Consequences of Disqualification as a Senator on Votes and Payments

[Updated on 6 April 2017, to address the High Court findings in Re Day [No. 2] (2017) as well as other changes in circumstances since the original post].

With the High Court finding that Rod Culleton and Bob Day were each ineligible to contest the 2016 Senate Election, and thus ineligible to be elected and sit in the Senate during the 45th Parliament, and with Day disqualified from sitting as a Senator for several months in the previous Parliament, a number of questions arise as to the consequences of this decisions for their votes while sitting in the Senate, and the recovery of any payments made to them.

Similar questions arose with and following the High Court decision in Re Wood [No.2] in 1988, where Robert Wood was ruled ineligible to contest the 1987 Double Dissolution election.

Wood had been elected to the Senate for New South Wales as a Nuclear Disarmament Party candidate at the Double Dissolution election of July 1987. His election was immediately challenged by an unsuccessful candidate, Elaine Nile of the Call to Australia Party, on the grounds that he had previously been convicted of an offence and that he owed a dual allegiance as a Communist, evidenced by his protests against US navy ships entering Sydney Harbour. However, Nile’s challenge was unsuccessful and Wood took his place in the Senate.

After a few months as a Senator, Wood made an application for an Australian passport, only to find that he was not an Australian citizen – having emigrated to Australia with his parents 20 years earlier, and thereby (but only) entitled to the benefits of permanent residency conferred on British subjects who had arrived before 1984. On learning this he applied for Australian citizenship. On doing so, the Department of Immigration and Ethnic Affairs alerted the Senate to the application, and the Senate referred the matter to the High Court as the Court of Disputed Returns.

In May 1988, the High Court ruled that having not been an Australian citizen at the time of the election, Wood was ineligible to stand, and was disqualified from holding the seat.

Do the votes cast by “Senators” Culleton and Day during the periods they were ineligible to serve as Senators remain valid?

The High Court ruled that Rod Culleton was ineligible to contest the 2016 Senate Election, and therefore was ineligible to sit in the Senate for the entirety of his short lived career. Nevertheless during that time, he participated in 98 Senate Divisions and 30 Divisions when the Senate considered amendments in the Committee of the Whole.

With regards to Bob Day, the majority of the High Court ruled that he became disqualified from serving in the Senate from 26 February 2016, which was the day the lessor of his electoral office nominated a company with a business name and bank account owned by Day to receive the lease payments from the Commonwealth. He was subsequently ineligible to contest the 2016 Senate Election, and was disqualified from serving as a Senator following that election.

From 26 February to 2 November 2016 (when he resigned from the Senate), Day took part in 47 Senate Divisions and 24 Divisions in the Committee of the Whole across the 44th and 45th Parliaments.

So what are the consequences for these votes, and any legislation or vote of the Senate that depended on the vote of one or both of these Senators to be passed?

The authority on Senate proceedings, Odgers’ Australian Senate Practice, states that:

The presence in the Senate of a senator found not to have been validly elected or to be disqualified does not invalidate the proceedings of the Senate in which the senator participated.

In Vardon v O’Loghlin 1907 5 CLR 201 at 208, the High Court, per Griffith CJ, stated:

In the last case [being where an election is valid, save for a defect in the election of one or a few Senators] the return is regarded ex necessitate as valid for some purposes unless and until it is successfully impeached. Thus the proceedings of the Senate as a House of Parliament are not invalidated by the presence of a senator without title.

The High Court, in Re Wood No.2 at 162-3., restated the above from Vardon v O’Loghlin, going on to state that:

A de facto election and return are therefore ineffective to confer the legal status of senator on an unqualified person though of necessity the return must be treated as having some effect.

One “effect” being the validation of votes and proceedings of a Senate notwithstanding that one or more of its number was improperly in attendance in the course of proceedings for want of qualification to be elected.

Does a disqualified Senator have to repay their salary and allowances?

Wood’s disqualification in 1988 also gave rise to questions about his Senate salary, allowances and superannuation paid while he sat.

In August 1988, Wood reportedly made an effort to recover the contributions that had been made in his name to the Parliamentary Contributory Superannuation scheme whilst serving as a Senator, and had made comments on ABC radio to the effect that the government had “confiscated” his superannuation.

In answer to a question without notice from Senator Mal Colston, even then renowned for his interest in parliamentary entitlements, the then Minister for Finance, Senator Peter Walsh, told the Senate:

… the High Court declared his place vacant, which throws doubt on what entitlements Mr Wood might have had to a salary during the period-how should one put it-that he never was Senator Wood. I have asked my Department to seek legal advice about that matter and about the consequences of the High Court’s disqualification of him, including whether there is any legal obligation for him to repay the salary that he received and to which the court later said that he was not entitled.

Walsh told the Senate a week later that the Attorney General’s Department had advised:

You ask … whether the superannuation contributions credited to Mr Wood are legally refundable to him or whether the moneys, at law, are considered to be available to the Commonwealth.

The short answer is that the moneys are not refundable to Mr Wood.

The amounts paid to Mr Wood by way of parliamentary and electoral allowance were not, in the light of the High Court’s decision, properly payable to him. That is, because Mr Wood was never a properly elected Senator, the appropriation in s. 7 (13) of the Remuneration Tribunals Act 1973 that applies, among other things, to parliamentary allowances, never authorised the payments made to Mr Wood. Those amounts would be recoverable pursuant to the principle stated in Auckland Harbour Board v. The King … I understand however that the moneys deducted as contributions under the Superannuation Act from the moneys paid to Mr Wood as parliamentary allowances in fact have always remained in Consolidated Revenue. Moneys deducted under the Superannuation Act are paid to the Commonwealth (s. 13 (8)). No question of recovery of those moneys from Mr Wood therefore arises.

The principle, as stated in Auckland Harbour Board, is that:

The days are long gone by in which the Crown, or its servants, apart from Parliament, could give such an authorisation or ratify an improper payment. Any payment out of the Consolidated Fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced.

In December 1988, Walsh told the Senate that the options available to him were to take legal action to recover Wood’s salary payments, which had amounted to $40,000, or to use provisions of the Audit Act to forgive any real or notional debt to the Commonwealth. He said he had been minded to “let sleeping dogs lie” and use the latter option, until Wood had reportedly sought an Act of Grace payment for $4500 to cover the contributions to the Parliamentary superannuation scheme, threatening a Legal Aid funded challenge if this was not granted.

While Walsh said that he intended to pursue the matter, there is nothing further on the public record to indicate the outcome of this matter.

In early 2013, the Remuneration Tribunal Act, which covers the payment of salary and allowances to Members of Parliament, was amended by the Gillard Government, to put the appropriation for MPs salaries on a surer footing after the successful challenge to the Commonwealth’s expenditure powers in the Williams “school chaplains” case, especially as it related to payments otherwise made ultra vires.

These amendments, made upon the passage of the Financial Framework Legislation Amendment Bill (No. 2) 2013, also made payments that were purported to be made under the Act, but were not authorised by the Act (as in the case of a disqualified Member or Senator) a “recoverable payment” for which the Government can take action in a competent court, or deduct it from any other “benefit” to which the person is entitled. The Commonwealth has to prepare an annual report of such recoverable payments.

Similar amendments were proposed to be made to the Parliamentary Entitlements Act, which covers the additional workplace expenses of Members of Parliament such as office and travel, as part of the Abbott Government’s first Budget. In October 2014, the Parliamentary Entitlements Legislation Amendment Bill was introduced, which would have had the effect of creating recoverable payments in respect of entitlements, including a loading of 25% on travel claims. However, this legislation was held up in the Senate, and lapsed with the dissolution of the Parliament in 2016.

In February 2017, responding to, among other things, the resignation of Sussan Ley as Minister for Health for an alleged breach of the conditions of her travelling allowance, the Parliament quickly considered and passed the Parliamentary Entitlements Legislation Amendment Bill 2017. Among the provisions of this bill was an amendment to the Parliamentary Entitlements Act to make expenses and allowances paid ultra vires “recoverable payments”, in a similar fashion to that for salaries. However, the situation is complicated here by the fact that some of these expenses, such as travel, might be incurred by a person who is not the MP, such as a spouse or a staff member. In respect of third parties who are not staff, the amendments make such a payment the liability of the MP.

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