Ben Aulich, Michael Papandrea allegedly conspired to launder illegal cigarette money

This detail of the case against solicitor Ben Aulich, 49, and accountant Michael Papandrea, 55, was revealed in the ACT Magistrates Court on Tuesday.

Both men have pleaded not guilty to a charge of conspiracy to launder money, while Mr Aulich denies a further allegation that he recruited Mr Papandrea for criminal activity.

During a preliminary hearing, magistrate Michael Crompton was set to deal on Tuesday with arguments about whether the court had the jurisdiction to eventually finalise the case.

Prosecutor Mark Tedeschi QC wanted to push ahead as planned, saying he believed the matter should be committed to the ACT Supreme Court for trial.

But barristers for the accused pair argued it would be "putting the cart before the horse" to ventilate the issue ahead of a decision on whether the ACT's chief police officer should have to disclose certain documents Mr Aulich's lawyers have sought under subpoena.

David Campbell SC, representing Mr Aulich, also complained that Mr Tedeschi had failed to properly outline the allegations against the solicitor.

He said the prosecution had simply served a 39-page case statement and effectively said: "You work it out for yourself."

"What's the conspiracy?" Mr Campbell asked.

"Who are the conspirators? When did each come and go, if they came and went?"

The senior counsel said it seemed Mr Aulich and Mr Papandrea were accused of entering into an agreement to help an undercover police officer launder money the operative anticipated earning through the illegal importation of cigarettes.

But he took issue with what he said was a lack of detail about precisely what the alleged conspirators had done as part of the supposed agreement.

Mr Tedeschi countered that it was "just inaccurate" to say it was unclear precisely what was alleged because the case statement was "very comprehensive".

As he pushed for the jurisdictional issue to be resolved, the prosecutor said the subpoena decision was irrelevant to the question of which court should determine the case.

The court has heard Mr Aulich's lawyers have served a subpoena on Australian Federal Police Deputy Commissioner Neil Gaughan, seeking the application investigators made for authorisation to conduct the "major controlled operation" that targeted the 49-year-old.

Major controlled operations allow undercover police to engage in certain illegal or unlawful conduct for the purpose of obtaining evidence.

Mr Campbell said on Tuesday that he suspected the application, which was approved, would reveal that "from the very beginning, this was an unlawful activity of entrapment".

He also reiterated previous comments about how there would therefore be questions around whether evidence from the operation ought to be deemed inadmissible.

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But Mr Tedeschi told the court that the evidence would be "completely the same" in this case regardless of whether a major controlled operation had been properly authorised.

The prosecutor said this was because the undercover officer had, despite the protections afforded by such an authorisation, not engaged in "the slightest iota of illegal conduct".

"There's been a lot of pretence by the undercover officer, but no illegal conduct," Mr Tedeschi said.

Barrister Ken Archer, appearing for Mr Papandrea, described being "quite surprised" to hear this claim.

Mr Crompton, a NSW magistrate who is hearing the case because of Mr Aulich's status in the ACT's legal community, ultimately agreed with defence lawyers that the jurisdictional issue should not be determined until the subpoena question had been resolved.

He listed the case to return to court on March 15, when he said he would give his decision on whether to grant the chief police officer's application to have the subpoena set aside.

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