7. Improving Acts and regulations: recommendations
151 Adequate drafting training of lawyers and recruits to the Office of Chief Parliamentary Counsel would lead to improved drafting. However, attention must also be given to certain factors which contribute to the difficulty faced by readers of Acts and regulations. These are of two types. The first is a lack of a coherent policy in relation to the structure of legislation. The second is the relatively unimaginative design and appearance of Acts and regulations.
The structure of legislation
Relationship between the body of an Act and the schedules
152 Legislation consists of two main parts, an Act and regulations made under it. The Act itself is often divided into the body of the Act and appendages called ‘Schedules’. The division of material between these components is made largely on the basis of precedent. Restricted use is made of Schedules. Most of the legislative material is normally contained in the body of the Act. As a result, Acts regularly state numerous particular and quite narrow rules from which it is extremely difficult to extract the underlying principles. The central message is overwhelmed by a mass of peripheral detail.
153 If the same amount of detail is to be preserved in legislation, improvements ought to be made in the way in which that detail is presented. One improvement would be to restrict the Act to a statement of the principles of the legislative scheme, the details being transferred either to Schedules to the Act, or to regulations made under it. The Renton Committee proposed the first of these changes in those areas of the law where it was necessary to maintain precision in detail:
Where such detailed guidance is required in the Bill, it should be contained in Schedules, and the main body of the statute should be confined to statements of its principles. This would enable those concerned primarily with principle to find it set out uncluttered by the details of its application and qualifications.
154 The removal of many essential but not central provisions from the body of an Act to a Schedule would be a considerable improvement. Transitional provisions and provisions which set up a Tribunal or Board and regulate its procedure are obvious candidates. This change appears already to be under way. But the greatest benefit is likely to come from the relegation to Schedules of qualifications and exceptions which at present obscure an Act’s central message. Take, for example, the Companies (Acquisition of Shares) (Victoria) Code. The aim of that Act is to regulate takeovers. It does so by requiring certain disclosures of shareholdings and by imposing certain limits on the acquisition of shares. But the level of shareholdings can be affected not just by ordinary takeover conduct, but also by numerous other acquisitions. These include acquisitions of shares—
• by will
• by allotment or purchase under varying types of prospectus
• by pari passu allotment
• by the exercise of a renounceable option, or an option or right conferred by a convertible note
• by the acquisition in certain circumstances of shares in another corporation.
None of these is intended to be regulated by the Act. Nor are a number of other acquisitions, including certain acquisitions in proprietary companies having less than 15 members, and the acquisition of not more than 3 per cent of shares in each six months.
155 The original deals with all this by proscribing all acquisitions of shares where that would result in a person being entitled to more than the prescribed percentage of shares, and then setting out a long list of exceptions. No less than five pages of exceptions follow the proscription. Only then does the Act get to its central message, namely, that acquisitions by means of a takeover scheme or a takeover announcement (each of which is regulated by the remainder of the Act) are exempt from the prohibition. This way of setting out the material is needlessly confusing. What is of major importance is submerged by the sheer volume of what is of lesser importance. In contrast, the plain English version states the central principles at the beginning. The detail has been relegated to a Schedule, with only a brief reference to it being preserved in the body of the Act.
Chief Parliamentary Counsel should ensure that the body of an Act commences with a clear statement of the relevant principles and that, as far as practicable, the details and qualifications which have to be included in the Act are relegated to Schedules.
Relationship between Acts and regulations
156 The possibility of relegating some of the detail now contained in Acts not to Schedules but to subordinate legislation (mainly regulations) was also noted by the Renton Committee. However, it agreed with a submission by the Law Society that:
the body of the Bill itself should contain the general principles set out as clearly and simply as possible; detailed provisions of a permanent kind should be contained in Schedules to the Bill; and only details which may require comparatively frequent modification should be delegated to statutory instruments.
Whether that provides an adequate basis for deciding upon the allocation of legislative material may be open to doubt. The need for ease of modification is certainly a relevant factor. But that must be balanced against the need for Parliamentary scrutiny of material which affects private rights. Yet the regulation making power sometimes includes a power to alter the effect of an Act by excluding persons or transactions from its operation. There may well be a need for guidelines to assist Ministers and Parliamentary Counsel in deciding what material should go into an Act and what should be left to
regulations. The development of those guidelines might result in a reduction in the material contained in some Acts and a consequent improvement in the communication of its central message.
157 A proposal to increase the amount of material left to regulations would give rise to two practical concerns. The first is the fact that the requirements imposed on departments by the Subordinate Legislation (Revocation and Review) Act 1984 (Vic), particularly in relation to regulatory impact statements in respect of substantial changes to regulations, have resulted in departments seeking to have more, rather than less, detail incorporated in the Act itself. The second is the fact that Acts tend to be much more accessible than regulations made under them. The reprint program and Anstat Pty Ltd services provide up to date information on Acts. Anstat Pty Ltd provides a similar service in relation to regulations. However, many regulations are unavailable because they are out of print. The Gazettes in which they were originally printed may be the only place in which they can be located. An improved service will ultimately be provided by electronic means. But not all users will have access to that system. If more detail is to be left to regulations, a better system of publishing and updating them will have to be developed.
158 A proposal to increase the amount of material left to regulations might also give rise to constitutional concern about the shift of power from the Parliament to the Executive. However, the approach to the allocation of material between an Act and the regulations made under it, already differs markedly from one Australian jurisdiction to another. Moreover, the concern should be alleviated by the role played by the Legal and Constitutional Committee of the Parliament under the Subordinate Legislation Act 1962 (Vic). That Committee has wide responsibilities in respect of all delegated legislation. The Attorney-General is required, in consultation with the Legal and Constitutional Committee, to prepare guidelines with respect to the preparation and content of statutory rules and the procedures to be implemented for ensuring consultation, coordination and uniformity in their preparation. In a wide variety of cases, a regulatory impact statement must be prepared and public comment must be invited and considered before the statutory rule is made. Such a statement and all submissions on it must be forwarded to the Legal and Constitutional Committee and the Department of Management and Budget. On a variety of bases, the Legal and Constitutional Committee may recommend that a statutory rule be disallowed or amended and may even suspend the operation of a rule pending its consideration by Parliament. Given these protections, the risk arising from a transfer of detail from Acts to regulations would appear to be minimal.
In consultation with the Cabinet Office, the Regulation Review Unit and other interested bodies, Chief Parliamentary Counsel should develop guidelines to assist Ministers, Departments and parliamentary counsel in the allocation of legislative material between an Act and the regulations made under it. In developing the guidelines, Chief Parliamentary Counsel should take account of the practical and constitutional concerns referred to in this report. The guidelines should be presented for consideration by the Government.
Reducing the total amount of legislative material
159 The comprehensibility of legislation would certainly be improved by the development of criteria for the allocation of legislative material between the Act, its Schedules, and regulations made under it. But a more radical change, involving an actual reduction in the total amount of legislative material, may ultimately prove necessary. Concern over the amount of detail contained in Acts is widespread. In 1975, the Renton Committee examined this problem in some detail. It concluded that the ‘general principle’ approach to drafting which is followed in some European countries should be adopted wherever possible. However, it recognised that this would involve some sacrifice of certainty and would place a heavier responsibility on the courts in applying the resulting legislation. It also recognised that such an approach would probably not be acceptable in relation to fiscal and other public laws defining the rights and obligations of individuals in relation to the State. For that reason, its recommendation was highly qualified:
We recommend that encouragement should be given to the use of statements of principle, that is to say, the formulation of broad general rules, whether or not the subject matter of the Bill is considered by the Government to call for detailed legislative guidance, through one method or another … Where such detailed guidance is required in the Bill it should be contained in Schedules, and the main body of the statute should be confined to statements of its principles. This would enable those concerned primarily with principle to find it set out uncluttered by the details of its application and qualifications.
160 The relationship between statements of principle and detail has also been examined by Sir William Dale. Dale contrasted the English legislative drafting style with those adopted in France, Sweden and Germany. He did so against the background of the English and Scottish Law Commissions’ criterion of intelligibility: a statute should be drafted so that it ‘can be understood as readily as its subject matter allows, by all affected by it’. English legislation did not meet this criterion. Its obscurity was the result of several factors including ‘much detail, little principle’. By contrast, lucid and often succinct drafting was to be found on the Continent:
The continental lawmakers, influenced by their heritage of codes, think out their laws in terms of principle, or at least of broad intention, and express the principle or intention in the legislation. This is the primary duty of the legislator—to make his general will clear.
By no means all Continental legislation was drafted in terms of principle. However, even when it contained detail comparable with that in an English statute, it rarely suffered from the defects common to the latter. Dale concluded that English drafting would be improved if drafters were to be ‘less fussy over detail … more general and concise’. Much could be done by improvements in style and arrangement. But a more profound change was also desirable:
A determination to seek the principle, to express it, and to follow up with such detail, illuminating and not obscuring the principle, as the circumstances require.
161 Nowhere has a reduction in legislative detail been more forcefully advocated than in the judgment of Sir John Donaldson MR in Merkur Island Shipping v Laughton. Having noted the difficulties faced by unions and management in understanding the relevant legislation, the Master of the Rolls absolved the drafter of the legislation from responsibility for those difficulties:
I do not criticise the draftsman. His instructions may well have left him no option. My plea is that Parliament, when legislating in respect of circumstances which directly affect the ‘man or woman in the street’ or ‘the man or woman on the shop floor’, should give as high a priority to clarity and simplicity of expression as to refinements of policy … When formulating policy, ministers, of whatever political persuasion, should at all times be asking themselves and asking parliamentary counsel: ‘Is this concept too refined to be capable of expression in basic English? If so, is there some way in which we can modify the policy so that it can be so expressed?’ Having to ask such questions would no doubt be frustrating for ministers and the legislature generally, but in my judgment this is part of the price which has to be paid if the rule of law is to be maintained.
162 Any proposal for a reduction in the detail contained in legislation and for greater reliance to be placed on statements of principle raises complex questions of two types. The first is a constitutional one. A reduction in legislative detail might be seen to involve a transfer of power from the legislature to the judiciary and the executive. The less the detail contained in an Act, the more necessary it would become for administrative tribunals or the courts to ‘flesh out’ the relevant provisions. The role of administrative bodies might expand. Developments of these types would take place at the expense of the legislature. The legislature would need to retreat from ground it now occupies. The second question is one of costs. It concerns the impact of such a change on the general public, on administrators and on the courts. The less detailed the legislation, the more open it would become to dispute in its application to particular circumstances. Additional costs would be involved in the increased exercise of administrative or judicial discretions and in increased litigation. These would have to be set against the benefits of simpler legislation, including, in particular, the flexibility which might be introduced in relation to the exercise of administrative discretions. These matters are not considered further in this report. They would require a separate study. That study would only become necessary if it proved impossible to achieve an appropriate level of intelligibility of legislation while preserving the present level of detail.
The design and appearance of legislation
163 The comprehensibility of legal documents is often affected by poor design and layout and by a lack of adequate aids for finding information. This is a particular problem with legislation. Improvements could be made in a number of areas, including typography, headings, the use of visual aids, cross-referencing, the provision of examples, and indexing.
164 Possible improvements include:
• The use of running heads at the top of each page to indicate the sections included on the page, and the Part and Division in which they are located.
• The use of larger type for the section number and its relocation in the margin to make it easier to find.
• The positioning of the section number beside the section heading to make the heading an integral part of the section and to use the number and heading in combination to divide the section from the previous one.
• The making of a sharper contrast between the style of section headings and Part and Division headings to facilitate access to information.
• The printing of Schedules in the same size of type as the body of the Act; it is not necessary to use a smaller type to differentiate the Act from its Schedules; other typographical devices could be used for this purpose.
• The use of an attractive, modern typeface that is as readable as the type used in popular publications.
A number of these proposals have been adopted in the revision of the Companies (Acquisition of Shares) (Victoria) Code in Appendix 2. None would increase costs for the Government. They would save costs for the community and for the legal profession, in particular.
165 Headings should also be improved. At present, they are often cryptic and uninformative. In some cases, a radical approach may be required. Headings, particularly headings to sections, could be phrased in the form of questions to which the relevant provisions then provide the answer. That was tried in early drafts of the Residential Tenancies Bill 1985 (Vic). Headings such as:
• What form must a tenancy agreement be in?
• What if the agreement is not in the standard form?
• What are the allowed terms for ending a tenancy?
• What if the premises are specially needed by the landlord?
• How much rent must a tenant pay?
• How often can rent be increased?
• Does a receipt have to be given for rent?
add substantially to the accessibility of a Bill to affected members of the public—in this case, landlords, agents and home renters. This device has been used recently in the Planning and Environment Act 1987 (Vic). It should be used much more widely.
166 Considerable use could also be made of headings in order to limit the scope of the sections themselves. A heading which makes it clear that the section only deals with takeover schemes, for example, saves continual reference to those schemes in the body
of the section. There has been considerable confusion over the status of section headings. Under section 36 (1) of the Interpretation of Legislation Act 1984 (Vic), headings to Parts and Divisions form part of an Act. Section headings, however, do not. Section headings were originally marginal notes. It was often said that marginal notes could not be used to assist in the interpretation of a statute. However, this approach was questioned by
Street CJ in 1983:
The often-repeated authoritative statements that marginal notes are inadmissible guides to construction are generalities based upon the danger of taking them at face value. If this danger be wholly removed by authenticating the marginal note, then the reason underlying the inadmissibility principle … is displaced and that principle ceases to apply to the marginal note in question. To the objection that Members of Parliament take no responsibility for the reliability of marginal notes as distinct from the text of sections, it could be answered that it is high time that they did. Marginal notes are plain to be seen in the printed Bill as well as the Act, and it could well come as a surprise to many Members of Parliament, and to the public at large, to be told there is an arbitrary and inflexible rule precluding any reference to marginal notes as an aid to construction. I not only see no justification for such an arbitrary and inflexible rule, but I see every reason in common sense and in law to permit such reference when the marginal note is properly authenticated.
Whatever the position at common law, the Interpretation of Legislation Act 1984 (Vic) makes it clear that any relevant matter or document may be used to assist in the interpretation of a statute. Consequently, while section headings may not be part of an
Act, they may be used in interpreting a statute and this fact should be borne in mind by those who draft them.
167 There is considerable scope for cross referencing in the margin in both Acts and
subordinate legislation. One case where that might be done is in relation to definitions.
The use of definitions provides a particular difficulty for readers of sections using defined words. This difficulty could be readily overcome if the reader’s attention were drawn to the fact that a particular word or phrase in a given section is defined elsewhere in the Act. Word processing equipment readily identifies every use of a word in a document. Each use of a defined word could be highlighted in some way and a cross-reference to the location of the definition could be included in each case. This has been done in the case of the re-drafted Companies (Acquisition of Shares) (Victoria) Code in Appendix 2.*
168 A more ambitious form of cross-referencing would provide valuable assistance in understanding the importance of amending legislation. At present, an amending Bill
can often be understood only if read with the principal Act. For example, the 1985 amendment to the Nurses Act 1958 (Vic):
In section 45 of the principal Act—(a) in paragraph (ja) after the words ‘nurses’ agents’ there are inserted the words ‘and inspection of the mode of business of nurses’ agents’… 
gives no indication at all of the significance of the change. It is necessary to refer to the Nurses Act 1958 (Vic) as well to make sense of the amendment. That causes quite unnecessary difficulty for Members of Parliament, in particular. To assist them, at least, amending Bills should substitute, in appropriate cases, whole paragraphs or subsections
for the existing ones rather than simply delete, insert or substitute words or phrases. The words and phrases to be deleted, inserted or substituted might be highlighted by bold
type or italics. The latter practice is sometimes followed in the Commonwealth Parliament in relation to substantial amendments. It does not affect the Bill itself but takes the form of a memorandum from the responsible Minister, showing relevant sections of the principal Act with the proposed amendments. A similar procedure should be considered in Victoria. The possibility of printing amended Acts in a similar manner for members of the public should also be examined. Some commercial organisations have used highlighting techniques to indicate corrections to reports or amendments to articles of associations. These systems allow readers to see at a glance where the changes have occurred and
what words have been added or deleted.
Use of examples
169 The intelligibility of Acts could also be improved by the use of examples showing how provisions apply to particular cases. Tests at the Communications Design Centre in Pittsburgh have shown that readers construct stories or episodes to help them understand abstract rules or complex procedures. This is known as the scenario principle. Drafters should capitalise on it. Newspapers sometimes adopt the practice when they are trying to explain government policies on such matters as fringe benefits tax or assets exemptions. The St Paul Fire and Marine Insurance Company followed the same principle in its Personal Liability Catastrophe Policy, setting out the policy first and then providing illustrations printed in italics:
If a liability covered by this policy is not covered by another policy of yours or anyone else insured, we’ll pay claims you legally have to pay up to the limit listed on the attached declarations page. However, you’ll have to pay a small deductible of 50% up to the first $500—in other words, no more than $250.
You’ve boarded your neighbours’ poodle while they’re away on vacation. You’re careless and the poodle runs away and gets lost. Your neighbours insist on you paying for the loss. If he was an ordinary poodle worth say $400, you pay $200 and we pay $200. But if he was a prize-winning show dog worth $4,000, you pay $250 and we pay $3,750.
170 The Consumer Credit Act 1974 (UK) is an example of what might be done in the case of legislation. Schedule 2 to that Act contains no less than 24 examples of the application of the Act’s new terminology to particular circumstances. These are preceded by a table setting out the new terms, the sections where each is defined and the examples relevant to each of them. Examples 1 and 11 are set out below:
Facts. Correspondence passes between an employee of a money-lending company (writing on behalf of the company) and an individual about the terms on which the company would grant him a loan under a regulated agreement.
Analysis. The correspondence constitutes antecedent negotiations falling within section 59 (1) (a), the money lending company being both creditor and negotiator.
Facts. X (an individual) borrows 500 pounds from Y (Finance). As a condition of the granting of the loan X is required—
(a) to execute a second mortgage on his house in favour of Y (Finance), and
(b) to take out a policy of insurance on his life with Y (Insurance).
In accordance with the loan agreement, the policy is charged to Y (Finance) as collateral security for the loan. The two companies are associates within the meaning of section 184 (3).
Analysis. The second mortgage is a transaction for the provision of security and accordingly does not fall within section 19 (1), but the taking out of the insurance policy is a linked transaction falling within section 19 (1) (a). The charging of the policy is a separate transaction (made between different parties) for the provision of security and again is excluded from section 19 (1). The only linked transaction is therefore the taking out of the insurance policy. If X had not been required by the loan agreement to take out the policy, but it had been done at the suggestion of Y (Finance) to induce them to enter into the loan agreement, it would have been a linked transaction under section 19 (1) (c) (t) by virtue of section 19 (2) (a).
Similar initiatives should be tried in Victoria, either in Acts themselves or in accompanying explanatory material.
Use of visual aids
171 Words are not the sole means for conveying ideas. Formulas, charts and maps are sometimes preferable vehicles. Take subsection 13 (4) of the Construction Industry Long Service Leave (Amendment) Act 1985 (Vic):
For the purposes of subsection (3) the ‘prescribed amount’ is an amount equal to the amount that bears the same proportion to the amount paid to the person as the period of service bears to the total period of service in respect of which payment was made.
To apply this provision, it is necessary to construct a mathematical formula:
While some readers may be able to make the necessary translation in this case, in others, formulas are quite indispensable.
172 Similar considerations apply to the use of maps and charts, particularly in relation to complex survey or geographical descriptions. Can anyone doubt that a map would have been preferable to the following description of a ‘controlled area’ in the Transport (Tow Truck) Regulations 1983 (Vic)?
Division 2—Operation Within a Controlled Area
60. The following area is declared to be a controlled area for the purposes of these Regulations (hereinafter referred to as ‘the controlled area’), namely that area bounded by a line drawn from the coastline at Mornington Jetty along Schnapper Point Drive, Main Street, Tyabb Road, Yuilles Road to its intersection with the railway line, following the railway line to its intersection with Moorooduc Road, along Moorooduc Road, to its intersection with Frankston-Flinders Road· then in an easterly direction to the intersection of Robinsons Road and Dandenong-Hastings Road, along Dandenong-Hastings Road to its intersection with Bayliss Street, then in an easterly direction to the intersection of Narre Warren-Cranbourne Road and Punt Road, then in a northerly direction along Narre Warren-Cranbourne Road to its intersection with Main Street, along Main Street to its intersection with A’Beckett Road, then north to the intersection of Belgrave-Hallam Road and Horswood Road, along Belgrave-Hallam Road, Mountain Flat Road and Wellington Road to its intersection with Belgrave-Gembrook Road, then in a northerly direction to the intersection of Queens Road and Lewis Road, along Lewis Road to its intersection with Hunter Road, along Hunter Road to … [and so on, for another 28 lines].
173 The absence of indexes is a major defect in legislation. This fact was noted by the Legal and Constitutional Committee in its 1983 report on the Interpretation of Legislation Bill 1982 (Vic). It recommended that:
All future Bills and, where appropriate, subordinate instruments should be accompanied by indexes and tables of contents. These should be produced in a detachable form so as to facilitate their updating when amendments to Acts and Regulations are made.
The development of appropriate word processing programs and the emergence of professional indexers has made the production of indexes simpler and less costly. In the case of complex legislation, in particular, indexes are indispensable aids to understanding. Discussions are taking place between Chief Parliamentary Counsel and the Victorian Government Printer with a view to the production of indexes for all major Acts. That program should be extended to subordinate legislation. Indexes are simply indispensable to clear communication in a highly complex functional document.
In consultation with the Cabinet Office, the Regulation Review Unit, the Victorian Government Printer and other interested bodies, Chief Parliamentary Counsel should develop a new design for Acts and regulations. The new design should incorporate improved cross-referencing systems and indexes for all major legislation. It should be presented for consideration by the Government.
174 The Commission has experimented with a number of page formats which might replace the present one. Two pages of the Mental Health Act 1986 are reproduced as Appendix 6 of this report. The revised format is on the left-hand page; the original is on the right. The revised format is presented only to indicate the extent to which improvements might be made. It is not put forward as a final revision.
Compare their use in Statute Law (Miscellaneous Provisions) Acts (Cth).
The problem is widespread. See Lord Scarman, English Law—The New Dimension, Stevens & Sons, London, 1974, 4.
The Preparation of Legislation, Cmnd 6053, Sweet & Maxwell, London, 1975, paragraph 10.13. See also paragraph 11.25.
See, for example, Guardianship and Administration Board Act 1986 (Vic).
Appendix 2 (Schedule 3).
The Preparation of Legislation, Cmnd 6053, Sweet & Maxwell, London, 1975, paragraph 11.25.
For example, Credit Act 1984 (Vic) s 19. Generally, see D Pearce, Delegated Legislation, Butterworths, Sydney, 1977, paragraph 12f.
Compare, for example, the Crimes (Confiscation of Profits) Act 1986 (SA) with the Crimes (Confiscation of Profits) Act 1986 (Vic). The former is less than one-third the length of the latter, partly because greater use will be made of subordinate legislation.
As amended by the Subordinate Legislation (Review and Revocation) Act 1984 (Vic).
Including the fact that the legislation ‘requires explanation as to its form or intention’: Subordinate Legislation (Review and Revocation) Act 1984 (Vic) and s 14 (1) (z).
The Preparation of Legislation, Cmnd 6053, Sweet & Maxwell, London, 1975, paragraph 10.13.
Legislative Drafting: A New Approach, Butterworths, London, 1977.
The Interpretation of Statutes, Law Com No 21, Scottish Law Com No 11, 1969, 3.
W Dale, Legislative Drafting: A New Approach, Butterworths, London, 1977, 331.
1 All ER 334, 351.
This was the basis for the call by the Victorian Attorney-General for a Takeovers Code which stated general principles and reposed substantial discretion in the National Companies and Securities Commission.
The Ombudsman v Moroney  1 NSWLR 317, 335.
* Published separately.
Nurses (Amendment) Act 1985 (Vic), s 13.
L Flower, J Hayes & H Swartz, Revising Functional Documents: The Scenario Principle, Communications Design Centre, Carnegie-Mellon University, Pittsburgh, 1950, Technical Report No 10.
G C Thornton, Legislative Drafting, 3rd ed, Butterworths, London, 1987, 46.
M Casen and J Steiner, ‘Mathematical Functions and Legal Drafting’, (1986) 102 Law Quarterly Review 585.