FEDERAL COURT OF AUSTRALIA

A3 v Australian Crime Commission [2006] FCA 894

A3 v AUSTRALIAN CRIME COMMISSION & ANOR

NSD373 OF 2006

EMMETT J

10 MAY 2006

SYDNEY

REASONS FOR JUDGMENT

1                     The first respondent seeks to read an affidavit of Mr Ian MacDonald Andrew, sworn 5 May 2006, on the basis that I make an order that that affidavit not be disclosed to any person or party other than the respondents and their legal representatives in this proceeding and an order that publication of that affidavit and any of its contents be prohibited. The applicant objects to the affidavit being read at all and also objects to its being admitted on the basis that I make the orders that I have outlined.

2                     The issue in this proceeding is whether certain documents evidencing communications between unnamed persons are the subject of legal professional privilege, such that their contents should be kept confidential. The documents were produced to the first respondent, the Australian Crime Commission (‘the Commission’), in response to a notice requiring production of the documents.

3                     On 15 May 2003, pursuant to s 7C of the Australian Crime Commission Act 2002 (Cth) (‘the Act’), the Board of the Commission authorised the Money Laundering and Tax Fraud Determination. That instrument authorised the Commission to conduct a special investigation in respect of certain kinds of federally relevant criminal activity, as defined in s 4 of the Act, including money laundering, tax fraud and related criminal enterprises. The duration of the investigation has been extended until 30 June 2006.

4                     Pursuant to the Money Laundering and Tax Fraud Determination, the Commission is currently conducting a special investigation, code-named ‘Operation Wickenby’. Operation Wickenby is an investigation of national and international significance into allegations of tax fraud and money laundering.

5                     Subsequent to the execution of search warrants at the first applicant’s home and business premises, pursuant to s 29 of the Act, an examiner of the Commission issued a notice to produce requiring production of certain materials. That notice bears the date 22 September 2005. In pursuance of that notice, numbers of documents were produced, including the documents in respect of which the applicant claims a determination that the documents are the subject of legal professional privilege.

6                     There are in excess of 40 documents involved. The documents involved have been tendered by the applicant but an order has been made, at the instigation of the applicant and not opposed by the respondents, that access to those documents be limited to counsel and solicitors for the applicant.

7                     The respondents dispute the claim to privilege on several grounds, one of which is that the communications evidenced by the documents in question were made in the furtherance of a crime, or fraud, or other impropriety, such that they are not privileged. The affidavit of Mr Andrew is said to establish that there are reasonable grounds for believing that the communications in question were made in the furtherance of a crime, or fraud, or other impropriety.

8                     Mr Andrew has said in a further affidavit, also sworn on 5 May 2006, that the Commission is currently conducting Operation Wickenby and that the investigation relates to suspected taxation fraud and money laundering by Australian residents who have used the services provided by Strachans SA, an accounting firm located in Switzerland. Strachans is alleged to be involved in promoting tax fraud and money laundering schemes internationally and within Australia. Due to the complexity and breadth of the ongoing investigations, it is expected that Operation Wickenby will continue for a number of years.

9                     To date, no criminal charges have been laid. However, the special investigation has identified the revenue at risk to the Australian Government to be in the vicinity of $300,000 million. Disclosure of the information contained in the affidavit now in question would have a prejudicial effect on the ongoing criminal investigations into the applicant and disclosure of that information would reveal police investigation methodology.

10                  Mr Andrew says that the affidavit in question sets out background to, and the current status of, Operation Wickenby, information about the first applicant and current investigation into the first applicant’s activities, details about various schemes in which the first applicant is said to be involved that are the subject of criminal investigation and details of how the documents in question have been handled by the Commission during the course of the investigation.

11                  Disclosure of the information contained in the affidavit may prejudice the ongoing investigations by revealing the current status and focus of the criminal investigation. Mr Andrew says that, on the basis of his experience in law enforcement, that could have the following outcomes:

(1) Preparation by the first applicant for the specific matters the subject of the proposed examination;

(2) Collusion between witnesses, potential witnesses and other persons of interest as to the evidence to be given before the examiner;

(3) The destruction or fabrication of evidence including the divesting of assets and affording the opportunity to alert other persons to the current status and focus of the investigation.

12                  The affidavit in question also details the methods used by the Commission in conducting criminal investigations into financial crimes. The disclosure of its contents would reveal the processes undertaken by the Commission in conducting, not only the specific investigation concerning the applicant, but Operation Wickenby as a whole.

13                  It is common ground, on the basis of that evidence, that there is a public interest in preserving secrecy and confidentiality in relation to the information contained in the affidavit and in documents exhibited to the affidavit, which the Commission will also seek to tender on the basis that the orders proposed relate to it as well. The first applicant opposes the reading of the affidavit and the tender of the documents on the basis that they are subject to public interest immunity, which it is not open to the Commission to or anyone else to waive. Specifically, the first applicant refers to s 130 of the Evidence Act 1995 (Cth), which provides that if the public interest in admitting into evidence information or a document that relates to matters of state is outweighed by the public interest in preserving secrecy or confidentiality in relation to the information or document, the Court may direct that the information or document not be adduced as evidence.

14                  Neither party has suggested that that provision does anything other than restate the general law in that regard. Section 130(3) provides that, in deciding whether to give such a direction, the Court may inform itself in any way it thinks fit. Section 130(4) provides that, without limiting the circumstances in which information or a document may be taken for the purposes of subsection (1) to relate to matters of state, the information or document is taken for the purposes of that subsection to relate to matters of state, if adducing it as evidence would:

(a) Prejudice the security, defence or international relations of Australia; or

(b) Damage relations between the Commonwealth and a State or between 2 or more States; or

(c) Prejudice the prevention, investigation or prosecution of an offence; or

(d) Prejudice the prevention or investigation of, or the conduct of proceedings for recovery of civil penalties brought with respect to, other contraventions of the law; or

(e) Disclose, or enable a person to ascertain, the existence or identity of a confidential source of information relating to the enforcement or administration of a law of the Commonwealth or a State; or

(f) Prejudice the proper functioning of the government of the Commonwealth or a State.

15                  Under s 130(5), without limiting the matters that the Court may take into account, the Court is required to take into account the following matters:

(a) The importance of the information or the document in the proceeding:

(b) If the proceeding is a criminal proceeding, whether the party seeking to adduce evidence of the information or a document is a defendant or the prosecutor;

(c) The nature of the offence, cause of action, or defence to which the information or document relates, and the nature of the subject matter of the proceeding;

(d) The likely effect of adducing evidence of the information or document, and the means available to limit its publication;

(e) Whether the substance of the information or document has already been published;

(f) If the proceeding is a criminal proceeding and the party seeking to adduce evidence of the information or document is a defendant, whether the direction is to be made subject to the condition that the prosecution be stayed.

16                  The first applicant says, in effect, that it is not open to the Court to permit evidence to be adduced that is not available to another party. In a sense, that is a curious submission, in the light of the order that I have already made, at the instigation of the first applicant, that access to the documents in question, which have been admitted into evidence in the proceeding, be limited to counsel and solicitor for the first applicant.

17                  Section 50 of the Federal Court of Australia Act 1976 (Cth) (‘the Federal Court Act’) provides that the Court may, at any time during or after the hearing of a proceeding in the Court, make such order forbidding or restricting the publication of particular evidence, or the name of a party or witness, as appears to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth. Section 23 of the Federal Court Act provides that the Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

18                  Disclosure of the contents of the affidavits and documents sought to be tendered by the Commission could clearly prejudice the administration of justice, insofar as the administration of justice includes the investigation and prosecution of criminal offences. A question may arise as to whether s 50 of the Federal Court Act, in authorising an order forbidding or restricting publication of evidence, extends to forbidding or restricting the disclosure of evidence to a party. Whether the power is to be found in s 50 or in s 23, I consider that it is open to the Court, in an appropriate case, as I have already done, to direct that access to particular evidence be limited to one party or the party’s legal advisers.

19                  The question that falls for decision involves the balancing of a series of public interests. There is a public interest in having before the Court all relevant evidence upon which any party wishes to rely, as long, of course, as the evidence is admissible (the ‘Full Evidence Interest’). There is also a public interest in ensuring procedural fairness between the parties to a proceeding, such that each party has knowledge of all of the evidence that has been admitted in the proceeding and is before the Court (the ‘Fairness Interest’). Finally, for present purposes, there is a public interest in preserving secrecy or confidentiality in relation to material, the publication of which could be prejudicial to the administration of justice including the investigation and prosecution of criminal offences (‘the Secrecy Interest’).

20                  Section 130 of the Evidence Act involves a balancing exercise between the Full Evidence Interest and the Secrecy Interest. Without anything further, in the present case, the Secrecy Interest would outweigh the Full Evidence Interest. That is to say, the disclosure of the contents of the affidavit and the documents exhibited to it, could prejudice the ongoing investigations involved in Operation Wickenby. However, if the proposed orders are made, the Full Evidence Interest would outweigh the Secrecy Interest. That is to say, if the proposed orders are made, there would be no prejudice to Operation Wickenby and the further investigation and prosecution of offences under investigation.

21                  The only persons who would have the material are those who already have access to it, plus the Court and Court officers. It has not been suggested that disclosure to the Court or to Court officers, by whom I mean my staff, will be prejudicial to the public interest. On the other hand, if the proposed orders are made, the Fairness Interest would be significantly affected. In my view, therefore, the question of whether the material should be admitted into evidence and whether the proposed order should be made involves resolution of a conflict between the Full Evidence Interest, on the one hand, and the Fairness Interest on the other hand. That is to say, does the public interest in procedural fairness in a proceeding in this Court outweigh the public interest in having before the Court relevant admissible material upon which a party wishes to rely.

22                  This proceeding is unusual insofar as the only issue in it concerns the question of whether or not legal professional privilege attaches to the documents which have been tendered and marked. I have not yet looked at those documents, although senior counsel for the first applicant has foreshadowed that he would invite me to do so on the basis that they and their contents are withheld from the respondents and their legal advisers.

23                  It would be a significant interference with the normal rules of procedural fairness for the legal advisers to the first applicant to be deprived of the opportunity of making specific submissions concerning whether or not the affidavit and exhibits intended to be relied upon by the respondents justify a conclusion that there are reasonable grounds for believing that the communications evidenced by the documents in issue were made in the furtherance of a crime, or fraud, or other impropriety. On the other hand, if it be the fact that the documents evidence communications made in the furtherance of a crime, or fraud, or other impropriety, there is a very significant public interest in the conclusion that they should not be the subject of legal professional privilege. The balancing exercise that I have to undertake is a delicate one.

24                  I consider, on balance, that the interests of justice will be best served by allowing the affidavit to be read on the basis that the orders proposed by the Commission are made in respect of the affidavit and any exhibits referred to in it. That, of course, is subject to my being satisfied that the contents of the affidavit and the documents referred to in it are otherwise admissible, according to the proper principles of evidence, in relation to any matter of fact that has to be proved and is relevant in this proceeding.

Associate:

Dated: 11 July 2006