Opinion Number. 1480


POWER OF COMMONWEALTH TO WITHOLD PAYMENT TO STATE in event of State’S failing to comply with provisions relating to Satisfactory Settlement: DETERMINATION OF ABROGATION OF AGREEMENT: Whether failure of Victorian Government to conduct impartial Inquiry into complaints from migrant settlers constitutES breach

Key Legislation


The Secretary, Prime Minister

The Secretary, Prime Minister’s Department, has forwarded the following memorandum to me for advice:

I forward herewith copies of the £34,000,000 Agreement between the British and Commonwealth Governments, and Subsidiary Agreement between the Commonwealth and State Governments, and should be glad of an opinion as to:

  1. Whether the Commonwealth Government has power to withhold payments to a State as contemplated under clause 19 of the Agreement between the Commonwealth and States, and as amplified in the Schedule attached to the Agreement, in the event of a State failing to comply with Clauses 16 and 18 of the State Agreement, particularly those provisions relating to ‘Satisfactory Settlement’.
  2. What exactly could be construed as an abrogation of clauses 16 and 18 and, in view of other terms embodied in the Agreement, who would be the Authority or Authorities competent to determine this factor; and
  3. Whether the failure of the Victorian Government, despite repeated promises to conduct an impartial Inquiry into the insistent and numerous complaints received from migrant settlers, may be construed to constitute a breach of clauses 16 and 18 of the State Agreement as regards ‘Satisfactory Settlement’.

Clauses 18 and 19 of the Agreement as amended read as follows:

18. In the case of an undertaking for the settlement of persons on farms, for every principal sum of £1,500 issued to the State Government in pursuance of this Agreement, the State Government shall–

  1. Provide one new farm;
  2. Arrange that within twelve months after the issue of the principal sum one assisted migrant family, consisting on the average of four persons without capital shall sail direct from the United Kingdom to the said State and be received into and satisfactorily settled in the said States; and
  3. Allocate at least one-half of the new farms provided in pursuance of this Agreement to assisted migrants who have sailed from the United Kingdom since the first day of June, one thousand nine hundred and twenty-two, and have not been resident in Australia for more than five years at the date of allocation.
    1. In addition to issuing moneys on loan to the State Government the Commonwealth Government will make payment to the State Government in accordance with the provisions of the Schedule to this Agreement in respect of farms provided and allocated to assisted migrants in accordance with the last preceding clause (hereinafter called ‘migrant farms’).
    2. The provisions of clause 20 of this Agreement shall apply as well in respect of moneys paid in pursuance of this clause as in respect of moneys issued on loan in pursuance of this Agreement.

A perusal of the Schedule referred to in clause 19 discloses that, subject to certain contingencies, an amount of £125 will be paid to the State in respect of each migrant farm established and satisfactorily settled in accordance with clause 18.

Paragraph 2 of the Schedule reads as follows:

The amount of £125 per migrant farm will be paid to each State Government after the close of each Commonwealth financial year, subject to satisfactory evidence being submitted to the Commonwealth Government as to the number of migrant farms established and settled under clause 18 of this Agreement or the said corresponding clauses during that year.

The scheme of the Agreement therefore is that, if the Commonwealth is satisfied with the evidence submitted by the State at the end of each Commonwealth financial year as to the number of farms established and satisfactorily settled during that year, it must pay the State the amount of £125 per farm.

The Commonwealth is the party which must be satisfied as to the establishment and settlement of the farms and if it is not so satisfied, it is justified in withholding payment accordingly; but in the event of a dispute between the State and the Commonwealth as to whether in any specific case a migrant has been satisfactorily settled, the Courts would be the ultimate judges in the dispute if either party resorted to them.

In my opinion the questions submitted by you should be answered as follows:

  1. Yes
    1. The first part of the question is too widely drawn to permit of a satisfactory answer. If advice is desired as to whether a breach of the agreement has been committed in any particular case the matter should be referred to me, with a full statement of the circumstances which, it is alleged, constitute the breach.
    2. The Court is the ultimate authority competent to determine whether a breach has been committed.
  2. No. I understand, however, that since these questions were asked the State has appointed a Royal Commission to investigate these matters.

[Vol. 24, p. 891]