Guiseppe Genco and City of Melbourne v Paul Kenneth Salter and Building Appeals Board

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No S APCI 2013 0080

GUISEPPE GENCO and CITY OF MELBOURNE	Appellants
	V
PAUL KENNETH SALTER and BUILDING APPEALS BOARD	Respondents

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JUDGES	NETTLE and OSBORN JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	2 December 2013
DATE OF JUDGMENT	12 December 2013
MEDIUM NEUTRAL CITATION	[2013] VSCA 365
JUDGMENT APPEALED FROM	Salter v Building Appeals Board & Ors [2013] VSC 279 (Beach J)

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ADMINISTRATIVE LAW – Judicial review – Apartments classified under the Building Code of Australia as Class 2 used largely for short-term commercial stays – Orders of municipal building surveyor – Orders affirmed by Building Appeals Board – Application to a judge of the Trial Division for judicial review dismissed – Appeal to Court of Appeal – Interpretation of ‘separate dwelling’ in clause A3.2 of the Code – Relevance of duration of stay – Relevance of hotel-like characteristics of use – Misdirection as to interpretation of Class 2 requirements – Whether evidence of change of use resulting in danger justifying orders of Building Appeals Board – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr T J Margetts SC with Mr T C Wallwork	Maddocks
For the First Respondent	Mr R M Niall SC with Ms S M C Fitzgerald	Fairweather Legal
For the Second Respondent	No appearance

NETTLE JA:

This is an application for leave to appeal from an interlocutory judgment given in the Common Law Division whereby the judge allowed an application for judicial review of a decision of the Building Appeals Board (‘the Board’). The Board decided that the use of some self-contained apartments as short term serviced apartment accommodation meant that the proper classification of the apartments under the Building Code[1] changed from Class 2 to Class 3. The judge held that the Board erred in its construction of Class 2 in a manner which vitiated the Board’s decision. Accordingly, his Honour remitted the matter to the Board for further consideration according to law.
[1]The Building Code of Australia (‘BCA’).

I have had the advantage of reading in draft the reasons for judgment of Osborn JA and I agree with his Honour’s conclusion. My reasons are as follows.

The facts of the matter are as set out in full by Osborn JA. It suffices for me to say that the apartments are part of a multi-building, multi-storey apartment complex constructed in Docklands and initially classified under the Code as Class 2: ‘a building containing 2 or more sole-occupancy units each being a separate dwelling’. Later, the first respondent (Mr Salter) began carrying on a business of advertising on the internet and providing to paying customers a small number of the apartments as serviced apartment accommodation. That led to a decision by the first appellant (Mr Genco) that the classification of each of the apartments so used as short term accommodation (which Mr Genco denoted as being accommodation for periods of up to 30 days) had changed from Class 2 to Class 3: ’ a residential building, other than a building of Class 1 or 2, which is a common place of long term or transient living for a number of unrelated persons, including … (b) a residential part of a hotel or motel’. Mr Genco thus gave notice to the respondents requiring each of the subject apartments to be made to comply with the requirements for a Class 3 building. The respondents appealed to the Board but the Board upheld Mr Genco’s decision. On application to the judge for judicial review, his Honour held that the Board had erred in law as to the meaning of ‘dwelling’ in the definition of Class 2.

The legislation

Section 40(1) of the Building Act 1993 (‘the Act’) prohibits a person from occupying a building ‘in contravention of the current occupancy permit’ issued under div 1 of pt 5 of the Act.

Section 106 of the Act provides that:

Subject to section 107, a municipal building surveyor or a private building surveyor may cause a building notice to be served on an owner of a building, land on which building work is being or is proposed to be carried out or a place of public entertainment if the building surveyor is of the opinion that any one of the following circumstances exists-
(a)building work has been carried out on the building, land or place without a building permit required by this Act, or in contravention of a building permit or this Act or the building regulations;
(b)the use of the building or place contravenes this Act or the building regulations;
(c)the building or place is unfit for occupation or for use as a place of public entertainment;
(d)the building, land or place or building work on the building, land or place is a danger to the life, safety or health of any member of the public or of any person using the building, land or place or to any property.

Section 102(1) of the Act confers an additional power to make emergency orders as follows:
A municipal building surveyor may make an emergency order under this Division, if he or she is of the opinion that the order is necessary because of a danger to life or property arising out of the condition or use or proposed use of a building, the land on which building work is being or is proposed to be carried out or a place of public entertainment.
Section 111(1) of the Act provides that:
Subject to section 107, a municipal building surveyor or a private building surveyor may make a building order under this section after the end of the time allowed by the building notice for making representations.
Regulation 112 of the Building Regulations 2006 (‘the Regulations’)provides that:
(1) For the purposes of these Regulations, buildings must be classified as set out in the BCA.
(2) If there is any doubt as to the classification of a building under the BCA, the relevant building surveyor must classify the building as belonging to the class it most closely resembles.
Regulation 1011(1) provides that:
A person must not change the use of a building or place of public entertainment unless the building or place of public entertainment complies with the requirements of these regulations applicable to the new use.
Part A3 of the Code of Australia (‘Classification of Buildings and Structures’) (‘the Code’) provides for the classification of buildings and structures in accordance with the principle that:

A3.1 Principles of classification
The classification of a building or part of a building is determined by the purpose for which it is designed, constructed or adapted to be used.

The Code then sets out a number of classes, including Classes 1, 2 and 3, as follows:

Class 1: one or more buildings which in association constitute—
(a) Class 1a — a single dwelling being—
(i) a detached house; or
(ii) one of a group of two or more attached dwellings, each being a building, separated by a fire-resisting wall, including a row house, terrace house, town house or villa unit; or

(b) Class 1b—
(i) a boarding house, guest house, hostel or the like—
(A) with a total area of all floors not exceeding 300 m²; measured over the enclosing walls of the Class 1b; and
(B) in which not more than 12 persons would ordinarily be resident; or

(ii) 4 or more single dwellings located on one allotment and used for short-term holiday accommodation, which are not located above or below another dwelling or another Class of building other than a private garage.

Class 2: a building containing 2 or more sole-occupancy units each being a separate dwelling.
Class 3: a residential building, other than a building of Class 1 or 2, which is a common place of long term or transient living for a number of unrelated persons, including –
(a) a boarding house, guest house, hostel, lodging house or backpackers accommodation; or
(b) a residential part of a hotel or motel; or
(c) a residential part of a school; or
(d) accommodation for the aged, children or people with disabilities; or
(e) a residential part of a health-care building which accommodates members of staff; or
(f) a residential part of a detention centre.

‘Sole-occupancy unit’ is separately defined in the Code as:

a room or other part of a building for occupation by one or joint owner, lessee, tenant, or other occupier to the exclusion of any other owner, lessee, tenant, or other occupier and includes—
(a) a dwelling; or
(b) a room or suite of rooms in a Class 3 building which includes sleeping facilities; or
(c) a room or suite of associated rooms in a Class 5, 6, 7, 8 or 9 building; or
(d) a room or suite of associated rooms in a Class 9c aged care building, which includes sleeping facilities and any area for the exclusive use of a resident.

The Code does not define ‘dwelling’ or ‘sole dwelling’ but, as has been seen, Classes 1a(i) and (ii) and 1b(ii) refer to a ‘single dwelling’ and ‘single dwellings’ in contradistinction to the kinds of buildings referred to in Class 1b. That implies that a ‘single dwelling’ is a place of separate living or dwelling for one person or a group of related persons, as opposed to a place of communal living for a multitude of unrelated persons.

Similarly, the Code does not define ‘separate dwelling’ in Class 2, but Class 2 refers to a ‘sole-occupancy unit … being a separate dwelling’ in contradistinction to the kinds of sole-occupancy units referred to in Class 3 which are not separate dwellings. That implies that a ‘sole-occupancy unit … being a separate dwelling’ is a sole occupancy unit which is adapted for use as a place of separate living or dwelling for one person or a group of related persons, as opposed to a place of communal living for a multitude of unrelated persons.

The significance of duration of stay

The Board began their reasoning with reference to dictionary definitions which the Board said indicated that ‘a dwelling is a permanent and long term residence’. They then went on to refer to the services which Mr Salter was providing to the occupants of the serviced apartments and concluded that Mr Salter was using the apartments in a manner ‘which had most of the hallmarks of a hotel’. Essentially on those two bases, the Board concluded that:

the Panel is not persuaded that the classification of the MBS that the subject apartments had become Class 3 as a result of their use for short term stays is incorrect, and therefore the Appeal is dismissed.
…
The Panel is of the view that the definition of dwelling does not include the use by short term guests resulting from a commercial enterprise which is conducted in a hotel style.
…
The Panel does consider that stays less than 3 days (which comprised 65.7% of guests who occupied the subject apartments) to be short term stays. However it does not deem it necessary to specify a particular duration associated with short term stays …
The Panel is of the view that the defined time frame of 30 days referred to in the Building Orders does not necessarily impact upon the Municipal Building Surveyors’ decision to issue the Building Orders …

The Board added a caveat, however, that:

That is not to say that the use of an apartment for short term accommodation can never be defined as a dwelling. However, based on the facts of this case, the use of the apartments is not permitted under Class 2.

The argument before the judge proceeded on the basis that the Board erred in law in holding or finding that a ‘dwelling’ means a place of permanent and long term residence; that use of the apartments as accommodation for periods of less than 30 days duration was not use as permanent and long term residence, but rather as short term accommodation; and, therefore, that such use was not use as a dwelling.

Understandably, the majority of the judge’s reasoning is similarly devoted to the question of whether ‘dwelling’ in Class 2 is confined to a place of permanent or long term residence or includes a place for living regardless of the term of stay. In particular, his Honour did not condescend to an analysis of the services provided to the occupants of the serviced apartments or their relevance to the determination of classification. His Honour concluded that, in the way in which Class 1b(ii) is defined, it contemplates that a building may be a dwelling although used for ‘short term holiday accommodation’. It followed, his Honour said, that it is not open to construe ‘dwelling’ in Class 2 in the way that the Board construed it unless ‘dwelling’ in Class 1 means something different to ‘dwelling’ in Class 2. In his Honour’s view, there is not a sufficient basis for holding that the meaning of ‘dwelling’ differs between Classes. Consequently, the Board misconstrued the Code by importing temporal requirements into the Code’s conception of ‘dwelling’.

Grounds of appeal

In substance, there are three grounds of appeal. First, it is said that the judge erred in failing to comprehend that the process of classification of buildings in accordance with the Code requires an assessment of the use and risk of the building and not just the physical structure of the building.

Secondly, it is contended that the judge erred in failing to appreciate that the Board determined that the use of the building (as short term commercial serviced apartment accommodation) most closely resembled the residential part of an hotel within the meaning of Class 3(b) and, therefore, pursuant to reg 112(2), fell within Class 3.

Thirdly, it is submitted that the judge erred in holding that the Board was in error in finding that the current use of the apartments results in a danger to life and safety.

Ground 1 — Principles of classification

Counsel for the applicant pointed to reg 112(1) of the Regulations which provides that buildings must be classified as set out in the Code, and to reg 112(2) which provides, inter alia, that if there is any doubt as to the classification of a building under the Code, the relevant building surveyor must classify the building as belonging to the class it most closely resembles. In counsel’s submission, the effect of those provisions is that it is not merely structure which needs to be considered but also the intended or actual use of the building and that the judge was in error in holding that the use of the units as short term hotel-style accommodation was irrelevant to whether they came within Class 2.

I accept counsel’s submission as to the significance of the use of a building in the classification of the building but I do not accept that the judge erred in the manner contended.

As a result of s A3(1) of the Code, the classification of a building or part of a building is to be determined or at least determined in part ‘by the purpose for which it is designed, constructed of adapted to be used’. Consequently, if a building (or part of a building) is adapted for a particular use and classified on that basis, but is later adapted to a different use, the change in use may result in a change in classification. For example, if a detached house with a total area of all floors not exceeding 300m² is initially designed and constructed as a single dwelling but later adapted for use as a boarding house, guest house or the like, in which not more than 12 persons would ordinarily be resident, the building will in the first place properly be classified within Class 1a and, upon being adapted for that new use, should properly be reclassified as Class 1b(i). Likewise, if a detached house with a total area of all floors greater than 300m² is initially designed and constructed as a single dwelling but later adapted for use as a boarding house, guest house, hostel, lodging house or backpackers accommodation, in which more than 12 persons would ordinarily be resident, the building will in the first place properly be classified within Class 1a and, upon being adapted for that new use, should properly be reclassified as Class 3(a). Equally, if four or more houses designed and constructed on a single allotment for use as homes for individual families are later adapted for use as short term holiday accommodation, the classification of each of those houses should properly be changed from Class 1a to Class 1b.

For similar reasons, if a building comprised of a number of sole-occupancy units each being a separate dwelling is in the first place properly classified as Class 2, but later all or a substantial number of the units is adapted for use as short term hotel style serviced apartment accommodation then, depending on all the facts and circumstances, it may be that each of the units so used should properly be re-classified as Class 3.

Contrary to counsel’s submission, however, it does not follow that the subject serviced apartments necessarily fall to be reclassified as Class 3.

Ground 2 — Regulation 112(2)
(ii) Whether similar to the residential part of an hotel

In order to come within Class 2, a building must ‘contain’ two or more sole-occupancy units, each being a separate dwelling – in that context, I construe ‘contain’ as used in the sense of being ‘substantially comprised of two or more sole occupancy units’ each of which is a separate dwelling – and, in order to qualify as a sole-occupancy unit within the meaning of Class 2, a residential unit must be a dwelling comprised of part of a building which is set aside for occupation by one or joint owner, lessee, tenant, or other occupier to the exclusion of any other owner, lessee, tenant, or other occupier, being a dwelling.

In case it matters, I doubt that a paying guest in short-term hotel style serviced apartment accommodation of two or three days’ duration would be a ‘lessee’ or ‘tenant’ within the meaning of the definition. The guest could not be regarded as a lessee or tenant (properly so called) unless present under an arrangement which conferred a right of exclusive possession.[2] Usually, the owner of an hotel retains dominion over a hotel room or suite with right to enter for cleaning and other purposes and power to forbid the guest from allowing others to stay there.[3] Depending on the facts, the same considerations would apply to a guest taking short term hotel style accommodation for a period of a few days in a serviced apartment.
[2]Raidich v Smith (1949) 101 CLR 209, 221-1 (Windeyer J); cf at 219 (Taylor J); KJRR Pty Ltd vCommissioner of State Revenue (1999) 99 ATC 4335, 4338 [6] (Tadgell JA); and see Bradbrook, MacCallum, Moor and Grattan, Australian Real Property Law, 5^th Ed, [14.80]-[14.90].
[3]See, for example, Appah v Parcnliffe [1964] 1 WLR 1064, 1070 (Davies LJ); Nash v Johnsen [1965] NSWR 1193.

Admittedly, the words ‘tenant’ and ‘tenancy’ are sometimes used in a looser sense than their legal meanings of lessee and lease. But I doubt that ‘tenant’ is used in a loose sense in the definition of ‘sole-occupancy unit’ for the purposes of Class 2. If anything, given the definition is expressed in terms of occupation to the exclusion of others, it rather implies that ‘tenant’ is intended to have its ordinary legal meaning. Additionally, although it is possible to have a tenancy for days and possibly even for hours,[4] ‘tenant’ in the definition of ‘sole-occupancy unit’ falls to be construed in context and the context created by the definition of ‘sole–occupancy unit’ suggests a person with an right to occupy the tenanted premises to the exclusion of others for more than just hours or days. It is also to be observed that, in this case, the Board found that the arrangement between Mr Salter and the guests who stayed in the subject apartments was one of licence as opposed to lease and therefore not a tenancy.[5] That finding is not disputed.

[4]Boylan v Dublin Corporation [1949] IR 60, 73-4 (Black J); cf Kelly v Wallworth [1921] 2 IR 5, 10 (Ronan LJ).

[5]Board’s reasons, 14.

In contrast, ‘occupier’ is a more protean term than ‘tenant’ and so, in some contexts, it may include a licensee and possibly even a squatter.[6] It is also implicit in the juxtaposition in the definition of ‘sole occupancy unit’ of ‘occupier’ and the references to rooms of the kind delineated in paragraphs (a), (b) and (c) of the definition that occupation is conceived of as including short term stays. It follows, I think, that the patrons of Mr Salter’s serviced apartments would be occupiers within the meaning of the definition of sole occupancy unit and so, prima facie, that the apartments would fall within Class 2.
[6]Wheat v E Lacon & Co Ltd [1966] 1 QB 335, 369 (Diplock LJ).

So to conclude, however, does not detract from the possibility already referred to that, if a building comprised of a number of sole-occupancy units, each being a separate dwelling, is adapted for use as short term hotel style serviced apartment accommodation, it may be appropriate to classify each of those units, under reg 112(2), as Class 3(b) (as the class they most closely resemble).

Experience suggests that there are any number of motels and not a few hotels of which the residential part is wholly comprised of self-contained sole-occupancy units each of which includes sleeping facilities, bathing facilities and rudimentary cooking facilities. With facilities of that kind, it would be possible to live in one of those units indefinitely. On one view of the matter, that is sufficient reason to classify each such unit as a sole-occupancy unit being a dwelling within the meaning of Class 2. But, if that were so, Class 3(b) would have no application to hotel and motel units of that kind. That can hardly have been the intention. Bearing in mind the evident purpose of this legislation, which is to provide for construction, fire and safety standards of buildings according to their design, construction and use, there is a strong implication that hotel and motel units of the kind in question are not within the conception of a sole-occupancy unit being a dwelling in Class 2 but rather within Class 3(b).

In terms of function, there is not a lot of difference between an hotel or a motel of which the residential part is comprised of self-contained units of the kind just described and a serviced apartment enterprise comprised of self-contained sole-occupancy units hired out as short-term hotel-style accommodation. Subject, therefore, to the facts and circumstances of a given case, it might well be appropriate to classify such units (pursuant to reg 112(2)) as Class 3(b) (as the class they most closely resemble). But whether or not they should be so classified is liable to depend on a range of factors including whether the apartments are of such a number and so physically disposed in relation to each other as to resemble the residential part of an hotel, and the range and nature of services provided to patrons of the apartments. I have in mind in particular the provision of common facilities such as a dining room, restaurant, swimming pool, gymnasium, laundry and business facilities.

So, for example, if all of the apartments in an apartment building, or all of the apartments in an identifiable section of an apartment building, are adapted for use as serviced apartments and provided with the full gamut or a substantial cross-section of the services customarily expected of a decent hotel, such as reception facilities, dining and restaurant facilities, laundry facilities, a swimming pool and gymnasium and a business centre, one might reasonably conclude that the apartments so much resemble the residential part of an hotel as properly to be classified (pursuant to reg 112(2)) as Class 3(b). Contrastingly, if there are only one or two such apartments scattered throughout a large apartment building and they are provided with but a few hotel like services and facilities of the kind I have mentioned, I should think that it would be very difficult to conceive of them as sufficiently similar to the residential part of an hotel to come within Class 3(b). Obviously, between those two extremes lies a range of possibilities.

(ii) The classification in this case

As will be seen from the facts set out in Osborn JA’s judgment, in this case there were only a few short term serviced apartments scattered randomly among a much larger number of units not adapted for use as serviced apartments. The services which Mr Salter provided to the patrons of the subject serviced apartments were also relatively exiguous. Essentially, they consisted of putting customers in touch with third party providers of laundry services and food and the like. Consequently, it does not seem to me that the units operated by Mr Salter much resembled the residential part of an hotel or a motel comprised of sole-occupancy units. In the end, however, that is a question of fact and degree and the Board’s decision on such a question ought not be set aside unless it appears not to have been open on the evidence or otherwise as informed by wrong principle. As matters stand, I am not persuaded that the Board’s decision was not open on the evidence.

That leads to consideration of whether the judge was correct in holding that the Board erred in law as to the meaning of ‘dwelling’ in a manner which vitiated the Board’s decision. In my view, his Honour was correct.

As the judge held, a building may be a dwelling in the relevant sense whether occupied on a long term or short term basis. Logically, the determination whether a serviced apartment falls within Class 3(b) must be equally even handed. Possibly, the length of occupation may be one of the factors taken into account is assessing the character of the building. Even so, the determination of whether serviced apartments come within Class 3(b) necessarily depends on an overall assessment of how similar are the units (in the way in which they are used) to the residential part of an hotel within the meaning of Class 3(b). That may be short term or long term.

As was earlier noticed, the Board were careful to state that their decision did not foreclose the possibility of a sole-occupancy unit being used as some form of short term accommodation and yet qualifying as a dwelling. But I do not think that changes the position. Ultimately, the Board decided the case on the basis that ‘[t]he Panel is of the view that the definition of dwelling does not include the use by short term guests resulting from a commercial enterprise which is conducted in a hotel style‘; and the Board accepted that anything up to 30 days was ‘short term’. For the reasons I have explained, I think that to be a misconception of ‘dwelling’.

In the result, whatever conclusions were or were not open to the Board on the basis of the evidence before them, it seems to me that the Board were materially influenced by a misconception that a ‘dwelling’ and thus a ‘separate dwelling’ in Class 2 is essentially a place of permanent or long term residence. It follows as I see it that the Board did proceed according to wrong principle, in that they misconceived the legal significance of the fact that the subject apartments were occupied on a short term basis. That was an error of law and, on that basis, the judge was correct to remit the matter for reconsideration.

Ground 3: Danger to life and safety

After concluding that the use of the subject apartments as short term serviced apartment accommodation placed them in Class 3, the Board went on to say that, even if they had not reached that conclusion, they would have upheld the decision of the MBS, because:

the changed use results in a danger to the life and safety of any person using the building in that the occupant characteristics, fire safety needs and reaction to fire or other emergencies have varied from that for which the building was originally designed, approved and intended to be used.[7]

[7]Board’s reasons, 14.

The judge rejected that analysis, for two reasons. First, as his Honour viewed the matter, the use of the apartments for short term serviced apartment accommodation was not a change in use in the relevant sense, and hence his Honour held the Board had made an error of law in holding or finding that there had been a change in use. I have dealt with that already. Secondly, the judge said that:[8]
[8]Salter v Building Appeals Board [2013] VSC 279 (‘Reasons’), [56]-[58] (citations omitted).

s 106(d) of the Act did not permit a building notice to be served unless the building was a danger to relevant people. In this case, while there might have been some evidence of a relevant danger as a result of the use of apartments, there was no evidence that the apartments themselves constituted a relevant danger. In cross-examination before the Building Appeals Board, the building surveyor (the second defendant) was asked and answered the following questions:
But you don’t say the building’s a danger? — No. If it was a danger then we would have been issuing emergency orders.

And you haven’t done that? — We haven’t done that.

While senior counsel for the second and third defendants relied upon some re-examination of the building surveyor in an attempt to answer the evidence to which I have just referred, the only conclusion open to the Board was that such references as there may have been to the building being a danger fell properly to be understood to be references to the building being a danger ‘in that’ the use had been said to be changed — a matter about which I have already said there was no evidence.
In different circumstances, it may have been open to the building surveyor to make an order under s 102 of the Act if there was a danger to life arising out of the use of an apartment. However, that was not this case. Further, in this regard, the Board’s reasons and the second and third defendants’ submissions in this proceeding simply did not pay close enough attention to the differences between the text of s 102 of the Act and the text of s 106(d) of the Act.

The nub of Ground 3 is that it was open to the Board under s 149(2) of the Act to decide, as if it were the original decision maker, that the change in use had resulted in danger to life and safety of any person using the building; and that the judge was wrong to hold as he did.

I reject that contention. I see no error in the judge’s reasoning that there was no evidence that the building was a danger. The highest the evidence went was that, because of the perceived change of use, it was considered necessary to undertake an assessment of whether the change in use had resulted in a danger and, if so, what should be done about it. It follows that Ground 3 fails.

Conclusion

For these reasons, I would allow the application for leave to appeal but I would dismiss the appeal.

OSBORN JA:

Introduction

On 22 March 2013 the Board upheld orders made by the municipal building surveyor of the City of Melbourne (the first appellant) in respect of three individual

apartments located within towers at Waterview Walk, Docklands. These orders respectively required the use to cease of each of the apartments as ‘short term commercial accommodation (hotel) or the like’ which was said to render each apartment a Class 3 building as defined by the BCA or alternatively that the apartment in each case be brought into compliance with the Class 3 requirements.

The Board’s orders were based upon a determination that the use of each of the apartments for short term stays with services supplied by their owner meant that the apartments were not Class 2 buildings as defined in the BCA and in particular were not to be regarded as separate dwellings in the sense contemplated by the BCA.

The Board further determined that the change in use had resulted in a danger to the life and safety of users of the building in that ‘the occupant characteristics, fire safety needs and reaction to fire or other emergencies have varied from that for which the building was originally designed, approved and intended to be used’.

The owners of each of the apartments challenged the Board’s determination by way of judicial review proceedings and on 30 May 2013 Beach J (as his Honour then was) ordered that the Board’s decision be set aside and remitted the matter for rehearing in accordance with law.

His Honour found first that the Board erred in characterising the use of the apartments as Class 3 by reference to the short term nature of the accommodation ordinarily provided within them[9] and secondly that the Board erred in concluding that there was evidence of a changed use either at all[10] or resulting in a danger to users.[11]
[9]Reasons [47]-[50].
[10]Ibid [55].
[11]Ibid [56].

His Honour’s decision is now the subject of appeal to this Court. In substance it is contended first that his Honour erred in his construction of the relevant classification provisions, secondly that his Honour erred in not treating the characteristics of the use in issue as a question of fact in respect of which the Board’s view was open and thirdly that he erred in his conclusion with respect to the evidence as to danger.

For reasons I shall explain more fully, in my opinion his Honour was correct to conclude that the Board misdirected itself when considering whether each apartment remained a separate dwelling within the meaning of the relevant part of the BCA. In essence a dwelling is a building (or part of a building) which contains within it the facilities necessary for separate residential occupation. In its ordinary meaning a ‘dwelling’ is simply a place of residence or abode, whether temporary or permanent.

The concept is further defined in each of the contexts specified in respect of building Classes 1, 2, 3 and 4 provided for in the BCA.

The definition of Class 2 dwellings constituted by individual dwellings within a multi-unit complex utilises both the concept of ‘sole occupancy unit’ as defined by the BCA and ‘separate dwelling’ to define the type of unit it comprises.

There is no justification for implying a further criterion with respect to permanency of occupation when:

· express criteria are identified in the definition;

· the concepts of short term and long term use are expressly utilised elsewhere in the classification provisions;

· the scheme of the Act is that the use permitted in a residential unit may be further limited either by the description of use in an occupancy permit or by conditions as to use in an occupancy permit derived from a building permit; and

· there is a residual power under the Building Act 1993 (‘the Act’) to control use of a building which operates by reference to danger to the users independently of the classification, particular description of use and condition of use specified in an occupancy permit.

Further a hotel and other Class 3 buildings:

(a) provide within one building a number of separate occupancies for unrelated persons or groups of persons; but

(b) do not provide all the facilities for residential occupation within each occupancy; and

(c) provide some communal facilities outside the separate residential occupancies but within the building, eg dining, cleaning, laundry facilities, etc.

The specific criteria applicable to a Class 2 unit define whether the individual apartments fall within that class. First, they must constitute separate dwellings and second they must each accommodate related, not unrelated, groups of people.

In turn, the fact the Board took a different view requiring permanent or long term use as a necessary component of ‘dwelling’ was directly relevant to the conclusion which it formed adversely to the respondents.

Likewise I agree with the trial judge that there was no evidence of relevant danger as a necessary result of the short term use of the apartments. Rather, the respondents’ evidence was that as a result of the change in classification of the use there was a heightened risk of danger which required investigation. The evidence went no higher than that there may be a danger to users of the building as a result of short term occupation.

Nevertheless the Board’s reasons fairly read demonstrate a finding that independently of the question of classification the change of use of the subject apartments created a risk to safety which required review.

Whilst this would not of itself justify treating the apartments as Class 3 it might do so if the evidence established this was necessary to meet the risk in issue.

Leave to appeal

The respondents submit that the appeal is properly characterised as one against an interlocutory decision and accordingly leave to appeal is required. The appellants submit that the effect of the orders of Beach J is to make the building order unenforceable and accordingly the decision should be regarded as final rather than interlocutory. Alternatively, it is submitted that an extension of time should be granted to make application for leave to appeal, leave to appeal be granted and the appeal be heard instanter.

In my view Beach J’s order was interlocutory in nature. It did not finally determine the principal proceeding before the Board but remitted it for further hearing.[12] The legal effect of the decision was not to finally determine the rights of the parties. The decision was interlocutory in the second sense identified by Callaway JA in Dodoro v Knighting & Anor.[13]
[12]See Gibbs v Kinna [1999] 2 VR 19, 21-2 [7]-[8] (Phillips JA) and the authorities there cited.
[13](2004) 10 VR 277, 281-3 [18]-[20].

Nevertheless I would accede to the appellants’ application to extend time in which to seek leave to appeal. First, it appears the failure to seek leave has occurred as the result of a genuine procedural error. Secondly, there is no evidence that the respondents have been prejudiced by the failure to seek leave to appeal within time.[14]
[14]Applicants A1 and A2 v Brouwer (2007) 16 VR 612.

I would also grant leave to appeal for the following reasons. First, the appellants seek to ventilate an issue of the public interest raising questions concerning the construction of controls intended to protect public health and safety. In this sense the appeal raises a question of general importance.[15] Secondly, the appellants do so on behalf of a sector of the public who may be affected by the operation of the relevant controls. They do not act in their personal interests.
[15]Cf Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2007) 212 FLR 56, 80 [82]; Vellar v Spandideas [2008] VSCA 139, [38]-[39].

Thirdly, the questions raised by the appeal are sufficiently arguable and the questions of law in issue sufficiently novel to warrant leave to appeal.

Fourthly, it would be undesirable for the matter to go back for redetermination by the Board on wrong principle of law in circumstances that may provoke further applications for judicial review and appeal.

Fifthly, I do not accept that the appellants would not suffer substantial injustice[16] if they failed to obtain the opportunity to appeal a decision which was in truth wrong in law. In particular, I accept the appellants are entitled to enforce the BCA on behalf of the residents and ratepayers of the City of Melbourne. I do not accept the submission that neither the municipal building surveyor nor the municipal council have a relevant interest in the proper construction of the controls in issue.
[16]Niemann v Electronic Industries Ltd [1978] VR 431, 441 (Murphy J).

The statutory framework
The Building Act 1993

The main purposes of the Act include:

(a)to regulate building work and building standards; and …
(c)to provide an efficient and effective system for issuing building and occupancy permits and administering and enforcing related building and safety matters and resolving building disputes; …[17]

[17]Section 1.

In turn the first objective of the Act is:

(a) to regulate building work and building standards; …[18]

[18]Ibid.

As a primary mechanism for achieving its objectives the Act provides for the stipulation of building standards by way of building regulations. Section 7 provides:

(1)The Governor in Council may make regulations for or with respect to prohibiting or regulating—
(a)the construction, use, maintenance, demolition and removal of buildings;
(b)any matter relating to the safety of buildings and places of public entertainment;
(c)the use and maintenance of places of public entertainment.

(2)Without limiting the generality of subsection (1), regulations under this Part may—
(a)provide for any matters set out in Part 1 of Schedule 1; and
(b)establish standards and requirements relating to any matter referred to in subsection (1)(a), (b) or (c) or Part 1 of Schedule 1; and
(c)require the carrying out of building work and maintenance on existing buildings and building work.

(3)The standards established by the regulations may be expressed in terms of performance, types of material, methods of construction or in other terms.
(4)The regulations may provide for buildings constructed with particular materials, designs or methods of construction to be deemed to satisfy the prescribed standards.
(5)The regulations may apply to existing buildings, whether or not building work is being or is proposed to be carried out on those buildings.[19]

[19]Section 7.

It may be noted that:

(a) the regulation making power extends to the regulation of ‘use’ as well as the construction, maintenance, demolition and removal of buildings;

(b) the regulation making power relating to the safety of buildings is expressed in broad terms;

(c) the matters stipulated in pt 1 of sch 1 to the Act include:

8.Fire prevention, fire fighting equipment and precautions and other emergency installations, services and equipment.[20]
[20]Schedule 1, pt 1.

They further include:

29.Changes of use of buildings and places of public entertainment.[21]
[21]Ibid.

and:

34.The safety of buildings and places of public entertainment.[22]

(d) the standards may be expressed in a variety of ways including performance standards.

[22]Ibid.

Part 3 of the Act provides for a system of building permits and s 16 provides that a person must not carry out building work unless a building permit in respect of the work has been issued and is in force under the Act and the work is carried out in accordance with the Act, the building regulations and the permit. A building permit may be issued subject to conditions.[23]
[23]Section 19.

A building permit may be issued by a private building surveyor as occurred in this case.[24]
[24]Section 76.

The permit must specify whether an occupancy permit is required in respect of the building work.[25] An occupancy permit is required in respect of all building work except work which the relevant building surveyor considers to be minor or which the surveyor considers to not compromise the suitability of the building for occupation or certain prescribed building work.[26]
[25]Section 21.
[26]Section 21(2).

Section 45 provides for the contents of an occupancy permit:

An occupancy permit under this Division must specify—
(a)the prescribed classification of the building or part of a building to which it applies; and
(b)the proposed use of the building or part of a building; and
(c)the maximum permissible live load within the building or part of a building, if applicable; and
(d)the maximum number of people to be accommodated within the building or part of a building, as determined in accordance with the regulations; and
(e)any conditions to which it is subject.[27]

[27]Section 45

It may be noted that an occupancy permit may deal with the use of the building in three ways:

· by way of the classification of the building;

· by stipulating the proposed use of the building; and

· by stipulating conditions to which it is subject.

The classification system thus provides a framework within which appropriate building standards are achieved for different types of use. It is not however the exclusive mechanism contemplated by the Act to achieve this purpose.

The Act further provides for the amendment and cancellation of permits and approvals.[28] Section 72 provides for cancellation in circumstances inter alia where the building is no longer suitable for occupation for the classification stated on the permit or ‘the use of the building has changed from the use stated on the permit.’
[28]Section 70 following.

Part 8 of the Act provides for the enforcement of safety and building standards. It provides for emergency orders if a municipal building surveyor is of the opinion that the order is necessary ‘because of a danger to life or property arising out of the condition or use or proposed use of a building, the land on which building work is being or is proposed to be carried out or a place of public entertainment.’

The Act further provides for building notices and building orders. Section 106 provides:

Subject to section 107, a municipal building surveyor or a private building surveyor may cause a building notice to be served on an owner of a building, land on which building work is being or is proposed to be carried out or a place of public entertainment if the building surveyor is of the opinion that any one of the following circumstances exists—
(a)building work has been carried out on the building, land or place without a building permit required by this Act, or in contravention of a building permit or this Act or the building regulations;
(b)the use of the building or place contravenes this Act or the building regulations;
(c)the building or place is unfit for occupation or for use as a place of public entertainment;
(d)the building, land or place or building work on the building, land or place is a danger to the life, safety or health of any member of the public or of any person using the building, land or place or to any property.[29]

[29]Section 106.

In the case of an existing building a notice might relevantly be given:

· if the use of the building contravenes the Act or the building regulations; or

· the building is unfit for occupation; or

· the building ‘is a danger to the life safety or health … of any person using the building …’.

I accept the appellants’ submissions that a change of use might give rise to a danger to the safety of the users of a building. The relevant danger may be to ‘any’ users of the building not ‘all’ users of the building. Thus a change in use may create safety risks associated with fire hazard or other matters which did not arise in circumstances of the previous use.

Section 108 provides for a show cause notice:

(1)A building notice may require the owner of a building or place of public entertainment to show cause within a specified period—
(a)why occupation of the building or place or its use for public entertainment should not be prohibited; or
(b)why the owner should not do either or both of the following things—
(i)evacuate the building, land or place;
(ii)carry out building work, protection work or work required by the regulations in relation to the building, land or place.

(2)A building notice must be in writing and must contain any matters required by the regulations.[30]

[30]Section 108.

Section 109 provides for representations by the owner and in turn s 110 provides for cancellation of the building notice and s 111 provides for its confirmation by way of a building order. Section 111(3) provides:

(3)A building order under this section may—
(a)prohibit the occupation of a building; or
(b)prohibit the occupation of a place of public entertainment or its use for public entertainment; or
(c)require the owner of a building, land on which building work is being or is proposed to be carried out or place of public entertainment to do either or both of the following things within a specified time or times—
(i)evacuate the building, land or place;
(ii)carry out building work, protection work or other work required by the regulations or to carry out a program of that work as directed in the order.[31]

[31]Section 111.

In turn s 142(2) of the Act provides for appeal to the Board against the making of a building order.

Building Regulations 2006

The objectives of the Regulations include:

(a)to remake with amendments the regulations which control the design, construction and use of buildings and places of public entertainment; and
…
(d)to regulate matters relating to the use and maintenance of buildings and places of public entertainment; …[32]

[32]Regulation 101.

Regulation 108 provides that any reference in the Regulations to the purpose for which a building is used includes the purpose for which it is intended to be used.

Regulation 109 adopts the BCA and provides that the BCA forms part of the Regulations as modified by the Regulations. Regulation 112 adopts the classification of buildings contained in the BCA and requires the relevant building surveyor to classify the building in cases of doubt.

(1)For the purposes of these Regulations, buildings must be classified as set out in the BCA.
(2)If there is any doubt as to the classification of a building under the BCA, the relevant building surveyor must classify the building as belonging to the class it most closely resembles.[33]

[33]Regulation 112.

Regulation 301(3) requires that an application for a building permit must contain sufficient information to show that the building work will comply with the Act and the Regulations.

Regulation 302(1)(d) requires that an application for building permit must be accompanied inter alia by a statement of the use or intended use of all buildings shown on relevant allotment plans.

Regulation 1011 provides that unless an exemption is granted by the municipal building surveyor a person must not change the use of a building unless

the building complies with the requirements of the regulations applicable to the new use.

The Building Code of Australia

The BCA forms part of the National Construction Code Series. It is an initiative of the Council of Australian Governments developed to incorporate all onsite construction requirements into a single code.[34]
[34]BCA Introduction.

It is published in volumes relating in the first instance to different classes of buildings.

The Introduction to the BCA describes it as:

a uniform set of technical provisions for the design and construction of buildings and other structures throughout Australia whilst allowing for variations in climate and geological or geographic conditions.

The BCA sets out objectives and functional statements by way of guidance, specifies performance standards and provides for building solutions either by ‘deemed to satisfy’ provisions or alternative solutions.

Alternative resolutions are assessed by the relevant building surveyor in accordance with specified performance requirements.

The introductory provisions of the BCA include a provision that a reference to a building in the BCA is a reference to an entire building or part of a building as the case requires.[35]
[35]Clause A1.7.

They also define ‘sole occupancy unit’ as follows:

Sole occupancy unit means a room or other part of a building for occupation by one or joint owner, lessee, tenant, or other occupier to the exclusion of any other owner, lessee, tenant, or other occupier and includes –
(a)a dwelling; or
(b)a room or suite of rooms in a Class 3 building which includes sleeping facilities; or
(c)a room or suite of associated rooms in a Class 5, 6, 7, 8 or 9 building; or
(d)a room or suite of associated rooms in a Class 9c aged care building, which includes sleeping facilities and any area for the exclusive use of a resident.

The classification of buildings and structures is governed by pt A3 of the BCA.

A3.1 Principles of classification
The classification of a building or part of a building is determined by the purpose for which it is designed, constructed or adapted to be used.
A3.2 Classifications
Buildings are classified as follows:
Class 1: one or more buildings which in association constitute –
(a)Class 1a – a single dwelling being –
(i)a detached house; or
(ii)one of a group of two or more attached dwellings, each being a building, separated by a fire-resisting wall, including a row house, terrace house, town house or villa unit; or

(b)Class 1b –
(i)a boarding house, guest house, hostel or the like –
(A)with a total area of all floors not exceeding 300 m² measured over the enclosing walls of the Class 1b; and
(B)in which not more than 12 persons would ordinarily be resident; or

(ii)4 or more single dwellings located on one allotment and used for short-term holiday accommodation, which are not located above or below another dwelling or another Class of building other than a private garage.

Class 2: a building containing 2 or more sole-occupancy units each being a separate dwelling.
Class 3: a residential building, other than a building of Class 1 or 2, which is a common place of long term or transient living for a number of unrelated persons, including –
(a)a boarding house, guest house, hostel, lodging house or backpackers accommodation; or
(b)a residential part of a hotel or motel; or
(c)a residential part of a school; or
(d)accommodation for the aged, children or people with disabilities; or
(e)a residential part of a health-care building which accommodates members of staff; or
(f)a residential part of a detention centre.

Class 4: a dwelling in a building that is Class 5, 6, 7, 8 or 9 if it is the only dwelling in the building.
Class 5: an office building used for professional or commercial purposes, excluding buildings of Class 6, 7, 8 or 9.
Class 6: a shop or other building for the sale of goods by retail or the supply of services direct to the public, including –
(a)an eating room, café, restaurant, milk or soft-drink bar; or
(b)a dining room, bar area that is not an assembly building, shop or kiosk part of a hotel or motel; or
(c)a hairdresser’s or barber’s shop, public laundry, or undertaker’s establishment; or
(d)market or sale room, showroom, or service station.

Class 7: a building which is –
(a)Class 7a – a carpark; or
(b)Class 7b – for storage, or display of goods or produce for sale by wholesale.

Class 8: a laboratory, or a building in which a handicraft or process for the production, assembling, altering, repairing, packing, finishing, or cleaning of goods or produce is carried on for trade, sale, or gain.

Class 9: a building of a public nature –
(a)Class 9a – a health-care building, including those parts of the building set aside as a laboratory; or
(b)Class 9b – an assembly building, including a trade workshop, laboratory or the like in a primary or secondary school, but excluding any other parts of the building that are of another Class; or
(c)Class 9c – an aged care building.

Class 10: a non-habitable building or structure –
(a)Class 10a – a non-habitable building being a private garage, carport, shed, or the like; or
(b)Class 10b – a structure being a fence, mast, antenna, retaining or free-standing wall, swimming pool, or the like; or
(c)Class 10c – a private bushfire shelter.

A3.3 Multiple classification
Each part of a building must be classified separately, and –
(a)
(i)where parts have different purposes – if not more than 10% of the floor area of a storey, being the minor use, is used for a purpose which is a different classification, the classification applying to the major use may apply to the whole storey; and
(ii)the provisions of (i) do not apply when the minor use is a laboratory or Class 2, 3 or 4 part; and

(b)Classes 1a, 1b, 7a, 7b, 9a, 9b, 9c, 10a, 10b and 10c are separate classifications; and
(c)a reference to –
(i)Class 1 – is to Class 1a and 1b; and
(ii)Class 7 – is to Class 7a and 7b; and
(iii)Class 9 – is to Class 9a, 9b and 9c; and
(iv)Class 10 – is to Class 10a, 10b and 10c; and

(d)A plant room, machinery room, lift motor room, boiler room or the like must have the same classification as the part of the building in which it is situated.

A3.4 Parts with more than one classification
(a)Notwithstanding A3.3, a building or part of a building may have more than one classification applying to the whole building or to the whole of that part of the building.
(b)If a building or part of a building has more than one classification applying to the whole building or part in accordance with (a), that building or part must comply with all the relevant provisions of the BCA for each classification.

As clause A3.1 makes clear, the classification of buildings is determined by reference to the purpose for which the building is designed, constructed, or adapted to be used. A dwelling is thus a building which is designed, constructed or adapted to be used for the purpose of dwelling within it.

A building will not be a dwelling unless it has essential facilities such as toilet, bathroom and cooking facilities as well as a room or rooms appropriate for sleeping and daily living. This notion accords with the ordinary meaning of a dwelling. In Bakes v Huckle,[36] Barry J applied this meaning and held that in deciding whether particular premises constituted a dwelling house (for the purposes of National Security Regulations): ‘the test is whether at the material time the premises possessed the characteristics ordinarily found in buildings used or let for human habitation as homes.’
[36][1948] VLR 159.

It follows that a beach house will be a dwelling as a matter of ordinary language if it has the facilities that are necessary to make a building habitable as a dwelling. It will remain a dwelling whether or not it is occupied only sporadically. It will also remain a dwelling even if it is let out during holiday periods to short term occupants.

Likewise an apartment will remain a dwelling as a matter of ordinary language even if its owner lives overseas or interstate and uses it only occasionally and then for relatively short periods. It will remain a dwelling even if it is let for short term use. There is nothing in the fundamental concept contained in BCA clause A3.1 or the ordinary meaning of dwelling which requires that a dwelling be occupied for extended periods of time by the same person.

I turn then to clause A3.2 which uses the term dwelling some six times and also utilises the term ‘sole occupancy unit’ which itself includes a ‘dwelling’.

In each of these contexts the term is used in contradistinction to residential occupancies which do not provide entirely self-contained facilities for residential accommodation but share or lack some facility which is usual to a separate dwelling, eg boarding house, guest house, backpackers accommodation, hotel or motel. Thus Class 1a provides for two types of ‘single dwellings’, Class 1b(ii) includes a particular kind of ‘single dwelling’, and Class 2 refers to units each of which is ‘a separate dwelling’.

The definition of Class 2 thus defines the relevant type of sole occupancy unit by reference to the sufficiency of the type of facilities provided in a separate dwelling as distinct from rooms which merely provide sleeping facilities. In the present case, the apartments are sole occupancy units but each comprises more than a mere room or suite of rooms as in a boarding house, guest house, hostel, lodging house, hotel or motel.

Conversely, because the apartment must be a sole occupancy unit, it must be occupied jointly by related persons whereas a boarding house and like facilities provide rooms for unrelated persons.

Indeed an essential characteristic of a Class 3 building is that it provide accommodation for a number of unrelated persons whereas a dwelling provides accommodation within the same occupancy for related persons. Thus a house which might otherwise be a dwelling may become a boarding house or lodging house simply because it accommodates unrelated persons.

There is nothing in the scheme or language of the classification provisions of clause A3.2 which suggests the characterisation of a sole occupancy unit as a dwelling depends upon the duration of its residential occupancies.

The definition of Class 2 expressly utilises both the concept of ‘sole occupancy unit’ and ‘separate dwelling’ to define the type of apartment it comprises. No other express criteria are identified.

There is no justification for implying conditions imposing an additional temporal requirement into the definition of Class 2. This is not a case where the word ‘dwelling’ was obviously intended to have the meaning for which the appellants contend.[37] The conditions which must be satisfied before a Court may read words into a statutory provision to give effect to its purpose have not been met.[38]
[37]Cf DPP v Leys & Leys [2012] VSCA 304, [48]-[49].
[38]Wentworth Securities Limited v Jones (1980) AC 74 (Lord Diplock); cited with approval in DPP v Leys & Leys (above) and Victorian WorkCover Authority v Elsdon & Ors [2013] VSCA 235.

Furthermore, the implication of a limitation of the type suggested is not supported by the structure and statutory context of the classification provisions. The concepts of short term and long term use are expressly utilised in other classification provisions and in particular Class 1b(ii) and Class 3. The Class 3 definition expressly refers to both ‘long term or transient living’ but none of the references to dwelling require use for ‘long term living’. The definition of Class 1(b) expressly contemplates that in that context a dwelling may be used for short term holiday accommodation.

The scheme of the Act is that the classification provisions may be supplemented either by the description of use in an occupancy permit or by condition as to use in an occupancy permit derived from a building permit. The purpose of the classification provisions does not require further implication of conditions as to use.

The appellants placed considerable weight upon the observations of Chesterman JA in Kazakova v Queensland Fire Rescue Service.[39] That case concerned a failure to answer requisitions given to the owner of a building pursuant to the Fire and Rescue Service Act 1990 (Qld). The building was a ‘budget accommodation building’ within the meaning of that Act and used as a boarding house. It was argued that it was exempt from the obligation to provide a fire safety plan because the building was a Class 1a building under the BCA. In the course of his reasoning his Honour observed:

[25]The Code makes it clear that a class 1a building, and its use as such, is different to a boarding house, guesthouse, hostel, lodging house or backpackers accommodation. These uses fall within class 1b or 3. What they have in common, is that the number of residents is likely to exceed that found in a conventional family household, and the composition of the group of residents will tend to change frequently. Residency is likely to be transient and residents will have only their address in common.
[26]When one has regard to the Code’s purposes of classification of buildings, one can see the importance of these concepts. A building used for a large number of residents who are strangers to each other, and who might occupy a building for brief periods and therefore not become familiar with its floor plan and means of egress, will have a greater need for a fire safety management plan than those who live in their own home and are familiar with it, and between whom ties of affection are likely to lead to a greater degree of assistance in the event of a fire than would be the case with a transient population of a boarding house.[40]

[39][2011] QCA 328 (18 November 2011).

[40]Ibid [25]-[26].

The observations are difficult to apply to the individual apartments in issue in this case. Whilst aspects of them may be relevant:

·There is no evidence that the use is likely to lead to a greater number of residents than would be the case if it were used for a conventional household; and
·the individual apartments subject to separate notices do not accommodate large numbers of residents and are not let to groups of persons who are strangers to each other.

This said, if short term accommodation were thought to render Class 2 apartments unsafe then there are other statutory mechanisms available to address the potential risk apart from a contrived reading of the classification provisions. As I have sought to explain, those provisions provide a framework for regulation but are not to be regarded as the sole control over changes of use which may give rise to a safety risk.

The use in issue

The first respondent is the owner or manager of Unit 909, Level 9, 8 Waterview Walk, Docklands (apartment S909), Unit 802 located on Level 8 of the

same building (apartment S802) and Unit 1502 located on Level 15, 18 Waterview Walk, Docklands (apartment N1502).

The apartments are located in two 16 storey towers erected above a podium containing retail and car park uses. They are part of a complex of approximately 340 apartments.

Each of the apartments in issue contains:

· a kitchen with cooking facilities;

· one or two bedrooms;

· bathroom facilities;

· laundry facilities;

· a sprinkler system;

· a domestic smoke alarm; and

· residential furniture and fittings.

Each of the apartments is contained in a building that was constructed in 2003-2004 in accordance with a building permit and each has been issued an occupancy permit permitting the occupancy of the apartments on the basis of their classification as a Class 2 building pursuant to the BCA.

The owners of the apartments do not live in the apartments.

The apartments are offered for rent on a short term basis, namely two to 90 days, for a fee. The apartments are managed and booked under the business name ‘Docklands Executive Apartments’.

Evidence before the Board showed the typical occupation of the apartments was for a period of three or less nights (65.77 per cent of the total nights rented out).

The first respondent and his partner meet occupants and provide check-in and check-out facilities from a bag in a manner which was described before the Board as ‘the mobile reception desk’. They offer assistance with luggage and provide a general introduction to the apartment, including a safety induction procedure. Each apartment contains a service guide which lists services generally available in the area.

The Board summarised the services supplied as follows:

a)        greeting guests on arrival;
b)        showing guests to their rooms;
c)        providing a directory for guests;
d)arranging various services to be provided by third parties eg babysitting, dry-cleaning, shuttles, etc, for an additional charge, daily linen changes could be arranged;

e)        Wi-Fi could be provided for an extra fee;
f)        luggage storage;
g)        check in and check out times;
h)        car parking.

Nevertheless the services supplied do not involve use of the apartment building as a whole (or the joint use of a section of the apartment building comprising a number of units) in the manner usual for a hotel. The first respondent’s evidence was:

The licence to occupy does not provide any services or facilities outside the apartment other than car parking and security (which incurs a ‘call-out fee’ if required). There is no reception desk or the like. There is no staff employed by or on behalf of the owners of the subject apartment that is permanently located on the premises or anywhere in the Watergate Apartments. Within the apartment, licensees are provided with basic toiletries and clean linen on the day of arrival. The apartment is cleaned weekly or upon departure, whichever is the sooner.

Moreover there is no common infrastructure within the building of the type frequently provided in serviced apartment complexes and described in the decision of the South Australian Environment Resources and Development Court in The Oaks Hotels and Resorts Pty Ltd v City of Holdfast Bay:[41]

The building on the property is a residential flat building, and, consequently, it cannot be a motel. However, the use of the 69 apartments in question in this matter is very similar to the manner in which motel rooms are generally used. There is a commercial element to the use proposed, which requires infrastructure, namely the office, the bag storage area and the linen store, which are not usual components of a residential flat building. The use proposed includes activities, such as the use of the ground floor reception area and the activities of the cleaners, which are not usual components of a residential flat building. In considering this issue, we bear in mind the evidence of Mr West that Oaks manages accommodation across Colley Reserve at the Plaza Pier Hotel and that there were situations in which Plaza Pier resources would be used to solve problems which arise at Liberty Towers. There were also situations in which people seeking accommodation at Liberty Towers would be accommodated at the Plaza Pier.[42]

[41](2010) 172 LGERA 195.

[42]Ibid 202.

In the present case after the municipal surveyor served a building notice based on the change of use of the individual apartments building orders were made in substantially identical terms. The building order in respect of apartment S909 contained the following:

NOW THEREFORE TAKE NOTICE THAT:
6.You are required to evacuate the building within 30 days of the date of the service of this Building Order.
6.1The use of apartment 909 as a short term commercial accommodation (hotel) or the like (Class 3 as defined by the National Construction Code) is prohibited within 30 days of the date of service of this Building Order. Please provide evidence that the apartment is being used by the owner or leased for a minimum 30 days.

OR ALTERNATIVELY,
7.You are required to carry out the following program of building work within 30 days as directed in the Order.
7.1Engage a registered building practitioner in the category of a Architect or Draftsperson to prepare documentations/plans [sic] to convert from a Class 2 (apartment) to a Class 3 (hotel or serviced apartment) in accordance with the National Construction Code, and
7.2Submit the above documentations [sic] (as listed on point 7.1) to a registered building practitioner in the category of a Building Surveyor to review and issue a building permit for the “change of use” from a Class 2 to a Class 3 in accordance with the Building Regulations 2006 and the National Construction Code (NCC) and specifying that a revised Occupancy Permit is required, and
7.3Provide an interim Emergency Management & Evacuation plan to ensure the safety of the occupants in the case of a fire of (scil or) emergency.

It was this order which was upheld by the Board. It can be seen that in substance the order requires each apartment to be brought into compliance with Class 3 requirements.

The Board’s decision

After setting out some background matters and reciting relevant statutory provisions the Board commenced its reasons by considering the meaning of the word ‘dwelling’ at some length. Noting that the Act, Regulations and BCA do not define ‘dwelling’, the Board considered dictionary definitions of ‘dwell’, ‘dwelling’, ‘dwelling place’, ‘home’ and ‘residence’. It further considered interpretation of the phrase ‘residential building’ in the Port Phillip Planning Scheme; the statutory definition of ‘home’ under the Domestic Building Contracts Act 1995; historical use of the term ‘dwelling’ in building classifications in the Victorian Building Regulations 1983; and the statutory definition of ‘dwelling’ under the Building Control Act 1981.[43]
[43]Board’s reasons, 9-11.

The Board went on to find:

The common aspect of Class 1 and 2 occupancies is that they are both dwellings. Reference to dictionary definitions indicate that a dwelling is for permanent and long term residence.
Having considered current and past definitions of Class 1, 2 and 3 buildings and the definitions of dwelling provided in past legislation and regulations, as well dictionary definitions of ‘dwelling’, the Panel has formed the view that a ‘dwelling’ is not only defined by the physical characteristics required by building codes, but also by a sense of connection of the occupants. The Panel is therefore of the view that the nature of the use is an important factor that a building surveyor considers when classifying a building. The Panel is also of the view that Class 2 apartments cannot used for short term accommodation such as the ‘serviced accommodation’ which is offered by Dockland Executive Apartments …[44]

[44]Emphasis added.

The view that a dwelling ‘is for permanent and long term residents’ directly informed the Board’s subsequent reasoning. After summarising the evidence and making findings about it the Board concluded:

The Panel finds that the use of the apartments for commercial short term stays is not a use which is permitted under the existing occupancy permit for Class 2 (which involves the operation of a business).
…
The Panel is of the view that the definition of dwelling does not include the use by short term guests resulting from a commercial enterprise which is conducted in a hotel style.
The current use of the subject apartments is very different to what would usually be the case under a tenancy agreement eg under a tenancy agreement, there are usually no check in and check out times, no limit on visitors, no daily rates to occupy the apartments, the time for the commencement of the tenancy agreement is usually between business hours, referees are normally requested, the stay is generally longer than 30 days, a security deposit is required to be deposited with the Residential Authority and not the landlord etc.
There has always been an inherent difference between a licence to occupy premises and a tenancy agreement. Quite clearly, in this case the occupants of the subject apartments are treated as guests and have a mere licence to occupy. They are not, unlike tenants of other apartments, entitled to use the pool and gym facilities, ie they have restricted access to common property. Further, the induction process of tenants is more comprehensive than Mr Salter’s induction of one of the nominated representatives of the apartment guests.
That is not to say that the use of an apartment for short term accommodation can never be defined as a dwelling. However, based on the facts of this case, the use of the apartments is not permitted under Class 2.[45]

[45]Emphasis added.

The appellants seek to support these findings.[46]
[46]Grounds 1, 2 and from the notice of appeal are as follows:
1.The Judge erred in law in holding that the Building Appeals Board (BAB) misconstrued the Building Code of Australia (BCA) by its finding that the First Respondent's use of Unit 909, Level 9, 8 Waterview Walk, Docklands in the State of Victoria (Apartment 909); Unit 902, Level 8, 8 Waterview Walk, Docklands (Apartment S802) and Unit 1502, Level 15 Waterview Walk (Apartment N1502) (collectively referred to hereinafter as "the Apartments") for short term commercial accommodation was a permitted use of a Class 2 building as set out in clause A3 .2 of the BCA.
2.The Judge erred in law in holding that the BAB misconstrued the meaning of the word "dwelling" as contained in the definition of a Class 2 building set out in clause A3.2 of the BCA.
3.The Judge erred in law by failing to take into account the BAB's finding of fact that the actual use of the Apartments by the First Respondent was not permitted under Class 2 of the BCA.

Grounds 1 and 2 of the notice of appeal raise a question of statutory construction. The critical question is whether Class 2 apartments cannot ordinarily be used for short term accommodation. It was the characteristic of use as ‘short term commercial accommodation’ which founded the evidence given on behalf of the appellants by the building surveyor who granted the original building permit and the municipal building surveyor in the present case.

The appellants join issue with the decision of Beach J that a dwelling may be used for short term accommodation and in the alternative submit that his Honour failed to recognise that it was the combination of such accommodation with hotel-like commercial use which founded the Board’s characterisation of the use in issue as Class 3.

I should interpolate that I agree with Beach J that the construction of the relevant provisions raised a question of law which was susceptible of judicial review either on the basis that the Board made an error on the face of the record or alternatively that if substantiated the error amounted to jurisdictional error. In terms of the propositions articulated by Phillips JA in S v Crimes Compensation Tribunal[47] the question of what was the proper meaning as a matter of construction of the statutory description which was relevant to the respondents’ success or failure before the Board was a question of law.
[47][1998] 1 VR 83, 88.

For the reasons I have already explained, I do not accept that the ordinary meaning of the word ‘dwelling’ is necessarily limited to buildings used for long term occupancy.

Neither the dictionary definitions nor the cases relating to different but similar terms in different contexts to which the appellants have referred in written submission persuade me otherwise.

Whilst is true the Board purported to classify the use by reference to what it most closely resembled, it is plain that it was fundamental to its conclusions that it considered that ordinarily a dwelling is not a building used for short term accommodation.[48]
[48]The 30 day minimum lease requirement in the building order also necessarily implies a critical concern with term of stay.

In turn the Board misdirected itself as to a central characteristic of the comparator which it rejected as against the use of hotel. This being so it is no answer to say that the Board’s ultimate decision was one of fact and degree turning upon all the circumstances of the case.

The decision of the South Australian Environment Resources and Development Court in The Oaks Hotels and Resorts Pty Ltd v City of Holdfast Bay[49] was correct insofar as it dealt with the relevance of short term stays to classification under Class 2:

There is no warrant for reading into the Building Code a distinction between Class 2 and Class 3 buildings based upon length of stay. In fact, the description of a Class 3 building specifically contemplates that it may be used for long term living. In our opinion, it is clear from the classification descriptions in the Building Code quoted above that the building under consideration in this matter is a Class 2 building whether the 69 apartments in question are inhabited by their owners, rented out for short or long terms by their owners, or rented out for short or long terms by Oaks on behalf of their owners.[50]

[49](2010) 172 LGERA 195.

[50]Ibid 207 [57].

It follows that unless the Board’s order could be justified on a basis other than its conclusion as to classification the trial judge was correct to remit the matter for rehearing. The Court’s finding as to the meaning of ‘separate dwelling’ was not dispositive of the appellants’ case on the merits because the appellants relied both on the combination of short term stays and the nature of the commercial services provided in conjunction with such stays. Accordingly, the proper course was to allow the Board to reconsider the facts of the matter in the light of the proper understanding of the Class 2 definition.

The alternative basis of the Board’s decision

The remaining grounds of appeal[51] go to the question of whether the trial judge was correct to conclude that s 106(d) did not provide an alternative basis for upholding the requirements of the building order. I accept the appellants’ submission that insofar as the trial judge characterised s 106(d) as concerned with danger from a building to specified categories of persons and hence narrower in its ambit than s 102(1) this is of no real relevance to the present case.
[51]Grounds 4, 5 and 6 from the notice of appeal are as follows.
4.The Judge erred in law by overturning the BAB 's alternative basis for upholding the Building Orders on the ground that there was no evidence of "changed use" whereas the BAB made findings of fact the First Respondent's use of the Apartments was in a manner which has most of the hallmarks of a hotel.
5.The Judge erred in law by failing to take into account section 149(2) of the Building Act (Vic) 1993 as a basis for the BAB's upholding of the First Appellant's decision to uphold the Building Orders.
6.The Judge erred in law by disregarding the BAB's fmding of facts that the use of the Apartments for short term commercial accommodation (referred to as "changed use" by the BAB) by the First Respondent results in a danger to the life and safety of any person using the building, and thereby is a proper basis to uphold the issuing of the Building Orders by the First Appellant.

I further accept that a change of use might give rise to a danger to the life, safety or health of persons using the building in a way which did not previously arise. Nevertheless, as the trial judge held, the appellants cannot maintain the Board’s decision in the present case on this basis because the evidence did not establish that an actual danger existed unless the building was brought up to Class 3 standards.

The evidence of the municipal building surveyor was:

Notably absent from the apartments are fire warning and protection systems that are required in buildings being used by short term occupants who do not have familiarity with the building, its safety measures or where appropriate egress points are. Such additional safety measures are required in a Class 3 building. They would generally include AS1670 smoke detection system extending into the apartments, upgrading of fire indicator panel to include the AS1670 smoke detection system, and a series of illuminated exit signs. Further, a review of the alternative solutions and whether they are still applicable for the change in occupant characteristics needs to be undertaken. This is an important process to be undertaken as the Alternative Solutions were approved at a time when it was not intended that the apartments would be used as class 3 type accommodation and therefore the safety measures approved in the initial building permit documentation may no longer be appropriate given the change of use.[52]

[52]Emphasis added.

To similar effect the municipal building surveyor has sworn an affidavit in this proceeding which states in part:

The dispensations/alternative solutions granted under the issued building permits and associated occupancy permits relate to a Class 2 residential use … Where the occupant and use characteristics change, a new assessment would be needed to determine whether the dispensations/alternative solutions provided for previously, would still be appropriate for the different occupant characteristics and this includes a change from a Class 2 to a Class 3 (including for short term commercial accommodation).

As the trial judge noted, the municipal building surveyor said in cross-examination before the Board as follows:

But you don’t say the building’s a danger?---No. If it was a danger then we would have been issuing emergency orders.
And you haven’t done that?---We haven’t done that.

In turn the Board expressed its conclusions in terms which reflected a finding of potential rather than actual danger.

The Panel notes that the original fire engineering report (the Arup report dated 20 June 2002) which the relevant building surveyor relied upon to approve the development contains numerous qualifications (refer sections 5.1 and 5.2) which indicate that any changes, including to building fabric and layout, fire load, occupancy characteristics or building classification may invalidate the findings contained in the report and would require review (by a fire engineer). It is considered that this type of qualification would be necessary when a municipal building surveyor assesses building enforcement action such as in this case.
…
Even if the Panel did not uphold the decision of the MBS, the Panel would still be of the view that the Building Notices were validly issued as the changed use results in a danger to the life and safety of any person using the building in that the occupant characteristics, fire safety needs and reaction to fire or other emergencies have varied from that for which the building was originally designed, approved and intended to be used.

These conclusions might be regarded as justifying a requirement for the owner to undertake a review of fire safety measures consequent upon change of use but, as the respondents submitted, they could not justify a requirement to meet Class 3 obligations simpliciter.

Hence, the proper course was once again to remit the matter for rehearing.

Conclusion

For the above reasons, an extension of time within which to seek leave to appeal should be granted and leave to appeal should also be granted, but the appeal should be heard instanter and dismissed.

Citations

Genco v Salter [2013] VSCA 365

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Salter v Building Appeals Board [2013] VSC 279

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[2013] VSCA 365

12 December 2013