Opinion Number. 719

Subject

DEFENCE: PRICE FIXING WHETHER COMMONWEALTH HAS POWER IN WARTIME TO CONTROL RENTS: APPOINTMENT OF RENTS BOARD

Author
Key Legislation

CONSTITUTION, s. 51 (vi): WAR PRECAUTIONS REGULATIONS

Date
Client
The Prime Minister

The Prime Minister asks to be advised as to the power of the Federal Parliament to provide for the appointment of a Rents Board to determine-

  1. that there shall be no increase in the rents of dwelling-houses during the war unless approved by the Board;
  2. that in the case of those dwelling-houses, the rent of which has been increased since the war, the rent shall be reduced to the former figure unless the Rents Board decides that the increase is justifiable.

Of course, apart from the defence power, the Commonwealth Parliament has no power in this regard. The only question therefore is whether the subject-matter is sufficiently connected with defence to make it, in wartime, a matter incidental to the defence of the Commonwealth.

In Farey's case(1), it has been held by the High Court that the War Precautions Regulations fixing maximum prices for bread, flour, etc. were a valid exercise of the defence power.

The principle of the decision is that 'defence' includes everything that may be done, either under the authority of Parliament or under the Royal prerogative, for the defence of the Realm; the test in each case being whether the measure, whose validity was in question, could conduce to winning the war, or whether the relation between the measure and the successful issue of the war was so remote that the one could not reasonably be regarded as affecting the other.

It may seem hard to distinguish, in principle, between the power to fix the maximum prices of necessary foodstuffs, and the power to fix the maximum rents of dwelling-houses. Housing is as necessary as food, and the cost of each may be considered to affect, in a similar manner, the capacity of the people to endure the strain of war, and the enlistment of volunteers.

I think it probable, therefore, that there is power in the Commonwealth Parliament to make provision against the inflation of the cost of housing the people. At the same time, I have grave doubts whether either of the proposals submitted for advice would, in the specific form in which they are stated, be held to be valid.

There is one substantial distinction between the price of a bushel of wheat, or a loaf of bread, and the rent of a house. The one is easily standardisable, the other is not. The value of a house depends upon a variety of circumstances: the site value, the character of the building, its state of repair, and so forth-each of which, in the case of any particular house, may fluctuate from time to time, independently of the other factors. A house may have been repaired or enlarged since the war began; the desirability of the neighbourhood may have altered. A particular house may have been let before the war at a low rent for some particular reason, because it suited the owner to let it. The rent of a dwelling-house is a matter for separate assessment in the case of each house; and it would be difficult to establish the connection between success in the war and the fixing of the rent of every dwelling-house in Australia at the rent which happened to be charged for it at the beginning of the war.

This objection is to a certain extent diminished in the case of the second proposition, which recognises that there may be justification for increase of rent in particular cases; but I am not satisfied that it removes the fundamental difficulty that there is no sufficient direct relation between the measure and the defence of the Realm.

There would be a closer relation to defence if the scope of such a measure were limited in its application to cases which had a definite connection with military operations-e.g. to dwelling-houses occupied by the dependants of soldiers on active service. A measure of that kind might probably be drawn which could be regarded as incidental to the defence power.

[Vol. 14, p. 372]

(1)Farey v. Burvett 21 C.L.R. 433.