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Thursday, 24 November 1927

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of land or part thereof in the Federal Territory (city area), after the erection of the buildings thereon, should be repealed.

Senator Sir WILLIAM GLASGOW - (Queensland - Minister for Defence) [9.31] . - In referring to certain aspects of the sub-letting of leases in Canberra, Senator Elliott dealt with a matter which recently has been under consideration by the Government. Before announcing what action the Government proposes to take it is necessary to refer to a number of the statements made by the honorable senator, which indicate that he is under certain misapprehensions as to the scope of the existing provision in the City Area Leases Ordinance, and also as to the maimer in which it is being applied by the Federal Capital Commission. The honorable senator has stated that a leaseholder may sub-let the whole of his shop or dwelling, but that a lease-holder in the civic centre cannot sub-let portion of his premises without the consent of the commission. As a matter of fact, a lease-holder may only sub-let the whole of his shop or dwelling without consent if, at the same time, he sub-lets the whole of the land on which the building stands. The provision in the ordinance is against the partition of land, and it provides that land shall be held as one undivided parcel. The object of this provision is to prevent unauthorized alterations in the city subdivisional blocks. The honorable senator also stated that the obligation to obtain the consent of the commission is not set out in all the leases, thus implying that it is set out in some only. This provision is not directly mentioned in any of the leases, but each is declared to be subject to the City Area Leases Ordinance, which contains the provision concerning consent, and this applies not only to those at the civic centre, but also to all city leases. It was suggested that the restrictions regarding sub-letting were super-imposed upon lessees by an ordinance even after the leases had actually been signed. The necessity to obtain the consent of the commission was not, as stated, superimposed upon the lessees by an ordinance, and no action was taken - as might be inferred from the honorable senator's remarks - to impose restrictions upon leaseholders after leases had actually been signed. It would be impracticable to state the whole of the law, as suggested, in each lease, but it is mentioned in the leases that they are granted subject to the ordinance.

It was stated that the old leases of the civic centre were called in in order to give effect to a proposal that the arcade should be annexed to the leases so as to compel lessees to keep it in repair. This is not correct. The arcade was already a portion of the land covered by the leases that were called in. so that the responsibility to repair was already there. The reason for calling in the leases was to effect certain improvements in the interests of the lessees themselves by making alterations to the building design' to give deeper shops and make certain architectural improvements. This could not be done except by common consent of all the lessees and this was obtained and new leases issued embodying the improvements. No alteration was made in the law, as suggested, except a minor amendment to provide that all the lessees' rights should be preserved, and, although they received additional land, that no extra payments or higher rental would be required. The matter was taken up at the instance of the lessees and was not originated by the commission. The honorable senator stated that by mutual consent the whole of the leases at the civic centre are now subject to the ordinance which provides that a portion of the shop or building shall not be sublet without the consent of the commission. He is confused between two matters. The provisions regarding sub-letting had nothing whatever to do with the calling in of the leases at the civic centre, but were actually in force some considerable time before that was done. Reference was made to the inconvenience of obtaining consent to sub-leases and to the delay in giving a decision. With the exception of the honorable senator's complaint, ' no complaints have been received by the Federal Capital Commission in regard to this matter, although many sub-leases have been dealt with. The honorable senator also stated that the ordinance is in force and apparently the commission does not know how to interpret it. Earlier in his speech he accused the commission of havdeli berately called in the leases at the civic centre for the purpose of issuing new ones subject to restrictions concerning sub-letting. His remarks in this regard were not consistent. He stated that there are no restrictions regarding subletting upon the lessees of dwelling houses, and that houses may be sub-let without the consent of the commission. This is not correct, as the clause con cerning consent to sub-letting applies to dwelling houses as well as to commercial premises. He implied also that the consent of the commission has been unreasonably withheld. I am assured that in no case has that been so. Reference was made also to the case of. a man who had been almost ruined by being unable to sub-let. In that case no proper application for a sub-lease was made to the commission beyond certain indefinite inquiries. At the time the commission had recived complaints from the shopkeepers to the effect that they were being charged excessive rentals by " middlemen " sublessees, but the Commission made no inquiries into the matter of rentals. All applications for consent to sub-lease have been approved, but in one instance consent was given subject to a certain condition that had nothing whatever to do with the question of fair rentals, but was concerned with the application of a requirement implied by the zoning system in regard to rear access to buildings. Another reference was to a lessee who was asked whether he intended to occupy the whole of the property for his business, and when he replied that he would not need the whole of it and that in the meantime he proposed to sub-let a portion of the building he was told he could not do so. I am advised that the commission has no knowledge of the matter as stated and that neither the commissioners nor their staff have made any such statement as is implied. The commission quite realizes that in some instances shopkeepers will not require the whole of their premises, and, pending expansion of business, will desire to sub-let a portion. To all such applications consent has been given.

The honorable senator contended that the ordinance of which he complained was passed because it was intended to permit an alteration in the building requirement of leases where residences oh the first floor were not. needed and it was desired to use the rooms for offices. There is a misunderstanding here, as no alteration in the purposes for which a building should be used was made at all. The provisions in regard to offices and residences were the same in each case, and, as already explained, the alterations in the law had nothing to do with the amendment of the building design in the leases at the civic centre. The honorable senator referred to the commission having been forced to disregard the ordinance which would prevent householders in Blandfordia letting rooms to lodgers. The law contains nothing to prevent a family taking in a boarder.' On the contrary, the commission was hoping that some residents would decide to do so and thus relieve the strain on the hotels and hoarding houses.

It will be seen that there is considerable confusion in the mind of the honorable senator regarding the operation of the law to which he takes exception, and I shall now endeavour to make the matter clear by a brief statement of the position. The City Area Leases Ordinance, 1924-26, which governs the leasing of land in the city area in the Territory for the Seat of Government originally contained no provision for sub-letting portions of a lease, but provided that the leased land should be held in each case as one undivided parcel. The object of this was to prevent unauthorized subdivision of lands and consequent modification of the approved sub-divisions. Later, when buildings came to be erected, it was essential to make provision by which portion of commercial premises could be sub-let as offices, as in many instances the original lessees did not desire to use the whole of the premises. The law was consequently amended to provide that the Federal Capital Commission might consent to the sub-lease of any portion or portions of a building apart from the rest of the building, and also that the commission might give or withhold its consent, or consent subject to any condition it might think fit. This is the present law on the subject. The Federal Capital Commission upon its appointment found itself confronted with unprecedented conditions in matters affecting the tenure of land in the city. A specific plan of layout had been adopted, involving a scheme of zoning or allocation of areas for definite purposes, and. in addition, the whole of the land was held on the leasehold principle. The commission accordingly set itself to administer the existing law, which - up to the present - has continued to bc the policy of the Government, and, at the same time, it proceeded to make a close study of the effect of the unusual conditions concerning land tenure and other relevant features, including the incidence of the provisions restricting sub-leasing, The commission felt that reliable opinions on these matters could be formed only as a result, of observation over a. reasonable period. As a result of an experience of nearly three years the commission has recommended, and the Government has now approved, that the existing provision of the law relating to sub-leasing be amended to remove the necessity for consent being given for the creation and disposal of sub-leases after the erection of buildings. The drafting of the amended legislation involved in the Government's decision is now being carried out, and it is proposed that an ordinance shall shortly be passed to bring it into force. This will remove the objections raised by the honorable senator, and lessees will no longer be required to obtain the consent of the commission. Sub-leases, however, will still remain subject to the general laws of the Territory and to any municipal regulations which affect the sub-division of buildings or health conditions, or similar matters.

Question resolved in the negative.

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