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Parliamentary Disqualification for Financial Conflicts
Published online by Cambridge University Press: 01 January 2025
Abstract
When should financial interests bar someone from election to or service in Parliament? This article critically analyses the case law on the Constitution’s provisions on pecuniary interests and offices of profit. These cases are seeing the High Court sculpting new law out of old stone. The article is structured both chronologically and thematically, and explores the case law’s litigational and political context, and its relationship to pecuniary interest registers, as well as its jurisprudential value. Ultimately, the Court is found to be grappling with—and somewhat at sea in — fixing workable and consistent purposes for the constitutional provisions, especially given the need to fit these provisions within the broader values of parliamentary and electoral law and practice. The article concludes by assaying and proposing reform options.
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Footnotes
This article has its roots in a presentation at the 2018 Constitutional Law Conference (UNSW, 23 February 2018). The author thanks John Kalokerinos and several anonymous reviewers for comments and suggestions; their input made the article longer but stronger.
References
Notes
1. Tony Blackshield, ‘The Unfortunate Section Forty-Four’ (2018) 29(1) Public Law Review 3.
2. (1975) 132 CLR 270 (‘Webster’s Case’).
3. (2017) 343 ALR 181 (‘Day’s Case’).
4. (2018) 351 ALR 559.
5. Day’s Case (2017) 343 ALR 181.
6. Gareth Evans, ‘Pecuniary Interests of Members of Parliament under the Australian Constitution’ (1975) 49 Australian Law Journal 464.
7. A truly febrile year, unlike the constitutional farce of the many MP disqualification cases of 2017: Graeme Orr, ‘Fertilizing a Thicket: Section 44, MP Qualifications and the High Court’ (2018) 29(1) Public Law Review 17.
8. The Age was then still a conservative newspaper. Despite that, Webster’s colleagues accused it of acting conspiratorially.
9. Disputed Elections and Disqualifications Act 1907 (Cth), in the wake of the litigation that culminated in Vardon v O’Loghlin (1907) 5 CLR 201.
10. The High Court in Day’s Case noted that such novel constitutional points were ‘usually’ decided by a full bench, a procedural point which made it easier to abandon the ruling in Webster’s Case: Day’s Case (2017) 343 ALR 181 [44], [46].
11. Official Report of the National Australasian Constitutional Convention Debates, Adelaide, 15 April 1897, 736–7; Sydney, 21 September 1897, 1022–8. What debate there was focused on the nature of shareholdings that should be caught or not caught.
12. John Quick and Robert Garran, The Annotated Constitution of the Australian Commonwealth (Angus & Robertson, 1901) 493.
13. The company had been founded by his grandfather. Webster held a seventh of the preferential shares and about a quarter of the ordinary shares.
14. Webster’s Case (1975) 132 CLR 270, 276.
15. Ibid 278.
16. Webster’s Case (1975) 132 CLR 270 citing Royse v Birley (1869) LR 4 CP 296, 319.
17. Maurice Gwyer, Anson’s Law and Custom of the Constitution (Oxford University Press, 5th ed, 1922) 372.
18. Ibid: a practice stopped by Prime Minister Pitt from 1784.
19. Webster’s Case (1975) 132 CLR 270, 279. See reflection on this in Day’s Case (2017) 343 ALR 181 [40]–[41].
20. Webster’s Case (1975) 132 CLR 270, 285–6.
21. Ibid 286–7.
22. In appointing Cleaver Bunton to the casual vacancy caused by the elevation, Barwick-style, of Labor Attorney-General Lionel Murphy to the High Court.
23. Webster could even have filled his own casual vacancy (as South Australian Liberal Senator Ferris did in 1996 after her qualifications were questioned). That is, the Country Party could have proposed him to the Victorian Parliament, once the family company had sworn off supplying goods to the Commonwealth.
24. See Vardon v O’Loghlin (1907) 5 CLR 201; cf Constitution s 15.
25. As has since been ruled to be the normal procedure for filling a Senate election that miscarries due to qualifications issues: Re Wood (1988) 167 CLR 145.
26. To a flat $200 for any days sat prior to the action being filed, and $200 for any day after that. It was also clarified that there could be no double penalty: if several common informers sued on the same matter, they would presumably share any penalty.
27. Joint Committee on Pecuniary Interests of Members of Parliament, Report on Declaration of Interests (Parl Paper 182 of 1975).
28. B C Wright (ed), House of Representatives Practice (Department of the House of Representatives, 6th ed, 2012) 146; Rosemary Laing (ed), Odgers’ Australian Senate Practice (Department of the Senate, 14th ed, 2016) 179. The Fraser government did act on declarations of ministers’ interests, following the independent Bowen Report, aka Committee of Inquiry Concerning Public Interest and Public Duty (Parliament of Australia, 1979), but even these were initially confidential disclosures. On the Bowen Report, see Colin A Hughes, ‘Public Duty and Private Interest: An Australian Report’ (1981) 61 The Parliamentarian 72.
29. Senate Standing Committee on Legal and Constitutional Affairs, The Constitutional Qualifications of Members of Parliament (AGPS, May 1981); see especially ch 7 on pecuniary interests.
30. Ibid [7.40].
31. Orr (n 7).
32. Evans was even accused in Parliament, by a colleague of Webster, of being in cahoots with The Age journalist and the citizen who first raised Webster’s affairs publicly.
33. Evans (n 6).
34. P J Hanks, ‘Parliament and the Electorate’ in G Evans (ed), Labor and the Constitution 1972–75: Essays and Commentaries on the Constitutional Controversies of the Whitlam Years in Australian Government (Heinemann, 1975) 166, 196–7.
35. J D (Jack) Hammond, ‘Pecuniary Interests of Parliamentarians: A Comment on the Webster Case’ (1976) 3 Monash University Law Review 91. Hammond’s article was later relied on by the High Court in Day’s Case (2017) 343 ALR 181 [25], [169], [273]. See also Gerard Carney, Members of Parliament: Law and Ethics (Prospect, 2000) 103–5.
36. I C Harris (ed), House of Representatives Practice (Department of the House of Representatives, 4th ed, 2001) 138.
37. Cf Constitution s 45(iii), as discussed below.
38. Including a link to the advice, see Ian Holland, ‘Section 44 of the Constitution’ (Parliamentary Library, E-Brief, March 2004) <https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/archive/Section44>.
39. (2017) 340 ALR 368.
40. Day’s Case (2017) 343 ALR 181 [187]. Gageler J at [113]–[116] also pointedly implied that Day’s desire was to give away his cake yet eat it too, something that buttressed his finding that the manoeuvrings did not render Day’s interest legally remote.
41. Ibid [242].
42. In 2014, Day advised the Commonwealth he was disposing of the building. In an email to the Commonwealth in early 2016 he claimed his interest was more remote than in Webster’s Case. See ibid [196] and [222]–[223]. Keane J at [135], [187] notes that as early as late 2013 (before he had even first assumed his seat) Day was concerned that the Commonwealth wanted him to occupy a former Senator’s office and realised it would not lease him office space in a building owned by his family trust.
43. In temporal terms, the disqualification dated at least from the point where the potential rent was directed to an account or purpose from which Day would benefit: ibid [195] (Keane J).
44. Ibid [13] (Kiefel CJ, Bell and Edelman JJ).
45. Ibid [88]–[92], [115]–[117] (Gageler J), [278]–[281] (Nettle and Gordon JJ). For similarly broad realism on ‘indirect pecuniary interest’, see [190]–[196] (Keane J).
46. See, eg, ibid [54]–[61] (Kiefel CJ, Bell and Edelman JJ).
47. Ibid [16] (emphasis added).
48. See, eg, ibid [33]–[34] (Kiefel CJ, Bell and Edelman JJ), and, more fully, [161]–[184] (Keane J).
49. Ibid [31]–[32], [39].
50. Ibid [48]–[49].
51. See further, in the Australian context, Paul Finn, ‘Public Trust and Public Accountability’ (1994) 3(2) Griffith Law Review 224; P D Finn, ‘A Sovereign People, A Public Trust’ in P D Finn (ed), Essays on Law and Government: Vol 1 (Law Book Co, 1995) 1; David Solomon, ‘Public Office As/Is a Public Trust’ (2018) 33(1) Australasian Parliamentary Review 156.
52. Day’s Case (2017) 343 ALR 181 [59].
53. Such as a personal loan on normal terms from a Commonwealth agency. This result also follows from stressing the purpose of protecting ‘public service’ ethics and funds: see Evans (n 6) 467–8 and Hobler v Jones [1959] Qd R 609.
54. Day’s Case (2017) 343 ALR 181 [65]–[66]. Similarly at [256]–[257] (Nettle and Gordon JJ).
55. Ibid [98]–[100].
56. Ibid [199]–[201] (Keane J).
57. Ibid [102] (Gageler J) (emphasis added).
58. The possibility of an MP exerting ‘corrupting influence on the officers of the administration’ animated Keane J: ibid [170].
59. Ibid [201].
60. Ibid [265]–[267] (Nettle and Gordon JJ). Older case law doubting a fast distinction between the Crown and its government departments, and general Crown agencies, is given by A N Lewis, ‘The Tasmanian Members’ Case: Contracts between Members of Parliament and Government Trading Departments’ (1933) 6(9) Australian Law Journal 322, 323–5.
61. Day’s Case (2017) 343 ALR 181 [263].
62. Ibid [282]–[283].
63. Solicitor-General Stephen Donahue QC, In the Matter of the Eligibility of Mr Dutton Pursuant to Section 44(v) of the Constitution (SG Opinion No 21 of 2018, 24 August 2018) 3.
64. Day’s Case (2017) 343 ALR 181 [260], noting that the issue was left open. The Solicitor-General accepted that an ‘arrangement or understanding’ could trigger s 44(v): ibid.
65. Compare the limitation favoured by Gageler J and Keane J: see Day’s Case (2017) 343 ALR 181 [102]–[107] (Gageler J), [199] (Keane J).
66. (2018) 353 ALR 1.
67. Some actions were filed in 2017 that were parasitic on the referral of MPs suffering dual citizenship disqualifications under s 44(i) of the Constitution.
68. Tony Blackshield, ‘Dr Gillespie and the Substitute Statute’, Inside Story (online), 5 October 2017, <http://insidestory.org.au/dr-gillespie-and-the-substitute-statute/>.
69. Alley v Gillespie (2018) 353 ALR 1 [37].
70. As recognised in Sue v Hill (1999) 199 CLR 462.
71. Alley v Gillespie (2018) 353 ALR 1 [77] (Gageler J), arguing that the common informer process was only ever ‘machinery for enforcing by penalties a decision made by [parliament]’.
72. In that critical vein, see Tony Blackshield, ‘“Exclusive Cognisance” and Cognitive Dissonance: Alley v Gillespie’, AusPubLaw (online), 3 April 2018, <https://auspublaw.org/2018/04/alley-v-gillespie>.
73. Sykes v Cleary (1992) 176 CLR 77 (‘Sykes’ Case’). See further Greg Carne, ‘Kicking Goals for Democracy?’ (1993) 67(4) Law Institute Journal 281.
74. He was, however, re-elected at the subsequent general election.
75. Sykes’ Case (1992) 176 CLR 77, 99–100 (Mason CJ, Toohey and McHugh JJ), 108 (Brennan J), 130 (Dawson J) and 132 (Gaudron J). Compare Deane J’s far more rational approach at 119–25.
76. Ibid 98 (Mason CJ, Toohey and McHugh JJ). See also Deane J at 118–19.
77. Ibid 95.
78. Ibid 96, citing Erskine May, Treatise on the Law, Privileges, Proceedings and Usage of Parliament (Butterworth, 16th ed, 1957).
79. Cf ibid 95–6, also citing May.
80. (1996) 185 CLR 296.
81. (2017) 350 ALR 204 (‘Re Nash’).
82. Re Lambie (2018) 351 ALR 559 [10].
83. In some jurisdictions, the mayor is selected by and amongst fellow councillors.
84. Re Lambie (2018) 351 ALR 559 [41].
85. Ibid [31], [43]–[51]. Contrast Edelman J, who at [55]–[59] felt the majority’s approach contradicted Sykes’ Case. The potential for control of a teacher and a councillor were, he felt, not dissimilar. The majority’s focus on tenure or profit from the office implied a distinction between high-level offices (caught by s 44(iv) of the Constitution) and lower offices (possibly not caught). That distinction collided with the 19th century understanding, upheld in Sykes’ Case, that undue influence of MPs could be present at any level of office. Edelman J, instead, would ask whether the office was ‘appointed’ by the executive, or whether it amounted to ‘employment’ within the executive: at [80]. The former implies executive carrot-dangling, the latter executive subordination. For our purposes, his approach is within the same ballpark as the majority, because it assumes the purpose of the disqualification is limited to MP independence, not MP venality.
86. Ibid [13]. Compare Edelman J’s longer discussion of the ‘from’ and ‘under’ distinction at [60]–[77].
87. Ibid [18]–[21].
88. Horne v Barber (1920) 27 CLR 494, 500.
89. Re Lambie (2018) 351 ALR 559 [28].
90. Ibid.
91. Day’s Case (2017) 343 ALR 181 [48].
92. Ibid (emphasis added).
93. Ibid [49].
94. A-G (Cth) ex rel McKinlay v Commonwealth (1975) 135 CLR 1, 56–7.
95. See especially, Hanna Pitkin, The Concept of Representation (University of California Press, 1967) ch 10. See also, Bernard Manin, The Principles of Representative Government (Cambridge University Press, 1997).
96. Re Lambie (2018) 351 ALR 559 [27].
97. Ibid [30].
98. Ibid [22], [31], invoking Re Canavan (2017) 349 ALR 534, where a stringent literalism was applied to MPs who were unaware of their dual citizenships, to avoid introducing a hard-to-prove subjective test into the s 44(ii) disqualification.
99. Orr (n 7).
100. Speculation about the application of s 45(iii) tends to arise when MPs, close to retirement (especially former ministers who might be thorns in a government’s side), are offered plum overseas roles. This kind of reward—or buying-off—of MPs seems entirely within the mischief of the provision and potentially even s 44(iv). But both prohibitions are avoided by the simple expedient of ensuring there is no entitlement to payment beyond expenses whilst the recipient remains an MP.
101. From 13 November 2017 these committees also gained oversight of a new ‘Citizenship Register’ to help address s 44(ii) citizenship concerns. Although details of birthplace, parentage and grand-parentage are to be given, it is less a register of hard facts and more a declaration of an MP’s beliefs about and efforts to investigate potential dual citizenships.
102. House of Representatives, Standing Orders: Register of Members’ Interests Additional Resolution, 13 February 1986, 117.
103. Joint Committee on Pecuniary Interests of Members of Parliament (n 27) 46.
104. House of Representatives, Standing Orders: Register of Members’ Interests, 9 October 1984 (as amended), 117, cl 2.
105. Deidre McKeown, ‘Codes of Conduct in Australian and Selected Overseas Parliaments’ (Background Note, Parliamentary Library, Parliament of Australia, 18 September 2012).
106. Senate Standing Committee of Senators’ Interests, Parliament of Australia, Code of Conduct Inquiry (Report 2/2012, 29 November 2012) [1.26]–[1.27].
107. See, eg, Integrity Act 2009 (Qld) s 7. An Independent Parliamentary Advisor for the Commonwealth level was proposed as part of the National Integrity Commissioner Bill 2012 (Cth), sponsored by The Australian Greens.
108. Lewis (n 60) 323.
109. Commonwealth Electoral Act 1918 (Cth) s 11.
110. Commonwealth Electoral Act 1918 (Cth) s 25(3).
111. Public Governance, Performance and Accountability Act 2013 (Cth) s 29.
112. Wright (n 28) 143.
113. Ibid 142, citing House of Representatives, Standing Orders s 134(a).
114. Wright (n 28) 143.
115. Official Record of the Debates of the Australasian Federal Convention, Sydney, 21 September 1897, 1024 (Sir John Downer).
116. An exception proving the rule is Deane J’s partial dissent in Sykes’ Case (1992) 176 CLR 77.
117. Day’s Case (2017) 343 ALR 181 [95], [97].
118. Ibid [97].
119. Re Canavan (2017) 349 ALR 534.
120. Re Culleton (No 2) (2017) 341 ALR 1.
121. Ibid [59].
122. Day’s Case (2017) 343 ALR 181 [183].
123. The rule against dual citizenship is widely regarded as an unnecessary, formalistic barrier. Comparable countries like New Zealand—and even the United Kingdom (whence it originated)—feel no need for it. The barriers based on current insolvency or conviction do not raise conflicts of interest and duty so much as moral questions easily left to the media, political pressure and (ultimately) the electorate.
124. Joint Standing Committee on Electoral Matters, Parliament of Australia, Excluded: The Impact of Section 44 on Australian Democracy (Report, May 2018) recommendation 1. Compare Senate Standing Committee on Legal and Constitutional Affairs (n 29) ix–xi. The 1981 report recommended repealing s 44(v) and clarifying the offices covered by s 44(iv) and indeed having those offices terminate on election to protect both electoral choice and the interest in avoiding conflicts of duty. On s 44(iv), see the similar recommendation in: House of Representatives Standing Committee on Legal and Constitutional Affairs, House of Representatives, Aspects of Section 44 of the Australian Constitution (Report, 25 August 1997) 11–16.
125. Joint Standing Committee on Electoral Matters, Parliament of Australia (n 124) 50–1.