Parents are evicted from
their home because they transferred title without
safeguarding continuing occupation rights
To save their house from being sold by the ANZ Bank, the
parents transferred the title to their daughter who borrowed
enough to repay the bank loan.
But the conveyancer who acted for both parties when the
title was transferred failed to safeguard the parents’
continuing occupation rights and payment for their remaining
equity in the house.
This failure resulted is a toxic legal dispute which has
come before the Supreme Court on four separate occasions to
date, with an appeal pending.
This is an account and analysis.
The parents, Mr & Mrs Wallis, built the house in
Schofield Parade, Pennant Hills in 1985. It was their family
home. Mr Wallis was a builder. In 2012 he developed a heart
condition and retired from building work. He was in serious
In early 2013, the daughter, Mrs Rudek, took out a
personal loan for $26,000 and gave it to her parents to ease
their financial difficulty. But that gave only temporary
relief. In June, the ANZ Bank commenced enforcement action
for their mortgage loan. Mrs Rudek agreed to raise $840,000
to pay out the ANZ Bank loan and other creditors in full.
The house was originally valued at $950,000 for loan
purposes. Later, the valuer increased it to $1,050,000 to
enable sufficient funds to be borrowed. This became the
price in the Contract and Transfer. The title was
transferred, the ANZ Bank loan and the other creditors were
The house was divided into two separate units. On
settlement, Mrs Rudek, her husband and two sons moved into
the upper unit, on the top two levels, while Mr & Mrs Wallis
moved into the lower unit, on the ground floor. Each unit
had a separate entrance and was self-contained. Some
furniture belonging to Mr & Mrs Wallis remained in the top
The continuing occupation rights were documented in an
‘amateurish’ form by the conveyancer (who acted for all
parties) in a licence agreement, in this way:
The licensor grants the licensee a licence to occupy
the part of the property on the bottom level of the
residence at a weekly licence fee of $1 from the date of
settlement until 16 August 2014 and following this time,
indefinitely on a month by monthly basis
The agreement was never signed. The licence fee was paid
for one year.
The remaining equity in the property was left up in the
air. In the settlement adjustment sheet the unpaid equity
was referred to as ‘an amount of $212,907.84 to be allocated
as rental fees’. No ‘allocation’ was made.
After Mrs Rudek and her family moved into the property,
various conflicts flared:
- The loan of $26,000 was not repaid when Mr & Mrs
Wallis sold an investment property.
- The local council issued notices to comply requiring
the construction of pillars on balconies and the
installation of shutters for bushfire purposes, which Mr
Wallis had never finished.
- The swimming pool had been drained and the pool area
was being used by Mr Wallis to store a large quantity of
- Mr Wallis was personally abusive, particularly to Mr
Rudek calling him a “rude dick” (a crude adaption of his
- The police had been called. They refused Mr Wallis’
request to take out an apprehended violence order.
- The conflicts came to a head in 2018, when Mrs
Wallis said that the Rudeks owed the Wallis $200,000,
which Mr Rudek said would be paid if the Wallises would
leave the house and go somewhere else.
Justice Parker concluded: “I am satisfied that Mr Wallis’
behaviour [the abuse] is wholly unreasonable, and represents
a substantial interference with Mrs Rudek’s and her family’s
enjoyment of their home.”
The Law, the findings and
The Wallises’ objective in commencing proceedings was to
secure their continued residence in the property. Justice
“The whole thrust of their case, at an evidentiary
level, involved seeking to establish that a promise had
been made to them which would allow them to remain in
the property indefinitely.”
The Court found that no promise had been made amounting
to a contractual agreement which could be specifically
enforced, and alternatively, no promissory estoppel was
Therefore, Mr & Mrs Wallis failed in their claim for
The Court was more accommodating in terms of the equity.
The Court found a common intention constructive trust and
applied the Baumgartner doctrine. Justice Parker stated:
“The doctrine ultimately rests on the inequity which
arises if an asset which is acquired with joint
contributions falls to the party who is the registered
proprietor on the breakdown of the relationship between
the parties. … In a case like this, the Court [will]
assess the [amount of] compensation … to avoid Mrs
Rudek’s unjust enrichment as a result of having paid her
parents less for the property than it was in fact
Having decided the property was worth $950,000 at the
time, the Court ordered the amount of $124,287.75 to be
paid. The Court ordered the amount be paid into Court.
In reaching this conclusion, the Court considered that
the usual remedy of appointing trustees for sale was not
appropriate given the Rudeks had made a much greater
financial contribution to saving the property from the bank,
and their intention to own the property into the future.
The Court also raised with Mr & Mrs Wallis the
alternative of claiming the unpaid balance price payable
under the Contract and was ‘mystified’ as to why they chose
not to pursue this contractual cause of action.
The Court ordered that:
- Mr & Mrs Wallis provide vacant possession of the
ground floor unit;
- Mr Rudek make the chattels in the upper unit
belonging to Mr & Mrs Wallis available for collection;
- Mr Wallis not ‘harass, intimidate, stalk or assault’
Mrs Rudek, her husband and children; and
- Mr & Mrs Wallis pay Mrs Rudek’s legal costs in the
proceedings on an indemnity basis (based on a
Calderbank offer). The amount claimed was
The Applications for Stay
An application for stay of the orders to vacate the
property and remove chattels pending appeal was heard by
Justice Parker on 30 March 2020.
The application was refused subject to leave to make an
application if there was evidence that the steps taken by
the various Australian governments to respond to the
COVID-19 emergency precludes the orders from being complied
Mr & Mrs Wallis chose to pursue their application for
stay in the NSW Court of Appeal, where it was heard by
Justice White on 6 April 2020.
The Court noted that “It is accepted that the Public
Health (COVID-19 Restrictions of Gathering Movement) Order
2020 does not preclude the appellants from seeking
The Court found that some of the appeal points may be
arguable, and so if measures were taken to remove the
opportunities for conflict pending the hearing of the
appeal, a stay would be granted. The Court took into account
the advanced age and poor health of the parents.
The application for stay was granted after undertakings
were proffered which included: an occupation fee of $300 per
week (if the appeal was not successful); the money paid into
court be security for Mrs Rudek’s legal costs; the goods
stored in the pool area or in the carport are to be removed
within two to three weeks; and Mr & Mrs Wallis were to
remain in their unit and not go into the garden or any other
part of the property.
It is too early to draw firm conclusions because the
appeal remains to be heard.
But what is clear is that the loose arrangements as to
continuing occupation and accounting for the equity at the
time the transaction took place were always likely to lead
to conflict. Substantial blame must be placed on the
conveyancer, who as Justice Parker said:
“put herself in an impossible position, by seeking to act
for both parties to a transaction, whose interests were in
conflict and [who] had not reached agreement on an essential
aspect of the deal. Her attempts to square the circle by
having the parties enter into a licence agreement pointed up
the problem but did not solve it.”
The Court judgements are:
Wallis v Rudek  NSWSC 162 (26 February 2020)
Wallis v Rudek (No 2)  NSWSC 215 (5 March 2020)
Wallis v Rudek (No 3)  NSWSC 338 (31 March
2020) (Parker J)
Wallis v Rudek  NSWSCA 61 (6 April 2020) (White
JA) Court of Appeal