S v Australian Crime Commission [2006] FCAFC 5 (15 February 2006)

Last Updated: 15 February 2006

FEDERAL COURT OF AUSTRALIA

S v Australian Crime Commission [2006] FCAFC 5

ADMINISTRATIVE LAW - whether summons issued complied with essential statutory requirement

CONSTITUTIONAL LAW – validity of Australian Crime Commission Act 2002 (Cth) – validity of s 4A of the Act – where Act gives ACC power to investigate state offences with a federal aspect – whether definition of ‘federal aspect’ in s 4A ensures Act is supported by a federal head of power

Acts Interpretation Act 1901 (Cth), s15A
Australian Crime Commission Act 2002 (Cth), ss4, 4A, 7, 7A, 7B, 7C, 24A, 28, 29, 46B
Corporations Act (1989) (Cth) ss 46 and 47
Corporations (Commonwealth Authorities and Officers) Regulations 1990 (Cth), r 3
Federal Court of Australia Act 1976 (Cth), s20
National Crime Authority Act 1984 (Cth)
National Crime Authority Amendment Act 2000 (Cth)
Proceeds of Crime Act 2002 (Cth)
Duties Act 2000 (Vic), s69B

Ex parte Walsh & Johnson: In Re Yates [1925] HCA 53; (1925) 37 CLR 36
Lockwood v The Commonwealth [1954] HCA 31; (1954) 90 CLR 177
R v Duncan; Ex parte Australian Iron & Steel Pty Ltd [1983] HCA 29; (1983) 158 CLR 535
R v Hughes [2000] HCA 22; (2000) 202 CLR 535
Re Cram; Ex parte NSW Colliery Proprietors Association [1987] HCA 28; (1987) 163 CLR 117

S v AUSTRALIAN CRIME COMMISSION
SAD250 OF 2005

B v AUSTRALIAN CRIME COMMISSION
SAD252 OF 2005

S2 v AUSTRALIAN CRIME COMMISSION
VID1294 OF 2005

B2 v AUSTRALIAN CRIME COMMISSION
VID1286 of 2005

C, R, D, A & M v AUSTRALIAN CRIME COMMISSION
NSD1358 OF 2005


RYAN, EMMETT & GYLES JJ
15 FEBRUARY 2006
MELBOURNE heard in ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD250 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	S APPELLANT
AND:	AUSTRALIAN CRIME COMMISSION RESPONDENT

JUDGES:	RYAN, EMMETT & GYLES JJ
DATE OF ORDER:	15 FEBRUARY 2006
WHERE MADE:	MELBOURNE (heard in ADELAIDE)

THE COURT ORDERS THAT:

1.	The appeal be dismissed.
2.	The appellant pay the respondent’s costs of the appeal.

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

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 252 OF 2005

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	B APPELLANT
AND:	AUSTRALIAN CRIME COMMISSION RESPONDENT

JUDGES:	RYAN, EMMETT & GYLES JJ
DATE OF ORDER:	15 FEBRUARY 2006
WHERE MADE:	MELBOURNE (heard in ADELAIDE)

THE COURT ORDERS THAT:

1.	The appeal be dismissed.
2.	The appellant pay the respondent’s costs of the appeal.

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	VID1294 OF 2005

REFERRED TO THE FULL FEDERAL COURT AT FIRST INSTANCE

BETWEEN:	S2 APPLICANT
AND:	AUSTRALIAN CRIME COMMISSION RESPONDENT

JUDGES:	RYAN, EMMETT & GYLES JJ
DATE OF ORDER:	15 FEBRUARY 2006
WHERE MADE:	(heard in ADELAIDE)

THE COURT ORDERS THAT:

1.	The application be dismissed.
2.	The applicant pay the respondent’s costs.

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	VID1286 OF 2005

REFERRED TO THE FULL FEDERAL COURT AT FIRST INSTANCE

BETWEEN:	B2 APPLICANT
AND:	AUSTRALIAN CRIME COMMISSION RESPONDENT

JUDGES:	RYAN, EMMETT & GYLES JJ
DATE OF ORDER:	15 FEBRUARY 2006
WHERE MADE:	(heard in ADELAIDE)

THE COURT ORDERS THAT:

1.	The application be dismissed.
2.	The applicant pay the respondent’s costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1358 OF 2005

REFERRED TO THE FULL FEDERAL COURT AT FIRST INSTANCE

BETWEEN:	C, R, D, A & M APPLICANTS
AND:	AUSTRALIAN CRIME COMMISSION RESPONDENT
JUDGES:	RYAN, EMMETT & GYLES JJ
DATE OF ORDER:	15 FEBRUARY 2006
WHERE MADE:	(heard in ADELAIDE)

THE COURT ORDERS THAT:

1.	The application be dismissed.
2.	The applicants pay the respondent’s costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY		SAD 250 of 2005
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:	S Appellant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 252 of 2005

BETWEEN:	B Appellant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY		VID 1286 of 2005
BETWEEN:	B2 Applicant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY		VID 1294 of 2005
BETWEEN:	S2 Applicant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		NSD 1358 of 2005
BETWEEN:	C, D, R, A, M Applicants
AND:	AUSTRALIAN CRIME COMMISSION Respondent

JUDGES:	RYAN, EMMETT and GYLES JJ
DATE:	15 FEBRUARY 2006
PLACE:	MELBOURNE (heard in ADELAIDE)

REASONS FOR JUDGMENT

RYAN J:

1 The factual and legislative background against which the various appeals and proceedings which require determination by this Full Court has been fully set out by Emmett J. I have had the advantage of reading his Honour’s reasons in draft and it is necessary only to explain briefly why I agree with the conclusion there reached on the central issue which it is common ground is determinative of each of the appeals and proceedings at first instance.

2 The hypothesis upon which s 4A(2) of the ACC Act rests is that the offence investigation into which by the ACC is authorised by the ACC Act, would have been validly created by a law of the Commonwealth had such a law been enacted. In other words, the creation of the presumptive offence must be within an enumerated head of Commonwealth power.

3 That was the proposition recognised in the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ in R v Hughes [2000] HCA 22; (2000) 202 CLR 535 at 558 [46] where their Honours observed:

‘... The present case emphasises that for the Commonwealth to impose on an officer or instrumentality of the Commonwealth powers coupled with duties adversely to affect the rights of individuals, where no such power is directly conferred on that officer or instrumentality by the Constitution itself, requires a law of the Commonwealth supported by an appropriate head of power.’ (emphasis added)

4 The requirement was identified in slightly different terms by Kirby J in his separate judgment in Hughes where his Honour said, at 577 [101]:

‘There are two relevant impediments to the effective conferral by State legislation of non-judicial functions and powers on an officer or authority of the Commonwealth. The first originates in the implied constitutional immunity which would forbid the States (or self-governing Territories) from imposing functions and powers on such an officer or authority (except by reason of a law applicable to persons generally [The Commonwealth v Evans Deakin Industries Ltd [1986] HCA 51; (1986) 161 CLR 254 at 262-266; Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority [1997] HCA 36; (1997) 190 CLR 410 at 427]) in a way that would prevent the latter from discharging the functions and duties of federal office. In an appropriate case this immunity might be waived. Secondly, it is not competent to a State (or self-governing Territory) to impose functions and powers on an officer or authority of the Commonwealth which are inconsistent with the functions and powers imposed by federal legislation [Constitution, s 109]. Any imposition of functions and powers would divert the federal officer or authority from the discharge of federal responsibilities, and ordinarily involve expenditure of funds and diversion of personnel, thus rendering the State or Territory law inconsistent with federal law unless expressly authorised by the latter. Hence the need, examined in Gould [(1998) [1998] HCA 6; 193 CLR 346 at 372, 385, 482, 489] and Re Wakim [(1999) [1999] HCA 27; 73 ALJR 839 at 880-881; [1999] HCA 27; 163 ALR 270 at 327], for a coincidence of valid State conferral of State functions and powers and valid federal authorisation of such conferral on the federal recipient concerned.’ (original emphasis)

5 The question which was left open in Hughes was whether a valid grant by the Commonwealth Parliament of authority adversely to affect the rights of individuals requires an antecedently existing law of the Commonwealth as well as an appropriate head of Commonwealth power. That question did not arise in Hughes because there was, in that case, an antecedently existing law of the Commonwealth embodied in ss 46 and 47 of the Corporations Act (1989) (Cth). The first of those sections provided that "a Minister [being, by force of the Acts Interpretation Act 1901 (Cth), one of the Queen’s Ministers of State for the Commonwealth appointed under s 64 of the Constitution] has such functions and powers by or under a corresponding law." Section 47(1) of the Corporations Act in turn provided that:

‘Regulations under section 73 may provide that prescribed authorities and officers of the Commonwealth have prescribed functions and powers that are expressed to be conferred on them by or under corresponding laws.’

6 The existence of those manifestations of Commonwealth law, including reg 3(1)(d) of the Corporations (Commonwealth Authorities and Officers) Regulations 1990 (Cth) made pursuant to s 73 of the Corporations Act, enabled their Honours to observe in the joint judgment at 553 [31]-[33];

‘[31] It may be accepted that, subject to what may be the operation of negative implications arising from the Constitution, for example Ch III, in the exercise of the incidental power the Parliament may permit officers of the Commonwealth holding appointments by or under statute to perform functions and accept appointments in addition to their Commonwealth appointments. Provisions such as s 46 and s 47 illustrate two further propositions. The first is that a State by its laws cannot unilaterally invest functions under that law in officers of the Commonwealth; the second is that a State law which purported to grant a wider power or authority than that the acceptance of which was prescribed by Commonwealth law would, to that extent, be inconsistent with the Commonwealth law and invalid under s 109 of the Constitution [Bond v The Queen [2000] HCA 13; (2000) 74 ALJR 597 at 600; [2000] HCA 13; 169 ALR 607 at 610. See also Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority [1997] HCA 36; (1997) 190 CLR 410 at 426-427, 447, 452-453, 472-473, 506-507].

[32] However, those propositions do not exhaust the operation of s 47 in the present matter; nor do they explain the operation of s 46. In particular, they do not provide a basis for the imposition by federal law upon Commonwealth officers of duties to perform functions or exercise powers created and conferred by State law. Such a federal law must be supported by a head of power. As indicated earlier in these reasons, the effect of the national scheme was to substitute the Commonwealth prosecution apparatus for that of the relevant State. State functionaries were directed by State law, in this case by s 33 of the WA Corporations Act, not to perform or exercise functions or powers conferred by the State legislation upon an officer or authority of the Commonwealth.

[33] It is submitted, principally by the DPP and the Attorney-General who intervened in his support, that reg 3(1)(d) of the Regulations and the federal laws which support it involve no more than an approval or consent to the exercise of State functions and powers by the DPP. It is said that the State provisions simply purport to confer powers upon the DPP, whose exercise may be the subject of general directions by the Attorney-General under s 8 of the DPP Act. However, what is involved in the federal legislation is more than consent or permission by the Commonwealth to the exercise by its officers of additional functions and powers derived entirely from State law. These additional functions and powers are imposed by federal law as a matter of duty or obligation, lest there be an abdication of State authority with no certainty of its effective replacement.’

7 The stipulation in [31] of the passage just quoted that "a State ... cannot unilaterally invest functions" under a law made by the State in officers of the Commonwealth is another way of saying that the investing of functions in Commonwealth officers requires the authorisation or support of a law of the Commonwealth. The second proposition in the same passage is a corollary of the first, namely that the investing State law must confer no wider power on the Commonwealth officers than that conferred by the supporting Commonwealth law. There is nothing in either the primary proposition or the corollary which requires the conferral of power by the supporting Commonwealth law to be in aid of some other existing or antecedent Commonwealth law.

8 The following paragraphs [32] and [33] which I have quoted from the joint judgment in Hughes go on to indicate the further need for the supporting Commonwealth law itself to be sustained by a federal head of power. The mere conferral of power on Commonwealth officers is not self-validating. However, it cannot be suggested in the present case that it is beyond the legislative power of the Commonwealth to authorise a body like the ACC to investigate a serious and organised crime which is an offence against a law of a State and which has a "federal aspect" as defined. It follows that the only remaining ground for an attack on the grant of power on the ACC is that it is embodied in the ACC Act itself and is not conferred by an antecedently existing law of the Commonwealth. For the reasons explained by Emmett J, the empowering Act itself can supply the supporting law of the Commonwealth mandated by the passage at [31] of the joint judgment in Hughes. Accordingly, I agree with the conclusions which Emmett J has reached and with the orders which he has proposed.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate:

Dated: 15 February 2006

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY		SAD 250 of 2005
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:	S Appellant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 252 of 2005

BETWEEN:	B Appellant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY		VID 1286 of 2005
BETWEEN:	B2 Applicant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY		VID 1294 of 2005
BETWEEN:	S2 Applicant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		NSD 1358 of 2005
BETWEEN:	C, D, R, A, M Applicants
AND:	AUSTRALIAN CRIME COMMISSION Respondent

JUDGES:	RYAN, EMMETT and GYLES JJ
DATE:	15 FEBRUARY 2006
PLACE:	MELBOURNE (heard in ADELAIDE)

REASONS FOR JUDGMENT

EMMETT J:

9 These five proceedings raise the same question as to the validity of provisions of the Australian Crime Commission Act 2002 (Cth) (‘the Act’). The question is whether the Australian Crime Commission (‘the Commission’) can be authorised to investigate matters relating to criminal activity that constitutes an offence against a law of a State but does not constitute an offence against a Commonwealth law, where the Commonwealth has power to make it an offence. Before formulating the precise question, it is desirable to say something about the Act.

INVESTIGATIONS UNDER THE ACT

10 The Commission is established by s 7(1) of the Act and consists of its Chief Executive Officer, examiners appointed under s 46B(1), who must be legal practitioners of at least five years standing, and the members of the staff of the Commission. Under s 7A, the functions of the Commission include:

• investigating matters relating to federally relevant criminal activity;
• providing reports on the outcomes of those investigations.

11 The Board of the Commission is established by s 7B(1) of the Act. The Board consists of:

• the Commissioner of the Australian Federal Police;
• the Secretary of the Department administering the Act;
• the Chief Executive Officer of the Australian Customs Service;
• the Chairperson of the Australian Securities and Investments Commission;
• the Director-General of Security holding office under the Australian Security Intelligence Organisation Act 1979 (Cth);
• the Commissioner or head of the police force of each State and of the Northern Territory;
• the Chief Police Officer of the Australian Capital Territory;
• the Chief Executive Officer of the Commission.

12 Under s 7C(1), the functions of the Board include authorising the Commission to investigate matters relating to federally relevant criminal activity. Under s 7C(3), the Board may, in certain circumstances, determine that an investigation into matters relating to federally relevant criminal activity is a special investigation. A determination under 7C(3) must describe the general nature of the circumstances or allegations constituting the federally relevant criminal activity and must set out the purpose of the investigation.

13 By s 4(1) of the Act, relevant criminal activity means any circumstances implying, or any allegations, that a serious and organised crime may have been, may be being, or may in future be, committed against a law of the Commonwealth, of a State or of a Territory. Section 4(1) of the Act defines the term serious and organised crime as an offence:

• that involves two or more offenders and substantial planning and organisation; and
• that involves, or is of a kind that ordinarily involves, the use of sophisticated methods and techniques; and
• that is committed, or is of a kind that is ordinarily committed, in conjunction with other offences of a like kind; and
• that is a serious offence within the meaning of the Proceeds of Crime Act 2002 (Cth) (‘the Proceeds Act’), an offence of the kind prescribed by the regulations or an offence that involves any of 20 crimes specified in the section; and
• that is punishable by imprisonment for a period of three years or more or is a serious offence within the meaning of the Proceeds Act.

A federally relevant criminal activity is defined as including, inter alia, a relevant criminal activity, where the serious and organised crime is an offence against a law of a State and has a federal aspect.

14 Section 4A of the Act specifies when an offence against the law of a State (referred to as a State offence) has a federal aspect for the purposes of the definition of federally relevant criminal activity. The object of s 4A is stated by s 4A(1) as being to identify State offences that have a federal aspect because:

• they potentially fall within Commonwealth legislative power; or
• the Commission’s investigating them is incidental to the Commission’s investigating an offence against a law of the Commonwealth or a Territory; or
• the Commission’s undertaking an intelligence operation relating to them is incidental to the Commission’s undertaking an intelligence operation relating to an offence against a law of the Commonwealth or a Territory.

15 Section 4A(2) relevantly provides that, for the purposes of the Act, a State offence has a federal aspect:

• if, assuming that the provision creating the State offence had been enacted by the Parliament of the Commonwealth instead of by the Parliament of the State, the provision would have been a valid law of the Commonwealth; or
• if, assuming that the Parliament of the Commonwealth had enacted a provision that created an offence penalising the specific acts or omissions involved in committing the State offence, that provision would have been a valid law of the Commonwealth.

There are other circumstances in which a State offence would have a federal aspect that are not presently relevant.

16 Section 24A of the Act provides that an examiner may conduct an examination for the purposes of an investigation into matters relating to federally relevant criminal activity that the Commission is conducting. Under s 28(1), an examiner may summon a person to appear before the examiner at an examination to give evidence and to produce such documents or other things, if any, as are referred to in the summons. However, under s 28(1A), before issuing such a summons, the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must record in writing the reasons for the issue of the summons. Under s 28(3), such a summons must, unless the examiner issuing the summons is satisfied that it would prejudice the effectiveness of the investigation for the summons to do so, set out, so far as is reasonably practicable, the general nature of the matters in relation to which the examiner intends to question the person. However, nothing in that provision prevents the examiner from questioning the person in relation to any matter that relates to a special investigation being conducted by the Commission.

17 Section 29B(1) provides that a person who is served with, or otherwise given, a summons or notice containing a notation made under s 29A must not disclose:

• the existence of the summons or notice or any information about it; or
• the existence of, or any information about, any official matter connected with the summons or notice.

However, that prohibition does not prevent a person from making a disclosure to a legal practitioner for the purpose of obtaining legal advice or representation. Nor does the prohibition prevent a body corporate from making a disclosure to an officer or agent of the body corporate for the purpose of ensuring compliance or a legal practitioner from making a disclosure for the purpose of obtaining the agreement of another person under s 30(3) to the legal practitioner answering a question or producing a document. Section 30(3) provides that a legal practitioner is entitled to refuse to comply with a requirement to answer a question or produce a document if to do so would be an infringement of legal professional privilege, unless the client agrees to the legal practitioner complying with the requirement.

THE DETERMINATIONS

18 On 15 May 2003, the Board made an instrument under s 7C of the Act entitled ‘Australian Crime Commission Special Investigation Authorisation and Determination (Money Laundering and Tax Fraud) 2003’ (‘the Money Laundering Determination’). The Money Laundering Determination was to commence immediately after it was made. By clause 4 of the Money Laundering Determination, the Board authorised the Commission to investigate the matter mentioned in Schedule 1 to the Money Laundering Determination relating to federally relevant criminal activity. Schedule 1 to the Money Laundering Determination was relevantly in the terms set out in Schedule 1 to these reasons.

19 By clause 5 of the Money Laundering Determination, the Board determined that the investigation is a special investigation. By clause 6, the Board determined the classes of persons to participate in the investigation. Clause 8 specified the purpose of the investigation as follows:

‘(a) to collect and analyse criminal information and intelligence relating to the federally relevant criminal activities, to disseminate that information and intelligence in accordance with the Act and to report to the Board; and
(b) to identify and apprehend persons involved in the federally relevant criminal activities, to collect evidence about those activities and to reduce the incidence and effect of those activities; and

(c) to make appropriate recommendations to the Board about reform of:

(i) the law relating to relevant offences; and
(ii) relevant administrative practices; and

(iii) the administration of the courts in relation to trials of relevant offences.’

20 On 27 July 2005, the Board made a further instrument under s 7C of the Act. That instrument is entitled ‘Australian Crime Commission Special Investigation Authorisation and Determination (High Risk Crime Groups) 2005’ (‘the High Risk Crime Groups Determination’). The High Risk Crime Groups Determination was to commence immediately after it was made. By clause 4, the Board authorised the Commission to investigate the matter mentioned in Schedule 1 to the High Risk Crime Groups Determination, relating to federally relevant criminal activity. Schedule 1 of the High Risk Crime Groups Determination was relevantly in the terms set out in schedule 2 to these reasons. Clauses 5, 6 and 8 were in terms similar to the clauses of the Money Laundering Determination referred to above.

THE SUMMONSES

21 By summonses of various dates (‘the Summonses’) addressed to certain individuals, who will be referred to as C, R, D, A, M, B and S (together ‘the Summons Recipients’), an examiner purported to require those individuals, pursuant to s 28(1) of the Act, to attend before the examiner to give evidence in relation to matters described in the summonses. The summonses addressed to C, R, D, A, M and B referred to a special investigation being conducted by the Commission pursuant to the Money Laundering Determination. The summons addressed to S referred to a special investigation being conducted by the Commission pursuant to the High Risk Crime Groups Determination. Each of the Summons Recipients was also required to produce documents as described in the respective summonses addressed to them. Each of the summonses contained a notation prohibiting disclosure of information about the summons or any official matter connected with it, except where s 29B of the Act does not prevent such disclosure.

THE PROCEEDINGS

22 Two of the proceedings before the Court are appeals. The other three proceedings have been referred to a Full Court by the Chief Justice pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth).

THE S PROCEEEDING

23 In the first proceeding, which was commenced in the South Australia District Registry (‘the S Proceeding’), S claimed a declaration that the Act, or alternatively, s 4A of the Act, is invalid and an order quashing or setting aside the summons served on S. S contended that, despite the apparent intention of the Parliament, s 4A failed to prescribe criteria for when an offence against a State law has a federal aspect which has a proper Constitutional foundation. Consequently, it was intended, s 4A is beyond power. It would also follow that any determination of the Board in the exercise of its functions to investigate a federally relevant criminal activity, where that activity involved or was based upon a serious and organised crime that was an offence against a law of the State and has a federal aspect, would be unauthorised and ineffective. Much was made of the object provision in s 4A(1), in particular the use of the word ‘potentially’.

24 In his reasons (S v Australian Crime Commission [2005] FCA 1310), the primary judge rejected that contention on the ground that it sought to elevate the object clause of s 4A to a status it did not enjoy. While his Honour considered that an objects clause in legislation may be relevant to the proper construction of the legislation, it could not cut down the plain and unambiguous meaning of the provision if that meaning, in its textural and contextual surroundings, was clear. His Honour considered that the use of the word ‘potentially’ in s 4A(1), while ambiguous, should be taken to mean simply that the State offences have a federal aspect because they could be the subject of a valid Commonwealth enactment, if the Commonwealth decided to pass such an enactment. His Honour considered that s 4A(2) was clear and that ss 4A(4) and 4A(6) also indicated that the condition for a State offence having a federal aspect was the existence of power in the Commonwealth to enact such an offence, not merely the possible existence of such a power.

25 The primary judge accepted that there may be difficulties in knowing whether a particular determination of the Board is a valid one, because the scope of Commonwealth power to show the federal aspect in relation to that determination may not have been definitively determined by the High Court. Nevertheless, his Honour considered that s 4A was not invalid simply because, in some circumstances, the extent of its reach may be debatable. The fact that, in some circumstances, a person summonsed under s 28 may dispute that, or may have difficulty in determining whether, a question during an examination is authorised by a valid determination by the Board, or by the summons, does not lead to the conclusion that s 4A of the Act is itself beyond power.

26 The primary judge also dealt with a contention that the summons addressed to S was invalid because it did not comply with s 28(3) of the Act. It was argued that it was necessary for the summons to state expressly that notice of the general topics for examination was not provided because the examiner is satisfied that to do so would prejudice the effectiveness of the investigation. His Honour considered that s 28(3) is expressed as it is because it is part of the process available to an examiner to pursue a special investigation. Such an investigation does not involve determining issues between parties. Rather, it concerns an investigation of serious and organised crime. His Honour considered that it was the clear legislative intention that such an investigation should not be frustrated by compulsory disclosure to a witness of the topics or matters upon which questioning was intended, where such disclosure might affect the efficacy of the proposed examination. His Honour accepted that s 28(3) recognises the desirability of a witness being notified in advance of the matters upon which questions should be anticipated. However, it does so in qualified terms and prescribes the circumstances in which notice should be given. Section 28(3) places the responsibility for deciding whether setting out the general nature of the matters in relation to which the examiner intends to question the witness would prejudice the effectiveness of the examination, upon the examiner.

27 The primary judge observed that neither s 28(3) nor any other provision of the Act requires the summons to be so expressed. By s 28(3) itself, the summons need not set out the general nature of matters in relation to which the witnesses is to be questioned if the examiner reaches the requisite state of satisfaction regarding possible prejudice to the investigation. Once the examiner has reached that state of satisfaction, the summons need not set out the general nature of the matters in relation to which the person is to be examined. The Act does not require a summons to record on its face that the examiner has reached the view that to disclose the general matters the subject of questioning would prejudice the special investigation. His Honour considered that there was no reason to imply such a prerequisite for the validity of a summons. Nor did his Honour consider that natural justice necessitated such a disclosure on the face of the summons. Under s 28(3) itself, nothing is to prevent the examiner from questioning the person summonsed about any matters not stated in the summons. The person is not entitled to be given notice of all of those topics about which he or she might be questioned. His Honour concluded that S had not shown that the summons did not comply with the requirements of s 28(3).

28 Accordingly, on 16 September 2005, the primary judge ordered that the S Proceeding be dismissed and ordered S to pay the Commission’s costs. By notice of appeal filed on 6 October 2005, S appealed to the Full Court from the orders of the primary judge dismissing the S proceeding.

THE B PROCEEDING

29 By a proceeding commenced in the Victoria Registry (‘the B Proceeding’), B claimed a declaration that the Act, or alternatively s 4A of the Act, is invalid. B also claimed an order quashing or setting aside the summons served on B. The B Proceeding was heard by the judge who heard the S Proceeding. For the reasons given in the S Proceeding, his Honour concluded that the contention as to the validity of s 4A of the Act must fail. B also contended that the summons addressed to B was invalid on two grounds. The first challenge was on the basis that the summons did not comply with s 28(3) of the Act. B contended that the summons did not set out, so far as reasonably practicable, the general nature of the matters in relation to which the examiner intended to question B.

30 The primary judge observed in his reasons (B v Australian Crime Commission [2005] FCA 1314) that, unlike the circumstances in the S Proceeding, the examiner in respect of the summons addressed to B had not reached a stage of satisfaction that the provision of information would prejudice the effectiveness of the special investigation that was the subject of the relevant Determination. His Honour was not persuaded that the summons addressed to B failed to comply with s 28(3) of the Act. His Honour considered that it gave B a general indication of the matters about which he may be questioned: it informed B in a general way of the general nature of what he might expect by way of questioning.

31 The second challenge to the summons by B was on the basis that it was contrary to s 28(7) of the Act. The examiner was said to have exercised the power improperly as it required B to give evidence in relation to his knowledge and/or involvement in ‘tax avoidance schemes’, when those schemes were not or may not be the subject of the special investigation. The basis of the submission was that tax avoidance schemes are regulated under the Duties Act 2000 (Vic) (‘the Duties Act’) and thus do not fall within the ambit of a special investigation. His Honour considered that it was erroneous to import into and limit the expression to the definition of ‘tax avoidance schemes’ in s 69B of the Duties Act. His Honour considered that the expression ‘tax avoidance schemes’ has a much more extensive and commonplace meaning than as defined in that Act. His Honour considered that the general usage of the expression clearly included reference to conduct that fell within a Commonwealth head of power. His Honour concluded that B’s second attack on the validity of the summons addressed to him must also fail.

32 Accordingly, on 16 September 2005, the primary judge ordered that the B Proceeding be dismissed and ordered B to pay the Commission’s costs of that proceeding. By notice of appeal filed on 7 October 2005, B appealed to the Full Court from the order of the primary judge dismissing the B Proceeding.

THE S2 PROCEEDING AND THE B2 PROCEEDING

33 In a subsequent proceeding commenced in the Victoria District Registry (‘the S2 Proceeding’), S claimed a declaration that the Act, or alternatively, s 4A of the Act, is invalid. S also claimed a declaration in that proceeding that the High Risk Crime Groups Determination is invalid and an order quashing or setting aside the summons served on S. B also commenced a further proceeding in the Victoria District Registry (‘the B2 Proceeding), in which B claimed a declaration that the Act, or alternatively s 4A of the Act, is invalid. B also claimed a declaration that the Money Laundering Determination is invalid. Each of the B2 Proceeding and the S2 Proceeding has been referred to the Full Court for hearing pursuant to 20(1A) of the Federal Court Act.

THE CRDAM PROCEEDING

34 Finally, a proceeding was commenced in the New South Wales District Registry (‘the CRDAM Proceeding’), in which the present applicants are C, R, D, A and M. In the CRDAM Proceeding, C, R, D, A and M claimed a declaration that the Act is invalid or alternatively:

• a declaration that ss 7A, 7C, 24A and 28 of the Act, to the extent that they apply to a federally relevant criminal activity, are invalid, or alternatively,
• a declaration that those sections, to the extent that they apply to a federally relevant criminal activity where serious and organised crime is an offence against a law of a State and has a federal aspect, are invalid.

C, R, D, A and M also claimed a declaration that s 4A of the Act is invalid and a declaration that the Money Laundering and Tax Fraud Determination is invalid. In addition, each claims an order quashing or setting aside the summonses served upon that applicant. The CRDAM Proceeding has been referred to the Full Court for hearing pursuant to 20(1A).

THE ISSUE

35 Senior counsel for C, R, D, A and M submitted, in substance, that the Money Laundering Determination is invalid in so far as it purports to authorise an investigation that is beyond the legislative competence of the Commonwealth. At the hearing, senior counsel for S and B adopted the submissions made on behalf of C, R, D, A and M. Thus, all of the proceedings succeed or fail together.

36 The essence of ss 7A, 7C, 24A and 28, as explained by the definitions in ss 4 and 4A, is that an examiner may summon a person to appear to give evidence and produce documents in relation to an investigation in relation to federally relevant criminal activity. Relevantly, relevant criminal activity will be federally relevant criminal activity where a State offence has a federal aspect. A State offence, or an offence against a law of a State, will have a federal aspect if:

• a provision enacted by the Parliament of the Commonwealth creating that offence; or
• a provision of an enactment of the Parliament of the Commonwealth that created an offence penalising the specific acts or omissions involved in committing that offence;

would be a valid law of the Commonwealth. While several issues were raised in the proceedings and in the notices of appeal, the only question now raised for determination by the Full Court in each of the five proceedings concerns the validity of provisions of the Act that have that effect.

37 The essential requirement of the relevant provisions of s 4A(2) is that the Commonwealth has power to legislate to create an offence but has not actually done so, in circumstances where a State has legislated to create the relevant offence. The question is whether the Act is valid in so far as it empowers the Commission to investigate matters relating to relevant criminal activity that constitutes a State offence, which is not an offence under Commonwealth law but which the Commonwealth has power to make an offence. The essence of the contention of the Summons Recipients is that the Summonses are invalid because they are dependent upon the Determinations and that the Determinations are invalid because they depend upon s 4A, which is not a law of the Commonwealth authorising the conferral of powers and duties on the Commission and the Board to investigate crimes or conduct that are not Commonwealth offences.

VALIDITY OF THE ACT

38 The Commonwealth has power to enact legislation pursuant to which a person can be compelled to answer a question that relates to a matter within the Commonwealth’s legislative competence. Such legislation is incidental to the various subject matter heads of legislative power found in s 51 (see Lockwood v The Commonwealth [1954] HCA 31; (1954) 90 CLR 177 at 184).

39 Further, it is not necessary for the Parliament to identify the head of power that supports a Commonwealth law. A law enacted by a parliament with power to enact it cannot be unlawful. The question is not one of intention of the Parliament, but of the power of the Parliament, irrespective of the source from which that power is derived. An enactment can be justified if it is competent under any of the powers vested in the Parliament, whatever the title of the enactment and whatever indications there may be in the enactment as to the precise power under which it may be suggested that Parliament purported to act (Ex parte Walsh & Johnson: In Re Yates [1925] HCA 53; (1925) 37 CLR 36 at 135 and R v Hughes [2000] HCA 22; (2000) 202 CLR 535 at [15]).

40 The Commonwealth has no general legislative power in relation to criminal law. Nevertheless, it can create criminal offences in the areas of its enumerated legislative powers, where the creation of the criminal offence is sufficiently connected to a legislative power.

41 The provisions of the Act that empower the Commission to investigate offences are supported by as many heads of power as are applicable in the particular circumstances in which the coercive powers are exercised. The relevant heads of power in relation to the Determinations include, but are not necessarily limited to:

• customs offences, based on s 51(i) of the Constitution;
• tax avoidance offences, based on s 51(ii);
• corporations law offences, based on s 51(xx);
• money laundering offences, based on s 51(v), (xii) and (xiii); and
• counterfeiting, based on s 51(xii).

In addition, general criminal offences can be based on s 51(xxix) if committed outside Australia, or s 52(i) if committed in a Commonwealth place or s 122 if committed in a Territory.

42 It was not suggested on behalf of the Summons Recipients that it would be beyond the power of the Commonwealth to legislate with respect to any of the offences that constitute the subject matter of the investigations authorised by the Determinations. Accordingly, each of the Summons Recipients accepts that, if the drafting technique adopted by the Parliament, in enacting the relevant provisions of the Act, is effective and the impugned provisions are valid, the respective summonses are valid.

43 The question is whether the Commonwealth can legislate to empower the Commission to investigate a matter in respect of which the Commonwealth has the Constitutional power to legislate but has not in fact legislated. The essence of the contention advanced on behalf of the Summons Recipients is that the Commonwealth cannot legislate to empower a statutory authority to investigate a matter in respect to which the Commonwealth has the Constitutional power to legislate but has not in fact legislated. That proposition is certainly not self-evident.

44 The criteria according to which a State offence can have a federal aspect are traceable to the National Crime Authority Amendment Act 2000 (Cth) (‘the Amendment Act’), which inserted into what was then the National Crime Authority Act 1984 (Cth) a provision that corresponds identically with s 4A of the Act. The secondary materials relating to the Bill for the Amendment Act make clear that s 4A was intended to accommodate comments made by the High Court of Australia in R v Hughes [2000] HCA 22; (2000) 202 CLR 535.

45 Thus, the Explanatory Memorandum accompanying the Bill for the Amendment Act recited the following in respect of proposed s 4A(2):

‘These provisions will make it clear that, for the purposes of the powers of the Authority, a State offence will have a federal aspect when the subject of the State offence is a matter over which the Commonwealth could legislate. There is no requirement for the Commonwealth to have actually legislated in relation to that subject, provided that the Commonwealth has a head of power under which it could legislate on the matter.’

46 The Minister’s speech on the Second Reading of the Bill in the House of Representatives on 8 November 2000 (Hansard 22501) commended the Bill for the Amendment Act in the following terms:

‘The National Crime Authority Amendment Bill 2000 amends the National Crime Authority Act 1984 and has been necessitated by the High Court’s decision in R v. Hughes. That decision casts doubt on certain investigatory functions of the National Crime Authority and the purpose of this bill is to remedy that situation.
Honourable members would be aware that the National Crime Authority was established in 1984 as a national crime body, exercising both state and Commonwealth functions. It is the only law enforcement agency in Australia whose investigations are not limited by jurisdictional boundaries. The authority is not confined to only investigating breaches of Commonwealth law but is empowered to investigate offences against both Commonwealth and state laws. It is a truly national body and its existence reflects the seriousness with which the Commonwealth and the states view organised crime.
The decision of the High Court in the Hughes case questions the capacity of Commonwealth authorities to exercise powers and functions conferred on them by state legislation in situations where the power or function is coupled with a duty and there is no federal head of power to support that power, function or duty. The bill amends the National Crime Authority Act to ensure that when the authority is investigating offences there is a connection with a federal head of power in as many situations as possible. This is achieved by expanding the scope of Commonwealth references to include offences against a law of a state where that state offence has a federal aspect. In addition, when the authority is under a duty to investigate a matter pursuant to a state reference, then those references will be limited to matters that have a federal aspect. The bill also amends the act to clarify that the authority does not have any duty or obligation under Commonwealth law to perform any function, or exercise any power conferred by a state law, unless there is a federal aspect. The amendments will ensure that the important work of the National Crime Authority in investigating organised crime is not jeopardised by the decision of the High Court in the Hughes case.’

47 In the light of those materials, the Summons Recipients accept that the Parliament intended to confer power on the Commission to investigate a State offence that satisfied one or other of the criteria in s 4A for possessing a federal aspect. They contended, however, that the adoption of such an ‘artificial device’ is invalid in so far as the provisions postulate the absence of any existing Commonwealth enactment or law of the Commonwealth to support the conferral and imposition on the Commission of the power and duty of investigating a State offence.

48 The foundation for the contention of the Summons Recipients was the following passage in Hughes:

‘The present case emphasises that for the Commonwealth to impose on an officer or instrumentality of the Commonwealth powers coupled with duties adversely to affect the rights of individuals, where no such power is directly conferred on that officer or instrumentality by the Constitution itself, requires a law of the Commonwealth supported by an appropriate head of power. (per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ at [46])’ [Emphasis added]

The Summons Recipients draw from that statement the proposition that the presence of an operative law of the Commonwealth, supported by an appropriate head of legislative power, is a Constitutional precondition for the conferral or imposition of a power or duty on a Commonwealth body or officer.

49 It is clear that a State cannot unilaterally invest in an officer of the Commonwealth functions under a law made by the State. That is to say, the investing of functions in a Commonwealth officer requires the authorisation or support of a law of the Commonwealth. Further, an investing State law can confer no wider power on a Commonwealth officer than that conferred by a supporting Commonwealth law (see Hughes at [31]). However, there is nothing in any of those propositions that requires the conferral of power by a supporting Commonwealth law to be made by some other existing or antecedent Commonwealth law.

50 The Act itself is the ‘law of the Commonwealth’ that the extract from Hughes mandates as necessary for a valid conferral on the Commission of coercive investigative powers. The Act is itself an operative law of the Commonwealth that authorises the Commission to investigate matters in respect of which the Commonwealth has power to legislate. That is sufficient to satisfy the requirement that there be an operative law of the Commonwealth to support the exercise of power by the Commission.

51 The Summons Recipients argue that the necessary nexus between an investigation by the Commission into federally relevant criminal activity and a supporting head of Commonwealth legislative power cannot be found. However, the answer to that proposition is the same. The Commonwealth has the power to legislate with respect to the matters that are the subject of the investigations authorised by the Determinations. That is the nexus.

52 The Summons Recipients assert that the federal element that the Act attempts to inject into a law of a State, so as to describe or specify an offence within the reach of the powers of the Commission, is artificial and hypothetical. The Commonwealth cannot, they say, by such an ‘artificial device’ cast a federal cloak over legislation that deals with conduct that, in the absence of an operative federal law proscribing the relevant conduct, must remain solely within the scope of State legislative authority and beyond the reach of Commonwealth legislative power. They point to the reference to State offences, in s 4A(1), as potentially falling within Commonwealth power. They therefore characterise the provisions of the Act under consideration as ‘a legislative fiction’.

53 The use of the word ‘potentially’ means simply that the State offences have a federal aspect because they could be the subject of a valid Commonwealth enactment, if the Commonwealth decided to pass such a law. There is no attempt to specify an offence that is either artificial or hypothetical. There are real offences to be investigated, albeit offences against State laws. It is not disputed by the Summons Recipients that the offences, the investigation of which is authorised by the Determinations, are real offences against State laws. There is no fiction involved in s 4A.

CONCLUSION

54 The provisions of the Act impugned by the Summons Recipients are not invalid. The Summonses are valid. That is the conclusion arrived at by the primary judge in the appeals by S and B. It follows that both appeals should be dismissed with costs. It also follows that the three proceedings in the original jurisdiction of the Court that are before the Full Court should also be dismissed with costs.

SCHEDULE 1

Schedule 1 to the Money Laundering Determination was relevantly in the following terms:

‘1. Investigation

An investigation to determine whether, in accordance with the allegations mentioned in clauses 3 and 4 and in the circumstances mentioned in clause 2, federally relevant criminal activity:
(a) was committed before the commencement of this instrument;

(b) was in the process of being committed on the commencement of this instrument; or
(c) may in future be committed.

2. Circumstances
The general nature of the circumstances constituting federally relevant criminal activity that may have been, may be being, or may in future be, committed arise from certain activities disclosed by the following transactions and events which cannot be readily explained by possibilities other than federally relevant criminal activity:

(a) suspect transaction reports made by cash dealers under the Financial Transaction Reports Act 1988;
(b) a suspicious pattern of significant financial transaction reports under the Financial Transaction Reports Act 1988 involving large sums of money:

(i) entering or leaving the banking system in Australia; or
(ii) paid to or withdrawn from gambling houses, casinos, bookmakers or other persons or entities carrying on business in the gambling industry; or
(iii) which are the proposed or actual subject of international fund transfers; or
(iv) which give rise to cash substitutes, being gold, precious metals or minerals, bearer bonds, travellers’ cheques or demand drafts; or
(v) in the form of cash transported into or out of Australia;

(c) reports of international funds transfer instructions made by cash dealers under the Financial Transaction Reports Act 1988 linked to persons or entities suspected of involvement in relevant criminal activity;

...
It is the experience of Australian law enforcement agencies that circumstances of the nature of those referred to above imply the commission of federally relevant criminal activity.

3 Allegations

The general nature of the allegations that federally relevant criminal activity may have been, may be being, or may in future be, committed, is that from 1 January 1995 certain persons I concert with one another or with other persons, may be engaged in one or more of the following activities:

(a) money laundering within the meaning of the Proceeds of Crime Act 1987;
(b) dealing with money or other property contrary to sections 400.3, 400.4, 400.5, 400.6(1), 400.6(2) or 400.7(1) of the Criminal Code;
(c) unlawful activities relating to financial transactions which involve the commission of the following offences (all of which constitute a serious offence within the meaning of the Proceeds of Crime Act 2002):

(i) an offence against section 15 (reports about transfers of currency into or out of Australia) of the Financial Transaction Reports Act 1988 involving a transaction of at least $50,000 in value; or
(ii) an offence against section 29 (false or misleading information) of the Financial Transaction Reports Act 1988 involving a transaction of at least $50,000 in value; or
(iii) an offence against section 24 (opening or operating accounts in a false name etc.) of the Financial Transaction Reports Act 1988 where transactions on the relevant account total at least $50,000 in value during any 6 month period; or
(iv) an offence against section 31 (conducting transactions to avoid reporting requirements) of the Financial Transaction Reports Act 1988 where transactions in breach of that section by the person committing that offence total at least $50,000 in value during any 6 month period;

(d) defrauding the Commonwealth within the meaning of section 29D or section 86 of the Crimes Act 1914 through evasion of, or making false claims in relation to, tax, customers duty or excise duty;
(e) obtaining property by deception within the meaning of section 14.1 of the Criminal Code through evasio of, or making false claims in relation to, tax, customs duty or excise duty;
(f) obtaining financial advantage by deception within the meaning of section 134.2 of the Criminal Code through evasion of, or making false claims in relation to, tax, customs duty or excise duty
(g) general dishonesty within the meaning of section 135.1 of the Criminal Code through evasion of, or making false clams in relation to, tax, customs duty or excise duty;
(h) conspiracy to defraud within the meaning of section 135.4 of the Criminal Code through evasion of, or making false claims in relation to, tax, customs duty or excise duty;
(i) any of the following activities being offences that may have been, or may be, connected, directly or indirectly, with a course of activity involving the commission of any of the offences referred to in paragraphs (a) to (h):

(i) the unlawful importation, possession or conveyance of, or dealing, illegal drugs within the meaning of the Crimes Act 1914 or the Customs Act 1901;
(ii) corruption or improper interference with the due administration of justice within the manning of section 33 of the Crimes Act 1914;
(iii) intimidation of or interference with a witness or proposed witness in a judicial proceeding within the meaning of section 36A of the Crimes Act 1914;
(iv) bribery of a Commonwealth public official, within the meaning of section 141.1 of the Criminal Code;
(v) giving a corrupting benefit to a Commonwealth public official, or receiving a corrupting benefit by a Commonwealth public official, within the meaning of section 142.1 of the Criminal Code;
(vi) abuse of public office by a Commonwealth public official within the meaning of section 142.2 of the Criminal Code;
(vii) perverting the course of justice;
(viii) market misconduct and other prohibited conduct relating to financial products and financial services contrary to Part 7.10 of the Corporations Act 2001;
(ix) conduct in relation to securities contrary to Part 7.11 of the Corporations Law;
(x) forging of passports;
(xi) organising bringing groups of non-citizens into Australia contrary to section 232A of the Migration Act 1958;
(xii) bringing non-citizens into Australia in contravention of the Migration Act 1958 or harbouring illegal entrants contrary to subsection 233(1) of the Migration Act 1958;
(xiii) such other incidental offences the head of this ACC special investigation suspects may be directly or indirectly connected with, or may be a part of, a course of activity involving the commission of any of the offences referred to in paragraphs (a) to (h);

(j) other unlawful activities that are related to or connected with these activities and that involve relevant offences against a law of a State that have a federal aspect.

4. Connected allegation
A connected allegation is that the activities mentioned in paragraphs 3(a) to (h) and (i) involve the commission of serious and organised crime.’

SCHEDULE 2

Schedule 1 to the High Risk Crime Groups Determination was relevantly in the following terms:

1 Investigation
An investigation to determine whether, in accordance with the allegations mentioned in clauses 3 and 4 and in the circumstances mentioned in clause 2, federally relevant criminal activity:
(a) was committed before the commencement of this Instrument; or

(b) was in the process of being committed on the commencement of this Instrument; or
(c) may in future be committed.

2 Circumstances
The general nature of the circumstances constituting federally relevant criminal activity that may have been, may be being, or may in future be, occurring are those implied from information available to Australian law enforcement agencies indicating that high risk crime groups are involved in the following activities within Australia: the trafficking in or supply of illegal drugs; fraud; corruption and bribery of officials; perverting the course of justice; violence related offences; securities market misconduct; theft (including theft of motor vehicles and vehicle parts); vehicle rebirthing; and identity crime. `Effective targeting of these networks requires a multi-agency intelligence-driven approach at a national level with access to coercive powers.

3 Allegations

The general nature of the allegations constituting federally relevant criminal activity that may have been, may be being, or may in future be, committed is that from 1 January 1990 certain persons, in concert with one another or with other persons, may be engaged in 1 or more of the following activities:
(a) the unlawful importation of illegal drugs into Australia;

(b) the unlawful importation of tier 1 goods (drug precursor chemicals) in contravention of section 233BAA of the Customs Act 1901;
(c) the unlawful possession or conveyance of illegally imported illegal drugs or prohibited drugs;
(d) possession of material used for dealing in illegal drugs which have been, or are reasonably suspected of having been, imported into Australia;
(e) dealing in illegal drugs on board Australian aircraft or Australian ships;
(f) dealing in illegal drugs overseas with a view to the commission of offences in Australia;
(g) corruption or improper interference with the due administration of justice within the meaning of section 33 of the Crimes Act 1914;
(h) intimidation of or interference with a witness or proposed witness in a judicial proceeding within the meaning of section 36A of the Crimes Act 1914;
(i) bribery of a Commonwealth public official, within the meaning of section 141.1 of the Criminal Code;
(j) giving a corrupting benefit to a Commonwealth public official, or receiving a corrupting benefit by a Commonwealth public official, within the meaning of section 142.1 of the Criminal Code;
(k) abuse of public office by a Commonwealth public official within the meaning of section 142.2 of the Criminal Code;
(j) perverting the course of justice;
(m) violence-related offences;
(n) market misconduct and other prohibited conduct relating to financial products and financial services contrary to Part 7.10 of the Corporations Act 2001;
(o) conduct in relation to securities contrary to Part 7.11 of the Corporations Law;
(p) defrauding the Commonwealth, within the meaning of section 29D or section 86 of the Crimes Act 1914 through tax evasion;
(q) obtaining property by deception within the meaning of section 134.1 of the Criminal Code through tax evasion;
(r) obtaining financial advantage by deception within the meaning of section 134.2 of the Criminal Code through tax evasion;
(s) general dishonesty, within the meaning of section 135.1 of the Criminal Code through tax evasion;
(t) conspiracy to defraud, within the meaning of section 1 35.4 of the Criminal Code through tax evasion;
(u) money laundering, within the meaning of section 81 of the Proceeds of Crime Act 1987;
(v) dealing with money or property contrary to sections 400.3, 400.4, 400.5, 400.6(1), 400.6(2) or 400.7(1) of the Criminal Code;
(w) theft;
(x) unlawful possession, receiving, or sale of stolen property, including motor vehicles or motor vehicle parts;
(y) vehicle rebirthing;
(z) unlawful possession, receiving, or sale of stolen property, being identity related information or any document or thing containing such information;
(aa) any of the following activities being offences that may have been, or may be, connected, directly or indirectly, with a course of activity involving the commission of any of the offences referred to in paragraphs (a) to (z);

(i) forging of passports;

(ii) organising bringing groups of non-citizens into Australia contrary to section 232A of the Migration Act 1958;

(iii) bringing non-citizens into Australia in contravention of the Migration Act 1958 or harbouring illegal entrants contrary to subsection 233(1) of the Migration Act 1958;

(iv) commission of the following unlawful activities in relation to financial transaction reporting requirements:

(A) opening and/or operating bank accounts in false names contrary to section 24 of the Financial Transaction Reports Act 1988 where transactions on the relevant account total at least $50,000 in value during any 6 month period;

(B) non reporting of transfers of currency into or out of Australia contrary to section 15 of the Financial Transaction Reports Act 1988 involving a transaction of at least $50,000 in value;

(C) providing false or misleading information, contrary to section 29 of the Financial Transaction Reports Act 1988 involving a transaction of at least $50,000 in value;

(D) conducting transactions to avoid reporting requirements of the Financial Transaction Reports Act 1988 contrary to section 31 of the said Act where transactions in breach of that section by the person committing that offence total at least $50,000 in value during any 6 month period;

(v) such other incidental offences the head of this ACC special investigation suspects may be directly or indirectly connected with, or may be a part of, a course of activity involving the commission of any of the offences referred to in paragraphs (a) to (z); and

(ab) other unlawful activities that are related to or connected with those activities and that involve relevant offences against a law of a State that have a federal aspect.

4 Connected allegation
A connected allegation is that the activities mentioned in paragraphs 3(a) to (z) and (ab) involve the commission of serious and organised crime.

I certify that the preceding forty-six (46) numbered paragraphs and two schedules are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated: 15 February 2006

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY		SAD 250 of 2005
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:	S Appellant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 252 of 2005

BETWEEN:	B Appellant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY		VID 1286 of 2005
BETWEEN:	B2 Applicant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY		VID 1294 of 2005
BETWEEN:	S2 Applicant
AND:	AUSTRALIAN CRIME COMMISSION Respondent

and

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		NSD 1358 of 2005
BETWEEN:	C, D, R, A, M Applicants
AND:	AUSTRALIAN CRIME COMMISSION Respondent
JUDGES:	RYAN, EMMETT and GYLES JJ
DATE:	15 FEBRUARY 2006
PLACE:	MELBOURNE (heard in ADELAIDE)

REASONS FOR JUDGMENT

GYLES J

55 The short, but novel, constitutional issue that requires determination and the circumstances that give rise to it, are explained in the judgment of Emmett J which I have had the advantage of reading in draft. I need not repeat that explanation, although I differ from Emmett J in the result.

56 The power to summons a witness to appear before the examiner at an examination to give evidence and produce documents is provided for by s 28(1) of the Australian Crime Commission Act 2002 (Cth) (the ACC Act). The exercise of that power depends upon the examination being for the purposes of a special Australian Crime Commission (ACC) investigation so far as is relevant for present purposes (s 24A of the ACC Act). That, in turn, depends upon a determination by the Board of the ACC that an investigation into matters relating to ‘federally relevant criminal activity’ is a ‘special’ investigation.

57 The definition of ‘federally relevant criminal activity’ provided in s 4 of the ACC Act includes:

‘...
(b) a relevant criminal activity, where the serious and organised crime:

(i) is an offence against a law of a State; and
(ii) has a federal aspect.’

58 ‘Federal aspect’ has the meaning given by s 4A(2) of the ACC Act. It is sufficient to note that, for present purposes, the most important criterion for a State offence to have a federal aspect is that the provision would have been a valid law of the Commonwealth if enacted by the Parliament of the Commonwealth (s 4A(2)(a)(ii), (b)(ii) and (c)).

59 The essence of the challenge is that the provisions in question are invalid as they purport to authorise a Commonwealth authority to investigate by compulsory means a breach or potential breach of State law without there being any corresponding breach of federal law or any request by a relevant State.

60 The decision of the High Court in R v Hughes [2000] HCA 22; (2000) 202 CLR 535 (Hughes) was called in aid of both sides of the argument. The legislative scheme considered in that case differs from the legislative provisions in the present case. It concerned a situation in which State legislation expressly conferred a particular power upon the Commonwealth authority and it was the corresponding conferral of authority to act that purported to be authorised by the Commonwealth legislation that was under challenge. It was accepted that the State conferral of the power to prosecute a State offence upon a Commonwealth authority or officer was valid in itself, although the Commonwealth authority or officer could not be validly compelled to exercise that power. The gravamen of the decision in Hughes was that, for the Commonwealth to impose on an officer or authority of the Commonwealth a power coupled with a duty to adversely affect the rights of individuals, a law of the Commonwealth supported by an appropriate head of power was required (absent direct Constitutional power). That case did not directly involve a question as to the circumstances under which the Commonwealth could impose such a power, coupled with a duty, in relation to the investigation of the committing of State offences, absent a corresponding conferral of power upon the Commonwealth authority or officer by State legislation.

61 The relevant provisions of the ACC Act were inserted in the then National Crime Authority Act 1984 (Cth) (the NCA Act) by Act No 133 of 2000, which introduced the notion of State offences against the law of a State having a federal aspect (with consequential effect) and included ss 55A, 55B and 55C in their present form. It is clear from the Explanatory Memorandum and the Second Reading Speech that those amendments were a package in direct response to the decision of the High Court in Hughes.

62 Prior to the 2000 amendment the position was as follows. ‘Relevant criminal activity’ meant:

‘any circumstances implying, or any allegations, that a relevant offence may have been, or may be being, committed against a law of the Commonwealth, of a State or of a Territory’. (s 4)

The Commonwealth could refer a matter relating to a relevant criminal activity to the National Crime Authority (NCA) for investigation insofar as the relevant offence was, or included, an offence or offences against a law of the Commonwealth or of a Territory (s 13). A State could refer a matter relating to a relevant criminal activity to the NCA for investigation insofar as a relevant offence was, or included, an offence or offences against a law of the relevant State (s 14). Section 55A(1) provided:

‘It is hereby declared to be the intention of the Parliament that the operation of a provision of a law of a State that:

(a) confers a power or function, or imposes a duty, on the Authority ..., being a power, function or duty that is also conferred or imposed by this Act ... is not prevented or limited by reason of the provisions made by this Act.
(2) It is also declared to be the intention of Parliament that, except as otherwise declared by the regulations, the Authority ... may, in addition to the powers, functions and duties conferred or imposed on it or them by this Act, have similar powers, functions and duties conferred or imposed on it ... by a law of a State.’

63 The concern apparently was that the NCA was a Commonwealth authority compelled by legislation to investigate the commission of State offences by compulsory means where there was simply a reference from a State. The decision in Hughes cast doubt upon the validity of that arrangement. The cure chosen in 2000 was that the obligation to investigate would only apply in relation to State offences with a Federal aspect as defined by the amendments. At that time, there was no suggestion that the NCA could investigate State offences, otherwise than on reference from the relevant State, leaving aside issues that may arise out of overlap with an existing investigation. The NCA Act was an embodiment of a cooperative scheme between the States, Territories and the Commonwealth similar in kind to that considered by the High Court in Hughes.

64 The ACC Act also embodies cooperation between the States, the Territories and the Commonwealth but with a rather different structure. The effect of the impugned sections is that the Board of the ACC can authorise the ACC to investigate matters relating to State offences with a federal aspect in order (inter alia) to facilitate the enforcement of State law without any reference by the relevant State. The ACC Act does include references to law reform (eg s 12(3)) but the main thrust of the ACC Act is the facilitation of law enforcement--see, for example, ss 7A, 7C, 12(1) and 12(1A). The States are indirectly represented on the Board of the ACC and there is also an inter-governmental committee with what might be called general oversight functions with State representation. Sections 55A, 55B and 55C deal with federal aspects of the arrangements. Section 55A expressly provides for conferral of State duties, functions and powers upon Commonwealth parties.

65 The validity of Commonwealth legislation purporting to confer compulsory powers upon a Commonwealth authority in aid of the enforcement of State law is the question at issue here as the provisions of s 55A were not availed of for present purposes.

66 The legislative device employed here is similar in effect to, and may well have been inspired by, the following passage from the judgment of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ in Hughes (at [43]–[44]):

‘However, s 15A of the Interpretation Act may be applied to read down a provision expressed in general terms, including a power to prosecute so as to apply only where the particular prosecution is supported by a head of power (Re Nolan; Ex parte Young [1991] HCA 29; (1991) 172 CLR 460 at 485–486). Consistently with the statement of general principle in the joint judgment in the Industrial Relations Act Case (Victoria v The Commonwealth [1995] HCA 45; (1996) 187 CLR 416 at 501–503), this would be achieved by construing the phrase in s 47(1) of the Corporations Act "functions and powers that are expressed to be conferred on them by or under corresponding laws" as limited to those functions and powers in respect of matters within the legislative powers of the Parliament of the Commonwealth (Bourke v State Bank of NSW [1990] HCA 29; (1990) 170 CLR 276 at 291; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18; (1996) 189 CLR 1 at 10, 26).
Accordingly, the federal legislation identified above (s 47(1) of the Corporations Act and reg 3(1)(d) of the Regulations) operates to provide such authority as is necessary under federal law to support the prosecution by the DPP of the offences against the law (WA) which are specified in the indictment.’
[emphasis added]

Here, the effect is spelled out rather than being left to reading down.

67 It is surprising that there should be direct federal involvement in the enforcement of State laws without direct or indirect State conferral of that power. As Sir Owen Dixon said in Foreman & Sons Pty Ltd, Re; Uther v Federal Commissioner of Taxation [1947] HCA 45; (1947) 74 CLR 508 (at 529):

‘In a dual political system you do not expect to find either government legislating for the other.’

There is no scope in this case for an argument that the provisions are supported by s 51(xxxix) as being in aid of the executive power. The executive power of the Commonwealth involves the execution and maintenance of the laws of the Commonwealth, not of the States (Hughes at [36]). It may be added that the executive power does not extend to the execution and maintenance of possible laws of the Commonwealth. The existence of unexercised legislative power does not create a penumbra of Commonwealth executive power as some of the arguments seemed to suggest. A State law creating an offence does not become a law of the Commonwealth because the Commonwealth could have legislated to create the same offence.

68 The learned Solicitor-General for the Commonwealth called in aid the cases concerning the Royal Commissions Act 1902 (Cth) to demonstrate that the Commonwealth can authorise the use of coercive powers to investigate any matter that relates to a Commonwealth head of legislative power. That proposition was described as ‘settled law’ by Finn J in Barnes v Boulton [2004] FCA 1219; (2004) 139 FCR 356 at [38]. However, cases concerning the Royal Commissions Act 1902 (Cth) provide little guidance in the present circumstances.

69 In R v Collins; Ex parte ACTU-SOLO Enterprises Pty Ltd (1976) 8 ALR 691, Stephen J described the function of Royal Commissions as ‘exclusively informative’ (at 695). In Colonial Sugar Refining Co Ltd v Attorney-General for the Commonwealth [1912] HCA 94; (1912) 15 CLR 182, Griffith CJ said that Parliament had a power to compel information on the subjects necessary for the effectual performance of federal functions (at 196). Barton J said (at 205–206):

‘Where the Commonwealth has power to legislate on any subject, such as Taxation, Bounties, the Customs, Inter-State or foreign Trade, there is a power in the Executive, even apart from Statute, to make inquiry on that subject, if necessary by Royal Commission. Were this executive power withheld, it would in many cases be impossible for the central Government to acquire the information necessary to equip it for intelligent legislation. An Act to regulate the issue of Royal Commissions of inquiry and to confer on them authority to obtain information, by compulsion where necessary, is beyond all question a beneficial incident of the exercise of constitutional power. But seeing why the information is necessary, we see also what are the limits within which legislation to be valid must operate. The necessity for the information is that the Executive or the Parliament, &c., may know how to apply the knowledge gained; for instance, by legislating wisely. Where there is not a constitutional power, the necessity for inquiry on the part of the Executive does not exist--at least in the contemplation of the Constitution, the fruit of inquiry being in this connection, "id sine quo res ipsa esse non potest". In truth this power of inquiry would exist if there were no paragraph xxxix., as a necessary incident to the legislative powers conferred. The members of this Court expressed themselves with some fulness on the subject of incidental powers in the Jumbunna Case (6 CLR 309). The limit, then, of the incidental power of inquiry is to be found in the extent of the existing legislative or executive or other power in the exercise of which the results of inquiry are to be applied. In the present case the powers intended to be exercised after the report of the Commission were evidently legislative, for it is difficult to imagine any other range of powers to which information on any of the subjects (a) to (h) in the letters patent can be referable, whether the question be one of External or Inter-State Commerce, Taxation (such as import and Excise duties), Bounties, or what not, perhaps all of them.’

70 The coercive provisions of the ACC Act plainly go beyond being exclusively informative. They are not limited to the execution of existing Commonwealth laws and are not restricted to obtaining information for the better framing of legislation. The principal purpose of the provisions is obviously the facilitation of enforcement of existing State legislation.

71 Neither are the provisions the subject of any substantive head of s 51 of the Constitution as such. There is no nominate Commonwealth law enforcement power. General law enforcement provisions are incidental to the execution of laws supported by a valid head of Commonwealth power. If the exercise of a coercive law enforcement power is challenged, that power requires support from the particular provision or provisions sought to be enforced. To that extent such powers are chameleon-like. It is a large step to conclude that such powers can fasten upon State offences that could have been, but are not, Commonwealth offences. In my opinion, a law granting coercive power in such circumstances is not incidental to the exercise of Commonwealth legislative power. I have already pointed out that it cannot be seen as incidental to Commonwealth executive power.

72 Those arguing for validity relied upon the following passage from the joint judgment in Hughes (at [40]):

‘The DPP Act [Director of Public Prosecutions Act 1983 (Cth)] in a sense is supported by as many heads of power as from time to time have been exercised by the Parliament to create offences against Commonwealth laws. State law may create offences in fields where it would have been competent for the Parliament of the Commonwealth to enter directly by its own offence-creating legislation. The power conferred by s 51(xx) with respect to foreign corporations and trading or financial corporations is an obvious example. In such a situation, a federal law which specifies that certain Commonwealth officers have powers and functions expressed to be conferred by the State law with respect to the prosecution of State offences is a law with respect to that head of federal legislative power. This will be true of perhaps the very great majority of offences created by the State legislation which adopts the Law.’ [emphasis added]

(See also Kirby J at [117]–[118].)

73 In my opinion, those passages from Hughes should be read as only applying to complementary and cooperative State and federal legislation with the State legislation directly conferring the relevant power upon the Commonwealth officer or authority, as was the case in Hughes (and also in R v Duncan; Ex parte Australian Iron & Steel Pty Ltd [1983] HCA 29; (1983) 158 CLR 535 and Re Cram; Ex parte NSW Colliery Proprietors Association [1987] HCA 28; (1987) 163 CLR 117 relied upon in Hughes). That would have been the case if the provisions of s 55A of the ACC Act had been utilised in the present circumstances. As they were not, in my opinion, the decision in Hughes does not govern this case.

74 The consequence is that the ACC Act has an operation going beyond Commonwealth legislative power and, to that extent at least, is invalid. It is well entrenched that the ACC Act should be read down so as to operate validly within the area of Commonwealth power where that is possible (Acts Interpretation Act 1901 (Cth), s 15A; Hughes at [43]). All of the ramifications of reading down were not fully explored in argument. It does not seem that a process of reading down could save the validity of operation of the ACC Act proposed by the ACC in the cases in issue in these proceedings. Indeed, there were no detailed submissions addressed to the point on behalf of the respondents. Because of the need to translate a finding of invalidity into precise relief in the various proceedings, I would order that the parties in each proceeding bring in draft short minutes of order for that purpose. These minutes should also deal with the question of costs.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated: 15 February 2006

Counsel for the Appellants in SAD 250 of 2005 and SAD 252 of 2005 and the Applicants in VID 1286 of 2005 and VID 1294 of 2005:	P Faris QC
Solicitors for the Appellants in SAD 250 of 2005 and SAD 252 of 2005 and the Applicants in VID 1286 of 2005 and VID 1294 of 2005:	Browne & Co
Counsel for the Respondent in SAD 250 of 2005 and SAD 252 of 2005 and the Applicants in VID 1286 of 2005 and VID 1294 of 2005:	A Southall QC with S J Maharaj
Solicitors for the Respondent in SAD 250 of 2005 and SAD 252 of 2005 and the Applicants in VID 1286 of 2005 and VID 1294 of 2005:	Australian Crime Commission
Counsel for the Intervenor in SAD 250 of 2005 and SAD 252 of 2005 and the Applicants in VID 1286 of 2005 and VID 1294 of 2005:	D M J Bennett QC, Solicitor-General, with S Donaghue
Solicitor for the Intervenor in SAD 250 of 2005 and SAD 252 of 2005 and the Applicants in VID 1286 of 2005 and VID 1294 of 2005:	Australian Government Solicitor
Counsel for Intervening Applicant The Herald Sun in SAD 250 of 2005, SAD 252 of 2005, VID 1286 of 2005 and VID 1294 of 2005:	G McAvaney
Solicitors for Intervening Applicant The Herald Sun in SAD 250 of 2005, SAD 252 of 2005, VID 1286 of 2005 and VID 1294 of 2005:	Minter Ellison
Counsel for the Applicants in NSD 1358 of 2005:	D Graham QC with A Thomas
Solicitors for the Applicants in NSD 1358 of 2005:	Cosoff Cudmore Knox
Counsel for the Respondent in NSD 1358 of 2005:	A Southall QC with S J Maharaj
Solicitor for the Respondent in NSD 1358 of 2005:	Australian Crime Commission
Counsel for the Intervenor in NSD 1358 of 2005:	D M J Bennett QC, Solicitor-General with S Donaghue
Solicitor for the Intervenor in NSD 1358 of 2005:	Australian Government Solicitor
Date of Hearing:	28 November 2005
Date of Judgment:	15 February 2006