The Turnbull government has admitted it was aware former Family First senator Bob Day faced questions over his eligibility to serve in Parliament four weeks ago, but defended its decision to keep that information private until Tuesday afternoon.
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It has emerged that questions arose back in August about Mr Day's eligibility due to a government lease, and that the government terminated Mr Day's lease last month.
Finance Minister Mathias Cormann said the government received independent legal advice last Thursday night that the lease may be in breach of section 44 of the constitution – rules that make it illegal for members of Parliament to receive "indirect pecuniary interests" from the Commonwealth.
The government handed that advice, centring on Mr Day's interest in the building where his Adelaide parliamentary office was located, to Senate president Stephen Parry on Friday morning, more than three days before Mr Day formalised his decision to quit the Senate and the controversy became public.
Senator Cormann said the government then decided the matter should be referred to the High Court, which could decide on a recount of the South Australian senate votes from the July 2 federal election and a new senator.
Party leaders received confidential briefings on the Day drama in recent days, but the dispute was not announced until Tuesday, after Senator Parry alerted members of Parliament.
"Ultimately, the only authority in Australia that can determine whether or not there was an indirect pecuniary interest in breach of relevant provisions within the constitution is indeed the High Court, sitting as the Court of Disputed Returns," Senator Cormann told ABC radio.
Special Minister of State Scott Ryan terminated the lease on the office property on October 7, three months after questions were asked about the arrangement. Mr Day on Wednesday called on all members of Parliament to immediately disclose any interest in properties or assets with a lease or other agreement with the Commonwealth.
Mr Day said he looked forward to the High Court resolving the dispute as soon as possible.
Senator Cormann said the initial advice about the possible breach had prompted independent legal advice, and it was appropriate for the government to rely on Mr Day's vote in the interim period.
"The government, when the Senate returns on November 7, intends to initiate a formal referral to the High Court of this question under section 376 of the Commonwealth Electoral Act," Senator Cormann said.
He confirmed former solicitor-general Justin Gleeson had not been asked to provide advice to the government about Mr Day's tenure, ending speculation that advice on the composition of the Senate caught up in Mr Gleeson's dispute with Attorney-General George Brandis could be involved in the Day drama.
Senator Ryan said Mr Day first approached him about the issue on August 4.
He said the government's external counsel had asked numerous questions in preparing the advice, meaning the advice couldn't be completed until last week.
"The legal situation, as I understand it, is a person remains a senator until a competent authority declares otherwise. In this case, the only competent authority is the court," he said.
Labor's Senate leader Penny Wong called on the government to give a full explanation of what it knew and when about Mr Day's eligibility to sit in Parliament.
"I think Australians wouldn't look too kindly on a government that sat on information or didn't deal with concerns because they wanted someone's vote," Senator Wong said.
