By Eryk Bagshaw
Former High Court judge Kenneth Hayne has been appointed to undertake the largest investigation into the banking and financial services industry in Australian history, a day after the Turnbull government backflipped and announced a royal commission into the sector.
Justice Hayne was appointed by Governor General Peter Cosgrove on Friday following recommendations from Prime Minister Malcolm Turnbull, Attorney-General George Brandis and Treasurer Scott Morrison.
The former Victorian Supreme Court judge served on the High Court for 17 years, and will be given sweeping powers to investigate all cases of misconduct across Australia's largest industry in the $75 million year-long probe.
Mr Turnbull said Justice Hayne's experience at the highest levels of Australia's judiciary made him the ideal commissioner.
Former High Court judge Kenneth Hayne.Credit: John Woudstra
"He is renowned for his brilliant mind, his forensic skill, and his deep sense of justice," he said.
Labor's shadow treasurer Chris Bowen said Justice Hayne had an a "appropriate level of experience and expertise" and called on the government to appoint more than one commissioner.
"This would ease the workload on the royal commission and enable it to work more quickly," he said.
He lashed the government for not taking advice from the Australian Securities and Investments Commission on the inquiry after the regulator's deputy chair Peter Kell told a parliamentary committee ASIC were not consulted prior to the Prime Minister's announcement.
Labor's Shadow Treasurer Chris BowenCredit: Aaron Bunch
The regulator appears to have been sidelined while the Reserve Bank and the Australian Prudential Regulation Authority were brought into negotiations.
It followed earlier revelations that banking victims networks had also not been consulted prior to the last minute policy u-turn.
Prime Minister Malcolm Turnbull. Credit: Alex Ellinghausen
"The government should not only be consulting with all relevant economic regulators but with banking victims too," said Mr Bowen, who has been calling for a royal commission since April 2016.
The government has yet to confirm the final number of commissioners that will sit on the bench.
But unlike the bill proposed by the Nationals and Greens that almost forced its way through Parliament they will not require the other two commissioners to be either industry or community representatives.
The government will now have to move swiftly to establish the commission in full over summer, with proceedings scheduled to begin in February.
Justice Hayne's appointment signals Melbourne is likely to be the home of the inquiry, where purpose-built facilities for the 2009 Victorian Bushfires Royal Commission are already established.
Justice Hayne was appointed to the bench by former prime minister John Howard in 1997 and returned to practice law following his mandatory retirement from the High Court at the age of 70.
He served under three chief justices and participated in more than 400 judgements as the longest serving judge on the former bench.
While largely siding with the majority in judgements during his High Court career, he dissented to rule against the government in 2014 when 157 Tamil asylum seekers were being held by the Australian navy at sea and recommended they be able to seek damages.
Unusually, he was replaced on the High Court bench in 2015 by his wife, Michelle Gordon.
In appointing Justice Hayne, the government opted against other retired High Court judges with experience in banking disputes and royal commissions.
Former High Court judge Robert French presided over mediation between the Australian Securities and Investments Commission and ANZ, National Australia Bank and Westpac earlier this year, while his colleague Ian Callinan was the chairman of the independent review of the Commonwealth Bank's financial planning scandal.
Justice Hayne will be given the power to compel witnesses to give evidence under oath, and make it an offence to fail to attend or produce documents to a royal commission; or to conceal, mutilate or destroy any documents.
The commission will be able to refer matters to the Director of Public Prosecutions, followed by criminal prosecutions.
It is expected to hand down its findings in February 2019.