Hansard of August 15th 2012 (Legislative Council) records MP Pennicuik reading parts of a letter that Cr Magee wrote to the Premier in regards to the countless governance issues that surround the role and function of the MRC Trustees . The letter was dated the 26th July and requested a response from the Premier. To the best of our knowledge, no response has been forthcoming. The full letter (minus address details) is presented below:
“Dear Mr Baillieu
Re: CAULFIELD RACECOURSE RESERVE
I am writing to bring to your attention concerns about the governance of the Caulfield Racecourse Reserve and the responsible financial management of some $2 billion dollars’ worth of public land.
Earlier this year, I was elected Chairman of Trustees.
- Composition of the Trust
The Trustees are appointed by the Governor in Council on the recommendation of the Minister for Crown Lands, the Hon Ryan Smith. The Trust is comprised of six nominees of the Melbourne Racing Club (MRC), three Councillors of the City of Glen Eira and six nominees of the Minister.
Those arrangements appear to date back more than a hundred years.
The MRC being the tenant and comprising 6/15ths of the Trustees seems to institutionalise actual or perceived conflicts of interest which do not seem consistent with contemporary standards of governance. One option would be to reconstitute the Trust as independent of all interested parties.
- Non-adherence to Government Guidelines
The Department of Sustainability and Environment publishes “Committee of Management Responsibilities and Good Practice Guidelines” (Guidelines). The Trustees received a copy of the Guidelines and advice from the Office of the Victorian Government Solicitor Anthony Leggiero, on the 24th February 2012 that in his opinion,”
“It is clear that members of the general public could reasonably form the view that the Nominated Trustees may experience a conflict between their private obligations’ to the Club and their duties as Trustees, which could influence their decision-making in relation to Reserve tenure issues.”
Guidelines recommend that the Nominated Trustees manage this perceived conflict of interest by:
- “Disclosing their potential conflict to the other Trustees:
- Recording this disclosure in the meeting minutes: and
- Implementing a transparent and accountable process to manage the perceived conflict.”
The Majority of Trustees have decided not to accept the advice or Guidelines.
- Responsible Financial Management
The Caulfield Racecourse Reserve is Crown Land with a commercial value of approximately $2 billion. The land is used for a range of purposes including racing, racing related, recreational and commercial. At present the commercial users pay their rents to the MRC and not to the Trustees. The Trust has virtually no income with which to discharge its responsibilities.
The Trustees are currently dealing with the appropriate leasing of the Reserve or parts of the Reserve for different purposes and tenures.
The governance arrangements referred to above and the non-adherence to the Government’s Guidelines raise urgent issues concerning decision-making on these very important leases.
- Tenure of Trustees
While Government and MRC-nominated Trustees retain their appointments for long periods of time, Trustees nominated by the Council are regarded as losing their eligibility at the end of each Council Term and, if re-elected it takes many months for them to be reappointed. That is likely to happen again when the Council Term expires on 27 October 2012. The Victorian Government Solicitor advises that the leases are likely to be finalised in the period immediately after this and the Council may be unrepresented in that process.
- Parliamentary scrutiny
These arrangements were the subject of an all-party Report by the Select Committee on Public Land Development in 2008, chaired by Hon David Davis MLC. The unanimous Report was critical of these arrangements and called for reforms. No response was made to that Report at the time and it would be appropriate for those concerns to be addressed urgently.
For all these reasons I would appreciate it if the Government would give urgent and serious attention to ensuring that the Crown Land is subject to appropriate governance arrangements and that the process for establishing leases over this land meets all government requirements.
Yours sincerely
Cr Jim Magee
Chairman
For and on behalf of the Trustees
Of the Caulfield Racecourse Reserve
Copy
Mr Des Pearson, Auditor General
Mr George Brouwer, Ombudsman
Glen Eira Debates 
February 23, 2013 at 9:33 PM
During the C60 debacle, Jack Campbell (a former Caufleld Mayor and an esteemed elder statesman of the Glen Eira Municipality) wrote a letter to the State Government (Labour) and the State Ombudsman clearly outlining the Trustees failure to properly manage the land – not only in abrograting their management resoponsibiltiy to the MRC but also right down to fact that the Trustees had failed to renew the leases and therefore the leases had expired.. The reaction was squat.
Hopefully with elections looming Magee’s efforts might not fall on deaf ears.
For over 150 years the Caulfield Racecourse Reserve has been designated a racecourse, public park and public recreation area – all with well established equally legal status. The Trustees continually favour the racecourse over park and recreation area usage.
It’s time the Trustees were held accountable for their failure. With the recent appointment of the Lipshutz, Hyams and Esakoff (all proven MRC supporters at the expense of the local residents and the Glen Eira Community) there is no better time for the issue of the administration of the Caulfield Racecourse Reserve to be subject to a public inquiry
February 23, 2013 at 9:42 PM
We had previously published the Jack Campbell letter. See: https://gleneira.wordpress.com/2011/03/17/law-legality-and-the-mrc/
February 23, 2013 at 10:11 PM
What a great letter from Cr. Magee to the Premier. Ted Ballieu is concentrating on Bollywood movies and shows and as a matter of fact has given $500K grant to them at the cost of cutting TAFE and other funding. One can imagine his calibre of being vindictive and has not selected Cr. Magee for the fear tht Magee will expose the government. Instead the members of the liberal party are trustees from the Council. It is time Ted and his followers to quit the office next year. Make way for Daniel Andrews and his compatible team.
February 23, 2013 at 10:58 PM
I don’t think the Labor party exactly covered itself with glory on this issue either. There’s been a 100 years of mismanagement and vested interests with every single parliament cowering before the might of the racing moguls.Perhaps in this century stakes are a little bit higher, the financial rewards are bigger and Naphine has to keep his seat hence the largesse to country racing. There’s also the revenue that comes from punting. It’s big bikkies all round. Which begs the question of course why Lipshutz Hyams and Esakoff would suddenly want to be trustees and rub shoulders with the big boys. I wouldn’t think that any of these people would know anything about racing and they certainly know nothing about big business. But to give them their dues, they would know a fair bit about behind the scenes manoevring and duplicity. A perfect match made in heaven I suppose – the MRC and the gang.
February 24, 2013 at 2:41 PM
The TAFE funding was being rorted by private business’s. There were 10,000 people training to be “personal trainers”. There is work for 900 in Victoria and projected to 2015. Students were being offered a free computer and in some cases a holiday to sign up for a course. There were numrerous micky mouse courses being run with no hope of employment. Aromatherapy was a big one. They were preying on young people that were being sold a dream that would never eventuate. While this was going on people wanting to start a plumbing apprenticeship had a 12 month wait at Homeglen due to a shortage of places. The whole thing was unsustainable. Anyone supporting this rorting was either a benificuary or someone that needs to re-think their values. Magee’s work didn’t help him win votes. He was only returned on the preferences of a losing candidate. Adonopoulolos got almost 200 more votes.
February 24, 2013 at 7:30 AM
Good on Magee for trying – I hope he continues fighting the issue and raises a huge stink in the Victorian and National Media.
The Trustees are a total sham who have handed over responsibility for the management of a huge chunk of public land to a the MRC. The Trustees are not held accountable and don’t even have to publish financial accounts.
February 24, 2013 at 9:04 AM
Magee’s letter centres on governance, conflicts of interest and public confidence in the entire operation of both the racecourse and the state government. It’s extraordinary that any government would not follow its own published guidelines or insist that they be adopted in toto. The letter was also copied to the ombudsman and the auditor general. They’ve sat on their hands as well.
The contents of the letter apply in triplicate to Hyams, Esakoff and Lipshutz. The public can not have any confidence that (1) they will be effective in any shape or form (2) that the Glen Eira community is their sole interest (3) that conflicts of interest will not arise continually since they’ve been involved up to their necks with the C60 and centre of the racecourse. The only advantage for residents is that if, and only if, some issue comes up about the racecourse they might be bound to declare a conflict of interest as trustees and therefore not gerrymander the council vote. I would not however have complete confidence that the likes of Lipshutz would even follow this tradition since he has repeatedly failed to declare even more obvious conflicts of interest on “simple” issues like the how to vote cards and his son as the frisbee playing exempt from punishment golden boy.
I’ve thought about this and cannot see any advantage to have any Glen Eira councillor as a trustee. Even with the best will in the world, 3 against 15 is a pointless exercise. Unless the composition changes nothing will change and unless the government is embarrassed into taking firm action, nothing will change. The best way forward I think and to create the greatest amount of embarrassment is for council to refuse to take part in the old boys club full stop.
February 24, 2013 at 11:09 AM
The mess that is the governance arrangement covering this Crown Grant in Caulfield has been 150 years in the making, primarily by politicians and powerful racing industry figures. I’m not surprised the Government has chosen to ignore the letter, its Select Committee report, its own principles and policies and legislation for the management of Crown land, and the history and purpose of the Crown Grant. Even the Ombudsman has become a party-political office. I disagree though about it being a waste of time for Councillor representatives to participate in the activities of the Trustees. The Trustees have chosen to be secretive about their decisions and rationale for them. Councillors have an opportunity and obligation to share with the community the information that is supplied to them in their roles as Trustees. That’s why they are appointed. Its not so they have an effective voice on the Trustees—the Government has stacked the Trustees to ensure that can’t happen—it’s so that they can facilitate information between the Trustees and the community via Council. Past representatives haven’t been very concerned about information sharing, and the latest appointments suggest the noxious practice isn’t about to change.
February 24, 2013 at 1:41 PM
You guys don’t get it. Trustees are appointed by the Sate Government to represent the State as the Landlord. Councillors should not become Trustees if they purely want to represent Glen Eira.They are primarily there to represent the State. Read the Trusts guidelines.
February 24, 2013 at 9:55 PM
It would be helpful to publish the URLs of the documents you refer to and believe people should read. I’m going to quote from DSE’s “Committee of Management Responsibilities and Good Practice Guidelines” instead.
“All committees manage their reserve on behalf of the Minister for Environment and Climate Change, and have the responsibility to manage, improve, maintain and control their reserve…Crown land is public land, provided for the enjoyment and benefit of the people of Victoria…The community is a committee of management’s main client group. A good relationship with the community is an important part of ensuring that a reserve is used, enjoyed, appreciated and developed by all.”
I note also in “Appointment and Remuneration Guidelines for Victorian Government Boards Statutory Bodies and Advisory Committees” [which the members are subject to] that they are to declare private conflicts of interest, and that “Conflicts of interests can be actual, potential or perceived”.
Finally, from the Select Committee itself: “the Committee was concerned that evidence from the Trustees themselves illustrates the complete lack of appreciation for the original purposes of the Reserve as a public park and the responsibility to uphold that purpose with equal status as horse racing”. The one thing the Committee screwed up was that the original grant didn’t mention horses at all.
February 24, 2013 at 2:51 PM
The Brumby Labor Government appointed former Cr. Nick Staikos as a life time trustee. I am yet to learn of Nic’s expertise in the racing industry. In fact he has little experience in anything but politics. as a councillor he had to resign to keep his job as an electorate offiicer. There were an other of other appointments by the ALP when they were in power. All blokes that vote with the MRC. You may want to factor in some of these facts into you thinking and give it some balance. No matter who Glen Eira put up they don’t have a hope.
February 24, 2013 at 9:26 PM
Off topic.
Seeing we invariably spend our time here being negative. Let’s give the Council a pat on the back for being way more abstemious than many other councils when it comes to spending on alcohol for councillors and staff according to figures in today’s HS for the years 2010-11 and 2011-12.
For example, Glen Eira’s expenditure was 11,695 compared to Melbourne $82,100 and Kingston $64,200.
February 25, 2013 at 8:57 PM
Reprobate the Trust is not a Committee of Management. Wrong
February 26, 2013 at 7:41 AM
Gotta disagree with you on this. The Trustees are appointed by the State Government to manage Crown Land (maintain, improve and control) on behalf of the Govt. As such, even though called Trustees rather than a Committee, they undeniably constitute a group of individuals charged with the management of a chunk of extremely valuable public land and can reasonably be called a committee of management. However, given the significance of wording in legislation it is possible (ethically wrong but possible) that not being formally called a Committee of Management means they bypass the Practice Guidelines.
The fact that they have totally handed over daily control to a powerful vested interest (and have thereby condoned ignoring 2 of the 3 intended uses of the Crown Land) does not, and should not, change their managerial role, their responsibilities or their accountability. Their performance, past and present, is abyssmal – they should be removed and the administration of the Caulfield Racecourse Reserve needs to be the subject of an independent public inquiry (aimed at redressing the balance of the 3 uses and ensuring that current “hands off” managerial practices are never again permitted)
February 26, 2013 at 8:19 AM
Absolutely correct. If it was a Committee then the whole game would be different. It is a trust and the make up of the trust members are described in the Deed.
Oh how simple it would be if it were a Management Committee. All of the DSE’s rules would apply.
February 26, 2013 at 1:02 PM
I didn’t actually claim the Trust is a Committee of Management. I implicitly did claim that the Guidelines apply to the Trustees, and that is the view of the DSE officers I spoke to. Further, DSE has this to say: “Trusts are an earlier form of local management and, while still used for some reserves, have been largely superseded by the committee of managagement model of local management”. The view of DSE probably isn’t legalistic though—just that there are some principles that should apply to land managers of Crown Land. Consistent application of the guidelines would assist the migration from an archaic form of management to something more in line with contemporary standards of governance.
For another, somewhat critical, view of issues concerning public land management in Victoria including Crown Land (Reserves) Act 1978, see “Sustainability and Public Land Planning” by David Gabriel-Jones of The Public Land Consultancy [http://publicland.com.au]. There’s some irony in the document being commissioned by DSE.