SMALL GRAZING RUNS AND RETROSPECTIVE LEGISLATION.

Press, Volume LXIV, Issue 19363, 16 July 1928, Page 11

SMALL GRAZING RUNS AND RETROSPECTIVE LEGISLATION.

TO THE EDITOB OF THE PBESS. Sir—We cannot afford to sacrifice a principle of honour and establish so vicious a precedent. The honest thing for the Government to have done if they were dissatisfied with the conditions under which these lessees held ' their leases as interpreted by the Privy Council was to have passed legislation in 1918 to determine these leases and face the question of compensation. For the benefit of "Lessee" and others similarly situated, as well as for the electors generally, I give the facts as concisely and as briefly as possible. In 1892 the Hon. John McKenzie, Minister for Lands, introduced the Land Act, 1892. In that Act were two new land tenures, namely lease-in-perpetu-itv and small grazing runs. His twofold object was to settle the poorer and inaccessible lands of the Dominion, and to give the landless man a chance to acquire a block of land. In the small grazing run lease, there were two conditions, right of renewal at the of 21 years, and at a rental of per cent, on the unimproved value. Many small grazing run leases were taken up, and improvements made, and there was general satisfaction on the part of nil concerned. This obtained till the first leases matured, when the Crown claimed that the 2J per cent, rental was not continuous. It ignored this important condition on which the leases were taken uo, and fixed a higher rental. The tenants objected, and foueht the matter. A lessee, the Mr St. Leser, whose case was considered a test case, took his case to the Supreme Court, and secured a favourable verdict. The Crown then went to the Appeal Court, and lost. It then took it to the Privv Council, with the same result. Thus, the hmhest Judiciarv in the Empire uphe'd the contention of the lessee, thnt the Crown was compelled t'o grant the renewal at 2A per cent, rental. 'Section 173 of tlie Land Act, 1892, states: "Such runs mav be declared to be open for lease on application at a rent of not less than 2* per centum of such price as the Board, subject to the approval of the Government, shall think fit. beinsr not less than the price at which second class land may be sold as provided in Section 112. Section 182. Clause B, of the same Act, dealing with renewed lease and its rental, states:—"The lessee shall elect by notice in writing delivered to the Commissioner, whether he will accept a fresh lease nf the said lauds for a further term of twenty-one years from

the expiration of the then term at a rental equal to not less than 2-J per centum of the value of the fee simple as fixed, less the value of improvements." The Privy Council's decision was as follows: "Upon the termination of the lease of a small grazing run »in New Zealand, the tenant is entitled under Section 182 of the Land Act, 1892, to renewal at a rental' of 2i per cent, of the value of the fee simple as fixed, less the value of improvements hy the Valuation made under that section. By the words 'equal to not less than' in

I that section, the Land Board is not authorised to require a rental exceeding 21 per cent:, and upon the tenants objecting to that rent without objecting to the valuation, "to hnve the lease put up' to auction." "Whatever was the intention of the Legislature in the 1892 Act. it was on the declared provisions.of that Act that Ihe lenses .ware taken up. In December, 1918. the 7tli to be precise (Saturday), just before the close of the session, the Government introduced a Bill now known as the Land Laws Amendment Act, 1918, including a retrospective clause taking away from the lessee the right to a renewal at 2} per cent. It passed its first and second readings on that day, and was put- through all its stages on the following Monday in a very thin House (mfjueuza year.;.-.-.lt is : to be .observed t;hat the Hon. Mr SK Leger is exempt from the operations of that Act.. * In defending the action of the Government, the Hon. Mr Massey said: "Notwithstanding the St. Leger case, it was never the intention of the Government that small grazing run lessees should have the right of fixing their rentals at 21-, per cent.," ami later: "There was a general concensus of opinion amongst the -executive officers of the Lands Department that the intent of the legislation then on the Statute Book was that rents for renewed leases could be calculated at any > rate not less than 2-i per cent, on the | new capital value.". ' I The Hon. Mr Guthrie, Minister for

Lands, said: "Sections 6 and 7 of the Land"Laws, Amendment Act, 1918, emphasised the fact that the effect of the Privy Council decision was_ contrary to the'true intent of the Legislature and to-the public interest, and further declared that Land Boards, in, offering; renewed leases of small grazing runs! always had the exclusive',power and right to determine the rate on. which rent under renewed lease should be calculated." ' If. that .is so, why was St. Leger exempt from the Act ? Further, the Hon. Mr Guthrie declared (see Hansard): "With, regard to the clause dealing with the renewals of leases of small grazing runs, it is well known that it is an absolute necessity to have this, as wo- a 'great many of the leases running out, and if the' matter is not put right the country will lose very large sums of money indeed." In spite of what the Hon. Mr Massey and Mr Guthrie said in regard to the intention of the legislation of 1892, Mr Sidney Weelman, Commissioner of Crown Lands in Christchurch, said in March, 1900, eight years after the 1892 Act was passed and when its intention was fresh in the minds of the officials: "And the rental of the Crown land leases, being at the rate of 2J per cent, per annum on its capital value, these proportions 3re fixed by law, and there is no power either under the. Land Act or under the Land for Settlements Act to alter them." -

The real significance of the retrospective legislation .of the 1918 Act ivas not immediately realised until the session of 1924, when a number of Poverty Bay lessees petitioned the House for redress: The Hon. Mr McLeod (not then Ministei for Lands) strongly supported. the claims of the lessees and condemned the action of the Government. He stated (see Hansard): "Now, if on the top of that the Minister intends to take up the attitude that the Legislature when it passed this Act (1892) did not intend so and so, undoubtedly he is, in my mind, robbing the man who has paid for the goodwill of such land; and I say that no Government and no country should have the right to do this." The Reform Party were so staggered at the revelation and so opposed to the principle involved that they made it very plain they were not gping to stand legislation of that sort. Mr Massey saw the point, and he offered the lessees the alternative of repealing the retrospective legislation or granting -them the right to the freehold. These petitioning lessees accepted the latter, and legislation was provided accordingly. Now, one asks, who gave these lessees the right to pledge the other small grazing run lessees? A vicious precedent has been established; a sacred contract has been violated. Where is, hence, our legislative security? Who shall say that other contracts shall not be broken by the Legislature, e.g., tax free bondsP The integrity of the Government and the sanctity of contracts must be maintained at all costs.—Yours; ete.. FARMER.