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Monday, 7 November 2016
Page: 1909

Senator RYAN (VictoriaSpecial Minister of State and Minister Assisting the Cabinet Secretary) (12:28): by leave—I move:

That, pursuant to section 376 of the Commonwealth Electoral Act 1918, the Senate refers to the Court of Disputed Returns the following questions—

(a) whether, by reason of s 44(v) of the Constitution, or for any other reason, there is a vacancy in the representation of South Australia in the Senate for the place for which Robert John Day was returned;

(b) if the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled;

(c) whether, by reason of s 44(v) of the Constitution, or for any other reason, Mr Day was at any time incapable of sitting as a Senator prior to the dissolution of the 44th Parliament and, if so, on what date he became so incapable;

(d) what directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference; and

(e) what, if any, orders should be made as to the costs of these proceedings.

This is not a matter I expected to deal with at any point in my ministerial career, nor is it one that I relish. But it is a very important matter and one that has been given due attention. I would like to outline to the Senate the matters involved and the course of action taken by the government in dealing with them. As the President has outlined, I have provided the President with a statement of facts regarding the issue and the documents relevant to determining the advice received by the government. I do not intend to restate those as the President has tabled them in this chamber. The course of events, however, is a matter I wish to outline. I should clarify at the outset that my references to legal advice from the Australian Government Solicitor and Mr David Jackson QC referenced in this speech are not a waiver of the Commonwealth's privilege in that advice.

My involvement in this matter commenced as a consequence of my being sworn in as Special Minister of State on 18 July. I should say that matters prior to my swearing in are not from my direct experience, but I will set out a short statement of facts. My colleague Senator Cormann will, in the speech that follows, provide further details.

In January 2014, then Senator elect Day indicated he did not wish to use the Gilles Street electorate office vacated by a defeated senator as his own electorate office. Instead, he proposed that he use a building he then owned as his electorate office. This is the Fullarton Road property in question. Following advice, then Special Minister of State, Senator Michael Ronaldson, indicated the Commonwealth's willingness to consider this request upon certain conditions being met, confirming the verbal advice from Senator Day that his interest in the building had been disposed of. In October 2014, Senator Ronaldson wrote to Senator Day, and Senator Day accepted the terms of the agreement.

In November 2014, the Department of Finance undertook a title search, which confirmed the property was formally transferred to Fullarton Investments in September 2014. In February 2015, heads of agreement were executed for Senator Day's electorate office. Senator Day moved from the Commonwealth parliamentary office to the Fullarton Road office in April 2015. On 1 December 2015, the lease for the electorate office was formally executed. The office was to be rent free from 1 July 2015 to 14 August 2016, or earlier if the vacant Gilles Street electorate office was sublet by the Commonwealth.

On 2August 2016, Senator Day was declared re-elected at the 2 July election of the both houses of parliament. On 4 August, Senator Day approached me regarding the lease, including the matter of payment of rent. I indicated I was not familiar with the details and would look into it. On 7 August, Senator Day responded to me raising and dismissing any concern with section 44(v) of the Constitution. This is the first time I recall section 44(v) being raised with me. Over subsequent days I looked into the matter. My office met with officials from the Department of Finance regarding the background to the terms of the lease, including being made aware of the key fact that no rent payments had been made but also that the Commonwealth became liable for payments from mid-August.

On 16 August, I met with Senator Cormann, as the former Special Minister of State, who outlined his decision that no rental payments were made. On 18 August, a further detailed discussion was held between myself and officials regarding the lease and specifically the possibility of an issue arising with section 44(v) of the Constitution. Following this conversation, I made contact with the Attorney-General later that morning. I explained the situation and facts. Senator Brandis asked for further information to allow him to form a preliminary view.

Later that morning, I subsequently informed the office of the Prime Minister, by telephone call to his Chief of Staff, that there was an issue with respect to the electorate office of Senator Day, that there were potential issues about which I had contacted the Attorney-General, that I was seeking advice and that if this matter was raised it was to be referred to me. I subsequently mentioned to the Prime Minister that I had a conversation with his Chief of Staff, outlined the terms of that conversation and that matters that related to this were to be referred to me.

On 23 August, I met with the Attorney-General regarding the matter. He recommended that advice be sought from the Australian Government Solicitor. On 24 August, the Attorney-General's office advised that more information was required and that I should write to Senator Day requesting this. On 26 August, I wrote to Senator Day and on 29 August he responded. This correspondence is included in the materials passed to the President and tabled. On the same day I received it, the response from Senator Day was forwarded to the Attorney-General's office for transmission to the Australian Government Solicitor.

At this point, I should also mention that I took a brief period of personal leave from the chamber due to the arrival of my second son, Benjamin, on 25 August. On 8 September, the Attorney-General's office informed that the Australian Government Solicitor required further information from Senator Day, specifically a copy of the vendor finance agreement between Fullarton Investments and Senator Day.

At this point, I need to declare another personal matter. On Thursday, 15 September, I had to take unexpected and urgent personal leave, departing parliament around lunchtime, prior to question time, due to the emergency hospitalisation of my newborn son. I returned to duties the following week.

On 20 September, I requested a copy of the vendor finance agreement from Senator Day. This was received from Senator Day on 26 September. On 4 October, the Attorney-General informed me that he had received preliminary draft advice from the Australian Government Solicitor. The advice was not conclusive. We discussed the matter and agreed that, given the potential seriousness of the matter, an opinion should be sought from an eminent constitutional silk. The Attorney-General recommended Mr David Jackson QC.

The Attorney-General and I briefed the Prime Minister in detail about the issues and the legal advice later that day. It was agreed that eminent external advice would be sought from Mr Jackson, as advised by the Attorney-General.

On 7 October, following verbal advice on 5 October, I formally advised the department to terminate the lease on Senator Day's electorate office and the Attorney-General briefed Mr Jackson to advise on the matter. I wrote to Senator Day and spoke to him informing him of both these matters. I specifically outlined the concerns regarding section 44(v).

At this point, I would like to highlight that these matters were determined, acted upon and communicated to Senator Day on Friday, 7 October prior to the resumption of parliament the following week. This demonstrates the absolute integrity and bona fides of the government in dealing with this matter.

On 12 October, via the Attorney-General's office, Mr Jackson requested further information regarding the Day family trust. I wrote to Senator Day requesting this information. On 25 October, as no response had been received from Senator Day, I called him with the Attorney-General present. I made another request from the information. Senator Day outlined that he had been occupied with personal matters and had not been able to do so yet, but he indicated he would do so in coming days. Later that day he provided the information requested, which was passed on to Mr Jackson.

On Thursday, 27 October after 5 pm, the Attorney-General's office received the advice from Mr Jackson. At approximately 6.30 pm the Attorney-General made contact with me and forwarded the advice. He indicated that he had also spoken to the Prime Minister. On the morning of Friday 28 October, a teleconference was held between myself, the Attorney-General, the Minister for Finance and the Prime Minister. It was determined to refer the matter to the Senate by communication with the President of the Senate that day.

Later that morning, the Attorney-General and I made contact with the President of the Senate to outline the matter and apprise him of the issues. I wrote to Senator Parry to formally communicate this. Following this, I also made contact with Senator Day outlining the receipt of the advice and the communication of the issues to the President of the Senate.

This is a complex legal and constitutional issue. There is not a great deal of jurisprudence on section 44(v). The only significant authority is Sir Garfield Barwick's judgement in Webster's case. This issue does not relate to a direct pecuniary interest because Senator Day disposed of his interest in the building. It relates to the financial arrangements regarding the building and the lease for the electorate office with the owners. From the inquiries made and the advice received, the only source of income for Fullarton Investments appears to be the rental payment by the Commonwealth under the lease and rental, if any, payable by other entities in occupation of the Fullarton Road property. Fullarton Investments is thus dependent upon the Commonwealth rental payments under the lease to enable it to pay the amounts falling due from time to time to NAB, pursuant to the mortgage to NAB and pursuant to its arrangement with B&B Day Pty Ltd. Senator Day is a beneficiary under the Day Family Trust, the trustee of which, B&B Day, is also liable to NAB for those obligations. Senator Day had given a guarantee and indemnity to NAB for the performance by B&B Day of its obligations under the facility agreement. If, as happened, the Commonwealth does not pay the rent to Fullarton Investments, effectively he has to pay. These facts lead to a conclusion that an indirect pecuniary interest within the meaning of section 44(v) of the Constitution may exist. But this is a matter for the court to determine, not myself as minister, not the government and not the Senate.

To bring my contribution to a conclusion, while the government has received advice, it is important to note that this is not determinative. I am not able to make a determination on whether there has been a breach of the constitution in either a personal or a professional sense—not being a lawyer—nor in a formal sense as a decision-maker. No decision of the government or this chamber can determine the matter. This is rightly and properly a matter for the court to determine. As I have outlined to the chamber, without jumping to conclusions, without prejudging serious issues and without attempting to determine complex constitutional matters, the government has taken every step to explore this matter, seek further facts and then take the appropriate steps to bring these matters to the appropriate body for consideration—that is, this chamber—under section 376 of the Electoral Act. The only party that is competent to determine this matter is the court. Accordingly, I move the motion to allow the court to consider the matter and make a determination.