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High Court considers definition of corrupt conduct

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15 April 2015

The High Court handed down its decision in the proceedings involving the Independent Commission Against Corruption (ICAC) and Deputy Senior Crown Prosecutor Margaret Cunneen SC. The High Court held, by majority, that ICAC has no power to conduct an inquiry into allegations made against Ms Cunneen because the alleged conduct was not corrupt conduct as defined in s 8(2) of the Independent Commission Against Corruption Act 1988 (NSW) (ICAC Act).

The decision is significant due to the narrow interpretation given to the term 'corrupt conduct' in section 8 of the ICAC Act which is the 'statutory gateway' to ICAC's functions. The decision particularly focuses on the meaning of corrupt conduct in section 8(2), which until now has received little judicial attention.

High Court Decision

The principal question before the High Court was: what is meant by the expression "adversely affects" or "could adversely affect" the exercise of official functions by any public official?

By majority, the High Court held that the expression "adversely affects" refers to conduct that adversely affects or could adversely affect the probity of the exercise of an official function by a public official.

In reaching this conclusion, the High Court read section 8(2) and section 8(1) of the ICAC Act together and found that the term "adversely affects" in section 8(2) means "an adverse effect upon the exercise of an official function by a public official such that the exercise constitutes or involves conduct of the kind referred to in section 8(1)(b)-(d)".

The relevant sections of section 8 are as follows:

8 General nature of corrupt conduct

(1) Corrupt conduct is:

(a) any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect, either directly or indirectly, the honest or impartial exercise of official functions by any public official, any group or body of public officials or any public authority, or

(b) any conduct of a public official that constitutes or involves the dishonest or partial exercise of any of his or her official functions, or

(c) any conduct of a public official or former public official that constitutes or involves a breach of public trust, or

(d) any conduct of a public official or former public official that involves the misuse of information or material that he or she has acquired in the course of his or her official functions, whether or not for his or her benefit or for the benefit of any other person.

(2) Corrupt conduct is also any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect, either directly or indirectly, the exercise of official functions by any public official, any group or body of public officials or any public authority and which could involve any of the following matters:

(a) official misconduct (including breach of trust, fraud in office, nonfeasance, misfeasance, malfeasance, oppression, extortion or imposition),
(b) bribery,
(c) blackmail,
(d) obtaining or offering secret commissions,
(e) fraud,
(f) theft,
(g) perverting the course of justice,
(h) embezzlement,
(i) election bribery
(j) - (y)....

Section 8(1)(b)-(d) limits the range of corrupt conduct which may be committed by a public official in the exercise of an official power to three specific kinds of misconduct.

Section 8(2) states that corrupt conduct is also any conduct of any person that adversely affects, or could adversely affect, the exercise of official functions by a public official. Section 8(2) then lists in subparagraphs (a)-(y) a range of matters in which this could apply, for example: bribery, blackmail, fraud and theft.

The High Court majority held that it is not enough to show only that there was conduct that could involve one of the matters listed in section 8(2)(a)-(y). Rather, for conduct to be corrupt, it must also affect the exercise of an official function in one of the ways listed in section 8(1)(b)-(d).

In this case, the alleged conduct was not conduct that could adversely affect the probity of the exercise of an official function by a public official in accordance with section 8(1)(b)-(d). Accordingly, the alleged conduct was not corrupt conduct within the meaning of s 8(2). On that basis, ICAC had no power to conduct the inquiry into the allegations against Ms Cunneen.

Impact of the Decision

  • Stay tuned to see if the ICAC Act will be amended in response to the decision to make it clear that sections 8(1) and 8(2) are to be read separately.
  • ICAC's ongoing investigatory functions could be curtailed in light of the narrow interpretation of corrupt conduct as this definition acts as the 'statutory gateway' to ICAC's investigative functions.
  • If pressed, ICAC may need to reconsider past findings of corruption which were predicated on a broader interpretation of 'corrupt conduct' and involved allegations of unlawful conduct which independently fell within the second limb of section 8(2) without reference to section 8(1)(b)-(d).
  • Despite the High Court's narrow interpretation of section 8, agencies need to remain vigilant against corrupt conduct. Given the unique facts, the impact on reporting obligations under section 11 of the ICAC Act is likely to be negligible.
Author

Scarlet Reid

Partner

61 2 9947 6820

scarlet.reid@hdy.com.au

Author

Michael Sullivan

Partner

61 2 9947 6185

michael.sullivan@hdy.com.au

Author

Dora Doukas

Special Counsel

61 2 9947 6168

dora.doukas@hdy.com.au

Author

Sally Moten

Senior Associate

61 2 9947 6777

sally.moten@hdy.com.au

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