22 Determination of matter completely and finally
The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.
26 The majority at 525 - 526 found as follows:
It is clear that s 22 cannot have been intended merely to give the Court power to make orders of particular kinds 'in relation to matters in which it has jurisdiction'; that work is explicitly done by the following provision, s 23. What the Court is required to do by s 22 is to grant all remedies to which any party appears to be entitled in respect of a claim properly brought forward in a matter. Is an order enforcing a compromise of a case such a remedy? On general principles it would seem at least arguable that the enforcement of a compromise of a claim is a remedy in a new claim and in a separate case. However, both Smith J [in Roberts v Gippsland Agricultural and Earthmoving Co Pty Ltd] and McPherson J [in General Credit (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 QdR 6] … have taken the contrary view. If, as McPherson J held (in our respectful opinion, correctly), the Queensland equivalent of s 24(7) of the English Judicature Act enlarged the circumstances in which a compromise may be enforced by order in the action compromised, that was only so because such an order is a remedy of the kind referred to in the section. McPherson J did not decide the case before him on the basis that what was sought was nothing but a remedy in respect of a fresh cause of action in contract; nor should we so decide this case.
27 In Mactilder v Dimovski (2003), the Full Federal Court (Wilcox, Jacobsen and Bennett JJ), at [50], accepted the majority view in Darling Downs concerning the application of s 22 FCA to permit enforcement proceedings of a settlement or compromise agreement, at least in respect of a matter "properly brought forward". The Full Court referred favourably to what Smith J had said in Roberts concerning the importance in s 61(7) of the Judicature Act 1873 (UK) of the words "properly brought forward", which also appear in s 22 FCA. In Roberts, at 564, Smith J (who wrote the leading judgment in the Full Court) summarised the common law position as being:
(i) The Court will allow and enforce the agreement of compromise upon motion in the action whenever the circumstances are such that it would have been enforced in the corresponding matter in the old Court of Chancery.
(ii) In addition, the agreement may be so enforced notwithstanding the fact that it involves matters extraneous to the action, and notwithstanding that there is a substantial question raised as to the terms or validity or enforceability of the agreement, provided that the Court is clearly satisfied that justice can be done under the summary procedure. At least this is so where all that the Court needs to order for the purposes of enforcing performance upon just terms is a stay of proceedings or a dismissal of the action or sum relief claimed in the action.
In deciding whether justice can be done under the summary procedure the Court, of course, needs to consider a variety of matters including questions of degree. These, I think, must include the extent to which extraneous matters are involved, how substantial are the questions to be determined, to what extent questions of credibility are likely to arise, and whether pleadings or discovery may be desirable.
28 Smith J, at 565, added two points:
First, if the action has been stayed or struck out, then it is necessary that the stay should be lifted or the action reinstated as an action for trial, before the agreement is enforced on motion in the action. And once an action has been stayed without qualification there maybe difficulty in having the stay removed. Secondly, though the fact that the agreement expressly stipulates that it shall be made a real Court, or that it shall be enforced by order in the action, it is still, I think, an important consideration in determining whether the summary procedure should be adopted, the Court is not bound to give effect to such an agreement. It has a discretion as to whether it will do so, which appears to be wide enough to give effect to any matter of such a nature as would have afford a defence in an action for specific performance.
29 Having regard to these and other factors considered by Smith J in Roberts as relevant, the Full Court in Mactilder v Dimovski (2003) considered that the applicant's enforcement proceeding in respect of the undertakings (even if they were treated as orders) did not involve a matter "properly brought forward" for the purposes of s 22 FCA. The Court did not think that justice could be done under the summary procedure of the Court. For that reason the Full Court did not consider that s 22 of the FCA supported the application before the Court for enforcement orders.
30 The Full Court also briefly considered s 32 FCA, which provides that:
To the extent that the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters… in which the jurisdiction of the Court is invoked.
The Full Court, at [55], said that the Court's jurisdiction would only be extended by this associated jurisdiction if both the original claim and the claim argued to fall within s 32 are a part of one "matter"; the test being whether both claims arise out of the same substratum of fact: see Fencott v Muller, at 606 and 607. In the case before the Court, the Full Court considered s 32 had no application.
31 In Mactilder v Demovski (2005), Allsop J, in providing his list of non‑exhaustive considerations that arise in relation to the enforcement of settlements of proceedings in the Court, expressly disagreed with some of the principles stated by the Full Court in Mactilder v Demovski (2003). First, in relation to Pallas, Allsop J, at [45], noted that Pallas was decided in 1985. In 1997, s 39B(1A)(c) was inserted into the Judiciary Act 1903 (Cth). He then referred to what Beaumont J with the agreement of the other members of the Court had said in Pallas concerning the accrued and associated jurisdictions of the Federal Court and other possible bases for jurisdiction in a proceeding to enforce a compromise or settlement agreement. At [60], Allsop J noted what the Full Court had said about the categories of case that required a separate action for their enforcement. However, his Honour doubted the correctness of that analysis and observed:
With respect, it is doubtful whether the fact that the proper way to bring forward a claim about a breach of contract as alleged by the applicant was in a fresh action (that is a fresh proceeding) concluded the question as to whether that fresh proceedings was a separate and distinct justiciable controversy for the purposes of federal jurisdiction. True it is there were new facts. That is obvious. But they were the facts which disclosed a breach of one contractual aspect of the 'matter' - that being the attempt (which was asserted to have failed) to end or quell the controversy.
32 Allsop J, at [61] then observed:
Difficult questions might arise as to the separateness of the matter if enough time or geography separated the complaints. The decision of a court as to whether a claim to enforce a settlement should be brought by way of motion in the original proceedings or should be brought by way of fresh statement of claim is a different enquiry from the question as to whether such a claim to enforcement is part of the original controversy or is an entirely distinct and separate controversy, for the purposes of federal jurisdiction. That is not to say that the analysis of the correct procedural approach may not be relevant to the assessment as to whether a new matter exists. For instance, if it were concluded that a notice of motion was an adequate or appropriate vehicle, that may well assist in the conclusion that the claims in the motion were part of the existing controversy.
33 At [62], Allsop J went on to note that the more substantial the debate, the more appropriate is a statement of claim, rather than the unpleaded notice of motion. But such are not considerations that will necessarily affect centrally the question whether there is a separate and distinct controversy in the area of discourse of federal jurisdiction. A proceeding does not define a matter; the matter is the whole justiciable controversy and the matter can involve more than one proceeding. Thus, even if procedurally a fresh statement of claim is an appropriate vehicle, that would not conclude the enquiry as to whether the claims in the statement of claim were part of, or comprised an entirely distinct or separate, controversy.
34 Allsop J then gave consideration to the associated jurisdiction that might arise under s 32 FCA. Again, with the "utmost respect" he disagreed with the Full Court on this question. At [67], Allsop J noted that s 32 deals with separate and distinct matters. It is not what is sometimes called "accrued jurisdiction". That expression may be better expressed as the limit of the matter or controversy. The associated jurisdiction under s 32 is the conferral of jurisdiction in another, different, federal matter, in respect of which jurisdiction could be, but has not been conferred.
35 Allsop J, at [70], noted that the possible relevance of associated jurisdiction under s 32 FCA in Pallas was recognised by Beaumont J. Allsop J then noted the introduction of s 39B(1A)(c) of the Judiciary Act in 1997, which provides that:
(1A) The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:
…
(c) arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.
36 At [70], Allsop J stated:
The possible role Beaumont J saw for associated jurisdiction if the settlement was between parties to the controversy was that the new matter (if it was not part of the existing controversy and so part of the accrued jurisdiction as his Honour also said) might well be a matter arising under a law of the Parliament. In 1985, Parliament had not conferred jurisdiction in terms of s 76(ii) of the Constitution on the Federal Court (though it could have done so). In 1997, it did so with the insertion of s 39B(1A)(c) … . Thus, Beaumont J in Pallas discussed the relevance of s 32 of the FCA Act. Now, the better view as to the relevant enquiry is whether s 39B(1A)(c) applies. It is to be noted that in his reasons in July 1985 Beaumont J did not refer to LNC Industries v BMW which had been handed down the previous October, but was not published in the Commonwealth Law Reports until 1985.
37 In relation to the enforcement action taken by the applicant in Mactilder v Dimovski (2005), Allsop J expressed the view that the matter was indeed within the jurisdiction of the Court for three reasons:
· The motion always asserted a claim for relief under the relevant legislation, the Copyright Act. Though "badly framed" in terms of the procedural vehicle, this asserted a federal claim which thereby made the whole motion within jurisdiction.
· The enforcement of a contract of settlement, based on Darling Downs, was part of the original matter. This is so even if the motion should have been brought forward as a separate proceeding.
· The enforcement action was within the jurisdiction of the Court by reason of s 39B(1A)(c) of the Judiciary Act, not s 32 FCA, which should be considered "less than centrally relevant".
38 Allsop J, at [79], referred to LNC Industries v BMW (1983) 151 CLR 575; [1983] HCA 31 (LNC Industries), which he considered supported the view that the enforcement proceedings raised issues arising under a law made by the Commonwealth for the purposes of s 39B(1A)(c) of the Judiciary Act, not s 32 FCA which should be considered "less than centrally relevant". In particular, his Honour referred to what was said in LNC Industries by the majority at CLR 581 (with which Murphy J agreed at 582 - 3):
A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right of property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law…
39 Allsop J, at [80], considered no‑one had alerted the Full Court to the "clear alternative basis" for jurisdiction (assuming that the contractual claim to enforce the terms of settlement was a separate matter) that the subject matter of contract was a suit authorised by, and rights claimed in the suit to be given by, laws of the Parliament: in this case the Copyright Act 1968 (Cth).
40 Allsop J did not express a concluded view, however, as to whether an enforcement proceeding in respect of a settlement agreement taken against persons who are not parties to the primary proceeding in the Court, involve the enforcement of rights owing their existence to Commonwealth law. Indeed, in his list of non‑exhaustive considerations, at [95], Allsop J expressly refers to Pallas in circumstance (4) and "its limits", and in circumstance (5) refers in parenthesis to the enforcement of a contract to settle a case, "at least between the parties to the suit", concerning rights owing their existence to Commonwealth law.
41 In We Two Pty Ltd v Shorrock (2005) 220 ALR 749; [2005] FCA 34, heard and decided in July 2005, some three months before argument in Mactilder v Dimovsi (2005), Finkelstein J seems to have taken a broadly similar approach to that of Allsop J. At [15], Finkelstein J noted that the Court has jurisdiction to enforce the terms of an agreement to settle or compromise an action properly instituted in the Court, and that the Court's jurisdiction - both federal and pendent jurisdiction - is to decide any issue in the disposition of a case properly before it. In particular, his Honour noted that it will make no difference if the enforcement of the settlement agreement is sought, as in the case before him, in the action itself or by a separate proceeding. His Honour referred to Re Wakim; Ex Parte McNally (1999) 198 CLR 511; [1999] HCA 27 at 506. In each case, the necessary federal element is the "matter" or controversy the subject of the underlying action. His Honour noted however, that the "position might be different if the terms of settlement travel far beyond the settlement of the action". In that case, enforcement of the extended aspects may or may not be within the Court's pendent jurisdiction and each case will have to be looked at separately.
42 At [16], Finkelstein J made reference to Pallas and considered that the reasoning was that the compromise agreement was not based in federal law. His Honour further noted, however, that:
The Court failed to consider whether the relevant federal aspect was the action itself. In any case that view may no longer be correct in light of recent decisions in the High Court.
43 His Honour then referred to Mactilder v Dimovski (2003) expressing the view that it should be limited to its particular grounds, the point in issue being whether the Court "had jurisdiction", that is to say "discretion" to enforce terms of settlement by a summary procedure.
44 While the dicta of Finkelstein J may provide some encouragement for the view that an enforcement action in respect of a settlement agreement arising out of a properly brought primary proceeding but against persons not parties to the primary proceeding may arguably, depending on the circumstances, itself have a "federal aspect", in my view the authorities canvassed do not currently go that far.
45 In light of this analysis of these relevant authorities, I am content to adopt the non‑exhaustive list of circumstances in which enforcement proceedings may be taken in or in relation to proceedings in this Court, as enumerated by Allsop J in Mactilder v Dimovski (2005), at [95], and supported generally by the dicta of Finkelstein J in We Two Pty Ltd v Shorrock.
46 In the case currently before the Court, the contractual obligations undertaken by Lisajoe Investments stand alone and are quite discrete from those undertaken by the respondents. The authorities, as I apprehend them, stand against the proposition that enforcement proceedings may be maintained against a party to the compromise or settlement agreement who is not a party to the proceeding in the Court. Neither the applicants nor the respondents in this case contend for some other proposition. There is no reason in principle, however, why the applicants should not be entitled to enforce the settlement agreement arising out of the proceeding against the respondents discretely. The fact that another entity, not a respondent in this proceeding, is also a party to the deed seems to me to be irrelevant, at least on the facts of this case where the respondents have undertaken obligations under the deed which operate quite independently of that undertaken by Lisajoe Investments under the deed.
47 Where orders are sought to enforce the terms of a settlement or compromise agreement, there is much to be said for the view that, under s 22 FCA, the Court is obliged to grant the orders sought to enforce compliance with the agreement, at least if there are no grounds suggesting the agreement is not applicable or enforceable. In this case, no issue is raised by the respondents concerning the enforceability or application of the agreement aside from the jurisdiction argument, which I have rejected. While it is also contended it would be more 'convenient' if there were only one set of enforcement proceedings against all parties to the deed, this presupposes that the applicants will find it necessary or elect to take enforcement proceedings against Lisajoe Investments in some other proceedings, something the Court should not presuppose. It also presupposes the Court has some 'discretion' not to make orders in a case like this. In my view, the applicants having made out their entitlement to relief are entitled under s 22 FCA to have the orders made.
48 In summary, the applicants, if not driven by the law to do so, are entitled to elect to bring an enforcement proceeding in the Federal Court of Australia in respect of the obligations of the respondents under the deed and maintain later, if they elect to do so, separate proceedings in a court of competent jurisdiction in respect of the other contracting party who is not a party to this proceeding.
49 For these reasons, the orders sought in the amended notice of motion are appropriate and should be granted.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.