Re An Application By Contis Investments Pty Limited and Dinach Holdings Pty Limited To Vary the Provisions of the Crown Lease Relating To Block [1989] ACTSC 23 (1 June 1989)

SUPREME COURT OF THE ACT

IN THE MATTER of an application by CONTIS INVESTMENTS PTY LIMITED and DINACH
HOLDINGS PTY LIMITED to vary the provisions of the Crown Lease relating to
Block 5 Section 31 Division of Belconnen in the Australian Capital Territory
S.C. No. 84 of 1989
Crown Lease

COURT

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

CATCHWORDS

Crown Lease - application for change of purposes clause opposition based on undesirability of increase in competition - whether ground for giving objector leave to oppose under s.11A(6) of the City Area Leases Ordinance 1936 (A.C.T.).

Kentucky Fried Chicken Pty Limited v. Gantidis [1979] HCA 20; (1979) 140 CLR 675

HEARING

CANBERRA
1:6:1989

ORDER

The application for leave to oppose be dismissed.

DECISION

The lease from the Commonwealth of the above described land provides that the premises (the land, building and all other improvements on it) may be used only for the purpose of a market for the storage and retail sale of a number of items which are identified in paragraphs (i) to (viii) inclusive of sub-clause 3(c). Paragraphs (ii) and (iii) are as follows:-
"(ii) bakery products (including bread pastries

cakes and biscuits) confectionery meat
poultry seafood delicatessen goods and
natural health foods;
(iii) foodstuffs (other than those specified in
paragraph (ii) of sub-clause (c) of this
Clause) groceries beverages (except liquor)
and domestic household goods."

2. Paragraph (iii) of sub-clause 3(e) of the lease provides that:

"not more than 200 square metres of the gross
floor area of the premises shall be used for the
purpose as specified in paragraph (iii) of the
sub-clause (c) of this Clause."

3. Contis Investments Pty Limited and Dinach Holdings Pty Limited (the applicants) are now the registered proprietors as tenants in common of the residue unexpired of the lease from the Commonwealth of the land. By notice of motion dated 9 February 1989 they sought under s.11A of the City Area Leases Ordinance 1936 (the Ordinance) that the lease of the land should be varied by the deletion from paragraph (iii) of sub-clause 3(c) of the words "(except liquor)" and by the addition to paragraph (iii) of sub-clause 3(e) (after an amendment made by leave of Gallop J. of 10 March 1989) of the words "provided that of the maximum 200 square metres the area used for the sale of alcoholic beverages shall not exceed 80 square metres."

4. Within the time prescribed by s.11A(6) Olaseat Pty Limited (Olaseat) filed a notice of intention to oppose the application on the following grounds:-

"(a) That the Crown Lease was issued as recently
as 20 January 1988 and its purposes clause
was consistent with the town planning principles
then prevailing.
(b) That these principles have not been altered
and still prevail.
(c) That the purposes for which the land might
be used were those enumerated in Clause 3(c)
and that Clause 3(c)(iii) specifically
excluded the retail sale of liquor.
(d) The reasons then prevailing for such
exclusion still apply and continue to apply.
(e) There is no community need for the purposes
to be changed in the manner proposed in the
Notice of Motion.
(f) Even if there were such a need (which is
denied) the specific requirements of the
neighbourhood must be shown to supersede the
town planning principles prevailing."

5. In support of Olaseat's opposition, Mr James Harry Notaras, Managing Director of Olaseat, deposed that it was the lessee from the Commonwealth of Block 1, 3, 5, 6, 7 and 11 of Section 50 Macquarie which form part of the retail complex known as the Jamison Centre. He deposed further that there are two liquor outlets, a licenced restaurant and a liquor store within, it would seem, although the evidence is not perfectly clear as to this, the area leased by Olaseat, and that on an adjacent parcel of land, Block 2 of Section 50, there is a Coles Supermarket which also holds a liquor licence. Mr Notaras went on to say:-

"The Jamison Centre has been operating for
approximately 15 years with all occupiers paying
full commercial rentals which varies broadly with
the respective turnover and operating margin of
each sub-lessee. In the case of liquor outlets
the margin is smaller than other businesses and
one of my concerns is that a liquor outlet at the
Belconnen Markets will adversely affect the
turnover of the liquor licencees at the Jamison
Centre thus putting pressure on their operating
margins and their competitiveness in the
Belconnen area. The adverse consequences will
flow onto the other sub-lessees.
I am further concerned that the application
before the Court implies some change in planning
principles from those which specifically excluded
the sale of liquor in January 1988, a change in
principle of which I am not aware and would
question. The Belconnen Markets were sold to the
applicant by A.C.T. Administration pursuant to
public auction specifically as fruit and
vegetable markets as appears from the documentation
annexed hereto and marked "B", and I
believe that there is no need there for any
liquor outlet, the markets being in such
proximity to the Jamison Centre.
Furthermore my belief is that the various market
sub-lessees at Belconnen Markets pay a much
smaller rental and have less overheads than do my
company's sub-lessees. With aggressive marketing
and promotion of any liquor outlet there, the
sub-lessees will derive disproportionate
advantage over my sub-lessees who pay full commercial
overheads.
My further concern is to protect the substantial
value of my company's investment in the Jamison
Centre which will inevitably decrease with
falling custom, loss of jobs and rising overheads
for our shopowners."

6. The Jamison Centre is relatively close to Belconnen Way, a principal arterial road serving the north-western suburbs of Canberra. So too are the Belconnen Markets. The two centres are no more than a kilometre distant from each other. It may therefore be readily accepted that if shoppers can have all their food and liquor needs met at one centre they are unlikely to patronise the other.

7. Counsel for the applicants stated that the liquor store referred to by Mr Notaras had begun trading after the Belconnen Markets had been sold to the applicant. Mr Notaras said, however, that the liquor store had previously been a liquor outlet and I accept that this was so.

8. It is plain from Mr Notaras's affidavit that the real objection which Olaseat has to the proposed variation of the purposes clause is that it will introduce what Mr Notaras considers to be competition which will affect adversely his company's sub-lessees. Counsel for the applicants pointed out that none of those sub-lessees had sought to oppose the application but I do not make too much of this since obviously if the desire to prevent further competition be a legitimate ground for opposition under s.11A it matters little whether the objection be taken by the landlord of the several premises where trading is carried on in the Jamison Centre or by the sub-lessees directly concerned themselves. Olaseat may be taken to be acting in the interests of all its sub-lessees.

9. Counsel for the applicants submitted that the mere threat of competition to existing businesses was not a relevant consideration under s.11A of the Ordinance. In support of this proposition he referred to Kentucky Fried Chicken Pty Limited v. Gantidis [1979] HCA 20; (1979) 140 CLR 675. In that case Stephen J. with whom Gibbs and Mason JJ. (as they then were) and Aickin J. agreed, said at p 687:

"If the shopping facilities presently enjoyed by
a community or planned for it in the future are
put in jeopardy by some proposed development,
whether that jeopardy be due to physical or
financial causes, and if the resultant community
detriment will not be made good by the proposed
development itself, that appears to me to bea
consideration proper to be taken into accountas a
matter of town planning. It does not cease to be
so because the profitability of individual
existing businesses are at one and the same time
also threatened by the new competition afforded
by that new development. However the mere threat
of competition to existing businesses, if not
accompanied by a prospect of a resultant overall
adverse effect upon the extent and adequacy of
facilities available to the local community if
the development be proceeded with, will not be
a relevant town planning consideration."

10. I find it very difficult to accept that it is possible that the proposed change of purposes would be offensive to town planning principle. As well as the items referred to in paragraphs (ii) and (iii) of Clause 3(c) the premises may also be used "for the storage and retail sale of ..... fruit and vegetables, food prepared on the premises for immediate consumption off-the premises and ancillary thereto on-site dining facilities, pets foods accessories and medicines for animals, animal skins and hides, cosmetic and health care products, plants flowers seeds fertiliser farm produce and ancillary thereto garden accessories, smokers requisites newspapers and magazines and arts crafts rugs coins stamps wall hangings and antiquarian books". If the premises may be used for the sale of such a wide range of goods it would afford no surprise to any shopper at the markets to find that liquor was also on sale.

11. None of the grounds proposed seems to me to constitute a proper basis for objection to the application.

12. Of course before leave to change the purposes clause may be granted the applicants must show that the reasonable use of the land is being impeded. However, it seems to me in the highest degree unlikely that the grounds of objection listed by Olaseat of themselves could constitute grounds for refusing the application for it seems to me that there is no reasonable risk that the shopping facilities presently enjoyed by the community or planned for it or any existing amenity of the area would be put in jeopardy by the proposed change of purposes.

13. The application for leave to oppose is therefore dismissed.