SPOTLIGHT Archive Part two

The Work Choices decision

Andrew Buckland

David Bennett

The High Court, by a 5:2 majority (Kirby J and Callinan J dissenting), has upheld the constitutional validity of the recent amendments to the Workplace Relations Act 1996 (WRA) made by the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices Act).

State of New South Wales v Commonwealth of Australia (Work Choices Case)

High Court of Australia, 14 November 2006
[2006] HCA 52

In upholding the constitutional validity of the Work Choices Act the Court has confirmed that the Commonwealth’s power with respect to trading, financial and foreign corporations extends to:

the regulation of the activities, functions, relationships and the business of a corporation
the creation of rights, and privileges belonging to a corporation
the imposition of obligations on a corporation.

In respect of these matters, the corporations power also extends to:

the regulation of the conduct of those through whom a corporation acts, its employees and shareholders
the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business.

Background

Historically, Commonwealth laws regulating aspects of industrial relations have relied on s 51(xxxv) of the Constitution, which confers power on the Commonwealth Parliament to enact legislation with respect to ‘conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State’. In more recent years, however, the Commonwealth has relied on other heads of power, including s 51(xx), for some aspects of its industrial relations legislation. Section 51(xx) confers power on the Commonwealth Parliament to enact legislation with respect to ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’ (constitutional corporations).

Then in December 2005 the Commonwealth Parliament enacted the Work Choices Act, which created a substantially new federal industrial relations regime primarily in reliance on the corporations power.¹ Most significantly, the WRA (as amended by the Work Choices Act) now directly regulates the industrial rights and obligations of constitutional corporations and their employees.

The States of New South Wales, Victoria, Queensland, South Australia and Western Australia and two trade union organisations challenged the constitutional validity of the WRA as amended by the Work Choices Act. The Attorneys-General of Tasmania, the Northern Territory and the Australian Capital Territory intervened in support of the plaintiffs’ challenge to the constitutional validity of the law. The case was argued over six days by a record 39 counsel.

According to the Explanatory Memorandum for the Work Choices Act, use of the corporations power (together with the other powers relied on) for the new regime ‘would mean that up to 85 per cent of Australian employees would be covered by the federal system’. The principal issue before the High Court was the validity of the extensive use of the corporations power to support the new federal regime.

The majority decision

Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ delivered a joint judgment upholding the validity of the legislation.

Scope of corporations power

After discussing previous High Court authority on the corporations power, developments in company and corporations law in the 19th century, the Convention Debates,² drafting history and various failed referendums³ to amend both s 51(xx) and s 51(xxxv), the majority endorsed the statement by Gaudron J in Re Pacific Coal Pty Ltd⁴ that the corporations power extends to:

the regulation of the activities, functions, relationships and the business of a corporation described in that sub-section, the creation of rights, and privileges belonging to such a corporation, the imposition of obligations on it and, in respect of those matters, to the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business.

It follows that the power ‘extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations’: [178].

The plaintiffs had relied on three main lines of reasoning to argue that the corporations power should not be construed as supporting the WRA: [57].

First, the corporations power was said to extend only to regulating the dealings of corporations with persons external to the corporation and not its internal relationships. The relationship between a corporation and its employees was said to be part of its internal relationships.
Secondly, it was argued that the corporations power did not support a law merely because it conferred rights or imposed obligations on a corporation. Rather, ‘the fact that the corporation is a foreign, trading, or financial corporation should be significant in the way in which the law relates to it’: [140].
Thirdly, it was argued that the corporations power had to be read down because of the presence of s 51(xxxv). The consequence was said to be that the Commonwealth Parliament could enact laws dealing with the industrial relations between a corporation and its employees only under s 51(xxxv) and not under the corporations power.

The joint judgment rejected each of these asserted limitations on the corporations power. Their Honours observed that underlying each of them ‘was a theme, much discussed in the authorities on the corporations power, that there is a need to confine its operation because of its potential effect upon the (concurrent) legislative authority of the States’: [54], [183]–[196]. They regarded this appeal to the ‘federal balance’ as carrying ‘a misleading implication of static equilibrium’.

The approach of the joint judgment was to determine the content of the power to legislate ‘with respect to’ constitutional corporations by applying settled principles of constitutional interpretation, beginning with the decision in the Engineers’ case.⁵ The Engineers’ case discarded ‘an approach to constitutional construction that started in a view of the place to be accorded to the States formed independently of the text of the Constitution’ although it ‘did not establish that no implications are to be drawn from the Constitution’: [194]. One of those implications is that the Constitution requires the continued existence of the States ‘as separate bodies politic each having legislative, executive and judicial functions’: [194]. However, the implication ‘does not identify the content of any of those functions’.

Their Honours emphasised at several points the need to construe the constitutional text and said:

The general principles to be applied in determining whether a law is with respect to a head of legislative power are well settled. It is necessary, always, to construe the constitutional text and to do that "with all the generality which the words used admit". The character of the law must then be determined by reference to the rights, powers, liabilities, duties and privileges which it creates. The practical as well as the legal operation of the law must be examined. If a law fairly answers the description of being a law with respect to two subject-matters, one a subject-matter within s 51 and the other not, it is valid notwithstanding there is no independent connection between the two subject-matters. Finally, as remarked in Grain Pool of Western Australia v The Commonwealth, "if a sufficient connection with the head of power does exist, the justice and wisdom of the law, and the degree to which the means it adopts are necessary or desirable, are matters of legislative choice". [142] (footnotes omitted)

It is apparent that their Honours did not regard the ‘fundamental and far-reaching legal, social, and economic changes in the place now occupied by the corporation, compared with the place it occupied when the Constitution was drafted and adopted’ as providing any basis for applying different principles in construing the text of s 51(xx): [67], see also [121]. The consequent extension in the range of activities that Commonwealth laws could now reach was a practical result of those changes but this fell well short of establishing that ‘the States could no longer operate as separate governments exercising independent functions’. The majority concluded that ‘the proposition, that a particular construction of s 51(xx) would or would not impermissibly alter the federal balance, must have content, and the plaintiffs made no attempt to define that content’: [196].

In rejecting the three particular ways in which the plaintiffs sought to restrict the scope of the legislative power in s 51(xx), the majority also reached the following conclusions.

First, the suggested division between external and internal relationships found no support in the text of s 51(xx) ([94]–[95]), was ‘a distinction of doubtful stability’ and, even if were to be adopted, ‘there seems every reason to treat relationships with employees as a matter external to the corporation’: [66], see also [89]–[90].

Secondly, the majority held that s 51(xx) is not, as some members of the Court had previously suggested, limited to the trading activities of trading corporations and the financial activities of financial corporations. That is not what s 51(xx) says: [169]. To the extent that the WRA prescribes norms regulating the relationship between constitutional corporations and their employees, or is directed to protecting constitutional corporations from conduct intended and likely to cause loss or damage to them, it can be characterised as a law with respect to corporations without needing to satisfy any additional requirement that the nature of a corporation (as a trading, financial or foreign corporation) is significant as an element in the nature or character of the law: [198].

Thirdly, there was no basis in the text and structure of the Constitution, or in the historical context in which s 51(xxxv) was included in the Constitution, for reading down s 51(xx) by reference to s 51(xxxv). The majority referred to the general principle that ‘a law with respect to a subject-matter within Commonwealth power does not cease to be valid because it affects a subject outside power or can be characterized as a law with respect to a subject matter outside power’: [219], see also [204]. Although s 51(xxxv) confers power in relation to particular means (conciliation and arbitration) for the prevention and settlement of a particular class of industrial disputes (interstate disputes), its text expresses the scope of the power as a compound conception rather than containing a positive prohibition or restriction upon what would otherwise be within its scope. There was, then, no reason to read s 51(xx) as subject to any such prohibition or restriction: [203], [219]–[222].

WRA validly regulates industrial rights and obligations

As a result, the majority upheld the validity under the corporations power of the provisions of the WRA that regulate the industrial rights and obligations of constitutional corporations and their employees. These include provisions dealing with:

minimum terms and conditions of employment covering matters such as rates of pay, maximum hours of work, and leave entitlements, which together constitute the ‘Australian Fair Pay and Conditions Standard’ in Part 7 of the WRA ([246]), and other provisions relating to minimum entitlements of employees: [251]
the making of workplace agreements, in Part 8 of the WRA ([252]), including provisions:

prohibiting certain content from being included in the agreements and proscribing conduct in relation to prohibited content: [275], [416]
regulating industrial action to do with the making of collective Workplace Agreements in Part 9: [258]–[261]

the minimum entitlements of employees in relation to termination of employment set out in ss 637 and 643 of the WRA ([278]), and the interim exclusion of certain corporations (small businesses) from State laws regarding redundancy pay effected by Part VIAAA : [270].⁶

The majority also upheld these provisions as supported by the Territories power (s 122) in so far as they apply to employers incorporated in a Territory, or employers that carry on an activity in a Territory so far as the employer employs, or usually employs, an individual in connection with the activity carried on in the Territory: [335]–[343].

Registration and accountability of organisations

Schedule 1 sets up a system of registration, incorporation and regulation of industrial organisations (i.e. unions and employer organisations). Registered organisations have a range of rights and privileges under the WRA, including to intervene in matters before the Australian Industrial Relations Commission (AIRC), to be parties to collective agreements and to seek certain relief under the Act. In return for such rights and privileges, however, registered organisations are required to comply with various standards set out in Schedule 1.

The majority upheld the validity of Schedule 1, stating that:

If it be accepted, as it should be for the argument on this branch of the plaintiffs' case, that it is within the corporations power for the Parliament to regulate employer–employee relationships and to set up a framework for this to be achieved, then it also is within power to authorise registered bodies to perform certain functions within that scheme of regulation. It also is within power to require, as a condition of registration, that these organisations meet requirements of efficient and democratic conduct of their affairs. [322]

Excluding State and Territory laws (s 16 of the Act)

Section 16 of the WRA deals with the exclusion of certain State and Territory laws. In particular, s 16(1) provides that the WRA is intended to apply to the exclusion of the State and Territory laws identified in s 16(1)(a) to (e) (such as ‘a State or Territory industrial law’, a term defined in s 4(1)) so far as those laws would apply in relation to an employee or employer. Section 16(4) then provides for additional State and Territory laws – that the WRA is intended to apply to the exclusion of – to be prescribed by regulation.⁷

The majority rejected an argument that s 16 of the WRA is invalid as a bare attempt to exclude State laws. The majority accepted the Commonwealth’s argument that s 16 validly indicated the ‘field’ that the WRA covers, even though the Act does not make detailed provision about every matter within that field which is dealt with by State and Territory law: [369]–[370]. Section 16 is not materially different from other Commonwealth provisions that had been upheld in previous decisions of the High Court: [372].

Other issues

A number of other challenges made by the plaintiffs to the WRA were rejected, including to the following:

Broad regulation-making powers: The operation of several provisions in the WRA depends on the making of regulations, for example as to what content is prohibited from being included in workplace agreements (s 356),⁸ and what additional State and Territory laws are excluded by s 16 (s 16(4)). The majority rejected arguments that these provisions involved an impermissible delegation of legislative power to the executive and thus were not ‘laws’: [375]–[376], [414]–[418], [420]. The majority did, however, state that the technique employed at least by s 356 was ‘undesirable’ (at [399]), and led to the ambit of the relevant regulation-making power being ‘imprecise’: [417].
Transitional arrangements for employees/employers leaving the federal system: Schedule 6 of the WRA provides transitional arrangements for non-federal system employers and employees, who were bound by federal awards made under the pre-reform WRA, but who are not within the new system established by the Work Choices Act. During a five-year transitional period those employers and employees remain bound by the relevant awards, which are continued in operation as ‘transitional awards’ and are maintained by the AIRC, but within the limits specified in Schedule 6. The majority held Schedule 6 to be valid, including because it was part of the Commonwealth’s staged dismantling of the previous system established pursuant to s 51(xxxv) of the Constitution: [307]–[308]. The majority similarly upheld transitional arrangements in Schedule 1 for organisations which may no longer be eligible for registration: [327].
Rights of entry under State law: The plaintiffs attacked various provisions in Part 15 which prohibit certain persons from exercising a right under State law to enter premises for OH&S purposes, unless amongst other things the person also holds a permit under the WRA. Part 15 relevantly applies to a right to enter premises occupied or controlled by a constitutional corporation, or where the right relates to conduct of a constitutional corporation, or where the right relates to a contractor in so far as the contractor provides services to a constitutional corporation. In so applying, Part 15 is supported by the corporations power: [284]–[286].
Freedom of association: Part 16 proscribes certain conduct to ensure that employers, employees and independent contractors are free to become, or not become, members of industrial associations and are not victimised because they are, or are not, such members (s 778(1)). Part 16 is supported by the corporations power because it only applies to conduct by or against constitutional corporations, conduct whose ultimate purpose or effect is to cause harm to a constitutional corporation, and conduct affecting a person in his or her capacity as employee of, or contractor to, a constitutional corporation: [291]–[294].
Restraining State industrial authorities: Section 117 confers power on the AIRC to make an order restraining a State industrial authority from dealing with a matter that is also the subject of proceedings before the AIRC. The majority rejected the plaintiffs’ arguments that s 117 is contrary to s 106 of the Constitution (which provides for the continuation of the ‘Constitution of each State’), or otherwise infringes what is known as the Melbourne Corporation doctrine, and held that s 117 is supported by the corporations power: [390]–[393]. The interference with the functioning of a State which s 117 permitted is ‘relatively minor’.

Dissenting judgments

Justices Kirby and Callinan each delivered strongly worded dissenting judgments, drawing attention to the wide-ranging consequences of a broad view of the corporations power, given the role that corporations now play in modern life. For example, Kirby J stated:

The States, correctly in my view, pointed to the potential of the Commonwealth's argument, if upheld, radically to reduce the application of State laws in many fields that, for more than a century, have been the subject of the States' principal governmental activities. Such fields include education, where universities, tertiary colleges and a lately expanding cohort of private schools and colleges are already, or may easily become, incorporated. Likewise, in healthcare, where hospitals (public and private), clinics, hospices, pathology providers and medical practices are, or may readily become, incorporated. Similarly, with the privatisation and out-sourcing of activities formerly conducted by State governments, departments or statutory authorities, through corporatised bodies now providing services in town planning, security and protective activities, local transport, energy, environmental protection, aged and disability services, land and water conservation, agricultural activities, corrective services, gaming and racing, sport and recreation services, fisheries and many Aboriginal activities. All of the foregoing fields of regulation might potentially be changed, in whole or in part, from their traditional place as subjects of State law and regulation, to federal legal regulation, through the propounded ambit of the corporations power. [539]

In light of this the dissenting judges considered that s 51(xx) had to be read down in order to preserve the ‘federal balance’ in the Constitution.⁹ Thus Callinan J stated:

There is nothing in the text or the structure of the Constitution to suggest that the Commonwealth's powers should be enlarged, by successive decisions of this Court, so that the Parliament of each State is progressively reduced until it becomes no more than an impotent debating society. This Court too is a creature of the Constitution. Its powers are defined in Ch III, and legislation made under it. The Court goes beyond power if it reshape[s] the federation. By doing that it also subverts the sacred and exclusive role of the people to do so under s 128. [779]

The dissenting judges then held that s 51(xx)¹⁰ should be read down or restricted in its operation by reference to s 51(xxxv), with the result that Parliament has, in effect, no power to legislate with respect to the employment relationship between a constitutional corporation and its employees except pursuant to s 51(xxxv): [583], [913].

In reaching this conclusion, the dissenting judges also referred to:

the history of failed referenda to amend the Constitution to confer power on the Commonwealth with respect to industrial matters more generally (Kirby J at [437], Callinan J at [707]–[735])
s 51(xxxv) as protecting industrial fairness (Kirby J at [519]–[531])
the assumption, by successive governments and courts, that s 51(xxxv) was the Commonwealth’s only source of power to legislate with respect to industrial matters (Kirby J at [428]–[447]).

According to the dissenting judges, the core provisions of the WRA as amended were laws with respect to industrial disputes or industrial relations and were invalid for failing to comply with the limitations in s 51(xxxv) concerning conciliation and arbitration. Furthermore, as those core provisions could not be severed from the balance of the amendments, the entire Work Choices Act was invalid: [599], [912]. Kirby J also held that Schedule 6 and various ‘opaque’ regulation-making powers were invalid in their own right: [460].

Issues for the future?

Since the Work Choices Act several lower courts have had to address whether various employers are constitutional corporations and thus covered by the WRA. In the present case, the majority emphasised that the question of what is a constitutional corporation was not in issue in this case, and that any debate about that question ‘must await a case in which [it] properly arise[s]’ (see e.g. [55], [58], [86], [158], [185]). Similarly, the majority noted that no party had sought to reopen the Incorporation case¹¹ and thus that there was no occasion to consider further what it decided (namely that s 51(xx) does not confer a general power to incorporate trading or financial corporations): [137].

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2006/52.html

AGS lawyers advised on the constitutional basis of the Work Choices Act and acted for the Commonwealth in the High Court litigation. The Commonwealth’s counsel in the litigation included the Commonwealth Solicitor-General David Bennett QC and AGS Chief General Counsel Henry Burmester QC.

For further information please contact:

Andrew Buckland
Senior Executive Lawyer
Constitutional Litigation Unit
T 02 6253 7024 F 02 6253 7303
andrew.buckland@ags.gov.au

David Bennett
Deputy Government Solicitor
Constitutional Litigation Unit
T 02 6253 7063 F 02 6253 7303
david.bennett@ags.gov.au

Notes

Parts of the WRA are also supported by other heads of power. Most notably, the operation of the WRA in Victoria is supported by a reference of power from that State pursuant to s 51(xxxvii) of the Constitution.
In relation to which the majority expressed some caution, stating that ‘the answer to [the] question [whether a law is within power] is not to be found in attempting to attribute some collective subjective intention to all or any of those who participated in the Convention Debates’: [120].
The majority concluded that ‘There are insuperable difficulties in arguing from the failure of a proposal for constitutional amendment to any conclusion about the Constitution's meaning.’: [131]–[135].
Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 at 375 [83].
Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129.
Part VIAAA has since been replaced by the more general exclusion of State laws effected by s 16 of the WRA.
According to the majority the kinds of laws that can be prescribed under s 16(4) are, however, limited by its statutory context: [361].
Section 356 provides: ‘The regulations may specify matters that are prohibited content for the purposes of this Act’.
At [532]–[559] per Kirby J, and [774]-[797] per Callinan J.
And other heads of power, except for the defence power (s 51(vi), [569], [797]), probably the external affairs power (s 51(xxix), [573], [797]) and perhaps the Territories power (s 122, [573], [910]).
NSW v The Commonwealth (The Incorporation Case) (1990) 169 CLR 482.

Important: The material in Spotlight is provided as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material.

‘An efficient and tenacious competitor’ – AGS annual report tabled in Parliament

Rayne de Gruchy

AGS's 2005–2006 annual report has been tabled in Parliament by the Attorney-General, the Hon. Philip Ruddock MP, and the electronic version is published on our web site at http://www.ags.gov.au/whoweare/lawfirm/AnnualReport.htm.

Over the reporting year, we continued our drive to provide our clients with the legal services they need in the dynamic and ever changing government environment. We strengthened our client service ethic, sharpened our expertise, actively marketed our talent, and further developed the supporting infrastructure of our business.

AGS 2005–2006 Annual Report highlights

We proved to be an efficient and tenacious competitor, continuing to be the leading provider of legal services to the Australian Government in the face of ever increasing competition.
We provided the Australian Government with significant and essential legal input into numerous legislative changes, legal challenges and commercial transactions that occurred during the year. These presented our people with opportunities to assist clients across the government spectrum and to experience the professional challenge and stimulation of this important work.
We continued to be a significant provider of tailored and timely legal training for our clients. We also increased the frequency and range of our publications and communication tools, which keep our clients informed of legal developments that are likely to affect them.
We updated our ethics statement, including the core values of AGS, to highlight, along with integrity and professionalism, the concepts of collegiality and commitment to the public good. We believe that our allegiance to these concepts encapsulates the essence of AGS, both as an employer and as a legal services provider.
Our employee snapshot survey indicated high levels of satisfaction with working at AGS.
We commenced implementing a number of career and skill enhancement programs for our people in different employee groupings as well as upgrading professional development training under our National Professional Development Strategy.
We continued to streamline and improve our support services to our lawyers, providing more and better templates, and advanced information and research services.
Following solid, sustained financial performance over the last few years, AGS, with the agreement of its shareholder ministers, has undertaken to pay a special dividend and equity repayment of $15 million in addition to the annual dividend for the 2005–06 financial year. This brings AGS’s return to government for 2005–06 to $21.5 million.

The year ahead

Strategically, we set about reflecting during the year on how far we have come as a government owned law firm in a competitive environment since 1999, and planning where we want to be in the future. We have worked to articulate the uniqueness of AGS as a law firm. Arising out of this we have adopted a new vision for AGS, together with new objectives and strategies on which we will focus our action and investment in the coming year. We are embarking on an ambitious program to develop the agility, client focus and responsiveness of every aspect of our business.

Thank you

As we look to the future of AGS with excitement, I continue to marvel at the talent of AGS’s people, their commitment to their clients, and their dedication to building a strong and resilient organisation that has at its heart the desire to contribute meaningfully to its clients and their public-interest outcomes. These people have built the AGS of today and they are working hard on the AGS of tomorrow. I record my gratitude to them.

We said goodbye this year to two of our inaugural AGS Advisory Board members, Bronwyn Constance and David Smith, at the conclusion of their five years on the board. I am most grateful to them for their wisdom and counsel over that period. We welcomed two new members to the board, Jeffrey Browne and Irene Kwong Moss AO, who join continuing members John Allen (chair), David Hunter and Richard Ryan AO. My thanks to all board members for their strong interest in AGS’s development and their valuable advice.

A final thank you to our clients – the focus of, and reason for, every aspect of our business. We value the opportunity to work in partnership with you to achieve your outcomes in the national interest.

Rayne de Gruchy
Chief Executive Officer

Corporate governance and the triple bottom line

Rayne de Gruchy

Triple bottom line accounting (TBL) is the process of identifying, assessing and reporting the business activities of a corporation (or organisation or business) in terms of their impact on the environment, society, and the economy. A catchier phrase sometimes used to describe TBL is that it is about reporting outcomes in terms of ‘People, Planet and Profit’.

Our CEO, Rayne de Gruchy, recently spoke on TBL and its application to corporate governance at the Inaugural Australian Women Lawyers Conference Celebrating Excellence in Sydney.

In her presentation, Rayne de Gruchy argued that it is desirable in today’s business environment, and indeed necessary for adequate risk management, for organisations to consider their social and environmental performance in addition to their financial performance. ‘Triple bottom line or sustainability reporting makes them socially and environmentally aware, transparent and accountable to their stakeholders’, she said.

Rayne concluded that sustainability reporting should not be a short-term marketing ploy ‘but a strategy that is used to enhance long-term competitiveness and thus encourage effective risk management.’

‘Business success and long-term sustainability depends on a great deal – principally on effective corporate governance, leadership and management across all dimensions of “Profit, People and Planet”.’

‘Good corporate governance is dependent on leaders who have a demonstrated commitment to sustainability and are ‘leading by example’. Sustainability reporting should be integrated with corporate governance, not a substitute. If organisation leaders’ hearts are not in it, then the attempt will be futile. Leaders must champion the cause’, she said.

Presentation snapshot

Below is a brief ‘snapshot’ of the main elements of Rayne de Gruchy’s paper.

Sustainability as a concept is gaining momentum – it is increasingly getting into the hearts and minds of people in developed nations.

Values based organisations are on the rise – evidenced by changes in management style since the 80s; generation change.

Business is about building long term shareholder value – covering a broad range of value criteria from return to shareholders, growth of long-term value, customer satisfaction, capability of employees, strategy, leadership, business systems and a whole lot more.

People build value – they are the way in which a business produces, sells, acquires, delivers products and services.

The more people feel they have the authority and support to build business value, the stronger their commitment and the more evident are other people’s attraction to the business as customers, future employees, suppliers and investors.

If the hearts and minds of the people who make up the business including its leaders believe the business has broad responsibilities to all the people who have or could have a connection to the business

to build its strategy
govern itself, and
take opportunities and manage risks

it is more likely to undertake action and set targets and measures that will help it deliver its long term sustainability.

Good governance is a precursor to action on sustainability – sustainability reporting is not for every business – without good governance and employee and leaders’ commitment to sustainability, sustainability reporting could only be superficial.

Action on sustainability will help leaders and employees to project the value of the business to its broad constituency. Getting active on sustainability is a precursor to going public on that action.

Sustainability reporting can be a useful tool to keep the people within the business alive to what value the business has more broadly beyond delivering on its profit targets and where it can improve that value.

About the author

As CEO of the Australian Government Solicitor since 1999, Rayne de Gruchy leads an 800-strong national law firm made up of people committed to legal excellence, business success, and helping clients advance the national interest. Rayne originally practised as a solicitor and then a barrister, before moving into executive positions in the public sector, first as Executive Director of Crown Law in Queensland, then Executive Director of the Australian Financial Institutions Commission, before taking up her current role.

The full version of Rayne de Gruchy’s paper is available here.

Contact for further Information:

Bronwyn Neroni
Senior Lawyer assisting the CEO
Australian Government Solicitior
T 07 3360 5628 F 07 3360 5795
bronwyn.neroni@ags.gov.au

Freedom of information and review of conclusive certificates

Justin Davidson

The High Court yesterday ruled on the role of the Administrative Appeals Tribunal when reviewing a conclusive certificate issued to exempt internal working documents from a Freedom of Information (FOI) request. In doing so the Court provided guidance on what factors the Tribunal should take into account when determining ‘whether there exist reasonable grounds for the claim that the disclosure of the document would be contrary to the public interest.’ The case will have significant consequences for agencies considering the use of conclusive certificates to respond to future FOI requests.

McKinnon v Secretary, Department of Treasury

High Court of Australia, 6 September 2006 (Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ) [2006] HCA 45

The Freedom of Information Act 1982 (FOI Act) establishes a regime for people to access government documents. For some kinds of documents, including ‘internal working documents’, ministers and secretaries of agencies can issue certificates to conclusively exempt documents from access.

In this case the Treasurer had issued two such certificates in relation to FOI requests regarding tax bracket creep and the First Home Owners Scheme.

The Administrative Appeal Tribunal (Tribunal) can review the issuing of such certificates. Its function on such reviews is to determine ‘whether there exist reasonable grounds for the claim [led in the conclusive certificate] that the disclosure of the document would be contrary to the public interest’ (FOI Act subsection 58(5)). The High Court’s judgment examines how the Tribunal is to establish the existence of ‘reasonable grounds’.

Decision of the High Court

The High Court ruled in Treasury’s favour, dismissing the appeal by a majority of 3–2. Callinan and Heydon JJ delivered a joint judgment for the majority, with Hayne J delivering the other majority judgment. Gleeson CJ and Kirby J delivered a joint judgment in dissent.

All five judges clearly held that it was not the role of the Tribunal under subsection 58(5) to decide whether the disclosure of a document was contrary to the public interest. Instead, the focus under the subsection is on the existence of reasonable grounds supporting the decision in the certificate.

The judgments differ in their assessment of the considerations which should be taken into account in determining the existence of reasonable grounds. The majority judgments reinforce the existing view that the Tribunal does not weigh up competing facets of the public interest in determining whether there are reasonable grounds for reaching the conclusion that disclosure would be contrary to the public interest. Rather, in the majority's view, the focus is squarely on the claims advanced by the Government, and their reasonableness in light of the evidence, and in particular the documents in issue.

The dissenting judgment of Gleeson CJ and Kirby J also confirmed that the Tribunal’s role under subsection 58(5) was not to decide whether disclosure was contrary to the public interest. However, they found that deciding whether there are reasonable grounds for the non-disclosure claim involves an evaluation of all the known facts, circumstances and considerations which may bear rationally upon the issue in question. In their Honour’s dissenting view these relevant considerations will include different facets of the public interest.

Implications for clients

The High Court’s decision confirms the view that the Tribunal does not make its own assessment as to whether disclosure is contrary to the public interest when reviewing a conclusive certificate. Instead, the Tribunal must focus its attention on whether reasonable grounds exist for concluding that disclosure is contrary to the public interest. In doing so, the Tribunal must consider the relevant facts and arguments put before it. This means the Tribunal retains its important role in reviewing conclusive certificates. However, it seems that one reasonable ground in support of the claim may be enough if supported by strong evidence, including the content of the specific documents in issue.

Two justices also provided some guidance as to what grounds may – or may not – be considered reasonable in the future. Callinan and Heydon JJ indicated that the need for confidential communication about controversial matters of ongoing sensitivity, a lack of context for financial data, or the inclusion of technical jargon in a document, may not be reasonable grounds for concluding disclosure is contrary to the public interest.

Text of the decision is available at: McKinnon v Secretary, Department of Treasury [2006] HCA 45

Justin Davidson, Lawyer, AGS acted as instructing solicitor for Treasury in this case. Madeline Campbell was junior counsel for Treasury and has recently retired from AGS.

For further information please contact:

Justin Davidson
Lawyer
T 02 6253 7240 F 02 6253 7380
justin.davidson@ags.gov.au

Important: The material in this note is provided as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.

AGS advocates

AGS counsel have assisted clients in a wide variety of court locations — from Federal Court
on-country native title hearings to the formality of the High Court.

Benefits to agencies

Many agencies choose to brief AGS counsel in preference to briefing counsel from the private bar. This occurs either where AGS is the solicitor on the record, or (very frequently) where a private firm on an agency’s legal panel is the solicitor on the record.

Our counsel are recognised by our clients for their expertise and experience in the relevant areas of law, for their intimate knowledge of the client’s business and for their close working relationship with their clients over a long period of time. The number of AGS lawyers who appear as counsel is a reflection of the success and cost benefits that we have demonstrated to agencies in this area of practice.

Our team is led by Chief General Counsel, Henry Burmester AO QC and Chief Counsel Litigation, Tom Howe.

Henry Burmester is AGS’s Chief General Counsel and was appointed Queen’s Counsel in June 1998 and was made an Officer of the Order of Australia (AO) in 2004. He is responsible for providing legal advice on constitutional and international law, and statutory interpretation issues. On a number of occasions he has acted as Solicitor-General when requested by the government. Prior to his current appointment, Henry was Principal International Law Counsel and Head of the Office of International Law at the Attorney-General’s Department. He held this position for five years from 1989. Before that he served as the head of a branch in the Office of General Counsel.

Henry has appeared as counsel for the Australian Government in the International Court, the High Court of Australia and other Australian courts, including the Federal Court and the Family Court. Some of the interesting cases Henry has worked on include detention of the Russian ship, the Volga, under the Law of the Sea Convention, Teoh (relevance of treaties in domestic law), Hughes (validity of Corporations Law scheme), and more recently he has appeared in cases raising the validity of migration detention and the Work Choices case. He has written extensively on constitutional and international law issues. Henry has been involved in a number of major constitutional cases. He has also been a member of many Australian delegations to international conventions and conferences, and on negotiating teams for international treaties.

Tom Howe and Henry Burmester

Tom Howe is Chief Counsel Litigation and has 19 years’ experience providing general legal advice and assistance on all issues relating to administrative law matters, including appearances before the Administrative Appeals Tribunal, disciplinary tribunals, Magistrates and Supreme Courts of the states and territories, Federal Court and High Court.

In recent years, Tom has specialised in advocacy services. He has been involved as counsel in many precedent-setting cases in the public law field. For example:

Anderson v Sullivan & Ors 148 ALR 633 in which the validity of a direction to an Australian Federal Police officer to provide a urine sample for drug-testing was upheld

McManus v Scott-Charlton 140 ALR 625 in which the Federal Court considered the extent to which a public servant can be given directions pertaining to off-duty conduct

O'Connell v Palmer 53 FCR 429 in which the full Federal Court considered the meaning of improper conduct in a public sector employment context

X v The Commonwealth HCA 63 in which the High Court considered the lawfulness of discrimination based on inherent requirements of employment.

Most recently Tom has appeared in high profile cases such as terrorism prosecutions, the recent ‘Bali 9’ proceedings in the Federal Court and the Cole inquiry.

For further information on AGS advocacy services please contact:

Leonie Farrant
National Practice Manager,
Litigation and Dispute Management
T 02 6253 7009
F 02 6253 7303
leonie.farrant@ags.gov.au

Liability of employer for unlawful discrimination in workplace

Paul Vermeesch

The Federal Court has held that an employer can be liable for unlawful sexual harassment engaged in by an individual employee where the applicant establishes that:

the employee did sexually harass the applicant contrary to the provisions of the Sex Discrimination Act 1984 (SDA), and
the employer is deemed to be liable for the unlawful conduct of the employee in accordance with section 106 of the SDA.

Ingram-Nader v Brinks Australia Pty Ltd

[2006] FCA 624 (26 May 2006) (Cowdroy J)

The Court held that the employer can be the only respondent to the court proceedings. The employee alleged to have engaged in unlawful conduct need not be a respondent (jointly with the employer) to the court proceedings.

The case reinforces the need for employers to have in place adequate programs for the prevention of sexual discrimination and harassment within the workplace, including mechanisms for the reporting and investigation of alleged incidents of sexual harassment.

Legislation

Sexual harassment, as defined by the SDA, is unlawful. Certain discrimination is also unlawful under the SDA. Complaints of sexual harassment or discrimination can be made to the Human Rights and Equal Opportunity Commission (HREOC) in accordance with the provisions of the Human Rights and Equal Opportunity Commission Act 1986 (the HREOC Act).

Generally the President of HREOC is required to enquire into complaints and attempt to conciliate them (see section 46PF). The President can terminate complaints on various grounds, including where the President is satisfied that there is no reasonable prospect of the matter being settled by conciliation (see section 46PH of the HREOC Act.)

There is no time limit for the making of complaints to HREOC. However, the President may terminate a complaint on the ground that the complaint was lodged more than 12 months after the alleged unlawful discrimination took place.

Where a complaint has been terminated, the complainant can then commence proceedings in the Federal Magistrates Court or Federal Court within 28 days of the issue of the notice of termination. Court proceedings for unlawful conduct in breach of the SDA are generally confined to matters the subject of the complaint to HREOC. The proceedings can allege unlawful discrimination by one or more of the respondents to the terminated complaint (see section 46 PO of the SDA). A ‘respondent’, in relation to a complaint, is defined by section 3 of the SDA to mean the person or persons against whom the complaint is made.

Section 106 of the SDA provides that in certain circumstances the employer may be liable for conduct of its employees which amounts to unlawful discrimination. Section 106 provides:

(1) Subject to subsection (2), where an employee or agent of a person does, in connection with the employment of the employee or with the duties of the agent as an agent:

(a) an act that would, if it were done by the person, be unlawful under Division 1 or 2 of Part II (whether or not the act done by the employee or agent is unlawful under Division 1 or 2 of Part II); or

(b) an act that is unlawful under Division 3 of Part II;
this Act applies in relation to that person as if that person had also done the act.

(2) Subsection (1) does not apply in relation to an act of a kind referred to in paragraph (1)(a) or (b) done by an employee or agent of a person if it is established that the person took all reasonable steps to prevent the employee or agent from doing acts of the kind referred to in that paragraph.

Complaint

In the present case the complaint was made to HREOC in December 2004. It related to alleged sexual harassment in the period from December 1998 to August 2004. The complaint was against the employer and against several former work colleagues of the complainant.

The employer was not aware of any complaints of sexual harassment before being advised of the complaint to HREOC. The alleged individual harassers were no longer employees.

The complaint was terminated by the President of HREOC. The applicant did not institute proceedings in the Federal Magistrates Court within the prescribed period of 28 days. The applicant commenced proceedings out of time and sought an application for extension of time to commence the proceedings.

Decision of Federal Magistrate

Federal Magistrate Driver refused the applicant’s application for an extension of time within which to commence the proceedings in the Federal Magistrates Court. He did so on various grounds. He held as follows on what he referred to as the issue of ‘vicarious liability’.

The complaint to HREOC was against the employer only even though it was a complaint of sexual harassment by reason of the applicant’s sexual preference. No complaint having been made against the alleged harassers, no proceeding can now be brought in this court against those persons. The jurisdiction of the court is limited to considering the claim against the harasser’s employer and would be based on asserted vicarious liability.

Decision of Federal Court

The Federal Court allowed the appeal from the decision of Driver FM. One ground on which the appeal was allowed was an error by Driver FM on the issue of ‘vicarious liability’. On this issue the Federal Court held as follows.

The liability of an employer for the conduct of unlawful conduct of an employee depends on section 106 of the SDA, not on common law principles of vicarious liability.
The effect of section 106 is to deem the employer liable for the unlawful conduct committed by individual employees without the need to prove the elements of vicarious liability against the employer.
The effect of section 106 is to render the employer severally liable for the unlawful conduct of its employee. The Court therefore rejected an argument that section 106 makes an employer jointly, but not severally liable, such that Order 6, Rule 5 of the Federal Court Rules would apply. That Rule provides that a party, which is jointly but not severally liable for relief, may apply for a stay of proceedings until all other persons jointly liable are joined to the proceedings.
The result under the SDA was consistent with common law principles for vicarious liability of employers for tortious conduct of employees. At common law a vicariously liable employer is a joint tortfeasor with the individual employee. At common law joint tortfeasors are jointly and severally liable for any loss occasioned by their tortious conduct.

Comments

Conduct involving alleged unlawful sexual harassment can often involve only two individual employees, the alleged perpetrator and victim. In such cases, the facts relevant to the allegations are peculiarly within the knowledge of the two individual employees.

Where a complainant to HREOC alleges unlawful sexual harassment or discrimination by an individual fellow employee, that employee should be a respondent to the complaint (see the definition of respondent in section 3). Such an individual employee should be identified by HREOC as a respondent to the complaint.

In any cases where the employer is a respondent to a HREOC complaint, the employer can seek an amendment to the complaint to add as a respondent an individual employee who has allegedly engaged in unlawful conduct. Section 46PF(3) of the HREOC Act enables any complainant or respondent, with the leave of the President, to amend a complaint to add, as a respondent, a person who is alleged to have done the alleged unlawful conduct.

Even where an individual employee allegedly responsible for unlawful conduct is a respondent to a complaint before HREOC, this does not necessarily mean that the individual employee must be a respondent in any court proceedings.

Where an individual employee who has allegedly engaged in unlawful conduct is not named by an applicant as a respondent to court proceedings, the respondent employer could seek orders to have the employee joined to the proceedings as a respondent. In cases where an individual employee is not made a respondent (for example, because the employee is deceased or cannot be located), it might be difficult for the respondent employer to adequately defend the proceedings against it.

It is in the interests of employers to seek to ensure that complaints of unlawful harassment and discrimination are made and resolved in a timely fashion. This will assist employers in resisting deemed liability for the conduct of its employees.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/federal_ct/2006/624.html

For further information please contact:

Paul Vermeesch
Special Counsel Litigation
T 02 6253 7428 F 02 6253 7381
paul.vermeesch@ags.gov.au

Important: The material in this note is provided as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this note.

Legal Technology Solutions

Julian Lambert

‘We now deploy legal technology services that go beyond traditional discovery-based 'litigation support'. These include using tools to assist the production of electronic evidence presentation, electronic transcript management and electronic management of the due diligence ‘Q & A’ process,’ says Julian Lambert, AGS’s Legal Technology Solutions manager.

AGS’s Legal Technology Solutions (LTS) team is an integral part of our national practice. They can tailor the most relevant technology to suit each matter, enabling our clients and lawyers to manage the critical tasks of accessing, organising and disseminating information quickly, easily and securely.

What is LTS?

Julian Lambert describes legal technology as a specialised area of IT that focuses on the management of matter-related information such as evidentiary material, transcript and due diligence documents.

What are the benefits of using LTS?

The benefits to AGS clients of using LTS services include:

identifiable cost and time savings
a means of efficiently managing matter-related information
a means of working collaboratively with AGS lawyers and Counsel
providing our litigation clients with strategic technical support.

What litigation support services does LTS provide?

‘Our team has extensive experience in providing legal technology solutions for litigation projects. We regularly work in partnership with AGS lawyers, clients, counsel, the courts and AGS’s Information and Technology Services team in support of our clients’ objectives,’ says Julian.

Example – significant trade practices matter

The LTS team was instructed to assist a team of AGS lawyers and clients with the management of a large volume of documentation in a significant trade practices matter. Given the significance of the matter and the volume of material involved, it was critical that the technology supported the client’s objectives, which included:

the efficient discovery of their documents
management of the respondent’s discovered documents
issue coding and privilege masking of discovered documents
a means of recording witnesses’ analysis information.

In support, LTS implemented a litigation support database, prepared the documents for the database, trained AGS lawyers, clients and counsel to use the system and provided support during the matter lifecycle. At the conclusion of the matter AGS Senior Executive Lawyers, Susan Pryde and Rami Greiss noted:

Without the work put in by the LTS team we would have had real difficulties in managing the extensive documentation generated by this case and meeting court deadlines. We gained a significant advantage by being well prepared and in control of our documentation. Clients who worked on the matter were also very positive about their experience with the database and the LTS team.

What commercial law support services does LTS provide?

The use of legal technology services in the commercial context is an important emerging area now available to AGS lawyers and clients, and many of the information management principles applied in the litigation context have been successfully applied in the commercial context.

Example – significant asset sale

The LTS team was instructed to provide an electronic due diligence question and answer solution for use by AGS lawyers and clients working on the sale of the last three Sydney Basin Airports. In order to meet requirements of the client, due diligence panel and bidders, LTS provided the panel with a reliable and efficient means of managing the flow of questions and answers during the ‘Q&A’ phase of the sale process. AGS Senior Executive Lawyer, Paul Lang commented:

I engaged LTS to develop an electronic process for the receipt and dispatch of question and answers to bidders during the Q&A phase of the Sydney Basin Airports Sale. Although such a Q&A process had not been previously trialled, LTS produced a robust and auditable database process that exceeded all expectations. LTS personnel fully supported the process throughout its operation including the provision of assistance to sale team members and bidders. It was an outstanding success.

The innovative solution, known as the 'Q&A Manager', was commended by the legal team, client and at the Commonwealth Executive Forum Innovation Awards. This tool remains as a valuable resource for AGS lawyers and clients in future due diligence projects.

For further information contact:

Julian Lambert
National Manager, Legal Technology Solutions
T 03 9242 1396 F 03 9242 1317
julian.lambert@ags.gov.au

The Legal Services Directions 2005

Simon Daley

The Attorney-General has issued new Legal Services Directions (LSDs), known as the Legal Services Directions 2005 to replace the Legal Services Directions issued in 1999. The new LSDs commence on 1 March 2006.

In the Explanatory Statement accompanying the Directions, the Office of Legal Services Coordination (OLSC) advises:

For clarity and ease of use, the Attorney-General has decided not to amend the existing Directions, but to issue a new instrument which comprises certain changes to the Directions in their previous form.

Major changes at a glance

Foremost among the new changes are:

the threshold for a ‘major claim’ rises from $10,000 to $25,000
extension of the coverage of Appendix C (‘Handling monetary claims’) to claims by the Commonwealth, as well as claims against the Commonwealth
agency heads must make available records of their agency's legal services expenditure
agency heads must after the end of each financial year disclose to OLSC any possible breach of the LSDs not previously reported
barristers who have been or are presently bankrupt and who have been the subject of an adverse disciplinary finding on that account, are only to be briefed with the approval of the Attorney-General
agencies conferring subrogation rights on contractors must use their best endeavours to ensure that the contractor agrees to comply with the model litigant policy, and consult with the agency if matters arise relevant to the tied work or ‘sharing of advice’ obligations under the LSDs
the type of limitation period that is to be invoked, in the absence of approval otherwise, now excludes those applying to judicial or merits review
the Attorney-General may impose sanctions for non-compliance with the LSDs.

What is the overall effect of the new LSDs?

Of particular note, there is a strengthening of:

agency accountability for LSD compliance
the 'whole of government' focus in the provision of legal services to agencies.

What is the application of the new LSDs?

As with the former LSDs, the new LSDs apply to all agencies that are FMA agencies (that is, prescribed agencies for the purposes of the Financial Management and Accountability Act 1997). They have the same limited application as the former LSDs to bodies covered by the Commonwealth Authorities and Companies Act 1997 that are not government business enterprises (GBEs) or companies under the Corporations Act controlled by the Commonwealth (see cl 12).

What are the new requirements on reporting and LSD compliance by agencies?

Agency heads under cl 11 will now be required by 30 October each year to make publicly available records of their agency's legal services expenditure for the previous financial year. Further, the agency head is responsible for giving to OLSC, within 60 days after the end of each financial year:

details of any possible breach of the LSDs not reported to OLSC
details of actions taken to address breaches occurring during the financial year
any other information relevant to the agency's LSD compliance.

Do the new LSDs affect the model litigant policy?

The model litigant policy detailed in Appendix B has been given further definition in new cl 2(d) to make clear that the requirement to limit legal proceedings wherever possible includes giving consideration to alternative dispute resolution before initiating legal proceedings, and participating in alternative dispute resolution processes where appropriate.

Have there been changes to the requirements for consulting administering agencies on requests for advice?

Clause 10, addressing advices sought on legislation administered by other agencies, has been amended to clarify and expand upon the obligation to consult on a request for advice, requiring, among other things:

the provision of a copy of the request for advice to the administering agency
such reasonable consultation with that agency as it may require before the advice is finalised.

The exemption for advices on a routine matter that merely applies a settled interpretation has been tightened slightly. As a result, even routine advices will need to be provided to an administering agency (or at least the agency consulted) where:

the advice relates to legislative provisions not previously considered by the courts, is contrary to existing policy, or could raise new policy issues in respect of the legislation
the matter could create a precedent, or
the requesting agency has identified a potential weakness in the legislation.

Has there been any change to requirements on the conduct of litigation using in-house lawyers?

There has been no change to cll 5.1 and 5.2, which stipulate that an agency may only conduct litigation using in-house lawyers with the Attorney-General’s permission.

Where can the new LSDs be found?

The new LSDs are accessible through OLSC's website. In addition, the website carries an Information Briefing and Explanatory Statement outlining the changes. The contact officers in OLSC for queries about the new LSDs are Susan Cochrane, Principal Legal Officer (02) 6250 6599 and Karl Alderson, Assistant Secretary, (02) 6250 6611, email olsc@ag.gov.au.

AGS, as the leading legal services provider to Commonwealth agencies, stands in a unique position to help agencies to understand and comply with the new LSDs as they may apply to the conduct of matters.

Simon Daley
Special Counsel Litigation
T 02 9581 7490 F 02 9581 7732
simon.daley@ags.gov.au

Important: The material in this note is provided as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this note.

Procedural fairness, secret information, disavowals of reliance by decision-makers and public interest immunity

Paul Barker

One of the most significant and unresolved issues in administrative law is whether, and to what extent, a decision-maker must afford procedural fairness in respect of information which is potentially adverse, but is given no weight by the decision-maker in reaching the decision.

The High Court has recently revisited this issue in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 (6 December 2005).

The facts

Applicant VEAL of 2002 (the appellant) and his partner were refused protection visas by the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA). They each sought review of the refusal by the Refugee Review Tribunal (RRT).

After the RRT’s review had commenced, but before it had made a decision, the RRT received (via DIMIA) an unsolicited letter containing allegations against the appellant. The letter contained the author’s name and address but asked that the information in the letter be kept ‘secret’. The letter contained allegations against the appellant that bore upon whether he had a well-founded fear of persecution for a Convention reason.

During the review, the RRT did not inform the appellant that it had the letter, it did not inform the appellant of the allegations made in the letter, nor did it ask the appellant about the substance of those allegations.

The RRT affirmed DIMIA’s decision to refuse the protection visas. At the end of the RRT’s reasons for decision, the RRT stated that it gave ‘no weight’ to the letter because it could not test the claims made in the letter. The RRT further stated that it decided the matter solely for reasons which did not take into account the information contained in the letter.

The decision

The High Court (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) delivered a joint judgment in this matter, holding that, before reaching its decision, the RRT should have informed the appellant of the substance of the allegations made in the letter and asked him to respond to those allegations.

The obligation to afford procedural fairness

Procedural fairness is directed to the obligation to give a fair hearing

The High Court confirmed that principles of procedural fairness focus on the processes by which a decision will be reached and not the decision that is reached. Principles of procedural fairness govern what a decision-maker must do in the course of deciding how their power is to be exercised.

Before reaching a decision, a decision-maker must determine whether information received is credible, relevant and significant. That determination will affect whether procedural fairness must be afforded.

The High Court adopted and clarified Brennan J’s statement in Kioa v West (1985) 159 CLR 550 that, in an ordinary case, an opportunity should be given to deal with adverse information that is ‘credible, relevant and significant’ to the decision to be made.

The High Court held that a decision-maker must determine whether information received is ‘credible, relevant and significant’ to the decision before that decision is made. That determination will affect whether a decision-maker must give a person an opportunity to deal with the information. ‘Credible, relevant and significant’ is to be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision.

Whether information is credible, relevant or significant is not to be determined by reference to the characterisation given by the decision-maker to the information in the reasons for decision. In the present case, the RRT’s statement in its reasons for decision that it gave no weight to the letter did not demonstrate that there was no obligation to provide an opportunity to respond to those allegations. Nor was the RRT relieved from affording procedural fairness because it could reach its decision on other bases.

The High Court held that the information contained in the letter could not be dismissed from further consideration by the decision-maker and procedural fairness required that the RRT draw the appellant’s attention to the information.

How should the RRT have drawn the information to the attention of the appellant?

The High Court held that procedural fairness required that the substance of the allegations made in the letter be provided to the appellant and that the appellant be asked to respond to those allegations.

This case posed the difficult problem in that the letter had been supplied confidentially by a person wishing to remain anonymous but the information in the letter bore on whether the appellant was entitled to a protection visa.

The High Court noted that the fact that the author of the letter asked DIMIA to keep it secret did not mean that equitable principles about confidential information were to be engaged in deciding what course the RRT took. Rather, the nature and extent of the RRT’s obligation to disclose the information were regulated by the Migration Act 1958 (the Act) and the obligation to afford the appellant procedural fairness.

The High Court held that, in this case, the content of the obligation to afford procedural fairness was to be identified by reference not only to the particular provisions of the Act but also by reference to the scope and objects of the Act as a whole. In that latter regard, it was important to keep two propositions at the forefront of consideration. First, the Act required that those persons entitled to a visa be granted the visa, and those not entitled to a visa not be granted a visa. Secondly, the RRT was exercising executive power (as opposed to judicial power).

As the RRT was exercising executive power, the steps the RRT was bound to take to afford procedural fairness were not necessarily the same as the steps a court should have taken when deciding a matter by adversarial procedures. Notwithstanding this, the High Court recognised that public interest immunity considerations which informed the procedures of courts may also inform the content of the RRT’s obligation to afford procedural fairness. However, care must be taken when transposing what is said about public interest immunity and its application to those who inform police about criminal activity, to the wholly different context of inquisitorial decision-making by the Executive.

In identifying what procedural fairness required in the present case, it was necessary to recognise the important public interest in ensuring that information from informers is not denied to the Executive Government when making its decisions. However, the existence of that public interest did not mean there was an absolute rule against a decision-maker disclosing information supplied by an informer or disclosing the identity of an informer. The application of principles of procedural fairness in a particular case must always be moulded to the particular circumstances of that case.

In the present case, the RRT was required to review a decision of the Executive made under the Act and to decide whether the appellant was entitled to the visa he claimed. The information contained in the letter was relevant to that inquiry and could not be ignored. However, giving the letter to the appellant or telling him who wrote it would give no significance to the proper administration of the Act, which required that those entitled to a visa be granted a visa and those not entitled be refused. It was in aid of that important public interest that, so far as possible, there should be no impediment to the giving of information to authorities about claims made for visas. In this case, that public interest could be accommodated with the need to afford the appellant procedural fairness, by telling the appellant the substance of the allegations in the letter. As the appellant would not know the identity of the person making the allegations, any response to the allegations would need to be considered in light of the fact that the credibility of the author could not be attacked.

Implications for clients

Administrative decision-makers will not be able to relieve themselves of the obligation to afford procedural fairness by disavowing reliance on certain information in the reasons for decision, or by making their decision on other bases unrelated to the information.

If a decision-maker receives adverse information, they must determine, before the decision is made, whether the information is credible, relevant and significant to the decision to be made. If so, procedural fairness will likely require that some form of that information (even if it is secret) be provided to a person affected by the decision for comment. The extent to which the information must be given to the person for comment will depend on a number of considerations, including the nature of the information concerned, the circumstances in which the information was received, the relevant Act under which the decision is to be made and the public interest in the proper administration of that Act.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2005/72.html

AGS acted as solicitor for the Minister for Immigration and Multicultural and Indigenous Affairs.

For further information please contact:

Paul Barker
Senior Lawyer
T 03 9242 1257 F 03 9242 1317
paul.barker@ags.gov.au

Important: The material in this note is provided as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this note.

Kathryn Graham

The workplace relations advertising case

In Combet v Commonwealth the plaintiffs did not establish a basis for declarations or injunctions preventing expenditure on an advertising campaign from the departmental appropriation to the Department of Employment and Workplace Relations (DEWR). The advertising campaign was to promote the Government's workplace relations reforms.

A majority of the High Court found that expenditure for 'departmental items' under annual appropriation Acts is not required to be for any of the stated 'outcomes' for the agency concerned. Instead, all that is required is that the amount paid should be for the 'departmental expenditure' of the agency.

Combet and Anor v Commonwealth and Ors

High Court of Australia, 29 September 2005 (order), 21 October 2005 (reasons), [2005] HCA 61

The Australian Government began a print and radio advertising campaign in support of proposed workplace relations reforms in mid-July 2005. The plaintiffs (the Secretary of the ACTU and the Shadow Attorney-General) instituted proceedings seeking to establish that the departmental appropriation to DEWR would not support the expenditure on the advertising campaign, and seeking to prevent the issuing of money from the Treasury of the Commonwealth to pay for the campaign.

Argument before the Court focussed on whether the proposed expenditure fell within Outcome 2 of the appropriation to DEWR, namely 'higher productivity, higher pay workplaces'.

Decision

Four members of the High Court (Gummow, Hayne, Callinan and Heydon JJ) in a joint judgment, concluded that for departmental items (as opposed to administered items), it is not necessary to demonstrate that the expenditure fell within the terms of a particular outcome (such as outcome 2).

Rather, their analysis of the text of Appropriations Act (No.1) 2005–2006 revealed that appropriations for departmental items are unrestricted by the terms of particular outcomes. That expenditure is limited only by the requirement that the amount to be spent is spent for 'departmental expenditure'. It followed that all the Commonwealth needed to demonstrate was that the advertising expenditure was within the terms of 'departmental expenditure'.

The joint judgment did not give detailed consideration to what might be encompassed by 'departmental expenditure'. In the present case it merely noted that the plaintiffs had not contended that the advertising expenditure was not 'departmental expenditure’, and it followed that the plaintiffs could not obtain the relief they sought.

In the course of their reasons, the judges joining in the joint judgment expressed the view that appropriations can be made in extremely general terms, and that it is for Parliament to determine how specific they are. They also discussed the effect of the so-called 'Compact of 1965' which is an agreement between the Senate and the Government about what comprises the 'ordinary annual services of the Government' in sections 53 and 54 of the Constitution, and concluded that it is of little relevance as a tool of construction in relation to appropriations legislation.

Implications

The most important implication of the decision is that while administered expenditure under annual appropriation Acts is confined by reference to the outcomes contained in those Acts, departmental items are confined only by reference to the concept of 'departmental expenditure'.

Questions that agencies may have on the possible implications of the decision for the appropriations framework may be directed to Marc Mowbray d'Arbela at the Department of Finance and Administration, T 02 6215 3657, marc.mowbray-d'arbela@finance.gov.au.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/high_ct/2005/61.html

AGS represented the defendants (the Commonwealth, the Minister for Employment and Workplace Relations, and the Minister for Finance and Administration). Kathryn Graham (Senior General Counsel, Office of General Counsel) was junior counsel for the defendants.

For further information please contact:

Kathryn Graham
Senior General Counsel
T 02 6253 7167 F 02 6253 7304
kathryn.graham@ags.gov.au

Important: The material in this note is provided as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this note.

Richard Harding

Jim Heard

Jessica Cleaver

Employment by authority of a law of the Commonwealth

The Full Federal Court has held that a person who was engaged by the Department of Defence as an independent contractor, and who had been found by the Australian Industrial Relations Commission (the Commission) to be an employee of the Commonwealth, was not entitled to bring an action for unfair dismissal in the Commission.

The Court found that the issuing of a radiographer’s contract under an administrative instruction made under the Defence Act 1903 (Cth) (Defence Act) could not constitute ‘employment … by authority of a law of the Commonwealth’, in accordance with section 170CD(1) of the Workplace Relations Act 1996 (WR Act), where the administrative instruction only allowed contracting for services rendered.

Re Australian Industrial Relations Commission and Arends; ex parte Commonwealth of Australia

Federal Court of Australia – Full Court, 16 September 2005, [2005] FCAFC 204

Mr Arends worked as a radiographer for the Department of Defence (the Department) for approximately 8 years, from 6 July 1994 to 24 April 2002. During that period, he signed six contracts, five for a term of one year and one for 14 months. In each contract, Mr Arends was described as an ‘independent contractor’. The Department entered into the contracts with Mr Arends under the ‘Defence Instructions (General) Administration 24.1’ (DI(G) ADMIN 24.1), made under section 9A(2) of the Defence Act.

Shortly before the end date of the last contract, the position held by Mr Arends was advertised. Mr Arends applied for the position but was unsuccessful. On 26 April 2002, he filed an application with the Australian Industrial Relations Commission, under section 170CE of the WR Act, seeking relief on the basis that the termination of his employment was harsh, unjust or unreasonable and/or that the Commonwealth was in breach of section 170 CK of the WR Act.

Senior Deputy President Drake determined that Mr Arends was an employee of the Commonwealth, despite being described as an independent contractor, on the basis that the type of work, hours of work, method of work, method of payment of salary, payment of superannuation contributions and other financial arrangements indicated an employment relationship. She did not decide whether Mr Arends had been a ‘Commonwealth public sector employee’ within the meaning of section 170CD(1) of the WR Act, but held regardless that the Commission had jurisdiction in the matter and granted relief to Mr Arends accordingly.

The Commonwealth sought leave to appeal against the decision to a Full Bench of the Commission, contending that, in order for the Commission to have jurisdiction, the contractual relationship between Mr Arends and the Department would need to fall within one of the three areas of engagement by the Commonwealth set out in the definition of ‘Commonwealth public sector employee’ in section 170CD(1) of the WR Act and that Mr Arends did not fall into any of the three categories. The Full Bench of the Commission granted leave to appeal but dismissed the appeal on the basis that Mr Arends fell within paragraph (c) of the definition by virtue of being a ‘person in employment ... by authority of a law of the Commonwealth’, namely DI(G) ADMIN 24.1.

Decision of the Full Federal Court

The Commonwealth sought orders in the High Court against the Commission’s jurisdiction and on 24 November 2004 the High Court made an order remitting the matter to the Full Federal Court. The Full Federal Court quashed the decision of the Full Bench of the Commission. It found that Mr Arends did not meet the test of employment by authority of a law of the Commonwealth in the definition of ‘Commonwealth public sector employee’ in the WR Act:

He was not employed as an employee under the Public Service Act 1999 or any other Act or instrument under an Act.
DI(G) ADMIN 24.1 authorised the making of a contract for services, not a contract for employment. The authority conferred by the law (to engage a contractor) determines the relevant character of the relationship established under the law. It is insufficient that the relationship of contractor established under the law may in practice develop features of an employment relationship.

Mr Arends relied on DI(G) ADMIN 24.1, but this instrument specifically provided that ‘the contractual arrangements … in this instruction only apply to situations where the contract is to be a contract for services rendered. It would not be appropriate to use these arrangements where the practitioner will be … deemed to be the Department’s common law employee’. Thus, DI(G) ADMIN 24.1 did not disclose any intent to apply the authority of the Commonwealth to make a person with whom a contract was entered into, under that instrument, an employee of the Commonwealth.

The Court held that ‘[t]he fact that subsequent “operational” factors such as method of work and performance would have the hypothetical effect at common law that Mr Arends was an employee does not mean that he was in employment by authority of a law of the Commonwealth, particularly in circumstances where the instrument under which the contract was made was specific in stating that the contract did not effect employment’. Consequently, Mr Arends was not a ‘Commonwealth public sector employee’ under section 170CD(1) of the WR Act and thus the Commission had no jurisdiction to grant relief under subdivision B of Division 3 of Part VIA of the WR Act, which contains the provisions relating to unfair dismissal.

Implications of the decision

Generally an employee in the APS will be covered by the unfair dismissal provisions of the WR Act only where the employee is employed as an APS employee under the Public Service Act 1999. Contractors generally will not be covered, even if they are common law employees. Similar observations apply to Commonwealth public sector employees who are engaged under other legislation governing their employment.

It is desirable that any statutory instruments relating to engagement of contractors in the Commonwealth public sector should specifically indicate that an employment relationship is not established or intended.

It is important to note that this decision relates only to the application of the unfair dismissal provisions of the WR Act. In other contexts when construing the relationship between the parties, the law will look beyond the legal authority for the relationship and will assess all the circumstances to determine whether an employment relationship exists.

The decision also provides another endorsement for the much quoted judgment of Brennan J in Director-General of Education v Suttling (1987) 162 CLR 427 at 437–8:

The relationship between a civil servant of the Crown and the Crown has often been described as contractual, though the civil servant has been appointed pursuant to statute … If the relationship is contractual, the contract must be consistent with any statutory provision which affects the relationship. No agent of the Crown has authority to engage a servant on terms at variance with the statute. To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service.

The text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/FCAFC/2005/204.html

AGS acted as solicitor for the Department of Defence.

For further information please contact:

Richard Harding Senior General Counsel T 02 6253 7026 F 02 6253 7304 richard.harding@ags.gov.au	Jessica Cleaver Lawyer T 02 6253 7455 F 02 6253 7381 jessica.cleaver@ags.gov.au
Jim Heard Senior Executive Lawyer T 02 9581 7477 F 02 9581 7650 jim.heard@ags.gov.au	Paul Vermeesch Senior Executive Lawyer T 02 6253 7428 F 02 6253 7381 paul.vermeesch@ags.gov.au

Important: The material in this note is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.

Geetha Nair

Limitations of legal professional privilege

The ACT Court of Appeal has held that the possession of a practising certificate by government lawyers is not a prerequisite for client legal privilege (CLP) under the Evidence Act 1995.

Commonwealth and Air Marshal McCormack in his capacity as Chief of the Air Force v Vance

Australian Capital Territory Court of Appeal, 23 August 2005 (Gray, Connelly and Tamberlin JJ) [2005] ACTCA 35

The Court of Appeal allowed the Commonwealth’s appeal from the decision of Crispin J at first instance, which was the subject of an earlier Express law.

Background

The plaintiff had been a serving officer of the RAAF. He instituted a claim for damages and other relief against the Chief of the Air Force and the Commonwealth for what he alleges was unlawful termination of his employment in the RAAF in August 1998.

LPP claim

On discovery, the defendants opposed production for inspection of a number of documents on the ground of legal professional privilege (LPP).

The LPP claim involved communications with lawyers who were part of the then Defence Legal Office, essentially the in-house lawyers of the Department of Defence or military lawyers (DLOs).

The civilian and military DLOs apparently did not have practising certificates, and had no statutory right to practise.

Decision on appeal

The Court held that Order 34 Rule 3 of the ACT Supreme Court Rules (dealing with the discovery of documents) displaced the common law on LPP in favour of provisions of the Evidence Act dealing with CLP.

The Court agreed with Crispin J that practising certificates were important in demonstrating that advice was independent and given professionally. However, a practising certificate was not conclusive in this regard. A person could still be seen as ‘independent’ or ‘as necessarily acting in a legal professional capacity’ for the purposes of giving ‘legal advice’ without holding a practising certificate.

The Court said:

It seems to us that the possession of a current practising certificate can be a very relevant fact to take into account in determining whether or not an employed lawyer, whether or not in government service, is employed in circumstances where they are acting in accordance with appropriate professional standards and providing the independent professional legal advice such that would attract a claim for client legal privilege under the Evidence Act. To make the holding of a practising certificate a pre-condition for such a claim, however, seems to us to go beyond the requirements of the Evidence Act, and to amount to appellable error. [30]

Even though the Court did not conclusively determine whether the outcome would have been the same had the common law applied, the decision may be persuasive in favour of a ruling that a practising certificate is not a prerequisite to LPP at common law.

Parliamentary Privileges Act issue

At first instance a transcript of evidence given to a committee of the Senate by a former legal officer in the RAAF was admitted, and oral evidence and submissions were put to the Court in relation to this evidence. This evidence was relied upon by Crispin J in making an adverse finding on independence. The Court of Appeal held that the admission of the transcript of the evidence to the Senate committee was contrary to section 16 of the Parliamentary Privileges Act. The Court held further that no waiver of the privilege could be imputed by the defendants’ failure to object to the admission of the transcript on the ground of parliamentary privilege. As this privilege belonged to the Parliament, it was incapable of being waived by a party to a court proceeding.

Outcome

The Court of Appeal remitted the claims of CLP to the trial judge for further consideration in accordance with its reasons. For further information on LPP and CLP, see AGS Legal Briefing No. 65,‘Legal Professional Privilege and the Government’, 2 October 2002.

Text of the decision is available at:
http://www.courts.act.gov.au/supreme/judgmentsca/vance1.htm

AGS acted as solicitor for the appellants.

For further information please contact:

Ms Geetha Nair
Senior Executive Lawyer
T 02 6253 7422 F 02 6253 7383
geetha.nair@ags.gov.au

Important: The material in this note is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this note.

Jake Blight

Tara McNeilly

Justin Hyland

AGS legal training courses – sharing our expertise with government

AGS has developed three new training courses for in-house lawyers and policy makers: Statutory Interpretation, Machinery of Government and Understanding Legislation.

‘We have received extremely positive feedback from people who have already attended these courses’, says Jake Blight, one of AGS’s presenters. ‘Our aim is to inject life and pace into what could otherwise be pretty dull fare!’

Other courses

AGS also offers diverse courses in administrative law, freedom of information, privacy and other relevant topics. These sessions are designed to help impart the legal knowledge and skills government employees need to do their jobs efficiently.

Feedback

‘Working with people from a wide range of government agencies in these courses is very rewarding’, says Tara McNeilly, one of many AGS lawyers who give their time to training activities for government. ‘It’s great to help demystify the law and its processes for people new to government, and to be able to spend time during the seminars discussing the issues raised by the participants, drawing on their experiences in the workplace.’

All presenters are AGS lawyers who have a great depth of knowledge of the government environment, and who practise extensively in the area of law covered by a particular session.

Style and content

‘Our presentations are interactive, and we encourage everyone to ask questions throughout. We use real-life examples and case studies to explain and illustrate issues’, says Justin Hyland, another experienced AGS presenter. Like Jake and Tara, Justin is an accredited trainer.

Course manuals include up-to-date and comprehensive overviews of the relevant topic and applicable law. Participants also receive relevant source materials, exercises, model answers and pertinent extracts from legislation. Certificates of attendance are given to all participants.

Customising courses

‘When clients have special requirements, we can design customised courses’, says AGS client training manager, Krissy Dickason. For further information on all courses please contact Krissy on 02 6253 7436.

Presenter profiles

Justin Hyland is a Senior Lawyer with the FOI and Privacy team, a part of the Litigation and Dispute Resolution Group in the Canberra office. He joined AGS in January 2001 after four years as Senior Legal Officer with the Australian Fisheries Management Authority. Prior to that, he worked in private legal practice in Canberra for several years. He acts as both advocate and instructing solicitor on behalf of Commonwealth government departments and agencies in freedom of information and other matters brought before the Administrative Appeals Tribunal. Justin also provides oral and written legal advice to various clients on matters involving freedom of information, privacy, statutory interpretation, practice and procedure and records management. In addition, Justin is a member of the Canberra office training team and has designed and presented training packages for several clients, including the Department of Defence, the Australian Customs Service and ACT and South Australian state government employees. Justin also regularly presents general administrative law, privacy and Commonwealth freedom of information training.

Tara McNeilly is a Senior Lawyer with the FOI and Privacy team in Canberra, where she acts as instructing solicitor on behalf of Commonwealth government departments and agencies in matters brought before the Administrative Appeals Tribunal and Federal Court. Tara also provides oral and written legal advice to various clients on matters involving freedom of information, disciplinary proceedings, privacy, practice and procedure and archives. She joined our Canberra office in November 1996, following several months with the ACT Government Solicitor’s Office. In addition, Tara is a member of the Canberra office training team and is involved in both designing and presenting training packages for various clients. She gives training in a number of administrative law areas, including freedom of information, privacy and records management, and presents introductory legal awareness seminars covering areas such as the framework of laws within which the Commonwealth operates, policy development, statutory interpretation and review of administrative decisions.

Jake Blight works as a Counsel in the Government team in the Office of General Counsel in Canberra. He has previously worked as an in-house lawyer with Customs and as a legal officer in the Attorney-General’s Department. In AGS, Jake provides advice on a range of matters including employment law, administrative law and general statutory interpretation as well as security law. Jake has also been involved with the development of legislation, from the initial policy development phase through to drafting, passage and implementation. He is regularly involved in our government law training courses.

Client Training Manager Canberra

Krissy Dickason

Krissy Dickason is responsible for overseeing and managing the provision of fee-for-service training for our clients. Krissy can help clients to design their own seminars or organise any of AGS’s regularly scheduled seminars to be run in-house at clients’ premises. Topics include freedom of information, privacy, statutory interpretation, machinery of government and employment law.

For all client training enquiries please email Krissy Dickason at cbrtraining@ags.gov.au or tel 02 6253 7414.

Justin Hyland

Amendments to the AAT Act

Significant amendments to the Administrative Appeals Tribunal Act 1975 (‘the AAT Act’) have now commenced. The Administrative Appeals Tribunal Amendment Act 2005 empowers the Federal Court to make findings of fact in appeals from decisions of the tribunal and introduces significant new requirements for decision makers. The amendments commenced on 16 May 2005. In this article we highlight some of the key changes.

Background

The Administrative Appeals Tribunal Amendment Act 2005 introduces a range of measures designed to assist the Administrative Appeals Tribunal (‘the tribunal’) to meet the aims of its new formal objective statement of ‘providing a mechanism of review that is fair, just, economical, informal and quick’. In his second reading speech, the Attorney-General described the amendments as ‘the most substantial reform’ to the tribunal since its inception.

Role of the Federal Court

It may now be necessary in future appeals to the Federal Court from decisions of the tribunal to give consideration at an early stage as to whether further evidence may need to be filed on the appeal.

Section 44 of the AAT Act now permits the Federal Court to make findings of fact in appeals from decisions of the tribunal. This amendment implements an Administrative Review Council recommendation and is designed to allow the court to dispose of appropriate matters completely rather than remitting them to the tribunal for the taking of further evidence. The new procedure also applies to the Federal Magistrates’ Court where matters are transferred to that court by the Federal Court.

Under new section 44(7) of the AAT Act, the court is only able to make findings of fact that are not inconsistent with those already made by the tribunal. Before making findings of fact, the court must determine whether it is convenient to do so having regard to factors including the expeditious and efficient resolution of the whole of the matter and the relative expense or delay to the parties. Section 44(8) of the AAT Act allows the court to have regard to evidence in proceedings before the tribunal and to receive further evidence for the purpose of making new findings under section 44(7).

Referral of questions of law

Section 45(1) of the AAT Act now requires the concurrence of the President to be obtained before a question of law may be referred to the Federal Court. This is designed to ensure that referrals occur only in exceptional circumstances that justify the guidance of the court.

Appeals to the Federal Court may still only be made on a question of law.

New requirements imposed on decision makers

Decision makers now have a legislative duty to assist the tribunal

New section 33(1AA) of the AAT Act imposes a duty on the person who made the decision under review to use their best endeavours to assist the tribunal to make its decision. The Explanatory Memorandum to the new amendments states that s 33(1AA) is consistent with the model litigant obligations under the Legal Services Directions issued by the Attorney-General, and is not intended to place any obligations on the decision maker that are the responsibility or obligation of the applicant. The Office of Legal Services Coordination of the Attorney-General’s Department has issued Guidance Note No. 1 of 2005 relating to this amendment.

Decision makers will need to consider the extent to which s 33(1AA) may require them to alter the way they conduct their cases before the tribunal. In some cases, this may raise difficult questions of approach, with time and resource implications. AGS envisages further guidance by it to clients in light of the developing understanding of s 33(1AA)’s operation.

Decision makers must now provide the tribunal with all documents objectively relevant to the review of the decision by the tribunal, not only those they subjectively consider relevant

Section 37(1)(b) of the AAT Act previously required that a decision maker must give to the tribunal every other document (or part thereof) that is in that person’s possession and considered by the person to be relevant to the review of the decision by the tribunal. This section has been amended by deleting ‘considered by the person to be’. The effect is to require decision makers to give the tribunal all documents that a reasonable person would consider relevant to the review of the decision by the tribunal, and not only documents which they, in their subjective opinion, consider to be relevant to the decision under review.

Reforms to tribunal procedures

Further statement of reasons

New section 29(1B) of the AAT Act enables the tribunal to obtain an amended statement of reasons from the applicant where the tribunal considers the original statement does not assist it in identifying why the applicant believes the decision is not the correct or preferable decision.

Alternative dispute resolution

New section 34A(1) of the AAT Act provides that where an application has been made for review of a decision, the President may direct the holding of a conference in relation to the proceeding or any part of it, or that the proceeding or any part of it be referred for a particular dispute resolution process. The range of alternative dispute resolution procedures available to the tribunal is also expanded to include neutral evaluation, case appraisal and conciliation.

New section 34D of the AAT Act enables parties to give effect to an agreement reached through alternative dispute resolution processes, on conditions including that the agreement is in writing and lodged with the tribunal and that the tribunal is satisfied that such a decision would be within its powers.

Reforms to tribunal management and constitution

Sections 20(2) and 20(4) of the AAT Act now give the President the power to issue directions determining tribunal practice and procedure on the conduct of reviews.

The amendments also remove restrictions in the AAT Act and some other legislation on how the tribunal is to be constituted for particular matters. The removal of these restrictions is designed to ensure the tribunal is constituted by the most appropriate members in each hearing, having regard to factors including the degree of public importance or complexity of the matter, the status of the decision maker, and the degree to which it is desirable for the members constituting the tribunal to have special knowledge, expertise or experience.

Other amendments

The accessibility and readability of the AAT Act is improved through the insertion of new headings and sub-headings and plain English terms like ‘given to’ instead of ‘served on’ and ‘given’ instead of ‘furnished’.

Criminal offences in the AAT Act have been redrafted in the style of the Criminal Code, and penalties for those offences have been updated.

A consolidated version of the AAT Act is available at:
http://scaleplus.law.gov.au/html/pasteact/0/27/pdf/AAT1975.pdf

For further information please contact:

Justin Hyland
Senior Lawyer
T 02 6253 7417 F 02 6253 7380
justin.hyland@ags.gov.au

Important: The material in this Spotlight article is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this article.

Virginia Masters

Reinstatement where the employment relationship has irrevocably broken down

Two recent cases of the Australian Industrial Relations Commission establish that the Commission is unlikely to order reinstatement of an APS employee where the employment relationship has irrevocably broken down. The decisions have significant implications for APS employers as they suggest that, even if the Commission finds that the termination of an employee’s employment was harsh, unjust or unreasonable, the Commission will refuse to order the employee’s reinstatement if it considers that the employee could not return to a harmonious working environment.

Andrea Walsh v Australian Taxation Office

Australian Industrial Relations Commission, Sydney, 4 March 2005, [PR 956205]

Decision at First Instance: PR951810 (Commissioner Eames)

In March 2004 Ms Andrea Walsh sought relief in the Australian Industrial Relations Commission under s.170CE of the Workplace Relations Act 1996 (the WR Act), following the termination of her employment by the Australian Taxation Office (ATO) for breaching the APS Code of Conduct. Alleging that that the termination of her employment was harsh, unjust or unreasonable, Ms Walsh sought reinstatement to the position in which she was employed immediately before the termination and also sought compensation for lost earnings.

Although the Commission found that there was a valid reason for the ATO to terminate Ms Walsh’s employment, Commissioner Eames found that the termination was harsh because, amongst other things, it was disproportionate to the gravity of Ms Walsh’s misconduct. This finding was triggered by the fact that in making its decision to terminate Ms Walsh’s employment, the ATO had not complied with its own policies and procedures and had taken into account a record of previous misconduct by Ms Walsh that should have been removed from her file. The Commission considered that it had been inappropriate for the ATO to rely on the prior misconduct in concluding that Ms Walsh had engaged in a ‘pattern of behaviour’, which was a key reason for the ATO’s decision to terminate Ms Walsh’s employment.

Despite this finding, Commissioner Eames refused to reinstate Ms Walsh to her former position within the ATO. Considering Ms Walsh’s proven misconduct, documented unsuitability for her employment and persistent behaviour of making inappropriate ‘jokes’ and offers of ‘inducement’ to supervisors, Commissioner Eames found that there was no basis on which Ms Walsh could return to the ATO on harmonious terms. Finding that Ms Walsh’s employment relationship with the ATO was incapable of being repaired, the Commissioner refused to order Ms Walsh’s reinstatement and instead awarded Ms Walsh compensation equivalent to six months’ salary for her unfair dismissal.

Full Bench Decision: PR956205
(Senior Deputy Presidents Duncan and Lloyd, Commissioner Cribb)

On 26 October 2004, Ms Walsh sought leave to appeal to a Full Bench of the Commission against Commissioner Eames’ decision, claiming that the Commissioner had erred in the exercise of his discretion concerning reinstatement by making findings of fact which were either not open or which were based on a mistaken view of the relevant facts. Ms Walsh also argued that Commissioner Eames had erred in law by failing to take account of each of the considerations set out in s.170CH of the WR Act and in finding that there was a valid reason for termination.

The Full Bench rejected all of these arguments and refused leave to appeal on the basis that the application disclosed no appellable error and no public interest consideration required that leave be granted.

In upholding Commissioner Eames’ refusal to order Ms Walsh’s reinstatement under s.170CH of the WR Act, the Full Bench placed considerable emphasis on the breadth of the discretion conferred under subsections (3) and (6) of the WR Act and the fact that Commissioners must exercise their discretion having regard to the evidence and material before them.

The Full Bench expressly endorsed the Commissioner’s ‘apparently contradictory’ findings that a valid reason for termination had existed due to Ms Walsh’s breach of the Code of Conduct, but that the termination was harsh due to its disproportionate nature.

The Full Bench noted that in addressing the question of whether or not it was appropriate to reinstate Ms Walsh, Commissioner Eames was required to have regard to all of the factors enumerated in s.170CH(2) of the WR Act. The Full Bench was satisfied that evidence of an irrevocably broken down employment relationship could be a relevant factor arising under the ‘any other matters’ consideration in s.170CH(2)(e) and was in fact critical in this case. The Full Bench noted that this approach was consistent with the established principle that the restoration of trust is a relevant factor when reinstatement is considered.

Conclusion

The significance of the Walsh decisions for APS agencies is that they confirm that even a large agency can resist a reinstatement order when the Commission has determined that the termination of an employee’s employment was harsh, unjust or unreasonable, if there is sufficient evidence that the relationship of trust has broken down. In preparing for arbitration of unfair dismissal cases, agencies should ensure that they consider applying this line of argument.

The decision is also a salutary reminder of the importance of APS agencies complying with their own policies and procedures.

Text of the decisions is available at:
http://www.airc.gov.au/decisionssigned/html/PR956205.htm

For further information please contact:
Virginia Masters
Senior Lawyer
T 02 6253 7470 F 02 6253 7381
virginia.masters@ags.gov.au

Important: The material in this Spotlight article is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this article.

Jenny Burnett

Richard Harding

Public service confidentiality

The Public Service Regulations 1999 have been amended to make new provision for regulating the disclosure by APS employees of work-related information. Amended regulation 2.1 in essence prohibits an APS employee from disclosing work-related information if the disclosure could prejudice the effective working of government or if the information was, or is to be, communicated in confidence.

Background

Old regulation 2.1 prohibited an APS employee from disclosing any information about public business or anything of which the employee had official knowledge, except in the course of the employee’s duties. This general prohibition had been in substantially the same form since 1902.

Questions about the interpretation and constitutional validity of the predecessor to the old regulation 2.1 arose in the Federal Court case of Bennett v President, Human Rights and Equal Opportunity Commission (2004) 204 ALR 119. Justice Finn found that the provision was a ‘catch-all’ provision prohibiting disclosure regardless of the nature of the information or the consequences of disclosure, including where the information was publicly available. He held that the provision infringed the freedom of political communication implied in the Constitution and was therefore invalid, essentially because the ‘catch-all’ nature of the provision was inconsistent with modern conceptions of open government and imposed too great a burden on the flow of government information. Justice Finn acknowledged that the Commonwealth might validly regulate disclosure of particular information for legitimate reasons relating to that information. Legitimate reasons included the effective working of government.

New regulation 2.1 commenced on 23 December 2004. It is designed to address changed community expectations and the matters raised by Justice Finn in the Bennett case (see Australian Public Service Commission Circular No 2004/8 at [2]-[3]).

New regulation 2.1

New regulation 2.1 is not a ‘catch-all’ provision. It prohibits disclosure by APS employees of information which they obtain or generate in connection with their employment in two (potentially overlapping) situations. These situations are:

where it is reasonably foreseeable that the disclosure could be prejudicial to the effective working of government, including the formulation or implementation of policies and programs; and
where the information was, or is to be, communicated in confidence within the government or was received in confidence by the government from a person or persons outside government, whether or not the disclosure would found an action for breach of confidence.

The new regulation does not prohibit disclosure in the course of duties or in accordance with an authorisation given by an Agency Head or as otherwise authorised by law.

The new regulation does not affect the operation of other Commonwealth secrecy and privacy provisions or the authority of an Agency Head to give directions in relation to disclosure of information.

Australian Public Service Commission Circular No 2004/8 gives guidance in relation to the application of the new regulation. Chapter 3: Managing Official Information of APS Values and Code of Conduct in Practice: a guide to official conduct for APS employees and Agency Heads has been significantly revised as a consequence of the new regulation, including revised guidance on making public comment.

AGS provided advice to the Australian Public Service Commission in relation to the formulation of new regulation 2.1.

Text of the new regulation 2.1 is available at:
http://scaleplus.law.gov.au/cgi-bin/download.pl?/scale/data/numrul/20/10426

Text of the APSC circular and guidance is available at:
http://www.apsc.gov.au/circulars/circular048.htm and http://www.apsc.gov.au/values/conductguidelines.htm

For further information please contact:

Jenny Burnett
Senior General Counsel
T 02 6253 7012 F 02 6253 7303
M 0409 445 295
jenny.burnett@ags.gov.au

Richard Harding
Senior General Counsel
T 02 6253 7026 F 02 6253 7304
M 0408 598 696
richard.harding@ags.gov.au

Important: The material in this Spotlight article was first published as an issue of Express law, an email service provided to AGS clients as an early, interim view for general information only. Further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.

Protecting the environment and water rights

Water management and environmental protection have become major social, economic and political issues for Australia.

Water has been a key focus for Council of Australian Governments (COAG) meetings since 1994. COAG sees the development and management of an appropriate legal regime of rights to water access as an important element in solving this complex problem. In June 2004 COAG agreed to a National Water Initiative which is expected to bring substantial benefits through greater compatibility and the adoption of best-practice approaches to water management nationally.

AGS has provided advice on water issues to a range of Australian Government departments and agencies. AGS lawyers Phil White, Susan Reye, Peter Jeffery, Hilary Manson, Robert Orr QC and others have advised on constitutional principles and arrangements, international obligations, common law and native title rights to water, and the often complicated state and territory regimes in relation to water management. They have also helped our clients with their development of new legal and policy models.

Interestingly, water rights were also a major issue for Australia at the time of federation in the late 19th century. The result was the insertion into the Constitution of section 100, which provides:

The Commonwealth shall not, by any law or regulation of trade or commerce, abridge the right of a State or of the residents therein to the reasonable use of the waters of rivers for conservation or irrigation.

We have had to grapple with what this provision means in the 21st century.

AGS held a public Government Lawyers Group at the National Library in Canberra in 2003 to discuss the legal and policy issues involved in water rights reform.

The Gwydir wetlands near Moree in northern New South Wales – a protected waterbird habitat. AGS acted for the Minister for the Environment and Heritage in the first civil penalty proceeding relating to a wetland protected under the internationally agreed Ramsar Convention. Photo courtesy WWF Australia

AGS has recently acted for the Minister for the Environment and Heritage in the first proceedings for breach of section 16 of the Environment Protection and Biodiversity Conservation Act 1999, Minister for the Environment & Heritage v Greentree (No 2) [2004] FCA 741 (11 June 2004). Section 16 prohibits unauthorised actions that have, will have, or are likely to have a significant impact on the ecological character of a ‘declared Ramsar wetland’. This section and other provisions of the Act effected Australia’s international obligations under the Ramsar Convention on Wetlands. The wetland in this case was on a farming property in northern NSW. The wetland had been designated under the Ramsar Convention in June 1999, however, in 2003 this site was completely cleared of vegetation, ploughed and planted with wheat.

AGS lawyers Stephen Vorreiter and Sonja Marsic, from our Sydney office, ran the litigation, with input from Helen Neville and Greg Prutej, AGS outposted counsel to the Department of the Environment and Heritage.

In June 2004 Justice Sackville of the Federal Court found that the respondents’ actions breached section 16 of the EPBC Act. On 14 October 2004 Sackville J delivered judgment on penalty and ordered that Mr Greentree pay a civil penalty of $150,000 and further ordered that his private company Auen Grain Pty Ltd pay a civil penalty of $300,000. His Honour also ordered Mr Greentree and Auen Pty Ltd to undertake various rehabilitation measures to the site.

Conference rooms in the AGS Canberra offices are named after nearby and famous Australian rivers.

AGS assists Bradshaw Indigenous land use agreement negotiations

AGS Senior Executive Lawyer, Harry Dunstall and AGS Senior General Counsel, Peter Jeffery, have advised the Department of Defence and the Native Title Unit of the Attorney-General’s Department in the drafting and negotiation of what is to date the most significant Indigenous land use agreement involving the Commonwealth.

Minister for Defence Senator the Hon. Robert Hill signs the Bradshaw Indigenous Land Use Agreement at Timber Creek,
Northern Territory. AGS Senior Executive Lawyer Harry Dunstall in discussion with representatives of the traditional land owners.
Photo by courtesy Department of Defence

The Bradshaw Agreement

The agreement covers 9000 square kilometres in the Northern Territory near the Western Australian border over an area known as Bradshaw Station which was previously subject to a pastoral lease. The lease was purchased by the Department of Defence in 1996. Defence wished to use Bradshaw Station to create one of the world’s best training areas, using it as a permanent location for military manoeuvres and joint service operations. Accordingly, the Commonwealth decided to negotiate a land use agreement with the Indigenous people of the area.

As the agreement was one of the first major Commonwealth Indigenous land use agreements to be negotiated, all parties were fully aware that the final agreement would be precedent setting, and negotiations extended over a long period.

Our lawyers’ work involved day-long teleconferences, and week-long trips to Darwin for intensive negotiation sessions. The success of the negotiations, to the satisfaction of all parties, is a testament to our lawyers’ abilities.

Eventually, Harry Dunstall was able to travel to Timber Creek in the Northern Territory to oversee the official signing of the agreement and related documentation.

The outcome is a win for all parties involved. The traditional owners have received real benefits, the Northern Territory Government is happy with the final, negotiated lease of up to 225 years. Defence has secure use of the area and can plan and build for the future. They have the consent of traditional owners to the construction of bridges, airfields, accommodation and training facilities.

Protection of sacred sites

The major point of concern to Indigenous users of the land was the protection of sacred sites. As a result, the agreement contains one of the most comprehensive range of provisions for the protection of sacred sites ever seen in an Indigenous land use agreement. Indigenous people have access to the land and the opportunity to continue with traditional uses of the land, including ceremonial activities. In fact, access has been improved through the creation of new roads and a new bridge over the Victoria River.

Traditional owners of the land will be given preferred access to employment and business opportunities that arise from Defence activities. And, the Indigenous land use agreement expressly provides that any possible native title on the land has not been extinguished.

At the signing ceremony at Timber Creek, one of the Traditional Owners handed over a painting of Bradshaw that included the new bridge – thus demonstrating acceptance of the new agreement.

Since the signing of the agreement AGS has been involved in the drafting and negotiation of two other indigenous land use agreements, this time in the Torres Strait to facilitate a joint Customs and Defence trial of a high frequency surface wave radar.

Susan Pryde, Senior Executive Lawyer, Melbourne. Her 15 years’ experience
includes some fascinating, sensitive and high profile cases.

Exceptional public sector experience

Susan Pryde works with a team of litigation lawyers in our Melbourne office. Her extensive experience in various federal and state jurisdictions and her experience with federal regulatory bodies ensure that Susan is kept busy responding to her client’s needs. This spotlight focuses on a few of Susan’s recent high profile, interesting cases, concerning Cruetzfeldt-Jacob Disease, alleged misuse of market power and the Royal Commission into the Building and Construction Industry.

Cruetzfeldt-Jacob disease

Susan’s litigation experience came to the fore in this unusual case. A woman claimed she had, or was at risk of developing, Cruetzfeldt-Jacob Disease (CJD), the human form of ‘Mad Cow’ disease, as a result of allegedly being infected by a contaminated batch of pituitary derived fertility hormones. The hormones were manufactured by the then Commonwealth Serum Laboratories and the plaintiff received them between 1976 and 1978. The hormone program had been developed to treat women with fertility problems, but was immediately abandoned when the risk of CJD contamination became known.

The hearing has been completed pending a decision by the Supreme Court.

Defining market power

Susan worked closely with the ACCC in a case against Boral Besser Masonry Limited over an alleged abuse of market power. This was a landmark case, proceeding ultimately to the High Court. It involved the complex interrelationship of law and economics in s46 of the Trade Practices Act (misuse of market power) and their application to the Melbourne masonry block market. In particular it involved a species of misuse of market power, predatory pricing, that had never before been considered by the High Court.

It was a matter involving extraordinary factual and theoretic complexity, for example in seeking to define and apply the economic concept of avoidable cost in a dynamic market subject to the fluctuations of the broader economic cycle. That Susan and her team mastered such issues is a measure of their ability and application.

Ultimately the High Court found that Boral Masonry lacked sufficient market power and thus had not misused it. There was strong dissent in the High Court and the decision reversed the unanimous view of the Full Federal Court; it remains an area of considerable controversy amongst expert commentators.

The power and the passion

The Royal Commission into the Building and Construction Industry was Australia’s first national review of the industry’s conduct and practices. At an early stage, the CFEMU challenged the Commissioner’s decision to conduct the Royal Commission in accordance with his early Practice Note 2, which gave directions about the calling of evidence. Although there is little judicial commentary on the extent of a Royal Commissioner’s powers, Susan and her counsel ensured that the Commissioner’s reasons for establishing the procedure in question were well understood by the Court. Ultimately, the Court found they the procedures were reasonable and did not involve any breach of natural justice. This enabled the Royal Commission to conduct itself and complete its task within its tight time frame.

Law at AGS

Susan is a Senior Executive Lawyer in AGS Melbourne and is one of the leaders of its large litigation practice. She holds a practitioner’s certificate in mediation and conciliation. In addition, she provides training to our clients on managing large-scale litigation, legal professional privilege, public interest issues, our ability to intervene in private proceedings, and relevant case studies. Susan is an active member of Victorian Women Lawyers.

“The great benefit in working in a litigation role at AGS is the diversity and variety of matters on which I have the opportunity to work. Each litigation matter brings with it new challenges, new people and new issues. My litigation team at AGS works as a tightly knit unit and it is a real plus to work with such supportive and committed colleagues,’ said Susan.

Susan Pryde and her litigation team, AGS Melbourne office.

Government Lawyer of the Year

Simon Daley, Special Counsel Litigation and National Practice
Leader of the Litigation and Dispute Management Practice Group

AGS Special Counsel, Litigation, Simon Daley, has won the inaugural Australian Corporate Lawyers' Association Government Lawyer of the Year award.

The award recognises Simon's recent work as Principal Solicitor Assisting the HIH Royal Commission. It also is a tribute to his extensive background in advising and conducting litigation on behalf of Commonwealth agencies and his contribution to AGS' litigation and dispute management capability as Leader of the AGS National Litigation and Dispute Management Practice Group.

In accepting the award Simon, who is based in AGS' Sydney office, paid tribute to the support of his AGS legal team that supported the work of the Royal Commission. He also highlighted the significance of the award in recognising the work of government lawyers.

'Government law has not always been recognised in the same way as private practice,' he said.

'A major motivation for those who choose to undertake work as government lawyers is the belief that serving the public interest is a worthy cause.'

'I certainly believe that to be the case and I have found working for government clients a very rewarding experience,' he said.

'I also believe that government service does merit wider recognition and I therefore applaud ACLA for instituting the Government Lawyer of the Year award.'

Achieving sound business outcomes for the Commonwealth has been the foundation of Simon's 17 year career with AGS. He has an extensive background in acting for a wide range of Australian Government entities with a particular focus in the areas of regulation, law enforcement and revenue.

As Principal Solicitor Assisting the HIH Royal Commission he played a critical role in assisting the Commission to deal with matters coming within its terms of reference.

It was a large undertaking, with AGS being one of the prime resources used by the Commission. The Commission heard from more than 120 witnesses and sat nearly continuously for over 200 days.

'The task facing the legal team was certainly daunting. We had to set ourselves up from scratch. In effect we became a new medium sized legal firm with the biggest matter in town. We also had to organise ourselves so we were able to undertake the investigative tasks and run the hearings concurrently.'

'One statistic that really sticks in my mind is the volume of documents that were involved. Including electronic databases and backup tapes, in excess of 43 million documents were produced to the Commission.' explained Simon.

'This necessitated the adoption of a sophisticated document handling system and I believe that the Commission's use of an electronic courtroom and other information technology support to conduct its business was truly innovative.'

The award is sponsored by law firm Minter Ellison and law publisher LexisNexis and was presented at an ACLA dinner in Brisbane on Friday 21 November.

For further information please contact Noela L'Estrange, Director Legal Practice Support, on
tel: (02) 6253 7224, fax: (02) 6253 7305, email: noela.l'estrange@ags.gov.au.

Successful end to HIH Royal Commission

AGS supported the HIH Royal Commission from its inception in 2001 through to overseeing the closing down of operations in 2003. It was a major undertaking. The Commission examined the reasons for and circumstances surrounding the collapse in March 2001 of HIH Insurance as well as looking at possible policy reforms relating to the insurance industry, government regulation and corporate governance. The Commissioner delivered a three-volume report which was released by the Government on 16 April 2003.

A complex and exciting project

AGS team leader, Simon Daley, described the project as challenging and exciting because of the enormous volume of material involved and the difficult legal and forensic issues which arose in seeking to unravel the reasons for the collapse of such a large and complex corporate group. Because the collapse had such a wide ranging impact, the Commission’s work was the subject of an extraordinary level of media and public interest. A very significant level of project management was required to ensure that the many strands of the Commission's inquiries were drawn together on time.

The AGS HIH Royal Commission team

To recognise their outstanding performance, the team received a 2003 AGS Australia Day award. Simon said, ‘The award for our AGS team recognised the hard work involved and the demanding subject matter of the inquiry’. The team assisted with the identification of areas of inquiry, obtaining documents and other evidence concerning the collapse, interviewing witnesses and the presentation of evidence and examination of witnesses. The Commission’s ability to search through the documents which it obtained and analyse them was greatly assisted by the use of a sophisticated relational database which captured electronic images of documents, relevant data about them and the team’s legal analysis. Electronic courtroom technology was also employed, facilitating the presentation of complex evidence to the Commissioner and the many parties involved. The Commission's inquiries required detailed examination and analysis of complex legal and factual issues, including reviewing in detail the auditing and actuarial work undertaken on behalf of relevant companies in the HIH Group, assessing the corporate governance of the companies and looking at the complex issue of the insolvency of a general insurer. Many areas of expertise were required from our team including insolvency and recovery, criminal law, administrative law and the coordination of a large evidentiary project using computerised litigation support. The AGS team was also heavily involved in developing recommendations for policy reform.

‘The Royal Commission’s success speaks for the professionalism and quality of the work of everyone involved’, commented Simon. ‘The team’s work was outstanding and the entire project was an extremely satisfying experience for all of us.’