CATCHWORDS
CRIMINAL LAW AND PROCEDURE - Jurisdiction, practice and procedure - evidence - warrants issued under the Telecommunications (Interception) Act 1979 ("Act") - appropriateness of civil court entertaining claim to restrain use of evidence in criminal proceedings - general principle against fragmentation of criminal proceedings - whether exceptional or extraordinary circumstances justify entertaining claim - whether member of Australian Federal Police has standing to apply for warrant - required form of written application for warrant - whether warrant contained "short particulars" of relevant offence - meaning of "short particulars" - whether scope of warrant exceeds legislative scheme - efficacy of warrant regime necessitates authorizing interception of all communications to and from telecommunication service - whether application for warrant vitiated by improper purpose - whether Act authorizes using information obtained under warrant for another investigation - whether applicant acted fraudulently - whether administrative act invalid because initiating and abiding purpose was ulterior one - admissibility of evidence - discretion to exclude where illegally obtained - "fruits of poison tree" doctrine and Bunning v Cross discretion examined - appropriate questions for criminal trial court - whether warrant invalid by reason of applicant's failure to disclose material matters - no general duty of disclosure imposed on applicant otherwise than by legislative scheme - although civil court might appropriately deal with purely legal questions, not appropriate to exercise discretion to grant judicial review where facts contentious.
ADMINISTRATIVE LAW - Judicial review on grounds of ultra vires or defective exercise of power - Judiciary Act 1903, s.39B - telecommunication interception warrant - discretion - distinguish situations where a bare point of law arises and those where facts are seriously disputed.
TORT - miscellaneous torts - misfeasance in public office - inappropriate to consider at present stage.
Telecommunications (Interception) Act 1979, ss.6B, 39, 40, 42, 45, 46, 49, 55, 66, 67, 74, 75.
Crimes Act 1914, s.10.
Australian Federal Police Act 1979, s.12G.
Cases considered
Seymour v A-G (Cth) (1984) 4 FCR 498
Sankey v Whitlam (1978) 142 CLR 1
Comptroller-General of Customs v Kawasaki Motors Pty. Ltd.
(1991) 103 ALR 661
John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508
Carroll v Mijovich (1991) 25 NSWLR 441
2.
Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523
Lego Australia Pty Ltd v Paraggio (1994) 52 FCR 542
McArthur v Williams (1936) 55 CLR 324
Murphy v R (1989) 167 CLR 94
Cooper v Booth [1785] 3 Esp. 135; 170 ER 564
R v Watts [1830] 1 B & Ad 166; 109 ER 749
Love v Attorney-General (NSW) (1990) 169 CLR 307
Hilton v Wells (1985) 157 CLR 57
Carroll v Attorney-General (NSW) (1993) 70 A Crim R 162
Bunning v Cross (1978) 141 CLR 54
Miller v Miller (1978) 141 CLR 269
Pollard v The Queen (1992) 176 CLR 177
Ridgeway v The Queen (1995) 69 ALJR 484
Zamir v Secretary of State for Home Department [1980] AC 930
Khera v Secretary of State for Home Department [1984] 1 AC 74
Karina Fisheries Pty Ltd v Mitson (1990) 26 FCR 473
Grollo v Commissioner of the Australian Federal Police (1995) 131 ALR 225
Northern Territory of Australia v Mengel (1995) 129 ALR 1
VG 612 of 1995
JOHN FLANAGAN AND ANGELA DIANNE FLANAGAN & ANOR v COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE & ORS
VG 613 of 1995
ROBERT CHARLES HOWARD v COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE & ORS
VG 747 of 1995
BRUNO GROLLO v COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE & ORS
BEAUMONT, RYAN AND LINDGREN JJ.
SYDNEY (HEARD IN MELBOURNE)
1 FEBRUARY 1996
IN THE FEDERAL COURT OF AUSTRALIA)
VICTORIA DISTRICT REGISTRY )
GENERAL DIVISION )
No VG 612 of 1995
BETWEEN:
JOHN FLANAGAN AND ANGELA DIANNE FLANAGAN
Applicants
AND:
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
First Respondent
DIRECTOR OF PUBLIC PROSECUTIONS
Second Respondent
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
PETER CADDEN HEEREY
Fourth Respondent
SALLY ELIZABETH BROWN
Fifth Respondent
No VG 613 of 1995
BETWEEN:
ROBERT CHARLES HOWARD
Applicant
AND:
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
First Respondent
DIRECTOR OF PUBLIC PROSECUTIONS
Second Respondent
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
PETER CADDEN HEEREY
Fourth Respondent
SALLY ELIZABETH BROWN
Fifth Respondent
2.
No VG 747 of 1995
BETWEEN:
BRUNO GROLLO
Applicant
AND:
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
First Respondent
DIRECTOR OF PUBLIC PROSECUTIONS
Second Respondent
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
PETER CADDEN HEEREY
Fourth Respondent
SALLY ELIZABETH BROWN
Fifth Respondent
CORAM: BEAUMONT, RYAN AND LINDGREN JJ.
PLACE: MELBOURNE
DATE: 21 DECEMBER 1995
MINUTES OF ORDERS IN EACH PROCEEDING
THE COURT ORDERS:
1. That the application be dismissed in relation to the claims for relief made in paras. 1, 3, 4, 5 and 6 of the amended application (i.e., order of review, declarations, orders quashing or setting aside, injunctions and orders for delivery up).
2. That the remaining question, namely whether the relief sought in para.7 of the amended application ("damages, including exemplary and/or aggravated damages") ought to be granted, be adjourned to a date to be fixed and be heard and determined by a single Judge.
3.
3. That there be liberty to apply to Ryan J. for directions in respect of Order 2 on 10 days' notice.
4. That the costs of the hearing before the Full Court be reserved; and that each party have liberty to apply for such costs by written submissions filed and served within 40 days of the date of the publication of the Reasons for Judgment.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA)
VICTORIA DISTRICT REGISTRY )
GENERAL DIVISION )
No VG 612 of 1995
BETWEEN:
JOHN FLANAGAN AND ANGELA DIANNE FLANAGAN
Applicants
AND:
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
First Respondent
DIRECTOR OF PUBLIC PROSECUTIONS
Second Respondent
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
PETER CADDEN HEEREY
Fourth Respondent
SALLY ELIZABETH BROWN
Fifth Respondent
No VG 613 of 1995
BETWEEN:
ROBERT CHARLES HOWARD
Applicant
AND:
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
First Respondent
DIRECTOR OF PUBLIC PROSECUTIONS
Second Respondent
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
PETER CADDEN HEEREY
Fourth Respondent
SALLY ELIZABETH BROWN
Fifth Respondent
No VG 747 of 1995
BETWEEN:
BRUNO GROLLO
Applicant
AND:
COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
First Respondent
DIRECTOR OF PUBLIC PROSECUTIONS
Second Respondent
THE COMMONWEALTH OF AUSTRALIA
Third Respondent
PETER CADDEN HEEREY
Fourth Respondent
SALLY ELIZABETH BROWN
Fifth Respondent
CORAM: Beaumont, Ryan, Lindgren JJ
PLACE: Melbourne
DATE: 1 February 1996
REASONS FOR JUDGMENT (NO 2)
THE COURT:
These are our reasons for the orders made on 21 December 1995.
INDEX
Page
1.0 INTRODUCTION AND PARTIES 4
1.1 Parties 4-6
1.2 Abbreviations 6-7
1.3 Dramatis Personnae 7-9
1.4 Issues raised by the proceedings 9
2.0 BACKGROUND FACTS 10
2.1 The events leading up to the preparation 10-25
of the TI warrant
2.2 The preparation of the application for the TI 25-28 warrant
2.3 The terms of the affidavit sworn by Draffin 28-38
on 1 June 1993 in support of the application
for the TI warrant
2.4 The terms of the TI warrant 38-40
2.5 Events after the issue of the TI warrant 40-53
3.0 THE RELIEF APPLIED FOR 53-54
4.0 THE CASE PLEADED BY THE APPLICANTS 54-59
5.0 THE LEGISLATIVE SCHEME 59-67
6.0 THE ISSUES AND REASONING ON THEM 67
6.1 Whether the Court should not entertain 67-73
the applications because of the general
principle against "fragmentation" of
criminal proceedings
6.2 Whether Draffin had standing to apply for 73-81
the TI warrant
6.3 Whether there existed on 2 June 1993 an 81-90
an application in writing for the TI warrant
6.4 Whether the TI warrant contained "short 90-103
particulars" of the relevant offences
6.5 Whether the scope of the TI warrant 103-107
exceeded what the legislation permits
such a warrant to authorize
6.6 Whether the application for the TI warrant 107-128
was vitiated by an improper purpose
6.7 Was the warrant invalid by reason of the 128-136
failure of the AFP to disclose material matters
6.8 Whether Draffin's affidavit was inadequate 136-138
to entitle the eligible Judge to issue the
TI warrant
6.9 The claim for damages for misfeasance in 138-141
public office
7.0 CONCLUSION AND ORDERS 141
1.0 INTRODUCTION AND PARTIES
1.1. Parties
In each of the these proceedings, application is made for relief relating to the issue on 2 June 1993 by the fourth respondent ("the eligible Judge"), an eligible Judge of the Court, of a warrant (the "TI warrant") pursuant to s.46 of the Telecommunications (Interception) Act 1979 ("the TI Act"). (An "eligible Judge" is defined by s.6D of the Act.)
The Chief Justice, considering that the matter was of sufficient importance to justify the giving of a direction under s.20 (1A) of the Federal Court of Australia Act 1976, directed that the jurisdiction of the Court be exercised by a Full Court. It was ordered that the three proceedings be heard together and that the evidence in any one be evidence in each of the others.
The applicants' case is
that the TI warrant, which purported to authorize the interception by certain
members of the Australian Federal Police ("the AFP") of
communications made to or from a certain telecommunications service, was
invalid and that all interceptions pursuant to the TI warrant were
unlawful. The applicants seek damages as
well as declaratory and injunctive relief against the use of the record of the
intercepted communications in other proceedings. The claim for damages is based on the tort of
misfeasance in public office by members of the AFP. The applicants contend that the third
respondent, the Commonwealth, is liable to pay damages to them.
Further, the applicants claim that the unlawfully recorded interceptions made in reliance on the TI warrant enabled the AFP, on 11 August 1993, to apply for and to obtain the issue by the fifth respondent (then Chief Magistrate of the Victorian Magistrates' Courts, now a judge of the Family Court of Australia) ("the Magistrate") of three search warrants pursuant to s.10 of the Crimes Act 1914 ("the Crimes Act"), and that all things seized upon the execution of the search warrants were unlawfully taken.
The applicants seek
relief in general terms in respect of the allegedly invalid TI warrant and in
respect of the "fruits" of that warrant. They seek to invoke the Court's jurisdiction
under s.39B of the Judiciary Act 1903 in respect of the issue of the TI
warrant, there being no jurisdiction to grant judicial review under the Administrative
Decisions (Judicial Review) Act ("the ADJR Act") of a decision of
that kind. However, the Magistrate's
decision is sought to
be reviewed under the ADJR Act.
Three of the four applicants, John Flanagan, Robert Charles Howard and Bruno Grollo, are due to stand trial on certain criminal charges in the County Court of Victoria on 5 February 1996. Certain relief sought by them is directed to preventing the tender by the second respondent, the Director of Public Prosecutions ("the DPP"), in those proceedings of evidence which, those applicants say, has become available as a result, direct or indirect, of the issue of the TI warrant and the exercise of the rights given by it.
1.2 Abbreviations
In these reasons for judgment, we use the following abbreviations:
"the ADJR Act": the Administrative Decisions (Judicial Review) Act 1977.
"the AFP": the first respondent, constituted by the AFP Act.
"the AFP Act": the Australian Federal Police Act 1979.
"the ATO": the Australian Tax Office.
"CCR": Customer Call Charge Record.
"the Commonwealth": the third respondent.
"COPS": Computerised On Line Police System.
"the DPP": Commonwealth Director of Public
Prosecutions.
"the eligible where referring to the particular eligible
Judge": Judge who issued the TI warrant, the fourth respondent.
"the IRP": an Internal Review Panel of the ATO.
"the Magistrate": the fifth respondent.
"product": recordings of intercepted conversations.
"the search the three search warrants under s.10 of
warrants" the Crimes Act 1914 issued by the Magistrate on 11 August 1993 to which these proceedings relate.
"the TI Act": the Telecommunications (Interception) Act
1979.
"the TI the Telecommunications
Regulations": (Interception) Regulations 1987
"TISB": the Telecommunications Interception Services Branch of the AFP located in Canberra.
"TI material" material obtained under a TI warrant.
"TI warrant": a warrant issued under the TI Act, and, in particular, the warrant issued by the
eligible Judge on 2 June 1993 to which these proceedings relate.
"Operation Poker"
and "Poker": an investigation into an alleged income tax fraud by certain companies and individuals associated with and including Bruno Grollo and Rino Grollo.
"Operation Retrieve"
and "Retrieve": an investigation into alleged attempts to corrupt Detective Superintendent Lloyd Farrell commencing in March 1993 and culminating in the arrests of Flanagan, Howard and Grollo; the subject of the forthcoming trials in the County Court of Victoria.
1.3 Dramatis Personnae
The following persons are designated by the abbreviated forms of reference indicated below in italics:
Bates, Brian: Deputy Commissioner (Operations) of Police who performed duties of Commissioner in April 1993.
Black, Allen Robert: Detective Sergeant in the Fraud and General Crime Division, Southern Region, of the AFP; case officer in control of the corruption investigation (Operation Retrieve) for a time.
Dowding, Bruce: financial adviser to the Grollo group.
Draffin, John William: Superintendent who acted as Acting Commander when Hadgkiss acted as Assistant Commissioner; when filling the role of Acting Commander, commanded the Fraud and General Crime Division of the Southern Region.
Farrell, Lloyd: Detective Superintendent, AFP, whom Flanagan allegedly attempted to corrupt.
Flanagan, John: with his wife, Mrs Flanagan, a co- applicant in proceedings VG 612/95; allegedly attempted to
corrupt Farrell.
Mrs. Flanagan, Angela Dianne: with her husband, Flanagan, a co-applicant in proceedings VG 612/95.
Grofam Pty. Ltd.: building company within the Grollo group; allegedly earned income from the construction of the Rialto Towers building, Melbourne, as agent for Grollo Australia Pty. Ltd.
Grollo Australia Pty. Ltd.: parent company within the Grollo
group.
Grollo group and Grollo group of companies: group of companies associated with Bruno Grollo and Rino Grollo.
Bruno Grollo: applicant in proceedings VG 747/95.
Rino Grollo: brother of Bruno Grollo.
Hadgkiss, Nigel: Commander, AFP; when required, assumed the role of Acting Assistant Commissioner.
Hardjadibrata, Yildana Kuswan: Legal Officer to the DPP.
Howard, Robert Charles: Applicant in proceedings VG 613/95.
McDermott, Kenneth: Detective Sergeant; case officer in charge of the day-to-day running of the investigation into the conspiracy to defraud the Commonwealth (Operation Poker).
St. Martins Pty. Ltd.: joint venture partner of the Grollo
group in respect of the Rialto Towers building project, the
other joint venturer being an arm of the Kuwaiti Government.
Morrison, John: Detective Sergeant; case officer in charge of Operation Retrieve after Black.
Obers: Constable, AFP; member of the Operation Retrieve team.
Radley, A.: Senior Constable, AFP, and a member of the Operation Retrieve team; supervised Obers.
Wood, Peter: Solicitor to the DPP.
1.4 Issues raised by the proceedings
The issues raised by the proceedings and our treatment of them appear in section 6 below. It is, however, convenient to set them out here:
Whether the Court should not entertain the applications because of the general principle against "fragmentation" of criminal proceedings (6.1)
Whether Draffin had standing to apply for the TI warrant (6.2)
Whether there existed on 2 June 1993 an application in writing for the TI warrant (6.3)
Whether the TI warrant contained "short particulars" of the relevant offences (6.4)
Whether the scope of the TI warrant exceeded what the legislation permits a TI warrant to authorize (6.5)
Whether the application for the TI warrant was vitiated by an improper purpose (6.6)
Whether the TI warrant was invalid by reason of the failure of the AFP to disclose material matters (6.7)
Whether Draffin's affidavit was inadequate to entitle the eligible Judge to issue the TI warrant (6.8)
The claim for damages for misfeasance in public office (6.9)
2.0 BACKGROUND FACTS
2.1The events leading up to the preparation of the application for the TI warrant
In July 1992, the AFP commenced an investigation into suspected income tax fraud by the Grollo group. The AFP code name for this investigation was "Operation Poker". The ATO referred the matter to the AFP on the grounds that it was suspected that the Grollo group had avoided paying a significant amount of tax on profits earned in a substantial development project (the "Rialto development") and that this may have involved criminal activity.
The officer responsible for significant decisions in relation to the investigation and, in particular, for the lines of inquiry to be pursued, was Hadgkiss, then Commander of the AFP's Fraud and General Crime Division, based in Melbourne. McDermott was the case officer in charge of the day-to-day conduct of the investigation.
By an information sworn on 17 September 1992, McDermott applied to a magistrate for search warrants pursuant to s.10 of the Crimes Act. The warrants were sought on the basis that there were reasonable grounds for believing that documents specified in the information would afford evidence as to the commission of several offences contrary to s.86(1)(b) and s.86A (formerly s.86(1)(e)) of the Crimes Act, including a conspiracy by, amongst others, Bruno Grollo, to defraud the Commonwealth by evading the payment of income tax on assessable income amounting to $59m., being income earned from the Rialto development. The offence of defrauding the Commonwealth contrary to s.29D of the Crimes Act, by understating taxable income, was also alleged against, amongst others, Bruno Grollo. The documents sought to be seized were said to be located at several premises, including the homes of members of the Grollo family, the offices of KPMG Peat Marwick, Chartered Accountants, Mallesons Stephen Jaques, Solicitors, and the ANZ Banking Group.
Section 10 of the Crimes Act provided:
"If a Magistrate or Justice of the Peace is satisfied by information on oath that there is reasonable ground for suspecting that there is in or upon any premises...or place:
(a) anything with respect to which any offence against any law of the Commonwealth... has been, or is suspected on reasonable grounds to have been committed;
(b) anything as to which there are reasonable grounds for believing that it will afford evidence as to the commission of any such offence; or
(c) anything as to which there is reasonable ground for believing that it is intended to be used for the purpose of committing any such offence;
or that any such thing may, within the next following 72 hours, be brought into or upon the premises,... or place, the Magistrate or Justice of the Peace may grant a search warrant authorising any constable named in the warrant, with such assistance, and by such force, as is necessary and reasonable, to enter at any time the premises... or place named or described in the warrant, and to seize any such thing which he or she might find there."
Section 29D of the Crimes Act provides that a "person who defrauds the Commonwealth or a public authority under the Commonwealth is guilty of an indictable offence." The penalty for the fraud includes a fine or imprisonment for 10 years, or both. Section 86(1)(b) provides that a person who conspires with another to prevent or defeat the execution or enforcement of a law of the Commonwealth is guilty of an indictable offence, punishable by imprisonment for three years. By s.86A (formerly s.86(1)(e)), it is provided that a "person who conspires with another person to defraud the Commonwealth or a public authority under the Commonwealth is guilty of an indictable offence" the penalty for which is a fine or imprisonment for 20 years, or both.
The search warrants were issued on 17 September 1992 and were executed later in that month and also in October 1992.
(In October and November 1992 and subsequently, several persons, including Bruno Grollo, instituted proceedings in this Court to challenge the validity of these search warrants. Those proceedings were set down for hearing before Jenkinson J. on 23 August 1993. Shortly before that date the parties agreed that the matters should go to mediation, after which the proceedings were dismissed by agreement.)
In a minute dated 12 January 1993, McDermott reviewed the Operation Poker inquiry, setting out his assessment of its status and his prediction of the way in which it would proceed over the next six months. He foreshadowed that arrests resulting from the investigation would be made in April and May 1993, with the committal proceedings being initiated a few months later in August or September 1993. He noted that arrests would not be made until it was certain that the hand-up brief needed for a committal hearing could be completed within the statutory maximum period of four months after arrest. His estimate took into consideration the likelihood that the investigation team would continue to be denied access to certain documents as a result of injunctions which had been granted by this Court and were still in force. Among his concluding comments in his report, he stated:
"23. The enquiry has been running for approximately six months and will take at least another six months before it shows positive results. Some enquiry members will remain on the investigation for the remainder of the year while others will be progressively released back to their respective Divisions during the second part of this year. Committal proceedings are likely to extend into 1994 with a trial commencing sometime that year. The trial will probably extend through to 1996. Even after leaving the enquiry, all members can expect to have a continuous association with the Operation until at least 1994, in varying capacities.
24. Although it is difficult to get a grip on how a large scale enquiry is performing at any one time, from experience I believe that the enquiry is proceeding at a satisfactory pace and will achieve it's [sic] final aims."
On 1 April 1993, Farrell told Hadgkiss that Flanagan had contacted him and had explored the possibility that he, Farrell, might pass information about the tax fraud investigation to Flanagan so that it could then be passed to the Grollos. Farrell further said that Flanagan had offered him $10,000 in return for this assistance. Hadgkiss decided that the attempt to corrupt Farrell needed to be investigated and that a covert operation, code-named Operation Retrieve, should be undertaken with the immediate aims of ascertaining whether Flanagan was in fact acting on behalf of the Grollos, exactly what was wanted and how much was already known about Operation Poker.
Hadgkiss assigned a separate team of officers to Operation Retrieve, headed by Black. On 28 May 1993, Black was replaced by Morrison as case officer of Operation Retrieve. McDermott was the only member of the Operation Poker team to be informed of this development.
Pursuant to the provisions of s.88(3)(g) of the Telecommunications Act 1991, officers involved in Operation Retrieve obtained customer call charge records ("CCRs") disclosing that calls had been made between services used by Flanagan on the one hand and Bruno Grollo on the other. Section 88 of that Act relevantly provides as follows:
"88. (1) A prescribed person must not disclose or use any information or document that:
(a) relates to:
(i) the contents or substance of a communication that has been carried by a carrier or supplier or a communication in the course of telecommunications carriage; or
(ii)telecommunications services supplied, or intended to be supplied, to another person by a carrier or supplier; or
(iii)the affairs or personal particulars (including any unlisted telephone number or any address) of another person; and
(b) comes to the person's knowledge, or into the person's possession, because the person is a prescribed person.
Penalty: Imprisonment for 2 years.
(2) A person who has been a prescribed person must not disclose or use any information or document that:
(a) relates to a matter mentioned in paragraph (1)(a); and
(b) came to the person's knowledge, or into the person's possession, because the person was a prescribed person.
Penalty: Imprisonment for 2 years.
(3) This section does not prohibit a disclosure by a person of information or a document:
...
(g) if the disclosure is reasonably necessary for the enforcement of the criminal law or of a law imposing a pecuniary penalty, or for the protection of the public revenue ...".
Further meetings between Flanagan and Farrell took place under surveillance and were recorded by the AFP. According to Farrell, at one such meeting on 13 April 1993, Flanagan told him that he had met with Bruno Grollo and that he acted for the Grollo brothers.
At about this time, a public relations consultant acting for the Grollos sought a meeting with the Minister for Justice in regard to the current tax fraud investigation into his clients' activities.
By letter to the Minister dated 14 April 1993, the Acting Commissioner of the AFP (Bates) advised against the meeting in these terms:
"AFP INVESTIGATION INTO THE GROLLO GROUP - UPDATE BRIEF
ISSUE
Your proposed meeting with Peter Berry of PB Industrial Relations Consultancy Pty Ltd and a representative of the Grollo Group.
BACKGROUND
The office of your predecessor has received previous briefings on this matter, which were provided to your office today. In summary it is believed that the following are the main points which need to be considered by you:
. This matter is a current major AFP investigation in which the AFP is working closely with the Australian Taxation Office (ATO) and the Director of Public Prosecutions (DPP). ATO auditors and a DPP financial analyst are attached to the investigating team.
. Continuous efforts by those being investigated and their legal counsel are delaying police access to documentation and this is hampering the investigation. DPP have briefed senior counsel and affidavits which have lead to the issuing of search warrants were vetted by Mr Peter Farris [sic] QC.
. Notwithstanding the delaying tactics, the
AFP
believe that there is sufficient evidence to prove criminal activity on the
part of the Grollo brothers and other persons in documentation already
available to police.
. It will take some time to complete analysis of the documentation, interview witnesses and prepare a brief of evidence.
. Whilst it was the AFP's expectation to be able to lay criminal charges in late April/May 1993 our efforts have been delayed by difficulties with the ANZ Banking group. The bank is under threat of being sued by the Grollo Group for breach of confidentiality if it supplies further information to police, and bank officers have been instructed not to answer police questions or provide statements. The DPP is trying to resolve this issue with solicitors for the ANZ Bank.
. Of considerable concern is the fact that a Superintendent from the AFP in Melbourne was recently approached by a private investigator known to him who stated that he had been employed by Bruno Grollo to obtain information in relation to the AFP investigation. The private investigator also claimed that money was no object and asked if certain officers responsible for the Grollo investigation could be bribed. The Superintendent who was approached was offered $10,000. A separate police investigation has been commenced into this matter. You would appreciate the sensitivity of this information.
. The AFP believe that the Grollo Group are making every endeavour to frustrate the AFP investigation. They are also believed to have claimed to be able to exert sufficient pressure to have the case against them collapse within the next month.
Having regard to these matters and the fact that this is an outstanding ongoing serious investigation your office should advise Mr Berry to raise any matters he may have about the investigation with the AFP. To that extent he could meet with the Officer in Charge of the AFP Southern Region, Melbourne, Assistant Commissioner Walter Williams.
My advice is that it would not be prudent for you to meet with Mr. Berry or the representative of the Grollo Group."
On 15 April 1993, the Grollo group commenced proceedings in this Court seeking to restrain the AFP from interviewing employees, or former employees, of the ANZ Banking Group in respect of the financial affairs of the Grollo group.
On 29 or 30 April 1993, McDermott entered the following information into the AFP's COPS database:
"... CASE OFFICER MAKES OPERATIONAL DECISION THAT OP. POKER WILL PROCEED TO ARREST CHARGE PHASE IN JULY 1993 AS INVESTIGATION HAS EFFECTIVELY `BOGGED DOWN' DUE TO DEFENCE TACTICS. CASE OFFICER SEEKS THE SUPPORT OF BOTH THE AFP AND THE DPP IN COMING TO THIS DECISION AND WILL CONFIRM IT AFTER DISCUSSIONS WITH P. FARIS Q.C. **NOTE** OP. POKER WILL NOT HAVE A FULL PRIMA FACIE CASE AGAINST THE SUSPECTS (IE - IN SIGNED STATEMENT FORMAT) BUT WILL HAVE MORE THAN SUFFICIENT TO JUSTIFY THE LAYING OF CHARGES AGAINST FIVE OF THE SIX CONSPIRATORS. CASE OFFICER QUALIFIES THIS BY SAYING THAT CHARGES CAN ONLY BE LAID IF THE ATO ISSUE [sic] COMPREHENSIVE ASSESSMENTS AGAINST THE GROLLO GROUP. ****** MATTER TO [BE] FURTHER DISCUSSED MAY/JUNE 1993."
On 29 April 1993, Farrell wrote the following minute to Hadgkiss:
"OPERATION RETRIEVE
JOHN FLANAGAN No9
Mr FLANAGAN again made contact on Thursday 29 April 1993 by telephone call direct to my office number at 1010hrs.
As usual he discussed progress on the computer hardware and software issue which has been the cover for all previous contact.
Meeting on 29 April 1993 Friday
He stated that there was much movement on the other front and requested a meeting on Friday 30 April for either coffee or lunch. I rejected lunch and opted to meet him at the Deli, corner of Queensbury and Elizabeth Streets, opposite the Queen Victoria Market at 1100hrs for coffee.
In addition as discussed with you I will provide access to and discuss release of the agreed document a copy of which is attached hereto for your reference. I will seek some initial payments for the subject information.
I have made arrangements with Superintendent CROSS to obtain and wear a recording device for this meeting. In addition I have briefed a surveillance team to oversight the meeting, take photos and follow the target away for any initial meetings he may have immediately afterward.
Meeting on 5 May 1993 Wednesday
I also advise that an informal army reunion is to take place on Wednesday evening 5 May 1993. This is prompted by the visit of an old army friend who is in Melbourne on business for a short period ex Perth. It is planned that all will meet at the RACV Club close to 5pm and then head off to an Asian Restaurant for dinner. Likely to be in the Little Bourke Street area.
I will propose, on Fridays [sic] meeting, with Mr FLANAGAN, that he come to police headquarters and park, then travel with me on the evening of the 5th. Alternatively I will attempt to pick him up from his city accommodation and have him accompany me to the dinner. This will assist for the purposes of facilitating the execution of a warrant on his private vehicle.
It would be my intention to wear a recording device for the evening of the 5th with a view to recording any conversation with Mr FLANAGAN that may occur away from the persons, should that opportunity present itself.
The surveillance unit will also be involved in the coverage of [sic]
Entrapment
I refer to the Commonwealth Briefing paper on ENTRAPMENT, a copy of which was supplied to me on Thursday 29 April 1993.
In R V S(1953) 53SR (NSW)460 at 483:
`It is no
defence to the commission of crime in this country to assert that the accused
was persuaded to do what he did because of the blandishments of some
person in authority.'
It has been a principle [sic] point in this investigation that Police not initiate contact with or pursue Mr FLANAGAN to provide, disclose or do any act. On the contrary, contact has always been initiated by Mr FLANAGAN who has instigated approaches for information and action by certain named police.
The issue of money was raised by Mr FLANAGAN on the first meeting on 1 April 1993 and has been a constant theme to encourage certain actions to occur. Police have only ever discussed amounts, methods of payment and what actions could be achieved.
I believe the only suggestions originated by police centred on the type of action that could assist achieve the common desired end, ie to stop any prosecution of the GROLLOs or their companies and some suggestions relevant to the mode of any related payments, ie safety deposit box.
The term entrapment, whilst a defence in United States Courts is rejected in English Courts. Any mitigation of the offender/s in this matter through alleging entrapment could be argued on the basis that the offenders were the prime movers of the scheme.
Corroboration
Obviously for the investigation to succeed beyond the possible offences committed by Mr FLANAGAN some evidence of mens rea by his employers will be critical to this matter. I believe that Section 33 Crimes Act 1914 will suffice for the purposes of Special Projects on the following:
.261 Bulleen Road Bulleen Tel: 850 4311
. 20 Chiffley Drv Preston Tel: 480 2200
including the mobile phone of Mr FLANAGAN if the number can be identified.
I will report further after each meeting."
Section 33 of the
Crimes Act creates an offence of official corruption. The reference to "Special Projects"
is a reference to TI warrants. However,
it is now common ground that the provisions of the TI Act do not allow for the
issue of a TI warrant on the ground that it is likely to assist in
the investigation of an offence against s.33 of the Crimes Act. It is also common ground that a TI warrant
may be issued if an eligible Judge is satisfied that it is likely to assist in
the investigation of the offences specified in the TI warrant challenged in
these proceedings.
By an information sworn on 4 May 1993, Black applied under s.10 of the Crimes Act to Deputy Chief Magistrate Hugh Francis Adams for a search warrant on the grounds that offences under s.73(3) and s.43 of the Crimes Act were suspected. (Section 73(3) creates an offence of corruption; s.43 creates an offence of attempting to pervert the course of justice.) The objects specified in the warrant included Flanagan's mobile telephone and other items, relating to the affairs of the Grollo group, which it was believed could be located in his motor vehicles. The search warrant was granted on 4 May 1993.
Apparently, Farrell and Flanagan met again on 5 May 1993 when Flanagan informed Farrell that Bruno Grollo had been shown a copy of an internal police report which Farrell had provided to Flanagan at a meeting on 30 April 1993.
As a result of the execution of the search warrant granted on 4 May, the AFP learned the number of Flanagan's mobile telephone (018 507492). By a request dated 7 May 1993 under s.88(3)(g) of the Telecommunications Act made by Black with the approval of Hadgkiss, CCR information was sought in respect of that telephone service.
In a report on Operation Poker to Hadgkiss dated 17 May 1993, McDermott reviewed the scope of the tax fraud investigation. In contrast with his earlier review dated 12 January 1993, in which he had estimated that the investigation would proceed to arrests in April or May 1993 with the committal proceedings being initiated a few months later in August or September 1993, McDermott reported that "[t]o the best of [his] understanding, ... Operation [Poker] ha[d] been directed/advised to widen the scope of the investigation and defer the timing of the arrest/charge phase to a much later date." He foreshadowed that "[t]he Operation [would] take another six months or more to complete, especially given the likelihood that the suspects [would] continue to obstruct available enquiry avenues." McDermott's revised estimate indicated that the investigation as at 17 May was less than 30% complete, with an estimated date for completion of November 1993 and the arrest phase commencing in December. The estimated time of completion of the hand-up brief was March 1994. In conclusion, McDermott stated:
"It would appear that the Operation can now be described as entering the middle phase of investigation and probably positioned somewhere at the commencement of that phase."
According to Farrell, at a meeting with Flanagan on 19 May 1993, Farrell had been handed $1,000 in notes and it was arranged that he would receive $10,000 for having provided the internal AFP report on 30 April 1993.
By a request dated 19 May 1993, Black sought CCR information in the present connection about a silent number (744 2308), referring to s.70 of the Crimes Act. (Section 70 creates the offence of disclosure of information by a Commonwealth officer in contravention of a duty not to disclose it.) At about this time, other similar requests were made in respect of Flanagan's mobile telephone. Those requests also referred to s.70 of the Crimes Act.
In a briefing paper dated 28 May 1993, Hadgkiss wrote to Assistant Commissioner Valentin, noting recent developments in Operation Poker. His comments followed a meeting which had taken place between the AFP and the ATO during the previous week. The status of the Operation Poker investigation was summarised as follows:
"a the AFP operation cannot be completed until the ATO issue assessments;
b the ATO are committed by their internal guidelines to review the decision to issue assessments;
c that review, almost certainly, involves the ATO in direct discussions with the targets;
d the ATO guidelines do not make provision for the review of assessments that involve allegations of criminal fraud;
e on the other hand, there is the clear potential for the IRP to unwittingly interfere with the investigation and future viability of any prosecution;
f the ATO is locked into a review process which may threaten the AFP operation;
g judging by their earlier behaviour and whatever the final outcome of the IRP, I believe the Grollo Group will attack any adverse finding and this will lead to additional delay."
On 2 June 1993, McDermott provided Hadgkiss with another report titled "Operation Poker" giving the latest information received on the conduct of the IRP and attaching the briefing paper referred to above. The report reviewed the developments in Operation Poker since a joint meeting between the AFP, the ATO and the DPP on 19 May 1993, and dealt specifically with the information received on the conduct of the ATO Internal Review. The report stated:
"17 Come the end of June 1993, almost one year after enquiry commencement, the operation will face the following quandary:
a Search Warrant execution has confirmed the original ATO complaint. The suspects have been identified. The enquiry is holding sufficient documents on which to continue the investigation and base charges in respect to all reported offences ( ie - the entire $59m in undeclared income). The enquiry does not require access to the documents currently before the Federal Court to complete the investigation.
b The initial ATO referral of 20 July 1993 will have been quantified (ie - as to the actual liability) and particularised (ie - as to where the liability falls within the Grollo Group trust structure).
c A separate prima facie Brief of Evidence, in
respect to the $3.5m profit figure, could be
assembled within four to six weeks (ie - by mid August 1993).
d Charges could be laid against three of the principal suspects in respect to this offence either immediately following the issuing of assessments, or the promise thereof.
e However, both our senior counsel and the DPP have already advised the operation not to proceed on the $3.5m profit figure as a separate prosecution.
f The investigation therefore remains orientated towards proving all of the alleged offences (ie - the entire $59m in undeclared income).
g Given that the operation can only complete the investigation when the ATO complete the IRP process and issue the remaining assessments, the operation cannot reach a resolution.
h Should the IRP process reach completion without the issuing of any further assessments, the AFP will have wasted most of the resources it has dedicated to the operation to date - remembering that the $3.5m investigation could originally have been completed by a Sergeant and one Constable inside a 12 week time frame."
In his conclusion, McDermott commented further on the ATO's involvement in the investigation. He noted that the ATO had "effectively allowed the Grollo Group the opportunity of reviewing the ATO complaint made to the AFP in 1992".
2.2 The preparation of the application for the TI warrant
Towards the end of May 1993, Hadgkiss decided that an application should be made for a TI warrant in respect of Flanagan's mobile telephone.
In his affidavit sworn in these proceedings on 16 August
1995, Hadgkiss gave the following description of the
preparation of the application for the warrant.
"12.... As the only evidence that we had at that time that linked Bruno Grollo to the attempted corruption consisted of call charge records and statements made by John Flanagan, a telephone intercept warrant or a listening device warrant seemed to me to be an obvious tool to employ in furthering the aim of the investigation to obtain evidence directly involving Bruno Grollo.
13. I was then acting as Assistant Commissioner of the AFP and Superintendent John Draffin was Acting Commander of the FGC Division in my place. I discussed the matter with him before making my decision and also with Asst. Com. Williams and Mr. P. Wood of the D.P.P., but the decision to apply was mine. I have obtained TI warrants quite frequently, and am therefore generally familiar with the Telecommunications (Interception) Act 1979. Acting Cmdr. Draffin and I examined the Act to determine whether it would be possible to obtain a warrant on the basis either of the corruption related offences or on the basis of the tax fraud offences. As with the search warrant that had been obtained in May, it would have been logical to rely upon the corruption offences, as they were the offences most directly connected with the conduct that was being investigated. However, it was soon apparent that there were no corruption offences that were within the categories of offence for which a TI warrant could be sought, and as the tax fraud offences were within such a category I decided that an application should be made on the basis of them. ... The purpose for seeking a TI warrant was in my mind to obtain evidence directly involving Bruno Grollo in the attempted interference with the tax fraud investigation, and my intention was at the time (as it had been from the outset) to use such evidence in any tax fraud charges that were laid against him and others as well as in any corruption charges that might be laid. I would not have permitted the application to be made if I had had any doubt as to the truth of the matters deposed to in the affidavit.
14. The affidavit in support of the application for the TI warrant was drafted in late May 1993. The affidavit was drafted under the active supervision and direction of Acting Cmdr. Draffin and myself by members of the Retrieve team with the assistance of the Operation Poker case officer and Mr. Wood of the DPP. The affidavit was sworn by Acting Cmdr. Draffin because as Acting Commander of the FGC Division he was the appropriate officer to swear it.
15. The reasons given in the affidavit in support for applying for the warrant in relation to the mobile telephone service used by John Flanagan rather than another service used by him or a telephone service associated with Bruno Grollo are accurately stated in the affidavit in support."
In his affidavit sworn in these proceedings on 15 August 1995, Draffin gave the following account of these events:
"5. Through my involvement with both investigations [i.e. Operations Poker and Retrieve], it was obvious to me that the two investigations were intertwined. More specifically, they were linked at two levels. In the first place, it was the tax fraud investigation that gave rise to the corruption investigation - there would have been no corruption investigation or corruption offences without the existence of the tax fraud investigation. Secondly, whatever information was gathered in the corruption investigation had the potential to provide additional evidence in the form of admissions or consciousness of guilt on the part of Bruno Grollo in relation to the alleged tax fraud.
6. In late May 1993 and early June 1993, I was Acting Commander of the FGC Division and Commander Hadgkiss was Acting Assistant Commissioner. Towards the end of May 1993 various discussions took place between Commander Hadgkiss and myself regarding the possibility of obtaining a telephone intercept warrant with a view to intercepting and recording telephone conversations between John Flanagan and Bruno Grollo concerning their attempt to sabotage Operation Poker. Most of the discussions centred on which telephone service would be targeted, but we also discussed the basis on which the application should be made.
7. As a result of my discussions with Acting
Assistant Commissioner Hadgkiss, it was agreed that I would apply for the
Warrant on the basis
outlined in my affidavit. ... I believed
then that that was the true purpose of the application ... .
8. I do not specifically recall giving consideration to relying upon the corruption related offences as a basis for the Warrant application, but, I believe that I would have considered whether this was possible. However, it is clearly not possible to rely on such offences. I do recall specifically forming the view that although the Warrant would obtain material directly related to the corruption offences, that material would constitute significant fresh evidence in the tax fraud investigation."
In his affidavit, Draffin continued:
"13.Prior to the obtaining of the Warrant, Commander Hadgkiss and I discussed which telephone service was the most appropriate service to be intercepted. ...
14. I signed several Telecom Call Charge Record requests during the course of Operation Retrieve. They would have been signed in my capacity as Acting Commander or as a nominal commissioned officer. All Call Charge Record requests must be signed by a commissioned officer (ie. an officer of the rank of Superintendent or above). The requests were made on the basis of a corruption related offence. There is a requirement to identify one offence. I nominated a corruption related offence, as opposed to any tax fraud offence, because the corruption offences were those most directly connected with the evidence that was being sought."
2.3The terms of the affidavit sworn by Draffin on 1 June 1993 in support of the application for the TI warrant
In the affidavit laid before the eligible Judge, Draffin deposed:
"1. I am a member of the Australian Federal Police (AFP) and hold the rank of acting Commander.
2. I am the applicant for a warrant under section 46 of the Telecommunications (Interception) Act 1979 in respect of telecommunications service (018) 50 7492 which is a telecommunications service within the meaning of the Telecommunications (Interception) Act 1979.
3. The Australian and Overseas Telecommunications Corporation Limited advise that telecommunications service (018) 50 7492 is a mobile service and is connected in the name of A D Flanagan of Hillcrest Road, Maiden Gully in the State of Victoria.
4. No previous application has been made for the issue of a warrant in respect of the telecommunications service referred to in paragraph 2.
5. The information set out in this affidavit includes the facts and other grounds upon which I base my application for a warrant under section 46 of the Telecommunications (Interception) Act 1979.
6. I have been informed by Detective Constable Christine Radley, a member of the AFP, Melbourne, of the facts and other matters set out in the paragraphs below and verily believe that they are true.
7. Since July 1992, the AFP acting upon a complaint by the Australian Taxation Office (ATO) has been conducting an investigation into suspected fraud by certain companies owned and controlled by Bruno Grollo and Rino Grollo (the Grollo Group). The Informant believes the following summary represents a reasonable overview of the investigation:
(i) In 1981 the Grollo Group entered into a joint venture partnership with a corporate arm of the Kuwaiti Government to construct the Rialto Twin Towers, 525 Collins Street, Melbourne. This venture was known as the Rialto Joint Venture (RJV) and the partners were Grollo Australia Pty Ltd and St Martins (Victoria) Pty Ltd.
(ii)Grofam Pty Ltd, a Grollo Group
company, contracted with the RJV to construct the Rialto Building. The RJV documentation was amended in
October 1983 to engage Grollo Australia Pty Ltd as the builder. The
shareholders and directors in both Grofam Pty Ltd and Grollo
Australia Pty Ltd are Bruno Grollo and Rino Grollo.
(iii) The Grollo Group made considerable savings on the original projected construction costs. The Grollo Group made a profit of approximately $59 million on the construction of the Rialto Building between 1982 and 1989.
(iv)Enquiries by the Australian Taxation Office have revealed that none of the $59 million profit was ever brought to account, by either Grofam Pty Ltd or Grollo Australia Pty Ltd, as assessable income, or indeed by any other Grollo entity.
(v) As a consequence, the Grollo Group paid no income tax to the ATO on the profits earned during the construction of the Rialto Twin Towers. The estimated amount of tax which should have been paid during this period is difficult to calculate as the Grollo Group is structured into many trusts with losses being available to absorb income in certain companies. I understand that the loss to the revenue as a result of the suspected fraud is not less than $20 million.
(vi)On or about 18 September 1992, section 10 search warrants under the Crimes Act 1914 were executed by members of the AFP on various premises in relation to the Grollo Group and the shareholders and directors Rino and Bruno Grollo.
(vii) The search warrants were obtained on the basis that there were reasonable grounds for believing that certain things to be found on the premises would afford evidence as to the commission of offences contrary to section 86(1)(b) Crimes Act 1914 (conspiracy to prevent or defeat the execution or enforcement of a law of the Commonwealth), section 86(1)(e), subsequently section 86A Crimes Act 1914 (conspiracy to defraud the Commonwealth) and section 29D Crimes Act 1914 (defraud the Commonwealth).
(viii) The
Grollo Group have instituted proceedings in the Federal Court of
Australia under both the Administrative
Decisions (Judicial Review) Act 1977 and section 39B Judiciary Act
1904 in which they have sought to review or challenge the granting of the
warrants and the subsequent execution of those warrants. Those proceedings have been issued out of the
Victoria District Registry and are designated as follows: VG 399 and 435 of 1992; VG 72 of 1993.
(ix)The Grollo Group have also instituted proceedings against the ANZ Bank and the AFP in which the Grollo Group seek to restrain the ANZ Bank from allowing its officers to make statements to the Police. The proceedings also seek to restrain the AFP from approaching the ANZ Bank for such purpose. Those proceedings are issued out of the Victoria District Registry and are designated VG No 110 of 1993.
(x) In each of the actions involving the issue and execution of search warrants, orders have been made by consent which provide for the lodging of material for which legal professional privilege is claimed or which is said to be outside the warrant with the Court pending the determination of those matters.
(xi)Related proceedings before the Federal Court are: VG 395 of 1992 Application brought by Mr. Bruce Dowding, a financial adviser to the Grollo Group whose residence was searched; and
VG 76 of 1993 Application brought by the St Martins Group which asserts that certain documents seized at the business premises of the Applicants were either or both subject to legal professional privilege or did not fall within the search warrant.
(xii) The ATO audit into the Grollo Group concerned a number of issues other than the Rialto Building. The adjustments to be taxable income of the Grollo Group are extremely complicated. Assessments have not issued to date.
8. On Wednesday 31 March 1993, Detective Superintendent Lloyd Farrell an officer of the AFP was contacted at work by a former Army associate, Mr. John Flanagan, who suggested they meet for lunch to renew their friendship. Flanagan and Farrell had limited contact with each other since 1976.
9. Flanagan is currently self employed, and together with his wife Angela operates an information management system for independent inquiry agents and a computer consultancy firm from his home address at Hillcrest Road, Maiden Gully near Bendigo in Victoria.
10. On Thursday 1 April 1993, Flanagan met with Farrell at a restaurant. During their meeting Flanagan requested information from Farrell in relation to the current investigation into the affairs of the Grollo Group of companies. Flanagan stated that he was on a retainer from the Grollo's to look into the investigation. Flanagan mentioned that there was a lot of money in it for Farrell if he could provide information. A figure of $10,000 was mentioned. Farrell subsequently contacted Commander Hadgkiss and advised him of the approach made by Flanagan.
11. Farrell was instructed by Commander Hadgkiss to receive any further approaches from Flanagan and to deal with any such approaches as directed.
12. On Thursday 8 April 1993, Farrell received a telephone call from Flanagan. During the conversation Flanagan began to question Farrell as to whether he had obtained any information in relation to their discussion on 1 April 1993. Farrell explained that he had obtained some details but was reluctant to divulge them. A second meeting was arranged for Tuesday 13 April 1993.
13. On Tuesday 13 April 1993 a second meeting took place between Farrell and Flanagan at a restaurant in Goldie Place, Melbourne. This meeting was monitored and recorded by members of the AFP. During the conversation the following issues were discussed.
(a) Flanagan asked Farrell if it would be possible to bribe either Commander Hadgkiss or Detective Sergeant McDermott, the Case Officers in the Grollo inquiry, to hamper the investigation.
(b) Flanagan asked whether Mr Rozenes QC, Director of Public Prosecutions, could be approached to intervene in the investigation. Flanagan went on to enquire as to whether a politician could influence Mr Rozenes.
(c) Flanagan stated to Farrell during their conversation that he was acting in this matter directly on behalf of the Grollo brothers (Rino and Bruno Grollo). Flanagan also explained that he had met with Bruno Grollo.
14. On Friday 23 April 1993, a third meeting was held between Flanagan and Farrell at a restaurant in Lonsdale Street, Melbourne. During their conversation the following issues were discussed:
(a) Farrell advised Flanagan that he had obtained access to the brief and relevant evidence. Discussions were then held around the possibility that vital pieces of evidence could be removed and handed over to Flanagan. In turn, Flanagan could then give the material to the Grollo brothers for destruction.
(b) Flanagan described his recent personal dealings with Bruno Grollo and a reporter for the Herald-Sun who was inquiring as to the AFP investigation.
(c) Discussions were conducted with regard to the amount Farrell should receive for his assistance in the sabotaging of the AFP investigation. A sum of $250,000 was suggested by Flanagan as being an appropriate amount. Different methods of payment were also proposed by Flanagan during the conversation, these included the use of a safety deposit box.
15. On Friday 30 April 1993, a fourth meeting was held between Farrell and Flanagan at a Pastry Shop on the Corner of Elizabeth and Queensberry Streets, Melbourne. This meeting was recorded by Farrell. During the conversation, the following issues were discussed:
(a) Flanagan said that there was only Bruno Grollo, Farrell and himself involved in their dealings. He said that he had discussed an amount of money with Bruno Grollo during a meeting in the middle of an open paddock.
(b) Flanagan said that Bruno Grollo had become very paranoid and believed he was under surveillance. Flanagan presented Farrell with a list of three vehicle registration numbers which Bruno Grollo had recorded as having possibly followed his vehicle. Farrell was asked to make enquiries to confirm that the vehicles were not Police surveillance vehicles.
(c) Flanagan also stated to Farrell that Bruno Grollo had told him during the meeting that he had employed a person to electronically scan the entire Grollo office building for listening devices. No devices were located. At this point that Flanagan began to ask Farrell a range of questions about the ability of the AFP to install listening devices and telephone intercepts.
(d) Flanagan advised Farrell that he had agreed with Bruno Grollo that the price for sabotaging the investigation would be $500,000. Farrell would receive $250,000 from this amount.
(e) During the meeting and acting upon directions, Farrell handed Flanagan a copy of an internal Police report outlining the Grollo investigation. It was then agreed that the document would be worth something to Bruno Grollo and that Flanagan should ask for money in exchange for handing over a copy of the report.
(f) During the course of the meeting it was agreed that the report should be taken by Flanagan and copied. The original report would then be returned to Farrell on Wednesday, 5 May 1993, during an Army reunion which had been previously organised.
(g) Flanagan said that Bruno Grollo was personally conducting the defence or reaction to the investigation. Flanagan said that Bruno Grollo was frightened on the basis that there was more to matters than met the eye and that the Police had only skimmed the surface.
(h) Flanagan referred to discussions with Bruno Grollo as to the matter of payment and difficulties in getting together large amounts of cash.
16. On Wednesday 5 May 1993, Farrell and Flanagan met at an Army reunion, which continued on to the Naval and Military Club, Little Collins Street, Melbourne. This meeting was again recorded by Farrell. As previously agreed on 30 April 1993, Flanagan returned the original copy of the report to Farrell and advised that he had shown the report to an associate of Bruno Grollo but had not handed over a copy.
17. On Thursday 6 May 1993, Farrell received a telephone call from Flanagan. During the telephone call Flanagan advised Farrell that he would not approach Bruno Grollo, but rather have Grollo initiate the next meeting. Flanagan also asked Farrell if he was still prepared to continue with the plan. Farrell advised that he was.
18. On Tuesday, 11 May 1993, Flanagan telephoned Farrell and requested a meeting on Friday, 14 May 1993 at 1100 hours. Flanagan said that he had met with Bruno Grollo since last seeing Farrell and that he would see Bruno Grollo again before the suggested meeting on the following Friday. The meeting was later postponed until Wednesday, 19 May 1993.
19. On Tuesday, 19 May 1993 a meeting was held between Farrell and Flanagan at a Restaurant in Lonsdale Street, Melbourne. This meeting was recorded by Farrell. During the meeting, the following issues were discussed:
(a) Flanagan outlined discussions with Bruno Grollo and said that Bruno Grollo was sick of everyone advising him what to do and what not to do.
(b) Flanagan handed to Farrell $1,000 in $100 notes and said that he had negotiated an amount of $20,000 cash as payment for the AFP internal report furnished to Flanagan at the meeting on 30 April 1993. Flanagan said that they should share the $20,000 between them. The arrangement was that Farrell would get $1,000 each week until he had received the total of $10,000. This arrangement was put in place so that there could be continuous contact with Farrell to discuss any new decisions made by the AFP in relation to the Grollo Group investigation.
(c) Flanagan mentioned that he needed to be careful speaking to Farrell over the phone because Farrell was at work.
20. During the course of the investigation Flanagan has continually used telecommunications service (018) 50 7492 which is a mobile service, to contact Farrell in order to organise meetings.
21. Information received from the Australian Overseas Telecommunications Corporation Limited, have [sic] revealed that eleven telephone calls from telecommunications service (018) 50 7492, have been made to telecommunication service (03) 480 2200, being a service registered to the Grollo Group, between 5 April 1993 and 30 April 1993. On the basis of the information set out above, the informant believes that Bruno Grollo was a party to these telephone calls.
22. Enquiries conducted during the investigation have revealed that Flanagan was formerly employed as a technician with the Australian Overseas Telecommunications Corporation Limited. It is the informant's belief that Flanagan has maintained a large number of contacts within this Corporation.
23. ...
24. ...
25. Enquiries conducted by AFP on 20-30 Chifley Drive, Preston reveal these premises to be a large two storey office block consisting of about thirty offices. The premises is serviced by a telecommunications system operated by a receptionist and which provides numerous lines to internal offices. Due to the number of telephone extensions within this system it is impossible to identify which telephone or telephones could be used by Bruno Grollo.
26. Enquiries conducted by the AFP regarding 261 Bulleen Road, Bulleen reveal that these premises contain more than one dwelling and are occupied by a number of individuals, including Bruno Grollo. The telecommunications service connected to these premises is also listed as the contact number for three Grollo related companies/businesses.
27. Methods of investigating the offence that do not involve intercepting communications are being applied by the AFP. As mentioned previously, search warrants have been executed and, subject to Federal Court proceedings, material is being assessed and witnesses located and interviewed. Given the nature of the inquiries required to investigate the aspect of the offences the subject of this warrant, such traditional methods of investigation would be unlikely to be effective. Indeed, such matters might be counter productive in that they may alert the principals to Police interest and involvement in this aspect of the offences and the attempts to avoid prosecution for those offences.
28. By reason of the facts and other matters aforesaid, I suspect that Bruno Grollo is involved in class 2 offences, namely conspiracy to defraud the Commonwealth contrary to section 86 (1)(e) and now section 86A of the Crimes Act 1914 and defrauding the Commonwealth contrary to section 29D Crimes Act 1914. Moreover, telecommunications service (018) 50 7492 is being used in connection with the commission of the said offence.
29. The information likely to be obtained by intercepting under a warrant would assist the investigation of these class 2 offences by demonstrating a consciousness of guilt and/or the obtaining of admissions on the part of Bruno Grollo. The information might also establish personal knowledge and involvement in the suspected offences by Bruno Grollo as distinct from the employees and advisers of the Grollo Group.
30. I suspect upon the grounds set out herein that Bruno Grollo is using or is likely to use telecommunications service (018) 50 7492 in contacting Flanagan or being contacted by Flanagan. Information likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist with the investigation of class 2 offences set out in paragraph 28 above.
31. Interception by members of the AFP of telecommunications made to or from the said telecommunications service for a period of ninety days is likely to assist such members in, or in connection with enquiries that are being made in relation to the abovementioned offences.
32. I consider it necessary for the warrant to be issued for the period of ninety days. This period will allow sufficient time for the AFP to gather further evidence concerning the offence under investigation."
(A claim by the AFP for public interest immunity from disclosure of paras. 23 and 24 of the affidavit was upheld by the Court. After examining these paragraphs for itself, the Court concluded that they went to technical matters only and were not relevant to any issue in the proceedings.)
2.4 The terms of the TI warrant
The TI warrant bore date 2 June 1993 and was in these terms:
"TO: Members of the Australian Federal Police in relation to whom an approval under sub-section 55(2) of the Telecommunications (Interception) Act 1979 is in force.
WHEREAS application has been made to me by John William DRAFFIN, Acting Commander on behalf of the Australian Federal Police for a warrant in respect of the following telecommunications service, namely telecommunication service (018) 507492, connected in the name of A.D. FLANAGAN at premises, Hillcrest Road Maiden Valley, in the State of Victoria.
AND WHEREAS I, Peter Cadden HEEREY
an eligible Judge, am satisfied, on the basis of the information given to me under Part VI of the Telecommunications (Interception) Act 1979 in connection with the application, that:
(a) Division 3 of that Part has been complied with in relation to the application;
(b) there are reasonable grounds for suspecting that a particular person, namely Bruno GROLLO a Company Director of 261 Bulleen Road, Bulleen in the State of Victoria, is using, or is likely to use, the service;
(c) information that would be likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist in connection with the investigation by the agency that applied for this warrant of the following class 2 offences in which that person is involved namely Conspiracy to Defraud the Commonwealth contrary to Section 86(1)(e), and now Section 86A of the Crimes Act 1914; and Defrauding the Commonwealth contrary to Section 29D of the Crimes Act 1914; and
(d) having regard to :
(i) how much the privacy of any person or persons would be likely to be interfered with by intercepting under a warrant communications made to or from that service;
(ii)the gravity of the conduct constituting the offences being investigated;
(iii)how much the information referred to in paragraph (c) would be likely to assist in connection with the investigation by that agency of the offences;
(iv) to what extent the methods of investigating the offences that do not involve intercepting communications have been used by, or are available to, that agency;
(v) how much the use of such methods would be likely to assist in connection with the investigation by that agency of the offences; and
(vi)how much the use of such methods would be likely to prejudice the investigation by that agency of the offences, whether because of delay or for any other reason;
and to no other matters;
I should issue a warrant authorising such communications to be intercepted:
NOW THEREFORE I, pursuant to Section 46 of the Telecommunications (Interception) Act 1979, hereby authorise members of the Australian Federal Police in relation to whom an approval under sub-section 55(2) of that Act is in force to intercept communications made to or from that service;
...
[At this point the words "subject to the following conditions or restrictions" had been struck through and initialled by the eligible Judge.]
AND this warrant shall be in force for a period of ninety days."
2.5Events after the issue of the TI warrant
On 7 June 1993, in a letter to the Minister for Justice headed "T.1636 - Operation Retrieve", Commissioner of Police McAulay informed the Minister of the issue of the TI warrant. The letter introduced the subject as follows:
"Members of the ... [AFP] ... are investigating the activities of certain residents of Victoria who are suspected of being involved in a conspiracy to defraud the Commonwealth".
Part of Operation Poker's Report of Occurrences dated 9
June 1993 is a message to members of that investigation from McDermott that
they had been "placed on possible `stand-by' to assist in Search Warrant
execution re
Operation Retrieve (i.e. - the highly protected enquiry currently run by
A/Superintendent MORRISON) ...".
In an AFP internal minute dated 13 June 1993 to the members of Operation Poker, McDermott discussed the changes which had occurred since the first review paper written six months earlier on 12 January 1993. That second resumé stated relevantly:
"1. This is the second Briefing Paper written directly to members of the investigation team.
2. In some ways, although the matters under investigation have not changed since the first review paper in January 1993, circumstances have compelled a change in the way we approach the investigation itself. There is little point in adhering to an investigation plan when everything but the plan has changed during the six month period.
3. I acknowledge the difficulties encountered by the operation during that time; because most investigation avenues have been obstructed by the suspects, there has been a tendency for the enquiry to turn in on itself.
4. However, if you analyse what has occurred since search warrant execution, although they have delayed the operation, the suspects have not been able to stop the investigation. The credit for this belongs as much to the DPP as it does to the AFP but admittedly, the enquiry team has played an important role in this process.
5. The investigation itself has always been on solid ground and the facts uncovered to date can only have strengthened the case for the prosecution. We know where the evidence is and the only real problem left is to obtain access to core documents or key witnesses. This can only be a question of time. Time to complete the investigation is no longer the major consideration in operation planning.
6. As far as the effect on the operation of an
ATO decision to issue assessments, for your purposes, it is sufficient to know
that the investigation will remain focused on the $59m profit figure. The operation will
continue in the belief that ATO will issue comprehensive assessments to fully
support their complaint. As long as the
enquiry team believes that the suspects have committed the offences, members
will take all reasonable actions required to compile a Brief of Evidence and
lay charges.
7. I know it is difficult to keep up with the amount of reading required to stay in touch with the investigation. I am also aware that verbal briefings sometime fail to get sufficient information across to individual members. Hopefully, this paper will go some of the way in giving you an overview of the operation.
8. The operation and team members will continue to attract a measure of criticism, both internally and externally. Accept this as an acknowledgment that our presence is being noticed. Be satisfied that at least one principal suspect is sufficiently worried by our enquiries to risk further criminal activity to defeat the investigation.
Discussion (A) - Enquiry concept
9. It will be fairly obvious that the operation is going to some lengths to document the investigation. Over 400 pages of running sheet entries, 100 pages of 'COPS' entries and numerous reports are testimony to the importance placed on recording all aspects of the investigation. Some of this information is not directly related to the investigation and more properly falls under the category of 'intelligence'. It is unusual to find a fraud investigation with such an emphasis on information gathering, mainly because fraud offences (and this includes Operation Poker) are normally anchored in physical, paper based exhibits.
10. The reason for recording every facet of the operation is equally obvious, the investigation was commenced with a degree of healthy `suspicion' built into the operation structure. I was directed to ensure that the AFP Operation Poker investigation maintained a high level of integrity. It was perceived that the main threat to the success of the operation was not from a lack of evidence but the power and influence which the Grollo Group could bring to bear against the investigation.
11. I interpreted this direction to equate to keeping all information out in the open and constantly updating the Division on all aspects of the operation. This approach has absorbed a lot of resources but it is a fail safe should the operation eventually terminate without achieving investigation aims.
12. The only exception to this rule has been my
interaction with the associated investigation, Operation Retrieve. You will have seen me make several references
to this investigation as the `highly protected' matter. You have been given a basic understanding of
this investigation and should be aware of the need for continuing security
about Operation Retrieve. It should be
sufficient to say to you that this operation is showing positive results at the
present time and may greatly assist Operation Poker if it succeeds."
According to Farrell, he met with Flanagan on several occasions in June and July 1993, at which times Farrell handed over additional documents and Flanagan paid him more money.
On 15 June 1993, the first conversations were intercepted on Flanagan's mobile telephone service; other conversations were intercepted later in that month.
On 24 June 1993, members of the Grollo group commenced proceedings in this Court seeking to restrain the AFP from interviewing former employees of the St. Martin's Group in respect of the Grollo group's financial affairs.
On 30 June 1993, members of the Grollo group commenced proceedings in this Court against the DPP and the Commissioner of Taxation, seeking to enforce an alleged agreement they had made with the Commissioner, which was said to have resolved a dispute about tax liability including that arising as a result of the Rialto development. It was alleged that the DPP had procured a breach of the agreement. In a cross-claim, the Commissioner alleged fraud against members of the Grollo group. In response to an application for interlocutory injunctive relief, on 1 July 1993 the Commissioner undertook not to raise any assessment until after the hearing and determination of the proceedings.
On 14 July 1993, members of the Grollo group commenced proceedings in this Court seeking to restrain the AFP from interviewing employees, or former employees, of KPMG Peat Marwick in relation to the financial affairs of the Grollo group.
According to an entry made by McDermott in the Operation Poker Report of Occurrences on 5 August 1993, he attended a meeting with Hadgkiss and discussed Operation Retrieve. Hadgkiss "handed over an excerpt of the Operation Retrieve ... Search Warrant Information, as it applie[d] to Operation Poker". (It appears that this was a reference to the Information sworn by Morrison for the search warrants to be mentioned shortly.) Hadgkiss then "requested a significant investigation report for Operation Poker ...".
In a document dated 5 August 1993 titled "SIGNIFICANT INVESTIGATIONS REPORT", McDermott provided an overview of the Operation Poker investigation to date, stating that the aim of the investigation was to "prove that there was a conspiracy within the [Grollo] Group to defraud the Commonwealth and/or defeat a law of the Commonwealth". The Report went on to state:
"4. ESTIMATED DURATION OF INVESTIGATION: 6 MONTHS
5. BRIEF SUMMARY OF PROGRESS MADE SINCE LAST REPORT together with inquiries anticipated in the immediate future.
The operation has had to dedicate an increasing amount of investigation time and resources towards rebuttal of the Grollo Group allegations which underpin their challenge to the validity of the AFP search warrants. Operation members have placed sworn affidavit material before the Federal Court in respect to each of the applications which have been listed for final hearing commencing 23 August 1993. The hearing is expected to take three weeks with judgements being handed down in late 1993 or early 1994.
Due to associated Grollo Group applications before the Federal Court for interlocutory relief, the operation has had to delay interviewing witnesses from the A.N.Z. Bank (the Grollo Group banker), the St. Martins Group of companies (the Grollo Group joint venture partner in the Rialto project) and KPMG Peat Marwick (the Grollo Group Accountants). The operation has also had to defer a suspect interview of a KPMG Accountant after she was restrained from disclosing alleged Grollo Group `confidential' commercial information to the AFP.
Remaining avenues of investigation still to be attempted are the interviewing of witnesses from the Rialto project building consultants (Architects, Quantity Surveyors and Consulting Engineers), the legal firm of Mallesons Stephen Jaques (the Grollo Group lawyers) and Grollo Group employees.
The operation timetable proposes that suspect interviews will occur before December 1993."
On 11 August 1993, Hadgkiss made a request for "customer information" in respect of Flanagan's service (054 46 8715), "pursuant to the investigation of an offence under the provisions of Section 71 [sic] of the Crimes Act 1914".
Also on 11 August 1993, an application was made to the Magistrate for search warrants authorising the AFP to search Grollo family homes, the Grollo group business offices, and the vehicles of Flanagan and Mrs. Flanagan, on the basis of an information sworn by Morrison, then the case officer for Operation Retrieve. The information is too long to be summarised here, but it referred to Operation Poker in summary, to Operation Retrieve in considerable detail and to documents believed to be located in the premises and places mentioned above. The information referred to offences under ss. 33, 42, 73(3) and 86(1)(a) of the Crimes Act.
The search warrants were issued on 11 August 1993 and executed on 13 August. An AFP document (undated) headed "EXECUTION" and subtitled "SEIZURE OF PROPERTY UNDER WARRANT" stated:
"The purpose of the execution of these search warrants is to gather evidence regarding the involvement of FLANAGAN and GROLLO in the commission of corruption offences. Only material that satisfies each of the three conditions outlined in each search warrant will be seized.
Although material may be located that would be of interest to the Operation POKER enquiry, this material will not be seized."
According to the
evidence of Hadgkiss, the search warrants issued on 11 August were sought for
the purpose of obtaining evidence in Operation Retrieve only and "not in
any way to gain relief for Operation Poker". (The validity of these
warrants was challenged in proceedings heard at first instance in September
1993 by Jenkinson J. who dismissed the application later that month and an
appeal from that decision was dismissed by a Full Court on 5 April 1995.)
On 13 August 1993, Flanagan was arrested.
On the same date, the AFP issued a media release describing aspects of Operation Retrieve and adding that -
"Federal Police say the investigation is linked to a current lengthy major tax fraud investigation being conducted by them."
Also on that day, Commander D.L. Blizzard, on behalf of Commissioner McAulay, wrote to Mr. Kerr, the Minister for Justice, reporting on the execution of the search warrants and expressing the expectation that Flanagan would be charged with corruption offences and that Bruno Grollo might later be charged. In a similar, though unsigned, document of the same date, reference was also made to the link with Operation Poker.
On 14 August 1993, Flanagan was charged with offences of attempted corruption and with conspiracy to corrupt.
On 16 August 1993, Morrison applied to the Commissioner for the revocation of the T.I. warrant -
"... as target of this investigation has been arrested, charged and is now in custody."
By AFP Minute to the Commissioner headed "T.1636 - Operation Retrieve", dated 17 August 1993, Mr. B.J. Brown, Detective Superintendent, Telecommunications Interception Services Branch, noted:
"ISSUE:
Revocation of Telecommunications Warrant T.1636 (AO790/0) - Operation RETRIEVE.
BACKGROUND:
The above warrant was issued pursuant to the provisions of Section 46 of the Telecommunications (Interception) Act 1979 on 2 June 1993, in respect to a cellular mobile telecommunications service 018 507492.
DISCUSSION:
Section 56 of the Telecommunications (Interception) Act 1979 requires that a warrant be revoked when the grounds for issue cease to exist or resources allocated are required for other tasks.
Information obtained by intercepting the telecommunications service, the subject of the abovementioned warrant, was used by members of the Australian Federal Police, Southern Region.
The main target of this intercept was arrested and charged with a serious fraud offence.
As the grounds on which this warrant had been issued have ceased to exist, I directed that the interception cease at 1058 hours on 16 August 1993.
RECOMMENDATION:
That you revoke warrant T.1636 (AO790/0). Suitable documentation is attached for your consideration and signature."
On 17 August 1993,
Commissioner McAulay signed the revocation
pursuant to s.56(1) of the TI Act, stating his satisfaction that the grounds on
which the TI warrant had been issued had ceased to exist.
On 19 August 1993, Howard was charged with offences of attempted corruption and with conspiracy to corrupt. On 23 August, Bruno Grollo was similarly charged. Mrs. Flanagan has not been charged with any offence, nor is it suggested that she will be.
On 23 August 1993, a report to the Minister was prepared for signature by Commander Blizzard, on behalf of Commissioner McAulay, containing the following information:
"ALLEGED CONSPIRACY TO BRIBE AN AFP COMMISSIONED OFFICER: UPDATE
ISSUE
Developments in the AFP investigation into an alleged conspiracy to corrupt an AFP officer and the taxation investigation into the Grollo group.
BACKGROUND
You were last briefed about this matter on 13 August 1993 (copy attached) when Mr John Flanagan was arrested and charged with bribing an AFP Superintendent.
Documents seized that day indicate that Mr Bruno Grollo and Mr Bob Howard, a Grollo company executive, were allegedly involved in the attempt by Mr Flanagan to corrupt the AFP officer. Mr Howard was arrested on 19 August and charged with conspiring to pervert the course of justice and conspiring to cause the AFP officer to unlawfully communicate facts and documents. Mr Bruno Grollo attended the AFP office in Southern Region this morning where he was interviewed and arrested on three charges: conspiring to pervert the course of justice, conspiring to corrupt a Commonwealth officer and conspiring to offer to give a benefit to a Commonwealth officer.
It appears that the three men and others, were attempting to unlawfully frustrate the taxation investigation into the Grollo Group. Court injunctions have also served to delay and complicate the AFP investigation. Mr Grollo's hearing has been adjourned until after the Federal Court issues are finalised.
Evidence indicates that Mr Grollo and others employed a number of people who had intelligence and law enforcement backgrounds to find material which would assist them in interfering with evidence, witnesses, counsel, and others involved in the investigation. Because of this, the AFP is particularly concerned about the aspect of safety, and it is for this reason that bail for Mr Grollo will be strenuously opposed in the Melbourne Magistrates' Court today. The court has granted Mr Howard bail.
For your information, in relation to the Grollo taxation investigation, hearings before the Federal Court on 19 August resulted in substantial concessions by the Grollo group. A restriction on interviewing witnesses has been withdrawn and legal argument next week will be about the ambit of search warrants."
On 7 September 1993, Obers, a member of the Operation Retrieve team, attended the AFP's TISB premises, having been instructed to listen to material intercepted under the TI warrant and to confirm which tapes were relevant to the corruption investigation.
In the Final Effectiveness Report for Operation Retrieve dated September 1993 regarding the TI warrant, Morrison stated:
"...Limited use has been made of this telecommunications service, but of those calls made, a substantial proportion relate directly to this operation, and will be used in the prosecution of the three people arrested and charged during this investigation.
VALUE
Information obtained from this warrant has been pertinent and of value in assisting team members when considering the direction and progress of the investigation. A number of these conversations are regarded as valuable evidence as to the commission of offences by the three persons arrested and charged during this investigation.
USE MADE OF INFORMATION
The information obtained through this warrant has only been disseminated to members of the [AFP], [DPP] and Instructing Counsel who are directly involved in this investigation."
In a report pursuant to s.94(2) of the TI Act, dated 14 October 1993 relating to the revocation of the TI warrant, Commissioner McAulay informed the Minister that the information gained as a result of that warrant was of evidentiary value "in the prosecution of the three persons arrested from this operation". He further stated that "[a]s the grounds on which this warrant had been issued ceased to exist", he had revoked the TI warrant.
On 10 December 1993, the hand-up prosecution brief in the corruption matter, including a copy of the TI warrant, was served on Flanagan. The committal hearing on the corruption charges commenced in April 1994. On 27 May 1994, Flanagan, Howard and Bruno Grollo, were committed for trial.
On 23 September 1994, an indictment was filed in the County Court of Victoria charging them with the following offences under the Crimes Act: (i) conspiracy to pervert the course of justice contrary to s.42; (ii) conspiracy to corrupt contrary to s.86(1)(a) and s.33(b); (iii) conspiracy to bribe contrary to s.86(1)(a) and s.73(3). On 28 September 1994 they were arraigned upon the indictment.
On 22 December 1994, Bruno Grollo, Rino Grollo and Dowding were charged with tax fraud. On 21 March 1995, the hand-up prosecution brief in connection with the tax fraud charges was served upon the accused. It did not contain any TI material or any other material obtained in Operation Retrieve. The Crown's intention to rely on this material in the tax fraud prosecutions was not indicated until 21 June 1995.
On 15 June 1995, at a mention of the corruption matter before his Honour Judge Barnett, the applicants indicated that they proposed to challenge the reception of the TI material on the ground that the TI warrant had been obtained for an improper purpose.
His Honour has made several rulings on admissibility of certain evidence on the voir dire before empanelling the jury, but the trial itself has been adjourned to 5 February
1996, pending the determination of these proceedings which were commenced, by Flanagan, Mrs. Flanagan and Howard in June 1995 and by Bruno Grollo in September 1995.
3.0THE RELIEF APPLIED FOR
By their amended applications, the applicants seek declarations that the application for the TI warrant and the TI warrant itself were not authorized by the TI Act and were unlawful, void, and of no force and effect. They further seek declarations that the information obtained from the subsequent interceptions was obtained in contravention of s.7(1) of the Act and was not lawfully obtained information for the purpose of Part VII of the TI Act, and accordingly is prohibited under s.63 and/or Part VII from being used in evidence or in any way used by the respondents. Section 7(1) precludes a person from intercepting a telephone communication, but this does not apply to, amongst other things, an interception under a TI warrant. By s.63, which is in Part VII, it is provided as follows:
"63. Subject to this Part, a person shall not, after the commencement of this Part:
(a) communicate to another person, make use of, or make a record of; or
(b) give in evidence in a proceeding;
lawfully obtained information or information obtained by intercepting a communication in contravention of subsection 7(1)."
The applicants also seek declarations that the search warrants issued by the Magistrate on 11 August 1993 were obtained by the unlawful use of information obtained from the communications intercepted under the TI warrant and that the issue of the search warrants was unlawful and constituted an improper exercise of power.
Orders are also sought quashing or setting aside certain decisions, namely, the decision of the first and second respondents (the Commissioner of the AFP and the DPP, respectively) or one or other of them to apply for the TI warrant, the decision of the eligible Judge made on 2 June 1993 to issue the TI warrant under s.46 of the TI Act, and the decision of the Magistrate to issue the search warrants. As well, the relief claimed includes injunctions restraining the respondents from using the intercepted communications and the documents seized in any way, including by giving evidence of those communications.
4.0 THE CASE PLEADED BY THE APPLICANTS
By their second further amended statements of claim, the applicants contend that the dominant purpose for which the TI warrant application was made was to assist in connection with the corruption investigation and not with the tax fraud investigation. On that basis, they claim, the application was not made bona fide, that is, for the purpose for which the power to apply for a warrant was conferred. (As has been noted, it is common ground that, under the TI Act, a TI warrant may be applied for in connection with the investigation of certain offences only and that the alleged tax fraud, but not the alleged corruption, was such an offence.)
The applicants further claim that, when making the warrant application, the applicant was under a duty to disclose fully to the eligible Judge all matters material to the exercise of his discretion under s.46 of the TI Act to issue the TI warrant. This duty allegedly arises from the terms of the TI Act; the nature of the facility to make an application and of the power to issue such a warrant; the nature of the rights and interests affected by the exercise of that power (including a right to conduct private telephone conversations); and by operation of law. They contend that the applicant for the TI warrant was in breach of this duty by not informing the eligible Judge of the following:
"(a)that the or a purpose for which the warrant application was made was to assist in connection with the corruption investigation which did not involve a class 1 or a class 2 offence.
(b) that the deponent of the Affidavit and the Informant referred to therein did not have any or sufficient knowledge of the tax fraud investigation to justify the matters set out in the Affidavit;
(c) that the applicant for the a warrant and in particular the deponent and Informant referred to in the Affidavit:
(i) were involved in the corruption investigation;
(ii) were not involved in the tax fraud investigation.
(d) that it was intended by the applicant for the warrant that information obtained by intercepting communications to or from the telephone service would be used to assist in connection with the corruption investigation;
(e) that John Flanagan the subject and/or target of the investigation in respect of which the warrant application was made was not involved in or being investigated in connection with the tax fraud investigation;
(f) that the AFP had established separate investigation teams for the corruption and tax fraud investigations and:
(i) the warrant application was prepared, conducted and made by the corruption investigation team;
(ii) intercepts pursuant to the warrant were intended to be used by the corruption investigation team as part of that investigation.
(g) that all prior applications for the exercise of statutory power in relation to the corruption investigation had been made solely in reliance upon corruption and not tax fraud offences."
(h) The applications for the exercise of statutory power are as follow:
(i) the following warrants were applied for and issued under section 10 of the Crimes Act 1914:
4 May 1993 Motor vehicle
4 May 1993 Motor vehicle
(ii) requests for call charge records and other information under the [TI Act] were made and are dated: [throughout April and May 1993 and 1 June 1993]
(i) that the [AFP] case officer in charge of Operation Poker, Detective Sergeant McDermott:
(i) on 12 January 1993 had formed the intention to arrest and charge, inter alia, Bruno Grollo with tax fraud offences; had formed the opinion that there was sufficient evidence to so arrest and had determined to proceed to such arrest in April/May 1993;
(ii) on 29 or 30 April 1993 had made the operational decision to arrest, inter alia, Bruno Grollo with tax fraud offences in July 1993 and had formed the opinion that there was sufficient evidence to charge and arrest;
(iii) on 2 June 1993 had formed the view that the execution of the search warrants issued on the application of the AFP had confirmed his view that the information including documentation in the possession of the AFP was sufficient to justify and form the basis for charges against three persons including Bruno Grollo for tax fraud in respect of $59 million undisclosed profit of the Grollo Group.
(j) that Deputy Commissioner Bates performing the duties of the Commissioner of the [AFP];
(i) by 14 April 1993 was of the opinion that notwithstanding delaying tactics the AFP believed that there was sufficient evidence to prove criminal activity on the part of the Grollo brothers and other persons in documentation already available to police; and
(ii) had so informed Minister Kerr by memorandum dated 14 April 1993."
The applicants also contend that contrary to the TI Act, the application for the warrant was made by an officer of the AFP and not by or on behalf of the AFP as the Act requires and was not in writing.
Furthermore, the applicants claim that the information provided to the eligible Judge was not at law capable of satisfying him of the statutory criteria erected by s.46 because Draffin's affidavit did not contain sufficient information concerning the tax fraud investigation or the communications which could be intercepted which would be likely to assist with it. Nor, they claim, did the affidavit sufficiently address the matters referred to in s.46(2), matters of which the eligible Judge had first to be satisfied before exercising his discretion and issuing the warrant.
The applicants also claim that the applicant for the warrant deliberately failed to disclose to the eligible Judge that the warrant would be likely to assist with the corruption investigation, even though the applicant was cognisant that such a purpose was not authorized under the TI Act. It is alleged, therefore, that the TI warrant application was an abuse of the processes provided under the TI Act and constituted fraud upon the power to make the application and that the conduct of the applicant for the TI warrant constituted misfeasance in public office.
In addition, the applicants contend that the TI warrant was not in the prescribed form as required by s.49(1) of the TI Act and that it failed to set out short particulars of each serious offence in relation to which the eligible Judge issuing the TI warrant must be satisfied (s.49(7)). It is also claimed that, contrary to s.46(1), the TI warrant did not restrict the authority given by it to interception of communications by or with the particular person identified in the affidavit as the person using the service which would be likely to assist in connection with the tax fraud investigation.
Ultimately, it is claimed that the TI warrant application, the decision to issue the warrant, and the TI warrant itself were ultra vires, unauthorized by the Act, void, unlawful and of no force or effect, and that the interceptions and the recording, use, and communication of obtained information was unlawful and contrary to s.63 of the TI Act.
With regard to the search warrants, the applicants claim that each decision of the Magistrate to issue the warrants was an improper exercise of the power conferred by s.10 of the Crimes Act. They claim that by relying on material which had been obtained under the TI warrant and contained in the information sworn by Morrison, the Magistrate took into account irrelevant considerations.
5.0 THE LEGISLATIVE SCHEME
The TI Act, which was originally introduced in 1979 in relation to "narcotics offences", was substantially amended in 1987 by the Telecommunications (Interception) Amendment Act 1987 and was extended to include "serious offences" as defined.
As has been mentioned, pursuant to s 7(1), a person must not intercept a communication passing over a telecommunications system, but this prohibition is subject to exceptions, including interception under a TI warrant (s.7(2)(b)).
Division 3 of Part VI prescribes the procedure to be followed by an "agency" when it applies for a TI warrant authorizing it to intercept telecommunications. An agency (a term defined in s.5(1) so as to include the AFP, a State Police Force or the National Crime Authority) may apply to an eligible Judge for a TI warrant (s.39) in writing or by telephone where the circumstances are urgent (ss.40 and 41). In the latter instance, particulars of the urgent circumstances must be given orally to the Judge (s.43). Section 42 requires that an affidavit accompany the TI warrant application (s.42(1)) setting out the facts and other grounds upon which the application is based (s.42(2)) and specifying the period for which it is sought that the TI warrant be in force and the reasons why that period is considered necessary (s.42(3)). The affidavit is required to set out, in relation to the service, and in relation to each person to whom the application relates, the number of (a) previous applications, (b) warrants previously issued, and (c) particulars of the use made by the agency of information obtained by interceptions under such previous warrants (s.42(4)). The eligible Judge may require further information be provided in connection with a TI warrant application (s.44).
Division 4 of Part VI provides for the issue of TI warrants. Section 45 deals with the issue of a TI warrant in relation to a "class 1" offence which includes, amongst others offences, murder, kidnapping, and certain narcotics offences. A lower evidentiary burden exists for the obtaining of a TI warrant in respect of "class 1" offences than "class 2" offences, that is, there are fewer matters of which the eligible Judge must be satisfied.
Section 46 corresponds with s.45 but deals with class 2 offences which are punishable by imprisonment for life or for a period of at least 7 years where the conduct constituting the offence involves, amongst other things, loss of life, serious personal injury or serious damage to property, trafficking in narcotics, serious fraud or serious loss to the revenue of the Commonwealth or of a State. These do not include corruption offences.
The administrative character of the function of an eligible Judge in issuing a TI warrant and its constitutional implications were considered by the High Court in Hilton v Wells (1985) 157 CLR 57 and, more recently, in Grollo v Commissioner of Australian Federal Police (1995) 131 ALR 225.
Section 46(1), which is central for our purposes, reads:
"Where an agency applies to an eligible Judge for a warrant in respect of a telecommunications service and the Judge is satisfied, on the basis of the information given to the Judge under this Part in connection with the application, that:
(a) Division 3 has been complied with in relation to the application;
(b) in the case of a telephone application - because of urgent circumstances, it was necessary to make the application by telephone;
(c) there are reasonable grounds for suspecting that a particular person is using, or is likely to use, the service;
(d) information that would be likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist in connection with the investigation by the agency of a class 2 offence, or class 2 offences, in which the person is involved; and
(e) having regard to the matters referred to in subsection (2), and to no other matters, the Judge should issue a warrant authorising such communications to be intercepted;
the Judge may, in his or her discretion issue such a warrant."
The reference in s.46(1)(c) (and in s.45(c)) to a "particular person" is elaborated on in s.6H which provides:
"For the purposes of this Act, an application by an agency to a Judge for a warrant in respect of a telecommunications service relates to a particular person if, and only if, information has been, or is proposed to be, given to the Judge under Part VI, in connection with the application, in order to satisfy the Judge, in relation to the person, of the matters referred to in paragraphs 45(c) and (d) or 46(1)(c) and (d)."
A person shall be taken to be "involved" in an offence if the person "has committed, or is committing, the offence" or "is suspected on reasonable grounds of having committed, of committing, or of being likely to commit, the offence" (s.6B(a) and (b) respectively).
In exercising the discretion to issue a TI warrant, the Judge must have regard to the following matters prescribed by s.46(2):
(a) how much the privacy of any person or persons would be likely to be interfered with by intercepting under a warrant communications made to or from the service referred to in subsection (1);
(b) the gravity of the conduct constituting the offence or offences being investigated;
(c) how much the information referred to in paragraph (1)(d) would be likely to assist in connection with the investigation by the agency of the offence or offences;
(d) to what extent methods of investigating the offence or offences that do not involve so intercepting communications have been used by, or are available to, the agency;
(e) how much the use of such methods would be likely to assist in connection with the investigation by the agency of the offence or offences; and
(f) how much the use of such methods would be likely to prejudice the investigation by the agency of the offence or offences, whether because of delay or for any other reason."
A TI warrant does not authorize communications to be intercepted unless (1) the Managing Director of the carrier operating the telecommunications system has been notified that the TI warrant has been issued (s.47(a)), and (2) an employee of the carrier intercepts the communications for the purpose of enabling the TI warrant to be executed (s.47(b)).
Section 49 provides for the form and content of a TI warrant. It is to be in a prescribed form (as provided by the Telecommunications (Interception) Regulations 1987 - "the TI Regulations") and "may specify conditions or restrictions relating to interceptions" under it (s.49(2)). The TI warrant must also "set out short particulars of each serious offence in relation to which the Judge issuing the warrant was satisfied, on the application for the warrant" (s.49(7)).
The Commissioner of Police or the Deputy, may revoke the TI warrant in writing at any time (s.56(2)) and must do so where "satisfied that the grounds on which the warrant was issued have ceased to exist" (s.56(1)). Where a TI warrant has been issued or revoked, notice must be given to the Managing Director of the carrier over which the telecommunication, which is proposed to be intercepted, passes (s.60).
In an "exempt proceeding" (defined in s.5B as, inter alia, a proceeding by way of a prosecution for a prescribed offence, a police disciplinary proceeding, or a proceeding in so far as it relates to alleged misbehaviour or improper conduct of an officer of the Commonwealth or of a State), a document certified in writing by a certifying officer of the AFP to be a true copy of a TI warrant must be received in evidence as if it were the original warrant (s.61A).
Part VII provides for the manner in which intercepted information is to be treated. Section 63, as has been seen, subject to Part VII, prohibits a person from communicating to another, making use of or making a record of or giving in evidence "lawfully obtained information or information obtained by interception of a communication in contravention of subsection 7(1)". Contravention of s.63 is an offence: s.105. Section 6E provides that a reference to "lawfully obtained information" is a reference to information obtained (a) by intercepting, otherwise than in contravention of s.7(1), a communication passing over a telecommunications system, or (b) by virtue of a warrant issued under s.11 or s.11A (to Australian Security Intelligence Organisation - "ASIO") or under Part IV.
There are, however, permitted exceptions within Part VII to the blanket prohibition expressed in s.63. One of these permitted exceptions is detailed in s.66 which provides that a person who has intercepted a communication under a TI warrant may communicate information obtained by the interception to the officer of the agency who applied for the TI warrant on the agency's behalf (s.66(1)(a)) or to an officer of the agency in relation to whom an authorization under subsection (2) by the chief officer of the agency is in force in relation to the TI warrant (s.66(1)(b)).
Section 67 offers another exception by providing that:
"An officer of an agency may, for a permitted purpose ... in relation to the agency, and for no other purpose, communicate to another person, make use of, or make a record of, lawfully obtained information other than section 11A [ASIO] information."
A "permitted purpose" is one connected with an investigation (which includes, in the case of the AFP, an investigation of an offence, in the course of the performance by the AFP of its functions, by its members: s.6A) by an agency of a "prescribed offence" which includes an "offence punishable by imprisonment for life or for a period, or maximum period, of at least 3 years" (s.5).
Sections 74 and 75 provide as follows:
"74. (1) A person may give lawfully obtained information (other than section 11A information) in evidence in an exempt proceeding.
(2) For the purposes of applying subsection (1) in relation to information, the question whether or not a communication was intercepted in contravention of subsection 7(1) may be determined on the balance of probabilities.
75. (1) Where a communication has been intercepted in contravention of subsection 7(1) but purportedly under a warrant (other than a warrant under section 11A), a person may give information obtained by the interception in evidence in an exempt proceeding, being a proceeding in a court or before a tribunal, body, authority or person, if the court, tribunal, body, authority or person, as the case may be, is satisfied that:
(a) but for an irregularity, the interception would not have constituted a contravention of subsection 7(1); and
(b) in all the circumstances, the irregularity should be disregarded.
(2) A reference in subsection (1) to an irregularity is a reference to a defect or irregularity (other than a substantial defect or irregularity):
(a) in, or in connection with the issue of, a document purporting to be a warrant; or
(b) in connection with the execution of a warrant, or the purported execution of a document purporting to be a warrant."
Finally, Parts VIII and IX deal with the keeping and
inspection of interception records of Commonwealth agencies and the compilation
of annual reports concerning interceptions
carried out throughout the year, by the Managing Director of the carrier and by
the agency which obtained the TI warrant (ss.93 and 94). These reports are to be sent to the Minister
who is then required to prepare a report on the matter (s.99).
6.0 THE ISSUES AND THE REASONING ON THEM
6.1Whether the Court should not entertain the applications because of the general principle against "fragmentation" of criminal proceedings
The AFP and the DPP have submitted from the first day of the hearing before us that the Court should not entertain the applications, irrespective of their merits, because of the principle against the fragmentation of criminal proceedings. The Commonwealth adopted the submission of the AFP and the DPP in this respect. Although the submission was maintained throughout, application was not made for a summary dismissal of the proceedings on this ground.
It will be recalled that on 28 September 1994, the three accused were arraigned upon the indictments. Their "trial" commenced at that time: Crimes Act 1958 (Vic), s.353; Judiciary Act 1903, s.68(2); and see R v Symons [1981] VR 297. Although the substantive hearing has not yet commenced, Judge Barnett has made several rulings, some being on the admissibility of evidence. Further, his Honour has conducted a voir dire in relation to the evidence of two members of the Operation Retrieve team, Radley and Obers, who had not been available to give evidence in the
committal hearing.
His Honour had proposed to empanel a jury in July 1995. On 15 June 1995, counsel for Bruno Grollo and Flanagan referred to the making of an application to this Court challenging the validity of the TI warrant based on non-disclosure by the AFP, relying on Karina Fisheries Pty Ltd v Mitson (1990) 26 FCR 473. On 28 June 1995, there was argument before his Honour as to whether the County Court could entertain a "collateral attack" on the validity of the warrant. Flanagan and Bruno Grollo submitted that until a TI warrant, regular on its face, had been set aside by order of this Court by way of judicial review, a trial judge must treat it as valid, and that s.9 of the ADJR Act had the effect that he could not exclude evidence obtained in reliance on the TI warrant, in the exercise of the discretion referred to in Bunning v Cross (1978) 141 CLR 54, unless and until such an order had been made. The Crown made submissions to his Honour to the contrary effect. In the event, the July hearing date was vacated and at present the jury is due to be empanelled on 5 February 1996. It is not necessary for us to deal with the respective submissions put to his Honour or with his treatment of them.
The principle is well-established that criminal proceedings should not be fragmented by other courts' entertaining, except in exceptional or extraordinary circumstances, applications of various kinds by or against one or more of the participants in the criminal trial (see Sankey v Whitlam (1978) 142 CLR 1 at 25-26 (Gibbs ACJ), 82-83 (Mason J); The Queen v Iorlano (1993) 151 CLR 678 at 680; Clyne v The Director of Public Prosecutions for the Commonwealth of Australia (1984) 154 CLR 640 at 643 (Gibbs CJ), 660 (Dawson J); Yates v Wilson (1989) 168 CLR 338 at 339; Vereker v O'Donovan (1988) 6 Leg Rep SL 3 (Mason CJ); Beljajev v Director of Public Prosecutions (1991) 173 CLR 28 at 31-32 (Brennan J.); Coco v Shaw, unreported, High Court of Australia, 26 June 1991 (on appeal from a Full Court of the Supreme Court of Queensland reported at Shaw v Coco (1991) 102 ALR 75) (Brennan J); Elliott v Seymour (1993) 68 ALJR 173 at 175 (Gaudron J); Re Rozenes; Ex parte Burd (1994) 68 ALJR 372 at 373 (Dawson J); Parker v Taylor (1994) 68 ALJR 496; see also, e.g., Rank Film Distributors Ltd. v Video Information Centre [1982] AC 380 at 442). This principle has been applied on many occasions by this Court and by State Supreme Courts.
The applicants do not dispute this general principle. Thus, the critical question is whether the present case is excluded from the operation of the general principle as an "exceptional" or "extraordinary" one. Numerous matters were suggested by the applicants to demonstrate that the present proceedings are "exceptional" or "extraordinary".
The applicants submit that in all cases in which civil courts have declined to exercise jurisdiction on the ground of fragmentation of the criminal process, the issue sought to be agitated was one which was able to be dealt with in the ordinary course of the criminal proceeding, there were adequate safeguards available in the criminal proceeding against any injustice which might otherwise occur, and the circumstances were not "exceptional" or "extraordinary". According to the applicants' submission, those considerations make the present case distinguishable.
In our opinion, it is important to bear in mind that, in these proceedings, two distinct types of claims are made.
(1)Claims for discretionary relief being orders for judicial review of the decisions to apply for, and to issue, the TI warrant, and in that connection, consequential relief in the form of declarations, injunctions and other relief, as sought in paras. 1 - 6 of the amended applications.
(2)Claims for relief as of right, being damages in tort, as sought in para.7 of the amended applications.
In deciding whether to grant the discretionary relief claimed in (1), above, a court must take into account the whole of the circumstances. But an important consideration is, as Jenkinson J., with the agreement of Fox J., observed in Seymour v A-G (Cth) (1984) 4 FCR 498, the public interest in the expeditious resolution of accusations of crime. His Honour said (at 501):
"... his Honour determined that he should not exercise the discretionary power to quash the order for committal ... In that conclusion he was in my opinion clearly right. Against the interest of the appellant in the result of the committal proceeding ... according to law must be weighed the public interest in the expeditious resolution of accusations of crime. The longer such an accusation remains unresolved the greater the risk of serious harm to the community. Those risks are multifarious: the fading of witness's recollections, the diminution of public confidence in the administration of the criminal law, the prolonging of fears and hatreds which the resolution of criminal charges tends to allay, and uncertainty as to the course which the life of the accused is to take, and not infrequently uncertainty as to the courses of other lives, are perhaps the more obvious and the most common. Those considerations of public interest are of great weight and in my opinion constitute a principal justification of the conclusion which was stated by the Full Court of this Court in Lamb v Moss (1983) 49 ALR 533 at 564:
`The power to make an order of review under the Act in respect of committal proceedings should be exercised only in most exceptional circumstances, especially in respect of a decision in the course of proceedings.'"
We respectfully agree with this statement.
Claims of the kind in (1) above may be classified into two types for present purposes:
(a)First, there are claims for relief involving pure questions of law, emerging from a context of undisputed facts, especially questions the resolution of which may clarify the law for other cases. A good illustration is the constitutional challenge dealt with by the High Court to the TI warrant the subject of Grollo v Commissioner of AFP, above. Another example is the declaration made on the cross-claim in Sankey v Whitlam. Further examples may be found in the questions of invalidity said to arise here by reason of alleged deficiencies in the terms of the warrant, e.g. the applicants' claim that the warrant failed to provide "short particulars" of the offences as required by s.49(7) of the Act. In that type of claim, there is ordinarily no need to consider evidence in detail, or, on occasions, at all: the point will usually emerge on the face of the warrant when considered in the light of the legislative scheme. It will be a point of law which should be capable of expeditious resolution.
(b)Secondly, there are claims based substantially on contentious matters of fact, including questions of mixed fact and law.
Prima facie there is much to be said in favour of the court's, in the exercise of its discretion, hearing and determining claims of type (a), above, if they are brought forward at an appropriate time. Where the facts are simple and few and the point is one of law, a claim may, as an exception to the fragmentation principle, be entertained on an application for judicial review, even if it could affect the admissibility of evidence (see, e.g., Young v Quin (1984) 4 FCR 483; cf. Sankey v Whitlam at 25-6). Equally, the courts do not ordinarily entertain claims of type (b), above, because the fragmentation of the criminal process which is involved is not outweighed by any real benefit that might flow from the collateral resolution of the issue (see, e.g., Quin, above at 493).
Consistently with this approach, in our view, we should deal with the questions of law considered in 6.2 to 6.5 and in 6.8, below. But for reasons which we will give in sections 6.6 and 6.7, it is not appropriate, in our view, that we should deal with the questions raised in those sections. We are also of the view that the claim in tort should proceed to trial in the ordinary way, before a single Judge of the Court (see 6.9, below).
6.2 Whether Draffin had standing to apply for the TI warrant
It is "an agency" that may apply to an eligible Judge for a TI warrant: see ss.39(1), 42(1), and 46(1) of the TI Act. The applicants submit that in this case the application was not made by an agency.
Section 5 defines the expression "agency" to mean, relevantly, "a Commonwealth agency" and the expression "Commonwealth agency" to mean, relevantly, "the Australian Federal Police". The applicants' submission directs attention to the meaning of the expression "the Australian Federal Police" and to the question of what will satisfy the requirement that an application for a TI warrant be made by the AFP.
The AFP is established by s.6(1) of the AFP Act. That subsection provides that the AFP is constituted by "the members mentioned in subsection (2) and the staff members mentioned in subsection (3)." The AFP is not a body corporate. The word "members" is used throughout the AFP Act to signify the individuals who comprise the AFP. The AFP's "members" are numerous individuals who are associated in an organised way for the purpose of supplying "police services" as provided for in the AFP Act.
In several respects, these matters are significant for present purposes. For example, although one can speak easily of the AFP acting collectively, as in "preventing crime" or "protecting persons from injury or death, and property from damage" (cf. the definition of "police services" in s.5 of the AFP Act), the notion of the AFP performing acts which can be performed only by an individual, such as the making of an application for the issue of a TI warrant, is apt to give rise to difficulty. Further, the absence of a separate legal personality in the case of the AFP can, in itself, raise a difficulty in relation to vicarious liability for wrongful acts of a member. These difficulties might be expected to be addressed in the legislation, and, as will be
seen, they are in fact addressed in the TI Act and the AFP Act respectively.
Section 13 of the AFP Act gives to the Commissioner of the AFP "the general administration of, and the control of the operations of" the AFP. Section 14 empowers the Commissioner to issue "General Orders" with respect to the general administration of the AFP and "General Instructions" for the effective and efficient conduct of the operations of the AFP. Section 15 provides that the Commissioner may, in writing, delegate to another member, all or any of his powers, functions or duties under the AFP Act. Finally, s.64B provides that the Commonwealth is liable in respect of a tort committed by a member in the performance, or purported performance, of his duties as such a member "in like manner as a person is liable in respect of a tort committed by his employee in the course of his employment ...".
What emerges from the foregoing outline is that, as the applicants submit, a "member" of the AFP is recognised as having an independent status not explicable by reference to the concept of an employee or agent of either the Crown or of any body corporate: cf. Enever v R (1906) 3 CLR 969. This is why s.64B of the AFP Act is necessary.
Subsections 39.(1) and (2) of the TI Act provide as follows:
"(1)An agency may apply to an eligible Judge for a warrant in respect of a telecommunications service.
(2)An application for a warrant shall be made on an agency's behalf by:
(a) in the case of the Australian Federal Police - a member of the Australian Federal Police ...".
The succeeding paragraphs of s.39(2) identify the persons by whom an application may be made "on behalf of" various other "agencies" there mentioned. The structure of the paragraphs is identical and is of the following kind: "in the case of [name of agency] - [class of person by whom the application may be made on behalf of the agency]". In our view, the purpose and effect of these provisions is to make plain that an application for a warrant is made by an agency (in the present case, the AFP), when it is made by a person of the class described (in the present case, any member of the AFP). It may be noted that the structure of s.6A(1) is similar: it defines, relevantly, an "investigation by an agency" as being, in the case of the AFP, an investigation, in the course of the AFP's performance of its functions, by members of the AFP.
The foregoing construction is confirmed by reference to other provisions of the TI Act which provide that a person may do certain things if granted authority or approval directly or indirectly by, in the case of the AFP, the Commissioner. The expressio unius principle supports our conclusion that the standing of a member to apply under s.39 and the validity of an application by a member do not depend upon the granting of authority to the member by the Commissioner and are not denied by a breach of, or non-compliance with, an administrative direction of the Commissioner, whatever other consequences might arise (cf. Reg v Home Secretary; Ex parte Ku [1995] QB 364 per Hobhouse LJ at 373). The sections to which we refer are s.40, which refers to the granting of authority to make an application by telephone; s.55, which provides that the authority conferred by a TI warrant may be exercised only by the Commissioner or a member of the AFP in relation to whom an approval in conformity with the section is in force in relation to the TI warrant; and s.66, which provides for the authorizing of members or classes of members to receive information obtained by interceptions under TI warrants or classes of TI warrants.
Lest it should be thought that the construction of s.39 advocated by the respondents and accepted by us poses the danger of a "rogue member" which the legislature cannot have intended, the respondents refer to the safeguards that the applicant-member is not, ipso facto, entitled to exercise the authority conferred by a TI warrant (s.55) and that the issue of the TI warrant must be brought to the attention of the Commissioner who is required to inform the chief executive officer of the "carrier" (defined in s.5) "forthwith of the issue of the warrant" (s.60). It is true that s.66 provides that a person who has intercepted a communication under a TI warrant issued to an agency may communicate information so obtained to, amongst others, "the officer of the agency who applied for the TI warrant on the agency's behalf". But, by that time the Commissioner, or a person deriving authority from him for the purpose, will have become aware of the TI warrant and of the member's application for it.
Finally, further support for the construction which we have adopted may be found in the "listening device" provisions of Division 2 (ss.12B-12L) of Part II of the AFP Act. Section 12G of that Act provides that "[a] member may apply to an eligible Judge for a warrant ... authorising officials to use a listening device". Section 12J, the counterpart of s.55 of the TI Act, provides that the authority conferred by a listening device warrant may be exercised only by the Commissioner or other members approved for the purpose. Why, it may be asked rhetorically, would the legislature give standing to any "member" to apply for a listening device warrant and not for a TI warrant? There is no obvious reason. We should note that the difference between s.12G's provision that "[a] member may apply ...", and s.39's provisions that "[a]n agency may apply ..." and that where the applicant-agency is the AFP the application is to be made by a member of the AFP, is obviously explicable by the fact that the AFP Act is concerned with the AFP alone whereas the TI Act is concerned with several agencies, for some of which it was inappropriate to provide, and was not provided, that any "member" of the agency had standing to apply.
Much attention was given in the applicants' submissions in the present context to two documents: an internal AFP document entitled "Telecommunications Interception and Listening Device Policies" ("the Policy") issued by the Commissioner of the AFP and Regional Instruction 5/92 issued on 2 June 1992 by the Assistant Commissioner, Southern Region. Both documents were in force in June 1993. The Policy provided for the constitution of "Special Projects Committees" consisting of three senior members of the AFP of specified ranks to consider and approve of the making of all applications for the issue of TI warrants under the Act. The Regional Instruction provided that all applications for a TI warrant must be submitted in accordance with the Policy. The evidence showed that the application in the present case was made by Draffin without prior approval of a Special Projects Committee. The applicants also referred to the Australian Federal Police (Discipline) Regulations, submitting that the making of the application without the prior approval of a Special Projects Committee constituted a disciplinary offence.
For their part, the respondents submitted that the Policy was no more than an internal regulatory document, and was not a source of authority. They further referred to General Order 1, made by the Commissioner under s.13 of the AFP Act, which stated in its preamble that it was important that members should apply the provisions of General Orders and General Instructions "as circumstances requiring their application arise, so that they may be given effect according to their spirit, true intent and meaning and so as to ensure the attainment of their object". The respondents submitted that this statement applied on the facts of the present case in view of the secrecy which necessarily surrounded Operation Retrieve within the AFP, and of the fact that the Policy did not even rise to the status of a General Order or General Instruction.
In view of our construction of s.39, we do not find it necessary to explore the question whether, as a matter of the internal administration of the AFP, the application in the present case was or was not made regularly and with authority. Whatever may be other consequences of a non-compliance with the Policy, it does not entail the conclusion that the application for the TI warrant in the present case was not made by a "member" of the AFP, and, accordingly, was not made "on behalf of" the AFP for the purposes of the TI Act.
It remains to refer to two matters. The first is the meaning of the expression "on behalf of". The expression "on behalf of" is "not an expression which has a strict legal meaning" (per Latham CJ in The King v Portus; Ex parte Federated Clerks' Union of Australia (1949) 79 CLR 428 at 435). It "bears no single and constant significance" and "may be used in conjunction with a wide range of relationships, all however in some way concerned with the standing of one person as auxiliary to or representative of another person or thing" (In re Ross; Ex parte Attorney-General for Northern Territory of Australia (1980) 54 ALJR 145 at 149). In the present context, the expression signifies no more than "by". In our view, the application for the TI warrant was made "on behalf of" or "by" the AFP for the purposes of the TI Act.
Secondly, it should not be thought that we have concluded that Draffin applied for the TI warrant otherwise than in conformity with the wishes of the Commissioner. There were in evidence documents dated 7 June 1993 signed by the Commissioner which referred expressly to the TI warrant without any suggestion that the application for it had been unauthorized. In performance of the obligation imposed on him by s.60(1)(d) of the TI Act, the Commissioner caused a copy of the TI warrant certified by him to be a true copy of it, to be given to the Managing Director, Telstra Corporation Limited, and on the same date he notified the Minister of the issue of the TI warrant and enclosed a copy of it. However, because of the view which we have taken as to the proper construction of s.39, it has not been necessary for us to pursue this question further.
6.3 Whether there existed on 2 June 1993 an application in writing for the TI warrant
The "warrant" which was issued by the eligible Judge on 1 June 1993 was expressed to be in respect of "Telecommunication service (018) 507493, connected in the name of A. D. FLANAGAN at premises, Hillcrest Road Maiden Valley, in the State of Victoria" and bore date 1 June "1992". The "warrant" issued by the eligible Judge on 2 June 1993 was identical but for the alteration of the last digit of the telephone number from "3" to "2" and the change in the date to 2 June 1993.
It was submitted on behalf of the applicants that the Court should find that the issue of the TI warrant had not been preceded by a written application as required by s.40(1) of the TI Act. That subsection provides:
"Subject to subsection (2), an application for a warrant shall be in writing."
Subsection (2) provides a facility in certain circumstances for making an application by telephone for a TI warrant. It is not relevant for present purposes. Section 41 indicates the contents of the requisite application by providing:
"A written application by an agency for a warrant shall set out:
(a) the name of the agency; and
(b) the name of the person making the application on the agency's behalf."
An indication is also
provided by s.42(1) that the written application is required to be embodied in
a document physically separate or otherwise distinguished from the
affidavit in support. That subsection
stipulates:
"A written application by an agency for a warrant shall be accompanied by an affidavit complying with this section."
We accept that, in the absence of urgency, the placing before the eligible Judge of a written application was required.
The evidence of Draffin, who was, while Acting Commander in June 1993, the applicant for the TI warrant and the deponent of the affidavit dated 1 June 1993 submitted to the eligible Judge in support of the application, was to the following effect:
.A written application accompanied by his affidavit and a draft TI warrant were submitted to the eligible Judge late (perhaps after 4.00pm) on 1 June 1993, the application was heard by the eligible Judge in his chambers, and the TI warrant was issued. That evening, particulars of the warrant were transmitted to the TISB. The same evening, or the following morning, the TISB informed Draffin that the telephone number in the warrant was wrong. Draffin also became aware of the error in the year of the date which appeared in the warrant ("1992" instead of "1993").
.On 2 June 1993, application was again made to the eligible Judge in reliance on the same written application and supporting affidavit for the purpose of overcoming the two typographical errors. A new form of draft TI warrant was supplied to the eligible Judge with the errors in the last digit of the telephone number and the year of issue corrected and, as well, a change in the date of issue from 1 June to 2 June.
.Draffin said that he believed that the eligible Judge, after issuing the TI warrant on 2 June, returned the instrument of application and affidavit to him (he attended at the Court) together with the issued TI warrant bearing date 2 June 1993.
.The TI warrant bearing date 1 June was not acted upon, that is to say, no interception took place between the issue of it and the issue of the TI warrant on the following day.
There are statements in evidence that the TI warrant dated 1 June was "revoked" on that date but there is no evidence that the AFP did anything on 1 or 2 June to revoke it apart from applying for the replacement TI warrant. However, on 7 June the Commissioner of the AFP signed an instrument of revocation of TI warrant No T1635 AO789/0 in respect of mobile telecommunications service number 018 507493. Unfortunately, that instrument of revocation referred to that TI warrant as having been issued on 2 June 1993. Other evidence showed that the TI warrant so numbered was issued on 1 June 1993 and that the "correct" TI warrant issued on 2 June 1993 was number T 1636 AO790/O. It is clear that the date in the instrument of revocation is an error. We construe that instrument as though it did not give a date of the TI warrant being revoked, the date in fact stated being mere surplusage.
Draffin gave evidence that a search had been made for the instrument of application which he said had been provided to the eligible Judge in support of the applications on 1 and 2 June but that the search had been unsuccessful. However, he put into evidence a "precedent" of the form of application which had been in use by the AFP at the time and which he said he believed was similar to the written application used.
The evidence of Draffin on this aspect was not shaken in cross-examination, and we regard it as establishing, on the balance of probabilities, that a written instrument of application was laid before the eligible Judge on both 1 and 2 June 1993.
Moreover, the TI warrant as issued on 2 June 1993 recited that an application had been made to the eligible Judge by Draffin on behalf of the AFP in respect of the specified telecommunications service connected in the name of A.D. Flanagan (Mrs. Flanagan) at specified premises. The TI warrant went on to recite his Honour's satisfaction that, amongst other things, Division 3 of Part VI of the TI Act had been complied with in relation to the application. Included in Division 3 of Part VI are ss.40, 41 and 42 to which we have already referred, and which require the existence of a written application. Thus, even without the secondary evidence of Draffin of the contents of the written application which is said to have been mislaid or destroyed, the Court would conclude, from the evidence afforded by the TI warrant itself, that a written application had been placed before the eligible Judge. The TI warrant being in evidence may be relied on for any matter which it tends to prove (cf. Phipson on Evidence, 14th ed. para.7-15; p.119). The presumption of regularity provides a further, alternative, basis for casting on the applicants the burden of going forward with evidence tending to show that no written application had been laid before the eligible Judge (see Cross on Evidence, 4th Aust. ed., pp.226-9).
In the absence of any such evidence we would be compelled to conclude, on that further alternative basis, that the requirements of s.40(1) and s.41 had been complied with.
Was the written application vitiated by the same errors as appeared in the TI warrant of 1 June 1993? It was not put to Draffin that the instrument of application had also been erroneous, and it is not shown that it was. Attention was being given to the correction of the errors in the first TI warrant, and we infer that the instrument of application was checked and found not to contain the errors. Even if it had, it would, we consider, have answered the description of an application in writing for a TI warrant and would, in that respect, have complied with s.41 of the TI Act.
Was the application which existed on 1 June 1993 spent by the issue of the TI warrant on that date? By way of an alternative submission that the TI warrant dated 2 June 1993 had been issued on an application which was not "in writing" as required by s.40(1) of the TI Act, the applicants contend that any application in writing which the Court might find to have existed on 1 June was a "spent force" upon the issue of the warrant on that date, and so could not satisfy the requirement of s.40(1) in relation to the application made on the next day, 2 June.
The events of 1 and 2 June lend themselves to two possible legal analyses, but on either analysis, the applicants' submission should not be accepted.
On one view, the TI warrant bearing date 1 June 1992 was a nullity since (and this is not disputed) there was no telecommunications service which answered the description which appeared in that document. The statutory power given to the eligible Judge is a power to issue a TI warrant in respect of a "telecommunications service". It is not necessary to set out the definition of that expression in s.5 of the TI Act as it is common ground that the description in the TI warrant bearing date 1 June was not a description of such a service. The first TI warrant was therefore, on this view, a nullity in the sense that it was not a warrant under the TI Act at all. The applicants accept that if the first TI warrant was a nullity, the written application dated 1 June which we have found against the applicants to have existed, remained alive on 2 June to support the issue of the TI warrant on that date.
On the alternative analysis that the TI warrant bearing date 1 June was not a nullity, the question arises whether the power to issue a TI warrant given to the eligible Judge by s.46 of the TI Act carried with it an implied power, at least so long as the first TI warrant had not been acted upon in any way, to revoke or withdraw that warrant. An implication to that effect can be said to arise from the need to ensure that the form of TI warrant as issued conformed to what the eligible Judge intended should be acted upon (cf. Comptroller-General of Customs v Kawasaki Motors Pty Ltd (1991) 103 ALR 661 at 666-667 (Beaumont J) and authorities there cited).
The circumstances are similar to those covered by a court's "slip rule" (in the case of this Court, expressed in O.35 r.7(3) of the Federal Court Rules). More extreme illustrations than the present one can be imagined. Assume (1) that on 1 June 1993 the eligible Judge inadvertently wrote 1 June 1992 into the form of TI warrant as its date; (2) that the TI warrant was expressed to be in force for a period of 90 days after the date borne by it; and (3) that a short while after the applicant for the TI warrant had left the Court with the issued TI warrant, the Judge recollected the erroneous dating. Could it seriously be suggested that the eligible Judge lacked power to correct his slip without the making of a fresh application in writing? We think not.
The falsa demonstratio principle (cf. Wingadee Shire Council v Willis (1910) 11 CLR 123 at 131, 139-140, 144 and 147-148) may be available to overcome some slips in warrants. However, we conclude that the power to issue a TI warrant carries with it an incidental power to do what is necessary to overcome clerical mistakes or accidental slips or omissions, at least for the purpose of ensuring that a TI warrant issued but not yet acted upon authorizes interceptions as intended by the eligible Judge and has legal efficacy.
The observations of Beaumont J in the Kawasaki case, above, are pertinent (at 666-667):
" ... the grant of a power to make, and to revoke, concession orders is made effective by the implication of a power to revoke a revocation order the validity of which has been called into serious question. In order to make the regime established by Pt XVA of the Customs Act work effectively, it is necessary, I think, to imply a power to remove genuine doubts as to the validity of a revocation order, which doubt could threaten the effective working of the system, by construing Pt XVA in such a way as to confer the power to revoke the doubtful revocation order."
These observations, particularly with respect to the power to make a revocation order, can be paraphrased to apply to the facts of the present case. If the TI warrant dated 1 June was valid, the eligible Judge had implied incidental power to revoke it for the purpose of removing the doubt as to its validity, and he did this by issuing the replacement TI warrant on 2 June.
6.4 Whether the TI warrant contained "short particulars" of the relevant offences
As has been noted, the applicants contend that the TI warrant did not comply with the requirements of s.49(7) of the TI Act. Section 49 is, relevantly, in the following terms:
"49. (1)A warrant shall be in accordance with the prescribed form and shall be signed by the Judge who issues it.
(2)A warrant may specify conditions or restrictions relating to interceptions under the warrant.
...
(7)A warrant shall set out short particulars of each serious offence in relation to which the Judge issuing the warrant was satisfied, on the application for the warrant, as mentioned in paragraph 45(d) or 46(1)(d), as the case may be."
(emphasis added)
The prescribed form of TI warrant is found in the TI Regulations, specifically, reg.3(4) which provides that the form of a TI warrant for the purpose of s.46 of the TI Act is the form in Schedule 4. The form of TI warrant there prescribed contains, amongst others, the following recitals:
"AND WHEREAS I, , an eligible judge, am satisfied, on the basis of the information given to me under Part VI of the Telecommunications (Interception) Act 1979 in connection with the application, that:
(a) Division 3 of that Part has been complied with in relation to the application;
...
(c) there are reasonable grounds for suspecting that a particular person, namely (full name of person and, if known, the address and occupation of that person) is using, or is likely to use, the service;
(d) information that would be likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist in connection with the investigation by the agency that applied for this warrant of the following class 2 * offence/* offences/, in which that person is involved, namely (set out short particulars of the class 2* offence/*offences/) ...". (emphasis added)
It will be recalled that, in the present case, the TI warrant, which appears to be in the form prescribed, recited the satisfaction of the eligible Judge in these terms: -
"(c)information that would be likely to be obtained
by intercepting under a warrant communications made to or from the service
would be likely to assist in connection with the investigation by the agency
that applied for this warrant of the following class 2 offences in which that
person is involved namely Conspiracy to Defraud the Commonwealth contrary to
Section 86(1)(e), and
now Section 86A of the Crimes Act 1914;
and Defrauding the Commonwealth contrary to Section 29D of the Crimes
Act 1914 ...".
(emphasis added)
On behalf of the applicants, it is submitted that the requirements of s.49(7) are not satisfied by the mere statement, in the emphasised passage, of the statutory provisions alleged to have been contravened coupled with a summary note of the offences created by those provisions; and that the words "short particulars" in s.49(7) are not thereby satisfied. The applicants say that, as a matter of substance, no particulars (whether "short" or otherwise) of the requisite offences were set out in the TI warrant and that minimum short particulars of a conspiracy to defraud would comprise particulars of parties, their agreement and its subject matter. Moreover, the argument runs, if the failure to provide particulars is a defect in the document, it is a substantial one, since those particulars, albeit "short", constitute the only official source of information with respect to the grounds for the TI warrant which are required in order that it may be acted upon. The applicants also point out that compliance with the requirements of s.49(7) assumes added significance when it is recalled that this statement is the only evidence or record of the opinion of the eligible Judge on the question. The applicants also rely upon the existence of the statutory power given to the Commissioner of Police to revoke a TI warrant in the circumstances described in s.56(1) of the TI Act, that is, where the Commissioner is satisfied that "the grounds on which the warrant was issued" have ceased to exist. They say that the grounds of the issue
of the TI warrant can be ascertained only from the particulars of the offence required to be set out in the TI warrant.
Although it must be accepted that s.49(7) imposes an obligation upon the eligible Judge to ensure that the TI warrant sets out the required "short particulars", we cannot accept that there was any failure to discharge that duty in the present case.
In the final analysis, the question for determination is one of statutory interpretation. For this purpose, it is legitimate and appropriate to look, not only at the TI Act, but also at the TI Regulations, not to construe an overall scheme or to throw light on ambiguity in the statutory provision, but "to ascertain what the [legislative] scheme is" (per Mason J. in Brayson Motors Pty. Ltd. (In Liq.) v Federal Commissioner of Taxation (1985) 156 CLR 651 at 652). When the TI Act and the TI Regulations are read together, it appears to us that what is required by s.49(7) is a statement of particulars which identify the alleged or suspected offences in a conceptual sense, in contrast to particulars of the essential factual ingredients of those offences in the particular case, such as those which an accused is entitled to have to enable him to prepare his defence (see, e.g., John B. Bishop, Criminal Procedure (1983), pp.145-8).
In our opinion, the requirements of s.49(7), as we construe them, were satisfied here. In particular, it was not necessary, in our view, that the TI warrant set out, as was suggested, "particulars" of parties to the suspected conspiracy, the agreement alleged and its subject matter, even if, on a trial, an accused would be entitled to be informed of such matters.
It will be recalled from our earlier discussion of the legislative scheme that s.46(1) provides that the eligible Judge may issue a TI warrant where, on the basis of the information given to him or her under Part VI, the Judge is satisfied, amongst other things, that:
"(d)information that would be likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist in connection with the investigation by the agency of a class 2 offence ... in which the person is involved ...".
(emphasis added)
In this regard it will be remembered that the form of TI warrant prescribed by the Regulations requires the recital of the eligible Judge's satisfaction of the matters stipulated in para.(d) to be followed by "short particulars" to be provided in the following context:
"... the investigation ... of the following class 2 offence/offences/ in which that person is involved, namely (set out short particulars of the class 2 offence/offences/) ...". (emphasis added)
It will be necessary to return to the TI Regulations later to illustrate their place in the legislative scheme. However, we record now that it has not been, and could not be, suggested that the TI Regulations are beyond power in requiring that s.49(7) be complied with in this fashion.
Before going to the terms of the present TI warrant, we must first consider further the true interpretation of s.46(1). As has been seen, s.46(1)(d) refers to a "class 2 offence". By s.5(1) of the Act, a "class 2 offence" is defined to mean:
"(a)an offence punishable by imprisonment for life or for a period, or maximum period, of at least 7 years, where the particular conduct constituting the offence involved, involves, or would involve, as the case requires:
(i) loss of a person's life or serious risk of loss of a person's life;
(ii) serious personal injury or serious risk of serious personal injury;
(iii) serious damage to property in circumstances endangering the safety of a person;
(iv) trafficking in narcotic drugs;
(v) serious fraud; or
(vi) serious loss to the revenue of the Commonwealth or of a State; or
[emphasis added]
(b) an offence constituted by:
(i) aiding, abetting, counselling or procuring the commission of;
(ii) being, by act or omission, in any way, directly or indirectly, knowingly concerned in, or party to, the commission of; or
(iii) conspiring to commit;
an offence that is a class 2 offence by virtue of paragraph (a) ...".
It is common ground that an offence under either s.29D or s.86A of the Crimes Act is punishable by imprisonment for a period exceeding seven years.
By s.6A(1) of the TI Act, it is provided that a reference to the investigation by an agency of an offence is, in the case of the AFP, a reference to an investigation of that offence, in the course of the performance by the AFP of its functions, by members of the AFP.
Mention should also be made of the definition, in s.6B of the TI Act of "involvement" in an offence. For the purposes of s.46(1)(d), a person is to be taken to be "involved in an offence" if, and only if, that person:
"(a) has committed, or is committing, the offence; or
(b) is suspected on reasonable grounds of having committed, of committing, or being likely to commit, the offence."
(emphasis added)
It follows that s.46(1) requires, relevantly, that the eligible Judge be satisfied that -
(1)there are reasonable grounds for suspecting that a particular person is using, or likely to use, the service (s.46(1)(c)); and
(2)information that would be likely to be obtained by intercepting communications made to or from the service would be likely to assist in connection with the investigation by the AFP of a class 2 offence or offences, in which the person is "involved" in the sense explained in s.6B (s.46(1)(d)).
Although the contrary was argued on behalf of the applicants, we think that it is clear that the phrase "in which the person is involved" qualifies the expression "a class 2 offence, or class 2 offences" and not the word "communication". That being so, the width of the definition of "class 2 offence" provides good reason for requiring that the particular person suspected or alleged class 2 offence be identified in conceptual terms.
A requirement of conceptual identification of the suggested offence or offences is distinct from and falls far short of a requirement that the eligible Judge set out in the TI warrant the essential factual ingredients of each offence which the person has committed, is committing or is suspected on reasonable grounds of having committed or being likely to commit. Whether the matter is considered literally or purposively, there is no sound basis for adopting the latter construction. For one thing, there is no practical way in which the eligible Judge, who has no inquisitorial function in this regard, could embark upon that exercise independently; further, there is no obligation imposed upon the AFP by the TI Act to provide information to the Judge to enable him or her to do so. But, in any event, such an exercise is inappropriate as a condition of the exercise of a power to facilitate the gathering of information likely to assist in connection with the investigation (as defined in s.6A(1)) of a class 2 offence. Entirely different considerations create the need for more extensive particulars at or after the laying of charges which marks the beginning of the trial process. Those differences are emphasised when it is recalled that the "short particulars" contemplated by s.49(7) may be of an offence as to which the Judge is satisfied only that the subject person is suspected on reasonable grounds of being likely to commit it. The Judge may well obtain that degree of satisfaction without being able to give particulars of the kind for which the applicants contend indicating the essential ingredients of the offence.
It follows, in our view, that the applicants' contention cannot be sustained as a matter of construction of the TI Act. Consideration of the form of warrant prescribed by the TI Regulations reinforces this conclusion. Support for it is also found in the fact that s.49(7) refers back to ss.45(d) and 46(1)(d) which refer to "a class 1 offence, or class 1 offences" and "a class 2 offence, or class 2 offences" respectively. This alone suggests that what is called for is a singling out of each particular class 1 offence or class 2 offence, as defined, which is relied on. No doubt a purpose of the requirement is to ensure and make plain that the alleged or suspected offence does indeed fall within the definition of "class 1 offence" or "class 2 offence", as the case may be, and is therefore one in respect of which there is power, and it is appropriate, to issue a warrant.
The terms of s.49(1) explicitly require that the prescribed form of TI warrant is to be adopted, and it appears that nothing in s.49(7) was intended to derogate from that prescription, that is, the prescribed form is quite consistent with s.49(7). As has been said, the contrary is not, and could not be, suggested. It will be recalled that the prescribed form initially follows the wording of s.46(1)(d) and proceeds as follows:
"... offence ... in which that person is involved, namely (set out short particulars of the class 2 offence) ...".
In our opinion, the use in this context of the word "namely" is significant. It serves to indicate a requirement that the offence be identified; and that this process of identification be carried out by the provision of short details of the offence in which the person is said to be involved in the requisite sense, sufficient to identify it in conceptual terms rather than provide "particulars" of material facts. By using the adjective "short", something different from such ordinary particulars, something special, is indicated.
In support of their contention, the applicants sought to rely upon several decided cases but, in our view, their context should be distinguished for present purposes.
They rely upon the reasoning in John L. Pty Ltd. v Attorney-General (NSW) (1987) 163 CLR 508 where it was held, by majority, that an information was defective because it failed to identify "the material particular" in which a statement was alleged to be false or misleading, as an element of an offence, in those terms, under s.32(1) of the Consumer Protection Act 1969 (NSW). Mason C.J., Deane and Dawson JJ. said (at 519):
"The traditional function of an information was to found jurisdiction to deal with an alleged offence. Disregarding the effect of statutory provisions curing or precluding reliance upon a defect, the old authorities established that an information should be quashed as insufficient in law and invalid if it failed to inform the justices before whom it was laid of the nature of the offence and the manner in which it had been committed. The rationale of that requirement has, in more recent times, commonly been seen as lying both in the necessity of informing the court of the identity of the offence with which it is required to deal and in providing the accused with the substance of the charge which he is called upon to meet: `an accused person could not be required to defend the charge if the information did not supply the particulars necessary to enable him to prepare his defence'...". (emphasis added)
While the former of these functions, that is, identification of the offence, is, we think, material for our purposes, the latter, as we have said, is not: there is no question here of providing information to an accused person (see R v Buckett (1995) 132 ALR 669 per Hunt CJ at 673).
In John L, the majority referred (at 519) to the common law requirement that "a valid information must at least identify the essential factual ingredients of the actual offence...". Their Honours continued (at 520):
"In De Romanis v Sibraa ..., Mahoney J.A. correctly pointed out that there was no technical verbal formula which could be applied to determine whether an information sufficiently identified the essential ingredients of the alleged offence. As his Honour commented ... :
`In Johnson v Miller ... Dixon J. saw the decision in Smith v Moody ... as requiring the information to specify `the time, place, and manner of the defendant's acts or omissions'; McTiernan J. ... referred to `fair information and reasonable particularity as to the nature of the offence charged'. The rule does not require that the information contain all such material as a defendant may require, upon an application for particulars, for the preparation of his defence ...
...
These cases establish that it may not be sufficient for an information to state the offence charged: it may be required to condescend to particulars. But, ... they do not indicate that the information must go beyond the statement of the offence and the proper particularization of it.'"
As we have said, there is no reason of principle or of expedience to import such a requirement into s.46 or into s.49 of the TI Act. On the contrary, there is every reason to suppose that the expression "short particulars of each ... offence" in relation to which the Judge is satisfied as mentioned in s.46(1)(d), signifies only sufficient conceptual identification to enable a reader of the TI warrant to perceive whether the offence is of the kind included in the definition of "class 2 offence" in s.5.
The applicants also rely upon the reasoning of the majority (Kirby P. and Handley J.A.) of the New South Wales Court of Appeal in Carroll v Mijovich (1991) 25 NSWLR 441 in which a search warrant was held invalid by virtue of non-compliance with s.13(1) of the Search Warrants Act 1985 (N.S.W.). That subsection was to the effect that a justice who issues a warrant "shall cause a record to be made of all relevant particulars of the grounds the authorised justice has relied on to justify the issue of the warrant". But it appears that the decision proceeded upon the footing that there had been a constructive failure by the justice to exercise jurisdiction (see per Handley J.A. at 456-7). Such an extreme position is not suggested here. In any event, the language of the New South Wales legislation was quite different from that which is before us.
Finally, in our view, the present warrant did identify two "class 2" offences and did so in conceptual terms which were adequate (cf. Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523 per Burchett J. at 537-8).
6.5Whether the scope of the TI warrant exceeded what the legislation permits such a warrant to authorize
For the applicants, it was argued that the TI warrant as issued authorized interceptions beyond those contemplated by the scheme of the TI Act because they were not limited to communications made to or from the relevant service which would be likely to assist in the investigation of the specified criminal offences. That submission was based on s.46(1) of the Act construed in the context of the Act as a whole. That subsection provides:
"Where an agency applies to an eligible Judge for a warrant in respect of a telecommunications service and the Judge is satisfied, on the basis of the information given to the Judge under this Part in connection with the application, that:
(a) Division 3 has been complied with in relation to the application;
(b) in the case of a telephone application - because of urgent circumstances, it was necessary to make the application by telephone;
(c) there are reasonable grounds for suspecting that a particular person is using, or is likely to use the service;
(d) information that would be likely to be obtained by intercepting under a warrant communications made to or from the service would be likely to assist in connection with the investigation by the agency of a class 2 offence, or class 2 offences, in which the person is involved; and
(e) having regard to the matters referred to in
subsection (2), and to no other
matters, the Judge should issue a warrant authorising such communications to be
intercepted;
the Judge may, in his or her discretion, issue such a warrant."
Against that background, it was argued that, since the subscriber for the service in question was Mrs. Flanagan, it was highly probable that at least some communications to and from the service would have nothing whatever to do with Flanagan or Bruno Grollo, being the "particular person" whom the eligible Judge was satisfied was using or likely to use the service. Those extraneous communications, so the argument went, would be unlikely to assist in the investigation of any relevant class 2 offence and, therefore, did not come within the ambit permitted by the phrase "such communications" in s.46(1)(e). However, the words in s.46(1)(d) "would be likely to assist in connection with the investigation ... of a class 2 offence" qualify the word "information" in that paragraph and not the phrase "communications made to or from the service". Thus, the expression "such communications" in paragraph (e) refers without qualification to all communications made to or from the service.
We have already indicated in section 6.4 above that the phrase "in which the person is involved" in s.46(1)(d) refers to "a class 2 offence or class 2 offences" and not to the word "communication".
As well as being required by the grammar of the legislation, the construction which we favour has the virtue of making it practicable. Until a communication to or from a service has been intercepted and recorded, it is impossible to know whether it would be likely to assist in an investigation, or even to identify the parties to the communication. If warrants were confined to authorizing the interception of communications to which the particular person could be identified at the outset as a party, they would lose much of their efficacy. This cannot have been intended.
The construction which we have adopted is reinforced by the language of s.46(2)(a) of the Act which stipulates:
"The matters to which the Judge shall have regard are:
(a) how much the privacy of any person or persons would be likely to be interfered with by intercepting under a warrant communications made to or from the service referred to in subsection (1)...".
Had the legislation been understood to authorize only the interception of communications to or from the particular person, it would have been more appropriate for the paragraph just quoted to direct that regard be had to the privacy only of the particular person and any person communicating with him or her, than for it to refer to the privacy of "any person or persons".
Section 67 of the TI Act and the definition of "permitted purpose" in s.5 recognise that communications may be intercepted pursuant to a TI warrant which are relevant, not to the investigation of the class 1 or class 2 offence specified in the TI warrant, but to the investigation of a prescribed offence as defined. There is no requirement that the prescribed offence be one in which the particular person contemplated by s.46(1) is involved. These considerations also militate against the construction advanced on behalf of the applicants.
For the reasons given in section 6.4 above, the TI Regulations can also be called in aid of construing the statutory scheme of which the Act forms the principal part. It is, therefore, significant that the authorization conferred by the form of TI warrant prescribed by the TI Regulations is one to intercept "communications made to or from the service". Had the applicants' interpretation been correct, one would have expected the form to limit the authorization to interception of communications made by means of the service to or from the particular person.
Finally, in this context, we observe that protection is afforded to extraneous communications by ss.56 and 57 of the TI Act, which make it mandatory for the Commissioner of Police or another chief officer to revoke a TI warrant forthwith once satisfied that the grounds for its issue no longer exist. Consequently, steps must be taken forthwith to ensure that interceptions of communications under the TI warrant are discontinued (s.58). (See also s.63 which, subject to Pt VII, prohibits the use or giving in evidence of lawfully obtained information, and s.79 which obliges a relevant agency's chief officer, who is satisfied that a record of a communication obtained by an interception is not likely to be required for a permitted purpose, to cause the restricted record to be destroyed forthwith.)
6.6Whether the application for the TI warrant was vitiated by an improper purpose
As has been noted, in their statement of claim the applicants allege (1) that the provisions of the TI Act did not authorize the making of an application for a TI warrant, or the issuing of such a warrant, to assist in connection with the corruption investigation; (2) that the purpose, or the dominant or substantial purpose for which the application for the TI warrant was made, was to assist in connection with the corruption investigation; and (3) that, accordingly, the application was not made bona fide for the purpose for which the power to apply for the issue of a TI warrant was conferred, but was made for an improper or ulterior purpose. In their submissions and by their cross-examination in relation to this branch of the case, counsel for the applicants made it plain that actual bad faith on the part of the AFP, and in particular of Hadgkiss as the officer directing this aspect of the operation, was alleged. The
credit of Hadgkiss was seriously challenged in cross-examination.
By their defence, the AFP and the DPP deny the applicants' allegations. They say that the provisions of the TI Act do not preclude the making of an application by reason only of the circumstance that it was the intention of the AFP to use information obtained pursuant to the TI warrant to assist in connection with the corruption investigation as well as with the tax fraud investigation (cf. the observations of Jenkinson J. in Grollo v Macauley (1993) 45 FCR 336 at 352). They also deny that the sole purpose for which the TI warrant application was made was to assist in Operation Retrieve, although they admit that this was a purpose for which the application was made. They further say that a substantial, or the substantial, purpose for which the application was made was to assist in Operation Poker, since: (1) Retrieve arose out of, and formed part of, Poker; and (2) the application was made for the purpose of obtaining information of the kind stated in para.29 of Draffin's affidavit, that is information demonstrating consciousness of guilt or admissions in respect of the tax fraud. In their submissions, counsel for the respondents relied on Moriarty v London, Chatham and Dover Railway Co. [1870] LR 5 QB 314 at 320, 321 and 323 and R v Watt [1905] Crim Law Cases, 852 at 854, as authority for the proposition that collateral material of this kind may be admissible as an admission by conduct out of court.
This issue is one of mixed fact and law.
On behalf of the respondents, it is accepted, properly, that if fraud or bad faith on the part of those applying for the TI warrant were made out, the warrant should be set aside (see, e.g., Lego Australia Pty. Ltd. v Paraggio (1994) 52 FCR 542 at 555-6).
It is equally well established, and not disputed here, that an administrative act will be invalidated where its "initiating and abiding purpose" is a foreign or ulterior one (see, e.g., Samrein Pty. Ltd. v Metropolitan Water, Sewerage & Drainage Board (1982) 41 ALR 467 at 470; Johns v Australian Securities Commission (1993) 178 CLR 408 at 423; Williams v Spautz (1992) 174 CLR 509; Ang v Minister for Immigration & Ethnic Affairs (1994) 121 ALR 95 at 101; Mathews v Maddigan, Full Federal Court, 6 November 1995, unreported; cf. Simpson v Attorney-General (Baigent's Case) [1994] 3 NZLR 667 at 673, 697; Bienke v Minister for Primary Industries & Energy (1994) 125 ALR 151 at 171-2). American jurisprudence in this area has developed the analogous notion of "subterfuge" or "device" as infecting the warrant with invalidity where officials deliberately conceal from a judge issuing the warrant the fact that they foresee the high likelihood that evidence of other crimes would be revealed. This deliberate concealment or hiding of such facts can give rise to an inference of bad faith (see, e.g., United States v Levine 690 F. Supp. 1165 (E.D.N.Y. 1988) at 1170; 103 ALR Fed 422 at 432; see also C. Fishman, Wiretapping & Eavesdropping, 1978).
Whether bad faith, actual fraud, or an improper purpose underlay the application for the warrant soon emerged before us as a contested question of fact. So much is clear from our earlier recitation of the background facts. It may be that the views of the AFP officers, at least as documented, were not always consistent on the question whether the two investigations were, on the one hand, separate and independent, or on the other, related and linked. The true context of some of the statements and complicated questions of degree and emphasis naturally assume significance in this connection.
In the course of cross-examination, as we have said, the credit of Hadgkiss, especially, was vigorously challenged. Out of all this, one thing emerged with clarity: the resolution of these factual issues could not be readily achieved. Early in the hearing, when this difficulty became apparent, counsel were asked to obtain instructions on whether it was appropriate for the matter to be referred to a single judge of the Court to make findings of fact. An example of the adoption of this course in a prerogative writ application in the High Court was given - see Re The Director-General of Health; Ex parte Thompson (1976) 51 ALJR 180 at 180 (Gibbs J). However, each of the parties opposed this course. Consequently, given the shortness of time before the trial resumes in the County Court, it is simply not practicable for a Full Court now to embark upon the lengthy and substantial task of making those findings, even if it were, in principle, appropriate for it to do so (cf. Carroll v A-G (NSW) [1973] 70 A Crim R 162, considered below). Any attempt to do so would necessarily involve considerable difficulty and delay in the commencement of the trial in the County Court. This would contradict the important public interest in the expeditious resolution of criminal charges.
On the question of discretion, we have taken into account other considerations urged on behalf of the applicants, including the reasoning in McArthur v Williams (1936) 55 CLR 324, as applied in Murphy v R (1989) 167 CLR 94, which we discuss below. However, we have concluded that such matters do not justify this Court's intervention in the criminal proceedings at this stage. In short, we are of the opinion that, in the criminal trial, it is open to the applicants to urge that the product, and the fruits of the product, be excluded. Whether the allegations of bad faith and impropriety will, in fact, be made out, and whether, if so, the power, duty or discretion to exclude the product and its fruits should be exercised, are questions entirely within the jurisdiction of the County Court. We do not, and should not, express a view on those questions. We now give our reasons for this conclusion.
In McArthur v Williams, an information had been sworn before a New Zealand magistrate, brought to Australia and endorsed by a police magistrate for New South Wales under the Fugitive Offenders Act 1881 (U.K.). The informant before the New Zealand magistrate, who had no personal knowledge of the facts, swore that he had just cause to suspect, and did suspect, that the defendant had published a false prospectus. The statutory form of information provided that if the facts were not within the personal knowledge of the informant, the matter was to be substantiated by the oath of another. On behalf of the defendant, it was argued that the information was laid by a person, not upon his own knowledge of the facts, but only upon information received by him; that in cases of suspicion the facts from which suspicion is said to arise should be set out in the information; that the informant did not have the suspicion which justified the issue of the warrant; and that no warrant should have been issued on such an information. It was held that the warrant was valid under the Justices of the Peace Act 1927 of New Zealand. Although the applicants place much reliance upon a passage in the reasons of Dixon, Evatt and McTiernan JJ., it appears that those observations were made in the special context of that case. In particular, there is nothing in McArthur which bears upon the power of a judge in a criminal trial to exclude evidence where appropriate. Latham C.J. said (at 334-5):
"Even if
the [statutory] form ... should be
regarded as applicable in all cases, I do not think that it is mandatory in
character. A magistrate need not
conduct a preliminary trial before he issues a warrant. He should act responsibly, but the
[form] would not be construed reasonably
if it were interpreted as meaning that, before issuing an information, the
magistrate must, as a condition precedent, require the oath of persons with
personal knowledge of the facts upon which the charge is based. The result of such an interpretation would be
that the magistrate in all except the simplest cases would have to examine a
number of witnesses who would have to be brought before him for the purpose of
being so examined. There is, however, no
method provided by law for compelling the attendance of witnesses for the
purpose of such an inquiry being made.
It is therefore prima facie unlikely that the construction for which the
applicant contends is correct. In my
opinion, if the [form] is to be regarded as applying in every case, it should
be construed as directory and not mandatory in character."
Starke J. said (at 349-350):
"The only question is whether the New Zealand magistrate had jurisdiction to issue his warrant for the apprehension of the accused: the magistrate's decision upon matters within his jurisdiction, even if erroneous, cannot be questioned: there is no appeal in these proceedings from the magistrate's decision. In R. v Hughes ... Huddleston B. said that `the information on oath is not necessary to give the justices jurisdiction to try, though it is necessary to give them jurisdiction to issue a warrant to apprehend' ... . No case decides that the information deposed to or oath must be within the personal knowledge of the informant: such a requirement would be impracticable in many cases without an extended hearing. A warrant should not be lightly issued, but the evidence - its credibility and its character - that justifies its issue is a matter for the judicial discretion of the person issuing it. There is nothing in the Justices of the Peace Act 1927 of New Zealand which conflicts with this view, unless it be the note to [statutory] form ... . But there is nothing in that [form] which suggests that the personal knowledge of the informant is the foundation of the magistrate's jurisdiction. The informant, according to the form, may verify the charge or his suspicion that an offence has been committed, and if the facts on which the information is founded are not within his personal knowledge, then the information may be substantiated by the oath of someone else. But all this is directed to matters within the discretion of the magistrate, and not to the foundation of his jurisdiction."
Dixon, Evatt and McTiernan JJ. said (at 364):
"Was it necessary that the informant himself should possess, or appear to the justice to possess, direct knowledge of circumstances amounting to just cause for suspecting the offence, or should produce a witness who possessed, or appeared to possess, such knowledge? This is a question of New Zealand law, but it is raised here because sec.14 requires that the magistrate before whom a prisoner is brought after his apprehension under a warrant backed under sec.13 shall, before ordering the return of the fugitive, be satisfied that the warrant was issued by a person having lawful authority to issue the same. Sec.13 also requires that the magistrate who is invited to back the warrant shall be so satisfied before he indorses it. It may be doubted whether this means more than that the magistrate must be satisfied of the existence in the person issuing the warrant of an authority to issue such a warrant. The sufficiency of the materials to enable him to exercise the power does not seem a fit subject for inquiry by the tribunal of another possession. The magistrate making an order under sec.14 acts judicially and must be satisfied by evidence of such a matter of foreign law. The validity of his order, as distinguished from the legal propriety of his making it, could not, in our opinion, be affected by an erroneous determination of such a question. The actual existence under the law of one possession in the magistrate who issued the warrant of an authority to do so is not made a condition precedent to the jurisdiction of the magistrate of the other possession to order the fugitive's return. On the contrary, it is a matter which he is called upon to decide in the course of exercising his jurisdiction. It is, therefore, not a ground upon which a prerogative writ of prohibition can be obtained. No irregularity in the proceedings before the magistrate is suggested, and mere error, as distinguished from excess of jurisdiction, is no ground for a writ of certiorari and no other ground appears."
Their Honours continued (at 365-6):
"Since
11 & 12 Vict. c.42 and 11 & 12 Vict. c.43 an
information or complaint substantiated on oath has been the necessary
foundation of a magistrate's authority to issue a warrant. But it has never been considered that the
validity of the warrant could depend upon the nature or sufficiency of the
materials upon which a magistrate granted the warrant if there was an
information on oath before him which, however irregular, was not a nullity. It is easy to understand that the existence
of a written information sworn to or supported on oath might be conditions
precedent to an authority to issue a warrant of apprehension. But when these conditions are satisfied, the
magistrate has materials upon which he must form his judgment. In general the sufficiency or character of
materials which are required for the purpose of exercising a discretion is not
a matter upon which the validity of the discretionary act is made to depend
(cf. Cooper v Booth [1785] 3 Esp. 135, at p.144; 170 E.R. 564, at
pp.567,568). [emphasis added]
There is nothing in the New Zealand statute, except the note to the form of information, to support the view that an oath is necessary of an informant or witness who had, or who appeared to have, personal knowledge of the facts relied upon. In our opinion that note supplies no sufficient reason for giving to the statute an interpretation which would make a warrant void if it were granted upon an information sworn by an informant who neither had nor appeared to have direct knowledge of the circumstances amounting to cause for suspecting the offence and substantiated by no other oath."
But Cooper v Booth, referred to by their Honours, was an action of trespass against excise officers who entered the plaintiff's premises under a statutory search warrant issued by the Excise Commissioners. Again, it did not bear upon the power of a judge in a criminal trial to exclude evidence. The relevant statute was in these terms (see 170 E.R. 564 at 565):
"That in case any officer ... shall suspect that any tea ... is fraudulently concealed with intent to defraud ... upon oath made to the commissioners of excise, setting forth the grounds of his suspicion, it shall be lawful for them to authorise the officer to enter such [premises] ... and seize and carry away such goods... ."
Lord Mansfield said (at 568-9):
"The second objection is, That if it is too much to say the validity of the warrant depends upon the finding of the goods or not, yet that the grounds of suspicion must be laid before, and the sufficiency of them made appear to the jury who are to try the cause.
This equally repeals the Act; the excise-officer may be the only person who knows from whence his suspicion arises, and he cannot in an action against himself give in evidence a reasonable suspicion; reasonableness of suspicion would have so much latitude to a jury, that no officer would be safe: the Act was made to remedy these inconveniences; the oath of the officer is made evidence of the truth of the ... fact; and the probability of the suspicion duly left to the magistrate to judge of. If the magistrate thinks the ground of suspicion sufficient, the warrant ought to issue; if not, it ought to be refused.
The regulation made by the Act is agreeable to the principles of justice and policy; the officer is not merely a party (though interested if the goods are found) but he acts as a public officer in the execution of his duty; and if he acts bona fide, he ought to be saved.
This Act points out the way in which he may be saved: he must swear to the grounds of his suspicion, take the opinion of the magistrates as to their sufficiency, and obtain a warrant to authorise the search. It is not left to the discretion of the officer; but there are several steps which would be necessary if it was requisite, either that the goods should be found, or that the officer should be obliged to produce the grounds of his suspicion before a jury. Where an officer acts mala fide, the Act will not protect him: he is punishable by an action upon the case, and therefore we cannot help being of opinion, though we differ from great authority, that he is not a trespasser: that the execution of a legal warrant is not a trespass, but that the party injured must bring his action upon the grounds of bad motives; for this is an action of trespass, and not an action to try whether he acted from bad motives or not; therefore the judgment of the Court of Common Pleas must be reversed."
In Murphy, above, the High Court held that to determine the admissibility of evidence obtained by the use of a device, purportedly under the authority of a warrant, the judge presiding over a criminal trial must determine merely whether the warrant was regularly granted and cannot inquire into the sufficiency of the material before the Supreme Court judge authorizing the use of the device.
Mason CJ. and Toohey J. (with the general agreement of the other members of the Court) said (at 105):
"The Court of Criminal Appeal agreed with the trial judge that no investigation of the circumstances of the grant of the warrant in relation to Miss X should be permitted in the course of the trial. In the Court's view, the warrant was granted by a judge of the Supreme Court and, being an order of a superior court, its validity was to be presumed `until it be set aside or corrected on appeal or by other due process of law'. The question is whether the presumption of validity could be displaced by a collateral attack upon the warrant founded on an alleged insufficiency of the materials placed before the Supreme Court by the applicant for the warrant. There was no challenge to the jurisdiction of the Supreme Court to grant a warrant; counsel sought to challenge the sufficiency of the grounds on which the warrant had been granted. This attack on the warrant was misconceived. The admissibility of the evidence of Miss X depended on the existence of the warrant, not on the sufficiency of the grounds for granting it."
Reference was then made to the passage in McArthur (at 365-6) emphasised above, which ends with the mention of Cooper v Booth. Mason CJ. and Toohey J. continued (at 106):
"Where a warrant can be issued by the appropriate authority only upon its being satisfied of prescribed matters to be shown by the applicant for the warrant, the validity of the warrant is not open to collateral attack merely on the ground that the material laid before the authority was insufficient to satisfy it of those matters: see Rubinstein, Jurisdiction and Illegality (1965), Ch III; Groenvelt v Burwell ... and R v Watts [1830] 1 B & Ad 166, at p.177 [109 ER 749, at p.753]. To determine the admissibility of evidence obtained by use of a listening device purportedly under the authority of a warrant, a court must determine merely whether the warrant was regularly granted by the Supreme Court. It does not inquire into the sufficiency of the material which satisfied the Supreme Court of the matters referred to in s.18(2)(b). There was neither need nor occasion for the Court in the present case to investigate the basis on which the warrant had been granted."
Reference should be made to the authorities mentioned by their Honours.
Rubinstein, above, wrote of the doctrine of collateral attack as follows (Ch.III at 35-6):
"Where the existence or non-existence of a certain act purporting to have legal consequences is relevant to the legal dispute over which the court has jurisdiction, this issue is examinable. This is so even where the disputed decision lies within the exclusive jurisdiction of another court or tribunal. This old common-law rule received its conclusive stamp of approval in the famous Duchess of Kingston's Case ... . Once this principle was established, any court of law ... was not only authorized but required to go behind the facade of an apparently valid decision and to examine its validity.
The doctrine of collateral attack is thus governed by two factors:
(a) The court is not bound by an apparently binding decision made by an otherwise authorized court or tribunal.
(b) The court, however, does not sit as a reviewing court and cannot enter into the legality of the decision challenged. It can only examine whether such decision exists; ... in other words, it may examine the question of jurisdiction.
This idea was succinctly expressed in a note in Salkeld to Groenvelt v Burwell ... . In that case, an action in tort challenged collaterally a warrant issued by the College of Physicians. The defendants pleaded this warrant in their defence and plaintiff's replication `was adjudged ill, for the traverse doth not deny that there was such a warrant, but the legality of it'."
R v Watts, above, the other case mentioned, concerned a writ of assistance, where an information was laid against the defendants for obstructing customs officers in the execution of their duty. Lord Tenterden CJ. said (109 ER 749 at 753):
"A general authority, like that which is supposed to be given by this writ, or by the patent recited in it, is certainly unknown to the common law, and cannot in our opinion be good or valid. The consequence of treating it as good at the common law, would be to give power to enter the dwelling of any man, and a man's house would cease to be his castle. When I say good and valid, I would be understood to mean good and valid absolutely, without reference to the event, or to ... probable cause, which lead to a different consideration, and a distinct question.
Now, if the
writ or patent confer a valid authority at the common law, as the writ and
patent do not require the presence of a constable, and the statutes do require
it, they are rather an abridgment or qualification of the power mentioned in
the writ and patent than an enlargement of it;
and we think the provisions in the statutes cannot be extended beyond
the terms so as to give a general and unqualified authority to search the
houses and places therein mentioned. The
contrary construction would be wholly at variance with the dicta in the cases
referred to. Whether those dicta are to be taken to the letter, that is, that
the officer can only be justified by the event;
or, whether the officer will be justified if he enters upon reasonable
cause of suspicion to be proved by him, as his justification, at the
trial; or will be justified by proving
that uncustomed goods were actually in the house at the time of his entry, are
points which it is not now proper to determine,
because each of these points involves a matter of fact to be decided by a jury
... ."
The comments of Mason C.J. and Toohey J. in Murphy were considered by the High Court in Love v Attorney-General (NSW) (1990) 169 CLR 307. It was there held, following Hilton v Wells, above, that the act of issuing a warrant was administrative and not judicial. The case concerned the issue of warrants under State legislation purporting to authorize AFP officers to install and use listening devices in the course of investigating alleged narcotic offences, in circumstances where such use by a member of the AFP would be prohibited by federal legislation, namely, s.219B of the Customs Act 1901. In committal proceedings, the appellants objected to the use in evidence of tape recordings made with the use of listening devices purportedly authorized by the warrants, on the ground that the warrants were invalid. In the Court of Appeal of the Supreme Court of New South Wales, McHugh JA. (Kirby P. agreeing) held that s.219B covered the field in connection with the use of listening devices for the purposes of the investigation of federal narcotics offences by members of the AFP, so that the State Act was invalid to the extent that it purported to authorize such use. Despite misgivings, the case proceeded in the Court of Appeal on the basis that the power to issue the warrant was judicial, and not administrative. McHugh J. considered, however, that the invalid parts of the warrant could be severed. Accordingly, a claim for delivery up of the tapes, transcript and other like material was refused, although a declaration of partial invalidity of the warrant was made.
In the High Court the appellants contended that the warrants were judicial orders infected by fundamental defects, such that persons affected by them were entitled, as of right, to have them set aside, and that no question of severance could arise since the grant of the warrant was a single judicial decision.
The argument was rejected, and the appeal dismissed on the ground that the exercise of the relevant power was not judicial. Mason CJ., Brennan, Dawson, Toohey and Gaudron JJ. said (at 322):
"There are, of course, many cases in which the issue of a warrant has been described as a judicial act: see, for example, the decisions referred to by Fox J. in Reg. v Tillett; Ex parte Newton ... ; Feldman, Law Relating to Entry, Search and Seizure ... . But these cases, for the most part, are concerned with the availability of relief by way of certiorari and prohibition. Consequently they focus on the question whether the issuing authority had a duty to act judicially and, on occasions, judges have answered this question in the affirmative by stating that the issue of the warrant is a judicial act. The better view is that the issue of the warrant under s.16 is a step in the administrative process and is thus an administrative function. Granted that a judge considering an application for a warrant under s.16 is bound to act judicially, that is, in a just and fair manner, with judicial detachment, this circumstance is not conclusive, for the same is true of many administration powers: Tasmanian Breweries ... ; Electronic Rentals ... .
Although the appellants relied on the comments of Mason C.J. and Toohey J. in Murphy v The Queen ... to support the view that a warrant issued under the State Act is a judicial order, the precise issue now under consideration was not argued in that case and we do not consider that the comments made in that case govern this issue."
Their Honours went on to hold that once it is accepted that the warrant is not a judicial order, it becomes an instrument made pursuant to a circumscribed statutory authority. Accordingly, the warrant must be construed so as not to authorize a breach of s.219B of the Customs Act. The result was that the warrants were wholly valid.
Love was considered by the New South Wales Court of Appeal in Carroll v Attorney-General (NSW), above. There, the plaintiff sought a review of warrants issued under the Listening Devices Act 1984 (NSW), contending that there had been no, or no proper, supporting material before the judges issuing them. In the course of criminal proceedings, the plaintiff sought access to affidavits by police officers which had been relied on in the applications for the warrants. Three questions were referred by Badgery-Parker J. to the Court of Appeal: (1) whether the Supreme Court can review a decision to issue a warrant; (2) if so, whether the review can be undertaken by a single judge of a Division or only by the Court of Appeal; and (3) whether the plaintiff was entitled to a declaration that the warrants were invalid.
It was held by Mahoney AP and Hunt AJA, Kirby ACJ dissenting, that the affidavits should not be made available for inspection by the plaintiff. It was further held, by the whole Court, that the evidence relied on by the plaintiff was insufficient to establish a case warranting the making of the orders sought.
Kirby ACJ was inclined to the view that, in principle, the decisions to issue the warrants were judicially reviewable but held that the material before the Court was inadequate to justify intervention by the Court.
Mahoney AP said (at 180-1):
"The summons has been brought for hearing before the Court of Appeal. Prima facie it is inappropriate that the proceeding be before this Court as there are or may be upon the allegations made in support of it serious issues of fact to be tried. However, the court has in the special circumstances of the case, heard the proceeding.
The proceeding has been brought on summons. The plaintiff's claim has not been pleaded or particularised. However, it has been assumed to be that contained in par 8 of an affidavit of Mr T S McCabe, Mr Carroll's solicitor. That paragraph reads:
`It will be submitted that the said warrants were issued because the police swore affidavits attesting to having reasonable grounds for a belief that prescribed offences had occurred whereas there was, a fact [sic], no material that could reasonably justify any such belief and that the police could not have entertained any such belief when they applied for the warrants. The applications were male [sic] fides.'
The evidence adduced in support of the plaintiff's claim consists in the main of: Mr McCabe's affidavit; and a copy of the indictment and of three `de-briefing' transcripts.
The plaintiff's right to the declaration he seeks depends upon his establishing that claim.
During the hearing the plaintiff called on subpoena for the affidavits made by the police officers in support of their applications for the warrants. The affidavits were produced to the court but Mr Lakatos, for the Commissioner of Police, objected to their production. An objection, previously foreshadowed, on the ground of public interest immunity, was not pressed. But it was submitted that it had not been shown, nor did it appear, that the affidavits provided any evidence relevant to the plaintiff's claim or to the support of it. It was submitted, in addition, that, because of the decision of the High Court in Murphy ..., it was not open to the plaintiff to contend that the warrants were defective in the manner alleged.
The court ruled that the affidavits produced on the subpoena should not be made available for inspection by the plaintiff. In my opinion, that ruling was correct. Where documents are subpoenaed in a proceeding, and no objection is taken to their production to the court, it does not follow that the parties subpoenaing them have the right to have them for inspection. The documents are produced to the court. If objection is taken to the inspection of them by the parties subpoenaing them, it must appear, to put the matter generally, that the documents are relevant to an issue for determination by the court in the proceeding."
His Honour continued (at 181-2):
"Mr. Horler QC, for Mr Carroll, was not able to indicate anything in the subpoenaed documents which would be relevant for the purpose or would support his client's case. In so far as that case claimed that the applications for warrants were mala fide, that was clear. He could not indicate, nor did it appear, that there was anything to support a claim of that nature.
The alternative ground suggested in Mr McCabe's affidavit raised a somewhat different question. That alternative was effectively that the police officers swore affidavits attesting to reasonable grounds for a belief that offences had occurred, whereas `there was in fact no material that could reasonably justify any such belief and the police could not have entertained any such belief'. That ground, construed in favour of the plaintiff, is essentially that there was in fact no material that could justify the relevant belief.
That ground assumes that the fact that there is no material that could reasonably justify the relevant belief is a ground for declaring that the warrants were invalid. I do not think that it is. The section operates not upon the existence of reasonable grounds but upon the court being `satisfied' that there are such grounds. The court may be wrong in being satisfied, but, if it is satisfied, then the warrant authorised is valid. This, I think, is part of the difficulty which the present plaintiff faces in seeking to inspect on subpoena the affidavits of the police officers. Even if the relevance in the abstract of the documents to the question of the existence of such material be accepted, that cannot be of assistance in establishing a relevant ground for the relief sought."
Mahoney AP would have dismissed the summons on that ground alone, but went on to say (at 184):
"As I have indicated, the fact that this proceeding fails does not mean that there is an injustice which cannot be remedied. If the evidence obtained by the listening devices be the result of mala fides or if it be otherwise within the scope of the abuse dealt with by Bunning v Cross, that can be raised and dealt with at the trial. The evidence can then be dealt with - and admitted or rejected - not according to the technicalities of the Listening Devices Act, but according to the substantial merits of the matter."
With respect, we agree. It is now quite clear that the power of the trial judge in criminal proceedings to exclude prejudicial material is extremely wide. As Gibbs CJ., Wilson and Dawson JJ. observed in Hilton v Wells (at 77):
"The discretion of a court when confronted with evidence which has been unlawfully obtained has been clearly explained in recent decisions of this Court: Reg. v. Ireland ...; Bunning v. Cross ...; Cleland v. The Queen ... . No doubt it is true, as Barwick C.J. recognised in Ireland ..., that acts in breach of a statute may more readily warrant the rejection of the evidence as a matter of discretion. But this is to do no more than confirm the existence of the discretion, a discretion which is to be exercised in the light of the competing public interests to which the Chief Justice referred."
Earlier, in Miller v Miller (1978) 141 CLR 269, Gibbs J., speaking of the Telephonic Communications (Interception) Act 1960, had said (at 277):
"Although I need not decide whether s.5(3) of that Act prohibits the giving of evidence of a conversation intercepted within the meaning of that Act, I doubt whether a court is `another person' within the meaning of the words, `A person shall not divulge or communicate to another person ...' in that sub-section: see Canadian Pacific Tobacco Co. Ltd. v Stapleton ...; Cowan v Stanhill Estates Pty. Ltd. ... . However, if the sub-section does not render evidence of such a conversation inadmissible, the court would have a discretion to exclude it, since it was unlawfully obtained: Bunning v Cross ...".
(For an example of the consideration by a trial judge of the use of such discretion, see R. v Curran and Torney [1983] 2 VR 133 per McGarvie J. at 148-9).
More recently, in Pollard v The Queen (1992) 176 CLR 177, Brennan, Dawson and Gaudron JJ. said (at 196):
"The exercise of the discretion to exclude evidence which has been improperly or illegally obtained involves a balancing of competing public policy considerations and is not so much concerned with the individual accused as with `whether the illegal or improper conduct complained of in a particular case is of sufficient seriousness or frequency of occurrence as to warrant sacrificing the community's desire to see the guilty convicted in order to express disapproval of, and to discourage, the use of unacceptable methods in achieving that end' ... ."
In Ridgeway v The Queen (1995) 69 ALJR 484, Mason CJ., Deane and Dawson JJ. said (at 493-4):
"The relative weight to be given to [the cases in which the Bunning v Cross discretion was established and explained] will vary according to the circumstances of the particular case. Thus, the weight to be given to the public interest in the conviction and punishment of those guilty of crime will vary according to the degree of criminality involved. The weight to be given to the principal considerations of public policy favouring the exclusion of the evidence - the public interest in maintaining the integrity of the courts and in ensuring the observance of the law and minimum standards of propriety by those entrusted with powers of law enforcement - will vary according to other factors of which the most important will ordinarily be the nature, the seriousness and the effect of the illegal or improper conduct engaged in by the law enforcement officers and whether such conduct is encouraged or tolerated by those in higher authority in the police force or, in the case of illegal conduct, by those responsible for the institution of criminal proceedings. When assessing the effect of the illegal or improper conduct, the relevance and importance of any unfairness either to a particular accused or to suspected or accused persons generally will likewise depend upon the particular circumstances. ... Ordinarily, however, any unfairness to the particular accused will be of no more than peripheral importance."
(For a recent example of the application of this comparative approach, see R v Karam, New South Wales Court of Criminal Appeal, 21 November 1995, [1995] ALMD 3529).
It follows, in our view, that properly understood, there is nothing in McArthur or Murphy, or in the early English cases that we have mentioned, which detracts from the capacity of the criminal trial judge to exclude, if appropriate, the evidence now in question by use of the Bunning v Cross discretion as explained in Ridgeway. On the other hand, there is general policy that civil courts should not fragment criminal trials where that would delay the application of the criminal process (for two recent examples, see Re Rozenes, above; Coco v Shaw [1994] 1 Qd.R 469). It is true that the insertion of s.63 in the TI Act was intended to afford additional protection to an accused person by itself making generally inadmissible, evidence found by the trial judge to have been obtained in contravention of the Act, instead of continuing to entrust its admissibility to the discretion of the trial judge (see the Second Reading, Parl. Deb., Senate, 4 June 1987 at 3530-1). However, if anything, this reinforces the approach we have taken.
The circumstances of this case suggest strongly to us that we should decline to intervene by way of civil judicial review on the ground now suggested. We bear in mind, in this connection, that, as a separate cause of action, the applicants also claim damages for misfeasance. We will return to this aspect.
6.7Was the warrant invalid by reason of the failure of the AFP to disclose material matters
Although, conceptually, this claim is distinct from the applicants' claim that the AFP was guilty of an improper purpose in seeking the warrant, there is necessarily some factual overlap between the two claims. The applicants contend that a duty of candour in relation to all material facts is imposed upon an applicant for a TI warrant and that this obligation was not discharged by the AFP in respect of the matters pleaded in the second further amended statements of claim summarised above. The applicants submit that the duty arises by virtue of the provisions of s.46 of the TI Act, given the nature of the power exercised, that is to say, the secret, ex parte invasion of the right to privacy of citizens without their knowledge. The applicants contend that in the light of the special, vulnerable position of citizens and eligible Judges to the potential abuse of power by those applying for TI warrants, there is a duty, akin to a fiduciary obligation, imposed by law upon those seeking such warrants.
Reliance is placed by the applicants upon certain observations by Lord Wilberforce in Zamir v Secretary of State for the Home Department [1980] AC 930. The question there was whether an immigration officer had grounds for deciding that there had been deception vitiating a permission to enter (at 950). In his speech Lord Wilberforce recalled an argument for the entrant appellant that (at p.950):
"[t]he appellant's only duty was to answer, if asked: he was under no duty to volunteer information. I do not accept this contention: indeed, it cannot be too strongly repudiated. At the very lowest, an intending entrant must not practise a deception; it has over and over again been decided, and the correctness of these decisions is incontestable, that deception vitiates the permission to enter. It is clear on general principles of law that deception may arise from conduct, or from conduct accompanied by silence as to a material fact. It can be no answer to a claim that such deception has occurred to say that no question was asked: paragraph 4 above merely confers a power, which carries a sanction if not complied with, and in no way derogates from a general duty not to deceive."
With respect, we agree with this. However, Lord Wilberforce went on, obiter, to say (at 950):
"I would, indeed, go further than this - a point so far left open in the Court of Appeal. In my opinion an alien seeking entry to the United Kingdom owes a positive duty of candour on all material facts which denote a change of circumstances since the issue of the entry clearance. He is seeking a privilege; he alone is, as to most such matters, aware of the facts: the decision to allow him to enter, and he knows this, is based upon a broad appreciation by immigration officers of a complex of considerations, and this appreciation can only be made fairly and humanely if, on his side, the entrant acts with openness and frankness. It is insufficient, in my opinion, to set as the standard of disclosure that which applies in the law of contract; the relation of an intending entrant and the authorities is quite different in nature from that of persons negotiating in business. The former requires a higher and more exacting standard. To set it any lower than as I have described is to invite - as unhappily so many of the reported cases show - a bureaucratic and anti-bureaucratic contest with increasing astuteness, manoeuvring and ingenuity on one side, and increasingly cautious technicality and procrastination on the other. This cannot be in the interest of sensitive administration."
But in Khera v Secretary of State for the Home Department [1984] 1 AC 74, these obiter observations were not followed.
In that case, Lord Bridge said (at 118-9):
"First, it is clear that a mere non-disclosure to the immigration officer by the person seeking permission to enter of a fact known to him cannot, by itself, amount to a contravention of section 26(1)(c) [of the Immigration Act 1971 UK]. In so far as the passage in the speech of my noble and learned friend Lord Wilberforce in Zamir's case at p.950 may be understood as imposing on an applicant for leave to enter a duty of candour approximating to uberrima fides the breach of which would have the same effect as fraud, it cannot, I think, be accepted. If intended in that sense, it was obiter, was not supported in the present case by Mr. Brown for the Secretary of State and, as I understand, does not now find favour with my noble and learned friend Lord Wilberforce himself. On the other hand, as Lord Wilberforce said in Zamir's case, at p.950:
`It is clear on general principles of law that deception may arise from conduct, or from conduct accompanied by silence as to a material fact.'
The relevant words of section 26(1)(c): `a statement or representation which he knows to be false or does not believe to be true;' embodying as they do the classic definition of a fraudulent deception, are amply wide enough to allow for the operation of this salutary principle."
Lord Fraser (at 96) agreed and added (at 97):
"The opinion was not a necessary part of the reasoning leading to Lord Wilberforce's conclusion, but was obiter. At the time when his speech was delivered I agreed with all of it including that passage, but further reflection, in the light of the arguments in the present appeals, has convinced me that it would be wrong to construe the Immigration Act 1971 as if it imposed on persons applying for leave to enter a duty of candour approximating to uberrima fides. But, of course, deception may arise from silence as to a material fact in some circumstances ...".
Lord Wilberforce said (at 99):
"The second [point] concerns a passage in the opinion I delivered in Zamir's case as to the positive duty of candour which, I suggested, rested upon those seeking entry to the United Kingdom. It was not necessary for the decision, since the view taken was that Zamir's case was a case of clear deception. The passage combines two lines of thought which ought to have been more clearly separated. The first relates to conduct which might vitiate the leave to enter and should indicate that vitiation may result, not only from positive acts of deception but also from concealment of or silence as to facts material to the granting or withholding of leave to enter, including those indicating a change of circumstances since entry clearance was granted. The passage was dealing, and I deal here, with the case of deception or concealment by the intending entrant him/herself, leaving for separate consideration in an appropriate case that of deception or concealment by another person. The second line of thought was prompted by the great number and variety of cases of deception, often organised for money, which have come before the courts. I ventured the opinion that a system of consideration of individual cases for the privilege of admission to this country can only work humanely and efficiently on a basis of candour and good faith on the part of those seeking entry. If here I trespassed on to the ground of moral judgment, I am unrepentant."
Lord Scarman, noting that the observations of Lord Wilberforce in Zamir were obiter, added (at 107-8):
"It is certainly an entrant's duty to answer truthfully the questions put to him and to provide such information as is required of him: paragraph 4 of Schedule 2. But the Act goes no further. He may, or may not, know what facts are material. The immigration officer does, or ought to, know the matters relevant to the decision he has to make. Immigration control is, no doubt, an important safeguard for our society. Parliament has entrusted the control to immigration officers and the Secretary of State: section 4. To allow officers to rely on an entrant honouring a duty of positive candour, by which is meant a duty to volunteer relevant information, would seem perhaps a disingenuous approach to the administration of control: some might think it conducive to slack rather than to `sensitive' (Zamir's case at p.950) administration. The Immigration Act does impose a duty not to deceive the immigration officer. It makes no express provision for any higher or more comprehensive duty: nor is it possible, in my view, to imply any such duty. Accordingly I reject the view that there is a duty of positive candour imposed by the immigration laws and that mere non-disclosure by an entrant of material facts in the absence of fraud is a breach of the immigration laws."
Moreover, it is to be borne in mind that the duty of utmost
good faith recognised for certain purposes of private law, as for example in insurance contracts, is not capable of automatic imposition on statutory officers in the discharge of their public duties. Similar considerations apply to the concept of non-disclosure which is embodied in the general law of misrepresentation (see Pan Atlantic Insurance Co. Ltd. v Pine Top Insurance Co. Ltd. [1995] 1 AC 501; Michael Furmston, "Contract", [1994] All ER Annual Review at 112). As Lord Mustill noted in Pan Atlantic (at 543), it is possible to consider this area as one of constructive fraud.
In Karina Fisheries Pty. Ltd. v Mitson, above, the view was expressed by the Full Court (Sheppard, Foster and Hill JJ) again obiter (at 481), that there was "a strict duty of full disclosure of material facts by the informant seeking a [search] warrant". But in the search warrant case, Lego Australia Pty. Ltd. v Paraggio, Beaumont and Whitlam JJ. held that the question of validity was one of statutory construction and public law to which the general duty of disclosure discussed in cases involving private law (e.g. Thomas A. Edison Ltd. v Bullock (1912) 15 CLR 679) was not applicable. Their Honours said (at 555):
"... in
our view ... there is no general, in the sense of abstract, `duty'of disclosure
here. This is not to say that a warrant
should not be set aside, as other administrative decisions can be, where there
has been fraud or misrepresentation. For
this purpose, a statement which was a half-truth and thus misleading (see eg R
v Kylsant ... ) would be
treated, in this, as in other contexts, as a misrepresentation.
Put differently, the primary question here is not whether the informant was under an obligation to disclose to the justice a particular fact, but whether the statements in the Information were sufficient to satisfy the requirements of s.10(1). There is also a question whether the decision to grant the warrant was induced by fraud."
Hill J. said (at 569):
"Thus it seems to me that the obligation should be stated in terms of an obligation to ensure that the material before the magistrate or Justice is not such as to mislead and that any omission of relevant material was inadvertent. This is merely another way of saying that the informant must in compiling the information act in `good faith'.
The power to lay an information before a magistrate or Justice for the issue of a warrant, like all powers, must be exercised in good faith and for the purpose for which the power was conferred. If the informant does exercise the power in good faith then the issue of the warrant cannot be criticised upon the basis that material was inadvertently excluded from the magistrate's attention. Absent good faith upon the part of the informant the result will be different."
His Honour continued (at 570):
"I would accordingly hold that the obligation of an informant for a warrant to make disclosure should be stated in terms of good faith and by way of corollary, that a failure in good faith to disclose material relevant to the issue which the magistrate or Justice has to determine will bring about the result that the discretion exercised by that functionary to issue a warrant will have miscarried by virtue that the procedures required by law for the issue of the warrant will not have been observed."
In Dunesky v Elder (1994) 54 FCR
540, Lockhart, Beaumont and Hill JJ. (with the concurrence of Lindgren J.) said
(at 554)
that they did not find it necessary to consider whether their Honours'
judgments in Lego reflected differences of principle or merely of
emphasis because if there was an obligation to disclose material facts, that
duty was discharged in the case before the Court.
The history of this area tends to support the view that there is no general duty of disclosure imposed on the applicant agency otherwise than by the legislative scheme of the statutory code. It will be recalled that s.46(1)(e) provides that the eligible Judge is to have regard to the matters referred to in s.46(2) "and to no other matters ..." (our emphasis).
The origin of the authority to intercept communications is obscure. The power to intercept was exercised in England from very early times and was recognised (although not expressly provided for) by statute (see Halsbury's Laws of England, 4th ed. Vol. 45 at 275). In Malone v Metropolitan Police Commissioner [1979] Ch. 344, Megarry V.C., having held held that telephone tapping was not unlawful at common law, called for legislation to regulate such a complex field. As Lord Mustill observed in Reg v Preston [1994] 2 AC 130 (at 167), the criticisms in the decision of the European Court of Human Rights in Malone v United Kingdom 7 EHRR 14 prompted the Government to legislate. The criticisms were directed, not to the long-established practice, but to its inaccessibility, imprecision and lack of formal safeguards. The English statute was plainly designed to put these matters right, as was the TI Act.
All of this suggests that the TI Act was to operate as a code, so that there must be considerable difficulty in constructing implied additional requirements. At the same time (as was held in Lego and in the earlier cases, for instance, Cooper v Booth (at 568)) an officer will not be protected if he acts mala fide, but this is a special, if universal, exception to the statutory code. That is not to say that a warrant will be good if its issue is dishonestly induced by a half-truth.
If, as a matter of fact, the non-disclosure alleged by the applicants amounted to fraud in the above sense, it would be conduct which could be taken into account by the criminal trial judge in the exercise of a Bunning v Cross discretion or in the performance of the duty imposed by s.63 of the TI Act. It follows, in our opinion, for the reasons given in considering the allegation of improper purpose, that this Court's discretion to grant judicial review should not, in the present circumstances, be exercised. The claim of misfeasance is dealt with below (see 6.9).
6.8Whether Draffin's affidavit was inadequate to entitle the eligible Judge to issue the TI warrant
The majority in the High Court (Brennan C.J., Deane, Dawson and Toohey JJ.) in Grollo v Commissioner of the Australian Federal Police, above, mentioned (at 237) that the absence of reasons creates practical difficulties in judicial review of a decision to issue a TI warrant. But review is still possible as the decision in George v Rockett (1990) 170 CLR 104 demonstrates. For one thing, it is possible that the discretion may not be properly exercised in the extreme Wednesbury sense. As Gummow J. noted in Bienke v Minister, the Wednesbury doctrine is "concerned with ultra vires in a broad sense of vitiation by reason of engagement by the decision-maker in an abuse of discretion".
The duty of the eligible Judge was, of course, to apply his mind to the exercise of the discretion conferred by s.46(1), having regard to the matters specified in s.46(2). In our opinion, no abuse of that discretion, in the sense explained by Mahoney JA. in Carroll, has been demonstrated, once it is accepted, as it should be, that evidence of consciousness of guilt can assist in the tax fraud investigation.
On behalf of the applicants, reliance is placed upon a later case, Wednesbury Corporation v Ministry of Housing & Local Government [1965] 1 WLR 261, but as it involved the separate issue of Crown privilege (or, now, public interest immunity), it should be distinguished for our purposes.
Reference should also be made to the decision of the Supreme Court of Canada in Re Restaurant Le Clemenceau Inc. and Drouin 42 DLR (4th) 761 (1987) where a search warrant was quashed on the ground that the information did not disclose the nature of the relevant investigation. But again, the case may be distinguished, on the facts, from the present matter where the nature of the two investigations was described in Draffin's affidavit.
In our view, no challenge to the validity of the warrant on this ground has been made out.
6.9The claim for damages for misfeasance in public office
This claim raises difficult questions going to whether either of the officers of the AFP who decided to apply for the issue of the warrant was a public officer in the requisite sense who maliciously committed an invalid or unauthorized act in the purported discharge of his public duty.
The element of malice, in particular, requires the application of several elusive concepts; see Northern Territory of Australia v Mengel (1995) 129 ALR 1 where, in the joint judgment of Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ, it is suggested (at 18), that the tort of misfeasance in public office should be confined to the intentional or reckless infliction of harm by an act which the public officer knows is beyond power and which involves a foreseeable risk of harm. Brennan J (at 26-27), analysed the mental element in these terms:
"I respectfully agree that the mental element is satisfied either by malice (in the sense stated) or by knowledge. That is to say, the mental element is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury or with knowledge that there is no power to engage in that conduct and that that conduct is calculated to produce injury. These are states of mind which are inconsistent with an honest attempt by a public officer to perform the functions of the office. Another state of mind which is inconsistent with an honest attempt to perform the functions of a public office is reckless indifference as to the availability of power to support the impugned conduct and as to the injury which the impugned conduct is calculated to produce. The state of mind relates to the character of the conduct in which the public officer is engaged - whether it is within power and whether it is calculated (that is, naturally adapted in the circumstances) to produce injury. In my opinion, there is no additional element which requires the identification of the plaintiff as a member of a class to whom the public officer owes a particular duty, ... though the position of the plaintiff may be relevant to the validity of the public officer's conduct. For example, the officer's administrative act may be invalid because he or she did not treat the plaintiff with procedural fairness. It is the absence of an honest attempt to perform the functions of the office that constitutes the abuse of the office. Misfeasance in public office consists of a purported exercise of some power or authority by a public officer otherwise than in an honest attempt to perform the functions of his or her office whereby loss is caused to a plaintiff. Malice, knowledge and reckless indifference are states of mind that stamp on a purported but invalid exercise of power the character of abuse of or misfeasance in public office. If the impugned conduct then causes injury, the cause of action is complete."
Deane J, at 36, cast his analysis of the mental element in similar terms.
Whichever formulation be adopted, it is clear that whether the applicants can make out the element of malice is inextricably bound up with the issues of improper purpose and non-disclosure which we have already discussed. Like them, it depends for its resolution on an assessment of the credit of several witnesses which, as we have earlier indicated, should not be embarked upon by this Court until after the completion of the criminal proceedings in the County Court.
Also dependent on the determination of the matters to which we have referred as raising serious questions of credit, are issues going to damages, particularly if the applicants are granted the leave which they seek to amend their statement of claim further to claim exemplary or aggravated damages. In this respect they seek to "rely upon all of the matters complained of in this Statement of Claim". In this context, it will be necessary to examine what injury likely to be caused to the applicants was foreseeable when the presumptive acts of misfeasance were committed. It is only when that injury has been identified that the Court could begin the no less complicated task of relating it to the claimed heads of damage and quantifying the compensation (if any) which the applicants should receive. The claim for damages, even in its existing form, was not formulated until well after the commencement of the present proceedings. Its resolution has no particular urgency. Moreover, the outcome of the criminal trial is likely to have a dramatic effect on the damages recoverable by the applicants (other than Mrs. Flanagan). For all of these reasons, we regard it as unnecessary and inappropriate now to examine any part of the applicants' claim under this head.
7.0 CONCLUSION AND ORDERS
It follows from the above analysis that relief directed to preventing the tender of evidence in the criminal proceedings should be refused, but that the claim for damages for misfeasance in public office should be the subject of an order for separate decision and should be determined in due course.
At this stage, the costs of the hearing before the Full Court should be reserved but there should be liberty to apply in that respect.
I certify that this and the preceding one hundred and forty (140) pages are a true copy of the Reasons for Judgment of their Honours Beaumont, Ryan and Lindgren JJ.
Associate:
Dated: 1 February 1996
Appearances: Mr R Merkel QC with Mr J Judd and Mr G Davies of counsel instructed by Michael Brereton & Co appeared for the applicants, Flanagan and Mrs. Flanagan in proceeding No VG 612 of 1995.
Mr R Finkelstein QC with Mr J Beach of counsel instructed by Galbally Fraser & Rolfe appeared for the applicant Howard in proceedings No VG 613 of 1995.
Mr C Heliotis QC with Mr J Judd and Mr G Davies of counsel instructed by Arnold Bloch Leibler appeared for the applicant Bruno Grollo in proceedings No VG 747 of 1995.
Mr M S Weinberg QC with Mr R Brett of counsel instructed by Director of Public Prosecutions appeared for the 1st and 2nd respondents in all three proceedings.
Dr S Kenny with Mr S McLeish of counsel instructed by Australian Government Solicitor appeared for the 3rd, 4th and 5th respondents in all three proceedings.
Dates of
hearing: 9-13 October, 27, 28, 30 November, l, 4-7 December 1995.
Date orders
made: 21 December 1995
Date reasons
published: 1 February 1996
