JUDGMENT No. 28.2-/ 2.8m CATCHWORDS HIGH COURT AND FEDERAL JUDICIARY - Federal Court of Australia - Jurisdiction and powers generally - Enforcement of agreement compromising proceeding. PRACTICE - Compromise of proceeding - Expenses included in particulars of damage claimed to fall within class of expenses recoverable as legal costs. Federal Court of Australia Act 1976 ~- s.51A Darling Downs Investments Pty. Ltd. v. Ellwood (Federal Court of Kistratio 21 April 1988, unreported) Roberts v. Gippsland Agricultural and Earth Moving Contracting Co. Pty. Ltd. T1336 VeR. 555 at 561-567 H_ 1976 NOMINEES PTY. LTD. v. JOEL AUCTIONS PROPRIETARY LIMITED, JOHN DWYER AND GRAHAM EDWARD JOEL ., VG174 of 1987 Jenkinson J. Melbourne 18 July, 1988 = IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No. VG 174 of 1987 GENERAL DIVISION ) CORAM: PLACE: DATE: BETWEEN: H 1976 NOMINEES PTY. LTD. Applicant AND: JOEL AUCTIONS PROPRIETORY LIMITED, JOHN DWYER and GRAHAM EDWARD JOEL Respondents MINUTES OF ORDER Jenkinson Jd. Melbourne 18 July, 1988 THE COURT ORDERS THAT: The respondents' motion of which notice was filed 21 June 1988 be dismissed. 4 Upon and in exchange for payment within 14 days by the respondents to the applicant of $5,000 the applicant deliver to the respondents' solicitors for the respondents the painting called "Faith" to which reference is made in paragraph 5 of the statement of claim as delivery upon sale of the said painting. Upon and in exchange for payment within 14 days by the respondents to the applicant of $11,000 the applicant deliver to the respondents' solicitors for the respondents the painting called "The Turn of the Tide" to which reference is made in paragraph 5 of the statement of claim as delivery upon sale of the said painting. The respondents pay within 14 days to the applicant's solicitors for the applicant $5,700. The applicant's claims in the proceeding be dismissed. (NOTE: 2. The applicant's costs of the proceeding to and including 28 April 1988 be paid by the respondents. The applicant's costs of the respondents' said motion and of the motion of which notice was filed 16 June 1988 to and including this day and of entering this order be paid by the respondents. Further consideration of the motion of which notice was filed 16 June 1988 be adjourned. Each party be at liberty to apply. Settlement and entry of orders is dealt with in 0.36 of the Federal Court Rules.) IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No. VG 174 of 1987 GENERAL DIVISION ) BETWEEN: H 1976 NOMINEES PTY. LTD. Applicant AND: JOEL AUCTIONS PROPRIETORY LIMITED, JOHN DWYER and GRAHAM EDWARD JOEL Respondents CORAM: Jenkinson J. PLACE: Melbourne DATE: 18 July, 1988 REASONS FOR JUDGMENT Motions by applicant and by respondents for judgment. The proceeding arose out of an auction conducted by the first-named respondent. The applicant bought two paintings at the auction and alleged that it was induced to buy them by fraudulent misrepresentations of each respondent. It was alleged that the misrepresentations constituted contraventions by the first-named respondent of s.52(1) of the Trade Practices Act 1974 in which each of the other respondents was involved. Those other two respondents were also alleged to have contravened s.11 of the Fair Trading Act 1985 (Vic.) and the second-named respondent was alleged to have contravened s.52(1) of the Trade Practices Act 1974 by conduct involving the use of telephonic services. Each 2. respondent was alleged to have caused the applicant damage by negligence and also by breach of contracts of warranty. Declarations, damages and interest were claimed. While the proceeding was pending the solicitors for the respondents sent to the applicant's solicitors a letter dated 28 April 1988 in these terms: "re: Joel Auctions Pty. Ltd. & Ors ats Hercules We refer to previous correspondence in this matter. In answer to the causes of action in the Statement of Claim delivered by the Applicant herein, the Respondents, with a denial of liability in respect of the aforesaid causes of action, offer to pay the Applicant the following: i) in consideration for the repurchase by the Respondents of the two paintings described in paragraph 5 of the Statement of Claim herein as 'Faith' by Arthur Hacker and 'Turn of the Tide' by James Webb, the sum of $5,000 and $11,000 respectively; and a ii) the sum of $5,700; in addition to the legal costs of the Applicant to date. This offer will remain open for a period of 14 days from the date hereof. , Take notice that this letter will be tendered as evidence on the question of costs at the hearing of this action." The applicant's solicitors sent to the respondents' solicitors this letter, dated 9 May 1988: 3. "re. H 1976 NOMINEES PTY. LTD. v. JOBL AUCTIONS PTY. LTD. & ORS. We refer to your letter of the 28th April, 1988, and the offer of settlement contained therein. Enclosed please find copy Letter of Acceptance of such offer delivered by our client's Counsel to your clients' Counsel this morning. We confirm that our client has accepted your clients' offer of settlement as set out in your said letter of the 28th April, 1988." The parties are agreed that the exchange of those letters effected a compromise of the proceeding and they are agreed that orders giving effect to the compromise should be made in the proceeding, but they disagree as to the terms of the order with respect to costs. Some expenses alleged to have been incurred by the applicant and claimed by it to be payable in accordance with the terms of the compromise as "legal costs" were included, before the compromise was made, in particulars of damage furnished by the applicant to the respondents as expenses claimed to be recoverable as damages in the proceeding. The respondents' notice of their motion for orders that the terms of the compromise be performed includes the following: "That the Respondents pay the legal costs of the Applicant up to the 28th day of April, 1988, to be taxed, but not including any items by way of disbursements in respect of those items claimed by the Applicant as loss and damage pursuant to paragraphs 10, 12, 16, 18, 22, 25 and 28 of the Statement of Claim herein, and particularized in paragraph 10 of the Statement of Claim and paragraph 3 of the Further and Better Particulars of the Statement of Claim." 4, The applicant's notice of its motion for similar orders includes the following: "That the Respondents pay the Applicant's costs of the proceeding including the costs of this Notice of Motion." My jurisdiction to entertain those motions for the enforcement of a contract of compromise in the proceeding to which the compromise relates has been established by the judgment of a Full Court of this Court in Darling Downs Investments Pty. Ltd. v. Ellwood (Qld G10 of 1985; unreported; judgment 21 April 1988). It may well be that since 1 July 1988 jurisdiction has been conferred by s.4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic.), which commenced on that date. (See Minister for Home and Territories v. Teesdale Smith (1924) 35 C.L.R. 120 at 127-129; 131; Pearce : Statutory Interpretation in Australia (2nd ed.) pp.156-162.) a The next question is whether, jurisdiction being available, it should be exercised in this proceeding or whether the parties should be left to institute a fresh proceeding. The considerations relevant to the exercise of the Court's discretion in determining that question are stated by Smith J. in Roberts v. Gippsland Agricultural and Earth Moving Contracting Co. Pty. Ltd. (1956] v.R. 555 at 561-567. Both the applicant on the one hand and the respondents on the other found their respective contentions upon the same evidentiary material, namely the series of written communications 5. passing between their solicitors which commenced with the latter dated 28 April 1988 from the respondents' solicitors to the applicant's solicitors and the documents served and filed in the proceeding before that date which gave particulars of the damages the applicant was claiming in the proceeding. Even if it should Prove necessary, contrary to the apparent expectations of the parties, to determine disputed questions of fact, there seems no reason to suppose that those issues will be complex or will require for their resolution any elaborate interlocutory proceedings. I think that the Court should accede to the parties' desire that their differences about the compromise be resolved on motion in this proceeding. Mr. Anastassiou of counsel for the respondents submitted that the phrase in the letter of offer, "In answer to the causes of action in the Statement of Claim delivered by the Applicant herein", indicated - and when the offer was accepted operated to produce the result - that all the items of damage alleged in the statement of claim or in particulars elaborating the statement of claim were included in that for the discharge of the applicant's claims to which the offerors were making the offers specified as (i) and (ii) in the letter. I cannot accept the submission. That phrase in my opinion merely confirms that what is required of the applicant is what would, unless there were some express provision to the contrary, be taken to be the consideration required of a plaintiff or applicant to whom an offer to compromise his action or proceeding was made, that is the release or extinguishment of each of the causes of action alleged in the action or proceeding. Neither that phrase nor anything else in the circumstances 6. imports, in my opinion, any contractual stipulation concerning particular items of expense which had been alleged in the pleadings or in particulars to have constituted damage recoverable upon one or more of those causes of action. The result which the compromise achieves in respect of any item of expense incurred by the applacant (whether or not that item be found in pleadings or particulars) is that it cannot be recovered against' the respondents upon any of those causes of action. And that, in my opinion, is all that the compromise effects. If an item of expense be in law part of the applicant's costs of the proceeding to the date of the letter of offer, that item will form part of what has been agreed to be paid to the applicant by the phrase, "in addition to the legal costs of the Applicant to date", in that letter. And that will be so, in my opinion, whether or not that item of expense was alleged in the particulars of damage to be recoverable as damages upon one or more of the causes of action agreed to be released, and whether or not that item would have been so recoverable as damages. It is unnecessary that I express, and I refrain from expressing, any opinion as to whether any item of expense included in the particulars does fall within the class of expenses recoverable as legal costs. That 1S a matter for the taxing officer. The appropriate orders to give effect to the foregoing conclusions are: 1. The respondents' motion of which notice was filed 21 June 1988 be dismissed. 2. Upon and in exchange for payment within 14 days by the respondents to the applicant of $5,000 the applicant deliver to the respondents' solicitors for the respondents the painting called "Faith" to which reference is made in paragraph 5 of the statement of claim as delivery upon sale of the said painting. 3. Upon and in exchange for payment within 14 days by the respondents to the applicant of $11,000 the applicant deliver to the respondents' solicitors for the respondents the painting called "The Turn of the Tide" to which reference is made in paragraph 5 of the statement of claim as delivery upon sale of the said painting. 4. The respondents pay within 14 days to the applicant's solicitors for the applicant $5,700. 5. The applicant's claims in the proceeding be dismissed. 6. The applicant's costs of the proceeding to and including 28 April 1988 be paid by the respondents. 7. The applicant's costs of the respondents' said motion and of the motion of which notice was filed 16 June 1988 to and including this day and of entering this order be paid by the .respondents. 8. Further consideration of the motion of which notice was filed 16 June 1988 be adjourned. . 9. Each party be at liberty to apply. The applicant sought an order, pursuant to s.51A of the Federal Court of Australia Act 1976, that each of the three money sums bear interest to be included in the sum for which judgment is given. In my opinion those sums are outside the operation of s.51A. These proceedings are not "for the recovery of any money", in my opinion. They are proceedings for specific performance of a 8. contract. The contractual terms of which orders for specific performance are sought are not terms stipulating merely for the payment of money. I certify that this and the 7 preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Jenkinson. Associate Dated: 18 July, 1988 Mr. M.B. Phipps Counsel for the Applicant Keith Hercules & Sons Solicitors for the Applicant Mr. D. Anastassiou Counsel for the Respondents Solicitors for the Respondents : Herbert Geer & Rundle Date of Hearing 23 June, 1988