The Attorney-General has referred to me for attention your letter, dated 1 August, 1950. In connexion with the proposal by the Commonwealth to acquire by agreement certain lands in the Warrawong district.

Advice is sought whether the acquisition by agreement of these lands would result in your being disqualified from retaining your seat as a member of the House of Representatives.

In my view, disqualification would result from the voluntary acquisition of the lands owned wholly or partly by the Trustees. Special considerations would apply in relation to the lands owned by the Company to which I will refer below.

Section 44(v) of the Constitution, so far as material, provides that ‘any person who has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons shall be incapable … of sitting as … a member of the House of Representatives’. If a member becomes subject to that disability, his place becomes vacant (section 45).

From the documents attached to your letter, it appears that these lands are owned by the Trustees of the X. settlement or Kembla Estates Pty Ltd. It is not clear to me whether the area to be resumed is owned jointly by the Trustees and the Company. However, whether the Trustees or the Company are full owners of particular blocks or only part-owners, the result, in relation to the Constitution, is, I think, the same in both cases. You are one of two Trustees of the Settlement and hold a quarter interest in it. The lands owned by Kembla Estates Pty Ltd were acquired under contract in which the Trustees hold an interest. The selling policy and prices of the Company are directed by the Trustees and the amount payable to them is dependent upon the value of the realizations by the Company.

I think a shareholder in the Company must be regarded as having at least an ‘indirect pecuniary interest’ within the meaning of section 44(v) in any acquisition by agreement by the Commonwealth of lands owned by the Company. If, then, the number of shareholders is less than twenty-five, or if your interest is other than in common with other shareholders, the acquisition by agreement would disentitle you from retaining your place in the House. Even if your interest in the Company is that of an ordinary shareholder, and the number of shareholders exceeds twenty-five, the fact that the Settlement is substantially interested in sales by the Company, and apparently derives some financial benefit from such sales, and that you have an interest in the Settlement, would bring you within section 44(v) in relation to agreements entered into by the Company in respect of the subject lands.

I would stress the fact that the views herein expressed are departmental views only, have no binding force at all, and should be regarded as for your personal information. Throughout the history of the Commonwealth, the Attorney-General and his Department have always felt the greatest diffidence in attempting to guide private members, in their individual capacity, as to the scope and application of the provisions of section 44.

[Vol. 39, p. 286]