Caratti v Commissioner of the Australian Federal Police & Anor [2018] HCATrans 93 (18 May 2018)

Last Updated: 24 May 2018

[2018] HCATrans 093

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S280 of 2017

B e t w e e n -

ALLEN CARATTI

Applicant

and

COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE

First Respondent

KEVIN TAVENER

Second Respondent

Application for special leave to appeal

BELL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 18 MAY 2018, AT 12.27 PM

Copyright in the High Court of Australia

MS R.L. SEIDEN, SC: May it please the Court, I appear with my learned friends, MR P.K. BRUCKNER and MR W.R. JOHNSON, for the applicant. (instructed by Hardinlaw Solicitors)

MS K.A. STERN, SC: May it please the Court, I appear with my learned friend, MR D.P. HUME, for the first respondent. (instructed by Australian Government Solicitor)

BELL J: Yes, Ms Seiden.

MS SEIDEN: Thank you. Your Honours, Beneficial Finance emphasises that the requirement to state the offence in a warrant exists so as to set the bounds of an area of search. It is therefore not necessary to state the offence with the particularity of an indictment for the reason that the goal is not to define the issues for trial but to define the search area.

Yet, what the courts have here done is, in effect, turned Beneficial Finance on its head to say that if the substance of the offence is stated, it must follow that the search area is sufficiently defined. The language used in Beneficial Finance – that the warrant should disclose the nature of the offence so as to indicate the area of the search – has now replaced the statutory language, something the court in Beneficial Finance itself, warned against.

GAGELER J: So, what ground of appeal are you speaking to here?

MS SEIDEN: Grounds 7 and 8 deal with whether or not there was ambiguity and by “ambiguity” the applicant means that the search warrants admitted of more than one interpretation so that the search areas, depending on how one interpreted the third condition in the offence – there was more than one interpretation so that there was more than one search area. So, that is what we would call the ambiguity ground which is at 7 and 8 of the book at page 246.

GAGELER J: If you were successful on that ground, you want the matter remitted to the Full Court to do it all over again?

MS SEIDEN: Indeed. We say the Full Court just did not deal with it at all and, for that reason, it could be appropriate to remit it. But that ground actually can be determined by looking at one piece of paper which is the search warrant. We have asked for it to be remitted. But if that was the only ground, then that ground can be answered by this Court looking at a single piece of paper. Everything that is needed to answer the question is written in the third condition.

The remittal would be necessary for the ultimate remedy which would be whether or not the discretion – in the discretion, even if your Honours decided that the warrant was bad, that the documents could nevertheless be kept and reviewed. So, that is another issue that the courts did not grapple with. So that question of the ultimate remedy - do the materials go back to the applicant or not - - -

BELL J: The court did not get to what you are now characterising as the “ultimate remedy”. All the judges who have looked at the matter have concluded that the search warrant was sufficient in its terms to comply with the requirements of section 3E of the Act. There was no consideration given to the idea that an invalid warrant might, nonetheless, be allowed to - - -

MS SEIDEN: Certainly.

BELL J: Yes.

MS SEIDEN: Certainly, your Honour. Although, we would, perhaps, put something slightly differently which was that it would be submitted that the Full Court did not itself consider whether the warrants were valid and that they were looking for error of approach. But, certainly, it would be accepted that they did not look at the discretion because their conclusion was that the warrants were not invalid.

BELL J: When you say that the Full Court did not itself carry out the task and did not address itself to the question of whether there was – what I think you were putting was impossible ambiguity or something of that character - the Full Court appears to have reviewed each of the offences in condition 3 with some care. Ultimately, to reach the conclusion – at application book 227, paragraph 122 – that just as the primary judge had concluded, the:

warrants were sufficient for the statutory purpose of confining the object of the search that was authorised - - -

MS SEIDEN: With respect, your Honour, we would put it, again, slightly differently – that if one looks at the approach that the Full Court took which – if I could take your Honours to paragraph 10, which is at application book 176 – what their Honours in the Full Court were looking for was demonstrated error in the sense of error of principle applied by the learned primary judge. At paragraph 10 at the book, 176, their Honours note at line 10:

It is not enough that this Full Court would have reached a different conclusion on any topic that was fairly open to his Honour –

Then, their Honours apply Reckitt Benckiser. Reckitt Benckiser, the Nurofen case, was a case about whether the appropriate amount of penalty had been applied. The range was anywhere from zero dollars to a million dollars per contravention. This case, it is submitted, is a construction of an instrument that should admit of only one possible construction. It is a binary outcome. So, the problems that are raised in terms of difficulties of appeal in a Reckitt kind of case simply do not arise here.

In a Reckitt-type of case, a Full Court finding that it perhaps would have preferred a different answer would not necessarily demonstrate error. But, as was said in Branir v Owston, when you have a case where you are construing an instrument and there is only one legally correct construction, the fact that the Full Court might prefer a different outcome would, itself, be indicative of error. It is submitted that the Full Court here was approaching the matter as if what the trial judge had done was some sort of instinctive synthesis whereas, really, the task was a pure instrument construction with a binary outcome.

BELL J: It was the construction of the warrant, in light of a long line of authority, that accepts that the statement of the offence need not be set out with the particularity of an indictment and, against that body of authority, the court was looking at the considerable body of evidence, as I understand it, concerning the nature of the investigation and looking at - for example, the first offence that was set out in condition 3 referred to 2008 and the primary judge concluded, if I understand it correctly, that at least some of the offending that was alleged was in 2008, albeit it was asserted that it had continued for a rather longer period. His Honour ultimately reasoned that it was sufficiently described for the persons on whom the warrant is served to understand that which was alleged and the scope of the search.

Now, in that context, both the primary judge and the Full Court were confronted with submissions that kept speaking of “impossible ambiguity” and to the extent that one finds the language at times of well, this was open to the primary judge, it might be thought to be responding to the way the matter was put.

MS SEIDEN: With respect, your Honour, the Full Court did articulate that the ambiguity that the applicant complained of was that there were variable search areas. If one looks at what the primary judge did, for instance, in that first offence – if I could take your Honours to application book 51.

BELL J: Yes.

MS SEIDEN: His Honour says, at paragraph 133 – the second line of that paragraph:

the description was sufficient to enable an occupier to discern a search perimeter relevant to the offence.

BELL J: Yes.

MS SEIDEN: You can see there that his Honour then identifies what we – sort of four pillars – that his Honour was looking to be satisfied in each case. The first one was the name of the accused. The second was an identification of the statutory provision. The third was a date or a date range and then the fourth one was the gist of the offence.

If your Honours turn to what his Honour said at paragraph 129, his Honour noted that there were potential issues with the date. It is somewhat unclear whether 2008 referred to the date on which the alleged deceptive conduct, that is, the accounting reclassification occurred – that was the first option – the lodging of the false tax return which was option number 2 and the date of the financial advantage which would have been when the assessment issued. We have identified another one which is the date of the receipt of the amount.

None of their Honours considered whether that ambiguity – in relation to what 2008 meant – affected the search area or what a person reading the warrant might think the search area was. For instance, if 2008 referred to the date of the receipt that would tell somebody who thought that that is what 2008 meant that the reference point by which the search area was to be looked at commenced in 2008.

But if one looked at the search warrant and thought that 2008 referred to the lodgement of the tax return that might signal that actually 2008 signals the end of the search perimeter. So there are two different search perimeters depending on one’s interpretation. What has one - - -

BELL J: Accepting that, just coming back to the point of principle that you seek to agitate, the Full Court found that the primary judge was correct to conclude that it was sufficient to identify the subject area of the warrant in relation to the first offence in condition 3 by reference to the date 2008 and albeit it was not, perhaps, the best way to identify the offence, to look to the accounting classification as distinct from the date in which the return was lodged, nonetheless it sufficed.

Where do we see the Full Court saying we accept the applicant’s submission that this was an inadequate particularisation of the offence but, nonetheless, we think it was open to the trial judge to come to a contrary view? I mean, that is, essentially, what you are contending, is it not?

MS SEIDEN: What we are contending is that they actually did not address that first question, your Honour – whether they accepted that the applicant’s submission that the offence was not sufficiently particularised for the reason that their Honours thought that it was not necessary – it was not enough if they might have preferred a different conclusion. If I could take your Honours back, at book 176 – I have taken your Honours to paragraph 10 – paragraph 12:

The conclusions by which the primary judge arrived at the declarations and orders . . . were fairly available to his Honour. The necessary error has not been established-

So, in each, the language is always - it was open. The language is not – and then, again, at paragraph 40, which is on application book 189 – and this, we say, is critical:

It is substantially a trial determination –

which refers back to the Reckitt analysis:

rather than an appeal determination, as the subjective nature of the determination will seldom lend itself to being a conclusion that was not open to a primary judge, even if members of an appeal court might have reached a different conclusion.

We say, in the first instance, it is not a subjective determination. It is an objective determination. The above principle makes appellate intervention, which is already difficult in many cases, often very hard. We do not see why appellate intervention – at least on this issue – should be difficult at all. It is an objective determination. It is a binary outcome. But the language is, throughout the judgment, again and again that the judge’s answer – the primary judge’s response was fairly open.

This is particularly stark at paragraph 117 which is at the book 225. In particular, it was open to the primary judge. In fact, even at 116, the last line of 116, these conclusions “were fairly open”, and 117 – “it was open to the primary judge”. Again, the submissions on behalf – and the middle of that paragraph - - -

BELL J: But if one goes back to paragraph 115, there one finds their Honours saying that:

The primary judge was correct to conclude that the necessary bar for validity had been met both as to the sufficiency of the material before the issuing officer and in the adequacy of the offence descriptions - - -

MS SEIDEN: Indeed. We would say that that formulation has to be read in light of the way that their Honours have prefaced the judgment that their Honours have referred to Reckitt Benckiser and your Honour will see something similar at 121 and 122. But, the final paragraph, 123:

There was no error demonstrated in the conclusion reached by the primary judge. Both of these grounds -

because they were looking for error without appreciating, in our respectful submission, that error would have been demonstrated had they simply preferred a different opinion. It is submitted that in light of the - - -

BELL J: Your contention is that insofar as this is an appeal by way of rehearing you accept that it is necessary to identify error of fact or law - - -

MS SEIDEN: Certainly.

BELL J: - - - or in the inferences to be drawn from the primary fact. But you say that if the appellate court had come to the view that the inferences to be drawn from the primary fact were that the terms of condition 3 were ambiguous and failed to identify the search areas with sufficient particularity, then it would have been incumbent on the court to intervene.

MS SEIDEN: Indeed.

BELL J: Where does one find any indication that their Honours so concluded?

MS SEIDEN: Your Honour at 123, they say:

There was no error demonstrated in the conclusion reached by the primary judge.

They were looking for error. If I take your Honour back to paragraph 10 at application book 176:

It is not enough that this Full Court would have reached a different conclusion on any topic that was fairly open –

and the language throughout the judgment is one of “fairly open” and a couple of times their Honours have referred to it would not matter if they reached a different conclusion – if they preferred a different conclusion. We say, in a case where you have a binary outcome, if the Full Court had preferred a different conclusion, that signals error and that absolutely is the error that the applicant needed to demonstrate.

BELL J: When you say a “binary outcome”, you refer to the circumstance that a warrant is either valid or it is not.

MS SEIDEN: Precisely.

BELL J: It is the absence of any indication that their Honours considered that despite the drafting deficiencies, at the end of the day the statement of the offences in condition 3 was not sufficient in terms of longstanding authority to identify the area of the search.

MS SEIDEN: Indeed. With respect, the applicant says that the Full Court simply did not ask itself that question. It asked itself whether the primary judge was wrong to apply Beneficial Finance, was wrong to use a proxy of the four pillars without turning their minds to actually whether they preferred a different outcome. Yet, the indication in the language throughout the case is that they would, in fact, have preferred a different outcome which would have met the test of the necessary error.

GAGELER J: Where do you get that – that they would have preferred a different outcome?

MS SEIDEN: Again, paragraph 10.

GAGELER J: I can see how you can say that the reasons can be read as applying a looser test of openness than would follow - - -

MS SEIDEN: Yes.

GAGELER J: - - - from Warren v Coombes. I understand that. But, where do you find in the judgment the Full Court expressing the view, well, we would have come to a different result but we are deferring to the result that the trial judge arrived at?

MS SEIDEN: They do not, with respect, actually put it that high because they do not turn their mind to it. But there are indications that had they turned their mind to it, it would have been – they would have preferred something else. At paragraph 117, which is the book 225, in the middle of that paragraph, they say:

Again, the submissions on behalf of –

The first line is “it was open to the primary judge” – so, that language again.

GAGELER J: Of course, yes.

MS SEIDEN: Then, in the middle:

Again, the submissions on behalf of Mr Caratti did not go further than suggesting that the primary judge did not reach the preferable conclusion. Accordingly, no error on his Honour’s part has been identified.

Again, they were looking for – had we done more than demonstrate that the judge, the primary judge had reached the preferable conclusion. There is not one. There is a correct conclusion. I think the language there that “Accordingly, no error”, so they were looking for some sort of error. We say that what has resulted is that the verbal formula in Beneficial Finance has now supplanted the statutory language.

The question is not, in fact, whether the substance of the offence is set out. The question is, as this Court noted in New South Wales v Corbett, whether sufficient substance has been set out. Their Honours really do not grapple with that question because they were looking to see if we had got over a higher hurdle.

BELL J: When you say that Beneficial Finance has supplanted the language of the provision, the language of the provision directs attention to whether the issuing officer is satisfied that there are reasonable grounds for the suspicion.

MS SEIDEN: But the third condition must identify the offence.

BELL J: That is the statement in the warrant under three 3E(5).

MS SEIDEN: Indeed. We say that it is that statement of the offence and the reason that one needs to state the offence is so that one knows the boundaries have not occurred here. One can tell that because when one stands back, one looks at these warrants and says, well, we do not know what 2008 stands for, nobody does. It is completely ambiguous. The primary judge found that the reference to 2008 could mean many things to different people and, if it means many things to different people, it means the search warrant has varying boundaries.

So, if one even stands back and says, well, quite apart from whether or not we have been able to demonstrate error, if one just looks at the search warrant one will say something has definitely gone wrong and we say it is because the Full Court did not look at it and the primary judge did not turn

his mind to whether or not the ambiguity that his Honour identified resulted in different areas of search. Your Honours, I notice that the red light is on.

GAGELER J: Yes.

MS SEIDEN: Thank you.

BELL J: Thank you. We do not need to hear from you, Ms Stern.

We are not persuaded that there is a sufficient prospect of success in demonstrating the error of principle that the applicant contends is to be seen in the reasons of the Full Court. For these reasons special leave is refused with costs.

The Court will now adjourn.

AT 12.51 PM THE MATTER WAS CONCLUDED