CATCHWORDS PRACTICE AND PROCEDURE - self-executing order by consent for security for costs of appeal - order not complied with and appeal thereby dismissed - whether consent order based on binding contract - whether time can be extended in spite of such a contract -~— whether time can be extended after appeal dismissed - effect of relevant rules of court. Patents Act 1952 s.170 Federal Court of Australia Act 1976 ss.56 & 59 Federal Court Rules 0.28, 0.35 r 7, 0.52 rr 20 & 38 Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 All ER 377 FAI General Insurance Co Ltd v Southern Cross Exploration NL (High Court, unreported, 25 March 1988) R.D. WERNER & CO JNG v BAILEY ALUMINIUM PRODUCTS PTY LTD No. VG 494 of 1987 Woodward, Jenkinson & Foster JJ 2 May 1988 Melbourne IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 494 of 1987 GENERAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: THE COURT 1. R.D. WERNER & CO INC Appellant and BAILEY ALUMINIUM PRODUCTS PTY LTD Respondent MINUTES OF ORDER COURT: Woodward, Jenkinson & Foster JJ DATE: 2 May 1988 PLACE: Melbourne ORDERS THAT: The appeal be allowed. The order made the 4th day of November 1987 in the appeal numbered VG 147 of 1987 be set aside and in lieu thereof it be ordered that the time which is limited by paragraph 1 of the order made the 24th day of July 1987 and which is specified in paragraph 2 of the said order be extended until the 20th day of May 1988 and that the said appeal (NOTE: numbered VG 147 of 1987 stand aS a pending appeal accordingly and that the appellant's costs of the motion in the said appeal numbered VG 147 of 1987 of which notice was dated the 2ist day of September 1987 be paid by the respondent. The appellant's costs of this appeal be paid by the respondent. The money paid into Court in compliance with paragraph 3 of the order made the 22nd day of December 1987 be paid out to the appellant's solicitors. Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules.) IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 494 of 1987 ee ee GENERAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: R.D. WERNER & CO INC Appellant and BAILEY ALUMINIUM PRODUCTS PTY LTD Respondent COURT: Woodward, Jenkinson & Foster JJ DATE: 2 May 1988 PLACE: Melbourne REASONS FOR JUDGMENT WOODWARD and FOSTER JJ. This is an appeal, by leave, from an interlocutory decision of a single judge of the Court. The basic facts are quite simple. On 24 July 1987 Ryan J made a consent order for security for costs in an appeal from a decision of the Supreme Court of Victoria in a matter arising under the Patents Act 1952. His Honour's orders were expressed in the following terms: 1. "Pursuant to Section 170 of the Patents Act 1952 the Appellant shall provide security for the costs of its Application for Leave to Appeal and its Appeal herein in the sum of TWENTY THOUSAND DOLLARS ($20,000) by paying the said sum into this Honourable Court within forty-five (45) days of the date of this Order. 2. In default of the Appellant providing the said security within the, said period of forty~five (45) days this Appeal is dismissed and the Appellant shall pay the Respondent's taxed costs relating thereto. ; 3. The Respondent's costs of this Application shall be part oof the Respondent's costs of the Appeal." As a result of an unfortunate chain of circumstances, which need not be detailed here, but which do not reflect seriously upon the appellant or its legal advisers, the payment into court was not made as required by the due date. Instead, a letter of credit for the required amount was filed on the last day. Two weeks later, an application was made to Northrop J to validate the letter of credit as a form of security or to extend the time within which the security for costs could be paid as ordered. To summarise his Honour's findings, he held that he would have extended the time if he had had power to do so, but that he lacked such power. This was not for the reason that the time had expired and the self-executing order had taken effect, but rather because the agreement between the parties for a consent order was a true contract between them and could not be varied by the Court. This finding of his Honour's has been challenged by the appellant in these proceedings, while the respondent challenges the first finding to the effect that the Court had power to vary the order even after its self-executing provision had taken effect. It is convenient to begin by considering whether there was in fact a binding contract between the parties expressed by the consent order, or whether this was one of the frequent cases in which an interlocutory order is made on the application of one party with the other party or parties consenting - in the sense of not objecting - but without there being any intention of entering into a formal and binding contract; see Siebe Gorman _& Co Ltd v Pneupac Ltd {1982} 1 All ER 377 AT 380. Courts are very familiar with the circumstance in which parties reach an agreement, either after a good deal of negotiation or perhaps quite readily, about the orders that should be made for the future conduct of an action. We would be most reluctant to reach any conclusion which tended to inhibit the ready consent of practitioners to the making of sensible arrangements in such cases. It would normally be understood by them that, if circumstances arose which made it necessary, they would be entitled to apply to the court for a variation of the orders to which they had consented. No doubt the fact of their consent would be a relevant consideration for the court in deciding whether to order a variation, but it would be understood by all that the ultimate decision was in the court's hands. It is not possible to set out all the indicia of a binding contract having been entered into in a particular case. The subject matter and the circumstances will both be important. In the present case there was a history of negotiation about the claim for security for costs which extended over several weeks. A number of letters were exchanged, and there was a good deal of discussion as to the appropriate sum in which security might be ordered, before the parties reached agreement as to the order which ought to be made. On the other hand there was nothing to indicate how the self-executing provision came to be introduced into the consent order. There is certainly nothing to show that this was insisted upon by the respondent and conceded by the appellant. It may be that, having been proposed by the respondent's advisers, it was not closely considered by the appellant's advisers because they had so much time to comply with the order. However it is clear that it was agreed to before the consent order was made. The only evidence of the circumstances in which the agreement was reached was provided on behalf of the respondent; it was not the subject of cross-examination or otherwise contradicted by the appellant. This evidence was given in an affidavit by the respondent's solicitor in the following terms: "6. On 22nd July, 1987, a settlement was reached with the Solicitors for the Appellant whereby the dispute (and Application) in relation to the provision of security for costs by the Appellant was resolved upon the following terms:—- A. That the Respondent accept $20,000.00 as sufficient security for costs in relation to the Appeal and the Application for Leave to Appeal; B. That the Appellant pay into this Honourable Court the said sum of $20,000.00 within forty-five (45) days from 24th July, 1987 (the date the hearing of the Application was scheduled to take place) and failing which, the Appeal be dismissed with costs; and Cc. That the costs of the Application for security for costs be the Respondent's costs in the Appeal. 7. Pursuant to the agreement reached between the Appellant and the Respondent, the Honourable Mr. Justice Ryan made an Order by Consent requiring the Appellant to provide security for costs on 24th July, 1987." It is, we think, significant that the agreement in this case was entered into two days before Ryan J was asked to make the consent order. This was not a case where agreement was reached in discussions at the door of the court (cf. Siebe Gorman, above). Other factors which we think are significant are that a money sum for the security had to be negotiated, along with a method of providing security, that such negotiations occurred in writing and were spread over a period of time, and that a particular order for costs was also negotiated. In these circumstances Northrop J found that there was an unconditional contract entered into between the parties on 22 July that a consent order be made. The order was duly made by consent, although it did not say so on its face. We note in passing that there is, of course, no suggestion that the court must make a particular consent order in an interlocutory matter simply because the parties have agreed to it. However there appeared to be no reason in this particular case why Ryan J should not have made the order which was requested of him. The appellant's counsel argued that the agreement in the present case was ",.. mo more than an arrangement of a type commonly made for the disposition of a procedural application upon certain terms. Essentially, the agreement was that' the parties' representatives would not oppose orders in the terms discussed." In our view, bearing in mind the significant factors we have identified, this argument cannot succeed. The consent order did give effect to a contract between the parties. However, this is not the end of the matter. The Court has an over-riding power to control its own proceedings. The existence of that inherent power of courts has long been recognized and acted upon. The power to. fix and extend times within which interlocutory steps are to be taken is a most common manifestation of the general power. It is now made explicit in rules of court to be found in all relevant jurisdictions. The power is discretionary and is exercised with due regard to all relevant circumstances. If it be legally open to the parties to oust this jurisdiction by agreement, then such ouster could be effected only by clear and express terms in the agreement and court order. | | | This view receives support from the judgments of the Court of Appeal in Siebe Gorman (above). Denning MR said, at 381, "As Eveleigh LJ said early on in this appeal, when people do not object to an order of this kind it is always on the terms that it is subject to the rules of court which enable an extension of time to be made". At the same page, Eveleigh LJ said, "Tf the court's power under Ord 3, r 5 can be excluded by the agreement of the parties and if the intention was to exclude' this jurisdiction, then to my mind it must be made abundantly clear. I am not satisfied on the facts of this case that the parties did agree to exclude the discretion of the Court to extend time." Templeman LJ said, at 384, ",.. nor do I accept the submission that, if there was a contract, Purcell's case compels the court in the instant case to find that one of the terms of the contract was that the jurisdiction of the court to extend time was ousted." His Lordship was, with respect, clearly right in this. In Purcell v F.C. Trigell Ltd [1971] 1 QB 358, Lord Denning MR said, ",.. there is no ground here so far as I can see for setting aside this consent order. It was deliberately made, with full knowledge, with the full agreement of the solicitors on both sides. It cannot be set aside. But, even though the order cannot be set aside there is still a question whether it should be enforced. The court has always a control over interlocutory orders. It may, in its discretion, vary or alter them even though made originally by consent." Winn LJ, agreeing with Denning MR said, " there is no fundamental distinction in law between a consent order made in interlocutory proceedings and. a consent order made on a final judgment. However, there is this to be said, that apparently the court would prefer to keep closer control over its interlocutory proceedings than it would over its final orders if satisfied that they had been agreed to by fully advised and competent parties." The judgment of Buckley Ld contains statements to similar effect. While the distinction between mere consent orders and orders giving effect to a contract is not always explicit in the passages cited, we think it is clear that the Court of Appeal has at least taken the view that interlocutory orders can be varied by the Court, even where they have been made as the result of a binding contract between the parties, and, also, that any ouster of the. Court's jurisdiction to make such a variation cannot be effected except by clear words. It may be that the court's control can never he ousted; see the recent decision of the New South Wales Court of Appeal in Morgan v 45 Flers Avenue Pty Ltd, unreported, 9 November 1987, and the remarks of Sheppard J in Du Pont E.I. de Nemours & Co. v Commissioner of Patents (unreported, 9 February 1987), but it is not necessary to decide that ultimate question in this case. The next question which has to be determined is whether the court in any event has power, in the circumstances of this case, to over-ride the terms of the contract by altering the time limit stipulated in it. This involves a consideration of the powers of the court to extend a time limit even after the time allowed for doing an act has passed and, particularly, an examination of such powers as the court may have to extend the time for doing an act even after a self-executing order dismissing an appeal has taken effect. It was argued by counsel for the respondent that Ryan J's order was made pursuant to s.170 of the Patents Act 1952 and no other source of power. Certainly the consent order recited that it was made pursuant to that section, which reads as follows: "170. If a person who - (a) gives notice of opposition under this Act; or (b) appeals to a prescribed court, neither resides nor carries on business in Australia, the prescribed court or _ the Commissioner, as the case may be, may require that person to give security for the costs of the proceeding or appeal, and in default of security being given to the satisfaction of the prescribed court or the Commissioner, as the case may be, the proceeding or appeal may be dismissed." It is clear that the present proceeding is an appeal to a prescribed court, within the meaning of the - 10 - section, and that the appellant neither resides nor carries on business in Australia. Section 56 of the Federal Court of Australia Act 1976 provides for security for costs in more general terms:- "56. (1) The Court or a Judge may order a plaintiff in a proceeding in the Court or an appellant in an appeal to the Court to give security for the payment of costs that may be awarded against him. (2) The security shall be of such amount, and given at such time and in such Manner and form, as the Court or Judge directs. (3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given. (4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that' the proceeding or appeal be dismissed. (5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security." Although s.170 of the Patents Act 1952 only covers in express terms some of the matters thus set out in s.56, we believe the powers given in sub-sections (2) and (3) above must also be implied in s.170 to make it workable. It is therefore unnecessary to refer further to s.56. Section 59 of the Federal Court of Australia Act 1976 empowers the Judges of the Court to make Rules of Court, -i1- including making provision "for or in relation to the furnishing of security" (see s.59(2)(n)). Order 28 of the Federal Court Rules deals generally with orders for security for costs, under that heading. It provides, so far as is relevant, "Interpretation 1. In this Order - (a) references to an applicant extend to any person who makes a claim for relief in any proceeding; and (b) references to a respondent extend to any person against whom a claim for relief is made in any proceeding. Application 2. (1) An application that an applicant shall provide security for costs shall be made by motion upon notice. (2) The notice of motion shall _ be supported by an affidavit stating the material facts and the grounds upon which security for costs is sought. Cases for security 3. (1) Where, in any proceeding, it appears to the Court on the application of a respondent - (a) that an applicant is ordinarily resident outside Australia; .... the Court may order that applicant to give such security as the Court thinks fit for the costs of the respondent of and incidental to the proceeding." Manner of giving security 4. Where the Court orders an applicant to give security for costs, the security shall be given in such manner, at such time, and in such terms (if any), as the Court may by order direct. ~12- Stay or dismissal 5. (1) Where the Court orders that the applicant provide security for costs, it may order ~ (a) that the proceeding on any claims by the applicant for relief be stayed until security is provided; or (b) that if the applicant fails to 'comply with the order to provide security within the time limited in the order, the proceeding be thereafter stayed or dismissed. (2) Subject to sub-rule (1), the Court may set aside or vary any order made under this Order. (3) Where a proceeding stands dismissed pursuant to an order under this Order, that order shall not be set aside or varied except in special circumstances. Saving 6. This Order does not affect the provisions of any Act of the Commonwealth or of a State or Territory under which the Court may require security for costs to be given." Other Federal Court Rules which may be relevant include the following:- Order 35 (JUDGMENTS AND ORDERS), rule 7 "7.(1) The Court may vary or set aside a judgment or order before it has been entered. (2) The Court, where it is not exercising its appellate or related jurisdiction under Division 2 of Part III of the Act, may if it thinks fit vary or set aside a judgment or order after the order has been entered where - ({c) the order is interlocutory; -13- Order 52 (APPEALS), rules 20 and 38 "20. Unless the Court or a Judge otherwise directs no security for costs of an appeal to the Court shall be required. 38. (1) Where an appellant has not done any act required to be done 'by or under these Rules, or otherwise has not prosecuted his appeal with due diligence, the Court may - (a) order that the appeal shall be dismissed for want or prosecution; (b) fix a time peremptorily for the doing of the act and at the same time order that upon non-compliance the appeal shall stand dismissed for want of prosecution, or subsequently and in the event of non-compliance, order that it be so dismissed; or (c) make any other order as may seem just. {2) A respondent may move on notice for an order under sub-rule (1), and the Court, after notice to the appellant has been given by the Registrar, may make orders in accordance with sub-rule (1) of its own motion. (3) An order under paragraph (1)(b) may be varied at any time before the appeal stands dismissed for want of prosecution, and in special circumstances may be varied or revoked after that time." Northrop J held that Court was exercising powers conferred by s.170 of the Patents Act and, by implication, 0.52 r.20. In so doing, and in the absence of specific rules in 0.52, the Court applied the practice and procedure of the Court prescribed by 0.28." "... in making the order of 24 July 1987, the His Honour went on to point out that the order of 24 July was entered, pursuant to 0.36, on 11 September 1987. This meant - 14 - that the appellant had to rely upon 0.35 r.7(2)(c) (above) in seeking: to vary an interlocutory order after it had been entered. It was argued, both before his Honour and in this Court, that both Ryan J and his Honour were exercising the appellate jurisdiction of the Court when they respectively made an order for security for costs in an appeal and considered whether that order should be varied. We are prepared, for present purposes, to assume that that submission is correct. 0.52 r.20 (above) provides that the Court constituted by a single judge has power to make the relevant type of orders; but since the matter only comes before the Court as an appeal from another court, it is difficult to avoid the conclusion that a single judge so acting is exercising part of the Court's appellate jurisdiction, Nevertheless, in our view, Northrop J was right when he held that, however this may be, the reference in 0.35 r.7(2) (above) to situations where the Court is not "exercising its appellate or related jurisdiction under Division 2 of Part III of the Act" is intended to describe the Court when it is actually hearing an appeal (or a related proceeding akin to an appeal) and is not apt to cover the present situation. If it were not so, neither a Full Court nor a single judge making orders preliminary to a Full Court hearing, could vary an interlocutory order after it had been -~ 15 - entered - a ridiculous situation. It is clear that the intention of the exception is to avoid adding an unfettered discretionary element to well-recognized grounds of appeal against interlocutory orders. \ It is not disputed that the order in question is an interlocutory order within the meaning of 0.35 r.7(2). See Pye v Renshaw (1951) 84 CLR 58 at 77. Assuming the existence of such a power to amend orders after they have been entered, the question remains whether this applies when a self~executing order has been made and entered, the time specified in it has expired, and the appeal to which it relates has thereupon been dismissed. It is true that no attempt was made to enter any further order to the effect that the appeal was dismissed - based on an affidavit of non-compliance. But it does not seem to be the practice in this or any other relevant jurisdiction - so far aS one can judge from decided cases or text books on procedure - to enter a further order after the self—-executing order has taken effect. On the question whether time can be extended after an appeal has been so dismissed, the very recent decision of the High Court in FAI General Insurance Co Ltd v Southern Cross Exploration NL (unreported, 25 March 1988) is relevant. In that case security for costs had been ordered by the New South Wales Supreme Court after a lengthy application to set the proceedings aside had failed. The order was not complied - 16 - with and the Court further ordered that the proceedings "be and stand dismissed" unless by a given date security was given and other orders complied with. That order was, as the Court found, not complied with either; and the Court held that it had no power to extend time for compliance after the self-executing order had taken effect. The Court of Appeal upheld an appeal against that decision and its judgment was affirmed by the High Court. In the High Court Wilson J, in a judgment concurred in by Brennan, Deane and Dawson JJ, considered the previous decisions of the High Court in Goodwin v Southern Tablelands Finance Co Pty Ltd (unreported 1968) and Bailey v Marinoff (1971) 125 CLR 529. In each of those cases it had been held, in effect, that a self-executing order made by a Full Court could not be re-opened after the time for its observance had passed. In Goodwin's case ex tempore judgments had been given, in a case in which the appellant had appeared in person, in the first case by Kitto J and on appeal by Menzies, Windeyer and Owen JJ. The Full Court had said, "It is not within the power of this Court to vary that order. Once the appeal was dismissed, that was the end of the case." In Bailey's case, Menzies J had said, at pp.531-2, "This appeal is not concerned with the power of a court to alter orders in pending litigation. It is concerned with the power of a court to make an order in litigation which, without any error or lack of jurisdiction, has been regularly concluded and is no _ longer before the court. To recognise the problem is, I think, to solve it. However wide the -~17- inherent jurisdiction of a court may be to vary orders which have been made, it cannot, in my opinion, extend [to] the making of orders in litigation that has been brought regularly to an end." Barwick CJ and Walsh J had delivered separate judgments to similar effect and Owen J had. concurred generally. Gibbs J (as he then was) had dissented, holding that there was no valid reason to limit the inherent powers of an appellate court so as to preclude it from varying a conditional order to dismiss an appeal after the time for compliance with the condition had expired. He had said, at pp.544-5, "Indeed, to say that the appeal is dead, or at an end, seems to me, with all respect, to be beside the point, which is whether' the inherent jurisdiction of the court permits it to vary the condition of an order dismissing an appeal after the condition has taken effect, and to say without more that because an appeal is at an end therefore no further order can be made is to beg the question." Wilson J pointed out that Bailey's case had relied, to some extent at least, on an early line of decisions in England, referred to as the Whistler cases, which had since been overruled by the Court of Appeal in Samuels v Linzi Dressers Ltd [1981] QB 115. His Honour went on _ to distinguish Bailey's case. His chief ground for doing so was that the Court in that case was concerned only with the inherent powers of the New South Wales Court of Appeal and not with relevant provisions in the rules of court. Another factor possibly limiting the authority of Bailey was that the case involved the powers of an appellate court not, as in PAI ~ 18 - General Insurance, of a judge at first instance (In this connexion it should be noted that the order we are concerned with in the present case was made by a single judge before the appeal reached a Full Court.) ' His Honour went on to find that the relevant rule of the New South Wales Supreme Court was plain in its literal meaning, and that "if the rule is to be read down, it must be because the context of the rule or extraneous considerations compel such a course. Here there is no such compulsion." Wilson J further noted that, "Counsel for the respondents did not press the Court to consider the correctness of the decision in Baile and in the absence of argument directed to that question it is inappropriate for the Court to pursue the matter." However Gaudron J, in her concurring judgment, appears to cast some doubt on the reasoning in Goodwin and Bailey. She said, "The substance of the argument made on behalf of the appellants is that a proceeding passes outside the power of a court once the time for fulfilment of a condition specified in a duly entered order for dismissal has passed without the condition being satisfied, that is that the court is then functus officio. See Reg. v. Cross (Patrick) [1973] Q.B. 937. Although the rule that a court may not vary a duly entered order which brings proceedings to a conclusion rests, at least in part, on the obvious desirability that litigation should be brought to an end, the converse of that rule viz. that a court of record may vary an order before the order is entered must rest on the notion that a court - 19 - is not functus officio whilst there remains any judicial function which may be performed in relation to a proceeding, even if it be only that of ensuring that the final order correctly records the meaning of the court. Thus it was put by Coke (Co. Litt. 260a): 'Of courts of record you may read in my Reports: but yet during the terme wherein any judiciall act is done, the record remaineth in the brest of the judges of the court, and .in their remembrance, and therefore the roll is alterable during that terme, as the judges Shall direct; but when that terme is past, then the record is in the roll, and admitteth no alteration, averment or proofe to the contrarie.' Although it has been common to speak of a conditional order for dismissal as self—-executing or of a proceeding upon which such an order has operated as 'dead', that seems to me to obscure the fact that a conditional order, of its nature, necessitates the exercise of the further judicial function of determining that the condition was not satisfied at the specified time. Where such an issue remains to be determined in relation to a proceeding it cannot be said that the court is funectus officio. That being so, there seems to me no relevant distinction between a proceeding in which a conditional order for dismissal has been entered and a proceeding in which an order has been made but not entered, notwithstanding the decisions in Goodwin and Bailey. However, it is neither necessary nor appropriate to pursue that issue, the respondents having made their case without direct challenge to the actual decisions in those cases." Brennan J said, "IT agree with the order proposed by Wilson J. for the reasons which his Honour gives. The question whether a court possessing no special statutory power to extend time is functus officio once the time for fulfilment of a condition specified in an order for dismissal has passed without the condition being satisfied does not have to be decided. But I should say that, in ny -~ 20 - respectful opinion, there is much force in the view expressed by Gaudron J. on this question." In the light of these judgments we think it may be said that the court may have power in all cases to extend the time for complying with a self-executing order even after the time originally limited by the order has expired, and that it certainly has such power in cases where the rules provide a relevant power to amend orders after they have been entered. In this case such a power is, in our opinion, given by the Pederal Court Rules. 0.35 r.7 gives the general power and this is explicitly related to the present case by 0.28 r.5. In our opinion 0.28 is intended to apply to appeals. It is sufficiently general in its introductory terms to do so and, without it, there is no detailed scheme to be applied to security for costs of an appeal, which is clearly provided for by s.56 of the Federal Court of Australia Act 1976 and 0.52 r.20 of the Rules made under s.59 of that Act. We have no doubt that, in this case, there are special circumstances present, within the meaning of sub-r.5(3) of 0.28. The question remains whether the Court's power should, as a matter of discretion, be exercised in favour of the appellant. Northrop J made it clear that he would have granted the extension sought had he felt that he had power to do so. We respectfully agree and would, for the reasons - 21 - given, uphold the appeal, with costs both here and in the Court below, set aside the order made on 4 November 1987, and order that the time for giving security for costs in accordance with the order of Ryan J dated 24 July 1987 be extended to 20 May 1988. I certify that this and the twenty (20) preceding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon Mr Justice Woodward and The Hon Mr Justice Foster Associate to The Hon Mr Justice Woodward Dated: 2 May 1988 Counsel for the Appellant: Dr P. Buchanan QC & Mr R. Garratt Solicitors for the Appellant: Arthur Robinson & Hedderwicks Counsel for the Respondent: Dr C. Pannam QC & Mr A. Robb Solicitors for the Respondent: Freehill Hollingdale & Page IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No, VG494 of 1987 GENERAL DIVISION ) : ON APPEAL FROM THE FEDERAL COURT OF' AUSTRALIA BETWEEN: R.D. WERNER & CO INC Appellant AND: BAILEY ALUMINIUM PRODUCTS PTY LTD Respondent COURT: Woodward, Jenkinson and Foster JJ. DATE: 2 May, 1988 PLACE: Melbourne REASONS FOR JUDGMENT JENKINSON J. The issues in this appeal are disclosed in the reasons for judgment of Woodward and Foster JJ., which I have had the advantage of reading. I agree in the conclusion their Honours express that, if the consensual origin of the order Ryan J. made be ignored, Northrop J. had power to extend the time limited by that order for the payment into Court. I agree in the reasons which they give for that conclusion. The making of an agreement between the parties that the order which Ryan J. in fact made should be made was in my opinion 2. a circumstance relevant to the determination of the application made to Northrop J. for extension of the time limited for payment into Court. And I am of opinion that the agreement was what I take Lord Denning M.R. to have intended by the expression "real contract" in Siebe Gorman & Co. Ltd. v. Pneupac Ltd. [1982] 1 W.L.R. 185 at 189-190 : a legally enforceable agreement, a contract. (And, therefore, an agreement for good consideration, as is pointed out in National Benzole Co. Ltd. v. Gooch [1961] 1 W.L.R. 1489.) But it was not, in my opinion, an agreement which included an implied term that the appellant would not invoke the Court's power to vary the order which was to be made. In that respect it was an agreement distinguishable from agreements for compromise of an action (as in Harvey v. Phillips (1956) 95 C.L.R. 235) or of an appeal (as in National Benzole Co. Ltd. v. Gooch, supra), in which a promise will in my opinion be implied not to invoke a curial power to set aside or vary orders giving effect to the compromise, except for a cause which would afford "a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it" (Harvey v. Phillips (1956) 95 C.L.R. at 243). The implication of a promise not to invoke that power derives from one of the promises made in such compromises, that one party will give up the claims it has been making for curial remedy. (That latter promise may itself be either express or implied.) The agreement between appellant and respondent in this case included no promise by the appellant to give up, if the appeal should be dismissed by force of the order to be made, the claims it has been making in this Court for curial remedy, in my opinion. The appellant is in my opinion free, subject to time limitations and to any plea of estoppel per rem 3. iudicatam, to seek to assert in a further appeal the claims to curial remedy it made in the appeal which now stands dismissed by the order of Ryan J. The agreement was a legally enforceable contract of compromise, of the respondent's claim for an order for security, but not a compromise, in my opinion, of anything but that claim. The words in the statement of the terms of the agreement, "and failing which, the appeal be dismissed with costs", must be understood in the context which s.170 of the Patents Act 1952, sub-section 56(4) of the Federal Court of Australia Act 1976 and the Federal Court Rules provide. Those provisions all contemplate dismissal of a proceeding as the consequence of a failure to comply with the terms of an order for security. And the terms of the agreement for payment into Court and for the respondent's costs make it plain that the parties to the agreement intended that there should be an order of the kind which those provisions prescribe. In those circumstances there is no justification for understanding those words as expressing any agreement for the giving up of the appellant's claims for the remedies sought in the appeal, in my opinion. That conclusion leads, in my opinion, to the further conclusion that no implication is to be made of a term that the appellant would not invoke the Court's power to extend the agreed period of 45 days. The parties were merely making an agreement as to the terms of the order by which the respondent's application for security should be resolved. Once that order had been made, the agreement had in my opinion been wholly performed. No further contractual obligation lay upon either party to the agreement, in my opinion. It will be apparent that the foregoing examination of the significance, in relation to the determination of the application made to Northrop J., of the consensual origin of the order of Ryan J. is out of harmony with the reasoning upon similar questions in Siebe Gorman & Co. Ltd. v. Pneupac Ltd., supra, and in Purcell v. F.C. Trigell Ltd. [1971] 1 Q.B. 358. The reasoning in those and other cases seems to me to rest on an assumption that any attempt to vary or set aside a curial order made by consent in performance of a contractual term that that order should be made by consent of the parties to that contract (other.than an attempt based on a ground which would suffice to render the contract void or voidable or to entitle the party making the attempt to equitable relief against the contract) constitutes a breach of that contract. That is not an assumption which is always justified, in my opinion. Whether the attempt is a breach will depend on the terms of the contract, including any implied terms, as it seems to me. The attempt this appellant made constituted no breach of its contract, in my opinion. Since an order extending the time limited by the order of Ryan J. would not in my opinion have involved acceding to an application made in breach of contract, there is no occasion to consider whether the Court can, or whether it should, in any circumstances accede to an application the making of which does constitute a breach of a contract between the applicant and another party to the proceeding. (See E.I. Du Pont de Nemours & Co. v. The Commissioner of Patents (Full Court of the Federal Court of Australia; unreported; No. G590 of 1986; judgment 9 February, 1987.) 5. I agree that the circumstances justify an extension of the time. Accordingly I agree in the orders Woodward and Foster JJ. have proposed. I certify that this and the 4 preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Jenkinson. { j Associate Dated: 2 May, 1988