Sakellis v Vourlos

1. [1]

   The plaintiff is the owner of a property at 578 Pittwater Road, North Manly. The defendant was married to the plaintiff’s niece who died on 29 July 2010. The defendant has occupied the North Manly property since either June/July 2015 (according to the plaintiff) or since mid-2016 (according to the defendant). The precise date does not matter for present purposes.

2. [2]

   By letters dated 18 December 2017, 1 February 2018 and 13 April 2018, solicitors acting for the plaintiff wrote to the defendant requiring him to vacate the property by dates specified in those letters. The defendant remains in the property.

3. [3]

   The plaintiff commenced proceedings on 6 June 2018 seeking possession of the property.

4. [4]

   The defendant defends the proceedings on the basis of a proprietary estoppel. He asserts that the plaintiff represented that he, his wife and children, could live in a property that she owned at 11A Edgecliff Esplanade, Seaforth for the rest of their lives. After some problems between the defendant and his son, the defendant said that the plaintiff represented that he could move to another of her properties being the North Manly property. He understood that his right to live there was on the same basis as had been represented to him in respect of the Seaforth property.

5. [5]

   He points to two aspects of detriment that he alleges gives rise to the estoppel. The first is that he gave up low cost subsidised housing that he and his family were renting in North Ryde in order to move to the Seaforth property on the basis of the plaintiff’s representation. Secondly, he says that he has expended various amounts of money and labour on both the Seaforth property and subsequently the North Manly property.

6. [6]

   By a notice of motion filed 16 November 2018 the plaintiff sought summary judgment for possession of the property. By an Amended Notice of Motion filed in court at the hearing of the motion, the plaintiff seeks, in the alternative to summary judgment, that the Defence be struck out pursuant to UCPR r 14.28. The defendant opposed the further relief being heard because of the shortness of notice (the defendant’s solicitors were only notified two days before the hearing of the motion), and because the basis for that relief was a lack of congruity between the pleading in the defence and the evidence of the defendant.

7. [7]

   I gave leave to the plaintiff to move on the amended motion for two reasons. First, the evidence of the defendant was served only on 7 December 2018. It was served in accordance with a direction I had made. There is no criticism of the defendant in that regard. Nevertheless, that was the first time the plaintiff’s lawyers were able to make a comparison between the pleading and the evidence. They notified the defendant’s lawyers on the second business day after service of that evidence. Secondly, the matters to be dealt with in relation to a strike-out application covered similar ground as that which would be dealt with when considering summary judgment. Both applications involved an assessment of the pleading and the evidence, and necessitated comparisons between them and an assessment of whether the evidence justified the pleading.

The Defence

1. [8]

   The Defence relevantly pleads:

The defendant’s evidence

1. [9]

   The relevant parts of the defendant’s affidavit are these:

Submissions

1. [10]

   The plaintiff accepted that the issue of whether representations were made, and what those representations were, is a triable issue and cannot be determined on a summary judgment application. The plaintiff submitted, however, that if the defendant’s evidence was taken at its highest, it did not justify the finding of a proprietary estoppel in the manner alleged in the defence.

2. [11]

   In that regard, the plaintiff submitted that the representation alleged by the defendant, found in paragraph 19(d), was that if the Seaforth property ceased to be available for occupation by the defendant and his wife, the plaintiff would provide alternative accommodation at another property owned by the plaintiff for the remainder of his natural life. The plaintiff submitted that taken at its highest, the estoppel claim cannot succeed because:

3. [12]

   The plaintiff in her written submissions asserted that the evidence cannot support the factual proposition that the defendant would have to wait five to ten years for alternative accommodation. The plaintiff submitted that the defendant should have filed a cross-claim seeking the only relief available to him on the evidence, namely, the right to stay in the North Manly property for a limited period, perhaps three months or so, until he obtained subsidised housing.

4. [13]

   However, in oral submissions, the matter of detriment was said to be connected with the strike-out of the pleading and not summary judgment. This was because, when the evidence concerned with the present availability of low-cost housing was considered, it showed that the defendant could never obtain the only relief he effectively claimed, that is, the right to reside for life in the North Manly property.

5. [14]

   The plaintiff submitted that the component of detriment alleged by the defendant cannot be made out. The plaintiff submitted that the defendant did not have a right to live in the North Ryde property for life. At most, the terms and conditions of the tenancy entitled the defendant's family to reside at that property in accordance with its terms. Those terms included that, to the extent that the defendant's family reduced in number, the defendant would be required to vacate that property and move to something smaller if still eligible.

6. [15]

   The defendant submitted that it is not appropriate as the plaintiff asserted in her written submissions to treat the issue of detrimental reliance as if it were a separate question to be determined on a summary judgment application. The defendant submitted that principles governing the Court’s discretion to grant summary relief, and the requirement in the authorities to undertake a broad enquiry into all the circumstances of the case to determine unconscionablility, pointed strongly against granting summary judgment on the question of detriment alone.

7. [16]

   The defendant submitted that the authorities make clear that the ingredients of proprietary estoppel cannot be subdivided into discrete compartments. The defendant submitted that where the plaintiff accepted that the content of the alleged representations was a triable issue, that concession was itself enough to defeat a summary judgment application.

8. [17]

   The defendant submitted that the Court of Appeal's decision in Sullivan v Sullivan [2006] NSWCA 312 was a complete answer to the motion for summary judgment.

9. [18]

   The defendant submitted that, in any event, the defendant in fact had security of tenure in the social housing he lived in because the evidence from Mr Wyngaard of Link Housing established that that organisation would generally not terminate a tenant's lease unless the tenant breached housing policies, became ineligible for social housing, or if there was a significant change of government policy.

Determination

1. [19]

   The principles which determine a summary judgment application are well known. In the context of a summary dismissal application they were recently summarised by Gleeson JA (Beazley P and Barrett JA agreeing) in Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405 at [196]-[200]:

2. [20]

   In my opinion, the plaintiff demonstrates no basis for obtaining either summary judgment or a strikeout of the defence for the following reasons.

3. [21]

   In challenging whether the evidence given by the defendant supports the representation made, the plaintiff isolates the representation in paragraph 19(d) and ignores the other sub-paragraphs which together are said to amount to the representations. In particular, the plaintiff overlooks paragraph 19(e) of the Defence which is a representation that the plaintiff would ensure that the defendant and his wife always had accommodation in a property owned by the plaintiff.

4. [22]

   The plaintiff also overlooks paragraph 57 of the defendant’s affidavit which alleges the plaintiff said to him that she intended to demolish the Seaforth property and that the defendant and his family would need another property to move into. What then follows in the defendant’s affidavit in relation to the purchase of the North Manly property and what was subsequently said to him is capable of providing evidence that, in effect, the North Manly property was being substituted for the Seaforth property and, in that way, bears out the alleged representation that the plaintiff would ensure that the defendant and his wife always had accommodation in a property owned by the plaintiff. All of the matters said by the plaintiff in her submissions relating to the proof of the particular representation, involve issues of fact including inferences from statements made and acts done by the plaintiff.

5. [23]

   As counsel for the defendant submitted, when the court comes to look at the words that were spoken between the parties, it does not examine it as a written contract would be construed. Rather, the enquiry is whether in the light of what was said and done, there was reasonable reliance by the promise to that person’s detriment, and whether it is unconscionable for the promisor to depart from the representation made.

6. [24]

   In Sullivan v Sullivan Handley JA said at [16]:

7. [25]

   Hodgson JA said at [84]-[85]:

8. [26]

   In Watson v Foxman (1995) 49 NSWLR 315 McLelland CJ in Eq said at 318-319:

9. [27]

   It is only possible to determine precisely what representations were made, the nature and extent of any reliance, and whether subsequent conduct was unconscionable after a trial where witnesses are cross-examined. It is only in those circumstances that “subtle nuances” can be discerned and proper inferences drawn from statements made and acts performed. Whether it was “reasonable for the representee to interpret it” as the defendant did, can only be determined after a trial. No firm conclusions can be reached on those matters on an application such as the present one.

10. [28]

    In my opinion, the representations pleaded are capable of being found on the basis of the evidence given by the defendant. That is not to say that they will be found. But it cannot be said that they are incapable of being found. In that way, I cannot find that the defendant’s defence based on the representations alleged is hopeless, unarguable or doomed to fail.

11. [29]

    In the same way, I do not consider that it is possible to reach any firm conclusion on the material available that the representation was confined to an offer to the defendant and his family, in contradistinction to an offer to him alone. Counsel for the plaintiff accepted that evidence to that effect was disputed. It was not clear if this submission went to a summary judgment point or to a pleading point but, whichever it was, it cannot be determined on this type of interlocutory application.

12. [30]

    In relation to the question of whether the defendant’s leaving the North Ryde housing amounted to a detriment, what was said in Sullivan v Sullivan has clear application to the present case.

13. [31]

    In his judgment Hodgson JA said:

14. [32]

    Justice Handley said:

15. [33]

    There is a clear factual dispute, and probably a legal dispute, about whether or not the defendant had a right to remain living at the North Ryde property for life. Such a factual dispute can only be determined at a final hearing. However, the outcome of that factual dispute is scarcely relevant in the light of what was said by the Court of Appeal in Sullivan v Sullivan in relation to detriment arising from a person giving up that form of housing to move to a property promised to them by a plaintiff.

16. [34]

    There is also a factual dispute about the time it may take for the defendant, if evicted from the North Manly property, to find and be accepted for subsidised housing. There was some concentration on this issue at the hearing of the motion, but it is a matter relevant only to the extent of the relief that might be granted to the defendant if a proprietary estoppel is found. The plaintiff submitted its relevance went to whether, in the absence of a cross-claim, the defendant could possibly succeed, when his only claim in the defence was a right to stay for life in the North Manly property. In that way, the plaintiff submitted, the detriment alleged (being deprived of subsidised housing for the rest of his life) is not supported by the evidence.

17. [35]

    In my opinion, the defendant has no obligation to file a cross-claim. He seeks to defend the plaintiff’s claim for possession by relying on an estoppel. He says that the effect of the estoppel is that he is entitled to reside in the North Manly property for life. If it is found for any reason that a right to reside in that property for life is not the relief to which he is entitled, provided an estoppel is established, the Court will mould the relief to what is found to be the effect of the representation. In Sullivan v Sullivan Handley JA at [20]-[26] discussed the way relief may be moulded and noted at [25] that subsequent events may even enlarge an equity claimed. I accept that Sullivan v Sullivan was a case brought by the person claiming the estoppel, but I do not consider that the remarks made concerning relief in that case are not equally applicable where possession is resisted on the basis of an estoppel. I consider that the decision of Rein J in Bushby v Dixon Holmes Du Pont Pty Ltd (2010) 78 NSWLR 111; [2010] NSWSC 234 at [27]-[28], [30] and [33] supports that view. Although Rein J was dealing with equitable estoppel, I consider that what his Honour said is equally applicable to proprietary estoppel.

18. [36]

    I certainly do not consider, in the light of those authorities, that any failure to file a cross-claim to claim some lesser relief means that the defendant’s defence is hopeless or unarguable. Nor is it a basis for striking out the pleading relating to the detriment on the basis of all of the evidence. As I have noted, there is a clear factual dispute on the evidence concerning detriment, both as to the defendant’s rights at the time he lived in the North Ryde property, and to any rights he may have to re-obtain subsidised housing.

Conclusion

1. [37]

   The plaintiff fails to demonstrate that she is entitled to summary judgment and that she is entitled to an order striking out any part of the defendant’s defence.

2. [38]

   I make the following orders:

   1. (1)

      Dismiss the plaintiff’s amended notice of motion filed 13 December 2018.

   2. (2)

      The plaintiff is to pay the defendant’s costs of the motion.