What would have been the reaction if the Federal Government had responded to the banking and child-sexual-abuse royal commissions by legislating to put the offending banks and churches into administration?
After all, the allegations against the banks and churches were of similar seriousness as those against the Construction, Forestry and Maritime Employees Union.
The very name of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry presumed there was misconduct. And the commission found banks laundered money, charged dead people for services not provided, and so on.
The Royal Commission into Institutional Responses to Child Sexual Abuse found appalling, conspiratorial conduct by the upper echelons of churches to cover up extremely serious criminal conduct.
Greens MP Max Chandler-Mather mentioned the royal commissions in an interview when he was questioned on the ABC’s 7.30 Report last week about his attendance and fiery support of the CFMEU earlier that day.
Chandler-Mather, of course, was not advocating putting the banks and churches into administration but was opposing legislation passed with Labor and Coalition support that would put the CFMEU into administration; would in effect freeze the CFMEU’s assets; and require it to pay for the cost of the administration.
But it is worth asking what would have been the case for legislating to put named banks and named churches into administration – taking their shareholders’ and members property, and forcing them to pay for the administration. When you do that, you start putting principle before prejudice and acting on facts rather than what “everybody knows”.
It raises the distinction between the rule of law and the rule of laws.
The Greens called the CFMEU legislation “an unprecedented attack on the rule of law”.
I do not want to carry a candle for the CFMEU. It has done enormous reputational damage to the union movement in Australia and to the principles of unionism in general. People arguing in favour of the right of workers to organise and negotiate for pay and conditions are often met with the rejoinder: “What about the CFMEU?” Its prominence for all the wrong reasons smears the whole movement.
But there are some important principles here.
One might well say that, if a law is passed by Parliament and is applied, surely that amounts to the rule of law. So, what are the Green on about?
But having a law passed through a Parliament and applied is not the rule of law. Unless other principles are adhered to, it is the rule of laws, not the rule of law.
History is replete with egregious examples of the rule of laws – from the extremes of laws about race passed by the Reichstag in the 1930s to milder examples of the overreach of executive and legislative power in the name of national security in Australia today.
A key element in the difference between the rule of law and the rule of laws is the separation of powers. Under the separation of powers, the legislature enacts laws that apply universally. The executive administers those laws. And the judiciary interprets and applies the laws in disputes and matters brought by parties before the courts.
Importantly, in Australia, our Constitution states:
“The legislative power of the Commonwealth shall be vested in a Federal Parliament,” and
“The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction.”
So, the courts cannot legislate (enact laws of universal application) and the parliament cannot exercise judicial power.
Classic examples of judicial power are the application of general laws to particular people or bodies.
For example, a law could provide that if a company cannot pay its debts as they fall due as evidenced by unpaid invoices etc, a court could order (on the application of a creditor) that the company be put into administration and its assets distributed to creditors.
The company could resist the order by, for example, arguing in court that the invoices were defective and so on. It might or might not be successful.
When you look at CFMEU legislation (which will likely be challenged by the union), it has the whiff of an unconstitutional exercise of judicial power by the legislature.
The separation of powers helps guard against the abuse of power that affects people’s liberty and property. Let’s take an extreme example for illustrative purposes. If the Parliament purported to pass a law saying, “John Smith will be jailed for life for tax evasion” it would be struck out as an unconstitutional exercise of the judicial power.
If, however, the Parliament passed a law saying that any person found by a court of being guilty of tax evasion could be sentenced by the court to life imprisonment, it would be a classic exercise of legislative power.
The CFMEU legislation looks very much like a “John Smith will be jailed for life” law – the rule of laws, not the rule of law.
It is for legislatures to define the prohibited conduct and provide a penalty. It is for the courts to determine whether a particular person or organisation has engaged in the prohibited conduct and to impose the penalty. In doing so, other important elements of the rule of law apply: the right to test the case brought against them; to adduce evidence on their behalf; and to be represented.
Yes, it is messy, time-consuming, and expensive, but it helps prevent abuse of power, and for that reason should be adhered to.
A further point: The uncovering of banking, church, and union malfeasance (like so much other malfeasance) was first done by media while “proper authorities” sat on their hands. If government regulators had more teeth or used what teeth they had to actually bite someone, a lot of this malfeasance could be nipped in the bud.
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 3 September 2024.