S CATCHNORDS Aradke Prachcas. Eeeemree - jurisdiction — settlement of action against corporation under Trade Practices Act, 1974 - terms of settlement refer to individuals not parties to original action - whether terms of settlement can be enforced in Federal Court of Australia - Federal Court of Australia not competent to hear contract matters simpliciter - common substratum of facts required. Fencott v. Muller (1983) 152 C.L.R. 570 - con. Roberts v. Gippsland Agricultural and Earth Moving Contracting Co. Pty. Ltd. £19567 V.L.R. 555 - con. MARK TAPANT PALLAS and JACOB FEODOR DUBINSKI-HUNT v. DONALD MURRAY FINLAY No. G42 of 1985 Northrop, Lockhart and Beaumont, JJ. 18 July 1985 Brisbane "y * fa IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND REGISTRY GENERAL DIVISION No. G42 of 1985 weuerwen ON APPEAL from a single judge of the Federal Court of Australia BETWEEN : MARK TAPANI PALLAS and JACOB FEODOR DUBINSKI-HUNT Appellants AND: DONALD MURRAY FINLAY Respondent MINUTES OF ORDER Judge making order: Northrop, Lockhart and Beaumont, Jd. Date order made: 17 July 1985 Where made: Brisbane THE COURT ORDERS THAT: 1. Appeal allowed. 2. Orders made on 7 May 1985 be set aside. 3. The respondent pay the appellants' costs of the appeal. 4. The respondent be granted a certificate under the _— i ree Le IEE ee we wee Federal Proceedings (Costs) Act, 1981. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND REGISTRY ) No. G42 of 1985 ) GENERAL DIVISION ) ON APPFAL from a single judge of the Federal Court of Australia BETWEEN: MARK TAPANT PALLAS and JACOB FEODOR DUBINSKI-HUNT Appellants AND: DONALD MURRAY FINLAY Respondent CORAM: Northrop, Lockhart and Beaumont, Jd. DATED: 18 July 1985 REASONS FOR JUDGMENT NORTHROP, J.: The Court has already announced its orders in this matter and I ask Beaumont J. to publish his reasons. I agree with the reasons published by Beamount, J. IN THE FEDERAL COURT OF AUSTRALTA QUEENSLAND REGISTRY No. G42 of 1985 ee ee ened GENERAL DIVISION ON APPEAL from a single judge of the Federal Court of Australia BETWEEN : MARK TAPANT PALLAS and JACOB FEODOR DUBINSKI-HUNT Appellants AND DONALD MURRAY FINLAY Respondent CORAM: Northrop, Lockhart and Beaumont, JJ. DATED: 18 July 1985 REASONS FOR JUDGMENT LOCKHART, J.: I agree with the reasons for judgment of Beaumont, J. | certify that this andthe fs preceding pages-are-a true copy of the Reasons for Judgment herein cf his Honour Mr Justice Lockhart ge Aa Z Associa' Dated. /F Joly 1985, ee a TIT IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND REGISTRY ) ) ) No. G42 of 1985 GENERAL DIVISION ON APPEAL from a single judge of the Federal Court of Australia BETWEEN : MARK TAPANT PALLAS and JACOB FEODOR DUBINSKI-HUNT Appellants AND: DONALD MURRAY FINLAY Respondent CORAM: Northrop, Lockhart and Beaumont, JJ. DATED: 18 July 1985. REASONS FOR JUDGMENT BEAUMONT, J.: On 17 July 1985, at the conclusion of argument in this appeal, the Court made orders allowing the appeal and setting aside the orders the subject of this appeal and indicated that the Court would subsequently give reasons for its decision. What follow are my reasons. By proceedings commenced in this Court in October 1983, the respondent to the appeal, Dr. Finlay, sought several forms of relief against Lincoln Hunt Australia Pty. Ltd.. By his application, Dr. Finlay sought orders declaring void certain contracts; an order directing Lincoln Nw Hunt Australia Pty. Ltd. to reconvey to him certain property; an order directing Lincoln Hunt Australia Pty. Ltd. to repay to him the sum of $150,000.00 deposited with it; an order directing Lincoln Hunt Australia Pty. Ltd. to obtain the discharge of a certain mortgage; damages for breach of ss3.52 and 53 of the Trade Practices Act, 1974; and further or other relief pursuant to s.87 of that Act. By his statement of claim filed with his application, Dr. Finlay alleged that he had been induced to enter into the two contracts mentioned earlier by reason of certain false representations made on behalf of Lincoln Hunt Australia Pty. Ltd.. These representations and other conduct were said to contravene ss.52 and 53 of the Trade Practices Act. Fraud was also alleged. No mention was made in these pleadings of the appellants, Messrs. Pallas and Dubinski-Hunt. However, an allegation was made in the statement of claim that Mr. Richard Furrer, said to bea director of Lincoln Hunt Australia Pty. Ltd., had made certain representations to Dr. Finlay. The final hearing of the proceeding commenced before a judge of this Court in February 1985. While the proceedings were part-heard, the learned judge was informed that the parties had settled the matter. On 19 February 1985, by consent, it was ordered that the matter stand over generally with liberty to e21ther party to restore it to the list on two days' notice. Although not then filed in Court, ee eet the parties, their counsel and the appellants signed terms of settlement as follows: Payment of the sum of $150,000.00 was not made. "Finlay v. Lincoln Hunt Australia Pty. Ltd. This action is secttled upon the following terms. l. Dr. Finlay shall be paid the sum of $150,000 in full settlement of the claim, cross-claim and costs. (The cross-claim concerned a caveat to be mentioned shortly. The parties to the cross-claim were the same as the parties to the claim 1itselz.) 2. Pallas and Dubinski-Hunt shall be personally jointly and severally Iiable for payment of the said sum to Dr. Finlay's solicitors ... on or before 19 April 1985. 4. Subject to para.5. hereof, Lincoln Hunt Australia Pty. Ltd. shall be relieved of any liability 1n the action to Dr. Finlay. 5. The caveat (as described) ... shall remain until payment of the said $150,000 aun accordance with these terms. 6. (Costs were dealt with.) 7. %In default of payment of the said sum an accordance with the terms hereof the applicant (Dr. Finlay) shall be entitled to enter judgment aqainst Pallas and Dunkinski-Hunt for the sum of $150,000 and they will agree to be joined for that purpose." On 29 April 1985, application was made by Dr. Finlay to add the appellants as respondents to the principal proceedings for the purpose of seeking, at a later stage, that judgment be entered in favour of Dr. Finlay against the appellants in the sum of $150,000.00. On that day, I gave leave to Dr. Finlay to amend the application in the principal proceedings by adding the appellants as respondents to those proceedings. I further gave leave to file and serve a notice of motion seeking orders, inter alia, that judgment be entered against the appellants as aforesaid. This application was made returnable on 7 May 1985 before another judge of the Court. On 7 May, 1985, the learned judge ordered that judgment be given in the matter in the sum of $150,000.00 against the appellants jointly and severally. The appellants now appeal from the judgment given on 7 May 1985. A number of arguments have been advanced in support of the appeal but, in the circumstances, it is necessary to deal with only one of the submissiongput by the appellants. It is submitted on behalf of the appellants that this Court lacked jurisdiction to make the orders now challenged. In essence, the argument is that any cause of action now available against the appellants must be found, if at all, in the contract allegedly made on entry into the compromise evidenced in the terms of settlement signed on 19 February 1985; that this Court's jurisdiction, being statutory only and for present purposes, limited to jurisdiction under the Trade Practices Act, does not entitle it, even in its accrued or associated jurisdiction, to entertain the claim now made against the appellants. In my opinion, the appellants' objection to jurisdiction should be upheld. 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. afresh cause of action in contract against the appellants alone. True, the compromise is executory only and the appellants and Lincoin Hunt Australia Pty. Ltd. have not performed their obligations under that agreement. But, unless and until it is set aside asa contract of compromise by a court of competent jurisdiction or otherwise discharged (see Harvey v. Phillips (1956) 95 C.L.R. 235 at pp.243-4), 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. It is submitted on behalf of Dr. Finlay that this is a case for the exercise of the Court's accrued or "pendent party" jurisdiction (see Kennedy v. Australasian Coal and Shale Employees Federation (1983) 50 A.L.R. 735). But, in my opinion, there 1s here, at this stage at least, none of the common substratum of facts which is required to confer jurisdiction upon this Court (see Fencott v. Muller (1983) 152 C.L.R. 570 at p.607). Rather, in my view, the present case 18 one of an attempt to advance "a completely disparate claim constituting in substance a separate proceeding" (see Fencott v. Muller, supra, at p.607). 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. Pinlav 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. In my view, the present case, at this stage at least, should be seen as an attempt to invoke the jurisdiction of the Court to enforce a simple contract. Looked at in isolation, the Court has no jurisdiction to entertain such a claim and, unless there is a substratum of facts common to a matter in which the Court has jurisdiction, the accrued jurisdiction is not available. Counsel for Dr. Finlay sought to defend the entry of judgment against the appellants by relying upon certain decisions of the Supreme Courts of Victoria and South Australia granting leave to enter judgment in proceedings upon default occurring in the performance of a compromise. Particular reference was made to Roberts v. Gippsland Agricultural and Earth Moving Contracting Co, Pty. Ltd. [1956] V.L.R. 555. There, Lowe and O'Bryan, JJ. held that in certain simple cases an agreement for the compromise of an action may be enforced ona motion for judgment in the action itself in accordance with the agreed terms. Smith, J. took a somewhat broader view (cf. Koutsouradis v. Koutsouradis £1983] 2 V.R. 488 at p.495). But, in my view, these questions and related issues such as the effect of a "Tomlin" order in a court of unlimited general jurisdiction such as the Supreme Court of Victoria or of South Australia (see McLaren v. Schuit (1984) 33 S.A.S.R. 139) provide no guidance here. The 1ssue now to be determined is the more wn] fundamental question of whether this Court has jurisdiction to entertain proceedings on a simple contract. In my view, in the absence of any present basis for invoking the accrued or associated jurisdiction of the Court, the Court is incompetent to enforce the agreement embodied in the terms of settlement. For these reasons, I concurred in the orders allowing the appeal and setting aside the orders made on 7 May 1985. I hereby certify that this and the preceding 7 pages constitute a true copy of the Reasons for Judgment of the Honourable Mr. Justice Beaumont herein. Dated 18 July 1985. Associate etm