FEDERAL COURT OF AUSTRALIA

Caratti v Commissioner of the Australian Federal Police (No 2) [2016] FCA 1132

ORDERS

THE COURT ORDERS THAT:

1.    Within 14 days the parties should confer in an endeavour to agree on the appropriate orders to give effect to the relevant findings and conclusions in the judgment, including in relation to costs.

2.    In the event that the parties reach agreement in relation to the orders to give effect to the judgment, short minutes of those orders are to be provided to the Associate to Wigney J within 14 days.

3.    In the event that the parties are unable to agree in relation to the orders to give effect to the judgment, the parties are within 21 days to each file written submissions in relation to the proposed orders, such written submissions not to exceed 5 pages (excluding the attached proposed orders). The written submissions should also indicate if a further oral hearing is requested.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WIGNEY J:

1    This matter concerns a scenario that is all too frequently encountered when search warrants are employed to facilitate the investigation of complex commercial or tax-related criminal offences. That scenario involves three potentially problematic features. The first feature is the issue and utilisation of so called “three condition” search warrants which define the object of the search in a broad, non-specific fashion. The warrants are often lengthy, overly complex and, regrettably, sometimes poorly drafted. The second feature is that the execution of the warrants is frequently, and unavoidably, carried out by teams of officers, many of whom have had little or no past involvement in the relevant investigation. The officers accordingly have little or no background knowledge or experience to assist them in the often complex and difficult task of executing the warrants. That frequently results in the execution of the warrants in a manner which is apt to create the perception, at least, that the officers do not really know what they should be searching for or seizing, and are instead simply seizing anything that looks even remotely like it might be relevant to the investigation. The third feature is that the execution of the warrants these days almost invariably involves the search and seizure of computer equipment and electronic data storage devices. That circumstances requires the executing officers, or forensic officers who are assisting them, to navigate the labyrinthine statutory provisions that deal with the search and seizure of such items.

2    The confluence of these three features often results in a judicial review challenge, by the occupier of the premises that were the subject of the warrants, or persons otherwise affected by the execution of the warrants (usually the target of the criminal investigation), to both the issue and execution of the warrants in question. Orders are generally sought for the return of the items said to have been unlawfully seized. Frequently that comprises a vast quantity of material.

3    That is what has occurred in this matter.

OVERVIEW OF FACTS, ISSUES & CONTENTIONS

4    On 23 January 2015, a member of the Australian Federal Police applied for, and a magistrate issued, search warrants pursuant to s 3E of the Crimes Act 1914 (Cth) in respect of five premises and two motor vehicles located in Western Australia. A further search warrant was applied for and issued in respect of other premises on 4 March 2015. The search warrants were applied for as part of a joint criminal investigation being undertaken by the AFP and the Australian Taxation Office. That investigation focused on the activities of Mr Allen Caratti, Mr Carrati’s de facto partner, Ms Tina Bazzo, and various companies allegedly associated with them. Those companies included Starbrake Pty Ltd, Whitby Land Company Pty Ltd, Westend Asset Pty Ltd, Mammoth Nominees Pty Ltd, Mammoth Investments Pty Ltd, Forest Hope Pty Ltd and Gucce Holdings Pty Ltd. The premises and motor vehicles covered by the search warrants included residential premises linked to Mr Caratti, business premises associated with the relevant companies, and premises associated with lawyers and advisers who had apparently been retained by Mr Caratti to provide advice in relation to the transactions the subject of the investigation.

5    The search warrants issued on 23 January 2015 were executed by members of the AFP (or “Federal Agents” as they apparently like to be called), assisted by employees of the ATO (or “tax officers” as they tend to be called), on various days between 28 and 30 January 2015. The 4 March 2015 search warrant was executed on 5 March 2015. The Federal Agents who executed the warrants seized a very large number of documents and other items, mainly computers and electronic storage devices, that they believed fell within the terms of the warrants.

6    Mr Caratti promptly commenced this proceeding against the Commissioner of the AFP, the magistrate who issued the warrants, the Commissioner of Taxation, a number of individual Federal Agents and a tax officer. He challenged both the validity of the search warrants and the lawfulness of the actions of the Federal Agents and tax officers pursuant to (or purportedly pursuant to) the warrants. The relief sought by Mr Caratti, pursuant to both the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth), included various declarations as well as orders quashing the decisions to issue the search warrants. It would be fair to say, however, that the principal relief sought by Mr Caratti was the return of the items seized under the warrants.

7    The proceedings were defended by the Commissioner of the AFP. The magistrate who issued the search warrants filed a submitting appearance. The claims against the individual officers were dropped. Mr Caratti ultimately did not press any claims for relief against the Commissioner of Taxation.

8    While Mr Carrati’s claims have at times lacked clarity and have undergone a somewhat dramatic metamorphosis over time (including during the hearing), they ultimately raised four broad categories of issues.

9    First, were the search warrants lawfully issued? Was the information before the issuing officer (the magistrate) capable of establishing the criteria or conditions for the issue of a search warrant in s 3E of the Crimes Act? Were there defects on the face of the warrants that meant that the warrants did not properly define the scope of the authorised search and seizure? Mr Caratti’s main arguments concerning the validity of the warrants related to, or arose from, what he contended were defective or deficient descriptions of the offences to which the warrants related.

10    Second, did the Federal Agents who executed the warrants, and the tax officers who assisted them, engage in conduct that was not authorised by the warrants or the relevant provisions of the Crimes Act? In particular, did they intentionally or unintentionally search for or seize items that they were not authorised to seize under the warrants? Did they otherwise act unreasonably, excessively or improperly? Mr Caratti’s basic contentions were that the executing officers and the officers assisting them did not understand (and indeed could not understand) the warrant conditions, in particular the descriptions of the offences in the third condition of the warrants, and did not seize items by reference to the warrants. Rather, they acted instead on the basis of instructions (written and oral) provided by certain tax officers which, in Mr Caratti’s submission, were based on a flawed understanding of the warrant conditions.

11    Third, were certain computers and other items of electronic equipment lawfully seized pursuant to the warrants and the specific provisions in the Crimes Act that deal with the search and seizure of such items? In particular, did the executing officers properly turn their minds to whether only the data on the equipment, as opposed to the equipment itself, fell within the terms of the warrants? Were the circumstances such that the executing officers should have copied the data on the equipment, as they were authorised to do under the relevant statutory provisions, rather than seize the equipment?

12    Fourth, if any of these questions are answered in the affirmative, with the result that some or all of the items seized under the warrants were not lawfully seized, what is the appropriate remedy? In particular, should the Commissioner of the AFP be ordered to return all unlawfully seized items to Mr Caratti? Does the Court retain the discretion to refrain from ordering the return of items found to have been unlawfully seized under a search warrant?

UNCONTROVERSIAL FACTS

13    The parties read a large number of affidavits, some of them very lengthy. They also tendered an equally large number of documentary exhibits. Most of the evidence concerned the actions of the Federal Agents and tax officers before and during the execution of the warrants. Many, if not most, of the deponents of affidavits were cross-examined, generally to little effect. At the end of the day, most of the evidence, and most of the cross-examination, was of little, if any, moment in resolving the key issues.

14    Following is a brief summary of the material facts established by evidence which was either uncontroversial or not substantially challenged. The contentious facts will be considered later in the context of the grounds of Mr Caratti’s challenge to the execution of the warrants and the seizure of specific items.

The joint investigation

15    In May 2014, the AFP and the ATO entered into an agreement, called a “Joint Agency Agreement”, to conduct a joint investigation into “suspected non-declaration of income, the deception of the ATO in order to refrain or limit the taxation paid by the CARATTI Group and the deception of the ATO in order to dishonestly obtain tax refunds”. The joint investigation was to be called “Operation Caballus” (curiously, the Latin expression for “horse”).

16    The agreement provided the following background to the investigation.

In 2008, Project CABALLUS was formed by the ATO to identify risks associated with the principal individuals of the CARATTI Group, primarily Allen CARATTI, born 24 February 1956 (CARATTI) and his de facto partner Tina BAZZO (BAZZO), born 24 February 1966. The CARATTI Group has a history of non-compliance with the ATO dating back to the 1970’s and despite the continued scrutiny of the ATO and repeated audits they continue to operate in a highly non-complaint manner.

Operation CABALLUS will investigate the CARATTI group’s involvement in false or misleading lodgement of business income tax returns and business activity statements, the non-declaration of income, the provision of forged documents, the deception of the ATO in order to refrain or limit the taxation paid by their companies and the deception of the ATO in order to dishonestly obtain refunds from the ATO.

It is estimated that the value of the alleged fraudulent activity is greater than $15 million.

17    The “mission” of Operation Caballus was said to include the investigation and prosecution of offences alleged to have been committed by members of the so-called “Caratti Group”, including Mr Caratti, Ms Bazzo and companies allegedly associated with them. Those offences were said to include forgery, contrary to s 145.1 of the Criminal Code Act 1995 (Cth), and fraud upon the ATO, contrary to various provisions in Part 7.3 of the Criminal Code. The AFP’s “primary focus” was to lead the investigation and prosecution of any Criminal Code offences. The ATO’s primary focus was to support the investigation and prosecution of those offences. It was specifically envisaged that the AFP would apply for and execute search warrants with “support” from the ATO. Federal Agent Alexander Nicholson was appointed senior investigating officer of Operation Caballus.

18    It is clear from the evidence of Federal Agent Nicholson, together with various operational documents prepared in the course of the investigation (including the Terms of Reference and Investigation Plan of Operation Caballus), that information concerning the suspected offences by Mr Caratti first emerged in the context of audits conducted by the ATO into the taxation affairs of Mr Caratti and companies allegedly owned, controlled or managed by him or Ms Bazzo. The ATO had referred that information to the AFP for the investigation of suspected serious criminal offences. The ATO was to assist the AFP in the investigation and possible prosecution of those offences. The effect of the largely unchallenged evidence of Federal Agent Nicholson was that, while there was a nexus with the ongoing or past ATO audits, the criminal investigation was not intended in any way to assist the ATO in relation to that audit activity. To the extent that the purpose of Operation Caballus included any assistance to the ATO, the assistance was to be provided to the ATO’s criminal investigation arm in respect of possible offences under the Taxation Administration Act 1953 (Cth).

19    The evidence concerning the purpose and respective roles of the AFP and ATO in pursuance of Operation Caballus was initially of some importance. That was because Mr Caratti’s challenge to the issue and execution of the warrants initially included a claim that the AFP applied for the warrants for improper and unlawful purposes. The unlawful purposes were alleged to include the sharing of “financial information” with the ATO so as to assist the ATO in issuing assessments or amended assessments to Mr Carratti, Ms Bazzo or the companies associated with them. It was also contended that any purpose of assisting the ATO to prosecute offences under the Taxation Administration Act would be unlawful. It is, however, unnecessary to consider those contentions or the evidence that was led in relation to them. That is because ultimately Mr Caratti did no pursue any claims involving the allegation of improper or unlawful purpose.

20    It would appear that of the various ATO “referrals” to the AFP, four specific groups of allegations or transactions became the main focus of the joint criminal investigation. The following summary of the four groups of allegations is based largely on the affidavit sworn in support of the search warrant application.

The Starbrake allegations

21    The first group of allegations concerned a company called Starbrake Pty Ltd. At the relevant time Mr Caratti was a director of Starbrake and beneficially owned all of its shares. In late 2004 Starbrake purchased land at 52 Callaway Street, Wangara, Western Australia. In July 2008, Starbrake granted a company called Rocla Pty Ltd a lease and exclusive licence to extract sand from the Callaway Street property. Rocla allegedly paid Starbrake $7,700,000 (inclusive of GST of $700,000) as either a royalty payment, payment for the grant of the licence, or as a prepayment for sand to be extracted from the land.

22    On 17 October 2008 Starbrake lodged a Business Activity Statement (BAS) for the purposes of A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act). The BAS was referrable to the period 1 July 2008 to 30 September 2008. Starbrake did not declare, or otherwise bring to account in the BAS, the $700,000 portion of the payment received by it which represented the GST collected in relation to its supply of the licence (or extracted sand) to Rocla.

23    In February 2012 Starbrake lodged its income tax return for the year ending 30 June 2009. The income declared or disclosed in the return did not include the $7,000,000 payment (excluding GST) received from Rocla.

24    The ATO conducted an audit of Starbrake. In the course of that audit, the ATO ascertained that Starbrake’s general ledger recorded the $7,700,000 receipt by Starbrake as a loan from Mammoth Nominees Pty Ltd. Mr Caratti was a director and sectary of Mammoth Nominees. The registered office of Mammoth Nominees was Mr Caratti’s home address. The ATO also obtained copies of emails sent to and received by Mr Joseph Catenacci, an accountant or tax agent who appears to have been retained by Starbrake. Those emails suggested that the accounting classification of the $7,700,000 receipt by Starbrake was changed in about December 2011. It was originally classified as income, however in December 2011 Mr Catenacci was allegedly instructed to classify the receipt as a loan from Mammoth Nominees.

25    The allegation being investigated was that Mr Caratti, as sole director of Starbrake, directed the reclassification of the receipt from Rocla so as to obtain a financial benefit. That financial benefit was said to be the understatement of Starbrake’s income for the year ending 30 June 2009, as well as the non-remittance to the ATO of the GST collected by Starbrake (the GST portion of the payment) in relation to its supply to Rocla. That remittance should have been included as part of the BAS for the quarter ending 30 September 2008.

The Westend allegations

26    The second group of allegations concerned a company called Westend Asset Pty Ltd. The sole director of Westend was Ms Bazzo’s mother, Ms Josephine Bazzo. Beyond that somewhat indirect connection, there was apparently no evidence to suggest that Mr Caratti had any direct or indirect interest in Westend. Despite this, it appears that the AFP alleged that Westend was controlled by Mr Caratti.

27    In 2002, Westend purchased land in Darch, Western Australia, for the purposes of undertaking a residential housing development. It would appear that the land cost somewhere in the order of $7,600,000. The residential development became known as the Ashdale Mews Estate development. The development apparently proceeded and in due course Westend sold the developed parcels of land. Those sales were said to have occurred between September 2003 and December 2008.

28    The ATO commenced an audit of Westend in 2009. In the course of that audit it was ascertained that Westend had not reported or declared the land sales as part of its business operations for tax purposes. It had not declared any before tax profits made from its sales of the developed land.

29    In the course of the audit, Westend provided the ATO with copies of tax invoices from Mammoth Nominees addressed to Westend for work supposedly carried out in relation to the development. Those tax invoices totalled $5,400,000. Presumably the invoices were provided for the purpose of demonstrating that the expenses reflected in the invoices reduced any pre-tax profit made by Westend from the development.

30    During an interview conducted by the ATO in January 2010, Mr Caratti and his tax agent, Mr Hendricus Schokker, told the ATO that the development work reflected in the invoices was in fact carried out by a company called Mammoth Investments Pty Ltd, supposedly on behalf of Mammoth Nominees. Mr Caratti and various members of his family were directors of Mammoth Investments.

31    The allegation being investigated as part of operation Caballus was that the invoices totalling $5,400,000 were false. An analysis conducted by the ATO from financial records and other information revealed that the cost of any work carried out by Mammoth Investments totalled just over $2,000,000; that Westend never paid Mammoth Investments (or Mammoth Nominees) $5,400,000 in respect of any works, but that the invoices were nevertheless treated as a loan expense; and that the invoices were created in June 2009, after the ATO’s audit had commenced. Mr Caratti’s brother, Mr John Caratti, told the ATO in the course of an interview that the invoices were false and were created by Mr Caratti.

32    It was alleged, in short, that Mr Caratti created the false invoices to inflate Westend’s expenses in relation to the development and therefore reduce any tax liability in respect of profits earned by Westend from the development.

Whitby Land Company allegations

33    The third group of allegations concerned a company called Whitby Land Company Pty Ltd. Mr Caratti was a director of Whitby Land Company.

34    In January 2008, Whitby Land Company acquired land at 293 Nicholson Road, Forrestdale, Western Australia. It would appear that Whitby Land Company subdivided and developed the Nicholson Road land into residential lots. The lots were subsequently sold for a total amount of about $24,000,000. Those sales appear to have occurred during 2011 and 2012.

35    Despite its involvement in the enterprise responsible for the development and sale of the Nicholson Road land, Whitby Land Company was never registered under the GST Act. It follows that it never reported or remitted any GST payable and collected by it in respect of its supply of the developed lots. The ATO assessed Whitby Land Company’s GST liability as being in the order of $1.5 million.

36    The allegation being investigated was that Mr Caratti, as a director of Whitby Land Company, deliberately failed to register Whitby Land Company for GST and deliberately failed to remit the GST portion of the consideration it received from the land sales.

The Gucce Holdings allegations

37    The fourth group of allegations concerned two companies: Gucce Holdings Pty Ltd and Forest Hope Pty Ltd. Ms Bazzo was a director of both companies. Mr Caratti had been a director of Gucce Holdings, though at a time well before the events the subject of the relevant allegations. He was a director of Forest Hope up to a time just before the most significant events the subject of the investigation.

38    In December 2009, Gucce Holdings and Forrest Hope entered into a joint venture agreement in relation to the subdivision of land in Avery, Western Australia. Gucce had a 50% interest in that land.

39    Gucce Holdings retained Mammoth Nominees to do civil and earth works in relation to the subdivision. Mammoth Nominees issued forty invoices to Gucce Holdings and Forest Hope in relation to the works. The invoices totalled $15,040,672.14, including GST of $1,367,344. Each of the invoices was signed-off by an independent site supervisor. Between August 2011 and December 2012, Gucce Holdings paid $14,153,499.33 to Mammoth in respect of the work.

40    In May 2013, the ATO commenced an audit of Gucce Holdings. During the audit it was ascertained that Gucce Holdings had claimed input tax credits under the GST Act in respect of the works carried out by Mammoth Nominees. The input tax credits claimed by Gucce Holdings totalled $2,218,953.22. In simple terms, the amount of the input tax credits to which Gucce Holdings was legitimately entitled to claim equalled the amount of the GST it paid in respect of Mammoth Nominee’s supplies: see s 11-25 and s 17-5 of the GST Act. It appeared that Gucce Holdings had claimed more input tax credits than it was legitimately able to claim.

41    In the course of the audit, Gucce Holdings endeavoured to support its entitlement to claim input tax credits referable to the supplies by Mammoth Nominees by providing detailed information, including invoices, suggesting that Gucce had in fact paid $22,847,181 to Mammoth Nominees for the works. That was a considerably larger amount than the amount reflected in the 40 invoices signed off by the independent site supervisor.

42    The allegation being investigated was that Mr Caratti and Ms Bazzo colluded to overstate the input tax credits which Gucce was entitled to claim and created false invoices to substantiate that claim.

The search warrants

43    In January 2015, Federal Agent Nicholson decided that the criminal investigation of the four groups of allegations would be advanced if search warrants were obtained and executed in respect of premises associated with Mr Caratti, Ms Bazzo, the relevant companies and their advisers. Those premises were:

    44 – 48 Wickham Street, East Perth, being the registered business address of Gucce Holdings and Mammoth Nominees;

    2 Duncraig Road, Applecross, Western Australia, being Mr Caratti’s residential premises and the registered office of Whitby Land Company;

    7 Cornish Turn, Baldivis, Western Australia, being the residential address of Mr Schokker, Mr Caratti’s accountant or tax adviser;

    517 Great Eastern Highway, Redcliffe, Western Australia, being the registered business address of Mammoth Investments;

    3/14-16 Irvin Street, Perth, Western Australia, being the officers of a firm of solicitors that acted for Starbrake in relation to the purchase of the Calloway Street property;

    Unit 4B/176 Main Street, Osborne Park, Western Australia, being the officers of Mr Catanecci, the accountant or tax agent that provided accounting services for Starbrake; and

    Two motor vehicles apparently associated with Mr Caratti and Ms Bazzo.

44    Federal Agent Nicholson told the AFP case officer for Operation Caballus, Federal Agent Szolnoki, of the decision to apply for search warrants. Federal Agent Szolnoki in due course swore an affidavit for the purposes of the application. That affidavit was sworn on 23 January 2015. Federal Agent Szolnoki’s evidence was that a draft of the affidavit was provided to Perth Magistrates Court on 22 January 2015. The magistrate issued and signed search warrants in respect of each of the premises on 27 January 2015.

45    The content of Federal Agent Szolnoki’s affidavit is of some considerable significance. That is because one of Mr Caratt’s grounds of challenge to the search warrant is that the search permitted by the warrants exceeded what was justified by the material that was before the magistrate. As will be seen, the main basis for that argument was that the offences specified in the search warrants were, in Mr Caratti’s submission, broader than justified by the information in the affidavit.

46    The search warrants the subject of the application were so-called “three condition” warrants. A three condition warrant is a warrant drafted in such a way that the “evidential material” to be searched for and seized is defined by way of three conditions, each of which must be met. The first condition is usually that the evidential material comprises “things” which are items of a particular description, such as a type of document or other item, such as a computer, mobile phone or hard-drive. The second condition is ordinarily that the “things” relate to particular persons or companies. The third and perhaps most important condition is that there are reasonable grounds for suspecting that the “things” will afford evidence as to the commission of particular offences specified in the warrant.

47    In his affidavit, Federal Agent Szolnoki deposed that he suspected “and an issuing officer may be properly satisfied” that evidential material which satisfied three conditions would be at the relevant premises. The three conditions referred to in the affidavit were the three conditions specified in the warrants that were the subject of the application. The warrants (including the three conditions) are extracted in full later in these reasons.

48    The affidavit then detailed information concerning each of the four groups of allegations that have just been summarised. Federal Agent Szolnoki deposed that the information had been obtained by him and other AFP officers in the course of their duties and that he believed it to be true and correct.

49    After setting out the information relating to the four groups of allegations, Federal Agent Szolnoki deposed as follows:

I suspect that the things described above will provide evidence of the following:

That Allen CARATTI, as sole director of STARBRAKE, reclassified income received by STARBRAKE, as a loan, in order to avoid paying lawful taxation, which resulted in him dishonestly obtaining a financial benefit from a Commonwealth entity, namely the Australian Tax Office.

That Allen CARATTI and Hank SCHOKKER, through the entity WESTEND, engaged in criminal activity, by falsifying costs incurred by WESTEND, in order to avoid paying lawful taxation, attempting to dishonestly obtain a financial benefit from a Commonwealth entity, namely the Australian Tax Office.

That Allen CARATTI, as director of WHITBY, deliberately withheld Goods and Service Tax payable to a Commonwealth entity, namely the Australian Tax Office, in order to dishonestly obtain a financial advantage, by failing to meet taxation obligations.

That Allen CARATTI and Tina BAZZO through their controlled entities MAMMOTH and GUCCE, formed an agreement to created false invoices, in order to attempt to claim Goods and Services Tax Credits, from a Commonwealth entity, namely the Australian Tax Office, in order to dishonestly obtain a financial benefit.

50    On 20 February 2015, Federal Agent Nicholson decided that a further search warrant should be applied for in respect of premises at 5 Wright Road, Harrisdale Western Australia. That task was allocated to Federal Agent van Tooren, who in due course swore an affidavit for the purposes of the application. That affidavit, which was sworn on 4 March 2015, annexed the affidavit earlier sworn by Federal Agent Szolnoki. It also contained additional information linking the premises at 5 Wright Road Harrisdale to Mr Caratti, Ms Bazzo and companies associated with them.

51    Each of the warrants issued by the magistrate was in relevantly the same terms. There are some differences in the list of persons or companies referred to in the second condition, though those differences ultimately do not bear in any material way on the issues raised by Mr Caratti in relation to either the validity of the warrants or the lawfulness of the search and seizure at particular premises. It is sufficient to set out, by way of example, the main operative parts of the warrant (omitting the notes concerning legal professional privilege and the statutory definitions of expressions such as “evidential material”) that was issued in relation to Mr Caratti’s residential premises.

COMMONWEALTH OF AUSTRALIA

CRIMES ACT 1914: Section 3E

SEARCH WARRANT FOR PREMISES

TO: Gary Geza Stephen SZOLNOKI

a constable within the meaning of the Crimes Act 1914, who is the executing officer in relation to this warrant;

AND TO any other constable whose name may be written on this warrant in accordance with section 3C(1) of the Crimes Act 1914, in which event that constable shall be the executing officer in relation to this warrant:

WHEREAS I Kevin M. Tavener, an issuing officer within the meaning of the Crimes Act 1914, am satisfied by information on oath within the meaning of the Crimes Act 1914 that there are reasonable grounds for suspecting that there is) at premises located at:

2 Duncraig Road, Applecross, Western Australia 6153, further described as a large residential house.

evidential material, as defined in the Crimes Act 1914, which satisfies ALL of the following THREE conditions, namely:

FIRST CONDITION

things which are:

•    Personal or laptop computers and peripheral devices;

•    Mobile telephones, Subscriber Identity Module (SIM) Cards, computer hard drives and equipment, faxes or any other electronic storage medium;

•    Identification documents; and

•    Emails, email addresses, user names and passwords.

originals or copies of any one or more of the following, including any of them which are stored on a computer, or on a computer storage device, or on any other type of storage medium or storage device:

•    Business records including general correspondence, invoice books, receipts, purchase orders, confirmation of orders, balance sheets, journals, ledgers, cash books, cash payment books, books of accounts, contracts, agreements, diaries, notes including handwritten notes, facsimile communications, address books, working papers, price lists, quotations, orders, invoices, commercial invoices, tax invoices, business cards, payment records, purchase records, sales records, sales orders, catalogues, delivery dockets, accounts payable, accounts receivable, minutes, telephone records, desk calendars and blotters, single transaction permissions, continuing permissions, computer files or records, electronic mail records and other records;

•    Banking and other financial institution records including bank statements, bank books, deposit books, bank vouchers, deposit and withdrawal slips, cheque books, cheque butts, or other correspondence with financial institutions;

•    Taxation records, including documents concerning the preparation and completion of business activity statements and taxation returns;

•    Notebooks, diaries, telephone numbers, handwritten notes;

•    Conveyancing files, including but not limited to contracts of sale, copies of payments, file notes, correspondence with vendor and purchaser, invoices and receipts detailing payments into solicitors trust accounts;

•    Trust documents and deeds;

•    Trust files; and

•    Land title documents.

SECOND CONDITION

and which relate to any one or more of the following:

•    Allen Bruce CARATTI;

•    Tina Michelle BAZZO;

•    Christina Marcia CARATTI;

•    Liang Ll;

•    Josephine Lynette BAZZO;

•    Rocla Pty Ltd;

•    Mammoth Nominees Pty Ltd ACN 101 717 177;

•    Mammoth Investments Pty Ltd ACN 008 735 797;

•    Joseph Catenacci Pty Ltd ACN 009 025 405;

•    Joseph CATENACCI;

•    Nicholas CHANDLER;

•    Stuart MACKINNON;

•    Andy LIU;

•    Nancy MUSGRAVE;

•    Ewing Consulting Engineers Pty Ltd;

•    Isaac Meyer ELLISON;

•    Henricus (Hank) SCHOKKER;

•    Bendigo Bank account number: [NUMBER REDACTED];

•    Bendigo Bank account number: [NUMBER REDACTED] ;

•    National Australia Bank;

•    Suncorp Metway Bank;

•    Bank of Western Australia (Bank West);

•    Gucce Holdings Pty Ltd ACN 099 191 714;

•    Whitby Land Company Pty Ltd ACN 115 233 193;

•    Westend Asset Pty Ltd ACN 106 132 790;

•    Forrest Hope Pty Ltd ACN 122 459 554;

•    Starbrake Pty Ltd ACN 107 942 058;

•    Ashford Taxation;

•    Clayton Utz Commercial Law Firm;

•    Herbert Smith Freehills;

•    Wilson and Atkinson Law Firm;

•    I.M.E Nominees Pty Ltd;

•    allen@mammothgroup.com.au;

•    Gucce Group;

•    Admin4@mammothgroup.com.au;

•    catenacci@bigpond.com.au;

•    lsaac@guccegroup.com.au;

•    Nicholas CHANDLER;

•    Dfts99@gmail.com;

•    [PHONE NUMBER REDACTED]

•    [PHONE NUMBER REDACTED];

•    Lot 3, Diagram 15871, Certificate of Title Volume 1267, Folio 569;

•    Lot 9029 Broadway, Aveley Western Australia 6069;

•    SLS Accounting;

•    293 Nicholson Road, Forrestdale Western Australia 6112; and

•    52 Callaway Street, Wangara, Western Australia 6065.

THIRD CONDITION

and as to which there are reasonable grounds for suspecting that they will afford evidence as to the commission of the following indictable offence(s) against the laws of the Commonwealth:

In 2008 at Perth in Western Australia, Allen CARATTI by a deception, in that he reclassified royalty income paid to Starbrake Pty Ltd into a loan from Mammoth Nominees Pty Ltd, dishonestly obtained a financial advantage by not paying income tax, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Section 134.2(1) of the Criminal Code 1995 (Cth).

In 2008 at Perth in Western Australia, Allen CARATTI did fail to pass on Goods and Services Tax collected by Starbrake Pty Ltd to the Australian Taxation Office, with the intention of dishonestly causing a loss to another person, namely Australian Taxation Office, which is a Commonwealth entity, contrary to Section 135.1(3) of the Criminal Code 1995 (Cth).

In 2008 at Perth in Western Australia, Allen CARATTI by a deception, in that he falsified costs incurred by Westend Asset Ply Ltd, attempted to dishonestly obtain a financial advantage by not paying income tax, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Sections 11.1 and 134.2(1) of the Criminal Code 1995 (Cth).

Between 1 July 2010 and 31 December 2013 at Perth in Western Australia, Allen CARATTI by a deception, in that he caused the Whitby Land Company Pty Ltd to withhold Goods and Services Tax, dishonestly obtained a financial advantage from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Section 134.2(1) of the Criminal Code 1995 (Cth).

In December 2011 at Perth in Western Australia, Allen CARATTI and Tina BAZZO, by a deception, in that they falsified costs incurred by Gucce Holdings Pty Ltd, attempted to dishonestly obtain a financial advantage by overstating Goods and Services Tax input credits, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Sections 11.1 and 134.2(1) of the Criminal Code 1995 (Cth).

Together with any storage medium or storage device which contains any of the above things and any manual, instruction, password or other thing which is needed to gain access to or interpret or decode any of the above things.

I HEREBY issue this warrant which authorises you to enter and search the premises described above.

AND by virtue of section 3F(1) of the Crimes Act 1914 this warrant authorises the executing officer or a constable assisting to do all of the following;

-enter the premises described above;

-search for and record fingerprints found at the premises and to take samples of things found at the premises for forensic purposes;

-search the premises for any evidential material that satisfies ALL of the THREE conditions specified above and to seize any such evidential material that may be found;

-seize any other thing found at the premises in the course of the search that the executing officer or the constable assisting believes on reasonable grounds to be:

(i)    evidential material in relation to an offence to which the warrant relates;

(ii)    evidential material in relation to another offence that is an indictable offence; or

(iii)    evidential material (within the meaning of the Proceeds of Crime Act 2002) or tainted property (within the meaning of that Act).

if the executing officer or the constable assisting believes on reasonable grounds that seizure of the thing is necessary to prevent its concealment, loss or destruction or its use in committing an offence; and

-seize any other thing found at the premises in the course of the search that the executing officer or the constable assisting believes on reasonable grounds to be a seizable item, in that it is a thing that would present a danger to a person or that could be used to assist a person to escape from lawful custody.

AND THIS WARRANT AUTHORISES the executing officer or a constable assisting to conduct an ordinary search and a frisk search of any person who is at or near the premises when this warrant is executed if the executing officer or the constable suspects on reasonable grounds that the person has in his or her possession evidential material or any seizable item, in that it is a thing that would present a danger to a person or that could be used to assist a person to escape from lawful custody, and to seize any such evidential material or other thing that may be found;]

Note that, by virtue of section 3ZR of the Crimes Act 1914, an ordinary search or a frisk search of a person under this warrant must, if practicable, be conducted by a person of the same sex as the person being searched.

AND, by virtue of section 3G of the Crimes Act 1914, in executing this warrant:

-    the executing officer may obtain such assistance as is necessary and reasonable in the circumstances;

-    the executing officer, and any constable assisting in the execution of this warrant who is a police officer, may use such force against persons or things as is necessary and reasonable in the circumstances; and

-    any person who has been authorised by the executing officer to assist in the execution of this warrant, but who is not a police officer, may use such force against things as is necessary and reasonable in the circumstances;

AND the executing officer or a constable assisting may exercise such other of the powers available under Division 2 of Part 1AA of that Act as are appropriate in the circumstances of the case;

AND if you exercise the power under section 3L(4) of the Crimes Act 1914 to secure electronic equipment on the premises, and if you then leave the premises, this warrant authorises a further entry to the premises to allow an expert to operate the equipment, provided that the further entry is made within 24 hours or that period is extended under section 3L(7) of that Act.

The offences to which this warrant relates are those specified above in the third condition.

(Personal identification details redacted where indicated)

52    A number of matters may be noted concerning the content of the warrants. First, the first condition is drafted in extremely broad terms. It would encompass most electronic devices capable of storing documents or data in electronic form and almost every conceivable type of document. It would include, for example, any document which could be considered to be a business record, taxation record, notebook, diary, handwritten note or banking record. The documents and other things that are listed in the first condition are not limited or restricted by reference to any period of time. That is not to say that the first condition is necessarily impermissibly wide or oppressive: cf. Propend Finance Pty Ltd v Commissioner Australian Federal Police (1994) 35 ALD 25 at 31-33. The first condition must be read together with the other two conditions. The point is that, in practical terms, the first condition contains no effective limit on the types of documents or other items that could be searched for or seized pursuant to the warrant.

53    Second, the second condition is also in very broad terms. It comprises a very long list of not only persons and companies, but also bank accounts, email addresses and telephone numbers. It is sufficient that the “thing” to be searched for and seized “relate to” any one or more of the persons, companies or other things included in the list. The words “relate to” in that context are of potentially very wide import: see Williams v Keelty (2001) 111 FCR 175 at 211-212 [158]. The result is that, like the first condition, the second condition does not significantly define or confine the types of documents or items that can be searched for and seized pursuant to the warrant.

54    Third, given the apparent breadth of the first two conditions, it is really the third condition that does most of the work in terms of properly defining and confining the scope of the search and seizure pursuant to the warrant. But for the third condition, the warrants would effectively authorise the seizure of just about any document, and just about any electronic device capable of storing files and data, that was likely to be located in the relevant premises.

55    Federal Agent Nicholson’s evidence was that the offences listed in the third condition accurately represented the allegations being investigated in respect of the conduct of Mr Caratti and Ms Bazzo. He expressed the view that the descriptions of the offences were sufficiently specific to restrict the search and seizure under the warrants to the matters under investigation. The main thrust of Mr Caratti’s challenge to the validity of the warrants was that, contrary to Federal Agent Nicholson’s view, the offences described in the third condition were so poorly drafted that they were not capable of properly defining or confining the scope of the search and seizure authorised by the warrants. In Mr Caratti’s submission, the warrants therefore created no “intelligible search perimeter”, or such perimeter as was created was broader than was justified or warranted by the information that was put before the issuing magistrate. Mr Caratti also contended that the poor drafting of the offences in the third condition of the warrants contributed to confusion and difficulties encountered by the Federal Agents and tax officers who were involved in the execution of the warrants.

The execution of the warrants

56    Most of the contentious evidence related to what was allegedly said or done by certain Federal Agents and tax officers in preparation for, or in the course of, the execution of the warrants. There was, however, no dispute about the basic facts and chronology concerning the execution of the warrants. Following is a brief summary of some of the basic facts, though it does not purport to be comprehensive. The affidavits filed by the parties contained excruciating, and in many respects largely unnecessary, detail in relation to the execution of the warrants. Most of the detail turned out to be largely irrelevant to the issues and contentions ultimately pursued by Mr Caratti.

57    Prior to the execution of the warrants, Federal Agent Nicholson decided that it would be beneficial to have tax officers who had some knowledge of the business and tax affairs of Mr Caratti, Ms Bazzo and their business interests to be present during the execution of the warrants. Federal Agent Nicholson believed that tax officers with that knowledge would be able to provide assistance to the executing officers in ascertaining what documents were covered by the three conditions in the warrant. He intended that the tax officers would be present under the direction and control of the executing officers and other Federal Agents who were involved in the execution of the warrants.

58    While that may have been Federal Agent Nicholson’s intention and belief, Mr Caratti contended that in reality the executing officers and Federal Agents needed to and did defer to the tax officers during the execution of the warrants, at least when it came to deciding whether or not a document could or should be seized. He contended that it was probable, or there was at least a substantial risk, that the Federal Agents involved in the execution of the warrants simply accepted the advice of the tax officers and did not turn their minds to whether documents fell within the terms of the warrants. That extensive reliance on the tax officers was said to be one aspect of the excessive and improper execution of the warrants.

59    On 22 January 2015, Federal Agent Nicholson distributed a draft Standard Tactical Plan to Federal Agents who were rostered to participate in the execution of the search warrants. That document relevantly contained background information concerning Mr Caratti and Ms Bazzo and summarised the four groups of allegations or transactions (the Starbrake, Westend, Whitby Land and Gucce Holdings allegations) in terms similar to, though shorter than, the search warrant affidavit. It also included details of the “substantive offences” in terms relevantly identical to the terms of the third condition of the warrants. The draft Standard Tactical Plan was emailed to some tax officers. It also appears to have been discussed at a meeting between the tax officers who were to assist in the execution of the warrants. That meeting, which was arranged by Mr Eastaugh of the ATO, was held on 22 January 2015.

60    On 27 January 2015, Federal Agent Nicholson delivered a briefing to the Federal Agents and tax officers who were expected to be involved in the execution of the warrants. The briefing utilised a “PowerPoint” presentation. Much of the briefing concerned administrative and logistical arrangements. There was, however, some attention given to the allegations and suspected offences. That was no doubt because Federal Agent Nicholson was well aware that many of the Federal Agents and tax officers who were to be involved in the execution of the warrants had no previous knowledge of or involvement in the investigation concerning Mr Caratti and Ms Bazzo. Federal Agent Nicholson asked a tax officer who had been involved in the ATO audits, Mr Peter Irvin, to provide some “background information” derived from the audit activity to those present at the briefing. It would appear, however, that the treatment of the alleged offences at the briefing was fairly cursory. The PowerPoint slides provided the following information concerning the allegations.

STARBRAKE:

•    A company owned by A. CARATTI

•    Granted Rocla Pty Ltd (ROCLA) a lease and exclusive licence to carry out extraction of sand on land located at Wangara, WA

•    ROCLA made payment of $7.7 million to STARBRAKE ($7,000,000 royalty and $700,000 GST)

•    STARBRAKE reclassified the payment in its books to show a loan from Mammoth Nominees Pty Ltd (MAMMOTH) - A.CARATTI's primary company.

FORRREST HOPE:

•    FORREST HOPE is a registered company in Australia; BAZZO is recorded as a co-director.

•    Part owned by GUCCE P/L which is BAZZO's primary company

•    FORREST HOPE set up for a land development in Aveley, WA. GUCCE on behalf of FH engaged MAMMOTH to do development works

•    GUCCE and MAMMOTH overstated costs to support GUCCE claiming GST input credits

WESTEND:

•    WESTEND relates to a property development in Darch, WA (historical 2003)

•    Legitimate work was completed on the WESTEND development totalling approximately $2,000,000

•    WESTEND subsequently attempted to claim works for taxation purposes totalling $5,400,000

WHITBY:

•    Current land development in Armadale, Perth

•    At 31 December 2013, total sales identified for WHITBY were valued at $96,279,500

•    There is an existing GST debt of about $4,600,000

•    No taxes (GST or income tax) with respect to WHITBY have been paid by A. CARATTI or associated entities.

61    The oral briefing did not appear to add much of significance to the information in the slides. No witness was able to recount any information of significance in relation to the alleged offences that was imparted during the briefing.

62    There were apparently also “premises-specific” briefings conducted by certain “Team Leaders” prior to the execution of the warrants at some of the premises. It does not appear, however, that those briefings dealt in any substantive way with the offences in the third condition of the warrants. In that regard, the evidence suggested that the team leaders did little more than read out the third condition offences and, perhaps, emphasise that only documents that satisfied the warrant conditions could be seized.

63    Mr Caratti contended that such briefings as were given by Federal Agents and tax officers in relation to the execution of the warrants were insufficient and provided a “distorted” picture of the allegations. That was said to be another aspect of the excessive and improper execution of the warrants. The evidence said to support those contentions is addressed later.

Execution at the Wickham Street premises

64    The warrant in respect of the premises at Wickham Street was executed over three days on 28, 29 and 30 January 2015. It appears to have been the main warrant and the most complex search. It certainly took the longest to execute and involved the largest number of people assisting. Mr Caratti’s case concerning excessive or improper execution mainly focused on events that occurred during the execution of the warrant at the Wickham Street premises.

65    The search warrant in respect of the Wickham Street premises was “signed-over” to Federal Agent Niranjan Jirasinha: which meant that Federal Agent Szolnoki, who was initially named as the executing officer in that warrant, wrote Federal Agent Jirasinha’s name on the warrant as the executing officer. That process is permitted, or at least envisaged by, the definition of “executing officer” in s 3C of the Crimes Act.

66    More than 25 Federal Agents were involved at various times in the execution of the warrant at the Wickham Street premises. Those that featured in the evidence included Federal Agents Wealands, Johnson, Joss, Fullerton, Rae, Leigh, Pluss and Mills. Two employees of the AFP who specialised in computer forensics, Mr Keith Fell and Ms Casey Scott, assisted in respect of the search of computers and computer equipment and the copying of computer data.

67    A large number of tax officers also assisted in some way with the execution of the Wickham Street warrant. Despite some initial suggestions to the contrary, it ultimately appeared to be accepted by Mr Caratti that the tax officers were authorised to assist in executing the warrant and were therefore “constables assisting” for the purposes of Part IAA of the Crimes Act: see the definition of “constable assisting” in s 3C of the Crimes Act. It would appear that upwards of 30 tax officers were involved in assisting in the execution of the Wickham Street premises. The main tax officers who featured in the evidence included Mr Irvin, Ms Amanda Milner, Mr Michael Crawshaw, Ms Melissa Randhas, Mr Michael Dunstan, Ms Ingrid Simon and Mr Dave Koopu. Up to 8 employees of the ATO who appeared to specialise in computer forensics also assisted. They included Mr Steve Ilett, Mr Mohammed Khan, Mr Chris Andrews and Mr Octavian Grigore.

68    The involvement of Mr Irvin and, perhaps to a lesser extent, Ms Milner, in the execution of the warrant at the Wickham Street premises was important to Mr Caratti’s case that the warrant was executed improperly. Mr Caratti contended that Mr Irvin was effectively the “team leader” in relation to the execution of the warrant at the Wickham Street premises. That was said to follow from the fact that he was apparently the person who possessed the most knowledge about the business and tax affairs of Mr Caratti, Ms Bazzo and their associated companies. He was a senior auditor at the ATO and plainly had an extensive involvement with and knowledge of the ATO audit of Mr Caratti and companies associated with him.

69    Mr Caratti claimed that Federal Agent Jirasinha and the other constables assisting who were involved in the execution of the warrant at the Wickham Street premises invariably accepted and deferred to the advice of Mr Irvin. Mr Caratti also contended that Federal Agents and tax officers involved in the execution also accepted, or at least had regard to, advice provided by Ms Milner and, perhaps to a lesser extent, Mr Crawshaw and Ms Ramdhas. It followed, so Mr Caratti submitted, that Federal Agent Jirasinha and the constables assisting did not (or at least probably did not) turn their minds to the terms of the search warrant when deciding what documents to seize. Rather, they treated Mr Irvin’s advice (and to a lesser extent the advice of Ms Milner, Mr Crawshaw and Ms Ramdhas) as a direction to seize. The evidence said to support that contention is addressed later.

70    Importantly (at least for Mr Caratti’s case), the evidence revealed that Mr Irvin created a document that was, according to Mr Irvin, intended to assist searchers by informing them of some of the background to the allegations that were the subject of the warrant. Curiously, and perhaps regrettably, it appears that he created that document without having read the search warrant, or at least without having read it in any great detail. Mr Irvin provided the document to Federal Agent Szolnoki who approved it for distribution to those who assisted in the execution of the warrant. The document was distributed to at least some of the officers who assisted in the execution of the warrant at the Wickham Street premises. Some reliance appears to have been placed upon it by those who were engaged in the search of those premises. The extent of that reliance is important. The evidence concerning that issue is dealt with later in the context of Mr Caratti’s challenge to the execution of the warrants.

71    The content of the so-called “Search Relevances” document prepared by Mr Irvin and distributed to those responsible for the execution of the Wickham Street premises was of some relevance to Mr Caratti’s case that the search and seizure at those premises was excessive and outside the terms of the warrant. He contended that the document was misleading and confusing and expanded the scope of the search and seizure beyond the terms of the warrant. It is accordingly necessary to set out the terms of the document in full.

1.    Whitby (Whitby Land Company Pty Ltd & Whitby Trust)

•    Subdivision of land known as Lot 22 Nicholson Road, aka 293 Nicholson Road, Jandakot/Canning Vale/Piara Waters.

•    Previous owner was Maria Jabado.

•    Purchaser was Whitby Land Company Pty Ltd in Nov-2007; $28M

•    May be a bare trust deed, indicating land held for benefit or MN

•    Client also maintained land held on trust for The Whitby Turst

•    In-house contractor was Mammoth Nominees Pty Ltd. (MN).

•    Ewing/VDM/BCA involved in contract design & administration

•    Development finance with Suncorp (>$100M), but loan in name of MN.

•    Loan drawdowns go to MN.

•    $150M subdivision, marketed as “Riva Estate”.

•    Client refers to it as “Riva” or “Lot 22 Piara Waters” or “293 Nicholson”

•    Development expenses all went to intercompany loan account, as liability owed to MN.

Sales began in 2011

2.    Westend (Westend Asset Pty Ltd)

•    Subdivision of 3 adjacent blocks known as

Lot 1 Skeit Rd Landsdale,

Lot 27 Landsdale Rd Darch, &

Lot 28 Landsdale Rd Darch.

•    Sole Director was Josephine Bazzo (Tina’s mother), but most decisions made by Allen Caratti & Tina Bazzo

•    Estate called “Ashdale Mews”, in Darch.

•    Land acquired in 2003/2004

•    Initial contractor was Mammoth Investments Pty Ltd (MI), who only removed topsoil.

•    Outside contractor Works Infrastructure (WI) was engaged to complete the job

•    Ewing/VDM engaged as supervising engineers; approved progress claims

•    WI submitted progress claims to Ewing for approval

•    MI submitted much higher progress claims to Westend Asset (bypassed Ewing)

•    Hermans & Rossi engged to build footpaths and bin pads

•    Development finance with Suncorp, in name of Westend Asset

•    Loan drawdowns go to Mammoth Nominees (MN)

•    Real development expenses to outsiders, paid by MI

•    MI development expenses went to Westend intercompany loan account as $7M owed to MI.

•    Loan drawdowns went to Westend intercompany loan account as $7.1M owed by MN

•    Planner was Gene Koltasz from RPS Koltasz Smith; involved in tenders and costings for Allen Caratti on this development

•    Sales began in 2005

•    After bank loan paid off, settlements disbursed to MN.

3.    Starbrake (Starbrake Pty Ltd, Starbrake Trust Pty Ltd, I.M.E. Nominees Pty Ltd)

•    Subject land is Lot 3 Calloway St, Wangara

•    Starbrake Pty Ltd acquired the land in Dec-2004

•    Starbrake signed a lease with Rocla Pty Ltd, whereby Rocla were granted exclusive licence to carry out operations on the land, to mine sand.

•    Rocla agreed to pay a Royalty of $7M exclusive of GST, by 1 July 2008 as part of the lease

•    Starbrake issued a Tax Invoice to Rocla for $7.7M inclusive of GST, dated 01/07/2008

•    Rocla paid $7.7M on 01/07/2008

•    03/07/2008 Starbrake transferred $7.2M to [M]ammoth Nominees

•    Starbrake GL treats Royalty payment as Contract Income, in a GL Summary titled “Starbrake Trust Pty Ltd”

•    Starbrake initially recorded a “distribution” of $6,479,740 to Mammoth Nominees (MN)

•    After a query from Nick Ashford (employees at tax agent Joseph Catenacci) on 24 Nov-2011, Mr Ashford reclassified $7.7M as a loan from MN.

•    On 20 Dec-2011, Mr Catenacci e-mailed Andy Liu confirming the tax invoice had now been treated as a loan account entry, so no profit to distribute.

•    Starbrake lodged 2009 ITR; omitting the Royalty income, and lodged Sep-2008 BAS; omitting the $700,000 GST payable.

•    On 16 Jan-2012, Allen Caratti wrote to Joseph Catenacci, advising the $7.7M should have been treated as a loan from MN, and the transaction was being adjusted in MN’s accounts, and income tax and GST implications adjusted and paid as necessary

•    MN’s records did not disclose any loan made to Starbrake, and we saw no evidence of any “adjustments” in MN’s accounts

•    Starbrake Pty Ltd has since changed its name to I.M.E. Nominees Pty Ltd

•    Isaac Meyer Ellison (IME) has now replaced Allen Caratti as the sole Director

4.    Forest Hope    Gucce Holdings Pty Ltd (“Gucce”)/ Forest Hope Joint Venture (“FHJV”)

•    Development known as ‘Aveley Green’ in Aveley (near Ellenbrook) – 4 stage development

•    Master lot acquired was Lot 9029 The Broadway (Deposited plan 61233)

-also known as ‘Super Lot 1’.

•    Master lot acquired by Forest Hope Pty Ltd to be held by the FHJV.

•    JV participants include Gucce Holdings Trust (Gucce is trustee).

Other JV’s include Parto Trust, Farah Investment Trust with links to individual Pourzand

•    Gucce directed by Ms Tina BAZZO

•    FHJV engaged Gucce to develop the land.

•    Gucce subcontracted work to Mammoth Nominees Pty Ltd (“Mammoth”).

Mammoth director is Mr Allen CARATTI

•    Westcoast Engineering Pty Ltd (“WCE”) engaged as the site superintendent / certifying engineer. WCE certified progress claims for all work done per documentation submitted by Mammoth

•    Gucce involved the work to FHJV equivalent to the WCE certified progress claims

•    FHJV claimed GST credits – COMPLIANT

•    Gucce failed to report all sales on BAS – NON-COMPLIANT

•    Mammoth invoiced Gucce the development work. The transactions considered to be overstated / excessive compared to WCE certified work. Some work considered not to have happened on basis it was not certified or FHJV had no awareness.

•    Gucce inflated GST credit claims using the Mammoth documentation – NON-COMPLIANT

72    As will be seen, Mr Caratti contended that the Search Relevances document impermissibly extended the scope of the warrant and was treated as a de facto or surrogate warrant by seizing officers.

73    A very large number of documents and other items were seized during the execution of the warrant at the Wickham Street premises. The seizures are recorded in a property seizure record that was prepared by Federal Agents Pluss and Fullerton. The property seizure record is over 70 pages long. The items seized included a large number of documents (hard copy and electronic) and many items of computer and electrical equipment. Mr Caratti contended that a number of hard drives and other electronic storage devices that were seized at the Wickham Street premises were not lawfully seized under the warrant or in accordance with the specific provisions in the Crimes Act that deal with the seizure of electronic equipment.

The Duncraig Road premises

74    The search warrant in respect of the Duncraig Road premises was executed on 28 January 2015. Federal Agent Szolnoki was the executing officer. He was apparently assisted by Federals Agents Cook, Evans, Croft and Curavic and the computer forensics experts Mr Fell and Ms Scott. For reasons that remained unexplained, it would appear that an AFP “canine team” also attended the premises.

75    The tax officers who assisted included Mr Crawshaw, Mr Dunstan, Ms Ramhdas, Ms Amanda Conway, Ms Shezah Arif, Mr Shane Comerford and Mr Rick Owen. It would also appear that Mr Shaun Ellis and Mr William Elliot, computer forensics officers from the ATO, were also present, though they did not feature at all in the evidence.

76    A number of documents and items of equipment were seized during the execution of the Duncraig Road premises warrant. They are recorded in a property seizure record that was completed by Federal Agent Curavic and which runs to five pages.

77    Mr Carratti specifically contended that some electronic storage devices and two Blackberry mobile devices were unlawfully seized from the Duncraig Road premises.

The Cornish Turn premises

78    The warrant in respect of the Cornish Turn premises was signed over by Federal Agent Szolnoki to Federal Agent Nicholas Joss. It was executed on 28 January 2015. Federal Agent Joss appears to have been assisted by Federal Agents Lassiter, Baum, Bryce, Jowers, Standing and Bruhn. A computer forensics officer from the ATO, Mr Octavin Grigore, was apparently involved in or assisted the search. It would appear that there were other tax officers involved in the execution of this warrant, including Mr Jared Needham, Mr Nicholas Khoo, Mr Phillip Ryan, Mr Anand Gokhani and MrGraeme Walker. They did not, however, feature at all in the evidence.

79    The items seized during the execution of the warrant in respect of the Cornish Turn premises were recorded in a property seizure record created by Federal Agent Standing. The items seized included a number of folders containing documents and two computers. Mr Caratti contended that the two computers seized during the execution of the warrant were not lawfully seized under the warrant or in accordance with the specific provisions in the Crimes Act that deal with the seizure of electronic equipment.

The Osborne Park premises

80    The warrant in respect of the Osborne Park premises was signed over by Federal Agent Szolnoki to Federal Agent van Tooren. It was executed on 28 January 2015. Federal Agent van Tooren appears to have been assisted by Federal Agents Paynter, Stevens, Powers and Guarino, as well as three forensics officers from the ATO: Mr John Jensen, Mr Greg Thomas and Mr Ben White.

81    A number of items, including documents and computer hard drives, were seized during the execution of the Osborne Park premises warrant. They are recorded in property seizure records completed by Federal Agent Stevens.

82    There was very little evidence concerning the execution of the Osborne Park premises.

The Irvin Street premises

83    The warrant in relation to the Irvin Street premises was executed on 29 January 2015. The warrant was apparently signed over by Federal Agent Szolnoki to Federal Agent van Tooren. Federal Agent van Tooren, as executing officer, was assisted by Federal Agents Cook, Curavic and Croft. Two AFP computer forensic specialists, Mr Fell and Ms Scott, assisted in the search of computers and computer equipment and the copying of data during the execution of the warrant. Two tax officers assisted in the search: Mr Crawshaw and Mr Michael Dunstan.

84    The Irvin Street premises were the offices of a firm of solicitors, Birman & Ride. It would appear that the solicitors were expecting a visit from the AFP. Search and seizure pursuant to the warrant appeared to proceed in a cooperative fashion. The solicitors facilitated access to the “information of interest”, which appeared to be in the form of electronic or computer documents. The Federal Agents and tax officers considered each document and discussed whether it was inside or outside the terms of the warrant. Federal Agent van Tooren’s evidence was that he generally accepted the views of the tax officers as to whether the documents were relevant. The documents that he decided to seize were copied onto a USB device by the solicitors. The property seizure record in relation to the Irvin Street premises (completed by Federal Agent Curavic) records that three USB devices containing files relating to Starbrake, Whitby Land Company and Mammoth Nominees were seized.

The Wright Road premises

85    Federal Agent van Tooren was the executing officer in respect of the warrant for the Wright Road premises. The warrant was executed on 5 March 2015. Federal Agent van Tooren was assisted by Federal Agents Perrot, Stevens, Sullivan, Mills and Evans and a computer forensics employee, Mr Thomas Waghorn. There were also a number of tax officers involved in the warrant execution, including Mr Eastaugh, Mr Irvin, Mr Dunstan, Mr Koopu and Mr Rimkus.

86    A number of documents were seized during the execution of the Wright Road premises warrant. They are recorded in a property seizure record completed by Federal Agent Stevens which runs to 10 pages.

Motor vehicles

87    There was very little, if any, evidence concerning the execution of the search warrants in respect of the two motor vehicles. Mr Caratti did not advance any specific complaints or claims concerning the execution of these warrants or any items seized from the two vehicles.

The AFP’s undertaking

88    On 30 January 2015, the AFP undertook not to inspect any of the material seized under the warrants pending the resolution of proceedings challenging the validity of the search and seizure. That undertaking was later extended to cover the material seized at the Wright Road premises.

GROUNDS OF CHALLENGE AND RELEVANT ISSUES

89    Mr Caratti’s challenge to the issue and execution of the warrants was initially wide-ranging. He initially alleged, for example, that the warrants were unlawful because they were sought for an ulterior purpose. He alleged that one of the purposes for applying for the warrants was to assist the ATO in relation to their audit and assessment activities relating to Mr Caratti and companies associated with him. He also appeared to allege that there was an ulterior and improper motive in executing the warrants. He contended, amongst other things, that the AFP intended to disseminate to the ATO items that were seized and information that was obtained in the course of the execution of the warrants. He also initially alleged that it was impermissible or unreasonable for the AFP to have tax officers present and assisting during the execution of the warrants. Those contentions were ultimately not pressed by Mr Caratti.

90    Mr Caratti amended his originating application and points of claim on a number of occasions. Despite those repeated amendments, the scope and nature of aspects of Mr Caratti’s case continued to shift and remained somewhat unclear right up to the point of final submissions. In his final submissions, Mr Caratti identified three grounds of challenge to the issue and execution of the warrants, though the first ground in fact comprised three separate grounds (grounds 1A, 1B and 1C). Grounds 1A and 1B and 1C related to the validity of the search warrants. Ground 2 to the execution of the warrants generally. Ground 3 related specifically to the seizure of computer or electronic equipment.

91    Mr Caratti’s final submissions summarised grounds 1A, 1B and 1C in the following terms:

1A.    The search permitted by the warrants exceeded what was justified by the material before the issuing officer; the offences in condition 3 of the warrants (when taken together with other conditions) were broader than justified.

1B.    No intelligible search permitter existed and the warrants did not sufficiently specify the perimeters within which materials were to be searched for and seized or to sufficiently inform the occupiers of the perimeters, because the descriptions of offences were ambiguous, unintelligible or not offences.

1C.    The search permitted by the warrants exceeded what was justified by the material before the issuing officer, in that the three lines after the third condition purported to authorise that, wherever on a “storage medium or storage device” there exists a document or other information which is evidential material falling within the 3 conditions of the warrant, it follows that each such storage medium or storage device is itself evidential material.

92    Grounds 1A and 1B were closely related. Both effectively hinged on what Mr Caratti submitted was the defective and deficient wording of the offences that comprised the third condition in each of the warrants.

93    The crux of Mr Caratti’s submission in relation to ground 1A was that the information before the issuing officer (the magistrate) was not capable of satisfying the issuing officer that there were reasonable grounds to suspect that items located at the premises would afford evidence of the commission of the offences in the third condition of the warrant. In Mr Caratti’s submission, the information before the issuing officer may have provided reasonable grounds for suspecting the commission of certain offences that involved discrete transactions and discreet timing. The offences in the third condition, however, were drafted so broadly and ambiguously that they did not confine what could be searched for and seized to offences involving those discreet transactions and times. In short, Mr Caratti submitted that the broad terms of the offences in the third condition of the warrants meant that the warrants were broader in scope than the material before the magistrate justified. Mr Caratti also contended that the information before the magistrate suggested that the dates or date ranges specified in the alleged offences were incorrect. The information suggested that if the offences were committed, they were committed on dates different to those particularised in the offences.

94    Mr Caratti’s basic contention in relation to ground 1B was to the effect that the warrants did not disclose the nature of the offences with sufficient clarity and particularity to define the permissible area of the search in terms capable of being understood by the occupier of the premises. In short, he submitted that the offences as described in the third condition were so unclear and ambiguous that the warrants were unintelligible. This was a challenge to the validity of the warrants on their face.

95    The critical issue in relation to both grounds 1A and 1B is the wording of the offences in the third condition. Were the offences in the third condition described in terms that were sufficiently clear and unambiguous to satisfy the requirements for the issue of a search warrant under the Crimes Act, both from the perspective of the sufficiency of the information before the issuing officer, and from the perspective of the matters that are required to be stated on the face of a warrant?

96    Ground 1C also appeared to raise issues concerning both the sufficiency of the information before the issuing officer and the validity of the warrants on their face. Each of the warrants contained the following paragraph after the description of the offences in the third condition of the warrant:

Together with any storage medium or storage device which contains any of the above things and any manual, instruction, password or other thing which is needed to gain access to or interpret or decode any of the above things.

97    While somewhat unclear, the inclusion of this paragraph appeared to suggest that a storage device, such as a computer, which contained an item that was “evidential material”, as defined in the Crimes Act and having regard to the three conditions in the warrant, was itself evidential material. The upshot of the inclusion of these words was, in Mr Caratti’s submission, that a computer containing an electronic file that might be evidence of any of the offences in the warrant could itself be seized, together with any manual or password needed to operate the computer. That would be the case even if the possibly thousands of other files on the computer were entirely irrelevant or unrelated to the suspected offences, and even if there were no reasonable grounds to suspect that the computer hardware itself would afford evidence of the commission of the offences. Was it open to the issuing officer to be satisfied that such a computer would itself be “evidential material”? Was a warrant that authorised the seizure of a computer in such circumstances contrary to the specific provisions in the Crimes Act dealing with the seizure of electronic equipment?

98    Mr Caratti’s central contention in relation to ground 2, which challenged the lawfulness of the execution of the warrants, was that the warrants were executed unreasonably and excessively because the executing officers and the officers who assisted them acted outside the authority of the warrants: they searched for and seized documents outside the scope of the warrants. Mr Caratti contended that the officers were in fact confused as to what the warrants authorised and did not understand enough about the entities listed in the warrants, or their affairs or functions, to know the appropriate scope of the search and seizure pursuant to the warrants. He relied on evidence that he contended indicated that the officers involved in the search interpreted the third condition in the warrants differently; that the briefings given to the officers were deficient; that the Federal Agents relied extensively and excessively on the advice of tax officers (including the advice in Mr Irvin’s “Search Relevances” document) that was not apparently constrained by the terms of the warrants; and that the tax officers themselves misunderstood the scope of the warrants.

99    On one level, the issues raised by this ground may be seen to be essentially evidential and factual: has Mr Caratti discharged his onus of proving that any or all of the executing officers and the officers who assisted them acted unreasonably, excessively or otherwise outside the authority conferred by the warrants? Mr Caratti relied on some general allegations, such as inadequate briefings, as well as a number of specific allegations concerning the actions of individual officers? The first question is whether any or all of those allegations has been made out.

100    There is, however, a more fundamental question. The relief sought by Mr Caratti included a declaration that “the execution of each of the Search Warrants was beyond power”. He also sought orders which would have the effect of requiring the AFP to return all seized items. He contended that such orders would be warranted if the execution of the warrants was beyond power, even if the warrants themselves were valid. The fundamental issue that arises in this context is whether, if Mr Caratti made out any, or even all, of the factual allegations advanced by him concerning the execution of the warrants, it necessarily followed that the execution of all of the warrants was beyond power such that the return of all items seized was warranted? Or does Mr Caratti have to demonstrate that such failures that he was able to prove were so fundamental or systematic that they infected the execution of the warrants in their entirety?

101    For example (and hypothetically), if Mr Caratti successfully demonstrated that some (but not all) Federal Agents who assisted in the execution of the Wickham Street premises warrant misunderstood the terms of the warrant, or relied on Mr Irvin or his Search Relevances document instead of the warrant, does it follow that the execution of the Wickham Street warrant in its entirety was beyond power? That question must be considered in light of the fact that the execution of the Wickham street premises warrant involved many officers and took place over three days. Can it be inferred from the actions of some officers that the actions of all, or even a substantial number of the other officers involved in the execution of the warrant were also unreasonable or excessive? If not, why should the actions of only some officers effectively impugn the actions of all the officers?

102    An even more difficult question is whether, if only the execution of, for example, the Wickham Street warrant was successfully impugned, would it necessarily follow that the execution of warrants other than the Wickham Street warrant were also beyond power? Would it follow that items seized under the authority of all warrants should be returned?

103    Ground 3 related to the seizure of electronic items under the warrants. Mr Caratti contended that electronic equipment, computer material and digital storage media, such as computers, hard disks and USB devices containing data, were unlawfully seized. He contended that the devices (as opposed to the files or data stored on them) did not comprise evidential material as defined by the three conditions in the warrants and that the specific provisions of the Crimes Act that deal with the seizure of electronic items. Mr Caratti’s case concerning the seizure of electronic equipment was initially put at a general level. He appeared to contend that there was a general misunderstanding or failure to comply with the relevant provisions. Ultimately, however, his contentions were directed to the seizure of specific items.

104    Mr Caratti’s final written and oral submissions addressed only these three grounds (grounds 1A, 1B, 1C, 2 and 3). To the extent that Mr Caratti’s originating application and points of claim (as amended) advanced grounds or contentions that extended beyond grounds 1A, 1B, 1C, 2 and 3, those grounds or contentions are taken to have been expressly abandoned.

THE VALIDITY OF THE WARRANTS – GROUNDS 1A, 1B, AND 1C

105    The main provision of the Crimes Act dealing with the issue of search warrants is s 3E. As is common with most modern Commonwealth legislation, however, to make sense of s 3E it is also necessary to go to a number of definitional provisions. Relevantly, ss 3E(1) and (5) of the Crimes Act are in the following terms:

3E    When search warrants can be issued

(1)    An issuing officer may issue a warrant to search premises if the officer is satisfied, by information on oath or affirmation, that three are reasonable grounds for suspecting that there is, or there will be within the next 72 hours, any evidential material at the premises.

…

(5)    If an issuing officer issues a warrant, the officer is to state in the warrant:

(a)    the offence to which the warrant relates; and

(b)    a description of the premises to which the warrant relates or the name or description of the person to whom it relates; and

(c)    the kinds of evidential material that are to be searched for under the warrant; and

(d)    the name of the constable who, unless he or she inserts the name of another constable in the warrant, is to be responsible for executing the warrant; and

(e)    the time at which the warrant expires (see subsection (5A)); and

(f)    whether the warrant may be executed at any time or only during particular hours.

106    The expression “evidential material” which is used in ss 3E(1) and (5)(c), is defined in s 3C as meaning “a thing relevant to an indictable offence or a thing relevant to a summary offence, including such a thing in electronic form”. The expression “thing relevant to an indictable offence” is defined in s 3 in the following terms:

Thing relevant to an indicatable offence means:

(a)    either of the following:

(i)    anything with respect to which an indictable offence against any law of the Commonwealth or of a Territory has been committed or is suspected, on reasonable grounds, to have been committed;

(ii)    anything with respect to which a State offence that has a federal aspect, and that is an indictable offence against the law of that State, has been committed or is suspected, on reasonable grounds, to have been committed; or

(c)    anything as to which there are reasonable grounds for suspecting that it will afford evidence as to the commission of any such offence; or

(d)    anything as to which there are reasonable grounds for suspecting that it is intended to be used for the purpose of committing any such offence.

107    Perhaps not surprisingly, the expression “thing relevant to a summary offence” is defined in corresponding terms in s 3.

108    In simple terms relevant to the warrants in question in this matter, it was open to the issuing officer to issue the warrants in question under s 3E(1) if the information on oath before him (being the affidavit sworn by Federal Agent Szolnoki) was capable of satisfying him that:

(a)    there were reasonable grounds for suspecting that there was, at the relevant premises (the premises to which the warrants related, being the premises described in the warrants as required by s 3E(5)(b));

(b)    anything with respect to which there were reasonable grounds for suspecting that those things would afford evidence as to the commission of the offences to which the warrants related (being the offences described in the warrant – relevantly in the third condition - as required by s 3E(5)(a) of the Act).

109    As already indicated, Mr Caratti contended that it was not open to the issuing officer to be satisfied of those two matters. That contention was not based so much on the sufficiency of the information in Federal Agent Szolnoki’s affidavit in terms of providing reasonable grounds for suspecting the commission of offences by Mr Caratti, or reasonable grounds for suspecting the presence in the premises of documents or other items that would afford evidence of those offences. It appeared to be accepted by Mr Caratti, if not expressly then certainly implicitly, that there was sufficient information in the affidavit to satisfy the issuing officer that there were reasonable grounds to suspect that there were things at the relevant premises which would afford evidence of the commission of certain offences by Mr Caratti. Mr Caratti’s point was that those offences (the offences supported by Federal Agent Szolnoki’s affidavit) were not the same as the offences described in the third condition; or at least were offences materially narrower in scope than the offences described in the third condition.

110    Before addressing that issue (which was, in effect, Mr Caratti’s ground 1A), it is convenient to consider Mr Caratti’s broader criticisms of the description of the offences in the third condition (Mr Caratti’s ground 1B). Those criticisms amounted to, in effect, a contention that the description of the offences in the third condition did not satisfy the requirement in s 3E(5)(a) that the issuing officer state in the warrant the offence to which the warrant relates. It is convenient to consider the issue concerning the sufficiency of the description of the offences first because that exercise will, to some extent, involve construing or interpreting the offences as described in the third condition. It is only when the offences as described have been considered and construed that it is possible to consider whether it was open to the issuing officer to be satisfied of the matters required by s 3E(1) of the Crimes Act.

Ground 1B — are the offences to which the warrants related sufficiently described to define the permissible area of the search?

111    Each warrant states that the offences referred to in the third condition of the warrants are the offences to which the warrant relates for the purposes of s 3E(5)(a). Even if that was not expressly noted in the warrant, a description of offences in the third condition of a three condition warrant is capable of amounting to compliance with s 3E(5)(a): Harts Australia Ltd v Commissioner, Australian Federal Police (1997) 75 FCR 145 at 151B-C.

112    The real issue is whether the descriptions of the offences in the third condition were sufficient to not only comply with s 3E(5)(a), but also sufficient to provide “real and meaningful perimeters as to the area of search”: Zhang v Commissioner, Australian Federal Police (2009) 111 ALD 123 at 127 718 [13]. Were the offences described in such broad and vague terms that a person affected by the warrant, in particular the occupier of the premises to which the warrant relates, could not know the object or area of the search authorised by the warrant?

113    The principles to apply in considering the sufficiency of the description of offences in a warrant under s 3E of the Crimes Act are now relatively well-settled. It was initially considered (in the context of the search warrant provisions in the Crimes Act that preceded s 3E) that a “warrant should state the description of the offence in question with a particularity sufficient to enable the person whose premises are being searched to know the exact object of the search” (emphasis added): Parker v Churchill (1986) 9 FCR 334 at 348 (Jackson J, with whom Bowen CJ and Black J relevantly agreed at 335); Australian Broadcasting Corporation v Cloran (1984) 4 FCR 151 at 153.

114    It is now generally accepted, however, that the test is not so exacting as to require the identification of the “exact object” of the search. Nor should an overly technical view of the description of the offences be taken. The statement of the offence in a search warrant need not be made with the precision of an indictment: Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523 at 533 (Burchett J, with whom Sheppard J agreed at 525 and Pincus J relevantly agreed at 525-526).

115    In Beneficial Finance, Burchett J said (at 543):

An approach which eschews overzealous technicality, while requiring the full measure of the substance to be observed, is also consistent with the fact that the legislature has entrusted to lay justices of the peace the task of issuing search warrants. If the courts were to insist upon the invalidation of a warrant for a legally incorrect formulation of an offence, although the substance of the offence could plainly be understood, they would not be interpreting the will of the Parliament but subverting it. For the Parliament cannot have intended lay justices to be held to such a standard, when it entrusted the task of issuing warrants to them. See Parker v Churchill (at 323).

I have discussed the authorities dealing with the true test, for the sufficiency of the statement of the offence in a search warrant, at considerable length, because of the importance of the principle, and the difficulty which has arisen from the conflicting statements of it. In my opinion, the conclusion emerges clearly that there is no justification for an “exact object” test. The matter should be viewed broadly, having regard to the terms of the warrant in the circumstances of each case. The question should not be answered by the bare application of a verbal formula, but in accordance with the principle that the warrant should disclose the nature of the offence so as to indicate the area of search. The precision required in a given case, in any particular respect, may vary with the nature of the offence, the other circumstances revealed, the particularity achieved in other respects, and what is disclosed by the warrant, read as a whole, and taking account of its recitals. See Re Church of Scientology (supra).

116    This broad and practical approach to the particularity required in the statement of the offence in a search warrant has been repeatedly followed and applied: see for example New South Wales v Corbett (2007) 230 CLR 606 at 630-631 [97]-[102] (per Callinan and Crennan JJ, with whom Gleeson CJ agreed at 607 [1]); Harts (1997) at 152A-C; Chong v Schultz [2000] FCA 582; (2000) 112 A Crim R 59 at 60-61 (Heerey J); Williams v Keelty at 206-206 [135]-[139]; Different Solutions Pty Ltd v Commissioner, Australian Federal Police [2008] FCA 1686; (2008) 190 A Crim R 265 at 289-294 [98]-[118] (Graham J); Zhang at 718 [12].

117    In general terms, these authorities indicate that, in considering the sufficiency of the statement of the offence to which the warrant relates, the warrant as a whole must be read fairly and not perversely. The fact that the language used may be infelicitous or inelegant, or may not display a fine appreciation of the legislation relevant to the offences, is largely immaterial so long as the substance of the offence is sufficiently disclosed so as to indicate the area of the search. A warrant will not necessarily be invalidated even in circumstances where the description of the offence involves an error which would most likely invalidate an indictment (for example on the ground of duplicity: Williams v Keelty at 209 [142]; Chong v Schultz at 62 [11]); or a legally incorrect formulation of the offence (Chong v Schultz at 61 [9]; Ozzy Tyre & Tube Pty Ltd v CEO of Customs [2000] FCA 891, where the statement of the offence did not refer to the mental element); or an inaccurate statement of the general nature of the offence (Parker v Churchill at 340 per Jackson J, with whom Bowen CJ and Lockhart J agreed at 335; Different Solutions at 295-296 [124]-[137]); or the wrong citation of a section or incorrect description of the statute creating the offence (Parker v Churchill at 340; Different Solutions at 291 [104]).

118    Mr Caratti contended that the description of the offences in the third condition of the warrants was, in each case, so ambiguous and so lacking in appropriate particularity that there was no intelligible search perimeter. To address that contention it is necessary to closely consider the terms of the relevant offence provisions as well as the description of each of the offences in the third condition of the warrants.

119    The offences described in the third condition are all said to be offences against either s 134.2(1) or 135.1(3) of the Criminal Code Act 1995 (Cth). Those offence provisions are in the following terms:

134.2    Obtaining a financial advantage by deception

(1)    A person is guilty of an offence if:

(a)    the person, by a deception, dishonestly obtains a financial advantage from another person; and

(b)    the other person is a Commonwealth entity.

Penalty: Imprisonment for 10 years.

….

135.1    General dishonesty

(3)    A person is guilty of an offence if:

(a)    the person does anything with the intention of dishonestly causing a loss to another person; and

(b)    the other person is a Commonwealth entity.

120    The elements of the offence against s 134.2(1) of the Code may be summarised as follows:

The person:

(a)    acting intentionally (see s 5.6(1) of the Criminal Code)

(b)    by a deception;

(c)    dishonestly obtains a financial advantage;

(d)    from a Commonwealth entity

121    The elements of the offence against s 135.1(3) of the Code may be summarised as follows:

The person:

(a)    does something (anything);

(b)    with the intention of dishonestly causing a loss;

(c)    to a Commonwealth entity.

The Starbrake offences

122    The first two offences in the third condition in the warrants relate to the Starbrake allegations. The offences are described in the following terms:

In 2008 at Perth in Western Australia, Allen CARATTI by a deception, in that he reclassified royalty income paid to Starbrake Pty Ltd into a loan from Mammoth Nominees Pty Ltd, dishonestly obtained a financial advantage by not paying income tax, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Section 134.2(1) of the Criminal Code 1995 (Cth).

In 2008 at Perth in Western Australia, Allen CARATTI did fail to pass on Goods and Services Tax collected by Starbrake Pty Ltd to the Australian Taxation Office, with the intention of dishonestly causing a loss to another person, namely Australian Taxation Office, which is a Commonwealth entity, contrary to Section 135.1(3) of the Criminal Code 1995 (Cth).

123    In relation to the first Starbrake offence, Mr Caratti contended that the description of the offence was deficient in three respects. First, he contended that the description of the offence lacked particularity because no royalty transaction (being the transaction that was alleged to have resulted in the royalty income) was specified. Second, he contended that the description was ambiguous because it did not make it clear whether the date on which this offence was allegedly committed (2008) was the date on which the deception was employed, or the date on which the financial advantage was received. Third, he contended that, whichever way the alleged ambiguity concerning the date of the offence was resolved, the information before the issuing officer indicated that neither the alleged deception nor the alleged obtaining occurred in 2008.

124    There is some merit in these criticisms of the wording of the first Starbrake offence. On just about any view, the description of the alleged offence was very poor having regard to the terms of the relevant offence provisions and the relevant provisions of the applicable tax legislation. The language used was infelicitous. The particulars were imprecise if not ambiguous in some respects.

125    There are at least four potential problems with the description of the first Starbrake offence.

126    First, strictly speaking income tax is not paid to the ATO. Generally speaking it is paid to the Commissioner of Taxation. In any event, the ATO is not a Commonwealth entity as defined in the Criminal Code: see the definitions of “Commonwealth entity” and “Commonwealth authority” in s 4 of the Criminal Code; see also Different Solutions at 295 [125]-[128] and 296 [136]-[137], where Graham J held that this deficiency was not sufficient to invalidate a warrant.

127    Second, such tax as may have been payable in respect of any royalty income received by Starbrake was payable under the applicable tax legislation by Starbrake, not Mr Caratti. There may accordingly be issues concerning the allegation that Mr Caratti obtained a financial advantage arising from the reclassification and non-payment of tax by Starbrake. At most, any financial advantage that may have been obtained by Mr Caratti was an indirect advantage.

128    Third, having regard to the terms of the applicable tax legislation, it would have been more appropriate to particularise both the alleged deceptive conduct and the alleged obtaining of a financial advantage in terms of a failure to include the royalty income in Starbrake’s tax return, rather than in terms of an accounting reclassification. The ATO was relevantly deceived by Starbrake’s tax return, rather than the accounting reclassification. Likewise, the alleged financial advantage to Mr Caratti arose from the non-declaration of the royalty income (on the allegedly false basis that it was a loan, not income) in Starbrake’s tax return, not from the reclassification.

129    Fourth, there are potential issues with the date on which the offence is said to have been committed. It is somewhat unclear whether the particularised date (2008) refers to the date on which the alleged deceptive conduct (the accounting reclassification of the royalty payment, or perhaps the lodging of a false tax return that did not declare the royalty income) occurred, or the date the financial advantage was allegedly obtained. That date would be the date on which the tax would, but for the deception, have been assessed as payable.

130    There could be little doubt that an indictment containing a charge framed in these terms would either be struck down, or at the very least the prosecution would have been required to clarify and provide further particulars of the alleged offending conduct.

131    The difficulty for Mr Caratti, however, is that the question of the sufficiency of the description of the offences in the warrant is not to be approached as if the warrant was an indictment and the issue was the legal sufficiency of the pleading. The exercise involved in determining whether the description of offences in a search warrant is sufficient is not to be approached as if it was a demurrer. Nor is it a counsel of perfection. Rather, as already indicated, the question is whether, viewed broadly and not perversely or with undue technicality, the general nature of the offences is sufficiently disclosed so as to indicate the authorised area of search.

132    When viewed in that way, these deficiencies with the wording and description of the first Starbrake offence are insufficient to invalidate the warrants.

133    While the first Starbrake offence was poorly described, read fairly in the context of the warrant as a whole, and without overzealous technicality, the description was sufficient to enable an occupier to discern a search perimeter relevant to the offence. The description of the offence identified the accused (Mr Caratti), the relevant offence provision (s 134.2(1) of the Criminal Code), the date (or date range) that the offence was alleged to be committed (2008) and the gist of the conduct said to constitute the offence (that the offence involved the dishonest non-payment of an amount of income tax by Starbrake resulting or arising from a deceptive reclassification by Mr Caratti of royalty income received by Starbrake).

134    Mr Caratti’s argument that the information before the issuing officer was insufficient to establish reasonable grounds for suspecting that the first Starbrake offence was committed in 2008 is considered later in the context of the next ground (ground 1A). For present purposes, however, it should be noted that while there may have been some ambiguity or uncertainty surrounding the date that the offence was alleged to have been committed (2008), it does not follow, as Mr Caratti submitted, that the search perimeter was effectively undefined as to date. In any event, the executing officers were not necessarily constrained by the date or date range during which the offence was said to have been committed. They could search for and seize documents bearing any date, so long as there were reasonable grounds to suspect that the documents would afford evidence of the commission of the offence suspected of having been committed in 2008.

135    There are similar issues concerning the wording of the second Starbrake offence. Mr Caratti contended that there were three specific deficiencies in the description of the second Starbrake offence. First, he contended that the description lacked particularity because it did not describe the transaction which led to the alleged collection of GST by Starbrake that should have been passed on to the ATO. Second, he contended that the description was ambiguous because it did not specify how it was alleged that Mr Caratti failed to pass on GST. Third, he contended that there was an error or deficiency in relation to the particulars of the date of the offence having regard to the information concerning this offence that was before the issuing officer. In Mr Caratti’s submission, the information before the issuing officer was insufficient to establish reasonable grounds for suspecting that the offence was committed in 2008.

136    The third of these complaints is addressed later in the context of ground 1A. In relation to the first two complaints, those complaints would again no doubt have some considerable merit if the question was whether an indictment containing the second Starbrake offence was properly pleaded and adequately particularised. The problem for Mr Caratti is that that is not the question. The adequacy of the description of the offence should not be approached as if this was some form of demurrer.

137    As was the case with the first Starbrake offence, there could be little doubt that the second Starbrake offence was poorly described. The description displays a very poor appreciation of the terms and operation of the GST Act. Strictly speaking the GST Act does not refer to GST being “collected”. Nor does it create or refer to an obligation to “pass on” GST that is collected. Rather, liabilities that arise under the GST Act arise upon the lodgement of a business activity statement that provides details of the GST payable in respect of taxable supplies less input tax credits. Amounts payable under the GST Act are also payable to the Commissioner of Taxation, not the ATO (see, for example, s 33-5 of the GST Act) and, in any event, the ATO is not a Commonwealth entity for the purposes of s 135.1(3) of the Criminal Code.

138    There is also some merit in Mr Caratti’s complaint that the description of the offence, considered in isolation, provides no meaningful details of the circumstances in which it was apparently alleged that Starbrake had GST liabilities that it did not discharge. There is, for example, no details of the taxable supplies made by Starbrake in respect of which GST was allegedly payable. Nor are there any meaningful particulars as to why Starbrake’s failure to discharge any such GST liability in that regard involved dishonesty on the part of Mr Caratti.

139    Nevertheless, the question is not whether the offence is pleaded and particularised in terms adequate to be included in an indictment. In considering whether the nature or substance of the offence was sufficiently described for the purposes of identifying the search area, the description must be read broadly and in the context of the warrant as a whole. It would be readily apparent to the occupier, or anyone else who read the warrant, that the first Starbrake offence was related to the second Starbrake offence. The two offences involved the same persons and entities (Mr Caratti and Starbrake) and were both allegedly committed in 2008. It would be readily apparent that the difference between the two offences was that the first offence related to the alleged non-payment of income tax and the second offence related to the alleged non-payment of GST. Read in that way, it would be apparent to the reader of the warrant that the gist of the second offence was that Starbrake’s liability to remit GST was related to its receipt of royalty income, and that Mr Caratti’s dishonest intention arose from the alleged reclassification of the royalty income.

140    It would again clearly have been preferable for the second Starbrake offence to have been described in terms that clearly and accurately reflected the operation of the relevant tax legislation. It would also have been preferable for the description to provide at least basic particulars of the key factual allegations that underlay the offence, so far as they were known, so that it was unnecessary to read it in conjunction with the first Starbrake offence. Nevertheless, while the second Starbrake offence was poorly drafted and lacked the clarity and particularity that would be necessary if it was to be included in an indictment, read fairly and in context, and without overzealous technicality, it was adequate to define an area of search relevant to the offence. It identified the accused (Mr Caratti), the relevant offence provision (s 135.1(3) of the Criminal Code), the date the offence was allegedly committed (2008) and the basic factual allegation: relevantly, that with the dishonest intention of causing loss to the ATO, Mr Caratti failed to pass on to the ATO GST that was properly payable by Starbrake. When read in conjunction with the first Starbrake offence, it would have been tolerably clear to the reader that the alleged GST liability related to the royalty income received by Starbrake, and that the dishonesty arose from the alleged reclassification of that income.

The Westend offence

141    The third offence in the third condition in the warrants related to the Westend allegations. The offence was described in the following terms:

In 2008 at Perth in Western Australia, Allen CARATTI by a deception, in that he falsified costs incurred by Wesend Asset Pty Ltd, attempted to dishonestly obtain a financial advantage by not paying income tax, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Sections 11.1 and 134.2(1) of the Criminal Code 1995 (Cth).

142    While again drafted in somewhat cumbersome and infelicitous terms, the substance and nature of the alleged offence was tolerably clear: it was alleged that Mr Caratti falsified costs incurred by Westend in an attempt to reduce the amount of income tax properly payable to the ATO by Westend. It would have been readily apparent to the reader that the allegation was that the falsified costs would have reduced Westend’s taxable income and hence the amount of tax payable by it. It was alleged that non-payment of income tax properly payable by Westend would result in a financial advantage to Mr Caratti. That was said to constitute an offence pursuant to s 11.1 and 134.2(1) of the Code. Section 11.1 of the Code provides, in essence, that a person who attempts to commit an offence is taken to be guilty of the offence of attempting to commit that offence. The offence was alleged to have been committed in 2008.

143    Mr Caratti contended that the description of the Westend offence lacked proper particularity, was ambiguous and included the wrong date. The description was said to lack particularity because there were no particulars of the costs that were allegedly falsified. It was said to be ambiguous because it was unclear whether the date on which the offence was alleged to have been committed was the date that Westend’s income tax return was lodged, the date that the costs were falsified, or the income year to which the falsified costs were said to be referable. The date was in any event said to be wrong because the information before the issuing officer did not provide reasonable grounds for suspecting either that the Westend’s return was lodged in 2008, or that the costs were falsified in 2008.

144    There is again some merit in these complaints of lack of particularity and ambiguity. If this description of the offence was included in an indictment, the prosecution would undoubtedly be required to provide further particulars of the costs that were alleged to have been falsified. It is also likely that the prosecution would be required to clarify exactly what was alleged to have occurred in 2008: the falsification of the costs, or the lodgement of the relevant income tax return, or whether 2008 simply referred to the relevant income year.

145    For the purposes of a search warrant, however, there was sufficient particularisation, and sufficient clarity, to define the area of search. While it would clearly have been preferable for the description of the offence to include further and better particulars, the relevant offence provision was identified (ss 134.2(1) and 11.1 of the Criminal Code), as was the name of the accused (Mr Caratti) and the date (or date range) that the offence was allegedly committed (2008). While the offence was particularised in broad, sparse and somewhat imprecise terms, nevertheless the gist or substance of the key factual allegations that underlay the offence were sufficiently apparent to identify the object or area of the search.

146    Mr Caratti’s contention that the date on which it was alleged that the offence was committed (2008) was not supported by the information before the issuing officer is considered in the context of ground 1A.

The Whitby Land Company offence

147    The Whitby Land Company offence was described in the third condition of the warrants in the following terms:

Between 1 July 2010 and 31 December 2013 at Perth in Western Australia, Allen CARATTI by a deception, in that he caused the Whitby Land Company Pty Ltd to withhold Goods and Services Tax, dishonestly obtained a financial advantage from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Section 134.2(1) of the Criminal Code 1995 (Cth).

148    On just about any view, this statement of the relevant offence was very poorly drafted. It is possible to discern, in very general terms, that the allegation against Mr Caratti was that in the period 1 July 2010 to 31 December 2013 he dishonestly and deceptively caused Whitby Land Company to “withhold” GST that was properly payable to the ATO. There are, however, a number of difficulties and deficiencies in the offence description.

149    First, the description again shows a very poor appreciation of the terms of the underlying tax legislation. It is not entirely clear what is meant by “withholding” GST. As already briefly touched on, in very simple terms, the GST Act provides that an enterprise that makes a taxable supply of a good or service must pay GST on that supply. The amount ultimately payable by the enterprise for a given period (the “net amount”) is determined by calculating the sum of the amounts of GST which the enterprise is liable to pay for that period, less input tax credits. Input tax credits essentially comprise the GST paid by the enterprise in respect of creditable acquisitions. Creditable acquisitions are, in general terms, acquisitions of things for the purpose of carrying on an enterprise. While in a broad sense it might be able to be said that GST payable by an enterprise in respect of a taxable supply is withheld until it is factored into the calculation of the net amount for the relevant GST period, there is otherwise no relevant concept of “withholding” GST in the GST Act. It may be, in the context of the description of the offence, the reference to “withholding GST” was intended to mean no more than not paying GST that should otherwise have been paid.

150    Second, and even accepting that “withholding” may be loosely taken to be a reference to Mr Caratti not paying to the ATO (and therefore “withholding”) GST properly payable by Whitby Land Company in respect of taxable supplies made during the relevant period, it is unclear what supplies were made. How or why did Whitby Land Company become liable to pay GST? Perhaps more significantly, there are no particulars of how or why Mr Caratti’s actions in not paying Whitby Land Company’s GST liability involved deception and dishonesty. The link between Mr Caratti and Whitby Land Company and, more importantly, why the alleged non-payment of GST owed by Whitby Land Company was a financial advantage to Mr Caratti, is also not explained or otherwise apparent from the description of the offence.

151    Mr Caratti contended that the description of the Whitby Land Company offence lacked appropriate particularity, was ambiguous and included an incorrect date. It lacked particularity because it did not describe how it was alleged that Mr Caratti caused Whitby Land Company to withhold GST. It was ambiguous because it was unclear what “withholding GST” meant and unclear how it was alleged that the withholding of GST payable by Whitby Land Company was a financial advantage to Mr Caratti.

152    Mr Caratti’s contentions concerning lack of particularity and ambiguity in respect of the description of the Whitby Land Company offence have some merit for the reasons already given. But is the description, poor and imprecise as it may be, sufficient to satisfy the requirement that it define or provide a meaningful or intelligible search perimeter?

153    The answer to that question is yes, though only barely so. The description of the offence specifies the name of the accused (Mr Caratti), the relevant offence provision (s 134.2(1) of the Criminal Code), the date range during which the offence was alleged to have been committed (between 1 July 2010 and 31 December 2013) and the barest particulars of the factual allegations: that Mr Caratti deceptively and dishonestly caused Whitby Land Company to withhold GST properly payable by it and thereby obtained a financial advantage. The absence of any, or any meaningful, particulars of how Whitby Land Company’s GST liability arose and why Mr Caratti’s withholding of amounts payable by Whitby Land Company was deceptive and dishonest is unfortunate and problematic. On balance, however, that deficiency is insufficient to result in invalidity.

154    If, contrary to this conclusion, the statement of the Whitby Land Company offence was found to be deficient and defective, it would be necessary to consider whether that part of the warrants could properly be severed. The applicable principles in relation to severing invalid portions of a warrant are considered later in these reasons in the context of ground 1C (the ground relating to the paragraph in the warrants relating to the seizure of storage devices). Given the conclusion that has been reached, it is unnecessary to decide whether it would have been appropriate to sever this description of the Whitby Land Company offence from the warrants. There is, however, much to be said for the proposition that an invalid statement of one offence in the third condition of the warrants could appropriately be severed without doing violence to the balance of the warrants. Thus, even if it had been found that the statement of the Whitby Land Company offence was deficient, it would not necessarily follow that the warrants as a whole would be declared invalid.

The Gucce Holdings Offence

155    The final offence referred to in the third condition of the warrants related to the Gucce Holdings allegations. The offence is described in the following terms:

In December 2011 at Perth in Western Australia, Allen CARATTI and Tina BAZZO, by a deception, in that they falsified costs incurred by Gucce Holdings Pty Ltd, attempted to dishonestly obtain a financial advantage by overstating Goods and Services Tax input credits, from another person, namely the Australian Taxation Office, which is a Commonwealth entity, contrary to Sections 11.1 and 134.2(1) of the Criminal Code 1995 (Cth).

156    It can readily be seen that the Gucce Holdings offence is again described in unfortunately broad, inelegant and somewhat opaque terms. The essential allegation would appear to be that Mr Caratti and Ms Bazzo falsified costs incurred by Gucce Holdings and thereby attempted to obtain a financial advantage from the ATO. No particulars of the falsified costs are provided. Nor is it entirely clear how the falsification of costs incurred by Gucce Holdings could secure (or attempt to secure) a financial advantage for Mr Caratti and Ms Bazzo.

157    A reader of the warrant who had some familiarity with the GST Act and the concept of input tax credits would perhaps have been able to discern that the falsification of costs would, if the costs were said to relate to a creditable acquisition, ultimately result in an overstatement of input tax credits and a consequent reduction of the amount payable to the ATO by Gucce Holdings in respect of GST. If the costs were dishonestly falsified, the consequent reduction in GST payable could then be seen to involve dishonesty. That could conceivably be seen to amount to the dishonest obtaining of a financial advantage by Gucce Holdings.

158    The point is, however, that these links between falsified costs, overstated input tax credits and a reduced GST liability, would not necessarily be readily apparent to someone not familiar with the operation of the GST Act. An occupier of promises who was not well-acquainted with the GST Act might encounter difficulties in understanding the offence. There could be little doubt that an indictment containing this offence would be liable to challenge. At the very least, it is likely that the prosecution would be required to provide further and better particulars of the offence.

159    Nevertheless, as with the other offences, on balance there is sufficient particularity and clarity in the description of the Gucce Holdings offence to indicate the area of search permitted by the warrants, though again only barely so. The description includes the name of the accused (Mr Caratti and Ms Bazzo), the relevant offence provision (ss 11.1 and 134.2(1) of the Criminal Code) the date (or date range) when the offence was alleged to have been committed (December 2011), and the general gist of the offending conduct (the falsification of costs resulting ultimately in the dishonest reduction of the amount payable to the ATO in respect of GST).

160    The Gucce Holdings offence clearly could have been described in clearer, fuller and more precise terms. In all the circumstances, however, the description was sufficient, albeit only barely so, for the purposes of a valid warrant.

Conclusion in relation to ground 1B

161    To say the very least, the description of each of the offences in the third condition of the warrants left a lot to be desired. In each case the language used was infelicitous, in some respects ambiguous or unclear, and generally showed a lack of appreciation of the terms of the underlying tax legislation. The descriptions lack the particularisation that would be expected if the offences as described were included in an indictment. Nevertheless, it is necessary to approach the description of the offences to which a search warrant relates broadly and without overzealous technicality. The offence descriptions must be considered fairly and in the context of the warrant as a whole. The question is whether in all the circumstances the nature of the offence to which the warrant relates is sufficiently disclosed so as to indicate the area of search.

162    When considered in that light, the descriptions of the offences in the third condition of the warrants in question are sufficient to avoid a finding of invalidity, though perhaps only barely so in relation to some of the offences. While the area of search defined by the offence descriptions (read together with the first two conditions) was undoubtedly very broad, nonetheless the degree of particularity was in all the circumstances adequate. While the language used was less than ideal and in some respects vague and ambiguous, nonetheless the deficiencies were not such as to render the warrants invalid on the basis that the persons affected by them would be unable to know or ascertain the authorised area of search.

Ground 1A - was the information before the issuing officer sufficient to ground the issue of the warrants?

163    The issue to be resolved in the context of ground 1A is whether the information before the issuing officer (the affidavit of Federal Agent Szolnoki) was capable of satisfying the issuing officer (the magistrate) that there were reasonable grounds for suspecting that there was or would be evidential material at the premises to which the warrants related. Relevantly, the evidential material comprised things as described in the first and second conditions in the warrant and with respect to which there were reasonable grounds for suspecting that those things would afford evidence as to the commission of the offences referred to in the third condition of the warrants.

164    A suspicion in this context is a “state of conjecture or surmise” or a “slight opinion without sufficient evidence”: George v Rockett (1990) 170 CLR 104 at 115, citing Shaaban bin Hussien v Chong Fook Kam [1970] AC 942, 948 and Queensland Bacon v Rees (1966) 115 CLR 266, 303. There must, however be some factual basis for the conjecture, surmise or opinion: George v Rockett at 115. Where a statute prescribes that there must be “reasonable grounds” for a state of mind, it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person: George v Rockett at 112. The requirement of “reasonable grounds for suspicion of guilt” has, albeit in a different context, been described as a very limited requirement: Shaaban bin Hussien v Chong Fook Cam [1970] AC 942 at 949; Williams v Keelty at 213 [165].

165    The issuing officer need not entertain the relevant suspicion; it is only necessary for the issuing officer to be satisfied that there are reasonable grounds for entertaining the suspicion: Williams v Keelty at 213 [167]. The requirement of “reasonable grounds for a suspicion” imports an objective test, though a decision concerning whether grounds are reasonable invariably involves a value or normative judgment about which there may be legitimate differences of opinion: Williams v Keelty at 213 [166]. An issuing officer’s finding that there were “reasonable grounds” for entertaining the relevant suspicion is only impeachable if the finding was one which could not lawfully be reached on the information before the issuing officer: Williams v Keelty at 213 [166], 214-215 [172].

166    An applicant who challenges an issuing officer’s decision to issue a warrant bears the onus of proving that the information before the issuing officer was not capable of establishing reasonable grounds for entertaining the relevant suspicion: Williams v Keelty at 225 [236]; Wong v Commissioner, Australian Federal Police [2014] FCA 443 at [4]. That is a “difficult and exacting task”: Wong at [4]. A court is not entitled to substitute its own opinion on whether there were reasonable grounds for the opinion of the issuing officer: Williams v Keelty at 213 [166]. The applicant must establish that there was an absence of “foundational facts” from which the issuing officer might entertain the relevant suspicion on reasonable grounds: Wong at [4]; Williams v Keelty at 213-215 [168]-[173].

167    The relevant “foundational facts” before the issuing officer in this matter were the facts deposed to by Federal Agent Szolnoki in relation to the Starbrake, Westend, Whitby Land Company and Gucce Holdings allegations. Those facts have already been summarised. There could be little doubt that those facts were capable of establishing that there were reasonable grounds for suspecting that Mr Caratti had committed certain offences and that there was, or would be, things at the premises to which the warrants related which would afford evidence of those offences. So much so appeared to be conceded by Mr Caratti: at least he did not expressly contend otherwise.

168    Mr Caratti’s contention that the information before the issuing officer was not capable of establishing reasonable grounds for entertaining the relevant suspicion focused on the description of the offences in the third condition of the warrants. He advanced two related arguments for why the information was not capable of satisfying the issuing officer that there were reasonable grounds for entertaining the relevant suspicion in relation to the offences described in the third condition. Mr Caratti’s first argument was based on the proposition that the offences in the third condition were broader than justified by the information before the issuing officer. The second argument involved the contention that the information before the issuing officer could not support the dates included in the offences as drafted in the third condition.

Were the offences broader than justified by the information?

169    Mr Caratti contended that the “foundational facts” in Federal Agent Szolnoki’s affidavit related to single or discreet transactions. In Mr Caratti’s submission, while there may have been reasonable grounds for suspecting offences concerning those discreet transactions, the offences in the third condition of the warrants were expressed in very broad terms. Mr Caratti contended that the warrants were in that respect “broader than justified”. It was, he submitted, “wrong” to issue a warrant authorising a “general” search by reference to broad offences where the reasonable grounds for suspicion related to discreet transactions.

170    In advancing that argument, Mr Caratti relied heavily on the obiter dicta of Fox J in The Queen v Tillett; Ex parte Newton (1969) 14 FLR 101. In that case, Fox J quashed a warrant issued under the former s 10 of the Crimes Act on the basis that it suffered from a number of defects. Having determined that the warrant should be quashed on the basis of those defects, his Honour went on to make the following observation as to the area of search permitted by the warrant (at 125);

As to the area of the search, I believe that the requirements are flexible. If, as is now likely to be the case, the issue of the warrant rests on statutory authority, the content of the warrant is governed by the statute and must not only comply with the more specific requirements thereof, but it should not be wider than is necessary to carry out the manifest legislative purpose. In a case under s 10 (b), for example, it would be wrong to issue a warrant which authorized a general search of bank premises, when the information pointed to one forged cheque. Even a search for all documents relating to a particular account may be too wide. There should be no limitation on an adequate search, but it is a function of the information to show how wide that search may have to be, and the function of the justice to ensure that his warrant does not authorize anything wider. Each case must depend upon its own facts.

171    It should be noted that the search warrant in question in Tillett purported to permit the search of bank premises and the seizure of “books, papers, documents or other things” as to which there were “reasonable grounds for believing that the same will afford evidence of the commission of an offence against the Commonwealth Crimes Act”. No specific offence was specified. There was effectively no limitation on the books, papers, documents and things that could be searched for and seized. It is not surprising, in those circumstances, that the warrant was found to be defective. The observations of Fox J should be considered in that context.

172    It is readily apparent that Fox J was not intending to lay down any rigid test concerning the issue of search warrants or the permitted area of search and seizure. As his Honour said, the “requirements are flexible”, the “content of the warrant is governed by the statute” in question and that “each case must be governed by its own facts”. His Honour’s reference to the warrant not being “wider than necessary”, and the issuing officer’s function being to ensure that the warrant does not authorise “anything wider”, must be read as meaning anything wider than permitted under the relevant statutory provision, properly construed. Contrary to Mr Caratti’s submission, Tillet is not authority for the much broader proposition that the offence specified in a search warrant must be particularised in the narrowest possible terms supported by the information before the issuing officer.

173    The question is whether the information before the issuing officer was capable of satisfying the officer, in simplified terms, that there were reasonable grounds to suspect that there were things at the premises that would afford evidence of the commission of the offences specified in the warrants. It may readily be accepted that the more broadly that a warrant describes the kinds of evidential material to be searched for (including the description of the offences), the more difficult it may be for the information before the issuing officer to satisfy this requirement: George v Rockett at 117. By the same token, it is not impermissible to describe the object of the search in a broad non-specific fashion: Dunesky v Elder (1994) 54 FCR 540 at 555E-F (per Lockhart, Beaumont and Hill JJ, with whom Black CJ agreed at 541F and Lindgren J agreed at 558D).

174    While the object of the search is unquestionably described in very broad terms in the warrants in question here, it cannot be concluded that there information before the issuing officer was not capable of satisfying the issuing officer that there were reasonable grounds to suspect that there were things at the premises that would afford evidence of the commission of the offences specified in the third condition of the warrants.

175    Mr Caratti’s characterisation of the information before the issuing officer as involving “discreet transactions” is neither fair nor accurate. Each of the four allegations involved relatively complex facts and conduct that extended over a period of time. There is no merit in Mr Caratti’s contention that the information before the issuing officer only supported the issue of search warrants that related to discreet transactions.

176    The Starbrake allegations and offences do not concern a single or discreet transaction. While the focus of the allegations and offences may have been on the reclassification of the royalty income received by Starbrake, it was also necessary to have regard to a broader course of conduct relevant to the alleged offences. That conduct allegedly included the receipt of the royalty payment, the initial accounting for that receipt, the subsequent direction by Mr Caratti to the accountant to change the accounting for the receipt and the subsequent conduct in lodging Starbrake’s income tax returns and business activity statement. There is no basis for Mr Caratti’s apparent contention that the information before the issuing officer only permitted the issue of a warrant which specified an offence particularised in terms of a single or discreet transaction, being the reclassification of the royalty payment.

177    It may be accepted, for the reasons already given, that the first Starbrake offence as particularised in the third condition of the warrant could have been drafted with a greater degree of particularity and clarity. It does not follow, however, that the warrants authorised a “general search”, or a search which was wider than justified by the information that was before the issuing officer.

178    Much the same can be said in relation to the other allegations and corresponding offences described in the third condition of the warrants.

179    The Westend offence may at first blush appear to focus primarily on the falsification of costs supposedly incurred by Westend. It does not follow that the offence related to a single transaction. The offence also involved other conduct and circumstances that provided necessary context and background to the alleged falsification of costs. The additional factual allegations included the development and subsequent sale of the land to which the costs allegedly related, the non-declaration of income derived from the sale of the land, the ATO audit and the provision to the ATO of allegedly falsified invoices. There is no basis for the contention that, for the purposes of the warrants, the Westend offences were required to be particularised in terms of a single or discreet transaction. While the Westend offences could have been drafted with more precision and particularity, it does not follow that the warrants permitted a general search, or a search that was wider than justified by the information before the issuing officer, or wider than permitted under s 3E of the Crimes Act.

180    The Whitby Land Company allegations and offence also do not involve a single discreet transaction. The description of the Whitby Land Company offence focused largely on the allegation that Mr Caratti caused Whitby Land Company to withhold GST that should have been paid to the ATO. The information before the issuing officer included details of a course of conduct whereby Whitby Land Company allegedly became liable to pay GST in respect of supplies it made over a period of time which extended over three and a half years. The alleged withholding of GST over that period was central to the offence. The issuing officer was not required to issue a warrant which only authorised a search by reference to an offence particularised in terms of a single or discreet transaction.

181    The Gucce Holdings allegations and offence raise somewhat different considerations. The allegations identified in Federal Agent Szolnoki’s affidavit revealed a course of conduct which apparently occurred over a period of time whereby Gucce Holdings overstated input tax credits. There was no single or discreet transaction. Indeed, if anything, the Gucce Holdings offence in the third condition was particularised in terms that were narrower than the allegations in Federal Agent Szolnoki’s affidavit would have warranted. That is because the offence as drafted was limited to the date December 2011. As will be seen, Mr Caratti’s second argument in support of ground 1A concerned the date in the Gucce Holdings offence. For present purposes, it is sufficient to state that Mr Caratti’s submission that the Gucce Holdings offence was particularised in terms broader than justified by the information before the issuing officer has no merit.

Were the dates in the offences wrong?

182    Mr Caratti contended that the information on oath before the issuing officer was not capable of providing reasonable grounds to suspect that the offences in the third condition were committed on the dates or date ranges particularised in offences. In short, he submitted that, on any proper interpretation of the offences as drafted, the foundational facts in Federal Agent Szolnoki’s affidavit suggested that the alleged offences were committed on dates different to those particularised. It followed, in Mr Caratti’s submission, that the issuing officer could not lawfully have been satisfied in accordance with s 3E of the Crimes Act in respect of the offences in the warrant.

183    When close consideration is given to the information in Federal Agent Szolnoki’s affidavit, together with the details of the offences in the third condition of the warrants, it can be seen that there are indeed a number of issues and ambiguities with the dates or date ranges particularised in the third condition offences. The question is whether those issues and ambiguities are sufficient to impugn the issuing officer’s decision to issue the warrants.

184    The first Starbrake offence as drafted alleges that the offence was committed in 2008. It is permissible for an offence to be particularised by reference to a date range, even a broad date range, particularly for the purposes of a search warrant. It might be alleged or suspected, for example, that the conduct constituting the offence occurred by a course of conduct over a period of time. Equally, it may be difficult for the investigators, at that stage of the investigation, to pinpoint exactly when the relevant conduct constituting the offence occurred or was suspected of having occurred. It was therefore not impermissible for the first Starbrake offence to be particularised in terms of having been committed either throughout, or on some day or days during, 2008.

185    That said, there is a potential problem or difficulty with the particularisation of the date in the first Starbrake offence. That difficulty is that the conduct constituting the offence appeared to be either the alleged deception (the reclassification of the royalty income, or perhaps the lodging of a false tax return) or the dishonest obtaining of an advantage (the non-payment of income tax properly payable by Starbrake). The information in Federal Agent Szolnoki’s affidavit tended to suggest that the alleged reclassification occurred in late 2011 or early 2012, shortly before Starbrake’s income tax return for the relevant financial year was lodged. As for the obtaining of an advantage, strictly speaking, Starbrake (and therefore Mr Caratti) could not be said to have obtained any financial advantage from the deception until the tax return that (by reason of the reclassification) did not include or disclose the income derived from the royalty was lodged. Only then would Starbrake’s taxable income and liability for income tax be assessed on the allegedly false basis. The only apparent relevance of the year 2008 would appear to be that the royalty payment occurred in July 2008, so any tax liability referable to it would have related to the financial year 1 July 2008 to 30 June 2009.

186    This analysis of the relevant information and offence is, however, overly technical and narrow where the issue is whether the information was capable of supporting the issue of a search warrant relating to the offence. It is an analysis that would perhaps be appropriate if the relevant question was whether a charge in these terms had been made out on the evidence. It might equally be appropriate if the question was whether an indictment containing this charge was properly pleaded and particularised. Such a narrow and technical analysis of the first Starbrake offence is not appropriate in considering whether it was open to an issuing officer to issue a warrant under s 3E of the Crimes Act relating to that offence.

187    As Burchett J pointed out in Beneficial Finance (at 543), in the passage extracted earlier, the legislature has entrusted the task of issuing search warrants not only to magistrates, but also to lay justices of the peace. Also relevant is the fact that, in deciding whether or not to issue a warrant, an issuing officer is acting administratively, not judicially, although the discretion is to be exercised in a judicial fashion: Baker v Campbell (1983) 153 CLR 52 at 70 (per Gibbs CJ). Just as it would be inappropriate to insist upon the invalidation of a warrant for a legally incorrect formulation of an offence, even if the substance could be understood, so too would it be inappropriate to impose an overly technical or exacting standard on issuing officers in considering the particularisation of offences specified in search warrants.

188    That point was recently emphasised by the New South Wales Court of Appeal in Polley v Johnson [2015] NSWCA 256. In that case, Simpson JA (with whom Beazley P and McColl JA agreed at [1] and [2]) said (at [44], [46] to [49]):

44    In determining whether or not to issue a warrant, an eligible issuing officer is acting administratively, or ministerially, although the discretion to do so is to be exercised judicially: Baker v Campbell [1983] HCA 39; 153 CLR 52 at p 70, per Gibbs CJ (noting that his Honour was in dissent as to the principal issue in that proceeding). It is not the role of the eligible issuing officer to whom application is made to explore any fine legal points concerning the construction of the legislative provision that creates the searchable offence upon which reliance is placed by the police officer seeking the issue of a warrant.

…

46    I accept that, in this case, it was reasonably clear to Ms Smith, from the information in the application, that there was then no current relevant judicial proceeding. But it is not the role of the eligible issuing officer to consider the sufficiency of the supporting material to found a conviction for the searchable offence identified in the application. The question for that officer is whether that material provides “reasonable grounds” for the issue of a warrant, which may yield relevant evidence or information.

47    Nor is it the role of the eligible issuing officer to engage in the construction of the legislation in question; particularly is that so, where, as here, there existed an unresolved (unresolved until the decision of the primary judge in this very case) issue of the construction of that provision. Ironically, it was the very absence of certainty about the construction of s 326(2) upon which the applicant relied to advance her claim for leave to appeal.

48    In a very different context (the extent of the application of legal professional privilege) Mason J (as he then was) and others in the High Court have commented on the undesirability of committing the determination of complex legal issues to individuals exercising administrative functions: Baker v Campbell, at p 75-76; O’Reilly v The Commissioners of the State Bank of Victoria [1983] HCA 47; 153 CLR 1 at 26. A similar approach was taken by Brennan J (as he then was) in relation to s 155(1) of the Trade Practices Act 1974 (Cth), which required the provision of information which might have exposed the person supplying the information to the risk of penalty: Pyneboard Pty Ltd v Trade Practices Commission; Dunlop Olympic Ltd v Trade Practices Commission [1983] HCA 9; 152 CLR 328 at 355. Yet that is the very nature of the exercise, it was implicit in the applicant’s argument, upon which Ms Smith ought to have embarked.

49    The guidance to be obtained from these cases is limited, but not non-existent. In each case, the argument concerned an implicitly asserted obligation on a non-judicial officer to make decisions that are essentially judicial, and of some legal complexity.

189    While it is not entirely clear, it would appear that the first Starbrake offence was particularised as having been committed in 2008 because the royalty payment was received in 2008. If, as alleged, that payment comprised income and was not a loan, it should have been returned as forming part of Starbrake’s assessable income for the financial year 1 July 2008 to 30 June 2009. While an overzealous and technical analysis might suggest that the charge could or should have been particularised with different dates, it was nevertheless open to the issuing officer to be satisfied that there were reasonable grounds for suspecting that the first Starbrake offence was properly particularised by reference to 2008. It was open to the executing officer to be satisfied that there were reasonable grounds for suspecting that at least some of the factual or legal elements of the alleged offence were referable to the year 2008. It was not the role of the issuing officer to explore fine legal distinctions or arguments that might suggest that the offence could or should have been particularised by reference to different dates.

190    Mr Caratti’s contention that the information before the issuing officer did not permit the issue of a warrant containing the second Starbrake offence has no merit for the same reasons. The second Starbrake offence was also particularised as having been committed in 2008. For the reasons already given, the second Starbrake offence should be read as relating to the non-payment of GST referrable to the royalty payment that was made in mid-2008. Starbrake was required to lodge a business activity statement and pay GST referable to the supply to which the royalty payment related in 2008. Accordingly, the alleged failure to “pass on” GST also arguably occurred in 2008. Whilst it may have been possible (and perhaps even preferable) to particularise the offence by reference to a particular date (for example the date the business activity was in fact lodged, or was required to be lodged) that level of particularisation was not required for the purposed of a valid search warrant relating to the alleged offence. It was open to the issuing officer to be satisfied in accordance with s 3E of the Crimes Act in relation to the second Starbrake offence as particularised.

191    The Westend offence concerned the allegation that Mr Caratti falsified costs in a dishonest attempt to reduce tax otherwise payable by Westend. The offence was particularised as having occurred in 2008. The information before the issuing officer, however, suggested that the alleged falsification of costs involved false invoices that were allegedly created in 2009, not 2008.

192    It is unclear why the Westend offence was particularised by reference to 2008. There are, however, some possible explanations. The information before the issuing officer suggested, for example, that some of the work to which the false invoices related may have occurred during 2008. That is because the developed land was sold between 2003 to 2008. As land sales were made during 2008, it would also appear that some of the income earned by Westend, against which the allegedly “falsified costs” were presumably allocated for income tax purposes, was earned during 2008. That might also provide a basis for suspecting that the offence was committed, at least in part, in 2008.

193    That said, there is no doubt a degree of uncertainty and ambiguity concerning the date period during which it was alleged that the Westend offence was committed. It no doubt would have been preferable for there to have been more clarity and particularity in relation to the date of the Westend offence. The particularisation of the offence as having been committed in 2008 would no doubt have been problematic if the question was whether an indictment containing the Westend offence should be struck down or dismissed having regard to the evidence. That, however, is not the question here. Such a technical and narrow approach to the particularisation of the offence is unwarranted where the relevant question is the sufficiency of the information before an issuing officer for the purposes of issuing a search warrant. It was at the very least open to the issuing officer to be satisfied that there were reasonable grounds to suspect that the Westend offence was referable, at least in part, to 2008.

194    The Whitby Land Company offence was alleged to have been committed over a three and half year period between 1 July 2010 and 31 December 2013. That would appear to be the period during which it was alleged that Mr Caratti caused Whitby Land Company to “withhold” GST that was properly payable to the ATO and thereby obtained a financial advantage. It would appear from the information before the issuing officer that the relevant supplies in respect of which it was alleged Whitby Land Company was liable for GST, the sales of the Nicholson Road land, occurred at various times during the period 2010 and 2012. The GST payable in respect of those supplies should have been brought to account in business activity statements lodged, or required to be lodged, during the latter part of 2010 and perhaps into 2013.

195    The dates in the Whitby Land Company offence would appear to relate to specific dates when business activity statements were required to be lodged, and GST paid, in respect of the taxable sales of land. It may be, as Mr Caratti effectively contended, that strictly speaking this period was slightly broader than the period during which taxable sales were made and GST liabilities incurred based on the information before the issuing officer. The information before the issuing officer concerning the dates of the relevant supplies was somewhat lacking in clarity and particularity. Again, however, the narrow and technical analysis inherent in Mr Caratti’s contentions is, in all the circumstances, not the appropriate analysis to adopt in considering whether it was open to the issuing officer to issue the warrants. In all the circumstances it was open to the issuing officer to be satisfied as required by s 3E of the Crimes Act in respect of the Westend offence particularised in terms of the period 1 July 2010 to 31 December 2013.

196    The central allegations in the Gucce Holdings offence were that Mr Caratti and Ms Bazzo falsified costs incurred by Gucce Holdings, with the result that Gucce Holdings overstated input tax credits properly claimable by it. In so doing, it was alleged that Mr Caratti and Ms Bazzo obtained a financial benefit by deception. The date on which the offence was alleged to have been committed was December 2011.

197    It is somewhat of a mystery why the offence was particularised by reference to December 2011. On one view of the information before the issuing officer, it would have been open to suspect, on reasonable grounds, that overstated input tax credits were or may have been claimed over a much longer period. The relevant works in respect of which the costs were allegedly falsified extended from about July 2011 to about November 2012. The apparently legitimate invoices in relation to the works extended over the period August 2011 to December 2012. There appears to have been a reasonable basis to suspect that the allegedly false invoices (and corresponding overstated input tax credits) covered the same periods.

198    Despite this apparent disjunct between the information, which suggested a broad offence period, and the offence, which was particularised in terms of a relatively narrow period, it was open to the issuing officer to issue warrants containing the Gucce Holdings charge as particularised. The particularised date, December 2011, was within the broader period during which the offences might reasonably have been suspected of having been committed.

Conclusion in relation to ground 1A

199    Mr Caratti’s contention that the search and seizure authorised by the search warrants in question exceeded what was justified by the information before the issuing officer is rejected. The warrants were not in any relevant sense wider than justified on the basis that the offences in the third condition could possibly have been drafted in narrower terms. Nor can it be concluded that the information before the issuing officer required the offences in the third condition to contain different dates or date ranges. While there was again a certain lack of clarity and particularity in the third condition offences, the information before the issuing officer was nevertheless capable of satisfying the officer that there were reasonable grounds to suspect that there was or would be evidential material at the relevant premises in respect of the offences specified in the third condition of the warrants.

Ground 1C – the “storage medium” paragraph

200    Ground 1C concerns the following paragraph which appears immediately after the third condition in each of the warrants.

Together with any storage medium or storage device which contains any of the above things and any manual, instruction, password, or other thing which is needed to gain access to or interpret or decode any of the above things.

201    Mr Caratti contended that this “storage medium” paragraph had the result that the warrants as a whole “exceeded what was justified by the material before the issuing officer”. In Mr Caratti’s submission, the information before the issuing officer did not provide reasonable grounds for suspecting that a “storage medium or storage device” comprised evidential materials simply because a “thing” stored on or in the device may otherwise have fallen within the terms of the warrant. He also contended that the storage medium paragraph impermissibly subverted the requirements of s 3L of the Crimes Act.

202    There is merit in Mr Caratti’s contentions concerning the operation and validity of this paragraph in the warrants.

203    It would appear that the storage medium paragraph was intended to deal with the seizure of computers and computer related devices, such as hard drives and USB storage devices. Section 3L of the Crimes Act contains detailed provisions that concern, in general terms, the use of electronic equipment during the execution of a warrant to access data on the equipment to determine if the data constitutes evidential material. Perhaps more significantly, it provides for the copying of the data and specifies the circumstances in which, instead of copying the data, the equipment itself can be seized. Section 3L (1), (1A), (2) and (3) are of particular relevance to this ground. Those subsections provide as follows:

(1)    The executing officer of a warrant in relation to premises, or a constable assisting, may operate electronic equipment at the warrant premises to access data (including data not held at the premises) if he or she suspects on reasonable grounds that the data constitutes evidential material.

Note:    A constable can obtain an order requiring a person with knowledge of a computer or computer system to provide assistance: see section 3LA.

(1A)    If the executing officer or constable assisting suspects on reasonable grounds that any data accessed by operating the electronic equipment constitutes evidential material, he or she may:

(a)    copy any or all of the data accessed by operating the electronic equipment to a disk, tape or other associated device brought to the premises; or

(b)    if the occupier of the premises agrees in writing--copy any or all of the data accessed by operating the electronic equipment to a disk, tape or other associated device at the premises;

and take the device from the premises.

(2)    If the executing officer or a constable assisting, after operating the equipment, finds that evidential material is accessible by doing so, he or she may:

(a)    seize the equipment and any disk, tape or other associated device; or

(b)    if the material can, by using facilities at the premises, be put in documentary form--operate the facilities to put the material in that form and seize the documents so produced.

(3)    A constable may seize equipment under paragraph (2)(a) only if:

(a)    it is not practicable to copy the data as mentioned in subsection (1A) or to put the material in documentary form as mentioned in paragraph (2)(b); or

(b)    possession by the occupier of the equipment could constitute an offence.

204    The meaning of the storage medium paragraph, read as it must be in the context of the warrant as a whole, is somewhat obscure. Like other parts of the warrant, it is poorly drafted. The reason for including it in the warrant is unclear given that the first condition of the warrant specifically referred to “computers and peripheral devices” and specifically adverted to documents and things “stored on a computer, or on a computer storage device, or on any other type of storage medium or storage device”. The need for including this additional paragraph is also questionable given the detailed provisions in the Crimes Act relating to the search and seizure of electronic equipment.

205    There are at least two available interpretations of the paragraph. One interpretation would be potentially problematic in terms of the validity of the warrant (subject to questions of severance), the other would not.

206    The interpretation embraced by the Commissioner was, in effect, that the storage medium paragraph does no more than clarify or confirm that an item falling within that paragraph, for example a “storage medium or storage device”, such as a USB device or “memory stick”, can be seized if it otherwise satisfies all three conditions in the warrant. If that was the extent of the operation of the paragraph, it would not be problematic. The question is, however, whether that is the extent of the intended and actual operation of the paragraph.

207    There is no reason to doubt that an electronic device containing data could itself constitute evidential material and therefore be seized under the warrant. That would be the case even without the storage medium paragraph. A hypothetical example of such an item would be if a searching officer located a USB storage device which was labelled “Starbrake accounts, tax returns and BAS-2008 to 2012”. Such an item would appear to satisfy each condition in the warrant. It would satisfy condition one because it could be considered to be an “electronic storage medium” in respect of which there were reasonable grounds to suspect that it contained “business records” and “tax returns”, all of which are things referred to expressly in condition one. It would satisfy condition two because it would be reasonable to suspect that it related to Starbrake, one of the listed entities in the second condition. Most importantly, it would be likely to satisfy condition three because there would most likely be reasonable grounds for suspecting that the device itself would afford evidence of the commission of the two Starbrake offences in the third condition.

208    The important point to emphasise in respect of this hypothetical example is that the device itself, not just the data on it, could constitute evidential material. Given the label on the USB device, there would be reasonable grounds to suspect that all of the data stored on it would be potentially relevant to the offences in the warrant. It would also be reasonable to suspect that the physical item itself (as distinct from the data on it) might be relevant. For instance, the label on the USB device itself might be evidence of the nature and provenance of both the device and its contents. It might be open, for example, to an executing officer to suspect that the handwriting on the label would assist in identifying who was responsible for compiling the data on the device. That scenario is analogous, in some respects, to the situation where a search officer located a single relevant document within a larger book, file or folder. If it was reasonable to suspect that the book, folder or file would assist in establishing the nature, authorship or provenance of the single document within it, the book, file or folder itself could be seized as evidential material: Harts Australia v Commissioner of Australian Federal Police (2002) 117 FCR 358 (Harts (2002) (First instance)) at 370 [39]; Adler v Gardiner [2002] FCA 1141; (2002) 43 ACSR 24 at 29-20 [21]-[22].

209    In such circumstances, it would be unnecessary to utilise any of the provisions in s 3L of the Act. There would be reasonable grounds to suspect that the device itself would comprise evidential material as defined by the three conditions in the warrant, even without the storage medium paragraph. Section 3F(1)(c) of the Crimes Act provides that an executing officer or constable assisting is authorised to seize “the kinds of evidential material specified in the warrant”. The hypothetical USB device itself could therefore be seized under the terms of the warrant and s 3F without resort to s 3L(2)(a) of the Crimes Act. That would be the case even without the storage medium paragraph.

210    The difficulty for the Commissioner is that the interpretation of the storage medium paragraph advocated by him is not supported by either the text of the paragraph or the context in which the paragraph appears in the warrants. A fair reading of the storage medium paragraph in context suggests that it purports to authorise more than the seizure of items, like the hypothetical USB device, that would otherwise meet each of the three conditions in the warrant and be able to be seized under s 3F(1)(c). The words “together with” at the beginning of the paragraph suggest that the paragraph purports to operate outside of, or in addition to, the three conditions in the warrant. It would also be unnecessary to add a paragraph to simply confirm or clarify that computers or other electronic equipment or devices that otherwise meet all conditions in the warrant could be seized. As indicated earlier, computers and storage devices are already expressly included in the first condition of the warrant.

211    When read in context, what the paragraph in fact purports to do is to authorise the seizure of an item (for example a storage device) if it contained anything which met the three conditions in the warrant, even if the storage device itself, as distinct from its contents, did not meet or satisfy each of the three conditions. It also purports to authorise the seizure of the storage device itself in circumstances which would not necessarily be permitted by s 3L of the Crimes Act. Another hypothetical example might serve to illustrate how the impugned paragraph purports to extend the authority to seize storage devices, such as computers, beyond what would otherwise be permitted by s 3F(1)(c) and the three conditions in the warrant or s 3L of the Act.

212    If a searching officer located an unlabelled laptop computer in the television room of Mr Caratti’s residential premises, it is doubtful that the officer could reasonably form a view, absent further information, that the computer fell within all three conditions of the warrant. Arguably it would satisfy the first condition because it was a “laptop computer”, which is amongst the long list of items in the first condition. Perhaps more contentiously, given that the computer was located in Mr Caratti’s house, it could possibly be said to “relate to” Mr Caratti, who is listed in the second condition. As an aside, this serves to demonstrate the breadth of the first two conditions in the warrants.

213    It is, however, difficult to see how it could reasonably be concluded that the computer would satisfy the third condition. There would not appear to be any reasonable grounds to suspect that it would afford evidence of any of the offences listed in the third condition. For all the officer knew, the computer might contain nothing more than recordings of Mr Caratti’s favourite episodes of “The Simpsons”. That might be evidence of an offence under the Copyright Act. It could not reasonably be suspected of being evidence of any of the third condition offences. Without more the computer could not be seized.

214    If however, there was something to suggest that the computer contained data that might be relevant to the third condition offences, the officer could operate the equipment pursuant to s 3L(1) of the Act. Let it be assumed that the officer had reasonable grounds to suspect that there may be data stored on the computer that might constitute evidential material and that, upon operating the computer, the officer found that thousands of documents (in the Microsoft “Word” electronic format) were saved to the computer’s hard drive. Those documents comprised personal correspondence that, with one exception, had nothing whatsoever to do with any of the condition three offences. Assume that the exception was a letter that contained admissions relevant to one of the offences. Assume also that there was nothing to suggest that the position, location or provenance of the relevant “Word” version of the letter as stored or saved on the computer was relevant, or that the computer itself would assist in proving the authorship or provenance of the electronic version of the letter.

215    In such circumstances, the officer could take one of two courses of action under s 3L.

216    First, the officer could utilise the provisions of s 3L(1A) of the Crimes Act and copy the data stored on the computer onto another disk, tape or associated device and then take that device (the device containing the copied data) from the premises. Second, the officer could utilise the provisions in s 3L(2) and either seize the computer itself (s 3L(2)(a)) or, using a printer at the premises, print the data in documentary form and then seize the printed document (s 3L(2)(b)). Section 3L(3) provides, however, that the computer can only be seized in such circumstances if either it was not practicable to copy the data on the computer to a device as provided for in s 3L(1A), or possession of the computer by the occupier could constitute an offence.

217    The important point is that, in this hypothetical scenario, the officer would have no authority to seize the computer other than as provided for in s 3L(2)(a) and (3). That is because, as already indicated, without more the officer would have no reasonable grounds for suspecting that the computer itself, as opposed to any data stored on it, would satisfy all three conditions of the warrant. The computer could therefore not be seized pursuant to s 3F(1)(c). At the very least the officer would have to turn his or her mind to the question whether it was or was not practicable to copy the data pursuant to s 3L(1A). If it was practicable to copy the data, the computer could not be seized.

218    The storage medium paragraph in the warrants would, however, appear to authorise the executing officer to seize this hypothetical computer (as a storage medium or storage device) on the basis that it contained a “thing” (the data file containing the relevant letter) because that data file or letter satisfied each of the conditions in the warrant. It would appear to authorise the seizure of the computer in the circumstances where there were no reasonable grounds to suspect that the computer itself, as distinct from the single relevant data file stored on it, satisfied the third condition of the warrant and therefore comprised evidential material. It would also appear to purport to authorise the seizure of the computer even if the conditions or circumstances in s 3L(3) were not satisfied.

219    In these circumstances, the impugned storage medium paragraph would appear to have the capacity to subvert or override the operation of s 3F(1)(c) and s 3L(2)(a) and (3) of the Act. It purports to permit the seizure of electronic equipment and storage devices that would otherwise not be able to be seized.

220    The Commissioner’s submissions concerning the operation of this paragraph of the warrant appeared to proceed on a false premise. The Commissioner submitted, in effect, that if a computer contained a file (even a single file) relevant to an offence in the warrant, the computer itself could be seized, without recourse to s 3L, if the first condition of the warrant included computers amongst the list of “things” that satisfied that condition. This submission appeared to be based on the premise that if a single file saved on the computer might be relevant to the offence, and would therefore satisfy the third condition, it necessarily followed that there would be reasonable grounds to suspect that the computer itself, as distinct from the single file, would afford evidence of the commission of the offence. That is wrong. Of course, there may be cases (such as the hypothetical labelled USB device considered earlier) where there computer or device itself could reasonably be suspected of comprising evidential material. That may be because the device itself may assist in proving the nature, identity or provenance of the files stored on it. There may, for example be labels or identification marks on the computer hardware itself which might be potentially relevant because they might tend to prove who used the computer. But that is not every case. The impugned paragraph purports to authorise seizure of a computer in any case where a relevant file is saved on the computer.

221    The Commissioner also contended that s 3L was facultative, not limiting, and simply supplemented the broader search and seizure powers in s 3F. That may be so. If a computer or other storage device satisfies the conditions in the warrant that define the relevant evidential material, it may be seized pursuant to s 3F(1)(c) of the Act. It does not need to be seized under s 3L(2)(a). That is the case even where it may have only became apparent that the computer itself satisfied the conditions in the warrant, and was therefore able to be seized under s 3F(1)(c), after the procedure provided for in s 3L(1A) was utilised and the computer was operated and the data stored on it examined. In circumstances where the computer is able to be seized under s 3F(1)(c), the question whether or not the condition or circumstance specified in s 3L(3) was satisfied does not arise. In this sense, s 3L(2)(a) provides an additional or alternative basis for seizing a computer.

222    However, the Commissioner’s submission that s 3L was facultative also proceeded on the premise that the mere presence of a relevant saved file on a computer would necessarily mean that the computer itself, as opposed to that relevant file, would satisfy the conditions in the warrant and could therefore be seized under s 3F(1)(c). For the reasons already given, that is not always the case. The computer in the hypothetical example just discussed provides an example of a case where the presence of a file on a computer would not necessarily justify seizure of the computer under s 3F(1)(c).

223    The Commissioner’s construction of the operation of ss 3F and 3L would effectively denude s 3L(2)(a) and (3) of any operation. On the Commissioner’s construction, an executing officer would almost never have to turn his or her mind to whether it was practicable to copy the data on a computer, as opposed to seizing the computer, other than perhaps in circumstances where the first condition of the warrant does not include computers or electronic equipment in the list of “things” that might be seized. Having regard to the way search warrants are almost invariably drafted these days, that will almost never be the case.

224    Contrary to the Commissioner’s submissions, the impugned storage medium paragraph impermissibly authorises seizure in circumstances not otherwise permitted by either s 3F or s 3L. The impugned paragraph purports to authorise seizure of a computer or other electronic device, which may not itself be evidential material, simply because it contains a file that may constitute evidential material. The very point of s 3L(2)(a) is to permit the seizure of such a computer (one that is not otherwise able to be seized under s 3F(1)(c) or any of the other paragraphs of s 3F), but only if the circumstances provided in s 3L(2)(a) and (3) are satisfied. The impugned paragraph purports to permit seizure even if those conditions are not satisfied.

225    It follows that there is merit in Mr Caratti’s contention that the storage medium paragraph (the paragraph immediately after the third condition in the warrants) operated, or purported to operate, so as to authorise the seizure of items that did not comprise evidential material and were not otherwise able to be seized under the relevant provisions of the Crimes Act. To the extent that it authorised seizure of items not otherwise able to be seized under s 3F or s 3L of the Crimes Act, it was beyond power and invalid. It was not open to the issuing officer to issue warrants containing the storage medium paragraph.

226    It does not necessarily follow, however, that the warrants (or the decisions to issue them) were void and of no effect and should be quashed. That is because in certain circumstances parts of a search warrant that have been found to be invalid may be severed from the balance of the warrant. The question is whether severance of the offending paragraph in the warrants is, in all the circumstances, warranted.

Severance

227    In Parker v Churchill, Jackson J found that significant parts of a search warrant that purported to describe the offences to which the warrant related were invalid. His Honour declared those parts of the warrant to be invalid, but ordered that the invalid parts could be severed from the warrants. His Honour declared the warrants to be otherwise valid. His Honour said (at 350):

There is no reason why a search warrant granted under s 10 may not include in respect of the same place a number of quite different matters and there is nothing in the section itself to suggest that if one of the matters so included exceeds the powers conferred by s 10, the warrant necessarily fails as to the other matters. It is possible, of course, that the good and bad parts of the warrants may be so interlinked that one cannot stand without the other but that would usually mean no more than that the parts, as a matter of construction of the warrant, were not truly separate. Further, as the primary judge said, the authorities suggest that a search warrant, being an order of a justice is divisible and when good in part and bad in part, the good may be divided from the bad, and the good affirmed and the bad quashed: see R v Johnson & Franklin Wholesale Distributors Ltd (1971) 3 CCC (2d) 484; Adler v Attorney-General of Alberta (supra) at 139-140; Abou-Assale v Bourden JSP (1978) I CR (3d) 213 at 231; Coward v Allen (1984) 52 ALR 320 and Brewer v Castles (No 3) (1984) 52 ALR 581.

228    Bowen CJ and Lockhart J agreed with Jackson J, other than in respect of one part of the warrant that Jackson J had declared invalid. It is readily apparent that Bowen CJ and Lockhart J agreed with Jackson J in relation to the question of severance. They declared that certain parts of the warrant were invalid, but that the warrants were otherwise valid.

229    In Beneficial Finance, Burchett J (with whom Sheppard J agreed at 525) considered that it was open to sever parts of a warrant which incorrectly recited the language of the former s 10(1)(a) of the Crimes Act. His Honour said (at 545).

The severability of a search warrant has some importance for the present case because of the argument, further consideration of which I deferred earlier in these reasons, that the warrants contain an inaccurate reproduction of the language of s 10(1)(a) of the Crimes Act, and thus purport to authorise inappropriately the seizure of things "in respect to which there are reasonable grounds for suspecting that [the suspected offences] have been committed". In my opinion, if this portion of the warrants is invalid, it is readily severable. As there has been no suggestion that any particular document has been, or is likely to have been, seized in reliance upon this portion of either of the warrants, it is unnecessary to decide whether the failure to follow precisely the wording of the statute did have any vitiating effect. I am unable to imagine anything in this case which could be a thing "in respect to which" the offence had been committed, yet would not fall within the terms of that part of the warrant which accurately reflects s 10(1)(b). That has already been made clear in the discussion of the true meaning of the word "and" in this very special context. The reflection of s 10(1)(a) in the drafting of the document cannot, in the circumstances, have made any practical difference to the search or the seizure. It would be an apotheosis of pedantry to refuse to sever the warrant, and to invalidate it on this ground.

230    Pincus J agreed “substantially” with the reasons of Burchett J, including that severance of invalid portions of a warrant is appropriate in some circumstances. His Honour took issue, however, with Burchett J’s view that it was relevant, in the context of severance, that there had been no suggestion that documents had been seized in reliance on the invalid parts. Pincus J expressed the view (at 526) that it “cannot be incumbent upon the party challenging an executed warrant to show which documents were seized in reliance on particular parts of it”.

231    In Peters v Attorney-General for New South Wales (1988) 16 NSWLR 24, McHugh JA followed Parker v Churchill and held that the doctrine of severability applied to warrants that were issued in excess of power. His Honour noted (at 41D-E), however, that “it is not possible to sever a warrant where the invalid provision forms part of an inseparable context, or would operate differently or produce a different result from that which was intended”. Perhaps even more importantly, his Honour found that, because warrants are instruments for the purposes of provisions such as s 32 of the Interpretation Act 1987 (NSW), they are to be read and construed to the extent that they can be read as valid instruments. The result was to throw the burden upon the person attacking an entire warrant to prove, in effect, that if the invalid part of the warrant was severed, the warrant would have operated differently, or would have produced a different result to that intended.

232    In all of the circumstances of this case, it is appropriate to sever the storage medium paragraph. That is so for a number of reasons.

233    First, the invalid storage medium paragraph forms only a very small part of the warrants. As already noted, properly construed, the paragraph purports to operate independently of the three conditions in the warrants. It is not at all intertwined with, or inseparable from, any other part or parts of the warrants. It only purports to authorise the seizure of storage media, storage devices and associated items. It only operates impermissibly in respect of devices that would not otherwise satisfy the three conditions of the warrant or be able to be seized pursuant to s 3L(2) of the Act. It does not impact at all on the authority to seize any other items under the warrant.

234    Second, since the paragraph could only operate to impermissibly authorise the seizure of a very narrow category of items (storage media and storage devices that would not otherwise be able to be seized under the warrant or s 3L(2)), it is readily apparent that the vast bulk of items that were seized under the authority of the warrants could not have been seized under the purported authority of the storage media paragraph. That is apparent irrespective of which, if any, party bore the onus, in this context, to prove which documents were seized in reliance on which particular parts of the warrants (cf. Pincus J in Beneficial Finance at 526).

235    Mr Caratti contended that if the paragraph in question was invalid, it invalidated the entire warrant and all items seized under the warrant should be returned. That submission is rejected. It would not, in all the circumstances, be appropriate to order the return all of the seized items in circumstances where the vast bulk of the seized items could not on any view have been seized under the authority of the impugned paragraph and were therefore validly seized.