Monday 23 July 2018

You can’t do that! Restricting use and sale of Government land

The Victorian Government Landholding Policy permits the sale or transfer of land to a government or community organisation for a public or community purpose where the terms of sale include a restriction on title reflecting that purpose which allows the State to control the future use and transfer of the land after disposal.[1]

The transfer of State owned or Crown land for public or community purposes will often be for nil consideration in recognition of the fact that the transferee will have obligations to make the land available for the intended purpose and to ensure that it is properly maintained for safe and enjoyable community use.

Once an agency has determined that it wishes to transfer land to an appropriate entity for public or community purposes, the next question is how best to ensure that the entity uses the land for the designated purposes and does not sell it to a third party to achieve a windfall gain or a profit.

Options for restricting use and sale of Government land

Restrictive covenants

As the Landholding Policy states, the restrictions are to be registered on the title to the land.  The traditional means of restricting use of land is via a restrictive covenant registered on the title of the land to be burdened by the covenant.  A restrictive covenant is an agreement between two landowners that one land owner will not do certain things on their land which could negatively affect the amenity of adjoining owners, for the benefit of the land held by the other owner. 

However, restrictive covenants are often not available to the State because they generally require that the State owns adjoining or reasonably contiguous land in freehold which will benefit from the restrictions set out in the covenant.  If these requirements are not met, the option will not be available.  The other challenge is that restrictive covenants can only include negative obligations (ie: an obligation not to do something on the land) and cannot oblige the burdened owner to spend money.

Statutory agreements

To address the shortcomings of restrictive covenants, various Acts provide for statutory agreements that can be entered into for public purposes and impose positive land use and development obligations on landowners.  Such agreements may be registered on the title to the land and can bind future transferees of the land, if transfer is permitted under the terms of the agreement.  Some of the more common statutory agreements are discussed below.

Section 173 of the Planning and Environment Act 1987 allows a responsible authority, commonly a local Council, to enter into an agreement with a land owner.  The agreement can provide for a restriction on the use or development of land, or any matter intended to achieve a planning objective in Victoria.  The responsible authority can enter into the agreement on anybody's behalf, and assumes responsibility for its enforcement once the agreement is recorded on the title to the land.

Where land is part of a designated project area, section 22 of the Project Development and Construction Management Act 1994 and section 49 of the Development Victoria Act 2003, allow the project authority under each Act to enter into an agreement with the transferee regarding use or development of the land.  In both cases, the agreements may be registered on title to the land as if they were an agreement under s 173 of the Planning and Environment Act 1987.  The key difference is that these agreements do not rely on the cooperation of the local Council to enforce the landowner's promises under the agreement and can instead by led and enforced by the project authority or facilitating agency.

Similarly, under s 69 of the Conservation, Forests and Lands Act 1987, the Secretary body corporate under that Act may enter into an agreement with a land owner relating to the management, use, development, preservation or conservation of land.  An agreement may also be entered into to give effect to the purposes of a law considered to be a relevant law.  The Act provides that any agreement will bind successors as long as the Secretary applies in writing to the Registrar of Titles to have it recorded on the title to the land.

A relatively recent example is the advent of the forestry and carbon management agreements as well as the carbon sequestration agreements.  These are provided for by a detailed scheme contained in the Climate Change Act 2017 (Vic).  The Act recognises proprietary rights in carbon sequestration and allows for the recording of various agreements between the landowner and the relevant person, which create binding obligations that run with the land and ensure the ongoing management of forestry, soil, and carbon sequestration rights.

As Property law experts within Government, the VGSO Property Team is well placed to assist you with land use arrangements and other property issues.  If you need further advice in relation to restricting the future use and transfer of State owned land, please contact:

Elizabeth Wortley
Senior Solicitor
9947 1433

Eloise Connelly 
Senior Solicitor
9947 1493


[1] Department of Treasury and Finance, Victorian Government Landholding Policy and Guidelines (September 2017) ii.

Tuesday 17 July 2018

Functus Officio - myth or reality?

If you work as a government decision-maker, there may be times when you want to reconsider a decision you have made under an Act.  Perhaps there has been a change of policy or you are concerned there was a mistake in the first decision.  What are the lawful options available to you to reconsider that decision? 

Options for reconsideration of decisions

The options available will depend upon the legislative context in which the relevant decision has been made and the nature of the decision itself.  At a general level:

  • Where a decision is affected by 'jurisdictional error', it can, in many cases, be treated as no decision at all and revoked and remade (following the High Court's decision in Minister for Immigration and Multicultural Affairs v Bhardwaj [1]).  Whether a decision is affected by jurisdictional error and may be treated in this way is a complex question on which we can provide advice.
  • Where the relevant legislation sets out a formal process for internally reviewing decisions (see, for example: Building Act 1993 (Vic), Pt 11, Div 4, sub-div 2), a decision can be reconsidered in accordance with the prescribed process.
  • Where a decision is not affected by jurisdictional error and no internal review process is prescribed, determining whether internal review is allowed (that is, without the decision being appealed to a court) can be a complex task, with which this article is principally concerned.

Indeed, this third scenario has recently been considered by the Full Court of the Federal Court in Minister for Indigenous Affairs v MJD Foundation Ltd (MJD).[2]


Recent authorities on the source and scope of a decision-maker's power to undertake internal review must be understood in the context of the common law doctrine that a statutory power, once exercised, becomes spent and cannot be exercised again, without express statutory authorisation.  (This doctrine even has a fancy Latin name: functus officio).  The operation of this doctrine can prevent a decision-maker from exercising a statutory power in respect of more than one person or circumstance.

Legislation now seeks to avoid the inconvenient consequences of the operation of this doctrine, in provisions such as s 40 of the Interpretation of Legislation Act 1984 (Vic) (ILA) and s 33(1) of the Acts Interpretation Act 1901 (Cth) (AIA), which provide that statutory powers may be exercised 'from time to time'.  The operation of these provisions is considered further below.

The Full Court's decision in MJD

MJD concerned the Minister's power under s 64(4) of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (Land Rights Act) to direct that money be paid 'for the benefit of Aboriginals living in the Northern Territory'.  On the making of such a direction, the Act required an equivalent amount be debited from the Aboriginal Benefits Account. 

The Minister had directed under s 64(4) that a payment be made to a particular charity.  The charity then determined that it required additional funding, so sought to vary the size of the original grant.  Accordingly, the Minister gave a further direction that an additional sum be paid to the charity.  Before the additional amount was paid, there was a change of government and the incoming Minister decided to reverse the outgoing Minister's second decision (ie directing that the additional funds not be paid). 

The questions before the Full Court were whether s 33(1) of the AIA empowered the incoming Minister to revoke the outgoing Minister's decision and whether, assuming the provision operated as such, the Land Rights Act revealed a contrary intention sufficient to displace the operation of s 33(1).

Mortimer J, with whom Perry J agreed,[3] held that the Land Rights Act revealed such a contrary intention and that s 33(1) of the AIA had no application to the outgoing Minister's second decision.  This meant that the incoming Minister could not reverse the outgoing Minister's decision. 

Although that was a sufficient basis on which to determine the appeal, Mortimer J then made a number of observations about the scope of s 33(1).  Her Honour considered that s 33(1) did not extend to a general implication of a power to reverse or undo an exercise of power, whether by revocation of a decision made in exercise of the relevant power or otherwise.[4]  To the extent that such a power is to be found in legislation, the source of that power would be the legislation itself, rather than s 33(1) of the AIA.  The effect of s 33(1) is merely that, subject to any contrary intention, powers may be exercised and functions performed on more than one occasion, in relation to different individuals and circumstances.[5]

Victorian context

The leading Victorian authority on this issue is the Court of Appeal's, now 13-year-old, decision in Kabourakis v Medical Practitioners Board of Victoria (Kabourakis),[6] which was cited with approval in MJD.

Kabourakis concerned an application for judicial review of a decision made by the Medical Practitioners Board of Victoria to hold a second hearing on allegations that a doctor had engaged in unprofessional conduct, after an earlier hearing had found that the doctor had not engaged in such conduct.  The relevant professional supervision scheme provided for the Board to hold a preliminary investigation, which it did, as part of which it received a number of reports from medical professionals that were relevant to the specific allegations made against the doctor.  Following the preliminary investigation, a panel of the Board was convened to hold an informal hearing on the allegations.  After the panel found that the doctor had not engaged in unprofessional conduct, the Board realised that it had neglected to provide the panel with one of the reports that it received during its preliminary investigation. 

The primary judge held that the error, a factual one, was sufficient to enliven a power in the Board to revisit the earlier decision (on the basis of the High Court's decision in Bhardwaj).  On appeal, the Court of Appeal held that Bhardwaj did not apply (because the error was non-jurisdictional)[7] and that the Board otherwise lacked power to revisit a final and binding decision about the doctor's conduct.[8] 

Nettle JA, with whom Chernov JA agreed, pointed to a number of features of the statutory scheme as revealing an intention that findings and determinations of the Board, which do not involve jurisdictional error and which are not challenged in accordance with procedures prescribed by the Act or by judicial review, 'are effective for all purposes notwithstanding they may involve reviewable error'.  This construction also reflected 'the requirements of good administration and the need for people affected directly or indirectly by decisions to know where they stand'.[9]

Having arrived at a construction of the legislation that did not permit the Board to revisit its earlier decision, Nettle JA also expressed doubt as to whether s 40 of the ILA would operate to imply a general power to add to, subtract from or reverse a previous exercise of the power.[10]

Determining whether internal review can be conducted

Ultimately, whether a government decision-maker is empowered to reconsider, alter or revoke an administrative decision will be a matter of statutory construction, which will require close consideration of the relevant legislative scheme.

Relevant factors may include:

  • whether the decision in question is of a character usually understood as being irrevocable;
  • whether the power in question must be exercised upon satisfaction of certain criteria; 
  • whether the decision affects a person's rights;
  • whether the decision triggers certain other obligations under the statutory scheme; and
  • whether the statutory scheme provides for a decision concerning rights following on some process of formal determination.

Further information

The VGSO has extensive experience providing advice to government decision-makers on review of administrative decisions and can assist decision-makers to design internal review procedures and draft relevant policies where no such procedures or policies have been prescribed by legislation.  For advice in this respect, please contact Alison O'Brien, Assistant Victorian Government Solicitor, or Leveasque Peterson, Assistant Victorian Government Solicitor.

Alison O'Brien
Assistant Victorian Government Solicitor
8684 0277

Leveasque Peterson
Assistant Victorian Government Solicitor
8684 0462

This blog was written by Maya Narayan, Senior Solicitor, and Jack Maxwell, Solicitor.


[1] (2002) 209 CLR 597.
[2] (2017) 250 FCR 31.
[3] MJD, [256] (Perry J).  Perram J, in dissent, held that s 33(1) could be invoked as a source of power to revoke the decision in question and that no contrary intention sufficient to oust the operation of that provision was evinced by the relevant legislative scheme: [62], [96].
[4] MJD, [100] (Mortimer J).
[5] MJD, [254] (Mortimer J).
[6] (2006) 25 VAR 449.
[7] Kabourakis, [4] (Warren CJ), [6] (Chernov JA), [43]-[46] (Nettle JA).
[8] Kabourakis, [6] (Chernov JA), [83] (Nettle JA).
[9] Kabourakis, [48] (Nettle JA).
[10] Kabourakis, [83] (Nettle JA).