Justifications for encroachments

13.48  While laws should generally not be retrospective, there are circumstances where retrospective laws are justified. Isaacs J, after referring to the presumption against retrospective operation, said:

That is the universal touchstone for the Court to apply to any given case. But its application is not sure unless the whole circumstances are considered, that is to say, the whole of the circumstances which the Legislature may be assumed to have had before it. What may seem unjust when regarded from the standpoint of one person affected may be absolutely just when a broad view is taken of all who are affected. There is no remedial Act which does not affect some vested right, but, when contemplated in its total effect, justice may be overwhelmingly on the other side.[62]

13.49  Similarly, Lon L Fuller said that, while laws should generally be prospective,

situations can arise in which granting retroactive effect to legal rules not only becomes tolerable, but may actually be essential to advance the cause of legality … It is when things go wrong that the retroactive statute often becomes indispensable as a curative measure; though the proper movement of law is forward in time, we sometimes have to stop and turn about to pick up the pieces.[63]

13.50  Some more specific justifications for retrospective laws are suggested below.

Justifications for retrospective criminal laws

13.51  It is difficult to justify the creation of retrospective criminal offences. Article 15 of the ICCPR may not be derogated from, even in times of ‘public emergency which threatens the life of the nation’. However art 15.2 contains one specific limitation:

Nothing in this article shall prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognized by the community of nations.

13.52  For example, retrospective provisions criminalising war crimes might fall within the permissible limitation in art 15(2), if drafted appropriately.[64]

13.53  The Refugee Advice and Casework Service agreed that in ‘extreme circumstances, retrospective laws may be justified in order to prevent particularly grave injustices’.[65]

Justifications for laws that change rights and obligations

13.54  Retrospective laws in the civil arena have not been as energetically condemned by judicial officers as have those in the criminal sphere, and the burden of justification is not heavy. The Scrutiny of Bills Committee is required to report on laws that could ‘trespass unduly on personal rights and liberties’, and it expects the explanatory memorandum for a bill with retrospective effect to detail the reasons retrospectivity is sought.[66] The Committee has indicated that it will not comment adversely on bills that are for the benefit of those affected, that make technical amendments or correct drafting errors, or implement a tax measure that applies from the date it was announced.[67]

13.55  Retrospective laws create uncertainty and can disappoint the expectations of those who have relied on the known state of the law to plan their actions. However, it has often been pointed out that prospective laws (and many other decisions of governments) also create such uncertainty and disappointment.[68] It may not be rational to expect that laws will not change, or that Parliament will never pass retrospective laws.[69] Both retrospective and prospective laws that disappoint expectations may sometimes be justified on grounds that other public interests outweigh that inconvenience and disappointment. Retrospective laws are not an effective way of deterring behaviour, but may serve other policy objectives.

13.56  The following justifications have been offered for retrospective laws in the civil arena.

  • The law operates retrospectively only from the date upon which it was announced by the Government that it intended to legislate, thereby fulfilling Blackstone’s call for laws to be ‘notified to the public’.[70] Most retrospective taxation laws fall into this category.

  • The retrospective law operates to restore an understanding of the law that existed before a court decision unsettled that understanding—see, for example, the transfer pricing laws discussed below.

  • The retrospective law operates to address the consequences of a court decision that unsettled previous understandings of the law—see for example the validation provisions in the Native Title Act discussed below.

  • The retrospective law operates to validate decisions that have been subsequently found to be invalid, in the interests of certainty—see the amendments to the Environment Protection and Biodiversity Act discussed below.

  • The law addresses tax avoidance behaviour that was not foreseen and that poses a significant threat to revenue—see dividend washing, discussed below.

13.57  Whether these justifications are considered acceptable and sufficient by those affected by the retrospective law will depend upon the particular circumstances. For example, as the Tax Institute indicated, if the Government announces an intention to legislate, and then legislates promptly, with retrospective operation to the date of the announcement, this will be more acceptable than if the legislation is delayed. A retrospective law that operates to restore a prior understanding will be more acceptable if that prior understanding was widely held and uncontested.

[62]           George Hudson Limited v Australian Timber Workers’ Union (1923) 32 CLR 413, 434.

[63]           Lon L Fuller, The Morality of Law (Yale University Press, 2nd ed, 1972) 53.

[64]           Laws retrospectively criminalising marital rape might also fall within the limitation. Australian Lawyers for Human Rights observed that as marital rape is ‘a gross breach of human rights’, but has been ‘historically protected or not prosecuted’, retrospective liability may be justified: Australian Lawyers for Human Rights, Submission 43. Laws regarding marital rape are a state or territory responsibility and are not explored in this Inquiry.

[65]           Refugee Advice and Casework Service, Submission 30.

[66]           Senate Standing Committee on Scrutiny of Bills, above n 34, 40.

[67]           Senate Standing Committee for the Scrutiny of Bills The Work of the Committee During the 41st Parliament November 2004–October 2007 (2008) 16.

[68]           Palmer and Sampford, above n 24, 221; AD Woozley, ‘What Is Wrong with Retrospective Law?’ (1968) 18 The Philosophical Quarterly 40, 46.

[69]           Palmer and Sampford, above n 24, 230; Bruce Cohen and Malcolm Abbott, ‘On Regulatory Change and “Retrospectivity”: Insights from the CPRS and the RSPT’ (2012) 227 Australian Tax Forum 815, 820.

[70]           William Blackstone, Commentaries on the Laws of England, (Clarendon Press reprinted by Legal Classics Library, first published 1765–1769, 1983 ed) 46.