Re Section 11a City Area Leases Ordinance 1936; and Re An Application By Atherane Pty Limited To Vary the Provisions of the Crown Lease Relating To Block [1988] ACTSC 48 (12 August 1988)

SUPREME COURT OF THE ACT

IN THE MATTER OF SECTION 11A CITY AREA LEASES ORDINANCE 1936; AND IN THE
MATTER OF AN APPLICATION BY ATHERANE PTY LIMITED TO VARY THE PROVISIONS OF THE
CROWN LEASE RELATING TO BLOCK 1 SECTION 29 DIVISION OF BRADDON IN THE
AUSTRALIAN CAPITAL TERRITORY
S.C. No. 635 of 1988
Town and Country Planning

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Town and Country Planning - City Area Leases Ordinance 1936 - application for variation of purpose clause of lease from Commonwealth under s.11A - whether proposed change from residential to commercial use is reasonable - weight to be given to fact that NCDC policy plans indicate support for a mix of residential and commercial use - weight to be given to incompatibility of appearance of proposed building with that of nearby houses - whether lack of objector lends weight to application - role of Minister in hearing of application.

Morpath Pty. Ltd. v. ACT Youth Accommodation Group Inc and Others (1987) 74 ALR 121

HEARING

CANBERRA
12:8:1988

ORDER

DECISION

This is an application to vary the purposes clause of a lease from the Commonwealth pursuant to s.11A of the City Area Leases Ordinance 1936 (the Ordinance). The lease is for a term of ninety-nine years from 26 March 1959. The habendum clause provides that the land is to be used by the lessor for residential purposes only. By clause 1(e) the lessee covenants with the Commonwealth to use the land for residential purposes. The application seeks the substitution of clause 1(e) by the following:

"1(e) To use the said land for one or more of the following

purposes:-

(i) offices;

(ii) professional suites;

(iii) carparking;

PROVIDED ALWAYS THAT:-

(A) the gross floor area of the building or buildings on
the said land shall not exceed 765 square metres. For
the purpose of this sub-clause "gross floor area" means
the gross area of the floor or floors of the building
or buildings measured from the external faces of the
external walls excluding rooftop plantrooms enclosed
balconies and basements used for carparking and housing
mechanical plant;

(B) the Lessee shall provide and maintain on site
carparking to accommodate one vehicle per 33 square
metres of the gross floor area;

(C) the maximum height of the building or buildings shall
be two storeys above ground level."

2. By transfer dated 20 May 1988 the applicant became the lessee for the remainder of the term for a consideration of $580,000.

3. The land is situated on the south-western corner of the intersection of Torrens Street and Elouera Street, Braddon. A standard single storey brick dwelling is erected upon the land.

4. If the change of purposes clause is approved, it is the intention of the applicant to demolish the building on the land and replace it by a two-storey office building containing not more than 765 square metres for the purpose of offices and professional suites.

5. Notice of the application has been duly advertised. The Minister has not filed a certificate stating that in his opinion the variation sought is repugnant to the principles governing the construction and development of Canberra. No person has applied for leave pursuant to s.11A(6) to object to the application.

6. It was stated by counsel for the applicant during the course of the hearing that the business of the applicant is that of a property developer. It was also said that the applicant carries on business from premises in Constitution Avenue. It was not suggested that the applicant needs to occupy the proposed new building for its own purposes. When the matter came before the Court on 22 July 1988 no plans had been drawn up for the proposed building. When the matter next came before the Court on 28 July 1988 an affidavit by Mr. John Kinlock Hindmarsh, director of the applicant company, sworn the previous day, annexed to it what were called "some preliminary plans" for the proposed building. These were drawn up by Philip Cox Richardson Taylor & Partners Pty. Ltd.

7. The land in question is the northern most block of Section 29 Blocks 1-8, 10 and 11 Division of Braddon. Block 2, which is immediately south of the land in question, has a standard single storey brick residential building erected upon it. The rest of the blocks in Section 21 Blocks 1-8, 10 and 11 immediately south in Torrens Street and extending as far as the intersection of Torrens Street and Cooyong Street are now taken up with two storey commercial buildings which have recently replaced the former single storey dwellings on each block.

8. On the eastern side of Torrens Street between Elouera Street and Cooyong Street is situated Northbourne Oval with, according to the plan in evidence, two or three buildings on it which appear to have a frontage to Torrens Street.

9. The land in Torrens Street which is north of Elouera Street and south of Girrahween Street is land which at the present time is used for residential purposes, and standard single storey dwellings are erected on each block on both the eastern and western sides of Torrens Street.

10. In order for the Court to have jurisdiction to approve the variation sought, it must be satisfied that it is desirable to vary the purposes clause in order that the reasonable user of the land should not be impeded. This inquiry involves a consideration of the town-planning aspects of the proposed new user, and where the proposal accords with the current plans of the National Capital Development Commission (NCDC), it will ordinarily follow that what is proposed should be regarded as a reasonable use: Morpath Pty. Ltd. v. ACT Youth Accommodation Group Inc and Others (1987) 74 ALR 121 per Beaumont J. at p 139.

11. In the "Civic Centre Canberra Policy Development Plan" published by the NCDC in February 1984, Section 29 Blocks 1-8, 10 and 11 were designated as "commercial office area 2". The policy for commercial office area 2 was stated to be as follows:

"The intention is that this area, comprising Section 29 Blocks 1-8
and Blocks 10 and 11 Braddon would accommodate low density residential
development and small scale office uses of one or two storeys.
Applications for re-development would be subject to specified
performance standards to maintain the existing streetscape and scale

and

pattern of development."

12. The land use policy schedule stated that the purposes for which a proposal for development or change of use would normally be supported were:

dwelling house;

residential building;

office/professional suite.

13. In November 1987 the NCDC published a further draft Policy Plan Implementation Plan for the Civic Centre, Canberra. The development of the western side of Torrens Street received particular attention. Section 21 Blocks 1-12 was designated "Precinct 9A" and Section 29 Blocks 1-8, 10 and 11 was designated "Precinct 9B". The main objective of the land use policies for the two precincts was stated to be to allow small scale offices and residential development in close proximity to the Central Business District. The main requirements of development criteria were summarised and the plan went on to state as follows:

"However, if the current draft policies for small scale residential
development are adopted as final policies, then 3 storey
re-development may be permitted where that re-development is for
residential purposes only."

14. The draft plan went on to state that all buildings in both precincts must be constructed of materials which are compatible in appearance with the existing houses and have pitched and tiled roofs. There was also some reference to the requirements for provision for carparking.

15. From this it would appear to me that the intention of the NCDC was that the land in the blocks comprising precincts 9A and 9B would be used for a mix of residential and commercial purposes. More than once the plans refer to residential development and small scale office use. No where is there reference to residential development or small scale office use. The possibility that three storey re-development may be permitted for residential purposes but not for other purposes is canvassed.

16. However, all the development which has taken place in Section 29 Blocks 3-8 and 10 and 11 has been for office development. If that pattern continues the policy of the NCDC as set out in the plans to which reference has been made will be frustrated.

17. The lessee of Section 29 Block 2, which is immediately south of the land in question, has indicated that he has no objection to the proposed change of purposes clause. That is a matter to be taken into account. However, the Court should consider what the likely effect of the granting of the present application would be upon the adjoining Block 2. It would be incongruous in the extreme if the present single storey dwelling house on Block 2 remained in the event of the present applicant carrying out its proposals to erect a two storey office building on the subject land on Block 1. It is likely that the value of the adjoining land immediately south would escalate greatly, and that application would be made sooner rather than later for a change of purposes clause as far as that land was concerned, so that in the end the whole of the land in Torrens Street on the western side between Elouera Street and Cooyong Street would be taken up by two storey commercial buildings. As I have already stated, that appears to me to be in clear conflict with the published plans of the NCDC.

18. Regard should also be had to the development guidelines of the NCDC in the 1987 draft plans which require all buildings to be compatible in appearance with the existing houses. The preliminary plans for the proposed building would appear to be less compatible with the appearance of existing houses than with that of the commercial buildings already erected in Section 29 Blocks 3-8, 10 and 11. These, with one possible exception, are in a style which might best be described as "post suburban". Whether the style is attractive or not is not a matter on which I care to express a view. However, the proposed two storey building is bulky and would, I think, tend to detract from the symmetry at present created by the single storey residences on three of the corners of the intersection, the fourth corner being the open space adjacent to Northbourne Oval.

19. The application is supported by an affidavit sworn by Mr. Henry Paul Street, a practising valuer and current president of the ACT Division of the Building Owners and Managers Association of Australia. He states that Blocks 5-8, 10 and 11 have been developed as small scale commercial developments and that the demand for such developments in the location has been consistently strong since these developments were marketed and that the demand continues "in expectation of further development". Mr. Street further states that "a much better, more economic and appropriate purpose clause would accord with the development of the property as office and professional suite accommodation". He goes on to express the opinion that "the present purpose clause is inconsistent with the use and development of the properties in Section 29 Division of Braddon." This opinion, in my view, fails to give proper weight to the NCDC plans which propose that the land in the area be developed for office and residential use. At any rate, I am not quite sure what weight I should give to Mr. Street's professional opinion. Annexed to Mr.Hindmarsh's affidavit sworn 28 July 1988, again for what purpose I am not sure, is an extract from the Canberra Times of 29 May 1988 which states, amongst other things, that the applicant company "is connected with" Mr. Street. It appears that Mr. Street's opinion evidence may not be that of the wholly disinterested expert.

20. There is a remaining matter which causes me concern. An affidavit sworn by the solicitor for the applicant annexes a letter dated 27 July 1988 over the signature of the secretary and manager of the NCDC the substantial part of which states as follows:

"The proposal to alter the purpose clause of the lease to allow
office/professional suites to be built is entirely consistent with
the Civic Centre Policy Plan 1984. The Plan on Page 23 explains
that purposes for which a proposal for development or change of
use would normally be supported include; dwelling house,
residential flat building and office/professional suite. Any or
all of these uses, provided there is sufficient space, would be
acceptable. There is no requirement to provide a mix of uses."

21. This expression of view point as to the meaning of an effect of the Civic Centre Policy Plan 1984 does not, as I have indicated, accord with my own. Nor does it accord with the draft plan of 1987. It may, however, be that the attitude of the NCDC has changed since the plans were published. Annexure A to Mr. Hindmarsh's affidavit of 28 July 1988 is a set of draft conditions for inclusion in the lease of the land at Section 29 Block 1 prepared by the NCDC in or about June 1988. The lease purposes clause, according to the draft, is "to use the land for the purposes of offices/professional suites". The remainder of the conditions, or most of them, are incompatible with residential use. From this it can only be concluded that the NCDC had abandoned its proposals that Section 29 Blocks 1-8, 10 and 11 be used for a mix of small scale offices and residential development. However, this radical change of attitude is not, as far as I am aware, expressed in any publication of the NCDC and the only evidence for it is contained in the letter signed by the secretary and manager. I do not find that evidence persuasive. The Minister is entitled to be heard on this application and has been represented by counsel. If the attitude of the NCDC has changed to the extent suggested by the letter from the secretary and manager, then I would expect that the Minister would be able to furnish evidence in the proper form to inform the Court that such is the case.

22. Mr. Hindmarsh states in his affidavit sworn 27 May 1988 that the re- development of the land for the purposes of offices and professional suites will serve to complement and enhance the amenity of users of land in the vicinity. It may well be that such re-development will enhance the amenity of the commercial users in Section 29 but I have no reason to conclude that it will enhance the amenity of the residents in Torrens Street and Elouera Street or the amenity of the members of the public who use Northbourne Oval.

23. The Morpath decision establishes that the question of the exercise of the wide discretion conferred by Section 11A(1) is to be exercised in the public interest, balancing society's interest in the fullest use of land against the interest of local users of land in their amenities. Consideration of the public interest requires that significant weight be given to the current plans of the NCDC as the public body charged with the responsibility of carrying out the planning and development of the National Capital. I have already indicated that insofar as it can be ascertained, the NCDC proposals for Section 29 Blocks 1-8, 10 and 11 are for a mix of small scale office and residential development. The present application will not tend to further those proposals; on the contrary, it will tend to ensure that no residential development or use occurs. Furthermore, on the present state of the evidence, I do not think that it is positively shown that the change of use will enhance the amenity of the area. I realise that the proposed development will be in the interest of the applicant, but I have to be satisfied that it will be in the public interest in the wide sense. Even allowing for society's interest in the fullest use of the land, I am not at this moment convinced that the application, if granted, would be in the public interest.

24. I take into account that nobody has appeared to seek leave to object to the application. That, however, does not of itself or in conjunction with the other material in the case compel me to the conclusion that the proposed change of use would be in the public interest. However, it does lead me to state that if there were further evidence before me, emanating either from the Minister or from the applicant, which convinces me that the NCDC supports the change of use on town-planning grounds which can be elucidated and explained, then I might be convinced that the proposed change of use is in the public interest. If the applicant wishes, I am prepared to stand the matter over generally so that further evidence can be obtained and put before the Court. If the applicant does not wish that course to be taken, I shall simply dismiss the application.