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Page 6 Senate Friday, 17 February 2017 Mr Faulkner: Yes. Senator WATT: And if there were any meeting notes taken, could I please request a copy of those? Mr Faulkner: I can take that on notice. Senator WATT: I am aware that, as this litigation progressed, there were certain issues on which the Australian tax office could intervene and there were other issues on which the Attorney-General, on behalf of the Commonwealth, could intervene. In you providing instructions to Mr Loughton, as opposed to the ATO providing instructions, was that because there was the possibility of the Commonwealth, as opposed to the ATO, intervening? Mr Faulkner: The issuing of the 78B notice means that the question of whether the Attorney-General wishes to intervene in the matter arises, and that question needs to be considered, so instructions provided to AGS to begin consideration of those issues. That is the question of the Attorney-General's intervention in the matter that raises the constitutional issues. That says nothing about any other party, including the Commissioner of Taxation. It is not uncommon for other emanations of the Commonwealth to have an interest in a proceeding which is also constitutional, so one could overstate the significance of there being another interested Commonwealth party in any particular proceeding of this sort. Certainly, my instructions to AGS were not contingent on any other agency having an interest in the matter. Senator WATT: Did you personally have a view at that point, when you provided instructions, as to whether the Commonwealth should intervene? Mr Faulkner: I could not express an opinion on an opinion. Senator WATT: Around that time, you have mentioned there was a meeting involving some people prior to providing those instructions. Is that correct? Mr Faulkner: No. I am not looking to be difficult here but, I believe that all I think I have said—all I intended to say, perhaps—is that my recollection is that the 78B notice was received around 1 December. I would expect that those of us generally with an interest in such things—Mr Loughton's area, and myself, at the very least— would have discussed that matter fairly shortly thereafter, possibly immediately. That is possible. So that is the kind of meeting that I had in mind. Issuing of instructions was, I imagine, around that time as well. Senator WATT: Did you have any contact with anyone in the Attorney-General's office at around that point? Mr Faulkner: No. Senator WATT: Okay—and not with the Attorney-General himself either? Mr Faulkner: No. Senator WATT: Okay. Is it normal at this fairly early stage of litigation for matters to be conducted by departmental officials as opposed to involving a minister's office? Mr Faulkner: Yes, but perhaps I could elaborate a little bit on the general process. I will not take up too much time and I apologise if I am repeating some things that have been said previously; that is entirely possible. The process for dealing with 79B notices—that is the notice that is given of a constitutional matter wherever one arises in any court—is the subject of a standing authorisation which has taken the same form over a couple of decades now. I can say this with some confidence because I have been there for a couple of decades and I have been responsible for the way these things work. Broadly, an Attorney-General will authorise initial consideration of all 78B notices which come in by my own office in the Attorney-General's Department, the Australian Government Solicitor and the Solicitor-General's office. Where the matter is not significant—we consider it not to be significant—we are authorised to indicate to the parties that there will be no intervention. However, wherever it is a significant matter, we prepare advice for the Attorney-General and it is considered in due course. So it is not at all uncommon for that process of preparing the advice for the Attorney-General to take quite a while. There can be all kinds of considerations like, for example, whether we expect the states to intervene, what their submissions might be, who might be in the case and able to put the arguments that we are interested in effectively or whether there is any utility in us being there to say particular things. It is quite a complex process and it takes quite some time. It is virtually never the case that that preliminary work would be raised specifically with the office or the Attorney-General. Does that help at all? Senator WATT: That is helpful. I am aware that in one of our previous hearings—I am not sure which witness it was—we had been told that the Australian tax office first sought advice from the Australian Government Solicitor around this matter, presumably relating to the Western Australian legislation, on 7 May 2015. Mr Loughton, are you aware of that request for advice? LEGAL AND CONSTITUTIONAL AFFAIRS REFERENCES COMMITTEE
Friday, 17 February 2017 Senate Page 7 Mr Loughton: I became aware of it after the fact. Senator WATT: Roughly when? Mr Loughton: As I said, at the time I began work on the litigation proper. Also, as Mr Faulkner was answering, I had the opportunity to consult my notes and I can add a little bit more precision. The 78B notice was received by AGS, as it turns out, on 3 December. The Bell litigation had started a few days before that. We knew about it. I think the whole world knew about it. So, as is sometimes the case, we took the opportunity in anticipation of the 78B notice to seek instructions to start preliminary work on the case. Mr Faulkner: Which, I might add, is not at all unusual. I consider myself authorised to give instructions in those cases, and it is often done, the point being to give ourselves as much time as possible to get on top of things. As you would be aware, I am sure, the time lines can seem extraordinarily long to the outside world sometimes, but, if you know the cases, they are ridiculously compressed, and one does one's best. Senator WATT: Without going into what was in the request for advice from the ATO, do you know which officer within the AGS dealt with that request? Mr Loughton: I believe that has been addressed earlier. Mr Faulkner: If I may be so bold as to interrupt, it does seem to me—I hesitate to raise this—that there is a question whether questions about advice sought and obtained by, in this case, the ATO really should be addressed to the ATO. I am conscious often of being in the rather invidious position of a legal adviser and provider of advice as well as someone who instructs, but nevertheless, as a provider of advice, certainly the thrust of the guidelines for official witnesses when it comes to the provision of advice quite particularly is that questions about advice really ought to be directed to the agencies which sought the advice. There is some difficulty in approaching the legal adviser him- or herself. As you would be aware, AGS is the provider of all constitutional advice to all agencies across the Commonwealth, and I think it is generally accepted that it is not appropriate to approach AGS about all the advice it is giving across the Commonwealth. One might say I am blowing this out of proportion in suggesting that this is the same kind of situation, but it is certainly an example of that sort of thing. So I just feel it is appropriate to raise that. I apologise. Senator WATT: I am being very careful not to request a copy of the advice. All I am asking, given Mr Loughton is a representative of the AGS, is which officer dealt with that request. I am not interested in getting a copy—I mean, I'd love to get a copy of the advice, but I won't! CHAIR: In line with my opening statement, we do understand that, in specifying the harm that might come from such a disclosure, often it is the party seeking the advice who is best able to put forward the evidence of the nature of any such harm. I understand in that context. Because legal professional privilege is not a ground in and of itself, it comes back down to the nature of the harm that would be caused from that disclosure, and the only party that could be harmed is therefore the party seeking that advice. Mr Anderson: To add to that: my recollection is that the evidence was actually given by Mr Mills from the ATO about the advice that the ATO had sought— CHAIR: That is right. Mr Anderson: and, with respect, I think the ATO is in the best position to say what harm, if any, there might be from disclosing information. Senator WATT: So you think there might be some harm in us finding out which officer in the AGS took over a request for advice? Mr Anderson: My point is that the ATO, as the client seeking that advice, is in the position that we are not: to actually be able to say whether there is any harm. CHAIR: The technical process as in— Senator BACK: Officers of the ATO are not here, are they? CHAIR: No. We have heard from them before. Senator BACK: And you cannot answer on their behalf. CHAIR: But we can ask questions of process, people, dates and times, which clearly must have been through— Senator BACK: Presumably, ATO officers would be best positioned to answer those questions. These gentlemen may not be in a position to answer those questions. CHAIR: Senator Back, I think you were seeking the call next. LEGAL AND CONSTITUTIONAL AFFAIRS REFERENCES COMMITTEE
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