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JOINT MEMORANDUM OF OPINION

Re: Eligibility of Peter Dutton

to sit as a Member of the House of Representatives


18 April 2018

Maurice Blackburn Lawyers


Att: Ben Slade
Level 32, 201 Elizabeth St
Sydney NSW 2000

Bret Walker
Fifth Floor St James Hall
169 Phillip St
SYDNEY NSW 2000
DX 181 Sydney
maggie.dalton@stjames.net.au

James Mack
Level 22 Chambers
Level 22 No 52 Martin Place
SYDNEY NSW 2000
DX 222 Sydney
jmack@level22.com.au

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A Background

1. We are asked by Noah Carroll, National Secretary and Campaign Director, Australian
Labor Party National Secretariat to advise whether it is arguable that the purported
member of the federal electorate of Dickson, Mr Peter Dutton, is eligible to sit as a
member of the House of Representatives.

2. At some time before 9 June 2016 Mr Dutton nominated as a candidate for the electorate
of Dickson. Mr Dutton was subsequently declared elected as the member for Dickson for
the 45th Parliament. Section 44(v) of the Constitution renders any person who has a
requisite pecuniary interest in an agreement with the Public Service of the
Commonwealth incapable of being chosen or of sitting as a member of the House of
Representatives. On 12 October 2016 in his House of Representatives “Statement of
Registrable Interests to the 45th Parliament” (Interests Declaration), Mr Dutton
declared that i) he holds a “beneficial interest” as “beneficiary” in the RHT Family Trust
(Family Trust)1, and ii) the Family Trust has one trustee and is an entity known as “RHT
Investments P/L”.2

3. The Camelia Avenue Childcare Centre (Camelia Childcare) was registered as a business
name on 4 December 2014.3 The holder of this business name is “The Trustee for RHT
Family Trust”.4 The Department of Education and Training (DET) makes payments to
entities for child care benefit (CC Benefit) and child care rebate (CC Rebate). 5 The
aggregate amount of money paid by DET for CC Benefit and the CC Rebate in relation
to Camelia Childcare for FY1415, FY1516 and FY1617 was over $1.8 million, with only

1 The Interests Declaration declares an interest under the heading “Name of Trust” in the “RHT Family Trust”. We
have assumed for the purposes of this Memorandum that this trust is the same trust as the trust which RHT
Investments Pty Ltd is listed as being the trustee of for the purposes of the register maintained by the National
Childcare Regulator, see fn 15.
2 Mr Dutton has declared that the name of the trust he is a beneficiary of is the “RHT Family Trust (RHT

Investments P/L ATF)”, see item 2 of the Interests Declaration. The reference to “ATF” is taken to be an acronym
for “As Trustee For”. The reference to “RHT Investments P/L” is taken to be a reference to RHT Investments
(Qld) Pty Ltd ACN 092 284 270 ABN 89 092 284 270, being i) the entity Mr Dutton was, until 22 March 2010, a
director of, ii) the entity listed at Items 1 and 4 of the Interests Declaration under “spouse”, and iii) the entity listed
in Mr Dutton’s Alteration of Interests dated 29 November 2016 as being the trustee for the RHT Family Trust.
3 See register maintained by ASIC available at https://connectonline.asic.gov.au/RegistrySearch/ for Camelia

Avenue Childcare Centre ABN 88 536 567 159 accessed on 11 April 2018.
4 See the Australian Government Business Register “ABN Lookup” available at https://abr.business.gov.au for

ABN 88 536 567 159 accessed on 16 April 2018.


5 The CC Benefit and the CC Rebate will soon be replaced by a single means tested payment known as Child Care

Subsidy upon the commencement of the relevant provisions of the Family Assistance Legislation Amendment (Jobs for
Families Child Care Package) Act 2017 (Cth).

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~$242k being paid in FY1415 but with over $750k being paid in each of FY1516 and
FY1617.6 The DET continues to pay money in relation to Camelia Childcare in FY1718.7

4. The following issues arise, whether:

a. the funds received in relation to Camelia Childcare are received by the trustee of
the Family Trust (Part B);

b. the DET is relevantly “the Public Service of the Commonwealth” (Part C);

c. the arrangement pursuant to which money was received in relation to the Camelia
Childcare is an “agreement with the Public Service of the Commonwealth” (Part D); and

d. Mr Dutton has a pecuniary interest in the relevant sense in any such agreement
(Part E).

5. The resolution of these issues, for the reasons that follow, leads us to the conclusion that
that it is clearly arguable that Mr Dutton is not eligible to so sit in the 45 th Parliament and
potentially not eligible to have been chosen for the 45 th Parliament. We are of the view
that this is the preferable argument.

B Camelia Childcare

B.1 Camelia Childcare and the Applied Law Scheme for Education and Care Services

6. Camelia Childcare is situated in Everton Hills, Queensland and is described on its website
as a “family owned and operated centre offering families child care services for children
aged 6 weeks to 6 years.8 The legal regime governing the provision of child care services
is governed by, inter alia, i) an applied law scheme commonly referred to as the Education
and Care Services National Law whose “host jurisdiction” is Victoria9 and whose provisions
apply as a law of Queensland10 as a “participating jurisdiction” (hereafter the National
Law), ii) A New Tax System (Family Assistance) Act 1999 (Cth) (the Assistance Act) which
relevantly governs when an individual is “eligible” for Commonwealth Government
family assistance, and iii) A New Tax System (Family Assistance) (Administration) Act 1999
(Cth) (the Administration Act) which relevantly governs when an individual is “entitled
to be paid” Commonwealth Government family assistance. It will be necessary at times

6 Information produced under Freedom of Information request.


7 Ibid.
8 See Camelia Childcare website https://cameliaavenuechildcare.com.au/home/ accessed on 11 April 2018.

9 Education and Care Services National Law Act 2010 (Vic).

10 Education and Care Services National Law (Queensland) Act 2011 (Qld).

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to refer to the Assistance Act and the Administration Act separately however when it is
not necessary to do so they will be referred to as the Family Assistance Law.

7. The body which oversees the National Law is the Australian Children’s Education & Care
Quality Authority (National Childcare Regulator). The relevant local regulatory body
in Queensland is the Regulation, Assessment and Service Quality, Early Childhood and
Community Engagement, Department of Education and Training (the Queensland
Childcare Regulator). The National Childcare Regulator maintains a register of
“approved providers” 11 and a register of “education and care services”. 12 In order to
become an approved provider a person must make an application containing “prescribed
information”. 13 In relation to an approved provider, the prescribed information which a
non-individual must provide in an application includes, the “applicant’s name and any
trading or other name used by the applicant” and “documentary evidence of the legal
status of the applicant and its constitution”.14 In relation to centre-based services, the
prescribed information which an applicant must provide is the “applicant’s full name”,
“provider approval number”, “the name of the proposed education and care service” and
various other information relating to type of care and proposed number of children to be
cared for.15

8. The register maintained by the National Childcare Regulator states that Camelia Childcare
operates from 1-3 Camelia Ave, Everton Hills Qld 4053 and is approved for 91 places of
the service type “centre-based care”. 16 The provider name for this service is “RHT
Investments (Qld) Pty Ltd as Trustee for RHT Family Trust”. 17 The conditions on
approval of the “service” are stated as follows: “this service is approved to provide
education and care to children from birth to over preschool age, not including school

11 Section 266 of the National Law.


12 Section 267 of the National Law.
13 Sections 10 and 11 of the National Law.

14 Regulations15(a) and (d) of the Education and Care Services National Regulations. The note to regulation 15(d) lists as

an example of documentary evidence the “partnership agreement for a partnership”. It is likely that a trust deed
appointing a trustee of a family trust would suffice as a documentary evidence.
15 Regulation 24(a) of the Education and Care Services National Regulations.

16 Service Approval No SE-40002932. Provider Approval No PR-40002415. See National Register maintained by the

National Childcare Regulator https://www.acecqa.gov.au/resources/national-registers/services, accessed on 11


April 2018.
17 Provider Approval No PR-40002415. See National Register maintained by the National Childcare Regulator

https://www.acecqa.gov.au/resources/national-registers/services, accessed on 11 April 2018. We have assumed that


the RHT Investments (Qld) Pty Ltd is the same entity denoted in fn 2 above namely an entity with the ACN 092 284
270.

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children”. 18 Thus, it is important to maintain a distinction between the “service” and the
legal entity which “provides the service”. For the purposes of the National Law it is
useful to conceive of Camelia Childcare as a service, being a “centre-based education and
care” service for the education and care of not more than 91 children who are not school
children. Further, for the purposes of the National Law, the legal entity which provides
this service is “RHT Investments (Qld) Pty Ltd as Trustee for RHT Family Trust” which
was approved to provide the services on 1 December 2014.

9. A distinct provider with a separate provider number is registered to provide a centre-


based care service at 2041 Gympie Road, Bald Hills Qld 4036 under the name of Bald
Hills Child Care Centre. The registered provider of this service is RHT Investments
(QLD) Pty Ltd which was approved to provide this service on 15 November 2010.19 Mr
Dutton is not a shareholder in RHT Investments (QLD) Pty Ltd and ceased to be a
director and secretary of RHT Investments (QLD) Pty Ltd on 22 March 2010. 20 What
flows from the above is that RHT Investments (QLD) Pty Ltd provides child care
services in two capacities. First, in its own capacity as an approved provider of approved
services at the Bald Hills Child Care Centre. Secondly, in its capacity as trustee of the
Family Trust, as an approved provider of approved services at Camelia Childcare.

B.2 Camelia Childcare and Family Assistance Law

10. As stated above the legal regime for child care services includes the provision of
Commonwealth Government assistance to certain individuals. To understand the
Commonwealth component of the regime, regard must be had to the interlocking
operation of two Commonwealth statutes which, as above, are i) the Assistance Act
which relevantly governs when an individual is “eligible” for assistance and ii) the
Administration Act which relevantly governs when an individual is “entitled to be paid”
assistance. The assistance provided by the Commonwealth Government relevantly
includes the CC Benefit and the CC Rebate. The payments made on behalf of the
Commonwealth in relation to the CC Benefit and the CC Rebate are administered by the
DET. The CC Benefit is usually paid to an “approved child care service”. An individual

18 Service Approval No SE-40002932. Provider Approval No PR-40002415. See National Register maintained by the
National Childcare Regulator https://www.acecqa.gov.au/resources/national-registers/services, accessed on 11
April 2018.
19 Provider Approval No PR-00001186. See National Register maintained by the National Childcare Regulator

https://www.acecqa.gov.au/resources/national-registers/services, accessed on 11 April 2018.


20 See ASIC Current and Historical Company Extract for RHT Investments (Qld) Pty Ltd ACN 092 284 270.

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can elect to have the CC Rebate paid to them directly or paid to an “approved child care
service”.21

11. Although the Administration Act speaks of payment being made to an “approved child
care service”, an approved child care service is not a legal entity and the true position is
that the payment is made to an “operator” of an approved child care service. The
Administration Act does not define the term “operator”. However, it is clear from s 195A
of the Administration Act that the “obligation imposed by the law on an approved child
care service is taken to be imposed on the person operating the service”. It is also a
condition of continuing eligibility under the Administration Act that the “operation of the
service” and the “provision of care by the service” comply with all requirements imposed
by other laws, which would include the National Law. 22 Moreover, the Explanatory
Memorandum for the bill which introduced s 195A notes that “the operator of the
service is the person on whose application (under section 194 of the Family Assistance
(Administration) Act) the service was approved for the purposes of the family assistance
law.”23

12. The matter is put further beyond doubt by the designated form which must be completed
and approved before the CC Benefit can be paid to an entity.24 This form references s 194
of the Administration Act which provides a “person who operates [a relevant service may
apply for approval]” and relevantly states that a person who can be an applicant includes
“the Trustee(s) of a Trust” and a “trustee company”. 25 The form also notes that once a
service is approved, the applicant must continue to operate the approved service and that
“a payment made under the Family Assistance Law to the service is generally paid to the
person operating the service. The person operating the service is legally responsible for
ensuring any payment made to the service and the Family Assistance Law is used for the
purpose for which it is made”. Further it states (original emphasis):

“IMPORTANT: The applicant must be the same legal entity that has received Provider Approval
from the relevant State or Territory Regulatory Authority. The full legal name of the applicant must

21 Section 65EAAAA of the Administration Act.


22 Section 196 of the Administration Act.
23 Explanatory Memorandum Family Assistance Legislation Amendment (Child Care) Bill 2009; see also the

definition of “audit team” which is “an audit of an operator of an approved child care service, means the expert
engaged to carry out the audit of the operator”.
24 Application form under section 294 of the Administration Act available at
https://docs.education.gov.au/documents/child-care-service-approval-online-application-form accessed on 11 April
2018. This version of the form was created 26 February 2014 and modified 7 September 2016. We have assumed
that a relevantly similar form was completed for Camelia Childcare.
25 The “Required Documents” for the application states to the effect that if the operator/provider is a trust deed, the

operator/provider is required to supply the “trust deed”.

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be the same as that specified on the Provider Approval Certificate. The ABN should also match the
ABN of the legal entity that applied for approval to the relevant State or Territory Regulatory
Authority”.26
13. It flows from the above that, in all likelihood, because the trustee of the Family Trust,
namely RHT Investments (Qld) Pty Ltd, is the “approved provider” of the “approved
service” at 1 – 3 Camelia Avenue, Everton Qld under the National Law, it is the entity
which receives any CC Benefit payments made on behalf of the Commonwealth under
the Family Assistance Law in relation to the services provided at that location.

B.3 Payment of CC Benefit to the trustee of the Family Trust

14. To be entitled to the payment of the CC Benefit under the Administration Act an
individual must first be eligible under the Assistance Act. The starting point for
determining if an individual is “eligible” is Div 4 of Pt 3 of the Assistance Act which is
entitled “Eligibility for child care benefit”. This Division introduces the concept of
“conditional eligibility”. In summary, an individual is conditionally eligible for the CC
Benefit in relation to a child, if the child meets certain basic criteria relating to age,
custody and residency.27 The concept of “conditional eligibility” is also deployed in s 50F
of the Administration Act which requires the Secretary to make a determination that a
claimant is conditionally eligible under s 42 of the Assistance Act. Section 50F of the
Administration Act operates in conjunction with s 48 of the Assistance Act which obliges
an “approved child care service” to notify the Secretary if an individual enrols a child for
care by the service 28 and to provide a weekly report to the Secretary about the care
provided to the child.

15. Only when the report is given and a determination has been made under s 50F will the
Secretary calculate the amount by which the fees charged by the service will be reduced. 29
This reduction will be calculated by reference to Schedule 2 of the Assistance Act which
in effect provides for the means testing of the CC Benefit, such that the CC Benefit is
only payable to individuals who meet the relevant income threshold requirements. A
further restriction on the amount of CC Benefit which is to be paid is that the amount
paid must not exceed the amount the service would have charged the individual. 30

26 Application form under section 294 of the Administration Act available at


https://docs.education.gov.au/documents/child-care-service-approval-online-application-form accessed on 11 April
2018.
27 See reference to FTB child in s 42(1)(a), the definition of FTB child in ss 3 and 22 of the Assistance Act.

28 See reference to FTB child in s 42(1)(a), the definition of FTB child in ss 3 and 22 of the Assistance Act.

29 Sections 48(3) and s 50J of the Administration Act.

30 Section 71(a) of the Assistance Act.

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However, no “ceiling” is placed on the amount of fees which can be charged for a service
for which the CC Benefit is payable.31

16. It is not clear from the materials briefed what services, as a matter of Family Assistance
Law, the Camelia Childcare service is approved to provide. It is also not clear what
component of the aggregate amount of payment made by the DET in relation to the
Camelia Childcare service is CC Benefit. It is clear that as a matter of National Law, the
Camelia Childcare service is approved to provide centre based child care services to up to
91 places. It is reasonable to assume that some of the 91 care places are taken up by
individuals who claim the CC Benefit. We have thus assumed that some component of
the aggregate $2,025,559.91 paid on behalf of the Commonwealth in relation to the
Camelia Childcare service includes payment for the CC Benefit. In our opinion, it is
reasonable to conclude that the CC Benefit component of the aggregate amount was paid
on behalf of the Commonwealth to the trustee of the Family Trust, namely to RHT
Investments (Qld) Pty Ltd.

B.4 Payment of CC Rebate to the trustee of the Family Trust

17. The critical difference between the CC Benefit and the CC Rebate is that the CC Rebate
is not means tested. The Explanatory Memorandum to the Family Assistance Legislation
Amendment (Child Care Rebate) Bill 2011 (Cth), gives the relevant history to the CC Rebate:

The CCR is a separate payment that provides assistance for working families who use approved child
care by covering half of all their out-of-pocket fees (after CCB), up to a maximum limit per child per
year. To be eligible for the CCR families must have used approved child care and met the work,
training, study test and be eligible for CCB. CCR is not income tested, and eligibility for CCB includes
families who are entitled to CCB at the zero rate due to income.
CCR was introduced to assist families meet their out-of-pocket child care expenses and it is paid
directly to families’ bank accounts. From July 2008, the CCR was increased from 30 per cent to 50 per
cent of child care out of pocket costs and from a maximum of $4354 up to $7500 per child per year.
At that time, the Government also gave families the capacity to elect to have their CCR paid quarterly
instead of annually to ensure families receive the assistance closer to the time they incur their child
care expenses.
18. The current legislative regime provides that an individual can be paid the CC Rebate
either weekly, quarterly or annually. If an individual is paid weekly they can elect for it to
be paid either directly into their bank account or to an approved child care service.32

B.5 Camelia Childcare and its trustee

31 Contrast with the restrictions placed on the “special childcare benefit” and the “grandparent childcare benefit” -

see paragraph [23].


32 Section 65EAAAA of the Administration Act.

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19. There are distinct legal duties which attach to RHT Investments (QLD) Pty Ltd in its
capacity as a provider and operator of the Bald Hills Child Care service on the one hand
and in its capacity as provider and operator of the Camelia Childcare service as trustee of
The Family Trust on the other. The primary document which will define the scope and
tenor of the trustee duties is the trust instrument which creates the Family Trust which
we have not been briefed with but was required to be provided to the Commonwealth as
part of the approval process under the Family Assistance Law regime. 33 That the trust
instrument does not prohibit distributions to Mr Dutton is a reasonable assumption to be
made on the basis of the Interests Declaration. This Memorandum proceeds on the
assumption that the trust instrument also does not prohibit distributions being made to
Mr Dutton for activities related to Camelia Childcare.

20. The operation of trust principles make it possible to say something further about the
nature of the duties which RHT Investments (QLD) Pty Ltd is bound to perform in its
capacity as trustee of the Family Trust. First, it is under a duty to not mix the funds of the
Family Trust, such as the payments made by DET in relation to Camelia Childcare, with
its own funds, such as the payments made by DET in relation to Bald Hills Childcare
Centre.34 Secondly, it must act in the best financial interests of the beneficiaries 35 of the
Family Trust, one of whom is Mr Dutton.

C DET and Public Service of the Commonwealth

21. The Administration Act has at all times been administered by a Minister of State
administering a department of State which was established by the Governor-General in
Council pursuant to s 64 of the Constitution. Relevantly, between 18 September 2013 and
23 December 2014, and from 15 September 2015 to the present day, the Administration
Act was and is administered by the Minister of State who administered the DET.
Between 23 December 2014 and 15 September 2015, the Administration Act was
administered by the Minister of State who administered the Department of Social
Services.36 In Re Day No [2]37 it was not contested that the Department of Finance was

33 The “Required Documents” for the application states to the effect that if the operator/provider is a trust deed, the
operator/provider is required to supply the “trust deed”.
34 Jacobs’ Law of Trusts in Australia pp 17-20.

35 Cowan v Scargill [1985] 1 Ch 270.

36 We note that the information obtained pursuant to the freedom of information request states that payments from

FY14-15 to FY17-18 were made by the DET. It is not clear from the information whether any payments were
administered by the Department of Social Services.
37 Re Day [No 2] [2017] HCA 14; 91 ALJR 518; 343 ALR 181 (“Re Day [No 2]”).

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relevantly the Public Service of the Commonwealth. The Department of Finance was
administered by a Minister of State who administered the Parliamentary Entitlements Act
1990 (Cth). In our opinion, it is also beyond contest that the DET and the Department of
Social Services are the Public Service of the Commonwealth for the purposes of s 44(v)
of the Constitution.

D An “agreement” with the Public Service of the Commonwealth

D.1 Agreement and the Family Assistance Law

22. It is an offence to provide a child care service otherwise than in accordance with the
National Law. 38 However, there is no mandatory obligation requiring an operator to
comply with the Family Assistance Law in relation to the CC Benefit and the CC Rebate.
That is to say there is no requirement that an “approved provider” under the National
Law also be an “operator” under the Family Assistance Law. In order to be both, an
entity must elect to enter itself into the Family Assistance Law regime. The reasons why
an entity, such as RHT Investments (Qld) Pty Ltd in its capacity as the trustee of the
Family Trust, may elect to be an operator under the Family Assistance Law are inherently
commercial reasons and include:

a. that when an entity participates in the Family Assistance Law regime as an


operator, the entity enables individuals to receive benefits (namely the CC
Benefit) through the entity which an individual would not otherwise be able to
access. To put it another way, an entity’s potential client base is automatically
enlarged upon becoming an operator as it can offer its services to clients who
would otherwise not be able to afford the services offered by the entity, or at the
least the services offered by an operator become more affordable to more
potential clients;

b. the entity receives income from the Commonwealth which it would otherwise not
receive if it were not an operator;

c. the income, as a matter of practical commerce, contributes to the profit of a


company or more relevantly, the income contributes to the amount of surplus
income available for distribution by a trustee to the beneficiaries of a trust (such

38 Section 103 of the National Law.

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income being generated pursuant to a duty to act in the best financial interest of
such beneficiaries); and

d. the entity is able to secure cash flow and receivables by reducing the liability on
their clients to pay for the services rendered by the operator.

23. In order to obtain the above benefits and in order to become an operator under the
Family Assistance Law regime, it is incumbent upon an entity to comply with certain
conditions which are imposed by the Commonwealth in order to ensure the integrity of
the Family Assistance Law regime. The obligations have their source in the Family
Assistance Law. The designated application form requires that an entity undertake,
acknowledge and declare various matters as part of the application process. One of the
undertakings is to not charge a higher amount because the service is receiving benefits
such as the Special Child Care Benefit 39 and the Grandparent Child Care Benefit 40
however the undertaking does not extend to restricting higher amounts being charged on
account of receiving the CC Benefit. One of the acknowledgements is that “any breach of
the applicant’s undertaking and legal obligations may result in the imposition of sanctions,
including cancellation of service’s approval, as well as civil penalties and criminal
prosecutions”. Finally, the applicant must “declare” that the signatories are authorised to
act on behalf of the applicant and complete the form. In the context of a trustee, such
authorisation must have its source in the trust instrument.

24. The nature of the “undertaking/acknowledgment/declaration” is to be understood by it


being proffered voluntarily by an act of will by an applicant entity. This act of will both
permits and regulates the receipt of money from the Commonwealth. The act of will also
exposes the entity to the sanction regime of the Family Assistance Law if the undertaking
is breached. That sanction regime includes the cancellation of approval,41 the imposition
42 43
of civil penalties and criminal liability. The obligations and powers of the
Commonwealth executive government are only enlivened following the act of will of an
entity in submitting an application under s 194 of the Family Assistance Law. Once
enlivened, the entity is exposed to a myriad of obligations but is also entitled to be paid
the CC Benefit (and the CC Rebate if an individual so elects). If an entity wishes cease

39 Section 219BB of the Administration Act.


40 Section 219BC of the Administration Act.
41 Section 202 of the Administration Act.

42 Part 8C of the Administration Act.

43 Sections 3A and 188 of the Administration Act.

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being subject to such obligations and cease being entitled to such payments it must
ensure that any obligations under the Family Assistance Law are fulfilled. 44 Thus, there
can be said to be mutual obligations which inhere in an entity under the Family
Assistance Law on the one hand and also the executive of the Commonwealth on the
other. The existence of such obligations is the result of a specifically volunteered state of
affairs brought into existence by the act of will of the applicant entity.

D.2 An agreement – relevant authority

25. The arrangement for the payment of the CC Benefit and CC Rebate is clearly not one
which can be categorised as a contract. However, s 44(v) does not require there be an
interest in a contract, rather it requires there be an interest in an “agreement”. In
determining whether the relationship as between an entity and the executive organ of the
Commonwealth can be characterised as an agreement for the purposes of s 44(v) of the
Constitution in the context of the Family Law Assistance regime, a Court would likely
look to the intended operation of the provision. In Re Day [No 2] the plurality held:

[39] When regard is had to the terms of s 44(v), it is obvious that it is also concerned with the interest
that a parliamentarian might have in agreements with the Commonwealth. A conclusion that s 44(v)
has some purpose wider than the protection of the freedom and independence of parliamentarians
from the influence of the Crown is inescapable. That wider purpose can only be the prevention of
financial gain which may give rise to a conflict of duty and interest…
[48] It follows from what has already been said in these reasons that s 44(v) has a wider purpose than
that given to it by Barwick CJ in Webster. Its object is to ensure not only that the Public Service of the
Commonwealth is not in a position to exercise undue influence over members of Parliament through
the medium of agreements; but also that members of Parliament will not seek to benefit by such
agreements or to put themselves in a position where their duty to the people they represent and their
own personal interests may conflict. Recalling that s 44(v) should be construed in the context of the
Constitution as a whole, it may also be observed that this wider purpose is consistent with s 44(iv) of
the Constitution. That provision provides that a person who “holds any office of profit under the
Crown” or “any pension payable during the pleasure of the Crown” is incapable of being chosen as a
member of Parliament.
[49] A construction of s 44(v) which proceeds from an understanding that parliamentarians have a
duty as a representative of others to act in the public interest is consistent with the place of that
provision in its wider constitutional context. The representative parliamentary democracy, for which
the Constitution provides, informs an understanding of specific provisions such as s 44(v) and assists
in determining the content of that duty, which includes an obligation to act according to good
conscience, uninfluenced by other considerations, especially personal financial considerations. In R v
Boston, Isaacs and Rich JJ spoke of a parliamentarian having a “single-mindedness for the welfare of
the community”.
[50] More recently, it has been said that Parliament has important functions to question and criticise
government on behalf of the people and to secure accountability of government activity. This is not a
new idea. There can be no doubt that if personal financial interests were to intrude, the exercise of
those obligations would be rendered difficult or even ineffective.

44 Section 219P of the Administration Act.

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26. Other judges expressed similar sentiments. Gageler J noted that the following may be
examples of agreements caught by s 44(v):

[101] A postal note issued by the Postmaster-General’s Department under the Post and Telegraph Act
1901 (Cth), a bond issued by the Treasury under the Commonwealth Inscribed Stock Act 1911 (Cth),
or an agreement as to the amount of compensation constituting just terms following the compulsory
acquisition of land under the Lands Acquisition Act 1989 (Cth).
27. In a similar vein Nettle and Gordon JJ noted:

[260] History tells us that the nature and the form of a person’s dealings are not limited by experience
but by imagination. In particular, whether, as the Attorney‑General submitted, “agreement” is not
limited to “contract” but means “any agreement, arrangement or understanding”, or whether
“agreement” includes both executory and certain executed contracts, cannot and should not be
determined in this Reference. Each case will depend on its own facts. What can be stated is that s
44(v) does not extend to an “agreement with the Public Service of the Commonwealth” in which a
person has an “interest” unless, by reason of the existence, performance or breach of that agreement,
that person could conceivably be influenced by the potential conduct of the executive in performing
or not performing the agreement or that person could conceivably prefer their private interests over
their public duty.
28. Gageler J also agreed with Keane J that s 44(v) did not include agreements entered into
by the Executive Government of the Commonwealth “in the execution of a law of
general application enacted by the Parliament”.45 Gageler J went on to note that “at its
core lie agreements for the procurement of services or property negotiated and entered
into for or on behalf of the Commonwealth in the exercise of non-statutory executive
authority by officers of the Executive Government of the Commonwealth within a
Commonwealth department.”46 In light of these statements it is necessary to note two
matters. First, there is, in effect, a double layer of dense legal regimes which apply so as to
make the Family Assistance Law of very specific application. Secondly, the money paid
on behalf of the Commonwealth to an operator is not a payment which all persons are
entitled to and in that sense is separate from a payment in the nature of a tax rebate.

29. In our opinion, the arrangement pursuant to which the CC Benefit and CC Rebate are
paid does not fall within called “core” agreements however it is also not beyond the so
called “outer”47 limits of the notion. It is clearly arguable that the arrangement under the
Family Service Law for the payment of CC Benefit and CC Rebate is capable of being
characterised as an agreement for the purposes of s44(v) of the Constitution. Such an
argument is strengthened when one considers the nature of the
“undertaking/acknowledgment/declaration” outlined in paragraph [24] above and when

45 Re Day [No 2] at [102] and [199].


46 Re Day [No 2] at [106] per Gageler J.
47 Re Day [No 2] at [106] per Gageler J, [198] and [201] per Keane J and [260] per Nettle and Gordon JJ.

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one focuses on the wider purpose of s 44(v) being the prevention of financial gain which
may give rise to a conflict of duty and interest.

E Mr Dutton’s Interest

E.1 The Interests Declaration

30. The Interests Declaration is not clear. On the one hand Mr Dutton has declared an
interest in the Family Trust, whose appointed trustee is RHT Investments (QLD) Pty
Ltd. The nature of the operation of the trust is stated to be “Investment”. There are
various possible trust relationships. One is that a trustee, pursuant to a trust instrument, is
required to invest trust money and the main source of income is from investment activity,
such a trust relationship may sometimes be referred to as an “investment trust”. Another
is that a trustee, pursuant to a trust instrument, is required to engage in trading activity
and the main source of income is from trading activity, such a trust relationship may
sometimes be referred to as a “trading trust”. In either case, a trust instrument, defines
the nature of the beneficial interest. A beneficiary may be entitled to a certain proportion
of trust income, such a trust relationship is usually termed a “unit trust”. Alternatively, a
trustee may maintain a discretion as to the proportions of income which are to be
assigned to a beneficial interest, such a trust relationship is usually termed a “discretionary
trust”. If a discretion is available to the trustee, a beneficiary has a right to be considered
in the exercise of that discretion.

31. It is not clear from the description under the heading “nature of the operation of the
trust” in the Interest Declaration i) if the trust operates as an “investment trust” or a
“trading trust”, or ii) if Mr Dutton is entitled to a set distribution of the income of the
Family Trust, or iii) if Mr Dutton’s distributions under the trust instruments are subject to
the operation of the discretion of the trustee, or iv) if the trustee has in fact exercised a
discretion so as to assign income to Mr Dutton pursuant to the relevant trust instrument.
It is noted that Mr Dutton has not declared that he has “any other substantial source of
income”48 and that the explanatory notes relevant to the Interests Declaration, state that
“as a general rule of thumb, income over $1000 per annum might be notifiable”. 49

32. These matters are further confused by i) the “entity type” for the “Trustee for RHT

48 Item 10, Interests Declaration.


49 House of Representatives Statement of Registrable Interests Explanatory Notes, p. 6.

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Family Trust” being a “discretionary trading trust”, 50 ii) the “activities of the company”
RHT Investments (Qld) P/L are declared to be “Child Care/Investment” under item 4 of
the Interests Declaration,51 iii) the ambiguous descriptor provided by Mr Dutton under
52
“beneficial interest” which is stated to be “Beneficiary”, and iv) Mr Dutton’s
declarations of registrable interests to the House in the 44th Parliament which did not
include any reference to an interest in the Family Trust and were not amended at any
time, including in December 2014 (being the month in which RHT Investments (Qld) Pty
Ltd as trustee for The Family Trust was approved to provide the Camelia Childcare
service and also the month in which Camelia Childcare became a business name held by
the Family Trust).

33. There are three available assumptions relating to the nature of Mr Dutton’s interest in the
Family Trust: i) to assume that what Mr Dutton means when he describes his “beneficial
interest” as being a beneficiary is that he is the beneficiary of a “unit trust” and the trustee
is duty bound to make distributions to Mr Dutton, ii) to assume alternatively, that the
trustee has previously exercised and is expected to continue to exercise a discretion to
assign income of the Family Trust to Mr Dutton, or iii) to assume that the Family Trust is
a discretionary trust and Mr Dutton has not yet in fact received any income at any
relevant time. Whether these assumptions have any bearing on Mr Dutton in relation to s
44(v) is considered below. As stated above, we have already assumed that there is nothing
in the relevant trust instrument that prohibits distribution to Mr Dutton for activities
related to the Camelia Childcare; we should not be taken as expressing a view as to the
validity of this assumption.

E.2 A s 44(v) interest

34. The text of s 44(v) of the Constitution is “[any person who] has any direct or indirect
pecuniary interest in any agreement with the Public Service of the Commonwealth… shall
be incapable of being chosen or of sitting…” The issue of whether the interest a
beneficiary has under a trust could be an interest within the meaning of s 44(v) was
considered in Re Day [No 2], relevantly the plurality stated:

50 See Australian Business Register available at https://abr.business.gov.au/ for the Trustee for RHT Family Trust
ABN 88 536 567 159 accessed 11 April 2018.
51 This part of the Interest Declaration relates to the “registered Directorships of companies” and concerns Mr

Dutton’s spouse. It would appear from the foregoing discussion concerning the registers maintained by the National
Childcare Regulator that the operation of the RHT Family Trust could also fit the description of “Child
Care/Investment”.
52 The Explanatory Notes hyperlinked to the registrable interests from states.

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[62] Beneficiaries of a discretionary trust, which benefits from, or via its trustee is party to, an
agreement to which s 44(v) refers, may be considered to have an indirect pecuniary interest in an
agreement…
[75] No narrow view of the operation of s 44(v) can be said to be warranted by its terms, read
consistently with its purpose. The submissions for Mr Day read s 44(v) so as to require him to be akin
to a party to the lease before he could be said to have an interest in it. This gives no effect to the word
“indirect” or to the inferences to be drawn from the exception to s 44(v) about the types of interest
which are within its purview.
35. Gageler J also rejected the argument that because a beneficiary under a discretionary trust
is only a potential beneficiary they could not be said to have an interest within the
meaning of s 44(v). Relevantly his Honour held:
[91] There was nothing remote or unlikely about the funds generated from the rent to be paid by the
Commonwealth in the performance of its obligation under the lease flowing through Fullarton
Investments to B & B Day, either as loan repayments or as trust distributions, to the ultimate financial
benefit of Mr Day…
[116] Mr Day’s intention in setting up the contractual and trust relationships between Fullarton
Investments and B & B Day is highly probative of the way in which those relationships could
objectively be expected to have worked to benefit him in practice. Quite apart from the direction as to
the payment of rent, the structure he put in place resulted in Mr Day having an expectation of
benefiting in money or money’s worth from the Commonwealth performing its obligation to pay rent
under the lease through him obtaining either, or both, a reduction in the extent of his contingent
liability to NAB or a distribution from B & B Day as trustee of the Day Family Trust…
[118] The theoretical legal possibility that others might benefit has no bearing on the practical
commercial likelihood that Mr Day would benefit. The operation of s 44(v) of the Constitution is
concerned with the latter, not the former.
36. Keane J held that it was not necessary to resolve whether s 44(v) captures a so-called
beneficiary’s interest under a discretionary trust but observed:

[191] Accordingly, it is not necessary in this case to resolve any question as to whether the corporate
and trust structures established by Mr Day were apt to avoid the disqualifying effect of s 44(v). An
expectation of a gain or loss of money generated by a promise may exist without a legally enforceable
entitlement to payment of money. Given the constitutional context, it is enough that the person’s
pockets were or might be affected.
[192] The term “indirect” indicates that, here, regard may be had “to practical as well as legal effect”
so that a person has at least an “indirect” interest of a pecuniary nature in an agreement if the
agreement is such that it can give rise to an expectation of a monetary gain or loss if it is performed.
A person who has an expectation of a benefit dependent on the performance of an agreement is
naturally said to be indirectly interested in the agreement. As was said in Ford v Andrews such a person
is “interested” if he [or she] is not ‘disinterested’ in a pecuniary or proprietary sense.
37. It appears that in deciding Mr Day had a s 44(v) interest, four judges of the High Court
(Keifel CJ, Bell and Edelman JJ and Gageler J) considered and expressly rejected the
argument that the interest of a person as an object of a discretionary trust cannot be an
interest within s 44(v) of the Constitution. In our opinion, this is binding authority for the
proposition that such an interest can, in certain circumstances, be an interest within the
meaning of s 44(v). Thus, it would appear that even on the weakest of the assumptions
posed (i.e. that Mr Dutton has at most a hope of receiving income and the trustee at
relevant times has not in fact made distributions to Mr Dutton) that Mr Dutton’s interest
is capable of being characterised as a s 44(v) interest. This is supported by the “objective

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