ALERT DIGEST 7 of 1995

BUSINESS FRANCHISE (TOBACCO) (AMENDMENT) BILL

1.1

This Bill was introduced into the Legislative Assembly on 23 May 1995 by the Honourable Alan Stockdale MP with the Honourable Ian Smith MP.

1.2

The purpose of the Bill is to amend the Business Franchise (Tobacco) Act 1974: -

• to provide for the compulsory licensing of tobacco wholesalers;
• to revise the procedure for applying for and granting wholesale tobacco merchant's and group wholesale tobacco merchant's licences.

1.3

Clause 4 sets out various definitions. Clause 6 inserts new section 2CA which defines a "controlling interest". Clause 7 amends section 6 to provide that a person must not on or after 1 August 1995, carry on tobacco wholesaling unless the person is the holder of a wholesale tobacco merchant's licence or a group wholesale tobacco merchant's licence. Clause 9 inserts a new section 9AA which sets out the application procedures for wholesale or group licences. New section 7AB sets out the matters which are to be considered by the Commissioner in determining applications. New section 7AC provides for the investigation of applications under section 7AA. New section 7AD sets out the application procedures in respect of existing licensees for wholesale or group licences. New section 7AE sets out the matters to be considered in determining such applications. If the Commissioner refuses to grant the application, he or she must include the reasons for the refusal. New section 7AH provides that the licence determination is not reviewable in any court or tribunal except as set out in sub-section (2). This is discussed at 1.5.

1.4

Clause 10 inserts a new section 7B which relates to sales to and purchases from unlicensed persons. Clause 11 inserts new section 9A, 9B, 9C and 9D into the Act. New section 9A provides for the regulation of discounting. New section 9B provides for the suspension of wholesale licences. The Minister may by notice published in the Government Gazette declare a price as the listed price of tobacco.

The notice may apply, incorporate, adopt or incorporate provisions set out in a specified issue of the Australian Retail Tobacconist published by the NSW Retail Tobacco Traders' Association. The Committee has written to the Minister to ensure that any incorporated material can be obtained from the relevant department.

New section 9B enables the Commissioner to suspend wholesale licences. A notice of suspension must set out the reasons for the suspension. New section 9D provides for the revocation of wholesale licences. Clause 12 inserts a new section 19EA into the Act which relates to the possession of tobacco. Clause 13 makes consequential amendments. Clauses 15, 16 and 17 are transitional provisions.

1.5 _¯ Variation of Section 85 of the Constitution Act 1975 (section 4D(b)(i)(ii) and (iii) of the Parliamentary Committees Act 1968)

Clause 14 amends section 21A of the Act so that it declares its intention to alter or vary section 85 of the Constitution Act 1975 to the extent necessary to prevent the Supreme Court entertaining proceedings of a kind to which section 7AH applies, except as provided in that section.

New section 7AH provides that a determination or decision of the Commissioner or an assessment under section 10 or 19A in respect of fees payable is not reviewable in any court or tribunal. However, sub-section (2) provides that the sub-section (1) does not apply to proceedings in the Supreme Court seeking the grant of relief or remedy in the nature of certiorari, prohibition, mandamus or quo warrant or the grant of a declaration of right or an injunction or the seeking of any order under the Administrative Law Act 1978. The Committee notes the statement in the Second Reading Speech:-

"Clause 14 precludes the Supreme Court from entertaining proceedings arising from a decision of the Commissioner to grant or refuse an application for a wholesale tobacco merchant's licence or in respect of the fees assessed in respect of licence fees for the first two wholesale licences to be held. The reason for limiting the jurisdiction of the Supreme Court is that persons seeking review of a decision of the Commissioner in these circumstances are to be restricted to the actions of administrative review available in the Supreme Court or proceedings under the Administrative Law Act 1978. The purpose of the proposed sections 7AA, 7AB, 7AD, 7AE and 9A of the Act would not be fully achieved if the Supreme Court could entertain proceedings to review the decision of the Commissioner whether or not to grant a wholesale tobacco merchant's licence or his assessment of licence fees for the first two wholesale licences, other than the proceedings which are saved under the proposed new section 9(5) of the Business Franchise (Tobacco) Act. This limitation of the Supreme Court's jurisdiction is confined only to the review of the decisions of the Commissioner in these limited circumstances. Otherwise, the Supreme Court's jurisdiction under the Business Franchise (Tobacco) Act is unaffected."

The Committee is of the view that the proposed provision is appropriate and desirable in all the circumstances. The Committee is of the view that in order to make the legislation more accessible to people who are not lawyers, there should be a table at the end of the Act or a footnote or some form of explanatory memorandum which explains the legal terms used. The Committee has written to Chief Parliamentary Counsel and the Attorney-General.

WATER INDUSTRY (AMENDMENT) BILL

2.1

The Committee reported on the above Bill in Alert Digest No. 6 of 1995 on 23 May 1995. The relevant extract is set out:-

"Clause 7 inserts a new section 55A which enables licensees to acquire easements where there is no land vested in the licensee which is benefited or capable of being benefited by that right. The Committee has written to the Minister seeking further explanation.

Clause 14 makes miscellaneous amendments. In particular it amends section 74 which relates to the liability of licensees arising out of the flow of water. It provides that there is no liability in respect of a flow of water from the works of a licensee in the exercise of a function under its licence if that flow is reasonable. The test for damages is usually whether the damage is "reasonably foreseeable". The Committee has written to the Minister seeking advice as to why it is necessary to exempt a licensee where the flow is "reasonable".

It also amends section 75. It substitutes "prescribed fees" for "any fee fixed by the licensee." It repeals section 146 which enables persons to apply to Melbourne Parks and Waterways for an information statement. The Committee has written to the Minister seeking further information as to why it is necessary to repeal this provision."

2.2

The Minister responded by way of letter dated 29 May 1995. The relevant extract is set out:-

"Thank you for your letter of 22 May 1995. I respond as follows:

(a)

Clause 7. This clause was inserted because of a problem which arose in a new residential sub-division. The developer had agreed to grant certain easements to a licensee but the Registrar of Titles refused to register the easements and issue the new certificates of title.

Ordinarily at law, an easement can only exist if there is land which immediately benefits from the easement. This is referred to as the dominant tenement. The land over which the easement exists is referred to as a servient tenement. In the case of the new residential subdivisions the Registrar has refused to register the easements because there was no dominant tenement.

(b)

Clause 14(28) amends section 74 of the Water Industry Act. This brings it into line with section 16(1) of the Water Act 1989. Section 74 is not confined to negligent conduct but also applies to intentional conduct (see section 74(1)(a)). The test of "reasonable foreseeable" is appropriate to negligent conduct but not to intentional conduct.

Section 74 may apply where, for example, a headworks licensee releases a large amount of water which floods adjoining land. If the water is released in order to prevent damage to the dam, in periods of high rainfall, the flow may be regarded as reasonable.

It is not appropriate to make headworks liable in all cases for the intentional release of water which floods adjoining land. If there were no dam constructed it may be that in times of high rainfall the downstream land would be subject to flooding in any event. The construction of a dam may prevent flooding in some years but in other years, during periods of high rainfall, the capacity of the dam be insufficient to hold the water. Hence a significant release of water may be reasonable although it floods land downstream.

I trust that these comment sufficiently answer your questions. I would be pleased to provide further information if required."

NATIONAL PARKS (YARRA RANGES AND OTHER AMENDMENTS) BILL

3.1

The Committee reported on the above Bill in Alert Digest No. 5 of 1995 on 9 May 1995. The relevant extract is set out:-

"12.7 _¯ Variation of Section 85 of the Constitution Act 1975 (Section 4D(b)(i)(ii) and (iii) of the Parliamentary Committees Act 1968)

Clause 27 provides that no compensation is payable by the Crown in respect of anything done under or arising out of this Part. Part 2 relates to designated water supply catchment areas. Clause 28 declares its intention to alter or vary section 85 of the Constitution Act 1975 to the extent necessary to prevent the Supreme Court awarding compensation in respect of anything done under or arising out of this Part.

The Committee notes the comments in the Second Reading Speech:-

"Clause 28 provides that it is intended to alter or vary section 85 of the Constitution Act 1975 to the extent necessary to prevent the Supreme Court from awarding compensation in respect of anything done under or arising out of Part 2 of this Act.

"The reason why this is necessary is as follows: To enable the Crown to change the status of land, it is necessary to ensure that the land is no longer subject to interests and rights arising out of its former use, other than those expressly provided for in the Bill. The existence of other interests and rights, and claims for compensation based on them or on the former use of the land, could delay or prevent a change in the use or status of the land that is in the greater interest of the community as a whole."

It appears that the land being dealt with is in fact Government land. On the face, the Committee believes that there is no need for a Section 85 provision. Again, this appears to reflect an overly cautious drafting practice. The Committee notes that Governments of both persuasions have adopted the policy of using these types of provisions. However the Committee is required under Section 4D(b)(i)(ii) and (iii) of the Parliamentary Committees Act 1968 to examine each Section 85 provision and assess whether it is "appropriate and desirable" in all the circumstances. The Committee has a responsibility to determine whether there may be more appropriate or better ways of achieving the same ends. The Committee does not find that the provision is appropriate and desirable in all the circumstances.

The Committee has written to the Minister. The Committee is examining this issue in a Discussion Paper on Section 85 which will be released shortly.

The Committee notes the argument used in respect of these types of provisions. During the debate in the Legislative Assembly on the Australian Food Industry Science Centre Bill, a letter from Chief Parliamentary Counsel to the Attorney-General was made available. The relevant extract is set out: -

"No compensation provisions are included in Bills that change the status of Crown land for at least 2 reasons: -

(a) in order to ensure that no claims arise from members of the public on the grounds that the privileges of the public have been taken away (for instance rights of access to the land, rights of way or any other rights arising from the public nature of the Crown land);

(b) in order to ensure that no private claims arise from persons who may have had a lease, licence or other right in respect of the land which. although unknown to the Government has not been revoked.

It is usual to make detailed enquiries about the land and any rights that may exist. If it is intended to preserve the operation of a lease, licence or other right, a Bill will expressly reserve the right. However, if it is intended that a clear title be given to the land, then it is necessary to deal with the land freed and discharged from all possible encumbrances and interests.

A change to the long established practice in these matters needs very careful consideration. The absence of a "no compensation" provision raises the implication that the Government is prepared to accept claims for compensation. Such claims would be uncertain in nature and extent and could expose the Government to unknown liability.

In the case of the land at Werribee, the Crown land has been used for many years for the purposes of a State research farm and I understand enquiries have not revealed the existence of any interests. This indicates that the Bill is unlikely to affect private rights but public rights may still be claimed.

It must also be remembered that record of Crown land do not provide protections of the kind provided through the Transfer of Land Act. It is quite possible for interests in Crown land to exist with no formal record appearing in any of the usual Government records.

Perhaps the reply to Mr Perton could be along the following lines:

"There is a need to include clause 28 in this Bill to provide that no compensation is payable by the Crown in respect of anything done under or arising out of section 27.

This is the usual provision in a Bill dealing with Crown land to ensure that the Government is not exposed to unforeseen claims by the public that their privileges in respect of Crown land have been removed or that any private right has been interfered with. The usual enquiries have been made in this case to ascertain whether the revocation of the Crown grant adversely affects any rights and no private right is known to exist.

In these circumstances, the inclusion of the usual provision in the Bill is for the complete protection of the State."

The Committee is of the view that there is insufficient justification for extinguishing rights of private citizens. The Committee is of the view that a preferable approach may be to insert a clause which prevents action being brought to hinder the Government's use of the land but specifically preserves the individual's right to compensation .

3.2

The Minister responded by way of letter dated 26 May 1995. The relevant extract is set out:-

"I refer to your letter of 10 May to the Minister for Natural Resources, the Hon. Geoff Coleman, concerning clauses 27 and 28 of the above Bill. This has been forwarded to me as Minister responsible for the National Parks Act.

The provisions to which you refer (clauses 27 and 28) are common to Bills where the status of land is changed and ensure that no actions for compensation arise. In the case of this Bill, some of the land being incorporated into the Kinglake and Yarra Ranges National Parks is currently vested in Melbourne Water Corporation (MWC) or held under Crown Grant by MWC, a separate corporate entity. It is clearly public land but some may argue that the land is not in fact Government land in the traditional sense. It is this very cautious approach that led, as I am advised, to the s. 85 clause being inserted.

I consider that the explanation of Chief Parliamentary Counsel, which you included on page 20 of your Committee's Alert Digest No. 5 of 1995, provides additional background as to why these provisions are included in Bills of this type.

I note that the Committee is releasing a Discussion Paper shortly in respect of section 85 of the Constitution Act 1975."

Committee Room
29 May 1995

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