“Serious corrupt conduct” – the ACT Supreme Court weighs in

Integrity and anti-corruption commissions play an important role in identifying and calling out inappropriate behaviour involving government bodies or actions. As part of undertaking any investigation and preparing the resulting report, these commissions are required to form a view about what is and is not corrupt conduct, and serious or systemic corrupt conduct. Given many inquiries are conducted in private and the resulting findings may never be publicly known, it is notable when Courts become involved and provide public guidance on what is “corrupt conduct”.

Last week, the ACT Supreme Court provided clarification on the meaning of “serious corrupt conduct” in the Integrity Commission Act 2018 (ACT) (IC Act)[1]. Importantly, the Court concurred with the approach taken to date by the ACT Integrity Commission (Commission) in its published reports. This endorsement should reinforce that the Commission is faithfully applying the law and that those findings of the Commission provide a clear guide to what conduct will and will not be “serious corrupt conduct” in the ACT.  

While the judgment also addresses a number of other technical issues, the key take away is that conduct can be “serious corrupt conduct” if it is corrupt conduct that has a real and not remote chance of threatening public confidence in the integrity of government or public administration. There is no requirement that the conduct must be serious, or that the threat is more likely than not. This is a relatively low bar and reinforces the need for government officials to be conducting themselves in a way that does not risk impacting the public confidence in the integrity of the government they serve.

Background

The former CEO of the Canberra Institute of Technology (CIT), Ms Cover, sought judicial review of a report by the Commission which found that she had engaged in “serious corrupt conduct” under the IC Act by:  

• deliberately concealing from the CIT Board and the responsible Minister key information regarding high-value contracts awarded to a consultant;[2]
• failing to disclose a ministerial letter raising concerns about value for money;
• omitting to inform the Board of the terms and existence of subsequent contracts; and
• not reporting critical warnings from the Minister’s Chief of Staff.[3]

The Commission concluded that this pattern of non-disclosure and concealment was intended to avoid scrutiny and prevent the Board from intervening in the procurement process, thereby posing a real risk to public confidence in the integrity of public administration.[4]

Ms Cover sought judicial review, that is, she sought to challenge the lawfulness of the Commission’s findings. One ground of Ms Cover’s judicial review application was that the Commission had misconstrued the expression "serious corrupt conduct" in s 10 of the IC Act.

Statutory Framework

When is “Corrupt Conduct” “Serious Corrupt Conduct”?

No additional “seriousness” element

Ms Cover argued that the word “serious” in the phrase “serious corrupt conduct” meant that the conduct needed to have a degree of “seriousness” that distinguished it from regular “corrupt conduct”.[10]  She argued that all behaviour that was “corrupt conduct” as defined would threaten public confidence in the integrity of government. Ms Cover was in substance arguing that unless an additional degree of “seriousness” was required, all “corrupt conduct” would be “serious corrupt conduct”.

The Court rejected that submission.[11] Justice Mossop held that “serious corrupt conduct” was a defined term and it is the definition which must be applied. There is no room to read in an additional requirement of “seriousness” when that is not one of the words used in the operative part of the definition.[12]

Behaviour will be “serious corrupt conduct” if it, firstly, meets the definition of “corrupt conduct” and, secondly, it is “likely to threaten public confidence in the integrity of government or public administration”.[13] No separate inquiry into gravity or culpability is required.

Meaning of “likely” to threaten public confidence

As part of considering a different ground of appeal, the Court was required to consider what “likely” meant in the context of the definition of “serious corrupt conduct”. Ms Cover was arguing that “likely” should be given a high threshold given the serious consequences of a finding that a person has engaged in serious corrupt conduct.

Justice Mossop found that “likely” means “a real and not remote chance or possibility”.[14] This is a lower standard than “more likely than not”.[15] The Court accepted that this meant that it was “easier” for the Commission to find that a person had engaged in serious corrupt conduct.[16]

Application to the facts and broader implications

The Commission had concluded that the CEO’s intentional concealment of ministerial concerns and multi-million dollar contracts from the governing board was “serious corrupt conduct” because it posed a real and not remote chance of threatening public confidence in ACT public administration.[17] Given the Court’s interpretation of the term “serious corrupt conduct” and its endorsement of the approach taken by the Commission, that conclusion was open to the Commission and there was no error of law.

It is unusual for integrity matters to be elevated to the Courts on judicial review and this decision provides helpful judicial authority and guidance on the assessment of serious corrupt conduct under the IC Act.  This judgment supports that a “lower” bar will be applied, with no extra requirement for the behaviour to be serious in nature nor for the potential threat to public confidence in the government to be any more than a real and not remote possibility. This decision gives the Commission greater discretion to make findings of “serious corrupt conduct”.

More broadly, the underlying investigation may lead to suppliers to government facing additional scrutiny. Operation Luna considered the appropriateness of (among other things) a contract that provided for large up-front payments for consulting services and where there had been repeat approaches to the market on a limited basis. In the face of this investigation and the observations made about these arrangements by the Commission, government departments are likely to be less willing to agree to such terms in the future.

Contact KWM

KWM’s specialist integrity, anti-corruption and inquiries team is available to assist, including delivering training on integrity issues as they emerge.