The Panic Amendment

When Panthers’ legal team, led by Bernard Coles QC, decided to challenge the scope of the Temby Inquiry’s powers in the Supreme Court, Roger Cowan was uncomfortable.

I could see the sense in what the Club was doing, but from the start I was concerned that a successful outcome by the Club would be misinterpreted as a win for me. It was my strong belief that the result would actually mean very little to me.

There were two counsel assisting on behalf of the Department of Gaming and Racing (DGR): David Staehli was to focus on the allegations against Cowan and Vicki Hartstein’s brief covered issues relating to the Club.

The crunch came came to when Vicki Hartstein, counsel assisting the Inquiry, presented submissions proposing findings of improper conduct against several Panthers directors. The Club’s lawyers argued that such findings would exceed the powers conferred on the Inquiry by section 41X of the Registered Clubs Act 1976.

She submitted a report which criticised a number of people, especially some directors on the Panthers Board. It focused on the cancellation of an election for the Board, and on changes in the Club’s constitution that had, in effect, served to circumvent the Registered Clubs Act.

Panthers’ legal team, led by Bernard Coles QC and barrister Terrence Lynch, took their objection to the Supreme Court on 17^th August 2004.

On 8 October, Justice Hamilton in the Supreme Court ruled in the Club’s favour and made a direction restraining Ian Temby from making a finding of corrupt or other improper conduct by any person in respect of Penrith Rugby League Club.¹

Justice Hamilton’s decision took reputation into account. If a person is found corrupt after an inquiry, the label sticks. That person may later face court and be found not guilty on the basis of fuller evidence, yet a reputation has been permanently damaged.

Independent MLC Peter Breen cited the case of Nick Greiner, whom he calls ‘arguably the most honest Premier in the past 50 years’. Within hours of Ian Temby’s finding of corruption against Greiner, headlines blared: ‘Greiner Corrupt’. The subsequent overturning of the finding by the NSW Court of Appeal could never erase that headline.²

Throughout the Temby Inquiry the government appear to want the headlines.

Cowan had opposed the strategy of going to the Supreme Court, believing it would be of great benefit to the Footy Five and potentially damaging to him.³

In fact, if Vicky Hartstein’s submission had been adopted, from Cowan’s perspective it would have introduced one tiny element of justice into the whole nightmare, because her report was much kinder to him than it was to the Footy Five.

Vicky Hartstein was highly critical of the directors for not honouring agreements, for cancelling an election and for their action in instigating certain changes to the constitution of the Club. She contended that the directors had acted in self-interest, and not in the interests of the Club as a whole when they aborted the March 2002 election, and when they changed the constitution. She said they had a duty to take into consideration the promises they knew had been made to members of other clubs – promises they had authorised Cowan to make on behalf of the Club.

She was scathing in her criticism of the Footy Five in relation to broken promises to amalgamating clubs.

She dismissed the allegations by some of the Five that Cowan had misled the Board of Panthers, the members of Panthers or the members of other clubs. She acknowledged that his authority, granted originally by a resolution of the Board, to make offers to other clubs, had never been revoked, and that the terms of those offers were clearly set out in the memorandum of understanding for each club, all of which the Board also subsequently approved. She stated that Cowan and other members of senior management were genuinely concerned about the breaches but were overborne by the Board.

In fact, there was only one criticism of Cowan in the entire document.

She claimed that it was inappropriate that he, and others in the management team, had relayed information to the Board about the number of members who had voted.

Those who chose to misinterpret the decision of the Supreme Court and use it to continue the attacks on Cowan included Ron Mulock, the Minister for Gaming and Racing Grant McBride, and the director general of the DGR, Ken Brown. It remains unclear whether they actually believed what they were saying, or just echoing the sentiments of a government which needed to justify its actions. McBride would demonstrate his position on the matter very clearly by his skewed report to parliament on Temby’s final report. Cowan says they should have given it a bit more thought before jumping to such a silly conclusion.

Going to the Supreme Court was of no benefit to me. The whole purpose of the Inquiry was to rake around for any evidence that could be used to show that I was corrupt or dishonest. No Supreme Court ruling would ever change that.

If Temby had reported any evidence of corruption or dishonesty incriminating me, the department would have charged me before the ink was dried on his report. That was the whole purpose of the exercise. What they all insist on ignoring, in a blatantly unfair way, is that there was no evidence of dishonesty or corruption.

The Supreme Court challenge made no difference to me. But it did stop some other people from being negatively labelled.

If the government had been confident when it drafted the 41X legislation it was now facing a problem. A fishing expedition with the powers of a royal commission should be catching something. Now, months into the Inquiry, there had still been no revelations of dishonesty or corruption. The Sydney Morning Herald headlines were helping their cause but they lacked substance when readers looked beyond the headlines.

Now it was starting to appear that Panthers’ counsel might have a valid argument to present to Justice Hamilton. There must have been some frenzied activity in the government corridors in Parliament House around this time. Between 17 August and 1 September – exactly two weeks – legislation was drafted and put before parliament.

On 1 September, before the Supreme Court handed down its judgment, Grant McBride introduced the amendment bill in the NSW Legislative Assembly. The Government presented it as part of a broader package of measures to strengthen accountability in registered clubs. However, one provision would expressly permit certain special inquiries to report findings of corrupt or improper conduct — precisely the power being challenged in the Supreme Court.

The timing raised an obvious question: was the Government attempting to circumvent an adverse decision it anticipated from the Court?

The member for the Upper Hunter, George Souris, accused the government of introducing the amendments with a sinister agenda. He believed that the original 41X legislation was failing to uncover corruption that the government was looking for, and that the amendments were designed to find another way.

At the time, Souris was Shadow Minister for Gaming and Racing and had a particular interest in the Inquiry. He was regarded by many in the registered clubs industry as a strong supporter of the sector. He is respected in the club industry as a person who deals straight, tells it like it is and supports the clubs. This is in stark contrast to the general perception of his government counterpart, Minister McBride.

George Souris led the opposition’s response. His opening remarks expressed his displeasure that he had only just received a copy of the bill, which he said ‘smacks of an ambush’.

Looking back on the debate Souris remarks:

Initially I was a bit lost at sea, because it suddenly appeared. It happened a great deal faster than is usually the case. There wasn’t the usual build up with new legislation. You have time to examine it, and you get all the consultant briefs. All I really got was an emergency briefing from one of the lawyers. It was just unbelievable.

In 2004 Souris suggested to the House that the legislation was ‘specifically designed to give retrospective powers to the presiding officer of the inquiry presently under way in relation to Panthers Rugby League Club’.

The relevant transitional provision extended the proposed new powers to inquiries already under way, provided their reports had not yet been produced. This meant the amendment could apply to the Panthers Inquiry even though much of its evidence had already been heard.

The Government maintained that it was clarifying the powers of special inquiries. Souris and other Opposition members argued that it was retrospectively changing the rules for an inquiry already approaching completion.

Souris continued,

So these new laws would apply retrospectively to that almost completed inquiry.

He called the legislation ‘philosophically obnoxious’ and said it would deny natural justice to all those witnesses who had already appeared. He said the witnesses had received legal advice and given their evidence, in the knowledge that the inquiry was being conducted under existing parameters. These witnesses knew that their evidence could, in extreme cases, lead to charges being laid against them, but that they would at least be entitled to a fair trial. The proposed changes meant that their evidence might be used to publicly label them as corrupt long before they would be given a chance to demonstrate their innocence.

Once the limitations of the 2003 legislation became the subject of Supreme Court proceedings, the Government moved to change the rules. Its opponents saw this as an attempt to secure powers that could produce findings damaging to individuals’ reputations and to the club industry.

Souris says that the appointment of Temby in the first place, and the action of the government in almost panic mode introducing new legislation indicates how serious it was about the issues.

They were so blindly, madly obsessed. They were even prepared to introduce a further piece of legislation. But the fact that it was retrospective – that was really too much for us all.

What the Government could never have planned for was the crossbench opposition that the legislation triggered.

The Independents – and this is a feat rarely achieved – agreed to defeat the bill in the Upper House.

Now, remember that there are Greens up there and left-wingers – all of whom usually hate clubs and anything to do with them. But this legislation was beyond principle.

Also exceptional in the Parliament was the fact that every member of the Coalition spoke against the bill in the Lower House.

The member for Epping, Andrew Tink, called the amendments ‘incompetence at its worst.’ He asked whether the incompetence resided in the offices of the Premier and the Treasurer. He added that if the people in the DGR were left to their own devices, ‘they would know better than to bring in a rubbishy bill like this’.

Independent MLC Peter Breen said these new provisions were ‘a case of the punishment seriously outweighing the crime’. He noted that normal rules of evidence did not apply, yet such evidence could be used as the basis of published findings.

And once a person is labelled corrupt, that person is forever known in the press as “the corrupt Mrs Brown”, even though those allegations were never tested in a court of law.’

Breen added that the bill was ‘pure politics dressed up as law reform’.

The bill also contained provisions allowing the Government to recover certain investigation costs from clubs. In Panthers’ case, this could add $1.5 million to the $800,000 it had spent to that point. The injustice of it was not lost on many politicians.

It seemed the government wanted to send a very strong message to the big clubs – cop the tax quietly, stop criticising the government, or it will cost you very dearly indeed. In the worst possible scenario, a government with that sort of disdain justice could pluck allegations out of the air to bring against dissident clubs.

Any analysis of the allegations behind this Inquiry is a stark reminder of that possibility.

The government’s numbers ensured that the legislation passed quickly through the Lower House. Newspaper stories at the time said that it was expected to also pass through the Upper House with the support of the cross-benchers.

Minister McBride continued to maintain in the press that the bill was not retrospective.

Other Labor politicians jumped in. Around the time that Justice Hamilton handed down his ruling, Paul Gibson⁴ [Labor member for Blacktown] made a stinging attack on the Club in parliament, including a statement that Panthers had been bad for Penrith. Gibson used an example the large number of restaurants he had to choose from in the days when he himself was a Penrith footballer. One comment he made was:

Now, the club has been allowed to get so big … that it has traded most local restaurants out of Penrith.

Panthers responded with an ad in the local press put together by Panthers media chief, Rob Weaver. It said, in part:

Today there are 133 eateries in the Penrith local government area. In the early 70s, when Mr Gibson played with Penrith, there were fewer than 20

The ad went on to shoot down the rest of Gibson’s outrageous – and obviously unresearched – claims and accused the politician of ‘twisting the truth’.

When Panthers got wind of the government’s latest ploy, Steve Bowers told the chairman of Panthers that he would like to try to defeat the legislation. At first, it sounded a little Quixotic – like duelling with windmills – but there was no harm in giving it a go.

Bowers spoke about the bill to Peter Breen, who had been watching the Panthers case. Breen wanted assurances that Cowan really was as honest as Bowers claimed. If he was going to support the push against the legislation, he – and the other cross-benchers – would need to be sure. Bowers says:

The independents did not want to stick their necks out and later find out he was a crook. All I could tell them was my experience of Roger for the past 30 years, what I personally knew of the man, his integrity, and what he had achieved. Fortunately, it must have been enough.

They already had a commitment from Souris that the opposition would vote against the bill. There were 11 cross-benchers, and to defeat it in the Upper House, Bowers needed nine. The government only needed three. He spent three long days walking the corridors of parliament, greatly assisted by Breen.

Bowers phoned each of them to make an appointment. A couple gave a direct ‘no’.

John Tingle refused to speak to me, and had an assistant phone ClubsNSW to tell me not to call again.

Tingle had supported the so-called ’19 faceless men’ who had tried to buy the building of what is now Port Macquarie Panthers. He had attacked Panthers in the press and in parliament at the time.⁵

From his time on Lane Cove Council, Bowers already knew Greens MLC Lee Rhiannon.

She was brilliant – she attended the appointment with her research assistant and spent about 45 minutes. She was very willing to listen, and we knew that she would speak to the other two Greens.

He did not feel it was right to ask Rhiannon for a straight-out commitment of support, but did his best to explain about the legislation and its ramifications. He says she gave him an undertaking that she would call him if she was lobbied again, to give him an opportunity to respond.

As we spoke to each one, we found there was particular opposition to the fact that the legislation would be retrospective. They were also shocked to discover that it would overturn the Supreme Court ruling. All the cross benchers we spoke to seemed to have great respect for the judiciary, particularly in a case such as this’.

Most of them were also surprised that the Labor staffers who had talked to them about the bill had not mentioned the Supreme Court decision. They saw such ‘less than frank’ lobbying as quite unfair.

I spoke to David Oldfield on the phone and he was supportive. Jon Jenkins from the Outdoor Recreation Party was also very supportive and certainly opposed to the bill.

With the Greens that meant Bowers had six on side.

We spoke to Fred Nile and Gordon Moyes. Peter Wong listened, but he was non-committal.

I was often in touch with ClubsNSW. Of course, the Labor Party kept turning up the heat. They knew what we were doing, so they kept putting the bill on the list and then taking it off again at the last minute.

Bowers agrees with George Souris about the unique aspects of the response to this bill in the Upper House.

The cross-benchers come from such diverse positions, it is almost unheard of for them to unite to defeat legislation. But they treated the matter very seriously, and they gave it respect.

Terrence Lynch praises Bowers’ efforts in stalling the amendments.

There was absolutely no doubt of the government’s determination to get them through. The importance of that lobbying, and the time that Stephen spent in Macquarie Street cannot be underestimated.

After the inquiry was over, he wrote to each of those Independents personally to thank them for their consideration.

Grant McBride must have discovered the effectiveness of the lobbying of Bowers and Breen.  September 2004 amendments were never tested in the Upper House. Bowers says it wasn’t that the legislation just died. It was put to death by a group of politicians united in their resolve to crush what was, at best, a very cynical exercise.

The government’s proposed amendments were never brought to a vote in the Legislative Council. Although they were not formally defeated on the floor of the House, Bowers believed the crossbench opposition had effectively ended their prospects.

It was never formally withdrawn, nor was it ever mentioned again.⁶

---

---

1. In Penrith Rugby League Club Ltd v Brown [2004] NSWSC 932, delivered on 8 October 2004, Justice Hamilton held that section 41X of the Registered Clubs Act 1976 did not authorise a special inquiry to make definitive findings that a person had engaged in corrupt or other improper conduct. The Court did not prevent the inquiry from making factual findings, including findings that might reflect adversely on individuals. The final declarations were settled on 14 October 2004.
   ↩︎
2. The judgment of the appeal court was 2-1 in favour of Greiner. The justices were Chief Justice Murray Gleeson, Justice Lancelot Priestley and Justice Dennis Mahoney. Justice Mahoney was the dissenting voice.
   ↩︎
3. This bellief proved quite prophetic. In most post-Inquiry ccommentary referring to Temby’s findings on Cowan, there is reference to this Supreme Court judgement as if it somehow “handcuffed” Temby. It is never mentioned that Cowan had joined with the DGR and Temby as a defent opposing the claim by Penrityh Rugby League Club Ltd. ↩︎
4. Paul Gibson is an ex-rugby league Penrith player who was also on the football board in the days of Merv Cartwright. He was also one of the members of the ‘insidious football committee’ that was described by Roy Masters as treacherous and anti-intellectual.
   ↩︎
5. For more details on this see: Beyond the Book — Not Your Everyday Amalgamation — Shenanigans in Port
   ↩︎
6. The Bill passed the Legislative Assembly on 26 October 2004 but stalled in the Legislative Council, where debate was adjourned on 28 October 2004. It remained on the parliamentary agenda until 13 September 2005, when it was formally discharged from the Legislative Council’s Business Paper. The proposed amendments never became law. ↩︎

---

Commentary and Contributions