Wallis v Rudek

[2020] NSWCA 61

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Wallis v Rudek [2020] NSWCA 61
Hearing dates:	6 April 2020
Decision date:	06 April 2020
Before:	White JA
Decision:	Direct the appellants’ counsel to bring in short minutes of order in accordance with these reasons.
Catchwords:	JUDGMENTS AND ORDERS — Court of Appeal – whether order requiring vacant possession be stayed pending the resolution of appeal proceedings – COVID-19 pandemic – no issue of principle
Cases Cited:	Fox v Percy (2003) 214 CLR 118 Wallis v Rudek (No 3) [2020] NSWSC 338 Wallis v Rudek [2020] NSWSC 162 Yeshiva Synagogue Inc v Karimbla Properties (No 10) Pty Ltd [2017] NSWCA 331
Category:	Procedural and other rulings
Parties:	Yuri Wallis (First Applicant) Olga Wallis (Second Applicant) Suzanne Rudek (Respondent
Representation:	Counsel: B Oliak (Applicants) J Bennett (Respondent)   Solicitors: P Dobrich & Co Solicitors (Applicants) Optic Lawyers (Respondent)
File Number(s):	2020/95805
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2020] NSWSC 162 Date of Decision: 26 February 2020 Before: Parker J File Number(s): 2018/191080

Judgment

1. HIS HONOUR: By notice of motion filed on 2 April 2020 the appellants seek a stay of orders 4, 6, 7 and 10 made by Parker J on 5 March 2020. Order 4 made on 5 March 2020 was that:

“The plaintiffs to provide vacant possession of the Ground Floor Unit within 28 days from the date of these orders, subject to any further order of the Court.”

2. Orders 6 and 7 provided a regime for the removal of chattels which are presently located on the upper floors of the property to be collected by the plaintiffs. The orders provided for the plaintiffs or their solicitors to give notice of an appropriate time for the chattels to be collected and orders were made for the plaintiffs to remove the chattels within 28 days. There is no occasion to stay orders 6 and 7. There is no dispute about those orders. The appellants have filed a notice of appeal on 1 April 2020. They do not seek the discharge of those orders.

3. Order 10 was an order that the plaintiffs (that is, the appellants) pay the defendants’ (that is, the respondents’) costs of the proceedings on an indemnity basis. No adequate reason is advanced for such a stay. There is no reason that in the absence of agreement those costs should not be assessed.

4. The real issue concerns order 4 requiring the appellants to provide vacant possession of their Ground Floor Unit. The appellants are aged 75 and 80 and have health issues (to which I will return later). They are concerned, understandably, about the effect of the COVID-19 pandemic and the advice given to persons in their situation to stay at home and self-isolate so far as possible.

5. The primary judge gave his principal judgment on 26 February 2020 (Wallis v Rudek [2020] NSWSC 162). The respondent defendant in the court below is the appellants’ daughter.

6. It appears from his Honour’s reasons for judgment that before August 2013 the appellants were the registered proprietors of the property now in question, being a property in Schofield Parade, Pennant Hills. But the appellants’ mortgage loan from the ANZ Bank had fallen into default. The ANZ Bank had threatened to sell the property in exercise of its powers as mortgagee. To forestall that the parties entered into an agreement for the sale of the property to the respondent. She raised sufficient moneys to discharge the debt owed by the appellants to the bank. Thereafter, the appellants lived on the ground floor of the property in what is called the Ground Floor Unit. The respondent, her husband and children moved into the upper levels of the property.

7. The appellants claimed that it was agreed between them and the respondent that they could continue to live in the Ground Floor Unit for the rest of their lives at no charge. The case was primarily framed either in contract or in proprietary estoppel. The case as pleaded in proprietary estoppel is also based upon an alleged promise or representation that the appellants could live in the Ground Floor Unit for the rest of their lives at no charge. The appellants pleaded that acting in reliance on that promise and induced by it, they assumed and expected that they would be permitted to reside in the Ground Floor Unit for the rest of their lives.

8. The primary judge held that although the appellants wanted and hoped for the assurance that they would be permitted to do so, that assurance was refused and no such promise was made (Judgment [83]). It seems that this conclusion was substantially based on the primary judge’s rejection of the first appellant’s credibility and reliability (Judgment [56]). His Honour also had reservations concerning the reliability of the second respondent’s evidence (Judgment [57] and [58]).

9. The primary judge said (at [72]):

“In her affidavit she [the respondent] denied that at the meeting in June or at any other time she ever indicated that her parents would be entitled to stay at the house until they died.”

10. The appellants submitted that this was wrong and that the respondent in her affidavit did not dispute the first appellant’s evidence that the respondent said to him words to the effect:

“I will pay off your loan to the ANZ Bank and you will transfer the property to me. We will move in and live upstairs. You can move to the flat downstairs and live there for life at no charge.”

11. The respondent’s affidavits were not before me on this application and I can make no assessment of that submission.

12. I was taken by counsel for the appellants to cross-examination of the respondent in which she conceded that she understood that her parents wanted to stay living in the property for the rest of their lives (T131). As I read the transcript she denied saying that they could live downstairs for life. Nonetheless, the primary judge held (at [73]):

“Under cross-examination, however, Mrs Rudek appeared to concede that at the first meeting her father did say that he wished to stay at the house, for the rest of his life, and that she agreed with this. But she insisted that, by the time the transaction came to be completed, this was no longer the case. She said that, once it was clear that Debt Rescue could not help, she made it clear to her father that he [scil. she] was buying the property on her terms, not his, and she would not agree to any such lifetime arrangement. For one thing, she said, she had no idea whether she would even be able to service such a large mortgage.”

13. The appellants’ argued on this application that by the time the transaction came to be completed it was too late for the respondent to seek to impose her own terms. This was because the appellants had irrevocably altered their position to their detriment by entering into an agreement with the respondent for her to buy the property and her paying a deposit that was used to reduce the mortgage.

14. Prima facie, the primary judge’s findings depended upon his assessment of the credibility and reliability of the witnesses as to the alleged oral promise or representation. Appellate courts will only interfere with such findings on very limited grounds (Fox v Percy (2003) 214 CLR 118). The appellants’ submission today seemed to be directed to support a plea of estoppel by acquiescence. The appellants’ counsel submitted that such a claim would be within the parameters of the case as fought at trial. I am not in a position to assess whether such a case could properly be advanced on appeal. Suffice it to say that I am satisfied that the appellants may have an arguable case that the respondent is estopped from denying their entitlement to remain in the Ground Floor Unit for their lives. That assessment is naturally constrained by the limited parameters of argument available on this application for a stay.

15. The respondent submitted that even if that were so, no equitable relief could be granted to give effect to the appellants’ expectation because the conflict between the parties had become intolerable. The primary judge found that the first appellant had engaged in obnoxious behaviour which he described at some length at [89]-[102] of his first judgment. His Honour found (at [103]) that the first appellant’s behaviour was wholly unreasonable and substantially interfered with the respondent’s and her family’s enjoyment of their home. His Honour said that the first appellant’s behaviour had caused anguish to the respondent which was plain for all to see in the course of her evidence.

16. The appellants will submit that these findings were not open to the primary judge because there had not been a pleading that equitable relief, if otherwise available, should be refused by reason of conflict between the parties. The appellants will rely upon a statement made to the parties by the primary judge before trial that things not referred to in the pleadings would be treated as irrelevant. I cannot assess the merits of the appellants’ argument in this regard, except to say that it may be arguable.

17. The primary judge concluded his reasons of 26 February 2020 with a finding that the respondent is entitled on her cross-claim to an order for possession together with injunctions to ensure the orderly vacation of the property and proper behaviour on the part of the appellants in the meantime. The proceeding was stood over to 5 March 2020 with a view to the parties bringing in short minutes of order that would give effect to his Honour’s reasons.

18. During March, the COVID-19 pandemic escalated rapidly. The appellants, it seems, had not taken any step to attempt to comply with the primary judge’s orders, made on 5 March 2020 but foreshadowed on 26 February 2020, that they deliver vacant possession of the property. Their solicitor deposes that the first appellant is 75 and the second appellant is aged 80. He deposes that the first appellant has an existing heart condition and that the second appellant has a slow-growing brain tumour that is said to impact her heart and blood pressure, and she is on blood pressure medication. They are of an age and in a state of health that makes them vulnerable to serious illness or death if they were to become infected with the virus. As I have said, public health advice is that so far as possible, persons in their position should remain at home. The appellants submit that it is antithetical to that public policy that they be required to vacate.

19. The orders of 5 March 2020 granted liberty to the appellants to apply to the primary judge for a stay of the orders requiring the delivery of vacant possession. The appellants exercised that liberty, albeit out of time. The application was heard by the primary judge on 30 March 2020. On that day, for reasons his Honour delivered the next morning, the primary judge dismissed the application. He gave leave to the appellants to apply to him at 4:15pm on either 31 March 2020 or 1 April 2020 for an extension of the order for possession and order for removal of chattels. The appellants did not take up that leave. Instead, as I have said, on 2 April 2020 they filed the present application in this Court.

20. The primary judge recorded that during the course of the hearing of the application for a stay, he proposed that there might be grounds for a short extension of time and as a condition of such an extension the appellants should pay an occupation fee. His Honour recorded that counsel for the respondent proposed a fee of $300 to which no objection was taken as to quantum, but the appellants did not consent to the imposition of such a condition.

21. Critical to the primary judge’s rejection of the stay was findings his Honour made as to continuing conflict between the first appellant and the respondent, her husband and her sons (Wallis v Rudek (No 3) [2020] NSWSC 338). His Honour found:

“59   Thirdly, there is the evidence about the current state of affairs at the house. The evidence before me was not the subject of cross‑examination, and it would not have been practicable for there to have been any such cross‑examination. But that does not mean that the Court must ignore the evidence of Mrs Rudek and her family. That evidence was given in sworn affidavits. It described the state of affairs which represents a continuation of the state of affairs disclosed in the evidence before me at the trial. Unfortunately, in the light of the findings made about Mr Wallis’ behaviour, the evidence in the latest affidavits is only too credible.

60   As against that, one has simply a series of statements by the Wallises, or by Mr Wallis, and recorded by their solicitor. Usually in order to comply with the Evidence Act 1995 (NSW), s 75, evidence of that character would be given by the Wallises’ solicitor on information and belief. As I have noted, the solicitor has not even deposed to his belief in the accuracy of what he has been told.

61   The affidavit evidence of Mrs Rudek and her family is vastly weightier than the recorded assertions of the Wallises, if those assertions have any evidentiary weight at all. There is no reason for the purposes of this application not to accept the Rudeks’ evidence.

62   It might be argued that, in the circumstances of the present emergency, Mrs Rudek and her family should be prepared to put up with the conduct described in their affidavits. But this would be to ignore the debilitating effect of what, based on the evidence before me at the hearing, was a period of years of obnoxious and aggravating conduct which the Rudeks were forced to endure. Nor, even on their own, are the complaints necessarily trivial. The continued prosecution of the apprehended violence order against Mr Rudek, if not properly based, could well amount to harassment contrary to the terms of the order made by the Court. So, too, could the other conduct complained of.

63   The Court is not being asked to make any final findings on this, and I do not do so. The point is that Mr Wallis’ ongoing behaviour may involve contempt of the Court's orders, as well as continuing to impose an entirely unreasonable burden on Mrs Rudek and her family.

64   For these reasons, I considered that the application for a stay of the possession order, even for a relatively short period of time, was not made out.”

22. The primary judge had described similar conduct in his principal judgment.

23. In rejecting the appellants’ application for a stay of the order for delivery of vacant possession, the primary judge also commented on the lack of particularisation of specific grounds of appeal challenging the critical factual finding that the respondent had made the promise that the appellants asserted. His Honour also stated that there was no evidence the appellants could not obtain alternative accommodation, either with their other children or in short-term rental accommodation in the Baulkham Hills area. His Honour said (at [51]):

“I am well aware that the COVID‑19 epidemic represents an emergency the like of which has not been experienced in this country for decades, but the mere invocation of the emergency should not result in a suspension of all critical thinking or judgment. In circumstances such as the present, the Court will not behave pedantically, or require the proof of matters which are obvious, but the fact is that the Wallises’ application simply does not establish that they have nowhere else to go. I repeat, that at no stage was it suggested that they lack the money required to pay for alternative accommodation.”

24. There is an initial question as to whether this application should have been brought in this Court when the primary judge had said that a further application could be brought before him on 31 March or 1 April 2020 for an extension of the order for delivery of possession. The appellants submitted that they did not take up that leave because their position is that they should not be required to leave the premises in the current state of emergency until the appeal is determined. Although in the ordinary course one would expect an appellant to seek a stay of execution of the judgment from the primary judge, and exhaust the opportunity to do so, I do not think that the failure to take up the last grant of leave should preclude my dealing with the application. It is settled that the refusal of a stay at first instance does not preclude this Court granting a stay of execution of a judgment pending appeal.

25. The position as to the absence of evidence from the appellants about finding alternative accommodation has not changed from the position as it was before the primary judge. There is evidence adduced by the respondent that suggests that residential accommodation would be available. There is evidence as to the steps that are taken by real estate agents to allow both the seeking of rental accommodation by limiting inspections to one individual at a time and there is no evidence that the appellants would not have the financial resources to obtain such accommodation. The appellants are not in a position to say that they would be unlikely to obtain such accommodation because they have made no attempt to do so.

26. In any event, one of the respondent’s sons, Mr Kostya Rudek, has offered to lease a house that he owns in Lalor Park, which is currently vacant, to his grandparents at a discounted rent of $310 per week. It is currently being advertised for letting at a cost of $380 per week.

27. The absence of available alternative accommodation is not a ground for granting a stay. Nor was that the principal basis for the application. Rather, it was submitted that any move which would require the engagement of removalists would expose the appellants to an increased risk of infection and would be contrary to current public health policy.

28. It is accepted that the Public Health (COVID-19 Restrictions of Gathering Movement) Order 2020 does not preclude the appellants from seeking alternative accommodation, even if they were unwilling to move to Lalor Park which they are because it is a suburb with which they are unfamiliar.

29. The Court would be in a position to offer a relatively early hearing date for the appeal. I understand that the parties have been offered a date for any day in the week commencing 25 May 2020.

30. The real objection to the stay of the order for the delivery of vacant possession is the threat of continued conflict at the property. But for that threat the current health crisis would be such that having regard to the age and medical condition of the appellants, they should not be exposed to any additional risk of infection. It is true that they have not adduced evidence as to how removalists might be being expected to guard against the spread of infection. Nonetheless, requiring the appellants to move would be to increase their exposure to the risk of infection in a way which is contrary to public health policy.

31. The respondents refer to a number of incidents which have been a catalyst for conflicts. Mr Kostya Rudek deposed to an incident on 17 March 2020 in which he said that as he was walking up a driveway the first appellant screamed words to the effect of “Move the fridge from the carport”, and after that he accepted advice from his mother only to go to the upper part of the house to avoid any conflict with either of the appellants. The first appellant had apparently objected to Mr Rudek’s having placed the fridge in the carport.

32. Mr Steve Rudek, another son of the respondent, gave evidence before the primary judge of aggressive behaviour by the appellant in relation to goods that the appellant had placed in an empty outside pool area. He said he was abused and was in fear of physical attack. It appears from photographs that were before me on this application that the first appellant, or perhaps both appellants, have stored a large quantity of what appears to be junk in the pool area.

33. The respondent’s husband, Mr Vass Rudek, gave evidence of having attended the Local Court in Burwood on 16 March 2020 in relation to an application that the first appellant had brought against him for an apprehended violence order. That application was apparently dismissed. He also gave evidence that on 23 March 2020 he was then in his backyard cleaning the top of his coffee table when the first appellant screamed words at him to the effect, “why are you cleaning my table”. He sought to avoid the confrontation and backed away. He deposed to his feelings of depression because of the continued conflict between his parents-in-law and him and his wife.

24. The respondent gave evidence that the first appellant continued to carry out his hobbies at the property, including painting and pulling apart and fixing different objects using the front and back yards of the property. She gave evidence that she has been effectively refused permission to do her family washing in a shared laundry which is located, as I understand the evidence or the statements made from the Bar table, in the Ground Floor Unit, presently occupied by the appellants. She deposed on 29 March that over the two previous Saturdays, being the day on which she did the family’s washing, the door to the laundry had been locked so that on each occasion she had to ask the plaintiffs for their permission to open the laundry. She said there was no reason as to why the door ever should be locked.

25. With the exception of the issue concerning the laundry door, the catalyst for the particular incidents creating a conflict appears to have been the first appellant’s objection to the respondent’s family using their property, either the pool area or, it might be inferred, the carport for their own purposes in a way which appears to him to interfere with his right to use the same areas for his purposes. In his first judgment, the primary judge said (at [108]) that:

“One of the striking things about the evidence in this case concerning Mr Wallis' behaviour is that there seems no shadow of a justification for his view that his entitlement to control the property extends beyond the ground floor living area and covers the garden, the swimming pool, and the external studio. Nothing in the evidence before me suggests that there was ever any agreement, even on the Wallises' own case, which would justify that view. Yet it is only at the end of the case that the Wallises agreed to do something which, insofar as I can see they have always been required to agree to.”

36. On this issue being raised by me, the appellants initially said that they would undertake to the Court within a time to be assessed, to remove all of the appellants’ goods which have been stored in the pool area and in the carport. Later I was told that there was an issue that the carport might form a courtyard or curtilage to the Ground Floor Unit and perhaps be thought to be part of it.

37. The appellants’ claim below was for a declaration that during their lifetime they were entitled to an exclusive licence to occupy as a residence for themselves “that area of the Property consisting of a self-contained ground flat of two bedrooms, bathroom, kitchen and laundry (herein described as ‘the Ground Floor Unit’) together with access to, from and in the vicinity of that area as may be reasonably required to permit the plaintiffs to enjoy quiet possession of the Ground Floor Unit”. One would have expected if it were the appellants’ contention that the Ground Floor Unit included the carport that would have been made plain on their pleadings and supported by evidence. Instead, it is clear from the description of what the Ground Floor Unit consists, that the appellants did not contend that the carport was part of the Ground Floor Unit. If, as I understand to be the case, access to what was described as the Ground Floor Unit is to be had through the carport, then if the plaintiffs succeeded on appeal, they would be presumably entitled to orders which would permit them such access. That is far from saying that they would have a right of occupancy of the carport.

38. It may also be noted that the appellants sought a declaration as follows:

“Subject to the plaintiffs’ entitlement to occupy the Ground Floor Unit ... the defendant is entitled to enjoy quiet enjoyment of the whole of the Property...”

39. It seems to me that if the appellants remove their goods from areas to which they make no claim, then the sources of conflict would be very much, if not entirely, removed. As I understand it, the appellants now proffer the following undertakings as undertakings to the Court. The second such undertaking addresses the occupation fee to which the primary judge alluded in his reasons of 31 March 2020. The appellants are prepared to give the following undertakings as a condition of any stay, namely:

1. the usual undertaking as to damages;

2. an undertaking if they are unsuccessful in the appeal they will pay to the respondent an amount for lodging (to be characterised as a domestic arrangement) in the sum of $300 per week for the number of weeks they remain in possession of the property the subject of the appeal from 2 April 2020 such an amount to be secured by the Judgment Sum.

(The “Judgment Sum” refers to an order that the primary judge made requiring the respondent to pay a sum of $124,287.75 into Court which she has done.)

3. that the Judgment Sum will not be uplifted by them and will be provided as security for the respondent’s costs and that they will prosecute the appeal with all due expedition.

40. They now proffer additional undertakings, which as I understand it, are as follows:

1. that they will remove or cause to be removed all of the appellants’ goods that are stored in the pool area or in the carport within two to three weeks. I was told that they anticipated that such removal would be effected by their son-in-law who lives in Orange;

2. an undertaking not to go onto the other parts of the property, except as required for access to the Ground Floor Unit.

41. The appellants’ counsel has suggested that the first appellant should be permitted to go onto the carport for a designated period on the basis that the carport is arguably a portion of the Ground Floor Unit. For the reasons I have given, it does not appear to me that that is arguable in the way that the appellants’ case was framed below. Nor do I think that to be a sensible suggestion to avoid conflict with the respondent and her family who are entitled to use and go onto the carport.

42. The appellants will also undertake to:

1. give the respondent 24 hours’ notice on which she would be able to go through the Ground Floor Unit to access the laundry.

43. There is already in force an order by the primary judge that the first appellant not harass, intimidate, stalk or assault the defendant, her husband or her children. That order remains on foot.

44. It appears to me with these arrangements in place, the opportunities for conflict of the kind the respondents have described should be removed, but there will be liberty to apply in case that expectation proves sanguine.

45. The respondent submits that if the stay is to be granted upon such conditions, the goods should be removed within seven days rather than two to three weeks. They point out that Easter is coming where presumably the appellants’ son-in-law from Orange may be able to transport the goods and the goods should not remain in place longer than seven days. I agree with that submission. The appellants raise the spectre that police may be stopping traffic between Orange and Sydney if the movement of persons is not regarded as essential. It should be clear from these reasons, which will be made available to the parties when transcribed, that the appellants’ son-in-law would have a reasonable excuse to travel for the purpose of allowing the appellants to meet their undertakings to the Court.

46. In dealing with the application as outlined above, I have attempted to follow the principles described by Basten JA in Yeshiva Synagogue Inc v Karimbla Properties (No 10) Pty Ltd [2017] NSWCA 331 adjusted to the facts of this case. In particular, I have had regard to the matters stated at [16] and [17].]

47. Direct the parties to bring in short minutes of order in accordance with these reasons.

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Decision last updated: 08 April 2020