Book Review: Secret State by Julian Grill

Speech given by Steven Penglis SC (researched by Tom Penglis) at official launch on 3 February 2022

Of “reputations”, in Poor Richard’s Almanack, 1750, Benjamin Franklin wrote “Glass, China, and reputation are easily crack’d, and never well mended”. In Othello, Act 2 Scene 3, William Shakespeare wrote “Reputation, reputation, reputation! Oh, I’ve lost my reputation! I’ve lost the immortal part of myself, and what remains is bestial”.

Although covering a far larger canvas, at its core, Julian Grill’s book Secret State is a detailed account of events which occurred in this State between 2005 to 2012, the likes of which should never have occurred and, importantly, the likes of which must never be allowed to occur again.

The scene is aptly set by the opening 2 paragraphs of the book.

“This is a story about justice. Or, more correctly, injustice. Rampant, blatant, ruthless injustice conducted by the apparatus of State of Western Australia in a nation that prides itself on embracing all of the protections of an enlightened

Western society.

It is a story of remorseless and unjustified pursuit of two individuals and their most unfortunate friends and associates, carried out with all the covert investigative and penal powers of an autocratic regime.

It is also the narrative of the shameful carnage visited upon a collection of civilians, innocent public officers and their shocked families.” Put simply, with respect to what Julian calls the “Smiths Beach” inquiry and then the “Lobbyist” inquiry, only one person was ever convicted with respect to any of the CCC’s investigations. That conviction was for giving false evidence to the Commission and resulted in a small fine. In other words, the matters which the Commission investigated did not result in any convictions. However, through its processes, and what in my opinion may fairly be described as a “scorched earth policy”, the CCC decimated the reputations of many innocent people.

That occurred largely because of two things. First, as lawyers well know, there is a fundamental difference between a Commission and a Court. As Julian notes in the book, parties appearing before the Commission (which is no more than an administrative body publishing no more than an opinion) enjoy hardly any of the rights afforded to a litigant, particularly an accused in criminal proceedings. In particular, the rules and procedures that have been established over centuries to protect the judicial process and those who are subjected to it, do not apply. Secondly, and without the protections afforded in court proceedings, many of the examinations took place in public. That then resulted in allegations made against persons appearing before the Commission being fair-game for the media, which, as Julian’s book demonstrates, regularly reported such matters with little balance.

To be clear, Julian, rightly in my view, does not suggest that the CCC should be abolished. To the contrary, he acknowledges it performs a critically important function in our modern democracy. Nor in my view does the solution lie in affording persons appearing before the Commission greater rights (although that would clearly assist). Rather, I am firmly of the view that the only way of avoiding anything coming close to a repetition of the damage to reputations laid bare in Julian’s book is to permanently close the doors on the CCC conducting public hearings. The statutory discretion to do so must be removed.

So how was all this possible? Well, the starting point is the first Corruption Commission in Australia, namely the New South Wales ICAC. It was based on the Hong Kong ICAC, founded some 15 years earlier. The Hong Kong ICAC did not hold public hearings. Notwithstanding, the New South Wales Parliament decided to empower the Commission with a discretion to order public hearings if satisfied in all the circumstances that it is in the public interest to do so. Whilst the Act identifies certain matters which the Commission must consider, in the end the discretion is at large (i.e. subject only to it being exercised having regard to and consistent with the overriding objectives of ICAC).

Along with Queensland, the WA CCC legislation adopted the same approach, namely providing that the Commission may “open an examination to the public if, having weighed the benefits of public exposure and public awareness against the potential for prejudice or privacy infringements, it considers that it is in the public interest to do so”: section 140. This does not apply to organised crime investigations (which must be held in private). The Independent Broad-Based AntiCorruption Commission legislation in Victoria is far more prescribed. It requires IBAC to reach a view to hold public hearings “on reasonable grounds” and only if “there are exceptional circumstances” and where “a public examination can be held without causing unreasonable damage to a person’s reputation, safety or wellbeing”.

The imposition of a requirement for any decision to hold a public hearing to be “on reasonable grounds” (i.e. an objective test) provides a much higher threshold that needs to be satisfied in the Eastern States and WA. It would therefore be easier (but not easy) to challenge such a decision in Court.

In stark contrast to other states is South Australia. The governing legislation of the SA ICAC provides that all examinations relating to corruption in public administration must be conducted in private: there is no discretion to hold public hearings. The Act does empower the Commissioner to make a public statement in connection with a particular matter, but only if, in the Commissioner’s opinion, it is appropriate to do so in public interest (after having regard to the various matters the Act requires to be taken into consideration).

The reasoning behind the private hearings was best explained by the Hon Thomas Kenyon in the second reading speech for the SA ICAC Act:

“Investigations into corruption conducted by the ICAC will be conducted in private. This is because persons under investigation by the ICAC have not been charged with any criminal offence. As is currently the case with criminal investigations undertaken by SA Police, a suspect is publicly identified once an investigation is completed and a charge or charges have been laid (subject of course to any suppression order that may be in place). To make an investigation undertaken by the ICAC into

corruption public, would prematurely and unnecessarily prejudice the reputation of a person or person, who may or may not end up being charged with any offence.” The reading of the Parliamentary debates with respect to the introduction of the CCC Act in WA discloses that, whilst Parliament certainly had an eye to the New South Wales ICAC, it didn’t blindly adopt that model. A reading of Hansard shows that there was significant disquiet amongst many members of Parliament with respect to public hearings. However, it also discloses the primary reason why those who held such reservations were prepared to support the Commission having qualified power to hold public hearings, namely the very strong views held and communicated by the late Terry O’Connor QC, the Chairman of the predecessor to the CCC, namely the AntiCorruption Commission. Mr O’Connor’s view was that the work of the ACC was hamstrung because it could not speak publicly about ongoing investigations. In the second reading speech, the then Attorney-General, Jim McGinty said, this:

“In a similar context, we discuss whether people could report the fact that they had made a complaint or referred a matter to the Corruption and Crime Commission.

The fact that people used the phrase

‘I’ve referred a matter to a body that cannot be named, ho ho ho’ brought the whole system into disrepute. People will misuse that opportunity in the lead up to Local Government and State elections.

However, it is a matter of the public being informed. Public hearings are a necessary requirement. The media should be

intelligent enough not to jump at the sensational when someone is using the

Commission as a political tool in the

lead up to an election” (emphasis added). Seriously?! In my view the position was best summed up by the Parliamentary speech of Matt Birney on 4 June 2003, which included the following:

“… one of the greatest issues of human rights that faces Western Australia today is the ability of a media outlet to print somebody’s name in a newspaper or air somebody’s name on an electronic media outlet when that person has not been found guilty. It is an absolute tragedy for somebody to wake up one morning and find his name in print associated with all manner of accusations, such as paedophilia, corruption as in this case, stealing or assault. It would be an absolute tragedy for somebody to have his name sullied publicly without being found guilty. We proceed in this country on the basis that one is innocent until found guilty. Unfortunately, public hearings do not recognise the court of public opinion. Like it or not, if somebody’s name appears in the media in association with a particular crime, human nature dictates that people automatically assume, rightly or wrongly, that he is guilty. The initial allegations against someone can be printed on the front page of a newspaper, but the conclusion of the court hearing in which that person may be found innocent can be printed on page 185. That is a tragedy for human rights. I greatly fear that public hearings will be misused to sully the name of a person who might subsequently be found to be innocent. I have a very strong reservation about the need for public hearings.

Having said that, I understand that the former Anti-Corruption Commission was somewhat hamstrung because it could not speak publicly about ongoing investigations. … One of the major problems that Mr O’Connor faced over a long period was his inability to respond to accusations. I am very pleased to hear and see today that, with the passage of this legislation, that will no longer be the case. However, I have a severe reservation about people’s names being made public in connection with allegations prior to any possible determination of guilt. I do not have any problem with the new commissioner being able to speak publicly about particular ongoing cases, but I have a problem with people being able to print somebody’s name in connection with a case prior to its being determined.

I guess that is something of a halfway mark. Mr O’Connor has been an advocate of public hearings and of openness and accountability, and I congratulate him for that. I believe we can go some way down that track. However, people’s names should not be printed unless they are found guilty. It would be a tragedy of mammoth proportions if that were not the case. I fear that public hearings will become a charade and a media circus, and will result in victimisation by association and guilt by media.” The reason why the CCC’s hearings should not be in public is in my view best expressed by the observations of Justice Cole of the Supreme Court of New South Wales in Chaffey v ICAC, an unreported judgment delivered in 1993, in which his Honour said:

“A clear distinction is to be drawn between the proceedings in a court where there is an obvious requirement in the public interest that save in exceptional circumstances proceedings should be heard ‘publicly and in open view’ in order that the public may have confidence in the judicial process, and proceedings before an administrative, investigative body such as ICAC. As Gibbs J said in Russell v

Russell (1976) 134 CLR 495 at 520: ‘It is the ordinary rule of the Supreme Court, as of the courts of the nation, that their proceedings shall be conducted “publicly and in open view” (Scott v Scott [1913]

AC 417 at 441). This rule has the virtue that the proceedings of every court be fully exposed to public and professional scrutiny and interest, without which abuses may flourish undetected. Further, the public administration of justice tends to maintain confidence in the integrity and independence of the courts. The fact that courts of law are held openly and not in secret is an essential aspect of their character. It distinguishes their activities from those of administrative officials, for “publicity is the authentic hallmark of judicial as distinct from administrative procedure” (MacPherson v MacPherson [1936] AC 177 at 200.’

Inquiries by ICAC are not judicial proceedings. They are administrative. As the High Court stated in Balog at 636: ‘The

Commission is primarily an investigative body whose investigations are intended to facilitate the actions of others in combating corrupt conduct. It is not a law enforcement agency and it exercises no judicial or quasi-judicial function. Its investigative powers carry with them no implication, having regard to the manner in which it is required to carry out its functions, that it should be able to make findings against individuals of corrupt or criminal behaviour.’

There is thus no compelling requirement that its inquiries be heard in public. As an administrative and investigatory body with the power in certain circumstances to render reports to the Parliament and others, confidence in its processes is more likely to flow from the quality of the material which it produces after conducting an inquiry, whether that product be a referral to an appropriate body (s53) for further action, or a report, whether to parliament or otherwise (s74), rather than from the circumstance that its inquiry is conducted in public.” I respectfully adopt his Honour’s remarks. The issue of “Public versus Private Hearings” is a matter dealt with in Chapter 4 of the 13 September 2017 report of the Federal Select Committee on a National Integrity Commission. The usual arguments for and against are set out therein by reference to various submissions that had been received. Importantly, submissions were received by the Parliamentary Inspectors of various State Corruption Commissions, all of whom strongly opposed the ability to hold public hearings.

On 25 November 2021, there was tabled in the New South Wales Parliament a report by the Committee on ICAC dealing with “Reputational impact on an individual being adversely named in the ICAC’s investigations”. Again, the usual arguments for and against public hearings are laid out. Importantly, the Committee “acknowledged and supported that a review be undertaken of the threshold for determining whether to hold public hearings in both legislation and practice by the ICAC compared to like bodies in other jurisdictions”. In doing so the Committee noted that, in a review of the NSW ICAC in 2016, a former Inspector of ICAC, the late Honourable David Levine, expressed the firm view that the ICAC could expose corrupt conduct while protecting reputations solely through the use of private proceedings. His Honour put it thus:

“I have come to the view that the proceedings of the ICAC should be in private. That does not prevent the exposure of found corrupt conduct at the end of the investigation and the referral to prosecuting authorities. It will prevent the undeserved trashing of reputations and will still permit a proper focus and a fairly managed forensic process, without the distraction of the temptation for flamboyance or theatre. The exposure of corrupt conduct after such proceedings will be in a more brilliant and clear light rather than in any part exposure merging out of the darkness, the shadows into an occasional entr’acte”.

On 26 June 2003, the then Shadow AttorneyGeneral, Mrs CL Edwards, when debating unrelated legislation (Prostitution Control Bill 2003), said that:

“The various models of corruption commissions that have been considered have shown that the personalities of the chairman of these commissions can determine the sorts of matters that are made public.” To make good that proposition one needs to only look at, for example, the statistics published in NSW ICAC Annual Reports comparing the years the Honourable David Ipp was Chairman to others. Similarly, there is a noticeable difference between the ratio of public and private hearing days in the Hammond/Roberts-Smith years of the CCC compared to the last 7 years under the guiding hand of the Honourable John McKechnie.

What is heard in public and what is heard in private cannot be left to the personalities of the Chairpersons from time to time. The fact that, for my part, one can say with confidence that the events described in Julian’s book will not be repeated during the term of the current Commissioner, provides little comfort for the future.

Let there be no doubt that when the events the subject of Julian’s book were unfolding, the then Commissioner, The Honourable Len Roberts-Smith, well knew the importance of reputation and that it is “easily crack’d, and never well mended”. In 2008, the Commission commenced proceedings against the Parliamentary Inspector of the Corruption and Crime Commission, Malcolm McCusker AO QC. The Commission had previously published a report entitled “Report on the investigation of alleged misconduct concerning Mr Stephen Lee, Mayor of the City of Cockburn”. The Parliamentary Inspector, has produced his own report which was highly critical of the Commission’s report. An advanced copy was provided to the Commission on 17 December 2008, a draft executive summary of the report having been provided on the 15th. In the afternoon of 17 December, the Commission wrote to the Parliamentary Inspector requiring further time within which to respond. The Parliamentary Inspector replied on the morning of 18 December indicating that he considered the Commission had had sufficient time to respond and observing that the Parliamentary Inspector was not prepared to delay the tabling of his report any later than 4:00pm on Tuesday 23 December 2008.

So what did the Commission do? It made an urgent ex parte application to the Supreme Court to restrain the Parliamentary Inspector from carrying out his statutory duty of reporting to Parliament. The application was heard that afternoon by the then Chief Justice, Wayne Martin. Stephen Hall SC (as his Honour then was and who acted as Counsel Assisting the Commission in the “Smith Beach” and “Lobbyists” Inquiries) appeared for the Commission. The Chief Justice was scathing of the Commission for having sought such orders without first giving notice to the Inspector. In that regard his Honour concluded “I can therefore see no justification whatever for having proceeded without notice to the Inspector in this case”. Whilst an application without notice to a statutory Inspector is bad enough, the basis upon which the urgent application was based is nothing short of gobsmacking. Remarkably, the Commission argued that it wanted to restrain publication of the report because “damage will be caused to the reputation of the Commission which can never be restored”!

The Martin CJ, with respect correctly, observed that in fact there was another reputation at stake, namely the person whose reputation had been damaged by the Commission’s report in the first place. At [17]-[18], the Chief Justice said this:

“There is another matter that I should mention, and that concerns the interests of others who are affected by these proceedings. As I have mentioned, the matters in respect of which relief is sought go to a report which has been published by the Commission into the conduct of Mr Stephen Lee, the Mayor of Cockburn. The basis upon which the relief is sought is because the draft report of the Inspector would cast doubt upon the validity of the adverse opinions expressed by the Commission in its report relating to Mr Lee.

The relief sought by the Commission would therefore prevent publication of the Inspector’s report – that report would go some way towards addressing and perhaps restoring to some extent the reputation of Mr Lee in the light of the previously published report of the

Commission. The relief that is sought by the Commission would have an adverse impact upon Mr Lee.” In the end, the Chief Justice dismissed the application, not only because the Parliamentary Inspector had not been given notice of it, but because the balance of convenience did not favour it, including by reason of the fact that any diminution in the reputation of the Commission, being a statutory body and not a natural person, was in large part outweighed by the interests of Mr Lee, a natural person, having his reputation partially restored. The theoretical arguments in favour of public hearings are far outweighed by the human toll of doing so. The system needs to be changed now so that there is simply no possibility of whomever comes to control CCC in the future holding public hearings through which the reputations of innocent people are damaged, let alone destroyed. It is bad enough that the CCC can, by a report, damage the reputations of people. However, at least at that stage all of the evidence has been heard by the Commission and an opinion formed. That is not the case during the hearing phase of an inquiry. It is my sincere hope that the publication of Julian’s book will, as it has with me, once again put in sharp focus how the human toll of public hearings is too high a cost for the perceived benefits of the CCC operating and being seen to be operating in public.