Short stay operators fight on

By Bethany Williams

Docklands Executive Apartments operator Paul Salter is fighting a “weak” decision of the Building Appeals Board (BAB) and is confident of winning in the Supreme Court.

In March the BAB upheld the City of Melbourne’s 2011 action against owners of short term apartments in the Watergate.

The Watergate building is a Class 2 residential building according to the Building Code of Australia, 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 the owners comply with building regulations applicable to Class 3 buildings or to cease trading.

Mr Salter operates his business in the Watergate building and has lodged a Supreme Court appeal against the BAB decision.

Following the release of the determination in March, the short stay industry community rallied around Mr Salter to raise the $200,000 necessary to launch the Supreme Court action.

Mr Salter said the BAB determination was weak as it focused on duration of stay.

He said it ignored a South Australian court decision that found no justification for distinguishing between Class 2 and Class 3 buildings based on length of stay.

He said the BAB decision also focused on the commerciality of the transaction, which was no different to a long-term rental.

“The appeals board dismissed expert opinion and ignored relevant evidence, so I am confident that the determination will be overturned in a higher court,” Mr Salter said.

“I am taking the case to the Supreme Court to fight for our property rights, consumer choices and to protect the competitiveness of Australia’s tourism industry.”

The case returned to the BAB last month after both the council and Watergate Owners Corporation made applications for costs.

But the BAB ruled against awarding costs to either party.

Despite the BAB determining the building orders should have been issued, it found that the applications for Mr Salter to pay council’s costs of $135,443 and the OC’s cost of $122,991 were not justified.

During the costs hearing Mr Salter’s lawyer Richard Niall said there was a statutory presumption that each party would pay its own costs.

He said there had to be something significant to prompt the panel to change this standard and argued there was nothing to justify Mr Salter paying costs for either party.

The BAB agreed with this and its costs determination stated that no party should have expected to be entitled to the costs of the proceedings should the determination be issued in its favour.

Mr Niall also said, considering the nature of the proceedings as a test case, council had a bigger agenda than just the case itself.

Accordingly, he implied that council’s use of the case as a test meant it should bear its costs itself as it would continue to use the results for further action unrelated to Docklands Executive Apartments.

The BAB panel didn’t agree with this submission and the determination stated that Mr Salter had launched the appeal due to commercial interests and that it had been launched rather than pursuing options such as building upgrades.

The determination also stated that many cases were relied upon as precedents and that this was an underlying principle of common law.

Additionally, the determination stated that there was no evidence provided during the hearings of other businesses operating which were similar to Mr Salter’s.

Mr Niall also contended that the Watergate OC should not be able to claim costs as it was not a necessary part of the appeal process. The Watergate OC joined the proceedings after the appeal had started.

The BAB panel found that the OC was not content to rely on City of Melbourne alone in defending the appeal and chose to continue to be a protagonist in the appeal.

Accordingly, the BAB dismissed the application for costs and found there would be no order as to costs in favour of any party.