Melksham & Anor v Fraser Island Barge Transport P/L & Anor [2002] QCA 218

SUPREME COURT OF QUEENSLAND

CITATION: Melksham & Anor v Fraser Island Barge Transport P/L & Anor [2002] QCA 218

PARTIES: SIDNEY ALBERT MELKSHAM & OSER PTY LTD ACN 010 946 719 / (applicants / appellants) / V / FRASER ISLAND BARGE TRANSPORT PTY LTD / ACN 093 569 530 / (first respondent) / KONSTANTINOS LADAS / (second respondent)

FILE NO/S: Appeal No 11303 of 2001 / SC No 673 of 2001

DIVISION: Court of Appeal

PROCEEDING: Appeal from Interlocutory Decision

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: 21 June 2002

DELIVERED AT: Brisbane

HEARING DATE: 23 May 2002

JUDGES: McMurdo P, Williams JA and Mackenzie J / Separate reasons for judgment of each member of the Court, each concurring as to the orders made.

ORDERS: 1. Allow the appeal and set aside the order that the application of 4 September 2001 be dismissed; / 2. Remit the matter to the judge at first instance to be dealt with according to law; / 3. Order that the respondents pay the appellants’ costs of and incidental to the appeal to be assessed.

CATCHWORDS: PROCEDURE – CONTEMPT, ATTACHMENT AND SEQUESTRATION – CONTEMPT – WHAT CONSTITUTES – ATTACHMENT AND COMMITTAL – AS A METHOD OF ENFORCING ORDERS OF THE COURT – THE APPLICATION – DEFENCES – appeal from an order dismissing an application for contempt of court for breach of a court order that restrained the respondents from entering specified beach zones on which vehicular ferries land - where an agreement by the parties was made subsequent to and which varied the original court order – consideration of authorities as to whether the order had been superseded by the agreement such that the order no longer had any force – consideration of the relevance of saving rights and obligations under the order - where a company associated with the appellants also was a party to the agreement but not to the order – whether the addition of that company brought the agreement outside the scope of the original proceedings and thus impacted on the enforceability of the order / Attorney-General v Times Newspapers Ltd (1974) AC 273, considered / De Bertodano v Hearn (1913) 108 LT 737, distinguished / Gilbert v Gilbert [1955] St R Qd 245, distinguished / Green v Rozen [1955] 1 WLR 741, distinguished / Harman v Secretary of State for the Home Department (1983) AC 280, considered / Harvey v Creswell (1991) 104 FLR 121, distinguished / Harvey v Hall (1873) LR 16 Eq 324, followed / McLaren v Schuit (1983) 33 SASR 139, distinguished / Pryer v Gribble (1875) LR 10 Ch App 534, distinguished / Re Hearn (1913) 108 LT 452, distinguished

COUNSEL: R G Bain QC for the appellants / G M Egan, with A M Curtin, for the respondents

SOLICITORS: Carswell & Company for the appellants / Grants Lawyers for the respondents

MCMURDO P: I agree with the reasons of Williams JA and with the orders he proposes.

WILLIAMS JA: The appellants applied to the Supreme Court for an order that the respondents be dealt with for contempt of court on the basis that they failed to comply with the order of Wilson J made on 25 January 2001. After hearing evidence Moynihan SJA concluded that the application should be dismissed, primarily because the parties had, subsequent to the order of Wilson J, entered into an agreement which had the effect of regulating the differences between the parties to the exclusion of the order of the court.

It follows that the critical matters are the order and the agreement. The order was in these terms:

“The applicant to undertake to operate their barges in accordance with clause 4 of the permits (Exhibits A, B of the affidavit of Sidney Albert Melksham filed 18/1/01) as if the respondents are operators in the permitted area A on the sketches attached to the said permits.

The applicant to give the usual undertaking as to damages.

The respondent is restrained until trial or earlier order from operating or causing to be operated any barge, ferry or other vessel in the area reserved by the applicant’s permits held from the Port Corporation of Queensland, except on such occasion as in the honestly (sic) and reasonably (sic) opinion of the Master of the vessel the prevailing weather conditions determine that continued operation of the vessel in any area other than that which is the subject of the said permits jeopardises the safe operation of the vessel and the safety of its passenger and crew.

…”

Shortly thereafter a company associated with the appellants, Jaigear Pty Ltd, also commenced operating a barge service in the general area in question. On 15 February 2001 the respondents applied to have Jaigear Pty Ltd joined as a party in the action and also sought an order that that company be restrained from carrying on barge activities beyond the limits of the areas designated “B”, “C” and “D”. In that action further orders were sought against the appellant Melksham.

Consequent upon that application being made an agreement was reached between the parties on 22 February 2001 which was recorded in the following formal agreement:

“1.The parties and Jaigear Pty Ltd ACN 010 400 503 agree as follows:

(i)in full compromise of the application by the defendants filed on 15 February 2001; and

(ii)subject to the terms hereof, in full compromise of the action.

The Plaintiffs agree that, notwithstanding paragraph 3 of the Order of Wilson J of 25 January 2001, the Defendants be at liberty from now until 21 September 2001 to operate or cause to be operated a barge in that part of “Area B” (described in and the subject of the permit, a copy of which is Exhibit “B” to the Affidavit of Sidney Albert Melksham filed 18 January 2001) between the boundary of Areas “A” and “B” and a line from the common inland point from which Areas “A”, “B”, “C” and “D” are therein defined, through that point which is sixty metres east of the common boundary between Areas “A” and “B” along the high water mark line in Area “B” identified in Exhibit A to the Affidavit of Adrian Charles Couper made on 14 February 2001.

Until trial or earlier order, the Defendants shall have use of that part of Area “B” referred to in paragraph 2 as if they were the operators of that area on the same terms as “Area A” under the undertakings to Wilson J on 25 January 2001.

In addition to the matters referred to in paragraphs 2 and 3, in the event that the ramp of any barge operated by or for the Defendants in the area referred to in paragraph 2 cannot be lowered at high tide onto sand (whether wet or dry) which is trafficable by four wheel drive vehicles because of tidal or wave action at the time when that barge is attempted to be landed there then, with the prior consent of any master then operating a barge between Inskip Point and Fraser Island on behalf of either of the Plaintiffs or Jaigear Pty Ltd, which consent shall not be unreasonably withheld, the defendant may cause the first-named barge to be landed at that point in Area “B” immediately easterly of the line referred to in paragraph 2 where, upon the lowering of the ramp, it is so trafficable.

Jaigear Pty Ltd agrees that until the sooner of trial of the action or 21 September 2001 it will not operate, or causes [sic] to be operated, a barge in Area “A” or that area referred to in paragraph 2.

Each of the parties to this application will carry his or its costs of and incidental to the application and agree in an order by the Court that the application be dismissed with no order as to costs.

Each of the parties and Jaigear Pty Ltd agrees that he or it will not until 21 September 2001 seek any injunction against the operation by the Defendants or Jaigear Pty Ltd of a barge in the Inskip Point Recreation Area easterly of the eastern boundary of Area “D” on the basis of the absence of lawful authority for any such operation.

Subject to the liberty afforded the Defendants referred to in paragraphs 2 and 3, the parties otherwise abide the orders by and undertakings to Wilson J on 25 January 2001.

The parties agree that, providing there has been compliance by the opposing party(s) with this agreement and those orders and undertakings, the parties themselves will take no further steps in the action and will join in consent transfer of the action to the abeyance list (or the equivalent as the Court directs) to the intent that, as soon as practicable after 20 September 2001, the action be discontinued by consent with no order as to costs”.

There was evidence before the judge at first instance which prima facie established that the respondents had breached the order of 25 January 2001 in that barges under their control had operated within areas which, in accordance with the order and the agreement, were the exclusive area of operation of the appellants. In broad terms the learned judge at first instance concluded that the agreement between the parties superseded the order of the court and that in consequence the appellants could not contend that by such conduct the respondents were in breach of the order, that is they were in contempt of it. It is that conclusion which is challenged by this appeal. If the appeal were to be upheld then the matter would have to be remitted to the judge at first instance to be dealt with according to law; allowing the present appeal does not necessarily mean that the respondents must be punished for contempt.

There is no doubt that to some extent the agreement varied the effect of the order. After 22 February 2001 the agreement permitted the respondents to operate a barge in an additional area of 60 metres measured along the high water mark which, in terms of the order, was a prohibited area with respect to their operations. The agreement also allowed the respondents some further latitude in that in defined emergency situations they could operate within the area otherwise denied to them by the order.

The agreement also dealt with matters outside the scope of operation of the order, namely the operations of Jaigear Pty Ltd.

But it is then clear that, subject to such matters, the parties by the agreement expressly intended the order to have full force and effect. By paragraph 8 of the agreement the parties agreed, subject to the terms of the agreement varying the order, they would “abide the orders by and undertakings to Wilson J on 25 February 2001”. Further, the discontinuance of the action was subject to there being compliance by the parties not only with the agreement, but also with the “orders and undertakings”.

The learned judge at first instance considered that those provisions of the agreement contractually bound the parties to the terms of the orders and undertakings to the extent that they remained applicable in the light of the agreement, but he concluded that such considerations did not mean that the respondents could be held to be in contempt of the order of 25 January 2001. His Honour held that the “agreement of 22 February regulates relations between the parties from that date in respect of the operation of barges between Inskip Point and Fraser Island and constitutes a fresh cause of action”. Because the parties had “resolved their differences by the agreement” the order of 25 January was “irrelevant or inapplicable to breaches of the agreement, save to the extent which they may have a contractual operation.”

In support of his reasoning the learned judge referred to Re Hearn; De Bertodano v Hearn (1913) 108 LT 452 and (1913) 108 LT 737; McLaren v Schuit (1983) 33 SASR 139 and Green v Rozen [1955] 1WLR 741. He also relied on the reasoning in Gilbert v Gilbert [1955] St R Qd 245, and Harvey v Creswell (1991) 104 FLR 121.

The appellants’ submission is that none of those authorities warrant the conclusion reached, particularly given the terms of this agreement. On the appellants’ argument the agreement did not solely regulate relations between the parties; the order remained alive and fundamental when it came to determining what the parties could or could not do. On the appellants’ submission the order was not discharged nor in any other way rendered unenforceable at the instance of the appellants.

Prima facie the parties at all material times recognised the continuing force of the order. Subject to varying its effect in ways which could be said to be relatively minor, the parties acknowledged by the agreement that they continued to be bound by the order. Further, the discontinuance of the action was dependent upon compliance with the order (subject to the variations occasioned by the agreement) until 20 September 2001 when the licences expired. Looked at in that light there was nothing in the agreement which would prevent enforcement of the operative terms of the agreement by any means available in the action, including proceedings for contempt.

The critical issue before this court is whether or not the authorities referred to at first instance necessitate the conclusion that in the circumstances here the order had been supplanted by the later agreement.

The correct statement of principle, in my opinion, is that found in Oswald’s Contempt of Court (Third Edition) at 122: “If an arrangement is made after the judgment or order for payment, under which its terms are interfered with, as by agreeing to take payments by instalments or otherwise, without saving the rights under the judgment or order, the right to a subsequent attachment to enforce the judgment or order will be lost.” The relevance for present purposes is obvious; here the agreement expressly saved rights and obligations under the order. That statement is supported by the judgment of Vice-Chancellor Bacon in Harvey v Hall (1873) L.R. 16 Eq 324. The reasons are not fully reported but it is clear from the statement of facts that the agreement, subsequent to the original order, to pay by monthly instalments, without saving rights under the original order, compelled the conclusion that default in payment could not lead to an attachment order being made by the court. As Bacon V.C. observed “there had been such an interference with the terms of the original order that an attachment could not now be issued”.

Many of the cases in which it has been held that either the order has been “spent and exhausted” or “superseded” because of the subsequent agreement have involved situations where the subsequent agreement included the making of an order that the existing proceedings be stayed. Such a case was Pryer v Gribble (1875) L.R. 10 Ch. App. 534. There the initial proceeding was a redemption suit against a mortgagee in possession. A compromise was agreed upon, under which the mortgagor was to pay a fixed sum on a certain day, the mortgagee was to carry on business in the meantime, and the mortgagee was to give up possession upon payment of that fixed sum. On that basis the suit was to be stayed. The mortgagor failed to pay the fixed sum in accordance with the agreement. Thereafter the mortgagee applied in the existing proceeding for an order that the mortgagor pay the agreed fixed sum by a certain day and for consequential orders. It was held by James L.J. that the agreement for compromise could not be enforced in the proceeding but a fresh bill would have to be filed for specific performance. In the course of his reasons he said at 539 – 40:

“If this were a simple agreement between the parties to stay a suit, or to have a bill dismissed, very likely the Court ought to give effect to that, as it would give effect to any other agreement relating solely to the conduct and prosecution of the suit. But when those matters are mixed up with a great number of details, money to be paid, and acts to be performed, it is far beyond the scope, as it seems to me, of an interlocutory motion, and far outside the jurisdiction of this Court on interlocutory motion”.

Importantly, in that case, the matter with which the court was concerned was the enforcement of an agreement requiring acts to be performed which went far beyond the scope of the original proceedings. That is far different from the enforcement of an order of the court which the parties have, by agreement, agreed should be varied in some comparatively minor respects.

The first case relied on in the judgment appealed from is that of Hearn. In that case a wife, living apart from her husband, took out an originating summons to have determined certain questions which arose under the will of the husband’s father. In particular the application sought a determination as to whether or not the husband had forfeited a life interest in certain property. Before the application was heard a “complex consent order” was recorded in the court. By the terms of that order, relevantly, the husband was to make periodical payments to the wife and he was left in possession of the subject properties; by consent all proceedings were stayed. Subsequently the husband made default in making payments. The wife applied for relief, including the appointment of a receiver, in the initial proceedings. At first instance Sargant J held that such an application could not be made in the original proceeding, but that independent proceedings had to be taken in order to obtain relief. In the course of his reasons he said that the original proceedings were “spent and exhausted” (454); that is the expression which has been used in many subsequent cases. It is, in my view, of critical importance to note that in that case the original proceedings were stayed by consent, and the “consent order” contained provisions which could not have been made by the court if the initial application had proceeded to judgment. On appeal it was said that Sargant J was “perfectly right”. (738)

The learned trial judge also relied upon Green v Rozen and McLaren v Schuit. The former case was subject to a detailed and careful analysis by White J in the latter case and I agree with all that was there said by White J. In some cases it can be correctly said that an earlier order of a court has been “spent and exhausted” and therefore it cannot be used as the basis for contempt proceedings. Further, in some cases it can be said that the cause of action, the subject of the initial proceedings, has been superseded by a compromise, so that subsequently only the compromise may be enforced. Whether or not the original order has been “spent and exhausted” or the original cause of action has been “superseded” by a subsequent agreement will always be a question of fact and law to be determined in each case. The determining feature will always be the circumstance, mostly an agreement, which is said to have either of those consequences.

Before proceeding further reference should also be made to the decisions in Gilbert and Harvey v Creswell relied on at first instance. In Gilbert an order had been made by consent for payment to the wife of alimony pendente lite. Subsequently the husband and wife agreed that certain house properties registered in their joint names should be sold and any arrears of alimony should be paid out of the husband’s share of the proceeds. Upon the decree for dissolution becoming absolute the parties entered into a further agreement, the effect of which was that the wife agreed to accept payment of arrears from a particular fund when it became available to the husband. Neither agreement contained any provision preserving the wife’s rights under the initial order. The wife subsequently sought leave to issue a writ of attachment for failure to comply with the terms of the order. Townley J held that because there was no saving of her rights under the initial order, the wife had waived her right to enforce payment of arrears by attachment. Relevantly his Honour said at 249:

“In my opinion where there is a judgment or order, particularly for the payment of money, the parties to the proceeding in which the judgment is given or order made, may by agreement so vary the terms or effect of that judgment or order that a court would decline to enforce it according to its original tenor by giving leave to issue a writ of attachment. Particularly would this be so, I think, where the original judgment or order is by consent”.

At the conclusion of his reasons at 254 he said:

“If parties make a contract, even though it be thereafter recorded in an order of the court made by consent, they have complete liberty afterwards to vary that contract by further agreement but, if they do so, one of them can hardly ask the court to enforce the original terms of their bargain where the further agreement substantially alters the effect of those terms”.

That last passage must, in my view, be construed in context. In Gilbert the subsequent variation by agreement of the parties went to the very substance of the court order; the order of the court could have no area of operation given the terms of the agreement varying it. That clearly distinguishes the situation in Gilbert from that which exists in the present case. Here, subsequently to the agreement of 22 February, the parties intended the order of 25 January to remain effective with respect to the balance area, that is, the area to which the order initially applied less the area deleted by the terms of the agreement.

Finally, it must be noted that the learned judge at first instance, relying on Harvey v Creswell, referred to a “principal or policy” that an order should not be enforced where the parties had agreed to resolve their differences prior to the application for contempt. That may well be so in circumstances such as existed in Harvey v Creswell. In that case, subsequent to the separation of husband and wife, the court on 14 December 1987 made an order providing for custody of and access to the children of the relationship. Thereafter there were difficulties between the parties with respect to custody and access and on 20 June minutes of a consent order were signed by the parties, and that became an order of the court on 29 June 1990. That order of 29 June 1990 had the effect of varying the orders made on 14 December 1987. Thereafter the husband brought proceedings for relief relying on alleged breaches by the wife of the order of 14 December 1987 which occurred prior to 29 June 1990. Finn J in the Family Court held (particularly at 128) that where “the parties conduct themselves inconsistently with its terms the Court has a discretion to refuse to enforce the order”.

Relying on cases such as Gilbert her Honour recognised that parties may by agreement so vary the terms or effect of an order that a court would decline to enforce it according to its original tenor. Again that decision is clearly distinguishable from the circumstances with which the court is here concerned. In cases such as Harvey v Creswell there is no scope for the continued operation of the original order; it is supplanted by the later agreement, particularly where, as in that case, the later agreement is embodied in an order of the court.

Here the terms of the agreement, particularly paragraphs 8 and 9 thereof, recognised that compliance with the terms of the order, as varied, was essential if there was to be compliance with the agreement. There was no uncertainty as to the scope of operation of the order after 22 February 2001; the area of its operation was reduced by 60 metres and there was an agreed definition of what the respondents could do in an emergency situation without breaching the order. The reference to Jaigear Pty Ltd in the agreement in no way impacted on the enforceability of the order; the terms of the agreement relating to Jaigear Pty Ltd were self-contained and independent of the order. It is clear from paragraphs 8 and 9 that it was fundamental to the agreement that the parties abide by the terms of the order except in so far as it had been varied in the relatively minor ways specified.

In the circumstances the submission by counsel for the respondents that the agreement of February “substantially altered” the rights of the parties pursuant to the order of January is not made out. Counsel for the respondents also submitted that the appellants were seeking to invoke the court’s coercive power in respect of an agreement which had not been sanctioned by the court and which was substantially different from the original order made. Again that submission must be rejected. The conduct of the respondents said to constitute contempt involves alleged breaches of the order not affected by the agreed variation thereof.

Counsel for the respondents also relied on cases such as Attorney-General v Times Newspapers Ltd (1974) A.C. 273 and Harman v Secretary of State for the Home Department (1983) A.C. 280 in support of the contention that the court would not enforce an order where a party had waived the benefit of it; that was said to flow from notions of public interest and fairness. It is sufficient to say that the appellants’ application was not dismissed on that basis and more specific findings of fact would have to be made before it could be said that a discretion had been properly exercised on those grounds.

It is sufficient for present purposes to say that the agreement does not necessarily preclude the appellants from seeking orders consequent upon proven breaches by the respondents of the order. Because of that the order at first instance must be set aside. But that does not mean that the appellants must necessarily succeed in obtaining the relief sought. If breaches were proved to the requisite standard then, subject to discretionary considerations, a finding of contempt could be made. None of those issues have yet been addressed at first instance. It follows that the matter should be remitted for further consideration.

The orders of the court should therefore be:

Allow the appeal and set aside the order that the application of 4 September 2001 be dismissed;

Remit the matter to the judge at first instance to be dealt with according to law;

Order that the respondents pay the appellants’ costs of and incidental to the appeal to be assessed.

MACKENZIE J: Because the analysis of the critical agreement and applicable principles and authorities by Williams JA is comprehensive and I agree with his reasons, it is unnecessary for me to duplicate what he has said.

I agree with the orders proposed by him.