Short-stay apartments to stay

By Bethany Williams

The Supreme Court has awarded victory to operators in the long-running dispute over short-stay apartments in residential buildings.

On May 30 Justice Beach ordered the Docklands Watergate test-case back to the Building Appeals Board (BAB)

Justice Beach has instructed the BAB to hear the case again, saying that the board incorrectly interpreted the Building Code of Australia (BCA).

The decision effectively means that short-stay apartments in residential buildings are here to stay as it is widely expected that the new BAB panel is unlikely to find against the short-stay industry.

In March the BAB upheld building orders the City of Melbourne had issued against Docklands Executive Apartments operator Paul Salter in 2011.

Mr Salter appealed the decision of the BAB at the Supreme Court.

Justice Beach also ordered that council pay Mr Salter’s Supreme Court appeal costs.

The following reasons were among those provided in his determination;

The BAB misinterpreted the building code when it gave the term “dwelling”, as it is used in the definition of a Class 2 building, a temporal requirement;

Despite the BAB being described by council’s lawyers as an “expert tribunal” it does not have jurisdiction to commit errors of law;

That there was no evidence of a “changed use” as referred to by the BAB in the reasons for its decision; and

That the building act did not permit a building notice to be served unless the building was a danger and that there was no evidence that the apartments themselves constituted a relevant danger.

The Watergate building is a Class 2 residential building according to the Building Code of Australia (BCA), but Council argued that short-stay apartments fall within the Class 3 classification, usually reserved for hotels and rooming houses.

Council’s 2011 building orders demanded owners comply with regulations applicable to Class 3 buildings or stop trading.

Mr Salter operates his business, Docklands Executive Apartments in the Watergate building and had appealed the building orders at the BAB.

Following the BAB’s decision affirming Council’s building orders, Mr Salter, with the support of the short-stay industry, lodged a Supreme Court appeal.

Justice Beach heard the appeal over two days of hearings on May 23 and 24.

Mr Salter’s appeal was based on alleged errors of law in the BAB’s determination.

Arguments from his lawyers included:

The BAB misinterpreted the definition of Class 2 by giving the term “dwelling” a temporal requirement;

The BAB took into account irrelevant evidence about other apartments in the building; and

The BAB’s finding that the building notices were validly issued due to a change in use that caused danger to life was incorrect because there was no change in use and no evidence of danger.  

The BAB was not represented at the Supreme Court but has indicated it will abide by its decision.  

The City of Melbourne was represented at the hearings and submitted that the BAB determination should be upheld.

Submissions made by council included:

That the BAB had correctly interpreted the BCA and the evidence presented during the hearings;

That the board had found that short-term apartments were used more like a hotel; and

That the use of the apartments as short-term accommodation was a change in use from what been initially planned and approved and therefore the building orders were necessary.