The case of Director of Public Prosecutions (Cth) v Keating [2013] HCA 20 concerns the construction of s 4.3(b) of the Criminal Code 1995 (Cth) ("the Code") with regard to retrospective legislation, and the elements of offences relating to social security fraud under s 135.2 of the Code. The decision is also important for the way in which it treats provisions in other statutes that are meant to operate with the Code offences.
Facts
The defendant, Keating, was charged under the the Code, s 135.2(1), for failing to report increases in her income during the period she was receiving the Parent Payment Single (more commonly known as the Single Parent Pension, the payment received by single parents to assist in caring for their children): at [2]. Section 135.2(1) makes it an offence for a person to engage in conduct that involves deriving a financial benefit from the Commonwealth (physical element), and they know, or believe, they are not eligible to receive that advantage (mental element).
The case also concerned the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”), s 66A, which was inserted by Social Security and Other Legislation Amendment (Miscellaneous Measures) Act 2011 (Cth) (“the Amendment Act”) to overcome the decision in Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 (upheld by the High Court in Commonwealth Director of Public Prosecutions v Poniatowska (2011) 244 CLR 408; [2011] HCA 43), where the Full Court of the Supreme Court of South Australia decided, “the use of the expression "engages in conduct" in s 135.2(1)(a) did not overcome the requirement that the conduct charged must be the omission of an act that a person is under a legal duty to perform”: at [3], citing Poniatowska at 584. Section 66A purports to impose just such a legal duty by requiring a person in receipt of a social security payment to inform the Department (“Centrelink”) within 14 days after an “event or change or circumstances occurs that might affect the payment of that social security payment”. The Amendment Act, Sch 1, Item 3 provides that s 66A, "applies in relation to an event or change of circumstances that occurs on or after 20 March 2000". The charged offences were committed between May 2007 and September 2009: at [6].
The Case
The Commonwealth Director of Public Prosecutions (“CDPP”) contended that by reason of s 66A of the Administration Act, Keating was under a legal duty to inform Centrelink of her change in financial position. As she did not, s 4.3(b) of the Code was engaged: at [7]. Section 4.3(b) states, “An omission to perform an act can only be a physical element if: (b) the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform.” (emphasis added).
Keating challenged the application of s 66A to her case on the grounds that s 135.2(1) requires the person be subject to the duty at the time of the omission: at [8]. Alternately, she contended that the retroactive function of s 66A was “a usurpation of or interference with the judicial power of the Commonwealth contrary to the separation of powers for which the Constitution provides”: at [8]. Both arguments rested on the fact that the provisions imposing the duty did not exist at the time she committed the omissions and therefore she should not be held liable.
The CDPP also alleged, in the alternative, that Keating failed to comply with “information notices” under the social security law, by not providing the correct financial information to the Department: at [9]. These notices are those issued to recipients of social security payments, relevantly here, requiring recipients to notify Centrelink of changes in their financial status. Under s 74(1) of the Administration Act it is an offence for a person not to comply with such a notice. Keating disputed that s 74 imposes such a duty for the purposes of liability under the Code: at [9].
The “Information Notices”
Keating was firstly issued a notice under s 67(2) of the Administration Act when her claim for the PPS was granted, and further notices under s 68(2) at various intervals: at [17]-[30]. Each notice required, “the person to inform the Department [Centrelink] if a specified event or change of circumstances occurs, or if the recipient becomes aware that a specified event or change of circumstances is likely to occur”: at [13].
Keating argued that an act required by an information notice is not “an act” under s 4.3(b) of the Code because:
- “[A] legal duty to act must be certain and it is unclear when the duty under an information notice arises and when it ceases”;
- “[T]he duty is "qualified" in that it does not apply to the extent that a person is incapable of complying with the notice, and does not apply to a person who has a reasonable excuse for non-compliance”; and,
- “The creation of the lesser offence under the Administration Act for a failure to comply with an information notice is inconsistent with the same conduct attracting criminal responsibility for the more serious offence under the Code.” (at [34]).
In answer to the first argument, the court (French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ) held that the duty was not unclear, but was rather a factual question depending upon the content of the notices: at [37]. In addressing the second and third arguments it held that, simply because the offence under s 74(1) of the Administration Act was lesser than that under s 135.2(1) of the Code, it did not amount to an inconsistency between the statutes. Although an offence under s 74(1) may constitute an element under s 135.2(1), the two offences contain different elements and thus, one cannot “subvert” the other: at [36]. It did however note that a conviction under s 135.2(1) may bar a subsequent prosecution under s 74(1): see Pearce v The Queen (1998) 194 CLR 610 at 616-620; [1998] HCA 57 at [18]-[28]. Therefore, the information notices were capable of creating a legal duty for the purposes of s 4.3(b); a failure to comply with information notices does constitute an omission under s 135.2(1): at [39].
Section 66A
The court held that the CDPP’s construction of s 66A of the Administration Act created “a statutory fiction with the effect of attaching criminal liability to the defendant for her failure to advise the Department of an event within 14 days of its occurrence”: at [46]. While the Parliament is within its power to impose such liability, to do so “[a] clear statement of legislative intention is required”: at [47]. To this end, the CDPP pointed to the remedial purposes of the Amendment Act and the Explanatory Memorandum: at [40]-[41]. The CDPP further submitted that “the usual criticism” of retrospective penal legislation did not apply here as all relevant people would have been aware that they were under an obligation to inform “the Department of the specified events and changes of circumstances listed in the notices given to them by Centrelink”: at [42]. But the issue was not the construction of s 66A, rather the interpretation of ss 4.3 and 135.2 of the Code, which was not the subject of the Amendment Act: at [47]. The court focused on the tense used in s 4.3(b) – “there is a duty to perform.” Their Honours concluded, “Criminal responsibility under s 4.3 is confined to the failure to do a thing that at the time of the failure the law requires the person to do. The obligation is coincident with the failure to discharge it”: at [49] (emphasis added). In other words, the court looked to the traditional requirement of the criminal law that the physical element coincide with the requisite mental element. Unless both can be said to be present at the same time, then no offence can be committed. Therefore, the court held that s 66A did not create a legal duty at the time of the charged offences, and due to facts in issue regarding the receipt of these notices, further consideration of whether the duty had arisen was remitted to the Victorian Magistrates’ Court for determination: at [38], [52].
Conclusion
The decision raises two important points with regard to an offence under s 135.2 of the Code. The first is that the legal duty imposed by s 74(1) of the Administration Act will be sufficient to create a legal duty for the purposes of s 135.2(1). The second is that s 66A of the Administration Act must, in this case, be regarded as a nullity. The court has very strictly applied the rule of statutory interpretation that penal statutes, especially retrospective ones, will be construed narrowly. It is arguable in this case that the court applied the rule in contradistinction to the will of parliament, as the very reasoning behind the insertion of s 66A was to address the exact circumstance concerning Keating. Indeed, there was no doubt that the Parliament had indicated clearly that s 66A was to have retrospective operation. In this sense a clear legislative intention had been expressed, and the section should have been interpreted in accordance with the Acts Interpretation Act 1901 (Cth) which requires courts adopt a purposive approach to interpretation. Thus the presumption against retrospectivity was rebutted: see Maxwell v Murphy (1957) 96 CLR 261 at 267; R vKidman (1915) 20 CLR 425 at 451; DC Pearce and RS Geddes, Statutory Interpretation in Australia (7th ed, 2011) at [10.12]. Where it seemingly failed was that it was expressed in a different statute from the Code. However, it is axiomatic to suggest that these provisions are intended to function as a legislative scheme. A legislative scheme is where a number of statutes form a scheme, and thus are meant to work together to fulfil their legislative purpose. The principles applicable to the interpretation of statutes in schemes are well-known: Sweeney v Fitzhardinge (1906) 4 CLR 716 at 726; DC Pearce and RS Geddes, Statutory Interpretation in Australia (7th ed, 2011) at [3.39]. In Commr of Stamp Duties v Permanent Trustee Co Ltd (1987) 9 NSWLR 719 at 723-724, Kirby P (as he then was) stated that the preferred construction of statutes with provisions clearly intended to work together was to interpret them harmoniously with one another: “We should presume that Parliament intended its legislation to operate rationally, efficiently and justly, together.” This approach was applied by Kirby P in Abdi v Release on Licence Board (1987) 10 NSWLR 294 at 295; 31 A Crim R 436 at 437 in the criminal context. It should be noted that there were no citations in the judgment here of any of the cases Pearce and Geddes cite as being emblematic of this approach.
It is argued in light of the apparent legislative scheme here, the court should have construed the s 4.3(b) with s 66A, not simply cast the latter to one side. Were this other than retrospective penal legislation, the court may have held otherwise and adopted a harmonious construction. But, as this decision illustrates, where the parliament insists on passing legislation so offensive to common law principles, it should not be surprising that the courts will use all the interpretive tools at their disposal to redress it. In future, the Parliament will need to ensure that it is mindful of the legal background against which its laws will operate; and the foundations on which the common law and the rules of interpretation are based.
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