Authorities
54 Authorities supporting the existence of jurisdiction are: Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 ('Darling Downs'); Reid v Interarch Australia Pty Ltd [2000] FCA 1328; We Two Pty Ltd v Shorrock (No 2) [2005] FCA 934 ('We Two') at [13]‑[16]; and Jarraman Arts Aboriginal Corporation v Tourism Australia (No 3) [2005] FCA 983 at [48]‑[50].
55 The only authorities which might be thought to suggest a negative answer are Pallas v Finlay (1985) 61 ALR 220 ('Pallas v Finlay') and Macteldir Pty Ltd v Dimovski (2003) 132 FCR 492 ('Macteldir'), which I will now consider.
56 In Pallas v Finlay, Dr Finlay sued Lincoln Hunt Australia Pty Ltd ('Lincoln Hunt'). Dr Finlay's federal claim was one of contravention of ss 52 and 53 of the TPA. He sought various forms of relief. Generally speaking, they can be described as an undoing of contracts which Dr Finlay had been induced to enter into by Lincoln Hunt's misleading and deceptive conduct. Pursuant to the contracts, Dr Finlay had transferred real estate to Lincoln Hunt and deposited $150,000 with it. Dr Finlay sought an order that Lincoln Hunt obtain a discharge of a mortgage over the property, reconvey the property unencumbered to him, and repay to him the $150,000. By a cross‑claim, Lincoln Hunt sought an order that Dr Finlay withdraw a caveat which he had lodged over the title to the property.
57 In the course of the final hearing, it was announced that the matter had been settled. By consent it was ordered that the proceeding be stood over generally, with liberty to either party to restore.
58 Two individuals, Messrs Pallas and Dubinski-Hunt, who had not been parties to the substantive proceeding, entered into terms of settlement with Dr Finlay by which they agreed that in consideration of his releasing Lincoln Hunt, they would pay him $150,000, and that upon default in payment he should be at liberty to enter judgment against them for that sum. To that end, Messrs Pallas and Dubinski-Hunt agreed, in the event of default by them, to be joined as parties to the proceeding for that purpose. Lincoln Hunt agreed that Dr Finlay should be entitled to maintain the caveat until payment of the sum of $150,000. Although the terms were signed by the parties to the proceeding, their counsel, and Messrs Pallas and Dubinski-Hunt, they were not filed in Court.
59 Messrs Pallas and Dubinski‑Hunt defaulted, and Dr Finlay obtained leave to add them as respondents. He successfully moved for judgment against them.
60 The Full Court allowed their appeal on the ground that the Court lacked jurisdiction to enforce the agreement between Dr Finlay and Messrs Pallas and Dubinski-Hunt.
61 The case is distinguishable. First, of course the case was decided prior to the enactment of s 39B(1A) of the Judiciary Act by the Law and Justice Amendment Act 1997 (No 34, 1997) s 3, Sch 11, Item 1. Secondly, the Full Court emphasised that Messrs Pallas and Dubinski-Hunt were not parties to the primary proceeding (except upon being joined pursuant to the terms of settlement and for the purpose of their enforcement). Beaumont J, with whom Northrop and Lockhart JJ agreed, observed that in these circumstances there was no common substratum of facts as between the federal cause of action and the making of the compromise, as is required to confer 'accrued' or 'pendent party' jurisdiction (citing Fencott v Muller (1983) 152 CLR 570 at 607). His Honour added that the position may have been different if, for example, Dr Finlay had joined the two men on the footing that they were involved in the contraventions: cf ss 82 and 75B of the TPA. His Honour observed that in such a situation, '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' (at 223).
62 In the present case, Mr Edge has been a respondent throughout. In the application which commenced this proceeding, the applicants (then only Needlework and Mr Meier) claimed, relevantly, damages under ss 82 and 75B of the TPA against him. The accompanying statement of claim alleged, relevantly, that Mr Edge made misleading and deceptive statements for himself and as agent for Chansonette; that, in consequence, Chansonette contravened s 52 of the TPA; and that Mr Edge was 'involved' in that contravention and was liable to Needlework and Mr Meier in damages under s 82 of the TPA.
63 Tancot became third applicant subsequently, and by an amended application and an amended statement of claim, both filed on 2 December 2003, it made similarly based claims for relief against Mr Edge.
64 The current further amended application and further amended statement of claim, both filed on 28 July 2004, continue to make claims against Mr Edge under ss 82 and 75B of the TPA, based on his involvement in the contraventions of s 52 by Chansonette.
65 Pallas v Finlay was distinguished by majority (Pincus and Einfeld JJ; Fisher J dissenting) in Darling Downs, another claim under the TPA which was settled by an agreement to pay money, this time, however, by the only respondent to the only applicant. The basis on which Pallas v Finlay was distinguished was that in Pallas v Finlay, Messrs Pallas and Dubinski-Hunthad not been respondents in the primary proceeding, and for this reason the motion to enforce the settlement against them had not been 'properly brought forward … in the matter' within s 22 of the FCAA.
66 The majority in Darling Downs saw the question in that case as being whether enforcement of the settlement agreement was permissible as part of the Court's disposition of the federal matter (at 521). Their Honours thought that the grant of remedies to enforce the agreement was within s 22 of the FCAA.
67 I turn now to Macteldir. As I observed in Wenkart v Pantzer (No 3) at [87], the Full Court decision in that case has been criticised: see Mark Leeming, 'Breach of Contract in the Federal Court' (2004) 78 ALJ 96‑98. As I also observed in that case (at [94]), Macteldir is not binding on me because the Full Court was exercising original jurisdiction. Reference may be made to Minister for Immigration and Multicultural and Indigenous Affairs v SZANS (2005) 141 FCR 586 ('SZANS') at [35]-[38] and the authorities their cited. However, again as I observed in Wenkart v Pantzer (No 3), I would decide inconsistently with Macteldir only if I thought it 'clearly' or 'plainly' wrong. The reason is that this very restraint should characterise my approach if the three Judges who composed the Full Court in Macteldir had given three single‑Judge decisions to the same effect in the original jurisdiction of the Court: see Bank of Western Australia Ltd v Commissioner of Taxation (1994) 55 FCR 233 at 255; Cooper v Commissioner of Taxation (2004) 139 FCR 205 at [46]; SZANS at [38].
68 In Wenkart v Pantzer (No 3) I said that I did not need to form an opinion as to whether Macteldir was clearly or plainly wrong, because it was distinguishable. I noted that no submission had been made in Macteldir based on s 39B (1A)(c) of the Judiciary Act 1903 (Cth), and held that I had jurisdiction under that provision to enforce the charge. For that reason I said that I did not need to determine whether I also had jurisdiction to do so within the accrued jurisdiction of the Court.
69 The facts of Macteldir were unusual. The applicants sought relief against the respondents under ss 115 and 116 of the Copyright Act 1968 (Cth) in respect of the respondents' publication of a directory-calendar for 2001 ('the 2001 Directory‑Calendar'). The proceeding was compromised, but subsequently, according to the applicant, the same respondents published a directory-calendar for 2002 ('the 2002 Directory‑Calendar'). The applicant contended that publication of the 2002 Directory‑Calendar constituted a breach of the terms of settlement. An order had been made dismissing the substantive proceeding.
70 By the opening words of the terms of settlement, the parties agreed to 'the following orders'. There followed numbered paragraphs. Paragraphs 2, 3, 5 and 7 were expressed as promises by the first and second respondents not to do, or to do, certain things.
71 The Full Court noted that at a directions hearing before the Docket Judge those paragraphs had been 'transformed' into undertakings to the Court. The applicant did not however, institute a proceeding for contempt of court constituted by a breach of the undertakings.
72 At [49]‑[51], the Full Court noted that the applicant did not seek to enforce 'just an agreement in the nature of a contract between the parties, but an agreement to seek certain orders of the Court'. As noted above, the opening words of the terms of settlement were indeed expressed as an agreement to consent to orders. The Full Court appears in these paragraphs to have considered that the agreement was overtaken by the Judge's noting of undertakings to the Court in the same terms. As a result, the Full Court appears to have treated enforcement of the agreement by the making of orders as a remedy no longer available. That is to say, the Court appears to have treated the substitution of undertakings to the Court for the making of orders by consent, as a 'substituted performance' of the agreement.
73 The present applicants, by contrast, seek precisely to enforce the agreement of compromise according to its terms, and there can be no suggestion of such enforcement having ceased to be available by reason of its having been replaced by a substituted performance.
74 At [57] their Honours said that it was unnecessary for them to make 'any general statement about the jurisdiction of the court to enforce compromises of existing proceedings' (my emphasis). Thus, their Honours appear to have intended not to touch upon the jurisdictional issue presented here.
75 At [60] their Honours observed that 'it might have been possible' for the applicant to have moved for an injunction to restrain conduct which would otherwise have amounted to a contempt of court, but that the applicant had not done so.
76 At [62], the Full Court said that it was 'the applicant's departure from a claim to enforce the existing undertakings which takes the notice of motion away from the ordinary case'. The reference seems to be to the fact that the notice of motion sought an injunction expressed, not in the terms of the undertakings, but in terms which related expressly and specifically to the 2001 Directory‑Calendar. With respect, I have difficulty in understanding the nature of any problem to which this circumstance was thought to give rise.
77 While I have difficulty in understanding certain aspects of the reasons in Macteldir, it seems clear that their Honours were at pains to emphasise that the case was not, in their view, one in which the motion was simply one for enforcement of the compromise agreement according to its terms. They appear to have thought that this had become impossible by reason of the supervening undertakings given to the Court. A refusal to enforce on this ground did not go to jurisdiction. Moreover, their Honours said that they were not intending to make any general statement about the Court's jurisdiction to enforce agreements in settlement of proceedings before the Court.
78 For the above reasons, I would distinguish Macteldir.
79 Their Honours considered at some length Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd [1956] VLR 555 ('Roberts v Gippsland'); McLaren v Schuit (1983) 33 SASR 139 ('McLaren v Schuit') and General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6 ('General Credits'). Those cases were, however, concerned with the procedural question whether a compromise agreement could be enforced by motion in the substantive proceeding, not with the anterior question of the jurisdiction of the Court to enforce the agreement at all. It is important to distinguish between the fundamental question of jurisdiction, and the non-jurisdictional question, whether a claim is properly brought forward in a proceeding already before the Court: cf s 22 of the FCAA, and Philip Morris.