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FEDERAL COURT AMENDMENT RULES 2006 (NO. 1) (SLI NO 88 OF 2006)
EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 88
Federal Court Amendment Rules 2006 (No. 1)
Section 59 of the Federal Court of Australia Act 1976 permits the Judges of the Court or a majority of them, to make rules of Court not inconsistent with the Act. These rules may provide for the practice and procedure to be followed in the Court and in Registries of the Court. They may extend to all matters incidental to any such practice or procedure that are necessary or convenient to be prescribed for the conduct of any business of the Court.
Under subsection 59 (4) of the Federal Court of Australia Act 1976, the Legislative Instruments Act 2003 (other than sections 5, 6, 7, 10, 11 and 16 of that Act) applies in relation to rules of court made by the Court under the Federal Court of Australia Act 1976 or another Act:
(a) as if a reference to a legislative instrument were a reference to a rule of court; and
(b) as if a reference to a rule-maker were a reference to the Chief Justice acting on behalf of the Judges of the Court; and
(c) subject to such further modifications or adaptations as are provided for in regulations made under section 59A of the Federal Court of Australia Act 1976.
The present Federal Court Rules came into operation on 1 August 1979. They are reviewed regularly.
The Judges have agreed to amend the Federal Court Rules by inserting a new Order 25A and a new Order 25B. The new orders give effect to rules on freezing orders and search orders developed by the Harmonised Rules Sub-Committee of the Council of Chief Justices. The development of the rules involved consultation with legal practitioners.
Details of the Rules are in Attachment 1.
The Rules commence on the day after they are registered.
Federal Court Amendment Rules 2006 (No 1)
This rule provides that the Rules are to be cited as the Federal Court Amendment Rules 2006 (No 1).
This rule provides that these Rules commence on the day after they are registered.
Schedule 1 amends the Federal Court Rules.
[1] After Order 25
This amendment inserts new Orders 25A and 25B after Order 25. Order 25A sets out the rules in relation to Freezing Orders. Order 25B sets out the rules in relation to Search Orders.
Order 25A Freezing Orders
Order 25A rule 1 defines certain expressions for the purposes of Order 25A.
Order 25A subrule 2(1) provides that the Court may make a freezing order, upon or without notice to a respondent, for the purpose of preventing the Court’s process from being frustrated or inhibited. A freezing order seeks to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.
Order 25A subrule 2(2) provides that a freezing order may restrain a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.
Order 25A rule 3 provides that the Court may make an ancillary order to a freezing order where it considers appropriate. An ancillary order may be made for eliciting information relating to assets relevant to the freezing order or prospective freezing order or determining whether such an order should be made.
Order 25A rule 4 provides that the Court may make a freezing order or an ancillary order against a respondent even if the respondent is not a party to the substantive proceeding.
Order 25A rule 5 deals with freezing orders against a judgment debtor, a prospective debtor or a third party.
Order 25A subrules 5(1), (2) and (3) provide, inter alia, that rule 5 will apply if:
· judgment has been given in favour of an applicant by the Court; or
· judgment has been given in favour of an applicant by another court, provided there is sufficient prospect that the judgment will be registered in or enforced by the Court; or
· an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the Court; or
· an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in another court provided there is a sufficient prospect that the other court will give judgment in favour of the applicant and the judgment will be registered in or enforced by the Court.
Order 25A subrule 5(4) provides that the Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because:
· the judgment debtor or prospective judgment debtor or another person may abscond; or
· the assets of the judgement debtor or prospective judgment debtor or another person are removed from Australia or from a place inside or outside Australia or are disposed of, dealt with or diminished in value.
Order 25A subrule 5(5) provides that the Court may make a freezing order or an ancillary order or both against a third party (being a person other than a judgment debtor or prospective judgment debtor) if the Court is satisfied that:
· there is a danger that any judgment will be wholly or partly unsatisfied because:
§ the third party may exercise a power of disposition over assets of the judgment debtor or prospective judgment debtor; or
§ the third party is in possession of, or in a position of control over, assets of the judgment debtor or prospective judgment debtor;
· a process in the Court is or may be available to the applicant as a result of a judgment or prospective judgment, by which the third party may have to disgorge assets or contribute towards satisfying the judgment or prospective judgment.
Order 25A subrule 5(6) provides that nothing in rule 5 affects the power of the Court to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so.
Order 25A rule 6 provides that nothing in Order 25A diminishes the inherent, implied or statutory jurisdiction of the Court to make a freezing or ancillary order.
Order 25A rule 7 provides that an application for a freezing order or ancillary order may be served on a person outside Australia, irrespective of the person’s domicile or residence, if any of the assets to which the order relates are within the jurisdiction of the Court.
Order 25A rule 8 provides that the Court may make any order as to costs, including costs of any person affected by a freezing or ancillary order, it considers appropriate in relation to an order made under Order 25A.
Order 25B Search Orders
Order 25B rule 1 defines certain expressions for the purposes of Order 25B.
Order 25B rule 2 provides that the Court may make a search order in any proceeding or prospective proceeding, with or without notice to the respondent. A search order is made for the purpose of securing or preserving evidence and requiring a respondent to permit persons to enter premises for the purpose of securing the preservation of evidence which is or may be relevant to an issue in the proceeding or anticipated proceeding.
Order 25B rule 3 provides that the Court may make a search order if the Court is satisfied that:
· an applicant has a strong prima facie case on an accrued cause of action; and
· the potential or actual loss or damage to the applicant will be serious if the order is not made; and
· there is sufficient evidence that the respondent possesses important evidentiary material and there is a real possibility that the respondent might destroy such material or cause it to be unavailable for use as evidence in a proceeding or anticipated proceeding before the Court.
Order 25B rule 4 provides that Order 25B does not diminish the inherent, implied or statutory jurisdiction of the Court to make a search order.
Order 25B subrule 5(1) provides that a search order may direct each person named or described in the order to do any of the following;
· permit other persons named or described in the order to enter premises specified in the order and take any steps in accordance with the terms of the order;
· provide other persons named or described in the order with any information, thing or service described in the order;
· allow other persons named or described in the order to take and retain in their custody any thing described in the order;
· not disclose any information about the order for up to 3 days after the date on which the order was served, except for the purposes of obtaining legal advice or representation;
· do or refrain from doing any act the Court considers appropriate.
Subrule 5(2) sets out the steps that may be taken in relation to a thing specified in a search order. These include searching for, inspecting or removing the thing, and making or obtaining a record – including a copy, photograph, film or sample – of the thing or any information it may contain.
Subrule 5(3) provides that an order may contain other provisions that the Court considers appropriate.
Order 25B subrule 6(1) provides that, if the Court makes a search order, the Court must appoint one or more solicitors, (each of whom is independent of the applicant’s solicitors,) to supervise the execution of the order and to do such other things in relation to the order as the Court considers appropriate. A solicitor appointed under this subrule is defined as an ‘independent solicitor’.
Subrule 6(2) provides that an independent solicitor may be appointed to supervise the execution of an order at any one or more premises. A different independent solicitor or solicitors may be appointed to supervise the execution of the order at other premises. Each independent solicitor has power to do such other things in relation to the order as the Court thinks appropriate.
Order 25B rule 7 provides that the Court may make any order as to costs, including as to the costs of any person affected by a search order, it considers appropriate in relation to an order made under Order 25B.