Seven West Media has had a victory in the Federal Court, which in applying s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) has quashed the search warrants used by the Australian Federal Police in that agency's high profile and ineptly managed visit to Seven West's offices.
The Age refers to "a dramatic raid", reporting
The AFP raided the Sydney offices of Seven last month in relation to the Proceeds of Crime Act, which prevents people from profiting from a criminal offence, because of speculation the network had paid convicted drug smuggler Schapelle Corby for an interview.
No evidence of a deal with Corby, who spent nine years in an Indonesian jail, was found and Seven has since decided not to pursue an interview.
Seven was successful, on Wednesday, in having search warrants used for the raids quashed.
The Court found that errors contained in the warrants and orders - which said Seven legal representatives and personnel had been reasonably suspected of having committed criminal offences - affected the decision of the Magistrate to issue the warrants.
The AFP had later admitted that nobody from Seven was suspected of committing a criminal offence, blaming a “word-processing error.”The traditional 'law enforcement dog ate my homework' excuse is unpersuasive.
Seven West's statement [PDF] indicates
The Court found that errors contained in the warrants and orders, which referred to Seven personnel and solicitors as “suspects” of an investigation and as being reasonably suspected of having committed criminal offences, could not be brushed aside as trivial or insignificant as the AFP had submitted.
Instead, the errors were material and serious and affected the decision of the Magistrate to issue the warrants.
Seven will seek payment of its legal costs from the AFP and is considering other options available to us to redress the costs of the AFP’s failed investigation.From a justice perspective it is reassuring that Australian courts continue to be underwhelmed by poor procedure on the part of law enforcement agencies.
In Seven West Media Limited v Commissioner, Australian Federal Police  FCA 263 [PDF] Jagot J states
The following search warrants issued under s 225 of the Proceeds of Crime Act 2002 (Cth) (the search warrants) be quashed as invalid and of no effect:
(a) CMO 14/035 in relation to the premises of Seven West Media Limited;
(b) CMO 14/037 in relation to the premises of “Pacific Magazines (New Idea), Media City”;
(c) CMO 14/039 in relation to the premises of Addisons Lawyers;
(d) CMO 14/043 in relation to the premises of Justine Munsie, each issued on 17 February 2014; and
(e) CMO 14/045 in relation to the premises identified as “Media City”, issued on 18 February 2014.
2. The following orders issued under s 246 of the Proceeds of Crime Act 2002 (Cth) (the s 246 orders) be quashed as invalid and of no effect:
(a) CMO 14/036 to “Seven West Media Ltd (Seven Network)”;
(b) CMO 14/038 to “### or or any other employee, Pacific Magazines (New Idea)”;
(c) CMO 14/040 to “Justine Munsie or any other employee, Addisons Lawyers”; and
(d) CMO 14/044 to Justine Munsie or any other resident, ###.
3. In the event of any request by a non-party to access to documents filed in the proceedings, all parts of documents filed in the proceedings (including pleadings, affidavits and submissions) which identify the names of:
(a) the natural persons identified as suspects in condition two of the search warrants; or
(b) the natural persons the recipient of a s 246 order, other than the names Justine Munsie, Vasilios Kalantzis, Schapelle Corby and Mercedes Corby,
not be disclosed other than to the parties and their legal representatives. ...The Court explains -
On 17 February 2014 the second respondent, a magistrate, issued five search warrants in respect of premises occupied by Seven West Media Limited (Seven West), Pacific Magazines Pty Limited (Pacific Magazines), Addisons Lawyers, Justine Munsie, a partner at Addisons Lawyers, and Kalantzis Lawyers. At the same time the second respondent issued five s 246 orders to provide information and assistance to Seven West, “[a named individual], or any other employee Pacific Magazines (New Idea)”, “Justine Munsie or any other employee, Addisons Lawyers”, “Justine Munsie or any other resident” at Ms Munsie’s residential address, and “Kalantzis Lawyers”. On 18 February 2014 the third respondent, a magistrate, issued a search warrant in respect of premises identified as “Media City” and which are occupied by Seven West’s wholly owned subsidiaries, including Pacific Magazines.
The applicants are persons aggrieved by the issue of the search warrants being, in proceeding NSD 201 of 2014, Seven West , Addisons Lawyers, Ms Munsie and Pacific Magazines and, in the second proceeding NSD 207 of 2014, Mercedes Corby and her lawyer Vasilios Kalantzis, the principal of Kalantzis Lawyers. The applicants contend that the search warrants and s 246 orders are invalid on numerous grounds most of which relate, one way or another, to the propositions that the s 246 orders identified the recipients as “reasonably suspected of having committed the offence stated in the warrant” when, in fact, none of them were or at any time had been suspected of having committed an offence, and that the search warrants identified individuals who were the applicants or their employees or partners as being “suspects…that are the subject of the investigation” when, in fact, none of them were, or at any time had been, suspected of having committed an offence or suspects the subject of an investigation. ...
it is common ground in this proceeding that none of the 33 people, entities and things identified in the second condition of the search warrants, other than Schapelle Corby in respect of the offence committed in Indonesia in 2005 for which she had been convicted and was on parole, was or had ever been a “suspect”. Further, none of the recipients of the s 246 orders was or had ever been “reasonably suspected of having committed the offence stated in the relevant warrant”What went wrong?
the applicants’ primary contentions of invalidity are founded upon the propositions that the s 246 orders wrongly asserted the recipients were reasonably suspected of having committed an offence and the search warrants wrongly identified numerous individuals as “suspects”. According to the applicants, as a result of these matters, the s 246 orders and search warrants are bad on their face as they show the second and third respondents addressed the wrong question, and the decisions to issue the s 246 orders and search warrants should be vitiated for error of law as those decisions: - (i) were based on facts which did not exist, (ii) disclose a failure of any consideration of the statutory conditions for the issue of the s 246 orders and search warrants, (iii) disclose the taking into account of an irrelevant consideration, and (iv) were so unreasonable that no reasonable person could have made the decisions.
The AFP answered the applicants’ primary contentions in a number of ways.
The AFP submitted that while the s 246 orders contained a clear clerical error (the statement that “[y]ou are reasonably suspected of having committed the offence stated in the relevant warrant”), the same could not be said of the search warrants. The second condition in the search warrants involves three alternatives – suspects, entities or other matters that are the subject of the investigation. Some of the items appearing in the list are plainly not capable of being “suspects” (for example, the item the “Mercedes CORBY Exclusive Agreement”). It is not tenable, according to the AFP, to construe “entities” and “other matters” as excluding natural persons as to do so would “suggest that individuals who were not suspects were intended to be excluded from the Second Condition (in circumstances where non-suspect entities were included”.Jagot J states
It may be accepted that the search warrants identify Schapelle Corby as having committed an offence. However, the second condition of the warrants also identifies “suspects, entities or other matters that are the subject of the investigation”. I do not accept the submission that a natural person may fall within the descriptions “entities or other matters”. The natural and ordinary reading of the second condition is that all of the individuals named in the list are “suspects… that are the subject of the investigation”. The ordinary meaning of a “suspect”, in the context of a search warrant, is a person suspected of having committed an offence.
The AFP’s submission that no person in the list “could even conceivably be regarded as a “suspect” in the commission of an offence” ignores the terms of the second condition. The submission also assumes both knowledge of the PoC Act (specifically that, despite its title, the Act provides a civil scheme for the recovery of literary proceeds and does not create any offence in connection with the payment of funds which might be recovered as literary proceeds) and that such knowledge would trump the plain words of the second condition. Neither assumption is justified. The AFP called no evidence explaining what occurred before the second and third respondents. No inference may be drawn in the AFP’s favour that the second and third respondents knew about the scheme of the POC Act insofar as it applies to literary proceeds or, if they held that knowledge, that it meant they did not give the search warrant its natural and ordinary meaning that each of the individuals appearing in the list under the second condition were “suspects … that are the subject of the investigation”.Damningly, Jagot J states
The issue of a search warrant and a s 246 order are solemn acts issued under the hand of the individual magistrate. They authorise actions which would otherwise constitute trespass and, insofar as searches of the person are concerned, an assault. They represent serious intrusions into private and property rights of which the common law “has long been jealous” (George v Rockett (1990) 170 CLR 104 at 110). Accordingly, the orders and warrants would not have been issued lightly by the second and third respondents.
These circumstances make it exceedingly unlikely that the second and third respondents failed to consider the terms of what they were issuing (the first possible explanation). It is equally exceedingly unlikely that the second and third respondents considered the terms of what they were issuing and, because they knew the scheme of the PoC Act, knew also that the terms included errors involving accusing numerous people of being suspected of having committed an offence or being suspects in an investigation when there is no offence under the PoC Act, and yet dismissed those matters as “mere clerical errors” and decided to issue the orders and warrants in any event (the second possible explanation). If that was the decision-making process, then it was so unreasonable that no reasonable magistrate could have made the decisions. Yet, accepting this last proposition – attributing to the second and third respondents manifest unreasonableness – is what the AFP’s submissions necessarily involve, once properly analysed. How else can it be said that the erroneous statements – such a prominent part of the s 246 orders and plainly disclosed in the search warrants – played no part in the second respondent’s reasoning process, as the AFP would have it?
Against these extremely unlikely possibilities is the third possibility identified – that the erroneous and ambiguous statements in the AFP’s material were considered by the second and third respondents as part of a proper consideration of the material as a whole and, in the circumstances of urgency and a lack of any cogent explanation in the material of how the PoC Act operated in respect of literary proceeds, led the second and third respondents to assume the AFP’s statements were correct and that there thus was some offence relating to literary proceeds in the PoC Act, thereby justifying the issue of the s 246 orders and warrants.
While I have said it is not necessary to make a finding as to which of the three possibilities is correct because each involves legal error sufficient to quash the s 246 orders and search warrants, I have considered these matters because of the way in which the hearing proceeded. In short, the AFP was critical of the applicants for identifying the alternative ways in which they asserted there must have been legal error by the second and third respondents. What the AFP did not acknowledge was that, when analysed, its own submissions – that the second and third respondents must be taken to have considered what was before them and treated the statements in issue as “mere clerical errors” – would have the second and third respondents acting in a manner in which no reasonable magistrate could have acted (that is, by issuing solemn documents identifying people as suspected of having committed and offence and as suspects, who could not be suspects or suspected of any offence given the terms of the legislation on the basis that those statements were a “mere clerical error”). Nor did the AFP acknowledge the fact that, had the second and third respondents done exactly what they could be expected to have done in the circumstances – that is, rely on the AFP to provide cogent and accurate information about the investigation in terms of the scheme in the PoC Act – it is not at all difficult to see how and why the second and third respondents were led into error by the AFP.
Third, the AFP said that no evidence was placed before the second or third respondents relevant to the commission of any offence by any person other than Schapelle Corby. As discussed above, the material placed before the second and third respondents did identify that Schapelle Corby had committed an offence. However, the problem is the combination of the erroneous statements and what the material did not say. The material did not explain that the PoC Act created no offence in respect of the derivation of literary proceeds, whether by Schapelle Corby in deriving such proceeds or by another person in facilitating that derivation. The material did not explain that a literary proceeds order is not founded upon any such offence, the scheme created by the PoC Act being a civil, rather than criminal, regime. The material did not do these things in the face of statements that the recipients of the s 146 orders were reasonably suspected of having committed an offence and the individuals listed in the third condition of the search warrants were suspects the subject of the investigation. In these circumstances, the fact that the material did not identify the commission of any offence by any person other than Schapelle Corby does not support the AFP’s submission that the erroneous statements played no part in the reasoning process of the second (or, for that matter, the third) respondent.
Fourth, the AFP said that the erroneous statement appears in each and every one of the s 246 orders and it is “highly improbable” that the second respondent was declaring himself satisfied that each recipient was reasonably suspected of committing an offence. I disagree. The submission assumes that the second respondent, despite the urgent circumstances, the errors and ambiguities in the AFP’s material, and the lack of any cogent explanation in the affidavit as to how the PoC Act operated, knew that the PoC Act did not create any offence relating to the derivation of literary proceeds yet issued orders and warrants asserting that numerous people connected with the Corby family perhaps deriving literary proceeds were suspected of having committed an offence. It is that assumption which is highly improbable. What is not highly improbable is that the second respondent was misled by the AFP, albeit by innocent errors, and wrongly assumed that there was an offence relating to the derivation of literary proceeds and that those involved in facilitating that derivation, accordingly, were reasonably suspected of having committed an offence and were suspects in the investigation.Earlier this month the Government introduced the Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (Cth), reflecting recommendations by the Parliamentary Joint Committee on Law Enforcement, "to take tough steps to strike at the heart of organised crime” through "the toughest framework possible to target criminal proceeds".
The Minister for Justice has promoted the Bill as
- ensuring that in all circumstances Federal law enforcement is able to seize relevant material such as bank statements, financial records and payslips as evidence in ascertaining the total wealth of the suspect, and what income is legitimate or dirty;
- ensuring that unexplained wealth proceedings will not be stalled by a suspect simply because they fail to turn up to court;
- expanding the circumstances in which Federal law enforcement is able to share information obtained under the Proceeds of Crime Act 2002 with appropriate state, territory and foreign authorities;
- introducing a new process to lock down dirty money and assets so a suspect can’t hide, spend or offload what the Commonwealth can confiscate.