Law Report

Justice Robert French has recently been announced as the new Chief Justice of the High Court.

And when you take out a new insurance policy, just how thorough must you be in disclosing possible claims looming on the horizon?

And a tribunal rules that an organisation that campaigns for overseas aid but doesn't distribute any itself is indeed a charity.

Transcript

This transcript was typed from a recording of the program. The ABC cannot guarantee its complete accuracy because of the possibility of mishearing and occasional difficulty in identifying speakers.

Damien Carrick: Today we look at the announcement of a new Chief Justice for the High Court.

Also, professional indemnity insurance—just how thorough do you have to be in informing your new provider about any possible storms looming on the horizon?

And, defining charity in the 21st century; a tribunal rules that an organisation that campaigns around overseas aid, but doesn't actually distribute any aid itself, is indeed a charity.

First to the High Court. Last week the Prime Minister announced a Federal Court judge, Robert French, will be Australia's next Chief Justice. Our first from Western Australia. He'll take up the role when the current Chief Justice, Murray Gleeson, retires next month.

So what kind of man is Justice Robert French? In a speech delivered earlier this year at the 2008 UNSW Constitutional Law Conference, he gave a hint about what makes him tick.

Robert French: Forty or so years ago, I had a university vacation job as a ward orderly in a mental hospital in Perth. I had a conversation with a man who'd been a resident there for about 20 years, a little less than the time I have been a judge. As he was instructing me in the finer points of the game of billiards, I remarked upon his apparent lack of troublesome symptoms and asked why he was still there. He told me that he had had a significant drinking problem. 'I used to drink a lot', he said, 'and I got the voices'. 'Was that bad?' I asked. 'They kept at you and at you,' he said, 'it was enough to drive you round the bend.' His view of normality, as you will see, incorporated the voices.

I have been a judge for 21 years; the voices have kept at me and at me. Mellifluous, strident, sad, cool, persuasive, angry, voices demanding justice, voices insisting upon the law, some voices wanting both.

Sir Owen Dixon was once warned that if he stayed long enough on the Bench he could go mad. He stayed there more than 35 years and history marks him as one of the great judges of the common law world.

As I remarked, upon being welcomed to the Bench in 1986 and looking forward to 31 years of judicial service, weighing my own talents in the balance against his, I confidently expected to avoid madness. So far I think I have, in spite of the voices, but it may just be that my concept of normality has shifted.

Damien Carrick: Justice Robert French, an extract from a speech titled 'Judicial Activists, Mythical Monsters?'.

Constitutional law expert Professor Greg Craven is the vice-chancellor of the Australian Catholic University. For over a decade he was based in Perth. He's known Robert French for many years.

Greg Craven, what kind of a man is Robert French?

Greg Craven: Well I think he is an interesting man. He's a person who doesn't have simple or simplistic views; he's not a person who it;s going to be easy to pigeonhole, either as an incredibly conservative judge or an incredibly radical judge. And he's an intellectual. Probably the most obvious thing about him is he's unusual as a lawyer, in that he has wide intellectual interests ranging across history and science. He's a marathon runner, he has as you would hear from that extract of his speech, a very, very quirky sense of humour; he is very, very easy to get along with, and he's very considered. He's a person who if he's listening to someone, and what is said takes his interest, this look of absolutely intense and rapt concentration will come over his face. So he is, as I say, a man of high intelligence and a man of very, very focused intelligence.

Damien Carrick: Back in 1969 as a young man aged 22, he ran as the Liberal candidate for the federal seat of Fremantle; I think as part of his campaign, he had a pop band, Timepiece, which played gigs and was headlined with the slogan, 'Pop Politics in a Swinging Seat'; so he is a man with a sense of humour.

Greg Craven: He is. And I think that probably has part of an element of self-parody about it. He's a person who in that sense is I think quite self-effacing. He is not a judge who takes himself seriously, he's a person who's quite used to having fun made of him, and making fun back.

Damien Carrick: He's had a lot of different roles, including with the Trade Practices Commission, the Native Title Tribunal, and also the Law Reform Commission of WA. The fact that he's spent time as the president of the Native Title Tribunal, does that suggest a strong commitment to, and interest in, Indigenous Australians?

Greg Craven: Yes, there's absolutely no doubt he has a very, very strong commitment to the betterment of Indigenous Australia. But his entire career if you look at it, is interesting, because he's a person who's spent as much time in applied law as he has in law, and he's been around Trade Practices, he's been around Indigenous Affairs, he's the sort of person who I think almost uniquely of Australian judges for a long time, if you get a Constitutional law case up about state powers, will actually be thinking as federalism in terms of vertical fiscal imbalance and political theory, as well as purely as a matter of black-letter law.

Damien Carrick: He'll think about the economics and the politics as well as the black-letter law?

Greg Craven: I think that's right. It doesn't mean that he's going to go off and make a decision based on economics and politics, but it does mean he will understand very, very clearly, the drivers and the ramifications of the cases that become before him I think, in a way it's relatively unusual for High Court judges.

Damien Carrick: Why do you think the Rudd government chose him over a bunch of other high qualified contenders, including of course the Chief Justice of New South Wales, Jim Spiegelman?

Greg Craven: Well partly perhaps because he's not an obvious Labor appointment. Maybe the fact that he's a little younger has something to do with it. He will be there for a little bit longer for example than Spiegelman.

Damien Carrick: Justice French has sat on many a controversial case. One of the most high profile was the Tampa case. He ruled in favour of the federal government, not the asylum seekers, who were on board the ship the Tampa, who wanted the court to allow them to enter Australia.

Greg Craven: Yes, and I guess what that tells you is that Justice French is a person who really does believe in the rule of law, because I suspect that most people who knew him would be reasonably comfortable with the prospect that he was unlikely to be terribly happy about the whole course of events around the Tampa, and nevertheless he ruled in a fairly compelling way I think on the law, against the applicants in that particular instance. So any government looking at that would say, 'Well here is a person whatever their own particular bent on social justice and their own conscience, they do accept the basic tenet of judicial office to rule according to law.'

Damien Carrick: A moment ago we heard an extract from a speech Robert French delivered earlier this year. It was titled 'Judicial Activists, Mythical Monsters?' What do you believe this speech tells us about him?

Greg Craven: I don't think it gives you some great insight into the direction that he's going to go in judicial interpretation, because if we actually look at the speech, it's a bit on the one hand, on the other, it quotes all the various objects and objections and all of the various defences of judicial actors; it doesn't come particularly down any way. It's more of a sort of survey speech than anything else, and I think trying to read into that the idea that French is a judicial activist, would be an extraordinarily long and quite unreasonable bow. I think it probably does show that he thinks that the use of the term 'judicial activism' can be abused, that it can be used to simply say, 'Well I don't like that', so you're being judicially active. On the other hand, I don't think that Justice French would for a moment agree with the version of judicial activism that involved the wholesale revision of the Constitution simply on the basis of what a particular High Court liked.

Damien Carrick: He said in the speech 'There are many definitions of judicial activism, and coming to grips with them is like coming to grips with blancmange'. Lines like that have commentators like Janet Albrechtson from The Australian saying 'Maybe there's a cause for concern here, or at least we need to say the jury's still out on this guy', because if your argument is that judicial activism can't be defined, then you're kind of saying it doesn't exist.

Greg Craven: Well it's certainly true there are a lot of definitions, and one of the ones that Justice French cites is mine, so if anyone is going to get worked up about it, I suppose I can. But as I say, I think it's more of a survey article. I don't have any doubt, and if you look at the Tampa case, I think that's probably a pretty good illustration that for a judge like Justice French there are out-of-bounds of judicial discretion, it's simply a question of where you draw those particular out of bounds. I mean I'd heard the arguments, I read Janet Albrechtson's piece, I think Janet Albrechtson often writes good stuff on the law, but I think it's drawing a very, very long bow indeed to say that just because Sir Anthony Mason was a judicial activist, which he was, and I think impermissibly, that therefore Robert French, who like Anthony Mason didn't show any tendencies of that at the time he was appointed, therefore also will be a judicial activist. I just don't think that's a reasonable position.

Damien Carrick: Is it ever easy to predict how someone will turn out once they're appointed to the High Court?

Greg Craven: No, it's extraordinarily difficult. I mean history is littered with examples of judges who have been appointed on the basis that they would run one way, and they've run the other. So for example, Sir William Dean I think was appointed, it was thought that he was a conservative Sydney equity silk, and he was probably one of the two or three most radical judges in a sense, on some areas of interpretation, that the court's seen.

So it is quite hard to pick those types of things. If you look at French, yes there are strands in his character that point one way; there are strands in his character that point the other way; there's not a lot of point in trying to make an absolute hard and fast line on which way he's going to go. But on the basis of what he's done before, you would say, 'Here is the judge who draws a line between on the one hand judicial discretion, and on the other hand, judicial choice constrained by law and precedent. And ultimately that's what you're probably looking for.

Damien Carrick: So watch this space. Professor Greg Craven, great talking to you, thanks for speaking to The Law Report.

Greg Craven: Thanks very much.

Damien Carrick: Professor Greg Craven, the vice-chancellor of the Australian Catholic University.

In a few weeks time we'll return to the inner workings of the High Court and take a look at the life and times of retiring Chief Justice Murray Gleeson.

Now to a legal fight over what is, and what isn't, a charity.

Last week the Administrative Appeals Tribunal ruled that an organisation called Aid Watch cuts the mustard. It does qualify as a charity, for tax purposes.

The decision raises some fascinating issues about how we construct the notion of charity in the 21st century.

You see Aid Watch is an organisation that monitors, researches and campaigns around Australia's overseas aid program to ensure aid is delivered effectively and delivered in an environmentally sustainable way. But it doesn't actually distribute any aid itself.

Anne Gooley, a partner with Maurice Blackburn Cashman was the lawyer for Aid Watch.

Anne Gooley: Aid Watch had been accepted by the Tax Office back in 2000 as a charity and in 2006 the Tax Office changed its mind and said that Aid Watch was no longer a charity because it said Aid Watch was too political. That meant that donations to Aid Watch were no longer tax deductible, it meant that charitable foundations which were an important source of income for Aid Watch, they were no longer able to give those donations to Aid Watch, so it severely curtailed their activities, and they challenged that decision in the AAT.

Damien Carrick: The legal question was what is and what isn't a charity. What is the legal test for whether an organisation is deemed to be a charity?

Anne Gooley: Well it will probably surprise your listeners to know that the foundation of our charities laws goes back to the statute of Elizabeth, and that's Elizabeth I, not Elizabeth II, so it's a law that's over 400 years old. Actually it's been repealed in England. That established a whole criteria for what is a charity, the relief of poverty, religion, schools...organising marriage for single women seemed to be a charitable purpose.

Damien Carrick: Marriages for poor maids.

Anne Gooley: That's right. So that set up the foundation and then what's happened over time is it's been developed by the Common Law to try and take that concept, and apply it in this century. But still it's a concept based on a very old notion, because no matter what the courts decide, the organisation still has to fit within the spirit of the statute of Elizabeth. So traditionally it's organisations for the relief of poverty, advancement of education, advancement of religion, and any other purpose beneficial to the community, again provided it fits within the spirit of the statute of Elizabeth.

Damien Carrick: Now Aid Watch raises some interesting conundrums, because it's an institution which as you said monitors researchers and campaigns about aid, but it doesn't actually distribute any aid itself, and it is, at its heart, a campaigning organisation. It's out there to kind of change perceptions and change policies.

Anne Gooley: And that's been one of the issues that have had to be dealt with by the law, which is what is a charitable organisation, can a charitable organisation be a political organisation? And that's been an evolving concept. But in 2005 the Australian Taxation Department took a very conservative view about that concept and said that not only couldn't you advocate for a political party, and clearly advocating for a particular political party would make that a political activity, you couldn't be attempting to change laws or policies and that's been a concept that's been in a lot of decisions over time. But they also went further and said you couldn't propagate or promote a particular point of view.

Now I think that raises some really difficult questions for organisations. What was the Tax Office saying? If you're trying to do something about poverty, you can hand out soup, you can have a soup kitchen, but the way they applied the law, you couldn't advocate for an increase in the pension, or you couldn't advocate for an increase in benefits because the level of benefits is a government policy and you couldn't advocate for that to increase, even though it would help alleviate poverty. So it seemed to be very much that tax ruling in 2005 narrowed down what a charitable organisation could be. And what's really important about this decision is it said you can advocate, you can put forward policies to government about how to alleviate poverty.

Damien Carrick: It's interesting though, presumably though you have many charities which take a big public role in advocating for change. I'm thinking of the Salvation Army which speaks out on many issues, but they are organisations which actually do as well as say. Here we have an organisation which is a monitoring research and campaigning organisation exclusively.

Anne Gooley: And the court had to deal with that directly, because in fact by the time it got to the hearing, the Tax Office's argument was if you didn't deliver aid, talking about aid, researching aid, campaigning about aid wasn't charitable, and the judge in this instance said, 'Yes, it is'. Unlike at the time of the Statue of Elizabeth when the government didn't actually deliver a great deal to people, what we have is a situation where the state has in fact stepped in, and delivers a lot of the things that would have been considered charitable back in the Elizabethan period. What the judge is saying in this instance is that trying to promote those things is charitable. So they were very clear, you don't have to deliver the aid to be a charitable organisation, and that's important because there are a number of other organisations out there who don't deliver the service, but advocate for an improvement in what service is being delivered.

Damien Carrick: Such as?

Anne Gooley: Human Rights Watch. That's an organisation that monitors human rights. Nobody would deny that the promotion of human rights is a charitable function, they don't—well how could they? How do you deliver human rights? That's an example of an organisation which I think we would in this century say is doing as much a charitable thing as somebody who was promoting marriage for poor maids back in Elizabethan times.

Damien Carrick: Justice Downes, the president of the Administrative Appeals Tribunal said 'Some of Aid Watch's activities might be thought to be on the edges of appropriate conduct.' What did he mean by that?

Anne Gooley: Well Aid Watch had at the time of the 60th anniversary of the World Bank, delivered to the World Bank a birthday cake as well as a watch as a retirement present because of its criticisms of the role that the World Bank has played in Third World countries in relation to development. So that was a thing they did. In reality it was a very small part of their activity, but it was an example that the Tax Office relied on to say well look, that's a political activity, that's not a charitable activity. And I think what the judge was saying was in the end, that doesn't matter, that's not what the issue is. It's not about how you do it, but what your purpose is. And the purpose, he said of Aid Watch, was to alleviate poverty.

Damien Carrick: We do have central to our law in this area, the idea that a charitable institution can never be a political organisation. What sorts of cases have there been on this point?

Anne Gooley: Well Amnesty International of course was the high point in relation to this. Amnesty International in an English case was found not to be a charity because it opposed the death penalty. Interestingly at that time of course, there was no death penalty in the United Kingdom, so they weren't trying to change the United Kingdom's policies or laws; what they were trying to change was foreign government policies and laws, and the British court said that trying to overturn or get the change to foreign laws was also not a charitable purpose. Since then I think there has been some development in that, though even there they would have said that if Amnesty had limited its activities to monitoring, to researching, to commenting on those issues, then it would have fitted within the criteria. It was because it actually advocated a change to the law, and in this case, in our case, there wasn't one law that Aid Watch was advocating a change in.

Damien Carrick: That's interesting, because it's still trying to influence the government, particularly with respect to priorities and methods of aid delivery. So there's perhaps a fine line between pushing the government in a direction and actually advocating for legislative change as in the Amnesty International case.

Anne Gooley: Well that's right. I think that the judge in this case has drawn a good line, yet he said Aid Watch wasn't advocating for a particular party, wasn't trying to change the law, its activities were consistent with government policy, even if within those policies, Aid Watch is trying to change the priorities. The reality is every charitable organisation in this country tries to change government priorities because if they didn't, all they would do is hand out soup.

Damien Carrick: Anne Gooley, partner with Maurice Blackburn Cashman.

And this case isn't the only one of its kind. Tomorrow morning on the Religion Report, Stephen Crittenden will be looking at a very interesting case before the High Court which involves a church-based charity.

Last week the High Court was in the news quite a bit. There was the announcement of the new Chief Justice. There was also the Blue Mud Bay decision that confirmed that indigenous landowners in the Northern Territory own all the way out to the low tide level. It's a decision that has big implications for both recreational and commercial fishing in the Top End.

There was also an insurance law decision that flew below the radar, but it has pricked up the ears of professional people, in particular, legal professionals. The case involved a New South Wales barrister, a Mr Anthony Porthouse, who along with a law firm was sued by a disgruntled client, a Mr James Bahmad.

The barrister approached his insurer CGU for indemnity. CGU declined. The dispute went all the way to the High Court, who decided unanimously that CGU was right to say no.

CGU's lawyer is Adrian Howie, a partner with Kennedy's in Sydney.

Adrian Howie: Mr Bahmad was a gentleman who was performing work pursuant to a community service order. He had an accident in the course of that work. He slipped down a fairly steep slope and was injured. He then went to see some solicitors who briefed Mr Porthouse to advise Mr Bahmad in relation to his rights to compensation. In mid-2001, the barrister advised that Mr Bahmad did not have any rights to Workers' Compensation Act. In fact that advice was incorrect, because due to a somewhat obscure piece of legislation, Workers' Compensation rights were then available to people performing work under a community service order. About the same time, the New South Wales government announced that it proposed to change the Workers' Compensation law, which would have the effect of removing the rights that Mr Bahmad then had, but which he had been incorrectly told he did not have. And it announced that those changes would come into effect as from 27th November, about four or five months later, 2001.

Damien Carrick: The barrister, Anthony Porthouse, had essentially given the wrong advice. He advised that there was no possible claim, when in fact this guy James Bahmad did have a claim, and that meant that at the end of the day, a statement of claim wasn't put in by the cut-off date for the changes in the law, and Mr Bahmad didn't end up getting any compensation.

Adrian Howie: That is correct. That's the effect of what happened. Mr Bahmad's claim went through a couple of legal steps before that was reached and it's those legal steps that were important in the later case between Mr Porthouse and CGU.

Damien Carrick: Because in May 2004, Mr Porthouse changed his professional indemnity insurer. He switched to your client, CGU, and he had to answer a series of the questions. What was the important one for this case?

Adrian Howie: Well before we identify the important one, it's probably important also to realise that at the time he had to answer that question, he knew that if a proceeding before the Court of Appeal went a certain way, Mr Bahmad would be barred from having any Workers' Compensation rights. And he would be taken to have known that that would have been because of the role he played and the solicitors played, in advising Mr Bahmad. Getting though to the question, the question that was asked in the proposal for insurance was in effect, are you aware of any circumstances which could result in a claim against you? And the answer the barrister gave was no.

Damien Carrick: Now of course in May 2005, Mr Bahmad commenced a legal action against his solicitors and against Mr Porthouse, stating that they should have filed the statement of claim before the 2001 cutoff. And ultimately I think a court found that there was faults by the solicitors and the barrister, and ordered that the lawyers and Mr Porthouse pay Mr Bahmad $170,000 in compensation.

Adrian Howie: Yes, that is correct.

Damien Carrick: And at that point, when the action was commenced against Mr Porthouse and his solicitors, Mr Porthouse came to his insurer and said, Will you cover me if this proceeds?

Adrian Howie: That is right. And what happened then in accordance with normal matters, is that we investigated the circumstances leading up to the claim against Mr Porthouse. It was necessary to consider whether an exclusion applied, called 'the known circumstances exclusion' which refers to any fact, situation or circumstance which a reasonable person in the insured's professional position, would have thought before the policy began, might result in someone making an allegation against the insured, in respect of a liability that might be covered by the policy.

Damien Carrick: Lawyer, Adrian Howie.

Samantha Traves is a Senior Lecturer in Law at QUT and she's also an insurance law consultant with Brisbane law firm, Barry and Nilsson.

I put it to Samantha Traves that doctors and lawyers are professionals who deal with unhappy people, people who have a medical or a legal problem, and it's really quite likely that a matter can blow up in their faces. So the issue of alerting insurers about any possible claim is a tricky one.

Samantha Traves: Yes, it is, and some people would say that if the clauses are drafted too broadly, it will leave barristers and other professionals in a very awkward position where they feel they may as well disclose every court case they had ever been involved in, for example, because even the ones they win could lead to an allegation of some sort against them. You know, there are always going to be unhappy clients. So I think that the clause shouldn't be interpreted too broadly. I think that the word 'reasonable' that it has to be something a reasonable person would consider might lead to an allegation against him or her, I think that should hopefully work to strike the right standard in that respect. So that you're not disclosing absolutely everything that you've been involved in, but perhaps only those matters that you think maybe there's been a breach of duty and possibly negligence on your part.

Damien Carrick: What's the take-home lesson from this case?

Samantha Traves:Well I think the lesson is for professionals to be very mindful of their disclosure obligations, and also to carefully construe the policy before entry into the policy. I think that barristers and professionals in particular, should be very careful to ensure that they've disclosed every matter that a reasonable person in their position would think might lead to a claim against them.

Adrian Howie: I think the take-home message is to be alert to things that you may get involved in which may rebound against you, someone may make a claim against you, and once you are alert to that, notify your insurer. The test is not whether you think the claim is going to succeed or is a bodgie claim, the test is whether the claim may be made.

Damien Carrick: Lawyer Adrian Howie, and before him, lawyer and academic Samantha Traves.

That's The Law Report for this week. A big Thank You to producer Anita Barraud and also to technical producer, Angie Grant.

Presenter

Damien Carrick

Producer

Anita Barraud