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Page 2 Senate Friday, 17 February 2017 Act allows the Attorney-General to intervene on behalf of the Commonwealth in any proceedings in any court that raises any issue involving the Commonwealth Constitution. Section 78B of the act requires that the Attorney- General, and state and territory counterparts, be given notice of any such proceedings. Under general arrangements approved by successive Commonwealth attorneys-general, section 78B notices are handled, in the first instance, by the AGS in consultation with the Solicitor-General and the Office of Constitutional Law. In practice, any 78B notice received by the Attorney-General's office is sent to the department, which in turn allocates the notice to AGS to deal with. Hundreds of section 78B notices are received each year. These arrangements also provide that in significant cases the Office of Constitutional Law puts a submission on the question of intervention to the Attorney-General based on AGS advice and consultation with any agency having a non-constitutional policy interest. Mr Moraitis has also outlined a number of issues arising from the committee's invitations to the department to appear which I would like to draw to the committee's attention as they remain relevant to the assistance that we may be able to provide today. Paragraph 4.8.1 of the guidelines for official witnesses states: Legal advisers owe a duty to their clients not to disclose the existence or content of any advice. It would therefore be inappropriate for any official who has provided legal advice to government, who has obtained advice from an external lawyer or who possesses legal advice provided to another agency, to disclose that advice. Paragraph 4.8.2 states: Where an official has been asked a question about the content of legal advice, it may be appropriate to advise the committee that such information might properly be subject to a public interest immunity claim and refer the question of disclosure to the responsible minister. AGS's work in relation to the Bell Group litigation is limited to providing legal advice and acting as lawyers for the Attorney-General and for the Commissioner of Taxation. The guidelines for official witnesses make it clear that it would not be appropriate for AGS to disclose any advice without the informed prior approval of its clients so as not to compromise any public interest immunity claims that those clients may wish to make. Accordingly, before AGS could respond to such requests for information, it would seek the opportunity to consult with its clients about the specific request, and that may require consultation with both the Attorney-General and the Commissioner of Taxation and include officials in the department as well as the ATO. In these circumstances, to the extent that the committee seeks information about AGS's work for its clients, it is important that that information be sought directly from the clients themselves and not from AGS, because it is the client, not the lawyer, AGS, which has a particular privilege interest which may give rise to public interest immunity claims. More broadly, the concern for client confidentiality, which is recognised in the guidelines, reflects an underlying concern for the integrity of the lawyer-client relationship. The trust and confidence which clients place in their lawyers is essential to the maintenance of the lawyer-client relationship, and AGS is concerned not to take any steps which may be seen by its clients, both in this inquiry and more broadly, to be inconsistent with that relationship. Similar considerations also apply in relation to Mr Faulkner. There is one other matter that I would like to raise. A number of questions were taken on notice at the hearing on 7 December. I believe answers to those were provided to the committee last night, and I am not sure whether those have been published by the committee. CHAIR: We have those answers now before us. I think we have all had access to them this morning. Mr Anderson: If I can go one step further and ask whether they have been published or not and whether they are still confidential to the committee or whether we can answer questions about them, should the committee ask questions? CHAIR: We would like to ask you questions about them, so I guess we need to work out whether to resolve to make them public now. You have no objection to those being made public? Mr Anderson: We have no objection. CHAIR: We will move to make those public now. Senator LUDLAM: So moved. CHAIR: Mr Anderson, I want to step through some parts of your opening statement with you briefly. You will note in my own opening statement I made the comment that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. That resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about how and when they were adopted. I just want to make sure that you are all clear about that part of your obligations before this committee today. LEGAL AND CONSTITUTIONAL AFFAIRS REFERENCES COMMITTEE
Friday, 17 February 2017 Senate Page 3 Mr Anderson: I can speak on behalf of my colleagues and I believe that we are all clear on that. I think it is important to foreshadow that much has happened since the hearing of 7 December. There will be questions, we expect, which we will simply need to refer to the Attorney-General or potentially to the Commissioner of Taxation and which we will not be able to answer today. CHAIR: Yes, but some of those questions might refer to particular dates when referrals of different matters between your offices were made. This committee is quite entitled to ask those questions. Mr Anderson: At the hearing of 7 December, those sorts of questions were, I believe, answered. But, again, there were other types of questions which went to the content of advice. CHAIR: We will now turn to the issue of the content, and legal professional privilege has never been accepted as grounds for not answering questions before the Senate or in fact any parliamentary forum. So legal professional privilege is not a ground in and of itself. In stepping through those questions today, you have an obligation in making such a claim to specify the harm that would be caused to the public interest. You must be able to give a substantive reference to what the harm would be in order to make such a claim. That claim does not relate to the fact that it is a legal matter. It has to refer back to the harm that would be caused, because legal professional privilege is not something that is accepted by this committee. Is that understood? Mr Anderson: That is understood. Senator WATT: Thanks, everyone, for coming. I think we will still have plenty of questions that are entirely able to be answered, despite everything that has been said. Mr Anderson, you and I have met a number of times now at these hearings. Thank you for your continued cooperation. I am not sure that I am going to have a lot of questions for you personally. I think we have covered that ground pretty extensively. Mr Kingston, I appreciate you are fairly recently in the role, so I am not going to make you talk about things that you were not involved in. But I particularly appreciate Mr Faulkner and Mr Loughton coming along because obviously you have been very involved in these matters as well. Just so I am clear on roles, Mr Loughton, your primary role was as instructing solicitor in what became known as the Bell litigation, the ATO intervention and the Commonwealth intervention. Is that right? Mr Loughton: That is right. I am a litigator with the Constitutional Litigation Unit of AGS and I was the solicitor having carriage of litigation in the High Court. Senator WATT: Yes, whereas Mr Faulkner, your primary role is within the department, but you obviously work very closely together in any constitutional litigation of this nature? Mr Faulkner: Yes. Senator WATT: This is probably a question for both of you. When did either of you first become involved in the consideration of how the Commonwealth might deal with the proposed Western Australian legislation? Mr Loughton: On my part, I first received instructions in relation to the litigation in early December 2016. Senator WATT: 2015? Mr Loughton: Yes. Senator WATT: So you first received instructions in December 2015. Was that the very first contact you had had with either the ATO or the Attorney-General's Department? Mr Loughton: No. I became aware of the prospect of this litigation perhaps a month or two earlier. Senator WATT: So probably October or November 2015? Mr Loughton: Yes. Senator WATT: But prior to, let's say, October at the earliest you really had not had any knowledge or dealings with any agency about the Western Australian legislation? Mr Loughton: No. I was a blank slate on the matter. Senator WATT: I bet you pine for those days. Mr Loughton: Indeed. Senator WATT: When you say that you first became aware of the 'possibility of litigation', I think you said— Mr Loughton: Yes. Senator WATT: in October or November, who made you aware of that? Mr Loughton: There was other litigation going on in the Western Australian Supreme Court in relation to the Bell matter. That litigation itself gives rise to constitutional issues. AGS Perth contacted me in relation to a LEGAL AND CONSTITUTIONAL AFFAIRS REFERENCES COMMITTEE
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