Von Arnim v The Health Insurance Commission [2004] FCAFC 33 (26 February 2004)

Last Updated: 26 February 2004

FEDERAL COURT OF AUSTRALIA

Von Arnim v The Health Insurance Commission [2004] FCAFC 33

SEARCH AND SEIZURE – whether warrant sufficiently stated purpose for which the warrant was issued – whether warrant sufficiently stated kind of evidential material to be seized – whether warrant sufficiently stated date that warrant ‘ceases to have effect’ – severance of ineffective parts


Health Insurance Commission Act 1973 (Cth) ss 8AA & 8Y
Health Insurance Commission Regulations (Cth) Reg 3


Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523 applied
Chong v Schultz [2000] FCA 582; (2000) 112 A Crim R 59 referred to
Freeman v Health Insurance Commission [2000] FCA 54 referred to
George v Rockett [1990] HCA 26; (1990) 170 CLR 104 applied
Hart v Commissioner of Australian Federal Police [2002] FCAFC 392; (2002) 124 FCR 384 referred to
Malubel Pty Ltd v Elder (No 2) (1998) 73 ALJR 269 referred to
Parker v Churchill (1985) 9 FCR 316 referred to
Williams v Keelty [2001] FCA 1301; (2000) 111 FCR 175 applied














DR ULRICH CHRISTOPH EBERHARD FREIHERR VON ARNIM v
THE HEALTH INSURANCE COMMISSION, ROBERT MILICI AND ANNE JEANETTE MAUGHAN
V961 of 2003


WEINBERG, DOWSETT & JACOBSON JJ
26 FEBRUARY 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	No V 961 of 2003

On appeal from a single judge of the Federal Court of Australia

BETWEEN:	DR ULRICH CHRISTOPH EBERHARD FREIHERR VON ARNIM APPELLANT
AND:	THE HEALTH INSURANCE COMMISSION FIRST RESPONDENT ROBERT MILICI SECOND RESPONDENT ANNE JEANETTE MAUGHAN THIRD RESPONDENT

JUDGES:	WEINBERG, DOWSETT & JACOBSON JJ
DATE OF ORDER:	26 FEBRUARY 2004
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.	The appeal be dismissed.
2.	The appellant pay the first and second respondents’ costs in the proceedings.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	No V 961 of 2003

On appeal from a single judge of the Federal Court of Australia

BETWEEN:	DR ULRICH CHRISTOPH EBERHARD FREIHERR VON ARNIM APPELLANT
AND:	THE HEALTH INSURANCE COMMISSION FIRST RESPONDENT ROBERT MILICI SECOND RESPONDENT ANNE JEANETTE MAUGHAN THIRD RESPONDENT

JUDGES:	WEINBERG, DOWSETT & JACOBSON JJ
DATE:	26 FEBRUARY 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

Introduction

1 This is an appeal from a judgment of the Court dismissing an application for review of a decision of a Magistrate to issue a search warrant under s 8Y of the Health Insurance Commission Act 1973 (Cth) ("the Act").

2 Three issues arise out of the appeal. The first is whether the warrant stated the purpose for which it was issued in accordance with s 8Y(5)(a) of the Act. The second is whether the warrant stated a description of the evidential material to be seized as required by s 8Y(5)(c) of the Act. The third is whether the warrant stated the day on which it ceased to have effect in accordance with s 8Y(5)(d) of the Act.

Background

3 The warrant was issued by the third respondent ("the Magistrate") on 14 July 2003.

4 The second respondent was an officer of the first respondent. He applied to the Magistrate for the issue of the warrant. He did so on an affidavit that deposed to his suspicion that the appellant had defrauded the Medicare scheme by issuing receipts and receiving payment for services that were not provided by the doctor named in the receipts.

5 The warrant was issued to search the premises specified in it for evidential material that satisfied three conditions. The first condition was for original or copies of six classes of documents including invoices, patient histories, diaries, appointment books and financial records. Two of the categories were described by reference to "patients referred to in Annexure C". There was no Annexure "C" attached to the warrant.

6 The second condition stated five further categories of invoices, receipts, financial records and also patients whose names and Medicare numbers were attached and marked Annexure "C". As we have said, there was no such annexure.

7 The third condition contained the following statements of the purpose for which the warrant was issued:

"This warrant was issued for the purpose of authorising the authorised officer specified above, with such assistance and by such force as is necessary and reasonable, to enter the premises specified in this warrant, to search for evidential material of the kind described in this warrant, being evidential material relating to the offences specified in the warrant, and to seize any such material that may be found."

8 The warrant stated the day of its expiry as follows:-

"This warrant ceases to have effect at the start of the day that is 7 days after issue of the warrant."

9 The warrant stated that it was given under the hand of the Magistrate on 14 July 2003.

The Legislative Scheme

10 The functions of the first respondent ("the HIC") under the Act include the implementation of measures to facilitate the detection of activities related to claims for payment, or receipt, of medicare benefits that may constitute an offence under the Act; see s 8AA(2) of the Act and Reg 3(2)(a)(iii) of the Health Insurance Commission Regulations (Cth).

11 The HIC’s functions also include the investigation of cases where there are reasonable grounds to suspect the commission of an offence under the Act; see s 8AA(2) of the Act and Reg 3(2)(c) of the Regulations.

12 Section 8Y(1) of the Act provides that if an information on oath is laid before a magistrate alleging that an authorised officer suspects on reasonable grounds that there may be on or in the premises particular evidential material and the information sets out the grounds, the magistrate may issue a search warrant in respect of the premises.

13 Section 8Y(4)(b) provides that a magistrate is not to issue the warrant unless he or she is satisfied that there are reasonable grounds for issuing it.

14 The relevant paragraphs of s 8Y(5) are as follows:-

"(5) There must be stated in the warrant:

(a) the purpose for which the warrant is issued, and the nature of the offence in relation to which the entry and search are authorised; and
(b) ...
(c) a description of the kind of evidential material to be seized; and
(d) a day, not later than 7 days after the day of issue of the warrant, upon which the warrant ceases to have effect; ..
(e) ..."

The Primary Judge’s Reasons

15 It is clear from his Honour’s reasons for judgment that the principal argument advanced at the hearing was that the absence of Annexure "C" had the effect that both the statement of purpose, and the description of evidential material to be seized, were too wide, vague and uncertain to satisfy the requirements of s 8Y(5)(a) and (c) of the Act respectively.

16 His Honour was of the view that, (provided that the evidential material was sufficiently identified), the statement of purpose which we have set out at [7] above recorded the purpose with specificity; see the primary Judge’s reasons at [13] and [14].

17 His Honour was satisfied, at [15], that the evidential material was sufficiently identified. He found at [16] that the absence of Annexure "C" did not affect the validity of the warrant. This was because, in accordance with well established authority, his Honour held that the two items of the first condition and the item in the third condition which referred to the Annexure should be severed from the warrant.

18 His Honour at [17] and [18] applied the reasoning of Hely J in a decision on very similar facts in Williams v Keelty [2001] FCA 1301; (2000) 111 FCR 175 ("Williams").

19 The contention that the warrant did not state the day on which it ceased to have effect was rejected by his Honour at [19].

The first issue – Statement of Purpose

20 In our opinion, the description of the purpose that we have set out at [7] above clearly satisfied the requirements of s 8Y(5)(a). The purpose was to authorise the authorised officer to enter the premises specified in the warrant, to search for evidential material of the kind described in the warrant, and to seize any such material that related to offences specified in the warrant.

21 The approach that this Court should take when assessing the sufficiency of a search warrant, and the precision required, in a given case, was comprehensively discussed by Burchett J (with whom Sheppard and Pincus JJ relevantly agreed) in Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523 at 533 ("Beneficial Finance"). His Honour observed that the authorities made it clear that the statement of the offence in a search warrant need not be made with the precision of an indictment. That would be impossible, and indeed to attempt would be irrational, bearing in mind the stage of the investigation at which a search warrant may be issued. His Honour also referred to what he had said in Parker v Churchill (1985) 9 FCR 316 at 319. See also Chong v Schultz [2000] FCA 582; (2000) 112 A Crim R 59 at [7] per Heerey J and Williams at [137] – [138].

22 Counsel for the appellant submitted that when the paragraphs in the warrant that referred to Annexure "C" were severed, the purpose was not sufficiently stated in accordance with s 8Y(5)(a) of the Act. This was because, he submitted, the purpose was to obtain evidence relating to the patients named in the Annexure.

23 However, as Burchett J said in Beneficial Finance at 558:

"In a very real sense, the purpose of the issue of a warrant under s 71 [of the Proceeds of Crime Act] is simply to enable the search, for which s 70 provides, to be carried out without the consent of the occupier. This, of course, is just what the statement in the present warrant asserts, on a fair reading of it."

24 In other words, his Honour held that a statement of the statutory purpose is sufficient to meet the requirement, contained in the relevant Act, that a statement of purpose be included in the warrant. As his Honour observed, a statement of the ultimate purpose to be achieved by the execution of the warrant was not intended because in many cases this could only be made at the risk of prejudicial disclosure.

The second issue – description of the evidential material

25 Hely J stated the applicable principles at [151] of his judgment in Williams as follows:-

"There is power in the Court to sever invalid portions of a warrant: Parker v Churchill (1985) 9 FCR 316 at 321-322 (on appeal Parker v Churchill (1986) 9 FCR 334 at 350) and Beneficial Finance at 545 so decide. See also Malubel Pty Ltd v Elder (1998) 88 FCR 242; Malubel Pty Ltd v Elder (No 2) (1999) 73 ALJR 269. However, severance will not be possible if "the good and bad parts of the warrants may be so interlinked that one cannot stand without the other" (Parker v Churchill (1986) 9 FCR 334 at 350) or if a document has or is likely to have been seized in reliance on the bad portion (Beneficial Finance at 545). In Love & Peters v Attorney General (NSW) (1988) 16 NSWLR 24 at 41; 84 ALR 319 at 334 McHugh J said:

"However, it is not possible to sever a warrant where the invalid provision forms part of an inseparable context or would operate differently or produce a different result from that which was intended."

26 His Honour said at [152]:

"It is clear that the issuing officer intended to issue a warrant which incorporated Attachment A. The failure to physically attach that document to the warrant means that his intention has miscarried. This is not the usual case in which the warrant is in the form intended by the issuing officer but, as a matter of law, the warrant is good in part and defective in part, such that the defective part is severed from the warrant. Nonetheless, severance principles are applicable because the warrant is partially defective. It does not matter that the defect arises from failure to attach a document, rather than from some misconception of the extent of the relevant power."

27 We agree with the learned primary Judge that the passage which we have set out at [25] from the judgment of Hely J is applicable in the present case. The three clauses which are to be omitted can be severed without altering the meaning of the remainder of the warrant. The effect of severing the ineffective parts of the warrant is merely to narrow the scope of the evidential material that may lawfully be seized.

28 Counsel for the appellant submitted that the decision in Williams was distinguishable because, there, the officer intended to issue a warrant which incorporated the annexure. Here, the evidence was that the reference in the warrant to Annexure "C" was an error. But in our opinion nothing turns on this. The question whether severance can be effected depends upon whether this can be done without affecting the remaining parts. It does not depend on the intention of the officer who applied for the issue of the warrant.

29 Nor does anything turn on the fact that the warrant had been executed before the hearing. The primary Judge referred to authority for the proposition that severance can be effected even after the warrant has been executed; see Malubel Pty Ltd v Elder (No 2) (1998) 73 ALJR 269 at [3].

The Third Issue – whether the warrant stated the day on which it ceased to have effect

30 The appellant’s counsel relied on the following passages from the judgment of Finkelstein J in Freeman v Health Insurance Commission [2000] FCA 54 ("Freeman") at [45]:-

"Even if I am wrong in the conclusions thus far reached, I would still have found the warrant to be invalid. Every search warrant must comply with s 8Y(5)(d) in that it must state a date upon which the warrant will cease to have effect. In this connection I do not read the final paragraph of the warrant namely "This warrant ceases to have effect on ..... a date not later than 7 days after the issue of the warrant" as a statement that the warrant will cease to have effect seven days after issue as the respondents assert. In fact the sentence does not stipulate any particular date on which the warrant will cease to have effect, although it recognises the warrant will have a maximum life of seven days.

In my opinion the failure to comply with s 8Y(5)(d) must lead to the invalidity of the warrant. The purpose of ss 8Y(5)(d) is to ensure that a warrant is issued only for a short period. The subsection contemplates that the magistrate must turn his mind to the precise period the warrant should have validity. This is an important safeguard to the citizen. It is one of the conditions upon which the validity of the warrant depends: compare George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at 110. Indeed it was accepted by the respondents that a failure to comply with the subsection would lead to invalidity. This concession was rightly made."

31 However, the statement of the relevant day in the present case was expressed in language that differed significantly from that used in the warrant in Freeman. Here, the day on which the warrant ceased to have effect could readily, and easily, be calculated from the words of the statement and the date of issue which appeared at the foot of the warrant. It was the start of the day that was seven days after 14 July 2003, that is 21 July 2003.

32 The appellant’s counsel submitted that a statement which enabled the day to be calculated, no matter how easily that could be done, did not comply with s 8Y(5)(d) of the Act. The effect of his submission was that the actual expiry date must be stated in express terms. We do not accept that submission. It is true that a strict approach to construction of the sub-section is required; see George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at 110-111. But in our view the approach urged on us by the appellant’s counsel would be inconsistent with the practical and operational realities which must apply to the interpretation of the language of search warrants; see Hart v Commissioner of Australian Federal Police [2002] FCAFC 392; (2002) 124 FCR 384 at [68] (French, Sackville and R.D. Nicholson JJ).

Orders

33 It follows that the appeal must be dismissed with costs.

34 We wish to record our gratitude to Mr Monotti of counsel, who appeared pro bono, and on short notice, for the appellant.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Weinberg, Dowsett & Jacobson.

Associate:

Date: 26 February 2004

Counsel for the Appellant:	B Monotti appeared pro bono
Counsel for the First and Second Respondents:	A Cavanough QC with R Doyle
Solicitor for the First and Second Respondents:	Director of Public Prosecutions (Cth)
Date of Hearing:	12 February 2004
Date of Judgment:	26 February 2004