Land uses change. A residence becomes a guesthouse, a farm becomes a depot, a business site changes trade. Under section 82(3)(d) of the Land Act 1996 every State lease carries a condition that the land will be used bona fide for the purpose only for which it was granted, or a purpose ancillary to it. Part XII is how you change that lawfully.
Section 118(1) — the power to vary the purpose
On application by a lessee, the Minister, after considering a report of the Land Board, may vary the purpose for which a State lease was granted — but not so as:
(a) to convert the lease into a lease of a type that may not be granted under the Division under which the original lease was granted; or
(b) to make the purpose of the lease a purpose for which the lease could not have been so granted in the first instance.
Three procedural elements: an application by the lessee (the Minister does not do this on his own motion), a Land Board report, and then the Minister’s decision.
What the two limits mean
(a) You cannot change the type of lease
Variation operates within the Division the lease was granted under. A Division 3 agricultural lease can be varied to another agricultural purpose — from copra to oil palm, from cropping to mixed farming. It cannot be turned into a Division 5 business lease, because a business lease is not a lease that may be granted under Division 3.
Where the use has genuinely moved to a different lease type, the answer is not variation. It is a surrender and a fresh grant of the right type — noting that surrender and re-grant is one of the grounds for exemption from advertisement under section 69.
(b) You cannot reach a purpose that was never available
The second limit stops variation being used to obtain, at second attempt, something the Act would have refused at first. Two examples from the Act itself:
- a special purposes lease cannot be granted for private residence purposes within a physical planning area (s 100(2)) — so it cannot be varied to that purpose either;
- a lease cannot be varied to a purpose that would contravene zoning or physical planning requirements, because section 67 prohibits granting a lease for such a purpose in the first place.
A variation application that would produce a use inconsistent with the zoning of the land is bound to fail. Deal with the planning position first — a lease purpose and a planning permission are two different things, and you need both.
Section 118(2) — relaxation for special hardship
The covenants and conditions of a State lease may be relaxed or modified or, if the lessee agrees, varied, by the Minister, after considering a report of the Land Board, where it seems to him that special hardship would otherwise be caused.
This is a distinct and very useful power, and it is under-used. Note the differences from subsection (1):
- it applies to covenants and conditions generally, not just to the purpose;
- the trigger is special hardship; and
- relaxation or modification does not need the lessee’s agreement; only variation does — which protects a lessee against having new obligations imposed under the guise of relief.
The most common use is improvement conditions that cannot be met in time for reasons outside the lessee’s control — a stalled project, a land dispute blocking access, drought, flood, or a collapse in the market for the crop.
Section 118(2) is the proper answer to improvement conditions you cannot meet. Applying before the time expires is far stronger than responding to a notice to show cause afterwards. Put the hardship in evidence: what you have spent, what you have done, what stopped you, and what you propose instead.
How to apply
- Identify the lease precisely — volume and folio, portion or allotment and section, and the current registered proprietor.
- State the current purpose as it appears on the title, and the purpose sought.
- Show the variation is within the same Division — deal with limit (a) expressly.
- Show the purpose could lawfully have been granted originally — deal with limit (b), including zoning.
- Attach the planning position — zoning, and any planning permission or application.
- For a section 118(2) application, evidence the special hardship with documents, not assertions.
- Address rent. A change of purpose can change the basis on which rent is assessed; a mission lease varied away from mission purposes will not stay rent free.
If the application is refused
A refusal is an exercise of statutory power and is amenable to judicial review in the National Court under section 155(3) and (4) of the Constitution — on grounds such as failure to consider a Land Board report the section requires, taking irrelevant matters into account, or breach of the principles of natural justice in section 59. Section 41 may also apply where the outcome is harsh or oppressive in the particular case.
A curiosity: section 118A
Part XII also contains section 118A, which does something statutes rarely do — it varies one identified lease by name. It deletes Condition D from the Lease for Special Purposes over Allotment 17, Section 136, Hohola, in the National Capital District, held by Telikom PNG Limited, and directs the Registrar of Titles to note the deletion and issue a new instrument of lease.
It is a reminder that the Register can be altered by Parliament directly, and that the printed Act is worth reading for provisions of this kind.
Sources
- Land Act 1996 — ss 67, 69, 82, 100, 118, 118A; Parts XII and XV
- Land Registration Act (Chapter 191)
- Constitution — ss 41, 59, 155
Before relying on anything here, read the current text of the Land Act 1996 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.