Scrutiny of Acts and Regulations Committee

"I refer to your letter of 23 November concerning the Melbourne Sports and Aquatic Centre Bill.

This Bill deals with certain Albert Park Land. One of the purposes of this Bill is to deal with the use of the Melbourne Sports and Aquatic Centre Land which was permanently reserved by Order in Council dated 21 March, 1876 as a site for a public park. The reservation for this purpose involves public access or public use of that land.

There may have been suggestions in some Victorian cases that members of the public may have a right to compensation if the status of these types of public access or use of reservations is changed. For this reason legislation revoking or otherwise changing the status of reserves includes a no compensation clause and an accompanying clause limiting the jurisdiction of the Supreme Court..

The Bill overrides the reservation of Albert Park land to the extent that it applies to the Melbourne Sports and Aquatic Centre land to allow the land to be used for purposes other than reserved purposes and to allow the land to be leased for those other purposes.

Because the Bill alters the status of the reservation of the land and allows it to be leased for purposes consistent with the new status it was considered necessary that the no compensation and section 85 clauses should be included for similar reasons to those applying in other cases where the reservation of the land is affected.

It should be noted that the Albert Park Land Act 1972 provided a similar scheme for overriding the reservation of Albert Park land and allowing the land to be leased for purposes other than those for which it was reserved. That Act provided a no compensation clause.

You also raised the issue of any private interests currently occupying part of the site intended for development. The clubs concerned, the South Melbourne Districts Sports Club and the Ajax Football and Cricket Clubs have acknowledged that they are required to vacate their respective buildings on the site no later than 6 March 1995.

I trust this information satisfies any concerns that the Committee may have."

The Committee formed the view that in this instance the provision was appropriate and desirable in all the circumstances. The Committee also sounded a warning that the occurrence of these type of provisions was common and that it would review this aspect of the section 85 procedure in due course.

7.6

The Committee finally came to the point where it reported adversely on the Victorian Plantations Corporation (Amendment) Bill. The issue again was whether it was appropriate to prohibit claims for compensation in which the Government proposes a change in the use of the land. Again the Committee requested the Minister's advice as to whether any private legal interests were adversely affected before forming a conclusion. The Minister's response indicated that he was not aware of any rights which would be likely to be infringed by the limitation of the Supreme Court's jurisdiction. The Committee incorporated the response into the Alert Digest. The relevant extract is set out:

"I refer to your letter of 16 November 1994 concerning clauses 13 and 14 of the above-mentioned Bill and the intention of those clauses to limit the jurisdiction of the Supreme Court in relation to anything done under or arising out of the Act.

Sections 27 and 33 of the Victorian Plantations Corporation Act 1993 prevent the Supreme Court from awarding compensation in respect of anything done under or arising out of the Act. That Act provided for the vesting and divesting of land, revocation of reservations and road closures, in order to facilitate the formal transfer of management of plantations to the Corporation. In order to ensure that those processes were not impeded or delayed by claims for compensation arising out of the former use of the land, the Act contained provisions to limit the jurisdiction of the Supreme Court.

The Victorian Plantations Corporation (Amendment) Bill merely provides for the further vesting and divesting of land to and from the Corporation, to facilitate more efficient management of the plantation estate. Inclusion of a provision in this Bill to limit the jurisdiction of the Supreme Court was considered necessary as it was unclear whether the scope of sections 27 and 33 of the Principal Act would extend to the further vesting and divesting actions provided for by the Bill. I am not aware of any rights which are likely to be infringed by the limitation of the Supreme Court's jurisdiction in the case of the matters provided for by this Bill.

The removal or alteration of land tenure is a decision which properly rests with the Parliament with any beneficial interests taken into account during the development of the legislation. The provisions are required to prevent unnecessary impediments to or delays in, the change of land status and are not intended to unduly interfere with the rights of any private person with an interest in the land."

The Committee reported that the section 85 provision was not appropriate and desirable in the circumstances.

7.7 The Committee's concerns

The Committee's concerns have become increasingly apparent throughout 1994 in respect of these type of provisions. The Committee is concerned as to why is it necessary to preclude the jurisdiction of the Supreme Court when there are in fact no rights which are likely to be infringed by the limitation of the jurisdiction.

7.8

For example, the land which was the subject of the Melbourne Exhibition Centre Bill was in fact a Government road surrounded by Government buildings. The question must surely be asked as to what action is being prevented by the insertion of a Section 85 provision in that instance. What action could conceivably be brought in such circumstances? Or to put it another way, why is it necessary to limit the ability of the Supreme Court in this instance at all? Similarly, in respect of the Land (Further Miscellaneous Matters) Bill the Minister advised the Committee that he was unaware of any rights which are likely to be infringed by the limitation of the Supreme Court's jurisdiction by the changes in status of reserved land. Why then the necessity to insert a clause which limits rights in the first instance?

7.9

The Committee understands the Government's need to be able to deal with land freely. Nevertheless the Committee has some difficulty with Section 85 provisions which may inadvertently remove existing legal private interests by providing that no compensation is payable by the Crown in respect of anything done under or arising out of a particular Bill. The Committee is not able to conclude that such provisions are "appropriate and desirable" in all the circumstances.

7.10

The Committee believes that there is distinction to be drawn between the Government's understandable and proper concern to ensure clear title and the removal of a right, albeit inadvertently, for compensation. The Committee is of the view that the Government's concern could be met with a section 85 provision which guarantees clear title but does not erode the jurisdiction of the Supreme Court. The Committee is not persuaded of the necessity to limit the jurisdiction of the Supreme Court where the Government proposes such changes in relation to land use.

7.11 The Experience in 1995 - Trends

The Committee was again forced to re-consider the issue in 1995 when the Land (Revocation of Reservations) Bill was introduced on 8 March 1995. The Bill removed several reservations over land. The Committee raised the following matters with the Minister:-

• Are there any private legal interests which may be affected?

• If there are no private legal interests which may be affected, is it necessary to use the clause in its current form in the first instance?

• Alternately, is it appropriate to insert a clause which allows for clear title so that the Government can deal with the land but allows for compensation if there are interests which may be affected?

7.12

Following further consultation with the Minister, the Committee wrote further letters to the Attorney-General, Crown Counsel and Chief Parliamentary Counsel with specific suggestions as to possible methods of dealing with the issues raised by Section 85 clauses in general. The Chairman of the Committee received a response from Mr Greg Craven, Crown Counsel dated 4 April 1995. The relevant extract is set out: -

"Thank you for your letter concerning the use of privative clauses in connection with legislation dealing with reserved land.

As I indicated to you in our telephone conversation yesterday, I believe that there is something to be said for an approach which secures the ability of Government to deal freely with land by extinguishing all interests in that land, while preserving a right to compensation in any affected person.

However, I make this comment subject to the following strict reservations:

1. A section 85 clause would still be required if the effect outlined above were to be achieved;

2. It would be imperative for the workability of such a legislative approach that the relevant legislation did in fact extinguish all interests in the land in question, and prevented the taking of interlocutory and other proceedings with a view to frustrating the Government dealing with the land;

3 . It would be highly desirable that practice in relation to such clauses was, so far as possible, uniform across Government. Nevertheless, such practice would have to recognise that there would be certain circumstances (for example, where extraordinary complexities of title were involved) where a no-compensation clause would be the only responsible course.

4. Finally, and most importantly, any such legislative practice should not be instituted without full and careful inquiry by SARC. You will recall that amendments to section 32 of the Interpretation of Legislation Act some years ago were made without proper consideration of their full impact, and most unfortunate consequences ensued. The potential for such unforseen consequences clearly would arise in connection with the present proposal."

The Committee received a letter from the Minister in respect of its original letter to him dated 16 March 1995. The relevant extract from the Minister's letter is set out: -

"I refer to your letter dated 16 March 1995.

The provisions referred to are common to all Bills of this type and are included to ensure that no actions for compensation arise over changes in the status of reserved land. I am not aware of private legal interests which are likely to be infringed by the limitation of the Supreme Court's jurisdiction contained in the Bill.

The provisions are based on a desire to achieve sound administrative practices and are not intended to unduly interfere with the rights of any private person with an interest in the land."

The Committee finally reported that: -

"The Committee concedes that it is unlikely that there are any private legal interests which may be affected. Nevertheless, the Committee has some difficulty with a provision which may inadvertently remove existing private legal interests. The Committee notes that Governments of both persuasions have adopted the policy of using these type 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."

7.13 The most recent use of a Section 85 provision in a Bill in 1995

The Committee's most recent consideration of a Section 85 provision was in respect of the Australian Food Industry Science Centre Bill introduced into the Legislative Assembly on 12 April 1995. The Bill removed the reservation over Government land. Given that the land being dealt with was Government land and no private legal interests were affected, the Committee formed the view that the Section 85 provision was unnecessary. The Committee did not find the Section 85 provision was appropriate and desirable in all the circumstances. The relevant extract from the Committee's report in Alert Digest No.4 is set out: -

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

Clause 28 provides that no compensation is payable by the Crown in respect of anything done under or arising out of section 27. Clause 29 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 section 27. The Committee notes the explanation in the Second Reading Speech:-

"Clause 29 of the Bill is intended to alter or vary section 85(5) of the Constitution Act 1975 to the extent necessary to prevent the Supreme Court from awarding compensation in respect of the change of the status of the reserved land at Werribee which is to be controlled and managed by the Australian Food Industry Science Centre.

The reason for preventing the Supreme Court from awarding compensation is as follows:

To enable a change to be made to the status of the reserved land, it is necessary to ensure that the land is no longer subject to any interests and rights arising out of its former use. The existence of such interests and rights and claims for compensation based on them on the former use of the land could delay or prevent a change in the use or status of the land."

It appears that the land being dealt with is in fact Government land and that there are in fact no private legal interests which may be affected. 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 type of provisions. However the Committee is required under Section 4D(b)(i)(ii) and (iii) of the Parliamentary Committees Act 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 Minister responded by way of letter dated 2 May 1995. The Committee reported the response in Alert Digest No.5 of 1995 on 9 May 1995. The relevant extract is set out: -

"I write in response to your letter of 21 April requesting advice as to the need for Section 85 provisions in the Australian Food Industry Science Centre Bill.

I have been informed by Parliamentary Counsel that the no-compensation provision relating to the change of status of Crown land is there for two reasons.

The first is to ensure that members of the public cannot make any claims on the ground that public privileges have been taken away - for example, the right of access to land, rights of way or any other rights arising from the public nature of Crown land.

The second is to ensure that no private claims are made by persons who may have had leases, licences or other rights over the land that, unknown to the Government have not been revoked.

The absence of a no-compensation provision would imply that the Government would be prepared to accept claims for compensation: but such claims would be uncertain in nature and extent and could expose the Government to unknown liabilities.

In the case of Werribee, the Crown land has been used for many years as a state research farm. I understand that inquiries have not revealed the existence of any interests. That indicates that the Bill is unlikely to affect private rights, but public rights might still be claimed if a section 85 provision were not included.

It must also be remembered that Crown land records do not offer protection of the kind provided under the Transfer of Land Act. It is possible for interests in Crown land to exist despite no formal entries appearing in any of the usual government records.

I note that the Committee is examining this issue in a Discussion Paper on Section 85 which will be released shortly."

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."

7.14 The current state of play - an Inquiry into possible changes in legislative practices in respect of particular Section 85 clauses

The Committee has now reached the stage in its examination of these particular types of Section 85 clauses where it has formed the view that there is a need for a re-appraisal by the Government and Parliamentary Counsel as to their approach to the issue. The Committee acknowledges the competing interests as between the Government's need to deal with such land freely and the Committee's concern in respect of the inadvertent removal of existing private legal rights. These types of provisions have been used by Governments of both persuasions. The challenge which presents itself is to draw an appropriate clause which achieves both ends. The Committee agrees with Crown Counsel's view that any change in legislative practice should not be instituted without full and careful inquiry. It may now the time has come for a Parliamentary Committee to undertake that inquiry.

7.15 A section 85 clause which abolished compensation in respect of improvements made to the Crown where a lease is terminated

A slightly different type of section 85 provision was also the cause of concern to the Committee in 1994. The Committee reported adversely in respect of the Crown Lands Acts (Amendment) Bill. In that instance, the section 85 clause abolished compensation in respect of improvements made to the Crown in the event of termination of a lease. The Committee was pleased to note that as a result of its criticisms, the Minister introduced a House Amendment which resolved the Committee's concerns.

Scrutiny of Acts and Regulations Committee
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