18 October 2006

Validating legislation - Treasury advice

Dr Cullen has now made the advice available: > Treasury Report > Cullen Cabinet paper A quick read suggests: - The advice on validation is superficial and simply asserts that validation is necessary. No adverse consequences arising from maintaining the unlawful are discussed. - The advice on the breadth of validation is also superficial. The fact that the validation goes beyond solely validating expenditure now vulnerable because of the Aud-Gen's report is not mentioned. Nor is the appropriateness of the 1989 validation date explained or justified. - There was no advice that it be validated under urgency. - The (non-)necessity of interim legislative definitions is not mentioned. In particular, no consider is given to the interim solution being implemented simply by the issue of new directions by the Speaker. - The advice says the Bill is consistent with LAC guidelines. However, clearly, its effect on the Darnton v Clark litigation raises implications about the effect of (retrospective) legislation on pending legislation. In particular, the LAC guidelines incorporate the LAC's May 1995 memorandum: "Legislation Overriding Judgments and Pending Proceedings" and suggest this type of legislation is objectionable because it overrides this pending litigation. If I had set this scenario as a student assignment, I would grade the product a C-. Extremely disappointing. As I've said before, the validation of misappropriations is capable of being undertaken in a manner which is not objectionable. The advice and approach fall to grapple with the significant constitutional issues at stake. I think we deserve better.


Anonymous said...

When did the VUW Law School start giving out "C-" grades?

Dean Knight said...

Good point; I had in mind a mark of 48%.

I really should grade it as a D?

Anonymous said...


How do you know the Treasury Official isn’t a graduate of your law School or University?

If you were setting the exam question consider whether you would frame the legal question within the political context.

The job of Treasury is to offer the Government of the day options for resolving legal, financial and public policy problems. The Government was also in an odd position on this matter. The view of its own law firm was already in the public arena and had in large measure contributed to its legal difficulties. Given the controversy it was also likely that any advice by Treasury would be publicly released. Whilst I don’t doubt that the concerns you have identified are real, extensively canvassing them in the fashion you suggest would likely result in that advice further contributing to the problem faced by the Government.

I think your grading is therefore a bit harsh – it depends on whose perspective one views the problem. I would hope that a Victoria graduate would take into account all the relevant considerations which must (if one is to do it properly) include not making the problem worse, and meeting the objective of the client in this case the Minister.

Regarding urgency I suspect the desire for this was caused by two factors: Darnton v Clark and Parliamentary Service advice that they have no clarity regarding the rules.

The need to boost the old prohibition into primary legislation is to stop another Mr Darnton appearing in the future and persuading a High Court judge to boldly go where no Judge has gone before. It also shuts down the Auditor General.

In this regard the approach of the Auditor General is instructive. I think had the Speaker’s hopelessly drafted direction of 2003 not been in force but rather it was the one in the validation Bill, I think the Auditor General may well have found the spending outside the scope of the statute because the secondary legislation (the Speaker’s Direction) cannot be used to authorize anything that is electioneering i.e. anything that reasonable person would conclude confers an electoral advantage to an existing MP or a political party. His over arching concern is the political advantage flowing to MPs from their spending. Of course we already have a statutory regime to regulate the political contest it’s called the Electoral Act 1993, with its own enforcement regime that may or may not be adequate. He has basically adopted view that he should supplement that regime to “clean up” this area of politics. While I have a strong sympathy for Jack Hodder’s view, I regard it as a statement about how the law should be rather than a statement about what the law probably was. Who is to say a High Court Judge might not initially take the same view.

Consider also the Franking privileges date back to 1660 in the House of Commons obviously prior to the Bill of Rights 1689 in which Parliamentary Privilege is sourced and in the US 1775 (Continental Congress). It’s actually fundamental stuff and whilst not quite up there with the freedom of speech inside the Chamber it is in my view getting up there in terms of importance to a functioning democracy. What has constituted “official business” has been expanding throughout that time.

Even in the US where Court action followed abuse of the system in the early 1970’s Congress has a self regulatory approach. The House of Commons is still entirely self regulatory. You would probably be in a better position to see whether there has been other litigation on MPs support allocations around the world. My guess is the Parliament’s are almost entirely self regulating in this regard.

In terms of parliamentary spending, my view is probably a minority one. I don’t have a problem in principle with the pledge card if that is what the Parliamentary Labour Party want to spend their allocation on, so long as it is explicitly stated that it is publicly funded, and publicly accounted for in a comprehensive disclosure of all parliamentary spending information. At that point the public can judge for themselves whether they approve and whether the spend complies with whatever rules that apply and also whether the spend has any impact on the return obligations under the Electoral Act.

I suspect the future reforms of the Parliamentary Service and the system of support allocations will mean that supervision from the Courts will be largely oustered in favour of Parliamentary supervision.

Dean Knight said...


They may well be a graduate of my school. But my hypothetical grading is not based on whether or not I agree with the advice, but rather according to whether it has identified the relevant issues and whether those issues are addressed in a reasoned and robust manner. The approach must be coherent, logical and complete.

Public lawyers routinely operate within a political environment but that does not mean they have free licence to reject legal principle or obfuscate advice. It merely adds extra layers of considerations - ones that must also be grappled with.

The most disappointing aspect of the Treasury advice is that it fails to identify and grapple with those issues. Quite frankly, the legal analysis on various blogs puts it to shame.

Anonymous said...


I am not suggesting that you grade papers on the basis of whether you like the arguments advanced – that would be unfair and such unfairness is most certainly unknown in the nation’s Law Schools :)

What I am suggesting is that your grading flows from how you think you would pose the question which probably isn’t the same question posed by Dr Cullen.

Nor do we know the extent of advice given outside that documented either – and while such advice touches on public law issues there are wider considerations, the size of the disputed sums involved given size of total government spending is but one.

Consider the breadth of the validation which whatever the briefing paper says was probably in the Treasury prepared draft Bill. If one’s object is to ensure that no further legal disputes arise over the legality of any of this spending, then why be partial about the validation? A partial validation of just of that spending identified by the Auditor General as illegal in a fractious political environment would simply be an invitation to file further cases in the High Court on other previous communications and other aspects of spending by MPs. Whilst I might enjoy this and find it interesting, this isn’t the view of the Government and all other MPs except National MPs (unless the case involved a spend involving them). One must consider the likelihood that other previous expenditure was arguably outside the scope of the appropriation (well who knows), the likelihood of their being further cases filed (very high), and the likelihood of a judge deciding to hear the matter. The final consideration is that whatever the partisan advantages, such cases present the Government with a problem. It is difficult to process business when the legislature is pre-occupied with arguments flowing from its own resourcing.

The extent of the validation also ensures that the Audit General isn’t incentivised to take a look at any other aspect of MP spending and but for contributing some suggestions for a future accountability regime is no longer a player in this political drama. There maybe a view that he is was a bit zealous in his approach to the issue, but one would hardly commit this to paper.

The urgency flows as a consequence of the breadth of the validation. If one adopts a broad validation model extending up to the day prior to the Royal Assent, one incentivises adventurous behaviour with the resources if there is a substantial gap between the introduction of the Bill and the Assent.

Regarding Darnton v Clark what has Mr Darnton lost it was a declaratory judgment case – what interest has he lost that all other Citizens haven’t also lost. What property or other interest is lost. He can still ask a Judge to provide him with some clarity about the state of the law it is just that should the Judge decide to offer him this clarity, the statement of the law may well be different.

Having said that I hope the High Court whacks both the Labour Party and Parliamentary Service for costs as a matter of principle, for in reality Parliament conceded the legal point as evidenced by its own actions. Ordering that they pay Mr Darnton directly by cheque drawn against their own back accounts would also be a nice twist.

Anonymous said...

I am sure Michael Cullen would give it an A+. It is an outstanding piece of political writing. It is almost entirely devoid of content, so there is nothing for anyone to object to. It strongly supports what the Government wants to do without saying why, and ignores any arguments against what the Government wants to do. You may train people to think freely, widely and rigorously at VUW Law School, - and award high grades for doing so - but the official who wrote this has followed a different set of rules, met them 100% and deserves the highest possible grade.

Graeme Edgeler said...

Is this even accurate:

"We also attach a draft B.15 report to accompany the Bill. When a Bill is introduced that seeks validation of expenses incurred without appropriation, a report needs to be presented to the House that sets out the amount of expenses so incurred, and an explanation of the Minister responsible for those expenses. As the Speaker has already tabled a report pursuant to the Controller and Auditor-General’s direction, the B.15 report can simply cross-reference that report."

The Speaker's report will have listed the amounts found to be unlawful in the three months prior to the election.

The Act validated expenses going back to 1989. Did the Speaker actually work out what they were for, and how much it would cost? Did anyone?

Anonymous said...

“The Act validated expenses going back to 1989. Did the Speaker actually work out what they were for, and how much it would cost? Did anyone?”

Making this enquiry not worthwhile is precisely the point of the validation.

I thought you VUW law types were supposed to have your finger on the political pulse.

Mr Edgeler – more Chen (let's fix the problem) less Unbridled Palmer.

Anonymous said...

Hmmm retrospective legislation, not good at the best of times, and done under urgency skipping the select process makes something already foul quite rotten.

Course Outline

Lord Justice Lawton in Maxwell v Department of Trade and Industry [1974] 2 All ER 122 said:

"From time to time ... lawyers and judges have tried to define what constitutes fairness. Like defining an elephant, it is not easy to do, although fairness in practice has the elephantine quality of being easy to recognise. As a result of these efforts a word in common usage has acquired the trappings of legalism: 'acting fairly' has become 'acting in accordance with the rules of natural justice', and on occasion has been dressed up with Latin tags. This phrase in my opinion serves no useful purpose and in recent years it has encouraged lawyers to try to put those who hold inquiries into legal straitjackets.... For the purposes of my judgment I intend to ask myself this simple question: did the [decision-maker] act fairly towards the plaintiff?"

This course examines the elephantine concept of fairness in the law, along with other contemporary legal issues.

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