Woolf v Kaye aka Woolf
[2018] NZHC 2940
•13 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2015-404-1043
[2018] NZHC 2940
BETWEEN VIRGINIA WOOLF
First Plaintiff
VIRGINIA WOOLF as Executor of the Estate of Noel Bernard Woolf
Second Plaintiff
AND
ALWYN BERNARD KAYE (previously known as ALWYN BERNARD WOOLF
First Defendant
MARK WILLIAM SYDNEY CLARK as
Executor of the Estate of Violet Isabel Woolf Second Defendant
Hearing: On the papers Appearances:
G A Keene for the Plaintiffs
A Gilchrist and C Fry for the Defendants
Judgment:
13 November 2018
JUDGMENT OF GORDON J
This judgment was delivered by me
on 13 November 2018 at 3.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors: Foy Halse, Auckland
Richard Wood, Auckland
Counsel:G A Keene, Auckland A Gilchrist, Auckland
WOOLF v KAYE [2018] NZHC 2940 [13 November 2018]
Introduction
[1] On 24 August 2018, I gave judgment in favour of the first defendant, Mr Kaye, against his sister, the first plaintiff, Ms Woolf.1 I dismissed all of Ms Woolf’s claims in respect of a residential property (the property) which she occupied (and continues to occupy) and whose sole registered proprietor is Mr Kaye. I then made the following orders:2
(a)Ms Woolf’s claims for breach of contract, resulting trust, constructive trust and for a sale order are all dismissed (Ms Woolf having failed to prove those claims on the balance of probabilities).
(b)I enter judgment for Mr Kaye in the sum of $273,165.01, being mesne profits for the period of six years prior to 25 June 2015, together with interest pursuant to s 87 of the Judicature Act on that sum.
(c)I make an order in favour of Mr Kaye for possession of the property at 14 Woodhall Road, Epsom, being all that parcel of land containing 562m² more or less being contained in Lot 1 on Deposited Plan 190523 Indemnifier NA 120B/931 (North Auckland Registry), to take effect two calendar months from the date of this judgment.
(d)I make an order in favour of Mr Kaye for a writ of possession for the property at 14 Woodhall Road, Epsom, being all that parcel of land containing 562m² more or less being contained in Lot 1 on Deposited Plan 190523 Indemnifier NA 120B/931 (North Auckland Registry), to take effect two calendar months from the date of this judgment.
(e)I make an order discharging the consent order under CIV-2015-404- 603 that Caveat No. 7005424.1 on the property at 14 Woodhall Road, Epsom, not lapse.
(f)I make an order that Caveat No. 7005424.1 on the property at 14 Woodhall Road, Epsom, being all that parcel of land containing 562m² more or less being contained in Lot 1 on Deposited Plan 190523 Indemnifier NA 120B/931 (North Auckland Registry), be removed.
(g)The remaining counterclaims made by Mr Kaye are dismissed.
[2] Ms Woolf now applies for an order staying execution of the orders made in (c), (d), (e) and (f) above pending her appeal of my substantive judgment to the Court of Appeal. She also seeks an order that the costs of, and incidental to, this application be reserved pending the outcome of the appeal.
1 Woolf v Kaye [2018] NZHC 2191.
2 At [381].
[3] Mr Kaye opposes the application. I record that he has undertaken that he will not seek to enforce the order made in (b) above until the appeal has been heard and determined. He seeks costs on this application.
[4]I first outline each party’s general position on the application.
Ms Woolf’s position
[5] Ms Woolf has sworn an affidavit in support of the application dated 12 October 2018. In the affidavit, Ms Woolf deposes as to the mental and emotional impact that my substantive judgment has had on her. She attaches a letter from her GP who says that Ms Woolf has struggled with depression and anxiety, and that Ms Woolf found it particularly difficult to cope with the stress of the litigation. She also mentions Ms Woolf’s physical difficulties due to a recent fall. Ms Woolf’s counsellor has also written a letter in which he discusses the same concerns.
[6] Ms Woolf further outlines how she currently earns approximately $500 per week from her tutoring business conducted at the property, and how it would be virtually impossible for her to find affordable rental accommodation in a suitable and safe location, especially given she has two dogs. She also says her ability to earn income will be adversely affected if she has to move out, as she will likely have to cease her tutoring business.
[7] Ms Woolf considers she should be able to remain in the property until the result of the appeal is known. She says she will do everything she can to arrange matters in the event the appeal is unsuccessful and she needs to vacate the property.
[8] In a further affidavit sworn 23 October 2018, Ms Woolf provides details as to her current financial position. Those details show that Ms Woolf has incurred significant liabilities as a result of the legal proceedings. But, notably, she has $33,000 in savings at the bank.
[9] Ms Woolf annexes to her 23 October 2018 affidavit, an email from a letting agent, Mark Steyn, to her counsel Mr Keene. Mr Steyn says in the email that the property is unrentable in its current state. Amongst other things, he says the ceilings
in the majority of the house have to be replaced, and some of the panels are a safety risk. He also says the stove has to be replaced urgently, and there needs to be insulation installed under the floors. He finishes by saying, “this is a wonderful character home but is going to take considerable work to bring it up to scratch”.
Mr Kaye’s position
[10] Mr Kaye has filed an affidavit in support of his opposition dated 19 October 2018. He says that if Ms Woolf’s position is that she can only live in Epsom, she should pay rent accordingly or find cheaper accommodation. She should not be permitted to stay in Epsom at his expense and subsidised by him.
[11] Mr Kaye also says that Ms Woolf overlooks the considerable benefit she has had from living in the property over a lengthy period of time without payment. He says the position she has found herself in is of her own making. She has had two months to depart the property, but she will neither depart nor pay market rent to remain.
[12] In the event the Court of Appeal takes a different view and finds that Ms Woolf has some form of interest in the property, Mr Kaye says that Ms Woolf would have still received significantly more by way of benefits.
Events since my substantive judgment
[13] It is worth noting that the parties have attempted to compromise their positions. Mr Kaye has offered to allow Ms Woolf to remain in occupation of the property through until 28 February 2019 on the condition that she pay a weekly rental of $660 (the rental assessment by a valuer, Peter Bates, who gave evidence on behalf of Mr Kaye at trial).
[14] Ms Woolf counter-offered to pay $300 per week and sought to be permitted to remain in occupation of the property through until 28 February 2019, or some later date if it suited Mr Kaye. Mr Kaye did not accept Ms Woolf’s counter-offer.
[15] Ms Woolf’s present position is that she seeks to remain in the property until the appeal has been heard and determined, on the basis of a weekly rental payment of
$300. She says she would be prepared to make the premises reasonably available to Mr Kaye and any tradespersons to enable repair and upgrading work to be completed.
Principles
[16]Rule 12 of the Court of Appeal (Civil) Rules 2005 provides:
(1)None of the matters referred to in subclause (2) operate as—
(a)a stay of a proceeding in which a decision was given; or
(b)a stay of execution of that decision.
(2)The matters are—
(a)an application for leave to appeal; or
(b)the giving of that leave; or
(c)an appeal.
(3)Pending the determination of an application for leave to appeal or an appeal, the court appealed from or the Court may, on application, —
(a)order a stay of the proceeding in which the decision was given or a stay of the execution of the decision; or
(b)grant any interim relief.
(4)An order or a grant under subclause (3) may—
(a)relate to execution of the whole or part of the decision or to a particular form of execution:
(b)be subject to any conditions that the court appealed from or the Court thinks fit, including conditions relating to security for costs.
(5)If the court appealed from refuses to make an order under subclause (3), the Court may, on application, make an order under that subclause.
(6)If the court appealed from makes an order under subclause (3), the Court may, on application, vary or rescind that order.
(7)The Court may, at any time, vary or rescind an order made by it under this rule.
[17] The starting point is that a successful party is entitled to the fruits of his or her judgment.3 Therefore, Ms Woolf must show why the usual consequences of the judgment should not follow.4 As the Court of Appeal recently explained in Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust:5
[10] … The court will need to balance the competing rights of the party who has obtained judgment against the need to preserve the appellant's position in the event of the appeal succeeding. The factors to be taken into account in the balancing exercise when a stay or interim order are sought include:
(a)whether the appeal may be rendered nugatory by the lack of a stay;
(b)the bona fides of the appellant as to the prosecution of the appeal;
(c)whether the successful party will be injuriously affected by the stay;
(d)the effect on third parties;
(e)the novelty and importance of questions involved;
(f)the public interest in the proceeding;
(g)the overall balance of convenience; and
(h) the apparent strength of the appeal. (Citations omitted)
[18] In SKIDS Program Management Ltd v McNeill, Woodhouse J emphasised that these are amongst the factors that the Court is likely to consider.6 The list is not determinative.7 Ultimately, each case must be determined on its own circumstances.
Submissions
[19] Mr Keene, on behalf of Ms Woolf, first submits that the appeal will be rendered nugatory if the stay of execution is not granted. He submits if the appeal succeeds on the major points, then there will be a significant change to the financial position of Ms Woolf and to the situation generally. The question of Ms Woolf vacating the property
3 Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust [2017] NZCA 377 at [10].
4 At [10].
5 Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust, above n 3.
6 SKIDS Program Management Ltd v McNeill HC Auckland CIV-2010-404-1696, 20 December 2011 at [9].
7 At [9].
will be approached from a completely different perspective. If she is forced to move out before the appeal is heard, Mr Keene submits Ms Woolf loses the ability to move out in an unhurried manner and she loses the opportunity to maximise the return on the property.
[20] If Ms Woolf is permitted to stay at the property, Mr Keene submits that the court needs to fix a weekly rental payment she can reasonably afford. He submits that her financial position is such that $300 per week will be manageable for her.
[21] Mr Keene also submits that Mr Kaye will not be injuriously affected if the stay is granted. As the evidence of Mr Steyn is that the property is not currently rentable, it cannot be said that Mr Kaye will lose $660 per week for between six to nine months.
[22] Mr Keene further submits that Ms Woolf intends to prosecute her appeal with due diligence. He expects Ms Woolf would be prepared to execute an undertaking to this effect. Although the application for legal aid has not yet been completed, Mr Keene notes the high volume of activity on the matter since the release of the substantive judgment (application for recall of the judgment, costs submissions, lodging an appeal and addressing security for costs on appeal) and Ms Woolf’s personal circumstances.
[23] As to the balance of convenience, Mr Keene submits it favours Ms Woolf continuing in occupation of the property until the appeal has been heard and determined. He submits that she has lived there for 36 years without Mr Kaye taking issue. He notes further that she works part-time due to mental and physical ill-health. As she only derives a modest income from her part-time work, he says she will be unlikely to find accommodation in the area and this means it will be unlikely that she will be able to continue her part-time tutoring business. He also refers to Ms Woolf’s evidence that she has recently fractured her wrist and ankle, making it more difficult for her to move about and locate suitable accommodation.
[24] Lastly, Mr Keene submits that the appeal cannot be categorised as “hopeless”. He submits the Court of Appeal might take a different approach to whether Ms Woolf’s
contribution to mortgage repayments can give rise to a resulting trust. He also submits that the Court might take a different view of my factual findings.
[25] Mr Gilchrist, on behalf of Mr Kaye, submits that Mr Kaye, as the successful party, is entitled to the fruits of his judgment.
[26] Mr Gilchrist principally submits that the appeal will not be rendered nugatory by the lack of a stay, and Ms Woolf’s position can be preserved without further detriment to Mr Kaye’s position. He submits that as Ms Woolf seeks that the property be sold (as part of the relief in the proceeding), there can be no suggestion of prejudice if she vacates the property now, or even if the property is sold. He claims that what Ms Woolf seeks will not do justice as between the parties, as Mr Kaye will be injuriously affected by ongoing losses of $660 per week if the stay is granted on the proposed terms. He submits that given Ms Woolf’s precarious financial position, a stay would effectively allow her to prioritize her other current and future creditors over Mr Kaye.
[27] Mr Gilchrist also submits that Ms Woolf’s appeal does not have any realistic prospect of success. Furthermore, there is no public interest in the proceeding, nor is there any novelty or importance in the questions involved.
[28] Lastly, Mr Gilchrist submits that the overall balance of convenience favours the refusal of a stay, or a stay on different terms.
Analysis
Will the appeal be rendered nugatory if there is no stay?
[29] I accept that if Ms Woolf were ordered to move out of the property, her input into any sales process which may take place before the appeal is heard, is likely, at best, to be reduced, given she currently has no legal interest in the property.
[30] Ultimately, however, Ms Woolf’s appeal will not be rendered nugatory if there is no order for a stay. She seeks an order for sale of the property. If she moved out of the property, and she was subsequently successful on appeal, she would still have an
interest in the property. Alternatively, if Mr Kaye sold the property in the interim, which he says is unlikely, he has consented to the net proceeds of any sale being held on trust. Ms Woolf would then be entitled to a part of the proceeds proportionate to her interest and/or her share in her (deceased) parents’ interest.
Bona fides of the appellant
[31] Mr Gilchrist submits that throughout the proceedings Ms Woolf has failed to adhere to timetable directions. That position has continued with Ms Woolf’s proposed application for legal aid which has not been filed by the date indicated to him by Mr Keene.
[32] However, I accept the advice from Mr Keene that there has not been any delay on the part of Ms Woolf in completing the sections of the application that she needed to complete. Mr Keene advises that there are reasons personal to him that will mean that the legal aid application will not be filed until 12 or 13 November 2018. I accept what Mr Keene says.
[33] I accept that Ms Woolf intends to prosecute her appeal. She filed a notice of appeal promptly. The delays in the legal aid application being filed are not attributable to Ms Woolf.
Will Mr Kaye be injuriously affected by the lack of a stay?
[34] Mr Gilchrist submits that Ms Woolf is currently depriving Mr Kaye of the economic advantage that he would otherwise derive from the property. He submits that Mr Kaye is currently losing out on $660 per week in rental payments.
[35] However, there is a contest which has arisen in the context of this application as to whether the property is currently rentable.
[36] In a telephone conference on 19 October 2018 held for the purpose of progressing Ms Woolf’s stay application, and in the absence of any opposition on behalf of Mr Kaye, I gave Ms Woolf leave to file two brief affidavits. As was expressed in my minute, one was to be from a letting agent regarding the current
condition of the property and what rental might be realised. The second was to be from Ms Woolf regarding her current financial position.
[37] What Mr Keene filed was not an affidavit but an email from Mr Steyn annexed to Ms Woolf’s affidavit of 23 October 2018. As already noted, Mr Steyn says that the property is not currently rentable.
[38] As to that evidence, Mr Gilchrist first submits that what Mr Steyn says is contrary to the unchallenged evidence of Mr Bates at trial that the property was rentable at a rate of $660 per week. Mr Bates’ evidence was that value reflected the condition of the property when he last visited on 15 March 2018. Mr Gilchrist also submits that Mr Steyn’s evidence is unsworn and he does not provide any details as to his qualifications. While making those strong criticisms, Mr Gilchrist does not go so far as submitting that the Court should not receive the email.
[39] I am prepared to treat the content of Mr Steyn’s email as reliable on the basis of Ms Woolf’s sworn evidence that Mr Steyn is an experienced letting agent. I make it clear that I am taking into account the evidence of Mr Steyn for the purpose of the stay application only. As noted, there was no contest over Mr Bates’ evidence at trial.
[40] Therefore, as the property is not currently rentable,8 it cannot be said that Mr Kaye would be injuriously affected by the grant of a stay (at least until any remedial work said to be necessary is completed).
Effect on third parties, novelty and importance of questions involved, and public interest
[41] Mr Gilchrist and Mr Keene agree that there is no effect on third parties. Nor is there any wider public interest in the proceedings. I accept those submissions.
8 The timetable orders I made at the telephone conference on 19 October 2018 permitted Mr Keene to file reply submissions. Ms Woolf was not given the opportunity to file further evidence. However, Mr Keene filed an affidavit of Ms Woolf sworn 9 November 2018 together with his reply submissions. Annexed to Ms Woolf’s affidavit were two further reports relating to the rentability of the property. Mr Gilchrist filed a memorandum submitting that the two further reports should not be read. I have issued a contemporaneous minute refusing their admission. In any event, as I have found in favour of Ms Woolf on this issue, the further reports are not necessary.
[42] I note that the issue of the presumption of advancement was discussed in some detail in my substantive judgment. There are aspects of the discussion which were novel, specifically whether the presumption applied to adult children.
[43] Nevertheless, I still regard all of these matters as neutral factors for the purposes of this application.
Apparent strength of the appeal
[44] Ms Woolf’s principal ground of appeal appears premised on my finding that there was no resulting trust either in her favour or in favour of the parents of Ms Woolf and Mr Kaye in relation to the property (Ms Woolf abandoned her claim for breach of contract, which had initially been advanced as her primary claim).
[45] Even if the Court of Appeal were to be attracted to any legal argument arising out of cases which Mr Keene relies on, the fact remains that Ms Woolf made a negative contribution to the CBA mortgage.9
[46]In relation to the parents, the factual question of whether they contributed
$3,500 or $14,000 to the purchase of the property will only have significance if the Court of Appeal reaches a different conclusion on the following issues:
(a)whether the presumption of advancement applies; and
(b)if so, whether Ms Woolf has rebutted the counter-presumption of advancement.
[47]As I explained in my substantive judgment:
[214] In the end, it is perhaps irrelevant as to whether the parents provided the amount of $3,500 or $14,000. Either way, the sum is subject to the counter-presumption of advancement and Ms Woolf has not provided any evidence to rebut that presumption. She has therefore not proved her claim of a resulting trust in relation to the parents on the balance of probabilities.
9 See Woolf v Kaye, above n 1, at [246]-[253].
[48] Mr Keene does not make detailed submissions on whether I was incorrect to find that the presumption of advancement applied in this case. He merely submits it is “an issue open to debate such that it could not reasonably be argued that there is no realistic possibility of the Court of Appeal taking a different approach”.
[49] I accept that there is an issue as to whether the presumption applies to adult children.
[50] As to whether Ms Woolf has rebutted the presumption by way of evidence, Mr Keene refers to a statement from Mr Kaye which is contained in a letter from Mr Kaye to Ms Woolf in 1999 where he said, “I will obviously have to repay Mum and Dad out of the money”. This was not referred to in my substantive judgment. He says this statement arguably assists Ms Woolf.
[51] However, this is one piece of evidence which needs to be considered in the wider context of all the evidence in the case.
[52] As to the defence of laches, I note that I did not strictly need to decide that issue given my decision against Ms Woolf on the claims. However, I note that Ms Woolf first needs to persuade the Court of Appeal that my substantive judgment was wrong and then that my view on the applicability of the defence of laches was wrong.
[53] Lastly, as to mesne profits, Mr Keene submits that I was wrong to find that Ms Woolf was wrongfully in occupation of the property. As recorded earlier in this judgment, Mr Kaye has undertaken not to enforce my order in that regard. It is therefore unnecessary to comment further on this issue.
Overall assessment
[54] In my view, the key factors in this case are whether Mr Kaye will be injuriously affected by the stay, and the overall balance of convenience. I have already determined that Mr Kaye will not be injuriously affected by the grant of a stay.
[55] As to the other factors, it cannot be said that the appeal will be rendered nugatory by the lack of a stay. I consider that the remaining factors I have addressed above are neutral factors.
[56]In my overall assessment, I also take into account the following.
[57] If Ms Woolf is required to vacate the property more or less immediately, she will need to move to a different part of Auckland where the rents are lower.
[58] Ms Woolf’s occupation of the property is closely connected to her ability to generate income from private tutoring which she does at home and also relief teaching.
[59] In relation to relief teaching, she has benefited as a result of the teacher shortage in Auckland. The current contacts that Ms Woolf has with secondary school principals in Auckland’s central region may be lost depending on how far away from Auckland’s central area Ms Woolf is required to move.
[60] In relation to tutoring, Ms Woolf’s contacts have been built up over a number of years. If Ms Woolf were required to move away from Auckland’s central area, there might well be an impact on her ability to earn income from tutoring.
[61] My view is that the balance of convenience favours Ms Woolf’s general position. That position allows Ms Woolf to remain in the property, which is an outcome contemplated by Mr Kaye if Ms Woolf were to pay the appropriate sum of weekly rent. Her position is that that amount is $300 (she does not suggest that she should pay no rent at all, even though Mr Steyn’s assessment is that the property is not currently rentable).
Result
[62] The application for a stay of my orders as set out in [1](c) to (f) of this judgment, is granted. Ms Woolf may remain in the property until the hearing of her appeal against my substantive decision, subject to the following conditions:
(a)Ms Woolf is to pay Mr Kaye the rental amount of $300 per week;
(b)The rental period is to commence from the date of this judgment;10
(c)Rent is to be paid seven days in advance (other than for the first two weeks’ rent which may be paid on the date for the payment of the third week’s rent);
(d)Rent is to be paid every seven days into an account nominated by Mr Kaye. Mr Kaye is to provide the account number to Ms Woolf within seven days of the date of this judgment;
(e)In the event a payment is missed or late, the stay does not automatically come to an end. In such circumstances, Mr Kaye may serve a notice on Ms Woolf giving her the opportunity to rectify any such default;
(f)In the event Mr Kaye wishes to undertake any remedial work to the property, Ms Woolf may remain in occupation of the property (subject to any health and safety issues). In the event that health and safety issues require Ms Woolf to vacate the property during any remedial work, no rent is payable for the period for which Ms Woolf is required to vacate;
(g)Ms Woolf is not to make any alterations to the house without the prior written approval of Mr Kaye;
(h)Ms Woolf is to be responsible for all yard maintenance (gardens and lawnmowing) at her cost;
10 Mr Kaye undertook not to enforce the orders in my substantive judgment pending my decision on the stay application. I therefore treat the date of this judgment as the date for commencement of rent (rather than 24 October 2018, being the date which would be arrived at applying the order at [1](c) above).
(i)Ms Woolf is to be responsible for payment of all utilities for the property at her cost and no invoices for utilities are to be outstanding against the property at the time Ms Woolf moves out of the property;
(j)Ms Woolf is to provide keys to the property and the security code for the alarm system to Mr Kaye’s New Zealand legal representatives (pursuant to an undertaking by those legal representatives not to release the keys or advise the alarm code to any other person other than with the express agreement of Ms Woolf. Such agreement is not to be unreasonably withheld);
(k)Ms Woolf is to allow inspections on the property, including the taking of photographs inside and outside by Mr Kaye or his representatives on the giving of 48 hours’ notice;
(l)Ms Woolf will give two weeks’ notice in writing if, for any reason, she intends to move out of the property prior to the end of the stay period; and
(m)When Ms Woolf moves out of the property, she is to leave power, water, security and phone services functioning and provide copies of all invoices, so that those services can be taken on by Mr Kaye.
Costs
[63] The outcome is that Ms Woolf has been successful in her application for a stay, albeit on some (but not all) of the conditions proposed by Mr Kaye. Overall, however, Ms Woolf has succeeded. Although Ms Woolf seeks an order that costs be reserved pending the outcome of her appeal, I consider that costs should be determined at this stage.
[64] My preliminary view is that Ms Woolf is entitled to costs on her application. I expect the parties to agree costs. In that case, a joint memorandum should be filed within 15 working days of this judgment. In the absence of agreement, Ms Woolf may file a memorandum within five working days of the date for the joint memorandum
and Mr Kaye may respond within a further five working days. I will determine costs on the papers.
Gordon J
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