Beene Oe 33) CATCHWORODS TOWN AND COUNTRY PLANNING ~ Application for variation of purpose clause of lease from Commonwealth - Section 11A City Area Leases Ordinance 1936 (ACT) - Discretion of Supreme Court pursuant to s.5.11A(1) - 'Reasonable user' considered - Paragraph 11A(2)(a) satisfied when 'a reasonable user' is impeded - Role of National Capital Development Commission discussed. City Area Leases Ordinance 1936 (ACT); S.11A National Capital Development Commission Act 1957 (Cth) No. ACT G 59 of 1986 BETWEEN: MORPATH PTY. LIMITED Appellant AND: A.€.T. YOUTH ACCOMODATION GROUP INCORPORATED, LOIS UNA HICKS, KATHERINE THORNTON, PETER HOPNER and THE MINISTER OF STATE FOR TERRITORIES Respondents No. ACT G 61 of 1986 BETWEEN: THE MINISTER OF STATE i So Appel 1a AND: A.C.T YOUTH ACCOMODATION OUP ENCORPORATED, LOIS UMA HICKS, KATHERINE THORNTON -sPETER-HOPNER and MORPATH ony > i aT _—_—— 7 '2 Oy ! - - vo ; S ReSpondents .~/CORAM: Fisher, Davies, Neaves, Beaumont arid Miles Jd. Canberra 26 June 1987 i ' Me teen nis sr mee cn eS mea tees 2 ~ * ot ' - ' seer ag ae re er ae : . oy Mee , ' IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION ce No. ACT G 59 of 1986 ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN : IN THE FEDERAL COURT OF AUSTRALIA MORPATH PTY. LIMITED Appellant A.C.T. YOUTH ACCOMMODATION GROUP INCORPORATED, LOIS UNA HICKS, KATHERINE THORNTON, PETER HOPNER and THE MINISTER OF STATE FOR TERRITORIES Respondents AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION ) ) ) No. ACT G 61 of 1986 ) ) ) "on APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN: AND: - THE MINISTER OF STATE FOR TERRITORIES Appellant A.C.T. YOUTH ACCOMMODATION GROUP INCORPORATED, LOTS UNA HICKS, KATHERINE THORNTON, PETER HOPNER and MORPATH PTY. LIMITED Respondents Wee ee To MINUTE OF ORDER JUDGES MAKING ORDER : Fisher, Davies, Neaves, Beaumont and Miles Jd. DATE OF ORDER : 26 June 1987 WHERE MADE : Canberra THE COURT ORDERS THAT: 1. 2. The appeals be allowed. The orders made by the Supreme Court of the Australian Capital Territory on 1 August 1986 be set aside. The application by Morpath Pty. Limited be remitted to that Court for rehearing, the costs already incurred in the proceedings in that Court to be in the disposition of the Judge rehearing the application. There be no order as to the costs of the appeals. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Ruies. Wee yp Se ee see IN THE FEDERAL COURT OF AUSTRALIA DISTRICT REGISTRY No. ACT G 59 of 1986 ) ) AUSTRALIAN CAPITAL TERRITORY ) ) ) ) GENERAL DIVISION ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN : MORPATH PTY. LIMITED Appellant AND: A.C.T. YOUTH ACCOMODATION GROUP INCORPORATED, LOIS UNA HICKS, KATHERINE THORNTON, PETER HOPNER and THE MINISTER OF STATE FOR TERRITORIES Respondents No. ACT G 61 of 1986 ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN: THE MINISTER OF STATE FOR TERRITORIES Appellant AND: A.C.T YOUTH ACCOMMODATION GROUP INCORPORATED, LOIS UNA HICKS, KATHERINE THORNTON, PETER HOPNER and MORPATH PTY. LIMITED Respondents CORAM: Fisher, Davies, Neaves, Beaumont and Miles JJ. 26 June 1987 REASONS FOR JUDGMENT FISHER J.: I have had the opportunity of reading the Reasons for Judgment prepared by Beaumont J. I agree with them and with the wees gee ge ee et ~ oa, fhe fe + " ia weary ae ny rm Ce oy orders that his Honour proposes. 2. I certify that this and the \ preceding page is a true copy of the Reasons for Judgment of Mr Justice Fisher. NX Associate --CtewCeo-— . Dated: 26 June 1987 "a Mote ' yee ape ower nd Steen © we cern ge nesters IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISTON IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENFRAL DIVISTON aq 26 June 1987 No. ACT G.59 of 1986 ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN : MORPATH PTY LIMITED Appellant ACT YOUTH ACCOMMODATION GROUP_INCORPORATED LOIS UNA_HICKS KATHERINE THORNTON PETER _HOPNER THE MINISTER OF STATE FOR TERRITORIES Respondents No. ACT G.61 of 1986 ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN : THE MINISTER OF STATE FOR TERRITORIES Appellant ACT YOUTH ACCOMMODATION GROUP INCORPORATED LOTS UNA HICKS KATHERINE THORNTON PETER HOPNER MORPATH PTY LIMITED Respondents ORAM : Fisher, Davies, Neaves, Beaumont and Miles JJ (iin tolediiet al: plaaeremaarenran caemmamenamiar ne an nas "th . aot 6 oye ere ve wy ee eee oe aan ' tek ae" i c Le REASONS FOR JUDGMENT is te DAVIES J : I have had the opportunity of reading the Reasons E es for Judgment prepared by Beaumont d. I agree with them and with t the orders that his Honour proposes. : ty I certify that this is a true t copy of the reasons for judgment of The Honourable Mr r Justice J.D. Davies. ' i . t Ld Qresidion cece cece ees (" Associate 'a c Dated .. 226-87. cece : wT mee ot eee + | REASONS FOR JUDGMENT NEAVES J. On 1 August 1986 the Supreme Court of the Australian Capital Territory (Gallop J.) gave judgment refusing an application by Morpath Pty. Limited pursuant to s.11A of the City Area Leases Ordinance 1936 (A.C.T.) ("the City Area Leases Ordinance") to vary the covenants of two leases in relation to the purpose for which the land the subject of those leases may be used. From that judgment Morpath Pty. Limited has appealed to this Court. An appeal against the judgment has also been instituted by the Minister of State for Territories who, pursuant to s.11A(5) of the City Area Leases Ordinance, was entitled to be heard, and was heard, on the application before the Supreme Court. Several objectors who were granted leave by the Supreme Court pursuant to s.11A(6) to be heard in opposition to the application are respondents to each appeal. The leases in question, which are held of the Commonwealth, are of land known as Blocks 8 and 93, Section 43, Division of Turner in the Australian Capital Territory. Both blocks are on the main highway, Northbourne Avenue, giving access to the centre of Canberra from the north and close to the commercial concentration of the City of Canberra, known as Civic Centre. Block 9 has frontages to Gould Street and the northbound carriageway of Northbourne Avenue. Block 8 is ummediately adjacent, its frontage being to Northbourne Avenue. The leases, which are for a term of 99 years, Were granted in 1950. They were acquired by Morpath Pty. Limited in 1982. Each contains a covenant that the lessee will use the land for residential purposes only. A single storey dwelling house 1s erected on each block. One 1s said to be ina reasonable state of repair: the other in ae estate of dereliction. The variation in each lease sought by Morpath Pty. Limited was to delete the covenant by the lessee to use the land for residential purposes only and to insert a covenant by the lessee in the following terms: "To use the said land for one or more of the following purposes: (1) offices; (i2) professional suites; (iil) carparking; (iv) single unit caretakers flat not exceeding 150 square metres in area; PROVIDED ALWAYS THAT: (v) the gross floor area of the building or buildings on the said land shall not exceed a plot ratio of one to one. 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 and basements used for carparking and housing mechanical plant; (vi). the lessee shall provide and maintain on site carparking for sufficient cars to provide one space for every 33 square metres of gross floor area; " ne ave (vii) the building or buildings shall be three storeys above ground level." Relevant Legislation The City Area Leases Ordinance applies (s.4) to land the property of the Commonwealth within what 1s referred to as "the City Area". The subject land is within that area. Section 5 provides that, subject to the Ordinance, the Minister may, in the name of the Commonwealth, grant leases of land for business or residential purposes or for both business and residential purposes. A lease granted for business purposes or for business and residential purposes may specify the particular class or classes of business for which the land included in the lease may be used (s.8). Section 111A, so far as Material for present purposes, provides: "LIA. (1) Notwithstanding anything contained in this Ordinance, the Supreme Court of the Australian Capital Territory may, subject to this section, on the application of the lessee (in this section referred to as the 'application for variation'), vary any provision, covenant or condition of a lease in relation to the purpose for which the land subject to the lease may be used. (2) No such variation shall be made - (a) unless the Court is satisfied that there are such circumstances existing as in the opinion of the Court make it desirable to vary the provision, covenant or condition in order that the reasonable user of the land should not be impeded; or {b) if, not later than seven days before the day for hearing named in the notice of motion filed by the applicant in . pursuance of this section, a certificate 1s filed by the Minister with the Registrar of the Court stating that, in his opinion, the variation sought would be repugnant to the principles for the time being governing the construction and development of the City of Canberra. (3) An application for variation shall be made by motion supported by affidavit. (5) The Minister and also the applicant for variation shall be entitled, either personally or by counsel or solicitor, to be heard on the application for variation and to examine and cross-examine witnesses. (6) Any person who, within twenty-one days after the publication of the notice of motion in the Gazette - (a) files with the Registrar of the Court notice of his intention to oppose the application for variation stating the grounds of his opposition; and (b) serves on the applicant for variation a copy of such notice of intention, shall, with the leave of the Court, be entitled, either personally or by his counsel or solicitor, to be heard in opposition to the application for variation and to examine and cross-examine witnesses. (8) An order of the Supreme Court under this section varying a provision, covenant or condition in a lease shall, in the first instance, be provisional only and is subject to - (a) the condition (to be included in the provisional order ) that if, in accordance with sub-section (9B) of this section, a premium is payable to the Commonwealth in respect of the variation, the premium will be paid to the Commonwealth by the lessee within the prescribed time; and (b) such conditions, whether as to compensation to other persons or otherwise, as the Court thinks just and are included in the provisional order. aaaraemtaeeeee ie (9F) A provisional order under this section shall be made a final order by the Court if the Court is, on an application by the lessee for a final order, satisfied that the lessee has complied with the conditions specified in the provisional order. (9G) Upon registration by the Registrar of Titles of a final order under this section, the lease of the parcel of land to which the order relates shall be deemed to have been varied in the manner specified in the final order. Reference should also be made to the National Capital Development Commission Act 1957 (Cth) ("the National Capital Development Commission Act"). The National Capital Development Commission ("the Commission") is established by s.3. The functions of the Commission are to undertake and carry out the planning, development and construction of the City of Canberra as the National Capital of the Commonwealth (sub-s.11(1)). For that purpose, the Commission is empowered to provide, or arrange for the provision of, within the Australian Capital Territory, buildings, roads, bridges, works for the supply of water or electricity, sewerage or drainage works and other matters or things for, or incidental to, that purpose (sub-s.11(2)). It has power to do all things necessary or convenient to be done for or in connexion with, or incidental to, the performance of its functions and the exercise of uts powers (sub-s.11(3)), including such powers in relation to matters affecting, or connected with, the planning, development and construction or the City of Canberra as are expressed to be exercisable by the Commission by, or by regulations under, an Ordinance in force under the Seat of Government (Administration) Act a a ara oP 1910 (Cth) (sub-s.11(4)). The Commission is obliged, by sub-s.12(1), to keep the appropriate Minister informed of the decisions of the Commission with respect to matters of policy in relation to the performance of its functions and provision is made for the resolution of any difference of opinion between the Minister and the Commission as' to the policy which should be followed by the Commission. The Buildings (Design and Siting) Ordinance 1964 (A.C.T.) ("the Design and Siting Ordinance") applies to land within the City Area. By s.6(1) the Commission is given certain powers including power to grant (either absolutely or subject to conditions) or refuse approval of proposais with respect to the external design and" thie-siting__of buildings and of proposals with respect to alterations affecting the external design and the siting of buildings. The Commission may not, however, refuse an approval unless the Commission 1s satisfied that it is necessary to da so for the purpose of securing the carrying out or observance of the policies of the Commission with respect to the planning and development of the City of Canberra (s.6(2). The expression "External design", in relation to a building, as defined to include any matters affecting the appearance of the exterior of the building. The Building Ordinance 1972 (A.C.T.) ("the Building Ordinance") provides for the appointment or a Building Controller and makes detailed provisions with respect to the erection, alteration and demolition of buildings. In particular, the Ordinance provides for the plans and ~ specifications relating to the carrying out of building work for the erection or alteration of a building to be submitted to, and to be considered by, the Building Controller and for ® the grant, 1n appropriate circumstances, of building permits De for building work. Section 8 of the Design and Siting - Ordanance provides, inter alia, that the Building Controller \ 1s not to approve the design of a proposed building, or- 1ssue a permit in respect of a proposed building, under the Building Ordinance unless proposals with respect to the external design and siting of the proposed building have an been approved by the Commission and the building to which - the approval or permit relates is to be in accordance with those proposals. Policy Plan for Civic Centre t, A plan for the Civic Centre of Canberra entitled "Canberra City Centre Development 1970-80" was prepared by the Commission in 1970 following the adoption of what was called the Metropolitan Strategy Plan (Y-Plan) in 1969. For reasons into which i1t 2S unnecessary to inquire, the Commission carried out a review of its policies -for Civic Centre and in February 1982 published for discussion a draft report. The draft report included a draft Policy Plan, comprising broad statements of planning policy together with specific policies on land use, transport and townscape, drawn up to indicate the location of future development in Civic Centre anda draft Development Plan showing how the more significant policies might be implemented by both the Mee ee re eee ee me eee + aor as public and private sectors. That draft report was circulated to representative community and business groups and to government agencies for comments and suggestions. That procedure was followed by more widespread public consultation. Following the public consultation programme, the Commission prepared a final report dated February 1984 entitled "Civic Centre Canberra - Policy Plan, Development Plan". Upon the formal adoption of the report by the Commission, the Minister for Territories and Local Government was informed in accordance with s.12 of the National Capital Development Commission Act. There appears to have been no difference of opinion between the Minister and the Commission as to the matters of policy set out in the report so as to require the machinery provided by sub-ss.12(2) and (3) to be brought into operation. The introduction to the report records that the Commission's role is to formulate planning policies and to carry out development which meets the social and economic needs of the resident and business community and that its aim is to have policies and development which are complementary to private enterprise investment. "Policy Plans" are said to comprise broad statements of planning policy as a basis for making decisions about urban development by both the public and the private sectors. "Development Plans" are described as showing development intentions and proposals for works by the Commission as well rated ve 10. as possible development by the private sector. The point 1s made that, in Canberra, land use and development control policies are implemented not by statutory zoning schemes but through the leasehold system. The report continues: "Because of the leasehold system, it is possible for the Commission, in conjunction with the Department of Territories and Local Government Cas the relevant department was then known], to determine criteria for new development and re-development in a manner which is sensitive to the needs of the particular site and the current social and economic climate. This 1S a more sophisticated and responsive mechanism than that provided by a zoning system and one which is advantageous to the planning authority and to the prospective developer, in that neither are Esicl bound by a rigid set of detailed permissions and prohibitions. It 1s increasingly being recognised by planners and administrators that single-use zoning is too inflexible, in the case of city centres where a complex inter-mixture of land uses is the norm. In this report, the Commission has adopted a concept of 'preferred uses' to aindicate the pattern of land uses considered most appropriate for Civic." After reference to the existing land-use pattern in Civic Centre, described as consisting of a number of discrete activity areas, e.g. retail, offices, government administration, set within a formal pattern of streets radiating from City Hill, the Policy Plan is set out in Chapter 3. That plan should, according to its terms, be understood "as a composite statement of objectives, land use policies, development standards and performance criteria". The specific policies for Civic Centre are formulated under the three principal headings of - ms tne eae mee crane soe v ae eee, ee me wee tren greta cope ee So ore Geer - ll. . Policy Plan (Land Use) » Policy Plan (Transport) - Policy Plan (Townscape). In order, as the Plan says, to obtain a coherent land use structure, Civic Centre is classified into several land-use categories. In respect of each land-use category a Land Use Policy Schedule forms part of the Plan. The statements made in the Plan describe the development which the Commission considers desirable in Civic Centre and provide the basis on which sites will be released for new development and applications for change of use considered. With respect to certain land in the suburbs) of Braddon and Turner, including Section 43 in Turner, the Plan states as follows: "Land Use to be Determined Section 21, Blocks 1-12 of Braddon and Sections 41, 42, 43 of Turner were described in the Draft Policy Plan for residential use. Not included in the Draft Policy Plan were Sections 24, 35, 37, 38, 39, 44, 45 in Turner. During the public consultation phase of the Draft Policy Plan, suggestions were made that these areas would be suitable for small-scale offices and residential intensification. The Commission has considered these suggestions and has released a draft proposal for public comment. Comments will be considered and a policy determined. The Policy for these areas, therefore, confirms the current uses, until consideration has been given to these public comments. Then either this policy wiil be confirmed or a new policy determined. Any new policy will require a ewe eee ae ee en 3 ep ee eee me Lew pres Svan Sens ened au dehataaeniemmaeneetiatan -\o3-, ced a 12. land-use, car parking and urban design performance in accordance with stated criteria." The Plan then contains a section headed Policy Plan (Transport) but 1t 1S unnecessary to refer to that section. The third principal heading under which specific policies for Civic Centre are formulated in the Plan is Policy Plan (Townscape). The objectives of Townscape Policy in Civic Centre, as stated in the Plan, are to - ". achieve harmony of buildings and landscape and, thus, give effect to Griffin's concept of a garden city, which is the foundation of design in Canberra . within Civic achieve a cohesive arrangement of buildings and spaces which are functionally and architecturally pleasing . recognise that while Civic is a part of the National Area, 1t 1s also the commercial centre cf Canberra and should be allowed to express its commercial character." Policy Plan for Section 43, Turner Draft Policy and Development Plans for Turner Sections 24, 35, 37-39 and 41-45 were made available for public comment in November 1983. In October i984 the Commission, after consideration of the comments received, approved the final Policy Plan and Development Plan for Turner Section 24 and Section 43 Blocks 1 - g. weer ee Ret ere 13. The preamble to the document records that the Commission considers that there is a lack of suitable accommodation an Canberra for small and medium scale commercial uses, particularly close to Civic Centre, and that the area to which the document relates is well located to accommodate that type of development. The provisions of the Plans are expressed to be designed to permit change of use and redevelopment to occur. The Policy Plan for Section 24 Blocks 1 - 13 and Section 43 Blocks 1 - 9 1s in the following terms: "The main objective is to provide opportunities for the development close to Civic of small-medium scale offices while ensuring that new development on Blocks 1 - 9 of Section 43 is related in form and function to the existing medium scale commercial mature of Northbourne Avenue. Proposals for a change of use to 'Office/Professional Suite' will normally be supported subject to compliance with the following criteria: - Buildings in Section 43 Blocks 1 - 9 shall be three storeys above ground level, while buildings in Section 24 shall be a maximum of three storeys above ground level. - The maximum plot ratio shall be 1: 1, subject to all car parking generated by the development being accommodated on-site, in conformity with the Commission's prevailing standard. (Some encroachment of basement car parking into the front landscape zone may be considered. ) - All buildings shall be constructed of Materials in the white to light buff colour range. . Continuous building facades shall not generally occupy more than two blocks. [. ora th vee we eek 14. Proposals to use more than two blocks will be considered on their merits Buildings shall be set back ten metres from the front street property boundary at Northbourne Avenue, Moore Street and Barry Drive. ACCESS AND PARKING No vehicular access to Barry Drive will be permitted from developments on Section 24. Full car parking demand generated by a change of use and/or redevelopment shall be accommodated on site in conformity with the Commission's prevailing standard. The rate which represents this standard may vary from time to time. The current rate is specified in the Development Plan. DEFINITION Gross floor area is the sum of all floors within all buildings on the block(s) as measured from their external surfaces excluding rooftop plantrooms and basements used for car parking and housing mechanical plant." Role of the National Capital Development Commission Section 11A of the City Area Leases Ordinance was inserted into the Principal Ordinance (Ordinance No. 31 of 1936) by the City Area Leases Ordinance (No.2) 1936 (A.C.T.) (Ordinance No.38 of 1936). It was amended by the City Area Leases Ordinance (No.3) 1936 (A.C.T.) (Ordinance No.40 of 1936). It is sufficient for present purposes to note that sub-ss.(l) and (2) of s.11A, as so amended, were in the same terms as the sub-sections at present in force. It appears that at that time such planning of Canberra as took place Was carried out by administrative decision within government departments. Ye TOG TR res pt ee ere wea ee po ee gre to : re oe foots prego s B peewee 15. In 1938, the National Capital Development Ordinance 1938 (A.C.T.) established the National Capital Planning and Development Committee. That committee was, however, an advisory body only. Its function was to inquire into, and report to the Minister upon, any matter in relation to the planning and development of the City of Canberra and its environs referred to it (s.6). By virtue of s.7, 1t might also, on its own initiative, undertake enquiries and make recommendations to the Minister (accompanied by a report) in relation to any of a wide variety of town planning and development matters. The Ordinance establishing the National Capital Planning and Development Committee was repealed on 28 November 1957. That was shortly after the National Capital Development Commission Act came into operation on 10 October 1957 and substantially changed the position. The intention of the Parliament in enacting the provisions conferring on the Commission all necessary powers to undertake and carry out the overall planning and development of the City as the National Capital of the Commonwealth was clearly that that responsibility should fall on the Commission and on no other body, subject to the mechanism provided by 5.12 for resolving any difference of opinion between the Minister and the Commission as to the policy which should be followed by the Commission ain relation to any matter. As Smithers J., referring to the objective of achieving a city with the character of the national capital of Australia, said in Kent v. Johnson (1973) 21 F.L.R. 177 at p.186: 16. "If such an objective 1s to be achieved by performing the functions of undertaking and carrying out planning, developing and construction it appears to me that the subject matter of the functions conferred on the N.C.D.C. 1s logically and practically incapable of division, incapable of being shared by that body with other bodies. The objective demands unified direction. It appears to me to be incompatible with the notion of conferring ona designated authority the functions of undertaking and carrying out the planning, development and construction of the city as the national capital that other bodies May also so plan, develop and construct. I am of opinion therefore that in conferring these functions upon the N.C.D.C. Parliament was conferring them upon the N.C.D.C. to the exclusion of other bodies. It is an inevitable consequence of this that the Act impliedly forbids other authorities to undertake and carry out the functions conferred on the N.C.D.C." The Parliament might, of course, have evinced a contrary intention 1n any subsequent enactment but no such enactment has any relevance to the present case. In consequence, the provisions of the City Area Leases Ordinance, and in particular s.11A thereof, must be read subject to the provisions of the National Capital Development Commission Act. Role of the Supreme Court It follows, in my Opinion, that, where an application 1s made to the Supreme Court under s.11A of the City Area Leases Ordinance to vary the purpose clause cf a lease of land in an area in respect of which there is in force a policy plan adopted by the Commission consistently with any intervention by the Minister or the woe ae eee, sytem on re "a 17. Governor-General under s.12 of the National Capital Development Commission Act, the Supreme Court may only approve a varied purpose clause which is consistent with the policy plan so adopted. I interpolate that, in the present case, there is no question but that the proposed purpose clause 1s consistent with the policy plan adopted by the Commission in respect of the relevant area. I am also of opinion that, on the hearing of such an application, the Court may not inquire into the adequacy or the legality of the procedures pursuant to which the policy plan was adopted. In relation to this latter aspect, I am, with respect, unable to accept the view of Kelly J. in Re Axiom Pty. Ltd. (1986) 66 A.C.T.R. 1 at p.27. To say that the Supreme Court may only approve a varied purpose clause which is consistent with a relevant policy plan does not, however, mean that a lessee 15s entitled, as of course, to an order varying the purpose clause of the lease so long as the variation sought is consistent with the policy plan so adopted by the Commission. That this must be so becomes apparent when regard is had to the true character and purpose of such a policy plan. Its adoption by the Commission clearly has no effect upon the existing purpose clause in the lease. In particular, 1t does not effect any variation of it. The lessee may continue to use the land for any purpose within the purview of the existing purpose clause and re-development for a use within that clause will be permissible subject only to compliance with any relevant _ ~~ Vee foe ee yo oe - i re See en nee Saas septs pee ee 1s. legislation such as the Design and Siting Ordinance and the Building Ordinance. If the lessee wishes to redevelop the land fora use outside the existing purpose clause, application must be made to the Supreme Court under s.1llA for a variation of the purpose clause. The lessee must satisfy the Court not only that the purpose clause proposed is consistent with the policy plan adopted for the area by the Commission, but also that, in all the circumstances, it 1s in the public interest that the variation be approved. The Court, thus, has a very wide discretion. One relevant matter 1s, obviously, the width of the language in which the proposed purpose clause is cast. The Court must have regard to the circumstance that, once approved, the lessee will not be confined to redeveloping the land according to some specific proposal which may then be in contemplation, but will be free, subject to the constraints already mentioned, to redevelop the land for any use within the varied purpose clause. Hence, a more limited variation than that proposed may be appropriate. Another very pertinent matter for the Court will be the question whether the proposed change of use should be approved at the particular time having regard to the amenity of the surrounding area. Many other considerations immediately spring to mind. It follows that any evidence which is relevant to the exercise of the Court's wide power will be admissible. To label any particular class of evidence as "town planning --—— =, — qrrs we sone ee wn ent ree oe goer ee ey ae wee eoner mere t gy aageere 19. evidence" and thereby seek to exclude it is, in my opinion, to fall into error. The only question for the Court 1s whether the evidence tendered is relevant to the resolution of the issues as I have sought to define them in the general observations set out above. The Present Case Having made those general observations, I now turn to the issues specifically raised on the hearing of these appeals. Section 111A provides that no variation is to be made uniess the Court 41s satisfied that there are such circumstances existing as in the opinion of the Court make it desirable to vary- the purpose clause in order that the reasonable user of the land should not be impeded. The primary judge took the view that the Court could not be so satisfied if all that was shown was that the proposed use was a reasonable use. His Honour held that 1t was necessary to show that no reasonable use of the land was possible unless the change of purpose were granted. I agree with the other members of the Court in thinking that his Honour took too narrow a view and, thus, fell into error. It is, in my opinion, sufficient for the purpose of s.1l1A 1f the Court is satisfied that the proposed user is a reasonable user of the land and that that user will be impeded 1f the variation is not approved. However, in considering this question the Court will need to have 20. regard not only to the particular proposed use which the lessee has in contemplation at the time the application is made but to any use which will be permissible if the variation sought 1s approved. If any use falling within the scope of the proposed purpose clause 1s found not to bea reasonable use in all the existing circumstances, the proposed purpose clause could not be approved, though some more restricted clause might well be appropriate. In the result, I would allow the appeals, set aside the orders made by the Supreme Court and remit the matter to that Court for hearing according to law. I certify that this and the preceding 19 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves. Viekts Broun Associate Dated: 26 June 1987 aes IN THE FEDERAL COURT OF AUSTRALTA ATISTPALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISTON Mo. } y ' ) ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY ACT G59 of 1984 _ ACT G61 of 1986 No BETHEEN AND BETWEEN: AND: MORPATH PTY. LIMITED Appellant ACT YOUTH ACCOMMODATION GROUP INCORPORATED LOTS UNA HICKS KATHERINE THORNTON PETER HOPNER THE MINISTER OF STATE FOR TERRITORIES Respondents : THE MINISTER OF STATE FOR TERPITORIES Appellant ACT YOUTH ACCOMMODATION GROUP INCORPORATED LOIS UNA HICKS KATHERINE THORNTON PETER HOPNER MORPATH PTY. LIMITED Respondents Fisher, Davies, Neaves, Beaumont and Miles JJ. 26 June 1987 eo * wet we ard 7 pooner eee Salama "aah oa aair Seeenaamomnel rt lJ REASONS FOR JUDGMENT BEAUMONT, J.: Morpath Pty. Limited is the lessee from the Commonwealth of lands situated near the Civic Centre, Canberra, known as Blocks 8 and 9, Section 43, Division of Turner. The leases, acquired by Morpath in 1982, were granted in 1950 under the provisions of the City Area Leases Ordinance 1936 ("the Ordinance") for terms of 99 years. A dwelling-house is erected on each block. Each lease contains a covenant that the lessee will use the lands for "residential purposes only". In December 1984, Morpath applied to the Supreme Court of the Australian Capital Territory for an order varying the covenant restricting the purpose for Which the lands might be used. The variation ultimately sought (the application was amended in March 1985) was the deletion of the references to "residential purposes only" and the substitution of use for the purposes of offices or professional suites and ancillary uses, subject to certain conditions, the details of which will be stated later. The application was made under s.1llA of the Ordinance which confers upon the Court jurisdiction, in certain circumstances, to order the varlation of any provision in a lease in relation to the purpose for which the land subject to the lease may be used. The application for variation was contested by several objectors. Gallop J. refused the application. Morpath and fhe Minister of State for Territories now appeal from that decision. The leases were granted pursuant to s.5 of the Ordinance. & which empowers the Minister, in the name of the Commonwealth, ta grant leases of land for business or residential purpose: or pert a ee woe we "ae cep were see " both. By s.llA(1), the Court may vary any provision of a lease in relation to the purpose for which the land subject to lease may be used, but no such variation shall be made - (a) unless the Court is satisfied that there are such circumstances existing as in the opinion of the Court may make it desirable to vary the provision "in order that the reasonable user of the land should not be impeded; " (s.1LlLA(2)(a)) (emphasis added) or (b) if a certificate is filed by the Minister stating that, in his opinion, the variation sought would be "repugnant to the principles for the time being governing the construction and development of the City of Canberra" (s. 1LLA(2)(b)). The Minister and the applicant are entitled tc be heard on the application and to examine and cross-examine witnesses (s.11A(5S)). Subject to certain formalities, anv person shall, with the leave of the Court, be entitled to be heard 1n opposition to the application and to examine and cross-examine witnesses (s.11A(6)). An order under s.11A varying a provision is, in the first instance, provisional only; if is subject to the condition that any premium payable to the Commonwealth will be paid within the prescribed time (s.11A(8)). (By s.11A(9), the Minister shall determine: (a) the capital sum that the lease might be fate eee ere peer el H Lee 4. expected to have realised assuming a bona fide sale on reasonable terms immediately before the day on which the provisional order was made; and (b) the capital sum that the lease might be expected to have realised if sold on the day such order was made. A premium is payable in accordance with a formula then prescribed (s.1l1A(9A), (9B) and (9C))). A provisional order is subject to the further condition that compensation, if ordered by the Court, be paid to any person injuriously affected by the variation ({s.1lA(8)). A provisional order under s.11A shall be made a final order if the Court is satisfied that the lessee has complied with the conditions specified in the provisional order (s.11A (9F)). In October 1984, the National Capital Development Commission ("the Commission") published a Pelicy Plan and a Development Plan for part of Turner including Section 432, Blocks 1-9. (The Commission was established by the National Capital Development Commission Act 1957. Its statutory Functions are "to undertake and carry out the planning, development and construction of the City of Canberra as the National Capital of the Commonwealth" (s.11(11)). The Commission is to k Minister informed of its decisions oD Ph) ep th with respect to atters of policy in relation to the performance of its functions (s.12(1'4). In the event of a difference of opinion between the Minister and the Commission as to the policy which should be followed by the Commission in relation to any matter, the Minister and the Commission are to endeavour to reach agreement '5.12(2). If they are unable to reach agreement, the Governor-General pee eee cage wy epee eee = ee wwe re Qc reves wr tee eee nae may, by order, determine the policy to be adopted by the Commission in relation fo the matter (s.11(3)).) In a preamble to its plans, the Commission stated: "The N.C.D.C. has a statutory responsibility to determine land use and the location of activities on specific sites. The Commission also establishes policies arising from the Commission carrying out its functions under the National Capital Development Commission Act 1957 and which constitute principles which govern the planning, development and construction of the City of Canberra. Policies where appropriate are incorporated into Policy Plans for specific areas. The Department of Territories and Local Government incorporates the Commission's town planning policies in the form of 'purpose clauses' in each property lease that it issues. As a result of the public consultation on the Draft Civic Centre Policy Plan the Commission examined the need for small-scale office developments and for residential intensification close to Civic Centre. The Commission considers that there is a lack of suitable accommodation in Canberra for small and medium scale commercial uses, particularly close to Civic Centre. The area to which these Policy and Development Plans relate is considered to be well located to accommodate this type of development. The provisions of the Policy and Development Plans outlined overleaf are designed to permit change of use and redevelopment to occur in a manner which retains the existing high visual quality of this part of Turner and minimises adverse environmental impacts on existing residential amenity. The Draft Policy and Development Plans for Turner Sections 24,35, 37-39 and 41-45 were released for public comment in November 1983. Following consideration of the comments received and modifications to the proposals, the Commission approved the final Policy and Development Plans for Turner Séction 24 and Section 43 Blocks 1-9 in October 1984. The Commission has determined that the existing land use policy for Turner Sections 37, 38, 39, 41, 42, 44 and 45 and Section 43 Blocks 11-21 shall be cetained...". The Policy and Development Plans were as follows: od —— vos rT . — -~-4— wrote, — =——— — < Ss ey The established procedure for thal appheation be Tarltory under the 1936 (a amecxied). g Ww | : . 1 Ps i ij s ' 1 is roi j 1 z £39335 Fe | #4 ELLE re ge, iil a | & ge fapszes gf ; & $y dseoske . 2 gh bybaagd |y | 3 Ay 22,2032 z §: funy 74 eH THIEL < a 3 = 3 ate x so ity ai a | Non Retal Commerctat & Professonal Oilces: FELOPMENT PLAN Section 43. Blocks I-? rendscape Zone lim Sulding Zone Zlim carparkng tose Unt Lardscapa Zone 3m Smick weil For Full wath of block 1ém igh 2 8 ' section 43 3% PR g Building SetbacksS8 & < = rar) roe) Section 14 Blocks I-13 est bandscaze Zone Wm Balding Zone oR Gerparkmg Zone thm 'e eomennds of tis Deurtogment Fan wre svt at he date of pub vane ond are wudlect Urge eho Ronee from Pat date e i j wth the Comneniion 6 preveleg standerd (Some enon Of Hwee Stortys soot Qrevnd level © The macteumn plot ratio shell be 1:1 pubfect fo ail cot porting Ganeeted by the development TAI nee Scvetopmmend en Blocks 14 of Sachin 42 te velated in form and heacton commenced natue of Hothbourne Avenue for @ change of use to "Orice/Preterslonet Guile" wi normaty be bupported eubirct 12 Beasogs by Section 43 Clocks 1-4 shell be Puce avers ebore cowl bere, while Bydhings in encrosctvnend of beremend Cad peiking indo Bre bent Larubetaps tone may be Conebiored) © AB WAS rs anal be Conbucted of meteriats 11 Bre ahte be Beit bl colo rene bring eccortenodated one In cardoresny Secon 24 ehal be a man! 'The mal objective te to provide Cocoruntes for the development close to Corkc of palladium ecole TUAKER SECTION 24 BLOCKS 1 19 AKO SECTION 43 BLOCKS 14 $0 the eoitang medium ecale Proponets POLICY PLAN comp hance wth tho . ORces ate ensuring 4 ho Brocka B and 10 sexpectraty of Gecton 36 are the Holy Trinity Lucheres Church end the Seventh Oey Aaeeritt Chasch Gecvone 41 and 42 are both rerigenhal eccommodaton, Section 41 beting the ANU Graduate House ond Catton 42 Harlock Hoye whch te 6 Comnranesaith Houel temporety being ered 00 ofhow Brock 1 of Section 37 ta @ Lenton Calera Chub Biot 2 le 8 Kindegecten and Dich 3 the Us io a . on 'Dect 3 he Uiselnten Combution in Turner commenced bn 1940 and many of the howtes tommain ter gely bs thew origenel sccomenodaha tor the Ash oten Fedwel Potcw CAASLOR, De 8 mane have Let GONE AdDONE And wharaHOnD Retctentet bioct hondeges in these sectons of Turret wary bron 73-4400 with depths of wo to 50m. Sectors 39 4 & 44 and the rorhem part of Section 36 are eahing traderoat eres st ore Blocks 42.3 6 4 of Lecton 74 The remainder of Secton 24 comoias hovtat whch have hewn charges of tare purpose te perma amelecele etfce Wien. EXISTING LAND USE PLAN Ousdings shall be focated eanthin che bur'ding zone shown on the Cevelopment Plan The folowing design entesta app © Gathage storage instalacicns she de nezted beniad the front Ene of buddings and be concealed [rom pute view © Mechanical eruipmint lichading ale condoning eguizment, heal pumps efc. shall be designed: and located in @ manner whieh uall Mot cause nanance (0 adjacent fesseet, © inthe ease of comer blocks cer parting wall not be permitted fongard of the budding Ene on cuner sirect frontage. * Extsung wees whhin block boundaries shad de retained where practicable ponieulaty where they form screens atang ade Bock boundartes, Prdte Unites, Leszees must make prevuuca for any public city dastazarions (euch as efecercity auvutations? CeThin either the building or car parting rone and screened from puble view Lessees chou'd also nate the kocattan nf crainage and lectnaty eaxemenis before prncetding to redeve'on any block The cast of refocaign of existing renices shall be barre by the lesser Car Parting shal be peoutded on ete in the ratio of T space per 33m! of gross forw arta, © Conmwont byddng teceder thal net Generally occupy mere Phan tea Mocha Froporets to use ' wah Bre Comet # peretng stendad The late etch roptanante sie standard may wary hom bere 1d tine The Cullens tate be opectied In #4 Devetopereed Pian mare tan too lochs il Be Contadeted orn thelr mands © DuAnagt ohed ba ant Beck fen metos rom the tent street propaily Lowadery of Honihoume Avene Unore Street ond Gave Drive ACCEES AND PANKMO Conderwty FA cot paring Genend Qenweied by 8 change Of wie edict tederetopmend shal bt accommmcdsted On Gron8 Mooe wipe he he eum of all Boole ein Of DUBENGT On Fhe bined(1) os mearined hem theb Otieina? a tores exchedeg reckon pAaniroene ond Laemens Wied bet Cor pe ting ond howeng echo el plant Ho wehecates occens to Beiry Dire mit be permitted bom derstoornents on Sector 24 ery DEFmuTIOH (ote 1 et Sechon 45 condaing Pints BMock 7 of Secton 43 Private Oifices end Dict 2 ef Eecton 4S Sechon 33 contens the Conteris Pokce ond Carers Youth CM (Doct t) ond the St Vincwnt de Pot Medco Sutes and ama Protespene! O1ces, Society (Dock 2) Section 43 © The third sorey of Sutfeza cn Bocks Section 43 shall be ret back at least f. metres fram ite reat biting fine too the overooking of adjazent suses © Plant roorts shal be xet back at leat f meinra (rom the front paraoet. © Mo amalgamation of blots froning Mamhdeume Avence unth thore frontinr Sirect wid be permated. The lersee ust required to conunect a trick wad Er the rear boundary fo the sativaco7 of Commissar, © fa the reat fandicape cone in Secon + cuca feces unt be regured (at urT year round tirrening along ihe enuice L the Noer even 43 Eveaturius tier € Menocera, & Gioswiis Sconate £ or & Mensilere Maculate Seettan 24 © Buldings wha ihe car care'ng cone considered In Sector 24 prauced mee parking standards ioecilied can be mer that the plot ratio ts not excerced ¢ Backs] 64 SE6 and 12613 o= comirrd 10 de amaigama ed poe to redeuciesment Steal leah od ae eee Tb' will be noticed that the Commission indicated that proposals in respect of Section 43 Blocks 1-9 for a change of use to "Office/Professional suite" would normally be supported, subject to compliance with the following principal canditions: (a) the building shail he three toreys above ground level; (b) the maximum plot ratic shall Wt Lil; (ca! car packing shall be accommodated on site. lon aD By its amended application filed in March 1985, Morpath sought an order varying the provisions of the lease so as to permit use for one or more of the following purposes: "(il offices; iri) professional suites; (iii) car parking; tiv) single unit caretakers flat not exceeding 150 square metres in area; PROVIDED ALWAYS THAT (v) the gross floor area of the building or plot ratio of one to one. 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 and basements used for car parking and housing mechanical plant; (vi) the lessee shall provide and maintain on-site cac parking for sufficient cars to provide one space for every 33 square metres of gross floor area; {vii) the building or buildings shall be three storeys abeve ground level." The application was opposed by a number of local residents. They are respondents to Morpath's appeal. Another respondent, ACT Youth Accommodation Group Incorporated, also objected. Its opposition was based in the main on the alleged shortage of "low cost" housing in Canberra; it claimed that a relevant connection existed between that shortage and the proposed change of user. No certificate under s.1llA (2)(b) was filed by the Minister. At the commencement of the hearing, counsel for the Minister informed Gallop J. that the Minister did not intend to file a certificate. Counsel asked for and was granted, leave to be excused. However, counsel for the Minister later put submissions to Gallop J. when the parties came to address his Honour. As had been said, Gallop J. refused the application. In declining to order the variation sought, his Honour held that the provisions of s.1llA(2\(a) were not satisfied in the present case, Gallop J. was of the view that, for thas pucpose, it was not sufficient merely to show that the proposed user was a reasonable user of the land: 1t was necessary to go further and to show that no reasonable use of the land was possible unless the change of purpose was granted (at p.47). The learned Judage said: "In the present case there can be no doubt that the present purpose clause for Blocks 8 and 9 does not prevent a reasonable user of those blocks. Admittedly, the domestic residences have been allowed to fall into a state of dilapidation but the land can be used quite well for residential purposes". re - J " wt Bo te ee a ee ee sot Sten! Gallop J. then indicated that, if he had had to exercise his discretion in the matter, then. for reasons which he then gave, he would have declined t0 order the variation sought in any event. It is now submitted by Morpath and by the Minister that his Honour erred in his construction of s.1lA(2)(a). They contend that the learned Judge overstated the reguirements of s.1LlA(2)(a} when these provisions were properly construed. They argue that there will be sutficient compliance with s.11A(2)(a) if it be demonstrated that the user proposed is one of several possible reasonable uses to which the lands could be put. They say that, although a residential purpose is a reasonable use of these lands, so also 1s the limited commercial use now proposed. Thus, their submission runs, the present restriction impedes fhe reasonable use of the land. The origins of s.1l1A may be found in provisions, such as s.84(1) of the Law of Property Act 1925 (U.K.) and $.89(1) of the Conveyancing Act 1919 (N.S.W.), which confer jurisdiction upon the court to discharge or modify restrictive convenants after they have become obsolete. The history of the United Kingdom legislation is described by Mr. Patrick Polden in his article "Private Estate Planning and the Public Interest" (1986) 49 M.L.R. 195. In 1919, the Scott Committee noted that in some cases land was bound by eovenants which were originally designed to ensure that the neighbourhoad shauld continue to enjoy a residential or other special character, and that such covenants continued to be in force long after the neighbourhood has ceased to enjoy the special character, to preserve which the covenants were imposed; and that in some cases, the owners were debarred from making the "fullest" use of their property, (see the Fourth Report of the Acquisition and Valuation of Land Committee (Cmd. 424) at p.8). The Committee recommended that there should be vested in an appropriate authority, on the application of any person interested in the land, a power by order to discharge or modify a restrictive covenant on being satisfied that the restriction ought to be deemed obsolete, or that "its continued existence would impede the reasonable user of the land for public or private purposes" subject to payment of compensation to the persons entitled to the benefit of such restrictions, if such persons are, in fact damaged by the discharge or modification of such restrictions (see the Scott Report at p.8). It was thought appropriate that jurisdiction to decide what were considered to be questions of policy rather than of law, should be given to the official arbitrators rather than to the courts. The Committee's recommendations were given effect by s.84(1) of the 1925 Act (see Jude Wallace, Propery Law Reform in Victoria, (1987) 61 A.L.J. 174 at p.175). In Re Henderson's Conveyance (1940) Ch. 835, Farwell J. made some observations on the meaning of s.84(1) which proved influential. In his Lordship's opinion, the Court had to consider whether the restrictions were such as can be "properly and justly" modified or released, and <a ye vest Too re yt rg § ft 10. whether there was a "real necessity", in order to enable the "proper development" of the neighbouring property , that there should be some modification or removal of the restrictions in question, as, for instance, in the case of an applicant seeking to develop his land for some purpose such as erecting small houses or shops (at pp.845-6). In a passage frequently cited in this connection, Farwell J. said (at p.846): "....-1 do not view this section of the Act as designed to enable a person to expropriate the private rights of another purely for his own profit. I am not suggesting that there may not be cases where it would he right to remove or modify a restriction against the will of the person who has the benefit of that restriction, either with or without compensation, in a case where it seems necessary to do so because it prevents in some way the proper development of the neighbouring property, or for some such reason of that kind; but in my judgment this section of the Act was not designed, at any rate prima facie, to enable one owner to get a benefit by being freed from the restrictions imposed upon his property in favour of a neighbouring owner, merely because, in the view of the person who desires the restriction to go, it would make his property more enjoyable or more convenient for his own private purposes. I do not think the section was designed with a view to benefiting one private individual at the expense of another private individual. At any rate, primarily, that was not, in my judgment, the object of this section. If a case is to be made out under this section, there must be some proper evidence that the restriction is no longer necessary for any reasonable purpose of the person who is enjoying the benefit of it, or that by reason of a change in the character of the property or the neighbourhood, the restriction is one which is no longer to be enforceable or has become of no value." In Re Henderson it was sought to modify a covenant not to erect a building upon part of land adjoining a garden of a house. The application failed because the continued existence of the restriction did not impede in any way the + ee meee or cence — li. erection of a house upon another part of the land (at p.849). The passage cited above from the judgment of Farwell, J. was approved by the Court of Appeal in Re Truman, Hanbury, Buxton & Co. Ltd's Application C1956] 1 Q.B. 261 at pp.270-1 (Evershed M.R., Birkett and Romer L.JJ.) and in Re Ghey and Galton's Application £19571 2 Q.B. 650 at p.659 (Evershed M.R., Morris and Pearce L.JJ.). In Re Ghey and Galton, it was sought to modify a restriction that premises were not to be used otherwise than as a private dwelling-house so as to permit the premises to be used as a convalescent or rest home "during such time as they were in the occupation or, or under the control of, the Metal Box Co. Ltd." Lord Evershed M.R. said (at p.659) that what has to be done, if an applicant is to succeed, is something far more than to show that to an impartial planner the applicant's proposal might be called, as such, "a good and reasonable thing: he must affirmatively prove that one or other of the grounds for the jurisdiction has been established." Lord Evershed pointed out (at p.662) that the Lands Tribunal is not asked to say "what he thinks would be advantageous from one point of view or another to the neighbours" ~ his role was not that of a "planning authority". In holding that the application did not fall within the relevant limb of s.84(1), Lord Evershed said at p.663): 12. ",..e.Df think 1t must be shown, in order to satisfy this requirement, that the continuance of the unmodified covenants hinders, to areal, sensible degree, the land being reasonably used, having due regard to the Situation it occupies, to the surrounding property, and to the purpose of the covenants. If that be the right view of the paragraph in the subsection, it seems to me quite plain that it cannot, on this evidence, be said that this second part of paragraph (a) of the subsection is satisfied. Indeed, some of the general observations of the tribunal seem to me expressly to negative any such view. He is, in truth, saying that this is a special privilege to be granted to a particular company in particular circumstances which ought not to be followed in any other instance." This approach meant that an applicant had to prove that the restriction had virtually sterilised the site (see Re Wakefield Corporation's Application (1953) 7 P & C.R. 90; see also The Report of the Law Commission (llth Report (1967) at pp.21-2). As aresult, the legislation was amended (see Polden at p.207; Preston & Newsom's Restrictive Covenants Affecting Freehold Land 7th Ed. at pp.242-8). The narrow interpretation of s.84(1) which found favour in the English Court of Appeal was followed in New South Wales and Victoria. In Heaton v. Loblay £19603 S.R. (N.S.W.) 332, Myers J. said of s.89 (1) of the Conveyancing Act (at p.335): ",..if application is made under par.(a) it is not sufficient to show that what the applicant proposes to do is a reasonable user of the land. It must appear if extinguishment is sought that no reasonable user of the land is possible unless the restriction is extinguished or if modification is sought that no reasonable user is possible unless the restriction is modified. The paragraph does not relate to the use which can be made of the land by the present owner, but to the use which can be made of it in the hands of any owner. This appears from em per a ete ee 13. the terms of the section itself and accords with the view taken by the Court of Appeal in _Re Ghey and Galton's Application." In Re Miscamble's Application [1966] V.R. 596, in refusing an application under s.84 of the Property Law Act 1958 (Vic), McInerney A.J. said (at p.603): "I think this 1s all the applicant succeeded in doing; he showed that a reasonable user of the land would be for flats, and that the continued existence of the restriction would impede such user. The evidence did not show that it was impossible to use the land as a family home, or that 1t is impossible to sell it for use as such. It merely showed that the applicant had been unable to sell at the price he asked". See also Re Alexandra [1980] V.R. 55 at p.58; and see Stannard v. Issa [1987] 2 W.L.R. 188 at pp.194-5 (P.c.). A more liberal interpretation was adopted by Negus J. in Smith v. Australian Real Estate & Investment Co. Ltd. [1964] W.A.R. 163. Speaking of s.129C of the Transfer of Land Act 1893 (W.A.), Negus J. said that the -words "reasonable user" in this context means any purpose for which a reasonable neighbour might reasonably use his land after taking into account all the circumstances and the existing character of the "neighbourhood and the extent to which the use may interfere with the adjoining owners' comfortable enjoyment of their properties or reduce the value of those properties (at p.166). The restrictive view of s.84(1) of the Law of Property Act has not found favour in the decided cases dealing with the construction of s.11A of the Ordinance or its Northern Territory counterpart (see Re City Area Leases wine wm i a . aid vy a wT op a8 we ote ine - or: 14. Ordinance (1963) 9 L.G.R.A. 190 per Dunphy J. at p.207; Re Bailey's Application (1963) 10 F.L.R. 175 per Eggleston Jd. at p.178; Re Lauder's Application (1968) 13 F.L.R. 238 per Blackburn, J. at p.241; Re Warmac Dickson Pty Ltd, unreported, 10 October 1969 per Kerr J. at pp.752-5; Re Atherane Pty Ltd's Application, unreported, Kelly, J. 8th November 1985 at p.5; see also (1985) 62 A.C.T.R. 22 per Miles, C.J. at p.28). In these cases it has been held that it is not necessary to show that the land would be sterilised unless the restriction is lifted. The ground for jurisdiction stipulated in s.11A(2)(a) will be made out where the applicant can point to the existence of a reasonable user of the land which is prohibited by the restrictive provision. The property legislation has been distinguished on the grounds that it is concerned only with proprietary rights as between subjects whereas the Ordinance deals, as a matter of public policy, with the terms upon which Crown leasehold land may be held inthe City of Canberra. This settled interpretation of s.11A(2)(a) accords with the ordinary meaning of the words used. The ordinary meaning of "reasonable" in the present context is "that which is not more or less than reason dictates within due or proper limits"; "proper"; "of such amounts, size, number, etc. as is judged to be appropriate or suitable to the circumstances or purpose" (see Webster's Dictionary; Shorter Oxford Dictionary). In Giris Pty. Ltd. v. Federal Commissioner of Taxation (1969) 119 C.L.R. 365, Windeyer J. a 15. said (at pp.383-4) that "as ameasure infact of time, space, quantity and conduct, reasonableness is a concept deeply rooted in the common law: and so, in such cases, 15 the power of a court to say whether a particular decision of that fact is or is not within the bounds of reason." When the Scott Committee spoke of permitting the "reasonable user" of the land, it had in mind allowing its proper development in the above sense. Similarly, Farwell Jd. recognised that a restrictive covenant could hamper the proper development of a property. Neither the Scott Committee nor Farwell J. heid that something like sterilisation of the land had to be found before the jurisdiction of the court would he enlivened. On the contrary, they specifically contemplated the need to permit the fuller use of land in accordance with development in the neighbourhood. (Section l1A(2)(a) is, of course, only a ground for jurisdiction. Even if its requirements are satisfied, there still remains the further question whether the general discretion conferred by- s.11lA(l) should he exercised in favour of the applicant). It is true that a stricter view was taken in Ghey and Galton and in the Australian cases which followed the Court of Appeal. Gallop, J. also followed this Court. However, it now appears that such a narrow approach was never intended by the Scott Committee nor by Farwell, J. Its logical development was the "sterilisation" test which, having been found to be unsatisfactory, was reversed in the United Kingdom by legislative action. In my opinion, that werycn cyrecce et eta ite anata 16. test should not be applied here (cf. Cook v. Cook (1986) 68 A.L.R. 353 at pp.362-3). This conclusion accords with the settled construction of s.1l1A(2)(a). It must follow that since Gallop J. applied the stricter test in this connection, the exercise of his statutory discretion miscarried. The question then arises as to the appropriate course now to be followed. On behalf of Morpath it is submitted that this Court should itself now deal with the matter. This raises two questions: (1) have the grounds for jurisdiction in s.11A(2)(a) been established? (2) 1£ so, should the discretion under s.11A(1) be exercised in favour of Morpath? In my opinion, this Court should not attempt to deal with either of these questions. It is more appropriate that the application be remitted to the Supreme Court for a'fresh hearing on all issues. In considering whether the provisions of s.11A(2)(a) have been satisfied here, it 15 necessary to inquire whether, in confining the user of the land to residential purposes, its proper development is inhibited. In this context, the fact that Morpath's proposal conforms with the published plans by the Commission in 1984 Cand presumably still the current view) is a powerful consideration in favour of the conclusion that' the present restriction is impeding that reasonable or proper development. But, even if it be assumed that the grounds fe Seer eee yt A os ete ee ee er 17. for jurisdiction in s.11A(2)}(a) are established, there remains the question whether the discretion conferred by s.1L1A(1) should be exercised in Morpath's favour. That discretion 15 conferred in unlimited terms. Such a discretion is unconfined except in so far as it is affected by limitations to be derived from the context and scope and purpose of the Ordinance (see The _Queen v. The Australian Broadcasting Tribunal; Ex parte 2HD Proprietary Limited (1979) 144 C.L.R. 45 at pp.49-50). It is evident from the context, scope and purpose of the Ordinance and s.1llA in particular, that the discretion vested in the Court under s.11A is to be exercised in the public interest having due regard to the interests of adjoining occupants in the local amenities. Lord Gardiner's description of the function of the Lands Tribunal is apposite here: "the task of holding the balance between the interest of the adjoining landowner an the amenities and the interest of society in the full use of the land must be left to the Tribunal" (H.L. Deb., ser. 5, Vol 301, Col.586 cited by Polden at p.207). Since Gallop J. did not embark upon these inquiries, it would be inappropriate for this Court to attempt to doso itself without the benefit of current findings of primary fact and without the benefit of the views of a trial judge as to the manner in which the discretion should be exercised in the light of those findings. Reliance was placed by Morpath upon some observations made by Kelly J., with the concurrence of Miles C.J. and Gallop dJ., in Re City Area Leases Ordinance Tes ven, ——-- - | 18. (1936) and Axiom Pty Ltd (1986) 66 A.C.T.R. 1 at pp.26-27 as to the function of the Court under s.11A. Kelly J. there said: "I think that the court's function requires it to consider first whether the proposed variation of user is repugnant to the principles for the time being governing the construction and development of the City of Canberra. That question answered in the negative, the court must then go on to consider whether the reasonable user of the land is being impeded by its present user provision. Giving to the word "development" the broad meaning which I think ought to be attributed to it, I am satisfied that it necessarily involves an element of planning and that therefore the planning in respect of which an application for variation of user, effectively a redevelopment, is made may be examined by the court. The approach to that examination is similar to but not, in my opinion, exactly the same as that taken by the court to decisions of inferior tribunals, '(A categorizing but not a derogatory description)': Anisminic Ltd v Foreign Compensation Commission £19691 2 Ac 147 at 182, per Lord Morris of Borth-y-Gest):" With all respect, I cannot agree with this analysis. The structure of s.11A requires the Court to proceed in two stages, The first stage is to inquire whether the grounds for jurisdiction described in s.11A(2) are satisfied. The Court nust be satisfied that it is desirable to vary the provision in order that the reasonable user of the land should not be impeded. As has been said, this inquiry will involve an inquiry into the town planning aspects of the proposed new user. Where, as here, the proposal accords with the Commission's current plans for the land, it will ordinarily follow that what is proposed should be regarded as a reasonable use. If so, the grounds for jurisdiction in $.11A(2)(a) will be made out. Where the Commission has no current plan or where what is proposed does not conform with Sn re oe en oe poten 7 I 4 ae . 19. the Commission's plan, the question still remains for the Court to decide whether the proposal is "reasonable" in the sense previously explained. The next inquiry 18 whether a certificate of the kind described in s.11A(2)(b) has been filed. This is a simple question of fact as to the existence or not of the statutory certificate. It does not permit or require the Court to embark upon an inquiry as to whether the proposal would be "repugnant to the principles for the time being governing the construction and development of the City of Canberra". Assuming the grounds for jurisdiction specified in s.11A(2) are made out positively, in the case of para.(a) and negatively in the case of para.(b), the Court then proceeds to the second stage, i.e., the question of the exercise of the wide statutory discretion conferred by s.1l1A(1),. As has been said, this discretion should be exercised in the public interest, balancing society''s interest in the fullest use of land against the interests of local occupants in their amenities. Ordinarily, town planning considerations will be prominent in any such inquiry. Of course, the Court is not a planning authority. But this is not to say that in the exercise of a judicial discretion the Court should disregard tow planning considerations. On the contrary, any consideration of the public interest requires that significant weight be given to the current plans of the Commission as the public body charged with that responsibility. There is a clear distinction between, on the one hand, asking the Court to ren poe eee i > 20. act as a planning authority and, on the other, entitling or requiring the Court to take planning material into account in the exercise of its judicial functions under s.1lA (see Preston and Newsom, op. cit. at p.212). Moreover, in balancing the public interest in the full use of land against the local interest in the amenities, it will be appropriate for the Court to consider whether it is proper to permit the variation to proceed but upon the condition that compensation is paid to those injuriously affected (see s.11A(8)(b)). The analysis of Kelly J. appears to assume that the discretion under s.11A(1) is the same as the jurisdictional fact required by s5.11A(2)(b). In my view, they are quite distinct matters. Moreover, Kelly J. seems to accept that on the one hand, the Court is powerless to review the merits of the Commission's plans, yet, on the other hand, it is open to the Court, in the course of an application under s.11A(1), to declare the plans of the Commission void on technical legal grounds which do not touch upon the merits of what the Commission proposes. Given the broad discretion under s.1llA(1l), it ais unlikely that such a technical approach was intended, even if it were open to the Court to strike down the administrative action of the Commission in its absence. It is far more likely that by s.1l1A(1) it was intended to vest in the Court a wide discretion in which all the merits of the matter, including the Commission's plans, were to be taken into account. ng ren, ee - Ve ' . ee Lan = SITE MI Re en pp re ge ee ' 21. Axiom was concerned only with the different question whether leave to oppose should be granted to an objector under s.1l1A(6). In my opinion, leave under that provision should be liberally granted (cf. Ogle v Strickland, Full Federal Court, unreported, 13 February 1987). In Axiom, it seems to have been held that leave should not be granted 1£ the objector wishes to argue against the planning for the area proposed by the Commission. With all respect, I cannot agree. Provided an objector can demonstrate an appropriate 'interest in the outcome of an application under s.11A(1), leave to oppose should generally be granted under s.11A(6). "Tt should be no disqualification that the objector wishes to canvass the merits of the town planning proposed by the Commission. That will be a central question in the ' proceedings even if, ordinarily, the Commission's current proposals are to be given significant weight. Tt is, oF course, a different question whether an objector has demonstrated a sufficient interest to be allowed in. But once allowed in, the objector is entitled to be heard in general opposition (see s.11A(6)). It may be that the 'objector in Axiom lacked the requisite interest in the proceedings to justify the grant of leave to oppose. But, with all respect, if such an interest did exist, it would be wrong to refuse leave merely because of the scope of the objector's argument. In any event, I do not agree that the argument sought to be advanced by the objector was irrelevant. On the contrary, it bore upon the central question in the proceedings. 23. . I would allow the appeals, set aside the orders made by Gallop, J. and order that there be a fresh hearing of Morpath's application. In the circumstances, each party should bear its, his or her own costs of the appeal. I certify that this and the preceding twenty two (22) pages are a trué copy of the Reasons for Judgment herein of his Honour Mr. Justice. Beaumont. Mehl. H Shugo Associate Dated: 26 June 1987 oe ee IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY No. ACT G59 of 1986 BETWEEN: MORPATH PTY. LIMITED Appellant AND: ACT YOUTH ACCOMMODATION GROUP INCORPORATED LOIS UNA HICKS KATHERINE THORNTON PETER HOPNER THE MINISTER OF STATE FOR TERRITORIES Respondents No. ACT G61 of 1986 BETWEEN: THE MINISTER OF STATE FOR TERRITORIES Appellant AND: ACT YOUTH ACCOMMODATION GROUP INCORPORATED LOIS UNA HICKS KATHERINE THORNTON PETER HOPNER MORPATH PTY. LIMITED Respondents CORAM: Fisher, Davies, Neaves, Beaumont and Miles JJ. DATE? 26 June 1987 hliedtee sh ek eet meant 4 ¥ ? g TR ae pee per ee re, rs ay a REASONS FOR JUDGMENT MILES, J.: Morpath Pty. Limited (Morpath) 1s the lessee from the Commonwealth of two adjoining blocks of land in Northbourne Avenue, just north of Civic, the central business district of Canberra. Their formal descriptions are Blocks 8 and 9 of Section 43 Division of Turner. The leases restrict the use of the land to residential purposes. Morpath wants to develop the land and to erect a building to be used for offices, professional rooms and the like. Morpath applied to the Supreme Court of the Australian Capital Territory for an order varying the purpose clauses of the leases pursuant to s.11A of the City Area Leases Ordinance 1936 (the City Area Leases Ordinance). The Minister for fTerritories (the Minister) appeared in order to support the application. The present respondents appeared, in pursuance of leave granted, in order to oppose the application. The application was refused on 1 August 1986. The learned Judge of the Supreme Court took the view that as a matter of principle the applicant could succeed only if it was shown that the intended use was the only reasonable use of the land. His Honour found on the evidence that the existing residential use was a reasonable one. It followed that the application had to fail. Morpath and the Minister appeal from that decision. In my view the appeal should succeed. There is a line of authority to the effect that an applicant for an order under s.11A need not show that the land cannot ne souk to a reasonable use unless the variation is approved: 2e City Area -3- Leases Ordinance 1936, as amended, s.11A (1963) 9 LGRA 190, Re Bailey's Application {1966) 10 FLR 175, Re tLauder's Application (1968) 13 FLR 238, Re Warmac Dickson Pty. Ltd. (unreported, Supreme Court of the Australian Capital Territory, 10 October 1969), Re Application of Atherane Pty. Ltd. (unreported, Supreme Court of the Australian Capital Territory, 8 November 1985) and (1985) 62 ACTR 22. In my opinion that line of authority 1s settled and should be followed. The textual origins of s.11A have been traced by Beaumont J., a draft of whose judgment I have had the advantage of reading. They go back to English legislation in 1925 which was directed to the discharge and modification of restrictive covenants. His Honour advances a number of reasons why judicial decisions' relating to statutory provisions elsewhere (e.g. s.89(1) of the Conveyancing Act 1919 (New South Wales)} should not be applied to the City Area Leases Ordinance. I agree with those reasons. I should like to add to those reasons the general observation that the system of land tenure in the ACT is so radically different from that elsewhere that reference to statutory provisions and judicial decisions in other places provides very little assistance in interpreting and applying the provisions of s.11A. It was submitted on behalf of Morpath that in the event of the appeal succeeding this Court should decide for itself whether or not the proposed variation should be allowed. oe cere c my -4- Although the Judge at first instance decided that he would in any event have exercised his discretion against the approving Of the variation on the merits of the case, that 15 not binding on this Court. There are several reasons why it 1S not appropriate for this Court to deal with the substantive matter. One reason is that prior to the hearing in the Supreme Court approval had already been given in that Court for a variation of purpose clauses in leases over properties adjoining Blocks 8 and 9. That variation allowed for a change from residential purpose to the purpose sought in the present application. We were told during the hearing in this Court that as a consequence of that variation a substantial building was then in the course of construction on the adjoining site. In my view a proper consideration of matters relevant to the present case includes a consideration of the development which has taken place and is likely to take place on the adjoining site. In view of the importance of the present case to land development in the Australian Capital Territory, a bench of five Judges was constituted to hear the appeal. A number of issues were raised by counsel which it 1s not necessary ta determine for the purpose of deciding the appeal. Nevertheless, because of the unusual nature of the appeal and un deference to the helpful submissions of counsel, it 18 desirable to say something about some of those issues. S.11A should, in my view, be seen in its local and historical perspective. I said something about this aspect in Re Axiom Pty. Ltd. (1986) 66 ACTR 1, and will repeat it in summary form. The Burley Griffin plan of layout of the City -5- of Canberra, drawn up pursuant to the Seat of Government (Administration) Act 1910, remains the blueprint for the planning of Canberra, and it may not be departed from without the approval of the National Parliament. However, that plan of layout is only a diagram of streets and waterways. It 1s not a planning scheme and it does not prescribe land use. The system of leasehold tenure established by the City Area Leases Ordinance 1n 1936 took effect subject to the plan of layout. It was intended to provide, amongst other things, a form of land use control in the City Area. The plan of layout and the leasehold system together constitute a form of town planning. Where a lease is granted over land in the City Area, the use to which the land may be put is restricted to the use specified by the Minister in the lease. No variation of the purposes clause of a lease 1s possible, even through the consent of lessor and lessee, without the approval of the Supreme Court. The approval of the Court may not be given until after public notification and after consideration of what may be put by the applicant, by the Minister and by those members of the public to whom the Court grants leave to be heard in opposition. It 1s true that the Court may not vary the purposes clause 1f the Minister files a certificate pursuant to s.11A(2)(b) stating that in his opinion the variation sought would be repugnant to the principles for the time being governing the construction and development of the City of Canberra. It is also true that the Supreme Court is not a town planning authority. But in my view it 1s inescapable that the Supreme Court, in conducting the inquiry —— cer Eo ee ae see ewe dat wee ' Spates alee eA et op eae e -6- required under s.11A and in exercising its discretion whether to grant or refuse the application to vary, has a much wider role to perform than to restrict 1ts attention to the interests Of the applicant and adjoining occupiers. That may be the role of a court called upon to modify or discharge a restrictive covenant but the issues under s.11A are much broader. The Supreme Court must, in my view, consider the public interest and a consideration of the public interest as 1t 1s affected by competing urban land uses involves a consideration of what would ordinarily be regarded as town planning principles. No matter how closely one examines the text of the City Area Leases Ordinance, the historical context, in my view, puts beyond doubt that it was always intended that, so long as the Minister declined to file a certificate stating in effect that the proposed variation was repugnant to town planning principles, the Supreme Court should consider a wide range of matters, including matters which touch on town planning, before it made a decision whether or not to allow a variation in the purposes clause of a lease. Frank Brennan perceived this in his book, Canberra in Crisis (Canberra, 1980) when he wrote of s.i1A: "This provision did not mean any abdication of control by the town planners and land use controllers. The Ordinance as amended provided that no variation would be made if the Minister filed a certificate stating that in his opinion the variation sought would be repugnant to the principles for the time being governing' the construction and development of the City of Canberra. The introduction of the Supreme Court into a question which was basically one of town planning was explained as necessary to give an impartial forum and hearing to all others who might desire to object to a change of the purpose for which that land could be used." "ony vie tea on aK Aapen adem v a -7- In 1957 the National Capital Development Commission Act (the NCDC Act) gave the body 1t created (the NCDC) the function "to undertake and carry out the planning, development and construction of the City of Canberra as the National Capital of the Commonwealth". In Ax1lom three Judges of the Supreme Court of the Australian Capital Territory sat to decide the precisa question as to whether certain objectors ought to he given leave to be heard in opposition to the application to vary the purposes clause of the lease. The Supreme Court considered the wider question of the extent to which the NCDC Act affected the power of the Supreme Court to vary a purposes clause under s.11A of the City Area Leases Ordinance. All three Judges considered that where the provisions of the NCDC Act conflicted with those of the Ordinance then the provisions of the NCDC Act prevailed. Each of the Judges, however, took a different view as to how far the provisions of the NCDC Act affected the powers of the Supreme Court. Each concluded, but for different reasons, that the provisions of the NCDC Act did not in general preclude the Supreme Court from taking town planning principles into consideration when deciding whether or not to vary a purposes clause under s.11A of the City Area Leases Ordinance. I adhere to what I said in that case except on one aspect. I expressed the view that as the case was one in which the NCDC had formulated plans and policies relating to the area in which the land in question was situated, and because the proposed use and the situation of the land had a distinctly "national" characteristic, then- the Supreme Court aoe ws Soe ne eee ee ne -8- had no power to approve a variation which would conflict with the NCDC's plans and policies for land in the area. To that extent I considered at that time that the Supreme Court had no power to consider town planning orinciples as they affected the particular land in question. In the light of the submissions of the appellants in this appeal, I am now of the view that what I said about the limits of the powers of the Supreme Court in Axiom was incorrect. I see some significance in the role given to the Minister and the Governor General by the NCDC Act. There is provision in s.12- of the NCDC Act that in the event of a difference of opinion between the Minister and the NCDC as to the policy which should be followed by the NCDC on any matter, then the Minister and the NCDC are to endeavour to reach agreement and if they cannot reach agreement the Governor General may by order determine the policy to be adopted by the NCDC in relation to the matter. There is thus conferred on the Governor General a power to determine policy in certain circumstances, and the NCDC 1s obliged to adopt the Governor General's determination of policy. There is also conferred on the Minister a negative power whereby he, simply by disagreeing with the NCDC, can force the policy-making decision to be taken out of the hands of the NCDC and placed un those of the Governor General. The powers thus conferred on the Governor General and the Minister are, in my view, inconsistent with the notion that the NCDC is sovereign in all matters falling within the scope of its statutory function. -9- It is artificial to seek to assign to Parliament any intention to restrict or diminish the powers of the Supreme Court under s.11A of the City Area Leases Ordinance. No such intention 1S to be found in or inferred from the terms of the NCDC Act, and the Minister's Second Reading Speech makes no mention of the matter. The NCDC Act recognizes that the policies of the NCDC are ultimately subject to the control of the executive Government. There is no reason, in my view, to read the NCDC Act as affecting the powers or the jurisdiction of the Supreme Court. In other words, there is no inconsistency between the NCDC Act and the Ordinance whereby the provisions of the NCDC Act override those of the Ordinance. Both Act and Ordinance can be read to co-exist one with the other. The view of Smithers J. in Kent v. Johnson (1973) 21 FLR 177 at p.186 that the NCDC Act impliedly forbids other authorities from undertaking and carrying out the functions conferred on the NCDC, is one with which TI would still respectfully agree, but 1t is necessary to add in the light of the foregoing remarks that the City Area Leases Ordinance does not purport to confer any of the functions of the WCDC upon the Supreme Court. It is not part of the function of the Supreme Court to carry out the planning, construction and development of Canberra whether as the National Capital or otherwise. That is not to say, however, that the Supreme Court may not take town planning matters into consideration when deciding whether or not to approve a variation of a purposes clause under s.ilA. Nor does it mean that the STD TN towne ee sae toe se yom > - 7h, > aaa -10- Supreme Court lacks the power to make a-decision approving or refusing a variation where that decision may conflict with NcDC plans and policies. For the Supreme Court to make a decision conflicting with the plans and policies of the NCDC may, depending upon the circumstances, be a wrongful exercise of discretion, but the Supreme Court does not lack the power to exercise that discretion, albeit wrongly. Whilst I no longer adhere to the view that the NCDC Act limits the powers of the Supreme Court to vary purposes clauses of leases, I nevertheless consider that decisions of the NCDC, if any, relating to a parcel of land the subject of a City Area lease will be relevant and possibly important for the Supreme Court to take into account before a decision is made to vary or not to vary a purposes clause. In formulating 1uts plans and policies in accordance with its charter, the NCDC must be concerned with the effect of those plans and policies on Canberra as the National Capital. However, the implementation of the plans and policies of the NCDC will have wider ramifications than their effect on Canberra as the National Capital. Canberra is now a city where a guarter of a million people live. The planning of the National Capital affects the nation but it also affects the residents and those who carry on business in Canberra in a more particular way. Some of the decisions of the NCDC may touch on the character of Canberra as the National Capital only remotely but have a direct and substantial impact upon residents and business people in the city. Accordingly, the Supreme Court will have to welgh up in every case the importance for the purposes of wen -11- the particular case of any plan or policy of the NCDC which affects the land in question. There may be some plans and policies of the NCDC which are so integral a part of the planning of the city as the National Capital that it would be a wrongful exercise of discretion on the part of the Supreme Court to make a determination contrary to the policy of the NcDC. There will be other cases in which the character of the nation's capital is not affected in any substantial way either by the NCDC's plans and policies or by the proposed change in use. In most cases it may be expected that good reason would have to be shown if the Supreme Court was to approve a variation which went contrary to a policy plan adopted by the NcDC. Conversely, where the proposed variation 1s for a change from an existing use which 1s inconsistent with an NCDC policy plan to a use which complies with the policy plan (as in the present case), the Supreme Court still has a discretion, The NCDC's policy plan must be given appropriate weight, a weight which in some cases may be overwhelming, but the Supreme Court must still decide the ultimate question for 1tself. As Neaves J. has pointed out, the adoption by the NCDC of a policy plan has no effect upon an existing purposes clause. An application to vary under s.11A may be made only by the lessee. Neither the Minister nor the NCDC has the capacity to seek an order varying a purposes clause. With respect to the submissions of counsel, particularly as they related to what was said in Axiom, 1t remains to say something about the way in which the Supreme Court should embark upon the hearing of an application to vary pa nase ae Se oper ene es -12- a purposes clause. In my view, general jurisdiction to determine the application is conferred by the opening words of s.11A(1) of the City Area Leases Ordinance. The Supreme Court is given a wide discretion to grant or refuse the variation which is unfettered except to the extent that the Supreme Court is prohibited from allowing a variation unless, in accordance with s.11A(2), the Supreme Court is satisfied that it is desirable to vary the provision in order that the reasonable user of the land should not be impeded or where the Minister has filed a certificate stating that in his opinion the variation sought would be repugnant to the principles for the time being governing the construction and development of the City of Canberra. The question of whether the Minister has filed a certificate or not is a simple one. [It would be usually convenient to deal with that question at the commencement of the hearing of the application because, in the event of a' certificate being filed, the Court may determine the application only by refusing it. If a certificate has not been filed, 1t 1s appropriate then for the Court to consider, pursuant to s.11A(2)(a) and before it exercises 1ts general discretion under s.11A(1), whether 1t is satisfied that the variation 1s desirable in order that the reasonable user of the land should not be impeded. Matters generally regarded as involving town planning principles will almost inevitably have to be taken into consideration for the purposes of the inquiry under s.11A(2)(a). A consideration of town planning 'principles will include consideration of relevant decisions of the NCDC if there are any. oer fen , om ory peepee 2 em "prope BODIES eee ee sete eee eer one woe tos stances rox a wese -13- Once the Supreme Court is satisfied of those matters required to be considered by s.11A(2), 1t has to decide the further and final question of whether in the general exercise of its discretion under s.11A(1) the variation ought be approved or not. It may well be that in many or even most cases everything relevant to the exercise of the general discretion will have been taken into account, when coming to a positive conclusion in deciding, pursuant to 's.11A(2), whether the proposed variation 1s desirable in order that the reasonable user of the land should not be impeded. Nevertheless, s.11A lays down a two stagel process and the Court must, in order to discharge its function properly, decide the final question according to general discretionary principles unrestricted to those particular matters to which it 1s required by s.11A(2) to have regard. (A Similar two stage process takes place in the determination of whether to grant or withhold certain types of liquor licences under New South Wales legislation: see Marriott v. Coleman (1963) 109 CLR 129, Lorence v. Abraham (1982) 2 NSWLR 551.) I would add that in my view it is not appropriate upon an application under s.11A to enquire as to whether the NCDC has properly observed the procedures necessary for the adoption of its plans and policies. There 1S a remaining matter relating to the granting of leave to objectors to be heard in opposition. As this matter was raised during argument, I express my view that the discretion of the Supreme Court whether or not to grant leave should be regarded as an open one. I agree that the Supreme -a- (as wm mee > ny -14- Court should be liberal in granting leave, but the Supreme Court should be free to refuse to allow leave to persons whose only arguments are in its view bound to fail, I would allow the appeals, set aside the orders in the Supreme Court and remit the application by Morpath to the Supreme Court for re-hearing. I would make no order as to the costs of the appeal. i ) cartify that this and the \> | preceding pages are a true copy of the ludameat herein cf his Hoxour, | t t { Mr. Justice J. A Miles , Reasons for Associate Dated: D& & 87 ee een oo —. For Morpath Pty Limited - Counsel : Mr N.A. Hemmings, Q.C. and Mr G.Jd. Lunney Solicitors : Barker & Barker For The Minister of State for Territories - Counsel : Mr T. Simos, Q.C. and Mr I.A. Curlewis Solicitor : Australlan Government Solicitor For A.C.T. Youth Accommodation Group Incorporated - Counsel : Mr B.T. Suily, Q.C. and Mr I.W. Nash Solicitors : Welfare Rights Centre For Katherine Thornton and Peter Hopner - Counsel : Mr W.R. Davison Solicitors : Macphillamy Cummins & Gibson No appearance for Louis Una Hicks Dates of hearing : 17 and 18 March 1987 wregome mye a "rm: vs