The High Courts decision in The Queen v Hughes has added to uncertainty concerning the enforcement of the Corporations Law. Although the Court upheld the power of the Commonwealth Director of Public Prosecutions in this case, it raises serious doubts for the future about the DPPs power in a range of other cases.
The decision follows the decision last year in Re Wakim, which removed most Corporations Law jurisdiction from the Federal Court.
The full ramifications of the Hughes decision are still being considered. However, it may also have implications for regulatory and administrative action under the Corporations Law.
Urgent legislative action is required to restore certainty to, and business confidence in, corporate regulation in Australia.
The current system of eight laws, even in the same terms, has produced complexity and legal uncertainty.
Justice Kirby said:
"It remains to be seen whether, in other factual circumstances, such defects will prove fatal to other prosecutions. Clearly, it is a fragile foundation for a highly important national law. The present accused fails in his challenge. But the next case may not present circumstances sufficient to attract the essential constitutional support. Early attention to the "novel legislative device" would appear to be prudent."
We agree.
The best way to achieve a more secure constitutional foundation is by an appropriate referral of power by the States to the Commonwealth. This would overcome the problems created by the decision in Re Wakim, and would reduce the vulnerability of the Corporations Law scheme to further constitutional challenges. In our view, it is the only way to secure a national, comprehensive and co-operative system of corporate regulation.
Commonwealth officers put a proposal for a referral of State power to their State counterparts last week. It is essential for this proposal to be finalised and implemented as a matter of the highest priority.