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Thursday, 25 May 2006
Page: 18


Mr TURNBULL (Parliamentary Secretary to the Prime Minister) (10:13 AM) —I move:

That this bill be now read a second time.

This is a bill to amend the Royal Commissions Act 1902 for the purpose of clarifying the operation of the act in respect of claims of legal professional privilege. This is a technical matter but also one of some importance. The amendments have been requested by the Hon. Terence Cole AO, RFD, QC, the commissioner of the current Inquiry into Certain Australian Companies in relation to the UN oil for food program, in light of the recent Federal Court decision in AWB Ltd v Cole.

Before dealing with the impact of that decision on the Cole inquiry and the amendments to be made by the bill to overcome that impact, I wish to first highlight the Australian government’s commitment to properly investigate the findings of the final report of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, more commonly known as the Volcker inquiry final report.

The Australian government established the Cole inquiry to investigate whether companies named in the Volcker inquiry final report into the UN oil for food program may have breached Australian law and, if so, whether the question of criminal or other proceedings should be referred to the relevant agencies. The government moved quickly to establish a publicly transparent and extensive inquiry in response to the findings of the Volcker inquiry final report and has provided the inquiry with the full powers of a royal commission, including the authority to compel witnesses and the production of documents.

As the Prime Minister has noted, the Cole inquiry is arguably the most thorough and comprehensive investigation initiated in any of the 66 countries named in the Volcker inquiry final report into the UN oil for food program. The Australian government is committed to providing full cooperation with the Cole inquiry, including providing access to all relevant documents and officers. This policy extends to all levels of government, and I note that the Prime Minister, the Deputy Prime Minister and Minister for Trade, and the Minister for Foreign Affairs as well as current and former ministerial staff and public servants have appeared before the inquiry. To date, at least 14 Commonwealth departments and agencies have provided documents and more than 70 current and former Commonwealth officials have submitted statutory declarations to the inquiry.

Senior counsel assisting the inquiry, Mr John Agius SC, noted on 14 March 2006 that the inquiry had the power to investigate and make findings in relation to the knowledge of the Commonwealth of alleged misconduct by Australian companies participating in the oil for food program. The commissioner has himself issued a statement about the scope of his inquiry, making clear that, if during his inquiry it appears to him that there might have been a breach of any Commonwealth, state or territory law by the Commonwealth or any officer of the Commonwealth related to the terms of reference, he would approach the Attorney-General to seek a widening of the terms of reference to enable him to make such a finding. The commissioner also said that this point had not been reached.

Since the inquiry commenced its public hearings, the Australian government has acted on a number of occasions to expand and clarify the inquiry’s terms of reference and to give the inquiry an extra three months to deliver its report. In each case the Australian government has acted quickly to respond to requests made by Mr Cole. The government’s actions have at all times been consistent with its ongoing commitment to ensure that Mr Cole has all the powers, resources and time he needs to conduct a thorough inquiry.

During the inquiry’s hearings, the question of the treatment of claims for legal professional privilege under the Royal Commissions Act has arisen. Public attention has focused to an extent on a draft statement of contrition by Mr Andrew Lindberg, the former Chief Executive of AWB, which was inadvertently produced to the inquiry. As a result of Mr Cole’s decision to reject AWB’s claim for legal professional privilege over the draft statement of contrition, AWB applied to the Federal Court for review of Mr Cole’s decision, challenging not just Mr Cole’s decision on the claim of privilege made for the document but also the commissioner’s capacity to determine claims of legal professional privilege.

While the Federal Court decision in AWB Ltd v Cole dismissed the application by AWB on the facts of the case and concluded that the statement of contrition was not protected by legal professional privilege, it also cast significant doubt on whether Mr Cole (or any other person appointed under the Royal Commissions Act) has the power to require the production of a document for inspection where a claim to legal professional privilege has been made.

The scheme of the Royal Commissions Act 1902 as it stands is that a member of a commission has the power to summon a person to appear before the commission to do either or both of giving evidence or producing documents or other things specified in the summons. It is an offence to fail to comply with such a direction but a defence is provided if a person has a reasonable excuse. A reasonable excuse is defined in the act as it stands as being:

... an excuse which would excuse an act or omission of a similar nature by a witness or person summoned as a witness before a court of law.

The practice has been in the past for persons directed to produce documents to make a claim for legal professional privilege and for the commissioner, in the same procedure a judge would apply in a court, to inspect the document and make a ruling. Then—just as the AWB has done in the case I mentioned earlier—the person who has produced the document may challenge that ruling under the Administrative Decisions (Judicial Review) Act. In the decision by Mr Justice Young, the learned judge has essentially concluded that a royal commissioner has no power to inspect a document in respect of which legal professional privilege has been claimed. He has relied upon a series of cases in the High Court which emphasise—and there is no criticism of this case law—that the importance of legal professional privilege as a common-law right, vital to the administration of justice, cannot be abrogated or qualified in a statute other than by express language. Following that reasoning, Mr Justice Young at paragraph 51 of his judgment said:

The principle enshrined in Baker and Daniels—

referring to two of those previous authorities—

is that, in the absence of clear and unmistakable language, a compulsive notice such as that which can be issued under s 2(3A)—

of the Royal Commissions Act—

will not be construed as requiring the production of legally privileged documents.

And then further at paragraph 59, His Honour goes on to say:

... it offends the general principles enunciated in Baker and Daniels to argue that a notice under s 2(3A) imposes an unqualified obligation to produce documents that are the subject of legal professional privilege, unless and until a reasonable excuse is established within the meaning of s 3(5).

His Honour goes on to say:

In my opinion, there is nothing in the RCA to support the contention that the Commissioner has implied authority to inspect documents produced under a s 2(3A) notice for the purpose of determining whether they attract legal professional privilege.

Where does this leave the conduct of royal commissions? It puts royal commissions in a very difficult practical situation, because it means that, if an order or direction is made that a document or class of documents be produced and a claim of legal professional privilege is made, the commission then must either abandon its efforts to obtain access to the document or go to a court itself to seek a declaration that legal professional privilege does not apply or indeed to seek a mandatory injunction that the document be produced. This is, in practical terms, an impossible obligation, because the commissioner has not seen the document and does not know how strong the claim of privilege is. It would make the conduct of inquiries of this kind open to considerable delay and, indeed, possibly tactical claims for legal professional privilege.

As a consequence of all of this, Mr Cole has expressed his concerns with the decision to the government and has sought urgent amendments to the Royal Commissions Act, noting these claims have been made in respect of a great many documents that have not been produced to his inquiry.

The government has accepted that it is desirable to amend the Royal Commissions Act to enable Mr Cole to complete his inquiry expeditiously, and that this should be done as soon as possible. We are therefore seeking passage of this bill in the current winter sittings. Once passed, the amendments will have immediate effect in assisting Mr Cole with completing his inquiry.

The amendments to be made by the bill will restore what most lawyers regarded as the status quo ante and put beyond doubt that a commissioner may require the production of a document in respect of which legal professional privilege is claimed for the limited purpose of forming an opinion about the claim. The amendments will not preclude privilege claims or prevent an application for review under the Administrative Decisions (Judicial Review) Act to the Federal Court of a commissioner’s decision on a privilege claim.

As I said, the bill therefore is intended to reflect the position that the government understood was the case prior to the decision in AWB Ltd v Cole. While passage of the bill will, of course, be of immediate benefit to the Cole inquiry, it will also clarify the law with respect to the way in which legal professional privilege claims are dealt with under the Royal Commissions Act more generally. So the bill is commendable for purposes well beyond Mr Cole’s inquiry.

The Australian government has repeatedly shown its willingness to address any concern raised by Mr Cole and will continue to do so. The amendments to be made by this bill provide another example of this willingness. I commend the bill to the House.

Debate (on motion by Mr Fitzgibbon) adjourned.