A solution looking for a problem
28 July, 2021, 3:56 pm
Attorney-General Aiyaz Sayed-Khaiyum has issued a very long, 30-paragraph defence of the iTaukei Land Trust (Amendment) Bill.
But I am not sure he has really got to the point.
The aim of the law change, he says, is to speed up the backlog of mortgage consent applications at the iTaukei Land Trust Board. Once this is done (he seems to suggest) investment will flow, and the value of iTaukei land leases will increase; and this will be great for landowners.
This is fantasy. Whoever has drafted the amendment Bill does not seem ever to have worked in the real world of dealing with iTaukei leases. For the past 25 years, I have worked for commercial tenants of iTaukei land. So let me try to enlighten him.
To cover every argument would take a lot more words. But let’s try to hit the key points. I am not talking here about the need to consult. Should the Government consult landowners? Of course it should. It is very important. That is just obvious.
What is the problem? The Government thinks this is a commercial problem. So let’s talk about commercial and tourism leases from TLTB.
TLTB usually approves mortgage consents in less than a week. No commercial lawyer I have talked to says differently.
If a request is more urgent, in my experience, TLTB will try to help.
TLTB’s fees for commercial lease consents are expensive – up to $1,000 plus VAT. So we should expect good service.
Most applications run smoothly. Occasionally they do not.
If TLTB thinks there is a problem with the mortgage or the lease, there may be delays. But that is normal, as in any process.
So — that’s TLTB leases. Now, what about leasing from the Government — State leases? State leases are a problem. To get a mortgage consent for a State lease can take weeks, or even months. The Government also wants a legal fix for the State Lands Act and Government leases. That is in Bill No 16.
One of the Government’s mistakes is to treat these two different types of land with exactly the same fix. The laws are One of the Government’s mistakes is to treat these two different types of land with exactly the same fix.
The laws are different. different.
“Cut, paste, vote”
In one sense each of the State Lands Act and the TLTB Act are the same.
They each say “you must not deal with my leased land without my consent”.
But they each say it in a different way.
The TLTB Act says a lessee can’t “alienate or deal with” a TLTB lease without consent. It also says that it is “in the absolute discretion” of TLTB whether it consents or not. That is all the TLTB Act says about it.
Is a mortgage a “dealing”? We all accept that it is – so end of story. We ask for consent. The State Lands Act says it differently. A lessee must get permission before it “alienates or deals with” State land (same as TLTB Act).
But a State land lessee must also get permission before it “mortgages, charges or pledges” the lease, or goes to court about the lease. And anyone who wants to lodge a caveat against a State lease must also get Government permission.
The TLTB Act does not have these additional restrictions. The law is different.
Has the Attorney-General’s Office realised this? Because it has simply put the same words into both of the Bills.
A good law firm frowns on “cut, paste print” lawyering. These Bills seem to be “cut, paste, vote” legislating. That is not a good way to change the law. If Bill No 17 had been circulated for consultation, we could point out these things.
So both laws are to be changed saying that consent is not needed for mortgages, charges, pledges, caveats and so on – but in a very long-winded way.
But there’s more If that was the only issue, we might just say “more badly-written laws, – Richard Naidu – what’s new?”
But that’s not all there is. In both Bills – 16 and 17 – there is another new subclause.
More cutting and pasting. And this is the change that bothers me, and which nobody seems to be focused on.
Each Act will also be changed to say this: “For the purposes of this section, any such consent shall only be refused where there is a breach of any lease condition or where such application to deal with the land is not in accordance with any law”.
What does this mean? For TLTB, it changes the rules. It means any lessee of TLTB land can sublease to anyone else — or sell a TLTB lease to anyone else — and TLTB must agree.
There are only two exceptions to this new rule; • if the lessee has breached the lease (for example, the lessee has not paid its rent); or • if the sale or sub-lease would breach a law (for example, a foreign investor is not allowed to do business on the land).
The explanatory notes to the Bill do not talk about this change. Nor do they say why this change is needed.
The TLTB Act says TLTB is supposed to have “absolute discretion” on any “alienation or dealing” with a TLTB lease. So why is this discretion being altered? Imagine you own a house and you rent it to someone. Your tenant says to you: “By the way, as long as I pay my rent, I can put another tenant in the house. Or maybe I will let someone else stay there and charge them a higher rent. And you can’t stop me. Would you agree to that? If you would not, why should TLTB be made to do that? Why is the government doing this? Most people know I am not a big fan of our current government. Do I think they are trying to take away landowners’ control of their land? No. I don’t think they mean to. But they don’t seem to know what they’re doing. And they never ask anyone for advice first. So they don’t seem to understand “the reality of the matter”.
These law changes do things that maybe they haven’t thought about. They need to be properly discussed. This Government is constantly rushing into Parliament to change any law it wants to, any time it wants to, without thinking clearly about it.
Many of our laws — including the TLTB Act — are decades old. They were well-designed, by expert legal drafters.
These people consulted properly and put thought and care into their words.
Now I see a lot of bad legal drafting being just “glued on” to good laws to satisfy some poorly thought out political whim.
It’s a bit like putting a Kia bumper onto the front of a Rolls-Royce.
If you have a problem in Government, look for the right ways to fix it. If there are delays at the Department of Lands, find out why and fix them. Don’t just reach for your pen to change the law.
Laws should be treated with more respect than that.
More value? And finally — what will be the effect of this law on iTaukei land? Will it make it more marketable? Will it make it more valuable? It will not change its value one bit. In 25 years of practice, I have never heard a developer, a banker, a lessee — or even a landowner say “gosh, if only there was no mortgage consent — iTaukei land would be so much more valuable”.
Political sloganeering is very different from the serious business of law. The two should not be mixed up. It’s great to say in the Budget speech “we will fix all the problems”. But there has to be a real problem first. This is just “a solution looking for a problem”. In the process it is creating a much bigger one.
• RICHARD NAIDU is a Suva-based lawyer. The views expressed in this article are not necessarily the views of The Fiji Times