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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
ROYAL COMMISSIONS AMENDMENT BILL 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of the Prime Minister,
the Honourable John Howard MP)
ROYAL COMMISSIONS AMENDMENT BILL 2006
OUTLINE
This Bill is to amend the Royal Commissions Act 1902 (the RCA) to clarify the
operation of the RCA in respect of claims of legal professional privilege (LPP).
Amendments were requested by the Commissioner of the current Inquiry into Certain
Australian Companies in relation to the UN Oil-for-Food Programme, the Hon
Terence Cole AO RFD QC, following the Federal Court decision in AWB Limited v
Honourable Terence Rhoderic Hudson Cole [2006] FCA 571.
Following release of the Final Report of the Independent Inquiry Committee into the
United Nations Oil-for-Food Programme on 28 October 2005, the Australian
Government announced on 31 October 2005 its intention to establish an independent
inquiry to examine the decisions or actions of Australian companies mentioned in the
Final Report. The government considered that, in order for such an inquiry to elicit
all relevant information, it was necessary for it to have the powers to take evidence
on oath and to require the attendance of witnesses and the production of documents,
and that it should therefore be conducted under the RCA.
The Governor-General issued Letters Patent for the Inquiry on 10 November 2005.
During the course of the Inquiry's hearings, the question of the treatment of claims
for LPP under the RCA has arisen. As a result of a decision rejecting an LPP claim
over a particular document, AWB Limited (one of the companies mentioned in the
Final Report) applied to the Federal Court for review of Mr Cole's decision,
challenging not just Mr Cole's decision on the document, but also his capacity to
determine claims of LPP. The matter was heard by the Federal Court (Justice Young)
on 24 April 2006.
In his judgment of 17 May 2006, Young J held that the application by AWB should
be dismissed, the document in question was not subject to LPP, and Mr Cole had the
power in the circumstances of the case (as the document had been inadvertently
provided to the Inquiry) to form an opinion on whether the document was subject to
LPP. However, the decision cast significant doubt on whether Mr Cole (or any other
person appointed under the RCA) has the power to require the production of a
document for inspection where a claim to LPP has been made.
Mr Cole has expressed his concerns with the decision to the Australian Government
and has sought urgent amendments to the RCA, noting that LPP claims have been
made in respect of many documents that have not been produced to his Inquiry.
The Australian Government accepts that it is desirable to amend the RCA to enable
Mr Cole to complete his Inquiry.
The Bill is to put beyond doubt that a Commissioner may require the production of a
document in respect of which LPP is claimed, for the limited purpose of making a
finding about that claim, that is, deciding to accept or reject it, for the purposes of the
Commission. The amendments would make a number of changes to that end. They
would:
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· put beyond doubt that the definition of `reasonable excuse' in s.1B of the RCA
applies to the expression as it appears in s.3(5);
· provide that a defence of reasonable excuse on the ground of LPP is not available
unless LPP was claimed before the Commissioner, or a court has found the
document to be subject to LPP;
· make plain that a Commissioner can make a decision whether or not to accept
such a claim;
· clarify a Commissioner's powers in this context, particularly with respect to
requiring production of documents for inspection; and
· provide for the consequences of a Commissioner's decision about an LPP claim.
Essentially, the Bill is intended to reflect the position that the Australian Government
understood was the case prior to the recent Federal Court decision.
The amendments are directed at claims of reasonable excuse based on LPP, as this
was the issue addressed in the decision of Young J. The Bill is not directed, directly
or by implication, at the powers and procedures applicable in respect of claims of
reasonable excuse under the RCA made on other bases.
The amendments proposed by the Bill are to commence on the day after it receives
Royal Assent and apply to actions on or after that date, by or in relation to a
Commission whether or not it was established prior to that date.
FINANCIAL IMPACT STATEMENT
The Bill will have no financial impact.
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NOTES ON CLAUSES
Clause 1: Short Title
1. Clause 1 provides that the Bill, once enacted, may be cited as the Royal
Commissions Amendment Act 2006.
Clause 2: Commencement
2. Clause 2 provides that sections 1 to 3 of the Bill (and anything else in the Bill
not specifically addressed in this clause) are to commence on the day the Bill receives
Royal Assent. Schedule 1 to the Bill is to commence on the day after the Bill receives
Royal Assent. This is a relatively early commencement, due to the urgency of the
powers to be provided by the Bill being available for the benefit of the current Inquiry
into Certain Australian Companies in relation to the UN Oil-for-Food Programme.
Clause 3: Schedule(s)
3. Clause 3 provides that each Act that is specified in a Schedule to the Bill is to
be amended or repealed as set out in the applicable items in the Schedule concerned,
and any other item in a Schedule to the Bill is to have effect according to its terms.
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SCHEDULE 1 - AMENDMENTS
Royal Commissions Act 1902
Item 1 - Section 1B
1. This item would renumber the existing section 1B as subsection 1B(1). This is
consequential on the proposed insertion by item 3 of a subsection 1B(2), explained
below.
Item 2 - Section 1B (definition of reasonable excuse)
2. The current definition of `reasonable excuse' is expressed to apply "in relation to
any act or omission by a witness or a person summoned as a witness before a
Commission". Subsection 3(5) provides a defence of reasonable excuse for a person
served with a notice under subsection 2(3A). Such a person, however, is not
necessarily a witness or a person summoned as a witness, so there is room for doubt
whether the definition applies to that subsection. As there is no policy reason to
support treating such a person differently from a witness or a person summoned as a
witness, this item would replace the current definition with one which more clearly
applies to the expression as it appears in subsection 3(5), as well as the expression as
it appears in subsections 3(1B) and (2B).
Item 3 - At the end of section 1B
3. This item would insert a new subsection to make plain, for the removal of any
doubt, that references in the Act to a requirement to produce a document, or refusal or
failure to produce a document, include references in relation to a part of a document.
This is because, for the purposes of new section 6AA, to be inserted by item 5, it is
convenient to make express reference to a part of a document, in the context of
spelling out the consequences of a finding that a document which had been produced
for inspection is in part subject to LPP. This might, apart from proposed subsection
1B(2), have given rise to doubt as to whether other references to a document included
a part of a document.
Item 4 - At the end of section 2
4. Item 4 adds a provision to the end of section 2 which would make clear for the
purpose of relevant offence provisions that the power in section 2 to require
production of a document extends to a power to require production of a document that
is subject to legal professional privilege (LPP). This amendment responds to
comments by Young J in AWB v Cole ([2006] FCA 571 at paragraph 51) that "in the
absence of clear and unmistakable language, a compulsive notice such as that which
can be issued under s 2(3A) will not be construed as requiring the production of
legally privileged documents". Proposed subsection 2(5) makes plain that there is an
obligation to produce such documents, when requested - though the obligation is
subject to the procedure to be provided under proposed section 6AA (to be inserted by
item 5) and subject also to the powers of courts to make binding determinations on
the existence of LPP. Proposed section 6AA is designed to ensure that, in the case of
a defence based on LPP, the person making the claim must justify the claim before
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the Commission; a person who is not satisfied with a decision by the Commission in
respect of a claim will be able to seek review of that decision in the Federal Court.
5. Proposed subsection 2(5) is not intended to enable a Commission to obtain a court
order compelling production of a document which is in fact subject to LPP. Only
proposed section 6AA, supported by the offence provision in proposed subsection
6AB(2), will provide a basis to compel production of such a document, and only for
the purpose of inspection.
Item 5 - After section 6
6. Item 5 inserts new express provision for the making of decisions on claims of LPP
and the powers available for that purpose, and related offence provisions.
New section 6AA - Legal professional privilege
7. New subsection 6AA(1) has the effect that LPP will not be effective as a defence
in a prosecution unless the claim for privilege has been upheld by a court (a
possibility left open by the provision), or the claim was made in a timely fashion
before the Commission.
8. New subsection 6AA(2) makes plain that, where LPP is claimed before a
Commission, the Commission can decide whether to accept or reject the claim. A
discretion is provided, so that where it is not a priority for a Commission to pursue
further a document which has been the subject of an LPP claim, the claim can be
concurred to on a de facto basis. It is not intended to provide the Commission with a
discretion to make a decision on grounds other than satisfaction or otherwise that the
legal basis for a claim of LPP has been established.
9. An intended effect of the express provision is to make plain that a Commission's
finding on a claim of LPP will be a decision under an enactment, and therefore
subject to judicial review under the Administrative Decisions (Judicial Review) Act
1977 as well as under section 39B of the Judiciary Act 1903.
10. Where LPP has been claimed before the Commission, new subsection 6AA(3)
makes plain that the Commission may require production of the document for
inspection, by the Commissioner and/or an authorised person or persons, for the
purpose of deciding whether to accept or reject the claim. This reflects the power
available to courts in cases where LPP is claimed.
11. New subsection 6AA(4) provides for consequences in the event a document is
produced for inspection and the claim for privilege is accepted. The document must
in that case be returned to the person who provided it. (In a case where a claim of
LPP is accepted in respect of part only of a document, a further requirement might be
issued for production of so much of the document as is not subject to LPP.) The
contents of a document that have been found to be subject to LPP will not be able to
used for the purposes of any report or decision the Commission makes; this may mean
disregarding part or all of a document for those purposes. (Item 7 below proposes
amendment of section 6DD, the use immunity provision, so that production for
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inspection will not be able to be used against the claimant of LPP in any other
context.)
12. New subsection 6AA(6) makes plain that the Commission can use its powers
under section 2 in relation to consideration of the claim of LPP, for example to
require information about the circumstances in which a document came into
existence, and to examine witnesses in relation to the claim.
New section 6AB - Offences relating to claims for legal professional privilege
13. This new section provides additional offences, closely paralleling the existing
offences in section 3.
14. New subsection 6AB(1) establishes an offence in circumstances where a person
fails to produce a document despite rejection of a claim for LPP under new section
6AA by a member and a further requirement to produce. (A member of a
Commission rejecting a claim for legal professional privilege conventionally allows
an additional period of time for compliance, for practical reasons and to allow an
application for judicial review of the decision rejecting the claim.)
15. New subsection 6AB(2) provides the sanction in relation to the obligation to
provide a document for inspection, for the purpose of making a decision on a claim of
LPP under new section 6AA.
16. Like the existing offences in section 3, these are offences of strict liability, with
maximum penalties expressed as $1,000 (that is, 10 penalty units, currently $1,100) or
6 months imprisonment. An offence of strict liability would not necessarily attract a
penalty of imprisonment, however, it is considered that the penalty is appropriate in
this case, because it is presently available in respect of the offences of strict liability
in section 3, and because of the importance of compliance with requirements issued
by a Commission established under this Act.
17. The defence of reasonable excuse will be available. As these offences relate to
conduct in connection with consideration of a claim for LPP by a member under
section 6AA, legal privilege cannot constitute a reasonable excuse unless established
by a court.
18. It will be a defence to a prosecution for an offence against this section if the
document in question was not relevant to the matters into which the Commission was
inquiring. This parallels existing subsection 2(6).
Item 6 - Subsection 6A(1)
19. Item 6 amends subsection 6A(1) by inserting "or section 6AB" after "subsection
3(2B) or (5)" so that a defence of self-incrimination will not be available in relation to
the new offences to be established in section 6AB, any more than they are available
for the existing offences in section 3.
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Item 7 - At the end of paragraph 6DD(1)(b)
20. Item 7 adds "or subsection 6AA(3)" to the end of paragraph 6DD(1)(b) to ensure
that evidence produced by a witness in order for a claim of LPP to be determined by
the member under subsection 6AA(3) cannot be used against that witness in any civil
or criminal proceedings.
Item 8 - Subparagraphs 6F(1)(a)(ii) and (c)(ii)
21. Item 8 amends subparagraphs 6F(1)(a)(ii) and (c)(ii) by inserting "or 6AA(3)"
after "subsection 2(3A)", in each provision. These amendments make plain that
documents produced by a witness in order for a claim of LPP to be determined by a
member under subsection 6AA(3) may be inspected by the member and the member
may make copies of them.
Item 9 - Application of amendments
22. Item 9 provides that the amendments made by Schedule 1 apply, after the
commencement of the Schedule, in relation to the proceedings of any Commission
after that commencement, whether the Commission was established before or after
that commencement. This is so that the provisions will be able to be used by the
current Inquiry into Certain Australian Companies in relation to the UN Oil-for-Food
Programme.
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