FEDERAL COURT OF AUSTRALIA Ualesi v Expeditors International Pty Ltd [2004] FCA 1705 PRACTICE AND PROCEDURE – application to cross-vest Local Court of New South Wales proceedings to Federal Court of Australia – application for leave to serve subpoenas in New Zealand – no basis or foundation in law for application to cross-vest – no jurisdiction to grant leave to serve subpoenas in New Zealand until after issue thereof by Local Court – both applications dismissed Trade Practices Act 1974 (Cth) ('TP Act') Judiciary Act 1903 (Cth Evidence and Procedure (New Zealand) Act 1994 (Cth) Quarantine Act 1908 (Cth) Customs Act 1901 (Cth) Civil Aviation (Carriers Liability) Act 1959 (Cth) Churcher V Edwardstown Carpets (reg) (1993) 11 ACLC 393 Putnin v Jenka Pty Ltd (1994) 12 ACLC 282 Queensland Steel and Sheet Pty Ltd v Clout (1994) 12 ACLC 444 Bell Group Ltd v Westpac Banking Corp [2000] FCA 439 Bluett v Fadden (1956) 56 SR (NSW) 254 R v Donyadideh & Ors (1993) 115 ACTR 1 ANASTASIA UALESI AND PETI J UALESI T/AS AUSTRALIAN EMPIRE IMPORTS v EXPEDITORS INTERNATIONAL PTY LTD NSD 1511 OF 2004 CONTI J 20 DECEMBER 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1511 OF 2004 BETWEEN: ANASTASIA UALESI & PETI J UALESI T/AS AUSTRALIAN EMPIRE IMPORTS APPLICANTS AND: EXPEDITORS INTERNATIONAL PTY LTD RESPONDENT JUDGE: CONTI J DATE OF ORDER: 20 DECEMBER 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Application dismissed. 2. Submissions as to whether indemnity costs should be ordered against the applicants be provided in writing within 14 days. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1511 OF 2004 BETWEEN: ANASTASIA UALESI & PETI J UALESI T/AS AUSTRALIAN EMPIRE IMPORTS APPLICANTS AND: EXPEDITORS INTERNATIONAL PTY LTD RESPONDENT JUDGE: CONTI J DATE: 20 DECEMBER 2004 PLACE: SYDNEY REASONS FOR JUDGMENT Background to the application as presented by the Applicants 1 This is an application filed on 28 September 2004 for the transfer of proceedings pending in the Local Court of New South Wales to this Court, pursuant to s 86A(4) of the Trade Practices Act 1974 (Cth) ('TP Act') and s 39B of the Judiciary Act 1903 (Cth), and further or in the alternative, for leave from this Court, pursuant to s 9 of the Evidence and Procedure (New Zealand) Act 1994 (Cth) ('E & P Act'), to serve certain subpoenas in New Zealand. The application is opposed by the respondent and came before me as duty judge as a matter of urgency because of the unavailability of the docket judge, and because dates had been earlier set down for the final hearing of the dispute in the Local Court of New South Wales on 20-21 January 2005. 2 The proceedings in the Local Court were commenced on 23 April 2003 by the respondent as plaintiff against the applicants as defendants, the subject matter of the claim being $11,923.17 for moneys owing for services rendered concerning the carriage, customs clearance and delivery of consignments of goods from New Zealand to Australia. Altogether six invoices were issued by the respondent to the applicants from 17 December 2002 to 10 January 2003 which made up that total sum. On 25 August 2003, the applicant filed in the Local Court grounds of defence to the respondent's liquidated claim, and on 13 October 2003, the applicants filed notice of cross-claim. The cross-claim relates to loss of profits for the late delivery of shipments of goods and for arrival of goods in other than 'good condition' and for damages for misrepresentation relating to a consignment of corned beef. For what it may presently matter, both the grounds of defence and cross-claim are confusingly pleaded. Later on 7 July 2004, the respondent filed an amended statement of claim in the Local Court, to which the applicants responded with amended grounds of defence. 3 It is apparent from the extensive written submissions of the applicants that the issues involved in the Local Court proceedings arise out of the same facts and circumstances as would be litigated if the same are to be transferred to this Court pursuant to the present application. The dispute between the parties is thus of a commercial kind arising out of steps put in place by the respondent for the import by the applicants of goods from New Zealand to Australia. 4 Until recently, the applicants have been legally represented by their daughter Ms Paras, a qualified lawyer, who described herself as 'a partner in the applicants business in charge of its legal division'. At the final hearing of the proceedings in this Court, the applicants were represented by a solicitor Mr Law. Mr PT Russell, Counsel for the respondent, had earlier objected to Ms Paras' retainer as solicitor for the applicants. Written material emanating from the Law Society of NSW was produced in support of that objection (see affidavit of Brennan Coleman sworn 29 November 2004 pars 41 to 52) and a Notice of Change of Solicitor was subsequently filed on 2 December 2004. 5 The applicants purportedly outlined by written submissions the nature of the disputes between the parties, being submissions which I have found to be confusing and difficult to comprehend, at least in terms of legal significance: '3. BRIEF BACKGROUND OF THE ROLE OF THE PARTIES 3.1 The Applicant is an importer/distributor. The Respondent is an international freight forwarder/customs broker. Both entities are businesses registered in Australia. 3.2 From 2001, the Respondent was appointed to act as a customs broker in Australia for the Applicant from time to time in relation to certain imports from overseas. 3.3 The Applicants' overseas sellers contracted with third parties for the transportation of certain consignments to Australia. 3.4 The Respondent's agents also sub-contracted the carriage and handling of goods consigned to the Applicant to third parties incorporated and located overseas. 3.5 These third party consolidators were, for the purposes of international conventions, the contracting parties with the actual carriers of the Applicant's goods. They were named as consignors and consignees on the relevant master bills of lading and master air waybills. 3.6 The Applicants were undisclosed principals in relation to these master bills of lading and air waybills. 4. THE RESPONDENT'S LOCAL COURT CLAIM 4.1 The Respondent commenced legal proceedings by way of Statement of Liquidated Claim in the Local Court of New South Wales (Downing Centre) on 23 April 2003 alleging that the Applicants were indebted to it in the sum of $11,923.17. The Respondent alleged that its right to recover the sums allegedly due was founded in the provisions of a document known as the 'Expeditors International Pty Limited Terms and Conditions for Distribution Service'. 4.2 On 25 August 2003, the Applicants filed defences to the Respondent's claim denying that they entered into an agreement for Distribution Services and denying they were indebted to the Respondent as alleged. 4.3 On 7 July 2004, the Respondent filed an Amended Statement of Claim alleging that the Applicants are obliged to Indemnify it pursuant to the Expeditors International Terms and Conditions which allegedly was incorporated into the commercial relations when an application for credit was signed on behalf of the Applicants in November 2001. 4.4 The matters raised in relation to the incorporation of terms and conditions in circumstances as pleaded by the Respondent, are analogous to a recent case decided by the Court of Appeal and which is currently on appeal to the High Court: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2003] NSWCA 75 (decided on 11 April 2003) [sic – judgment was delivered by the High Court in this matter on 11 November 2004: see Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52]. 4.5 The Applicants have filed an amended defence pleading an estoppel and challenging the application and the Respondent's interpretation of the Expeditor's Terms and Conditions (ANNEX A). 5. THE LOCAL COURT CROSS-CLAIM 5.1 On 13 October 2003, the Applicants filed a cross-claim against the Respondent claiming compensation for damage and delay to four (4) consignments of goods which were carried by sea from New Zealand to Australia. 5.2 The Applicants also plead a claim alleging misleading and deceptive conduct pursuant to section 52 of the Trade Practices Act. They seek damages under section 82 and 87 of the Act in relation to certain representations by the Respondent leading to the importation of a consignment of canned corned beef. This consignment was denied entry into Australia because it was handled on New Zealand premises which were not approved or licensed by the Ministry of Agriculture and Fisheries of New Zealand for handling meat products. 5.3 Further it is alleged that the Respondent and its agents in New Zealand exported the consignment prior to obtaining the 'proper' export documentation thus contravening the New Zealand Customs Act. This in turn, disqualified and prevented the Applicants from obtaining any retrospective approval for importation of the consignment into Australia. 5.4 The Respondents filed a defence making 'blanket' denials to the allegations pleaded in the Applicants Cross-Claim. 5.5 In the course of these proceedings it has become apparent that the Respondent intends to rely on the provisions of house bills of lading for its defence to the cross-claim, even though these bills are undated, unsigned and were surrendered in New Zealand. Effectively the Applicants deny they are bound by the terms of the bills of lading because they were not given the opportunity to contract prior to the goods being transported. 5.6 Flowing from that argument it is also in issue whether or not the Respondent will be able to rely on the Himalayan Clauses contained on the master documents. 5.7 It is envisaged that in the course of the hearing, arguments similar to those advanced in the recent High Court case of Siemens v Schenker [2004] HCA 11 and the role of house bills of lading will be advanced by the Applicants. 5.8 Another issue that will require determination is the method of calculating damages where the carrier does not declare the value of goods or the nature of cargo on the face of bills of lading. This is a matter which received the attention of the Full Court of the Federal Court in El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA [2004] FCAFC 202 which is currently on appeal to the High Court.' 6 Much of the applicants' foregoing description of the background to this dispute is highly contentious from the respondent's perspective. The respondent pointed out that the cross-claim relates to four consignments of cargo said to have been delayed in point of time for arrival and in any event to have been damaged. Three of those consignments are said by the respondent to be unrelated to the invoices the subject of the statement of claim filed in the Local Court and the fourth to corned beef which was refused entry by Australian Customs. It is apparently that consignment for which the applicants make claim under the TP Act, said by the respondent not yet to have been particularised. Be all that as it may, the above summary put forward by the applicants falls well short of alleging in a comprehensible manner any material facts in comprehensive form of the circumstances said to give rise to the purported defence and cross-claim of the applicants. 7 Affidavit evidence tendered by the respondent's solicitor traced in detail the events that have occurred since the respondent's institution of the Local Court proceedings. That material reflects unusual conduct on the part of Ms Paras of the Local Court proceedings on behalf of her parents, being of course the applicants in the proceedings in this Court, being conduct of no apparent materiality to the present cross-vesting application. I should perhaps observe that Magistrate Latham dismissed one application of the applicants made to the Local Court and ordered the applicants to pay the respondent's costs of $1000, which apparently however remains unpaid. The case of the applicants in this Court 8 The applicants seek the transfer of the whole of the proceedings on foot in the Local Court to the Federal Court upon the purported footing that the Local Court does not have power to deal with the current dispute between the parties, and in particularly the matters raised in the applicants' cross-claim, for reasons which, to venture an understatement on my part, are at least largely confusing, if not in parts incomprehensible. Those reasons so advanced by the applicants in purported support of this present application for transfer of the Local Court proceedings to this Court are reproduced below, mainly by way of literal citation, because of the largely impossible task of summarising the purported significance thereof, at least for the purposes of the present application - (a) 'The cross-claim proceedings arise out of carriage of goods by sea between New Zealand and Australia.' 'This will involve a determination of disputed questions relating to the contractual terms and the application and effect of international conventions.' In particular, it is said that the Court will have to consider certain international rules such as the '1924 Brussels International Convention for the Unification of Certain Rules relating to Bills of Lading' and the Carriage of Goods Act 1991 (Cth) which 'does not expressly or impliedly confer jurisdiction on State Courts as is the case with other federal legislation which preserves the power of State Courts'. As a result, it is further said that 'inferior courts such as the Local Court of New South Wales are not the type of courts envisaged by the special provisions reserving the power of state courts in Commonwealth legislation particularly where the legislature is exercising its powers in relation to treaties under section 51 (xxix) of the Constitution'. (b) 'The Respondent's evidence filed in the [Local Court] proceedings suggests that it intends to rely on the provisions of the terms and conditions reproduced on the reverse side of their house bills of lading.' Such terms were said to 'incorporate the provisions of the Carriage of Goods by Sea Act of the USA and by default those of Canada'. 'Further the Court will be required to determine the effect of section 11(2) of the Carriage of Goods by Sea Act (Cth) which renders void any provision in carriage documents which have the effect of precluding or limiting the jurisdiction of a court of the commonwealth or State in respect of a bill of lading.' 'For the sake of consistency and in the interests of justice these proceedings should be referred to the Federal Court for final determination'. (c) 'The Applicants need to issue subpoenas for production in New Zealand to verify or contradict the evidence filed on behalf of the Respondent' and it 'may also be necessary to compel the attendance of witnesses located in New Zealand.' 'If this matter is not transferred to the Federal Court the Applicants (and perhaps the Respondents) will need to return to this Honourable Court for multiple applications seeking leave to issue subpoenas for evidence and production under the Evidence and Procedure (New Zealand) Act 1994.' 'This will inevitably lead to higher costs for the parties in the long run than would be the case if the proceedings were transferred now'. (d) 'The Respondent in its Statement of Claim [in the Local Court] is alleging that the Applicants failed to indemnify it in relation to contracts for the carriage of goods by sea and air'. This determination 'will depend on the application and interpretation of the Vienna Sales Convention, the application of the Warsaw Convention as amended at the Hague (for carriage of goods by air) and the Hague-Visby Rules (for the carriage of goods by sea).' 'The Applicants will be leading evidence obtained from the Respondent's records that the Respondent billed the Applicant for costs incurred overseas simply because it did not wish to pursue debt recovery with third parties.' 'This raises an issue of equitable estoppel. The Local Court does not have the equitable jurisdiction and therefore, the Applicants will be prejudiced if this matter is not referred to the Federal Court'. (e) 'Even though, the Respondent has by conduct acknowledged that the Applicants entered into contracts on a CIF basis (confirmed by the Customs Declarations filed by the Respondent with the Australian Customs Service) it continues to pursue the Applicants for carriage, freight and insurance. The Court seized of this matter will need to determine the meaning of the CIF term in the INCOTERMS published by the International Chamber of Commerce and used extensively around the world in international trade. This raises an important matter which will have an effect on international trade and therefore, it is submitted that the Federal Court is the proper forum for such a determination'. (f) 'Under the legislative provisions of section 74 of the Local Court (Civil Claims) Act 1970, the parties are not able to remove these proceedings into the Supreme Court. Therefore, the Supreme Court cannot accept this matter from the Local Court of NSW'. (g) 'The Local Court and the Federal Court do not share concurrent federal jurisdiction in matters involving the carriage of goods by sea, quarantine matters, customs matters and other matters arising under international treaties or conventions' for the following reasons: (i) 'Even though section 86B(1) [of the Quarantine Act 1908 (Cth)] preserves the power of state courts invested with federal jurisdiction to deal with matters arising under this Act, the Local Court of NSW is not a court vested with federal jurisdiction for the purposes of the Quarantine Act'; (ii) 'Even though section 227A(1) [of the Customs Act 1901 (Cth)] preserves the power of state courts invested with federal jurisdiction to deal with matters arising under this Act, the Local Court is not a court vested with federal jurisdiction'; (iii) 'Even though section 19 [of the Civil Aviation (Carriers Liability) Act 1959 (Cth)] preserves the jurisdiction of state courts by providing that for the purposes of section 38 of the Judiciary Act, an action under the Convention shall not be deemed to be a matter arising directly under a treaty, there is real doubt this aspect of the claim falls within the jurisdiction of the Local Court'; and (iv) 'The Carriage of Goods by Sea Act 1991 does not reserve the power of state courts. Notable section 3 lists one of its objectives 'to introduce a regime of marine cargo liability that (b) is compatible with arrangements existing in countries that are major trading partners of Australia and (c) takes into account developments within the United Nations in relation to marine cargo liability regimes'. This is a matter arising under a treaty and falls within the original jurisdiction of the Federal court. (h) 'The Local Court is an in inferior court of record created by statute and has no powers, jurisdiction or authorities other than those authorized (sic) by statute.' As such, '[t]he Local Court does not have equitable jurisdiction or power to administer rules of equity such as estoppel.' 'Even if the Local Court has some power under section 39(2) of the Judiciary Act 1903 to exercise federal jurisdiction under section 86 of the Trade Practices Act, that power is limited by jurisdictional limits'. As a result, '[t]he Local Court does not have jurisdiction to hear and determine the entire dispute between the parties: Churcher V Edwardstown Carpets (reg) (1993) 11 ACLC 393, Putnin v Jenka Pty Ltd (1994) 12 ACLC 282 and Queensland Steel and Sheet Pty Ltd v Clout (1994) 12 ACLC 444 referred to in Bell Group Ltd v Westpac Banking Corp [2000] FCA 439, paragraph 92-93. 'In contrast, the Federal Court has original jurisdiction under all Commonwealth Laws which contain powers to decide a case given to the Court pursuant to or by Chapter III of the Constitution', 'is a superior court of record and a court of equity' and 'has specialist and experienced judges who can deal with types of issues which are likely to arise in these proceedings'. (i) The applicants will be prejudiced in prosecuting their cross-claim and defending the respondent's substantive claim in the Local Court as 'once documents are produced by parties in New Zealand in response to the Applicants' subpoenas certain witnesses will be required to give evidence and be cross examined by video links or telephone under Part 4 of the Evidence and Procedure (New Zealand) Act 1994', 'the Local Court [not having] this power to receive evidence by video link.' 9 The applicants further submitted in writing that the transfer of proceedings to the Federal Court would not prejudice the respondent, and the absence of transfer would prejudice the applicants, for reasons which must necessarily be again extracted below: '13. PREJUDICE TO APPLICANT IF PROCEEDINGS NOT TRANSFERRED 13.1 In summary (a) the Applicants will be forced to make multiple applications for issuing subpoenas in New Zealand as documents are produced – this will increase costs; (b) the interests of the parties, costs and efficiency make it more appropriate that the Federal Court determine these proceedings than the Local Court – where jurisdiction will still be an issue; (c) the risks of wasted time, resources and expenditure can be removed by a transfer to the Federal Court which clearly has 'original' jurisdiction to hear and determine all claims on both sides; (d) there has been no delay on the part of the Applicants in bringing this application. The respondents amended their Statement of claim on 7 July 2004 and filed their evidence in support in August after the applicants had filed a Notice of Motion seeking dismissal of the claim for want of prosecution; (e) Further it is in the interests of justice that this matter be transferred to the Federal Court. The Applicants will be precluded from calling any witnesses located in New Zealand to give evidence viva voce if the proceedings are not transferred to the Federal Court; (f) The applicants will be precluded from having their matter determined by a specialist court experienced in dealing with the matters arising in these proceedings. This will lead to higher costs because of the Local Court's inexperience in dealing with international transport disputes and matters arising in maritime law; (g) There is a greater possibility that an aggrieved party will appeal the decision of the Local Court, particularly since the respondent is an international freight forwarder. 13.2 Therefore, it is submitted that by transferring the matter to the Federal Court there is the added benefit of lessening the risk of there being further resources expended on jurisdictional issues and questions and repeated applications to issue subpoenas for productions or to give evidence under the Evidence and Procedure (New Zealand) Act. 14. PREJUDICE TO RESPONDENT IF PROCEEDINGS ARE TRANSFERRED 14.1 There is no prejudice to the respondent if the proceedings are transferred. 14.2 In fact, the respondent itself has indicated that it too wishes to serve subpoenas in New Zealand. (ANNEX D). No doubt it will also desire to have the option of cross examining witnesses called to give evidence on behalf of the applicants.' Despite the width and purported particularity of the foregoing submissions, no details were provided of the generality of those broadly framed allegations. As to alleged absence of prejudice to the respondent, it suffices for me to point out that the respondent has the benefit of a hearing in the Local Court due to commence in about one month's time. The case of the respondent 10 In response to the lengthy submissions prepared by the applicant, the respondent stated simply and precisely that 'this is not a case appropriate for the exercise of the power under s 86A of the TP Act because: (a) the Local Court proceedings were commenced on 23 April 2003; they have been set down for hearing for 2 days on 20 and 21 January 2005; the parties have filed and served their evidence for that hearing; (b) subject to the submissions below, any subpoena that the applicants wish to have issued by the Local Court may, in appropriate circumstances, be served in New Zealand pursuant to leave under s 9 of the [E & P Act]; (c) there is no issue, matter or remedy with which the Federal Court is or may be seized or able to grant to the exclusion of the Local Court; (d) the respondent's claim of $11,923.17 and the applicants' cross-claim of $12,006.20 in the Local Court proceedings are small and barely exceed the Small Claims jurisdiction of the Local Court ($10.000); (e) there will be obvious delay, waste of costs and increase of costs to the parties in the event that the Local Court proceedings are transferred to the Federal Court, (cf Trade Practices Commission v Port Adelaide Wool Company Pty L td & Anor, 13 October 1995, FCA (Branson J) unreported; Australian Competition & Consumer Commission v Glendale Chemical Products Pty Ltd, 17 February 1998, FCA (Emmet J) unreported; Cytel Pty Ltd v Mastech Asia Pacific Pty Ltd [2004] 1464 (11 November 2004) (Bennett J))'. 11 The cases cited by the respondent deal with situations in which the Court's power was exercised to transfer proceedings from an inferior state court to the Federal Court. It should, however, be noted that in all three situations the transfer occurred because related proceedings were already on foot in the Federal Court. 12 I have found it necessary or appropriate to reproduce in detail the applicants' written submissions in order to illustrate not just the confusion of thought which tends to invade much of the same, but also to illustrate the practical wisdom of the Law Society's rule to the effect inter alia that legally qualified persons should be disqualified from representing a corporation in court proceedings, in circumstances such as distilled in the Society correspondence tendered in evidence. There is always potential for conflict between a qualified lawyer's duty to a corporation in which he or she holds office, whether de jure or de facto, and the person's duty to the Court in the context of litigation involving that corporation as a party. I should record nevertheless that Mr Law, the solicitor belatedly retained by the applicants after I upheld the respondent's objection to her further representation of the applicants, conducted the applicants' case in an entirely appropriate manner. Within and subject to the apparent framework of his instructions, Mr Law sought to assist the Court on behalf of the applicants in relation to issue as to the transfer of the proceedings from the Local Court to this Court, as sought by the applicants pursuant to s 86A(4) of the TP Act, and to the further order additionally sought by the applicants pursuant to s 9 of the E & P Actas to service of subpoenas in New Zealand. The proceedings conducted before me on 17 December 2004 13 At the hearing of the proceedings conducted before me on 17 December 2004 in which Mr Law appeared in Court for the first time for the applicants, the issues between the parties became more definitive than as previously presented confusingly by Ms Paras. Mr Law explained that '[t]he question is the cross-claims and the cross-claims are for unliquidated damages'. Mr Law accepted in effect that if the cross-claims were not shown to be framed, such as to demonstrate viable causes of action, it would be at least more difficult for the applicants to resist the entry of judgment in favour of the respondent in the Local Court. 14 The next matter I should record is Mr Law's frank indication to the Court that the calculation of unliquidated damages the subject of the cross-claim had not yet been undertaken. Mr Law put forward the suggestion that the hearing dates for the Local Court should be vacated, irrespective of the outcome of the present application to the Federal Court, being a course which was said not to prejudice either party. Any such vacation was of course entirely out of the question so far as the respondent was concerned, and understandably so, in the view of the time, effort and cost already expended in the Local Court. 15 Thereafter discussion took place before me in relation to the applicants' requirement to serve subpoenas in New Zealand, apparently on companies unrelated to the respondent. Counsel for the respondent disputed the contention of the applicants, based upon correspondence between Ms Paras and the Local Court (shortly to be extracted), that subpoenas to produce documents could not be effectively issued by the Local Court for service upon a New Zealand resident corporate or government body (or natural person). However I was referred by the respondent to Order 69A of the Federal Court Rules headed Trans-Tasman Proceedings, which provides, as far as is material, as follows: 'Leave to serve a subpoena 4(1) Leave to serve a subpoena in New Zealand must be sought by filing: (a) if the subpoena was issued by the Court – a motion in that proceeding; or (b) if the subpoena was issued by another court – an originating motion to be heard ex parte. (2) The motion must be supported by an affidavit annexing a copy of the subpoena and setting out: (Here follows seven segments of detail to be completed) (3) Before granting leave under the [Evidence and Procedure (New Zealand) Act 1994 to serve a subpoena, the Court may require the applicant for leave to undertake to meet the expenses reasonably incurred by the person named, not being a party to the proceedings, in complying with the subpoena, if those expenses exceed the allowances and travelling expenses to be provided to that person at the time of serve of the subpoena. …' There was no evidence tendered as to the applicants' willingness or capacity to meet any such expenses, much less as to the precise relevance of the documents sought by the applicants to any issue arising in the Local Court proceedings. 16 Mr Law next sought to read in the present context an affidavit of 25 September 2004 made by Ms Paras, which recorded the steps taken in the proceedings in the Local Court to date. In summary, that affidavit pointed inter alia to the following matters, which I should record for completeness: (i) the commencement by the respondent of the Local Court proceedings on 23 April 2003; (ii) the filing by the applicants of cross-claims in relation to four consignments of cargo transported from New Zealand to Australia which were damaged and delayed; (iii) the intended pursuit by the applicants of the subject proceedings in this Court for relief upon the combined footing of ss 52, 82 and 87 of the TP Act, involving the following claims: 'A. AMENDED DETAILS OF CLAIM On the grounds stated in the accompanying affidavit of Sophia Paras and filed herein, the Applicant claims: 1. An order that the current proceedings between the parties pending in the Local Court of New South Wales (Downing Centre) File no: 4177 of 2003 be transferred to the Federal Court of Australia. 2. Further and or in the alternative, that the Applicants be given leave pursuant to section 9 of the Evidence And Procedure (New Zealand) Act 1994 to serve subpoenas in New Zealand on the Ministry of Agriculture and Fisheries, Expeditors International (NZ) Limited, Kiwi Bond Stores Limited, Hemisphere Freight (NZ) Limited, McCullum Industries Limited and the Customs Authority of New Zealand. 3. An order that the Respondent pay the Applicant's costs of this Application. 4. Any other order the Court deems fit. B. CLAIM FOR INTERLOCUTORY RELIEF AND the applicant claims by way of interlocutory relief: 1. An ex-parte order that the proceedings in the Local court of New South Wales (Downing Centre file no 4177 of 2003 be stayed pending the determination of this Application. Dated: 28 September 2004'; and (iv) the affidavit of Ms Paras in support of those proceedings in this Court, which set out a number of the procedural matters and events which had occurred, none of which appear to have been directed to any substantive counterclaim or defence as distinct from procedural or adjectival matters. 17 Finally in the context of its conduct of its present interlocutory applications, the applicants tendered a letter of 24 November 2004 from Ms Paras, on the letterhead of AEI Legal, addressed to the Local Court, containing the following request for advice: '… At present, there is an application before the Federal Court of Australia seeking orders inter alia, that leave be granted to the defendants to issue subpoenas for production in New Zealand under the Evidence and Procedure (NZ) Act ("the Act"). This matter is part heard and has been re-listed for tomorrow morning. His Honour Conti J enquired as to whether or not the Local Court had power to issue the subpoenas prior to being granted leave to serve those subpoenas by the Federal Court. I have examined the Act and the Local Court Rules and my impression (although I may very well be wrong) is that leave must be granted from the Federal Court prior to the subpoenas being issued. This was confirmed yesterday by the Registry. In addition, the defendants will require the attendance of witness who are resident in New Zealand to give evidence at the hearing via video link. Once again, I have checked the Rules and have not found any power which would allow the Local Court to take evidence from witness in New Zealand. I would be most grateful for your learned advice in relation to the above matters.' 18 I should for completeness record the Local Court's response, dated 13 December 2004, which will later be further discussed: 'The Registrar… has indicated that he can find no reference in the Service and Execution of Process Act 1992, nor in any other Act which would give the Local Court power to issue a Subpoena, whether for Evidence or for Production, which was to be served on a party or parties in New Zealand. The question of which Court has the power to issue and serve subpoenae in New Zealand should be addressed to the Federal Court of Australia, as the matter is before that Court. The question of service on a jurisdiction outside of Australia does not fall within the powers of the Local Court of New South Wales.' 19 In response to the applicants' principal application, that is, for the Local Court proceedings to be transferred to the Federal Court, counsel for the respondent demonstrated seriatim what he submitted to be misunderstandings of legal principle, inherent in that application. I would summarise those submissions of counsel for the respondent as follows: (i) the applicants have not tendered any Federal Court pleading, nor have made any effective or viable submissions, as to how any one or more of the various Commonwealth statutes referred to by the applicants bear directly or indirectly upon the processes purportedly pursued or proposed to be pursued by the applicants in the context of this litigious dispute; (ii) the provisions of s 38 of the Judiciary Act 1903 (Cth) would only prevent the Local Court from exercising jurisdiction in matters arising directly (the respondent's emphasis) under a treaty; where the terms of a treaty have been incorporated into a statute, the matter will be regarded as arising indirectly under that treaty, and therefore as falling within the concurrent jurisdiction of the High Court and at least of the State Courts (Bluett v Fadden (1956) 56 SR (NSW) 254 at 261-262); (iii) none of the matters or issues raised by the applicants could rightly be said to arise directly or indirectly under a treaty; (iv) Bluett was not followed by Miles CJ in R v Donyadideh & Ors (1993) 115 ACTR 1, where a narrower approach was adopted to the meaning of 'matters arising under a treaty in s 75(i) of the Constitution', and where his Honour concluded that as the treaty created no rights, duties, obligations or liabilities justiciable in Australian law, and further that, notwithstanding the statute there in question required recourse to the treaty involved for the purposes of construction and interpretation, where the subject matter (being the prosecution for an offence) did not arise under that treaty but under a relevant statute; the facts involved in the present case were said by the respondent to be a fortiori, since potentially relevant statutes afforded to relevant treaties the force of law in Australia; I was referred in that context to s 8 of the Carriage of Goods by Sea Act 1959 (Cth) and to s 5 of the Sale of Goods Act (Vienna Convention) Act 1986 (NSW); that difference in judicial opinion was not considered necessary to be resolved by the High Court in re East; ex parte Nguyen (1998) 196 CLR 354, though Kirby J at [71-72] expressed a preference for the view adopted in Bluett; (v) in relation to the Hague-Visby Rules, and other rules of carriage of goods by sea referred to by the applicants, the same are enacted and given the force of law in Australia by the Carriage of Goods by Sea Act 1991 (Cth): see ss 8, 10, 13 and 15 thereof; those rules could not be described as arising under any treaty, but rather have the force of law by virtue of statute; (vi) similarly the Warsaw Convention as amended at the Hague (for carriage of goods by air) is enacted and given force of law in Australia by the abovementioned provisions of the Civil Aviation (Carriers' Liability) Act 1959 (Cth); that legislation, specifically by s 19 thereof, preserved the jurisdiction of State Courts, and therefore of the Local Court; (vii) The Vienna Sales Convention as referred to by the applicants is given force of law in New South Wales by the abovementioned provisions of the Sale of Goods (Vienna Convention) Act 1986 (NSW); and (viii) the effect of the various statutes and conventions above referred to is in any event to amend or imply terms in existing contracts, and does not operate to exclude the contractual substance of the respondent's existing liquidated claim from recourse to the jurisdiction of the Local Court; see in that regard s 10(1) of the abovementioned Carriage of Goods by Sea Act 1991 (Cth) and Article 2 of the Hague-Visby Rules in Schedule 1; see also Article 1 of Schedule 2 of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) and Article 1 of Schedule 1 of the Sale of Goods (Vienna Convention) Act 1986 (NSW). 20 For completeness on the subject of jurisdiction of the Local Court, I should add that it was further contended by counsel for the respondent (whose industry in research and assistance to the Court was of considerable assistance to the Court's considerations) that if, contrary to his submissions, there were matters arising directly under any treaty within s 38(a) of the Judiciary Act, that would be of no assistance to the applicants in their present application. The Federal Court is not conferred with jurisdiction in relation to such matters: see s 39B of the Judiciary Act. 21 I have reached the conclusion that the submissions of the respondent must be accepted, essentially for the reasons provided by the respondent's counsel which I have summarised above. It is unnecessary for me to provide reasons beyond the substance of those well researched submissions. It follows that the application of the applicants for the transfer of the Local Court proceedings to, and the determination by, the Federal Court of the issues therein purportedly arising in the Local Court, should be dismissed. 22 That leaves for determination the applicants' request for the issue of subpoenas by the Federal Court upon various persons or corporations or instruments of government in New Zealand. Those subpoenas relate to the production of a great deal of documentation from New Zealand bodies and entities. I put to one side the absence of what proposals the applicants would presumably intend to make to the proposed subpoenaed parties to meet the obviously not insignificant costs inherent in compliance with those subpoenas, concerning which the evidence of the applicants is silent. 23 The respondent submitted that the jurisdiction of the Federal Court (or a Supreme Court) to exercise the power conferred by s 9 of the E & P Act to issue a subpoena in New Zealand may only be enlivened once a subpoena has in fact been first issued by the court for which the documentation is required by the moving party, being in this case the Local Court. Section 9 of the E & P Act reads as follows: 'Subpoenas not to be served without leave (1) If the proceeding is in a superior court, the subpoena must not be served in New Zealand without the leave of a judge of the court. (2) If the proceeding is in an inferior court, the subpoena must not be served in New Zealand without the leave of a judge of: (a) in any case – the Federal Court of Australia; or (b) if the inferior court is a court of a particular State or Territory – the Supreme Court of that State or Territory. (3) Without limiting the matters that the judge may take into account in deciding whether to give leave, the judge is to take into account: (a) the significance of the evidence to be given, or the document or thing to be produced, by the person named; and (b) whether the evidence, document or thing could be obtained by other means without significantly greater expense, and with less inconvenience to the person named. (4) In giving leave, the judge: (a) is to impose a condition that the subpoena not be served after a specified day; and (b) may impose other conditions. (5) The judge must not give leave if the person named is less than 18 years old.' The Local Court is of course an 'inferior court' within the meaning of the E & P Act. 24 Counsel for the respondent further stated that there is nothing in s 72 of the Local Court (Civil Claims) Act 1970 (NSW) or Pt 24 of the Local Court (Civil Claims) Rules 1970 (NSW) which provides that 'the court cannot or will not issue a subpoena naming a party overseas.' Rather: '… you can issue a subpoena to anyone anywhere in the world, in my respectful submission. It's enforceability is an entirely different issue and that is why one comes to the Federal or Supreme Court for leave in this case to serve it in New Zealand under the legislation. My friends have put to you matters of hearsay about the practice down [ie in the Local Court] there or the view of an assistant to a Registrar down there. I just simply ask that you disregard those matters because if no application is properly put on by them to issue a subpoena, and I would anticipate, say, for example, you would request the court and say, well, we would like a subpoena issued, we would like to go up to, say, the Federal Court or the Supreme Court for leave to serve it in New Zealand and that's why we need it issued now, one can hardly understand why the Local Court would not issue the subpoena in those circumstances. If they get leave it has effect, if they don't it's just a piece of paper. 25 I agree with this submission. Before each of sub-sections (2), (3) and (4) of the above s 9 of the E & P Act can be considered by this Court in accordance with O 69A of the Federal Court Rules or by the Supreme Court of New South Wales in accordance with that Court's Rules, it is first necessary for the registrar of the Local Court to issue the relevant subpoenas. I do not think that the Local Court's response extracted above to what was a confusing letter of Ms Paras and which, inter alia mistakenly asserted that I 'enquired as to whether or not the Local Court had power to issue the subpoenas prior to being granted leave to serve those subpoenas by the Federal Court', is correct in law. 26 It follows from what I have already reviewed of the processes relevantly and necessarily involved that it is premature for this Court to respond to any application of the applicants for leave for the issue of subpoenas which the applicants might ultimately propose to serve in New Zealand. Aside from the fact that the Federal Court does not at present have jurisdiction to deal with the request, given the fact that subpoenas have not yet been issued by the Local Court, the Federal Court would need undertakings as to conduct money or other financial arrangements to be undertaken by the applicants, and also specific and comprehensible evidence as to the potential materiality of the documentation required by the applicants for the purposes of the pending litigation in the Local Court, bearing in mind the inconvenience to which a subpoenaed party is inherently subjected, particularly where that party is resident overseas in New Zealand. Should the applicants wish to re-agitate matters and or seek leave from this Court in accordance with O 69A of the Federal Court Rules once subpoenas have been issued by the Local Court, appropriate arrangements should be made with the chambers of the docket judge Stone J. 27 It follows there is no basis or foundation in law for granting the application sought for cross-vesting, nor presently for leave to issue subpoenas, and that the applications should be dismissed. Given my reasons for that outcome, and other matters of an adjectival nature to which I have referred in these reasons, I have invited submissions as to the costs of the applications, including costs on an indemnity basis. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 22 December 2004 Solicitor for the Applicant: Law Rexstraw Lawyers Counsel for the Respondent: PT Russell Solicitor for the Respondent: Barringer Leather Lawyers Date of Hearing: 17 December 2004 Date of Judgment: 20 December 2004