Foundas v Arambatzis

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[This headnote is not to be read as part of the judgment] The appellant has previously challenged a decision of a judge of the Equity Division who dismissed the appellant's notice of motion to set aside orders made in her absence. That appeal was allowed in part although the orders of the primary judge were largely confirmed. Amongst those was an order for the appointment of trustees for sale of a property co-owned by the appellant and the first respondent. Consequential orders were made which included an order for the appellant to deliver vacant possession (order 6) and an order that the trustees be at liberty to obtain a writ for possession forthwith, not to be executed for 28 days (order 7). On 25 March 2020 the appellant forwarded an email to the judges of the court in which she sought the variation or setting aside of the order for possession and the related order concerning the obtaining of a writ of possession. That email was treated as an application under r 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) and is the subject of the present application. The appellant sought to vary or set aside orders 6 and 7 on the basis that the COVID-19 pandemic prevents her from seeking new accommodation and that various legislative and executive instruments prevent the trustees from requiring her to deliver up vacant possession. The issue before the court was whether those orders ought to be set aside or varied in light of the COVID-19 pandemic and the governmental responses to it.

The Court of Appeal (Bell P, Basten and White JJA) unanimously rejected the application:

Per White JA (Bell P and Basten JA agreeing at [1] and [2] respectively): At no time has there been any legislation or Ministerial Order in force that would preclude the appellant from seeking new residential accommodation or which would preclude the execution of a writ for possession: [15], [20]. Evidence of the availability of other rental accommodation and the absence of evidence regarding the appellant's financial position does not justify a stay of the orders: [24], [25]. The provisions of the provisions Residential Tenancies Act 2010 (NSW) and the regulations made thereunder as they relate to COVID-19 do not apply to the appellant as she was not in possession pursuant to a residential tenancy agreement: [14], [17]. The appellant has not shown that she has been relevantly affected by the COVID-19 pandemic to attract the operation of those provisions in any event: [16], [18], [19].

Judgment

1. BELL P: I agree with White JA.
2. BASTEN JA: I agree with White JA.
3. WHITE JA: Judgment in this matter was given and final orders made on 24 March 2020 (Foundas v Arambatzis [2020] NSWCA 47). Order 6 required that the appellant give vacant possession of a property in Magee Street, Ashcroft to the second respondents (trustees for sale) within 28 days. Order 7 provided that the trustees for sale would be at liberty to obtain a writ for possession forthwith, such writ not to be executed before the expiry of 28 days. Order 8 provided for the appellant to be charged with a reasonable market rent for her occupation of the property on the taking of an equitable account.
4. On 25 March 2020 the appellant forwarded an email to the judges of the court in which she sought the variation or setting aside of the order for possession and the related order concerning the obtaining of a writ of possession. On 26 March 2020 the court took the email of 25 March 2020 as being an application by the appellant to vary or set aside those orders and dispense with the requirements of rr 18.1 and 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) that the application be made by way of notice of motion. The court also dispensed with those requirements if the appellant was seeking the variation or setting aside of order 8 made on 24 March 2020 (Foundas v Arambatzis (No. 2) [2020] NSWCA 51).
5. In light of the circumstances that existed as at 26 March 2020 it was not clear whether the trustees for sale would consent to or oppose an extension of time for the appellant to deliver vacant possession.
6. The trustees for sale later advised that they would not seek to enforce the order for possession or the order granting liberty to obtain a writ of possession prior to 28 May 2020.
7. On 7 May 2020 the court dismissed the appellant's application to set aside order 8 made on 24 March 2020. Directions were given for the service of evidence and any further submissions if the appellant sought a stay of orders 6 and 7 dealing with the delivery of vacant possession beyond 28 May 2020 (Foundas v Arambatzis (No. 3) [2020] NSWCA 87).
8. The appellant has sought a stay of the order for possession. She has provided an affidavit dated 14 May 2020 which contains her submission. The affidavit takes issue with the judgments of 24 March and 7 May 2020 and attaches documents apparently in support of an application to set aside the orders of 24 March 2020 and adduce further evidence.
9. Except to the extent the application was made to vary or set aside the orders of 24 March 2020 within the 14-day period allowed by UCPR, r 36.16(3A) the orders of 24 March 2020 are final and cannot be reopened (DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17 at 245, [38]).
10. In her email of 25 March 2020 the appellant submitted: "In what capacity does the Court believe that Item (6) for vacation of land during a pandemic of COVID-19 is a suitable solution to the case? I would like to know what the Court thinks fit in this instance given that Real Estate Auctions are closed and so are House Inspections as well until further notice. This was closed by the Federal Government. Where does my family and I including my therapeutic pets go? This now places my family and I in great danger because the Court was to hand down a premature decision and further to that Item (8) add another component of RENT that wasn't in the originating Orders dated 15th October 2018 purely to protect the legal representation to the Respondent's and counter the Appellant's increase. Under Orders from the Australian Government and the Prime Minister i am to stay home. Under the NSW Supreme Courts i am to vacate. Procedurally this matter was not conducted thoughtfully given the current situation. As it was on the day 24th March 2020 i was NOT allowed to appear in person as the Courts were closed from in person Contact. I await any further instructions that may help this situation. I do not see it fit that given all are closed and that includes Real Estate Auctions and House Inspections that i should continue during this period to pay RENT and have VACATED as well. The Trustee cannot have possession during this time as the house cannot be sold as quickly as they may want to and that then raises another issue of on going costs. I will be looking at my options as well."
11. In her submissions of 2 April 2020 in support of her application to set aside order 8 made on 24 March 2020 the appellant submitted: "Federal Government has handed down rules/laws that has frozen the collection of rent because of the current pandemic of COVID-19 with no end date in sight."
12. In the only part of her submissions of 14 May 2020 that addressed orders 6 and 7, the appellant said: "17. As for COVID-19 pandemic. The Hon T F Bathurst AC mentioned via email to me that my questions will be answered. I never saw that. He also mentioned the Sheriff's Department will not evict until further notice. With all that said it staggers me how this Court initially and prematurely gave a judgement and now insists that no further time will be granted by the Respondents when the NSW Government has issued a Moratorium on evictions until 15th October 2020 when it will be reviewed."
13. The appellant also submitted that until the trustees for sale obtained a writ of possession she continued to have a beneficial interest in the property, apparently in support of a contention that she could not be required to deliver vacant possession (para 18). As explained in previous judgments, the effect of the order appointing trustees for sale was to convert her beneficial interest in the land to a beneficial interest in the net proceeds of sale once the land is sold.
14. The appellant does not refer to any legislation or order to support her submission that "the NSW Government has issued a moratorium on evictions until 15th October 2020 when it will be reviewed." There is a moratorium on certain actions by landlords to recover possession under the Residential Tenancies Regulation 2019 (cl 41C). However, as explained below these provisions do not apply to the appellant.
15. At no time has there been any legislation or Ministerial Order in force that would preclude the appellant from seeking new residential accommodation or which would preclude the execution of a writ for possession. The Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 (NSW) of 31 March 2020 prohibited a person from leaving the person's place of residence without reasonable excuse (cl 5(1)). A reasonable excuse included inspecting a potential new place of residence or moving to a new place of residence (Sch 1 Item 8).
16. On 15 April 2020 the Minister for Better Regulation and Innovation made the Residential Tenancies Amendment (COVID-19) Regulation 2020. Subject to immaterial qualifications, it prohibited a landlord giving an "impacted tenant" a termination notice of a residential tenancy agreement or applying to the NSW Civil and Administrative Tribunal for a termination order in relation to a residential tenancy agreement. An "impacted tenant" meant a tenant who was a member of a household impacted by the COVID-19 pandemic.
17. The Regulation did not apply to the appellant and second respondents. The appellant is not in possession of the premises pursuant to a residential tenancy agreement.
18. In any event, clause 41B provided that a household was impacted by the COVID-19 pandemic if: "41B When a household is impacted by the COVID-19 pandemic (1) For the purposes of this Part, a household is impacted by the COVID-19 pandemic if - (a) any 1 or more rent-paying members of the household have - (i) lost employment or income as a result of the impact of the COVID-19 pandemic, or (ii) had a reduction in work hours or income as a result of the impact of the COVID-19 pandemic, or (iii) had to stop working, or materially reduce the member's work hours, because of - (A) the member's illness with COVID-19, or (B) another member of the household's illness with COVID-19, or (C) the member's carer responsibilities for a family member ill with COVID-19, and (b) as a result of any of the matters stated in paragraph (a), the weekly household income for the household has been reduced by at least 25% compared to the weekly household income for the household before the occurrence of any of the matters. (2) In this clause - weekly household income means the total of the weekly income, including any government payments, received by each rent-paying member of the household."
19. The appellant has adduced no evidence that any of the matters in (a) and (b) of cl 41B were satisfied.
20. The Public Health (COVID-19 Restrictions on Gathering and Movement) Amendment (Real Estate) Order 2020 was made on 7 May 2020. It was made under the Public Health Act 2010 (NSW) by the Minister for Public Health and Medical Research. That Order amended the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 by restating and extending the exception to the prohibition in cl 6(1) of more than two persons participating in a gathering in a public place, where the gathering was of persons on real property to enable persons to view or inspect the real property for the purposes of sale or lease of the real property (Sch 1 Item [1] inserting new (j) in cl 6(2) of the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020).
21. That amendment commenced on 9 May 2020 (cl 2 of the Public Health (COVID-19 Restrictions on Gathering and Movement) Amendment (Real Estate) Order 2020).
22. On 14 May 2020 the COVID-19 Legislation Amendment (Emergency Measures - Miscellaneous) Act 2020 (NSW) commenced. It moved definitions formerly contained in the Residential Tenancies Regulation 2019 (NSW) including definitions of "impacted tenant" and "moratorium period" from the Residential Tenancies Regulation to the Residential Tenancies Act 2010 (NSW). It re-enacted in substance the definition as to when a household was impacted by the COVID-19 pandemic. Clause 41B of the Residential Tenancies Regulation was omitted. A new section 228C was introduced to the Residential Tenancies Act. Section 288C is of no relevance to the present application, both because there is no evidence that the appellant is an "impacted tenant" within the meaning of the legislation, and because she is not a party to a residential tenancy agreement.
23. On 15 May 2020 the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 of 31 March 2020 was revoked. Clause 6(1) of that Order contains a Ministerial Direction under the Public Health Act that a person must not participate in a gathering in a public place of more than 10 persons. There is a qualification to that prohibition in cl 6(2) which provides that sub-clause 6(1) does not apply to a gathering to facilitate a move to a new place of residence or a gathering of persons on real property to enable persons to view or inspect the real property for the purposes of a sale or lease of the real property (cl 6(2)(d) and (h)).
24. The appellant submitted (above at [11]) that the Federal Government has issued 'rules/laws' that have the effect of freezing the collection of rent. On 29 March 2020 National Cabinet issued a statement of common principles regarding the COVID-19 pandemic which was designed to inform the various State governments in developing their legislative and executive response to COVID-19. Although these principles mention the reduction or waiver of rental payments they are of no legal effect absent their adoption by legislation or executive order. To the extent that those principles have been given effect they have been considered earlier in my reasons.
25. On 7 April 2020 the National Cabinet issued a national code regarding changes to laws regarding rent and evictions for commercial tenants. This code was given effect in NSW by the Retail and Other Commercial Leases (COVID-19) Regulation 2020. To the extent that any of those provisions restrain the collection of rent or the eviction of lessees they have no application to appellant as, at the very least, she is not a commercial tenant.
26. Although in her email of 25 March 2020 the appellant said that she would be "looking at my options as well", she gives no evidence of having made any attempt to find alternative residential accommodation. There is evidence from a real estate agent, Mr Michael Galluzzo, of Liverpool that at present there are high stock levels in the rental market, low levels of enquiry and rental prices have dropped accordingly. He deposed: "We are now once again able to conduct open homes for both rental and sales properties, as long as it is within the social distancing and NSW Government requirements."
27. There is no evidence that would justify a stay of the orders for possession beyond 28 May 2020. The appellant submits that as neither of the respondents know her financial status it is unfair for them to assume that she could simply move out. But to implement the trust for sale it is necessary that vacant possession of the Ashcroft property be delivered to the trustees for sale. That will have to be done. There is no evidence that the appellant and her husband could not afford rental accommodation or that there was no other accommodation available to them. The onus lies on the appellant to establish any such grounds for staying the order for possession after 28 May 2020. It is in the interests of both parties that the trustee be enabled to sell the property without being put to further expense and without the incurring of further costs.
28. The appellant submits that she has been informed that the Sheriff will not execute a writ for possession until further notice. The timing of the execution of a writ for possession will be a matter for the Sheriff, but there is no reason that the trustees for sale should be further delayed by the court in seeking to have such a writ executed.
29. Contrary to the appellant's apparent belief, this court has not made an order staying orders 6 and 7 made on 24 March 2020. There was no need to do so because the trustees for sale indicated that they would not seek to enforce those orders before 28 May 2020. There is no reason that they could not seek to do so after 28 May 2020. For abundant caution and for clarity it should be noted that orders 6 and 7 made on 24 March 2020 are not stayed and that if the second respondents have not yet obtained a writ for possession, order 7 made on 24 March 2020 is varied so as to delete the requirement that such writ not be executed before the expiry of 28 days.
30. The appellant must pay the costs of her application to vary or set aside orders 6 and 7 made on 24 March 2020.
31. In accordance with order 9 made on 24 March 2020 any further application in relation to execution of the trust for sale or the taking of accounts should be made to the primary judge.
32. I propose the following orders: 1. Refuse the appellant's application to set aside or vary orders 6 and 7 made on 24 March 2020. 2. Note that orders 6 and 7 made on 24 March 2020 are not stayed. 3. Vary order 7 made on 24 March 2020 by deleting the requirement that a writ for possession not be executed before the expiry of 28 days. 4. Order that the appellant pay the respondents' costs of her application.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 May 2020