Re Day (No 2)

Case [2017] HCA 14

HIGH COURT OF AUSTRALIA

KIEFEL CJ,
BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ

IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING MR ROBERT JOHN DAY AO

Re Day [No 2]

[2017] HCA 14

5 April 2017

C14/2016

ORDER

The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 8 November 2016, as amended by orders made by French CJ on 21 November 2016, be answered as follows:

Question (a)

Whether, by reason of s 44(v) of the Constitution, there is a vacancy in the representation of South Australia in the Senate for the place for which Robert John Day AO was returned?

Answer

Yes, there is a vacancy in the representation of South Australia in the Senate for the place for which Robert John Day AO was returned, by reason of s 44(v) of the Constitution.

Question (b)

If the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled?

Answer

The vacancy should be filled by applying the provisions of s 273(27) of the Commonwealth Electoral Act 1918 (Cth) by analogy by filling the vacancy by a special count of the ballot papers.

Question (c)

Whether, by reason of s 44(v) of the Constitution, Mr Day was at any time incapable of sitting as a senator prior to the dissolution of the 44th Parliament and, if so, on what date he became so incapable?

Answer

Mr Day was incapable of sitting as a senator, by reason of s 44(v) of the Constitution, on and after 26 February 2016, being a date prior to the dissolution of the 44th Parliament.

Question (d)

What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference?

Answer

A single Justice should make any further directions and orders necessary to finally dispose of this reference.

Question (e)

What, if any, orders should be made as to the costs of these proceedings?

Answer

The Commonwealth should pay Mr Day's and Ms McEwen's costs of the proceedings, save for costs excluded by an order of a Justice of the Court.

Representation

A S Bell SC with D P Hume appearing on behalf of Mr Robert Day AO (instructed by Griffins Lawyers)

S P Donaghue QC, Solicitor-General of the Commonwealth and N J Williams SC with C L Lenehan and B K Lim appearing on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)

J K Kirk SC with S Gory appearing on behalf of Ms Anne McEwen (instructed by SBA Law)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Re Day [No 2]

Constitutional law – Parliamentary elections (Cth) – Senate – Reference to Court of Disputed Returns – Where person elected and re-elected…

Continue reading Re Day (No 2)

Sign in free to access the full text

Details
AGLC
Re Day (No 2) [2017] HCA 14
Case
[2017] HCA 14
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered questions referred by the President of the Senate concerning Senator Robert John Day AO. The dispute arose from a lease agreement between Fullarton Investments Pty Ltd and the Commonwealth for Senator Day's electorate office. Senator Day had a financial interest in the premises, which were previously owned by a company of which he was a director and shareholder, and which was held in trust for beneficiaries including himself. The rent payable under the lease was directed to be paid into Senator Day's personal bank account, and he was a guarantor of a loan secured by the property.

The Court was required to determine whether Senator Day was incapable of being chosen or of sitting as a senator under section 44(v) of the Constitution due to an indirect pecuniary interest in the lease agreement with the Commonwealth. If a vacancy was found, the Court also had to decide how that vacancy should be filled, and whether Senator Day had been incapable of sitting as a senator prior to the dissolution of the 44th Parliament, and if so, from what date.

The Court reasoned that Senator Day had an indirect pecuniary interest in the lease agreement because the rent payments to his nominated bank account reduced his contingent liability as a guarantor of the loan secured by the property. Furthermore, as a beneficiary of the Day Family Trust, which was a beneficiary of the Fullarton Road Trust, he had a prospect of receiving distributions of rent proceeds. Applying the principles established in previous cases concerning section 44(v), the Court found that Senator Day was indeed incapable of being chosen or of sitting as a senator.

The Court answered the referred questions, finding that a vacancy existed in the representation of South Australia in the Senate for Senator Day's place by reason of section 44(v) of the Constitution. The vacancy was to be filled by applying section 273(2) of the Commonwealth Electoral Act 1918 (Cth) by analogy, through a special count of ballot papers. The Court also determined that Senator Day had been incapable of sitting as a senator on and after 26 February 2016. Directions were made for a single Justice to handle further proceedings, and the Commonwealth was ordered to pay Senator Day's and Ms McEwen's costs.

Orders

Orders of the court

The questions referred to the Court of Disputed Returns by the President of the Senate in his letter dated 8 November 2016, as amended by orders made by French CJ on 21 November 2016, be answered as follows:

Question (a)

Whether, by reason of s 44(v) of the Constitution, there is a vacancy in the representation of South Australia in the Senate for the place for which Robert John Day AO was returned?

Answer

Yes, there is a vacancy in the representation of South Australia in the Senate for the place for which Robert John Day AO was returned, by reason of s 44(v) of the Constitution.

Question (b)

If the answer to Question (a) is "yes", by what means and in what manner that vacancy should be filled?

Answer

The vacancy should be filled by applying the provisions of s 273(27) of the Commonwealth Electoral Act 1918 (Cth) by analogy by filling the vacancy by a special count of the ballot papers.

Question (c)

Whether, by reason of s 44(v) of the Constitution, Mr Day was at any time incapable of sitting as a senator prior to the dissolution of the 44th Parliament and, if so, on what date he became so incapable?

Answer

Mr Day was incapable of sitting as a senator, by reason of s 44(v) of the Constitution, on and after 26 February 2016, being a date prior to the dissolution of the 44th Parliament.

Question (d)

What directions and other orders, if any, should the Court make in order to hear and finally dispose of this reference?

Answer

A single Justice should make any further directions and orders necessary to finally dispose of this reference.

Question (e)

What, if any, orders should be made as to the costs of these proceedings?

Answer

The Commonwealth should pay Mr Day's and Ms McEwen's costs of the proceedings, save for costs excluded by an order of a Justice of the Court.

Background

Background to the litigation

Section 46 provides for the payment of a penalty by a person declared to be incapable of sitting as a senator or as a member of the House of Representatives for every day on which he so sits.Background to the questions referred The salient features of the facts which give rise to the questions referred may be stated shortly. The events in question concern a lease entered into between Fullarton Investments Pty Ltd ("Fullarton Investments"), the registered proprietor of premises at 77 Fullarton Road, Kent Town in South Australia ("the Fullarton Road property"), and the Commonwealth. Part of those premises was used by Mr Day as his electorate office after he was elected to the Senate for the first time, following the 2013 federal election. His term as a senator for South Australia commenced on 1 July 2014. He occupied an office in those premises from April 2015. At the time Mr Day was first elected, the Fullarton Road property was owned by B & B Day Pty Ltd ("B & B Day") as trustee of the Day Family Trust. Certain members of the Day family, including Mr Day and his wife, were beneficiaries of that trust. Until the day before commencing his term as a senator, Mr Day was the sole director and shareholder of B & B Day. At all relevant times there was a loan facility provided by a bank to B &B Day to a limit of $1,600,000, which was secured by a mortgage over the Fullarton Road property and by a guarantee and indemnity given by Mr Day and his wife with respect to the performance by B & B Day of its obligations under the loan facility. On 24 April 2014, Fullarton Investments purchased the Fullarton Road property for $2,100,000 from B & B Day. B & B Day was said to have provided vendor finance to Fullarton Investments, although no consideration appears to have passed between those parties. The sole director of Fullarton Investments at this time was Mrs Debra Smith, the wife of Mr Day's business associate. Fullarton Investments was the trustee of the Fullarton Road Trust, of which the Day Family Trust was a beneficiary. One of the benefits provided to members of Parliament[1] is office accommodation in the electorate, together with necessary equipment and facilities. A lease of the Fullarton Road office was entered into between Fullarton Investments, as lessor, and the Commonwealth, represented by the Ministerial and Parliamentary Services Division, Corporate and Parliamentary Services Group of the Department of Finance, as lessee. The lease was entered into on 1 December 2015; it had a commencement date of 1 July 2015, was for a term of five years and contained an option to renew. The rent payable was $66,540 per annum, together with GST.[1]Parliamentary Entitlements Act 1990 (Cth), s 4(1), Sched 1 Pt 1 item 7. Fullarton Investments was entitled, pursuant to the lease, to direct the Commonwealth to pay rent to any person. On 26 February 2016, it nominated "Fullarton Nominees" and directed payment to a bank account. Fullarton Nominees was a business name owned by Mr Day and the bank account was his.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

KIEFEL CJ, BELL AND EDELMAN JJ GAGELER J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: KIEFEL CJ, BELL AND EDELMAN JJ, GAGELER J

Full text does not contain this section.