SECTION 79 JUDICIARY ACT 1903 - HOW WIDELY DOES …BY CA TRION A COOK* INTRODUCTION A re-examination of the application and effect of s 79 of the Judiciary Act 1903 (Cth) - that "tangled

SECTION 79 JUDICIARY ACT 1903 - HOW WIDELY DOES IT TRAVEL?

BY CA TRION A COOK*

INTRODUCTION

A re-examination of the application and effect of s 79 of the Judiciary Act 1903 (Cth) - that "tangled and technical" topic1 - is called for by three developments: the institution, in 1976, of the procedure which the High Court has used to remit all diversity suits to other courts;2 the establishment of the seat of the High Court in the Australian Capital Territory;3 and the enactment of cross-vesting legislation in all Australian jurisdictions. 4

Those events have raised problems as to the law applicable when a court is exercising federal jurisdiction. A related question, to which no consistently satisfactory answer has been given, is: which is the most appropriate court to which to remit any particular case? That problem will be discussed below, although it is likely to arise less frequently with the coming into force of the new legislation on the cross-vesting of jurisdiction. 5 As a result of that legislation, the practice of litigants commencing diversity suits in the High Court is likely to cease. 6 That, in tum, will obviate the need for the High Court to remit those cases to other courts. Still, the issue of the applicable law will not necessarily cease to arise; and when it does it will be in the Federal Court or State Courts rather than in the High Court. Moreover, many other actions falling within the High Court's original jurisdiction will still have to be commenced there; for given s 75 of the Constitution, they cannot be instituted in any other court. 7

The rules governing the applicable law when a court is exercising federal jurisdiction are given in ss 79 and 80 of the Judiciary Act 1903 (Cth).

79 The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

* Lecturer-in-Law, Australian National University. The research assistance of Candida Brebner, final year student at the Law School, is gratefully acknowledged. Since this article was written, the High Court has handed down its decisions in two of the cases referred to. They are Oceanic Sun Line Shipping Co Inc v Fay (1988) 79 ALR 9 and Breavington v Godleman (1988) 80 ALR 362.

1Suehle v The Commonwealth (1967) 116 CLR 353, 357 per Windeyer. J. 2 Judiciary Act 1903 (Cth) s 44. In 1976, the then exisiting s 44 was repealed and replaced with the

present one (Judiciary Amendment Act 1976 sub-s 9(1)). 3 High Court of Australia Act 1979 (Cth) s 14. 4 The legislation under which the scheme will operate is entitled Jurisdiction of Courts (Cross

Vesting) Act 1987 in each jurisdiction. See Act No 24 of 1987 (Cth); No 125, 1987 (NSW); No 41, 1987 (NT); No 88, 1987 (Qid); No 67, 1987 (SA); No 78, 1987 (Tas); No 29, 1987 (Vic); No 68, 1987 (WA).

5 For an explanation of the background to and an appraisal of the legislation see C Baker "Crossvesting of Jurisdiction between State and Federal Courts" (1987) 14 UQU 118.

6 For reasons explained infra at n 26. 7 They cannot be commenced in the Federal Court as it does not have jurisdiction over such

matters. Nor can they be instituted in State courts because of s 38 of the Judiciary Act which makes much of the s 75 jurisdiction exclusive to the High Court.

200 Federal Law Review [VOLUME 17

80 So far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment, the common law of England as modified by the Constitution and by the statute law in force in the State or Territory in which the Court in which the jurisdiction is exercised is held shall, so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth, govern all Courts exercising federal jurisdiction in the exercise of their jurisdiction in civil and criminal matters.

These sections presuppose the possibility of the Constitution or a law of the Commonwealth applying. When an action arises under a Commonwealth statute, the provisions of that statute will govern the substantive questions in the matter. Procedure, in so far as it is not governed by the statute, is governed by the procedural rules of the jurisdiction in which the action is brought. But when a State or Territory court, dealing with a common law matter such as a contract action, is exercising its federal jurisdiction simply because the litigants are, say, residents of different States, or because the Commonwealth is a party, then there is no Commonwealth statute to provide the substantive rules, and ss 79 and 80 come into play.

This article is primarily concerned with the question of the law applicable in the High Court when exercising its original jurisdiction, in the Federal Court, and in other courts exercising federal jurisdiction. The discussion will be on the basis of assumptions which, while possibly not beyond challenge, are certainly well established.

The first assumption is that the federal Parliament was constitutionally competent to enact ss 79 and 80 in relation to matters within federal jurisdiction, including diversity cases. 8

Secondly, it is assumed that ss 79 and 80 are not themselves choice of law rules. Rather are they provisions which identify the applicable law in the sense of the whole body of law of a particular jurisdiction, including the choice of law, or conflicts, rules which form part of that law. 9

Thirdly, s 79 does no more than pick up State laws with their meaning unchanged. 10 This proposition is not, however, as straightforward as it seems. Although it was stated by Kitto J in Pedersen v Young 11 that the Judiciary Act cannot give a State statute new meaning, 12 several decisions have given wider effect to provisions in State legislation, as a result of the application of s 79, than

8 M Pryles and P Hanks Federal Conflict of Laws (1974}, O'Brien "The Law Applicable in Federal Jurisdiction" (1975-1976) I UNSWU 327 cf PO Phillips QC "Choice of Law in Federal Jurisdiction" (1961) 3 MULR 170.

9 Musgrave v Commonwealth (1937) 57 CLR 514; Huddart Parker Ltd v The Ship Mill Hill & Her Cargo (1950) 81 CLR 502; The Commissioner of Stamp Duties (NSW) v Owens (No 2) (1953) 88 CLR 168; R v Oregan; Ex parte Oregan (1957) 97 CLR 323; Deputy Commissioner of Taxation for the State of NSW v Brown (1958) 100 CLR 32; Pedersen v Young (1964) 110 CLR 162; Parker v Commonwealth (1965) 112 CLR 295; Anderson v Eric Anderson Radio & TV Pty Ltd (1965) 114 CLR 20; Suehle v Commonwealth (1967) 116 CLR 353; John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 but cfMason J at 95. Also cfPryles and Hanks Federal Co7f.ict of Laws (supra at n 8). In Chapter 5 the authors refer toss 79 and 80 as "choice of law" rules.

1 The Commissioner of Stamp Duties (NSW) v Owens (No 2) (1953) 88 CLR 168; Pedersen v Young (1964) 110 CLR 162.

II (1964) 110 CLR 162, 165. 12 In that instance, by converting a State limitation of actions provisions into a provision limiting

the time for the commencement of actions outside that State.

1987] Section 79 Judiciary Act 1903 201

would otherwise be the case. 13 The effect of those decisions has been to confirm that a provision in a State statute will probably be applicable to the High Court exercising its federal jurisdiction in that State, even though the section as expressed does not apply to the High Court.

The question whether there is a need for s 80 in addition to s 79, and the fact that the sections can be interpreted either so as to produce much the same effect or so as to be inconsistent with each other, have been discussed elsewhere. 14 But, whatever s 80 means and whether or not both s 79 and s 80 are necessary to ensure that there is no lacuna in the law applicable to a matter with respect to which a court is exercising federal jurisdiction, in the majority of cases it is s 79 which has been employed; and it is that section which will be relied on most in the following discussion.

The burden of this article is that s 79 is, or ought to be, applicable in at least two situations-

• when the High Court is deciding where to remit a matter, and

• when the Federal Court is hearing any action not, or not completely, governed by federal legislation.

I REMITTAL OF ACTIONS BY HIGH COURT OF AUSTRALIA

Remittal15 of actions by the High Court is provided for in s 44 of the Judiciary Act 1903. 16 This article is concerned with diversity cases and actions against the Commonwealth, two components of the High Court's original jurisdiction in which actions may now be remitted to another federal, State or Territory court.

13 For example, Huddart Parker Ltd v The Ship Mill Hill (1950) 81 CLR 502, in which Dixon J said, at 507, that s 79 "should be interpreted and applied liberally." but cf John Robertson & Co Ltd v Fer§uson Transformers Pty Ltd (1973) 129 CLR 65.

1 Musgrave v The Commonwealth (1937) 57 CLR 514, 547 per Dixon J; Huddart Parker Ltd v The Ship Mill Hill and Her Cargo ( 1950) 81 CLR 502, 507; R v Oregan Ex p Oregan ( 1957) 97 CLR 323, 331 per Webb J; EI Sykes and MC Pryles Australian Private International Law (1987), 278; Pryles and Hanks Federal Conflict of Laws supra n 8, 160-161.

15 Cases which use different substantive forms of the verb "to remit" have included: "remitter" in Centrepoint Freeholds v Lucas (1985) 60 ALR 187, Pozniak v Smith (1982) 151 CLR 38 and Johnstone v Commonwealth (1979) 143 CLR 398; "remission" in Weber v Aidone (1981) 36 ALR 345, Pozniak v Smith and Johnstone v Commonwealth; and "remittal" in Robinson v Shirley (1982) 149 CLR 132 and Bargen v State Government Insurance Office (Queensland) and Another (1982) 154 CLR 318.

16 Section 44 states: "Any matter that is at any time pending in the High Court, whether originally commenced in the High Court or not, may upon the application of a party or of the High Court's own motion, be remitted by the High Court to any federal court, court of a State or of a Territory that has jurisdiction with respect to the subject-matter and the parties, and, subject to any directions of the High Court, further proceedings in the matter shall be as directed by the court to which it is remitted." Before 1976, remittal was provided for in s 45 of the Act but under that section the order for remittal could be made only on the application of a party. It can be argued that s 44 is unconstitutional in so far as it encompasses matters falling within s 75 of the Consitution: see Z Cowen and L Zines Federal Jurisdiction in Australia (2nd ed 1978) 80, 81. As Sykes and Pryles point out, however, the final decision in such a matter would rest with the High Court; and as that Court has several times acted upon the provision by remitting a number of cases to State Courts, the result of a challenge to the validity of the section would scarcely be in doubt. Australian Private International Law (2nd ed 1987), 277.


A Federal diversity jurisdiction

Federal diversity jurisdiction over matters between residents of different States is provided for in s 75(iv) of the Constitution. It corresponds to the similar jurisdiction in the United States, on which it was based. In Australia, however, unlike the United States, diversity jurisdiction was made part of the original jurisdiction of the most superior federal court, the High Court.

The generally accepted reason for the existence of the diversity jurisdiction of the inferior federal courts in the United States was that it guaranteed litigants an impartial tribunal. 17 Thus foreign litigants, or those from another State, were protected from the possibility of local prejudice. As has frequently been stated, 18

that reason, in the Australian context, is not justifiable. And the other American justifications - national cohesion and the encouragement of commerce, the creation of uniform common law, superior federal justice and mutual improvement19- are either equally inappropriate in Australia or are achieved by other means. 20

A more convincing explanation for the inclusion of the diversity jurisdiction in the Australian Constitution is that given by Inglis Clark, Chairman of the Judiciary Committee at the 1891 Constitutional Convention. 21 He stated that the purpose of the High Court's diversity jurisdiction was to ensure that a plaintiff need not necessarily sue in the court or courts which had jurisdiction over the defendant at common law, but could, alternatively, sue in the High Court and obtain a judgment which would be valid and enforceable throughout the Commonwealth. That procedural justification received contemporary support from Quick and Groom, 22 even though the paths of plaintiffs had, by then, been made smoother by the enactment of the Service and Execution of Process Act 1901 (Cth). Both Cowen and Zines23 and Pryles and Hanks24 question whether that procedural justification is sufficient to warrant the continued existence of the diversity jurisdiction. But whether or not the justification is sufficient, the jurisdiction will continue to exist until there is a constitutional amendment -which is unlikely.

The cases suggest that the High Court has never been particularly enthusiastic about its diversity jurisdiction - perhaps because the matters which come before it in this jurisdiction tend to be relatively trivial and time-wasting and unduly to increase the workload. 25 Perhaps because it could not suggest legislation to do away with the jurisdiction given that it is provided for in the Constitution, the

17 Z Cowen and L Zines supra nl6 83ff; Pryles and Hanks supra n 8 107. 18 For example, Australian Temperance and General Mutual Life Assurance Society v Howe

(1922) 31 CLR 290; Z Cowen and L Zines Federal Jurisdiction in Australia supra n 16, 85; M Pryles and P Hanks supra n 8, I 09.

19 M Pryles and P Hanks supra n 8, 11{}-111. 20 Ibid 109-110. 21 Reproduced in M Pryles and P Hanks supra n 8, 114. 22 The Judicial Power of the Commonwealth (1904) 112-113. 23 Ibid 86. 24 Ibid 115. 25 In the exercise of this jurisdiction, the Court seems to have to deal predominantly with run-of

the-mill motor accident cases such as in Pozniak v Smith (1982) 41 ALR 353 and Fielding v Doran (1985) 60 ALR 343.


Court took early opportunities to limit the scope of the jurisdiction;26 and, in 1976, the Parliament did amend the Judiciary Act to provide a procedure for remitting any action pending in the High Court to any federal court of a State or Territory. 27

That amendment (section 44) has been given a wide interpretation, with the result that the High Court may remit a case to another court even if that other court would not have had jurisdiction over the case at first instance. 28

B Actions against the Commonwealth

Also questionable is the justification for the other matters listed in s 75 of the Constitution being within the original jurisdiction of the High Court. 29 According to Cowen and Zines, 30 the incidents of federal jurisdiction provided for in the Constitution were largely copied from the United States Constitution. Unlike the latter, however, the Australian Constitution vests that extensive jurisdiction in the High Court rather than, as occurred with the United States, in inferior federal courts. Moreove~ 1

. . . [T]he Australian Federal Conventions do not appear to have subjected the particular subject-matters of original jurisdiction assigned to the American federal courts to very close scrutiny in considering their suitability for allocation to the original jurisdiction of the High Court.

While "[i]t may well be that the dignity of the parties to an action demands a trial in the highest court, so that matters between governments, State and State, and Commonwealth and State are properly triable at first instance in the High Court", to burden that Court with the other matters within its original jurisdiction is a "maldistribution of functions". The reasons for having two sets of courts in the United States - namely, the tensions between State and federal governments, the desire for uniform interpretation of federal law, and the problem thrown up by the need for judicial policing of a bill of rights - either did not exist in Australia or were less pressing than in the United States.

As with the diversity jurisdiction, however, although the High Court cannot entirely avoid hearing these matters it now has the power, under s 44, to remit them for trial in another court.

26 In Australian Temperance and General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290, the Full Court held that the word "resident" ins 75(iv) did not extend to corporations, and in Watson and Godfrey v Cameron ( 1928) 40 CLR 446, a Full Court of five held that if there was, on each side to the litigation, a resident of the same State, who was a necessary party to the action, it was not a matter between "residents of different States". See also, Faussett v Carroll (1977) 15 WN (NSW) No 12, Marlow v Tat/ow (1965) 39 AU 140, Cadet v Stevens (1967) 50 AU 361 and Morrison v Thwaites (1969) 43 ALJR 452.

27 Judiciary Act 1903 (Cth), s 44, supra n 16. 28 Johnstone v Commonwealth (1979) 143 CLR 398, Weber v Aidone (1981) 36 ALR 345, (1981)

55 AUR 657; Pozniak v Smith (1982) 151 CLR 38; Broken Hill Proprietary Co Ltd v National Companies and Securities Commission (1986) 67 ALR 545. And see 1984 amendment to the Judiciary Act 1903 (Cth), para 44(3)(a).

29 Section 75 states: In all matters -(i) Arising under any treaty: (ii) Affecting consuls or other representatives of other countries: (iii) In which the Commonwealth, or a person suing or being sued on behalf of the

Commonwealth, is a party ... the High Court shall have original jurisdiction.

30 Federal Jurisdiction in Australia (2nd ed 1978) Chapter I. 31 Ibid 4.


2 PRESENT A TIITUDE OF THE HIGH COURT TO REMITI AL

A Remittal of diversity suits

Why do litigants make use of the diversity jurisdiction? The vast majority, if not all, of the diversity suits which have been remitted by the High Court under s 44 are negligence actions arising out of car accidents. In each case, the reason for the action's being instituted in the High Court must have been that the plaintiff hoped thereby to gain some juridical or personal advantage which was not available in the State court or courts with jurisdiction over the matter- or, at least, to avoid some juridical or personal disadvantage.

In both Weber v Aidone32 and Guzowski v Cook,33 the plaintiff must have chosen to institute proceedings in the High Court because he did not wish to litigate in the only other court with jurisdiction over the matter. 34 In each case the defendant wanted remittal to that other court but in neither case was there a difference between the two possible courts in the benefits available to the plaintiff. In Weber, Aickin J, and, on appeal, the Full Court, decided that, in accordance with the balance of convenience, the case should be remitted to the Supreme Court of Victoria. No consideration was given to the question of the applicable law or to choice of law, except that the respondent agreed to abandon his claim for solatium, under the South Australian Act, if the matter stayed remitted to the Supreme Court of Victoria (which would probably not have had jurisdiction over that statutory cause of action). Johnstone v Commonwealth35

was applied as authority for the proposition that, even if the Victorian Supreme Court would not have had jurisdiction with respect to the appellant if proceedings had been instituted in that Court in the first instance, it did have jurisdiction with respect to the parties within s 44 of the Judiciary Act.

In Guzowski, Gibbs CJ, in deciding to remit to Queensland, also took into account that, at time of the accident, the plaintiff was resident in Queensland and, perhaps surprisingly, that the Supreme Court of Victoria would not have had jurisdiction if the action had been commenced in that Court. If that last were the deciding factor, it ran counter to Weber and Johnstone v Commonwealth. 36

Guzowski v Cook was followed by Robinson v Shirley, 37 which was the first of the cases in which there was a difference in benefits to the plaintiff depending on which court was chosen for the remittal. The plaintiffs, who were residents of New South Wales, were injured in 1974 in an accident in Queensland by the defendants, who were resident there. In 1979, each plaintiff issued a writ out of the principal registry of the High Court claiming damages for negligence occasioning personal injuries. Why did they institute proceedings in the High Court when the Queensland Supreme Court had jurisdiction over the matter because of the presence of the defendants there? There is one obvious reasonthat the action was statute barred in Queensland; and another possible reason -that the plaintiffs hoped to get the action remitted to New South Wales, which would be more convenient for them. In any event, the Robinsons applied for

32 (1981) 36 ALR 345, (1981) 55 AUR 657. 33 (1982) 56 AUR 282. 34 South Australia in Weber's case, Queensland in Guzowski's case. 35 (1979) 143 CLR 398. 36 Ibid. 37 (1982) 56 ALJR 237.


remittal to New South Wales and the defendants applied for remittal to Queensland. Mr Justice Brennan held that three questions were raised on the hearing of the applications for remittal: the effect of the Law Reform (Limitation of Actions) Act of 1956 (Qld); the effect of the statutes in each jurisdiction relating to survival of the cause of action (because of the death of Mr Robinson in 1980); and the balance of convenience. On the first question it was accepted, following Pedersen v Young, 38 that the statute had no application to actions instituted in the High Court. Mr Justice Brennan sat in Canberra to hear the applications for remittal and, had the High Court chosen to hear the case itself, rather than to remit it, that hearing would also have taken place in Canberra. 39 He did not, however, mention the limitation legislation of the Australian Capital Territory.

That left to be considered the issue of the survival of Mr Robinson's cause of action for the benefit of his estate (Mrs Robinson was his executrix) and the balance of convenience. In looking at the survival of actions legislation, Brennan J considered only that of Queensland and New South Wales. He had no doubt that the appropriate legislation would apply, as a result of s 79, in whichever jurisdiction the case was heard. The relevant provisions formed part of the general body of law. There was, however, a difference between the jurisdictions in the measure of damages which might be recovered for the benefit of a deceased's estate. In discussing the fact that the amount of damages would be affected by the forum in which the action was brought, Brennan J said:40

Where a plaintiff is entitled to choose as the forum a court exercising federal jurisdiction, and the defendant is within Australia, he is amenable to the command of the federal writ in whatever part of Australia he is served. The body of law to be applied, however, is the law of the place in which the court exercises its jurisdiction (Judiciary Act 1903 (Cth), s 79). The body of general law which binds such a court speaks, as it were, with a variety of tongues, and a federal court when it chooses its venue determines the tongue to which it will listen. In making the choice, the rules of private international law provide no binding guidance, for the choice of law follows inexorably from the place where the jurisdiction is exercised. A similar problem arises when this Court exercises a discretion to remit an action for trial by a Supreme Court of a State or Territory: the choice of the Court to which the action is remitted determines the body of law which is to be applied to it.

The plaintiff, by instituting the proceedings in the High Court, had already gained an advantage given that the claim was statute-barred in Queensland, and no other court had jurisdiction. Even if the remittal were to the Queensland Supreme Court, the statute, which could apply only to proceedings instituted within the State, would have no effect.

Mr Justice Brennan considered the question whether to remit to Queensland or New South Wales and said:41

Where the action is a claim for damages in tort, there are powerful reasons for adopting the law of the place where the tort is committed. If it were not for the existence of an obligation under that law, no cause of action would be enforceable

38 [1964] 110 CLR 162. 39 High Court of Australia Act 1979 (Cth), s 14. Although s 15 of the Act permits the Court to sit

elsewhere, those sessions are confined to visits to non-Eastern capital cities: see (1980) 54 AU 55 and 306.

40 (1982) 56 AUR 237, 238-239. 41 (1982) 56 ALJR 237, 239.


under any other body of law which might be made applicable to the resolution of the matter. The law of the place where the tort was committed is the law which first gives rise to the cause of action . . .

This passage suggests that he was adopting the obligatio theory as the apposite guiding principle. While that theory was, at one time, widely applied in the United States,42 the Full Court of the High Court in Koop v Bebb43 said "courts applying the English rules of private international law do not accept the theory". That rejection has been repeated subsequently both in Australia44 and in England.45

Mr Justice Brennan then went on to say:

It would not be appropriate to allow the difference in benefits to the plaintiff conferred by two systems of law to affect the exercise of the discretion, which is intended to facilitate the course of litigation rather than to enhance or diminish a plaintiffs rights or correspondingly alter a defendant's obligations.46

That statement raises unequivocally the two questions - what is the purpose of the diversity jurisdiction and what is the purpose of the remittal procedure? The first has already been considered above, 47 and Brennan J' s view of the second is clear. But if the reason for giving the High Court a discretion whether to remit a matter and, if the matter is to be remitted, to which court the remittal should go, is simply to facilitate the course of litigation and not to alter the plaintiff's rights or the defendant's obligations, then, it would seem clear, the remittal should be to the jurisdiction whose laws most closely resemble the law which would be applied in the High Court. That will most often be Australian Capital Territory law. Only if there is more than one court with laws the same as, or very similar to, those operating in the Australian Capital Territory should the question of convenience be considered in making the final choice. But Brennan J said:48

I am not persuaded that convenience in the conduct of the trial is a factor which is capable of affecting the exercise of the discretion which must choose between two systems of law which confer rights of different measures upon the plaintiff. But it is not necessary for me to decide that question in the present case, for the balance of convenience does not clearly favour a trial in Sydney.

Pozniak v Smith49 was the next diversity case to come before the Full Court of the High Court. The plaintiff, a resident of New South Wales, had been injured in an accident in Queensland. Having instituted proceedings in the High Court in its diversity jurisdiction, he applied for remittal of the action to the Supreme Court of New South Wales. The defendant, a resident of Queensland, applied for remittal to the Supreme Court of Queensland. In a joint judgment, Gibbs CJ, Wilson and Brennan JJ pointed out that there were significant differences between the laws of Queensland and of New South Wales touching the conduct and determination of actions for damages in respect of personal injury arising out

42 Slater v Mexican National Railroad Co (1904) 194 US 120; Western Union Telegraph Co v Brown (1914) 234 US 542; New York Central v Chisholm (1925) 268 US 29; and Loucks v Standard Oil Co of New York (1918) 120 NE 198.

43 (1951) 84 CLR 629, 643. 44 Anderson v Eric Anderson Radio & TV Pty Ltd (1965) 114 CLR 20, 41-42, per Windeyer J. 45 Boys v Chaplin [1971] AC 356, 385-387, per Lord Wilberforce. 46 Supra n 41. 47 Supra text at n 17 and n 21. 48 (1982) 56 AUR 237, 239. 49 (1982) 41 ALR 353; (1982) 56 AUR 707.


of the negligent driving of a motor vehicle. Those differences, no doubt, were the reason for the plaintiffs choosing to institute proceedings in the High Court rather than in the Supreme Court of Queensland, the only other court with jurisdiction over the matter. 50

Referring to Weber v Aidone,51 Gibbs CJ, Wilson and Brennan JJ identified the balance of convenience as having been the crucial factor although the locus delicti had been acknowledged as an important consideration. On the matter before them, they had no doubt that the different discount rates which might apply in the quantification of damages according to whether the remittal was to Queensland or to New South Wales went directly to the heart of the matter2 and rendered the Court's exercise of its discretion a significant factor in the ultimate result of the action. Given that the discount rate in Queensland was 5% whereas in New South Wales it was only 3%, they said that "a decision in favour of New South Wales would have the effect of conferring a fortuitous advantage on the plaintiff and a corresponding disadvantage on the defendant, as compared with the rights of the parties if the case were determined in accordance with the law of the State where the cause of action arose."53 The majority then went on to ask the question - was there any principle which would justify the conferring on the plaintiff of that "fortuitous advantage"?54

In looking for the reasons for the High Court's original jurisdiction in diversity cases, they concluded that its purpose was to provide an inpartial forum. 55 They said there was no reason to suppose its purpose was to provide a different body of law for the resolution of such a matter, even though that may have been the result in the event of the action's being heard in the High Court in a State other than that in which the cause of action arose (sees 79 of the Judiciary Act). They concluded by saying:56

The only safe course, in a case where the relevant law in the competing jurisdiction is materially different in its effect on the rights of the parties, is to remit to the State whose law has given rise to the cause of action. As Brennan J observed in Robinson v Shirley, the power "is intended to facilitate the course of litigation rather than to enhance or diminish a plaintiff's rights or correspondingly alter a defendant's obligations".

Once again we see highest attention being paid to the place where the cause of action arose and dependence on Brennan J's observation about advantage and disadvantage if the alternative is chosen.

Mr Justice Mason gave a separate judgment, in the course of which he discussed the different approaches that are taken in different jurisdictions to the choice of law in tort actions containing a foreign element. That discussion was relevant because, as he said:57

[T]here is something to be said for the view that in making an order for remitter the Court should be guided by those criteria which would influence its decision in

50 Unless, of course, the defendant could have been persuaded voluntarily to enter New South Wales for the purpose of having a New South Wales writ served on him.

51 (1982) 41 ALR 353. 52 Ibid 357. 53 /d. 54 /d. 55 Ibid 358. 56 Ibid 359. 57 Ibid 360.


determining the place of hearing if the Court, instead of remitting, were itself to proceed to hear and determine the case.

He then continued:

It is scarcely acceptable that the Court by its order for remitter should identify as the law to be applied a law which differs from the law which this Court would have applied had it proceeded to exercise the jurisdiction invoked by the plaintiff, a jurisdiction vested in it by the Constitution. 58

It is all the more disappointing, therefore that Mason J subsequently chose the Supreme Court of Queensland for the remittal resulting "in the trial of the action according to the law of Queensland . . . requiring the assessment of lump sum damages for future loss at a discount rate of 5 per cent, in lieu of the 3 per cent discount rate which prevails in New South Wales ... "59 The discount rate in the Australian Capital Territory, where the High Court would have sat had it heard the action itself, was also 3 per cent.

Two years later, Dawson J had to exercise the discretion on remittal in the case of Fielding v Doran. 60 The car crash in that case occurred in Queensland but the plaintiff and her medical witnesses were in Victoria and the defendant was in Tasmania. The Tasmanian courts would have had common law jurisdiction over the defendant and the Queensland courts had jurisdiction over the matter under the Service and Execution of Process Act 1901 (Cth). But neither of those jurisdictions suited the plaintiff, who wished to sue in Victoria. She therefore issued a writ out of the Victorian Office of the High Court of Australia and applied for the matter to be remitted to a Victorian court. The defendant, on the other hand, wished remittal to Queensland. There were significant differences between the relevant law in the two jurisdictions. First, the discount rate on damages for future loss was 5% in Queensland and only 3% in Victoria. Secondly, in Victoria interest was payable on the damages, for the period between the commencement of the action and the entry of judgment at "such rate not exceeding the maximum rate approved by the Australian Loan Council at the time when judgment is entered on the order made for long term borrowing for new public securities issued by semi-government authorities". 61 In Queensland, on the other hand, the judge was invested with a discretion as to the rate of interest to be applied, and that interest was payable from the time the cause of action arose (roughly four years before the commencement of the action) until the date of judgment. 62

Clearly the first of those differences would result in an advantage to the plaintiff, were she permitted to proceed in Victoria, while the second would, presumably, disadvantage her in comparison with the interest she might expect to receive were the action to be remitted to Queensland. The fact that Queensland was the place where the alleged tort was committed was entirely fortuitous, neither party having had any long term connection with that State. 63 It must be assumed, therefore, that the plaintiff chose Victoria for reasons of convenience,

58 /d. 59 Ibid 365. 60 (1985) 60 ALR 342. 61 Supreme Court Act 1958 (Vic) s 79A. 62 Common Law Practice Act 1967-1981 (Qld) s 72. 63 Cf Boys v Chaplin [1971] AC 356.


as she and her medical witnesses were there, and also because she estimated that overall she would recover more there than in Queensland. That latter assumption is strengthened by the fact that the defendant chose Queensland.

Mr Justice Dawson referred to the earlier decisions of the High Court in Robinson v Shirley64 and Pozniak v Smith65 and quoted the question posed by the Court in Pozniak:66

Is the balance of convenience a factor which is capable of affecting the exercise of the discretion when the choice is between two systems of law which confer rights of different measures upon the plaintiff?

He also quoted the Court's answer:67

The only safe course, in a case where the relevant law in the competing jurisdictions is materially different in its effect on the rights of the parties, is to remit it to the State whose law has given rise to the cause of action.

Finally, he referred to the statement by Mason J, in his separate judgment, that the remittal of a case should lead to a hearing and determination which "would as nearly as possible, approximate a hearing in this court".68

It is disappointing and puzzling both that "safety" won the day and that, although Dawson J referred to s 79 of the Judiciary Act and its effect, he did not consider the laws of the Australian Capital Territory on the discount rate and prejudgment interest. 69

Whilst the balance of convenience may favour Victoria, the existence of [material differences between the respective laws of Queensland and Victoria] makes the only safe course, to use the words of the majority in Pozniak's case, to remit the action to the Supreme Court in Queensland to be tried there. 70

A comparison between the provisions of Australian Capital Territory law, which the High Court would have had to apply had it heard the action, and of the laws of Queensland and Victoria respectively, might not have led to a different outcome but it would, at least, have shown that all the relevant factors were taken into account before the discretion was exercised.

This brief summary of diversity cases which have been remitted from the High Court since 1976 suggests that the Court's approach to the choice of jurisdiction is as follows:

• the existence and effect of s 79 of the Judiciary Act is recognised, but there is no acknowledgement of the fact that the majority of High Court cases are heard in Canberra and that therefore the law which would apply were the Court to hear the case itself would usually be Australian Capital Territory law;

• the Court tends to favour the jurisdiction in which the cause of action arose, even if the locus was entirely fortuitous and despite the fact that contemporary

64 56 AUR 237. 65 (1982) 151 CLR 38. 66 Ibid 44. 67 Ibid 47. 68 (1985) 60 ALR 343, 345. 69 Although it seems that Dawson J heard the remittal proceedings in chambers in Melbourne, had

the substantive matters been heard in the High Court the Court would have sat in Canberra. High Court of Australia Act 1979 (Cth) ss 14 and 15, and (1980) 54 AU 55 and 306.

70 Supra n 68, 346.


jurisprudence in analagous questions, such as the choice of law in tort actions, does not favour that approach;71

• little, if any, weight is given to the fact that litigants in diversity cases have a constitutional right to bring their actions in the High Court and a consequential right to have the matter governed by a particular system of law.

It is submitted that, in addition to the jurisdictions chosen for remittal by the plaintiff and the defendant respectively, and assuming that if the High Court were to hear the matter it would do so in the Australian Capital Territory, the possibility of remittal to an Australian Capital Territory court should also be considered. It is not suggested that, because the majority of High Court cases are heard in Canberra, all cases should be remitted to the Supreme Court of the Australian Capital Territory. But the fact that, as a result of s 79, the law applied in that Supreme Court is the same as that which is applied in the High Court, in the absence of an applicable Commonwealth statute, should be a relevant factor. If there is a jurisdiction in which the applicable law is the same as, or substantially similar to, that in the Australian Capital Territory and which is otherwise a more appropriate forum, then a court in that jurisdiction should normally be the one chosen for the remittal. In cases where the law of all other possible jurisdictions is very different from that in the Australian Capital Territory, 72 then surely remittal to the Supreme Court of the Australian Capital Territory should be very seriously considered and should be rejected only if there are highly persuasive countervailing factors.

It is unfortunate that the courts seem to have a fixation with avoiding what they see as the conferring of a fortuitous advantage on a plaintiff when the latter chooses to sue in the jurisdiction in which he stands to recover most. In some cases, after all, it is likely that the plaintiff could expect to do better in the court of the place where the cause of action arose than in one or more of the other courts with jurisdiction over the matter. In those circumstances, would the majority in Pozniak v Smith 73 consider that it would be unjust for the plaintiff to proceed in that court? It seems unlikely.

B Remittal of actions against the Commonwealth

The matters in which the jurisdiction of the High Court is exclusive are listed ins 38 of the Judiciary Act. In 1984, the Judiciary Act was amended to give the High Court power to remit any matter referred to ins 38 (apart from those in para

71 See the cases cited in footnotes 47-49 above and eg Th M de Boer Beyond Lex Loci Delicti ( 1987) but cf Pryles "The Remission of High Court Actions to Subordinate Courts and the Law Governing Torts" (1984) 10 Syd L Rev 352. As far as Australia, at least, is concerned, it is hoped that the question of the correct choice of law in tort actions will be settled by the High Court's decision in Breavington v Godleman (on appeal from the Supreme Court of Victoria [1985) VR 851) which is expected soon. Since this article was written, the High Court has handed down its decision (1988) 80 ALR 362. Unfortunately, although all seven justices sat on the case, the result was inconclusive as to the correct choice of law rule in tort actions. Mason CJ abandoned the approach he had developed in Pozniak v Smith (1982) 151 CLR 38 and decided that the lex loci should always be applied. Wilson, Gaudron and Deane JJ relied on s 118 of the Constitution to provide that the lex loci should apply, at least on the facts before them. Brennan, Dawson and Toohey JJ adopted a double actionability approach to which Toohey J would add the flexibility exception from Chaplin v Boys [1971) AC 356.

72 As is the case at present with respect to the discount rate on damages. The Australian Capital Territory applies the common law rate of 3% while all other jurisdictions have legislated for a rate hi~her than 3%.

3 (1982) 151 CLR 38.


38( e)), either upon the application of a party or of the High Court's own motion, to the Federal Court of Australia or any court in a State or Territory. 74

Given the relatively recent enactment of sub-s 44(2), few cases can be studied as illustrations of its operation. One case, however, is particularly interesting: State Bank of New South Wales v Commonwealth Savings Bank of Australia. 78

The State Bank of New South Wales brought an action against the Commonwealth Savings Bank claiming a large sum which represented half the profit made by the Commonwealth Bank in carrying on its business in New South Wales during the 1982-1983 financial year. The claim was based on an agreement made between the parties in 1931. As a matter within its exclusive jurisdiction, proceedings were begun in the High Court; but the parties agreed that the matter should be remitted to another court. The plaintiff wanted it remitted to the Supreme Court of New South Wales, while the defendant wanted it remitted to the Federal Court.

The first issue which Gibbs CJ had to decide was whether the effect of s 44(2Af6 was that the matter could be remitted only to the Federal Court, as was argued for the Commonwealth. He decided that remittal under s 44 could be either to a Supreme Court or to the Federal Court. 77 He then had to consider how to exercise the discretion as to which of them to choose. Gibbs CJ concluded, for reasons he did not give, that in either case the matter would be heard in Sydney, so that neither court would be more appropriate than the other in terms of convenience. The Commonwealth, the defendant, submitted that the law to be applied in the Supreme Court would be materially different in two respects from that which would be applied if the matter remained in the High Court. The first of those suggested differences was on the question of admissibility of certain evidence; but it was found to be without substance. The second difference was, as it so often is, in relation to the award of interest. The parties thought that s94 oftbe Supreme Court Act 1970 (NSW), which gives the Supreme Court power to award interest, would have no application in the High Court or the Federal Court. 78 That submission meant that Gibbs CJ had to consider the effect of s 79. He mentioned the view expressed by Mason J in Australian National Airlines Commission v Commonwealth Bank of Australia and Canadian Pacific Airlines Ltd, 79 which was obiter, that s 79 does not render s 94 applicable in either the High Court or the Federal Court. He also considered the differences of opinion, on the effect ofs 79, which emerged in John Robinson & Co Limited v Ferguson

74 See sub-s 44(2) of the Judiciary Act 1903 (Cth) inserted by the Judiciary Amendment Act (No 2) 1984, which took effect on I June 1984.

75 (1984) 53 ALR 625. On the law to be applied in such cases, see E Campbell"Suits Between the Governments of a Federation" (1968-1971) 6 Syd L Rev 309, 326-334.

76 (2A) Where a matter in which the Commonwealth is a party is at any time pending in the High Court, the High Court may, upon the application of a party or of the High Court's own motion, remit the matter, or any part of the matter, to the Federal Court of Australia. -inserted by the Statute Law (Miscellaneous Provisions) Act (No I) 1984.

77 Supra n 75 628. 78 The cause of action had arisen before the 1984 amendment to the Federal Court of Australia Act

1976 (Cth), when s 51 A was inserted into that Act by the Statute Law (Miscellaneous Provisions) Act (No 2) 1984, and provided for the Federal Court to award interest. The latter Act also amended the Judiciary Act 1903 (Cth) by adding s 77MA which is in the same terms as s !SA of the Federal Court Act.

79 (1975) 6 ALR 433.


Transformers Pty Ltd. 80 Unfortunately Gibbs CJ did not reach any conclusion on the question whether s 79 did render s 94 applicable to proceedings in the High Court or Federal Court. Still, he referred to Pozniak v Smith81 particularly to Mason J's judgment, and concluded:82

. . . I do not accept that it is clear that the law to be applied in this court or in the Federal Court would be different from that to be applied in the Supreme Court of New South Wales, but it is clear that the law to be applied in the Federal Court would be the same as that applicable in this court, and the remarks of Mason J, which are of course entitled to great respect, support the view that s 94 of the Supreme Court Act, which would be applied in the Supreme Court, would not be applied in this court or in the Federal Court.

He remitted the case to the Federal Court. While it was probably appropriate, in what were merely remittal proceedings,

for Gibbs CJ to decline to rule on the question of the applicability of s 94 in the Federal Court sitting in New South Wales, it is difficult to understand why he considered it clear that "the law to be applied in the Federal Court would be the same as that applicable in [the High Court]".83 As long as the matter in question was not entirely governed by federal statute, the effect of s 79 would surely be to render New South Wales law applicable in the Federal Court in Sydney and Australian Capital Territory law applicable in the High Court in Canberra.

3 APPROACH TO REMITTAL THAT THE HIGH COURT SHOULD TAKE

In view of the reasons for the inclusion, within the original jurisdiction of the High Court, 84 of the diversity jurisdiction and jurisdiction over actions to which the Commonwealth is a party, it can be argued, strongly, that the purpose of the jurisdiction is to give plaintiffs the chance to have their actions heard in the High Court. If that is correct, the purpose is also ipso facto to give them the chance to have their actions heard in the Australian Capital Territory or, possibly, one of the non-Eastern capital cities. The plaintiff has chosen the limitation period, the survival of actions legislation, the rules on quantum of damages and on interest, of the Australian Capital Territory.

When it remits a matter under s 44, the High Court is saying, with complete justification, that it is not an appropriate forum for the trial of the action. So when the Court is exercising its discretion as to which court to remit the case, the discretion is similar to that exercised by any court to which a defendant has pleaded forum non conveniens.

80 (1973) 129 CLR 65. 81 (1982) 151 CLR 38. 82 (1984) 53 ALR 625, 630. 83 /d. 84 Supra text at n 21 ff.


A Forum non conveniens

The current rule in Australia85 on the staying of actions in response to a forum non conveniens submission was formulated by Lord Diplock in Rockware Glass Ltd v MacShannon. 86 The principle, which was accepted by the Supreme Court of New South Wales in Garseabo Nominees Pty Ltd v Taub Pty Ltd, 87 was commonly expressed as follows:

1. A mere balance of convenience is not a sufficient ground for depriving a plaintiff of the advantage of prosecuting his action in the forum, if it is otherwise properly brought.

2. In order to justify a stay

(a) the defendant must satisfy the court that there is another forum, to whose jurisdiction he is amenable, in which justice can be done between the parties at substantially less inconvenience and expense; and

(b) such stay must not deprive the plaintiff of a legitimate personal or juridical advantage which would be available to him, if he invoked the jurisdiction of the court in which the stay is sought. 88

The law in this area has been developed further, however, by the recent House of Lords decision in Spiliada Maritime Corporation v Consulex Lt~9 so that in England, at least, it is no longer appropriate to follow the Diplock formulation in MacShannon. 90

The issue confronting the House of Lords in Spiliada91 was whether the plaintiffs action in England should be stayed, given the defendant's submission that British Columbia was a more appopriate forum.

Under the old formulation, the decisions had inevitably concentrated on the question of when a personal or juridical advantage was legitimate and when it was illegitimate, 92 despite the fact that the term "legitimate advantage" was

"'At the time of writing- May 1988. Since this article was written the High Court has handed down its decision in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 79 ALR 9. The majority, Brennan, Deane and Gaudron JJ confounded the predictions of most commentators by holding that the doctrine of forum non conveniens has not become part of Australian law. In a strong dissenting judgment, however, Wilson and Toohey JJ approved the developments that had taken place in England and held that Spiliada [ 1987] I AC 460 should be followed. Consequently, it seems that a precise and authoritative statement of the principles that should be applied in dealing with an application to stay proceedings, is still required. See also, C Cook "Internationalism in Transnational Liti~ation Defeated" (1988) ACL: AT 19.

8 [1978] AC 795. See also Schuz, R "Controlling Forum-shopping: The Impact of MacShannon v Rockware Glass Ltd'' (1986) 35 ICLQ 374.

87 [1979] I NSWLR 663. 88 Ibid 667-668. 89 [1987] I AC 460. 90 It is expected that the High Court, when it hands down its decision in Oceanic Sun Line Special

Shipping Co Inc v Fay (on appeal from the NSW Court of Appeal (1987) 8 NSWLR 242), will probably adopt the approach taken by the House of Lords and the Privy Council particularly as that approach also reflects current American jurisprudence on forum non conveniens. See, for example, EF Scoles and P Hay Conflict of Laws (1982) But see note 85 supra.

91 [ 1987] I AC 460. 92 See, for example Castanho v Brown & Root [1981] AC 557, Smith Kline & French v Bloch

[1983]1 WLR 730; Ranger Uranium Mines Pty Ltd v BTR Trading (Q/d) Pty Ltd (1985) 34 NTR I and Muller v Fencott (1981) 37 ALR 310.


simply judicial and it was recognised that it should not be elevated to an importance it did not warrant. 93

Under the expression of the principle now current, however, the phrase "legitimate personal or juridical advantage" is omitted. Lord Goff of Chieveley's "summary" of the law is too long to reproduce but the essence of it is that, in order to justify a stay, the court must be satisfied that there is some other available forum which is clearly or distinctly the more appropriate forum for the trial of the action - that is, in which the case may be tried more suitably for the interests of all the parties and the ends of justice. Lord Goff also stated that94

[W]here the choice is between competing jurisdictions within a federal state . . . a strong perference should be given to the forum chosen by the plaintiff upon which jurisdiction has been conferred by the constitution of the country which includes both jurisdictions.

and, further, that where no particular forum could be described as the natural forum for the trial of the action, he could see no reason why the court should not refuse to grant a stay in such a case, where jurisdiction had been founded as of right.95

It is neither possible nor appropriate to apply the rule, as it stands, to diversity cases, but it may be possible to use it to provide guidelines for the exercise of the discretion on remittal.

If the plaintiff has gained an advantage in instituting the action in the High Court (and, of course, plaintiffs would not go there unless there was at least the possibility of their gaining an advantage), they surely should not be deprived of that advantage simply to suit the defendant's preference.

A defendant, when he asks for remittal to a certain court, will by definition be able to satisfy the Court that there is another forum to whose jurisdiction he is amenable. But he needs also to show that his chosen forum is distinctly more appropriate for the trial of the action so as to displace the preference which should be given to the forum, chosen by the plaintiff, upon which jurisdiction has been conferred by the Constitution. If, under the Constitution, a prospective plaintiff, whether an individual or a State or Territory, is provided with a choice of courts with jurisdiction to hear the action, each of which is equally appropriate in the sense that there is some connecting factor between it and the matter, is it necessarily unacceptable to allow the plaintiff to proceed in the Court in which he is likely to be most handsomely compensated?

93 "The formula is not, however, to be construed as a statute. No time should be spent in speculating as to what is meant by 'legitimate'. It, like the whole of the context, is but a guide to solving in the particular circumstances of the case the 'critical equation' between advantage to the plaintiff and disadvantage to the defendants." Castanho v Brown & Root [1981] AC 557, 575 per Lord Scarman.

94 Spiliada Maritime Corp v Cansulex Ltd [1987] I AC 460, 476 to 477. 95 For a topical discussion of the doctrine see DW Robertson "Forum Non Conveniens in America

and England: 'A Rather Fantastic Fiction"' (1987) 103 LQR 398.


When the High Court is deciding to which jurisdiction to remit a diversity case, one of the factors influencing its decision must be the effect of s 79.96 The Court should be aware of any procedural advantage which has been gained by the plaintiff as a result of his decision to proceed in the High Court, whether sitting in the Australian Capital Territory or one of the smaller States, and should not dismiss that advantage as illegitimate.

Once the cross-vesting regime is in force, so that in many cases plaintiffs will be able to go directly to the jurisdiction of their choice without the preliminary step of issuing a writ out of the High Court, then the chosen forum should decide whether to accede to any request from the defendant for a stay, on the basis of the forum non conveniens doctrine - which does not necessarily take to be an illegitimate advantage the fact that, for whatever reason, the plaintiff stands to fare better in one jurisdiction than another. If the chosen forum is otherwise appropriate in terms of convenience and expense both to parties and to witnesses, and if there is no abuse of the legal process, then the plaintiff should be permitted to continue to prosecute the action there.

4 LAW APPLIED BY FEDERAL COURTS

As mentioned at the outset, the issue of the law applicable in courts, other than the High Court, exercising federal jurisdiction is one which has not been given adequate consideration. Problems will most frequently arise, whether or not their existence is acknowledged, when the Federal Court is hearing a matter which is not, or is not entirely, governed by federal legislation. As a result of the system of cross-vesting of jurisdiction, those occasions are likely to be more common in the future than they have been in the past. 97

For convenience the present practice of the Federal Court is considered in three categories: first, the application of State arbitration statutes; secondly, actions under the Trade Practices Act 1975 (Cth); and thirdly, other State statutes including those providing for pre-judgment interest on damages.

96 In Mabo v State of Queensland and Another (1986) 64 ALR 1, the plaintiff Murray Islanders claimed certain proprietary rights in various islands which were part of Queensland. They sued Queensland and the Commonwealth in the High Court and requested remittal to the Federal Court sitting in Queensland. Queensland contended that the action should be remitted to the Supreme Court of Queensland, which would have had jurisdiction in any event, while the Commonwealth expressed no preference. The plaintiffs were under the impression that for two reasons it would be more advantageous for them to bring the action in the Federal Court than in the Supreme Court. Gibbs CJ was satisfied, however, that there would be no difference in the substantive law to be applied and that the one suggested difference between the respective powers of the two courts had not been shown to be signifiCant. Because of the close connection of the action with Queensland and the fact that, apart from the remittal procedure, the Supreme Court was the only court other than the High Court with jurisdiction, Gibbs CJ exercised his discretion in favour of ordering remittal to the Supreme Court. Although he referred to Pozniak v Smith (1982) 41 ALR 353, (1982) 56 AUR 707, as authority for the principles to be applied to the exercise of his discretion, he did not mention the law which would have been applied had the action been heard in the High Court. It seems unlikely, however, that relevant Australian Capital Territory law would have been different from Queensland law, so no such mention was necessary. That is, there was no need to discuss the effect of s 79 of the Judiciary Act, although its operation must have been implicitly acknowledged by Gibbs CJ when he concluded that there would be no difference between the two courts in the substantive law to be applied.

97 Difficulties are unlikely to arise in State or Territory courts exercising federal jurisdiction because, whether consciously or not, they presumably apply the law of the forum, including the conflicts rules on choice of law. Thus s 79 is complied with.


A Application of State arbitration statutes

In Bond Corp v Thiess, 98 one of the issues before French J was whether s 53 of the Commercial Arbitration Act 1985 (WA), which enabled the staying of arbitration proceedings, could apply in the Federal Court sitting in that State. While French J was not prepared to accept the submission that State law was a direct source of power for the Federal Court, he had no difficulty with the proposition that s 79 rendered s 53 of the Commercial Arbitration Act applicable in the Federal Court. In support of his conclusion, he referred to the judgment of Dixon J in Huddart Parker Ltd v The Ship "Mill Hill". 99 Mr Justice Dixon in fact dismissed two summonses for a stay in that case but in so doing he held that the High Court had the power under s 5 of the Arbitration Act 1958 (Vic) to stay the proceedings. Section 5 was rendered applicable, by s 79, to the Court exercising its federal jurisdiction notwithstanding doubts expressed earlier by the Court on a similar point in Lady Carrington Steamship Co Ltd v Commonwealth100 when their Honours had expressly declined to state any definite view on the point.

B Actions under the Trade Practices Act

In Thomas v Ducret, 101 the question arose, in the High Court, of the applicability of State laws in the Federal Court when hearing an action under the Trade Practices Act 1974 (Cth). The applicant had been convicted in the Federal Court of nine offences created by the combined effect of s 5 of the Crimes Act 1914 (Cth) and ss 59(2) and 79(1) of the Trade Practices Act. Mr Justice Smithers imposed a fine in respect of each offence and held that, by virtue of s 18A102 of the Crimes Act 1914 (Cth) and ss 82 and 106103 of the Magistrates (Summary Proceedings) Act 1975 (Vic), it was mandatory on the court to fix a period of imprisonment in the case of each fine should the applicant default in the payment of any of the fines.

The Full Court 104 held that s 18A was a section similar in intent to s 79 of the Judiciary Act. Citing the principle explained by both Gibbs and Mason JJ in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd, 105 they said that in its

98 (1987) 71 ALR 125. 99 (1950) 81 CLR 502. 100 (1921) 29 CLR 596. 101 (1984) 153 CLR 506. 102 Section 18A states: "The laws of a State or Territory with respect to the enforcement of fines

ordered to be paid by offenders, . . . shall, so far as those laws are applicable and are not inconsistent with the laws of the Commonwealth, apply and be applied to persons who are convicted in thatState or Territory of offences against laws of the Commonwealth."

103 Section 82 of the Magistrates (Summary Proceedings) Act gave a Magistrate's Court or a stipendiary magistrate power, inter alia, to allow time for payment of any sum of money adjudged to be paid. Section 106(1) provided: "Notwithstanding anything in any Act where a Magistrates' Court stipendiary magistrate or justice imposes a fine the following provisions shall apply:-(b) Except in the case of a corporation the Court magistrate or justice shall order that in default of

payment of the amount of the fine the offender shall be imprisoned -(iv)where the amount of the fine exceeds $250 but does not exceed $500- for a term of not

more than six months; (v) where the amount of the fine exceeds $500- for a term of not more than twelve months."

104 Gibbs CJ, Mason, Murphy, Wilson and Deane JJ. 105 (1973) 129 CLR 65. ·


application to s 18A it had the following effect: 106

The Jaws of a State with respect to the enforcement of fines, . . . . shall, so far as they are applicable and not inconsistent with the Jaws of the Commonwealth, apply to an offender who has been convicted in a federal court of an offence against a Jaw of the Commonwealth . . . notwithstanding that the State laws are in their terms confined to persons convicted in State courts of offences against the Jaws of the State. To that extent, and to that extent only, the State Jaws are given an expanded meaning. Otherwise the Jaws are applied with their meaning unchanged . . . A proper understanding of the effect of [the judgments of Gibbs and Mason JJ in John Robertson]; leads to the conclusion that s 106 of the Victorian Act, which applies only to Magistrates' Courts, stipendiary magistrates and justices, has no application to an offender convicted by a judge of a superior court such as the Federal Court.

At the time, there was no law in Victoria enabling a judge who dealt summarily with an offender and imposed a fine to impose a sentence of imprisonment in default. Such a power existed only in relation to punishment for indictable offenders.

C State statutes including those providing for pre-judgment interest

Given the discussion so far, it may be argued as a general proposition that, as a result of the operation of s 79 of the Judiciary Act, both procedural and substantive provisions in a State statute will apply to courts, including the Federal Court, when exercising federal jurisdiction within that State. 107 Two distinct views are apparent, however, on the question whether provisions for the award of pre-judgment interest are so applicable. One view, the main proponent of which is Lockhart J, 108 is that s 79 does not operate to render a State prejudgment interest provision applicable in the Federal Court where that provision refers to a specific State court. 109

In addition, Lockhart J is of the opinion that such provisions are substantive rather than procedural. 110 While there is some authority for the proposition that provisions awarding interest on damages are substantive, 111 there is also authority for the opposite view. 112

In any case, even if s 94 of the Supreme Court Act 1970 (NSW) and similar sections are substantive, it does not necessarily follow, as Lockhart J suggests, that s 79 of the Judiciary Act cannot operate to render them applicable in courts exercising federal jurisdiction. For the words used in s 79 "including the laws relating to procedure, evidence and the competency of witnesses" do not suggest an application only to procedural law. 113 Also, in reaching his conclusion,

106 (1984) 153 CLR 506, 511, 512. 107 See, for example, Centrepoint Freeholds Pty Ltd v TN Lucas Pty Ltd (1984) 6 FCR 133;Aussie

Protection Inc & Anor v Hy-Way Sunvisors (Sales) Pty Ltd (Federal Court of Australia, 23 December 1987, unreported) and Cameron's Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46.

108 See Hubbards Pty Ltd v Simpson (1982) 41 ALR 509, Milner v De/ita (1985) 61 ALR 557 and State Bank of New South Wales and Another v Commonwealth Savings Bank of Australia ( 1986) 67 ALR 123.

109 Section 30c of the Supreme Court Act 1935 (SA) in Hubbards Pty Ltd v Simpson (1982) 41 ALR 509 and s 94 of the Supreme Court Act 1970 (NSW) in Milner v De/ita (1985) 61 ALR 557 and State Bank of NSW v Commonwealth Savings Bank (1986) 67 ALR 123.

110 State Bank of NSW v Commonwealth Savings Bank (1986) 67 ALR 123, 125. 111 Simonius Vischer and Co v Holt & Thompson [1979] 2 NSWLR 322. 112 Boys v Chaplin [1971] AC 356, 381 per Lord Guest. 113 Deputy Federal Commissioner ofTaxation v Brown (1958) 100 CLR 32, 39 per Dixon CJ; R v

Oregan; Ex parte Oregan (1957) 97 CLR 323, 330 per Webb J.


Lockhart J relied on what Mason J said in John Robertson v Ferguson Transformers, 114 which was that it was unnecessary to determine whether s 79 applied to substantive as well as procedural laws; and what Gibbs J said in Maguire v Simpson: 115

. . . s 79 "does not purport to do more than pick up State laws with their meaning unchanged" ... It was pointed out [in John Robertson v Ferguson Transformers]; that there is an exception to the generality of that statement; a State law may be rendered applicable by s 79 to a court exercising federal jurisdiction, which is not a State court, notwithstanding that the law according to its own terms is limited in its application to the courts of the State.

Assuming that is the passage on which Lockhart J intended to rely, it is difficult to see how it supports his conclusion.

It is not clear whether Lockhart J's proposition that s 79 does not pick up the substantive laws of the State in which the Federal Court is sitting refers to:

• any substantive laws including common law;

• substantive laws contained in State statutes; or

• substantive laws contained in State statutes which in terms apply only to a particular court, or to the courts in general, of that State.

He probably intended the third of those possibilities. That is justified by the rule that s 79 picks up State laws with their meaning unchanged - but only if it is accepted that the above mentioned exception to that rule does not apply in this case. If, however, he intended the first or even the second meaning, then he is not supported by authority and cannot be correct. In considering the dispute with respect to the 1931 agreement on which the State Bank's claim was based, one of the issues considered by Lockhart J was whether the Commonwealth Savings Bank could raise an estoppel by convention. In so considering, he must have been referring to the substantive rules of common law of New South Wales. Had it been appropriate to apply any of the provisions of the Contracts Review Act 1980 (NSW), then, as a result of s 79, that statute would also have been applicable to the dispute. 116

In reaching his conclusion that s 79 did not render s 94 of the Supreme Court Act applicable to the Federal Court proceedings, Lockhart J distinguished Centrepoint Freeholds Pty Ltd v TN Lucas Pty Ltd117 where the State statutory provision in question referred to "all courts whatsoever". Section 94, on the other hand, referred specifically to the Supreme Court of New South Wales. 118 Mr Justice Lockhart had previously distinguished the Centrepoint Freeholds 119 case,

114 (1973) 129 CLR 65, 95. 115 (1977) 139 CLR 362, 376. 116 On this point see also Centrepoint Freeholds v Lucas (1984) 6 FCR 133, 143: In the present

case, the learned trial judge found in favour of the applicant against Centrepoint both in respect of breach of the common law and of contravention ofs 52(1) of the Act [52 ALR, 480]. He then turned, in the first instance, to consider damages for deceit. In the course of doing so, his Honour held [514] that the applicant's claim for interest could not be justified by reference to s 79. However. it is clear that the cause of action for deceit owed everything to the law of the State of Victoria including the common law.

117 (1984) 6 FCR 133. 118 That specific reference is explicable by the fact that there were identical provisions in both the

District Court Act, 1973 (NSW) s 83A and the Local Courts (Civil Claims) Act, 1970 (NSW) s 39A. 119 (1984) 6 FCR 133.


on similar grounds, in Milner v Delita120 where he chose to follow instead the approach of Mason J in Australian National Airlines Commission 121 and of the trial judge and the dissenting Full Court judge in Centrepoint Freeholds. 122

The other approach has been championed mainly by Pincus J 123 and was also espoused by Sweeney and Woodward JJ who formed the majority in Centrepoint Freeholds. 124

In Centrepoint Freeholds, 125 the majority found that, as a result of s 79 of the Judiciary Act, s 79A of the Victorian Supreme Court Act did apply to the Federal Court sitting in Victoria. They were able to read s 79A, which provided:

(1) The Judge upon application shall in all actions for the recovery of debt or damages give damages in the nature of interest . . . from the commencement of the action until the entry of judgment ...

in conjunction with s 60 which provided:

The several rules of law enacted by . . . this Act shall unless express provision is otherwise made be in force and receive effect in all courts whatsoever so far as the matters to which such rules relate shall be respectively cognizable by such courts.

as being wide enough to apply to the Federal Court despite what Mason J had said, obiter, in the Australian National Airlines Commission case 126 on s 94 of the Supreme Court Act, 1970 (NSW).

If the majority decision in Centrepoint Freeholds 127 is correct then s 94 of the New South Wales Supreme Court Act 1970 should apply to federal courts sitting in New South Wales. The distinction between the relevant provisions in the two Acts is one of form rather than substance. While the Victorian Act has s 79A which provides for the award of interest, and s 60, the heading to which is "Rules of law to apply to inferior Courts" to ensure that interest may be awarded also in the County and Magistrates courts, 128 the New South Wales Act has no section which is equivalent of s 60. That is not surprising, however, as each of the inferior courts in New South Wales has the power to award interest by virtue of its own Act. 129 There is no need, therefore, for a section providing for the application in inferior courts of the rules enacted with respect to the Supreme Court.

120 (1985) 61 ALR 557 at 577 to 580. 121 (1975) 6 ALR 433. 122 (1984) 6 FCR 133. 123 See Neilsen v Hempston (1986) 65 ALR 302 and Schepis v Elders (1986) 70 ALR 729. 124 (1984) 6 FCR 133. 125 /d. 126 (1975) 49 AUR 338, 340. 127 (1984) 6 FCR 133. 128 Also, for example, the County Court Act 1958 (Vic) provides in sub-s 78(6): "In any case not

provided for in this Act . . . the general principles of practice and the rules observed in the Supreme Court may be adopted and applied to any action or matter with such modifications as the different constitutions of the two courts may render necessary at the discretion of the judge before whom the action or matter is depending."

129 For example, s 83A of the District Court Act, 1973 provides: "(I) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) the Court may order that there shall be included, in the amount for which judgment is given, interest at such rate as it thinks fit . . . for the whole or any part of the period between the date when the cause of action arose and the date when judgment takes effect ... "


In Neilson v Hempston, 130 s 72 of the Common Law Practice Act 1867-1981 (Qld) was in issue. It provided:

In any proceedings in respect of a cause of action that arises . . . in a court of record for the recovery of money (including proceedings for debt, damages or the value of goods), the court may order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit . . .

Mr Justice Pincus held that the expression "a court of record" in the Queensland legislation meant a Queensland court of record but that that did not prevent s 79 of the Judiciary Act from making it applicable in cases in the Federal Court. As the statute applied to Queensland couts of record generally the problem referred to by Mason J in Australian National Airlines Commission 131

did not arise. In Schepis and Others v Elders /XL Ltd132 Pincus J again had to deal with the

issue of pre-judgment interest - this time in Western Australia. The provision in question was s 32 of the Western Australian Supreme Court Act 1935 which provided for interest up to judgment and applied to "the Court", which was defined as meaning the Supreme Court of Western Australia. Under s 34 of the same Act, "[t]he several rules of law enacted and declared by this Act, shall be in force and take effect in all courts whatsoever in Western Australia so far as the matters to which such rules were laid shall be respectively cognisable by such courts." Mr Justice Pincus referred to the majority's proposition in Centre point Freeholds 133 that the question, whether s 79 of the Judiciary Act operated to make the interest provision applicable in the Federal Court, depended on whether the State statute used expressions wide enough to apply to the Federal Court. He disagreed with that proposition. In his view no State statute, by its terms, would be wide enough to apply to the Federal Court: 134

[T]ypically such State statutes will be so drawn as to apply expressly to State courts only, but some such statutes do not mention courts at all. But even where they do not, they set out to regulate procedure in State courts only. It is s 79 of the Judiciary Act which makes them appliable here, and where the State law (whether procedural or otherwise) applies to State courts generally, s 79 appears to require that it be treated as binding in proceedings in this court.

The only shortcoming in the statement of principle is that it does not go quite far enough. Why should the applicability or effect of s 79 depend on whether the statute mentions a particular State court or all State courts or no courts, since any such mention, or lack of it, is likely to be entirely fortuitous and dependent only on that State's legislative scheme for governing procedure in its courts. It is submitted that the plain meaning of s 79 is consistent with the intention of the legislature which enacted it and that there is no acceptable reason for restricting its effect. 135 As Mason J said in John Robertson: 136

130 (1986) 65 ALR 302. 131 Supra n 126. 132 (1986) 70 ALR 729. 133 (1984) 6 FCR 133. 134 (1986) 70 ALR 729, 730. See also Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd and

Others (1987) 71 ALR 125. 135 Huddart Parker Ltd v The Ship "Mill Hill" (1950) 81 CLR 502, 507 per Dixon J; Pedersen v

Young (1964) 110 CLR 162, 168 per Menzies J. 136 (1973) 129 CLR 65, 95, emphasis added.


To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally.

The possibility of a section referring to a specific State court being applicable, by virtue of s 79, to a federal court exercising jurisdiction in that State was not excluded by Mason J because there was no reason to do so.

5 LAW WHICH SHOULD BE APPLIED BY FEDERAL COURTS

Despite the efforts of some Federal Court judges to distinguish inconsistent decisions in order to maintain a facade of consistency, it can be seen that there is disagreement within the Court as to the effect of s 79. Further confusion is demonstrated by the decision in Seymour v Southern Districts Video Pty Ltd. 137

The respondent was the subject of a creditors' voluntary winding up, and the question arose whether sub-s 401(2) of the Companies (Western Australia) Code 138 had any application to proceedings in the Federal Court for damages pursuant to s 82 of the Trade Practices Act 1974. The word "Court" used in the section was defined to mean "the Supreme Court of Western Australia or a Judge of that Court".

Mr Justice Toohey, following L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (No 2) 139 and John Robertson v Ferguson Transformers, 140 (he referred especially to Mason J's judgment in the latter) decided that sub-s 401(2) of the Code was a law relating to procedure and, as a result of s 79 of the Judiciary Act, was binding on courts exercising federal jurisdiction. That meant that the leave of the Supreme Court was required to commence proceedings in the Federal Court or to continue such proceedings.

Both Smithers J in Grollo 141 and Toohey J would seem to be correct in their conclusions that s 79 operated so as to make provisions of State companies legislation applicable to proceedings in the Federal Court even though those provisions referred specifically to the Supreme Court in each case. 142 It is interesting, however, that they did not gives 79 full effect. It would seem that to satisfy "the clear requirement that State laws . . . are to be applied in federal jurisdiction143 not only must it be found that procedural provisions, referring specifically to a State court or courts, should apply to actions in the Federal Court but also that when the section provides for the seeking of leave of "the Court" that leave should be sought of the federal court in which the action will take place

137 (1985) 59 ALR 154. 138 Sub-section 40(2) states: "After the commencement of the winding up, no action or other civil

proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes."

139 (1980) 47 FLR 44. 140 (1973) 129 CLR 65. 141 (1980) 47 FLR 44. 142 In Grollo (1980) 47 FLR 44. Sub-s 263(2) of the Companies Act 1961 (Vic) referred to "the

Court" which appears to have been taken to mean the Supreme Court of Victoria. 143 John Robertson v Ferguson Transformers (1973) 129 CLR 65, 95 per Mason J.


- which may not be the Supreme Court. That would be consistent with the approach taken by Pincus J in Neilsen v Hempston 144 where, as a result of the application of s 79 of the Judiciary Act, he interpreted the phrase "the court may order that there shall be included in the sum for which judgment is given interest . . . " as meaning that the Federal Court might so order; and similarly in Schepis v Elders /XL Ltd. 145

6 CONCLUSION

The foregoing pages have shown the added difficulties that have arisen with the application, or lack of it, of s 79 of the Judiciary Act, given the recent developments both in and touching the exercise of federal jurisdiction. The institution of the High Court's remittal procedure and, even more so, the crossvesting regime have highlighted the need for more uniformity between the procedural and, if necessary, substantive rules in each State and Territory. Problems will arise as long as there are differences in the rules with respect to the limitation of actions, to prejudgment interest on damages, or to the discount rate applied to awards of damages. Once the cross-vesting of jurisdiction regime is in force, a plaintiff is likely to bring his action in the jurisdiction which he considers will give him the best result. While the doctrine of forum non-conveniens may, to some extent, temper the more extreme manifestations of forum shopping, the fact that the plaintiff stands to gain more, financially, from proceeding in one jurisdiction rather than another should not of itself be considered an illegitimate advantage. If the courts accept that approach, one consequence- assuming that a substantial connection can be shown between the action and two or more jurisdictions - will be that those jurisdictions with the most generous provisions are likely to experience an increase in litigation.

As long as the rules in different jurisdictions remain different, it is essential that the effect of s 79 is finally settled so that there is no doubt as to whether or not the provisions of State statutes, particularly those which refer specifically to a particular State court, apply also in a federal court sitting in that State. The topic, while undoubtedly still "tangled and technical", would appear also to be tractable - if treated in the manner suggested above.

144 (1986) 65 ALR 302. 145 (1986) 70 ALR 729.

Documents

SECTION 79 JUDICIARY ACT 1903 - HOW WIDELY DOES …BY CA TRION A COOK* INTRODUCTION A re-examination of the application and effect of s 79 of the Judiciary Act 1903 (Cth) - that "tangled