Lega! & CoRstitistioRa! Commitiee

Nineteenth Report on

Subordinate Legislation

Alpine Resorts (Leasing) (Amendment) Regulations 1990

Conservation, Forests and Lands (Contracts) Regulations 1990

LOAN COPY (PLEASE RETURN TO THE

PROCEDURE OFFICE)

November 1990

LEGAL AND CONSTITUTIONAL COMMITTEE

Nineteenth Report to Parliament

on

Subordinate Legislation concerning

Alpine Resorts (Leasing) (Amendment) Regulations 1990 (S.R. No. 104/1990)

Conservation, Forests and Lands (Contracts) Regulations 1990 (S.R. No. 183/1990)

Ordered by the Legislative Assembly to be printed

MELBOURNE L. V. NORTH, GOVERNMENT PRINTER

1990

No. 156

EXTRACTED FROM THE MINUTES OF THE PROCEEDINGS OF THE

LEGISLATIVE COUNCIL

TUESDAY 15 NOVEMBER 1988

7. LEGAL AND CONSTITUTIONAL COMMITTEE - The Honourable Evan Walker

moved, by leave, That the Honourables Joan Coxsedge, D.M. Evans,

W.A. Landeryou, R.J. Long, J. McLean and G.A. Sgro be members of the Legal and

Constitutional Committee.

Question - put and resolved in the affirniiative.

TUESDAY 1 MAY 1990

8. LEGAL AND CONSTITUTIONAL COMMITTEE - The Honourable D.R. White

moved, by leave, That the Honourable G.A. Sgro be discharged from attendance upon

the Legal and Constitutional Committee and that the Honourable R.S. Ives be added

to such Committee.

Question - put and resolved in the affirmative.

I l l

EXTRACTED FROM THE VOTES AND PROCEEDINGS OF THE

LEGISLATIVE ASSEMBLY

THURSDAY 3 NOVEMBER 1988

11. LEGAL AND CONSTITUTIONAL COMMITTEE - Motion made, by leave, and

question proposed -... {Mr. Fordham).

Question - That Mr. Jasper, Mr. Lea, Mr. Perton, Mr. Thomson, Mrs. Toner* and

Mr Smith {Glen Waverley) be appointed members of the Legal and Constitutional

Committee - put and agreed to.

TUESDAY 21 MARCH 1989

6. LEGAL AND CONSTITUTIONAL COMMITTEE - Motion made, by leave, and

question - That Mr. Shell be appointed a member of the Legal and Constitutional

Committee {Mr. Ropei) - put and agreed to.

•Resigned 28 February 1989

LEGAL AND CONSTITUTIONAL COMMITTEE

MEMBERS

The Honourable D.M. Evans, MLC The Honourable Joan Coxsedge, MLC The Honourable R.S. Ives, MLC Mr. K.S. Jasper, MP The Honourable W.A. Landeryou, MLC Mr. D.J. Lea, MP The Honourable R.J. Long, MLC The Honourable Jean McLean, MLC Mr. Victor Perton, MP Mr. H. K. Shell, MP Mr. E. R. Smith, MP Mr. K. J. Thomson, MP

(Chairman) (Deputy Chair)

STAFF

Ann Blake Mr. Marcus Bromley Mr. Andreas van Eerten Ms. Zara Officer Miss Sorrel D'Silva Ms. Jennifer Hutchinson

Director of Research Executive Officer Assistant Secretary Research Officer Word Processor Operator Stenographer

REPORT

The Legal and Constitutional Committee has the honour to report as follows:

A. INTRODUCTION

Pursuant to s.14 of the Subordinate Legislation Act 1962 the Committee has examined the following statutory rules:

Alpine Resorts (Leasing) (Amendment) Regulations 1990 (SR No. 104/90)

Conservation, Forests and Lands (Contracts) Regulations 1990 (SR No. 183/1990)

The Committee is reporting to Parliament in respect of the first listed rule on the basis that it makes unusual or unexpected use of the powers conferred by the Act under which it was made, having regard to the general objectives, intention or principles of that Act. The rule is therefore subject to report under s.14(1)(d) of the Subordinate Legislation Act.

The Committee is making this report to Parliament in respect of the remaining rule on the basis that it contains matters which should properly be dealt with by an Act and not by subordinate legislation. The rule is thus subject to report pursuant to s.14(1)(e) of the Subordinate Legislation Act.

B. ALPINE RESORTS (LEASING) (AMENDMENT) REGULATIONS 1990 (SR NO. 104/1990).

The Alpine Resorts (Leasing) (Amendment) Regulations are concerned with the power of the Alpine Resorts Commission to grant or renew leases in Victorian alpine resorts. The statutory rule amends the prescribed limits on the power of the Commission to grant or renew leases under s.28(2) of the Alpine Resorts Act 1983 (the Act). Section 28(2) of that Act provides:

28. (2) The Governor in Council or, where the term and the value of the improvements to be erected are less than the limits prescribed in relation thereto, the Commission, may grant or renew leases of land in alpine resorts -

(a) for business undertakings for a term not exceeding 50 years or, in any particular case where the Commission certifies that in its opinion any buildings or structures to be erected are of such substantial nature and high value as to justify a longer term, for a term not exceeding 99 years; and

(b) for ski lodges for a term not exceeding 50 years; and (c) to any public authority for a term not exceeding

50 years. Pursuant to this section, the Governor in Council is empowered to

grant or renew leases on land in alpine resorts. The Alpine Resorts Connmission (the Commission) is empowered to grant or renew leases within prescribed limits. These are defined with reference to the value of improvements to be erected on the land to be leased, and the length of the lease. By s.28(2) and the general regulation making power in s.42 of the Act, these limits are prescribed by regulations.

The value of improvements and the length of leases were originally prescribed in 1985 in the Alpine Resorts (Leasing) Regulations 1985 (SR 413/1985). These are called the principal regulations, and are reproduced as Appendix I to this report. Under the principal regulations, the prescribed limits for the value of improvements, and the terms of leases were:

(a) For leases for business undertakings under s.28(2)(a) of the Act -$10 million, and for a period not exceeding 50 years, or in special circumstances a period not exceeding 99 years.

(b) For leases for ski lodges under s.28(2)(b) of the Act - $5 million, and for a period not exceeding 50 years.

(c) For leases to a public authority under s.28(2)(c) of the Act -$5 million, and for a term not exceeding 50 years. The effect of the Alpine Resorts (Leasing) (Amendment)

Regulations 1990 is to substantially increase the prescribed values. The rule is reproduced as Appendix II to this report, in it, the power of the Commission to grant or renew leases on land in alpine resorts is extended by increasing the prescribed value of improvements to be erected on land to a level two and a half times that of the previously prescribed limits. The prescribed limits to the length of leases are not altered. The statutory rule increases the values as follows:

(a) For leases for business undertakings under s.28(2)(a) of the Act -$25 million.

(b) For leases for ski lodges under s.28(2)(b) of the Act -$12.5 million.

(c) For leases to a public authority under s.28(2)(c) of the Act -$12.5 million. The Commission was unable to satisfactorily explain the necessity

for increasing the prescribed values by such large amounts. One reason for the increases put to the Committee was that there

had been large increases in real estate values since 1985. However, the limits

on the power of the Commission to grant or renewleases is not defined in the Act with reference to real estate values. Rather, the limits are defined on the basis of the value of "improvements to be erected". Therefore, the value of real estate is not relevant to the intention of the Act.

The Commission was unable to provide evidence that the value of improvements to be erected had increased since 1985. It was suggested to the Committee that increases in construction costs and interest rates had occurred since 1985. However, the extent of the impact (if any) which such increases might have had on the value of improvements to be erected on the land in alpine resorts could not be explained to the Committee.

Further, the Committee was informed that there is currently only one proposal for a lease which falls outside the original limits set by the principal regulations in 1985.

The Committee has been informed that disallowance of the Alpine Resorts (Leasing) (Amendment) Regulations would mean that the Governor in Council will be required to consider this proposal. This would appear to be a significant proposal, apparently involving a 99 year lease and improvements to be erected valued at approximately $25 million dollars.

Section 28(2)(a) of the Alpine Resorts Act provides that leases for business undertakings may be granted for a term not exceeding 50 years. If the Commission certifies that in its opinion the buildings or structures to be erected are of such substantial nature and high value as to justify a longer term, a lease may be granted for a term not exceeding 99 years.

Committee members are of the view that the Alpine Resorts Act intends that major leases of public land such as the proposal in question be considered by the Governor in Council. This view is supported by the fact that the leasing proposal brought to the Committee's attention is for the maximum term allowed under the Act.

The Committee does not believe the Act intends that power to grant and renew all leases under the Act be delegated to the Commission. This is evident from the wording of s.28 of the Act, which imposes limits on the length of the leases that may be granted by the Governor in Council and the Commission under the Act. The prescribed limits which apply to the Commission cannot exceed the limits set out in s.28.

Section 28(2) provides that the Commission may grant or renew leases when the term of the lease and the value of improvements on the land is less than the prescribed limits. It follows from this that the power of the Commission to grant or renew leases must be more limited than the power conferred on the Governor in Council to do so.

On the Committee's interpretation of the legislation therefore, the Commission is not empowered to grant or renew leases of 99 year duration. Consequently, the Committee believes that the Governor in Council would in any case be required to consider the major leasing proposal mentioned above.

On the basis of this information it is difficult to accept that the increase in the prescribed values is necessary. The Committee has taken the view that there is insufficient justification for extending the power of the Commission to grant and renew leases to the extent provided by SR 104/1990. This has led the Committee to the view that the statutory rule makes unusual or unexpected use of the power conferred by the Alpine Resorts Act to prescribe the value of improvements to land in alpine resorts for the purposes of s.28 of that Act.

The Committee does not believe that the Pariiament intended that the power conferred on the Commission to grant or renew leases would be extended unnecessarily without corresponding increases to the value of improvements on the land, for example.

As the need for the proposed statutory rule cannot be demonstrated, the Committee is also of the view that the statutory rule has been prepared in contravention of the provisions of the Subordinate Legislation Act, and the contravention is of a substantial nature. This is because that Act requires the need for a statutory rule to be justified. The Alpine Resorts (Leasing) (Amendment) Regulations would therefore be subject to report under s-14(1)(j) of the Subordinate Legislation Act, though the Committee does not wish to pursue this matter further.

RECOMMENDATION

Accordingly, the Committee recommends that the Alpine Resorts (Leasing) (Amendment) Regulations 1990 be disallowed. Disallowance will have the effect of maintaining the limits at those set in 1985 by the Alpine Resorts (Leasing) Regulations 1985.

C. C O N S E R V A T I O N , F O R E S T S AND LANDS (CONTRACTS) REGULATIONS 1990 (SR NO. 183/1990).

The Conservation, Forests and Lands (Contracts) Regulations 1990 are concerned with the power of the Director of the Department to make contracts. Limitation upon the Director-General's power is provided by s.19 of the Conservation, Forests and Lands Act 1987 (the Act), which provides:

Limitation upon the Director-General's power to maiie contracts.

19. (1) In this section "prescribed amount" means -

(a) $50 000; or

(b) if a greater amount is prescribed for the purposes of this section, that greater amount.

(2) A contract or agreement entered into by the Director-General wtiere -

(a) the consideration exceeds the prescribed amount: or

(b) the period for performance exceeds three years -

has no force or effect unless approved by the Minister.

(3) This section does not apply to a land management co-operative agreement under Part 8.

Thus, by virtue of the operation of this section, the Director-General may enter into contracts or agreements of $50,000 or less, or an amount prescribed by regulations, and contracts of a duration of three years or less, without the approval of the Minister.

The Conservation, Forests and Lands (Contracts) Regulations prescribe the amount of $500,000 for the purposes of s.19 of the Act. These are the first regulations to prescribe an amount for the purposes of s.19 of the Act.

The effect of the regulations is therefore to increase the power of the Director-General to enter into contracts without the approval of the Minister, from a limit of $50,000 to one of $500,000.

The Committee is of the view that the Parliament ought to have been given the opportunity to engage in full debate over the limitations on the power of the Director-General to enter into contracts. It is of particular concern to members that such a substantial increase in power was conferred by regulations.

The Minister has advised the Committee that many of the contracts that would be entered into under these regulations are largely for administrative matters, and matters previously agreed to in principle by the Minister such as land purchases. Argument was made that the size of the amalgamated Conservat ion and Environment Department has emphasised the need to streamline approval processes.

Further, the Committee was informed that the amount of $500,000 was selected because it corresponds, in the Minister's view, with other authorisations in relation to expenditure under the Treasury Regulations 1981. The Treasury Regulations are made under the Audit Act ^95&.

Finally, it was put to the Committee that s.19(1)(b) of the Act provides power to prescribe any amount greater than $50,000. The Minister advised that consideration was not given to amending the primary legislation to provide the $500,000 limit due to the fact that this section was agreed by the Parliament at the time of passage of the legislation.

These explanations and arguments do not alleviate the concerns of the Committee. The Committee is unable to accept that because the Act provides power to make these regulations, that it is necessarily appropriate that

5

the large amount prescribed be provided by subordinate legislation. Members interpret the means chosen to increase the power of the Director-General to enter into contracts without reference to the Minister as an erosion of opportunity for the Parliament to debate matters regarding government and Ministerial power.

Additionally, the Committee does not agree that the amount of $500,000 is analogous to authorisations for expenditure under the Treasury Regulations.

RECOMMENDATION

Accordingly, the Committee recommends that the Conservation, Forests and Lands (Contracts) Regulations 1990 be disallowed by the Parliament. Disallowance of this statutory rule will have the effect of maintaining the limitation on the power of the Director-General to enter into contracts at the level contained in the Conservation, Forests and Lands Act 1987.

COMMITTEE ROOM 21 November 1990

APPENDIX I

STATUTORY RULES 1985

No. 413

Alpine Resorts Act 1983

Alpine Resorts (Leasing) Regulations 1985

At the Executive Council Chamber, Melbourne, the seventeenth day ofDecember\9S5

PRESENT:

His Excellency the Lieutenant-Governor of Victoria Mr Kennan Mr Simmonds

Mr Walker Mr Walsh

IN PURSUANCE of the powers conferred by the Alpine Resorts Act 1983 and all other powers him thereunto enabling. His Excellency the Lieutenant-Governor of the State of Victoria, on the recommendation of the Alpine Resorts Commission and by and with the advice of the Executive Council of the said State, hereby makes the following Regulations:

Title

1. The Regulations may be cited as the Alpine Resorts (Leasing) Regulations 1985.

Definition

2. In these Regulations— 'Act' means the Alpine Resorts Act 1983.

Authority

3. These Regulations are made under sections 42 (1) {o) and 42 (3) of the Act when read with section 28 (2).

Objective

4. The objective of these Regulations is to prescribe limits for terms of leases and the value of improvements to be erected on land in alpine resorts for the purposes of section 28 (2) of the Act. 13230/85

2 S.R. 413 Prescribed Limits for the Value of Improvements

5. For the purpose of section 28 (2) of the Act the limits prescribed for the value of the improvements to be erected are as follows:

{a) For leases referred to in section 28 (2) {a)—$10 million; and {b) For leases referred to in section 28 (2) {b)—$5 million; and (c) For leases referred to in section 28 (2) (c)—$5 million.

Prescribed Limits for Terms of Leases 6. For the purpose of section 28 (2) of the Act the limits prescribed

for the terms of leases are as follows: {a) For leases—

(i) for business undertakings referred to in section 28 (2) (a)—a term of not more than 50 years; or

(ii) where the Commission certifies that a longer term is justified under section 28 (2) (a)—a term of not more than 99 years;

(b) For leases referred to in section 28 (2) {b)—a term of not more than 50 years;

(c) For leases referred to in section 28 (2) (c)—a term of not more than 50 years.

And the Honourable Robert Fordham, Her Majesty's Minister for Industry, Technology and Resources for the State of Victoria shall give the necessary directions herein accordingly.

L. G. HOUSTON Clerk of the Executive Council

No. 413 of 1985 Alpine Resorts (Leasing) Regulations ©Slate of Victoria By Authority F D Atkinson Government Printer Melbourne Recommended Retail Price $0.40

APPENDIX I I

STATUTORY RULES 1990

No. 104

Alpine Resorts Act 1983

The Governor in Council on recommendation of the Alpine Resorts Commission makes the following Regulations:

Dated: 29 May 1990

Responsible Minister:

STEVE CRABB Minister for Tourism

N. PLAYFORD Acting Clerk of the Executive Council

Alpine Resorts (Leasing) (Amendment) Regulations 1990

Title

1. These Regulations may be cited as the Alpine Resorts (Leasing) (Amendment) Regulations 1990.

Principal Regulations

2. In these Regulations the •Alpine Resorts (Leasing) Regulations 1985 are called the Principal Regulations.

Objective

3. The objective of these Regulations is to amend the value of improvements in regulation 5 of the Principal Regulations.

Authorising provision

4. These Regulations are made under sections 28 (2), 42 (1) (o) and 42 (3) of Xhc Alpine Resorts Act 1983.

*S.R. No. 413/85

68138/90 9

r.5 Alpine Resorts (Leasing) (Amendment) Regulations 1990 S.R. No. 104/1990

Value of improvements 5. In regulation 5 of the Principal Regulations—

{a) for "$10 million" substitute "$25 million"; and {b) for "$5 million" (where twice occurring) substitute "$12-5 million".

A Victorian Government Publication Published by VGPO Melbourne Victoria Australia ©State of Victoria 1990 This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act. Address all inquiries to the Government Printer for the State of Victoria PO Box 203 North Melbourne 3051 Victoria Australia Jean Gordon Government Printer Melbourne Counter Sales Information Victoria Bookshop 318 Lt. Bourke Street Melbourne 3000 Telephone inquiries (03) 663 3760 Mail and Bulk Order Sales VGPO PO Box 203 North Melbourne 3051 66-112 Macaulay Road North Melbourne 3051 Telephone inquiries (03) 320 0201 Price Code 1

APPENDIX I I I

STATUTORY RULES 1990

No. 183 Conservation, Forests and Lands Act 1987

The Governor in Council makes the following Regulations: Dated: 24 July 1990 Responsible Minister:

STEVE CRABB Minister for Conservation and Environment

NEIL MORROW Clerk of the Executive Council

Conservation, Forests and Lands (Contracts) Regulations 1990

Title 1. These Regulations may be cited as the Conservation, Forests

and Lands (Contracts) Regulations 1990. Objective

2. The objective of these Regulations is to provide for the Director-General to sign contracts with an interest up to a value of $500 000. Authorising provision

3. These Regulations are made under sections 19 and 99 of the Conservation, Forests and Lands Act 1987. Prescribed amount for the purposes of contracts

4. For the purposes of section 19 of the Conservation, Forests and Lands Act 1987, the prescribed amount is $500 000.

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