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Thursday, 17 September 1936

Senator Sir GEORGE PEARCE (Western Australia) (Minister for External Affairs) [4.32]. - I hope that when the bill reaches the committee stage honorable senators will give serious consideration to one point raised by Senator Duncan-Hughes in respect of which an amendment lias been foreshadowed. [ refer to regulations affecting the rights of individuals, which after being found to be invalid are superseded by new regulations validating what had been done earlier. There is a well-known class of cases which generally arise under the taxation laws. I have several of such cases in my mind, and I well remember the discussion of them in Cabinet. Before the Senate makes any alterations whatever, I hope that honorable senators will weigh the consequences of what they are being asked to do. The history of these regulations is usually the same. Regulations are prepared by a draftsman, usually the officer who drafted the act; he believes them to be in consonance with the act. In several cases, the regulations were in force for several years, and nobody ever thought of contesting their validity until one day some individual, more clever or pertinacious perhaps than others, proceeded to contest a particular regulation. On taking the case to the High Court, the court determined that, because of its language, and not because of its intention, this regulation, which everybody had thought until that time was valid, and under which taxpayers had paid large sums of money, did not mean what the draftsman, the responsible department, the Government and everybody else' thought it meant.

Senator Duncan-Hughes - Is not the law always determined by the wording rather than the intention?

Senator Sir GEORGEPEARCE.It is a question of interpretation. In the cases to which I refer the Parliament, the Government and the draftsman responsible for the drawing up of the regulation had a definite intention, which the wording was believed to express, but the High Court interpreted it in a different way. Senator Duncan-Hughes says that a new regulation should not- be issued to cover up the gap thus revealed, and that those whose rights were affected by a regulation which was subsequently found to be invalid should be entitled to recover against the Commonwealth. In reply to an interjection by the Assistant Minister (Senator Brennan), he went so far as to say that they should be able to recover moneys overpaid without even the application of the Statute of Limitations.

Senator Duncan-Hughes - If provision of that kind is to be made for the "future, why not for the past?

Senator Sir GEORGEPEARCE.I have in mind a case in which a taxpayer successfully contested in court, the validity of a regulation. In respect of that taxpayer, the revenue was affected by only a few hundred pounds; but in considering the decision of the High Court, the Government had to have regard to its effect on other taxpayers. No government, lightly contemplates making a regulation retrospective. Senator Duncan-Hughes- speaks as if governments contemplate retrospective legislation with equanimity. I assure him that before a decision in favour of retrospective legislation is arrived at. the matter is thoroughly discussed by Cabinet. I have in mind another instance in which a decision of the court involved the Treasury in a possible loss of nearly £750,000.

Senator DUNCAN-HUGHES (SOUTH AUSTRALIA) - Hughes. - : The amount involved does not affect the principle.

Senator Sir GEORGEPEARCE.Every one believed that the legislation under which the money was collected was valid. Indeed, the taxpayer paid it in that belief, and it was not until a con-, siderable period had passed that he contested its validity. Obviously, the intention of Parliament was that the amount should be paid, but a technical error in the drafting of the regulation enabled that taxpayer to escape. Are we to disregard the possibility of the country being mulct in an amount of £750,000 because of a technical mistake by a draftsman?

Senator Grant - Unfortunately, the correction of technical mistakes is not always the reason for retrospective legislation.

Senator McLeay - Would the Leader of the Senate say that the broadcasting case arose out. of ; a technical mistake by the draftsman?

Senator Sir GEORGE PEARCE - I am not acquainted with the details of that case, and, therefore, cannot reply to the honorable senator's interjection. The case to which I referred arose out ofa technical mistake by a draftsman; and I assure the Senate that it was not an isolated one. As a Minister, I believe that it is my duty to acquaint the Senate with what may be the consequences of its agreeing to the proposed amendment. In my opinion, no injustice will be done by accepting the bill. What every one thought to be the law was suddenly found to be invalid, and the Government, as the mouthpiece of Parliament, took action to put matters right. The tax was paid in the belief that the law as then interpreted had been rightly interpreted, and it was not until some time later that the High Court pronounced otherwise. In one case which I have in mind the Supreme Court of a State had declared valid a regulation which subsequently the High Court hold to be invalid.

Senator Collings - There are too many courts interpreting our laws.

Senator Sir GEORGE PEARCE - There is always an element of doubt about the precise meaning of an act of Parliament. . I ask honorable senators not, to accept the view that the Government favours the making of retrospective. legislation. Sometimes, however, a government finds it necessary to protect the rights of an individual, even as, at other times, it takes action in the interests of the community as a whole.

SenatorDuncan-Hughes. - Should not that be done by legislation?

Senator Sir GEORGE.PEARCE.No. The . statute book is already sufficiently voluminous, and, moreover, the passing of legislation to do what can be done better by regulation would, involve the almost continuous sitting of Parliament. I ask the Senate to think seriously before making the proposed amendment.

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