Dixon (Trustee) v Citiline Developments Pty Limited, in the matter of Nasr

1. Order 1 made on 5 September 2018 be vacated. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

LEE J: 1 On an application made by the applicants for orders that a caveat currently lodged over property of the respondent be extended, an affidavit by Rania Nasr sworn on 4 September 2018 was read by the respondent. Annexure C to that affidavit is a contract for the sale and purchase of land in Dover Heights New South Wales with the purchaser being the sole director of the respondent (Contract). It is unnecessary for present purposes to explain the relevance of the Contract, but it is common ground that the document could, as a matter of theory, rationally affect the assessment of the probability of the existence of a fact in issue on the application (see s 55 of the Evidence Act 1995 (Cth) (EA)). 2 Although no objection was advanced by the applicants when the respondent read the affidavit which annexed the Contract, I drew the parties' attention to s 304 of the Duties Act 1997 (NSW). That section relevantly provides as follows: 304 Receipt of instruments in evidence (1) An instrument that effects a dutiable transaction or is chargeable with duty under this Act is not available for use in law or equity for any purpose and may not be presented in evidence in a court or tribunal exercising civil jurisdiction unless: (a) it is duly stamped, or (b) it is stamped by the Chief Commissioner or in a manner approved by the Chief Commissioner. (2) A court or tribunal may admit in evidence an instrument that effects a dutiable transaction, or is chargeable with duty in accordance with the provisions of this Act, and that does not comply with subsection (1): (a) if the instrument is after its admission transmitted to the Chief Commissioner in accordance with arrangements approved by the court or tribunal, or (b) if (where the person who produces the instrument is not the person liable to pay the duty) the name and address of the person so liable is forwarded, together with the instrument, to the Chief Commissioner in accordance with arrangements approved by the court or tribunal. … (emphasis added). 3 It is also common ground that: (a) the Contract is an instrument that effects a dutiable transaction; (b) there was insufficient material before the Court to establish that it has been duly stamped; and (c) s 304(2) of the Duties Act is not engaged because no arrangements for the later transmission of the document to the Chief Commissioner were proposed for approval by the Court. 4 Notwithstanding the provisions of s 304 of the Duties Act, I received the document into evidence. My reason for doing so was that I initially did not believe that the s 304 prohibition was applicable. For reasons that follow, it is necessary to vacate that order. 5 State laws such as s 304 of the Duties Act cannot apply of their own force in the exercise of Federal jurisdiction. Where an exercise of legislative power is directed to the judicial power of the Commonwealth, it must operate through, or in conformity with, Chapter III of the Constitution. Section 79 of the Judiciary Act 1903 (Cth) operates to "pick up" state laws and apply them, but only to the extent that such laws are not inconsistent with either the Constitution or the laws of the Commonwealth. As was explained by Bell, Gageler, Keane, Nettle and Gordon JJ in Rizeq v Western Australia [2017] HCA 23; (2017) 344 ALR 421 at 435 [63]: The incapacity of a State Parliament to enact a law which governs the exercise of federal jurisdiction by a court, whether it be a federal court or a State court, explains the necessity for s 79 of the Judiciary Act and is the key to understanding the nature and extent of its operation. Section 79 is a law, enacted under s 51(xxxix) of the Constitution, which serves to ensure that the exercise of federal jurisdiction is effective. The section fills a gap in the law governing the actual exercise of federal jurisdiction which exists by reason of the absence of State legislative power. The section fills that gap by picking up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction. The section has no broader operation. 6 Here, at first glance, there is a law of the Commonwealth that provides otherwise than the State law, being s 56(1) of the EA, which provides: Relevant evidence to be admissible (1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding. 7 Accordingly, it initially appeared that the Commonwealth Parliament enacted a law which made it plain that all relevant evidence is to be admissible except as otherwise provided for in the Commonwealth law, being the EA. For this reason, I initially ruled the document to be admissible. 8 Since that ruling, although not mentioned during the course of argument, it has become apparent to me that s 9(3)(b) of the EA applies. This provision provides that the EA does not affect a law of a State or Territory so far as the law provides for the admissibility of a document to depend on whether stamp duty has been paid. Accordingly, s 304 is not inconsistent with the laws of the Commonwealth and is "picked up". The ruling as to admissibility was not dispositive of the application and, in the circumstances, it is appropriate to vacate my earlier ruling. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.