Federal Court of Australia

Electoral Commissioner of Australian Electoral Commission v Wharton (No 3) [2021] FCA 742

ORDERS

THE COURT DECLARES THAT:

1.    The Respondent failed to make the disclosures by 2 September 2019 required by s 304 of the Commonwealth Electoral Act 1918 (Cth) (the Electoral Act) and thereby contravened s 304 of the Electoral Act.

2.    The Respondent failed to make the disclosures by 2 September 2019 required by s 309 of the Electoral Act and thereby contravened s 309 of the Electoral Act.

THE COURT ORDERS THAT:

3.    Within 30 days of the date of service of this order upon him, the Respondent pay to the Commonwealth of Australia, pursuant to s 82(3) of the Regulatory Powers (Standard Provisions) Act 2014 (Cth), the following pecuniary penalties totalling $10,000, which are hereby impressed upon him in respect of the declared contraventions:

(a)    in respect of his contravention of s 304 of the Electoral Act - $5,000; and

(b)    in respect of his contravention of s 309 of the Electoral Act - $5,000.

4.    Payment of the said penalties may be made into such official bank account as is nominated in writing by the Applicant (AEC) or, failing such nomination within 7 days of a written request in that regard by or on behalf of the Respondent, as directed by the Court and the receipt by the Commonwealth of Australia (or of the AEC on its behalf) of cleared funds into any such bank account so nominated or directed shall be sufficient discharge of the Respondent’s liability to pay the penalties imposed by this order. A certificate under the hand of a proper officer of the Commonwealth of Australia, or as the case may be, of the AEC, certifying to such receipt of funds is to be furnished to the Respondent upon its written request. A certificate so furnished is prima facie evidence of the receipt of the penalties and of the related discharge of the obligation to pay them.

5.    The Respondent pay the Applicant’s costs of and incidental to the proceeding, to be fixed by a Registrar if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

LOGAN J:

1    A federal election, including an election for members of the Senate, was held on 18 May 2019. Mr Wayne Morris Wharton, the respondent, was a candidate for election as a senator for Queensland in that election. The Commonwealth Electoral Act 1918 (Cth) (the Electoral Act) imposes particular duties of post-election disclosure on those who have been candidates at a federal election. One such obligation is disclosure of gifts. As to this and materially, s 304(2) of the Electoral Act provides:

Disclosure of gifts

(2)    The agent of each person (including a member of a group) who was a candidate in an election or by-election shall, within 15 weeks after the polling day in the election, furnish to the Electoral Commission a return, in an approved form and in accordance with this section, setting out the total amount or value of all gifts, the number of persons who made gifts, and the relevant details of each gift, received by the person while the person was a candidate in the election or by-election.

Civil penalty:

The higher of the following:

(a)    60 penalty units;

(b)    if there is sufficient evidence for the court to determine the amount or value, or an estimate of the amount or value, of gifts not disclosed--3 times that amount or value.

…

2    As to electoral expenditure and again materially, s 309(2) of the Electoral Act provides:

Returns of electoral expenditure

…

(2)    The agent of each person who was a candidate in an election (not being a member of a group) shall, before the expiration of 15 weeks after the polling day in the election, furnish to the Electoral Commission a return, in an approved form and in accordance with this section, setting out details of all electoral expenditure in relation to the election incurred by or with the authority of the candidate.

Civil penalty:

The higher of the following:

 (a)    60 penalty units;

(b)    if there is sufficient evidence for the court to determine the amount, or an estimate of the amount, of electoral expenditure not disclosed--3 times that amount.

…

3    The reference in each of these provisions to “agent” will be noted. The effect of s 289(2) of the Electoral Act is that if a candidate does not appoint an agent, a candidate is taken to be his or her agent in relation to the election.

4    Read in isolation, it might be thought that to have application, s 304(2) of the Electoral Act requires that there be a gift received. That construction is encouraged by the “simplified outline” found in s 302V of the Electoral Act. However, that possibility has been considered and negated by the parliament by express provision for nil returns. See s 307, which provides:–

Nil returns

(1)    Where no details are required to be included in a return under this Division in respect of a candidate, the return shall nevertheless be lodged and shall include a statement to the effect that no gifts of a kind required to be disclosed were received.

(2)    Where no details are required to be included in a return under this Division in respect of a group, the return shall nevertheless be lodged and shall include a statement to the effect that no gifts were received.

5    A like impression might also be formed in relation to a need for the incurring of expenditure for s 309(2) to have application. Once again, the “simplified outline” found in s 307A reinforces that impression. Again, however, that impression is negated expressly by provision for nil returns in s 313 of the Electoral Act, which provides:

Nil returns

(1)    Where no electoral expenditure in relation to an election was incurred by or with the authority of a particular candidate or the members of a particular group, a return under this Division in respect of the candidate or group shall nevertheless be lodged and shall include a statement to the effect that no expenditure of that kind was incurred by or with the authority of the candidate or the members of the group.

(2)    If no electoral expenditure in relation to an election was incurred by or with the authority of a particular registered political party or State branch of a registered political party that endorsed a candidate in the election, a return under this Division in respect of the party or branch must nevertheless be lodged and must include a statement to the effect that no electoral expenditure was incurred in relation to the election by or with the authority of the party or branch.

6    The Electoral Commissioner alleges that Mr Wharton has contravened each of s 304(2) and s 309(2) by failing to make the required disclosure by return within the required 15 week period.

7    When the proceeding was called on today for trial, there was no appearance by or on behalf of Mr Wharton.

8    Mr Wharton had, however, appeared on 3 March 2021, as a sequel to an order for substituted service at an interlocutory stage. It was at that time and in Mr Wharton’s presence that the trial was fixed to commence today. At that time, Mr Wharton asserted from the bar table that he had attended as a matter of courtesy and that he was a Kooma man with the consequence that the Electoral Act had no application to him in relation to the obligations mentioned. Consequentially, he submitted further, that the Court had no jurisdiction to entertain the proceeding. The nature of the submission made by Mr Wharton was such that I considered that he had raised a matter arising under the Constitution or involving its interpretation, namely, the legislative competence of the parliament to enact the Electoral Act in a way which had application to him and to provide for proceedings for civil penalties recoverable in this Court in the event of proved contraventions of the Act. That being so, I directed that notices be given by the registrar to the Attorneys-General for the several States and self-governing territories. There has been no application by any Attorney-General for intervention or for the removal of the proceedings into the High Court. I consider that a reasonable time has elapsed since the giving of notices, such that it is appropriate now for the Court to embark on the hearing.

9    Mr Wharton’s absence is, of course, no reason not to determine today whether the contraventions alleged have been proved and if so, what penalty, if any, should be imposed, assuming of course, that the Electoral Act has valid application.

10    Whilst I do not for one moment doubt Mr Wharton’s sincerity in the assertion which he has made, it is not an assertion which can be accepted in terms of Commonwealth legislative competence. In Coe v Commonwealth of Australia (1979) 53 ALJR 403 (Coe), at 408, Gibbs J, as his Honour then was, with whom Aickin J agreed, stated:

The aboriginal people are subject to the laws of the Commonwealth and of the States or Territories in which they respectively reside. They have no legislative, executive or judicial organs by which sovereignty might be exercised. If such organs existed, they would have no powers, except such as the laws of the Commonwealth, or of a State or Territory, might confer upon them. The contention that there is in Australia an aboriginal nation exercising sovereignty, even of the limited kind, is quite impossible in law to maintain.

In expressing that view, Gibbs J upheld a like view which had been expressed in the original jurisdiction by Mason J, as his Honour then was.

11    Coe was decided prior to Mabo v Queensland (No 2) (1992) 175 CLR 1. However, in Walker v New South Wales (1994) 182 CLR 45, at 48, having referred to the passage in Gibbs J judgment in Coe just mentioned, Mason CJ stated:

There is nothing in the recent decision in Mabo v. Queensland [No 2] to support the notion that the Parliaments of the Commonwealth and New South Wales lack legislative competence to regulate or affect the rights of Aboriginal people, or the notion that the application of Commonwealth or State laws to Aboriginal people is in any way subject to their acceptance, adoption, request or consent. Such notions amount to the contention that a new source of sovereignty resides in the Aboriginal people. Indeed, Mabo [No 2] rejected that suggestion.

[footnote references omitted]

12    In that case, insofar as the statement of claim was based on a proposition that the legislatures lacked power to legislate over Aboriginal peoples, Mason CJ at 49, concluded that the statement of claim disclosed no reasonable cause of action.

13    The enduring authority of the view as to an absence of Aboriginal sovereignty or any form thereof expressed by Gibbs J in Coe has recently been affirmed by a majority of the High Court in Love v Commonwealth (2020) 94 ALJR 198. On this subject, there was no disagreement, as there was, with respect sharply, in relation to the meaning of “alien”: see as to the enduring authority of Coe, Kiefel CJ, at [29]; Gageler J, at [102] – [103]; Keane J, at [199] – [205]; Nettle J, at [266]; and Gordon J, at [356].

14    Like conclusions as to an absence of Aboriginal sovereignty were reached by Kirby J in Thorpe v Commonwealth (No 3) (1997) 144 ALR 677 and by Spender J in Turrbal People v Queensland (2002) 194 ALR 53.

15    Thus, the proposition which underpins the assertion made by Mr Wharton is contrary to overwhelming and binding authority. The only conclusion open in law is that the Electoral Act, and in particular s 304 and s 309, had lawful application to Mr Wharton.

16    Further, the only conclusion open in law is that, by virtue of that Act, read in conjunction with the Regulatory Powers (Standard Provisions) Act 2014 (Cth) (Regulatory Powers Act), the Court has jurisdiction to hear the present proceeding and if contraventions are proved, to impose penalties.

17    I turn then to the subject of whether contraventions are proved.

18    Though its apparent purpose is to provide for standard provisions, it must be said, with all respect to those responsible for its drafting and enactment, that the Regulatory Powers Act introduces an additional layer of complication with respect to ascertaining who may institute a proceeding such as the present, which court may entertain such a proceeding and the applicable practice and procedure.

19    However that may be, the upshot is that the Electoral Commissioner is a person authorised as an authorised applicant to institute the present proceeding: see s 82(1) of the Regulatory Powers Act and s 384A(2) of the Electoral Act. Likewise, the provisions of s 304 and s 309 of the Electoral Act are, in terms of s 79 of the Regulatory Powers Act, enforceable civil penalty provisions: see s 384A of the Electoral Act. The applicable civil penalty in respect of each of these provisions, if contravened, is 60 penalty units: see s 304 and s 309 of the Electoral Act.

20    Further, this Court is, in terms of s 81 of the Regulatory Powers Act, a relevant court: see s 384A(2)(c) of the Electoral Act.

21    So I am satisfied, albeit at the price of assimilating complicated statutory provision, that the Electoral Commissioner is competent to institute the proceeding and that the Court has jurisdiction as a relevant court to entertain it.

22    As to proof, in the ordinary course of events, the effect of s 87 of the Regulatory Powers Act is that the rules of evidence and practice, applicable in civil proceedings, apply to a proceeding such as the present.

23    Thus, s 140 of the Evidence Act 1995 (Cth) is applicable in the event of any evidentiary controversy such that proof on the balance of probability is, having regard to the gravity of issues to be proved, is both necessary and sufficient. In turn, that means, as was correctly submitted on behalf of the Electoral Commissioner, that useful guidance in the event of any controversy is to be found in the judgment of Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336.

24    As it happens, there is no defence which has been filed. Even assuming that I were to regard Mr Wharton’s statements from the bar table on 3 March 2021 as an oral pleading and deem that to be sufficient, that oral pleading went no further than denying legislative competence and jurisdiction. Mr Wharton did not then, nor has he since by a formal defence, put in issue any of the factual allegations in the statement of claim. Given that civil practice and procedure is applicable, it follows from that that materially, r 16.07(2) of the Federal Court Rules 2011 (Cth) (the Rules) is prima facie applicable. That provides, by r 16.07(2), that allegations in a statement of claim that are not specifically denied are taken to be admitted.

25    On the assumption that deemed admissions of that kind for which the rules provide might, given the penal character of the proceeding, perhaps not be applicable (a subject upon which I express no view), the Electoral Commissioner, nonetheless, introduced evidence by affidavit in respect of elements of the contraventions alleged. Having regard to that affidavit evidence, I am satisfied, in the balance of probabilities, that a federal election was held on the date alleged and as already mentioned, that Mr Wharton was a candidate at that election. I am further so satisfied, that he did not, by a return, disclose any gifts received or expenditure incurred, even nil in either case, on or before 2 September 2019. That was the last date within which without contravention, the obligations found in s 304 and s 309 could be discharged.

26    On the evidence, Mr Wharton did just not lodge any return at all on or before that date. That being so, I am satisfied that the contraventions alleged have been proved.

27    It is material to note in relation to penalty that both before and after the last date for lodgement, the Electoral Commissioner, on multiple occasions, either reminded or sought to remind Mr Wharton of the existence of his obligations to lodge a return as provided for by s 304 and s 309.

28    There is no particular guidance to be obtained from past cases where penalties for contraventions of these provisions have been found proved and penalties imposed.

29    It was submitted that the purpose of each of the provisions is transparency in relation to the electoral and particularly political process. In other words, each provision, it was submitted, was directed to making it overt as to particular gifts received from particular sources and particular amounts of expenditure incurred by candidates. That does to me, seem to be the purpose with the overall end being that such transparency is conducive to the avoidance of corrupt behaviours or at least behaviours where candidates, including those who have become elected, act in particular ways as a result of particular support received. So viewed each provision serves an important public purpose in a democratic society.

30    There are equivalent provisions in Queensland’s state electoral law, evidently for like purposes: see s 290 and s 291 of the Electoral Act 1992 (Qld). Again however, there does not appear to have been any earlier proceedings under that legislation which might afford guidance in relation to penalty.

31    There is however, guidance of a more general nature offered by the High Court’s judgment in Commonwealth of Australia v Director of Fair Work Building Industry Inspectorate (2015) 258 CLR 482, the “Agreed Penalties” case where, French CJ and Kiefel, Bell, Nettle and Gordon JJ observed in their joint judgment, at [55]:

55    No less importantly, whereas criminal proceedings import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:

“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the Act.”

[footnote references omitted]

32    The present is not, of course, a case concerned with economic regulation, but rather with the conduct of candidates in and in relation to elections. Even so, I accept the submission made on behalf of the Electoral Commissioner that the purpose of penalties is wholly that of deterrence, both in the individual sense as well as in the general sense. The purpose is to deter repetition by the contravener and conduct by others who might be tempted to contravene the obligations for which the Electoral Act provides.

33    In relation to civil penalty orders, the Regulatory Powers Act does offer, by s 82(6), some guidance. That subsection provides:

(6)    In determining the pecuniary penalty, the court must take into account all relevant matters, including:

(a)     the nature and extent of the contravention; and

(b)     the nature and extent of any loss or damage suffered because of the contravention; and

(c)     the circumstances in which the contravention took place; and

(d)     whether the person has previously been found by a court (including a court in a foreign country) to have engaged in any similar conduct.

34    Obviously enough, there is no loss or damage suffered by reason of the contravention in a monetary sense, but there is a loss which society suffers, having regard to the purposes, which I have mentioned. And that is a loss in relation to Mr Wharton’s candidacy of transparency.

35    Mr Wharton has not been shown to have been previously found by a court to have engaged in any similar conduct anywhere. He is therefore a first contravener.

36    With commendable fairness, the Electoral Commissioner raised a question as to whether having regard to s 84(2) of the Regulatory Provisions Act and the particular contraventions alleged, it could be said that they entailed the same conduct. In my view, they do not; they involve discrete contraventions which constitute similar conduct but not the same conduct. It is possible to comply with one but not the other and still yield a contravention of the other by non-compliance. A distinction between similar and the same conduct was highlighted by Franki J in Trade Practices Commission v Simpson Pope Ltd (1980) 30 ALR 544, at 555, in relation to s 76(3) of the then Trade Practices Act 1974 (Cth).

37    I have also, for completeness, considered s 85 of the Regulatory Provisions Act. I do not consider that provision is applicable as here there is no series of contraventions of the same or similar character. There is no series at all; just an occasion which yielded two separate contraventions.

38    That there was an occasion which yielded what, in law, are separate contraventions, prompted the recollection of an observation made in L Vogel & Son Pty Ltd v Anderson (1968) 120 CLR 157 (Vogel v Anderson), at 168, where Taylor, Menzies and Owen JJ stated in respect of an observation made by Kitto J in the original jurisdiction in respect of contemporaneous and connected contraventions of the Customs Act 1901 - 1960 (Cth):

… [W]e agree that, in determining the appropriate penalties to be imposed in respect of the numerous offences, it was material to take into consideration - as his Honour did - that, though the offences in each group were separate offences in law, they were substantially contemporaneous and connected.

39    In my view, Mr Wharton’s contraventions might also be classed as substantially contemporaneous and connected. It is important therefore, in that context not to over-penalise Mr Wharton in respect of the contraventions.

40    The Electoral Commissioner submitted that a penalty in each instance of half of the maximum for which the statute provides would be appropriate. The maximum is certainly a yardstick and there was no suggestion, nor would I find, that Mr Wharton’s conduct is of the worst possible kind, such as would attract a maximum penalty. Neither is the conduct to be trivialised, having regard to the important purposes served by s 304 and s 309.

41    There is much to be said for the middle ground position promoted by the Electoral Commissioner. If I were penalising in respect of but one contravention, I may well have been inclined to adopt that particular amount. However, taking into account the observations made in Vogel v Anderson and what would be the totality of penalty were I to adopt that middle ground approach in respect of each contravention, the view I have reached is that would over-penalise what is contemporaneous and connected conduct. That being so, in my view the objective of deterrence is served by imposing in respect of each contravention a penalty of $5,000. That will yield a total penalty of $10,000.

42    The Rules, by r 39.02 provide:

Time for compliance with orders

A person ordered to do an act or thing or to pay money into Court must do so in the time specified in the order or, if no time is specified, within 14 days after the date of service of the order on the person.

Given that civil practice is applicable, prima facie it seems to me that an order for the payment of a penalty is an order for the doing of an act or thing, such that were I not to specify a time for payment, payment would have to be made within 14 days, after service of the order on Mr Wharton. I do not have any evidence at all in relation to Mr Wharton’s means. Nonetheless, for most Australians, finding $10,000 in 14 days, or perhaps at all for some, would be a very tall order indeed. It seems to me that the interests of justice are served by at least allowing, as again with fairness, the Electoral Commissioner promoted, 30 days for the payment of each of the penalties imposed.

43    The effect of the Regulatory Provisions Act, by s 83(1), is that a pecuniary penalty is a debt payable to the Commonwealth. Accordingly, I shall specify in the order that each penalty be paid to the Commonwealth of Australia. It may be necessary to make provision also for whom might give good discharge on behalf of the Commonwealth for any such payment. I shall hear counsel in relation to that subject before making final orders. The ordinary course, also in relation to a proceeding such as the present, is that costs may be awarded and that costs in the ordinary course would follow the event. Counsel has sought an order for costs accordingly.

44    It might perhaps be thought by some that there was an inconsistency between Mr Wharton’s taking advantage of the provision made by the Electoral Act for the holding of elections and for persons to stand as candidates, and his not complying with obligations as to disclosure by return for which that Act also provides. It is not unknown as a form of protest for persons of a particular race, nationality or belief to participate in an electoral process in respect of a legislature, where they contest nonetheless overarching sovereignty. That type of protest is known as abstentionism.

45    In modern times, the best example of abstractionism is to be found in the longstanding policy of the Irish Republican political party Sinn Fein, which has long stood candidates for election to the House of Commons but as a matter of policy those candidates, even if elected, do not take up their seats. That is because so doing would entail the swearing of allegiance to the sovereign of the United Kingdom of Great Britain and Northern Ireland. There is reason to think that that stance in turn was inspired by the approach of the Hungarian and Czech nationalists in the mid-nineteenth century, in relation to the Austrian Imperial Council: see Arthur Griffith, The Resurrection of Hungary, 1904. Griffith was one of those early exponents of Irish nationalism.

46    It is not possible, however, on the evidence and submissions such as they have been from Mr Wharton at an interlocutory stage, to attribute any such altruistic motive to him in relation to his apparent inconsistent behaviour. I have therefore not taken, though I have considered, as I trust the reference to abstentionism makes plain, whether that motive might be a factor in this case, which would be relevant in relation to penalty. It is not possible to make an affirmative finding in Mr Wharton’s favour of any such motivation. Rather, it is just a case of, notwithstanding reminders, a failure to comply with important statutory obligations.

Associate:    

Dated:    2 July 2021