Malcolm Turnbull has elevated questions over Peter Dutton’s eligibility to sit in parliament as a central concern in the Liberal leadership struggle, saying the issue must be resolved before Dutton could become prime minister.
Turnbull announced the solicitor general is now expected to provide advice by Friday morning ahead of a party room meeting at noon, so that Liberal MPs know whether Dutton’s childcare business interests might disqualify the leadership challenger before a vote.
“This is a very, very significant point,” Turnbull told reporters on Thursday. “I cannot underline too much how important it is that anyone who seeks to be prime minister of Australia is eligible to be a member of parliament.”
A minister who is not eligible cannot validly exercise their powers, he warned.
Turnbull said that the advice “may impact” on Dutton’s decision to run and, if he were to win, Dutton would “have to establish that he is eligible to sit in the parliament” before the governor-general appointed him prime minister.
“I hope the solicitor-general deals with this very conclusively and clearly and it won’t be an issue at all.”
Regardless of the solicitor-general’s advice, Dutton’s eligibility can only be determined by the high court or the lower house itself. Since the lower house has now adjourned until 10 September there is no prospect of a referral before the Liberal party room showdown. However, the solicitor general’s advice may still sway votes in the ballot.
Earlier, Labor released advice by barrister Bret Walker SC arguing the “preferable argument” is that Dutton is ineligible because he may have an “indirect pecuniary interest” in an agreement with the commonwealth.
After Labor released its advice Dutton dismissed what he called “a spurious and baseless campaign” against him, questioning its “timing on the eve of current events” as he launched a second bid in a week for the Liberal leadership.
Dutton also released his two-page legal advice which he claimed showed “there has never been any doubt about my eligibility to sit in the parliament”.
On Thursday morning Labor called a vote in the House of Representatives to refer Dutton to the high court, narrowly losing 69 votes to 68 with crossbench MPs Adam Bandt, Rebekha Sharkie, Cathy McGowan and Andrew Wilkie supporting the move.
Labor’s advice says Dutton is a beneficiary of the RHT Family Trust, which operates the Camelia Avenue childcare centre and receives childcare subsidies from the department of education and training.
There is no suggestion the businesses received preferential treatment of any kind but the lack of cases testing the limits of section 44(v) leaves it unclear whether ordinary federal subsidies paid to childcare centres could put Dutton in breach.
The advice is dated 18 April 2018, indicating that Labor was aware of the circumstances that give rise to Dutton’s constitutional issue long before the story first broke on Monday, the day before the former home affairs minister’s unsuccessful tilt for the Liberal leadership.
The advice argues that although payment of childcare subsidies is not a “contract”, it is “an agreement” in which Dutton has a “pecuniary interest”.
Labor’s advice concedes that it is not clear from Dutton’s pecuniary interest register whether he is entitled to payments from the trust for activities related to the Camelia childcare centre and proceeds on the assumption that nothing prohibits him from receiving payments. It notes the trustee company has only one shareholder, Dutton’s wife.
The advice notes that four judges in the precedent case in which Bob Day was disqualified from the Senate found being the beneficiary of a trust does not provide a sufficient degree of separation to escape the disqualification.
The legal opinion concludes that it is arguable Dutton was not eligible to have been elected and to sit in the 45th parliament, even stating it is the “preferable argument”.
“If this matter were referred to the high court ... and if our assumptions are correct, there is a reasonable prospect that the court would make its decision in accordance with this conclusion.”
Dutton’s legal advice – by Guy Reynolds SC – conceded that payments were made by the commonwealth to the trustee of the RHT Family Trust, of which Dutton, his wife and children are beneficiaries. The advice was written in December 2017, before changes to how childcare subsidies are paid came into effect in July.
Reynolds said that payments to childcare centres “are not paid pursuant to any contract with these entities” and therefore there is not “agreement” with the trustee.
“The only relevant rights which are created are a species of statutory entitlement,” he said. “Accordingly, Mr Dutton cannot have a pecuniary interest in an agreement within the meaning of section 44(v) by virtue of the trustee company’s receipt of payments under this statutory scheme.”
Constitutional law experts Anne Twomey and George Williams have both said that there is an arguable case that Dutton is in breach of section 44(v) of the constitution.
After the release of Labor’s advice, Williams said it is “clear” Dutton should be referred to the high court.
“There is a real prospect that a person seeking to be our [prime minister] has breached section 44 of the constitution and is disqualified from parliament,” he said.
