WALLER -v- WALLER [2009] WASCA 61 (19 March 2009)

WALLER -v- WALLER [2009] WASCA 61 (19 March 2009) - WASCA 2009 case summary — Zoe

[125]

Your father's Estate was not sold and divided after his death. The wholesale butcher business continued. Geraldton Foods retained the land that it owned and some of it was recently sold. Specifically, on 28 August 2005, certificate of title volume 1736 folio 613 was transferred from Geraldton Foods to Silverglow Asset Pty Ltd. My clients understand the sale price of that land was over $10 million.
My clients note that you are a Director of Geraldton Foods and have been a Director of that company since 7 December 1964. The other Directors are your wife, Christine Waller, who was appointed on 7 September 1971 and Lynton Scott who was appointed on 23 January 1986.
The shares in Geraldton Foods are owned by you (1 share) and a company associated with you, Wainter Pty Ltd, which owns 20,504 shares. Given the shareholding of Geraldton Foods as at the time of your father's death, my clients have no idea how the shares of Geraldton Foods as at todays date have come to be owned by you and your company.
What my clients do know is that on 23 July 1973 your wife, Christine Waller, agreed to purchase from Mary Stevens (formerly Waller) all of the shares in Geraldton Foods and Waller & Son for $80,000.00. My clients do not have a copy of that Agreement. They wish to inspect and take a copy of that document.
My clients do have a copy of a document dated 30 July 1982, which records the existence of the contract made on 23 July 1973. I enclose a copy. The document dated 30 July 1982 records an agreement by Mary Stevens (formerly Waller) to release Christine Waller from her obligation to pay the sum of $80,000.00 in return for you assuming that liability. Further, it records that the balance outstanding as at 30 July 1982 is $77,000.00. That is to say, that in 9 years only $3,000.00 of the $80,000.00 had been paid. The balance of $77,000.00 was to be paid over 24 months at $1,000.00 per month, with the balance $50,000.00 to be paid on 30 July 1985. My clients note that there is no provision for interest.
My clients also note that part of the assets of Geraldton Foods comprised the property referred to above, which was sold last year for $10 million.
My clients consider that, at face value, the agreements made on 23 July 1973 and 30 July 1982 are not valid commercial transactions.
My clients (in their capacities both as beneficiaries of your father's Estate and as shareholders of Waller & Son and Geraldton Abattoirs) may seek orders that those transactions be set aside and the shares in Geraldton Foods be transferred back to the Estate of the Deceased. The same applies with respect to any benefits derived by you from the shares of Waller & Son and Geraldton Abattoirs, which companies have now been wound up.

[198]

The question whether a judgment is final or interlocutory for the purpose of the rules relating to appeals is one productive of much difficulty. The test now applied in this court for determining whether a judgment is final or not is whether the judgment or order appealed from, as made, finally determines the rights of the parties: Licul v Corney [1976] HCA 6; (1976) 180 CLR 213. An order refusing to set aside a default judgment does not as a matter of law finally dispose of the rights of the parties, for it is open to the disappointed defendant to apply again to have the judgment set aside: Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423. In practice, in some cases a second application of that kind might be successful, for example, when the first application had been dismissed on a technicality. In other cases, however, the second application would be doomed to failure because the issues of substance which it raised would have been decided adversely to the defendant in the first application. The appellants here submit that their right to make a further application is purely theoretical, since any such application must necessarily fail, and urge that in these circumstances the judgment should be regarded as a final one.

In my opinion the test in Licul v Corney requires the court to have regard to the legal rather than the practical effect of the judgment. If this were not so, the question whether a judgment is final or interlocutory would be even more uncertain that it is at present. In some cases it would be necessary for the court, for the purpose of determining the practical effect of an order refusing to set aside a default judgment, to embark on a detailed inquiry as to the facts of the matter and the course of the proceedings already taken - - an inquiry quite inappropriate when the only issue is whether a right of appeal exists. As will be seen, it would be necessary to make an inquiry of that kind in the present case if the practical test were to be adopted. The rigour of the rule that the legal effect of the judgment is decisive may of course be mitigated by the exercise of the court's power to grant special leave to appeal (248).

[204]

Accepting as I must that the 'term "matter" has meaning only in the context of a legal proceeding': Abebe at 11; the subject of AsA's inquiry and complaint has the capacity to constitute a matter. The real question in the present case, in my view is not whether there is a matter, but how the jurisdiction of the court in respect of that matter can properly be enlivened. That involves a question of judicial power. In this particular setting the answer to that question depends upon whether preliminary discovery of the type envisaged by O 15A r 6 is an incident of the exercise of judicial power in relation to the matter: cf Re Wakim; Ex Parte McNally [1999] HCA 27; (1999) 73 ALJR 839 at 866 - 867; [1999] HCA 27; 163 ALR 270 at 307 - 308. In my view it clearly is.

Ordinarily a court's jurisdiction is enlivened by an initiating process seeking a determination of the substantive claim one party alleges it has against another. But as I indicated earlier in these reasons such need not necessarily be the case. Necessity may require otherwise if a person's right is to be vindicated in a substantive claim. Preliminary discovery of the types provided in O 15A rr 3 and 6 have long been accepted as a proper and appropriate precursor to the making of a substantive claim - and appropriate because it assists in the administration of justice in relation to the making of the claim itself. There is no reason for present purposes to distinguish between the two types of discovery. Each reflects a different necessity.

Though in form a discrete proceeding (as was the old bill of discovery: see the quotation from Story) preliminary discovery is, as a matter of substance, properly to be regarded as interlocutory in character in that it does not, nor is it intended to, determine finally the rights inter se of the parties to the substantive application: cf Malouf v Malouf. Its function rather is to assist in that determination when or if the substantive application is brought consequent upon what is revealed in the preliminary discovery itself [25] - [27].

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Judgment (211 paragraphs)

WALLER -v- WALLER [2009] WASCA 61 (19 March 2009)

Legislation Cited (3)

Cases Cited (19)