Legislative scrutiny
Following the introduction of the bill, the legislation was examined by the Senate Standing Committee for the Scrutiny of Bills (the Scrutiny Committee).
In accordance with Senate Standing Order 24, the Scrutiny Committee examined the bill to determine the effect of the proposed legislation on individual rights, liberties and obligations, and on parliamentary scrutiny.
The Scrutiny Committee provided its comments on the bill, noting that it had specific concerns in relation to the issues of ‘reversal evidential burden’, ‘strict liability’ and ‘privilege against self-incrimination’, which are all detailed further below.
Reversal evidential burden
The Scrutiny Committee pointed to Item 6, Schedule 6 of the bill, which seeks to insert a number of new offences into the CATSI Act, and noted that:
Proposed subsection 453-2(5) provides that it will be an offence if the Registrar gives a person a notice to produce specific books and the person does an act, or omits to do an act, with the result that the notice is not complied with. Proposed subsection 453-2(6) provides an exception to the office (offence-specific defence), stating that the offence does not apply if the person has a reasonable excuse.
The Scrutiny Committee also noted that proposed subsections 453-3(2) and 453-4(2) provide that a person commits an offence if they are given an order under proposed subsection 453-3(1) and the person does an act, or omits to do an act, with the result that the notice is not complied with.
Item 126 of Schedule 1 – which seeks to insert proposed subsection 201-150(5) into the Act – was also referenced by the Scrutiny Committee. This amendment would provide four new exceptions to the existing offence of not holding an AGM within five months after the end of the year.
In commenting on these proposed amendments, the Scrutiny Committee noted that, at common law, ‘it is ordinarily the duty of the prosecution to prove all elements of an offence’. It was argued that this is an important aspect of the right to be presumed innocent until proven guilty, and that provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interferes with this common law right.
The Scrutiny Committee also argued that:
while in this instance the defendant bears an evidential burden rather than a legal burden, it expects that any such reversal of the evidential burden of proof should be justified;
the Guide to Framing Commonwealth Offences provides that a matter should only be included in an offence-specific defence (as opposed to being specified as an element of the offence) where it is peculiarly within the knowledge of the defendant and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter;
in this case, it is not apparent that any of the matters in the proposed new subsections are matters peculiarly within the defendant’s knowledge, and that it would be difficult or costly for the prosecution to establish the matters (these matters appear to be matters more appropriate to be included as an element of the offence);
no clear explanation has been provided in the EM regarding why an offence of ‘reasonable excuse’ has been used in relation to the offence-specific defences in Item 6 of Schedule 1, or why it would not be possible to design more specific defences.
The Scrutiny Committee summarised its comments about ‘reversal evidential burden’, (including the questions it had of the Minister in relation to this issue) as follows:
The committee requests the minister’s detailed justification as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in proposed subsections 453-2(6), 453-3(3) and 201-150(5).
The committee also requests the minister’s advice as to whether the bill can be amended to provide for more specific defences in proposed subsections 453-2(6), 453-3(3) and 453-4(3).
The committee further suggests that it may be appropriate for the bill to be amended to provide that the defences set out at proposed subsection 201-150(5) are instead specified as elements of the offence. The committee requests the minister’s advice in relation to this matter.
Strict liability
The Scrutiny Committee noted that Item 81 of Schedule 1 seeks to insert proposed section 180-37 into the CATSI Act to provide that at the end of each financial year, a CATSI corporation must give the Registrar a copy of the register of members. Proposed subsection 180-37(3) provides that a corporation commits an offence of strict liability if it fails to do so. The penalty for the offence is 25 penalty units or imprisonment for six months, or both.
The Scrutiny Committee argued that under general principles of the criminal law, fault is required to be provided before a person can be found guilty of a criminal offence (ensuring that criminal liability is imposed only on persons who are sufficiently aware of what they are doing and the consequences it may have). It was also noted that when a bill states that an offence is one of strict liability, this removes the requirement for the prosecution to prove the defendant’s fault. In such cases, an offence will be made out if it can be proven that the defendant engaged in certain conduct, without the prosecution having to prove that the defendant intended this, or was reckless or negligent.
Further, the Scrutiny Committee indicated that:
the Guide to Framing Commonwealth Offences states that the application of strict liability is only considered appropriate where the offence is not punishable by imprisonment and only punishable by a fine of up to 60 penalty units for an individual;
the bill proposes applying strict liability to offences that are subject to a penalty of up to 6 months imprisonment, and it is the committee’s view that it is inappropriate to apply strict liability in circumstances where a period of imprisonment may be imposed;
the bill’s EM should provide a clear justification of any imposition of strict liability, including outlining whether the approach is consistent with the Guide to Framing Commonwealth Offences;
while the EM notes that the penalty aligns with the penalties for failing to lodge annual reports, the committee does not consider that consistency with existing provisions is a sufficient justification for including strict liability offences with a penalty of imprisonment.
The Scrutiny Committee summarised its view in relation to ‘strict liability’ as follows:
From a scrutiny perspective, the committee considers that the bill should be amended to remove the penalty of imprisonment from the strict liability offence in subsection 180-37(3), consistent with the principles set out in the Guide to Framing Commonwealth Offences. The committee requests the minister’s advice in relation to this matter.
Privilege against self-incrimination
The Scrutiny Committee noted that the bill seeks to insert a number of broader powers for the Registrar to compel the production of books.
The Scrutiny Committee specifically referenced Section 461-15 of the CATSI Act, which currently provides that it is not a reasonable excuse for a person to refuse to, or fail to, give information or produce a book because the information or production of the book might tend to incriminate the person or make the person liable to a penalty. It was noted that this section overrides the common law privilege against self-incrimination, which provides that a person cannot be required to answer questions or produce material which may tend to incriminate himself or herself.
The Scrutiny Committee also indicated that a limited use immunity is currently included in subsection 461-15(2) for oral statements only, and no use or derivative use immunity is provided in relation to the production of books. It was noted there may be certain circumstances in which the privilege against self-incrimination can be overridden. However, abrogating the privilege represents a serious loss of personal liberty, and in considering whether it is appropriate to abrogate the privilege against self-incrimination, it is important to consider whether the public benefit in doing so significantly outweighs the loss to personal liberty.
The Scrutiny Committee acknowledged that the bill’s statement of compatibility provides some explanation, and noted that it:
…considers that any justification for abrogating the privilege against self-incrimination will be more likely to be considered appropriate if accompanied by a use and derivative use immunity (providing that the information or documents produced or answers given, or anything obtained as a direct or indirect consequence of the production of the information or documents is not admissible in evidence in most proceedings).
The Scrutiny Committee also specifically noted that section 461-15 of the bill includes a limited use immunity; but not a derivative use immunity. This means that anything obtained as a consequence of the requirement to produce a document or answer a question can be used against a person in criminal proceedings.
The Scrutiny Committee drew the matter of ‘privilege against self-incrimination’ to the attention of Senators and noted that it:
…leaves to the Senate as a whole the appropriateness of expanding powers in relation to the production of books in circumstances where the privilege against self-incrimination has been abrogated and no use or derivative use immunity is provided.