Treasury Laws Amendment (2018 Measures No 3) Bill 2018 - Commentary on Ministerial Responses [2018] AUSStaCSBSD 141 (9 May 2018)

• Treasury Laws Amendment (2018 Measures No. 3) Bill 2018
• Reversal of the evidential burden of proof80

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Treasury Laws Amendment (2018 Measures No. 3) Bill 2018

Purpose	This bill seeks to amend the Competition and Consumer Act 2010 to: • increase the maximum civil pecuniary penalties and penalties for criminal offences; • provide protection, through a safe harbour, for egg producers who comply with the requirements of the Free Range Egg Labelling Information Standard; and • ensure that confidential supplier information obtained by the Australian Energy Regulator during its wholesale market monitoring and reporting functions remains confidential under the Commonwealth law
Portfolio	Treasury
Introduced	House of Representatives on 15 February 2018
Bill status	Before the House of Representatives

2.145 The committee dealt with this bill in Scrutiny Digest No. 3 of 2018. The assistant minister responded to the committee's comments in a letter received 10 April 2018. Set out below are extracts from the committee's initial scrutiny of the bill and the minister's response followed by the committee's comments on the response. A copy of the letter is available on the committee's website.^[79]

Reversal of the evidential burden of proof^[80]

Initial scrutiny – extract

2.146 Section 18, paragraph 29(1)(a) and paragraph 151(1)(a) of the Consumer Law make it unlawful for a person to engage in misleading and deceptive conduct or to make false or misleading representations about goods or services. A breach of paragraph 151(1)(a) constitutes an offence. Contraventions of section 18 and paragraph 29(1)(a) are subject to civil penalties.

2.147 Proposed section 137A seeks to provide a specific exemption (an offence-specific 'safe harbour' defence) to the offence and civil penalty provisions in section 18, paragraphs 29(1)(a) and paragraph 151(1)(a). Proposed subsection 137A(1) provides that the relevant offence and civil penalty provisions do not apply in relation to the labelling or displaying of eggs as free range eggs if, when doing so, the person is complying with all requirements:

• specified in an information standard for eggs; and

• relating to the labelling or displaying of free range eggs, including requirements about:

• the use of the words 'free range'; or

• representing that eggs are free range eggs.

2.148 Proposed subsection 137A(2) then provides that, if a person seeks to rely on proposed subsection 137A(1) in proceedings brought against the person in respect of section 18 or paragraph 29(1)(a) or 151(1)(a) of the Consumer Law, the person bears an evidential burden in relation to the matters set out in subsection 137A(1).

2.149 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence. This is an important part of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interferes with this common law right.

2.150 In this instance, the defendant would bear an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter. However, the committee would still expect the reversal of the burden of proof to be justified.

2.151 Additionally, the committee notes that the Guide to Framing Commonwealth Offences^[81] provides that a matter should only be included in an offence-specific defence (as opposed to being specified as an element of the relevant offence) where:

• it is peculiarly within the knowledge of the defendant; and

• it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.

2.152 In this instance, the explanatory memorandum states:

In placing an evidential burden on the respondent/defendant, consideration has been given to the Attorney-General's Department's Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011 edition.
This evidential burden is appropriate in these circumstances because the evidence as to whether a respondent/defendant has complied with the information standard and the free range egg labelling or display requirements is peculiarly within the knowledge and control of the respondent/defendant.
For the current information standard, Australian Consumer Law (Free Range Eggs Labelling) Information Standard 2017, compliance would require consideration of whether:

• the hens had meaningful and regular access to an outdoor range during daylight hours during a laying cycle;

• the hens were able to roam and forage on the outdoor range; and

• the eggs were laid by hens subject to a stocking density of 10,000 hens per hectare or less.

It is the respondent/defendant who can readily access evidence of this kind, which would not be easily accessible and available to the applicant/prosecution. It would be significantly more difficult and costly for the applicant/prosecution to obtain evidence that could be easily adduced by the defendant.^[82]

2.153 The committee notes the explanation provided for the reversal of the burden of proof in proposed section 137A. However, while the committee appreciates that it may be easier for the defendant than for the prosecution to adduce evidence relating to the matters in proposed subsection 137A(1), it is not apparent that those matters would be peculiarly within the defendant's knowledge, or that the matters would be significantly more costly and difficult for the prosecution to establish.

2.154 The committee further notes that the reversal of the burden of proof in proposed section 137A may relate to civil penalties (where that section is relied on as a defence to section 18 or paragraph 29(1)(a)). However, the committee recognises that, in certain cases, there may be a blurring of distinctions between criminal and civil penalties, with civil penalties applied in circumstances that are akin to criminal offences. The committee considers that reversals of the burden of proof in such cases merit careful scrutiny,^[83] as there could be a risk that reversing the burden of proof in such cases may unduly trespass on personal rights and liberties. This is particularly the case where more significant penalties are imposed. In this case, the committee notes that contraventions of section 18 and paragraph 29(1)(a) are punishable by a civil penalty of $220,000 for individuals. Moreover, the bill proposes to increase the penalty imposed in relation to these sections to $500,000.^[84]

2.155 The committee seeks the assistant minister's more detailed advice as to the appropriateness of reversing the evidential burden of proof in relation to the 'safe harbour' defence in proposed section 137A, noting that the offence and civil penalty provisions to which the defence applies carry significant financial penalties.

Assistant Minister's response

2.156 The assistant minister advised:

The reverse burden of proof was considered to be appropriate for a number of reasons. In the past, producers who chose to label their eggs 'free range' were not required to adhere to prescribed mandatory requirements. It will now be the case that, should producers choose to label their eggs 'free range', they must be able to prove that they have met the requirements of the Free Range Egg Labelling Information Standard. Producers would generally prove that they have met these requirements by gathering information through daily monitoring of hens and record keeping. This information is within the producers' knowledge and there would be no additional burden on producers to produce it as evidence should the need arise.
If the burden of proof for the safe harbour was not reversed, the regulator would be required to undertake costly and difficult investigations. In some cases the regulator may have some difficulty accessing properties, would only be able to observe the hens on sporadic occasions, may face health and safety difficulties and could pose biosecurity risks when visiting farms.

Committee comment

2.157 The committee thanks the assistant minister for this response. The committee notes the assistant minister's advice that the reversal of the evidential burden of proof was considered appropriate because the information that would be relied on by a producer to prove that they had met the requirements of the Free Range Egg Labelling Information Standard (Information Standard) would be within the producer's knowledge, and that there would be no additional burden on producers to produce that information as evidence should the need arise.

2.158 The committee further notes the assistant minister's advice that, were the burden of proof for the safe harbour defence not reversed, the regulator would be required to undertake costly and difficult investigations, could face difficulties gathering information, and could pose biosecurity risks when visiting farms.

2.159 While noting the minister's advice, the committee reiterates that the Guide to Framing Commonwealth Offences^[85] provides that a matter should only be included as an offence-specific defence where it is peculiarly within the knowledge of the defendant and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.

2.160 It is unclear in this instance that whether a defendant has met the requirements of the Information Standard is a matter that would be peculiarly within the knowledge of the defendant. Rather, it appears to be a matter of which both the defendant and the prosecution would have, or could obtain, knowledge. In this regard, the committee emphasises that a matter being 'within the producer's [that is, the defendant's] knowledge' does not equate to the matter being peculiarly within the knowledge of the defendant.

2.161 The committee draws its scrutiny concerns to the attention of senators, and leaves to the Senate as a whole the appropriateness of reversing the evidential burden of proof in proposed section 137A.

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[79] See correspondence relating to Scrutiny Digest No. 5 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest

[80] Schedule 2, item 2, proposed section 137A. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).

[81] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 50-52.

[82] Explanatory memorandum, p. 23.

[83] In this regard, see also Australian Law Reform Commission, Traditional Rights and Freedoms – Encroachments by Commonwealth Laws (ALRC Report 129), December 2015, p. 284.

[84] See Schedule 1, items 48 and 49.

[85] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 50-52.