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Statement to Parliament about Garfield Barwick



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-Ij. A U S T R A L I A

PRIME MINISTER

FOR MEDIA APRI1 29. 1080

STATEMENT TO PARLIAMENT

ANY ALLEGATIONS MADE AGAINST THE CHIEF JUSTICE OF AUSTRALIA ARE A MATTER OF SERIOUS CONCERN, THE POSITION OF CHIEF JUSTICE IS ONE OF THE HIGHEST POSITIONS IN THE COUNTRY, THE GOVERNMENT TREATS THE ALLEGATIONS AS A VERY SERIOUS MATTER,

I KNOW THAT THE CHIEF JUSTICE HIMSELF SIMILARLY TREATS THEM AS A VERY SERIOUS MATTER. .

THERE HAS BEEN SPECULATION IN THE AGE NEWSPAPER - ALTHOUGH NO IMPUTATION IS MADE OF ANY STANDING WHATSOEVER AGAINST THE IMPARTIALITY OF THE CHIEF JUSTICE, THE PURPOSE OF THE NEWSPAPER'S RESEARCH IS NOT CLEAR - BUT THE NEWSPAPER HAS

EXPRESSLY.DISCLAIMED ANY IMPUTATION AGAINST THE IMPARTIALITY OF THE CHIEF JUSTICE,

NEVERTHELESS, THE NEWSPAPER ARTICLE HAS LED TO SPECULATION AND SUGGESTIONS, AND AT THE OUTSET THE FACTS OF THE MATTER NEED TO BE CLEAR, THE CHIEF JUSTICE HAS WRITTEN TO ME AND

HAS AUTHORISED ME TO MAKE HIS LETTER AVAILABLE TO THE PARLIAMENT, I ASK LEAVE, MR SPEAKER, TO HAVE THAT LETTER INCOROPATED IN HANSARD. I DRAW THE HOUSE'S ATTENTION PARTICULARLY TO THE FACT THAT THE CHIEF JUSTICE'S LETTER STATES CATEGORICALLY THAT HE HAS

NEVER HAD ANY PROPRIETARY INTEREST, LEGAL OR BENEFICIAL, IN MUNDROOLA PTY LTD, OR IN ANY OF ITS ASSETS - MUNDROOLA BEING A FAMILY COMPANY FORMED TO BENEFIT THE CHIEF JUSTICE'S TWO CHILDREN,

THE LETTER INDICATES THAT PRIOR TO 1974 THE CHIEF JUSTICE HAD CEASED TO BE ACTIVELY ENGAGED IN THE MANAGEMENT OF THE COMPANY, IN1974 HE RESIGNED FROM THE DIRECTORATE OF THE COMPANY AND SINCE THEN HAS .NOT KEPT HIMSELF IN TOUCH WITH THE COMPANY'S A C T IV IT IE S . LET ME THEN QUOTE TWO PARAGRAPHS OF THE CHIEF JUSTICE'S LETTER:

QUOTE JUSTICE IS SEEN TO BE DONE IF AN INFORMED AND FAIR-MINDED PERSON COULD NOT HAVE HONESTLY ENTERTAINED DOUBT AS TO THE IMPARTIALITY OF THE JUDGE, THE IDENTITY OF THE JUDGE, THE NATURE OF THE ISSUES IN THE CASE, THE POSSIBLE EFFECT OF THEIR DECISION AND, WhiERE SHAREHOLDING IS INVOLVED, THE

EXTENT OF THE SHAREHOLDING IN QUESTION, WOULD NO DOUBT ALL BE INCLUDED IN THE FAIR-MINDED PERSON'S CONSIDERATION, FURTHER, IN CONSIDERING THE POSSIBLE EFFECT OF THE DECISION OF THE CASE EITHER WAY UPON THE RIGHTS OF A SHAREHOLDER IT WOULD BE REMEMBERED THAT IT IS ONLY IN THE MARKET VALUE OF THE SHARES AND THE EXTENT OF A DIVIDEND THAT THE RIGHTS OF A

SHAREHOLDER ARE LIKELY TO BE AFFECTED,

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I AM CERTAINLY QUITE SURE THAT NO DECISION OF MINE HAS BEEN IN THE LEAST INFLUENCED BY THE FACT THAT MUNDROOLA PTY LTD HAD ANY SHARES IN COMPANIES IN LIT IG A T IO N BEFORE THE COURT, I CANNOT AND DO NOT BELIEVE THAT A FAIR-MINDED PERSON,

KNOWING THE FACTS AS I HAVE INDICATED THEM, WOULD IN ALL HONESTY HAVE ENTERTAINED ANY DOUBT OF MY IMPARTIALITY IN THE RESOLUTION OF AN APPEAL, PARTICULARLY AN APPEAL INVOLVING, AS MOSTLY THEY DO, MATTERS OF LEGAL P R IN C I P L E : THAT IS TO SAY, I FEEL SURE THAT NO INFORMED AND FAIR-MINDED

PERSON WOULD HAVE HONESTLY THOUGHT THAT MY VIEWS MIGHT HAVE BEEN INFLUENCED BY THE FACT THAT MY ADULT CHILDREN BENEFICIALLY OWNED SHARES IN THE LITIGANT COMPANY, UNQUOTE

THESE, MR SPEAKER, ARE THE FACTS OF THE MATTER, THE GOVERNMENT IN 1 9 / 9 RECEIVED A REPORT OF A COMMITTEE OF INQUIRY CONCERNING PUBLIC DUTY AND PRIVATE INTEREST - THE BOWEN REPORT, THE BOWEN REPORT DEALS WITH QUESTIONS OF CONFLICT OF INTEREST IN

RESPECT OF HOLDERS OF J U D IC IA L OFFICE, THE GOVERNMENT HAS ACCEPTED THE BOWEN REPORT IN GENERAL TERMS, THE REPORT HAS THIS TO SAY ABOUT HOLDERS OF JU D I C I A L OFFICE,

QUOTE' CONFLICT OF INTEREST SITUATIONS INVOLVING MEMBERS OF THE FEDERAL JUDICIARY ARE CURRENTLY REGULATED BY THE CRIMINAL LAW, BY LEGAL DOCTRINE, AND BY CONVENTION,

UNQUOTE,

THERE IS NO SUGGESTION THAT THE CHIEF JUSTICE HAS BROKEN THE LAW. THE BOWEN REPORT GOES ON TO SAY:

QUOTE IT IS NOW ACCEPTED THAT JUDGES SHOULD NOT ENGAGE IN BUSINESS OR IN ANY WAY BE ASSOCIATED WITH BUSINESS INST IT UTIONS , FOR EXAMPLE AS DIRECTOR, TRUSTEE OR ADVISER, THE LAW D ISQU AL IF IES a Judge who has a p e c u n i a r y i n t e r e s t i n one of t h e p a r t i e s

BEFORE THE COURT, ALTHOUGH IT IS ACCEPTED THAT THE PARTIES TO A CASE CAN WAIVE THE DISQUALIF ICATION, FOR EXAMPLE, A JUDGE IS D IS QUAL IF IED IF ONE OF THE PARTIES IS A COMPANY AND HE IS A SHAREHOLDER IN I T , IN ENGLAND, IT HAS BEEN ASSUMED

THAT THE DISQUALIFICATION APPLIES WHETHER THE SHARES ARE THE JUDGE'S PERSONAL HOLDINGS OR THOSE OF HIS SPOUSE, HOWEVER, IN THE BANK NATIONALISATION CASE, WHERE THE WIFE OF ONE JUDGE HELD-SHARES IN ONE OF THE PARTIES AND ANOTHER JUDGE WAS JOINT HOLDER OF SHARES AS A BARE TRUSTEE FOR SOMEONE

ELSE, THE JUDGES WERE NOT DISQ UALIF IED, UNQUOTE,

THE BOWEN REPORT THEN CONSIDERED WHETHER THERE WAS A NEED FOR FURTHER RULES IN AUSTRALIA EITHER ALONG THE LINES OF UNITED KINGDOM PRACTICE, OR UNITED STATES PRACTICE, IT CONCLUDED THAT THERE WAS NO DISCERNIBLE NEED FOR SUCH EXTENSION,

IN OTHER WORDS, MR SPEAKER, THE BOWEN COMMITTEE SATISFIED ITSELF AS TO CURRENT AUSTRALIAN PRACTICE; AND CURRENT AUSTRALIAN PRACTICE WOULD NOT REGARD A CONFLICT OF INTEREST SITUATION ARISING- SIMPLY BECAUSE OF SHAREHOLDINGS BY MEMBERS OF THE IMMEDIATE FAMILY OF A JUDGE OR CHIEF JUSTICE, SO HERE THERE IS NO IMPROPRIETY,

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I WOULD LIKE TO DRAW PARTICULAR ATTENTION TO THE STATEMENT IN THE BOWEN COMMITTEE'S REPORT THAT

QUOTE IT IS NOW ACCEPTED THAT JUDGES SHOULD NOT ENGAGE IN BUSINESS OR IN ANY WAY BE ASSOCIATED WITH BUSINESS INSTITUTIONS, FOR EXAMPLE AS DIRECTOR,^ TRUSTEE OR ADVISER,

UNQUOTE,

HAVING REGARD TO WHAT THE REPORT SAID ABOUT MINISTERS, I SUGGEST THAT THIS STATEMENT SHOULD NOT BE READ AS PREVENTING A JUDGE FROM BEING THE DIRECTOR OF A FAMILY COMPANY WHICH HOLDS LAND OR A PORTFOLIO OF SHARES, I SUGGEST THAT THE TYPE OF CIRCUMSTANCES IT IS DIRECTED TO IS THIS -THAT A JUDGE

SHOULD NOT FOR INSTANCE BE INVOLVED IN THE DAILY CONDUCT OF A BUSINESS WHICH BRINGS KIM INTO CONTACT WITH MEMBERS OF THE ■ PUBLIC, NOR SHOULD HE BE A DIRECTOR, TRUSTEE OR ADVISER OF A CORPORATION WHICH CARRIES ON A BUSINESS LIKE A RETAIL TRADING COMPANY, INSURANCE COMPANY OR TRUSTEE COMPANY WHICH HAVE SUBSTANTIAL DEALINGS WITH THE PUBLIC,

A JUDGE WHO IS MERELY THE DIRECTOR OF HIS FAMILY COMPANY WHICH OWNS A PORTFOLIO OF SHARES OR LAND IS NOT IN THIS POSITION AND I DO NOT THINK THIS SENTENCE SHOULD BE READ AS APPLYING TO SUCH A JUDGE,

I UNDERSTAND THAT SIX PARTICULAR CASES HAVE BEEN MENTIONED IN WHICH THE BARWICK FAMILY COMPANY IS SAID TO HAVE HAD SHARES IN ONE OF THE PARTIES APPEARING BEFORE THE COURT ON WHICH THE CHIEF JUSTICE SAT. THERE IS NO EVIDENCE THAT ANY OF THESE CASES WAS IN ANY WAY AFFECTED BY THE INTERESTS HELD BY MEMBERS OF THE CHIEF JUSTIC E'S FAMILY,

FOUR OF THE SIX CASES WENT AGAINST THE PUBLIC COMPANY CONCERNED ON THE CHIEF JUSTIC E'S VOTE AND OTHER JUDGE'S VOTES, NONE OF THE DECISIONS TURNED ON THE VIEWS OF THE CHIEF JUSTICE ALONE. THAT IS , THE DECISIONS WERE EITHER UNANIMOUS -

INDEED IN FIVE OF THE SIX CASES - AND IN THE SIXTH BY A

MAJORITY OF FOUR JUDGES (INCLUDING THE CHIEF JUSTICE) TO « ONE,

THE DECISION AS TO WHETHER A CONFLICT OF INTEREST SITUATION ARISES IS ONE FOR THE INDIVIDUAL TO MAKE, IT IS CLEAR FROM THE CHIEF JUSTIC E'S LETTER THAT HE DOES NOT CONSIDER, AND NEVER DID CONSIDER, THAT SUCH A CONFLICT OF INTEREST EVER AROSE, ALLEGATIONS, SOME TIME AFTER THE EVENT, THAT THERE HAS BEEN OR MAY HAVE BEEN CARRY LITTLE WEIGHT, THEY ARE AMPLY AND ABSOLUTELY REFUTED BY THE FACTS PRESENTED IN THE CHIEF JUSTIC E'S LETTER, AND BY THE FINDINGS OF THE BOWEN

REPORT AS TO WHAT IS AND SHOULD BE PRACTICE IN AUSTRALIA,

AS I STARTED OFF BY SAYING, THE GOVERNMENT REGARDS ANY ALLEGATIONS SURROUNDING THE POSITION OF CHIEF JUSTICE OR OF ANY JUDGE AS A MATTER OF SERIOUS CONCERN, WE HAVE CONSIDERED THE MATTER SERIOUSLY AND FIND NO BASIS THAT ANY CONFLICT OF INTEREST

SITUATION EXISTS OR EXISTED,

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IT HAS BEEN SPREAD IN THE NEWS MEDIA THAT THE OPPOSITION SEES THIS MATTER AS AN OPPORTUNITY OF GREAT ELECTORAL· ADVANTAGE AND IS SET TO PURSUE THE CHIEF JUSTICE PUBLICLY AND IN THE PARLIAMENT, I CAN UNDERSTAND THE OPPOSITION'S ELECTORAL WORRIES, IT IS , .’HOWEVER, SINGULARLY UNFORTUNATE IF THEY .

HAVE DECIDED UPON THIS AS AN ELECTION DEVICE,

IN THE FIRST PLACE, IT DEMEANS THEM; IN THE SECOND PLACE, THE FACTS DO NOT SUPPORT WHAT IS SAID TO BE A CASE AGAINST THE CHIEF JUSTICE, THERE IS NO CASE IN ANYTHING THAT HAS BEEN PRESENTED FOR THE ESTABLISHMENT OF A JOINT PARLIAMENTARY COMMITTEE OR A PARLIAMENTARY INQUIRY, OR OF ANY OTHER INQUIRY

WHATSOEVER, '

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HIGH C O U R T OF AUSTRALIA

C H A M B E R S O F T H E C H I E F J U S T I C E

T A Y L O R S Q U A R E

D A R L I N G H U R S T . N S W . 2 0 1 0

28th April, 1980.

As publicity has been given to the affairs of Mundroola Pty. Ltd., and as political advantage is obviously sought to be made of them and my former connection with them, you should know the following facts.

As a young man, I formed Mundroola Pty. Ltd. to benefit my two children, both during my lifetime and after my death. With the exception of. a relatively small shareholding taken by my wife for a purpose which I will later mention,

our two children have always been the sole proprietors, legally and beneficially, of the shares of the company and therefore of all its assets.

I have never had any proprietary interest, legal or beneficial, in the company or in any of its assets. I have never derived any income, nor any personal advantage in taxation, from the existence or the activities of the company.

With the assistance of Mr. L. J. Thompson, a man . of high repute in the business world, I managed and controlled the company's affairs during my children's minority and for some time thereafter. But the making of returns, including

income tax returns, was left respectively to the solicitors and accountant employed by the company. The company was never a trading company and confined itself to investment in land and shares in companies.

. As my son progressed in his legal studies, I progressively involved him in the management of the company's affairs and’lessened my own participation therein. Consequently, for some years prior to 1974 I had ceased to be actively engaged in that* management. I had decided that my son, in

consultation with his sister and with the assistance of Mr. Thompson, should completely take over that management.

In 1974 my attention was called to the fact that . legally I retained control of the company. I then formalised the situation which had developed and resigned from the directorate of the company. .

My wife remained as a shareholder and as a director so as to be available to arbitrate between the children in the event of their disagreement about the company's affairs.

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She has never actively participated in those affairs and has never had any need to act as arbiter between the children.

Since disconnecting myself from the active management of the company, I have not kept myself informed of the details of its activities and, in particular, of its share portfolio or its movements.

Mention has been made of my being a member of a Full Court deciding cases in which public companies were litigants and in which Mundroola Pty. Ltd. held some shares. It is not suggested, I gather, that my views in' any of these

cases were in any wise influenced by the circumstance that my children, then adult, were entitled in their own right to shares in the companies concerned; but it is suggested that justice might not appear to have been done in those cases.

Justice is seen to be done if an .informed and fair-minded person could not have honestly entertained doubt as to the impartiality of the judge. The identity of the judge, the nature of the issues in the case, the possible effect of their decision and, where shareholding is involved,

the extent of the shareholding in question would no doubt all be included in the fair-minded person's consideration. Further, in considering the possible effect of the decision of the case either way upon the rights of a shareholder it would be remembered that it is only in the market value of

the shares and the extent of a dividend that the rights of a shareholder are likely to be affected.

I am certainly quite sure that no decision of mine has been in the least influenced by the fact that Mundroola Pty. Ltd. had any shares in companies in litigation before the Court. I cannot and do not believe that a fair-minded person, knowing the facts as I have indicated them, would in

all honesty have entertained any doubt of my impartiality in the resolution of an appeal, particularly an appeal involving, as mostly they do, matters of legal principle: that is to say, I feel sure that no informed and fair-minded person would have honestly thought that my views might have been

influenced by the fact that my adult children beneficially owned shares in the litigant company.

I notice'that reference is made in the press to the fact of my bankruptcy in the 19201s , no doubt hoping by the reference to discredit me in the public mind. In those circumstances, I may be permitted to refer to the facts of the matter, something which I have not heretofore troubled to do. . .

I had allowed a business run by my brother to be conducted in my name because he 'was then a minor. When the business failed I was legally liable for its debts. The principal creditors were three oil companies. I negotiated with them and asked for time to pay, undertaking to do so as promptly as I could. They refused and preferred to bankrupt me.

Notwithstanding the bankruptcy and my discharge from it, I fully paid out of my subsequent earnings all the creditors of the business and all my own creditors, including my bank, all the moneys formerly due to them, with the

exception of the oil companies. I felt no moral obligation to make payment to them, having regard to their choice of my bankruptcy rather than the acceptance of my.offer to pay.

You are at liberty to publish this letter or to use its information as you may see fit.

The·Right Honourable Malcolm Fraser, C.H., M.P., Prime Minister of Australia, ■

Parliament House, CANBERRA. A.C.T. 2600.