Determination of the cl 12.2 issue
23The crucial question in this case is whether the defendant was bound to carry out the works required by the council's letter of 16 June 2011 at its expense. The source of the defendant's obligation, if any, is cl 12.2 of the lease which provides:
"12.2 To make all amendments alterations reparations and additions of a structural nature which by virtue of any statute or by-law now or hereafter in force may be required to be done or executed in or upon the demised premises including compliance with any fire notice or order by the Council or relevant authority at any time during the term of the Lease or any holding over thereof."
24In summary, the defendant denied that the works were of a structural nature and thus fell outside the application of cl 12.2. It was put that to satisfy this description it was necessary for the works to be shown to affect or alter the framework, or load bearing capacity or stability of the building, or to remedy some failure in the structure. It was put that it was the present effect on these aspects of the structure which was relevant rather than the limitation of damage to the building in the future, or that the underlying purpose was for the safety of the public. It was put that the relevant question was whether the works interfere with or alter the framework or load bearing capacity of the building, or remedy some failure on the part of the structure.
25The defendant further submitted that it was necessary to make a separate determination in respect of each item with regard to its effect upon, or interference with, the framework or load bearing capacity of the building. The argument was that this exercise could not be carried out merely by looking at the works as a whole. On the defendant's approach, it was submitted that none of the items were of a structural nature as they did not alter or interfere with the framework or the load bearing components of the building. Finally, it was put that under the lease the defendant was not obliged to undertake the works. Liability to do so fell upon the plaintiff under cl 7.2.
26The plaintiff submitted that the works to be done for compliance with the fire safety provisions of the code were amendments, alterations, or reparations of a structural nature within cl 12.2. It was put that the question whether the works are of a structural nature will turn on the particular circumstances of the case and the language used in the legal instrument giving rise to the obligations between the parties. It was put that, in deciding the question in this case, the works should be considered as a whole rather than as separate components, and the court should adopt a practical approach. Further, it was submitted that it was relevant to take into account the purpose or effect of the works, and their relationship to the use and operation of the hotel building. It was submitted, taken as a whole, the works were for the preservation of the structural adequacy and integrity of the hotel building in the event of fire and, hence, were works of a structural nature. It followed, so it was put, that under the lease the defendant was obliged to carry them out.
27The question is whether or not the works, or part of them, are within the meaning of "amendments alterations reparations and additions of a structural nature". Under the lease, the lessee's obligation to carry out works which are "structural" (cl 7.2) or "of a structural nature" (cl 9.12) is expressly excluded.
28The term "amendments" is ordinarily understood to include improvements, or rectifications, or corrections of a fault. The term "alterations" is ordinarily understood to include changes or modifications. Meanings of "reparations" given in the Macquarie Dictionary include "3. restoration to good condition; 4. repairs". The natural and ordinary meaning of "structural" given in the Macquarie Dictionary is "1. of or relating to structure; relating or essential to a structure".
29In context in cl 12.2, the term "of a structural nature" is intended to be descriptive of works carried on in and upon the hotel building. As a structure is something consisting of component parts, it follows that the description is not limited to works which affect only those parts which are load bearing such as the main walls.
30There are many cases which discuss the meaning of "structure", "structural alteration", and "structural repairs", but all are with regard to the legislation, lease, or agreement in the particular case. Sometimes they afford helpful, but not determinative, guidance for the approach to be taken. In the end, the question is one of interpretation to ascertain the obligation of the party with regard to the words used in the clause in context, and to the surrounding circumstances.
31The phrase "of a structural nature" is of wide generality. It concentrates the mind upon the condition, state, or quality of the building. It suggests something which is associated with, relates to, or affects the structure considered as a whole. I would respectfully agree with the following statement of Paine J in Di Francesco & Ors v Blantrix Pty Ltd & Ors [2004] NSWLEC 669:
"53 Adopting a practical approach to the provisions of cl 4 of Sch 3 of SEPP 60 ... and mindful of observations in cases such as Bondi Diggers and Almado, I consider that the phrase 'structural alterations' refers to work which is substantial, meaning not de minimis or minor and which changes or adds to the form of the fabric of the building in a manner which cannot be regarded as merely decorative. Works that fall within this description cannot be 'non-structural alterations' ..."
32The cases establish that the determination of the question whether or not, for example, amendments or alterations are of a structural nature, is largely a matter of fact and degree. The court should apply a practical, "common-sense man-of-the-world view". (Wates v Rowland [1952] 2 QB 12, p 23; Brew Bros. Ltd v Snax (Ross) Ltd [1970] 1 QB 612, pp 640, 641.)
33In my opinion, the question in this case must be determined with regard to the whole of the works to be done rather than to the component parts of the works individually (Brew Bros p 641, 646). This is because necessary compliance with the fire safety standards under the code depends upon the combined effect of completion of the various items required. The defendant's denial of liability turned on a narrow interpretation of the scope of the term "of a structural nature" which, in the circumstances, I find to be wrong. On this issue I reject the defendant's submissions, and accept generally those for the plaintiff.
34The inescapable conclusion on the evidence is that the works affect, and are directly related to, the fire safe and fire resistant condition of the hotel building. The evidence shows, and I find, that because the building falls short of the required fire safety standards its utility as a place for public access and accommodation as a hotel is compromised. In my assessment, the works, taken as a whole, involve the installation of a system for the compartmentation and containment of fire in the hotel building. By carrying out the works the condition of the building will be amended or changed to a standard which is regarded as essential for the ordinary use and enjoyment of the amenities of a hotel (cf: R v Lowe (1954) 19 LGR (NSW) 345, p 351). Put another way, without completion of these works the structure could not be lawfully used for the purpose for which it was designed, built, and let to the plaintiff. It is relevant, of course, that under the lease the plaintiff is required to use the premises as a hotel, and to keep it open for the provision of liquor and accommodation to members of the public at all reasonable times (cll 9.1, 9.2, 9.7).
35In short, performance of the works will change the condition of the building from unsafe to safe. Accordingly, in my opinion, the works the subject of the council's letter of 16 June 2011 require the making of amendments and alterations of a structural nature within the meaning of cl 12.2 of the lease.