Dunn and Another v Australian Crime Commission and Others

69 ATR 280
[2008] FCA 424

(Judgment by: Tracey J)

Dunn and Another
vAustralian Crime Commission and Others

Court:
Federal Court of Australia

Judge:
Tracey J

Legislative References:
Mutual Assistance in Criminal Matters Act 1987 (Cth) - The Act
Administrative Decisions (Judicial Review) Act 1977 (Cth) - The Act
Judiciary Act 1903 (Cth) - 39B
Crimes Act 1914 (Cth) - 29D
Criminal Code Act 1995 (Cth) - 11.5(1)
Proceeds of Crime Act 1987 (Cth) - 81
Director of Public Prosecutions Act 1983 (Cth) - 5; 6(1)(a)-(e); 6(2)
Australian Crime Commission Act 2002 (Cth) - 59; 51

Case References:
Oceanic Life Ltd v Chief Cmr of Stamp Duties - (1999) 168 ALR 211; [1999] NSWCA 416
George v Rockett - (1990) 170 CLR 104; 93 ALR 483
McKinnon v Secretary, Department of Treasury - (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516; [2006] HCA 45
Attorney-General's Department v Cockcroft - (1986) 10 FCR 180; 64 ALR 97; 12 ALD 468
Minister for Immigration and Ethnic Affairs v Teoh - (1995) 183 CLR 273; 128 ALR 353; 39 ALD 206; [1995] HCA 20
Bollag v Attorney-General (Cth) - (1997) 79 FCR 198; 149 ALR 355; 47 ALD 568
Kennedy v Australian Securities and Investments Commission - (2005) 142 FCR 343; 218 ALR 224; 52 ACSR 301; [2005] FCAFC 32
Lego Australia Pty Ltd v Paraggio - (1994) 52 FCR 542; 124 ALR 225
Puglisi v Australian Fisheries Management Authority - (1997) 148 ALR 393
Director of Public Prosecutions v Australian Broadcasting Corporation - (1987) 7 NSWLR 588
Health Insurance Commission v Freeman - (1998) 88 FCR 544; 158 ALR 267
AA Pty Ltd v Australian Crime Commission - (2005) 219 ALR 666; 85 ALD 422; [2005] FCA 1178
Australian Crime Commission v AA Pty Ltd - (2006) 149 FCR 540; 88 ALD 642; [2006] FCAFC 30
Secretary, Department of Social Security v Alvaro - (1994) 50 FCR 213; 34 ALD 72
O'Reilly v Commissioners of the State Bank of Victoria - (1982) 153 CLR 1; 44 ALR 27

Hearing date: 29-30 August, 5-6 September 2007
Judgment date: 24 April 2008

Melbourne

Judgment by:
Tracey J

[1] On 16 March 2005, a delegate of the Commonwealth Attorney-General set in train a series of events which, it was hoped, would enable certain Commonwealth authorities to obtain access to documents which were believed to be located in Switzerland. On that day the delegate made a request to Switzerland under the Mutual Assistance in Criminal Matters Act 1987 (Cth) (the Mutual Assistance Act) and the Treaty Between Australia and Switzerland on Mutual Assistance in Criminal Matters done at Berne in Switzerland on 25 November 1991 (the treaty). The request sought the assistance of Swiss authorities in obtaining business records from Strachans SA, an accountancy services firm based in Geneva, and from Corner Banca SA, which is a private banking institution based in Lugano. The request advised the Swiss authorities that the records were required for "the investigation into, and possible prosecution of" certain named individuals, including the first applicant (Mr Dunn) in this proceeding, whom, it was said, was suspected of tax fraud and conspiracy offences against the laws of the Commonwealth. The second applicant was also named in the document as trustee for a unit trust which was "beneficially owned by [the first applicant]". The applicants seek various forms of relief under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the AD(JR) Act) and s 39B of the Judiciary Act 1903 (Cth), which, if granted, would have the practical effect of rendering nugatory the Attorney-General's attempts to obtain the documents sought in the request.

[2] The respondents, by notice of objection to competency, objected that much of the conduct of the respondents in respect of which relief was sought under the AD(JR) Act could not be impugned under that Act because the proceeding was commenced out of time and because the conduct did not involve "decisions" or "conduct" to which the AD(JR) Act applies. I need not rule on these objections because it was accepted that the court had jurisdiction to entertain parts of the application under s 39B of the Judiciary Act, subject to its discretionary power to refuse relief because of delay in commencing the proceeding.

[3] The evidence was substantially in documentary form. Two affidavits sworn by the applicants' solicitor Mr David Shaw were read. These affidavits dealt with uncontentious matters and exhibited a large number of relevant documents.

Mr Shaw was not cross-examined. The following affidavits were read and relied on by the respondents:

•
Mr Michael Outram, the executive director, operational strategies of the Australian Crime Commission (the ACC);
•
Ms Margaret Jackson, first assistant secretary, international crime cooperation division of the Attorney-General's department;
•
Ms Jasmin Phillips, a member of the staff of the ACC;
•
Ms Donna Buttsworth, also a member of the staff of the ACC; and
•
Mr Lloyd Woodwood, also a member of the staff of the ACC.

Mr Outram and Ms Jackson were cross-examined. The other deponents were not. The Commonwealth Attorney-General's delegate who had signed the mutual assistance request, Mr Craig Harris, appeared pursuant to a subpoena and was cross-examined by senior counsel for the applicant.

The evidence

[4] The request was made in the course of what has become known as Operation Wickenby, criminal investigations being undertaken by the ACC into the conduct of certain persons who are suspected of having committed serious offences against Commonwealth law. On 10 February 2005 a senior officer employed by the ACC (Mr Kevin Considine) forwarded certain information to an officer (Mr David Adsett) designated by the Commonwealth Director of Public Prosecutions (the DPP) to deal with Operation Wickenby matters. The investigator also provided the DPP with a draft mutual assistance request. The draft request alleged that Mr Dunn may have committed offences against Commonwealth laws.

[5] On 14 February 2005, an officer in the DPP's office (Ms Sara Cronan) wrote to the Attorney-General's department. She passed on the information obtained from the ACC investigator and enclosed a draft mutual assistance request to Switzerland. It was alleged that Mr Dunn had understated his income for the 2002, 2003 and 2004 income tax years while remitting large sums to overseas bank accounts. The DPP asked the Attorney-General to make "requests for assistance in a criminal investigation to Switzerland". It was said that the material sought "will assist in an investigation into a major tax fraud in Australia". The DPP asked that "the request should be made on behalf of the DPP, and the ACC".

[6] Officers of the Attorney-General's department gave consideration to the DPP's request. It was determined that a mutual assistance request should be made to the Swiss authorities under the Mutual Assistance Act. A "REQUEST FOR ASSISTANCE IN A CRIMINAL MATTER" was prepared. It was signed by Mr Craig Harris, a delegate of the Attorney-General, on 16 March 2005. It was a lengthy document containing 154 paragraphs and eight attachments. In all it consisted of 46 pages. Much of the material in it did not relate to either of the applicants. It will, therefore, only be necessary to refer to some parts of the document.

[7] The prefatory words of the request identified it as "a request by Australia for assistance in a criminal matter, made under the Treaty between Australia and Switzerland on Mutual Assistance in Criminal Matters done at Berne on 25 November 1991". Under the heading "AUTHORITY AT WHOSE INSTANCE THE REQUEST IS MADE" the following paragraph appeared:

2.
The assistance of the authorities of Switzerland is requested by the undersigned at the instance of:

(a)
the Office of the Commonwealth Director of Public Prosecutions, an independent body established by the Commonwealth Government of Australia to authorise and conduct the prosecution of offences against the criminal laws of the Commonwealth of Australia and action to recover the proceeds of crime, and
(b)
the Australian Crime Commission (ACC), the Commonwealth agency responsible for the coordination of the investigation giving rise to this request.

The purpose of the request was for business records to be obtained from Strachans SA and Corner Banca SA: para 3. As already noted, the Swiss authorities were advised that the business records were "required for the investigation into, and possible prosecution of" a number of individuals including Mr Dunn. The Swiss authorities were also advised that:

5. The material may also be used in possible action by Australian authorities against these suspects to recover proceeds of crime. Please provide the material in a form that is admissible in Australian courts.

Then followed a recital of alleged facts. It was alleged that Dunn had introduced clients to Strachans, which had, in turn, supplied the clients with company and trust structures. Dunn was said to have been involved in an income dissipation arrangement which used a chain of trust distributions. It was further alleged that:

87. Entities associated with Dunn that participate in the arrangements usually receive trust distributions from client entities which are paid to Dunn in the form of fully franked dividends. For the 2002, 2003 and 2004 income tax years he has only returned income of A$30,000 while being able to remit millions of dollars to overseas bank accounts.
88. Banking records show that:

(a)
between March 2003 and September 2004, Dunn remitted A$1,900,000 to the Strachans in-house company, Overseas Trading and Promotions, care of the National Westminster Bank ...
(b)
between April 2001 and November 2004, Dunn remitted A$2,876,000 to an account named Gregory Dunn and Mariluz Masamayor ...

Various other transactions in which Dunn was involved were then described. The Swiss authorities were advised that:

100. The ACC believe that the transactions described above are fraudulent and have been devised and actioned by Dunn [and certain other individuals] for the sole purpose of defrauding the Commonwealth of Australia by declaring less income than the actual income made. This supports the belief of ACC investigators that Egglishaw through Strachans, provides more than administration, accounting and banking services, but is a willing participant in facilitating criminal activity. The ACC suspect that Dunn has used Egglishaw's and Strachans' services to commit criminal acts, such as obtaining financial advantage by deception, defrauding the Commonwealth of Australia and money laundering.

The request identified a number of offences which may have been committed by Mr Dunn and others who were named in the document. These offences included defrauding the Commonwealth (s 29D of the Crimes Act 1914 (Cth)), obtaining financial advantage from a Commonwealth entity by deception (s 134.2 of the

Schedule to the Criminal Code Act 1995 (Cth)), conspiracy to commit the offences created by s 29D and s 134.2 (s 11.5(1) of the Schedule to the Criminal Code Act 1995 (Cth)) and money laundering (s 81 of the Proceeds of Crime Act 1987 (Cth) and s 400.4 of the Schedule to the Criminal Code Act): paras 122-9. The Swiss authorities were asked to execute search warrants to obtain relevant documents from Strachans and Corner Banca. They were asked to "return the requested material to the Australian Central Office for Mutual Assistance in Criminal Matters": para 146. The address of the office (within the Attorney-General's department) was provided. It was foreshadowed that "[d]epending upon the nature of the material obtained pursuant to this request, the Australian authorities may wish to make a supplementary request for assistance": para 154.

[8] The request for assistance was forwarded to an officer of the Federal Office of Justice in Berne under cover of a letter dated 17 March 2005. That letter was on the letterhead of the criminal justice division of the Commonwealth Attorney-General's department and was signed by a Ms Lani Gibbins, who was identified as a legal officer. Ms Gibbins was not a delegate of the Attorney-General under the Mutual Assistance Act. The letter sought urgent mutual assistance in the matter of "Operation Wickenby". The letter advised the Swiss authorities that:

Enclosed is an urgent request for assistance in the matter of Operation Wickenby. The request is made on behalf of the Commonwealth Director of Public Prosecutions and the Australian Crime Commission ...

Ms Gibbins invited Swiss officials to contact her if they had "any enquiries".

[9] The Swiss Federal Office of Justice responded to the request by letter dated 18 May 2005 addressed to Mrs Gibbins. The letter was written by Mr Nicolas Bottinelli. Mr Bottinelli wrote:

We refer to the above mentioned request. The Examining Magistrate has carefully examined this request and is [of] the view that it could be executed only partially in its actual state. The request does not fulfil some of the requirements of Swiss law in order to grant the requested assistance.

He drew attention to Art 2 of the treaty under which Switzerland can refuse assistance in fiscal matters and went on to deal with certain aspects of Swiss criminal law. He continued:

For all the above mentioned behaviour, Switzerland cannot grant assistance.
Generally speaking, the Australian request does not fulfil the Swiss requirements under those [sic] aspects:

•
The request must describe as exactly as possible which fraudulent means were used in order to obtain tax decisions that were illegitimate [sic] favourable for the tax payers; for example: production to the fiscal authorities of false commercial accounts which includes forged bills or false debts;
•
The request should also [indicate] if the State of Australia was really defrauded, or if it was only an attempt.

Dealing specifically with the allegations made against Mr Dunn, Mr Bottinelli asked: "which fraudulent means have been used in order to get the money out of Australia?"

[10] An initial response to Mr Bottinelli's letter was prepared by Mr David Hellings, a senior financial investigator employed by the ACC. It was incorporated in a draft letter on ACC letterhead dated 25 May 2005. That part of the response which dealt with Mr Dunn advised that:

The ACC has obtained documentary evidence that Dunn has given false instructions to his accountant concerning the funds sent offshore to Overseas Trading and Promotions thus causing him to prepare false tax returns.
The ACC has banking records showing that Dunn made a $100,000 cheque payable to Consolidated Artists, an in-house Strachans service company. The cheque was banked at the National Westminster Bank in London by Phillip De Figueiredo. Based on evidence held by the ACC, we believe that Strachans created a false invoice for a film script to allow the payment to falsely appear in the accounts of Dunn's company as a payment for the purchase of a film script. Strachans has assisted in the creation of false documentation to support the fraudulent deception of the ATO.

This draft letter was forwarded by Ms Gibbins to Mr Bottinelli by email on 25 May 2005. Ms Gibbins' email read, in part:

Attached is the draft letter as discussed in our telephone conversation this evening/morning. I note that the Magistrate will have the final decision on this matter but I would be very grateful for your comments. I look forward to hearing your comments in the morning.

[11] The formal response to Mr Bottinelli's letter was made on 26 May 2005. It comprised a covering letter from Ms Gibbins to Mr Bottinelli to which was attached a revised version of Mr Hellings's draft letter. It will be convenient, at times, in these reasons to refer to those documents collectively as "the May letter". The covering letter read, in part:

Enclosed is an urgent letter in response to your facsimile dated 18 May 2005 about the mutual assistance request in the matter of Operation Wickenby. In your facsimile you sought clarification of the request in light of the requirements of Swiss domestic law regarding fiscal matters.
2. Attached is a letter from the Australian Crime Commission which clarifies the request. This letter has been drafted in consultation with the Commonwealth Director of Public Prosecutions and the Australian Central Authority, the Attorney-General's Department.

The attached letter was signed by Mr Hellings and was written on ACC letterhead. It is dated 26 May 2005. In so far as it deals with Mr Dunn, it advised that:

The ACC has obtained documentary evidence showing that Dunn has prepared false instructions for his accountant concerning the funds sent off shore to Overseas Trading & Promotions and back dating documents thus causing his accountant to prepare false tax returns.
The ACC has banking records showing that on 10 January 2003, Dunn's company Misty Mountain Pty Ltd drew a $100,000 cheque payable to Consolidated Artists, an in-house Strachans service company. The cheque was banked at the National Westminster Bank in London by Phillip De Figueiredo. On 4 February 2003, Dunn and Philip Egglishaw meet in Perth, Australia. A file note of the meeting produced by Egglishaw shows that he sent an instruction to his staff to obtain some more Consolidated Artists letterheads as they needed to sell another script. He also states in the note a copy from the last letter to Dunn regarding the sale of a script. The file note and the payment indicate that the fraudulent behaviour, in paying for a non existent script, took place.
When the ACC issues search warrants in the near future in respect of Dunn and his companies, it expects to seize the false invoices in respect of payments to Consolidated Artists and other evidence of his fraudulent instructions.
Based on evidence held by the ACC, the ACC believes that Strachans created a false invoice for a film script to allow the payment to falsely appear in the accounts of Dunn's company as a tax deductible payment for the purchase of a film script when in effect it
was just a transfer of money to Dunn's trust administered by Strachans. Strachans assisted in the creation of false documentation to support the fraudulent deception of the ATO.

[12] Further communication between the Swiss Federal Office of Justice and the Commonwealth Attorney-General's department occurred later in the year. On 10 October 2005, Mr Bottinelli wrote to Ms Gibbins seeking, relevantly, "more details about the modus operandi used by [those allegedly involved in criminal activity] to defraud the Commonwealth". The Attorney-General's response was provided under cover of a letter, dated 7 December 2005, from Ms Jane Christie, a senior legal officer in the department, to Ms Isabella Fumagalli in the Swiss Federal Office of Justice. Like Ms Gibbins, Ms Christie was not a delegate of the Attorney-General for the purposes of the Mutual Assistance Act. The covering letter read, in part:

Please find enclosed a letter and attachments in response to Mr Bottinelli's letter of 10 October 2005 and the Examining Magistrate's verbal request made in June 2005 ...
...
I would be most grateful if the letter and attachments are passed to Magistrate Dumartheray as soon as possible.
Please contact me if you have any queries or require further information.

A letter on ACC letterhead dated 15 November 2005 was attached. It was signed by Mr Kevin Considine, the national team leader of Operation Wickenby within the ACC. It was directed to the attention of Mr Bottinelli. It commenced by noting that:

This letter is in response to your letter dated 10 October 2005 and the Examining [Magistrate's] verbal request made in June 2005 to be provided, at a later date, with an update as to the progress of this investigation. It sets out details of the current status of this investigation, answers your queries and seeks your assistance in expediting current proceedings in Switzerland relating to Operation Wickenby. These proceedings relate to documents seized by your office from Strachans SA on 9 & 10 June 2005 in response to a mutual assistance request from the Australian Government.

The letter went on to record that 50 search warrants had been executed in Australia since 9 June 2005 at the homes and business premises of persons under investigation and at the premises of certain accountants and legal advisers. Attached to the letter was a document headed "STATUS OF CRIMINAL INVESTIGATIONS". The 15 November 2005 letter and the attachment thereto will be referred to subsequently as "the November letter". In a section of the attachment which dealt with Mr Dunn and certain other persons it was recorded that:

The ACC has banking records showing that DUNN made a $100,000 cheque payable to Consolidated Artists, a Strachans in house company. It is suspected that Strachans created a false invoice for a non existent film script allegedly sold to DUNN or one of his companies to substantiate the payment and the tax deduction.
DUNN has given instructions to his accountant concerning the funds sent off shore to Strachans and their in house companies thus causing him to prepare incorrect tax returns.

There was then reference to Mr Dunn having been instrumental in creating certain company structures to assist other named individuals (including one Pollock) to avoid Australian taxation. There follows some lengthy passages which it is necessary to set out because the applicants contend that they contain a new request under the Mutual Assistance Act and new allegations against Mr Dunn. Under the heading "Findings in Australia" it is recorded that:

Dunn
In addition to his involvement in facilitating transactions for Bartlett, Sayers and Pollock, Dunn appears to have also engaged in a series of fraudulent deceptions to mask the payments he received as fees for the services he provided. Analysis of documentary material seized from Dunn's business premises shows that he has falsely represented in his accounts payments that he has received from Strachans-related entity, Ambassador Finance (which had been held by Strachans for his benefit) as a loan by Ambassador Finance to his own company. In addition to this false representation, Dunn also falsely claimed interest expenses on the fictitious "loan" (the alleged new request).
Pollock
The ACC has established that when Pollock sold his business in 1998, the net proceeds of nearly AU$11m, was paid to entities controlled by Dunn to pay non existent debts. Dunn in turn paid the majority of funds (less Dunn's fees) to an entity controlled by Strachans on behalf of Pollock. In April 1998 Dunn flew to Jersey and met with Phillip Egglishaw, where he paid Egglishaw a cheque for AU$4.75m, being AU$3million for Pollock and AU$1.75m for Dunn. By adopting this method of payment, Dunn and Pollock were able to avoid the scrutiny of Australia's law enforcement agencies. The ACC has information that suggests these funds were used to acquire shares in a company, MACGROVE INVESTMENTS LIMITED (MACGROVE). The ACC believes that this is a fictitious transaction as the funds are believed to have been immediately moved out of MACGROVE and paid into the Pollock and Dunn associated STRACHANS) entities. Pollock's accountant who is believed to have knowledge of these transactions and investments has not retained any documentation and expressed concerns about them.
The ACC has information that suggests that when Pollock wished to bring funds back into Australia, Dunn insisted that a company and a trust be established to conceal the link between the original funds and funds being repatriated to Australia. These funds appear to have been fraudulently represented as an investment by an independent offshore entity in the newly created Australian unit trust.
Bartlett & Sayers
The ACC has information that confirms that the Strachans administered company, Crossline Overseas Limited, (CROSSLINE) is beneficially held for Bartlett and Sayers and that CROSSLINE has not provided any consideration in exchange for promissory notes, payable on demand, which have a face value of AU$32.4m. Further evidence has been obtained confirming that the arrangement between CROSSLINE and Bartlett and Sayers is a charade designed to conceal their involvement with the company from Australian authorities.
Dunn met with representatives of the Australian Taxation Office on 25 and 26 October 2001 to discuss the promissory notes and Dunn provided them with copies of the promissory notes numbers 5 and 6 ... The copies provided to the ATO did not show the indorsement to Crossline, dated 26 October 2001, and no mention of Crossline was made by Dunn during the meetings. Additional promissory notes were issued on 26 October 2001 which were also indorsed to CROSSLINE and copies of these notes were not provided to the ATO. The ACC has information that suggests that CROSSLINE was not in existence until sometime after 26 October 2001 (the first new allegation).
...
The ACC has established that a legal advisor working for Dunn gave a legal opinion that the arrangement was illegal and she immediately terminated her employment with Dunn. The ACC also has information that [suggests] the legal advisors for Barminco
also have expressed grave concerns regarding the illegality of the arrangement that Bartlett and Sayers have entered with Dunn and CROSSLINE (the second new allegation).

Under the heading "False or Fictitious Documents produced by Strachans located in Australia" it is said:

Dunn
...
Documentary material seized from Dunn's business office included several documents which described the purchase of shares in MACGROVE for AU$4.75m. It is believed that this transaction is fictitious and that these funds of which AU$3m is [Pollocks's], was split between Pollock and Dunn and moved to their own STRACHANS associated entities. (the third new allegation).
Analysis of the accounting records seized from Dunn's business office shows that it would appear that the fictitious film scripts and the AU$4.75m purchase of shares in MACGROVE have been used to create false entries in his accounting records. Dunn has claimed a 100% write off of the AU$4.75m investment in shares and it is expected that Dunn may also write off the investments in the scripts to create further capital losses. It is anticipated that these losses will be applied against future taxable capital gains.

Later in the document, under the heading "How False Documents used in Breaking Australian Law", it is said that:

The false and misleading documentation so far identified during the course of the investigation has been used by Dunn, Bartlett and Sayers, Pollock and entities under their control to conceal or disguise income and assets by fraudulently representing the funds to be business expenses and loans from independent foreign entities, and also to conceal or disguise the transfer of funds offshore as payments for non-existent expenses or the purchase of non-existent assets. The use of these false documents is likely to have resulted in the underpayment of millions of dollars of income tax.

[13] By letter dated 2 June 2006 to Mr Bottinelli, Ms Christie corrected some of the information contained in the "STATUS OF CRIMINAL INVESTIGATIONS" document which formed part of the November letter. Ms Christie advised Mr Bottinelli as follows:

Request for Assistance to Switzerland in the Matter of Operation Wickenby

...
The purpose of this correspondence is to clarify information previously provided in relation to the above request.
2.
On 7 December 2005, I sent you correspondence attaching a letter dated 15 November 2005 from the Australian Crime Commission (ACC). The ACC letter and its accompanying document "Status of Criminal Investigations" (the Summary), provided a summary of the progress of its investigation.
3.
This correspondence was in response to the verbal request from the Examining Magistrate, Mr Dumartheray, in June 2005 and your letter dated 10 October 2005.
4.
At page 17 of the Summary, the ACC provided information about its investigation into the alleged sale of two non-existent film scripts to Mr Gregory Dunn (Dunn) or Misty Mountain Pty Ltd, by Consolidated Artists, a Strachans SA in-house company.
5.
Subsequent to the preparation of the Summary, the Attorney-General's Department has received a letter and documents from Dunn and Misty Mountain Pty Ltd's (Misty) legal representatives Shaw & Associates, regarding this additional information. Following examination of the documents provided by Dunn and Misty's legal representatives the ACC now provides the following information.
6.
Entries have been made in the accounting records of Misty Mountain Pty Ltd recording the purchase of two allegedly non-existent film scripts from Consolidated Artists for $100,000 and $330,000. Other entries record the write-off of the value of those assets to nil.
7.
Within the Summary and other documents provided by Australia, it has been said Dunn had claimed tax deductions in respect of funds made payable to Consolidated Artists, a Strachans in-house company. We wish to advise that no income tax deduction has yet been claimed in respect of the payments of $100,000 and $330,000 to Consolidated Artists.
8.
However, Dunn's legal representatives have advised that the sum of $430,000 is recorded in the 2003 accounts of Misty Mountain Pty Ltd as a capital loss on write-off of Capital Assets. The ACC believes that this write-off may be used in the future for taxation purposes. If Dunn purports to sell the alleged non-existent scripts or if the write-off value is confirmed by the declaration of a liquidator, the write off could be utilised against taxable capital gains.
9.
The ACC continues to suspect that the payments of $100,000 and $330,000 made to Consolidated Artists were for the purpose of concealing the transfer of funds to accounts offshore for the benefit of Dunn, by representing the transfer as payments for the alleged non-existent film scripts, with the intention of deceiving the Australian authorities. Because no satisfactory explanation has been offered by Dunn as to why he, or associated entities, have purchased at least two allegedly non-existent film scripts from Strachans SA, the ACC has advised that it is continuing with its investigation.

The letter continued with a request to Mr Bottinelli to pass the information contained in the letter to the examining magistrate for consideration by him during his consideration of the mutual assistance request.

The applicants' grounds

[14] The applicants contend that the mutual assistance request "was made without authority, outside jurisdiction, or unlawfully". The consequence is said to be that the request is "invalid". It "should be set aside or quashed". The grounds on which relief is sought are numerous. The applicants contend that:

•
Necessary preconditions for the making of a valid application for assistance under the Mutual Assistance Act were not observed.
•
The request misstated a number of important facts.
•
The involvement of the DPP in the making of the request was unlawful.
•
The involvement of the ACC in the making of the mutual assistance request was also unlawful.

The Mutual Assistance Act points

[15] The applicants attacked the validity of the mutual assistance request because of a series of alleged failures, on the part of Australian authorities, to comply with the requirements of the Mutual Assistance Act.

Delegation

[16] The first complaint is that the request was not made by the Attorney-General or his delegate as required by the Mutual Assistance Act.

[17] Section 10(1) of the Mutual Assistance Act provides:

10 Request by Australia
(1) A request for international assistance in a criminal matter that Australia is authorised to make under this Act may be made only by the Attorney-General.

Section 40 of the Mutual Assistance Act empowers the Attorney-General to delegate his powers under s 10 to an officer of the Attorney-General's department.

[18] The applicants accept that Mr Harris was a duly appointed delegate for these purposes and that he signed the request dated 16 March 2005. They contend, however, that the request was ultra vires and "invalid" because:

•
The covering letter, under which the request was forwarded to the Swiss authorities, formed part of the request and it was signed by Ms Gibbins who was not a delegate of the Attorney-General.
•
The request was expressly stated to have been made both "on behalf of" and "at the instance of" the DPP and the ACC.
•
The subsequent correspondence emanating from Australia on 26 May, 15 November and 7 December 2005, and 2 June 2006 formed part of the request but was not made or sent only by the Attorney-General or a delegate of the Attorney-General.

An additional and alternative submission was made in argument. It was that each of the letters sent from Australia after 16 March 2005 constituted a new request because each contained fresh allegations.

[19] The Mutual Assistance Act provides for requests to be made by Australia for assistance relating to criminal matters. The requests may be made of a foreign country with which Australia has entered into a mutual assistance treaty. That assistance may take various forms. It may be for the taking of evidence (s 12(1)), the search for and seizure of documents (s 14) or the foreign country authorising the attendance of nominated persons at a criminal hearing in Australia (s 16(1)). Such requests for assistance may only be made by the Attorney-General or his delegate. Such requests cannot be made by other Australian authorities, such as police forces, to their counterparts in other countries. This may, however, be done if the form of assistance sought is not one comprehended by the Mutual Assistance Act: see s 6.

[20] It was common ground that the form of assistance sought in the instrument signed by the delegate was assistance of the kind comprehended by s 14 of the Mutual Assistance Act, namely that the Swiss authorities authorise searches and seizures under warrant of documents in the possession of Strachans SA and Corner Banca SA in Switzerland. That assistance was sought in and by the document entitled "REQUEST FOR ASSISTANCE IN A CRIMINAL MATTER" signed by Mr Harris, as delegate of the Attorney-General, on 16 March 2005. In my view it was the only request made to Switzerland under the Mutual Assistance Act for present purposes.

[21] The letter, signed by Ms Gibbins and dated 17 March 2005 was not a request for assistance under the Mutual Assistance Act. As it said it "enclosed" such a request. The request itself was made by the delegate of the Attorney-General.

[22] Ms Gibbins' letter did state that the request was "made on behalf of" the DPP and the ACC. The request itself was stated to have been made "at the instance of" the DPP and the ACC. The "at the instance of" formulation probably accords most closely with the factual position. Nothing, however, turns on the accuracy or otherwise of either of these statements. When read with s 40, s 10(1) of the Mutual Assistance Act requires that a request for assistance must be "made" by the Attorney-General or his or her delegate. If the Attorney-General makes the request the requirement imposed by s 10(1) will have been satisfied. It matters not that the request was made at the instance of one or more statutory authorities or on behalf of such authorities. It is to be expected that bodies such as the DPP and the ACC will, from time to time, request that the

Attorney-General makes requests under the Mutual Assistance Act to assist them in investigating criminal matters. The Attorney-General does not undertake criminal investigations so it is hardly likely that he or she would do other than act on behalf of entities which do so. But it is the Attorney-General who acts by making the application. The request signed by the Attorney-General's delegate on 16 March 2005 is specifically said to have been made by the delegate.

[23] The various documents sent from Australia to the Swiss authorities in the wake of the request did not form part of the request. These documents were:

•
The May letter: Under cover of Ms Gibbins' letter to Mr Bottinelli dated 26 May 2005 she forwarded a letter, bearing the same date, from the ACC. This correspondence, as it stated, was responsive to Mr Bottinelli's facsimile letter of 18 May 2005 in which he sought clarification of various aspects of the request and sought additional information.
•
The November letter: The 15 November 2005 letter from Mr Considine to Mr Bottinelli was sent in response to Mr Botinelli's letter of 10 October 2005 and to a verbal request from the examining magistrate, made in June 2005.
•
The letter from Ms Christie to Ms Fumagalli dated 7 December 2005 was simply a covering letter under which the 15 November 2005 letter was forwarded to the Swiss authorities.
•
The letter from Mr Christie to Mr Bottinelli dated 2 June 2006 was sent to clarify and correct "information previously provided in relation to the ... request".

None of the signatories of these documents was a delegate of the Attorney-General under the Mutual Assistance Act. This is of no moment because none of the letters or attached documents constituted a request for assistance under the Mutual Assistance Act. That request was made when the document entitled "Request for Assistance in a Criminal Matter", signed by the Attorney-General's delegate on 16 March 2005, was sent to the Swiss authorities. What followed was correspondence which dealt with various aspects of the request but no new request was made.

The terms of the request

[24] The second complaint made by the applicants is that the mutual assistance request and the associated correspondence contained misdescriptions "of essential acts and omissions". These misdescriptions, it was contended, gave rise to contraventions of s 14 of the Mutual Assistance Act and Art 7 of the treaty. As developed in argument their substantial complaint was that the request for assistance and the subsequent correspondence were beset by sundry errors such that Australia had failed to satisfy its obligations under the Act and the treaty. The shortcomings ranged from omission of material facts and the making of vague and unsubstantiated allegations to the making of false allegations. It will be necessary to return to these alleged shortcomings in greater detail later in these reasons. It will, however, be convenient, first to refer to the relevant provisions of the legislation and the treaty.

[25] Section 14 of the Mutual Assistance Act provides that:

14 Requests by Australia for search and seizure
(1) This section applies to a proceeding or investigation relating to a criminal matter involving a serious offence against an Australian law if there are reasonable grounds to believe that a thing relevant to the proceeding or investigation may be located in a foreign country.
(2) If this section applies to a proceeding or investigation, Australia may request the appropriate authority of the foreign country:

(a)
to obtain a warrant or other instrument that, in accordance with the law of the foreign country, authorises:

(i)
a search for a thing relevant to the proceeding or investigation; and
(ii)
if such a thing, or any other thing that is or may be relevant to the proceeding or investigation is found as a result of the search -- the seizure of that thing; and

(b)
to arrange for the thing that has been seized to be sent to Australia.

By s 3 of the Mutual Assistance Act a number of terms employed in s 14(1) of the Act are defined:

•
A "criminal matter" is defined to include "a criminal matter relating to revenue (including taxation and customs duties)".
•
A "serious offence" is defined to mean an "offence" for which the prescribed penalty is death or imprisonment for not less than 12 months.
•
The word "offence" is defined to include an offence against a law relating to taxation or other revenue matters.

[26] By s 7(2) of the Mutual Assistance Act provision is made for the making of Regulations identifying foreign countries to which the Act applies. By s 7(2), the regulations may also make the application of the Act subject to any mutual assistance treaty which has been entered into between Australia and the other country. If such a qualification is made, s 7(3)(a) provides that the Act "applies subject to the limitations, conditions, exceptions or qualifications that are necessary to give effect of the treaty in relation to [the particular foreign country]".

[27] In regulations made under the Act -- the Mutual Assistance in Criminal Matters (Switzerland) Regulations 1994 (Cth) (the Regulations) -- the Mutual Assistance Act is rendered applicable to Switzerland "subject to such limitations, exceptions or qualifications as are necessary to give effect to the Treaty": see reg 4(1).

[28] Article 1.1 of the treaty records that Australia and Switzerland have agreed to "grant to each other assistance in investigations or proceedings in respect of offences the punishment of which falls or would fall within the jurisdiction of the judicial authorities of the Requesting State". By Art 1.2(d) such assistance extends to the execution of requests for the search for and seizure of documents.

[29] Article 2 prescribes grounds upon which the requested state might refuse a request for assistance. One of these grounds, provided for in Art 2.1(b) is that "the request concerns a fiscal offence".

[30] A further basis for refusing assistance is provided for in Art 3. It deals with what are described as "compulsory measures" which may include searches and seizures under warrant. Article 3 reads:

ARTICLE 3
COMPULSORY MEASURES
1. Assistance involving compulsory measures may be refused where the assistance sought relates to acts or omissions which, if committed in similar circumstances in the Requested State, would not be punishable under the laws of that State.
2. Paragraph 1 of this Article does not apply where the assistance requested is directed to establishing the innocence of a person.

[31] Communication between Australia and Switzerland in relation to mutual assistance requests is to be channelled through what are known as "Central Offices". By Art 6 it is provided that:

ARTICLE 6
CENTRAL OFFICE
1. The Contracting Parties shall each appoint a Central Office for the purpose of this Treaty. Until the relevant Contracting Party designates another authority, the Central Office of Australia shall be the Attorney-General's Department in Canberra and the Central Office for Switzerland shall be the Federal Office for Police Matters of the Federal Department of Justice and Police in Berne.
2. Requests for assistance shall be made through the Central Offices, each of which shall arrange for the prompt carrying out of such requests by the appropriate competent authorities in the Requested State.
3. The Central Offices may communicate directly with each other.

[32] Article 7 of the treaty deals with the contents of a request for mutual assistance. Relevantly the Article provides:

ARTICLE 7
CONTENTS OF REQUESTS

1.
Requests for assistance shall include:

(a)
the name of the competent authority conducting the investigations or proceedings to which the request relates;
(b)
the subject matter and nature of the investigations or proceedings and, except in cases of requests for service of documents, a description of the essential acts or omissions alleged or sought to be ascertained, including the text, or a statement, of the law applicable at the place where the offence is committed;
(c)
the purpose for which the request is made and the nature of the assistance sought;
...
(e)
the full name, place and date of birth, address and any other information which may aid in the identification of the person or persons who are, at the time of the request, the subject of the investigations or proceedings ...

2.
Request for assistance, to the extent necessary and insofar as possible, shall include:

...
(d)
a description of the documents or material to be produced or preserved as well as a description of the appropriate person to be asked to produce them and, to the extent not otherwise provided for, the form in which they should be reproduced and certified;
...
(f)
as accurate a description as possible of any place to be searched and the material to be seized.

...
4.
If the Requested State considers that the information contained in the request is not sufficient in accordance with this Treaty to enable the request to be dealt with, the State may request that additional information be furnished.

[33] The applicants object that the allegations made against them in the request for assistance (which was made on 16 March 2005) involved generalised assertions of the kind set out in para 87 and what were described as vague assertions of suspected tax fraud in para 100: see above at [7]. The applicants point to the requirement in Art 7 of the treaty that a request must disclose "a description of the essential acts or omissions alleged or sought to be ascertained". They contend that, by reason of the alleged errors in the request, there were no "reasonable grounds to believe that a thing relevant to the proceeding or investigation may be located in a foreign country" as required by s 14 of the Mutual Assistance Act.

[34] The applicants identify what they assert are fresh allegations against them in the part of the May letter which was signed by Mr Hellings of the ACC and sent to Mr Bottinelli in response to his letter dated 18 May 2005. The relevant passages from the ACC letter are set out above at [11]. The applicants draw attention to "a significant number of additional references to such matters as false documents, misleading documents, false instructions, fraudulent behaviour ... and false income tax deduction" which they say had not earlier been made in correspondence with the Swiss authorities.

[35] The applicants further complained that the November letter signed by Mr Considine which was sent to the Swiss authorities under cover of a letter from the Attorney-General's department dated 7 December 2005 contained three new allegations. Those allegations are identified in the quoted passages above at [12]. Attention was also drawn to the ACC's stated anticipation that Mr Dunn might seek, in future, to offset falsely claimed capital losses against capital gains. It was further said that the November letter improperly incorporated legally privileged material, namely advice which a former legal advisor to the applicants had given to the effect that certain arrangements made by the applicants were illegal.

[36] The applicants submit that the omissions and factual errors contained in the mutual assistance request and the May and November letters were:

•
the failure to disclose that millions of dollars in income had been declared by the applicants or their associated entities in returns lodged in respect of the income tax years 1999 - 2004 inclusive;
•
the failure to disclose that neither applicant had lodged a tax return which included a claim based on an invoice for a film script;
•
there was no factual basis for the assertion in the May letter that documentation had been created in connection with a film script to support fraudulent deception of the ATO;
•
the failure to disclose that neither applicant had claimed a tax deduction in respect of interest expenses from a loan from Ambassador Finance; and
•
the failure to disclose that neither applicant had claimed a write-off of an AU$4.75m investment in shares in Macgrove Investments Ltd.

There was also a general complaint in the pleadings that the validity of the mutual assistance request was also undermined because of a failure to "disclose the investigating role of the ATO". This, it was said, gave rise to "an abuse of power" on the part of the respondents.

[37] These acts and omissions, it is contended, caused the mutual assistance request and the subsequent letters to contravene s 14 of the Mutual Assistance Act and the treaty because:

•
they did not relate to a "proceeding or investigation relating to a criminal matter";
•
they did not constitute offences of the kind comprehended by Art 1 of the treaty;
•
there were no "reasonable grounds to believe that a thing relevant to [a] proceeding or investigation" was located in Switzerland;
•
they contained no disclosure of whether circumstances existed which could justify refusal of assistance under Art 2 of the treaty, including whether the request concerned a fiscal offence; and
•
they failed to disclose whether circumstances existed which could justify refusal of assistance under Art 3 of the treaty, including whether acts or omissions which, if committed in similar circumstances in Switzerland, would not be punishable under the laws of Switzerland, in accordance with Art 3 of the treaty.

There was a further submission, which was not pressed at trial, that the documents disclosed information about the applicants in breach of the Privacy Act 1988 (Cth).

Criminal matters

[38] No criminal proceeding has been commenced against either applicant arising out of Operation Wickenby. It was, therefore, necessary for an "investigation relating to a criminal matter" to be underway before a valid request for assistance of the Swiss authorities could be made under s 14 of the Mutual Assistance Act. The word "investigation" is not defined in the Act. Section 3 does, however, define a "criminal investigation" to mean "an investigation into an offence (whether the offence is believed to have been committed, to be being committed or to be likely to be committed)". The use of the phrase "investigation relating to a criminal matter" in s 14(1) comprehends a wider range of activities than those falling within the defined concept of a "criminal investigation". An investigation "relating to" a criminal matter has the potential to apply to a far broader range of activities: compare Oceanic Life Ltd v Chief Cmr of Stamp Duties (1999) 168 ALR 211 at 224-5 ; [1999] NSWCA 416 and the cases there referred to. It is not necessary, for present purposes, to determine the extent of the differences. This is because the evidence clearly establishes that the mutual assistance request was made to assist in the conduct of a criminal investigation known as Operation Wickenby. The evidence was given by Mr Outram, the ACC Executive Director, Operational Strategies. He deposed (and I accept) that Operation Wickenby began as a result of information contained in documentary material obtained after the execution of a search warrant in February 2004 on a hotel room occupied by Mr Phillip Egglishaw. That material suggested that a significant number of Australians had committed criminal offences involving taxation fraud. From July 2004 the ACC and the Australian Taxation Office (the ATO) examined the material to determine which matters should be the subject of criminal investigation by the ACC and which matters should be the subject of civil investigation by the ATO. The ensuing criminal investigation conducted by the ACC was known as "Operation Wickenby". The civil investigations conducted by the ATO did not form part of Operation Wickenby. Operation Wickenby was conducted by the ACC pursuant to the Australia Crime Commission Authorisation and Determination (Money Laundering and Tax Fraud) Determination 2003. It involved the investigation of whether certain individuals had committed offences against Commonwealth criminal laws. Operation Wickenby is to be distinguished from Project Wickenby which was the title assigned to the separate investigations being overseen by the ATO.

Allegation of offences

[39] Even if it be assumed that Art 1 of the treaty imposes a positive obligation on Requesting States to identify with precision the offences to which the relevant investigation relates, there is no substance in the applicants' complaint that the request did not allege the commission of particular offences against Australian law. The request did contain references to a number of offences against Australian criminal law which it was alleged Mr Dunn had committed. The treaty does not require the requesting state to provide evidence that particular offences against its laws have been committed. As already noted, all that is required is that there be in existence a bona fide investigation which is designed to determine whether or not such offences have been committed.

Reasonable grounds

[40] The power to make an application for assistance, which is conferred by s 14 of the Mutual Assistance Act, is conditioned on there being "reasonable grounds to believe that a thing relevant to the ... investigation may be located in a foreign country". The request for mutual assistance which was sent to the Swiss authorities under cover of Ms Gibbins' 17 March 2005 letter, contained a good deal of information which suggested that material relevant to the investigation might be found in Switzerland. This information was largely derived from documents found on the personal computer of Mr Phillip Egglishaw and from responses by him to questions asked during a hearing conducted by the ACC. Strachans SA was based in Geneva. Mr Egglishaw was one of the principals of Strachans SA. He resides in Geneva. The Swiss Central Office was advised that "Australian authorities are investigating a number of Australian residents for using companies, trusts and bank accounts administered by Strachans SA, an accounting services firm in Switzerland, to disguise their involvement in tax fraud schemes and money laundering": para 7. The Swiss authorities were also advised that the ACC believed that services provided by Strachans SA enabled Australian residents to obtain access to their funds "from anywhere in the world by the use of debit or credit cards linked to bank accounts opened and operated for them by Strachans outside Australia, including at Corner Banca, SA in Lugarno, Switzerland": para 9(c).

[41] The possibility of there being documents in Switzerland which were relevant to the investigation was considered by Mr Outram. His evidence was that, having received advice from those who had examined the material seized from Mr Egglishaw, he believed that Strachans SA, which had offices in Geneva, established personalised schemes for their clients to minimise or avoid paying tax. He believed that it was likely that information relating to these matters would be found in Strachans SA offices in Switzerland. He expected that information to include communications between Strachans SA and their promoters, the identities of beneficial owners of trusts operated by Strachans SA and information linking the accounts and trusts operated by Strachans SA, the promoters and the persons under investigation in Australia.

[42] The phrase "reasonable grounds to believe" (or variants of it) has a well understood and well settled meaning. In George v Rockett (1990) 170 CLR 104 at 112 ; 93 ALR 483 at 488 the High Court said that:

When a statute prescribes that there must be "reasonable grounds" for a state of mind -- including suspicion and belief -- it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person.

Later, in its joint judgment, the court continued (at CLR 116; ALR 491):

The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of mind may, depending on the circumstances, leave something to surmise or conjecture.

[43] In subsequent cases the High Court and this court have cautioned against adopting paraphrases such as "not irrational, absurd or ridiculous" in construing the phrase "reasonable grounds": see McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 445 ; 229 ALR 187 at 203-4 ; 91 ALD 516 at 532-3 ; [2006] HCA 45 per Hayne J and at CLR 467-8; ALR 221; ALD 550 per Callinan and Heydon JJ ; Attorney-General's Department v Cockcroft (1986) 10 FCR 180 at 190 ; 64 ALR 97 at 106-7 ; 12 ALD 468 per Bowen CJ and Beaumont J. The words are to be given their ordinary meaning. What is needed is a sufficient factual basis supporting the relevant belief.

[44] In the present case the Australian investigators were seized of a good deal of information which pointed to the strong possibility that documents, relevant to their investigation, were likely to be found in the premises occupied by Strachans SA and Corner Banca in Switzerland. The information obtained from Mr Egglishaw pointed to the existence of schemes which involved Strachans SA administering trusts on behalf of Australian residents and the facilitation of the repatriation of funds to those residents by use of automated teller machines. Their accounts were held with banks such as Corner Banca.

Non-disclosure

[45] The request for mutual assistance did not advise the Swiss authorities that neither applicant had claimed a tax deduction for interest expenses from a loan obtained from Ambassador Finance and that neither applicant had claimed a write-off of AU$4.75m investment in shares in Macgrove Investments Ltd. Both of these transactions were referred to in the document entitled "Status of Criminal Investigations" which formed part of the November letter which was sent to Mr Bottinelli: see above at [12]. The applicants submit that the Attorney-General was under an obligation, when making the mutual assistance request, to disclose these matters to the Swiss authorities. This was because he was "under an obligation of disclosure in relation to all material facts". This obligation is said to arise from the treaty. In particular, reliance was placed on the requirement, in Art 7.1(b), that requests for assistance shall include "a description of the essential acts or omissions alleged or sought to be ascertained" by the requesting state. It was submitted that one of the purposes of this requirement was to enable the Swiss authorities to make a judgment as to whether or not to refuse the request for the reasons mentioned in Arts 2.1(b) and 3.1 of the treaty. Both provisions allow requested states, in their discretion, to refuse assistance where the request, respectively, concerns a fiscal offence or involves compulsory measures and the assistance sought relates to acts or omissions which, if committed in similar circumstances in the requested state, would not be punishable under the laws of that state.

[46] It is to be noted at the outset that the two omissions which are identified in the preceding paragraph were matters of detail which might have assisted the applicant had they been charged with false deduction claims in income tax returns. The mutual assistance request did not allege that false claims had been made in relation to these payments. They were not relied on for the purposes for the request for assistance. They appear to have come to the attention of investigators after the request was made and were drawn to the attention of Swiss authorities in the progress report on the investigation which was prepared over 6 months later.

[47] There are, in addition, other obstacles in the path of the applicants' argument. The first is that the treaty does not form part of Australian domestic law and, therefore, save in an immaterial respect, does not impose binding obligations on the Attorney-General: see Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 286-7, 304 and 315 ; 128 ALR 353 at 361-2, 375-6 and 384 ; 39 ALD 206 at 213-14, 226-7 and 234-5 ; [1995] HCA 20.

[48] Relevantly, s 7(2) of the Mutual Assistance Act provides that Regulations may provide that the Act applies to a foreign country subject to any mutual assistance treaty between that country and Australia. By s 7(3) of the Act it is provided that, if Regulations have been made in accordance with s 7(2), then "this Act applies subject to the limitations, conditions, exceptions or qualifications that are necessary to give effect to the treaty in relation to that country". Regulation 4(1) of the Regulations provides that the Act applies to Switzerland "subject to such limitations, conditions, exceptions or qualifications as are necessary to give effect to the Treaty". These provisions do not have the effect of incorporating the treaty into Australian domestic law: see Bollag v Attorney-General (Cth) (1997) 79 FCR 198 at 214-16 ; 149 ALR 355 at 370-2 ; 47 ALD 568 at 582-4. As the respondents submit, in the absence of inconsistency between the Mutual Assistance Act and the treaty, the Act applies and the treaty does not.

[49] In any event, no general obligation of disclosure of "all material facts" is to be found in the treaty. The relevant obligation, imposed by Art 7.1(b), extends no further than a requirement to describe essential acts or omissions which are alleged or which it is anticipated the investigation may ascertain. This information is to be provided to assist the requested state to make a judgment about how it should respond to the request. This includes consideration of the questions of whether Arts 2.1(b) or 3.1 apply and, if so, whether assistance should be refused on discretionary grounds: see Kennedy v Australian Securities and Investments Commission (2005) 142 FCR 343 at 365 ; 218 ALR 224 at 245-6 ; 52 ACSR 301 at 322-3 ; [2005] FCAFC 32. The request for assistance identified with sufficient precision the facts which gave rise to the offences which it was then suspected had been committed. The potentially relevant provisions creating criminal offences were also referred to. This information was sufficient to alert the Swiss authorities to the possibility that the fiscal offences provisions might be engaged. As a result, they directed a series of questions to their Australian counterparts seeking further information about the allegations being made against the applicants and others. Sufficient information was, in my opinion, provided in the request to satisfy Australia's obligations under Art 7.1(b) of the treaty.

[50] The omission of any reference to what was said to be "the investigating role of the ATO" from the mutual assistance request was not a matter placed at the forefront of the applicants' case. As I understood the argument it was that, had reference been made to the ATO, it would have been clearer to the Swiss authorities that fiscal issues may have been involved and that they may have been more inclined to exercise their powers under Arts 2.1(b) or 3.1 of the treaty. I do not accept these submissions. The ATO was not conducting the criminal investigation which led to the making of the request. A clear separation of functions had been arranged under which the ATO was confined to civil aspects of the investigations. It may well have been misleading, in a request, made under the Mutual Assistance Act, to have implied or suggested that the ATO was engaged in the criminal investigation. In any event, as already noted, the Swiss authorities understood that the request dealt with fiscal offences. Failure to mention the ATO did not cause them to overlook this point.

[51] It is also to be borne in mind that the discretionary considerations comprehended by Arts 2.1(b) and 3.1 include matters arising under the domestic law of the requested state which might not be known to or anticipated by the state making the request. It is, of course, open to the requested state (as occurred here) to seek further information from the requesting state should this be necessary in order for an informed decision to be made on the request. It is also to be remembered that the requested state might, in its discretion, determine to respond to the request notwithstanding the fact that the request is one which might properly be refused under those provisions.

[52] It may also be the case, as the respondents argued, that the fact that scope exists for the requested state to seek elaboration of a request for assistance before making a decision as to whether or not comply, renders the request immune from successful attack unless it be established that the pleaded omissions had occurred by reason of fraud or bad faith: compare Lego Australia Pty Ltd v Paraggio (1994) 52 FCR 542 at 555-6 ; 124 ALR 225 at 237-9 ; Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393 at 400. It is not, however necessary to determine whether this line of authority has application to requests for assistance made under the Mutual Assistance Act.

Privileged material

[53] The November letter contained a paragraph which read:

The ACC had established that a legal advisor working for Dunn gave a legal opinion that the arrangement was illegal and she immediately terminated her employment with Dunn. The ACC also has information that [suggests] the legal advisors for Barminco also have expressed grave concerns regarding the illegality of the arrangement that Bartlett and Sayers have entered with Dunn and CROSSLINE.

The applicants surmise that the first statement was founded on an opinion, provided to Mr Dunn by an in-house lawyer employed by the second applicant, Ms Jillian Saint. The applicants suggest that the ACC became aware of the substance of Ms Saint's opinion when she disclosed it in the course of an examination of her by an ACC examiner Mr Tim Sage in September 2005. Ms Saint gave Mr Sage a 31-page version of the opinion. Mr Dunn's solicitor, who was also present at the examination, provided a facsimile copy of a different version of the opinion which ran to 21 pages. The uncontradicted evidence of Ms Phillips, Ms Buttsworth and Mr Woodwood, establishes that the opinions were placed in a sealed envelope by Mr Sage and that nobody had access to the opinions until 15 December 2005, well after the November letter had been sent.

The respondents submit that the information which is recorded in the first sentence of the statement was obtained from a letter that Ms Saint wrote to Mr Dunn on or about 1 September 2003. In that letter Ms Saint gave Mr Dunn some reasons for her decision to terminate her employment. While she refers to certain "arrangements" which had caused her to lose sleep and become extremely stressed she does not refer to a particular arrangement; nor does she do more than imply that she had given advice relating to it. There is no reference in the letter to the matters contained in the second sentence of the statement relating to Messrs Bartlett and Sayers and CROSSLINE. No evidence was given by the author of the November letter. I am, therefore, unable to determine whether the statement was made in reliance on Ms Saint's letter or whether it reveals legally privileged material. No attempt has been made to establish that the opinion provided by Ms Saint was, in fact privileged. No determination to this effect has been made. I note that Mr Sage considered that the claim was dubious given that Ms Saint did not, at relevant times, hold a practicing certificate and that she was an employee of Misty Mountain.

[54] Even if the statement was partly based on an opinion which was subject to a claim of privilege or was, in fact, privileged it does not follow that the November letter, or that part of it, was in some way rendered "invalid". The applicants did not advance argument as to why this should be so.

The involvement of the DPP

[55] The DPP played a limited but, none the less, an important role in relation to Operation Wickenby. Operation Wickenby, as has already been noted, was conducted by the ACC under the Australian Crime Commission Act 2002 (Cth) and Determination (Money Laundering and Tax Fraud) Determination 2003. It involved an investigation directed to determining whether or not certain named individuals had committed offences against Commonwealth criminal laws. Following the execution of the search warrant on Mr Egglishaw's hotel room in February 2004, ACC investigators formed the view that it was likely that documents relating to the investigation would be found on premises occupied by Strachans SA and Corner Banca in Switzerland. The ACC investigators were aware that, in order to obtain such documents, it would be necessary for a mutual assistance request to be made to the Swiss authorities. The investigators were also aware that, pursuant to a memorandum of understanding between the DPP and the Attorney-General's department, which had been made in 1997 (the memorandum of understanding), it was provided that the DPP had the primary responsibility for the drafting of mutual assistance requests made by Commonwealth agencies. The DPP was to perform a quality assurance role to ensure that any material obtained pursuant to a request was provided in a form that would be admissible in an Australian court in the course of a criminal prosecution or proceedings for the recovery of the proceeds of crime. The prosecution of such proceedings fell within the statutory responsibility of the DPP.

[56] Under the memorandum of understanding it was also the role of the DPP to determine whether Australian authorities were undertaking the investigation of serious criminal matters such as to justify a request for mutual assistance from a foreign country and to advise the Attorney-General's department as to whether a request should be made. The DPP appointed Mr Adsett, a senior officer, as its Operation Wickenby coordinator. That officer was, from time to time consulted by the ACC to clarify whether evidentiary material which had been collected suggested that particular criminal offences may have been committed.

[57] It was in accordance with these arrangements, that in February 2005, the ACC forwarded information to the DPP which alleged that Mr Dunn and others may have committed offences against Commonwealth laws and provided a draft mutual assistance request. That draft was settled by an officer in the DPP's office. Later in February 2005, Ms Cronan passed on the information obtained from the ACC investigator to the Attorney-General's department. She provided a copy of the draft mutual assistance request and asked the Attorney-General to make the request for mutual assistance. She asked that the request should be made on behalf of the DPP and the ACC. This was done.

[58] When the mutual assistance request was made in March 2005 it was said to have been made at the instance of the Office of the Commonwealth DPP and the ACC.

[59] The applicants, in their written submissions, contended that the DPP "had no proper function to perform in relation to the mutual assistance request and that the involvement of the DPP in the mutual assistance request (and the subsequent letters) rendered it invalid". As developed in oral argument the issue was framed in terms of power. It was said that the DPP lacked power to do any of the acts which he had performed in relation to Operation Wickenby and that its participation in the making of the request caused it to be "invalid".

[60] The Office of the DPP is established by s 5 of the Director of Public Prosecutions Act 1983 (Cth) (the DPP Act). The functions of the DPP include the carrying on of prosecutions for offences against Commonwealth law: see s 6(1)(a)-(e) of the DPP Act. Section 6(2) of the DPP Act provides that, in addition to the function identified in s 6(1), the functions of the DPP include functions conferred on him or her under any other Commonwealth law (para (a)) or "such other functions as are prescribed" (para (b)). Section 6(1)(n) of the DPP Act is significant for present purposes. It provides that it is a function of the DPP "to do anything incidental or conducive to the performance of any of the functions referred to in paragraphs (a) to (mb) and in subsection (2)".

[61] Although s 6(1)(n) of the DPP Act, in terms, identifies a "function" of the DPP, it has been construed as being an empowering provision. In Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 the New South Wales Court of Appeal held that s 6(1)(n) of the DPP Act conferred a special power on the DPP: see at 597. A similar approach to the construction of s 6(1)(n) of the DPP Act was adopted by a Full Court of this court in Health Insurance Commission v Freeman (1998) 88 FCR 544 ; 158 ALR 267 (Freeman). While rejecting the notion that s 6(1)(n) empowered the DPP to give legal advice on request to Commonwealth authorities merely because they happened to be investigating the commission of offences under Commonwealth law, it held that such advice might be given in certain circumstances. Merkel J (with whom von Doussa and Carr JJ agreed) held (at FCR 564-5; ALR 285) that:

... in any particular case, the function to which the legal advice is incidental or conducive must be identified. Contrary to the view held within the DPP's office, the DPP is not empowered under the DPP Act to give legal advice, if and when sought, to any Commonwealth authority merely because it is investigating the possible commission of offences under Commonwealth law. Before the precondition in s 6(1)(n) is met there must be some nexus between the investigation being conducted by the authority and a statutory function of the DPP. The nexus must be something more than a mere theoretical possibility that the DPP might institute, carry on or take over a prosecution at some future date. The facts of the particular case or the nature of the alleged offence must, at the very least, establish that the possibility of the DPP becoming involved in a prosecutorial function is a real one. A course of conduct of past referrals of similar matters to the DPP or evidence of an intention to refer the particular matter to the DPP for prosecution may suffice. Ultimately, each case will depend on its own facts.

His Honour had earlier (at FCR 561; ALR 282) expressed the view that:

... it would seem to be incidental or conducive to the DPP's function of prosecuting, carrying on or taking over proceedings, including considering prosecuting, carrying on or taking over proceedings, to give legal advice to any Commonwealth authorities or agencies involved in the investigation of matters which are likely to be the subject of such proceedings, irrespective of whether the proceedings are prospective, imminent or actual ... For example, it would clearly be "conducive" for the better fulfilment of the prosecutorial functions of the DPP, for advice to be given to an investigative agency to ensure evidential material being gathered by it for the purpose of a prosecution which it is intended to be carried on by the DPP, is being gathered lawfully.

[62] The applicants are, no doubt, correct in contending that the memorandum of understanding between the DPP and the Attorney-General's department cannot and does not confer power on the DPP which he does not otherwise possess under a relevant enactment. They are also correct in contending that the DPP was not free to provide advice for the benefit of the ACC merely because the ACC was conducting an investigation into conduct by individuals which may contravene Commonwealth criminal law. The question for determination is, however, whether the various activities of the DPP, which were undertaken in the course of Operation Wickenby, were conducive to the performance of one or more of the prosecutorial functions of the DPP. In my view they were.

[63] The ACC's investigation into the conduct of the applicants and others caused it to suspect that they had committed offences under Commonwealth criminal law. Specific offences were identified. The ACC determined that it was likely that documentary evidence which might assist in establishing whether or not offences had been committed was likely to be found in Switzerland. At this point the ACC placed the information, which it had by then obtained in the course of its investigation, in the hands of the DPP. Advice was sought as to whether the evidence suggested the possibility that serious criminal offences had been committed by the applicants and, if so, the terms in which an application for mutual assistance could be made to the Swiss authorities. One aspect of that request was that any documentary material seized in Switzerland should be made available to the Australian authorities in a form which would be admissible in an Australian criminal court. At all relevant times it was reasonably anticipated by the ACC that the DPP would be responsible for prosecuting any charges laid as a result of its investigation. These considerations, in my opinion, establish the necessary nexus between the investigation being conducted by the ACC and the prosecutorial function of the DPP. As a result the DPP was empowered, by s 6(1)(n) of the DPP Act to act as he did.

[64] An additional source of power is to be found by a reading of s 6(1)(n) with s 6(2)(b) of the DPP Act. In Freeman Merkel J observed (at FCR 566; ALR 286) that "[i]f it is regarded as desirable that the DPP have a general entitlement to give legal advice to Commonwealth authorities investigating the commission of offences under Commonwealth law, then that is a matter for Parliament".

The DPP Act had, since its inception, contained s 6(2)(b) which empowered the executive, by regulation, to confer additional functions on the DPP. The power was not exercised, so as to confer power on the DPP to give general advice, until after the decision in Freeman was handed down. By reg 3(1)(f) and (g) of the Director of Public Prosecutions Regulations 1984 (Cth) (as amended by the Director of Public Prosecutions Amendment Regulations 1998 (No 1) (Cth) which commenced on 22 December 1998) it was provided that it was a function of the DPP to provide legal advice to Commonwealth, state or territory authorities "whether or not the advice is for the purposes of a particular investigation". It was plainly incidental and conducive to the performance of this function that the advice proffered by the DPP to the ACC and the Attorney-General's department was given.

[65] I note in conclusion that no argument was developed by the applicants to explain how and why, if the DPP had acted ultra vires, his involvement with the making of the request by the delegate of the Attorney-General, would render that request "invalid".

The involvement of the ACC

[66] The applicants allege that the ACC did not act lawfully in providing to the DPP the information and advice sent in February 2005 by Mr Considine to Mr Adsett and in providing the information contained in the letters from the ACC to the Attorney-General's department in May and November 2005.

[67] The respondents contend that each of these communications occurred lawfully pursuant to either subss (7) or (9) of s 59 of the Australian Crime Commission Act 2002 (Cth) (the ACC Act).

[68] The ACC is established by s 7(1) of the ACC Act. It consists of the CEO, examiners and the members of the staff of the ACC. The functions of the ACC, provided for in s 7A of the Act, include the dissemination of criminal information, the investigation of conduct rendered criminal by Commonwealth laws and reporting on the outcomes of its investigations. Section 51 of the ACC Act makes it an offence for any member of the staff of the ACC to divulge or communicate to any other person any information acquired by him or her in the performance of his or her duties otherwise than in connection with the performance of those duties under a relevant Act. One relevant Act is the ACC Act itself: see s 51(4). In so far as they are relevant, subss (7) and (9) of s 59 provide:

(7) The CEO may give to:

(a)
any law enforcement agency; or
(b)
any foreign law enforcement agency ...

any information that is in the ACC's possession and that is relevant to the activities of the agency or body if:

(d)
it appears to the CEO to be appropriate to do so; and
(e)
to do so would not be contrary to the law of the Commonwealth, a State or Territory that would otherwise apply.

...
(9) Where any information relating to the performances of the functions of:

(a)
a Department of State of the Commonwealth;

...
comes into the possession of the ACC in the course of any operations or investigations conducted by it, the CEO may, if he or she considers it desirable to do so:

(d)
furnish that information to the Department, the Administration or the instrumentality ...

The term "law enforcement agency" is defined in s 4, inter alia, to mean "any other authority or person responsible for the enforcement of the laws of the Commonwealth or of the States".

[69] By s 59A of the ACC Act the CEO may delegate, by writing, all or any of the CEO's powers and functions to a member of staff of the ACC of senior executive service level. It was common ground that Mr Considine (the author of the February communication and the November letter) and Mr Hellings (the author of the second part of the May letter) were members of the staff of the ACC but were not delegates of the CEO for the purpose of the exercise of the CEO's powers under s 59(7) or (9) of the ACC Act. Such a delegation was however held by Mr Outram who was an SES level officer. Mr Outram gave evidence which was sustained under cross-examination that:

•
He had responsibility for the management, coordination and control of all ACC investigations including Operation Wickenby.
•
Due to the strategic importance of Operation Wickenby to the ACC, he personally spent a "significant amount of [his] time" on Operation Wickenby.
•
He was personally aware that it was proposed to send the information, contained in the February communication and the May and November letters, to the recipients prior to those letters being sent.
•
In each case, he had formed the view that it was appropriate, desirable and relevant to the functions or activities of the DPP and the Attorney-General's department that the provision of the information to those agencies should occur for the purpose of facilitating the making of the mutual assistance request or furnishing the Swiss authorities with information which they had requested following the making of the request.

[70] The applicants contend that the information contained in the February communication to the DPP did not relate to the functions of the DPP and that the CEO did not and could not have formed the view that it was appropriate to give that information to the DPP. They further contend that the information contained in the May and November letters did not relate to the functions of Switzerland and the CEO did not and could not have formed the view that it was appropriate to give the information to the Swiss authorities. The applicants also contend that it was not the function of the ACC to send any of the letters.

[71] The applicants' submissions are founded, in part at least, on certain misstatements of fact. The May letter and the November letter were both sent to the Attorney-General's department with the intention that the information contained in them would be forwarded to the Swiss authorities. It was a matter for the Attorney-General's department to determine whether the letters would be forwarded to the Swiss authorities. It was necessary for the information to be forwarded to the Attorney-General's department because it was the Central Office through which, in accordance with Art 6 of the treaty, communications relating to a mutual assistance request were to be channelled.

[72] The DPP was a "law enforcement agency" for the purposes of s 59(7) of the Act. In AA Pty Ltd v Australian Crime Commission (2005) 219 ALR 666 ; 85 ALD 422 ; [2005] FCA 1178 at [19], Finkelstein J held that a Director of Public Prosecutions or an Attorney-General were persons who had general responsibility for the enforcement of the laws of the Commonwealth and were, therefore, law enforcement agencies for the purposes of s 59(7) of the ACC Act.

Although his decision was overturned on other grounds by a Full Court (see Australian Crime Commission v AA Pty Ltd (2006) 149 FCR 540 ; 88 ALD 642 ; [2006] FCAFC 30), this aspect of his Honour's reasons remained undisturbed. Indeed, the Full Court took a wider view of the term "law enforcement agency" than Finkelstein J had done.

[73] The Attorney-General's department is plainly a Department of State of the Commonwealth for the purposes of s 59(9)(a) of the DPP Act. The May and November letters were directed to this department. One of the functions of the department was to act as a central office in accordance with Art 6 of the treaty.

[74] Before information held by the ACC could be sent to another agency the CEO or his delegate must first form the opinion that such a communication was "appropriate" (s 59(7)) or "desirable" (s 59(9)). In each case Mr Outram formed the necessary opinion prior to the letter being sent. He was not, however, the author of any of the letters; nor did he forward any of the letters to the recipients. This was done, in each case, by a member of the staff of the ACC who was not a delegate of the CEO for the purposes of s 59(7) or (9) of the DPP Act. For this reason, the applicants contend, each of the communications was unlawful. I do not accept this submission.

[75] The issue which arises is whether a delegate is required personally to perform each and every act which it is necessary to perform to exercise the delegated power. Various decisions of high authority suggest that the answer to this question, in any given case, will depend on a range of considerations. The considerations include the exigencies attaching to the exercise of the power, whether or not the delegate has the capacity to exercise the power on each and every occasion it is likely to be exercised, the potential for the exercise of the power to impinge on the rights of others and the status of the agent: see Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213 at 222-5 ; 34 ALD 72 at 80-1. A delegate may be able to act through the agency of subordinates in performing some or all of the incidents of the exercise of delegated power.

[76] In O'Reilly v Commissioners of the State Bank of Victoria (1982) 153 CLR 1 ; 44 ALR 27 the High Court was called upon to determine the validity of certain notices given under the Income Tax Assessment Act 1936 (Cth). The Commissioner of Taxation had power to give the notices and he had delegated that power to deputy commissioners. Notices were given which bore a facsimile of the signature of a deputy commissioner which was stamped on the notices by the chief investigation officer who had been authorised, by the deputy commissioner, to do so. The majority held that the notices were valid. Gibbs CJ (with whom Murphy J agreed) considered (at CLR 12-13; ALR 30-2) that the deputy commissioner's delegated powers could be exercised through "a properly authorised officer". The chief investigation officer was properly authorised notwithstanding the fact that the Deputy Commissioner had no personal knowledge that the officer intended to issue the particular notices. Wilson J (at CLR 30-1; ALR 45-7) held that delegated power could be exercised through servants or agents. Mason J, in a dissenting judgment, was prepared to countenance the performance of ministerial acts by an agent of a delegate. His Honour said (at CLR 18-19; ALR 36):

Apart from any exercise of his powers of delegation the Commissioner may appoint agents to act on his behalf and in his name. But, having regard to the statutory provisions here, I do not think that the Commissioner can appoint an agent to act on his behalf in exercising a statutory discretion or a statutory power which involves the formation of an opinion, except perhaps on the footing that the Commissioner retains to himself the substantial exercise of discretion or the substantial formation of the opinion, or the exercise of substantial control over the exercise of the discretion or the formation of the opinion, leaving to the agent the ministerial act of communicating the decision or issuing the notice.

See, generally, M Campbell, "The Carltona Doctrine", (2007) 18(4) PLR 251.

[77] The power conferred, by s 59(7) and (9) on the CEO of the ACC or his delegate, Mr Outram, was conferred to facilitate departures from the general rule that information in the possession of the ACC should not be disseminated outside that body. The exercise of the power was conditional on the forming of value judgments as to the appropriateness or desirability or such dissemination. Information could only be communicated to a limited number of agencies. The significance which the legislature attached to the formation of the value judgments is indicated by the fact that, in each case, the judgment was to be formed by the CEO or a delegate drawn from the senior ranks (SES level) of the ACC. There was no evidence to suggest that the occasion for the exercise of power under s 59(7) or (9) was so frequent as to give rise to an assumption that the legislature could not have expected the CEO or a delegate personally to exercise the power. The exercise of the power had no direct effect on the rights of third parties but might, indirectly, have such an affect if the agency to whom the information was provided acted on it to the detriment of the third party.

[78] These considerations suggest that the CEO or his delegate could not authorise other ACC officers to exercise the powers conferred by s 59(7) and (9). Had Mr Outram purported to authorise Mr Considine or Mr Hellings to form the value judgments which lie at the heart of these statutory discretions, I would have been disposed to hold that the relevant disclosures had been made ultra vires. That is not, however, what occurred.

[79] Mr Outram formed the necessary opinions upon which the exercise of the statutory discretions, provided for in s 59(7) and (9), depended. He approved the sending of each of the letters. The acts of Mr Considine and Mr Hellings in composing, signing and sending the letters were, in my opinion, ministerial acts which they performed at the behest of and under the supervision of Mr Outram. No contravention of s 59(7) or (9) the ACC Act occurred in relation to the forwarding of the letters to the DPP and the Attorney-General's department.

[80] Even had I formed a contrary view on the question of whether the three letters had been sent conformably with the requirements of the ACC Act, I would not have concluded that the legal efficacy of the mutual assistance request was thereby affected. Only the February communication predated the making of the request. The request was based on information supplied by the ACC but it was made by the delegate of the Attorney-General. There was no reason to suppose that the information had been provided by the ACC other than in good faith. There is nothing in the evidence to suggest that the material was not believed by the ACC to constitute a fair summary of the results of its investigation to that point. The fact that the ACC may have acted in contravention of Australian domestic law in making the communication to the DPP who, in turn, passed it onto the Attorney-General's department does not, on the evidence, provide a legal basis for the conclusion that the request was invalid.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).