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Editions

Watergate ordered to pay costs

06 Dec 2016

The Supreme Court costs court has ordered the Watergate Owner’s Corporation (OC) to pay short-stay operator Paul Salter $133,500 in costs after losing a series of cases.

On November 2 the court ordered the OC to pay the costs of Paul Salter, Belinda Balcombe and others for recent legal cases pursued both in the court and also in the Victorian Civil and Administrative Tribunal (VCAT).

The court ordered three payment instalments: $50,000 on or before December 8; $51,500 on or before February 8, 2017 and a further $31,000 on or before April 8.

The costs cover the June 15 VCAT action when the OC tested its rule that stays could not be less than 30 days. Mr Salter won that case and the OC appealed the decision to the Supreme Court. Mr Salter won that case too and $133,500 awarded costs also cover that matter.

Mr Salter estimated that the Watergate OC had spent about $500,000 in all in its attempts to prevent short-stays.

Watergate OC chair Barbara Francis said $500,000 “was not an unreasonable estimate”, but said it was money well spent.

“This equates to approximately $286 per apartment per year over the five year period,” Ms Francis said.

“The benefits to Watergate from the action – which as you know was initiated by the City of Melbourne –  has been the reduction in short stays from 45 in February, 2011 to 13 in November, 2016, and the consequent decrease in wear and tear on the building.”

“However, even with just 13 short-stay apartments, the ongoing commercial operations continue to create a significant negative impact on our building,” she said.

Mr Salter alleged that the OC had been advised that its action would fail if challenged at VCAT.

“Not only did they ignore that advice and lose in VCAT they appealed the decision to the Supreme Court and lost again,” he said.

He questioned whether the Watergate committee could justify the spend.

October was also a good month for Mr Salters’ Docklands Executive Apartments business, having been awarded Trivago’s highest rated accommodation in Melbourne and third in Victoria.

In the meantime, media reports point to a tightening of bookings and margins by short-stay operators due to more players entering the market.

In October, The Age reported a 32 per cent decline in monthly incomes from AirBnB rentals in the City of Melbourne.

Mr Salter, who is also the president of the Victorian Accommodation Industry Association, agreed that margins had dropped.

“Yes, margins have dropped, but it is all about service, vacancy rates and price per night. Short stay accommodation is here to stay for those who deliver what the consumer wants will grow, the others better keep their day jobs,” Mr Salter told Docklands News.

“Simply because anyone can set up a property and rent it as short-stay does not give them any guarantee that they can make money. The beautiful thing about looking after your own livelihood, is that your success is solely your responsibility and you better learn to be good and have a point of difference,” he said.

“Our point of difference is unique and it was thrust on us – How to deal with five years of litigation while delivering above average service and remain number one on Tripadvisor for the same period.”

Mr Salter said he was soon to embark on a national speaking tour to advise the

short-stay industry what he had learned in his long-running battle with the Watergate OC.

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