ChAPTER 10

REFORM OF THE royal commissions ACT 1902 (CTH)

Subject / Paragraph
A – INTRODUCTION / 1
B – POWERS UNDER THE ROYAL COMMISSIONS ACT 1902 (CTH) / 4
C – SERVICE / 7
D – PENALTIES / 20
E – SURVEILLANCE DEVICES LEGISLATION / 28

A – INTRODUCTION

1.At a federal level, Royal Commissions are governed by theRoyal Commissions Act 1902(Cth).

2.Previousanalyses, such as the comprehensive review by the Australian Law Reform Commission (ALRC)[1] and the Final Report of the Royal Commission into the Building and Construction Industry[2] (the Cole Royal Commission Report), haveincluded recommendations for reform in relation to the powers of Royal Commissions.

3.This Chapter considers some specific practical suggestions for reform which have arisen from the particular experiences of this Royal Commission. Suggestions for reform are made not only in relation to the Royal Commissions Act 1902(Cth) but also the legislation governing the use of surveillance devices.

B –POWERS UNDER THE ROYAL COMMISSIONS ACT1902 (cTH)

4.Part 2 of the Royal Commissions Act 1902 (Cth) confers a variety of powers on federal Royal Commissions, including powers to summons witnesses, compel the production of documents, apply for search warrants, and issue warrants for the arrest of witnesses who fail to appear in response to summonses. Persons who fail to attend, produce documents, or be sworn or give evidence are liable to penalties. Part 3 of the Royal Commissions Act 1902 (Cth)sets out additional offences and penalties relating to false or misleading evidence, destruction of documents, interference with witnessesand contempt. These provisions are largely replicated in analogous legislation of States and Territories, but this Chapter will address the Federal provisions only.

5.Two issues that have been ofsome concern to this Royal Commission,because of their impact upon efficiency, effectiveness and cost, relate to service of documents and the penalties for non-compliance with certain provisions of the Royal Commissions Act 1902 (Cth).

6.For the reasons set out below, it is recommended that the Royal Commissions Act 1902 (Cth) be amended to address these two issues.

C –SERVICE

7.The combined effect of the Royal Commissions Act 1902 (Cth) and the Royal Commissions Regulations 2001 (Cth) is that allsummonses to appear and/or produce documents and notices to produce must be personally served in order to be enforceable.[3] Personal service meanshanding the document to the person or, if on tender of the document to the person the person refuses to accept it, putting it down in the person’s presence after the person has been told of the nature of the document; or, where the addressee is a corporation, by handing it to a person who is apparently an officer of that entity and above the age of 16 years at the addressee’s registered office or principal place of business.[4]

8.However, personal service of every summons and notice to produce is an impractical, expensive and unnecessaryrequirement, especially when it involves service on institutional recipients, or recipients who are the subject of a number of notices to produce over time and who are legally represented.

9.The service requirements of the Royal Commissions Act 1902 (Cth) have not always been this burdensome. When the legislation was first enacted, the penalties for non-compliance with a summons could be enforced ‘whether the summons [was] served personally or by being left at [the addressee’s] usual place of abode’.[5]

10.The service requirements for Royal Commissions that are imposed by the current form of theRoyal Commissions Act 1902 (Cth) are more burdensome than those which are prescribed for most courts and other investigative bodies.

11.In most civil jurisdictions, personal service is generally required for originating processes, subject to some exceptions which will be outlined below. However, once proceedings have been commenced, subsequent documents may generally be served by way of‘ordinary service’.[6] Ordinary service may be effected by sending a document via post addressed to the recipient at his or her address for service (or, in some instances, last known business or personal address) or such other mechanisms as may be directed by the Court.

12.Even when personal service is generally required for an originating process or other particular category of document, the rules of most Courts prescribeexceptions in certain circumstances. Common exceptions include where a solicitor accepts service on behalf of the party to be served,[7]and where the parties agree to an alternative method of service.[8]

13.Similarly, other investigatory bodies arepermitted to use methods of service which are more practical and convenient than personal service in a variety of circumstances. For example, r 7(1)(a)(ii) of the Australian Crime Commission Regulations 2002 (Cth) specifically provides that, where personal service of a summons is not ‘practicable’, service may be effected by methods including leaving the summons with another person at the last known or usual place of residence or business of the addressee, or by sending a copy by registered post or certified mail to those addresses or the last known or usual postal address. Pursuant to s108 of the Independent Commission Against Corruption Act 1988 (NSW), service of a document on a person may be effected by leaving it at, or by sending it by pre-paid post to, the residential or business address of the person last known to the person serving the document. Similar rules apply for the Australian Competition and Consumer Commission.[9]

14.Where there is no specific provision for a method of service within a piece of legislation,[10] subsection 28A(1) of the Acts Interpretation Act 1901 (Cth) providesa general mechanism as follows:

For the purposes of any Act that requires or permits a document to served on a person, whether the expression ‘serve’, ‘give’ or ‘send’ or any other expression is used, then the document may be served:

(a)on a natural person:

(i)by delivering it to the person personally; or

(ii)by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document; or

(b)on a body corporate – by leaving it at, or sending it by pre-paid post to, the head office, a registered office or principal office of the body corporate.

15.The case for amendment of the provisions of the Royal Commissions Act 1902 (Cth) requiring personal service is made even more compelling by the huge volume of documents that a modern commission of inquiry generates and dispatches.

16.For example, in this Commission, over the period of about twenty months, more than2000 notices to produce were issued to various recipients located all around Australia. In thevast majority of cases, the notices were addressed to sizeable entities such as banks, government departments, companies and trade unions. A significant number of these entities received multiple notices to produce over time, as investigations progressed and more issues came to light. Furthermore, in many cases, the notices were attended to by in-house counsel, legal officers or external legal representatives. Of the relatively few individuals who were issued with notices to produce, many were assisted by legal representatives (some of whom also acted for related entities).

17.Additionally, over 500summonses to appear and give evidence were issued to various individuals. Again, many recipients had legal representation, some of whom were closely acquainted with the Commission’s proceedings. A small number of people received more than one summons, such as those who had been released from further attendance in 2014, who were then required to appear in 2015 after the term of the Commission was extended and some new fields of inquiry opened up.

18.Of course, there are circumstances where personal service remains desirable and appropriate. That is particularly so where a recipient of a notice to produce or summons is an individual with whom a Commission has previously not been in contact. It is important, in such cases, to ensure that the notice comes to the recipient’s attention by means of personal service. It is also important to ensure that personal service is effected if there is a concern that a person might seek to avoid or evade compliance with a summons or notice to produce.

19.It should also be noted that serious consequences may flow from non-compliance, both for recipients and the efficient workings of Royal Commissions.[11] As such, it is desirable that appropriate steps be taken to ensure that summonses and notices are received. However, as observed above,these competing factors may be accommodated by retaining a general requirement of personal service but introducing exceptions.

Recommendation 77

The Royal Commissions Act 1902 (Cth) be amended to dispense with the requirement for personal service of a summons or notice to produce in circumstances where:

(a)a solicitor accepts service on behalf of the addressee;

(b)the addressee agrees to an alternative method of service; or

(c)(in relation to a notice to produce only) the addressee has been served with a notice to produce previously by the Royal Commission in question, whether that notice was effected personally or otherwise.

D – PENALTIES

20.Anotherrecommendation for reform arises out of the marked inadequacy of existing penalties for a number of offences, including a failure to comply with summonses or notices to produce issued under theRoyal Commissions Act 1902 (Cth).[12]

21.A person who fails, without reasonable excuse, to attend a hearing or produce documents or things in response to notices issued pursuant to s2 of the Royal Commissions Act 1902 (Cth), commits an offence which is punishable by a maximum penalty of $1,000 or imprisonment for six months.[13] Similarly, a person who refuses to be sworn or to make an affirmation, or to answer any relevant question asked by a Commissioner or legal practitioner assisting or appearing before a Royal Commission, commits an offence and is liable for the same penalty.[14]

22.Over a decade ago, these penalties were described as ‘inadequate’ in the Cole Royal Commission Report.[15] Having regard to the penalties which could be imposed by other investigative bodies at that time,[16]the report recommended that the Royal Commissions Act 1902 (Cth) be amended to increase the penalty for failure or refusal to attend when summonsed, failure or refusal to answer questions and failure or refusal to provide documents to at least five years’imprisonment or a $20,000 fine.[17] Despite this recommendation, the penalties in the Royal Commissions Act 1902 (Cth) remain unchanged.

23.The power to impose penalties of imprisonment in addition to monetary penalties was introduced in 1983, but since that time the maximum term of imprisonment has not altered from six months.[18]

24.The monetary penalties have remained unchanged for a considerably longer period of time. In fact, once the rate of inflation is taken into consideration, it is apparent that the current value of those penalties is very much less than it was initially.

25.Pursuant to ss 5 and 6 of the Royal Commission Act 1902 (Cth) as originally enacted, any person appearing as a witness who refused to be sworn or make an affirmation, or to answer any question put to him or her, was liable to a penalty‘not exceeding fifty pounds’. According to an inflation calculator managed by the Reserve Bank of Australia, the value of £50 in 1902 would be equivalent to $6,746.63 in 2014 (the most recent year for which relevant data is held).[19]

26.The fines were increased to £500 in 1912[20] which has since only been amended to reflect the introduction of decimal currency in 1966, when the penalty became $1000.[21] However, this change did not affect the value of the fine, and so effectively there has been no increase of the penalty since 1912. According to the inflation calculator managed by the Reserve Bank of Australia, the value of £500 in 1912 would be equivalent to $57,174.86 in 2014.[22] This illustrates that non-compliance with an exercise of a Royal Commission’s coercive power was, at the time of enactment and within the first decade thereafter, considered to be an extremely serious offence. The current value of the penalty has been seriously eroded by inflation. Legislative amendment is clearly necessary.

Recommendation 78

The Royal Commissions Act 1902 (Cth) be amended to increase the penalties for a failure to comply with a summons to attend, a failure to comply with a notice to produce, a failure to be sworn or answer questions, and a failure or refusal to provide documents to at least a maximum penalty of two years’imprisonment or a fine of 120 penalty units, or both.

27.The reason for selecting two years’ imprisonment is that this is consistent with the penalties available for failure to comply with notices issued by the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission. The number of penalty units has been determined having regard to s 4B of the Crimes Act 1914 (Cth).

E – SURVEILLANCE DEVICES LEGISLATION

28.Various Commonwealth and State Acts make provision for the use of surveillance devices and surveillance device evidence. Each of the Commonwealth, New South Wales, Victoria and Western Australia has an Act entitled the Surveillance Devices Act.[23] Queensland’s legislation is called the Police Powers and Responsibilities Act 2000 (Qld).

29.Save for some particular points of detail, the regime for obtaining approval for the use of a surveillance device,[24] and the dissemination and use of surveillance device evidence and information in relation to such evidence, is broadly the same under each of the Commonwealth, New South Wales, Victorian and Queensland Acts. None of these Acts authorise a Royal Commission to seek, obtain or issue a warrant to use surveillance devices. Further, none expressly provide that a Royal Commission may be informed about, receive or use surveillance device evidence.

30.In part because a Royal Commission is not expressly provided for in the legislation, the means by which surveillance device evidence can be made available to and used by a Royal Commission is unnecessarily complex.

31.Under the Commonwealth Act, protected information obtained by a law enforcement officer or agency from the use of a surveillance device may be provided by that officer to aRoyal Commission and dealt with by a Commission pursuant to a combination of provisions including s 45(5)(a), read with ss45(3),45(7)(b), 47 and 48. Amongst other things, those provisions permit use, communication, and admission into evidence of protected information where necessary for the investigation of a relevant offence or the making of a report on the outcome of an investigation. This is just one example of the problems in this legislation. This test is poorly craftedand difficult to apply in practice. It unnecessarily limits the circumstances under which the information can be made available to a Royal Commission.

32.This is only one of the issues which make it desirable for there to be legislative reform. It is important to ensure the permissibility of reception and use of surveillance device evidence in matters of public importance, which it may be assumed are those matters which are the subject of a Royal Commission, are clearly and properly available.

33.The regime described above can be compared to the clear regime established by the Telecommunications (Interception and Access) Act 1979 (Cth). That regime deals with the interception of telecommunications. Under it, ‘the Minister’[25]may declare a Commonwealth Royal Commission to be an ‘eligible Commonwealth authority’for the purposes of the Telecommunications (Interception and Access) Act 1979 (Cth)if satisfied that it is likely to inquire into matters that may involve the commission of a prescribed offence.[26] State Royal Commissions are not included in this regime.

34.The Telecommunications (Interception and Access) Act 1979 (Cth)regime also operates by way of a general statutory prohibition with legislated exceptions. However, it works more sensibly than the Surveillance Devices Act 2004 (Cth)with respect to a Royal Commission. The Telecommunications (Interception and Access) Act 1979 (Cth)generally prohibitslawfully intercepted information from beingcommunicated, used, recorded, or being given as evidence in a proceeding.[27] A series of exceptions then provides for dealing and communication in certain specified situations. Relevantly, a Commonwealth Royal Commission which has been declared by the Minister to be an eligible Commonwealth authority may receive lawfully intercepted information[28] if the information relates or appears to relate to the commission of a relevant offence[29] in relation to an eligible Commonwealth authority. The Commonwealth Royal Commission is permitted to communicate lawfully intercepted informationif it is for a permitted purpose,[30] which includes an investigation that the Commonwealth Royal Commission concerned is conducting in the course of the inquiry it is commissioned to undertake, or a report on such an investigation.[31]

35.Further, the information may be used in an exempt proceeding, which is defined to include a proceeding of an eligible Commonwealth authority.[32]

36.As can be seen, by contrast with the Surveillance Devices Act 2004 (Cth), under the Telecommunications (Interception and Access) Act 1979 (Cth)there is a more realistic and practical threshold test before a Royal Commission may be provided with information obtained from an interception. The test provides that information can be communicated to a Royal Commission where it ‘relates or appears to relate to the commission of a relevant offence’ that is the subject of its investigations. This test is clearly more practical and appropriate to the investigative functions of a Royal Commission than the test of necessity.

37.It is recommended that a thorough review be undertaken of the Surveillance Devices Act 2004 (Cth) as it relates to Royal Commissions with a view to amending it appropriately.

Recommendation 79

The provisions relating to the reception and use of surveillance device evidencein the Surveillance Devices Act 2004 (Cth) in relation to Royal Commissionsbe reviewed.

[1] Australian Law Reform Commission, Making Inquiries: A New Statutory Framework,ALRC Report 111 (October 1999),ch 11.

[2]Royal Commission into the Building and Construction Industry, Final Report (2003) Vol2, ch8.

[3]Royal Commissions Act 1902 (Cth), ss 2(3A), 3(1), 3(2),6AA(3) require service ‘as prescribed’, ands 6B(1) provides consequences for non-compliance with s 2.Royal Commissions Regulations2001 (Cth), r 6 sets out the prescribed manner of service for the purposes of these provisions.

[4]Royal Commissions Regulations2001 (Cth), r 6.

[5]Royal Commissions Act 1902 (Cth) as made, s 5. The provision in that form was repealed by the Royal Commissions Amendment Act 1982 (Cth).

[6]High Court Rules 2004 (Cth), r 9.01.5;Federal Court Rules 2011 (Cth), r 10.31;Court Procedures Rules 2006 (ACT), r 6420;Supreme Court Rules 1987 (NT), r 6.06;Uniform Civil Procedure Rules 2005 (NSW), r 10.5;Uniform Civil Procedure Rules 1999 (Qld), r112;Supreme Court Civil Rules 2006 (SA), r 68;Supreme Court Rules 2000 (Tas), r 144;Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 6.07;Rules of the Supreme Court 1971 (WA), O 72, r 5.

[7]High Court Rules 2004 (Cth), r 9.01.1(a); Federal Court Rules 2011(Cth), r 10.22; Court Procedures Rules 2006 (ACT), r 6464; Supreme Court Rules 1987 (NT), r 6.08; Uniform Civil Procedure Rules 2005 (NSW), r.10.13;Uniform Civil Procedure Rules 1999 (Qld), r115; Supreme Court Civil Rules 2006 (SA), r 67(1)(c); Supreme Court Rules 2000 (Tas), r134; Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 6.09; Rules of the Supreme Court 1971 (WA), O 9 r 1(2).