Lestery Pty Ltd, Lessue and Lessue v Quetel Pty Ltd

[1993] QCA 439

IN THE COURT OF APPEAL	[1993] QCA 439
SUPREME COURT OF QUEENSLAND

C.A. No. 72 of 1993

Brisbane

[Lestery v. Quetel]

BETWEEN:

LESTERY PTY. LTD.

(First Plaintiff)

- and -

GEOFFREY ROBERT LESSUE and
DENISE ELIZABETH LESSUE

(Second Plaintiffs) Appellants

- and -

QUETEL PTY LTD

(Defendant) Respondent

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ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ

The Chief Justice
The President

Mr Justice Cullinane

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ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ

Judgment delivered 01/11/93

Reasons for judgment prepared by the President and
Cullinane J. jointly, the Chief Justice dissenting
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APPEAL ALLOWED. RESPONDENT'S APPLICATION DISMISSED.
RESPONDENT TO PAY THE APPELLANTS' COSTS HERE AND IN THE
COURT BELOW.
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CATCHWORDS: DECLARATIONS - Hypothetical issue - whether issue as to validity of specific provisions in a contract is hypothetical when provisions to operate only in event of a contingency.

Counsel:	Mr A.J.H. Morris Q.C. for the appellants. Mr P. Keane Q.C. with him Mr P. Freeburn for the respondent.
Solicitors:	Lyons for the appellants. Minter Ellison Morris Fletcher for the respondent.

Hearing date: 22/09/93
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 72 of 1993

Brisbane

Before Chief Justice The President Mr Justice Cullinane

[Lestery & Ors v. Quetel]

BETWEEN:

LESTERY PTY LTD

(First Plaintiff)

- and -

GEOFFREY ROBERT LESSUE and

DENISE ELIZABETH LESSUE

(Second Plaintiffs) Appellants

- and -

QUETEL PTY LTD

(Defendant) Respondent

REASONS FOR JUDGMENT - THE CHIEF JUSTICE

Judgment delivered 1/11/93

The President in his reasons has set out the issues and referred to the authorities which would justify a conclusion that the court's jurisdiction to grant declarations extends to cover proceedings such as these. Notwithstanding the availability of the jurisdiction, I would not be disposed to interfere with the decision of the primary judge that jurisdiction should be declined in this case.

The court was told the minimum about the commercial consequences for the plaintiffs of a claim by them under s. 18B of the repealed Act for a share of the annual licence fees if such a claim were to draw in response a demand by the defendant for "additional clear yearly rental". The court was left to deduce that such a consequence might make any claim for a share of the fees not worthwhile or not as worthwhile.

The plaintiffs will have had all of the usual opportunities for access to their own legal advisers for assistance in making a decision about the way in which they should proceed but what is obviously sought from the declaration proceedings is advice from the court which will have the effect of further clarifying the choice for them.

The plaintiffs wish, in effect, to know whether in their own interests they should proceed in one way rather than another but the situation is one where no party is threatening proceedings against them or bringing pressure to bear to force them towards any particular decision.

The present case lies in a sort of middle area between two contrasting categories where, on the one hand, the jurisdiction to grant the remedy of declaration should, on proof of the necessary enlivening facts, clearly be exercised and, on the other, where it should clearly be refused because of a disproportion of hypothetical elements attending the situation. In Ainsworth v. Criminal Justice Commission (1992) 175 C.L.R. 564, it was observed in the joint judgment of the Chief Justice, Dawson, Toohey and Gaudron JJ. at 582 that the inherent power to grant declaratory relief "is confined by the considerations which mark out the boundaries of judicial power".

To refuse the plaintiffs' declaratory relief in a case like this does not result in a pronouncement which shuts out the parties from their respective rights or finally declares the extent of their obligations. It leaves those matters unaltered and there will remain a full opportunity for subsequent determination of rights in suitable proceedings if the plaintiffs do, in fact, resolve to claim against the defendant a share of the annual licence fees.

I do not consider that the doctrine expressed in

General Steel Industries Inc. v. Commissioner for Railways

(N.S.W.) (1964) 112 C.L.R. 125 at 128, 129 per Barwick C.J. namely that "the jurisdiction summarily to terminate an action is to be sparingly employed" applies or applies as fully in a case of the present character. There is so much of the flavour of an advisory opinion in what the plaintiffs are asking the court to decide that the court is justified in declining to entertain the declaration proceedings and doing so summarily. The primary judge had a discretion to exercise and it was one which could be fairly and usefully exercised at a preliminary stage of proceedings. In a case such as this the Appeal Court should give weight to the decision made by the primary judge, one way or the other.

The exercise of the discretion at an early stage has an advantage because of its capacity to save costs.

I would conclude that the decision of the primary judge should be interfered with only if there is a sufficiently clear case for interference and I do not detect it here. If the plaintiffs were to decide to make a demand for a share of the fees and if that were to result in a counter demand for "additional clear yearly rental" then the case for determining the dispute by the making of a declaration would be obvious if that remedy were sought but it was not wrong to leave the plaintiffs to decide for themselves whether they wished to initiate this sequence. I would refuse the appeal with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 72 of 1993

Before The Chief Justice

The President

Mr Justice Cullinane

[Lestery v. Quetel]

BETWEEN:

LESTERY PTY. LTD.

(First Plaintiff)

- and -

GEOFFREY ROBERT LESSUE and
DENISE ELISABETH LESSUE

(Second Plaintiffs) Appellants

- and -

QUETEL PTY. LTD.

(Defendant) Respondent

REASONS FOR JUDGMENT - THE PRESIDENT AND CULLINANE J.

Judgment delivered 01/11/93

This is an appeal from an order made in the Trial Division striking out the appellants' Statement of Claim and dismissing their action. The primary judge's reasons were not reduced to writing.

The appellants seek declaratory relief with respect to a transaction between them and the respondent concerning licensed premises known as "The Logan City Tavern". The respondent is the owner of the tavern, the first appellant, Lestery Pty. Ltd., is the lessee and the other appellants are directors of the first appellant and guarantors of its obligations as lessee. The appellants assert that the first appellant is entitled to make demand upon the respondent and to receive from it an amount equal to one quarter of the total annual license fees paid to the Licensing Commission of Queensland for each of the years ended 30 June 1989, 1990 and 1991. For the purpose of the present proceeding that is assumed to be so, notwithstanding that the basis for the first appellant's claim is section 18B of the Liquor Act 1912, which has been repealed. No demand has been made but, according to the appellants, it is intended to make a demand if the subject proceedings are resolved in their favour.

Under the terms of the leases of the tavern, additional rent is payable by the first appellant if a demand is made. The appellants seek to have it declared that, upon a demand being made for the amount to which the first appellant is entitled in respect of the license fees, the first appellant is not obliged to pay additional rent to the respondent because the lease terms which provide for additional rent in the event of a demand are void and unenforceable by reason of the same section of the repealed Liquor Act.

No doubt with the possibility of amendment in mind, neither party sought to have the matter determined by reference to possible shortcomings in the appellants' pleading. This is significant. For example, it might be fatal to a claim for a declaration that the respondent is not entitled to the extra rental that it is not alleged that it has threatened to make a claim; In re Clay (1919) 1 Ch. 66; Midland Bank PLC v. Laker Airways Ltd. (1986) 1 QB 689, 700H-701A, 710C-D, 715E; Hume v. Monro (No.2) (1943) 67 CLR 461, 474, 478-479.

That is not the respondent's point. It's point is that the appellants' claim is objectionable because it is hypothetical, in that the opinion of the Court is sought with respect to the parties' respective rights and obligations in the event of a nominated contingency which might not occur, namely, the making of a demand by the first appellant on the respondent. If the principles which govern the striking out of a Statement of Claim and summary dismissal of an action and the details of the appellants' pleading both be put to one side, the essential question is whether an issue as to the validity of specific provisions in a contract is hypothetical in the material sense when the provisions are to operate only in the event of a contingency which might not occur. Importantly, there is a present dispute between the parties concerning the validity of the contractual provisions which the respondent contends are not void or unenforceable.

The extent and limits of the Court's power to grant declaratory relief are now well-established. In Ainsworth v. Criminal Justice Commission (1992) 175 CLR 564, Mason Cj., Dawson, Toohey, and Gaudron JJ. said in a joint judgment at pp.581-582:

"It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which '[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise.' Forster v Jododex Aust. Pty. Ltd. (1972) 127 C.L.R. 421, at p.437, per Gibbs J..

However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions: re Judiciary and Navigation Acts (1921), 29 C.L.R. 257. The person seeking relief must have a 'real interest' Forster (1972) 127 C.L.R. at p.437, per Gibbs J.; Russian Commercial and Industrial Bank v. British Bank for Foreign Trade, Ltd. [1921] 2 A.C. 438, at p.448, per Lord Dunedin, and relief will not be granted if the question 'is purely hypothetical', if relief "is claimed in relation to circumstances that [have] not occurred and might never happen'. University of New South Wales v. Moorhouse (1975), 133 C.L.R. 1, at p.10, per Gibbs J., or if the 'Court's declaration will produce no foreseeable consequences for the parties'; Gardner v. Dairy Industry Authority (N.S.W.) (1977), 52 A.L.J.R. 180, at p.188, per Mason J.; see also p. 189, per Aickin J.; 18 A.L.R. 55, at pp.69, 71 respectively."

In the same case, Brennan J., after referring to Maxwell v. Department of Trade (1974) QB. 523, said at p.596:

"In that case, Lord Denning M.R., while refusing to restrict the court's declaratory jurisdiction, observed [1974] Q.B. at p.536, that 'the case must be very rare in which it would be right to make such a bare declaration in the air'. The making of a declaration and the terms in which, if made, it should be framed are in the court's discretion. As the Privy Council - said in Ibeneweka v. Egbuna [1964] 1 W.L.R., 219, at p.225;

'After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making.

Beyond that there is no legal restriction on the award of a declaration.'

The circumstances that call for the making of a declaration are not present if there be no real controversy to be determined: re Tooth and Co. Ltd. (1978) 31, F.L.R. 314, at p.331. The characteristics of a controversy fit for determination by judicial declaration were stated by Viscount Dunedin in Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd. [1921] 2 A.C. 438, at p.448.

'The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought.'

More recently, the High Court refused special leave to appeal from the decision of the Full Court of South Australia in American Home Assurance Company v. J.N. Taylor Holdings Ltd. (in liquidation) and, in doing so, said that it was "... not ... persuaded that there is sufficient doubt about the correctness of the Full Court's decision": The Legal Reporter, Vol.14, No.16, 13 September 1993.

In that case, the plaintiffs were companies in liquidation and the defendants were three of their former directors against whom claims were made for alleged breaches of their duties as directors. One of the defendants was bankrupt and the other two had left the country. An insurance company had issued a policy of insurance indemnifying each of the defendants against loss arising from any claims made against them by reason of any wrongful act committed by them in their capacity as directors of the companies. The liquidator of the companies wrote to the insurer inquiring whether it accepted liability to indemnify the defendants in respect of the plaintiffs' claims. The insurer replied denying liability to indemnify the defendants. In consequence, the plaintiffs sought to join the insurer as a defendant in the proceeding, claiming a declaration that it was obliged to indemnify the director- defendants for any loss which they sustained in consequence of judgment in the action. The primary judge refused the liquidator's application but his decision was reversed by the Full Court.

The leading judgment was delivered by King CJ., who said, after extensive reference to authority:

"The learned judge summarised his reasons for holding that the question sought to be determined was theoretical only, at this stage, as follows: 'The plaintiffs do not have an interest sufficient to maintain an action unless and until they succeed in this action and are able to obtain the consent of the trustee in bankruptcy to prosecute an action in his name to enforce the right of indemnity provided by the policy or, failing that consent, have the leave of the Court to prosecute such an action in the name of the trustee in bankruptcy. It might also be said that the issues which the plaintiffs seek to have determined by the application for a declaration in this action are hypothetical until they succeed in an action against the defendants.'

I think that that is too narrow a view of the interest of the plaintiffs required to render the issue real rather than theoretical. It is true that the plaintiffs have to surmount certain obstacles before they can gain recourse to the proceeds of the indemnity, but the first and most important of those obstacles is the determination of whether the insurer is liable to indemnify the directors under the policy in respect of any judgment the plaintiffs might recover. If that question is determined against the insurer concurrently with the determination of the defendant directors' liability to the plaintiffs, the plaintiffs will avoid the costs of a further trial of that issue. Moreover, armed with a declaration of the insurer's liability to indemnify the directors, the plaintiffs will be far better placed to secure the consent of the trustee in bankruptcy, or alternatively authority to sue in the trustee's name. It is true that the issue of the insurer's liability will cease to be a live issue if the plaintiffs fail in their action against the defendants, but to my mind, their interest in obtaining a declaration of the insurer's liability concurrently with that of the liability of the defendants, is undeniable."

Perry J. agreed with the Chief Justice. Prior J. expressed his "substantial agreement" and continued:

"In particular, I agree that the judgment appealed from reflects too narrow a view of the interest of the plaintiffs required to render an issue real rather than theoretical. The plaintiffs have an interest sufficient to invoke declaratory relief in the present action notwithstanding the absence of a cause of action against the insurer. The judge erred in denying that the plaintiffs had an interest sufficient to invoke the inherent power of a superior court to grant declaratory relief. That discretionary power is not to be fettered by laying down rules as to the manner of its exercise, but it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question is purely hypothetical, if relief is claimed in relation to circumstances that have not occurred and might never happen or if the Court's declaration will produce no foreseeable consequences for the parties: Ainsworth v. Criminal Justice Commission [1992] 66 ALJR 271 at 278.

This case involves no mere hypothetical question. Foreseeable consequences will be produced for the parties. Real interests exist. The plaintiffs should not be left pursuing potentially hollow remedies. By joinder there should be determination of legal controversies sufficient to justify the exercise of the jurisdiction. The plaintiffs' claim to declaratory relief is within jurisdiction."

It seems that it was an important feature in that case that the declaration sought with respect to the insurer's obligation to provide indemnity would not be determined before, but concurrently with, the establishment of the contingency upon which the insurer's obligation depended, namely, the liability of the insured to the plaintiffs.

That serves to distinguish the case from earlier decisions which favour the view that, except perhaps in exceptional circumstances, a declaration of the liability of an insurer to indemnify its insured should not be made before the liability of the insured to the person claiming the declaration is established: Post Office v. Norwich Union Fire Insurance Society Ltd. (1967) 2 QB 363; AMP Fire and

General Insurance Company Limited v. Dixon (1982) VR 833, 837 f.f.; cf. Tannous v. Mercantile Mutual Insurance Co. Ltd. (1978) 2 NSWLR 331.

It has also been held that a declaration ought not ordinarily be made that a party is entitled to recover from another party by way of damages the amount of the first party's liability to a third party once ascertained, although the reason given for this seems not to be that the contingency, that is that the first party's liability to the third party might not be established, but because such a declaration at that time might shut a party against whom it is granted out from disputing issues upon which it is entitled to be heard: Trans Trust S.P.R.L. v. Danubian Trading Co. Ltd. (1952) 2 QB 297, 303. See also British Electrical and Associated Industries (Cardiff) Ltd. v. Patley Pressing Ltd. (1953) 1 WLR 280, 284-285.

Apart from such assistance as it gains from the cases

to which reference has been made and the general statements of principle, such as those in Ainsworth and other authoritative decisions (for example, The Commonwealth of Australia v. Sterling Nicholas Duty Free Pty. Ltd. (1972) 126 CLR 297 and Forster v. Jododex Australia Pty. Ltd. (1972) 127 CLR 421), the respondent derives its principal support from the decision of Holland J. in Dormer v. Solo Investments Pty. Ltd. (1974) 1 NSWLR 428. In that matter, the plaintiff failed to establish that it was entitled to rescind a contract and, for that reason, a declaration that it was entitled to do so was refused. However, at pp.434- 435, his Honour added:

"I should observe that, if I had been in the plaintiff's favour, I would have had doubts whether the jurisdiction of the court to make a declaration of right ought to have been exercised in the present case. I am not the least inclined to find limits on the beneficial jurisdiction of this Court to make declarations of right, but it is one thing to declare present contractual rights of the parties, another to declare them contingently on the plaintiff electing to take some course that he has not yet taken is not bound to take and may not take. In the present case the plaintiff has said that; if I were to find that he was entitled to rescind, then he would rescind, but he would not in any way have been bound to do so if I had made the declaration that is sought.

It seems to me that, although the claim in the summons is for an order that the plaintiff is entitled to rescind, in substance, the relief that is sought is a declaration that, if the plaintiff elects to give a notice of rescission, that notice of rescission will be effective to terminate the contract.

I think the court ought to hesitate to make declarations as to the potential effect on the contractual position of the parties of events upon which a party has not yet acted and which would not alter the existing contractual rights unless he did so act.

As modern authority shows the court has a broad discretion as to whether to exercise the jurisdiction to grant declaratory relief, a discretion which is only limited by the need that it be exercised with a proper sense of responsibility and full realization that judicial pronouncements ought not to be made unless there are circumstances that properly call for their making: see Sutherland Shire Council v. Leyendekkers (1970) 91 W.N. (N.S.W.) 250; Foster v. Jododex Australia Pty. Ltd (1972) 46 A.L.J.R. 701; As Else-Mitchell J. observed in Ku-Ring-Gai Municipal Council v. Suburban Centres Pty. Ltd (1971) 2 N.S.W.L.R. 335, at p.339, it is not generally the function of the courts to entertain applications designed primarily or solely as a means of obtaining advice as to the legal potentials of a situation that has arisen between the parties. Also the time of the Court is not to be taken up deciding hypothetical question: see also D.C. Wagemaker & Sons Pty. Ltd. v. Commonwealth Development Bank of Australia (1970) 91 W.N. (N.S.W.) 617; and Sutherland Shire Council v. Leyendekkers (1970) 91 W.N. (N.S.W.) 250, at p.260.

In the present case, if the declaration had been made the plaintiff could not only have decided not to act on it by giving a notice of rescission (in which case the defendant would have been put to unnecessary trouble and expense and the court's time would have been wasted) but, if he had never really intended to rescind the contract he could use the declaration as a bargaining weapon to obtain a reduction of the price. Proceedings could be taken on the chance of getting a favourable declaration to use only or such a purpose and the cost of failure could be a cheap price to pay for the chance of improving a party's bargaining position. I am not saying that this is what was done in the present case, because I was informed by counsel for the plaintiff, without dissent by opposing counsel, that the plaintiff has already given one notice of rescission which has lapsed by waiver and, as I have said, the plaintiff, with the date for completion imminent, desires to give another immediately if he is entitled to do so. Therefore I accept that the plaintiff was acting in good faith in approaching the court."

These remarks are no doubt helpful to the respondent, at least if attention is focussed upon the possibilities that (i) the appellants may never activate the material provisions of the lease by a demand for the respondent's payment of an amount equal to the relevant proportion of the licensing fees and (ii) if they do so, the respondent might not require payment of the additional rent for which the material provisions of the lease provide. His Honour's statements are, however, less directly apposite if emphasis is placed upon the appellants' fundamental contention that the material provisions of the lease are void and unenforceable, which is the subject of an existing dispute with the respondent.

Before considering this further, it is desirable to note some decisions which may favour the appellants.
In Thompson Brothers and Co. v. Amis (1970) 2 Ch. 211, Sargent J. held that plaintiffs, who had not paid duty which had been assessed and in respect of which they had appealed, were entitled to a declaration that, on paying the duty, they would be entitled to recover the amount paid by them from the defendant, a former employee: see pp.220-221.
In Wimbledon and Putney Commons Conservators v. Tuely (1931) 1 Ch. 190, Bennett J. answered by declaration the question whether the Conservators would be acting ultra vires if they took a step which was specified.

In Rajvenback v. Mamon (1955) 1 Q.B. 283, the tenant of a rent restricted flat orally agreed with his landlord that he (the tenant) would vacate it at the end of 1954 and that, in the event of his doing so and in consideration thereof, the landlord would pay him £300. On the landlord later repudiating this agreement, the tenant brought an action claiming a declaration that, in the event of his delivering up vacant possession on or before January 1, 1955, he would be entitled to payment from the landlord. Winn-Parry J. made the declaration sought.

In Hordern-Richmond Ltd. v. Duncan (1947) 1 KB 545, Cassels J. held that one of two possible defendants was entitled to claim a declaration that the other was bound to indemnify it, or to contribute, if persons injured in a collision between two vehicles sued only the party seeking the declaration. The necessity for the declaration was that the potential plaintiffs' claim against the person against whom the declaration was sought would become statute-barred at a time when they could still bring proceedings against the party seeking the declaration.

A surety's right to contribution from a co-surety can be declared before actual payment is made or loss sustained provided that such payment or loss is imminent: Wolmershausen v. Gullick (1893) 2 Ch. 514, citing McLean v. Discount and Finance Ltd. (1939) 64 CLR 312, 329, 331; Acherson v. Tredegar Dry Dock and Wharf Co. Ltd. (1909) 2 Ch. 401, 408. This is an example of the Court's willingness to grant quia timet relief, as is well illustrated by the Privy Council's decision in Rediffusion (Hong Kong) Ltd. v. Attorney-General of Hong Kong (1970) AC 1136. At p.1158B, Lord Diplock, delivering the majority judgment, said:

"All questions involved in quia timet proceedings are hypothetical and future. to exclude the jurisdiction of the Court to inquire into them in order to decide whether to exercise its discretion to grant relief, the defendants would have to show that the questions were purely abstract questions the answers to which were incapable of affecting any existing or future legal rights of the plaintiffs."

The final decision to which it is proposed to refer at this point is The Distillers Company Bio-Chemicals (Australia) Pty. Ltd. v. Ajax Insurance Company Limited (1974) 130 CLR 1. There, a number of actions for damages for negligence were pending against the plaintiff which was insured by the defendant under a public risks insurance policy. Two declarations were made in the plaintiff's action, one of which clearly related to the consequences of possible future action by the plaintiff which might not occur. A declaration was made that such conduct would constitute a breach of a condition of the policy.

Such a course seems in accordance with the following passage from the judgment of Lord Sumner in Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd. (1921) 2 AC 438 at p.452:

"For many years it has been accepted practice in cases in the commercial list to hear and determine claims for a declaration of right, when a real and not a fictitious or academic question is involved, and it is in being between two parties, in order that they may know what business course to take without having to run the risk of acting and finding themselves liable for damages, when at last the matter is brought to court."

In Pharmaceutical Society v. Dickson (1970) AC 403 at 433,
Lord Upjohn said:

"This principle is not confined to trade. A person whose freedom of action is challenged can always come to the court to have his rights and position clarified, subject always, of course, to the right of the court in the exercise of its judicial discretion to refuse relief in the circumstances of the case."

It is a sufficient answer to the respondent's application to have the appellants' Statement of Claim struck out and its action dismissed that the authorities fall short of establishing either that (i) the Court lacks jurisdiction to grant declaratory relief to the appellants, (ii) settled principles regarding the exercise of the court's discretion to grant declaratory relief require that the appellants' claim against the respondent be dismissed or (iii) irrespective of the breadth of the Court's discretion, it is so plain that the appellants must fail that their action should be dismissed at the threshold. In these circumstances, the respondent was not entitled to the summary dismissal of the appellants' claim.

However, it is possible to go further, at least provided that it is recognized that the essence of the appellant's claim is not the possibility of a future, and as yet unthreatened, assertion by the respondent of a claim under the material provisions of the lease but the parties' present dispute concerning whether those provisions are void and unenforceable (or valid and enforceable). The resolution of that dispute will determine a real controversy between the parties and produce foreseeable consequences for them.

The grant of such a declaration is well within (i) the Court's jurisdiction and (ii) a proper exercise of its discretion.

For these reasons, the appeal should be allowed and the respondent's application dismissed. The respondent must pay the costs here and in the Court below.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 72 of 1993

Brisbane
[Lestery v. Quetel]

BETWEEN:

LESTERY PTY. LTD.

(First Plaintiff)

- and -

GEOFFREY ROBERT LESSUE and
DENISE ELISABETH LESSUE

(Second Plaintiffs) Appellants

- and -

QUETEL PTY. LTD.

(Defendant) Respondent

The Chief Justice
The President

Mr Justice Cullinane

Judgment delivered 01/11/93

Reasons for judgment prepared by the President and Cullinane

J. jointly, the Chief Justice dissenting

APPEAL ALLOWED. RESPONDENT'S APPLICATION DISMISSED.
RESPONDNET TO PAY THE APPELLANTS' COSTS HERE AND IN THE
COURT BELOW.

CATCHWORDS: DECLARATIONS - Hypothetical issue - whether issue as to validity of specific provisions in a contract is hypothetical when provisions to operate only in event of a contingency.

Counsel:	Mr. A.J.H. Morris Q.C. for the appellants
Mr. P. Keane Q.C. with him Mr. P. Freeburn for the respondent
Solicitors:	Lyons for the appellants Minter Ellison for the respondent

Hearing Date: 22/09/93