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Thursday, 10 March 1932


Mr FRANCIS (Moreton) (Assistant Minister for Defence) . - I have much pleasure in moving -

That the bill be now read a second time.

By this measure it is proposed to amend three sections of the War Service Homes Act. Several of the amendments are more or less formal in character, but the proposed amendment of section 36 is of a more important nature. Most honorable members are aware that the War Service Homes Commission has provided homes without requiring the payment of a deposit; in thousands of cases the only deposit requested has been a minimum sum of £10. Such a payment would not provide the margin of security required by a private individual; but the commission felt that it was interpreting the wish of the Government of the day in making homes available to returned soldiers on the best terms possible. Owing to the difficult economic circumstances that have prevailed for some time, a number of purchasers have found themselves unable to meet their obligations, and notwithstanding the sympathy and helpful treatment which has been extended by the Government, some purchasers have vacated the homes provided for them. On the cancellation of the contracts, the commission has acted under regulation 17, and has required payment of the instalments outstanding at the time of the cancellation.

Regulation 17 reads -

1.   Notwithstanding the cancellation of any contract of sale, the commissioner may sue for and recover any instalment of purchase money or any other money which became clue under the contract at any time prior to the date of cancellation.

2.   In the event of the cancellation taking place during any period in respect of which an instalment is accruing due, a proportionate sum shall be deemed to have fallen due up to the date of cancellation.

The power to cancel a contract of sale on non-payment of instalments is contained in section 36 of the act, which provides -

1.   If at any time any instalment or money payable in respect of any contract of sale or advance under this act, or any part of such instalment or money, is unpaid for three calendar months next after the time appointed for the payment thereof, then, although no legal demand has been made for payment, the commissioner may enter upon and take possession of the land or land and dwelling-house with respect to which the contract of sale was entered into or the advance was made, and may-

(a)   in the case of a purchaser, cancel the contract of sale, and, in his discretion, forfeit the instalments previously paid by the purchaser; and

(b   ) in the case of a borrower, after giving to him such notice of the time, place, terms and conditions of sale as the commissioner thinks just and expedient, sell the estate and interest of the borrower in the land or land and dwelling-house, either by private sale or public tender or auction, and subject to such conditions of sale as he thinks expedient, and transfer the land or land and dwelling-house to the person who has purchased it and give a good and valid title thereto.

Regulation 17 was considered by the Full Court of Victoria to exceed the powers given under paragraph a of subsection 1 of section 36 -

2.   The Commissioner shall apply the proceeds derived from any sale made in pursuance of this Part, in payment in the first instance, of all moneys due in respect of the land or land and dwelling house, and in the payment or repayment of any amount charged thereon in favour of the Commissioner, or of so much thereof as remains unpaid, and of all expenses incurred by the Commissioner in relation to the sale or otherwise with respect to the land or land and dwelling house, and shall pay the balance (if any) to the persons appearing to the Minister to be entitled to receive it.

3.   For the purposes of this section money payable to the Commissioner for insurance as prescribed, or for water, sewerage or municipal rates, shall bo deemed to be money payable in respect of a contract of sale or advance under this act.

All contracts which have been entered into contain a clause setting out that they are subject to the acts and regulations, but recently theFull Court of Victoria held that regulation 17 was ultra vires. The purpose of the amendment, therefore, is to overcome this defect, and also to validate the action taken since the commencement of the act under section 36 and regulation 17. It does not extend in any way the powers which the commission believed it had, nor does it increase the obligations which applicants assumed when they entered into the contract of sale and purchase. Power similar to that conferred by this amendment is held directly or indirectly by all State housing authorities. The amendment has been drafted in such a way as not to deprive the applicant who contested the regulations of the benefit of the judgment he obtained.


Mr Beasley - Is the Minister referring to Davies ?


Mr FRANCIS - Yes. Approximately £10,000 has been collected under regulation 17, and £28,000 is still owing by expurchasers. Applications have been made to the War Service Homes Commissioner for a refund of moneys paid under this regulation, and a validation of such payments by the passing of this amendment is imperative for the protection of the revenue.

At the present time the commission may enter upon a property and carry out the necessary repairs where the purchaser or borrower has failed to do so. Section 31 makes it appear that when the commission enters upon a property in this way, it takes legal possession under the contract or mortgage. This was not intended, and to overcome the difficulty an amendment is proposed.

Every purchaser and borrower under section 31 is required to maintain his property in good order and repair, in order that the security for the loan granted by the commission shall not depreciate. Legal opinion recently obtained discloses that the commission cannot enforce this condition, which is included in every contract and mortgage, unless the purchaser or borrower is actually in possession of the home. If the House accepts the amendment proposed, the commission will be able to carry out necessary repairs to a property of which it is in possession with the object of effecting a re-sale. This power, I understand, is held by housing authorities operating in the Commonwealth, and is very necessary.Honorable members will agree that generally a better sale price, pro rata, can be obtained for a home in good order than for one which requires repairs and renovations. At the present time the property market is so glutted that unless houses are offered in good repair a sale is almost impossible. In some instances the result of making available for inspection a home which is out of repair is to lose a prospective purchaser. The higher the price at which a war service home can be sold, the greater the advantage to the borrower, whose equity is thereby increased accordingly.


Mr Rosevear - Does not the commission exercise supervision of the houses while the purchasers are in possession ?


Mr FRANCIS - It has power to require an occupier to keep his house in good order and repair, but if he does not do so, and for any reason vacates the home, the commission has no power to effect the necessary repairs. The amendment is definitely in the interests of the soldier occupant. Honorable members may be assured that, if it is accepted, only those works regarded as essential to preserve the security, or to place the property in a reasonable condition for re-sale, will be undertaken.

The act does not give to the commission specific authority to let a property of which it is in possession. The commission endeavours to effect a re-sale, but if a purchaser is not readily available a tenant is placed in the property with the. object of keeping down the accruing liabilities. This action is taken in the interests of the purchaser or borrower concerned. The commission should be empowered to let a house, and the amendment will give it the legal authority to do so.

From time to time the commission has to issue notices to purchasers or borrowers, principally in connexion with the collection of arrears of instalments. Section 43 makes no provision for the service of notices when the purchaser or borrower is deceased; the bill proposes to remove this defect and prescribes the manner in which all notices shall be issued. The amendment, therefore, may be regarded as containing the machinery necessary for the proper administration of the act.

The proposed alterations are designed only to ensure to the commission the right' to let unoccupied houses, to enable him to serve notices where the purchaser or borrower is deceased, and to restore to him certain other powers he was always understood to possess. No additional obligation is thrown upon the occupiers of war service homes.


Mr White - Where the decline in property values has deprived a soldier of his equity, will the Government credit him with any improvements he has effected?


Mr FRANCIS - If the improvements effected by the borrower have increased the value of the home, he will get the benefit of a higher price when the property is sold.


Mr James - That has not been so in the past. Will the soldier be credited in future with the increased value given by his improvements when he is dispossessed of his home?


Mr FRANCIS - The value of a property can be determined only by the demand for homes ; any additional value resulting from the improvements will be reflected in the sale price.

Debate (on motion by Mr. Riley) adjourned.







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