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Tuesday, 3 December 1974
Page: 3071


Senator MISSEN (Victoria) -I desire to address my remarks on this Bill to a particular section which gives me considerable concern. I refer to clause 5 in the Bill which is the validating provision. I draw attention to the original memorandum which was circulated in respect of this Bill. Among the main purposes of the Banking Bill, it says that it is to validate, for the purposes of any civil proceedings, acts or transactions already entered into or which might be entered into in future without proper exchange control authority and that the right of the Government to prosecute persons for breaches of the Banking (Foreign Exchange) Regulations will not be affected. The last part does not concern me at all, but the first part does. Clause 5 of the Bill as it stands validates all actions that may be done. I understand there are many actions which are, in most cases I imagine, quite innocent breaches of the regulations.

The further explanation in the memorandum says:

This clause provides for the automatic validation, for the purposes of any civil proceedings, of any act or transaction done in the past without the proper exchange control authority.

I notice from a further amendment that is intended to be moved tonight that that is to be changed. It is proposed, under clause 5, to exclude from that validation any act, thing, contract or other transaction the validity of which has before 3 December 1 974 been called in question for that reason in any proceedings whether or not the proceedings have been completed before that date. There is a further sub-section which is irrelevant for the purpose of my argument. So it is proposed to exclude from a date those proceedings where actions have been taken in the courts and where there has been reliance presumably on the illegality of the act not having obeyed the regulations.

I should also mention that during the afternoon we received a further addendum to the explanatory memorandum which explains amendments which no members of this chamber, so far as I know, had until quite recently. I do not think honourable senators would have had the amendment until a few minutes ago, except I and I think Senator Cotton had it earlier this evening. So far as the further amendment is concerned the explanatory memorandum states:

The purpose of the exemption is to enable proceedings which would be effected by retrospective validation to continue to be decided by the courts under the existing law. The exemption is considered to be equitable.

One of the purposes of my speaking tonight is to challenge whether all those exemptions will be equitable and to suggest that we should look very carefully at that amendment. I have circulated another amendment which would have the effect of saying, so far as the exemption is concerned, that it should be left to the court that is hearing the case to say whether it is just and equitable that that particular piece of litigation should be excluded and whether the right of claiming illegality should be allowed to that particular litigant. I wonder why we are receiving these amendments at such short notice. I wonder why we are receiving explanatory memoranda in the afternoons and the amendments themselves at night. The result is that I have been able to draft my amendment only this evening and I have not been able to consult my colleagues on the matter. I will be moving, at the conclusion of the second reading debate, that the Committee stage be adjourned until the next day of sitting so that there is proper opportunity to consider the amendments and the import of them.

The important significance is that while this is all retrospective legislation and while it is validating actions which I think have been taken mostly innocently by many people and companies over the years, we are going to exclude what, I understand, are very few cases which are either before the courts or, on one reading of the Government's amendment, perhaps have even been completed. The Government's amendment states that the validation is not to apply to persons where litigation has taken place before 3 December. The amendment goes on and adds:

Whether or not the proceedings have been completed before that date;

I raise a doubt as to whether the proceeding which has gone to court and been finished could now be re-raised or an appeal could be lodged. Would it be possible now to raise this question of illegality? I do not speak here from a position of not being without representations from persons who think that they will be affected by the Government's amendment and who believe that strong representation may have been made to the Government for the purposes of individual gain. So in fact persons will in litigation be greatly affected by whether this amendment is adopted. If that is so we should scrutinise it very carefully before this Parliament adopts legislation which will affect litigation.

It is well known, I think, by lawyers in this chamber that very often claims of illegality on the basis that people have not obeyed regulations is a pretty unmeritorious defence where parties have entered into contracts and agreements and acted on them for years and then one endeavours to get out of the contract on the basis of some illegality which he suggests voids the whole contract. I suggest that when the Government says that the exemption it suggests is considered to be equitable it really all depends on the circumstances. One may be thinking of actual cases. But if in fact in litigation the defence of illegality has been raised by way of blackmail or by way of bargaining without any real suggestion of moral wrong on the part of the litigant, I suggest this Parliament should not, by its legislation, give some favoured position so far as the litigants are concerned. That is why I hope to have the Senate consider tomorrow whether it would not be fair that this issue should be determined by the court in which the litigation is to be heard. That court will have all the facts before it. It will have before it the circumstances of how the defence arises, how the parties have acted, how long they have proceeded and whether or not they should proceed. Why should we pick out the date 3 December and say that if people had put in some defence before that date they must be protected? Of course, they may have done that for unworthy motives. They may have just done that in the hope that this legislation might be amended. I suggest that that is no real test, it is no desirable test as to whether the validation which the Government considers should overwhelmingly be given to people who have not obeyed the regulations should be denied to parties who are in fact in this situation.

What I am merely saying at this stage is that this matter should be looked at very carefully by the Senate, because it is very easy, in the rush to get legislation through at this time, to pass something that will in fact be of great benefit to some persons who make representations and speak with a loud voice. Amongst other things I refer to the way in which this amendment is being proceeded with and the way in which it has not received proper consideration by the parties in this chamber. Nor has very much material been put before the Senate as to the reasons for the amendment, in what way it is equitable, how many people will be involved, and so on. For these reasons I suggest that after the second reading stage, the Committee stage should be adjourned so that we do not do an injustice in this area.







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