S v Australian Crime Commission

S v Australian Crime Commission - [2006] FCAFC 5 - FCAFC 2006 case summary — Zoe

[14]

RYAN J: 1 The factual and legislative background against which the various appeals and proceedings which require determination by this Full Court has been fully set out by Emmett J. I have had the advantage of reading his Honour's reasons in draft and it is necessary only to explain briefly why I agree with the conclusion there reached on the central issue which it is common ground is determinative of each of the appeals and proceedings at first instance. 2 The hypothesis upon which s 4A(2) of the ACC Act rests is that the offence investigation into which by the ACC is authorised by the ACC Act, would have been validly created by a law of the Commonwealth had such a law been enacted. In other words, the creation of the presumptive offence must be within an enumerated head of Commonwealth power. 3 That was the proposition recognised in the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ in R v Hughes (2000) 202 CLR 535 at 558 [46] where their Honours observed: '… The present case emphasises that for the Commonwealth to impose on an officer or instrumentality of the Commonwealth powers coupled with duties adversely to affect the rights of individuals, where no such power is directly conferred on that officer or instrumentality by the Constitution itself, requires a law of the Commonwealth supported by an appropriate head of power.' (emphasis added) 4 The requirement was identified in slightly different terms by Kirby J in his separate judgment in Hughes where his Honour said, at 577 [101]: 'There are two relevant impediments to the effective conferral by State legislation of non-judicial functions and powers on an officer or authority of the Commonwealth. The first originates in the implied constitutional immunity which would forbid the States (or self-governing Territories) from imposing functions and powers on such an officer or authority (except by reason of a law applicable to persons generally [The Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254 at 262-266; Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 427]) in a way that would prevent the latter from discharging the functions and duties of federal office. In an appropriate case this immunity might be waived. Secondly, it is not competent to a State (or self-governing Territory) to impose functions and powers on an officer or authority of the Commonwealth which are inconsistent with the functions and powers imposed by federal legislation [Constitution, s 109]. Any imposition of functions and powers would divert the federal officer or authority from the discharge of federal responsibilities, and ordinarily involve expenditure of funds and diversion of personnel, thus rendering the State or Territory law inconsistent with federal law unless expressly authorised by the latter. Hence the need, examined in Gould [(1998) 193 CLR 346 at 372, 385, 482, 489] and Re Wakim [(1999) 73 ALJR 839 at 880-881; 163 ALR 270 at 327], for a coincidence of valid State conferral of State functions and powers and valid federal authorisation of such conferral on the federal recipient concerned.' (original emphasis) 5 The question which was left open in Hughes was whether a valid grant by the Commonwealth Parliament of authority adversely to affect the rights of individuals requires an antecedently existing law of the Commonwealth as well as an appropriate head of Commonwealth power. That question did not arise in Hughes because there was, in that case, an antecedently existing law of the Commonwealth embodied in ss 46 and 47 of the Corporations Act (1989) (Cth). The first of those sections provided that "a Minister [being, by force of the Acts Interpretation Act 1901 (Cth), one of the Queen's Ministers of State for the Commonwealth appointed under s 64 of the Constitution] has such functions and powers by or under a corresponding law." Section 47(1) of the Corporations Act in turn provided that: 'Regulations under section 73 may provide that prescribed authorities and officers of the Commonwealth have prescribed functions and powers that are expressed to be conferred on them by or under corresponding laws.' 6 The existence of those manifestations of Commonwealth law, including reg 3(1)(d) of the Corporations (Commonwealth Authorities and Officers) Regulations 1990 (Cth) made pursuant to s 73 of the Corporations Act, enabled their Honours to observe in the joint judgment at 553 [31]-[33]; '[31] It may be accepted that, subject to what may be the operation of negative implications arising from the Constitution, for example Ch III, in the exercise of the incidental power the Parliament may permit officers of the Commonwealth holding appointments by or under statute to perform functions and accept appointments in addition to their Commonwealth appointments. Provisions such as s 46 and s 47 illustrate two further propositions. The first is that a State by its laws cannot unilaterally invest functions under that law in officers of the Commonwealth; the second is that a State law which purported to grant a wider power or authority than that the acceptance of which was prescribed by Commonwealth law would, to that extent, be inconsistent with the Commonwealth law and invalid under s 109 of the Constitution [Bond v The Queen (2000) 74 ALJR 597 at 600; 169 ALR 607 at 610. See also Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 426‑427, 447, 452‑453, 472‑473, 506-507]. [32] However, those propositions do not exhaust the operation of s 47 in the present matter; nor do they explain the operation of s 46. In particular, they do not provide a basis for the imposition by federal law upon Commonwealth officers of duties to perform functions or exercise powers created and conferred by State law. Such a federal law must be supported by a head of power. As indicated earlier in these reasons, the effect of the national scheme was to substitute the Commonwealth prosecution apparatus for that of the relevant State. State functionaries were directed by State law, in this case by s 33 of the WA Corporations Act, not to perform or exercise functions or powers conferred by the State legislation upon an officer or authority of the Commonwealth. [33] It is submitted, principally by the DPP and the Attorney-General who intervened in his support, that reg 3(1)(d) of the Regulations and the federal laws which support it involve no more than an approval or consent to the exercise of State functions and powers by the DPP. It is said that the State provisions simply purport to confer powers upon the DPP, whose exercise may be the subject of general directions by the Attorney-General under s 8 of the DPP Act. However, what is involved in the federal legislation is more than consent or permission by the Commonwealth to the exercise by its officers of additional functions and powers derived entirely from State law. These additional functions and powers are imposed by federal law as a matter of duty or obligation, lest there be an abdication of State authority with no certainty of its effective replacement.' 7 The stipulation in [31] of the passage just quoted that "a State … cannot unilaterally invest functions" under a law made by the State in officers of the Commonwealth is another way of saying that the investing of functions in Commonwealth officers requires the authorisation or support of a law of the Commonwealth. The second proposition in the same passage is a corollary of the first, namely that the investing State law must confer no wider power on the Commonwealth officers than that conferred by the supporting Commonwealth law. There is nothing in either the primary proposition or the corollary which requires the conferral of power by the supporting Commonwealth law to be in aid of some other existing or antecedent Commonwealth law. 8 The following paragraphs [32] and [33] which I have quoted from the joint judgment in Hughes go on to indicate the further need for the supporting Commonwealth law itself to be sustained by a federal head of power. The mere conferral of power on Commonwealth officers is not self-validating. However, it cannot be suggested in the present case that it is beyond the legislative power of the Commonwealth to authorise a body like the ACC to investigate a serious and organised crime which is an offence against a law of a State and which has a "federal aspect" as defined. It follows that the only remaining ground for an attack on the grant of power on the ACC is that it is embodied in the ACC Act itself and is not conferred by an antecedently existing law of the Commonwealth. For the reasons explained by Emmett J, the empowering Act itself can supply the supporting law of the Commonwealth mandated by the passage at [31] of the joint judgment in Hughes. Accordingly, I agree with the conclusions which Emmett J has reached and with the orders which he has proposed. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

[26]

INVESTIGATIONS UNDER THE ACT 10 The Commission is established by s 7(1) of the Act and consists of its Chief Executive Officer, examiners appointed under s 46B(1), who must be legal practitioners of at least five years standing, and the members of the staff of the Commission. Under s 7A, the functions of the Commission include:

investigating matters relating to federally relevant criminal activity;
providing reports on the outcomes of those investigations. 11 The Board of the Commission is established by s 7B(1) of the Act. The Board consists of:
the Commissioner of the Australian Federal Police;
the Secretary of the Department administering the Act;
the Chief Executive Officer of the Australian Customs Service;
the Chairperson of the Australian Securities and Investments Commission;
the Director-General of Security holding office under the Australian Security Intelligence Organisation Act 1979 (Cth);
the Commissioner or head of the police force of each State and of the Northern Territory;
the Chief Police Officer of the Australian Capital Territory;
the Chief Executive Officer of the Commission. 12 Under s 7C(1), the functions of the Board include authorising the Commission to investigate matters relating to federally relevant criminal activity. Under s 7C(3), the Board may, in certain circumstances, determine that an investigation into matters relating to federally relevant criminal activity is a special investigation. A determination under 7C(3) must describe the general nature of the circumstances or allegations constituting the federally relevant criminal activity and must set out the purpose of the investigation. 13 By s 4(1) of the Act, relevant criminal activity means any circumstances implying, or any allegations, that a serious and organised crime may have been, may be being, or may in future be, committed against a law of the Commonwealth, of a State or of a Territory. Section 4(1) of the Act defines the term serious and organised crime as an offence:
that involves two or more offenders and substantial planning and organisation; and
that involves, or is of a kind that ordinarily involves, the use of sophisticated methods and techniques; and
that is committed, or is of a kind that is ordinarily committed, in conjunction with other offences of a like kind; and
that is a serious offence within the meaning of the Proceeds of Crime Act 2002 (Cth) ('the Proceeds Act'), an offence of the kind prescribed by the regulations or an offence that involves any of 20 crimes specified in the section; and
that is punishable by imprisonment for a period of three years or more or is a serious offence within the meaning of the Proceeds Act. A federally relevant criminal activity is defined as including, inter alia, a relevant criminal activity, where the serious and organised crime is an offence against a law of a State and has a federal aspect. 14 Section 4A of the Act specifies when an offence against the law of a State (referred to as a State offence) has a federal aspect for the purposes of the definition of federally relevant criminal activity. The object of s 4A is stated by s 4A(1) as being to identify State offences that have a federal aspect because:
they potentially fall within Commonwealth legislative power; or
the Commission's investigating them is incidental to the Commission's investigating an offence against a law of the Commonwealth or a Territory; or
the Commission's undertaking an intelligence operation relating to them is incidental to the Commission's undertaking an intelligence operation relating to an offence against a law of the Commonwealth or a Territory. 15 Section 4A(2) relevantly provides that, for the purposes of the Act, a State offence has a federal aspect:
if, assuming that the provision creating the State offence had been enacted by the Parliament of the Commonwealth instead of by the Parliament of the State, the provision would have been a valid law of the Commonwealth; or
if, assuming that the Parliament of the Commonwealth had enacted a provision that created an offence penalising the specific acts or omissions involved in committing the State offence, that provision would have been a valid law of the Commonwealth. There are other circumstances in which a State offence would have a federal aspect that are not presently relevant. 16 Section 24A of the Act provides that an examiner may conduct an examination for the purposes of an investigation into matters relating to federally relevant criminal activity that the Commission is conducting. Under s 28(1), an examiner may summon a person to appear before the examiner at an examination to give evidence and to produce such documents or other things, if any, as are referred to in the summons. However, under s 28(1A), before issuing such a summons, the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must record in writing the reasons for the issue of the summons. Under s 28(3), such a summons must, unless the examiner issuing the summons is satisfied that it would prejudice the effectiveness of the investigation for the summons to do so, set out, so far as is reasonably practicable, the general nature of the matters in relation to which the examiner intends to question the person. However, nothing in that provision prevents the examiner from questioning the person in relation to any matter that relates to a special investigation being conducted by the Commission. 17 Section 29B(1) provides that a person who is served with, or otherwise given, a summons or notice containing a notation made under s 29A must not disclose:
the existence of the summons or notice or any information about it; or
the existence of, or any information about, any official matter connected with the summons or notice. However, that prohibition does not prevent a person from making a disclosure to a legal practitioner for the purpose of obtaining legal advice or representation. Nor does the prohibition prevent a body corporate from making a disclosure to an officer or agent of the body corporate for the purpose of ensuring compliance or a legal practitioner from making a disclosure for the purpose of obtaining the agreement of another person under s 30(3) to the legal practitioner answering a question or producing a document. Section 30(3) provides that a legal practitioner is entitled to refuse to comply with a requirement to answer a question or produce a document if to do so would be an infringement of legal professional privilege, unless the client agrees to the legal practitioner complying with the requirement.

[27]

THE DETERMINATIONS 18 On 15 May 2003, the Board made an instrument under s 7C of the Act entitled 'Australian Crime Commission Special Investigation Authorisation and Determination (Money Laundering and Tax Fraud) 2003' ('the Money Laundering Determination'). The Money Laundering Determination was to commence immediately after it was made. By clause 4 of the Money Laundering Determination, the Board authorised the Commission to investigate the matter mentioned in Schedule 1 to the Money Laundering Determination relating to federally relevant criminal activity. Schedule 1 to the Money Laundering Determination was relevantly in the terms set out in Schedule 1 to these reasons. 19 By clause 5 of the Money Laundering Determination, the Board determined that the investigation is a special investigation. By clause 6, the Board determined the classes of persons to participate in the investigation. Clause 8 specified the purpose of the investigation as follows: '(a) to collect and analyse criminal information and intelligence relating to the federally relevant criminal activities, to disseminate that information and intelligence in accordance with the Act and to report to the Board; and (b) to identify and apprehend persons involved in the federally relevant criminal activities, to collect evidence about those activities and to reduce the incidence and effect of those activities; and (c) to make appropriate recommendations to the Board about reform of: (i) the law relating to relevant offences; and (ii) relevant administrative practices; and (iii) the administration of the courts in relation to trials of relevant offences.' 20 On 27 July 2005, the Board made a further instrument under s 7C of the Act. That instrument is entitled 'Australian Crime Commission Special Investigation Authorisation and Determination (High Risk Crime Groups) 2005' ('the High Risk Crime Groups Determination'). The High Risk Crime Groups Determination was to commence immediately after it was made. By clause 4, the Board authorised the Commission to investigate the matter mentioned in Schedule 1 to the High Risk Crime Groups Determination, relating to federally relevant criminal activity. Schedule 1 of the High Risk Crime Groups Determination was relevantly in the terms set out in schedule 2 to these reasons. Clauses 5, 6 and 8 were in terms similar to the clauses of the Money Laundering Determination referred to above.

[30]

THE S PROCEEEDING 23 In the first proceeding, which was commenced in the South Australia District Registry ('the S Proceeding'), S claimed a declaration that the Act, or alternatively, s 4A of the Act, is invalid and an order quashing or setting aside the summons served on S. S contended that, despite the apparent intention of the Parliament, s 4A failed to prescribe criteria for when an offence against a State law has a federal aspect which has a proper Constitutional foundation. Consequently, it was intended, s 4A is beyond power. It would also follow that any determination of the Board in the exercise of its functions to investigate a federally relevant criminal activity, where that activity involved or was based upon a serious and organised crime that was an offence against a law of the State and has a federal aspect, would be unauthorised and ineffective. Much was made of the object provision in s 4A(1), in particular the use of the word 'potentially'. 24 In his reasons (S v Australian Crime Commission [2005] FCA 1310), the primary judge rejected that contention on the ground that it sought to elevate the object clause of s 4A to a status it did not enjoy. While his Honour considered that an objects clause in legislation may be relevant to the proper construction of the legislation, it could not cut down the plain and unambiguous meaning of the provision if that meaning, in its textural and contextual surroundings, was clear. His Honour considered that the use of the word 'potentially' in s 4A(1), while ambiguous, should be taken to mean simply that the State offences have a federal aspect because they could be the subject of a valid Commonwealth enactment, if the Commonwealth decided to pass such an enactment. His Honour considered that s 4A(2) was clear and that ss 4A(4) and 4A(6) also indicated that the condition for a State offence having a federal aspect was the existence of power in the Commonwealth to enact such an offence, not merely the possible existence of such a power. 25 The primary judge accepted that there may be difficulties in knowing whether a particular determination of the Board is a valid one, because the scope of Commonwealth power to show the federal aspect in relation to that determination may not have been definitively determined by the High Court. Nevertheless, his Honour considered that s 4A was not invalid simply because, in some circumstances, the extent of its reach may be debatable. The fact that, in some circumstances, a person summonsed under s 28 may dispute that, or may have difficulty in determining whether, a question during an examination is authorised by a valid determination by the Board, or by the summons, does not lead to the conclusion that s 4A of the Act is itself beyond power. 26 The primary judge also dealt with a contention that the summons addressed to S was invalid because it did not comply with s 28(3) of the Act. It was argued that it was necessary for the summons to state expressly that notice of the general topics for examination was not provided because the examiner is satisfied that to do so would prejudice the effectiveness of the investigation. His Honour considered that s 28(3) is expressed as it is because it is part of the process available to an examiner to pursue a special investigation. Such an investigation does not involve determining issues between parties. Rather, it concerns an investigation of serious and organised crime. His Honour considered that it was the clear legislative intention that such an investigation should not be frustrated by compulsory disclosure to a witness of the topics or matters upon which questioning was intended, where such disclosure might affect the efficacy of the proposed examination. His Honour accepted that s 28(3) recognises the desirability of a witness being notified in advance of the matters upon which questions should be anticipated. However, it does so in qualified terms and prescribes the circumstances in which notice should be given. Section 28(3) places the responsibility for deciding whether setting out the general nature of the matters in relation to which the examiner intends to question the witness would prejudice the effectiveness of the examination, upon the examiner. 27 The primary judge observed that neither s 28(3) nor any other provision of the Act requires the summons to be so expressed. By s 28(3) itself, the summons need not set out the general nature of matters in relation to which the witnesses is to be questioned if the examiner reaches the requisite state of satisfaction regarding possible prejudice to the investigation. Once the examiner has reached that state of satisfaction, the summons need not set out the general nature of the matters in relation to which the person is to be examined. The Act does not require a summons to record on its face that the examiner has reached the view that to disclose the general matters the subject of questioning would prejudice the special investigation. His Honour considered that there was no reason to imply such a prerequisite for the validity of a summons. Nor did his Honour consider that natural justice necessitated such a disclosure on the face of the summons. Under s 28(3) itself, nothing is to prevent the examiner from questioning the person summonsed about any matters not stated in the summons. The person is not entitled to be given notice of all of those topics about which he or she might be questioned. His Honour concluded that S had not shown that the summons did not comply with the requirements of s 28(3). 28 Accordingly, on 16 September 2005, the primary judge ordered that the S Proceeding be dismissed and ordered S to pay the Commission's costs. By notice of appeal filed on 6 October 2005, S appealed to the Full Court from the orders of the primary judge dismissing the S proceeding.

[31]

THE B PROCEEDING 29 By a proceeding commenced in the Victoria Registry ('the B Proceeding'), B claimed a declaration that the Act, or alternatively s 4A of the Act, is invalid. B also claimed an order quashing or setting aside the summons served on B. The B Proceeding was heard by the judge who heard the S Proceeding. For the reasons given in the S Proceeding, his Honour concluded that the contention as to the validity of s 4A of the Act must fail. B also contended that the summons addressed to B was invalid on two grounds. The first challenge was on the basis that the summons did not comply with s 28(3) of the Act. B contended that the summons did not set out, so far as reasonably practicable, the general nature of the matters in relation to which the examiner intended to question B. 30 The primary judge observed in his reasons (B v Australian Crime Commission [2005] FCA 1314) that, unlike the circumstances in the S Proceeding, the examiner in respect of the summons addressed to B had not reached a stage of satisfaction that the provision of information would prejudice the effectiveness of the special investigation that was the subject of the relevant Determination. His Honour was not persuaded that the summons addressed to B failed to comply with s 28(3) of the Act. His Honour considered that it gave B a general indication of the matters about which he may be questioned: it informed B in a general way of the general nature of what he might expect by way of questioning. 31 The second challenge to the summons by B was on the basis that it was contrary to s 28(7) of the Act. The examiner was said to have exercised the power improperly as it required B to give evidence in relation to his knowledge and/or involvement in 'tax avoidance schemes', when those schemes were not or may not be the subject of the special investigation. The basis of the submission was that tax avoidance schemes are regulated under the Duties Act 2000 (Vic) ('the Duties Act') and thus do not fall within the ambit of a special investigation. His Honour considered that it was erroneous to import into and limit the expression to the definition of 'tax avoidance schemes' in s 69B of the Duties Act. His Honour considered that the expression 'tax avoidance schemes' has a much more extensive and commonplace meaning than as defined in that Act. His Honour considered that the general usage of the expression clearly included reference to conduct that fell within a Commonwealth head of power. His Honour concluded that B's second attack on the validity of the summons addressed to him must also fail. 32 Accordingly, on 16 September 2005, the primary judge ordered that the B Proceeding be dismissed and ordered B to pay the Commission's costs of that proceeding. By notice of appeal filed on 7 October 2005, B appealed to the Full Court from the order of the primary judge dismissing the B Proceeding.

[38]

In addition, general criminal offences can be based on s 51(xxix) if committed outside Australia, or s 52(i) if committed in a Commonwealth place or s 122 if committed in a Territory. 42 It was not suggested on behalf of the Summons Recipients that it would be beyond the power of the Commonwealth to legislate with respect to any of the offences that constitute the subject matter of the investigations authorised by the Determinations. Accordingly, each of the Summons Recipients accepts that, if the drafting technique adopted by the Parliament, in enacting the relevant provisions of the Act, is effective and the impugned provisions are valid, the respective summonses are valid. 43 The question is whether the Commonwealth can legislate to empower the Commission to investigate a matter in respect of which the Commonwealth has the Constitutional power to legislate but has not in fact legislated. The essence of the contention advanced on behalf of the Summons Recipients is that the Commonwealth cannot legislate to empower a statutory authority to investigate a matter in respect to which the Commonwealth has the Constitutional power to legislate but has not in fact legislated. That proposition is certainly not self-evident. 44 The criteria according to which a State offence can have a federal aspect are traceable to the National Crime Authority Amendment Act 2000 (Cth) ('the Amendment Act'), which inserted into what was then the National Crime Authority Act 1984 (Cth) a provision that corresponds identically with s 4A of the Act. The secondary materials relating to the Bill for the Amendment Act make clear that s 4A was intended to accommodate comments made by the High Court of Australia in R v Hughes (2000) 202 CLR 535. 45 Thus, the Explanatory Memorandum accompanying the Bill for the Amendment Act recited the following in respect of proposed s 4A(2): 'These provisions will make it clear that, for the purposes of the powers of the Authority, a State offence will have a federal aspect when the subject of the State offence is a matter over which the Commonwealth could legislate. There is no requirement for the Commonwealth to have actually legislated in relation to that subject, provided that the Commonwealth has a head of power under which it could legislate on the matter.' 46 The Minister's speech on the Second Reading of the Bill in the House of Representatives on 8 November 2000 (Hansard 22501) commended the Bill for the Amendment Act in the following terms: 'The National Crime Authority Amendment Bill 2000 amends the National Crime Authority Act 1984 and has been necessitated by the High Court's decision in R v. Hughes. That decision casts doubt on certain investigatory functions of the National Crime Authority and the purpose of this bill is to remedy that situation.

[41]

47 In the light of those materials, the Summons Recipients accept that the Parliament intended to confer power on the Commission to investigate a State offence that satisfied one or other of the criteria in s 4A for possessing a federal aspect. They contended, however, that the adoption of such an 'artificial device' is invalid in so far as the provisions postulate the absence of any existing Commonwealth enactment or law of the Commonwealth to support the conferral and imposition on the Commission of the power and duty of investigating a State offence. 48 The foundation for the contention of the Summons Recipients was the following passage in Hughes: 'The present case emphasises that for the Commonwealth to impose on an officer or instrumentality of the Commonwealth powers coupled with duties adversely to affect the rights of individuals, where no such power is directly conferred on that officer or instrumentality by the Constitution itself, requires a law of the Commonwealth supported by an appropriate head of power. (per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ at [46])' [Emphasis added] The Summons Recipients draw from that statement the proposition that the presence of an operative law of the Commonwealth, supported by an appropriate head of legislative power, is a Constitutional precondition for the conferral or imposition of a power or duty on a Commonwealth body or officer. 49 It is clear that a State cannot unilaterally invest in an officer of the Commonwealth functions under a law made by the State. That is to say, the investing of functions in a Commonwealth officer requires the authorisation or support of a law of the Commonwealth. Further, an investing State law can confer no wider power on a Commonwealth officer than that conferred by a supporting Commonwealth law (see Hughes at [31]). However, there is nothing in any of those propositions that requires the conferral of power by a supporting Commonwealth law to be made by some other existing or antecedent Commonwealth law. 50 The Act itself is the 'law of the Commonwealth' that the extract from Hughes mandates as necessary for a valid conferral on the Commission of coercive investigative powers. The Act is itself an operative law of the Commonwealth that authorises the Commission to investigate matters in respect of which the Commonwealth has power to legislate. That is sufficient to satisfy the requirement that there be an operative law of the Commonwealth to support the exercise of power by the Commission. 51 The Summons Recipients argue that the necessary nexus between an investigation by the Commission into federally relevant criminal activity and a supporting head of Commonwealth legislative power cannot be found. However, the answer to that proposition is the same. The Commonwealth has the power to legislate with respect to the matters that are the subject of the investigations authorised by the Determinations. That is the nexus. 52 The Summons Recipients assert that the federal element that the Act attempts to inject into a law of a State, so as to describe or specify an offence within the reach of the powers of the Commission, is artificial and hypothetical. The Commonwealth cannot, they say, by such an 'artificial device' cast a federal cloak over legislation that deals with conduct that, in the absence of an operative federal law proscribing the relevant conduct, must remain solely within the scope of State legislative authority and beyond the reach of Commonwealth legislative power. They point to the reference to State offences, in s 4A(1), as potentially falling within Commonwealth power. They therefore characterise the provisions of the Act under consideration as 'a legislative fiction'. 53 The use of the word 'potentially' means simply that the State offences have a federal aspect because they could be the subject of a valid Commonwealth enactment, if the Commonwealth decided to pass such a law. There is no attempt to specify an offence that is either artificial or hypothetical. There are real offences to be investigated, albeit offences against State laws. It is not disputed by the Summons Recipients that the offences, the investigation of which is authorised by the Determinations, are real offences against State laws. There is no fiction involved in s 4A.

[135]

GYLES J 55 The short, but novel, constitutional issue that requires determination and the circumstances that give rise to it, are explained in the judgment of Emmett J which I have had the advantage of reading in draft. I need not repeat that explanation, although I differ from Emmett J in the result. 56 The power to summons a witness to appear before the examiner at an examination to give evidence and produce documents is provided for by s 28(1) of the Australian Crime Commission Act 2002 (Cth) (the ACC Act). The exercise of that power depends upon the examination being for the purposes of a special Australian Crime Commission (ACC) investigation so far as is relevant for present purposes (s 24A of the ACC Act). That, in turn, depends upon a determination by the Board of the ACC that an investigation into matters relating to 'federally relevant criminal activity' is a 'special' investigation. 57 The definition of 'federally relevant criminal activity' provided in s 4 of the ACC Act includes: '… (b) a relevant criminal activity, where the serious and organised crime: (i) is an offence against a law of a State; and (ii) has a federal aspect.' 58 'Federal aspect' has the meaning given by s 4A(2) of the ACC Act. It is sufficient to note that, for present purposes, the most important criterion for a State offence to have a federal aspect is that the provision would have been a valid law of the Commonwealth if enacted by the Parliament of the Commonwealth (s 4A(2)(a)(ii), (b)(ii) and (c)). 59 The essence of the challenge is that the provisions in question are invalid as they purport to authorise a Commonwealth authority to investigate by compulsory means a breach or potential breach of State law without there being any corresponding breach of federal law or any request by a relevant State. 60 The decision of the High Court in R v Hughes (2000) 202 CLR 535 (Hughes) was called in aid of both sides of the argument. The legislative scheme considered in that case differs from the legislative provisions in the present case. It concerned a situation in which State legislation expressly conferred a particular power upon the Commonwealth authority and it was the corresponding conferral of authority to act that purported to be authorised by the Commonwealth legislation that was under challenge. It was accepted that the State conferral of the power to prosecute a State offence upon a Commonwealth authority or officer was valid in itself, although the Commonwealth authority or officer could not be validly compelled to exercise that power. The gravamen of the decision in Hughes was that, for the Commonwealth to impose on an officer or authority of the Commonwealth a power coupled with a duty to adversely affect the rights of individuals, a law of the Commonwealth supported by an appropriate head of power was required (absent direct Constitutional power). That case did not directly involve a question as to the circumstances under which the Commonwealth could impose such a power, coupled with a duty, in relation to the investigation of the committing of State offences, absent a corresponding conferral of power upon the Commonwealth authority or officer by State legislation. 61 The relevant provisions of the ACC Act were inserted in the then National Crime Authority Act 1984 (Cth) (the NCA Act)by Act No 133 of 2000, which introduced the notion of State offences against the law of a State having a federal aspect (with consequential effect) and included ss 55A, 55B and 55C in their present form. It is clear from the Explanatory Memorandum and the Second Reading Speech that those amendments were a package in direct response to the decision of the High Court in Hughes. 62 Prior to the 2000 amendment the position was as follows. 'Relevant criminal activity' meant: 'any circumstances implying, or any allegations, that a relevant offence may have been, or may be being, committed against a law of the Commonwealth, of a State or of a Territory'. (s 4) The Commonwealth could refer a matter relating to a relevant criminal activity to the National Crime Authority (NCA) for investigation insofar as the relevant offence was, or included, an offence or offences against a law of the Commonwealth or of a Territory (s 13). A State could refer a matter relating to a relevant criminal activity to the NCA for investigation insofar as a relevant offence was, or included, an offence or offences against a law of the relevant State (s 14). Section 55A(1) provided:

[136]

'It is hereby declared to be the intention of the Parliament that the operation of a provision of a law of a State that: (a) confers a power or function, or imposes a duty, on the Authority …, being a power, function or duty that is also conferred or imposed by this Act … is not prevented or limited by reason of the provisions made by this Act. (2) It is also declared to be the intention of Parliament that, except as otherwise declared by the regulations, the Authority … may, in addition to the powers, functions and duties conferred or imposed on it or them by this Act, have similar powers, functions and duties conferred or imposed on it … by a law of a State.' 63 The concern apparently was that the NCA was a Commonwealth authority compelled by legislation to investigate the commission of State offences by compulsory means where there was simply a reference from a State. The decision in Hughes cast doubt upon the validity of that arrangement. The cure chosen in 2000 was that the obligation to investigate would only apply in relation to State offences with a Federal aspect as defined by the amendments. At that time, there was no suggestion that the NCA could investigate State offences, otherwise than on reference from the relevant State, leaving aside issues that may arise out of overlap with an existing investigation. The NCA Act was an embodiment of a cooperative scheme between the States, Territories and the Commonwealth similar in kind to that considered by the High Court in Hughes. 64 The ACC Act also embodies cooperation between the States, the Territories and the Commonwealth but with a rather different structure. The effect of the impugned sections is that the Board of the ACC can authorise the ACC to investigate matters relating to State offences with a federal aspect in order (inter alia) to facilitate the enforcement of State law without any reference by the relevant State. The ACC Act does include references to law reform (eg s 12(3)) but the main thrust of the ACC Act is the facilitation of law enforcement - see, for example, ss 7A, 7C, 12(1) and 12(1A). The States are indirectly represented on the Board of the ACC and there is also an inter-governmental committee with what might be called general oversight functions with State representation. Sections 55A, 55B and 55C deal with federal aspects of the arrangements. Section 55A expressly provides for conferral of State duties, functions and powers upon Commonwealth parties. 65 The validity of Commonwealth legislation purporting to confer compulsory powers upon a Commonwealth authority in aid of the enforcement of State law is the question at issue here as the provisions of s 55A were not availed of for present purposes. 66 The legislative device employed here is similar in effect to, and may well have been inspired by, the following passage from the judgment of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ in Hughes (at [43]-[44]): 'However, s 15A of the Interpretation Act may be applied to read down a provision expressed in general terms, including a power to prosecute so as to apply only where the particular prosecution is supported by a head of power (Re Nolan; Ex parte Young (1991) 172 CLR 460 at 485-486). Consistently with the statement of general principle in the joint judgment in the Industrial Relations Act Case (Victoria v The Commonwealth (1996) 187 CLR 416 at 501-503), this would be achieved by construing the phrase in s 47(1) of the Corporations Act "functions and powers that are expressed to be conferred on them by or under corresponding laws" as limited to those functions and powers in respect of matters within the legislative powers of the Parliament of the Commonwealth (Bourke v State Bank of NSW (1990) 170 CLR 276 at 291; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 10, 26).

[139]

68 The learned Solicitor-General for the Commonwealth called in aid the cases concerning the Royal Commissions Act 1902 (Cth) to demonstrate that the Commonwealth can authorise the use of coercive powers to investigate any matter that relates to a Commonwealth head of legislative power. That proposition was described as 'settled law' by Finn J in Barnes v Boulton (2004) 139 FCR 356 at [38]. However, cases concerning the Royal Commissions Act 1902 (Cth) provide little guidance in the present circumstances. 69 In R v Collins; Ex parte ACTU-SOLO Enterprises Pty Ltd (1976) 8 ALR 691, Stephen J described the function of Royal Commissions as 'exclusively informative' (at 695). In Colonial Sugar Refining Co Ltd v Attorney-General for the Commonwealth (1912) 15 CLR 182, Griffith CJ said that Parliament had a power to compel information on the subjects necessary for the effectual performance of federal functions (at 196). Barton J said (at 205-206): 'Where the Commonwealth has power to legislate on any subject, such as Taxation, Bounties, the Customs, Inter-State or foreign Trade, there is a power in the Executive, even apart from Statute, to make inquiry on that subject, if necessary by Royal Commission. Were this executive power withheld, it would in many cases be impossible for the central Government to acquire the information necessary to equip it for intelligent legislation. An Act to regulate the issue of Royal Commissions of inquiry and to confer on them authority to obtain information, by compulsion where necessary, is beyond all question a beneficial incident of the exercise of constitutional power. But seeing why the information is necessary, we see also what are the limits within which legislation to be valid must operate. The necessity for the information is that the Executive or the Parliament, &c., may know how to apply the knowledge gained; for instance, by legislating wisely. Where there is not a constitutional power, the necessity for inquiry on the part of the Executive does not exist - at least in the contemplation of the Constitution, the fruit of inquiry being in this connection, "id sine quo res ipsa esse non potest". In truth this power of inquiry would exist if there were no paragraph xxxix., as a necessary incident to the legislative powers conferred. The members of this Court expressed themselves with some fulness on the subject of incidental powers in the Jumbunna Case (6 CLR 309). The limit, then, of the incidental power of inquiry is to be found in the extent of the existing legislative or executive or other power in the exercise of which the results of inquiry are to be applied. In the present case the powers intended to be exercised after the report of the Commission were evidently legislative, for it is difficult to imagine any other range of powers to which information on any of the subjects (a) to (h) in the letters patent can be referable, whether the question be one of External or Inter-State Commerce, Taxation (such as import and Excise duties), Bounties, or what not, perhaps all of them.'

[140]

70 The coercive provisions of the ACC Act plainly go beyond being exclusively informative. They are not limited to the execution of existing Commonwealth laws and are not restricted to obtaining information for the better framing of legislation. The principal purpose of the provisions is obviously the facilitation of enforcement of existing State legislation. 71 Neither are the provisions the subject of any substantive head of s 51 of the Constitution as such. There is no nominate Commonwealth law enforcement power. General law enforcement provisions are incidental to the execution of laws supported by a valid head of Commonwealth power. If the exercise of a coercive law enforcement power is challenged, that power requires support from the particular provision or provisions sought to be enforced. To that extent such powers are chameleon-like. It is a large step to conclude that such powers can fasten upon State offences that could have been, but are not, Commonwealth offences. In my opinion, a law granting coercive power in such circumstances is not incidental to the exercise of Commonwealth legislative power. I have already pointed out that it cannot be seen as incidental to Commonwealth executive power. 72 Those arguing for validity relied upon the following passage from the joint judgment in Hughes (at [40]): 'The DPP Act [Director of Public Prosecutions Act 1983 (Cth)] in a sense is supported by as many heads of power as from time to time have been exercised by the Parliament to create offences against Commonwealth laws. State law may create offences in fields where it would have been competent for the Parliament of the Commonwealth to enter directly by its own offence-creating legislation. The power conferred by s 51(xx) with respect to foreign corporations and trading or financial corporations is an obvious example. In such a situation, a federal law which specifies that certain Commonwealth officers have powers and functions expressed to be conferred by the State law with respect to the prosecution of State offences is a law with respect to that head of federal legislative power. This will be true of perhaps the very great majority of offences created by the State legislation which adopts the Law.' [emphasis added]

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