Re: consent arbitration Tooley, Lyndsay

[1998] NFSC 3

SUPREME COURT OF NORFOLK ISLAND

JURISDICTION OF COURT – Application to Court to issue subpoenas for attendance of witnesses at arbitration hearing -  Arbitrator appointed by parties pursuant to arbitration clause in lease agreement – Whether Court has power to issue subpoenas – Discretion of Court.

Supreme Court Ordinance  1960 (N.I.) s 5(1)
Supreme Court Act 1933 (ACT) s 20(1)
9 and 10 Will. III c.15 (Imp.)

IN THE MATTER OF a consent arbitration between LYNDSAY and SHARON TOOLEY (Lessors) and MARTIN and HEATHER CROSS (Lessees)

No. 10 of 1998

JUDGE:         WILCOX J
PLACE:         SYDNEY (HEARD BY TELEPHONE FROM NORFOLK ISLAND)

DATE:           30 OCTOBER 1998

IN THE SUPREME COURT OF NORFOLK ISLAND 10  of   1998

BETWEEN:	IN THE MATTER OF A CONSENT ARBITRATION BETWEEN LYNDSAY AND SHARON TOOLEY Lessors
AND:	MARTIN AND HEATHER CROSS Lessees
JUDGE:	WILCOX J
DATE OF ORDER:	30 OCTOBER 1998
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. On application by or on behalf of Martin Cross, and Heather Cross the Registrar issue out of the Court:

(a)a subpoena ad testificandum directed to Reg Jefferies; and

(b)a subpoena ad testificandum and/or a subpoena duces tecum directed to Donna Henderson,

requiring in each case the recipient to attend before Arbitrator Michael Zande at his office at Harness Lane, Norfolk Island, at such time and place as Mr Zande may nominate to the Registrar, to provide evidence in the arbitration being conducted by him between Lyndsay John Tooley and Sharon Johnnie Tooley on the one hand and Martin Cross and Heather Cross on the other.

1. The costs incurred in connection with the issue of the said subpoenas (including the costs of this application) be costs in the discretion of the arbitrator.

IN THE SUPREME COURT OF NORFOLK ISLAND  10 of 1998

BETWEEN:	IN THE MATTER OF A CONSENT ARBITRATION BETWEEN LYNDSAY AND SHARON TOOLEY Lessors
AND:	MARTIN AND HEATHER CROSS Lessees
JUDGE:	WILCOX J
DATE:	30 OCTOBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

WILCOX J:  The application before me raises a question as to the extent of the jurisdiction of the Supreme Court of Norfolk Island.  In particular, the question is whether the Court has power to direct the issue of subpoenas ad testificandum[1], to compel the attendance of witnesses, and subpoenas duces tecum[2], to compel the production of documents, at an arbitration conducted by a private arbitrator appointed by the parties, pursuant to an arbitration clause in a lease.  The point is not free from difficulty but I have reached the conclusion the Court does have this power.

[1]  Subpoena ad testificandum:  A court order requiring the attendance of a person to give evidence.

[2]  Subpoena duces tecum:  A court order requiring the attendance of a person at Court at a specified time and place to produce specified documents.

The facts

On 18 October 1994 Martin Cross and Heather Cross, the present applicants, leased shop premises in Taylors Road, Norfolk Island for a period of three years.  The owners of the premises were then William Borry Evans and Letty Joy Evans.  They were the lessors named in the lease agreeement.  The lease agreement contained an arbitration clause in these terms:

“In the event that any dispute or difference shall arise between the parties hereto concerning any aspect of the within Lease, such dispute shall be referred to an arbitrator to be appointed by the parties hereto, and where the parties hereto cannot agree on the appointee for the purpose of such arbitration such arbitrator shall be as appointed by the Court of Petty Sessions of Norfolk Island on a joint application thereto by the Lessor and the Lessee, with the cost of such application to be met as to one half by the Lessor and one Half by the Lessee.  The parties hereto agree to accept the result of such arbitration by way of settlement of such dispute or difference.”

On 20 November 1996 Lyndsay John Tooley and Sharon Johnnie Tooley, the respondents to this application, purchased the premises and became the lessors to Mr and Mrs Cross.

At the expiration of the three year term, by agreement Mr and Mrs Cross remained in possession of the premises as weekly tenants.  They vacated the premises on or about 14 March 1998 and removed what they claim to have been trade and tenants fixtures and fittings purchased and installed by them in the premises.  Mr and Mrs Tooley apparently denied their right to remove these items and also alleged damage to the premises and failure to keep them in good repair.  They claimed $7,095.45 by way of damages.  Mr and Mrs Cross disputed this claim and the parties agreed to refer the claim to the arbitration of Michael Zande, a solicitor practising on the island.

Mr Zande embarked on the hearing of the matter.  Counsel for Mr and Mrs Cross, Mr A Cook QC, wished to adduce oral evidence from Ray Jefferies, a person who had carried out building work in the premises on the instructions of Mr and Mrs Tooley, and Donna Henderson, the current lessee of the premises.  Mr Cook also wished Ms Henderson to produce to the arbitration certain documents in her possession relating to the premises.  At Mr Cook’s request, Mr Zande issued summonses addressed to Mr Jefferies and Ms Henderson requiring their attendance at a hearing on 16 September 1998 and, in the case of Ms Henderson, requiring production of certain documents.

The summonses were served on each of the proposed witnesses but neither attended the 16 September hearing.  Mr Cook thereupon sought an adjournment of the further hearing of the matter to enable this application to be made.  Notwithstanding the opposition of Mr and Mrs Tooley, Mr Zande acceded to that application.  The matter currently stands adjourned until 3 November 1998.

Having regard to the fact that it is unlikely the Court will sit on the island again this year, and the desirability of avoiding undue delay in disposal of the arbitration, I directed the motion be heard by a telephone conference call between the Courthouse and my chambers in Sydney.  The Registrar notified Mr and Mrs Tooley of the arrangements but they informed him they did not wish to participate; instead Mr Tooley would supply a letter outlining their position.  I have received that letter and will refer to it in a moment.

The parties’ contentions

At the telephone hearing Mr Cook referred to Currie v Chief Constable of Surrey [1982] 1 All ER 89, a decision of McNeill J of the Queen’s Bench Division of the High Court of Justice (England and Wales). The question in that case was whether the High Court had power to issue subpoenas ad testificandum requiring the attendance of two persons at a hearing constituted by the Chief Constable of Surrey under the Police (Disciplinary) Regulations 1977.  McNeill J held the Queen’s Bench Division had “a clearly recognised general power” to issue a subpoena “to assist inferior tribunals by enforcing the attendance of witnesses”.  He referred to several authorities, the most relevant of which is probably The Queen v Greenaway (1845) 7QB 126; 115 ER 436. That case concerned the validity of the issue of subpoenas duces tecum out of the Queen’s Bench Division to compel the production of documents at Petty Sessions.  Delivering the judgment of the Court, Lord Denman CJ said (at 134, 439):

“On the general point no doubt can be entertained.  The course of practice, during a long period, was certified to us by our officer; and it is necessary for the due administration of justice.  This Court has in all times lent its aid to inferior tribunals, where they have wanted the means of enforcing the attendance of witnesses.  If viva voce evidence is alone required, the ordinary subpoena ad testificandum will attain the object:  if documents are wanted, recourse must be had to the equally well known writ of subpoena duces tecum.”

Perhaps not surprisingly, in his letter Mr Tooley did not enter into discussion about the Court’s power to issue the desired subpoenas.  He asked four other questions:

“(i)As consent arbitrator, is Michael Zande seized with jurisdiction in this matter and is it appropriate that this matter be referred to the Supreme Court of Norfolk Island?

(ii)Since the amount in dispute is only $7,095.45 is it appropriate that the attendance of witnesses be referred to the Supreme Court of Norfolk Island?

(iii)Is it the responsibility of the parties to arrange for necessary witnesses to appear on their behalf?

(iv)Did the applicants offer to pay the witnesses for their attendance was witnesses and any out of pocket expenses they would incur?

I will treat these questions as going to the issue whether, if the Court has jurisdiction to issue the subpoenas, it ought to do so, in the exercise of its discretion.

Power to issue the subpoenas

In all the cases referred to by McNeill J in Currie, the superior court of record was asked to act in aid of an established inferior court or tribunal.  No doubt because of that circumstance, it was apparently common ground before McNeill J “that the inferior court or tribunal should be one recognised by law though not necessarily established by statute”.  This requirement is understandable; courts ought not act in aid of tribunals that have no standing in the justice system.  However, I have not succeeded in finding any authority as to what degree of recognition will suffice.

Unlike most jurisdictions, Norfolk Island does not have the benefit of a modern, comprehensive statute relating to arbitration. However, the law of Norfolk Island includes the statutes in force in England on 25 July 1828: see the Proclamation of Sir Gerald Strickland (then Governor of New South Wales) reproduced in Renfree “Federal Judicial System of Australia” at 757. This Proclamation has been continued in force by a series of Commonwealth statutes: see s 4 of the Norfolk Island Act 1913, s 12 of the Norfolk Island Act 1957 and s 16 of the Norfolk Island Act 1979.

The English statutes in force in 1828 included an Act of 1698 (9 and 10 Will III c.15) short- titled “Act for determining differences by arbitration”.  That Act provided that, from and after 11 May 1698, “it shall and may be lawful for all merchants and traders, and others desiring to end any controversy, suit or quarrel … for which there is no other remedy but by personal action or suit in equity, by arbitration, to agree that their submission of their suit to the award or umpirage of any person or persons should be made a rule of any of his Majesty’s courts of record, which the parties shall choose, and to insert such their agreement in their submission, or the condition of the bond or promise, whereby they oblige themselves respectively to submit to the award or umpirage, of any person or persons, which agreement being so made and inserted in their submission or promise, or condition of their respective bonds, shall or may” be enforceable as an order of the court in which the rule is entered.

The procedure provided by this statute differs from that followed in the present case, to the extent that the 1698 Act envisaged the arbitration clause inserted in the parties’ agreement, bond or promise would nominate the court of record in which the rule should be entered.  However, this difference seems immaterial.  The significance of the 1698 Act is that consensual arbitration under court supervision is part of the law of Norfolk Island.  I think an arbitrator exercising power under an arbitration clause in a contract is an “inferior … tribunal … recognised by law” within the principle adopted in Currie.

Section 5(1) of the Supreme Court Ordinance 1960 (NI) confers on the Supreme Court of Norfolk Island “the same jurisdiction in and in relation to the Territory as the Supreme Court of the Australian Capital Territory has in and in relation to the Australian Capital Territory”. Section 20(1) of the Supreme Court Act 1933 (ACT) confers on the latter Court “all original and appellate jurisdiction that is necessary to administer justice in the Territory”. Particularly in the light of the 1698 Act, it seems to me the administration of justice in Norfolk Island includes supervision of arbitration proceedings held pursuant to contractual clauses. If it is necessary in a particular case for the Supreme Court to assist an arbitrator in the performance of his or her duties, by issuing a subpoena to compel the attendance of a witness or the production of documents, this is something “necessary to administer justice in the Territory”; it is therefore within the jurisdiction of the Court.

Discretion

Without the issue of subpoenas, it seems Mr Jefferies and Ms Henderson will not attend the hearing being conducted by Mr Zande.  They seem to be material witnesses and no reason has been offered as to why Mr and Mrs Cross should be denied the opportunity of putting before the arbitrator whatever relevant evidence they are able to supply.  The questions raised in Mr Tooley’s letter do not provide any reason for declining to issue the desired subpoenas.  There seems to be no doubt that Mr Zande is “seized with jurisdiction”, to use Mr Tooley’s words, in the arbitration.  It is appropriate for the matter of issue of subpoenas to be referred to the Supreme Court because Mr Zande has no power to compel the attendance of witnesses.  It will be Mr Zande’s task, of course, to evaluate whatever evidence the witnesses may give.  As to the amount in dispute, I agree this provides a reason for doing everything possible to minimise costs.  It is unfortunate the parties were not able to resolve their dispute without an arbitration hearing.  It is even more unfortunate that potential witnesses proved unwilling voluntarily to attend and it was necessary for this application to be made.  But these things happened.  The Court can only deal with the situation as it is.  I express the hope the matter will now be expeditiously resolved with a minimum of cost to the parties.

In relation to Mr Tooley’s third question, it is the responsibility of the parties to arrange the attendance of witnesses.  However, if a particular witness will not voluntarily attend, a party may need the assistance of the Court in compelling the witness to attend.  That is the reason for this application.  I make no comment on what previously occurred regarding witnesses’ expenses; proper conduct money will have to be offered upon the service of the subpoenas whose issue I propose to direct.

Orders

I propose to direct that, on application by or on behalf of Martin Cross and Heather Cross, the Registrar issue out of the Court a subpoena ad testificandum directed to Mr Jefferies and a subpoena ad testificandum and/or a subpoena duces tecum directed to Ms Henderson requiring their attendance before Arbitrator Michael Zande at his office at Harness Lane, Norfolk Island at such time and date as he may nominate to the Registrar.

As suggested by Mr Cook, I order the costs incurred in connection with the issue of the subpoenas, including the costs of this application, be in the discretion of the arbitrator.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox

Associate:

Dated:             30 October 1998

Counsel and solicitor for the Applicants:	A Cook, QC
There was no appearance for the Respondents
Date of Telephone Hearing:	28 October 1998