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Legal and Constitutional Affairs Legislation Committee
16/10/2012
Estimates
ATTORNEY-GENERAL PORTFOLIO
Federal Magistrates Court of Australia

Federal Magistrates Court of Australia

[21:15]

CHAIR: Good evening to you all. Have you got an opening statement at all that you wanted to commence with?

Mr R Foster : No, Chair, I do not.

Senator BRANDIS: In what capacity are you appearing at the moment?

Mr R Foster : I think in terms of the Family court of Australia but, as you would prefer, the Federal Magistrates Court I am prepared to be flexible about.

Senator BRANDIS: That is what I am getting at. I do not want to rake over old coals here, but you will recall for some years now at this estimates committee I have raised concern about the peculiarity of your position as the CEO of one court and, simultaneously, the acting CEO of another court, where those courts were in some respects at least in dispute. But that issue in a sense is history now because the government has raised the white flag and capitulated to the opposition's view that the Federal Magistrates Court should never have been abolished in the first place, which is a good thing, and has indeed stolen one of my ideas from the Liberal Party's 2010 Attorney-General's policy and rebadged the Federal Magistrates Court the Circuit Court of Australia. I am very happy about all of that.

It raises a new issue about your status and the relationship between the courts because—although you can, I think, barely make a case for one person being the CEO of one court and the acting CEO of another when the latter is in the course of in effect being wound up and folded largely into the former—I cannot see how there is any case that could possibly be made for having a single officer, yourself, as the CEO of two permanent, separate courts, each with their own statute, each exercising their own jurisdiction, each entirely separate judicial entities under chapter 3 of the Constitution.

I will go on to say, Mr Foster, that the whole juridical conception of a court depends upon a certain organic autonomy, which I cannot see how it is possible to achieve by having the administrative arm of the court fused but the judicial officers of the court separate.

I am making that rather long statement by way of prologue to indicate to you my concerns here. I am going to invite you to respond to what I have had to say and in particular on how you see, now that these two courts are established on a permanent basis and your position as the acting CEO of one is no longer a transitional or a temporary position, that it is possible to be the registrar of two organically independent courts.

Mr R Foster : I think the first point to make in answering that is that until such time as the Federal Circuit Court is established and assented to the current arrangement is probably okay. I do not disagree with many of the things you have said about the permanent nature of the Federal Circuit Court. Other arrangements need to be in place. It is my understanding that it is the government's intention to formally combine the administration of the two courts, but that might be a question best answered by the Attorney-General's Department rather than myself.

Senator BRANDIS: I am going to give Mr Wilkins or the appropriate officer a chance to respond, but before I turn to them I want to ask you: if this were to be a permanent arrangement, as it seems it is the government's intention that it should be, how are you going to deal with potential conflicts between the two courts? There are jurisdictional issues between them, particularly in relation to family law matters, aren't there?

Mr R Foster : I have been dealing with those for the last nearly four years, and—

Senator BRANDIS: Yes, and every time I have challenged you on it you have manfully said to me, 'Well, Senator Brandis, this is only a temporary arrangement.' Well, now it is not.

Mr R Foster : I think there is a track record to reflect on and I think that the conflicts between the courts have diminished significantly over the last five or six years. From my position, for any conflict that arises there are now administrative and organisational structures in place to deal with them. For example, there is a heads of jurisdiction group set up, membership of which is made up of the Chief Justice of the Federal Court, the Chief Justice of the Family Court, the Chief Federal Magistrate, the respective CEOs and a representative from the Attorney-General's Department. It deals with many issues that confront all of the Commonwealth courts. There is a similar structure in place, the Family Law Courts Advisory Group, which is made up of representatives of the Chief Justice of the Family Court, the Chief Federal Magistrate, a federal magistrate, a judge of the Family Court, the CEO and, again, a representative of the Attorney-General's Department. Issues are discussed openly and resolved in a consensual manner. At this stage, certainly from my perspective, there have not been any issues that have not been resolved on a consensual basis. The courts are working very closely together. I do not disagree with your proposition that there probably needs to be some sort of legislative permanency about that arrangement, but I think—

Senator BRANDIS: Sorry to jump in, but it is not my proposition that there should be legislative permanency about the arrangement. My proposition, in a sense, is the opposite. It is that if there is to be legislative permanency about the arrangement, which I think there should be, there ought to be functional separateness as part of that legislative permanency.

Mr R Foster : There are many different court structures and court organisations, and not every court has a CEO, such as in state courts. For example, in South Australia, where there is the Courts Administration Authority, the court administrator has responsibility for resourcing et cetera across all of the courts. The Supreme Court of South Australia does not have a chief executive officer. It has a registrar but not a CEO. The District Court in South Australia does not have a CEO; it has a registrar of that court.

Senator BRANDIS: Yes, but the registrar is the old fashioned term for what we now call a CEO of a court.

Mr R Foster : But that registrar—or whatever you want to term it—is responsible to the state courts administrator, who has the responsibility for providing resources and other services to all the courts. There are different models that exist.

Senator BRANDIS: I understand that, Mr Foster, and it is a fair point you make. But I do think there is a difference between saying, from a resourcing point of view, that there is a good rational economic case to be made for a common authority across the various courts of state or Commonwealth jurisdiction and saying that therefore the person in the charge of the administration of that court can be a common resource between that court and another court.

Mr R Foster : I respect your point of view, but that is not necessarily the view shared by the Chief Justice and the Chief Federal Magistrate. They are quite comfortable with the arrangements—

Senator BRANDIS: Well, that is, until they have a fight.

Mr R Foster : But the point is that they are not fighting.

Senator BRANDIS: No, but neither are China and the United States. That is not really the point, is it? I have a deep philosophical difficulty with the notion that courts which are separate entities should be organically fused in some aspects of their operation and separate in others.

Mr R Foster : I respect that view, but I believe that there are other organisational structures that do not reflect in any way on or take away from the effectiveness of the operation of the particular court.

Senator BRANDIS: I want to come back to you, Mr Foster, on a couple of financial issues, but I think I should invite Mr Wilkins or the other appropriate officer of the Attorney-General's Department to state the government's position if they want to add to anything you have said.

Mr Wilkins : I think you have probably heard enough from me tonight, Senator, but I will just ask Louise Glanville whether she wants to say anything.

Senator BRANDIS: I think you might be on surer ground with some administration, Mr Wilkins.

Mr Wilkins : Do you want to talk about a business process? No, I will pass to Ms Glanville if she has something to say.

Ms Glanville : This was a recommendation of the Skehill report—

Senator BRANDIS: I know.

Ms Glanville : The government has accepted that recommendation and is moving forward in that direction.

Senator BRANDIS: Yes, but that does not mean it is a good idea. You are just telling us that a particular person had an idea and the government accepted it. That is the history of this.

Ms Glanville : Well, the Skehill report—

Senator BRANDIS: Do you, drawing from either your familiarity with the Skehill report or your own experience of the issues that we have been discussing, apprehend that there are potential issues of conflict where you have the heads of the two jurisdictions having a difference of opinion? There are jurisdictional boundaries between these courts. It is not at all inconceivable that the day will come when there is a conflict between them. What is the poor old CEO to do? Which master is he to answer to: the Chief Justice of the Family Court or the Chief Justice of the Commonwealth Circuit Court?

Ms Glanville : I have full confidence in the Skehill recommendation and in the Chief Justices' own determinations that this is a workable model.

Senator BRANDIS: Have they said that?

Ms Glanville : It has been accepted that this is the model.

Senator BRANDIS: Just a moment. I do not think the Chief Justices of both of those jurisdictions are entirely happy with this model at all, certainly not the fused registry and common CEO structure. In fact, I happen to know that at least one of them is not.

Ms Glanville : That is a matter for them, but they are working well to implement the Skehill recommendation.

Senator BRANDIS: Sure, but, Ms Glanville, in responding to my earlier question, the basis on which you said there was not a problem was that the heads of jurisdiction were happy with it. Well, they are not.

Ms Glanville : They indicated that they are working well together on implementing this recommendation.

Senator BRANDIS: They play well together, but that is no basis on which to establish an important constitutional structure—that is, a court—is it?

Ms Glanville : The Skehill report carefully examined this issue over quite a long period of time. This was the recommendation. The government has accepted the recommendation and the courts are working with government to implement this recommendation.

Senator BRANDIS: I do not want to make an unworthy political point, but this government does a lot of stupid things. The fact that the government has accepted a recommendation is hardly a warrant that it is a good idea.

Mr Wilkins : It is basically about efficiency, as you know, Senator.

Senator BRANDIS: Yes.

Mr Wilkins : These are savings that we have spoken about in the past. I was under the impression that you accepted that it was a good idea, actually, so—

Senator BRANDIS: No. I think having separate courts is a good idea.

Senator Ludwig: I thought you were calling yourself stupid there!

Senator BRANDIS: Having separate courts is absolutely a good idea.

Mr Wilkins : No, I mean before. I remember when we were talking about the Semple report, which you disagreed with—

Senator BRANDIS: Yes.

Mr Wilkins : I do not want to misquote you, but you seemed to be saying that at least a shared service here would make some sense in terms of efficiency.

Senator BRANDIS: That is what I said to Mr Foster before.

Mr Wilkins : And that is what Mr Foster is saying.

Senator BRANDIS: But my point, Mr Wilkins, is that there is an important difference between a common arrangement for resourcing, which I do see the point of, and I said that to Mr Foster, and having the CEO of two different courts—two different entities—being the same person.

Mr Wilkins : Sorry, I do not quite understand that. If you can take me through it: they have common resourcing, and that is okay, but you would see them having common resourcing and two separate CEOs. Is that my understanding?

Senator BRANDIS: I think common resourcing can really mean an allocation within the Attorney-General's Department from which the different courts draw but, with decision making, I am drawing the distinction between resourcing and decision making. Administrative decision making in any court has to be a matter for the head of jurisdiction in consultation with the CEO. In circumstances in which, as between two courts which are in a jurisdictional hierarchy, there can potentially very well be differences. I cannot for the life of me see how that CEO is going to do his job when he is serving two masters, if the two heads of jurisdiction have a different point of view about an issue. It is no good to say, as Ms Glanville did, 'Well, they get on well'. Good, they do, but that is no warrant that they will forever or that issues will not arise.

Mr Wilkins : They have even set up an institutional arrangement so that they can obviate or resolve issues. So you would say that they could share CFOs or CIOs but not CEOs.

Senator BRANDIS: No, I am not sure about that, Mr Wilkins. I will just make the point I made that the registrar or CEO of a court is an important official of that court and for a court to have its own CEO or registrar, however so called, is an essential feature of that court's organic autonomy—that is what I am saying.

Mr Wilkins : Is it the registry or registrar activity that is critical, from your point of view, of a CEO?

Senator BRANDIS: I think not exclusively—I am not here to answer questions of course. We are having a bit of a seminar about this, I acknowledge. I turn to the resourcing issue. Mr Chris Merritt, from the Australian, in an article on 14 September this year, suggested—and he quotes you, Mr Foster—that the savings from a common administration and having a common CEO between the two courts were not what the government was expecting. Those costs are tabulated. Are you familiar with that article? You are quoted in it.

Mr R Foster : I certainly do not remember saying that we did not make those savings. Could you read through me what I said?

Senator BRANDIS: Let me read to you what Mr Merritt quotes you as saying:

Over the past several years, the courts have been operating at a loss. Despite implementing many cost-cutting initiatives, the point has been reached where in order to balance the budget in 2012-13, it would no longer be possible to continue the provision of many existing services, such as maintenance of regional registries, circuits and the use of family reports in parenting cases. Replacement of judicial officers could not be afforded without further impinging on other services. This additional funding, together with other savings to be implemented in 2012-13, such as reductions in travel, general administration, integration of divorce workload and realignment of the services provided by the national inquiry centre, will assist in putting both courts on a stronger financial footing. The funding will mean the courts are able to maintain a presence in rural and regional Australia…

You seem to be saying, as I read you but correct me if I am wrong, that although this consolidation has produced some benefits the benefits are well short of what was anticipated as the justification for fusing the two offices.

Mr R Foster : I am sorry, Senator, I misunderstood what you were saying earlier. I thought you were suggesting that I said that we did not make significant savings in regard to—

Senator BRANDIS: No, I was not saying that.

Mr R Foster : Because the answer is that we did.

Senator BRANDIS: The proposition is that the fundings that have been secured by this arrangement are much less than was anticipated, aren't they?

Mr R Foster : No, not at all. We anticipated making savings of $7.8 million, which we did. The government returned $1.5 million in relation to family reports. In effect there was a net return to government of $6.3 million. That was expected and we knew that would happen out of that one initiative. But there are a whole lot of other pressures on the courts outside of the administration: the impact of the efficiency dividend, rental increases et cetera. So it has been long-term impact of cost increase to the courts that brought us to the position where we were going to have to make significant savings without some sort of assistance from government. I am pleased to say we made a submission and got in the order of nearly $30 million over the next four years in additional supplementation.

Senator BRANDIS: I guess what I am putting to you is that the savings that have been able to be achieved are not of the order that the Skehill report anticipated would be the result of the savings of these joined or fused structures.

Mr R Foster : My understanding of the Skehill report, if my memory serves me correctly, is that Skehill said that the courts did not have the capacity to make sufficient savings to meet their future budget requirement unless there was some drastic action taken. Some of those issues that you raised were things that the court said we would have to do if we did not receive some sort of assistance into the future.

Senator BRANDIS: These are additional payments, these are not all efficiencies.

Mr R Foster : Not at all. This is just one aspect of it, yes. But our costs increase. We rent a lot of commercial premises in rural and regional Australia and the rents go up. We do not get supplementation for it. There are a whole range of reasons why our costs increase, but our the baseline funding does not, like every other agency of government. We have limited ways to cut our cloth because 52 per cent of our expenditure is a fixed cost around judicial salaries and rent on Commonwealth Law Courts buildings. We have no capacity to reduce that cost, so we have a very limited capacity to meet escalating costs without supplementation. We foreshadowed this some three years ago and started benchmarking all of our operations: our national support office, our IT, our client services across the whole operations of the courts. We came up with a proposal to government following the Skehill report that we have done all we possibly can in terms of savings, we have been good corporate citizens, we have returned money to government, but we cannot continue to do that without significant reductions in services. I think that is the reason why we were successful in getting extra supplementation to the tune of $30 million.

Senator BRANDIS: But that is an ad hoc thing, that is an ad hoc subvention.

Mr R Foster : It is a pretty significant injection of funds. It does not mean we still do not have to make further savings, because we do. Like every operation, we have to look at the way we can increase efficiency and reduce costs, and we will continue to do that with some of the things you mentioned.

CHAIR: Thank you very much, gentlemen. We are not going to stop formally to have a break this evening, so grab a tea or coffee as we work.