I Have Received a Notice to Show Cause. What Do I Do?

A notice to show cause is the formal warning that the State intends to forfeit your State lease. Under section 122 of the Land Act 1996 it is a mandatory step. It is also your opportunity, and there is usually only one.

Why the notice must be given

Two things follow. The notice must specify the grounds — a notice that does not tell you what you are said to have done wrong is defective. And responding is not a formality: a lessee who shows good cause cannot lawfully be forfeited on that ground.

First: read the notice properly

1. What ground or grounds are specified? Rent six months in arrears (s 122(1)(a)); unpaid fees (b); unpaid improvement money (c); breach of a covenant, condition or provision, or of a section 91 destocking notice (d); or a grant obtained by knowingly false or misleading statements (e).
2. What period does it give? The Act does not fix it — the notice does. Diarise the last day immediately.
3. Is there also a compliance notice under section 122(2)(b) requiring you to remedy the breach within a stated period? The Minister may serve one whether or not cause has been shown.
4. Who else was served? Section 122(4) requires copies to go to everyone the Departmental Head knows has or claims an interest — mortgagees, sublessees, caveators. Tell your mortgagee at once if it has not been served.

What “good cause” looks like

The Act does not define it. In practice a response succeeds on one or more of these lines:

• The ground is factually wrong. The rent was paid; the payment was misallocated; the improvement conditions were met. Attach receipts, bank records, photographs, invoices.
• The breach has been remedied. Arrears paid in full, conditions now satisfied. Evidence it.
• The breach is being remedied on a definite timetable. Not an assurance — a schedule, with contracts, orders and dates.
• The failure was caused by something outside your control. Access blocked by a land dispute, natural disaster, a State approval that has not issued, collapse of the market for the crop, death or incapacity of the lessee.
• Forfeiture would be disproportionate. Substantial compliance, large investment, third parties affected, a modest or technical breach. This engages section 41 of the Constitution, under which even an act done under a valid law is unlawful if harsh or oppressive or disproportionate in the particular case.

Writing the response

1. Head it clearly — “Response to Notice to Show Cause”, with the lease description (volume and folio, allotment and section or portion), the notice date and its reference.
2. Answer each specified ground separately. Do not write generally around them.
3. Attach the evidence, indexed and paginated. Receipts, bank statements, dated photographs, contracts, correspondence, valuations, medical or probate documents.
4. Set out what has been done and spent on the land to date. Substantial performance matters.
5. Propose a remedy with dates if anything remains outstanding.
6. Ask expressly for the alternatives — see below.
7. Lodge within the period, by a method that produces a receipt, and keep a full copy.

Make the parallel applications at the same time

The response is not the only thing to file. In the same letter, or alongside it, consider:

• A section 118(2) application — to relax or modify the covenants and conditions where special hardship would otherwise be caused. Decided after a Land Board report.
• A section 118(1) application — to vary the purpose, where the use has genuinely changed, within the two statutory limits.
• A section 83(5) application — to remit or postpone rent, in whole or in part, for a special reason.
• An invitation to proceed under section 124 — a non-compliance fee instead of forfeiture, with your reasons why that is the proportionate response.

If the lease is forfeited anyway

Forfeiture takes effect by notice in the National Gazette. Two routes remain:

• Section 123 — where the forfeiture was by mistake, and no section 75 notice has been published for another applicant, the Departmental Head may revoke it by Gazette notice, and the lease is then treated as if the forfeiture had never occurred. This window closes once the land is re-allocated, so move immediately.
• Judicial review in the National Court under section 155(3) and (4) of the Constitution — on grounds including no valid notice, no specified ground, forfeiture before the period expired, failure to serve interested parties under section 122(4), breach of natural justice under section 59, or section 41 disproportion.

Where the State is a defendant, the notice requirements of the Claims By and Against the State Act 1996 apply and are strict. Get advice quickly — the Public Solicitor, or a firm from the law firms directory.