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Thursday, 13 October 1927

Senator ELLIOTT (Victoria) .- I move -

That the Senate is of opinion that the provisions of the existing' ordinance requiring the consent of the Federal Capital Commission to any sub-lease of land or part thereof in th< Federal Territory (city area), after the erection of the buildings thereon, should be repealed.

The existing ordinance relating to leases in the Federal Capital Territory provides in the first place, that a building must be constructed on a lease within a specified time. Prior to that the lessee has not the right to assign or sub-let his lease in any way. If a shop or office is constructed, the lessee, if he so desires, may sub-let the whole of the building; but he cannot sub-let a portion of it without the consent of the commission.

Senator McLachlan - Does the honorable senator think that a lessee should have the right to sub-let the whole of his premises without consent?

Senator ELLIOTT - I do not intend to debate that point. As a leasehold system has been inflicted upon the unfortunate inhabitants df this place, the authorities should make it approximate, as nearly as possible, to the freehold system until they reach that happy stage when they are able to obtain the freehold. At present a lease-holder may sub-let the whole of his shop or dwelling; but, for some unknown reason, a lease-holder in the Civic Centre cannot sub-let the upper story of his premises without the consent of the Federal Capital Commission. I do not know why such a distinction should be made. The obligation to obtain the consent of the commission is not set out in all the leases.

Senator Sir Henry Barwell - How does it arise?

Senator ELLIOTT - It is superimposed upon leases by an ordinance. The average layman when ascertaining the conditions under which he takes up the land, naturally refers to his lease. Theoretically every one is supposed to be conversant with the law; but I venture to say there are very few persons in the Territory who can say what the ordinances provide. They have been amended from time to time.

Senator Foll - Does the honorable senator say that the commission superimposed restrictions upon lease-holders after the leases had actually been signed?

Senator ELLIOTT - I cannot say that is so in all cases. In all probability some of the leases were granted before the ordinance to which I refer was adopted ; but it apparently occurred to some one that the arcade at the Civic Centre should be annexed to the leases so as to compel them to keep it in repair. In order to give effect to this proposal the old leases were called in, and new leases were granted so that irrespective of the year of original issue, these uew leases are now subject to an ordinance passed prior to this year.

Senator Foll - Could they be called in before they expired?

Senator ELLIOTT - Yes, by mutual consent. In the first place there was an original building scheme when the arcade, as in the case of a verandah, was over the footpath, and then a new proposal to construct an arcade on the lot frontages was submitted. When the first sale was held the original building scheme was in operation, but at the time of the second sale the uew scheme was under consideration.

The commission then approached the original lessees, and asked them to agree to the new proposal.

Senator Reid - Was it justified in imposing any restrictions?

Senator ELLIOTT - It could not force the lessees to accept new leases, but they were offered various advantages to induce them to agree to the new arrangement. By mutual consent the whole of the leases are now subject to the ordinance which provides that a portion of a shop or building shall not be sublet, without the consent of the commission first being obtained. This is causing a great amount of inconvenience to those - who may wish to change their tenants. The commission has a tremendous amount of business to transact, and weeks sometimes elapse before a decision is given. In such cases the tenants cannot wait.

Senator Foll - Is the commission adopting this course in order to shut out certain trades?

Senator ELLIOTT - No one knows why it is being done. A private owner has a very clear idea what he wants when he insists upon his consent being obtained. In such cases it may be his desire to avoid competition in a particular area, but the commission has no such interests to conserve. The commission says, in effect, that Parliament must have intended it to do something in regard to this wretched thing, but that there is no principle to guide it.

Senator Grant - What are its reasons ?

Senator ELLIOTT - I do. not know. The ordinance is in force, but apparently the commission does not know how to interpret it.

Senator Sir Henry Barwell - It is not altogether unreasonable that consent should be obtained.

Senator ELLIOTT - It depends entirely upon the viewpoint. There are no such restrictions upon the lessees of dwelling houses, where the character of the inhabitants may be of some importance. Houses may be sublet without the consent of the commission,

Senator McLachlan - Is the Torrens system applicable to the Federal Capital Territory.

Senator ELLIOTT - Yes. If the ordinance is not complied with a lease in which £10,000 may be invested may be forfeited, as it would be a breach of the covenant to sublet without the consent of the Commission.

Senator McLachlan - There is provision for relief against that.

Senator ELLIOTT - Not in this ordinance. In Victoria, the law provides that where a private individual inserts in a lease a clause that it shall not he assigned without consent, it shall be implied that such consent shall not be unreasonably or arbitrarily withheld. In this instance no such provision has been made, as the commission has the discretionary right to withhold its consent. So far as I have been able to gather, the ordinance was framed on the recommendation of the VicePresident of the Executive Council (Senator Sir George Pearce).

Senator Sir William Glasgow - Is the honorable senator aware of any instance where trouble has arisen in connexion with subletting of such, premises ?

Senator ELLIOTT - I know of one case where a man has been almost ruined, by being unable to sublet to a person who was agreeable to pay him £2,000 a year. When this person was told of this arbitrary power in the commission under which it professed to be able to inquire if rents charged were fair, it led to the cancellation of the contract. It will be difficult to find tenants if the commission is to inquire into the rents to be charged. There is a Fair Rents Court in New South Wales, but up to the present no such court has been established in the Federal Capital Territory. Apparently it is the intention of the commission to ascertain whether the rentals to be charged are reasonable or excessive.

Senator McLachlan - Under the Torrens system no such inquiries can he made.

Senator ELLIOTT - Generally speaking the. Torrens system, as adopted here, does not go so far as the honorable senator suggests. r

Senator Andrew - Is it not usual for leases to include a provision for subletting?

Senator ELLIOTT - The State legislatures have invariably provided that, as such a clause is open to abuse, the proviso that such consent shall not be unreasonably or arbitrarily withheld is implied in all such clauses.

Senator Sir William Glasgow - Did the commission have anything to do with fixing the amount at £2,000?

Senator ELLIOTT - The commission asked the lessee whether lie intended to occupy the whole of the property for his business. When he replied that, for a time, he would not need the whole of it for his business, and that in the meantime he proposed to sub-let a portion of the building, he was told that he could not do so.

Senator Sir William Glasgow - I take it that the commission meant that he would have to seek permission to sublet the property.

Senator ELLIOTT - He was given to understand that permission to sub-let would not be granted. The commission made it clear that it was opposed to middlemen. The man then feared that he had made a serious mistake in trying to lease the property. This condition of affairs has arisen because of an excess of caution on the part of Sir George Pearce, who at the time was Minister for Home and Territories. The ordinance was passed because it was intended at first that the shops should have residences above them ; later, when it was found that there was no demand for the residences, it was decided that the upstairs rooms should be used for offices. When, the rooms were made available as offices the condition? as to sub-letting residences remained in force. I believe that the commission would be glad to be relieved of its responsibility in the matter, but, with the ordinance in force, it feels that it must take every precaution. Seeing that the whole of a building may be disposed of. there is no reason why the present restrictions regarding sub-letting, of parts of the building should continue. If the desire is to prevent overcrowding, the position could be met by a special ordinance.

Senator Andrew - If the ordinance is repealed, how will it be possible to deal with undesirable tenants?

Senator ELLIOTT - An undesirable tenant can now be the lessee ofthe whole of a building. It would not be any worse for him to have the lease of the top floor. The whole position is inconsistent. What is to guide the administration ?

Senator Reid - Cornmonsense.

Senator ELLIOTT - That is an indefinite term. If Canberra is to progress, lessees should know where they stand.

Senator Foll - If a tenant engaged in someundesirable occupation, some regulation to deal with him would be necessary.

Senator ELLIOTT - The leases make clear what can and cannot be done.

Senator Sir William Glasgow - Every lease is subject to the ordinances of the Territory.

Senator ELLIOTT - That is so. The leases set out clearly that in certain areas only certain business may be conducted. For instance, the lease of a site for a motor service station contained a provision that repairs to motor vehicles could not be carried out on the premises.

Senator McLachlan - Does the honorable senator contend that if the sublessee violates the conditions of the lease it may be forfeited?

Senator ELLIOTT - Yes. The Federal Capital will not develop if lessees are needlessly harassed. The leases themselves contain ample safeguards against undesirable businesses being conducted on the premises. That is the proper place for such conditions. Moreover, there is power to pass any further ordinances considered necessary. For instance, it would be possible to prevent the establishment of boilingdown works in the Territory by passing a special ordinance to prohibit them.

Senator Reid - I take it that the honorable senator wishes to relieve the tenant as well as the commission.

Senator ELLIOTT - Yes. While the present uncertainty exists, there will be no expansion of trade. Lessees should know where they stand. In the case that I have mentioned the lessee has gone to Sydney for the purpose of engaging counsel to advise him regarding relinquishing the lease.

Senator Reid - What was the purpose of the ordinance?

Senator ELLIOTT - It was apparently in the desire to avoid slum conditions that it was introduced. The matter has not been re-considered in' the light of the buildings being used as offices. Originally, it was intended that householders in Blandfordia should not be permitted to let rooms to lodgers; but the commission has been forced to disregard the ordinance to that effect. I do not know whether the Minister has discussed this matter with the commission; but I feel sure that its officers will agree that something should be done.

Debate (on motion by Senator Sir William Glasgow) adjourned.

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