Wilkinson v Wilkinson[2009] QSC 191

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

DOUGLAS J

No 6204 of 2009

BRISBANE

..DATE 14/07/2009

ORDER

HIS HONOUR:  This is an unusual application for pre-litigation disclosure and pre-litigation interrogatories. 

The application arises out of an agreement to compromise proceedings between the applicant and the respondent which was entered into in December 2003.  The respondent pursuant to that deed, agreed to accept not less than $1.6 million as a distribution or a franked dividend from the winding up of some companies and trusts referred to in the deed.  She also agreed to make certain investments to the value of $1.6 million and to refrain from giving gifts in excess of $10,000 per annum to her son and other people listed in clause 5.4 of the deed.  She also agreed to make a will in terms of annexure B to the deed, which gives certain items of personalty to the applicant, her daughter, and bequeaths the rest and residue of her estate as to one half for her son and the other half for her daughter, who is as I have said, the applicant in these proceedings. 

The deed, unfortunately, did not include any mechanism by which the respondent would advise the applicant that the terms had been carried out.  It is now five and a-half years, approximately, since the deed was executed and there have been several attempts by the applicant through her solicitors, to verify that the terms of the compromise have been carried out.  Recently the respondent has confirmed by a letter of 7 July 2009 that she used apparently professional advice to construct an investment portfolio of shares and securities in 2004, but she has not provided any documentary evidence of what she did there, nor has she provided responsive answers to other questions raised with her by the applicant's solicitors.  For example, on 19 February 2007, the solicitors asked her to confirm that she had used the monies paid to her under the Deed of Compromise, to purchase investments in accordance with it, for details of the investments acquired to compile her portfolio envisaged by the deed, the name and address of the investment professional whom she engaged and details of the investments presently held in the portfolio.  Some of that information was provided in the recent letter received on 8 July 2009 and dated 7 July 2009.  But other documents sought pursuant to a letter of 24 April 2009 including correspondence between the respondent and the body called, "The Investment Professionals" or documents in relation to those investments, and a codicil to her will dated 11 December 2003 and copies of any new will or wills made by her after 11 December 2003 were not provided. 

The solicitors also provided a draft set of interrogatories in respect of the performance by the respondent of her obligations under the deed.  They remain unanswered and the documentary information sought also remains unprovided. 

The applicant's legitimate concern is that it has not been established that the respondent has met her obligations under the deed.  The applicant’s rights may be affected if this issue remains unresolved by the time of the expiration of any limitation period arising under the deed, whether it be a six-year period or a 12-year period.  They may also be affected by the prospects of survival of her mother.  Although there is no evidence that her health is poor, the respondent is 85 years old. 

In those circumstances, there is a distinct possibility that, if the terms of the deed have not been complied with, the applicant may have a right of action in damages but one which she is not presently in a position to institute because of lack of information about whether or not the obligations imposed on the respondent have been met by her.  It is that situation which has led to this application. 

I shall deal first with the application for pre-litigation disclosure which is based partly on the Court's equitable jurisdiction to determine an action for discovery in accordance with the Norwich Pharmacal principle, recognised here by Shepherdson J in, Re: Pyne [1997] 1 Qd R 326.  Since His Honour's decision, the Uniform Civil Procedure Rules also deal with some issues relevant to such an application for pre-litigation disclosure. 

Rule 250 permits the Court to make an order for the inspection of property if the property is property about which a question may arise in a proceeding.  Ms Treston, for the applicant, submitted persuasively that that language was consistent with a process designed to aid a proceeding that was prospective rather than actually already instituted.  She also submitted that, in that context, the ability to make orders against non-parties contemplated by Rule 250(2) and Rule 250(4), strengthens that submission. 

The difficulty she drew to my attention was that Rule 254 provided that,

"In urgent circumstances, the Court may, before a proceeding starts, make an order under Rule 250 as if the proceeding had started." 

She conceded that there was no particular evidence of urgency before the Court apart from the possibility of limitation issues if there were any further delay in the proceeding.  There is some weight given to that by the failure of the respondent to provide information which one would have thought would have been easily provided if the obligations placed on her by the deed had been met. 

There is a flavour from the correspondence from the correspondent that she is sick of being involved in litigation with her daughter, but by the same token, the correspondence appears to show an intelligent understanding of the matters sought and a failure to provide information which, as I have said, should have been readily available to her.  In that situation, having regard to the time since the deed was executed, there does seem to me to be some element of urgency sufficient to trigger the remedy envisaged by Rule 254. 

In any event, the equitable right to seek a bill of discovery remains as something recognised by Rule 255 of the Uniform Civil Procedure Rules. 

This application does not seem to me to be characterizable simply as a fishing expedition but more as a genuine attempt to determine whether or not the applicant's rights pursuant to the deed have been vindicated by performance by the respondent of her obligations.  That seems to me to be a real grievance which, in the interests of justice, the applicant should be allowed to pursue.  See British Steel Corporation v Granada, Television Ltd [1981] AC 1096 at 1173. 

This is also a case where it is apparent that it was the respondent's duty contractually to perform obligations under the deed and the enquiry is directed at whether she has done that and that seems to me also to fall within the contemplation of the principle in Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 at 175 and 191 to 192. 

Accordingly it seems to me to be appropriate to make an order for disclosure in the terms sought; namely the documents identified in correspondence to the respondent from the solicitors for the applicant dated 24th April 2009, which are exhibited to the affidavit of the applicant at pages 96 to 98 of Exhibit FW1. 

Pre-litigation interrogatories are also sought.  They are permissible under Rule 229(1)(b), which permits the Court to allow a person to deliver interrogatories to help decide whether a person is an appropriate party to a proceeding or would be an appropriate party to a proposed proceeding. 

I considered that rule in Pacific Century Production Pty Ltd v Netafim Australia Pty Ltd [2004] 2 Qd R 422.  There are some analogies between that rule and order 15A rule 5 of the Federal Court Rules which are discussed in that decision.  That rule has been discussed in a more recent decision by Siopis J, in the Federal Court, in Cape Australia Holdings Pty Ltd v Iannello [2009] FCA 709, where his Honour said at paragraph 57,

"… that it is incumbent on an applicant for preliminary discovery to adduce evidence that he or she requires the relief available under O 15A to commence, or to determine whether to commence, a proceeding in this court based on a cause of action which invokes the original jurisdiction of the court, or at least, that a proceeding based on such a cause of action will be commenced, and that the O 15A relief is sought in respect of other causes of action or potential causes of action, comprising part of the same matter." 

That seems to me to apply to this situation as the applicant needs the information to determine whether to commence a proceeding in this Court based on the possibility of breach of the deed, something she cannot determine without the relevant information. 

The interrogatories are also identified by reference to the draft that has been delivered to the respondent by the letter of 24th April 2009. 

Accordingly, I propose to make an order in terms of paragraphs 1, 2, 3 and 4 of the application.  There is evidence that the respondent was served and chose not to attend and it seems to me that an order for costs would follow if that is sought also. 

Do you have a draft order? 

MS TRESTON:  I'll hand-up a draft, your Honour, with a short hand written amendment on that - his Honour would have a copy. 

HIS HONOUR:  I'm just wondering if it mightn't be better, instead of doing it by reference to the affidavit and the exhibits, that you actually transcribe into the form of the order the disclosure sought and attach the interrogatories. 

MS TRESTON:  I'm happy to make those amendments to the draft order and have it emailed to your Honour's Associate. 

HIS HONOUR:  It just seems to me that it makes it easier for the respondent to respond; she's an 85 year-old lady, she probably needs to have things made very clear to her. 

MS TRESTON:  I take your Honour's point.  I was just obtaining some instructions about - the draft order was put on the basis that there be no order as to costs but I am instructed that my client does wish to seek a cost's order.

HIS HONOUR:  Why don't you take this away and provide another draft to me incorporating those suggestions? 

MS TRESTON:  Is your Honour happy for me to email it to your Honour's Associate? 

HIS HONOUR:  Yes. 

MS TRESTON:  Or would your Honour like me to come back this afternoon? 

HIS HONOUR:  No, I think if you email it to my Associate that should be enough. 

MS TRESTON:  Thank you, your Honour.  Can I just ask your Honour to look at paragraph 2 of the draft order, just as the orders that were in the originating application didn't identify a timeframe for the inspection and copying of the documents identified in that correspondence, is your Honour content if I make that amendment to paragraph 2, to fix a timeframe? 

HIS HONOUR:  Yes.  Yes.  There's 14 days to the answers to the interrogatories too, isn't it? 

MS TRESTON:  Yes, your Honour.  We don't have a problem if your Honour considers that that period should be slightly longer, 21 or 28 days; we're comfortable. 

HIS HONOUR:  Well I'll make it 21 in each case, I think. 

MS TRESTON:  Thank you, your Honour.  I'll make those amendments and email them to your Honour's Associate. 

HIS HONOUR:  Thanks.  What I have in mind, in respect of 2 and 3, is the addition of the relevant words - identify the documents from that letter and then annexing the draft interrogatories. 

MS TRESTON:  Thank you, your Honour. 

HIS HONOUR:  Thank you.  Thanks for your help.