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Wednesday, 4 November 1992
Page: 2626


Mr COSTELLO (9.42 p.m.) —The time allotted for the debate of the Law and Justice Legislation Amendment Bill (No. 4) 1992 will elapse at 10.15 p.m. That means that some 33 minutes have been allowed to debate this Bill in the Parliament of this country. If this Parliament were operating properly I would have 30 minutes to speak and the other two speakers listed would have 20 minutes to speak. We would then go into committee where I would move some five amendments and they would be debated and put. The Parliamentary Secretary to the Attorney-General (Mr Duncan) would then come into the Parliament and respond to the arguments that we had put and the matter would go to debate.

  The fact is that this Parliament is not operating properly. Regardless of the fact that honourable members have sought to speak in this debate, they will be unable to do so. Regardless of the fact that we have amendments to move, we will be unable to debate them in committee. Regardless of the fact that the relevant Minister or Parliamentary Secretary ought to come in here to respond and put an argument in opposition to the position we have put, it will not occur because this debate—come hell or high water—will finish in this House at 10.15 this evening.

  If the people of Australia really want to know what is wrong with politics in this country at the moment they would get a very fair indication from the way in which this Bill is being treated, and indeed the way in which some 40, 50, maybe 60 Bills will be treated this week and next week. The Parliament of this country has sunk to a low ebb. It is the responsibility of the Government; the Government manages the Parliament. Frankly, the Government does not have the operation of this Parliament high on its agenda in allowing it to fulfil its proper constitutional role—the role it ought to have in scrutinising legislation.

  It is instructive to look at it from that point of view. This is the Law and Justice Legislation Amendment Bill (No. 4) 1992—in other words, it is the fourth Bill this year correcting other statutes. If the Government had got its act together and done it properly first off, these Bills would not have been necessary. Even though this is the Law and Justice Legislation Amendment Bill (No. 4) for 1992, at the end of its sorry, constricted passage this evening there will be errors which no doubt will have to be fixed by the Law and Justice Legislation Amendment Bill (No. 1) 1993. So we will cascade along next year, fixing up drafting errors because this Government will not allow enough time, debate or consideration to get these things right in the first place.

  This Bill seeks to amend eight Acts, including the Bankruptcy Act. We are now amending the Bankruptcy Amendment Act 1991, which is not even 12 months old. We have already had to come back to amend a Bill which was put through under very similar circumstances—guillotined through the Parliament—in 1991 and which has errors in it that now need to be corrected. Indeed, the amendments which are being made in the Law and Justice Legislation Amendment Bill (No. 4) do not even correct the errors which were in the Bankruptcy Amendment Bill 1991. I will move, in due course, the amendments circulated in my name—amendments Nos 1 and 2—which improve the siguation caused by errors which have been left out of this correction which is correcting other errors and which will be accepted by the Government.

  This indicates the fact that the Opposition takes legislation in this place seriously. We read it and, when we have the opportunity, we improve it. The effect of those amendments will be that annulments of bankruptcy and annulments in relation to compositions of creditors which have to be determined by the court will still be heard in open court. I thank the Government for accepting amendments Nos 1 and 2 which improve this Bill which is correcting errors that should never have occurred in the first place.

  This Bill will also make amendments to the Complaints (Australian Federal Police) Act. It will pick up consequential amendments that are necessitated by a Bill which went through the Parliament in 1991 and that were not made then. So we are back here this year picking up consequential amendments that were left out in error then.

  We will be doing the same thing in relation to the Freedom of Information Act. A Bill went through last year—the Freedom of Information Amendment Bill 1991—which amended various sections of the Freedom of Information Act, but it did not pick up all of the consequential amendments. It was again lacking. It again was not in the form in which it could have been if the legislation had been prepared properly. So this Bill will go through in order to correct some of those errors. We will support the correction of those errors, but the fact is they should never have been made—and would never have been made if the Government had attended properly to its legislative program; or, indeed, if it could not do that, if it had allowed for proper debate in this Parliament so that the Parliament itself could have scrutinised this legislation.

  We then come to amendments to the Federal Court of Australia Act 1976. Section 43 of that Act empowers the Federal Court to award costs in proceedings. The proposed amendment in this Bill will prohibit the Federal Court awarding costs against a person represented in representative proceedings brought under part IVA of the Act. An exception will be made in the special circumstances dealt with in sections 33Q and 33R in part IVA and in the case of a proceeding of a representative character commenced under another Act in respect of any provision in the Act to the contrary.

  Part IVA was inserted into the Act by the Federal Court of Australia Amendment Bill 1991—another Bill that went through the Parliament last year which we are now back here amending one year later. Under the amendments that were put by the Government to allow representative or class actions, it is possible that people can be joined into a class and an action can be taken on their behalf. Where such a representative proceeding is taken and lost, the question arises: who bears the cost? This amendment will make it clear that if people have been joined into a class action and are represented in a proceeding which then fails, the costs will not be ordered against them. So even though people can be joined into a court action without their knowledge or consent, at least now they will not be ordered to pay the costs if those court proceedings fail.

  This is a great admission from the Government, but this piece of legislation was vehemently opposed by the Opposition. When it was debated in this place on 26 November I said it was bad legislation; it was an attack on legal rights. Under our system of law if people want to go to court they will choose to do so. People consent to go to court; they do not get bound up in court proceedings that they have not heard of by reason of the fact that they have not taken steps to get out of it.

  I remember standing in the Parliament and raising this exact point. What would be the position of a person who had been joined into a class and an action had been taken and failed? What would be their position in relation to costs? If the Government at that stage had been more interested in good legislation than railroading the Parliament, we could have fixed it then.

  I want to make it clear that the Opposition's objections to this procedure, that automatically joins people in a particular class into an action without some conscious act of consent, stands. We do not believe in a system that says your rights can be determined without your knowledge in the event that you have failed to take steps to have yourself taken out of the action. We believe that your rights ought to be determined only when you choose to have them determined, either by taking your own action, or indeed by opting into a representative action.

  Given the fact that the Government has taken the conceptually wrong position, which has now led to complications—and indeed has led to the problems that we are now seeking to amend—we will support this amendment. It makes a little less worse a very bad system. I do want to raise, however, something that we will be moving by way of an amendment in due course. It is a point that I raised when this Bill came in in the first place.

  If people want to take a class action and join in all members of a class, in the event that they do not consciously take themselves out, and if, as a result of that, the action loses—none of the members of the class are liable for costs—there will be an obvious incentive to put up an impecunious representative party. Why would you not? If the representative proceeding fails and it is only the representative party, the named party, that can be liable for costs, why not have an impecunious person? The defendant in those circumstances will not be able to recover costs. It does not matter that they get an order for costs; they will not be able to recover costs.

  Obviously, this raises the possibility of greenmail, where a class action can be started in the name of an impecunious plaintiff and the defendant knows that even if it wins, at the end of the day it has an order for costs which will be barren against an impecunious representative party. The obvious commercial decision of those defendants will be, `We will spend some of the money we would obviously have to spend defending our position in buying off the representative party, or indeed the class, and come out, not vindicated by the court, but at least less financially worse off'.

  The Opposition will move amendment No. 5 of the amendments that have been circulated in my name directed at covering potential abuses of the system. It gives the court a discretion to award costs against persons on whose behalf a proceeding has been commenced, if there are exceptional circumstances for so doing. We do not define `exceptional circumstances', but the circumstance we seek to cover is where there are members of a class who have assets or who indeed may have decided the action should be taken, but the person against whom the order for costs can be made is an impecunious plaintiff or representative party or named party, and those people can effectively shield behind that impecunious person. In those circumstances, if evidence is forthcoming to the court, the court should have the power nonetheless to make an order for costs which has some chance of being fulfilled. Justice demands it.

  The Bill also proposes to insert new sections into the Federal Court of Australia requiring registrars and deputy registrars to take an oath or affirmation of office before the Chief Judge of the Federal Court or a judge of the Federal Court before commencing duty. This is very interesting. When it came to prescribing the oath that the registrars would take, a form of oath was set out in the legislation, what is commonly called an oath of office, that the person would discharge his or her duties and would discharge them in accordance with their requirements.

  I managed to compare it with the oath that is required of the judges themselves. The oath that is required of the judges themselves, of course, is rather different. It is not just an oath of office; it is also an oath of allegiance that the judicial officer will bear true allegiance to Her Majesty the Queen of Australia, her heirs and successors according to law. It is a common form of oath. It is taken by members of parliament. It is taken by judges. It is taken by members of the Industrial Relations Commission. It is taken by the registrar of the Industrial Relations Commission, and when there was a recent amendment to the Australian Capital Territory Supreme Court Act, it was provided that it would be taken by the registrar of that court. Mysteriously, the oath prescribed for registrars of the Federal and Family courts does not follow that form and does not provide for that oath of allegiance to be taken.

  Whatever the Government thinks—and we see Ministers who like to fly off to Asian capitals and cast aspersions on the heirs to the throne—the fact is that in this country, the Queen is the head of the constitutional monarchy and until that is lawfully changed, as in a citizenship oath, oaths of loyalty are taken in that prescribed form. There is no reason why the oath should not be the same for registrars in the Federal and Family courts as indeed it is for the judges. We will move amendments to ensure that there is that common form and to ensure that it is the same common form as applies to other registrars and indeed in other commissions.

  I come now to the Privacy Act. The Privacy Act is one of the real doozies of this Government. It was one of those Acts that sort of started and never seemed to have an end. It was one of those Acts that even confused the Government. The honourable member for Gippsland (Mr McGauran) will say that is not difficult. We just saw a Minister in here who did not bring down the pages of one of his speeches and could not finish the speech. The people of Australia probably think that Ministers know what they are doing. It is very instructive to see what actually happened.

  The Privacy Act illustrates indeed one of the great legislative failures of this Government. When it finally got to the Senate, the Opposition moved 50 amendments and the Government accepted 10. The Government moved 40 of its own, and that was in December of 1990. When it was due to come into effect by September of 1991, the Government rushed down here to delay its coming into effect—this was some eight months after it had finally passed the Bill with some 50 amendments—and it put further amendments.

  So we had 10 of our amendments and 40 of the Government's amendments in 1990. By 1991 we had a whole new raft of amendments and, lo and behold, what are we doing now in 1992? Good heavens, we have discovered that there is a need for some more amendments to the Privacy Act. I do not think there is anything left of the original Act. I think that the tapestry of amendments has now been sewn together into an Act of an entirely different quality. The one thing that can be said for the Government, I suppose, is that it really must keep the parliamentary draftsman busy as it considers and reconsiders.

  You know what? I think we will be back here next year amending this very same Act. In fact, I think this Parliament could probably go for 10 years amending the Privacy Act, bit by bit, piece by piece, in order to finally get it wrong. Sooner or later, you really have to get legislation right. Presumably we do not exist in this Parliament year after year to amend our own incompetent work. Presumably, one day this Privacy Act is going to be settled and is actually going to be a piece of legislation that has a clear start and a clear end, is carefully thought out and actually works, and works well.

  There are quite a few changes as a result of these amendments, and I will review some of them briefly. The bulk of the amendments make further provision for securitisation schemes. They deem organisations involved in securitisation arrangements to be credit providers while they are performing tasks for the purposes of those arrangements. The consequence of deeming trustees and trust managers involved in securitisation arrangements to be credit providers is that they will be able to obtain access to credit reports from credit reporting agencies in their own right for the purpose of assessing a risk involved in purchasing loans by means of the arrangements.

  Similarly, credit enhancers will be able to obtain access to credit reports for the purposes of assessing the risk of undertaking credit enhancement of the loan. These amendments will facilitate the growth and operations of the securitisation industry and are welcomed by the Opposition.

  There will be a widening of the provisions as regards disclosure of information to guarantors. I refer to proposed new paragraph 18N(1)(bg). Honourable members should just mull that around in their minds. That will give them an idea as to how simple and well thought out this legislation is! By the way, laymen are supposed to understand this kind of thing. People are supposed to be able to read these laws and know what the Parliament has asked them to do. But, by the time this Government has mishmashed the whole of its legislative policy, one would have to be much brighter than the Minister who lost his speech tonight to understand what it actually means.

  Proposed new paragraph 18N(1)(bg) will permit credit providers to disclose to guarantors credit information relating to a borrower where the borrower has consented to the disclosure of the information. The provision will apply to guarantees entered into after the commencement of the amendments. In respect of guarantees entered into before the commencement of the amendments, the borrower's consent will not be required, but the information that may be disclosed will be limited to information relevant to the amount or possible amount of the person's liability under the contract of guarantee. These amendments will assist guarantors to find out relevant information about the persons that they are guaranteeing, and we will support them.

  I should say again that when the credit reporting provisions of the Privacy Act came forward we said that they were flawed. Indeed, we introduced an alternative Bill which was much more straightforward than the current Bill with all of its amendments. It was a Bill that was overwhelmingly supported by the business and users community of this country and would have avoided many of these problems. The problem is that, when we start out with a Bill that has a flawed logic to it, we get into all of these sorts of complications as we try to pick up the unintended consequences of all sorts of things that should never have been tried in the first place.

  Other amendments will permit the disclosure of information concerning an account such as the account balance, the amount of available credit on the account and minimum payments due to a person who is authorised to operate the account. So we are talking there about joint account holders such as the husband and wife situation where the husband or the wife may have the account in his or her name but another person is authorised to operate it. That other person will now be allowed to get information concerning the account such as the account balance and available credit so that he or she will be able to know the position of the account when coming to operate it. Obviously, there is a good policy in that. Overall, in a flawed situation with a dreadful track record of legislative amendment, the best that can be said for this Bill is that it improves a bad situation, and it will have our support.

  I foreshadow the amendments that have been circulated in my name. Amendments Nos 1 and 2 will correct the error in the current amendments to the Bankruptcy Act, and I thank the Government for accepting them. Amendments Nos 3 and 4 will prescribe a uniform oath for registrars in the Federal Court and the Family Court in the same form as that for the judges and, as I said before, for other registrars in Commonwealth judicial positions. Amendment No. 5, as I said before, will deal with the situation in relation to the class actions or representative proceedings to allow the facility in exceptional circumstances for judges to make orders for costs that are necessary in the interests of justice and to avoid what otherwise could amount to manifest injustice. I commend to the Government not only foreshadowed amendments Nos 1 and 2 but also amendments Nos 3, 4 and 5.