Macteldir Pty Ltd v Dimovski

REASONS FOR JUDGMENT THE COURT: 1 These reasons concern a Special Case stated by a judge of the Court (Madgwick J) pursuant to s 25(6) of the Federal Court of Australia Act 1976 (Cth) ('Federal Court Act'). The question asked by his Honour is '[w]hether the Court has jurisdiction to grant the relief sought pursuant to the applicant's notice of motion filed 12 July 2002'. The background facts 2 In order to understand the question, it is necessary to have regard to some background facts, as summarised in the Special Case. 3 On 7 March 2001, the applicant, Macteldir Pty Ltd ('Macteldir'), commenced a proceeding in this Court (N207 of 2001) against two respondents, Mile Dimovski and Rockdale Ilinden Soccer Club Inc. By its application filed that day, the applicant sought relief against both respondents under ss 115 and 116 of the Copyright Act 1968 (Cth) ('Copyright Act'), by way of injunctions and damages. 4 In a statement of claim, also filed on 7 March 2001, the applicant alleged the respondents breached its copyright over the contents of a magazine published and distributed by it, the Macedonian Telephone Directory. The infringing publication was said to be the Rockdale Ilinden Soccer Club Inc Sponsors Directory-Calendar of 2001 ('the 2001 Directory-Calendar'). 5 The respondents entered appearances in the proceeding. However, before any further steps were taken, so far as the Court was concerned, a settlement agreement was reached. This agreement was set out in a document entitled 'Terms of Settlement' signed by the solicitors for each of the parties. The document read: 'BY CONSENT and without admission of liability the parties agree to the following orders: 1. This is the full and final settlement of this matter and the Terms are not to be disclosed by any party. 2. The first and second defendants will not publish, produce, distribute, promote or in anyway be related with the publication, production, distribution or promotion of any book, magazine or document which contains advertisements, pictorials or drawings with similar contents which have been copied or reproduced from the form and layout of the Macedonian Telephone Directory. 3. The first and second defendants will publicly announce an apology to the plaintiffs through the Radio Station 2NBC which broadcasts in the Macedonian language within the state of New South Wales and consents to the announcement. The first and second defendants will also advertise an apology with a Macedonian newspaper which circulates in New South Wales. 4. The contents of the advertisement/apology will be as agreed between the plaintiff and first and second defendants and if there is no agreement within one month from the date of these orders then both parties will be bound by the decision of the Mediators Dimitar Todorovski and Igor Aleksandrov Avramovski. 5. The first and second defendants will not advertise or announce through any radio station advertisements which have been copied or reproduced from the form and layout of the Macedonian Telephone Directory. 6. The first defendant will pay all legal and associated costs and disbursements in respect of these proceedings for both the plaintiff and the second defendant, on behalf of the Plaintiff agreed to be sum in the sum of [sic] $7,000.00 payable within 28 days. 7. The first and second defendants will deliver to the plaintiffs the remainder of the printed directories which were printed by Rockdale Ilinden Soccer Club, which have not yet been distributed within one calendar month from the date of these orders.' 6 On 7 August 2001, the matter came before Madgwick J at a directions hearing. The only appearance was by Mr L Angelovski, representing the applicant, Macteldir. The Court's official record of that hearing, the Report of Listing, notes the matter as 'settled'. Under the heading 'Results', the following appears: 'His Honour noted the following as per the attached Terms of Settlement: 1. undertakings to the Court as per paras 2, 3, 5 & 7; 2. agreement as per para 4. His Honour ordered the following: 3. Order in accordance with para 6. 4. By consent, the matter is dismissed.' 7 On 27 February 2002, Macteldir commenced a second action in this Court (N135 of 2002). The same respondents were named. Once again there was a claim of breach of Macteldir's copyright over the contents of the Macedonian Telephone Directory; this time by material published in the 2002 edition of the second respondent's Directory-Calendar ('the 2002 Directory-Calendar'). In a statement of claim, filed on the same day, Macteldir complained of breaches of the Terms of Settlement handed to Madgwick J. 8 Proceeding N135 of 2002 came before Wilcox J at a directions hearing on 21 June 2002. Counsel for Macteldir, Mr J de Meyrick, stated the application and statement of claim had not been served on the respondents and his client wished to discontinue the proceeding. A notice of discontinuance was filed in Court. It is common ground that the filing of this document terminated proceeding N135 of 2002. 9 On 12 July 2002, the solicitors for Macteldir filed a notice of motion in the original proceeding (N207 of 2001). The document sought the following orders: '1. An Order restraining the first and second respondents, their servants and agents, from further publication, distribution and promotion of the publication titled, "Sports Magazine, Club Sponsor's and Member's Directory 2002 Volume 2", or any later volume or edition thereof. 2. An Order restraining the first and second respondents, their servants and agents, from publishing, distributing and promoting any other book, booklet, magazine or document, being in the nature of a directory printed in the form, layout style, content and general appearance of the applicant's Macedonian Telephone Directory. 3. An Order restraining the first and second respondents, their servants and agents, from promoting the publication referred to in Order 1, in any radio broadcast, print media or other form of mass communication. 4. An Order that the first and second respondents account to the applicant in respect of all moneys received and all profits made in respect of the publication titled, "Sports Magazine, Club Sponsor's & Member's Directory 2002 Volume 2." 5. An Order that the first and second respondents pay to the applicant damages in the amount of profit indicated by the taking of accounts pursuant to Order 4. 6. An Order that the first and second respondents pay to the applicant pursuant to section 115(4) of the Copyright Act 1976 (Clth), such other damages as to the Court seems just. 7. An Order that the first and second respondents deliver to the applicant within 28 days, all remaining copies of the publication referred to in Order 1, wheresoever those copies may be located within the possession, control and recovery of the respondents, their servants and agents. 8. Such other and further orders as to the Court seem just. 9. Costs.' 10 The solicitors also filed supporting affidavits containing allegations of breaches of what were called 'the undertakings' of the respondents in the Terms of Settlement. 11 The notice of motion came before Madgwick J on 19 July 2002. His Honour suggested to Mr de Meyrick that he would need to start a new proceeding. Mr R Alkadamani, counsel for the respondents, supported that position, but Mr de Meyrick disagreed. After some discussion, Madgwick J stood the matter over for a week. 12 On 26 July 2002, there was further discussion about the appropriateness of the motion. There was also discussion about security for costs and the filing of affidavits. During the course of that discussion, Mr Alkadamani reasserted the inappropriateness of the procedure adopted by Macteldir. However, Mr de Meyrick stood firm and Madgwick J made some directions about mediation and security for costs. 13 The matter was not settled at mediation. It returned to Madgwick J's directions list. Numerous affidavits were filed. Interrogatories were administered. Many people were served with subpoenas. The matter was set down for a five-day hearing commencing on 10 March 2003. 14 On 10 March 2003, Mr D M Yates SC appeared, with Mr Alkadamani, for the respondents. He argued the Court had no jurisdiction to grant the relief sought in the notice of motion; the motion only sought enforcement of an agreement between the parties. He said the motion made a claim of breach of contract, a claim not cognisable in the Federal Court. Mr Yates also submitted that, if the Court did have jurisdiction, the relief sought in the motion would be inappropriate to a breach of contract claim. 15 Mr de Meyrick contended the notice of motion was within the Court's jurisdiction, though he conceded some of the claimed relief would be inappropriate. He said: 'The only paragraph that really now matters is damages'. Mr de Meyrick referred to para 6 of the notice of motion, which sought an order that the respondents pay to the applicant damages pursuant to s 115(4) of the Copyright Act. Mr de Meyrick said: 'The matter comes down to the enforcement of the terms'. The following exchange then occurred: 'HIS HONOUR: Mr de Meyrick, the court's jurisdiction has been challenged. In order to judge that I at least have to know what exactly you're seeking - now, what exactly are you now seeking, that's all. I'm not asking you why I just want to know what. MR DE MEYRICK: What we are seeking is the enforcement of the terms of settlement and damages.' 16 In subsequent discussion, Mr de Meyrick resiled from this position. He said he sought order 2 (an injunction restraining the respondents from publishing, distributing or promoting any book, booklet, magazine or document in the form, layout style, content and general appearance of the applicants' directory) and order 7 (an order for delivery up of infringing material). In relation to damages, and despite the form of the notice of motion, Mr de Meyrick said he was not relying on s 115(4) of the Copyright Act; therefore, he did not seek order 6, but rather order 5, which he had previously disavowed. Order 5 seeks an order for damages 'in the amount of profit indicated by the taking of accounts pursuant to Order 4'. 17 When the hearing resumed after the luncheon adjournment on 10 March, Mr de Meyrick asked Madgwick J to state a Special Case for the Full Court. His Honour agreed to do so. A draft case was subsequently prepared and filed. 18 Apparently at the insistence of the respondents, the Special Case, as finally settled, contained the numerous affidavits that had been filed (by both sides) relating to the alleged breach of the Terms of Settlement. 19 Paragraph 20 of the Special Case reads: 'The applicant's claim is for breach of the terms of settlement.' Submissions 20 With the concurrence of the parties, the Court directed that argument on the Special Case proceed by written submissions, at least in the first instance. These were provided in accordance with the timetable fixed by the Court. The submissions have been carefully considered. We are able to dispose of the matter without putting the parties to the expense of oral argument. 21 As mentioned, the question asked by the Special Case is '[w]hether the Court has jurisdiction to grant the relief sought pursuant to the applicant's notice of motion filed 12 July 2002'. Having regard to the matters set out above, this must be regarded as a question whether the Court has jurisdiction to grant injunctive relief or damages in respect of the respondents' alleged breach of the Terms of Settlement filed in Court on 7 August 2001. 22 In their written submissions, Mr Yates and Mr Alkadamani point out that, whereas the statement of claim filed in matter N207 of 2001 concerned conduct that allegedly occurred prior to the commencement of the proceeding, the notice of motion relates to conduct alleged to have occurred after that proceeding was dismissed; namely, publication of the 2002 Directory-Calendar. That conduct was the subject of proceeding N135 of 2002; however, that proceeding was discontinued by the applicant before trial. Counsel say: 'Regardless of whether that proceeding was commenced in an appropriate way … the cause of action is for breach of contract. That claim has nothing to do with the first proceeding other than the fact that the "contract" alleged to have been breached (by subsequent conduct) is the compromise into which the parties had entered and which had extinguished the claims made by the applicant in the first proceeding. Thus, the present claim is a completely separate and distinct claim for breach of contract. It is respectfully submitted that the Court does not have jurisdiction over such a claim.' 23 It should be noted that the respondents dispute that the new publication is copied or reproduced from the applicant's Macedonian Telephone Directory. There were no admissions of liability with respect to the respondents' publication of the 2001 Directory-Calendar that was the subject of the original proceeding. 24 Counsel criticise the procedure adopted by the applicant. They argue that reliance on s 22 of the Federal Court Act, mentioned by Mr de Meyrick before Madgwick J, is 'wholly misconceived'. They say: '(a) Section 22 cannot be construed as conferring jurisdiction, but only as conferring power to grant relief in relation to a matter in which the Court does have jurisdiction: Philip Morris Inc. v Adam P Brown Male Fashion Pty Ltd (1981) 148 CLR 457 at 489-490; 529. (b) As submitted above, the claim brought forward in the notice of motion is simply a new (and disputed) claim for breach of contract, simpliciter. The Court does not have jurisdiction in relation to that claim. (c) In certain simple cases an agreement for the compromise of an action may be enforced on a motion for judgment in the action itself in accordance with agreed terms, in reliance on a Judicature Act provision such as section 22: Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 [('Darling Downs')]; General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6 at 7-8, 9 [('General Credits')]; Roberts v Gippsland Agricultural and Earth Moving Contracting Pty Ltd [1956] VLR 555 [('Roberts')]. In such a case the Court is dealing only with the making of orders embodying or reflecting a compromise already made in existing proceedings: see, for example, Darling Downs at 525. That is the sense in which a court "enforces" a "compromise" pursuant to a Judicature Act provision such as section 22. Typically the compromise is to pay a sum of money; the compromise is "summarily enforced" by entering judgment for the sum. The compromise may be more complex. As Smith J made clear in Roberts (at 561): "What we are concerned with is the class of case in which, following upon the making of such an agreement, and at a stage when no order has been pronounced, one of the parties comes to Court, with the other opposing, and asks the Court to make an order to which, by the agreement, the other party undertook to give his consent, or an order directing the other party to pay money or do some other act which, by the agreement, he undertook to do. In other words it is the class of case in which a party to an action comes to the Court seeking what is, in effect, an order enforcing the agreement specifically". (d) The present matter is not such a case - (i) There is no dispute between the parties as to the existence of the compromise they made. The compromise, as reflected in the terms of settlement, has already been the subject of undertakings and orders of the Court (ie, the compromise has already been "enforced" in the relevant sense by the giving of the undertakings and the parties joining in the making of the consent orders). There is simply no subject matter for summary enforcement of the kind for which section 22 has been held to be appropriate. (ii) What the applicant seeks to do here is to agitate claims which are legally, factually and temporally removed from the claims in the first proceeding. It is relying on claims which, at law, can only proceed from the compromise itself. Any claims it had of the kind pleaded in the statement of claim in the first proceeding no longer exist. Further it is also relying on disputed conduct which occurred after the making of the compromise and after the conclusion of the first proceeding (ie, conduct in respect of a new and different publication). It follows that there can be no substratum of fact which is common to the claim as compromised and the claims now sought to be made. In short, the Court is being asked to adjudicate upon a claim which proceeds from an entirely separate and different legal and factual basis from the claim that was the subject of the first proceeding. As stated, the new claim arises after the dismissal of the original proceeding. In terms of section 22, the present claim is not "properly brought forward by [the applicant] in the matter", the "matter" being the controversy originally before the Court in the first proceeding. What the applicant seeks to do is to bring forward and agitate a completely new controversy - a new "matter". That new "matter" - being one sounding only in contract - is not one in respect of which this Court has jurisdiction.' 25 Mr de Meyrick's response sets out his client's contention in this way: '(a) That what it seeks to have enforced is not just an agreement in the nature of a contract between the parties, but an agreement to seek certain Orders of the Court, which the Court has treated in the essential parts as undertakings given to the Court; (b) That, even so, "the matter" falls within the law as determined in relation to the enforcement of such terms; (c) That otherwise, the Court still has jurisdiction to hear and determine the matter.' (Original emphasis) 26 Mr de Meyrick argues it is necessary, at the outset, to characterise the 'Terms of Settlement'. He says the parties agreed to those orders, in resolution of the claim; this is not a case of a claim being dismissed by reason of the parties having entered into a private contract. He says the Court dealt with that agreement by treating paras 2, 3, 5 and 7 as being undertakings to the Court. The Court noted para 4 and made an order in terms of para 6. 27 Mr de Meyrick submits 'the matter, in terms of section 22 of the [Federal Court Act], is properly within the jurisdiction of the Court'. However, Mr de Meyrick acknowledges it 'is well settled and not in dispute here that section 22 does not confer jurisdiction, only power to grant relief where the Court already has jurisdiction'. So he turned to s 32 of the Federal Court Act, arguing that the present dispute was part of the 'matter' in respect of which his client instituted proceeding N207 of 2001. 28 In dealing with the question of common substratum of facts, Mr de Meyrick argues: 'The respondents contend that the substratum of facts have changed in the present case because it now involves a second volume of the original publication about which the undertakings were given and about which further infringements of copyright are alleged. As such, they say, the applicant is seeking to agitate new claims not consistent with the initial pleadings. With respect, that contention is misconceived. All that has changed is that the respondents, without admitting it, would appear to have infringed the applicant's copyright, and to avoid the likelihood of judgment and damages by giving undertakings to the Court and to the applicant that they would not do so in future, they have allegedly breached those undertakings by doing the same again. Also, in respect of the undertakings in re [sic] paragraphs 3 and 7, where the respondents have undertaken to do certain things, those things have not been done (although, with the passing of time they have since lost their usefulness to the applicant). The applicant submits that the substratum of facts still remain clearly within the Court's jurisdiction. The applicant, having put aside its claim for damages on the faith of the respondents' undertakings to both the Court and to itself, and those undertakings having been allegedly dishonoured, the "matter" is surely able to be revived in the light of such subsequent events. Those events being seen to thwart and frustrate the non-judged, yet court sanctioned purported resolution of these proceedings.' The authorities 29 In Pallas v Finlay (1985) 61 ALR 220, the Full Court of this Court was confronted with a case in which an action under the Trade Practices Act 1974 (Cth) had been compromised on the basis that a sum of $150,000 would be paid to the applicant in full settlement of his claim. Two persons (Pallas and Dubinski-Hunt), who had not previously been parties to the case, agreed to be personally liable for the payment. The terms of settlement included a term that, in default of payment, the applicant 'shall be entitled to enter judgment against Pallas and Dubinski-Hunt for the sum of $150,000 and they will agree to be joined for that purpose'. 30 The money was not paid. The applicant obtained an order joining Pallas and Dubinski-Hunt as parties. Pallas and Dubinski-Hunt appealed, arguing the Court had no jurisdiction. The Court agreed. Beaumont J, with whom Northrop and Lockhart JJ concurred, said at 222: 'Although it may have been open to Dr Finlay to do so at any time before entry into the compromise, until the present application was made, Dr Finlay made no attempt to join the appellants as parties to the proceedings for the purpose of seeking relief pursuant to s 75B of the Trade Practices Act or otherwise. As framed at the time of the compromise, the proceedings were brought against Lincoln Hunt Australia Pty Ltd alone. When those proceedings were settled, there was agreed to be substituted for the statutory causes of action brought against Lincoln Hunt Australia Pty Ltd a fresh cause of action in contract against the appellants alone. True, the compromise is executory only and the appellants and Lincoln Hunt Australia Pty Ltd have not performed their obligations under that agreement. But, unless and until it is set aside as a contract of compromise by a court of competent jurisdiction or otherwise discharged … the agreement embodied in the terms of settlement is the sole source of the respective rights and obligations of the parties. The only cause of action available to Dr Finlay against the appellants is one based on that contract of compromise. That cause of action arises under the general law and not under the Trade Practices Act or under any other statute in respect of which jurisdiction is conferred upon this court.' 31 Beaumont J made a comment that was picked up in Darling Downs. He said at 223: 'The position may well have been different if the appellants had been joined in the proceedings on the footing that they were involved in the contraventions; or, if, before suit, the appellants had agreed to give Dr Finlay an indemnity in respect of the loss he now claims to have suffered. In those situations, as the decision in Fencott v Muller demonstrates, the accrued jurisdiction of the court, if not the associated jurisdiction under s 32 of the Federal Court of Australia Act 1976, may well have been attracted.' 32 Darling Downs was also a trade practices case. It was compromised on the basis that the respondent would pay to the applicant the sum of $77,500 inclusive of costs. It was agreed there would be a first instalment of $20,000 and the balance of $57,500 paid one month later. A deed of settlement was prepared but never executed by the respondent. After the respondent paid the first instalment, Pincus J was informed the matter had been settled. He adjourned it to the Registrar. The respondent failed to make the final payment on the due date. The applicant thereupon applied for judgment for the balance of the agreed amount ($57,500). It was conceded the original proceedings had never been 'discontinued or otherwise terminated and that they could be restored for hearing upon application to the Registrar'. 33 The application for judgment succeeded before Spender J. His decision was upheld on appeal (Pincus and Einfeld JJ; Fisher J dissenting). At 521 the majority referred to Pallas v Finlay in these terms: 'There, proceedings were brought against a company under the Trade Practices Act. They were settled on the basis that two persons not parties to the suit undertook to pay a certain sum. When it was not paid, the applicant obtained orders joining the persons who had promised to pay the money as respondents in the proceedings and later obtained judgment against them - both those steps being contemplated by the terms of settlement. A Full Court set aside the judgment on the ground of lack of jurisdiction. There was some discussion, in the course of the argument before us, as to the basis of the reasons of Beaumont J with whom Northrop and Lockhart JJ agreed. The reasons are, it seems to us, capable of two interpretations. One is that where proceedings in this Court are settled on the basis of a promise to pay a particular sum, the Court has no jurisdiction, if the settlement is not carried out, to enter judgment for the agreed sum. The second is that this proposition is correct only if judgment is sought against a person not party to the original proceedings.' 34 Their Honours concluded that Beaumont J's reasons may have been limited to the second category of case. They accepted a submission that s 22 of the Federal Court Act applies to enforcement of settlements in Federal Court proceedings. They thought this view was consistent with that applied in a number of State Supreme Court decisions to which they referred. 35 The most significant of those decisions is Roberts, a decision of the Full Court of the Supreme Court of Victoria. The respondent had sued the appellant for Ł1306/4/1 for work and labour due. The action was compromised on the basis that the appellant would pay the respondent Ł750 and thereupon the respondent would cause the writ to be struck out. It was further agreed that, in default of payment by the due date, the respondent was to be entitled to move for judgment for Ł750, or so much of it as should remain unpaid, and the appellant would consent to judgment. Consistently with that last term, no action was taken to have the proceeding stayed or dismissed. 36 The money was not paid. On application being made, Dean J entered judgment for Ł750. The appellant appealed, contending the Court lacked jurisdiction to enter a judgment enforcing the agreement. The Full Court unanimously dismissed the appeal. 37 Smith J wrote the leading judgment, in which he comprehensively analysed the decided cases and practice books. His Honour first examined the position in the Court of Chancery prior to the Judicature Act 1873 (UK). At 562-563 he summarised that position as follows: '(a) The Court would ordinarily leave a party to proceed by separate bill if the agreement involved matters extraneous to the suit compromised. And it regarded an agreement as falling within this general category, (i) if it dealt with property as to which no question was raised in the suit, or (ii) if it provided for things to be done which went beyond the ordinary range of what the Court would order in such a suit, or (iii) if its enforcement involved giving effect to equities of a different nature from those involved in the suit, or (iv) if there were parties to the agreement who were not parties to the suit. (b) On the other hand in cases not falling within this first general category the Court would ordinarily enforce the agreement in the suit compromised. In particular this was so if the agreement related solely to the conduct or prosecution of that suit, or to the staying or dismissal thereof, or to the granting of the whole or part of the relief claimed therein or to the doing of that which the suit was brought to enforce. (c) For the purpose of deciding which of these two general categories a case fell within, the Court did not look merely at the particular obligations sought to be enforced. It looked also at the obligations of the applicant, so far as justice required that the application should not be granted without ensuring that they too would be performed. But it would disregard altogether obligations already fully performed. It may be observed that in order to ensure the performance of obligations by the applicant the Court could make an order conditional upon such performance. (d) If there was a substantial question to be determined as to what were the terms of the agreement, or as to whether it was valid or specifically enforceable, as for example where a substantial case was put forward of material mistake or of other circumstances such as would afford a defence to a suit for specific performance, a party would ordinarily be left to proceed by separate bill so that the matters raised might be fully investigated. (e) The fact that the only outstanding obligation under the agreement of compromise was one for the payment of an ascertained sum of money did not preclude the Court from enforcing the agreement in the suit. (f) Circumstances which might dispose the Court to enforce in the suit compromised an agreement which otherwise would not have been so enforced included - (i) that the agreement contained an express stipulation that it should be made a rule of Court, or, presumably, an express stipulation that an order for its enforcement should be made in the suit; or (ii) that immediate interference was essential in order to give effect to the agreement.' (References omitted) 38 Smith J then considered whether the Judicature Act made those rules applicable to common law actions. He answered this question affirmatively, mainly because of the presence in that Act of s 61(7). That sub-section was the ancestor of s 22 of the Federal Court Act. In practical terms, s 22 seems indistinguishable from it. 39 Smith J emphasised the importance in s 61(7) of the words 'properly brought forward'. At 564 he summarised the common law position as being: '(i) The Court will now enforce the agreement of compromise upon motion in the action whenever the circumstances are such that it would have been enforced in a corresponding manner 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 purpose of enforcing performance upon just terms is a stay of proceedings or a dismissal of the action or some 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 involving 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 and discovery may be desirable.' 40 At 565 Smith J 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 may be difficulty in having the stay removed. Secondly, though the fact that the agreement expressly stipulates that it shall be made a rule of Court, or that it shall be enforced by order in the action, 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 enable it to give effect to any matter of such a nature as would afford a defence in an action for specific performance.' (References omitted) 41 The other members of the Court, Lowe and O'Bryan JJ, wrote a short judgment in which they agreed with the conclusion reached by Smith J. At 557 they said: 'Both on principle and in accordance with Victorian authorities we have no doubt that in certain simple cases an agreement for the compromise of an action may be enforced on a motion for judgment in the action itself in accordance with the agreed terms. If the action itself is still on foot, not having been stayed or discontinued or struck out or its normal progress otherwise interrupted; and if the claim in the action is for payment of a sum of money for one of the common counts, such as work and labour done, and the compromise is upon terms that the defendant pay to the plaintiff an agreed amount at an agreed date in full settlement of the plaintiff's claim in the action, and with an agreement by the defendant that in default of payment the plaintiff may enter judgment for that amount and that the defendant will consent to such judgment, we entertain no doubt that this Court has jurisdiction on motion in the action to direct that judgment be entered for the agreed sum if the defendant makes default in payment - even if at that stage the defendant is, contrary to her agreement, no longer a consenting party.' 42 In General Credits, McPherson J of the Supreme Court of Queensland followed Roberts. 43 McLaren v Schmit (1983) 33 SASR 139 was a decision of White J, of the Supreme Court of South Australia, on appeal from the Local Court. The question was whether the appellant was entitled to an order for judgment in the sum of $3,500. The parties had agreed that the case was to be settled on the basis of the defendant paying that sum to the plaintiff's solicitors. White J treated the defendant's offer as constituting an admission of the truth of the plaintiff's case, within the meaning of relevant Court Rules. But he examined many of the old cases. In so doing, he drew a distinction between, on the one hand, compromises that dealt both with matters within the scope of the original action and matters outside it, and, on the other hand, simple compromises entirely within the scope of the original suit. He thought the old learning about the original proceeding being 'spent and exhausted' applied only to the former type of case. Conclusions 44 As Madgwick J observed during the course of argument, the applicant appears to feel a genuine sense of grievance against the respondents. Whether the grievance is well-founded has not been determined. It is unfortunate that the parties have become distracted by a jurisdictional dispute. However, a dispute having arisen, it must be resolved. 45 The genesis of the present problem is the failure of the parties properly to implement the agreement they negotiated in August 2001. It appears from the Terms of Settlement that they agreed to obtain certain orders. However, when the matter came before Madgwick J, only one of those orders was made. This was the order dealing with costs (para 6 of the Terms of Settlement). Agreed orders 2, 3, 5 and 7 were transformed into 'undertakings' by the respondents to the Court. How this came about is not clear to us. However, in response to an inquiry made on our behalf, counsel for the respondents expressly accepted that undertakings were given to the Court in terms of orders 2, 3, 5 and 7. We proceed on that basis. 46 Madgwick J ordered (apparently with the concurrence of Mr Angelovski) that 'the matter is dismissed'. That order brought the proceeding to an end, subject only to such rights of enforcement as arise out of the undertakings accepted, and orders made, by his Honour. 47 The costs agreement, recorded in para 6, became enforceable as an order of the Court. However, the same cannot be said of the promises embodied in paras 2, 3, 5 and 7. Whatever their intention, the parties did not obtain orders in respect of those matters. 48 Accepting counsel's concession that the promises set out in paras 2, 3, 5 and 7 of the Terms of Settlement were accepted as undertakings to the Court, it might be open to Macteldir to institute proceedings for contempt of court. But Macteldir has not taken that course. 49 Mr de Meyrick seems to accept there is no enforceable order in relation to the matters mentioned in paras 2, 3, 5 and 7. As we understand him, that is why he says his client seeks to enforce, not just an agreement in the nature of a contract between the parties, but an agreement to seek certain orders of the Court. The reason why this Court has jurisdiction to entertain that application, according to Mr de Meyrick, is that the settlement agreement arose out of proceedings in this Court and concerned orders to be made in this Court. 50 There is ample authority for the proposition that s 22 of the Federal Court Act is to be interpreted liberally. Without finding it necessary to resolve the matter, we are prepared to assume that the majority view in Darling Downs is to be preferred to that of the dissentient, Fisher J. The majority view applies to this Court the principles adopted in Roberts. However, as Smith J remarked in that case, a critical question in the application of s 61(7) of the Judicature Act is whether the relevant legal or equitable claim is 'properly brought forward'. The same question arises under s 22 of the Federal Court Act, where the same words are used. 51 There is no doubt that the agreement sought to be enforced by Macteldir arose out of proceedings in this Court and concerned orders to be made in this Court. However, the relevant proposed orders (paras 2, 3, 5 and 7 in the Terms of Settlement) have not been made. Even assuming the orders sought in the notice of motion go no further than to enforce these proposed orders, had they been made, in fact they have not; consequently, there is no basis for the Court to make enforcement orders. 52 Even treating the undertakings as if they were orders, the present situation seems to fit within categories (a) and (d) of the position applicable in the Court of Chancery, prior to the United Kingdom Judicature Act, as set out by Smith J in Roberts. Following Smith J's reasoning as to the position at common law, this is not a case of a matter 'properly brought forward'. Bearing in mind that the factual matters with respect to the new publication are in dispute and that it is not a case of the applicant seeking a stay of proceedings or dismissal of an action, it does not seem to us that justice can be done under the summary procedure of the Court. 53 Further, unlike the situation in each of the cases mentioned above, in the present case the original action is no longer in existence. Madgwick J dismissed it on 7 August 2001. As Smith J pointed out in Roberts, if a proceeding has been stayed or struck out, it would be necessary to lift the stay or reinstate the proceeding before making any orders for enforcement of an agreement between the parties. Macteldir has not applied for reinstatement of the dismissed action. Were it to do so, significant issues would arise, both as to power and exercise of the Court's discretion. If the application were successful, the next step would be for Macteldir to seek orders in accordance with paras 2, 3, 5 and 7, as originally agreed. Whether the Court would be prepared to make orders in those terms would be debatable. Only if it did, could Macteldir apply to enforce these orders; but presumably not retrospectively. 54 It will be apparent that, having regard to all these problems, s 22 of the Federal Court Act does not suffice to found Macteldir's application. 55 We turn briefly to s 32 of the Federal Court Act. The associated jurisdiction conferred on the Court by that section may, in an appropriate case, extend the scope of the Court's jurisdiction. However, this may only occur if both the original claim and the claim argued to fall within s 32 are part of one 'matter'; the test being whether both claims arise out of the same substratum of fact: see Fencott v Muller (1983) 152 CLR 570 at 606 and 607. In the present case, the orders sought in Macteldir's notice of motion relate to the respondents' conduct in respect of a different publication (the 2002 Directory-Calendar) to the conduct in issue in proceeding N207 of 2001 itself (the 2001 Directory-Calendar). Given that publication is of the essence of both complaints, each complaint necessarily raises at least one separate factual issue. 56 Section 32 of the Federal Court Act has no application to the present application. 57 It is unnecessary for us to make any general statement about the jurisdiction of the Court to enforce compromises of existing proceedings. However, we wish to make it clear that, where undertakings to the Court have been given, ordinarily the Court would have jurisdiction to enforce such undertakings. 58 The Court has a wide range of remedies to ensure compliance with its orders: see Australian Meat Industry Employees Union v Mudginberri Station Pty Limited (1986) 161 CLR 98 ('Mudginberri') 161 CLR 98 at 114-115 (per Gibbs CJ, Mason, Wilson and Deane JJ). 59 There is no reason why, in an ordinary case, the Court could not grant an injunction to restrain a breach of an undertaking to the Court: see Australian Builders Construction Employees & Builders Labourers' Federation v Commonwealth of Australia (1981) 37 ALR 470 at 471 (per Deane J). Although his Honour was there speaking of an injunction to restrain a criminal contempt, it is necessary to bear in mind that the underlying rationale of every exercise of the contempt power is to protect the administration of justice: see Mudginberri at 107. 60 Here, it might have been possible for the applicant to frame its motion as a claim for injunctive relief to restrain conduct which would otherwise have amounted to a contempt. But it did not do so. 61 The second undertaking (as to which see para 5 above) is not limited in its terms to existing books, magazines or documents. It extends to future publications provided they have been copied or reproduced from the form and layout of the Macedonian Telephone Directory. However, the notice of motion seeks orders restraining the first and second respondents which go beyond the terms of this undertaking. The proposed orders are not limited to publications copied or reproduced from the Macedonian Telephone Directory. They seek orders in respect of specific publications or any publications 'in the nature of a directory printed in the form, layout style, content and general appearance of the applicant's Macedonian Telephone Directory'. The notice of motion also seeks an account of profits and damages. 62 It is the applicant's departure from a claim to enforce the existing undertakings which takes the notice of motion away from the ordinary case. Disposition 63 The conclusion we have reached is that the Court has no jurisdiction to grant the relief sought in the notice of motion filed on 12 July 2002. The question asked by the Special Case must therefore be answered 'no'. 64 There is no reason to depart from the usual rule as to costs. Having regard to the result, Macteldir should be ordered to pay the respondents' costs of the motion. However, those costs should not include any costs related to the attachment of affidavits to the Special Case. Notwithstanding a contrary submission by counsel for the respondents, we agree with Mr de Meyrick that it was unnecessary for affidavits to be attached to the Special Case. There was no reason to think it would be necessary to refer to them in order to appreciate the nature of the original claim and the present claim. If there is a dispute about the costs concerned with the making of the affidavits, as distinct from their attachment to the Special Case, that dispute should be resolved by Madgwick J, to whom we will remit the case. 65 Mr de Meyrick also argues that any costs order against his client should not include 'any cancellation fees for their legal representation in respect of the 4 days hearing time that was abandoned when this jurisdictional issue was taken upon the first day of the hearing'. That submission is directed to the costs of the proceeding itself, not the costs of the Special Case. The appropriate order for the costs of the proceeding itself will be a matter for Madgwick J to determine. Any issue of quantum of costs is a matter for the taxing officer, in default of agreement between the parties. We only express our surprise that it is thought there is even a chance of cancellation fees being sought on taxation: see Commissioner of the Australian Federal Police v Razzi (1991) 30 FCR 64 at 67. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate: Dated: 17 October 2003 Counsel for the Applicant: Mr J de Meyrick

Solicitor for the Applicant: R J Walsh Murphy & Roskov Solicitors

Counsel for the Respondent: Mr D Yates SC and Mr R Alkadamani

Solicitor for the Respondent: John Ajaka Solicitor

The matter was decided on the basis of written submissions.