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Royal Commissions Amendment Bill 2006

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(Circulated by authority of the Prime Minister,

the Honourable John Howard MP)






This Bill is to amend the Royal Commissions Act 1902 (the RCA) to clarify the operation of the RCA in respect of claims of legal professional privilege (LPP).  Amendments were requested by the Commissioner of the current Inquiry into Certain Australian Companies in relation to the UN Oil-for-Food Programme, the Hon Terence Cole AO RFD QC, following the Federal Court decision in AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571.


Following release of the Final Report of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme on 28 October 2005, the Australian Government announced on 31 October 2005 its intention to establish an independent inquiry to examine the decisions or actions of Australian companies mentioned in the Final Report.  The government considered that, in order for such an inquiry to elicit all relevant information, it was necessary for it to have the powers to take evidence on oath and to require the attendance of witnesses and the production of documents, and that it should therefore be conducted under the RCA.


The Governor-General issued Letters Patent for the Inquiry on 10 November 2005.


During the course of the Inquiry’s hearings, the question of the treatment of claims for LPP under the RCA has arisen.  As a result of a decision rejecting an LPP claim over a particular document, AWB Limited (one of the companies mentioned in the Final Report) applied to the Federal Court for review of Mr Cole’s decision, challenging not just Mr Cole’s decision on the document, but also his capacity to determine claims of LPP.  The matter was heard by the Federal Court (Justice Young) on 24 April 2006.


In his judgment of 17 May 2006, Young J held that the application by AWB should be dismissed, the document in question was not subject to LPP, and Mr Cole had the power in the circumstances of the case (as the document had been inadvertently provided to the Inquiry) to form an opinion on whether the document was subject to LPP.  However, the decision cast significant doubt on whether Mr Cole (or any other person appointed under the RCA) has the power to require the production of a document for inspection where a claim to LPP has been made.


Mr Cole has expressed his concerns with the decision to the Australian Government and has sought urgent amendments to the RCA, noting that LPP claims have been made in respect of many documents that have not been produced to his Inquiry.


The Australian Government accepts that it is desirable to amend the RCA to enable Mr Cole to complete his Inquiry.


T he Bill is to put beyond doubt that a Commissioner may require the production of a document in respect of which LPP is claimed, for the limited purpose of making a finding about that claim, that is, deciding to accept or reject it, for the purposes of the Commission.  The amendments would make a number of changes to that end.  They would:

·          put beyond doubt that the definition of ‘reasonable excuse’ in s.1B of the RCA applies to the expression as it appears in s.3(5);

·          provide that a defence of reasonable excuse on the ground of LPP is not available unless LPP was claimed before the Commissioner, or a court has found the document to be subject to LPP;

·          make plain that a Commissioner can make a decision whether or not to accept such a claim;

·          clarify a Commissioner’s powers in this context, particularly with respect to requiring production of documents for inspection; and

·          provide for the consequences of a Commissioner’s decision about an LPP claim.


Essentially, the Bill is intended to reflect the position that the Australian Government understood was the case prior to the recent Federal Court decision.


The amendments are directed at claims of reasonable excuse based on LPP, as this was the issue addressed in the decision of Young J.  The Bill is not directed, directly or by implication, at the powers and procedures applicable in respect of claims of reasonable excuse under the RCA made on other bases.


The amendments proposed by the Bill are to commence on the day after it receives Royal Assent and apply to actions on or after that date, by or in relation to a Commission whether or not it was established prior to that date.




The Bill will have no financial impact.




Clause 1:  Short Title


1.         Clause 1 provides that the Bill, once enacted, may be cited as the Royal Commissions Amendment Act 2006.


Clause 2:  Commencement


2.         Clause 2 provides that sections 1 to 3 of the Bill (and anything else in the Bill not specifically addressed in this clause) are to commence on the day the Bill receives Royal Assent.  Schedule 1 to the Bill is to commence on the day after the Bill receives Royal Assent.  This is a relatively early commencement, due to the urgency of the powers to be provided by the Bill being available for the benefit of the current Inquiry into Certain Australian Companies in relation to the UN Oil-for-Food Programme.


Clause 3:  Schedule(s)


3.         Clause 3 provides that each Act that is specified in a Schedule to the Bill is to be amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the Bill is to have effect according to its terms.




Royal Commissions Act 1902


Item 1 - Section 1B


1.       This item would renumber the existing section 1B as subsection 1B(1).  This is consequential on the proposed insertion by item 3 of a subsection 1B(2), explained below.


Item 2 - Section 1B (definition of reasonable excuse )


2.       The current definition of ‘reasonable excuse’ is expressed to apply “in relation to any act or omission by a witness or a person summoned as a witness before a Commission”.  Subsection 3(5) provides a defence of reasonable excuse for a person served with a notice under subsection 2(3A).  Such a person, however, is not necessarily a witness or a person summoned as a witness, so there is room for doubt whether the definition applies to that subsection.  As there is no policy reason to support treating such a person differently from a witness or a person summoned as a witness, this item would replace the current definition with one which more clearly applies to the expression as it appears in subsection 3(5), as well as the expression as it appears in subsections 3(1B) and (2B). 


Item 3 - At the end of section 1B


3.       This item would insert a new subsection to make plain, for the removal of any doubt, that references in the Act to a requirement to produce a document, or refusal or failure to produce a document, include references in relation to a part of a document.  This is because, for the purposes of new section 6AA, to be inserted by item 5, it is convenient to make express reference to a part of a document, in the context of spelling out the consequences of a finding that a document which had been produced for inspection is in part subject to LPP.  This might, apart from proposed subsection 1B(2), have given rise to doubt as to whether other references to a document included a part of a document.


Item 4 - At the end of section 2


4.       Item 4 adds a provision to the end of section 2 which would make clear for the purpose of relevant offence provisions that the power in section 2 to require production of a document extends to a power to require production of a document that is subject to legal professional privilege (LPP).  This amendment responds to comments by Young J in AWB v Cole ([2006] FCA 571 at paragraph 51) that “in the absence of clear and unmistakable language, a compulsive notice such as that which can be issued under s 2(3A) will not be construed as requiring the production of legally privileged documents”.  Proposed subsection 2(5) makes plain that there is an obligation to produce such documents, when requested - though the obligation is subject to the procedure to be provided under proposed section 6AA (to be inserted by item 5) and subject also to the powers of courts to make binding determinations on the existence of LPP.  Proposed section 6AA is designed to ensure that, in the case of a defence based on LPP, the person making the claim must justify the claim before the Commission; a person who is not satisfied with a decision by the Commission in respect of a claim will be able to seek review of that decision in the Federal Court.


5.       Proposed subsection 2(5) is not intended to enable a Commission to obtain a court order compelling production of a document which is in fact subject to LPP.  Only proposed section 6AA, supported by the offence provision in proposed subsection 6AB(2), will provide a basis to compel production of such a document, and only for the purpose of inspection.


Item 5 - After section 6


6.       Item 5 inserts new express provision for the making of decisions on claims of LPP and the powers available for that purpose, and related offence provisions. 


New section 6AA - Legal professional privilege


7.       New subsection 6AA(1) has the effect that LPP will not be effective as a defence in a prosecution unless the claim for privilege has been upheld by a court (a possibility left open by the provision), or the claim was made in a timely fashion before the Commission.


8.       New subsection 6AA(2) makes plain that, where LPP is claimed before a Commission, the Commission can decide whether to accept or reject the claim.  A discretion is provided, so that where it is not a priority for a Commission to pursue further a document which has been the subject of an LPP claim, the claim can be concurred to on a de facto basis.  It is not intended to provide the Commission with a discretion to make a decision on grounds other than satisfaction or otherwise that the legal basis for a claim of LPP has been established.


9.       An intended effect of the express provision is to make plain that a Commission’s finding on a claim of LPP will be a decision under an enactment, and therefore subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977 as well as under section 39B of the Judiciary Act 1903 .


10.     Where LPP has been claimed before the Commission, new subsection 6AA(3) makes plain that the Commission may require production of the document for inspection, by the Commissioner and/or an authorised person or persons, for the purpose of deciding whether to accept or reject the claim.  This reflects the power available to courts in cases where LPP is claimed.


11.     New subsection 6AA(4) provides for consequences in the event a document is produced for inspection and the claim for privilege is accepted.  The document must in that case be returned to the person who provided it.  (In a case where a claim of LPP is accepted in respect of part only of a document, a further requirement might be issued for production of so much of the document as is not subject to LPP.)  The contents of a document that have been found to be subject to LPP will not be able to used for the purposes of any report or decision the Commission makes; this may mean disregarding part or all of a document for those purposes.  (Item 7 below proposes amendment of section 6DD, the use immunity provision, so that production for inspection will not be able to be used against the claimant of LPP in any other context.)


12.     New subsection 6AA(6) makes plain that the Commission can use its powers under section 2 in relation to consideration of the claim of LPP, for example to require information about the circumstances in which a document came into existence, and to examine witnesses in relation to the claim.


New section 6AB - Offences relating to claims for legal professional privilege


13.     This new section provides additional offences, closely paralleling the existing offences in section 3. 


14.     New subsection 6AB(1) establishes an offence in circumstances where a person fails to produce a document despite rejection of a claim for LPP under new section 6AA by a member and a further requirement to produce.  (A member of a Commission rejecting a claim for legal professional privilege conventionally allows an additional period of time for compliance, for practical reasons and to allow an application for judicial review of the decision rejecting the claim.)


15.     New subsection 6AB(2) provides the sanction in relation to the obligation to provide a document for inspection, for the purpose of making a decision on a claim of LPP under new section 6AA.


16.     Like the existing offences in section 3, these are offences of strict liability, with maximum penalties expressed as $1,000 (that is, 10 penalty units, currently $1,100) or 6 months imprisonment.  An offence of strict liability would not necessarily attract a penalty of imprisonment, however, it is considered that the penalty is appropriate in this case, because it is presently available in respect of the offences of strict liability in section 3, and because of the importance of compliance with requirements issued by a Commission established under this Act.


17.     The defence of reasonable excuse will be available.  As these offences relate to conduct in connection with consideration of a claim for LPP by a member under section 6AA, legal privilege cannot constitute a reasonable excuse unless established by a court.


18.     It will be a defence to a prosecution for an offence against this section if the document in question was not relevant to the matters into which the Commission was inquiring.  This parallels existing subsection 2(6).


Item 6 - Subsection 6A(1)


19.     Item 6 amends subsection 6A(1) by inserting “or section 6AB” after “subsection 3(2B) or (5)” so that a defence of self-incrimination will not be available in relation to the new offences to be established in section 6AB, any more than they are available for the existing offences in section 3.


Item 7 - At the end of paragraph 6DD(1)(b)


20.     Item 7 adds “or subsection 6AA(3)” to the end of paragraph 6DD(1)(b) to ensure that evidence produced by a witness in order for a claim of LPP to be determined by the member under subsection 6AA(3) cannot be used against that witness in any civil or criminal proceedings.


Item 8 - Subparagraphs 6F(1)(a)(ii) and (c)(ii)


21.     Item 8 amends subparagraphs 6F(1)(a)(ii) and (c)(ii) by inserting “or 6AA(3)” after “subsection 2(3A)”, in each provision.  These amendments make plain that documents produced by a witness in order for a claim of LPP to be determined by a member under subsection 6AA(3) may be inspected by the member and the member may make copies of them.


Item 9 - Application of amendments


22.     Item 9 provides that the amendments made by Schedule 1 apply, after the commencement of the Schedule, in relation to the proceedings of any Commission after that commencement, whether the Commission was established before or after that commencement.  This is so that the provisions will be able to be used by the current Inquiry into Certain Australian Companies in relation to the UN Oil-for-Food Programme.