Celermajer Holdings Pty Ltd v Kopas
[2011] NSWSC 304
•14 April 2011
Supreme Court
New South Wales
Medium Neutral Citation: Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 304 Hearing dates: 30 March 2011 Decision date: 14 April 2011 Jurisdiction: Equity Division Before: Ward J Decision: Leave to re-open and vary judgment and leave to amend pleadings to reflect case as opened and conducted by plaintiff.
Catchwords: PRACTICE AND PROCEDURE - application to re-open and vary judgment pursuant to Rule 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) - alleged misapprehension of law going to evidence permissible to satisfy onus under s 98A of the Landlord and Tenant (Amendment) Act 1948 (NSW) - alleged misapprehension of effect of Barilla v James [1964] NSWR 741 - application for leave to amend pleading - HELD - motion to re-open and vary granted on basis of misapprehension of effect of Barilla v James - onus satisfied by evidence contained in earlier registered lease - premises are not controlled premises and tenant is not a 'protected tenant' under Part 5A - plaintiff entitled to possession - leave to amend pleading granted Legislation Cited: Civil Procedure Act 2005 (NSW)
Landlord and Tenant (Amendment) Act 1948 (NSW)
Residential Tenancies Act 1987 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)Cases Cited: Abrahams v Senes and Berger [1963] NSWR 1073
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27
Australian Securities Commission v Fairlie [1993] TASSC 69; 11 ACLC 669; ACLC 694
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Barilla v James [1964] NSWR 741
Brand v Monks [2010] NSWSC 313
Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506
Clough and Rogers v Frog (1974) 4 ALR 615
Compagnie Noga Case [2001] 3 All ER 513
Ex parte Stern; Re Harrington [1965] NSWR 93
Form-Quip Ltd v Trafalgar Properties Ltd (unreported, NSWSC, 19 July 1991).
Leotta v Public Transport Commission of NSW (1976) 50 ALJR 666
Manche v Bigazzi (1963) 80 WN (NSW) 1681
Manufacturers Mutual Insurance Ltd v Motor Accidents Authority of NSW (1991) 7 ANZ Ins Cas 61-090
May v Ceedive [2006] NSWCA 369
Mutual Shipping v Bayshore Shipping Co Ltd (The Montan) [1985] 1 All ER 520
New Cap Reinsurance Corporation Ltd v Grant [2009] NSWSC 950
Newmont Yandal Operations Pty Limited v the J Aron Corporation and the Goldman Sachs Group, Inc and 3 Ors [2007] NSWCA 195
O'Brien v Bolton [1961] NSWR 760
Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1343
Rathborne v Gandali [1970] 1 NSWR 297
Roddy v Perry (No. 2) (1958) SR (NSW) 41
State Rail Authority v Codelfa Construction Pty Ltd (1982) 150 CLR 29
Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446
Twenty-First Australia Inc v Shade (unreported, 31 July 1998)
Vines v Djordjevitch (1955) 91 CLR 512
Walsh v Suranyi [1963] NSWR 88
Wentworth v Rogers (No 9) (1987) 8 NSWLR 388
Wentworth v Rogers [2002] NSWSC 921
Wentworth v Wentworth [1999] NSWSC 638
Wilson v Walshe (unreported 31 May 1985, Smart J)Texts Cited: Hope, Mackerras and Freeman, Landlord and Tenant Practice and Procedure (7th edn, 1971) 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
HER 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.
In 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.
I 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.
However, 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.
As 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).
I 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.)
Following 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).
Further, 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.)
Counsel 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.
In 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]).
The 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.
Before 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).
Mr 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
I 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.
Relevantly, 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.)
In 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.
As 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.
This 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)).
I 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).
I 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)).
What 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).
Mr 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).
Mr 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).
I turn then to the issues for determination.
(i) Motion to vary
Is this an appropriate case for the exercise of the power to vary?
It 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).
Similarly, 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).
Mr 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.
In 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?"
His Honour, in Paul's Retail Pty Ltd v Morgan [2009] NSWSC 1343, referred to the above principles (at [5]) as well settled.
Mr 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)
In 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".
Mr 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.
Barrett J in Wentworth v Rogers [2002] NSWSC 921 (at [7]) noted three matters central to the jurisdiction to re-open:
- first, whether the party seeking to re-open has shown that, without accident or fault on the appellant's part, he or she has not been heard on a relevant matter;
- secondly, whether there has been shown an error in the court's reasoning because of a misapprehension of the facts; and
- thirdly, whether there has been an error in the court's reasoning because of some misapprehension of the relevant law
noting also the further consideration identified by Young J (as his Honour then was) in Twenty-First Australia Inc v Shade (unreported, 31 July 1998), as to where an appeal to correct an inadvertent failure to deal in the judgment with important matters raised by Counsel would involve inevitable delay.
As to the three instances identified by Barrett J as central to the jurisdiction to re-open, the relevant matter in this case is the asserted misapprehension of law relation to the interpretation to be accorded to Barilla v James and the failure to consider Rathborne v Gandali in that context.
Mr Marshall takes no issue (at least for the purposes of this application) with the findings (contrary to CHPL's position at trial on these issues) that it was open to Dr and Mrs Kopas to assert an absence of vacant possession (notwithstanding that their pleading had not raised that factual point) and that s 98A of the Landlord and Tenant (Amendment) Act 1948 did apply to this proceeding.
What is sought to be varied relates to the finding that CHPL failed to establish the requirement in s 5A(1)(d)(i) as to vacant physical possession.
Mr Marshall submitted that Barilla v James does not stand for the proposition that a landlord who has an onus in relation to Landlord and Tenant (Amendment) Act matters must go into evidence and establish by positive direct evidence all of the matters required to bring the lease within s 5A but, rather, that it proceeded on the basis that the registered lease is some evidence of the relevant matters and would be sufficient for the landlord but for the admission of contrary evidence. He submitted that this was accepted in Rathborne v Gandali (to which I admit I did not at the time have regard).
On the present application, Mr Marshall went in some detail through the decision in Barilla v James and that in Wilson v Walshe (unreported 31 May 1985, Smart J). In each of those cases the dispute was between the landlord and the tenant the subject of the registered lease (not as here between the landlord and a subsequent tenant). Mr Marshall noted that in each of the earlier cases, the tenant had produced actual evidence of facts within that tenant's knowledge which showed that the premises had (as a matter of factual certainty) not been taken out of the operation of the Act, and the question in each case was whether the tenant was precluded by the terms of the registered lease and the doctrine of estoppel from relying upon that evidence.
Mr Marshall noted that the contest in those cases was thus between the registered lease on the one hand, and facts proven in evidence by the tenant on the other hand and the question was whether the tenant was to be shut out from the opportunity to adduce evidence directly relevant to the Act.
In Barilla v James, where the relevant provision was s 5A(1)(d) (which was in a different form to that applicable in 1970), Mr Marshall submitted that there was no question of the landlord being shut out from relying upon the lease; rather, the doctrine of estoppel had been invoked to preclude the tenants from relying on evidence contrary to what was recorded in the lease.
Mr Marshall referred to the submission put before Walsh J (as recorded at page 744 line 27 of his Honour's judgment):
But the appellants [landlords] contend that the respondents [tenants] are estopped from asserting or relying upon this non-compliance with the requirements of s5A and that the evidence tending to establish it should have been excluded
the conclusion as to which (at page 744 line 40) was that:
The respondents [tenants] are not precluded from establishing or relying on the fact that the lease was not witnessed as required by the relevant provision in s5A. They are entitled to set up that, as lessees under the lease, they were in the position of protected lessees ...
Mr Marshall submitted that it was implicit in Barilla v James that the landlord would have won but for the fact that the tenant was entitled to go into evidence and prove as a fact that the lease had been invalidly witnessed. Mr Marshall argued that the issue was not whether the landlord was precluded from reliance on the certificate in the lease; it was whether the certificate went further and precluded evidence being adduced by the tenant. It is in this respect that Mr Marshall contends that para [410] of my reasons contains a misapprehension of law.
It is submitted that the fact that the certificate in the lease in Barilla v James was admissible and had some evidentiary value (but was simply held not to be conclusive for all purposes) is clear from the second issue raised by the tenants in Barilla v James ( namely the argument that there had been a failure to comply with the requirement as to explanation by the independent solicitor) as to which Asprey J (at page 757 lines 26-36) said:
In other words, the attitude of the respondents [tenants] on this aspect of the case is that proof by a lessor that the solicitor in matters referred to in subsection (2) does not end the matter and that they are entitled to go behind the certificate and ascertain the factual situation which existed between the solicitor and his lessee-client, and, If by so going they can satisfy the tribunal that the solicitor did not do one of more of those things which he is required to do under subsection (2), then the fact required to be proved in subclause (v)(c) cannot be said to have been proved.
Mr Marshall noted that, on this issue, the certificate in the lease was sufficient according to Asprey J (with whom Walsh J expressed his agreement in respect of that conclusion - page 743 line 50).
Thus, it is submitted that all that Barilla v James decides is that the certificate in the lease does not shut out a tenant from relying on other evidence to prove that the position was contrary to that recorded in the lease.
Support for this conclusion was drawn from Rathborne v Gandali (accepted as a qualification to Barilla v James in Hope, Mackerras and Freeman, Landlord and Tenant Practice and Procedure (7th edn, 1971) at p 18.8). There, McClemens J said (at [298] lines 45-55):
Mr Seletto [counsel for the tenant] also claims that in order to support a valid 5A lease the lessor is obliged to lead evidence to the Court to show that the relevant subsections of s5A have been complied with. In my opinion this is not so. If there is evidence, as there was in Barilla v James [1964-65] NSWR 741; 81 WN (Pt 1) (NSW) 457, that the 5A lease is not in proper form or contains some irregularity, or the certificate has not been properly given, then different considerations would apply. But, in my opinion, in the absence of any such evidence the court should not act on mere suggestions of irregularity.
In response (somewhat to my surprise given that it was he who had first contended that Barilla v James should be applied) Mr Maroya submitted that Barilla v James did not squarely deal with the situation in the present case (because, unlike the present, that was a case arising out proceedings taken under the Landlord and Tenant Act 1899 ). It is said that s 98A of the Landlord and Tenant (Amendment) Act 1948 has no application in proceedings for possession taken under the Landlord and Tenant Act 1899 (relying on Manche v Bigazzi (1963) 80 WN (NSW) 1681 at [1682], [1684]. Mr Maroya contends that what Barilla v James decides (independently of s 98A) is that in order to have the benefits of exclusion from the scheme of the Act, the landlord must establish that the subject lease is within s 5A of the Landlord and Tenant (Amendment) Act 1948 but that it is not applicable where, as here, the s 98A onus applies.
Mr Maroya submitted that in a case arising out of, or taken under the Landlord and Tenant (Amendment) Act 1948 , s 98A introduces further considerations from the requirement in Barilla v James that each of the sub-paragraphs be established to the satisfaction of the Court. I have considered in my earlier reasons the authorities which have held that the section creates a presumption in favour of the application of the provisions when invoked ( Abrahams v Senes and Berger [1963] NSWR 1073 per Sugerman J (as his Honour then was) and May v Ceedive [2006] NSWCA 369 at [93]).
I have already accepted that the effect of this provision is that the onus is here cast on CHPL to "prove otherwise". Nevertheless, I also accept Mr Marshall's submission that s 98A casts no special onus on the landlord in that regard - it being open to the landlord to "prove otherwise" to the satisfaction of the Court in the normal way.
Mr Maroya contends that what CHPL was required to do was to establish to the satisfaction of the Court the circumstances which would bring the premises within the operation of the section upon which it seeks to rely (be that subs 5A(1)(d) or (e)) (as to which I agree) and that, for the reasons elaborated at paragraphs [389]-[396] and [397]-[412] of my judgment, CHPL had not been able to do so (as to which, with hindsight, I consider that my conclusion was flawed for the reasons I set out below).
Mr Maroya noted as significant in this regard the conclusion in Wilson v Walshe (that the plaintiffs had not established that they had obtained vacant physical possession) notwithstanding his Honour's acceptance of the evidence by the Clerk of Petty Session in that case as to the circumstances of his explanation and witnessing of the lease. His Honour had observed that it was "hard to imagine the defendant entering into the lease in question if he had appreciated his statutory rights under s 83A of the Act". There, however, the defendant's rights under s 83A seemed not to have been canvassed in the lease and hence it might be assumed that they were not the subject of any explanation by the Clerk. O'Brien v Bolton [1961] NSWR 760 was also referred to by Mr Maroya as an example (in a different context - namely a fair rent determination case) of the protective effect of the operation of s 98A.
Mr Maroya submitted that Rathborne v Gandali has no application to the situation in the present case since it fell within the purview of the Landlord and Tenant Act 1899 and not the 1948 Act. Reliance was placed for that proposition on Manche v Bigazzi at [1682] and [1684], where McClemens J (as his Honour then was) said (at [1684]):
The Landlord and Tenant (Amendment) Act, 1948, has, except as to commonality of subject matter, nothing to do with the Landlord and Tenant Act, 1899. Proceedings which arise out of, taken under, or purporting to arise out of or taken under the provisions of the 1899 Act cannot be said to arise, out of, be taken under or purport to arise out of or be taken under the provisions of 'this Act' [scil. the Landlord and Tenant (Amendment) Act 1948, s 62].
In Rathborne v Gandali, a lease of prescribed premises bearing the s 5A certificate was entered into for a term of less than 3 years, during the currency of which the rent was reduced and it was argued (after the term of the lease had expired and a notice to quit had been issued) that this had resulted in a new lease that was itself the subject of the 1948 Act. No issue of the s 5A lease was raised and thus Mr Maroya submitted that the case is irrelevant for present purposes and no omission to cite that case amounts to any misapprehension of law.
Relevantly, Mr Maroya submitted that s 98A could not have been and was not invoked in that case, and that neither party had led evidence of the qualification of the premises for the purposes of exclusion under s 5A of the Act. Rather, both parties accepted the validity and regularity of the s 5A lease. Mr Maroya submitted that given the apparent acceptance by the parties of the regularity of the s 5A(1) lease; there having been no invocation of s 98A by the tenant, and consequently, no evidence having been led as to the qualification of the premises, it was not then possible for the tenant to assert (in support of his contention that there was no holding-over, but a new demise) that the landlord was required to lead evidence on that point as to the qualification of the premises under s 5A(1), and hence it cannot c orrectly be said that Rathborne v Gandali operates as a qualification of the effect of s 98A on s 5A, or as a general qualification of what was said in Barilla v James.
Mr Maroya submitted that Manche v Bigazzi makes clear that McClemens J was not deciding anything novel in Rathborne v Gandali. He also referred to Walsh v Suranyi [1963] NSWR 88 as an illustration of the effect of the absence of the s 98A onus in an 1899 Act case (namely, that in such a case there i s no onus upon the landlord to do anything positively to defend the validity of the s 5A lease - Mr Maroya contending that "in the terrain of the 1899 Act, and bereft of the protection of s 98A, the lessee had the substantial forensic burden").
Mr Marshall took issue with the proposition that a possession proceeding taken under the Landlord and Tenant Act 1899 could never involve questions under the 1948 Act. He submitted that where a landlord sought to commence proceedings for possession of premises which the landlord contended were not subject to the 1948 Act, that would be done under the 1899 Act, but that if those proceedings were then met by the tenant asserting that the tenant had the benefit of a protected tenancy under the 1948 Act and, in particular, invoking s 62 of the 1948 Act, then there would be an issue in the proceeding as to whether the lease was subject to the 1948 Act and this would raise issues similar to those presently before the Court (referring to the explanation given by Walsh J in Barilla v James in the second and third paragraphs of the judgment at p 742 and Wallace J at p 749 lines 1-15).
It is submitted that the position is no different from that in the present case, where CHPL issued a notice to quit but was met by the assertion by Dr and Mrs Kopas that the lease was the subject of the Landlord and Tenant (Amendment) Act , which (if correct) would have the consequence that the notice to quit would not be valid. Thus, it is submitted by Mr Marshall that cases which involve the landlord seeking possession under the 1899 Act can, and often do, involve questions under the 1948 Act (said to be recognised in the headnotes to Barilla v James and Rathborne v Gandali). It is said to be wrong for Dr and Mrs Kopas to have submitted that cases commenced under the 1899 Act have "no application" (referring to paras [16], [38] and [50]).
Mr Marshall also pointed to the irony in the present case of Dr and Mrs Kopas' submission that Barilla v James does not squarely deal with the present situation, when it was their Counsel who raised Barilla v James (and, it is said, persuaded the Court to apply Barilla v James beyond its ratio).
Mr Marshall submitted that where a civil claim has been brought against the tenant for possession, s 98A adds nothing to the onus that the landlord has in any event. Mr Marshall relied upon the background against which this legislation was drafted. It was said that because (as a consequence of the definition of "prescribed premises" in s 8 of the Act) all premises were within the definition of prescribed premises unless farm or holiday premises or gazetted premises, the only way for prescribed premises not to be the subject of the Act was for it to be established that the premises fell within s 5A. Accordingly, whoever wished to assert that the premises were not subject to the Act had to prove that the premises fell within one of the exceptions in s 5A. Given that it would usually be the landlord who would wish to assert that the premises were not subject to the Act, Mr Marshall submits that it is reasonable to assume that it is likely to be the case that the landlord would have to prove one of the exceptions in s 5A.
Thus Mr Marshall contended that in a civil proceeding between landlord and tenant, no different position is obtained as a result of s 98A than would have been obtained prior to its introduction, noting that s 98A was introduced in 1957 to reverse the result of Roddy v Perry (No. 2) (1958) SR (NSW) 41 (a criminal proceeding in which it was held (as a consequence of Vines v Djordjevitch (1955) 91 CLR 512) that the prosecution (and not the accused landlord) bore the onus on one of the exceptions in s 5A). Mr Marshall submitted that this no doubt explained the opening words of s 98A: "In any proceedings, civil or criminal , ..." (his emphasis).
In that regard, insofar as the reference is made to the 'satisfaction of the Court', Mr Marshall notes what Wallace J said in Barilla v James (at [749.1]) as to the onus:
Such onus, of course, is in accordance with the ordinary standard appropriate to civil proceedings
Even if, prior to the amendment to the legislation, the lessee bore some substantial forensic burden in matters of this kind, it is submitted by Mr Marshall that it would be irrelevant because all the cases cited were ones which did involve the Landlord and Tenant (Amendment) Act . It is submitted that in all disputes between landlord and tenant (with or without s 98A), the effect of s 8 of the Landlord and Tenant (Amendment) Act is that the premises will be "prescribed premises" unless the party seeking to avoid the Landlord and Tenant (Amendment) Act proves that s 5A applies. Mr Marshall denied any particular "protection" afforded by s 98A.
As to Rathborne v Gandali, Mr Marshall took issue with the proposition argued by Mr Maroya . In that case there were two arguments. The second was based on a suggestion of irregularity in the lease and that therefore, the landlord was obliged to lead evidence to show compliance with s 5A. In the Court of Appeal it was noted that "no point was sought to be taken by the lessee as to the invalidity of the s 5A lease" and therefore it is not correct to assert that the "tenant accepted the validity and regularity of the s 5A lease".
Ironically, therefore, both parties (for different reasons) seem to agree that Barilla v James is not determinative of the issue as to whether reliance on the certificate and clause 20 of the Birzulis lease is precluded in the present case (as I had in effect found at [410]). Mr Marshall submitted that this was not the ratio of Barilla v James and that it was qualified in Rathborne v Gandali . Mr Maroya submitted that Barilla v James is not squarely applicable in any event. At least to that extent, both parties seem to agree that the reliance on Barilla v James in the judgment was misplaced (even if Mr Maroya does not wish to contest the conclusion that followed from such reliance), though they submit that different conclusions should follow from the evidence that was before me, leaving aside the Barilla v James issue.
In relation to the question whether this is an appropriate matter for the exercise of the power to vary, my immediate reaction (when the motion to vary was raised on the basis that there had been a misapprehension as to the import of Barilla v James ) was that if there had been such a misapprehension then it would follow that this must have tainted my reasoning on the protected tenancy issue (even if, on the proper reasoning, the same conclusion would have been reached). This is because it is my very clear recollection that I had reached the conclusion as to that issue on the basis that my understanding was that Barilla this required direct evidence of vacant physical possession and that an agreement or acknowledgment of the facts as contained in the lease could not provide the necessary evidence. I raise this only because (albeit in a different context - namely that of the slip rule), while what is sought is to ascertain the objective intention of the court, and subjective evidence of intention is not necessarily admissible (see Newmont Yandal Operations Pty Limited v the J Aron Corporation and the Goldman Sachs Group, Inc and 3 Ors [2007] NSWCA 195 , per Spigelman CJ at [91] and [95]), some account may nevertheless be taken of the trial judge's ex post facto observations. There are cases in which reference has been made to what was said in writing or orally by the decision maker in relation to the error which has been or is sought to be corrected in which it appears there is some relevance attached to the reaction of the decision maker to news of the perceived mistake (see for example , Form-Quip Ltd v Trafalgar Properties Ltd (unreported, NSWSC, 19 July 1991). In Newmont Yandal (and, again noting the different context in which this was said), Spigelman CJ said (at [182]):
Satellite litigation and delay should be avoided with respect to both the inherent jurisdiction and the slip rule. I agree with Handley AJA that the judge who made the orders is overwhelmingly the preferable person to make the corrections. That s/he may be influenced by, and even express, her or his subjective intention is not a ground for disqualification.
In Mutual Shipping v Bayshore Shipping Co Ltd (The Montan) [1985] 1 All ER 520, for example, Robert Goff LJ said (at [530]):
In the present case, if the arbitrator, being in doubt whether he had power to correct his error under section 17, had explained his error and asked the court to remit the award to him to enable him to correct it, I have no doubt that the court would have done so. I myself think that, in a case such as this, that is the best course for the arbitrator to take. He does not have to refer to the document called his reasons, and so no question of confidentiality arises. He simply has to explain the nature of his mistake, and its effect upon his award; and his own evidence (which would normally be on affidavit) would supply the best evidence of his mistake and its consequences . (my emphasis)
In Storey & Keers Pty Ltd v Johnston (1987) 9 NSWLR 446, McHugh JA (as his Honour then was) said (at [453]) "in general the test of whether a mistake or omission is accidental is that ... if the matter had been drawn to the court's attention, would the correction at once have been made?" Similarly, in Newmont Yandal there was an acceptance that, had the position been put to Austin J at the time the initial order was made, he would "at once" have corrected the order (at [138]).
Therefore, insofar as my immediate response is an objective fact, and may be relevant to the question whether this is an appropriate case in which to exercise the power to vary the judgment, I have recorded that response above (and I think I made clear during the course of argument on the motion that this had been the process of my reasoning).
I accept that, in treating Barilla v James as determinative of the issue as to whether CPHL had satisfied the requirement in s 5A(1)(d) for vacant possession to be established (in that I considered that it precluded reliance on clause 20 of the Birzulis lease and the certificate therein), I was in error (whether or not the omission to take Rathborne v Gandali into account was itself also in error). It seems to me that this is a misapprehension of the law such as to give rise to the proper application of the jurisdiction to vary my reasons for judgment and is not one that should (consistently with the imperative for the just quick and cheap determination of the real issues between the parties) be left to an appellate court to rectify.
Effect of error
In my reasons for judgment, I did not have regard to Rathborne v Gandali . Had I done so, then the proper construction of Barilla v James would have been raised. With the benefit of the argument now put before me (and on which there had not been such focus at the trial) it is clear that I did not properly address the import of Barilla v James in its application to the present case.
That error then affected the manner in which I approached the evidence that was adduced on the s 5A(1)(d) issue. Thus, it seems clear to me that the decision has miscarried in that regard and that it should be rectified at this point. I am satisfied that CHPL has shown an error in reasoning because of that misapprehension of the law.
Barrett J identified, as one of the central matters on the rehearing jurisdiction (and I do not read those three matters as necessarily cumulative), the question as to whether, without accident or fault on the part of the party now seeking to vary the judgment, that party was not heard on the question. (Mr Maroya contended that CHPL was heard on the clause 20 question and should not permitted a rehearing on that issue.)
It seems to me fair to say that the argument on the protected tenancy issue did not occupy more than a relatively small part of the submissions in relation to the matter as a whole (and at the time, Mr Maroya himself seemed to concede that his clients faced a difficult position in that regard, since there was no evidence of the circumstances leading up to entry into the Birzulis lease).
In explanation for the fact that Rathborne v Gandali was not drawn to my attention, Mr Marshall referred to the fact that there had been a change of Counsel just prior to the commencement of the hearing and that he, himself, had to withdraw from the hearing for personal reasons prior to the stage of submissions, leaving Ms Sibtain to take over the cross-examination of the remaining witnesses and the closing submissions at very short notice. Mr Marshall said, and there is no reason not to accept, that it had been his intention to raise Rathborne v Gandali and that it was a matter of inadvertence that this was not done. (That there was some scope for matters to fall between the cracks, so to speak, is evident from the inconsistency in approach as to whether reliance was being placed on s 5A(1)(e) at all - a matter that Mr Marshall contends was never intended to be the case by the time the matter came to trial, yet which seemed to be put as an alternative in the closing submissions.)
I accept that this is not a situation where, following the first instance judgment, the arguments have been sought to be clarified and new points raised in order to seek a re-hearing of a point already determined. Rather, this is a situation where the construction that was (as now appears erroneously) placed on Barilla v James meant that proper consideration was not given by me to the inferences that CHPL contends are open to be drawn from clause 20 and the certificate in the Birzulis lease. To the extent that the construction that I placed on Barilla v James was not articulated during the course of submissions, CHPL did not have the opportunity to be heard on that issue.
Accordingly, I consider that this is an appropriate matter in which to exercise the jurisdiction to re-open the hearing and to vary the judgment insofar as the conclusion on onus is concerned.
As adverted to above, the question then is whether the removal of the restriction I had considered was placed by Barilla v James means that the overall conclusion on the protected tenancy claim should be varied. That depends on the view reached as to the weight of the evidence when assessed without regard to the restrictions I had considered were to be placed by reference to Barilla v James .
Consideration of evidence re satisfaction of s 5A requirements
The matters to which CHPL points in this regard are as follows.
First, it is said that on the face of the 1970 lease, its execution by the tenant was witnessed by a solicitor (who certified that he was instructed and employed independently of the lessor); the lease bore a certificate by the solicitor to the effect that he duly attended the premises with the tenant and explained the lease to him before it was executed, and that the solicitor witnessed the execution by the tenant and that he (the solicitor) was instructed and employed independently of the landlord. I accepted that this was the effect of the execution clause (see [385]).
Secondly, the lease contained a certificate pursuant to s 5A(10) (this certificate is admissible in the proceeding and is prima facie evidence first, that the 1970 lease was registered and secondly, of the particulars certified in and by the certificate that the lease bears). Therefore, Mr Marshall submitted that there is prima facie evidence that the solicitor was independent in advising the 1970 tenant and that he explained the lease to the 1970 tenant. It was submitted that one can properly infer that this included the effect of the provisions, including clause 20 - which is relied upon by CHPL (and I have already accepted that such an inference can be drawn at [386]).
Thirdly, it is noted that clause 20 of the 1970 lease was in the following terms:
The parties hereto agree to and admit the truth of the following, namely, that:
All the facts, matters and circumstances referred to in at least one of paragraphs (a), (b), (c), (d), (e) and (f) of section 5A(1) of the said Act and necessary to be established in order that the provisions of Parts II, III, IV and V of the said Act shall not apply in respect of this lease exist in relation to this lease and the demised premises.
Fourthly, it is said that the 1970 tenant, having had the benefit of independent legal advice, accepted that the premises were not controlled premises and must have done so by reason of the fact that all the matters in either s5A(1)(d) or s5A(1)(e) were satisfied (since the other sub-paragraphs are plainly inapplicable). Given the findings in relation to s 5A(1)(e) necessarily not being applicable, Mr Marshall submitted that clause 20 must implicitly have meant that the 1970 tenant had accepted that the matters in s 5A(1)(d) had been satisfied and (as the only relevant factual matter under s 5A(1)(d) apart from execution and registration is vacant possession, being a matter which the 1970 tenant was in a position to know) that the tenant had accepted and agreed that vacant possession had been obtained prior to the commencement of the 1970 lease.
Fifthly, the conclusion above is said to be reinforced by the fact that, as at 1970, the 1970 tenant had accepted it to be the case that the premises were not controlled premises and had done so following an explanation given by an independent solicitor of the lease. It is submitted that one can reasonably infer that the solicitor acted properly, in accordance with his duties as a solicitor independent of the landlord, and explained to the 1970 tenant the import of clause 20 of the lease (see [393]).
Sixthly, it is submitted that it is proper to assume that the acknowledgment in clause 20 would not likely be given by a tenant if the facts had been otherwise than as acknowledged.
Seventhly, it is said to be a matter to be expected that the agent at the time of the 1970 lease would have been aware of the need to obtain actual vacant possession as an appropriate prerequisite to the registering of the lease under s 5A. Reference is made to the fact that the lease is in a form which was prepared to be under s 5A of the Landlord and Tenant (Amendment) Act (see heading on first page of the lease) and was shortly thereafter registered. From this, it is said to be proper to infer that the agent was apprised of the requirements applicable under the Act in order to lawfully and properly protect the landlord. It is also submitted that it is appropriate to infer that the agent, on behalf of the landlord, would have taken actual physical possession (so as to enable that to occur). Related to this is said to be the fact that the 1970 tenant would have known whether there had been actual vacant possession or not, and would have been likely to have raised this matter with the independent solicitor if there had not been actual vacant possession (once an explanation as to what was required had been given to him).
Mr Marshall submitted that the consequence of this is that it is to be inferred, in the absence of any evidence to the contrary, that the acknowledgment contained in clause 20 of the 1970 lease was properly given. (In other words, it is said that if there had not been actual vacant possession, the agent would have been wrong to submit the lease, the 1970 tenant would have been wrong to give the acknowledgment, and the independent solicitor would have breached his duty in failing to ascertain this matter when advising the 1970 tenant.)
Eighthly, it is said that at no point after entry into the 1970 lease is there any evidence that the 1970 tenant ever asserted there was a protected tenancy (a matter said to be relevant not only because of clause 20 but also because there is a subsequent passage of years which is only consistent with the 1970 tenant not having a protected tenancy).
Finally, reliance is placed on the presumption of regularity. Mr Marshall referred in this regard to what was said in Manufacturers Mutual Insurance Ltd v Motor Accidents Authority of NSW (1991) 7 ANZ Ins Cas 61-090 (NSW Court of Appeal) by Handley JA (Clarke and Hope JJA agreeing) at [77,347] column 1:
Mr Gee further submitted that the prescribed fee had not been paid, which is true, and that there was no evidence that the RTA had approved the non-payment of the fee for the purposes of R53A(2) which is not true. The issue by the Registry of a letter, interim receipt, and interim registration label to a member of the public during working hours and in the ordinary course of business was prima facie evidence that the RTA had approved the waiver of any fee. The inference of approval is strengthened by the later entries in the RTA's own records and the internal memoranda which the dishonour of the owner's cheque generated. The prima facie inference arises from the presumption of regularity which applies to business transacted by the public openly and in good faith with government officials. This is only one manifestation of the principle that acts are presumed to have been done rightly and regularly unless the contrary appears. See Morris v Kanssen [1946] AC 459 at 475 and Balmain Association Inc v The Planning Administrator for the Lelchhardt Council (CA unreported 19 February 1991 at 48). See also Cross "On Evidence" Australian Edition 1991 at pp 1072-1074 and the cases there cited. In McLean Bros v Grice (1906) 4 CLR 835 at 850 Griffiths CJ quoted with approval the following statement from a decision of the Supreme Court of the United States:
"It is a rule of very general application that where an act is done which can be done legally only after the performance of some prior act, proof of the latter carries with it a presumption of the due performance of the prior act."
Consider also Popovic v Tanasijevic (no 5) (2000) 34 ACSR 134 at pl5 [85]-[86] per Olssen J:
[85] If there remained any need to do so, then it seems to me that resort may properly be had to the presumption of regularity, which is by no means restricted, in its application, to public acts or acts of public officials . As was pointed out by Griffith CJ in McLean Bros & Rigg Ltd v Grice (1906) 4 CLR 835 at 850; [1907] VLR 317; (1906) 13 ALR 77 (McLean), this principle is certainly applicable to the proceedings of corporate bodies. It logically touches on acts preceding what has publicly occurred , in this case the registration of the SCWA. (my emphasis)
[86] In absence of evidence to the contrary it is to be inferred, as a matter of probability, that the necessary pre-requisite formalities to bring an association into existence were attended to: see reasoning of Hope JA in Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 at 514. As was stressed by Lord Simonds in Morris v Kanssen [1946] 1 All ER 586 at 592, resort to the principle is, inter alia, based on the premise that "The wheels of business will not go smoothly round unless it may be assumed that that is in order which appears to be in order".
Mr Marshall submitted that against all of the above in favour of CHPL, there is no countervailing evidence from Dr and Mrs Kopas and that on the balance of probabilities the requirements of s 5A(1)(d) have been satisfied.
(Mr Marshall further submitted that the contention by Dr and Mrs Kopas that there is a protected tenancy is opportunistic. He noted that in 1984, there was a prior registered lease under s 5A (namely the 1970 lease) and that for over 20 years there was no assertion by Dr and Mrs Kopas as to any defect in the prior registered lease. It is submitted that the contention that the premises are protected (made in circumstances where all their other allegations have fallen away) is an attempt to take advantage of difficulty of proof of actual physical vacant possession in 1970, some 40 odd years ago.)
On the evidentiary issue, Mr Maroya characterised the above submissions as an attempt by CHPL to equiparate "some evidence" with evidence that is sufficient to satisfy the Court of the circumstances which would bring the premises within the operation of s 5A of the Act. He points out (and I accept) that the Court is not obliged to accept the evidence proffered by CHPL (even if uncontradicted or ineffectively contradicted, referring to Wilson v Walshe by way of example). Mr Maroya submitted that uncontradicted evidence, if not on its face sufficiently probative, need not be accepted (citing Cole v Commonwealth [1962] SR (NSW) 700 at 704; 708 (FC); R v Gear [1964] Qd R 528 at 534-35, referring to Sheahan v Woulfe [1927] St R Qd 128; and Taylor v Ellis [1956] VLR 457 at 465). Nor, it is said, is there any requirement that Dr and Mrs Kopas adduce any "countervailing evidence", having regard to the import of the s 98A onus.
As to the nine matters set out above (to which Mr Marshall has pointed), Mr Maroya responded as follows:
(i) That Mr Markham's certification that he "explained" the lease to Mr Birzulis can rise no further than an assertion that he gave an explanation, since the lease itself does not make clear what was the subject of the explanation.
(ii) The fact of certification pursuant to s 5A(10) of the 1948 Act confers no additional quality to the substance of the evidence, and cannot address the fact that the lease did not make plain the relevant facts giving rise to the admission (referring in this regard to the comment I had made at paragraph [406] of the judgment).
(iii) Speculation should not be permitted to replace the facts appearing on the face of the lease itself.
(iv) It is said that this cannot gainsay paragraph [406] of the judgment.
(v) Similarly, it is said that the fifth matter raised cannot gainsay paragraph [406] of the judgment, or the result in Wilson v Walshe.
(vi) It is said that assumptions that are speculative cannot stand in the place of matters which, by s 98A, must be proven by CHPL to the satisfaction of the Court.
(vii) Again it is said that this submission, which amounts to no more than speculation, is met by paragraph [406] of the judgment.
(viii) As to the presumption of regularity, it is said that this confers no enhanced quality on the probative value of evidence in this case and that, in any event, the certification under s 5A(10) performs all of the limited work that any presumption in this case can properly do.
In relation to the last point, Mr Maroya submitted that the presumption of regularity is an instance of a fact being presumed by the law from the existence of another, antecedent, fact and that the presumption cannot be used such that a subsequent fact (that of certification under s 5A(10)) is used to draw an assumption after the event as to the nature of what might have happened antecedently. Further, it is said that any wider application of the principle to leases between private individuals must be doubted in light of the beneficial statutes like the Landlord and Tenant (Amendment) Act 1948 , and in particular, when a general, imperative statutory presumption such as that contained in s 98A applies.
On the latter point, Mr Marshall contends that subsequent events can lead to the inference that antecedent matters have taken place. Mr Marshall relies, by way of example, on Re NIAA Corporation Ltd (In Liq) (1993) 33 NSWLR 344 (per Santow J as his Honour then was) at [349B-C] (where the filing of a notice in the prescribed form with ASIC was treated as itself prima facie evidence that a quorum existed and by parity of reasoning that the resolution was in fact put at a continuing meeting of the corporation, relying on McLean Bros & Rigg Ltd v James Grice (1906) 4 CLR 835; Dawson v Westpac Banking Corporation [1991] HCA 52; (1991) 104 ALR 295; (1991) 66 ALJR 94 at [31], ALR p 304-305 (per Mason CJ with whom Deane J and McHugh J agreed) (where registration of the change of name was said to be based on an acceptance of the efficacy or presumed efficacy of the special resolution recorded in the notice and the court applied "The general rule is that, where an act is done which can only be done legally after the performance of some prior act, proof of the later act is presumptive evidence that the prior act was done")).
Mr Marshall points to Australian Securities Commission v Fairlie [1993] TASSC 69; 11 ACLC 669 at [93], ACLC 694 (where filing of an annual return containing material in compliance with the statutory requirements was admissible evidence of the facts contained therein on the basis that those statements were contained in a public document) and it was said to be open to conclude that the company had held an annual general meeting on the relevant date) and Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 (per Hope JA, Samuels JA and Priestley JA concurring), where his Honour said (at [514] col 1) that:
The true rule is that the presumption may reasonably be drawn where an intention to do some formal act is established, when the evidence is consistent with that intention having been carried into effect in a proper way, the observance of the formality has not been proved or disproved and its actual observance can only be inferred as a matter of probability.
I have noted above my view that it is appropriate to vary the judgment to correct the misapprehension as to the import of Barilla v James , which had led me to the view that I was precluded from according evidentiary weight to the admission and agreement contained in clause 20 (and the inference to be drawn from the certificate as to the fact of an explanation of the lease, albeit that precisely what was the content of the explanation was not in evidence). In that regard, the statement in para [398] of my earlier judgment (that clause 20 of the Birzulis lease does not assist) must be withdrawn.
I accept that the question is as to whether the onus has been satisfied on the balance of probabilities (and that caution should be exercised in reaching that view in light of the protective intent of the legislation). However the onus to be satisfied remains the ordinary civil standard of proof.
I had formed the view at the time of my earlier judgment that it was difficult to see how a tenant independently advised could properly have admitted to the matters in clause 20 without direct knowledge of the relevant facts. One of those facts must be the fact of vacant physical possession of the premises.
I had considered there to be some doubt as to what facts the acknowledgment could be said to have encompasses in this regard. However, Mr Marshall, on the present application, submitted that in the circumstances of this case the admission could only have gone to the facts in s 5A(1)(d) (since (a)-(c) and (f) were not directly applicable).
While I am not convinced that the presumption of regularity arises in this context (since the registration of the lease would in my view indicate no more than an acceptance that the lease had been duly executed and certified but would not necessarily involve an acceptance as to what were the antecedent facts forming the basis of the certification), I am nevertheless satisfied that the onus has been satisfied by CHPL. I consider that clause 20 permits the inference to be drawn (in the absence of any evidence to suggest it is incorrect) that vacant physical possession was given at the relevant time (since the only relevant ground to which the acknowledgement could have gone was premised on the obtaining of vacant physical possession). (In this regard, the fact that Dr and Mrs Kopas have previously invoked the Residential Tenancies Act provisions which would not be applicable if the premises are controlled premises, is something that - while I do not rely on it in weighing the evidence going to the s 5A(1)(d) position and in reaching the above conclusion - nevertheless gives me comfort that the inference I consider should be drawn are consistent with the manner in which the parties have conducted their affairs.)
I am satisfied that, but for my misapprehension as to the import of Barilla v James , my conclusion on the s 5A(1)(d) point would have turned on whether (notwithstanding that the facts on which the agreed state of affairs had not been specified in the lease itself) an inference should properly be drawn that vacant possession had been obtained prior to the commencement of the lease.
I am also satisfied that such an inference is open to be (and should be) drawn and therefore that CHPL has satisfied the onus in relation to this requirement.
Accordingly, the conclusion that I had reached in para [412] of my earlier reasons is wrong and it should be rectified.
Paragraphs [410] - [412] will be amended as follows (and consequential variation made to other paragraphs of the judgment as necessary to reflect the above findings):
[410] I had considered that Barilla v James (and particularly the observation in that case that estoppel could not be used to deprive the lessee of the statutory protection it would otherwise have) precluded reliance on the certificate and clause 20 of the Birzulis lease in the present case and, mindful of the caution expressed in Barilla v James , and of the protective nature of the provisions in this legislation, I was of the view that I could not 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).
[411] I noted that one perhaps incongruous result of such a finding would be that, despite the reliance by Dr and Mrs Kopas in their case on the termination in 1992 of the 1983 residential tenancy agreement (and therefore the fact that, on their case, a new tenancy agreement came into existence at a time well after the time from which no new protected tenancies are to be created under the provisions of the Landlord and Tenant (Amendment) Act , that being 1 January 1986, the effect of s 5AA seems to be that this new (1992) tenancy remains governed by the Act. Section 5AA provides:
On and from 1 January 1986, the provisions of Parts 2, 3, 4 and 5:
(a) do not apply in respect of prescribed premises unless the premises were the subject of a lease immediately before 1 January 1986, and
(b) cease to apply, and shall not thereafter apply, to any such premises upon vacant possession of the premises being obtained or upon those provisions ceasing to apply to the premises by reason of the operation of section 5A or any other provision of this Act.
[412] Following submissions made on the motion to vary, and further consideration of the reasoning in Barilla v James , I am satisfied that Barilla v James does not preclude reliance by CHPL on the certificate and clause 20 of the Birzulis lease for whatever evidentiary value they may have and, for the reasons set out in my judgment on that motion, having considered the appropriate inferences open to be drawn from the provisions of the 1970 lease (unrestricted as I thought I had been by virtue of Barilla v James ), I now find that CHPL has satisfied the onus that rests on it of proving that these are not controlled premises and that Dr Kopas is not a protected tenant. It follows that the Notice of Termination of 19 October 2005 was not, as I had thought, 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, should be upheld.
I find that the Notice of Termination dated 19 October 2005 is valid and that CHPL is entitled to an order for the termination of the holding over tenancy and for possession of the premises. I will issue an amended judgment in this regard (amending the paragraphs indicated above and the summary in 14(iii) and (v)) and I will place a copy highlighting those amendments on the court file in case the matter is taken further.
(ii) Amendment of pleading
The amendment is sought in order to bring the pleading into line with how the case was opened and conducted, and with how the judgment proceeds (see [379]). Mr Marshall contends that there is no prejudice occasioned thereby (as was recognised at [376]) and that it is appropriate that the pleading reflect the way the case was in fact conducted (referring to the Civil Procedure Act 2005 (NSW) s 64(2)). It is said that this regularises how the case was decided and is supported by what was said in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 at [14], [29] and [30]; Leotta v Public Transport Commission of NSW (1976) 50 ALJR 666 at [668]; and Clough and Rogers v Frog (1974) 4 ALR 615 at [618] per the Court (McTiernan ACJ, Menzies, Gibbs and Mason JJ).
As to the particular opposition to s 5A(1)(f) being added, that raises no other point and it is only the part of s 5A(1)(f) that refers back to s 5A(1)(d) that is relied upon. CHPL is not covertly seeking to rely on the other sub-paragraphs referred to in (f). To make that clear, it is submitted that the amendment as to (f) can be expressly limited as follows:
The reference to "s5A(1)(e)" be amended to read "s5A(1)(d) and/or s5A(1)(f) (but only insofar as sub-paragraph (f) refers to sub-paragraph (d)) "
As to the amendment, although Mr Maroya submitted that the manner in which the case was conducted and decided can be readily discerned from the judgment, I consider that (in circumstances where I am prepared to re-open the hearing in order to vary the judgment), it is consistent with the authorities referred to by Mr Marshall that I grant leave to amend the pleading so as to ensure that the pleading reflects the way in which the case was conducted (and decided). I therefore allow the amendment, limited insofar as it relates to s 5A(1)(f) in the words suggested by Mr Marshall.
Costs
As to costs, while CHPL has succeeded on the motion to vary, my preliminary view is that Dr and Mrs Kopas should not bear the costs of the failure of CHPL to make clear its position in relation to Barilla v James and Rathborne v Gandali in the first place (or my misapprehension as to the import of Barilla v James ). I am therefore inclined to think that CHPL should pay their costs of the motion to vary (but that those costs should be set off as against the costs of the main proceedings which should be borne by Dr and Mrs Kopas having regard to the ultimate conclusion of the proceedings). However, I will hear submissions on that matter as the question of costs was deferred for argument after the disposition of the notice of motion.
Orders
The orders I now make will be as follows:
1. A declaration that Dr Kopas is the only tenant of the premises described in Schedule A.
2. A declaration that the tenancy of Dr Kopas is pursuant to a common law periodic tenancy on the terms of the holding-over provisions of the residential lease dated 6 January 1984 between Celermajer Holdings Pty Limited and Dr Kopas.
3. A declaration that that the provisions of Parts 2-5 of the Landlord and Tenant (Amendment) Act 1984 (NSW) do not apply to the premises described in Schedule A by virtue of the operation of s 5A of that Act.
4. A declaration that the Residential Tenancies Act 1987 (NSW) and now Residential Tenancies Act 2010 (NSW) apply to the residential tenancy agreement constituted by the tenancy the subject of the declaration in paragraph 2 above.
5. A declaration that there is no "1992 Agreement" as alleged by Dr Kopas in paragraph 6 of the Further Amended Defence of 27 May 2009 and as alleged by Dr and Mrs Kopas in paragraph 4 of the Further Amended Statement of Cross-claim of 27 May 2009.
6. A declaration that Dr and Mrs Kopas do not have an equitable life tenancy in respect of the premises described in Schedule A.
7. An order that caveat AB983341J in respect of the premises described in Schedule A be removed.
8. A declaration that there is no "2000 Agreement" as alleged by Dr Kopas in paragraph 18 of the Further Amended Defence of 27 May 2009 and as alleged by the Dr and Mrs Kopas in paragraph 8 of the Further Amended Statement of Cross-claim of 27 May 2009.
9. A declaration that the Notice of Termination dated 19 October 2005 served by Celermajer Holdings Pty Limited on Dr Kopas was a valid notice in compliance with sections 56 and 63 of the Residential Tenancies Act 1987 (NSW).
10. An order under s 64(2) of the Residential Tenancies Act 1987 (NSW) terminating Dr Kopas' lease of the premises described in Schedule A.
11. An order under s 64(5) of the Residential Tenancies Act 1987 (NSW) in favour of Celermajer Holdings Pty Limited for possession of the premises described in Schedule A such order to take effect 90 days from the date of this order.
12. Judgment in favour of Celermajer Holdings Pty Limited for possession of the premises described in Schedule A.
13. Celermajer Holdings Pty Limited have leave to issue a Writ of Possession upon the expiry of the period in order 11 above.
14. Judgment for Celermajer Holdings Pty Limited on the Cross-Claim and that the Cross-Claim otherwise be dismissed.
15. Celermajer Holdings Pty Limited have leave to file an amended Reply and an Amended Defence to Cross-Claim so that in paragraphs 2(b) and 20(b) respectively, the reference to s 5A(1)(e) is amended to "s 5A(1)(d) and/or s 5A(1)(f) (but only insofar as sub-paragraph (f) refers to sub-paragraph (d))".
Schedule A
The land described in Folio Identifier 3/SP13165 and known as Unit 3/65 Chaleyer Street, Rose Bay, New South Wales.
I will hear the parties on the question of costs at a convenient time.
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Decision last updated: 19 April 2011
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