Will Icac collapse? It depends on the meaning of the word 'could'
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Version 0 of 1. According to Arthur Moses, the barrister acting for NSW crown prosecutor Margaret Cunneen, the corruption fighter Icac has “put down its pen ... for reasons not immediately apparent”. Putting down its pen means that the final reports into Liberal party fundraising and the operations of Australian Water Holdings are in peril. The outcome of the Cunneen case will have a direct impact on the ultimate outcome of these two Icac investigations, and it all comes down to the interpretation of a few words in the Icac Act. What does “could adversely affect” mean, after all? Cunneen has sought judicial review of Icac’s decision to hold a public inquiry into allegations she perverted the course of justice by advising her son’s girlfriend, Sophia Tilley, to fake chest pains to avoid a breath test after a car accident. Last month, the NSW Court of Appeal held by majority that Icac did not have the power to investigate the allegations against Cunneen, her son and his partner. In the first round, the chief judge at common law, Cliff Hoeben, upheld Icac’s power to investigate the alleged offences. On appeal, Justices John Basten and Julie Ward found that the alleged behaviour did not fall within the definition of “corrupt conduct” in the Icac Act. The chief justice of NSW, Tom Bathurst, was in the minority, finding Icac was well within its jurisdiction to examine the allegations against Cunneen. So, two senior judges have decided in favour of Icac’s jurisdiction and two against. It is now up to the High Court to resolve the impasse. At a directions hearing before the chief justice Robert French, counsel for Icac Jeremy Kirk said that the majority findings by the NSW Court of Appeal have “knock-on effects for a wide range of people and a wide range of inquiries”. Moses said Icac’s statements were “sweeping [and] overkill”. To understand what is at stake it is important to look at the reasoning of the two majority appeal judges, Basten and Ward. It gets down to some granular detail about a few words in one of the legislation’s key provisions which define corruption – conduct that “could adversely affect directly or indirectly the exercise of official functions”. In the view of the Court of Appeal majority, that means that a public official must have been induced to act, and to have acted, improperly or dishonestly. The majority’s view is that where the conduct of an individual is unlawful, but that conduct does not have the capacity to lead a public official into doing something dishonest, then the public official has not acted corruptly and so no finding of corruption should be made. Chief Justice Tom Bathurst, in the minority, had a more straightforward interpretation of the words “could adversely affect”. Rather cuttingly, he said he would “prefer to focus on the words of the section”. In his opinion, the relevant phrase in the legislation meant “a reasonable possibility” that the relevant conduct would have an adverse effect on public administration. In Bathurst’s view, the conduct alleged against Cunneen, her son and her son’s girlfriend falls within the legislative definition of “corruption” because it would have the tendency to frustrate or deflect the course of possible court or tribunal proceedings or to impair the court’s capacity to do justice. “It must be remembered that judges and magistrates are public officials,” said Bathurst. So, if you tell lies to a policeman to obstruct the course of justice, you could impair the capacity of judges sitting in the court to perform their official functions. In the majority’s view “could adversely affect” has transmogrified into “the capacity to compromise” the integrity of public administration. In the reasoning of the majority judges, the word “could” requires a public official to have actually acted improperly, as opposed to conduct that gives rise to “a reasonable possibility ... or potential” for improper official behaviour. In this rather knotty parsing of the legislation, Basten and Ward appear to have infused an element of certainty into the word “could” that has escaped most users of the English language. So what does this mean for Operations Spicer and Credo? Credo focused on Australian Water Holdings Pty Ltd and whether people with an interest in that company obtained financial benefits by “adversely affecting” the official functions of the state government organisation, Sydney Water Corporation. This involves allegations of billing for bogus expenses and inflated executive salaries. Eddie Obeid Jr, chief executive and Liberal party fundraiser Nick Di Girolamo and former company director Senator Arthur Sinodinos were all subject to grilling about their roles at Australia Water Holdings. Di Girolamo was described by counsel assisting Icac, Geoffrey Watson, as “an old-fashioned shyster, fraudster and barefaced liar”. According to Justices Basten and Ward in the Cunneen case, if officials at Sydney Water Corporation believed they were acting properly in paying these billed expenses, under an infrastructure agreement with AWH, then the investigation into Obeid Jr, Di Girolamo, Sinodinos and others would be outside Icac’s jurisdiction. On this reasoning, it’s only if Sydney Water Corporation acted improperly could it be found that Obeid Jr and Di Girolamo acted corruptly. Similarly with Operation Spicer, which looked at allegations that members of parliament received money from prohibited donors and failed to properly disclose those donations. If a property developer, a prohibited donor, gave money to a Liberal party candidate, the Electoral Funding Authority could still have acted honestly and impartially in the exercise of its duties, so on the basis of the Court of Appeal’s reasoning, it would be beyond Icac’s jurisdiction to make a finding of corruption. This is why Icac “has put down its pen”. The findings from the Credo and Spicer investigations cannot be released by Icac until the High Court has worked out the meaning of “corruption” under the Icac Act. To top it off, Cunneen has now engaged one of the leading High Court advocates, David Jackson QC, for the battle which gets underway in March. Also in March it is expected that Icac will face another jurisdictional challenge in the High Court – this one from Newcastle property developer Jeff McCloy. His argument is that banning political donations by developers is a breach of their right of political communication, which should be protected by the constitution. Icac has undertaken to pay Cunneen’s legal costs for the High Court appeal. Plenty in the main political parties and various business wheelers and dealers must surely be hoping that the High Court permanently stays Icac’s pen. |