A majority of the full court of the High Court of Australia has upheld the decision of the New South Wales Court of Appeal that the Independent Commission Against Corruption (ICAC) has no power to conduct an inquiry into certain allegations made against a senior NSW Crown prosecutor, Margaret Cunneen SC, as the alleged conduct did not amount to ‘corrupt conduct’, as defined in the Independent Commission Against Corruption Act 1988 (NSW) (ICAC Act).    This is the first review of ICAC's powers by the High Court since its inception in 1989. This decision has implications for ICAC's jurisdiction when investigating the conduct of private citizens.  Following this decision, private citizens can only be investigated where their conduct has the capacity to affect the probity of a public official’s conduct.  The narrowing of ICAC's jurisdiction may have implications for past, current and future ICAC investigations.  It is possible that an entire investigation could be undermined if it included matters which are now assessed to be beyond ICAC's powers. 

'Corrupt conduct' is defined broadly in the ICAC Act.  Section 8(1) of ICAC Act relevantly describes corrupt conduct as conduct (whether or not by a public official) that adversely affects, or that could adversely affect, either directly or indirectly, the honest or impartial exercise of official functions by any public official. This was not considered by the High Court in this decision.  Rather, the focus of the High Court was section 8(2) of the ICAC Act which provides that "corrupt conduct" is conduct of any person (whether or not a public official) that: (a) adversely affects, or could adversely affect, the exercise of official functions by any public official; and (b) which could involve specified matters, including bribery, blackmail, fraud and relevantly here, perverting the course of justice. 

Cunneen was accused of advising a person to lie to the police following a car accident in order to avoid a breathalyser test.  This was the subject of an ICAC inquiry.  The alleged conduct did not concern the exercise of Cunneen's official functions as a Crown prosecutor, but her conduct in her personal capacity. ICAC contended that the alleged conduct was corrupt conduct because it could adversely affect the exercise of official functions by the investigating police officers and by a court that would deal with any charges arising from the motor vehicle accident, and amounted to perversion of the course of justice.  This goes beyond conduct that could 'corrupt' the conduct of a public official and extends to conduct that adversely limits or prevents the proper performance of the official's functions.  Cunneen commenced proceedings in the Supreme Court of New South Wales to stop the inquiry, seeking a declaration that the inquiry was beyond ICAC’s powers. The proceedings were initially dismissed.  An appeal was allowed by the New South Wales Court of Appeal. ICAC challenged the blocking of the investigation by taking the matter to the High Court, which unanimously granted special leave, but dismissed ICAC's appeal by a four-to-one majority. 

The definition of corrupt conduct in s 8(2) was held to be concerned with the probity, or integrity, of the exercise of official functions.  Corrupt conduct requires impropriety on the part of the public official.  This includes a public official acting dishonestly or impartially, acting in breach of public trust or misusing public information or material.  The High Court found that the alleged conduct was not conduct that could adversely affect the probity of the exercise of an official function by a public official.  The High Court rejected ICAC's argument that s 8(2) would be satisfied where conduct could adversely affect the efficacy, or effectiveness, of the exercise of official functions. This construction was considered too broad and would, if correct, extend to matters which have no connection with the ordinary understanding of corruption in public administration such as lying to a police officer.

After initially declining to comment on Monday 20 April 2105 ICAC issued a public statement about the High Court decision.  ICAC asserted that the narrow construction given to s.8(2) by the High Court will 'substantially damage' ICAC's ability to carry out its corruption investigation and corruption prevention functions.  ICAC will also be unable to investigate or report on several current operations, including Operations Spicer (which related to certain members of parliament concealing or not disclosing political donations or benefits in or prior to the 2011 NSW state election ) and Credo (which related to persons with an interest in Australian Water Holdings Pty Ltd seeking to obtain financial benefits from Sydney Water).

In its statement, ICAC declined to accept the 4-1 majority decision of the High Court on its powers, stating the decision is contrary to the legislative intention evidenced by the second reading speech of the ICAC Act in 1989, the analysis of that section in the McClintock review and the ordinary meaning of words. ICAC has made a submission to the NSW Government to amend s.8(2) to ensure that the section 'can operate in accordance with its intended scope and make any such amendment retrospective'.  This is an extraordinary request.

While the Premier of NSW refused to exclude any option and was seeking legal advice, the Office of the Inspector of the ICAC, retired Supreme Court judge David Levine QC, referred to ICAC's statement as a 'blustering statement by a poor loser'.  In the current political environment it would be surprising if any amendment to the ICAC Act was a priority for the newly re-elected NSW Government.

On 6 May 2015 the NSW Parliament, in a rare showing of bipartisanship, passed the Independent Commission against Corruption Amendment (Validation) Bill 2015, the effect of which is to validate all ICAC's findings prior to 15 April 2015, the date of the High Court judgment. The Bill also seeks to validate ICAC's actions to date in current inquiries.  It remains to be seen whether persons the subject of those findings now seek to challenge this legislation.