Vizl, Anthony Francis & Anor v Fehon, Paul & Ors [1998] FCA 557

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 168 of 1997

BETWEEN: ANTHONY FRANCIS VIZL

First Applicant

MICHAEL VIZL

Second Applicant

AND: PAUL FEHON

First Respondent

JON FANNING

Second Respondent

KEIRAN MURPHY

Third Respondent

THE CHAIRPERSON, NATIONAL CRIME AUTHORITY

Fourth Respondent

JUDGE: EMMETT J

DATE: 15 may 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT HIS HONOUR: By an application for review pursuant to section 39B of the Judiciary Act 1903(Cth)the applicants sought to review: (a) decisions of the first and second respondents made on or about 4 March 1997 to seize certain documents of the applicants; (b) the conduct of the first and second respondents in seizing the documents; and (c) the decisions of the third and fourth respondents made on about 6 March 1997 to retain, inspect and copy such of the documents as they choose. The proceedings have now been discontinued pursuant to leave granted on 13 February 1998. However, questions remain as to who should bear the costs of the proceedings prior to their discontinuation. In such a circumstance, if it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the Court will make no order as to the costs of the proceedings. (See, for example, Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 143 ALR 1 at 4. per McHugh J.) In some cases the court may feel confident that although both parties have acted reasonably one party was almost certain to have succeeded if the matter had been fully tried (see Ex parte Lai Qin at 3 per McHugh J). It is therefore necessary to determine whether or not the applicants acted so unreasonably in bringing these proceedings or whether the respondents acted so unreasonably in defending the proceedings that it would be proper for the applicants to pay the costs or alternatively for the respondents to pay the costs. In order to determine this question it is necessary to say something about the proceedings. The proceedings arise out of the purported execution of a search warrant addressed to the first respondent, Sergeant Paul Fehon, who was on secondment to the National Crime Authority. By the search warrant a Stipendiary Magistrate stated that he was satisfied by information on oath that there were reasonable grounds for suspecting that there was at the premises of Brett Galloway, Solicitors, Level 10, 155 King Street, Sydney, evidential material which satisfied all of three conditions which were there stated. The first condition was that the things must be conveyancing files, loan documents, trust documents, trust ledgers and receipts, client files and any of the above material that was electronically stored on any floppy disk, hard drive, magnetic tape, compact disk or magneto-optical disks and any equipment required to read that material. The second condition was that the things must relate to any one or more of the following: · Steven John Wallis; · James Andrew Whiting; · Michael Vizl; · CMD Discretionary Trust; · Anthony Vizl; · Lot 3 Tourmaline Court, Mudgeeraba Bonnegan; · Lot 4 Tourmaline Court, Mudgeeraba Bonnegan. The third condition was that the things must be things as to which there are reasonable grounds for suspecting that they will afford evidence as to an offence against the laws of the Commonwealth, namely, that between 1 January 1991 and 20 February 1997 at the Gold Coast in the State of Queensland Steven John Wallis defrauded the Commonwealth. By the warrant, the executing officer, any person assisting who was a constable and any other person who has been authorised by the executing officer to assist in executing the warrant was authorised, amongst other things, to enter the said premises, to search the premises for any evidential material that satisfies all of the three conditions specified above and to seize any such evidentiary material that may be found. On 4 March 1997, Detective Sergeant Fehon and the second respondent, Constable Fanning, attended at the premises and sought to execute the warrant. It is common ground that on that occasion the first and second respondents had a discussion with Mr Brett William Galloway, a principal of the firm of solicitors named in the warrant. There is some dispute as to the precise conversations which then took place. I have before me affidavits by Mr Galloway and by Sergeant Fehon as to their respective versions of what occurred. To the extent that there is any difference between their versions I do not understand it to have been suggested that either of them was deliberately fabricating evidence. However, I would have been asked to conclude, had this matter gone to a final hearing, that the recollection of one or other was defective. The issue between the applicants and the respondents concerns the extent to which the third condition in the search warrant to which I have referred was satisfied. It is common ground that Mr Galloway had, prior to 4 March 1997, at various times acted for the first applicant, Mr Anthony Francis Vizl and the second applicant, Michael Vizl, who is the father of AnthonyVizl. It is also common ground that Mr Galloway had previously acted for the CMD Discretionary Trust. However, Mr Galloway said, and it was not suggested to the contrary, that he had no knowledge of Steven John Wallis or James Andrew Whiting. He also said that he had no knowledge of the two parcels of land referred to in the third condition. It is also common ground that Mr Galloway informed the first two respondents on 4 March 1997 that, whereas he was familiar with Michael Vizl, Anthony Vizl and the CMD Discretionary Trust, he had no knowledge of the two parcels or land or Steven John Wallis or James Andrew Whiting. The difference between the versions of the discussions given by Mr Galloway and Sergeant Fehon relates to the circumstances in which custody of various files which were in the possession of Mr Galloway was entrusted to the first two respondents. Mr Galloway said that Sergeant Fehon said to him words to the effect: "If you have any files relating to any of these things in the second condition, we have to take them". Mr Galloway said that, having consulted his client list and identified a number of files which he believed met the second condition, he said to Mr Fehon: "OK how do we do this?" Mr Fehon, according to Mr Galloway, said: "You get the files out, Senior Investigator Fanning will make a list, you will get a receipt. You can tell us what is privileged and we can put that in a separate envelope. Arrangements will be made for the legal officer to come down from Brisbane in the next couple of days and you can discuss the privileged documents with him." Mr Galloway said that he replied: "I haven't spoken to my client. It's his privilege but I'd be at least claiming privilege on my personal notes and my correspondence with the client. There are a lot of files. I don't know if I should take them all apart. Maybe I can leave things intact and I'll document the file name and deal with the other issues later. I can discuss what will happen with legal privilege and the relevance of what is in the files later with the legal officer on Wednesday or Thursday. Thursday will be better for me". He said that he told Mr Fehon: "None of these files contain any information about a person called Wallis or Whiting. I can guarantee that." Mr Fehon did not respond. He also said that as he gave each file to Mr Fanning with Mr Fehon nearby, he said words such as: "This is a debt collection file. You won't want that." or "Are you sure you want that?" To such statements Mr Fehon responded to the effect: "We'll worry about that later." or "We've got to take it". Mr Galloway says that he described every file by reference to its file title but did not describe the contents of the bundle of documents. He watched both of the first two respondents and neither of them looked inside any file or through the loose bundle of papers. Some corroboration of Mr Galloway's version is to be found in an affidavit of his secretary. She said that in the presence of the first two respondents Mr Galloway said to him: "They will require everything you have on the computer with regard to either the CMD Discretionary Trust, Michael or Anthony Vizl. Will you show them what you have and give them the computer disks?" Sergeant Fehon disputes much of what I have set out above and recounts his version of the discussion principally as follows: Mr Galloway indicated to Sergeant Fehon at various stages during the search the documents which he considered to be his personal notes on each file. During the course of that exercise Mr Galloway said words to the effect: "In my opinion some of these documents are not related to the conditions in the warrant." He said Mr Galloway used words to the following effect when he came upon a file which he considered was not relevant: "I think this file is not relevant. Do you require it?" Mr Fehon responded: "On what grounds do you think that it is not relevant?" Mr Galloway: "I think that it is outside the warrant." Sergeant Fehon: "If that is the case, I will have to inspect the document fully." Mr Galloway: "Look, I don't have any objection to you having the document. I have some clients I need to attend to, so which ever is the easiest way to do this."