ICAC’s WINGS CLIPPED BY HIGH COURT IN CUNNEEN APPEAL: WHAT NEXT?

The High Court has decided that the Independent Commission against Corruption (the Commission) does not have the power to investigate allegations that senior NSW prosecutor Margaret Cunneen SC perverted the course of justice. This case note looks at that decision and its significant implications for the Commission’s previous findings and investigations as well as the subsequent policy debate as to the appropriate breadth of the Commission’s substantial powers.

BACKGROUND

The Commission summoned Ms Cunneen to a public inquiry to investigate allegations that she perverted the course of justice by advising her son’s girlfriend, Sophia Tilley, to pretend to have chest pains in order to avoid a blood alcohol test by police at the scene of a car accident.

Ms Cunneen, her son, Stephen Wyllie, and Sophia Tilley, challenged the Commission’s power to conduct the inquiry. They argued that the allegations did not constitute ‘corrupt conduct’ within the meaning of the Independent Commission Against Corruption Act 1988 (NSW) (the Act), and that therefore, the Commission does not have authority to conduct the investigation.

Section 8(2) of the Act relevantly provides that ‘corrupt conduct’ is any conduct of a person that could adversely affect the exercise of official functions by a public official, and could involve perverting the course of justice.

At first instance, the NSW Supreme Court rejected Ms Cunneen’s claim. It found that Ms Cunneen’s alleged conduct could constitute perverting the course of justice and that therefore section 8(2) was enlivened. However, on appeal, the NSW Court of Appeal construed ‘corrupt conduct’ more narrowly.

DECISION OF THE NSW COURT OF APPEAL

Whilst the Court of Appeal agreed that Ms Cunneen’s conduct could be considered as perverting the course of justice, it considered that more was needed to enliven the Commission’s power to summon Ms Cunneen. A majority of the Court found that conduct will only be caught by section 8(2) of the Act where it has the potential to lead a public official ‘into dishonest, partial or otherwise corrupt conduct.’

Applying this test, the Court found that Ms Cunneen’s alleged conduct did not fall within the definition of ‘corrupt conduct’ required by section 8(2). The Court stated that even if the allegations against Ms Cunneen were true, ‘it could not be said that the police officer acted otherwise than honestly and impartially in taking steps in accordance with his or her understanding of the circumstances.’

In other words, if the officer reasonably believed that Sophia Tilley was suffering from chest pains, and on that basis decided not to obtain a blood alcohol reading, the officer could not be said to have acted dishonestly or partially.

The decision of the NSW Court of Appeal places a significant limitation on the investigative powers of the Commission. It essentially says that corruption takes two to tango. It is not enough that a person engages in conduct that perverts the course of justice. That conduct must also have the potential to affect the honesty and partiality of the public official to whom the conduct is directed.

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HIGH COURT APPEAL

The Commission was quick to lodge an appeal to the High Court, which heard submissions from both sides on 4 March 2015.

The High Court unanimously agreed to grant special leave. By majority, it dismissed the appeal.

The majority held that the expression “adversely affect” in section 8(2) addressed conduct that adversely affects or could adversely affect the probity of the exercise of an official function by a public official.

It held that the definition of “corrupt conduct” did not extend to conduct that adversely affects or could adversely affect merely the efficacy of the exercise of an official function by a public official, in the sense that the official could exercise the function in a different matter, or make a different decision.

Ms Cunneen’s conduct, was of the latter type. The High Court held that the alleged conduct was therefore not “corrupt conduct” within the meaning of section 8(2) of the ICAC Act and as such ICAC, has no power to conduct the inquiry.

In reaching this determination, the majority judgment embarked upon a detailed discussion of the proper principles of statutory construction, with particular reference to the principles enunciated in Project Blue Sky Inc v Australian Broadcasting Authority1:

"The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose ofall the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. ...

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning ofthe competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions."2

The majority also considered the overriding considerations of public policy set against the context provided by the secondary materials regarding the original Second Reading Speech for the Act in 19883 and its subsequent review and amendment in 20054: Their Honours concluded that:

“It is not likely that an Act which is avowedly directed to investigating, exposing and preventing corruption affecting public authorities – and for which the justification for the conferral of extraordinary powers on ICAC was said to be the difficulty of discovering and exposing corruption in the nature of a consensual crime of which there is no obvious victim willing to complain – should have the purpose or effect of extending the reach of ICAC to a broad array of crimes having nothing to do with corruption in public administration apart from

1 (1998) 194 CLR 355 at 381-382 [69]-[70] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28, recently applied in Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at 389 [24] per French CJ and Hayne J; [2012] HCA 56 and in Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 88 ALJR 847 at 855 [42] per French CJ, Hayne, Crennan, Kiefel and Keane JJ; 312 ALR 537 at 546; [2014] HCA 34. 2 Per French CJ, Hayne, Kiefel and Nettle JJ at [31] 3 Second reading speech, the then Premier of , Mr Greiner, New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 26 May 1988 at 674-675 4 McClintock, Independent Review of the Independent Commission Against Corruption Act 1988: Final Report, (2005) at ix

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such direct or indirect effect as they might conceivably have upon the efficaciousness of the honest and impartial exercise of official functions by public officials.”5

IMPLICATIONS

The decision has far-reaching implications for the ongoing role of the Commission as well as previous enquiries and findings, the validity of which have now been seriously thrown into question.

In its submissions to the High Court, the Commission specifically noted that it had decided to defer completing its reports into the investigations known as "Operation Credo" (allegations concerning corrupt conduct involving Australian Water Holdings Pty Ltd) and "Operation Spicer"(allegations concerning soliciting, receiving and concealing political donations) pending the determination of the appeal. Having regard to the Court’s holdings, it is likely that these investigations, or at least a significant part of them, were outside the jurisdiction of the Commission. That is particularly the case in respect of “Operation Credo” which focused upon issues of alleged overcharging under a commercial contract between Australian Water Holdings and Water Corporation - a matter which clearly falls outside the jurisdiction of the Commission as determined by the High Court.

The Commission has also noted that the decision will have potential implications for at least three other current investigations which (unlike Operation Credo and Operation Spicer) have not yet been the subject of public inquiries.

Finally, there are numerous matters in which the Commission has already issued reports and made findings of corruption against individuals based upon an interpretation of that term which is significantly broader than the interpretation determined by the High Court. Unsurprisingly, we have already seen a flurry of applications by such persons to have those finding set aside.

The Commission has confirmed that it will consent to orders sought by Travers Duncan, John McGuigan, Richard Poole and John Atkinson in the NSW Court of Appeal to set aside corrupt conduct findings made against them in Operation Jasper. It will also consent to orders dismissing its appeal against the July 2014 decision of the Supreme Court to set aside the corrupt conduct finding against Mr Kinghorn6.

Simultaneously, the Commission has issued a press release expressing the view that the High Court majority got it wrong:

“…the narrow construction adopted by the majority in the High Court is contrary to the legislative intention evidenced by the second reading speech when the ICAC Act was first introduced, the analysis of the section in the report of the McClintock review of the ICAC Act and the ordinary meaning of the words used in the section”7.

The Commission has made a submission to the NSW Government to consider, as a matter of priority, amending section 8(2) to ensure that the section can operate in accordance with its intended scope and making any such amendment retrospective. The Baird government has said that it will consider the ICAC submission and that all options, including retrospective legislation, are on the table.

This article was prepared by Andrew Sharpe, Principal; Angela Smith, Senior Associate and Michele Izzo, Graduate.

This article is not legal advice. It is intended to provide commentary and general information only. Access to this article does not entitle you to rely on it as legal advice. You should obtain formal legal advice specific to your own situation. Please contact us if you require advice on matters covered by this article.

5 Per French CJ, Hayne, Kiefel and Nettle JJ at [53] 6 ICAC Press Release “Court of Appeal proceedings in Duncan and others” 23 April 2015 7 ICAC Press Release “Public statement regarding ICAC v Cunneen” 20 April 2015

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