they are re-drawn. As those claims in pars 30 - 41 are dependent upon those earlier paragraphs, I have not separately dealt with them. Much of the vagueness and repetition of which the respondents complain may well then disappear. The significance of those allegations does dictate, however, that the relevant state of mind of Mr Williams and of the DCT each be properly pleaded. As I have observed earlier in these reasons, it is at present unclear to me how the allegations can properly be maintained against the DCT in his personal capacity, but that is for the applicants to further consider.
In addition, in respect of the allegations against the DCT for misfeasance in public office, in my judgment, the allegations in pars 35, 38.2 and 38.3 are not properly pleaded. The material facts upon which the conclusions alleged are not pleaded. It is intended to allege and probe, for example, that the taxation assessments (to be particularised) referred to in par 35 were excessive, and the amount of any proper assessment, and if so what are the material facts relied upon, or is it intended to prove that the DCT deliberately issued assessments knowing them to be excessive, and if so what are the material facts relied upon, or is it intended to prove something else? The seriousness of such allegations requires that the pleading comply properly with the Federal Court Rules.
It may be that the applicants, upon reflection, will substantially simplify their claims or will not pursue each of the factual matters apparently pleaded or suggested in the consolidated statement of claim. They may also adopt that course in the light of my observations about the application itself.
For those reasons, in my judgment, the consolidated statement of claim is unduly complex. It is unnecessarily convoluted, to such an extent that it should be struck out. It has a tendency to cause prejudice to the respondents by its complexity and by the looseness of certain of its claims. For the same reasons, it has the tendency to cause embarrassment to the respondent and delay in the proceedings, including during the hearing. Accordingly, in my judgment, it should be struck out under O 11 r 16(b) of the Federal Court Rules.
Orders
I consider that is the preferable course to strike out the consolidated statement of claim rather than striking out parts only of the consolidated statement of claim. The parts to be struck out are quite extensive. They are, in many respects, interrelated and unnecessarily cross-referenced. The striking out of pars only would be unlikely to lead to a more coherent, clear and concise statement of the applicants’ claims than if the applicants are given the opportunity to redraw the document in its entirety, but in accordance with these reasons.
I have also considered whether, having regard to the history of the proceeding thus far, the applicants ought not be given the opportunity to yet again plead their case. I have decided against that course of action. In the first place, the applicants clearly are intent on pursuing their claim, and there is no element of them simply being unable or unwilling to identify the foundations for their claims. It is really rather the manner in which those claims are expressed. Secondly, the underlying themes to their claims have been consistently identified. And, thirdly, to an extent I accept that certain of the detail in the consolidated statement of claim is the result of additional information they have received from one or other of the respondents through the filing of affidavits or from discovery. Despite the prolonged pleading history to date, I consider that the applicants should be given one further opportunity to plead their case.
For the above reasons, I strike out pars 4 - 7 (first appearing) of the application and I also strike out the consolidated statement of claim. I give leave to the applicants to file and serve a further amended application and a further amended statement of claim in such terms as they may be advised.
As the NCA, the DCT and Mr Williams have succeeded to a significant respect on each of their notices of motion, I order that the applicants pay to the respondents, other than the fourth respondent, their costs on their respective notices of motion to date to be taxed.
I will hear the parties as to the time which should be allowed for them to do so. I will also adjourn the notices of motion to a date to be fixed after any further amended application and amended consolidated statement of claim have been filed and served, to enable the respondents to consider the contents of those documents.
I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate:
Dated: 2 August 2000
Counsel for the Applicants: N Rochow and E Holmes Solicitors for the Applicants: Douglas Wardle Counsel for the First and Third Respondents: M Gray QC Solicitors for the First and Third Respondents: Luke Davis Counsel for the Second Respondent: A Macdonald Solicitors for the Second Respondent: Australian Government Solicitor Date of Hearing: 1 May 2000 Date of Judgment: 2 August 2000
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