Re Alexander Horowitz; Claudius Bilinsky and Richard Spinak v Brendan C Condie; Stan Woods; John Jones and Andrew Corby [1989] FCA 149 (5 May 1989)

FEDERAL COURT OF AUSTRALIA

Re: ALEXANDER HOROWITZ; CLAUDIUS BILINSKY and RICHARD SPINAK
And: BRENDAN C. CONDIE; STAN WOODS; JOHN JONES and ANDREW CORBY
No. G1153 of 1988
FED No. 203
Search Warrant
41 A Crim R 285

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Search Warrant - validity - whether warrant invalidated by the uncertainty and prolixity of its terms - legal professional privilege - Crimes Act 1914 (Cth) s. 10.

Crimes Act 1914 (Cth): s.10

HEARING

SYDNEY
5:5:1989

Counsel for the Applicants: Mr. P. Roberts

Solicitors for the Applicants: Horowitz and Bilinsky

Solicitors for First Respondent: State Crown Solicitor's Office

Counsel for the Second, Third and Fourth Respondents: Mr. N.R. Cowdery Q.C.,
Ms. E.A. Wilkins

Solicitors for the Second, Third and Fourth Respondents: Commonwealth Director of Public Prosecutions

DECISION

This case concerns the validity of a search warrant issued on 2 August 1988 pursuant to s. 10 of the Crimes Act 1914 authorising Federal police officers to enter the premises of Messrs. Horowitz and Bilinsky, solicitors of Sydney, and search for and seize certain documents. The matter came before me for hearing on 31 march 1989 and by consent certain preliminary questions of law were dealt with. I then answered some of those questions. I shall now give my reasons for judgment.

2. At about 8.15 am on 3 August 1988 Federal Police officers visited premises on the 1st Floor of 229 Macquarie Street, Sydney where the applicants conduct their practice as solicitors. There they spoke to the second applicant, Claudius Bilinsky, and showed him a copy of the search warrant under challenge authorising certain named Federal Police officers to enter the premises and seize defined documents or classes of documents. These documents related to financial or property dealings involving the use of certain specified names by or on behalf of Franklyn Ernest Yates during the period from 23 June 1978 to 21 June 1988. The warrant stated that there were reasonable grounds for believing that those things would afford evidence as to the commission of offences against Commonwealth law. The warrant then specified some six offences under various sections of the Bankruptcy Act 1966.

3. Also on 3 August 1988, application was made by the applicants to this Court to restrain the further execution of the search warrant. Orders were made by Davies J. restraining the four respondents to these proceedings, who are Federal Police officers, from further executing the search warrant. A direction was also made that the documents seized pursuant to the warrant be delivered up to the Registrar of this Court forthwith. Certain consequential orders were also made and the matter was set down for directions later in August 1988.

4. Following the making of these orders the documents which had been seized by the Federal Police officers from the premises of the applicants were placed in a box and sealed in accordance with the orders of this Court and the box handed to the Registrar of the Court in whose custody they remained until certain orders were made to which reference shall be made later.

5. A tape recording of conversations which occurred between Mr. Bilinsky, the third applicant (Richard Spinak) and the police officers during the course of 3 August 1988 was made by Mr. Bilinsky, or on his instructions, with the consent of the police officers present. That recording has not however been used in these proceedings.

6. On 24 November 1988 an order was made by Davies J. that certain issues be heard separately from the other issues in the proceeding. By consent of the parties I heard the following issues as preliminary questions of law on Friday, 31 March 1989, namely:-

"1. Whether the search warrant was invalid in
that it failed to describe with sufficient
particularity the documents being sought.
2. Whether the words on page 4 of the warrant
'all of the abovementioned documents or
abovementioned things pertaining to any
financial or property dealing involving the
use of any of the above names by or on
behalf of Franklyn Ernest Yates' properly
and adequately described the documents and
things being sought.
3. Whether the search warrant was invalid in
that the documents described therein were
not individually made referable to
particular offences and offenders."
4. Whether a search warrant is invalid which
empowers the holder to deal as provided in
this warrant with documents which may be the
subject of a claim of legal professional
privilege.
5. Whether the first respondent had the power
to issue a warrant under Section 10 of the
Crimes Act 1914 in the terms of this warrant
empowering the holder to deal with documents
which may be the subject of a claim of legal
professional privilege.

7. The above statement of issues is taken from the Statement of Issues filed by the second, third and fourth respondents on 9 December 1988.

8. The first respondent, the Justice of the Peace who issued the warrant at the request of Federal Police officers, appeared before me through his solicitor and made the usual submitting appearance.

9. Included in the evidence tendered on behalf of the applicants were two affidavits of Claudius Bilinsky, one sworn on 31 August 1988 and the other on 7 October 1988. In his affidavit of 31 August Mr. Bilinsky identifies the particular files and documents which he collected on 3 August 1988 and delivered to the Registrar of this Court. He also deposes to a conversation between himself and Federal police officers that day. In his affidavit of 7 October 1988 Mr. Bilinsky annexes copies of searches from the Corporate Affairs Commission in relation to some of the companies named in the search warrant. I admitted those affidavits subject to objection and to relevance; but when giving judgment on 31 March held that they were inadmissible on the questions then before the Court and rejected them. I also said that, even if they were admissable they would not have led me to reach a different conclusion on those questions.

10. On 31 March I held that the search warrant was not invalid by reason of any of the matters mentioned in questions 1, 2 and 3. I declined at that stage to deal with questions 4 and 5 as they appeared to involve issues of fact which would need to be resolved in a determination of the remaining questions. Furthermore questions 4 and 5 are based on certain assumptions which may prove to be academic. In the light of further events, the parties have in fact reached an agreement and the remainder of the application shall not proceed. I shall refer to this agreement in greater detail below.

11. The search warrant contains fifteen pages. It commences with the recital that the first respondent, a Justice of the Peace, was satisfied by information on oath that there were reasonable grounds for suspecting that there were upon the solicitors' offices certain things or classes of things including documents:

"... pertaining to any financial or property
dealing involving the use of any of the above
names by or on behalf of Franklyn Ernest YATES
during the period from 23 June 1978 to 21 June
1988 inclusive as to which there are reasonable
grounds for believing that the said things will
afford evidence as to the commission of offences
against a law of the Commonwealth involving the
persons, companies and/or entities named above,
..."

The reference to "the above names" and later to "the persons, companies and/or entities named above" are to the names set out on pages 1 and 2 of the warrant. On page 1 there are specified some nine surnames of natural persons and on page 2 thirteen Christian names followed by nine company names. It was agreed by counsel that there are some one hundred and seventeen possible combinations of names of natural persons to which one must add the nine names of companies. The "things" being the subject of the warrant are described from pages 2 to 4 inclusive and they are detailed and minute in their identification of the things. It is unnecessary to specify them but they include documents of many descriptions and a large part of the description is with respect to computers and computer facilities including hardware and software.

12. The warrant specified some six offences under various sections of the Bankruptcy Act 1966. These offences were said to have been committed between 23 June 1980 and 21 June 1988. The offences in which Mr. Yates was alleged to be involved were:

(a) obtaining credit to the extent of $500 or more
from a person without disclosing that he is an
undischarged bankrupt (s. 269(a));
(b) with intent to defraud creditors, concealing
property (sub-para. 263(1)(a)(i));
(c) wilfully making false statements of assets (s.
263(A));
(d) failure to fully disclose to the trustee all
property and its value (para. 255(1)(a));
(e) carrying on a business under an assumed name (s.
269(b));
(f) failure to fully disclose to the trustee
particulars of dispositions prior to the
bankruptcy (para. 265(1)(b)).

13. The operative part of the warrant is on page 6 and it authorises the three named Federal police officers to enter the offices of Messrs. Horowitz and Bilinsky. This is then followed on page 6 by a section of the warrant titled "THE PROCEDURE" which extends through to page 10. This is a reference to the procedure to be followed by the officers executing the warrant which the warrant describes as "the agreed guidelines between the Commissioner of the Australian Federal Police and the Law Council of Australia". The guidelines are designed to aid Australian Federal police officers in the execution of search warrants at the offices of lawyers and are intended to give the lawyers the opportunity to claim legal professional privilege on behalf of their clients. They would seem to be the result of discussions which took place following the decision of a Full Bench of this Court in Arno v Forsyth (1986) 65 ALR 125. The procedure is elaborately described; but as I have not at this stage answered questions which touch the question of legal professional privilege I need say nothing further about it.

14. The warrant concludes with the authority being conferred on page 10 to the police officers to seize the things mentioned earlier which are then again set out by detailed description on pages 10 through to 15 which also includes a restatement of the offences alleged to have been committed by Mr. Yates.

15. Counsel for the applicants did not argue that the warrant lacked particularity or sufficient particularity in the description of the documents. Indeed, this argument could hardly be sustained because the warrant identifies the things or classes of things including documents which minute particularity covering about two pages of the warrant itself. The attack upon the warrant by counsel for the applicants was that the holder of the warrant would not know what it authorised him to search for and seize and would leave him to speculate. This argument was founded on the presence of the words which I extracted above, but which I will restate:

"All of the abovementioned documents or other
abovementioned things pertaining to any financial
or property dealing involving the use of any of
the above names by or on behalf of Franklyn Ernest
Yates during the period from 23 June 1978 to 21
June 1988 inclusive ..."

It was submitted that it was impossible for the police officers to know with any degree of certainty what documents would answer the description of documents pertaining to financial or property dealing involving the use of any of the many combinations of names "by or on behalf of Mr. Yates". The exception to this was conceded as being documents, if any, which on their face purported to be executed by one of the names specified on behalf of Mr. Yates or documents which on their face purported to be a financial or property dealing by Mr. Yates himself. In short, there were no criteria specified in the warrant by which its holder could execute it with any degree of certainty knowing the documents or classes of documents or other things falling within the scope of the warrant.

16. There are many reported cases establishing the prerequisites for a valid search warrant and it is sufficient to mention R. v Tillett; Ex parte Newton (1969) 14 FLR 101; Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52; Brewer v Castles (No. 2) (1984) 52 ALR 577; Arno v Forsyth, supra, Brewer v Castles (1984) 1 FCR 55; Lander v Mitson (1989) 83 ALR 466; Crowley v Murphy [1981] FCA 31; (1981) 52 FLR 123; Inland Revenue Commissioners v Rossminster Limited [1979] UKHL 5; (1980) AC 952; Australian Broadcasting Corporation v Cloran (1984) 4 FCR 151.

17. A warrant must "describe the particular offences in relation to which the seizure is authorised so as to enable the persons to whom they are addressed and the persons whose premises are to be searched to know the exact object of the search" Cloran's Case, supra, per Lockhart J. at 153; Arno v Forsyth, supra, per Jackson J. at 143-4. The practical application of this requirement will vary, of course, from instance to instance. As mentioned above, the warrant in question did set out with some particularity the offences alleged and also the approximate dates on which it is said such offences were committed. There is no basis for disputing the validity of the warrant on this ground.

18. The draftsman of this warrant certainly did not err on the side of generality in the specification of the documents or things within the scope of the warrant or the names of the persons or corporations who may have been involved in any of the transactions described in the warrant. The categories of documents are extensively itemised and the total number of persons referred to is no less than 126.

19. The police officer executing the warrant and the applicants whose premises were being searched would have been able to identify the relevant categories of documents covered by the warrant. The words "involving the use of any of the above names by or on behalf of Franklyn Ernest YATES" are capable of interpretation either by reference to the document itself on which it may appear whether the name was used by or on behalf of Mr. Yates, or by reference to another document which itself makes it clear whether the document in question did involve the use of relevant names by or on behalf of Mr. Yates or from information within the knowledge of the searcher or information within the knowledge of the applicants. It leaves the police officers with some degree of discretion but this fact is not necessarily fatal to a warrant: Tillett's Case per Fox J. at 114. In my view the warrant is not invalid by reason of any of the matters mentioned in questions 1, 2 and 3 before me.

20. I say in conclusion that the reported cases in effect give instruction to persons having authority to issue search warrants and those who are to execute them and to the persons whose premises are to be searched as to the requirements that must be observed when search warrants are issued. The cases establish the essentials or indispensable elements for a valid warrant, the signposts to be followed to achieve those essentials and the beacons to avoid the shoals or dangerous points. I have the impression that the draftsman of this search warrant took the lessons to be learnt from the cases very much to heart and set about describing with scrupulous and minute particularity every conceivable kind of document that could be said to be relevant and every conceivable kind of computer equipment, including hardware, software and printout material. Such extensive itemisation will not be necessary in each case, though sometimes it may be essential or desirable depending on the circumstances. The specificity does not invalidate this warrant, but it does make the task of the reader time consuming, and probably unnecessarily so. I do not say this critically because I am conscious of the problems that must confront those who draft these warrants, but there is a happy medium between undue generality and excessive particularity which at times can border on prolixity.

21. Finally, some mention ought to be made of the way in which this case was ultimately resolved. The documents seized in purported execution of the warrant were held in the custody of the Registrar of this Court. As counsel and solicitors for both parties also acted in the prosecution of related criminal proceedings, neither the applicants nor the respondents were prepared to permit an inspection of the documents by legal representatives for the purpose of determining whether the documents were properly seized or if some or any of them were properly the subject of a claim for legal professional privilege. Broadly speaking it was possible to envisage three categories of documents amongst the seized documents, namely:

(i) documents which were irrelevant and therefore not
covered by the terms of the warrant;
(ii) documents otherwise within the terms of the warrant, but
properly the subject of a claim for legal professional
privilege;
(iii) documents covered by the terms of the warrant for which
no claim of privilege could properly be made.

22. It would only be the third category of documents which could properly be seized by the Australian Federal Police under the warrant.

23. Counsel for the applicants and the respondents asked me to examine the documents and determine which were properly seized and which were covered by a claim for legal professional privilege. In the absence of any other suitable method of resolving the problem I agreed to undertake the task. I then examined the documents and classified them into the three categories mentioned above. The parties accepted my classification which effectively resolved the remaining areas of dispute between the parties. On the application of the applicants which was not opposed by the respondents, the application was dismissed with no order as to costs. The documents in categories (i) and (ii) were released to the applicants whilst those determined to be inspectable and therefore properly seized were released to the second respondent.

24. It was in this somewhat informal way that the parties were able to agree without further litigation, on the questions of legal professional privilege and of the width of the class of documents covered by the warrant.

31:3:1989

The course I propose to follow is to now indicate the

conclusion which I have formed on questions 1, 2 and 3 and to give my reasons later.

2. These questions are set out in the statement of issues filed by the second, third and fourth respondents on 9 December 1988 which, by consent, is the document to which I shall have regard for the purpose of formulating the questions envisaged in the order of another Judge of this Court severing the issues for trial.

3. I have formed the view that the answers to questions 1, 2 and 3 should be that the warrant is not invalid by reason of any of the matters mentioned in those three questions.

4. I decline at this stage to deal with questions 4 and 5 as it seems to me they involve questions of fact which may also be involved in some of the remaining questions. Furthermore questions 4 and 5 are based on certain assumptions which may prove to be academic, as has been clearly indicated in the course of the arguments of counsel.

5. I am of the view that for the purposes of dealing with questions 1, 2 and 3, the affidavits of Claudius Bilinsky of 31 August 1988 and 7 October 1988 are irrelevant, but even if I were to take them into account for the purpose of dealing with those questions, my answer would be the same.

6. I make no formal declarations or orders today, so that in the event of any party wishing in due course to test the matter further, time shall not run against him.