Judicial Oversight of Royal Commissions.

01 Feb 2018

Judicial Oversight of Royal Commissions.

Introduction

In a time of relentless “24/7” news coverage, “clickbait” and “alternative facts”, there are increased reputational risks for individuals and corporations called to appear before royal commissions. This is particularly so in relation to the new Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Financial Services Royal Commission).

The Financial Services Royal Commission’s terms of reference draw attention to the scope for possible adverse findings and reputational consequences. In addition to reputational risks, the terms of reference point to the possibility of criminal prosecutions resulting from findings.

The purpose of this article is to highlight some of the key issues in relation to the conduct and supervision of royal commissions by courts. Although royal commissions are subject to the supervision of superior courts, there are legal and practical limits to the availability of review. For persons appearing before royal commissions, this highlights the fundamental importance of presenting the best possible case at hearing and in written submissions.

Powers of royal commissions

To the public, a royal commission may have all the outward appearances of a court. Royal commission hearings are usually conducted in the style of court hearings. Witnesses are called to give evidence and, in many cases, are legally represented.

Moreover, royal commissions have coercive powers of the kind exercised by courts, including the power to compel the giving of evidence by witnesses and the production of documents.

Yet royal commissions are not courts and do not exercise judicial power. They do not resolve controversies between adversarial parties, nor do they determine the rights or liabilities of persons. Typically, royal commissions only make findings and recommendations in the form of a report (or reports) to the government.

Supervision by the courts

Australian superior courts have traditionally been cautious in their approach to the supervision of royal commissions. They have acknowledged that royal commission reports can harm the reputations of affected parties.

However, the caselaw shows that Australian courts have also been concerned to respect the role given to royal commissions and commissions of inquiry by the executive and legislative branches of government.

In Australia, a defining characteristic of the High Court and the Supreme Courts in each jurisdiction is the power to supervise the exercise of power by inferior courts, tribunals and administrative decision makers. This supervisory jurisdiction is referred to as judicial review and is available even in the absence of a statutory appeals procedure. The power is inherent but may also be provided for expressly in the enabling statute of the court.

At the risk of oversimplifying the more complex aspects of judicial review, it is possible to make a few general observations about the scope of judicial review as it relates to royal commissions.

First, judicial review is not an appellate procedure and there are no statutory rights of appeal from the findings or recommendations of a royal commission. Findings and recommendations do not usually have legal effect, even though ultimately they may influence government action.

Second, the courts have traditionally been reluctant to interfere with the undertaking of royal commissions and commissions of inquiry by the Executive and the Parliament. In an early High Court case, Clough v Leahy (1904) 2 CLR 139, Griffith CJ stated:

It would be an unfortunate thing if the Courts undertook to consider the propriety of the acts either of the Executive or of the Legislature. In the case of the Legislature, our duty is to see what it has done, and to give effect to it; and with respect to the Executive, the only duty of the court is to see that its acts are not unlawful, and if they are, to restrain them. With this limitation, the general rule of liberty must govern the attitude of the Courts towards the Executive as towards the private individual.

Thus, the correctness or merits of a royal commission report are not open to judicial review.

Third, there is limited scope to challenge the findings of a royal commission. Certain procedural decisions made by a royal commission may be reviewable, such as a decision to summon and examine a witness. However, a royal commission’s final report cannot normally be challenged, except where there has been a denial of natural justice.

Natural justice

Natural justice has different minimum requirements in the context of a royal commission than it does in relation to a court. This is because a royal commission is an investigative body. Thus, in considering whether natural justice has been afforded in the royal commission context, an important question to consider is: what does natural justice require of an investigative body in this particular situation?

In this context, natural justice includes at least the following two requirements. First, the decisions of a royal commission must be made, or findings reached, without bias or the appearance of bias (the “bias rule”).

Second, a party must be given a proper opportunity to be heard in respect of proposed findings that may affect the interests of the party (the “hearing rule”). Such interests include reputation. In Annetts v McCann (1990) 170 CLR 596, Brennan J stated:

Personal reputation has now been established as an interest which should not be damaged by an official finding after a statutory inquiry unless the person whose reputation is likely to be affected has had a full and fair opportunity to show why the finding should not be made.

Opinions may differ as to what constitutes a “full and fair opportunity” to be heard. Moreover, there may be practical issues affecting the ability of a party to properly respond to evidence: for example, affected parties may be given the opportunity to make submissions in respect of evidence led at hearing, yet be practically constrained in their ability to put forward contrary evidence.

Lawyers and parties should not assume that a royal commission will apply the same procedural standards and approach as the courts do.

For example, the Royal Commission into Institutional Reponses to Child Sexual Abuse stated in its guidelines that it would not apply the rule in Brown v Dunn except in certain limited circumstances. The rule generally requires propositions adverse to a witness to be put to the witness in cross examination for the purposes of allowing the witness to contradict such propositions if he or she is able to do so. In court proceedings, observance of the rule is regarded as an important natural justice requirement.

Conclusion

Royal commissions have extensive powers to investigate and expose misconduct. Existing statutory powers are not, however, accompanied by legal remedies for parties whose reputations are harmed. Moreover, as the law presently stands, there is limited scope for judicial oversight of the conduct of royal commissions. For the time being, there will continue to be a substantial difference between the legal effect of the findings of a royal commission and public perceptions of its institutional significance.


Hernan Pintos-Lopez

Solicitor 2009
Barrister 2012

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