Royal Commission into Certain Housing Commission Land Purchases and Other Matters

Full description

The establishment of the Royal Commission into Certain Housing Commission Land Purchases and Other Matters had been announced by the Premier (The Hon. R.J. Hamer) in the Legislative Assembly on 5 June 1979. The original Letters Patent setting out the Terms of Reference of the Royal Commission and appointing The Honorable Sir Sydney Frost, Q.C., LL.M. as Royal Commissioner was issued by an Order-in-Council on 20 June 1979, and published in the Victorian Government Gazette on 20 June 1979. A subsequent Order-in Council, appointed Sir Sydney Frost Q.C., LL.M to be Chairman of the Royal Commission on 24 July 1979 and was published in the Victorian Government Gazette on 25 July 1979.

This Royal Commission originated as a consequence of a previous Board of Inquiry into Housing Commission Land Purchases (VA 3017), and the failure to stop the extensive press speculation about the continual corruption in land purchases made by the Housing Commission.

The Royal Commission's Terms of Reference were to inquire into and report on

1. The administrative methods and procedures adopted by the Housing Commission in the purchase of any land exceeding $100,000 (including adjacent parcels of land having an aggregate value exceeding $100,000) during the period commencing 1 July 1973 and ending 5 December 1978 (other than land reported upon by the Board of Inquiry (VA 3017) appointed by Order in Council made 9 August 1977, and in particular:

(a) whether the methods adopted were adequate to ensure that the purchase prices paid for such land were fair and reasonable.

(b) whether the valuations used in the purchase of such land were properly made and based.

(c) whether there was dishonesty, impropriety, malfeasance or negligence on the part of any person in relation to the purchase of such land or the valuation thereof.

2.(a) Whether the present methods and principles of valuation of land purchased by the Government or any Government instrumentality, and the instructions given to valuers in respect thereof, ensure accurate and properly based valuations.

(b) Whether the provisions of section 5A of the Valuation of Land Act 1960 should be amended, and if so in what manner, in relation to the valuation of such land.

3. Whether, having regard to -

(a) the reconstitution of the Ministry of Housing and the Housing Commission effected by the Housing (Amendment) Act 1978.

(b) the requirement of the Government that purchases and sales of land of a value exceeding $100,000 by Government departments and authorities is to be monitored by the Department of Property and Services; and

(c) the requirement of the Government that in respect of all such purchases of land a valuation be obtained from the Valuer-General together with at least one other valuation or, where the proposed purchase price exceeds $1 million, at least two other valuations.

There is a need for any further changes affecting the administrative procedures and methods relating to the purchase of land by the Housing Commission exceeding the value of $100,000. In particular, whether there should be a statutory requirement of consent of the Treasurer to purchases of land by the Housing Commission.

The report of the results of this Inquiry is to be completed by Alfred James Ellwood, Esq., LL.M by 31 December 1979.

Five amendments were made to the original Letters Patent of this Royal Commission, with two being additions to the original Terms of Reference. The first addition to the Terms of Reference was set out on the 22 January 1980 and published in the Government Gazette on 23 January 1980 and included

4. The circumstances in which the Housing Commission entered into

(a) A Contract of Sale dated the 6th Day of April 1976 for the sale to Damian Buildings Proprietary Limited of the whole of the land described in Certificate of Title Volume 8898 Folio 925.

(b) A Contract of Sale dated the 4th day of April 1977 for the sale of R.& M.Cardigan Developments Proprietary Limited of the whole of the land described in Certificate of Title Volume 8786 Folio 756.

including in each case the means and circumstances in which the amount of the consideration for the sale of the said land and the special conditions included in the Contract of Sale were determined, and in particular

(i) Whether, in each case, the consideration for such sale and the terms and conditions thereof were fair and reasonable and appropriate in the circumstances.

(ii) Whether there was dishonesty, impropriety, malfeasance or negligence on the part of any person in relation to the sale of such land or in arriving at the consideration for the sale of such land or in the determination of the terms and conditions upon which the land was sold.

The second addition made to the Terms of Reference set out on 30 September 1980 and published in the Government Gazette on 1 October 1980 were:

5. The following matters arising out of the contract of sale dated 18 July 1972, entered into between the Housing Commission and North Terrace Club Investments Pty. Limited with respect to certain land in an area bounded by Haines Street, Abbotsford Street, O'Shannassy Street and Dryburgh Street and being the balance of the land remaining untransferred in Certificate of Title Volume 8885 Folio 519 as at 1 July 1972 namely

(a) whether the consideration for such sale and the terms and conditions thereof were fair and reasonable and appropriate in the circumstances.

(b) the circumstances and propriety of the Housing Commission entering into agreements of 18 April 1974, and 9 April 1976 with the Australia and New Zealand Banking Group Limited ("the Bank) with respect to sums of $1 800 00 and $4 200 000, respectively, to be made available by the Bank to Inge Bros. Developments (Aust.) Pty. Limited which that company was to use to develop the land the subject of the aforesaid contract of sale on behalf of North Terrace Club Investments Pty. Limited.

(c) whether the sale of the land and the intended development of the land as referred to in the special conditions which form part of the aforesaid contract of sale was appropriate in the circumstances or whether the Housing Commission should itself have proceeded with the development of the land.

(d) whether the special conditions in the contract of sale relating to the intended development of the land were appropriate in the circumstances.

(e) whether the development of the land has been carried out in accordance with the special conditions and, if not, the reason therefore; and

(f) whether there was any dishonesty, impropriety, malfeasance or negligence on the part of any person in relation to the sale of such land or in arriving at the consideration for the sale of such land or in the determination of the terms and conditions upon which the said land was sold or in the arrangements made by the Housing Commission with regard to the loan by the Australia and New Zealand Banking Group Limited to Inge Bros. Developments (Aust.) Pty. Limited.

Three of the Order-in-Councils extended the due date of the final report of the Royal Commission to 15 October 1981.

The final report of the Royal Commission was published in Papers Presented to Parliament: Session 1981-82 Vol 8, No 33-35 and Session 1981-82 Vol 9, No 36.

The Commission investigated purchases in the Melbourne metropolitan area as well as a large number of provincial areas. Its report, released on 15 October 1981, was critical of both the Ministry of Housing and of the Housing Commission and endorsed the findings of the earlier Board of Inquiry into Housing Commission Land Purchases (VA 3017).

The major changes implemented as a result of the final report were administrative procedures such as; valuations, budget, planning and accountability. The Ministry of Housing also discontinued the practice of purchasing large areas of land, for Housing Commission estate development.