commenced proceedings in the NSW Supreme Court where she sought
a declaration that the alleged conduct was not "corrupt
conduct" within the meaning of the ICAC Act, and, therefore,
ICAC was acting outside its power in issuing the summons. At first
instance, the alleged conduct was considered to be corrupt conduct
under the ICAC Act. On appeal, the majority of the NSW Court of
Appeal found that the alleged conduct did not fall within the
definition of "corrupt conduct" within the meaning of s
8. ICAC subsequently appealed to the High Court.
The High Court was tasked with determining the proper construction
of s 8(2), which provides that:
Corrupt conduct is also any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect... the exercise of official functions by any public official....
and that could involve a number of specific offences including,
amongst other things, perverting the course of justice. The High
Court focussed on what kind of effect would be required to amount
to an adverse effect for the purposes of s 8(2).
Probity or Efficacy? The High Court considered
that, at a general level, there were two competing constructions
available for s 8(2). On one hand, the "adversely
affects" language could mean adversely affect the probity of
the exercise of an official function in the sense that the public
official is led to perform his or her official functions
dishonestly or with a lack of integrity. Alternatively, it could
mean adversely affect the efficacy of the exercise of an official
function in the sense that the conduct could limit or prevent the
performance of the official function in a way that does not involve
any wrongdoing on the part of the public official.
In terms of the allegations against Cunneen, the alleged
counselling of Sophia Tilley did not have the capacity to affect
the probity of the exercise by the police officers of their
investigatory powers as her conduct could not have led the officers
to act without integrity or in a partial manner. However,
Cunneen's conduct had the capacity to prevent police officers
from conducting an investigation into a suspected crime; as such,
it could have adversely affected the efficacy of the exercise of
the officers' investigatory powers. If the meaning of
"adversely affect" were extended to encompass adverse
effects on efficacy, then it would be within ICAC's power to
investigate Cunneen.
Decision of the High Court. The Court found that
in order for ICAC to investigate a person who is not a public
official, the following conditions must be met:
- The conduct must be such that it adversely affects or could adversely affect the probity of the exercise of an official function by a public official in one of the ways specified in s8(1)(b)-(d). Specifically, the conduct of the public official must constitute or involve either the dishonest or partial exercise of his/her official functions, a breach of public trust, or the misuse of information acquired in the course of his/her official functions.
- The conduct must have the capacity to involve any of the offences listed in s8(2)(a)-(y).
- Further, s 9 provides that in order to amount to corrupt conduct, the conduct must have the capacity to constitute or involve either a criminal offence, a disciplinary offence, reasonable grounds for dismissing a public official, or breach of an applicable standard of conduct.
Different Approaches to Statutory Interpretation.
The issue for consideration by the High Court was one of statutory
interpretation, which involves assessing the competing
constructions of an expression to determine which construction
"Parliament should be taken to have
intended".1
The majority of the High Court, French CJ, Hayne, Kiefel and Nettle
JJ, interpreted s 8(2) by reference to the context in which it
appears. Such an approach involves interpreting the relevant
provision "... so that it is consistent with the language
and purpose of all the provisions of the
statute".2 The ICAC Act as a whole was
conidered to be directed toward promoting the integrity and
accountability of public administration in a probity sense. The
majority sought to determine which of the competing constructions
is more consistent or "harmonious" with the ICAC Act as a
whole.
The majority construed s 8(2) in light of the provisions
surrounding it and the objects of the ICAC Act. The misconduct
identified in s8(1)(b)-(d) was taken to define the extent of
improbity of public officials in the exercise of official functions
to which the ICAC Act is directed. The majority used the contextual
approach to import this into the definition of "corrupt
conduct" in s 8(2). Accordingly, the majority concluded that
the phrase "adversely affects, or that could adversely
affect..." means adversely affect the probity, not
merely the efficacy, of the exercise of an official
function by a public official in one of the ways specified in s
8(1)(b)-(d). The majority considered this interpretation to align
with the ordinary understanding of corruption in public
administration and the principal objects of the ICAC Act.
In contrast, Gageler J (in dissent) focussed on the natural and
ordinary meaning of the text of the clause under consideration. His
approach is based on the recognition that the language in which a
statutory definition is framed is ordinarily chosen for the meaning
it conveys. Gageler J preferred an expansive literal definition of
the phrase "adversely affects, or that could adversely
affect" extending to include adverse effects on efficacy.
Gageler J considered it sufficient for ICAC to be able to
investigate where the alleged conduct had the capacity to limit or
prevent the proper performance of an official function by a public
official.
The Response of the NSW Legislature
The High Court's judgment limited the scope of ICAC's
investigatory powers. As a result, ICAC did not have the power to
conduct an investigation into the allegations against Cunneen. The
decision also cast doubt on the validity of previous ICAC
investigations and findings.
On 6 May 2015, the New South Wales Parliament responded to the High
Court's decision by passing the Independent Commission
Against Corruption Amendment (Validation) Bill 2015
(NSW). The Bill commenced operation as an Act on the same
day.
The Validation Act added Part 13 (clauses 34 and 35) to Schedule 4
of the Act, which validates actions taken by ICAC prior to the High
Court's decision (including investigations, examinations and
directions by ICAC) that would otherwise have been valid if s8(2)
of the ICAC Act extended to "conduct that adversely affects,
or could adversely affect, the efficacy (but not the probity) of
the exercise of official functions". Such actions are
validated from the date they were done or purported to have been
done. The validation extends to acts by other persons or bodies and
legal proceedings which took place prior to the High Court's
decision where their validity relies on the validity of ICAC's
past actions (e.g., previous prosecutions, convictions and
sentences following ICAC investigations will stand). ICAC is also
authorised (and taken to have always been authorised) to refer
matters and evidence to other persons or bodies.
Duncan v ICAC
In late May 2015, a constitutional challenge to the validity of
the Validation Act was brought by Travers Duncan, as part of an
appeal to the New South Wales Court of Appeal against findings of
corruption made against him by ICAC. ICAC, in its report titled
"Investigation into the Conduct of Ian Macdonald, Edward Obeid
Senior, Moses Obeid and Others" ("Report"), had
previously found that Duncan had engaged in conduct which adversely
affected (or could have adversely affected) the efficacy, but not
the probity, of the performance of official functions by the New
South Wales Executive Government.
It was common ground in Duncan v ICAC that, given the High
Court's decision in Cunneen, ICAC's findings of
corruption against Duncan were based on a misconstruction of s 8(2)
and, as such, the Report was affected by jurisdictional error at
the time of its original publication. Duncan challenged ICAC's
findings in the New South Wales Court of Appeal on that basis.
Further, following the enactment of the Validation Act, Duncan
additionally sought a declaration that Part 13 of the Act (inserted
by the Validation Act) was invalid on constitutional grounds.
On 25 May 2015, Gageler J of the High Court made orders for the
constitutional challenge to be removed from the New South Wales
Court of Appeal and heard by the High Court. The challenge was
heard by a Full Bench of the High Court in August 2015.
Duncan argued that, on the proper construction of Part 13 (clauses
34 and 35) of the Act, the conduct referred to in the Report was
not deemed to be "corrupt conduct". It was argued that,
rather than validating invalid acts of ICAC, Part 13 "directs
courts to treat as valid acts that were, and remain,
invalid".3 Duncan submitted that, in doing this,
Part 13 contravened and offended constitutional principles
previously established in the High Court.
On 9 September 2015, the Full Bench of the High Court delivered its
judgment in Duncan v ICAC. The High Court unanimously
dismissed the challenge, holding that ICAC's findings of
corrupt conduct against Duncan were properly deemed valid by Part
13, which operated to alter the substantive law in relation to the
meaning of "corrupt conduct" and retrospectively
conferred jurisdiction upon ICAC.
Another Look at Statutory Interpretation. The
majority of the High Court, French CJ, Kiefel, Bell and Keane JJ,
considered Duncan's proposed construction of clauses 34 and 35
to be "distinctly implausible" in light of the purpose of
Part 13's enactment and considered that it strained too hard
against the ordinary meaning of the provisions. The majority
focussed on the ordinary use of the language in clauses 34 and 35
and concluded that:4
[Clauses] 34 and 35 deem to be valid acts done by [ICAC] before 15 April 2015 [the date of the judgment in Cunneen] to the extent that they would have been valid if corrupt conduct as defined in s 8(2) of the ICAC Act encompassed conduct which adversely affected the efficacy, but not the probity, of the exercise of official functions.
The majority was of the opinion that clauses 34 and 35 operate to
amend s 8(2) of the ICAC Act with respect to its application to
acts done by ICAC prior to Cunneen. Therefore, as a matter
of substantive law, the Validation Act widened the scope of
"corrupt conduct" from the meaning attributed to the
phrase in the Cunneen decision with respect to that
period, which in turn widened ICAC's jurisdiction in relation
to the conduct of the investigation into Duncan. The majority
concluded that, as a matter of law, the Report into Duncan became a
report into "corrupt conduct" made under the ICAC Act and
accordingly Duncan's challenge to the validity of clauses 34
and 35 must fail.
Gageler J came to the same conclusion as the majority, noting that
on a plain reading, the text of clauses 34 and 35 does no more than
provide that the authority conferred on ICAC extends to include the
authority to have done past acts which would have been in excess of
ICAC's power due to the reasons stated in Cunneen if
it were not for the enactment of the Validation Act. The Validation
Act simply (and permissibly) made the "invalid" exercise
of power "valid".
Nettle and Gordon JJ also agreed with the majority's finding;
however, they were of the opinion that rather than amending s 8(2)
of the ICAC Act, clauses 34 and 35 create a new or different legal
regime.
The Future of ICAC's Powers
At the same time as the introduction of the Validation Act, the
NSW Government commissioned an independent panel of experts,
chaired by former High Court Chief Justice the Honourable Murray
Gleeson AC QC, to review the scope of ICAC's jurisdiction going
forward.5 The panel was asked to consider and report on
any legislative measures required to provide ICAC with appropriate
powers to prevent, investigate and expose serious corrupt conduct
and/or systemic corrupt conduct involving or affecting public
authorities and/or public officials and whether any limits or
enhancements should be applied to the exercise of ICAC's
powers. The panel's report was issued on 30 July 2015.
Following this, on 8 September 2015, the Independent Commission
Against Corruption Bill 2015 was introduced into New South
Wales Parliament, the object of which is to further amend the
jurisdiction and powers of ICAC to incorporate the recommendations
in the panel's report. A further Jones Day Commentary
will follow regarding the future of ICAC's jurisdiction and
powers.
1 ICAC v Cunneen [2015] HCA 14 at [57].
2 ICAC v Cunneen [2015] HCA 14 at [31] quoting Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]-[70].
3 Duncan v ICAC [2015] HCA 32 at [9].
4 Duncan v ICAC [2015] HCA 32 at [10].
5 Premier Mike Baird, Second Reading Speech, Independent Commission Against Corruption Amendment (Validation) Bill 2015; The Hon. Duncan Gay, Second Reading Speech, Independent Commission Against Corruption Amendment (Validation) Bill 2015.
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