Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Kopas v Celermajer Holdings Pty Ltd [2012] NSWCA 53
• Hearing dates: 9 December 2011
• Decision date: 29 March 2012
• Before: Campbell JA at [1]; Young JA at [2]; Tobias AJA at [43]

Decision

(1) Application for leave to appeal dismissed with costs.

(2) Application for leave to cross appeal dismissed with no order as to costs.

(3) Extend the present stay of the order giving possession to the respondent for a further 42 days from the date of these reasons so that the respondent is at liberty to issue a writ of possession on or after the 43rd day.

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

• Catchwords: EVIDENCE- rejection of evidence- affidavit evidence excluded by judge because "uncertain and of low probative weight"- Court of Appeal must consider all available grounds when deciding whether decision to exclude evidence was wrong- Court of Appeal very reluctant to interfere with such decisions- in any event material probably properly rejected- leave to appeal not granted.; LANDLORD AND TENANT- application by respondent in CTTT for termination of lease and possession transferred to Supreme Court- applicant alleged a prior tenancy dispute was settled on the basis that he would be a tenant for life- whether s 5A Landlord and Tenant (Amendment) Act 1948 operated to exempt the lease from the 1948 Act- proceedings were not taken under the 1948 Act- therefore s 98A of the 1948 Act had no application- held that the proceedings were exempt from the operation of the 1948 Act.; LANDLORD AND TENANT- vacant possession- whether a question of fact or a mixed question of fact and law- vacant possession is purely a matter of fact.; PROCEDURE- re-opening after judgment- whether re-opening should be allowed- re-opening should be allowed where obvious that the decision has miscarried and that the miscarriage may be rectified by the attention of the primary judge rather than an appeal court- this principle applies to errors of fact and errors of law.
• Legislation Cited: Civil Procedure Act 2005, s 61; Evidence Act 1995, s 135; Landlord and Tenant (Amendment) Act 1948, ss 5A, 98A
• Cases Cited: Barilla v James [1964-5] NSWR 741; (1964) 81 WN (Pt 1) (NSW) 457; Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264; Di Salvio v Manthorpe [1965] NSWR 360; Hughes v Yuen (No 2) [1948] VLR 21; Ibrend Estates VB v NYK Logistics (UK) Ltd [2011] EWCA Civ 683; 4 All ER 539; Manche v Bigazzi (1963) 80 WN (NSW) 1681; New Cap Reinsurance Corporation Ltd v A E Grant [2009] NSWSC 950
• Category: Principal judgment
• Parties: Jurai Kopas (Applicant); Celermajer Holdings Pty Limited (Respondent)
• Representation: Counsel: A E Maroya (Applicant); J M White (Respondent); Solicitors: McCabe Terrill Lawyers (Applicant); Michael Michell & Associates (Respondent)
• File Number(s): CA 2006/255754

Decision under appeal

• Jurisdiction: 9111
• Citation: Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40; Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 304
• Before: Ward J
• File Number(s): SC 2006/255754

Judgment

1 CAMPBELL JA: I agree with Young JA.

2 YOUNG JA: This is the concurrent hearing of an application for leave to appeal, and if leave is granted, the appeal itself, as well as similar applications with respect to a cross appeal in a tenancy dispute between the parties over a flat at Rose Bay.

3 On 6 January 1984, the applicant Dr Kopas and the respondent entered into a lease of the premises for six months the term of which ended on 10 July 1984. The tenant held over after that date.

4 In 1992, the respondent sought possession of the premises and indeed obtained an order from the Residential Tenancy Tribunal giving it possession. However, in April 1992, there was a conference between the parties as a result of which unpaid back rent was paid, the respondent made certain undertakings as to the repair of the premises and a missive was despatched to the Tribunal consenting to the order for possession being rescinded. There is no evidence that the Tribunal actually did this, but the case has been conducted on the basis that it did so.

5 The parties had various stoushes before the Tribunal between 1992 and 2005, the upshot being some agreement and withdrawal of the application in most cases. Some of these applications involved Mrs Kopas as an alleged co-tenant.

6 The present proceedings had their genesis in a letter from the respondent's property agents to the applicant and his wife on 28 April 2005 informing them that their premises were intended to be sold with vacant possession.

7 Following this, on 30 November 2005, the respondent filed an application in the Consumer Trader & Tenancy Tribunal (CTTT) seeking orders terminating the lease and for possession. After considerable delay, apparently brought about by the fact that the applicant's son who is not legally qualified was appearing for him and was not sufficiently on top of the matter to be of assistance, the proceedings were transferred to the Supreme Court.

8 It would appear that the reason for the transfer was that the applicant alleged that in 1992 one of the parties' disputes was settled on the basis that he would thereafter be a tenant for life. It would seem that this part of the dispute between the parties took the major time before the primary judge. She dismissed the claim, commenting that much of the applicant's evidence was ludicrous.

9 On 23 September 2008, Hammerschlag J made directions. Those directions included that the defendant (ie the present applicant) "has served all the evidence on which it [sic] relies in support of the amended defence and will not serve any further evidence (other than):...(ii) an affidavit from a tenancy expert on the registered 5A lease/protected tenancy issue by Friday 12 December 2008." The hearing was then fixed for 4 to 7 May 2009. For some reason or other that fixture was vacated and the matter next came up before Ward J on 1 July 2010. Her Honour made rulings on the evidence, some preliminary, some final, and one of the matters which she considered was an affidavit of Mr Aldis J Birzulis apparently sworn on 23 March 2010.

10 The significance of this affidavit was that the deponent's brother was the person who took a lease of the premises. That lease which is in evidence was dated 19 November 1970 and bore a certificate from a Mr Markham, solicitor, of Bondi, that on 19 November 1970 he explained the within lease to the within-named lessee before it was executed and then witnessed his signature. I should note that that lease was registered under s 5A of the Landlord and Tenant (Amendment) Act 1948 at the office of the Rent Controller on 26 January 1971.

11 The affidavit verified the deponent's brother's signature on the lease and indicated that the brother had died on 26 October 1993. Paragraphs 4 and 5 were as follows:

4. In 1968 I returned to Sydney from Canada, where I had been working.

5. Sometime in about the following year (that is, 1968 or 1969) my brother moved into Unit 3 ... Rose Bay. I visited ... about once a month after he moved in.

12 The transcript of 1 July 2010 before Ward J discloses that when the affidavit was read, the judge said:

There is objection to this affidavit on the same grounds as to lateness and in responding to matters in relation to which leave was given. My problem is understanding the relevance of this affidavit.

I should note that whilst the affidavit was sworn on 23 March, it was not filed until about a month later.

13 Counsel for the applicant said that he had only recently come into the case and he would look further at the matter "with a view to deciding whether or not Mr Birzulis' affidavit is needed at all." He continued: "The difficulty I am in at the moment, to be completely candid, is I don't know whether the affidavit can achieve the purpose it was intended to achieve. It is a matter of pure law."

14 Counsel for the respondent said: "Could I indicate this: my principal objections are to paragraphs 4 and 5. What it appears to be is an attempt by the cross-claimant to raise matters which are not pleaded. What it appears to be is an attempt to introduce a matter that is not pleaded as being an issue in the case. That is an issue about vacant possession prior to entering into a Section 5A lease, and that is some 40 years ago." Counsel then referred the judge to para 21 of the further amended cross claim. That paragraph alleged, in the alternative, that the lease of 6 January 1984 operated under the 1948 Act. The particulars were, inter alia, that the lease of 19 November 1970 was invalid because of uncertainty or because it had not been duly executed. There was no mention of invalidity because of failure to obtain vacant possession under one of the placita of s 5A.

15 The hearing commenced before Ward J on 2 August 2010. It took seven days. On the first day of the trial, the judge gave reasons provisionally ruling paras 4 and 5 inadmissible. She noted the basis of the objection was relevance and lateness in time. Her Honour said at [4]:

The basis on which the plaintiffs object to those paragraphs being read was put primarily this morning on the basis of relevance, although prejudice in terms of the lateness of time is also relied upon. As far as relevance goes, it is said by counsel for the plaintiffs that there has been no pleading in the defence or in the cross-claim which alleges that vacant possession was or was not obtained by the plaintiff prior to the relevant date for the purposes of 5A(1)(e)(ii)(a) of the Landlord and Tenant Amendment Act 1948.

16 Her Honour then noted that the applicant maintained that he was not required to plead because of the deeming provision in s 98A of the 1948 Act.

17 Her Honour then indicated that, given the fairly low probative weight that the evidence bears on the face of the document itself, and the prejudice that would be suffered by the plaintiff, paras 4 and 5 should be rejected.

18 The trial then proceeded and her Honour gave judgment on 9 February 2011: [2011] NSWSC 40. She found in favour of the present applicant.

19 However, the respondent within the 14 days permitted by the rules, moved the Court to reconsider. Her Honour acceded to this request and then, after hearing counsel, revised her reasons and delivered a judgment on 14 April 2011 which found in favour of the respondent and made an order for possession; see [2011] NSWSC 304. Her Honour granted a stay of that order pending the decision of the Court of Appeal.

20 The applicant's summary of argument shows that there are three questions involved on his application, viz:

A. Whether it was appropriate for the learned trial judge to open and vary her judgment in the way she did;

B. The correctness of the learned trial judge's (revised) interpretation of Barilla v James and the conclusion that it entailed;

C. The correctness of the learned trial judge's refusal to permit the applicant at trial to rely upon an affidavit of Mr Aldis Birzulis (the brother of the tenant under the 1970 lease) going to the question of vacant possession.

21 The application was heard on 9 December 2011, Mr A E Maroya of counsel appearing for the applicant, and Mr J M White of counsel for the respondent.

22 Apart from the applicant's application, there was also before the Court an application by the respondent for leave to cross appeal. This was purely defensive. If this Court were to hold that her Honour should not have reopened the case, then the cross appeal says that because her Honour was wrong in her first judgment, this Court would, on appeal, come to the same decision as her Honour came to in her second judgment.

23 Dealing with the questions raised by the applicant in order, it seems to me that the matter can be very quickly dealt with.

24 A. It is really of no moment whether the judge was right or wrong in reopening the case. The reason is that if she was right, then the applicant has no quarrel; if she was wrong, then it would be almost certain that the Court would give leave to cross appeal and would consider the merits of the matter on appeal, so that the third of the questions would arise in any event.

25 Both sides agreed that the principles were correctly stated by Barrett J, as his Honour then was, in New Cap Reinsurance Corporation Ltd v A E Grant [2009] NSWSC 950, [20] where his Honour said:

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 re-opening 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.

It is clear that that principle applies to both to errors of fact and errors of law. In the present case her Honour came to the view that she had made an error in the way she treated the case of Barilla v James [1964-5] NSWR 741; (1964) 81 WN (Pt 1) (NSW) 457 and that she should remedy that error. Indeed such error has now been conceded by both parties.

26 Accordingly, there is no merit in the first point.

27 B. It is conceded by both counsel that the learned primary judge's first view of Barilla v James was wrong. This means that her second exposition of the principle in that case was correct, and indeed, the contrary has not been argued.

28 What I mean by that is that the primary judge held that Barilla v James did not prevent her from considering whether, on all the evidence, the relevant provisions of s 5A of the 1948 Act meant that the lease was exempt from the operation of the 1948 Act. What one would have thought might have been contested but is not, is whether her Honour correctly assessed the other factors and was correct in finding that the lease was excluded. The applicant relies on s 98A of the 1948 Act. That deems premises to be prescribed premises "In any proceedings, civil or criminal, arising out of or taken under, or purporting to arise out of or to be taken under, the provisions of this [1948] Act".

29 The present proceedings were not taken under the provisions of the 1948 Act and it is doubtful whether they arose under that Act. The section does not say that whenever someone raises the question of the 1948 Act applying, that the section 98A presumption automatically kicks in. The proceedings in the present case were taken under the Residential Tenancies Act 1987. On analogy with the reasoning of McClemens J in Manche v Bigazzi (1963) 80 WN (NSW) 1681, s 98A has no application to this case at all. Accordingly, there is no comfort for the applicant in this point.

30 C. There is a difficulty for this Court in that it is unclear as to why the primary judge rejected the material. There are three main possibilities, viz:

(i) it was irrelevant to any issue in the case;

(ii) the lateness of the material in view of the directions that had been made entitled the judge to reject the evidence under s 61 of the Civil Procedure Act 2005; or

(iii) the material was properly rejected under s 135 of the Evidence Act 1995.

31 The judge merely said that she excluded the material because it was uncertain and of low probative weight.

32 Mr Maroya says that it is clear that the principal reason was that the judge considered the material of low probative weight though she added lateness and prejudice to this principal consideration. Mr Maroya says that lateness could not really be of consideration because there was over three months after the affidavit was filed for the respondent to consider the matters contained in it and there was no evidence of prejudice other than, of course, the fact that the judge could have used the material to make an adverse finding against the respondent.

33 However, even if it is unclear as to the grounds on which her Honour rejected the material, this Court must consider all the available grounds when having to decide whether the applicant should have the chance of having the Court of Appeal rule that her Honour was wrong in rejection of the material and sending the matter back for a new trial.

34 The question is one of practice and procedure. The Court is very reluctant to interfere with such decisions. Secondly, the material does appear to me to be completely irrelevant to the issues in the pleadings. The applicant never amended the pleadings to raise the matter of lack of vacant possession and it was a matter that would take the opponent by surprise if it was not properly raised. Even in July 2009, the applicant's counsel was unsure as to whether the matter was relevant and respondent's counsel made it clear that if the applicant wanted to make out a case that there was a failure to obtain vacant possession before the 1970 lease was registered, then that should be made plain. It never was. Counsel indeed took the view that s 98A of the 1948 Act meant he did not have to plead it, and as I have said, that section has no relevance to this case, that decision was wrong.

35 It is significant that when the case was reopened and the significance of the applicability of the 1948 Act became clearer, there was no further application to the primary judge to admit the evidence.

36 In any event, the material was so nebulous that whilst it may have had some probative value, it had only a very slight value and could have been ruled out under s 135 of the Evidence Act.

37 I do not consider that the problem with this material is sufficient to warrant the grant of leave to appeal.

38 The question was raised as to whether the requirement that vacant possession be obtained involved a question of fact or a mixed question of fact and law. Although it is probably unnecessary to go into this matter, I would have thought that the authorities make it fairly clear that it is purely a matter of fact, that is, were the premises physically vacant subject to the de minimus rule: Hughes v Yuen (No 2) [1948] VLR 21; Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264; Di Salvio v Manthorpe [1965] NSWR 360 and Ibrend Estates VB v NYK Logistics (UK) Ltd [2011] EWCA Civ 683; [2011] 4 All ER 539.

39 In my view, leave to appeal should be refused with costs.

40 In the circumstances, this makes the cross appeal otiose and accordingly the application for leave to cross appeal should be dismissed, but as it is purely defensive, with no order as to costs.

41 There is a stay of the order of possession up to today. That stay should cease, but it is reasonable in the circumstances, seeing that the tenant and his wife have been in occupation of the premises for 27 years, that the Court grant a further six weeks to the applicant to vacate so that the stay is continued for six weeks with liberty to the respondent to issue a writ of possession on or after a date 43 days from the date of delivery of these reasons.

42 Accordingly, I propose the following orders:

(1) Application for leave to appeal dismissed with costs.

(2) Application for leave to cross appeal dismissed with no order as to costs.

(3) Extend the present stay of the order giving possession to the respondent for a further 42 days from the date of these reasons so that the respondent is at liberty to issue a writ of possession on or after the 43rd day.

43 TOBIAS AJA: I agree with Young JA.

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Decision last updated: 30 March 2012