Opinions galore

UPDATE ... Bret Walker disagrees with Crown Solicitor's advice ... Power of parliamentary committee to summon witnesses while parliament is prorogued ... Gentrader inquiry to proceed ... Heaps of opinions on Parliament v Executive

Eric Roozendaal and Kristina Keneally: covering-up botched power saleThe NSW Legislative Council committee investigating the Gentrader transactions has suspended for a week the summonses to appear issued to the directors of the State government electricity generators.

This follows advice received on Friday (Jan. 21) from Bret Walker SC to the Clerk of the Parliaments, Lynn Lovelock.

Walker's advice has crystallised the legal issues that arose as a consequence of the proroguing of parliament in December.

Walker agrees with Lynn Lovelock's advice earlier this month that the standing committee can still transact its business while parliament is prorogued (but not dissolved).

He thought that the advice relied on by the government from the NSW Crown Solicitor, Ian Knight, that the committee had no legal authority to conduct hearings or call witnesses, was incorrect.

Walker says that the hearings also attract parliamantary privilege, which has been the sticking point for most of the witnesses.

Witnesses will be sent copies of Walker's advice and asked to consider it. The summonses are now returnable by Monday week (Jan. 31).

Walker's advice is that the standing order under which the committee is operating is valid.

"That in my opinion is the end of the question. All other matters flow consequentially, in favour of the ancilliary powers to compel attendance of and answers from witnesses, and for the production of papers."

See Walker's advice HERE.

On Monday (Jan. 24) Opposition Leader Barry O'Farrell and Shadow Treasurer Mike Baird are to give evidence about the Liberal policy on the Gentrade transactions and whether they are prepared to unscramble the omelette should they be elected in March.

The stoush over the Legislative Council's General Purpose Standing Committee Number One is a classic fight between parliament and executive.

Fortunately, the NSW government does not control the upper house and members there have taken it upon themselves to explore the finer details of the government's sale to private resellers of the output of two state-owned power generators.

GPSC No.1 is seeking to examine the details of the energy reform transactions, the circumstances that led to the resignation of directors from the energy generation companies and the impact the privatisation of energy retailing will have on electricity prices.

Eight directors of the Eraring and Delta electricity generators resigned on the eve of the legislation's passage through the parliament because they feared the terms of the sale of their company's output would jeapordise their fiduciary duties as board members.

The standing committee summonsed them to appear on Monday (Jan. 24).

Four other directors who had not resigned also were required to appear last Friday (Jan. 21).

If the directors fail to appear on the newly appointed date then the Legislative Council may seek Supreme Court orders, or have them arrested for contempt.

Arthur Moses SC and constitutional law academic Professor Patrick Keyzer have been working on submissions on behalf of the state Opposition for a possible court hearing.

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The Premier, Kristina Keneally, clinging to a 1994 opinion written by Crown Solicitor Knight for the dying Fahey government, originally insisted the committee's investigation while parliament was prorogued was "illegal".

Fahey's Coalition government lost control of the Assembly in October 1994 and that was the reason it advised the Governor to prorogue parliament. The election didn't take place until March 25 the following year.

Treasurer and Premier: synchronised eye rolling as "joint" witnessesThe general odium surrounding the Gentrader cover-up ultimately forced Keneally to change tack and agree to appear.

She fronted-up as a "joint" witness with the sepulchral Eric Roozendaal, NSW Treasurer, who had carriage of the botched fire sale of the energy assets.

Keneally said she would not rule out legal action against witnesses who said the wrong (right) thing - an intimidation directed at anyone who might want to tell the truth.

That remark and her repeated insistence that the work of the committee was "illegal" was earmarked by one set of lawyers as a potential contempt of parliament.

The Treasury officers were more enlightening in their evidence, revealing that of the total sale price of $5.3 billion the net proceeds will fall about $2 billion short of the amount the government claimed a month ago.

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Bret Walker SC had been asked to advise the Legislative Council about parliamentary privilege and compelling witnesses. The non-ALP members of the committee did not want further advice from the Crown Solicitor, but rather a high-flyer from the independent bar.

"A source" from the committee was quoted in The Sydney Morning Herald today (Jan. 21) as saying:

''Using the Crown Solicitor is like having the manager of the soccer team come on as referee. As the lawyer to the executive, the Crown Solicitor is not independent.''

To help guide the interested observer through the thickets, Justinian here outlines some of the opinions, judgments and legal solutions on offer.

• Crown Solicitor Ian Knight's 1994 advice to the Fahey government:

Parliamentary committees cannot transact business after parliament had been prorogued. Committees are the creatures of parliament and once parliament ups anchor, so too do its committees.

Further, the standing orders which purport to give committees the power to meet, transact business and report following prorogation, are invalid.  

• Egan v Willis:

This was decided by the High Court in December 1998. By a 5:1 majority the court said the Legislative Council had an implied power to require a Minister to produce state papers to the house.

The implied power was supported by what is "reasonably necessary" for the proper exercise of the functions of the Legislative Council.

• Lynn Lovelocks's advice of August 1999:

The clerk of parliaments advised MLCs that with the proroguing of parliament on August 11, 1999 till September 7, 1999 the standing committees continue in existence, their references remain valid and are held over until the house meets again.

Lovelock pointed to the Crown Solicitor's 1994 advice that the standing order under which the committees were established was invalid. She added, "assuming this is correct".

• Lovelock & Evans - New South Wales Legislative Council Practice, 2008:

By 2008 Lynn Lovelock had come to reject Knight's opinion.

She and the former clerk of parliaments, John Evans, said that the Crown Solicitor's advice "was based on an extremely restrictive view of the powers of the council (and assembly)".

• David Shoebridge MLC, briefing December 2010:

Shoebridge: Parliamentary Protection BillFormer barrister, Greens MLC and member of General Purpose Standing Committee Number One David Shoebridge provided briefing notes to the media on the legal position.

He said: "The advice relied on by the Premier is more than a decade-and-a-half old and fails to take into account significant legal developments since that time."

The NSW Constitution Act also says the council is competent to "dispatch any business" as long as the lower house has not been dissolved.

• Opinion from Arthur Moses and Patrick Keyzer for the Leader of the Opposition Barry O'Farrell. December 2010:

They agree with the observations in New South Wales Legislative Council Practice, by Lovelock and Evans, that Knight's view of the powers of the council are "extremely restrictive".

They say that a binding determination by the Supreme Court is preferable "to the uncertainty of competing legal advices being debated in the public arena".

They advise that the comments by the Premier that the committee has no legal standing have the tendency to interfere with the committee's work and may constitute a contempt of parliament.

The Moses-Keyzer opinion was dismissed by Keneally as "politically motivated". She claimed it was based on a "factual inaccuracy" in that it presumed parliament had been prorogued to avoid the inquiry.

The Premier tried to keep a straight face, but the fact that she has not ruled out legal action against anyone whose evidence to the committee she finds offensive rather undermined her claim of "factual inaccuracy".

The government's attack on these advisers was particularly unpleasant.

Professor Keyzer is  admired for his work on constitutional law and acts pro bono for aboriginal and prisoner rights. Certainly he's not "motivated" by right of centre causes.

Moses has acted for ALP affiliated trade unions and state government departments. Recently he completed a report for the Public Service Association and the Police Association on the NSW industrial relations system.

He also acted for former Labor attorney general Jeff Shaw in various proceedings. He was asked by the Liberal Party to stand for Epping, but he never nominated for the seat.

• Crown Solicitor Ian Knight's January 2011 advice to the Keneally government:

Essentially the same as 1994. Nothing has changed. Committees have no legal force after parliament has been prorogued, unless there is specific legislation to say so. They cannot call witnesses and there is no privilege for their proceedings.

Bizarrely, Knight continued to claim that the standing order authorising the standing committee to sit is invalid because it is not a "standing order for the "orderly conduct" of the Legislative Council.

• Parliamentary Protection Bill 2011:

This is mainly the work of David Shoebridge MLC.

The Bill seeks to give retrospective protection to witnesses who appear before committees while parliament is prorogued.

The Leader of the Opposition said he would support the Bill once parliament resumes after the election in March.

• Crown Solicitor's advice to the President of the Legislative Council, Amanda Fazio MLC:

Knight was asked by the president whether the Legislative Council itself or its members would be liable for actions in defamation or breach of confidence arising from evidence given by witnesses before the committee.

Knight said he doubted that any member or the council itself would be vicariously liable for any tort "committed in the course of the activities of the subject members".

In relation to retrospective legislation to protect witnesses, he added that there was no doubt "as to the power of the legislature to pass retroactive legislation".

Nonetheless, he pointed to Higgins J in R v Kidman on the "inexpediency and injustice ... of legislating for the past, of interfering with vested rights".

• Advice from Lynn Lovelock, clerk of the parliaments to the President of the Legislative Council, January 2011:

Lovelock refines her disagreement with the Crown Solicitor.

She said that the committee will be able to exercise its power to summon witnesses to give evidence.

The power of the modern standing committee to sit after prorogation is based on the common law principle of "reasonable necessity".

A contemporary reading of the system of responsible government is that the LC, through its standing committees, must be able to exercise its constitutional role of scrutinising the actions of the executive government.

Specific legislation is not required and the relevant standing order is not invalid.

Parliamentary privilege for the witnesses was not mentioned.

• Bret Walker's advice to the Clerk of the Parliaments - January 21

"I have no doubt that the concept of 'orderly conduct' is by no means restricted to trivial (if necessary) matters."

The nub of the Crown Solicitor's advice was a very narrow view of the Constitution Act's provision that standing orders regulate the "orderly conduct" of the council.

According to Knight, standing orders seeking to empower the operation of standing committees during the "life of the parliament" were invalid.

Walker has joined Lovelock in rejecting that constriction.

The system of responsible government requires the parliament to question and hold the executive to account.

"What possible justification could there be, in modern terms, for permitting the executive to evade parliamentary scruitiny by taking care to time controversial or reprehensible actions just before advising the Governor to prorogue the chambers?"

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Fazio: proceed with cautionOn January 12 President Fazio announced she would support the holding of an inquiry into the Gentrader transactions.

"I will not withhold any of the resources of the Legislative Council from the committee undertaking the inquiry."

However, in view of conflicting legal views about summonsing witnesses and parliamentary privilege, she added that "there can be no legal certainty regarding the powers of the committee".

"Therefore, the committee should proceed with caution as there is no guarantee of legal protection."

Strangely, at no point was advice from the Solicitor General requested.

Latest news to hand (Feb. 1) is that the sale of the second trance of the electricity output assets has failed.

Because of the political uncertainty about the future of the privitisation program no bids were received.