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Wednesday, 5 April 2000
Page: 15321

Ms GILLARD (6:19 PM) —As outlined by other speakers in this debate, the Jurisdiction of Courts Legislation Amendment Bill 2000 deals with a number of distinct issues. It is my intention this evening to address two of them, namely the question of cross-vesting which arises from the High Court's decision in 1999 in the case of re Wakim ex parte McNally and the question of the clarification of the power of the Commonwealth Director of Public Prosecutions. I will also be making reference to the second reading amendment which was moved by the shadow Attorney-General, the member for Barton, at the commencement of this debate.

It is somewhat distressing that we even need to be having this kind of discussion and dialogue at this stage in our history, because this debate tonight yet again indicates that we continue to be plagued, as we move into a new century and a new millennium, by limitations arising from our Constitution. That is not surprising, I suppose. Any federal compact which was come to 100 years ago is obviously going to become a little bit worn as times change. Our world has changed remarkably in the time intervening from when the federal compact was struck through a series of constitutional conventions.

I now think that there can be no doubt in any of our minds that our Constitution needs significant renewal and renovation if it is to put Australia in a position to meet the challenges of the 21st century. Obviously, opinions vary about what those matters of renewal and renovation should be, but there needs to be a genuine dialogue about each of them. We have obviously had a dialogue about the question of the republic, though how genuine that dialogue was is open to question. We have had a dialogue about the question of a preamble, about the statement within the Constitution of core values which bind Australians together. In the context of that suggestion of a preamble, we have had something of a debate about the question of recognition in the Constitution of prior custodianship of this land by the Aboriginal and Torres Strait Islander peoples.

However, the debate tonight is not perhaps about matters as all-embracing or as fundamental as any of those, but it is about an important matter, a technical matter that has arisen because of the High Court decision in the case of re Wakim, to which I have referred. In that case, the court found that under chapter 3 of our Constitution, Federal Courts cannot exercise jurisdiction conferred by state legislatures. That decision has thrown into chaos the enforcement matters relating to a number of areas where state and federal governments have introduced similar laws based upon agreements that these matters need to be regulated on a cooperative basis nationally.

One of the very important examples of this, in an area in which I used to litigate prior to coming to this place when I was still in practice as a lawyer, was the area of the Corporations Law. As we are all aware, the Commonwealth has limited constitutional power in relation to the regulation of corporations. So our Corporations Law is in fact a cooperative scheme whereby the Commonwealth and each of the states have legislated identically to create a seamless system, so that corporations which operate and trade throughout Australia can be subject to the same legal regimes no matter where they are located or trading or employing people. That, of course, is an obvious thing to do.

Indeed, I suspect the debate about corporate regulation, as we move further into this century, is going to be a debate not about the nature of national regulation but about the nature of transnational regulation. Unfortunately, we are still struggling as a result of this High Court decision with the question of national regulation. When we raise issues like the Corporations Law and litigating under the Corporations Law, that can strike people as a fairly dry area, as perhaps a technical area, an area where there are some difficulties but where people's rights are not really affected. In fact, nothing could be further from the truth, because the Corporations Law, in defining the way in which corporations operate, defines the duties the directors owe when they seek to be directors of corporations. It actually deals with some very fundamental and important matters.

One of the areas in which I used to litigate and which as an enforcement matter has been thrown into a fair bit of chaos by the re Wakim decision is the question of litigating in involvement trading, that is, litigating in circumstances where directors have breached the positive duty placed on them by section 588G of the Corporations Law to prevent a company continuing to trade when it is insolvent. That is an offence under our Corporations Law; it is an offence with an objective standard. The price that directors pay for engaging in the offence of insolvent trading is under section 558M of the Corporations law: a creditor who has suffered loss or damage as a result of that insolvent trading has a right to seek compensation personally from the directors who are responsible.

This is a very important set of provisions that touches upon one of the major public policy debates that we have had this year, namely, the debate about employee entitlements. In many of those circumstances, when a corporation ceases to trade, is insolvent and cannot pay its employees their lawful entitlements—whether they be unpaid wages, unpaid annual leave, unpaid long service leave or unpaid redundancy moneys—the directors will have offended against this provision of the Corporations Law. I think we can easily imagine circumstances in which that could happen. If you are in an industry where the nature of the future of the industry is fairly easy to predict—for example, I would have thought someone engaged in the textiles, clothing and footwear industry in this country would be able to assess market conditions fairly clearly; there is a stable system of government regulation in respect of tariffs, all of that sort of thing—you would be able to work out where you were going with your business.

If you continue to trade your business past a point where you could pay your employees their entitlements, one would, in the ordinary course, assume that you had done that with due knowledge. It is not the same as a situation where, completely unforeseen, an act of God, a freak act of nature, destroys part of the capital needed to run your business or where some international market closes down as a result of a war or where some unexpected trading bloc changes and suddenly you can no longer get your goods to the place where you used to sell them. It is not that kind of circumstance. I think that in most cases where, for example—just to pick an example, perhaps a topical example—textiles, clothing and footwear companies cease to trade, the fact that they will not be able to meet their employee entitlements is something that is foreseeable. If people have traded in those circumstances then, prima facie, one would say that there are possible breaches of the Corporations Law. This House has had cause to debate some celebrated failures in the textiles, clothing and footwear industry during the course of this year, the most celebrated of which is perhaps the National Textiles example. But there are examples—not in my own electorate, but in an electorate adjacent to mine involving the Braidwood workers—which have been the cause of debate and concern by at least this side of this House. It is enforcement of those sorts of matters, that sort of cooperative scheme under the Corporations Law, that has been affected by the re Wakim decision, and it is that kind of problem that this legislation seeks to address.

As other speakers have raised, there is some issue about whether or not this legislation will succeed in doing what it seeks to do, which is successfully patching the problems that have been caused by the re Wakim decision. The attempted solution in this bill to overcome perhaps the worst aspects flowing from the re Wakim decision is that we will, through this legislation, facilitate a situation where actions taken by Commonwealth officers in the administration of cooperative state and federal schemes like the Corporations Law will be redefined as federal actions even though they have been taken pursuant to a state law. That is the device, if you like, that is contemplated by this legislation in order to get around the problems created by the re Wakim decision. As outlined by the shadow Attorney-General, the member for Barton, and speakers since, there is some reason to suspect that this patching may not be sufficient to fix the problem. I think the government recognises that there are ongoing difficulties in this area and is seeking to pursue a solution by way of having appropriate referral of powers from states to the Commonwealth so that the patching becomes unnecessary. However, at some point there might need to be a more profound solution to this problem, and that of course could only be achieved by way of referendum.

I think we are all acutely aware, particularly after last year's republic debate, that the fate of referendums in this country is not a kind one; if we count through the numbers we do not see too many successes and we see a lot of failures. But it may be—and I think we will have to assess this over time—that at some point the Commonwealth says to itself that the matter of corporate regulation, for example, is such a major public policy area that we need to finally clarify our constitutional arrangements, that that would necessitate a referendum and that such a referendum would be worth while. The shadow Attorney-General has outlined the views of the Labor opposition about that matter, and it might be something that we need to contemplate over time.

I now turn to the second issue which I indicated I would address and which arises from this piece of legislation, that is, the question of the clarification of the powers of the Commonwealth Director of Public Prosecutions. The need for the clarification of the powers of the Commonwealth Director of Public Prosecutions was recognised by the Standing Committee of Attorney-Generals when it met in Melbourne on 24 March. At that stage the Commonwealth committed itself to restoring the power of the Director of Public Prosecutions and clarifying the fact that the director is able to mount appeals under state laws. Of course, this issue arose because of the problem that arose in the Alan Bond case where the Commonwealth Director of Public Prosecutions appealed in relation to the question of sentence. The High Court indicated on 9 March that it was its view that that appeal was not authorised because of the state-Commonwealth issues and could not be further proceeded with. On the very day that the High Court made that determination the opposition called on the government to close this loophole, and we are proceeding to that now.

I think it is important once again to recognise that matters such as these are not just technical matters and in respect of the context in which this matter arose—that is the context of the Alan Bond case—it is a matter which goes to the question of the public's view of, and the faith that the public has in, its legal system. One cliche that is often used is that the law is an ass. Every time it is, every time the law fails to meet expectations of fairness or efficacy, I think we lose a little bit more faith in our system, we lose a little bit more trust in our society and we diminish the bonds between us.

I believe when looking at criminal matters people have in their minds a shared intuitive view of what is right and what is wrong. People intuitively know that violent crimes, murders, sexual offences and crimes against the person are the worst sorts of crimes and that crimes of this nature should attract the most heavy sentencing options. People intuitively believe that property crimes which contain no violent acts are of a lesser nature than crimes against the person. When dealing with property crimes, people intuitively believe that the more people you have damaged through property crimes the more severe the sentence you should receive for having engaged in that unlawful conduct.

So I would say that your average person would say that to steal some leftover pizza or a pram, particularly in the context of a family dispute, is not a very serious matter. I believe your average person would say to steal a cigarette lighter is not a very serious matter. I believe your average person would say to steal a towel is not a very serious matter. I believe your average person would say to steal 90c is not a very serious matter. Yet I believe, on people's intuitive scale of what is right and what is wrong, people would say that stealing $1.3 billion is an enormously serious matter. In fact, it is hard to imagine a bigger property crime.

Yet Alan Bond served one day's imprisonment for every million dollars he stole, while under the Northern Territory's mandatory sentencing policy we see people serving jail time for the most minor of property offences—14 days for the pizza and the pram, 14 days for the $2.50 cigarette lighter, a year for the towel and 90 days for 90c. What is the difference between Alan Bond and the Aboriginal boy who went to jail for 90 days for 90c? It is pretty hard to avoid the conclusion: one is white and rich; one is poor and black.

In circumstances where our laws allow two men to be treated so differently I think there are real problems for people continuing to give their moral consent to the way in which our laws are operating. I think that diminishes the bonds between us and ultimately diminishes our society. Through this legislation the government is addressing one part of the problem—it is addressing the problem that the Commonwealth DPP could not appeal and perhaps get a more heavy sentence in respect of Alan Bond. The task before the government now is to ensure that it fixes the other part of the problem, stops avoiding its obligations and fixes the mandatory sentencing issue.