Celermajer Holdings Pty Ltd v Kopas

Category: Procedural and other rulings Parties: Celermajer Holdings Pty Ltd (Plaintiff/Cross-Defendant) Jurai Kopas (Defendant/Cross-Claimant) Janice Kopas (Cross-Claimant) Representation: Counsel: J E Marshall SC with P M Sibtain (Plaintiff/Cross-Defendant) A E Maroya (Defendant/Cross-Claimants Solicitors: Michael Michell & Associates (Plaintiff/Cross-Defendant) McCabe Terrill Lawyers (Defendant/Cross/Claimants) File Number(s): 06/255754

Judgment 1HER HONOUR : On 9 February 2011, I handed down my reasons for judgment in this matter. The proceedings involved a dispute as to whether the plaintiff, Celermajer Holdings Pty Ltd ( CHPL ), the owner of residential premises in Rose Bay, was entitled to possession as against the long term occupants of those premises (Dr and Mrs Kopas), following service in October 2005 on Dr Kopas of a Notice of Termination of Residential Tenancy Agreement. The background to the dispute is set out in some detail in my reasons for judgment handed down in February and will not be repeated here. 2In summary, I found against Dr and Mrs Kopas on their contention that a binding agreement had been entered into in 1992 pursuant to which they asserted an entitlement to an equitable life tenancy of the premises (and on the various claims for relief based on the existence of the alleged agreement or for misleading and deceptive conduct in relation thereto). I also found against them on the allegation that an agreement had subsequently been entered into in 2000 when disputes between the parties were in another forum. 3I found that the occupation of the premises by Dr Kopas from the expiry of the initial six month term of his 1984 residential lease (the only signed lease agreement over the period of his occupation of the premises) was pursuant to a holding over tenancy from month to month up until 23 April 1992 and that, thereafter, his occupation had been pursuant to a common law monthly periodic tenancy, on the terms of that earlier holding over tenancy (by reference to an implied agreement reached on 29 April 1992 for the reinstatement of the tenancy which had earlier been terminated by the Tribunal's orders on 16 April 1992). I found that the sole tenant (though not the sole occupant) at all relevant times had been Dr Kopas. 4However, relevantly on the current application, I found against CHPL on the question as to its entitlement to possession of the premises. I came to the conclusion that CHPL had not established that, as at the time of the entry by Dr Kopas into the 1984 lease, the premises were not controlled premises under the operation of the Landlord and Tenant (Amendment) Act 1948 (NSW) and hence had not established that Dr Kopas was not a protected tenant under that Act. The consequence of that finding was that the provisions of the Residential Tenancies Act 1987 (NSW) did not govern the residential tenancy agreement for the premises. 5As to the relief that had been sought by CHPL, I considered that it was entitled to various of the declarations sought in respect of the tenancy of the premises, and to an order for the removal of the caveat lodged on the title, but that it was not entitled to an order for possession of the premises (on the basis that the October 2005 notice of termination was not for a prescribed ground under the Landlord and Tenant (Amendment) Act). 6I noted that, had I been satisfied that these were not controlled premises, then I would have held that the said notice of termination was a valid notice under the Residential Tenancies Act and I would have considered it appropriate in the circumstances of the case to order possession of the premises to be given on a date not earlier than 90 days from the date of this judgment, in order to allow Dr and Mrs Kopas a reasonable period of time to secure alternative accommodation. (The claims for relief made by Dr and Mrs Kopas, having regard to my findings, failed in total.) 7Following that decision, on 11 March 2011, CHPL filed a notice of motion pursuant to Rule 36.16(1) of the Uniform Civil Procedure Rules 2005 (NSW), seeking an order varying in part that judgment. The variation sought was as to the conclusion that I had reached as to the failure of CHPL to satisfy the onus cast upon it by s 98A of the Landlord and Tenant (Amendment) Act of establishing that the 1984 residential lease fell within Part 5A of that Act, and hence that the premises were not controlled premises for the purposes of that Act (with consequential variation to the outcome on that issue). 8Further, CHPL seeks leave to amend paragraph 2(b) of its Reply and paragraph 20(b) of its Defence to the Further Amended Cross-Claim so that the reference in each to " s 5A(1)(e)" is amended to read " s 5A(1)(d) and/or s 5A(1)(f)". the basis for this amendment is to bring the pleadings into conformity with the way in which the protected tenancy issue was opened by Senior Counsel for CHPL (Mr Marshall SC) during the hearing of the matter and the way in which CHPL conducted its case at the hearing. (It was noted by Mr Marshall that such an amendment would reflect the reasons given on this point in my judgment at [379] and that the reference to s 5A(1)(f) was because, if s 5A(1)(d) applied having regard to the 1970 lease, then the conclusion as to s 5A(1)(f) would follow as a matter of law.) 9Counsel for Dr and Mrs Kopas (Mr Maroya) objected to the grant of leave for the amendment of the pleadings and opposed the motion to vary the judgment on the basis that n o application to amend (even ex abundante cautela) was made by CHPL at the hearing and that such an application at this stage was futile. Further, it was said that insofar as the application to amend included a reference to s 5A(1)(f), this presupposed that the premises are "a dwelling-house or a residential unit to which the provisions of Parts 2, 3, 4 and 5 have at any time ceased to apply by reason of paragraph (c), (d) or (e)", which it was submitted was not supported by the evidence. 10In relation to the motion to vary, apart from contending that the judgment had not proceeded on any misapprehension of the relevant law, Mr Maroya submitted that the substance of the application is not properly a matter under Part 36 of the Rules and that, to the extent that it is suggested by CHPL that I have erred in my application of the decision in Barilla v James [1964] NSWR 741 , that contention is properly a matter for the Court of Appeal (referring to the principles I had reviewed in relation to a motion to vary in Brand v Monks [2010] NSWSC 313 at [14] and [15]). 11The issues now before me, therefore, are as to whether this is a matter appropriately falling within the variation power contained in Part 36 of the Rules and, if it is, whether the judgment should be varied having regard to what is said to have been a misapprehension of the effect of Barilla v James in the present case; and, secondly, as to whether leave should be given to amend the pleadings. 12Before turning to those issues, I note that for the purposes of the current application, CHPL accepts that (Dr Kopas having asserted that there is a protected tenancy) it is CHPL that bears the onus of establishing that the premises fall within s 5A of the Landlord and Tenant (Amendment) Act so as to exclude the operation of that Act and, in particular, s 62. What CHPL contends, however, is that the onus is the ordinary civil onus on the balance of probabilities and that s 98A of the Act does not introduce any onus different from the ordinary standard (and, relevantly for present purposes, does not require any special satisfaction of the court, nor any particular form of proof by the landlord). 13Mr Marshall submits that the decision in Barilla v James does not operate (as I accept I had, in effect, found) so as to preclude CHPL from relying upon such inferences as may be drawn from the putative s 5A lease (and its certificate), nor does it preclude CHPL from relying on the circumstances surrounding execution of the lease. (Mr Marshall points out that in Barilla v James the landlord was permitted to rely on the lease and its certificate, but that such evidence was outweighed by direct evidence from the tenant.) (i) Misapprehension of law - proper interpretation of Barilla v James 14I considered the protected tenancy claim in paras [357] - [412] of my reasons for judgment and concluded (at [412]) that CHPL had not satisfied the onus that rested on it of proving that these are not controlled premises and that Dr Kopas is not a protected tenant; that it followed that the Notice of Termination of 19 October 2005 was invalid; and that the application for an order for termination of the holding over tenancy and for possession of the premises, as sought by CHPL, must fail. 15Relevantly, for present purposes, I accepted that the effect of s 98A of the Landlord and Tenant (Amendment) Act was that, once an issue was raised as to the application of the Act, the onus lay on the party seeking to deny the operation of the Act to prove the facts necessary for such a conclusion as a matter of law. (That is not now disputed by CHPL.) 16In relation to the issue as to whether Dr Kopas' lease fell within Part 5A of the Landlord and Tenant (Amendment) Act , Mr Maroya submitted (when the matter was before me on the substantive hearing) that it was necessary for CHPL to establish each of the matters in the relevant subparagraphs of s 5A(1)(e) (that being the particular paragraph pleaded by CHPL, although in his opening Mr Marshall indicated that reliance was instead placed on s 5A(1)(d)]). As authority for that proposition, Mr Maroya referred to Barilla v James and Ex parte Stern; Re Harrington [1965] NSWR 93. Thus, it was Mr Maroya who drew my attention to, and placed reliance on, Barilla v James in this regard. 17As I noted at [383], in Barilla v James , Walsh J was considering whether a lease registered pursuant to s 5A(1)(d) was in fact excluded from the provisions of Part III of the Act) had regard to s 5A(1)(d)(v) of the Landlord and Tenant (Amendment) Act (as it then stood, ie under the 1899 Act) which specified the requirements as to registration and execution of such a lease. His Honour considered that it was necessary that a dwelling house have all of the characteristics set out in the subsection before it could be said to be touched or affected by s 5A. 18This was raised by Mr Maroya in the context of the submission that CHPL had not been able to satisfy the test in Barilla v James in relation to subparagraph 5A(1)(e)(ii)(a) , namely, that the premises were the subject of a lease executed before 1 January 1969 (which, as Mr Marshall frankly concedes, it could never have done; hence the reliance placed at the hearing on the preceding subparagraph s 5A(1)(d)). 19I had regard to what had been said in the authorities as to the need for vacant possession to be obtained in the physical sense before the relevant date in order to satisfy the requirement of vacant possession and said (at [404]): What must be established in the present case, therefore, is that before the lease to Mr Birzulis in 1970, the premises became physically vacant (and, for the purposes of whether the applicable provision is (d) or (e), what that date is) (since the lease to Dr Kopas was not itself certified and registered such as to take it out of the operation of the Act). 20I noted (at [405]) that the other requirements of the subsection had clearly been satisfied (since the lease was one that had been executed as provided for in s 5A(1)(d)(i)(c); bore a certificate as required in s 5A(1)(d)(ii)(b) and was registered as required under s 5A(1)(d)(iii)). 21What I drew from Barilla v James , however, (this being where Mr Marshall submits I fell into error) was that CHPL could not rely on an acknowledgement or agreement by the former lessee (Mr Birzulis) to establish that there was vacant possession in a physical sense at the relevant time. I concluded that clause 20 of the Birzulis lease could not assist me in that regard (because, as I had read Barilla v James , the parties to a residential lease could not estop themselves by agreement as to the effect of the lease from relying on facts and hence it did not seem to me that I could place reliance on such an agreement as contained in clause 20 of the Birzulis lease). At [406] - [410], I said: [406] This brings me to the reliance that can be placed on clause 20 of the 1970 lease. It might be thought difficult to see how a tenant, independently advised in late 1970, could properly have admitted to the matters set out in clause 20 of the 1970 lease (and in that regard I note that the clause went further than an agreement to a state of affairs, in its terms it was an admission) without direct knowledge of the relevant facts. However, the difficulty is that those facts are not made plain on the terms of the lease and, further, in Barilla , Wallace J made clear that parties cannot, by agreement, take a lease out of the operation of the statutory protection provisions (referring for support in drawing that conclusion to the contracting out prohibitions in ss 89 and 90). Rather, these provisions must be satisfied as a matter of fact. [407] In Barilla v James , execution of the lease had not been witnessed by a solicitor as required by s 5A(1)(d). Walsh J said that: ...the impact of the restrictive provisions of the Act upon [a dwelling house not answering the description in (d)] cannot be prevented or altered, either by agreement of the parties or by their conduct or by matters which, according to ordinary principles, would create an estoppel against one of them... [408] His Honour noted that the Act allowed parties to arrange a transaction of leasing in such a way that the restrictive provisions would not attach but did not allow them to do so in any manner they might choose to adopt. Rather, it only allowed them to bring it about by entering into a lease which conformed to the appropriate stipulations set out in one or other of the various paragraphs of s 5A. His Honour said that estoppel could not be allowed to operate to deprive the lessee of the statutory protection which otherwise it would have: It seems clear that unless [entry into a lease conforming with one or other of the various paragraphs of s 5A(1)] any agreement of the parties designed to prevent the operation of the Act is equally ineffective, whether the parties purpose is to make such agreement before or after they enter into the lease noting the effect of ss 89 and 90 of the Act (the provisions which preclude contracting out of the provisions of the Act). [409] (Smart J commented that the case before him (in Di Salvio ) showed the value of the doctrine of estoppel not operating and the importance of the requirement for vacant possession in the operation of s 5A(1) in circumstances where, in that case, he found it hard to imagine that the defendant would have entered the lease if he had appreciated his statutory rights under s 83A of the Act as a child of the deceased tenant and a pensioner as at the date of his mother's death. Similar considerations do not necessarily apply in this case.) [410] It seems to me that this is ultimately what precludes reliance on the certificate and clause 20 of the Birzulis lease in the present case. Mindful of the caution expressed in Barilla , and of the protective nature of the provisions in this legislation, I am not satisfied that I can conclude that the basis for the admission in clause 20 of the 1970 lease is that vacant possession had physically been obtained by CHPL on or after 1 January 1969 and before the commencement of the lease in November 1970 nor, as a matter of law, would such an admission be enough (in the absence of evidence that vacant possession of the premises had been physically obtained as a matter of fact). 22Mr Marshall submitted that when Barilla v James is properly understood (referring in this regard to Rathborne v Gandali [1970] 1 NSWR 297 to which my attention had not been drawn), CHPL could only fail on the relevant onus if it were precluded altogether from relying upon the evidentiary matters it sought to draw from the terms of the 1970 lease and its certification (among other things) or there was countervailing evidence from the tenant (which there was not, unlike in Barilla v James). 23Mr Marshall submitted that it was not a correct interpretation of Barilla v James that CHPL was precluded from relying on the inferences otherwise to be drawn from clause 20 of the 1970 lease (and the presumption of regularity) that CHPL had sought to invoke and that there was no requirement for CHPL to adduce evidence beyond the relevant lease document (at least in the absence of countervailing evidence from Dr and Mrs Kopas). 24I turn then to the issues for determination. (i) Motion to vary Is this an appropriate case for the exercise of the power to vary? 25It has been said in a number of cases that the purpose of the jurisdiction to vary judgments is not to permit parties to re-agitate arguments or to have a rehearing, and that it is not to be utilised as an appellate process. Mr Maroya noted that caution was sounded in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 in respect of the exercise of the discretion when the application in question would have the effect of re-opening the matter to enable a re-hearing of matters already heard and adjudicated upon, Mason CJ, there observing (with reference to the judgments in State Rail Authority v Codelfa Construction Pty Ltd (1982) 150 CLR 29) that (at p 303): However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases. (my emphasis). 26Similarly, Brennan J, at p 309, in Autodesk said: It is one thing to reopen an appeal after judgment if the Court has reached a conclusion by adopting a proposition of fact or law which the unsuccessful party has not had an opportunity to argue. In that event, natural justice is denied and it can be said that the Court's jurisdiction to hear and determine the matter is not exhausted. But that is not the present case. Here the ground on which the appeal was determined had been argued in the Courts below and had been the subject of submissions in this Court. The appeal was determined after it was fully heard. That being so, I find no jurisdiction to set aside the judgment already pronounced merely because it is submitted by the unsuccessful party that, on further argument, the Court would be satisfied that it had reached the wrong conclusion in law (my emphasis). 27Mr Maroya also referred to what had been said by Kirby P, as his Honour then was, in Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 at [394E-F]: ... the jurisdiction to set aside an order and to allow [the applicant] a hearing is not a right but an 'indulgence'. The reason for this cautious attitude is obvious. It is stated by Mason and Wilson JJ in [State Rail Authority v Codelfa Construction Pty Ltd (1982) 150 CLR 29 at 38] to be the public interest in maintaining the finality of litigation. Otherwise a determined or wealthy litigant could postpone final judgment and exhaust the rights and funds of his opponent by continuously denying the finality of the judgment and seeking to reopen disputes which that judgment was designed to close, at least so far as the courts were concerned. 28In New Cap Reinsurance Corporation Ltd v Grant [2009] NSWSC 950, Barrett J (after referring to the decision of Santow J, as his Honour then was, in Wentworth v Wentworth [1999] NSWSC 638) said at [20]: It seems to me that these principles, as they apply in a case such as the present, can be summarised in one basic proposition, namely, that a single judge whose decision is susceptible to appeal through readily available channels (with or without any preliminary need for leave to appeal) should allow reopening after judgment where it is obvious to that judge that the decision has miscarried and that the miscarriage may be rectified and the situation retrieved by attention to the matter by that judge rather than by an appeal court . [my emphasis] What is highly undesirable is that the first instance judge should be cast in the role of hearing what amounts to an appeal against his or her own decision. I adopt, in that connection, the following observation of Rix LJ in Compagnie Noga D'Importation et D'Exportation SA v Abacha [2001] 3 All ER 513: 'I do not wish to say anything against the usefulness of the reconsideration jurisdiction, within its proper limits. I have made use of it myself. However, it is in the nature of the legal process that, once judgment has been rendered, analysis thereafter becomes clarified and refined, and citation of authority is applied to the findings made at first instance so as to illuminate that clarification and refinement of analysis of which I speak. But that is the function of the appeal process. In my judgment, to grant this application that I reconsider my judgment would subvert the appeal process itself. In doing so, it would not answer the interests of justice, but would be the antithesis of justice according to law. There are of course cases where an error of fact or law may be too clear for argument. The best test of that is perhaps - but not necessarily - where the judge himself identifies the error which concerns him. In such a case, it is better that the error is corrected without imposing on the parties the need for an appeal. But no parallel to Noga's application has been cited to me. It is in my judgment wrong for a judge to be treated to an exposition such as would be presented to a court of appeal. If in such circumstances a judge should be tempted to open up reconsideration of his judgment, an appeal would not be avoided, it would be made inevitable. Every case would become subject to an unending process of reconsideration, followed by appeal, both on the issue of reconsideration and on the merits?" 29His Honour, in Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1343, referred to the above principles (at [5]) as well settled. 30Mr Maroya noted that Rix LJ in the Compagnie Noga Case ([2001] 3 All ER 513 at [44]-[45]), had said in a passage preceding that cited by Barrett J in New Cap: In the present case Noga asks the court to reconsider its judgment because of the submission that it has got the answer wrong. In every case where an appeal is allowed, the court below has, by definition, got it wrong. The solution is to appeal. What is special, what is exceptional about this case? What are the strong reasons? It is not a case of an ex tempore oral judgment. The judgment here, whatever its defects, has been reserved and is the product of substantial reflection. It is not a case where a new binding precedent has immediately reversed the previous law so as to make a judgment simply unsustainable, as in In re Harrison's Share. It is not a case where a judge has of his own motion immediately come to the conclusion that he is wrong , as in Millensted, or Pittalis (not perhaps a good example of judicial second thoughts), or In Re Australian Direct Steam Navigation Company (1876) 3 Ch D 661, where Sir George Jessel MR realised, after giving an oral judgment, that he had not had his attention directed to the crucial article in the company's articles of incorporation. If this case is like none of those, what is it then? It is a case where it is said that the judge has got it wrong, on points which have been argued. The very issue for reconsideration is in dispute. (my emphasis) 31In New Cap at [22], Barrett J distinguished between a case in which the application for leave to re-open was tantamount to an appeal and a case where it was not sought to disturb any of the court's findings or reasoning "except to the extent that they have proceeded on a misapprehension" (there about the absence of differentiation between the two groups of defendants and the need to attribute to the respective groups the debts and payments relevant to particular years). His Honour there held that the new evidence sought to be tendered should be received and taken into account so that, in making its decision, the court could proceed upon a correct basis as regards those matters "and thereby remedy the effects of the misapprehension which caused the original decision to miscarry". 32Mr Maroya submitted that, in this case, no proper reason has been shown which would warrant the relief sought by CHPL, since CHPL's contentions as to clause 20 of the 1970 lease were the subject of submissions at the trial and the general position for which CHPL now contends is no different from that raised in argument. Thus, it is submitted that this application "is tantamount to an appeal" and is seeking to cast me in the unenviable role of hearing what amounts to an appeal against my own decision. 33Barrett J in Wentworth v Rogers [2002] NSWSC 921 (at [7]) noted three matters central to the jurisdiction to re-open: