10. External territories


10.1 The terms of reference for the inquiry require the Commission to consider the application of Commonwealth law in Australia’s external territories in relation to cross border civil remedies. This chapter discusses the general legal framework applying in Australia’s external territories and, within that context, the remedies available in those territories for cross border disputes. For this purpose the chapter focuses on the extent to which the principles governing Australian court orders and remedies that are set out in chapters 6-8 also apply in Australia’s external territories.

Legal framework applying in the external territories


10.2 Australia currently has the following external territories

  • Ashmore and Cartier Islands

  • Christmas Island

  • the Cocos (Keeling) Islands

  • the Coral Sea Islands

  • the Australian Antarctic Territory

  • the Territory of the Heard and McDonald Islands

  • Norfolk Island.

The legal framework applying in these territories is a mixture of Commonwealth law, State law and local Territory law. This section outlines the framework applying in each territory.

Commonwealth laws

10.3 Each of the external territories owes its existence to an Act of the federal Parliament.[dclxxvii] These Acts contain the majority of provisions determining the legal and political structure applying in that external territory.

10.4 Several important provisions in relation to the external territories exist outside the specific federal Act governing existence of the Territory. Section 15B(2) of the Acts Interpretation Act 1901 (Cth) deems any reference in a Commonwealth Act to a ‘Territory’ to include a reference to the ‘coastal sea of the Territory’ as if that coastal sea were a part of the relevant Territory. ‘Coastal sea’ is defined in s 15B(4) to be the territorial sea adjacent to the Territory. The territorial sea is the area 12 nautical miles offshore. Consequently the laws of the Commonwealth and the jurisdiction of the courts competent to hear matters relating to those laws extend throughout the relevant external territory and up to this limit.

10.5 Under s 122 of the Australian Constitution the federal Parliament retains authority to make laws for all territories including all external territories. This has been said to be a plenary power and that all that needs to be shown to support an exercise of this power in the form of a statute is that there is a sufficient nexus or connection between the law and the relevant Territory.[dclxxviii] It is a power that is sufficiently wide to allow the federal Parliament to make laws providing for the direct administration of a Territory and also to allow the federal Parliament to endow a Territory with separate political and administrative institutions and functions.[dclxxix] In this way the federal Parliament retains overall plenary power to make laws in respect of all its Territories as it sees fit, subject to any other inherent limitations contained in the Australian Constitution.[dclxxx]

10.6 The Acts Interpretation Act 1901 (Cth) makes it clear that, except for the Christmas Islands and the Cocos (Keeling) Islands, legislation of the federal Parliament only applies to the external territories if it is expressly stated to do so or if it is obvious from the legislation in question that it was intended to do so.[dclxxxi] This position is restated in each of the relevant Acts governing the existence of each external territory (excluding the Christmas Islands and the Cocos (Keeling) Islands).[dclxxxii] In the case of the uninhabited external territories,[dclxxxiii] very few federal laws have been so expressed. In the case of the Christmas Islands and the Cocos (Keeling) Islands these Territories are defined as part of the definition of ‘Australia’ in the Acts Interpretation Act 1901 (Cth) and therefore all laws of Australia are applicable to these Territories unless specifically excluded.

Indian Ocean Territories

10.7 The Cocos (Keeling) Islands and Christmas Islands comprise the Indian Ocean Territories of the Commonwealth. These islands became Territories of the Commonwealth in the 1950’s and until recently had a system of law inherited from Singapore when they became dependencies immediately after the Second World War. The Islands are not self governing but they do have a local government.

10.8 The Indian Ocean Territories occupy a unique position in relation to the application of laws of the Commonwealth when compared with the position of other external territories. Since July 1 1992 and pursuant to s 17(a) of the Acts Interpretation Act 1901 (Cth), a reference to ‘Australia’ in a Commonwealth statute specifically includes a reference to the Indian Ocean Territories. Consequently all laws of the Commonwealth, subject to specific exceptions that may be stated or implied in a particular statute, are applicable to the Indian Ocean Territories as if they were a part of Australia.[dclxxxiv] No other external territories have the laws of the Commonwealth generally applying in this manner. The Ordinances of the Governor-General have no effect to the extent they purport to affect the application of a federal statute in relation to the Indian Ocean Territories.[dclxxxv]

10.9 As a result of the Territories Law Reform Act 1992 (Cth) a Western Australian based legal system was introduced to the Indian Ocean Territories from 1 July 1992. The federal Government has also agreed with the Western Australian State Government for it to administer the new laws with respect to the Indian Ocean Territories on an agency basis on behalf of the Commonwealth. This is to be conducted on a contract basis. This is specifically provided for in s 8H of the respective Acts supporting the existence of each Indian Ocean Territory. In effect this gives responsibility for enforcement of all laws, State and federal, to the appropriate courts of the State of Western Australia.

10.10 For both the Indian Ocean Territories the Western Australian courts have jurisdiction in relation to each Territory as if the Territory were a part of the State of Western Australia.[dclxxxvi] The rules of practice and procedure of the West Australian courts will also apply to each Territory.[dclxxxvii] However, this position is made subject to any other law relating to each Territory existing before July 1 1992 that is to remain in force.[dclxxxviii] The Western Australian Supreme Court is responsible for the overall administration of justice in the Indian Ocean Territories.

10.11 Subject to the preserved existing laws and the laws of the federal Parliament as they apply to each Territory, the laws of Western Australia are also deemed to be in force for each of the Territories.[dclxxxix] However an Ordinance by the Governor-General relating to any of the Territories may amend or repeal any law of Western Australia.[dcxc] Alternatively, the Western Australian Parliament may terminate the operation of a Western Australian statute in either of the Territories.[dcxci]

Norfolk Island

10.12 The preamble to the Norfolk Island Act 1979 (Cth) makes it clear that it is the federal Parliament’s intention that this Territory should progressively achieve internal self government as a Territory under authority of the Commonwealth. The federal and Norfolk Island Governments have been discussing and negotiating on the progressive transfer of State and local government responsibilities to the Norfolk Island Government. This transfer is still in progress. The position now is that this Territory has a substantial degree of self government with responsibilities similar to those of the Northern Territory and Australian Capital Territory governments.

10.13 The Norfolk Island Legislative Assembly is now the main source of statute law for Norfolk Island. The Assembly has the power to make laws for the peace, order and good government of Norfolk Island. Subject to several express limitations, this is a plenary law making power.[dcxcii] However, the Territory is not sovereign. The powers of the Legislative Assembly to legislate for the Territory are subordinate to the powers of the federal Parliament and the Governor-General to

  • pass Laws and Ordinances for the Norfolk Island Territory under s 122 of the Australian Constitution and s 27 of the Norfolk Island Act 1979 (Cth) respectively, and

  • disallow part or all of any proposed law of the Legislative Assembly.

The federal Minister also has a power of veto over legislation passed by the Legislative Assembly, the subject matter of which comes within Schedule 3 of the Norfolk Island Act 1979 (Cth).[dcxciv]

10.14 Even though the powers of the Legislative Assembly are expressed in the same terms as the powers of State and internal territory[dcxcv] legislatures, the legislative capacity of the Norfolk Island Legislative Assembly is not restricted in the same ways as these other legislatures.[dcxcvi] For example, State and internal territory legislatures are ordinarily not permitted to make laws in regard to immigration. This is not the case in Norfolk Island which can make such laws with ministerial consent.[dcxcvii] Norfolk Island has its own immigration, taxation and social security regimes. It is also not constrained by the usual requirement, whether written or unwritten, that trade, commerce and intercourse between the States and the Territories shall be absolutely free.[dcxcviii]

10.15 Ordinances made by the Governor-General pursuant to s 27 of the Norfolk Island Act 1979 (Cth) in most cases must be introduced into, and approved by, the Legislative Assembly. However, where urgency requires, this requirement can be dispensed with. The Governor-General may promulgate an Ordinance even if the Legislative Assembly rejects it if the Legislative Assembly’s response is deemed to be unacceptable. The federal Parliament has an option to disallow Ordinances of the Governor-General. Conflict between Ordinances and Acts of the Legislative Assembly of the Territory is resolved in favour of the Ordinance.[dcxcix] However, conflict between ordinances and Acts of the federal Parliament is resolved in favour of the latter.[dcc]

10.16 Ordinances made by the Governor-General under the Norfolk Island Act 1957 (Cth) (now repealed) remain in force until such time as they are amended or repealed by the Assembly or by an Act of the federal Parliament or a later Ordinance of the Governor-General. The same applies to laws made under the Norfolk Island Act 1913 (Cth). The consolidated laws issued by proclamation on December 24 1913 are the next most important source of law and, in the absence of the Norfolk Island Judicature Ordinance 1960, would have been the final source of law. However, the Judicature Ordinance had the effect of making the Island’s legal regime subject to English statutes which were current in 1828 and which had been received in Norfolk Island in 1960.

10.17 Norfolk Island has a Court of Petty Sessions and a Supreme Court. It does not have a county or district court. The Norfolk Island Court of Petty Sessions was established under the Court of Petty Sessions Ordinance 1960. It deals with summary criminal matters and civil matters where the amount of damages sought is $10 000 or less. The jurisdiction, practice and procedure of the Supreme Court of Norfolk Island are set out in the Supreme Court Ordinance 1960.[dcci] It has unlimited jurisdiction and may sit in the Australian Capital Territory, New South Wales and Victoria. The Court may make its own rules but where it does not the rules of the Australian Capital Territory Supreme Court apply.

Uninhabited external territories

10.18 The uninhabited external territories are generally considered to be

  • Ashmore and Cartier Islands

  • the Coral Sea Islands

  • the Australian Antarctic Territory, and

  • the Heard and McDonald Islands.

As indicated above, legislation of the federal Parliament only applies to these external territories if it is expressly stated to do so or if it is obvious from the legislation in question that it was intended to do so. Very few federal laws have been so expressed.

10.19 There are two other sources of law governing these territories. First, Ordinances may be made by the Governor-General for the peace, order and good government of a particular territory.[dccii] Secondly, each of these external territories is expressly linked by statute to one of the internal territories so that, to the extent that there are no such federal laws or special Ordinances applying, the laws of that particular internal territory are deemed to be in force for the external territory as if the external territory forms part of the internal territory.[dcciii]

10.20 An Ordinance made by the Governor-General may not be made so as to affect the application of an Act of the federal Parliament as it applies to the particular territory.[dcciv] However an Ordinance can amend or repeal an Act that is in force in the external territory by virtue of the adoption of the laws of the relevant internal territory.[dccv] The courts of the relevant internal territory are granted jurisdiction in and in relation to the relevant external territory.[dccvi] These external territories are for all intents and purposes treated as if they were a part of the internal territory with which they have these legal ties.

Application of remedies principles in the external territories


10.21 Notwithstanding their different sources of law, for practical purposes the external territories occupy the same position as the States and the internal territories in regard to

  • the remedies available from courts with jurisdiction in relation to those territories for disputes with an international element, and

  • the enforcement of judgments of the relevant superior courts in foreign jurisdictions.

This section outlines how the general principles governing cross border civil remedies in Australia also apply in the external territories.

Application of treaties

10.22 By virtue of being part of the Commonwealth, each of the external territories will enjoy the benefit of any treaty or other international agreement to which the federal Government is a signatory.

Reciprocal enforcement of judgments

10.23 Reciprocal enforcement of judgments is discussed in chapter 6. Except where otherwise indicated in chapter 6 the position in relation to enforcement of judgments of the courts of external territories is the same as applies for the States.

10.24 The Foreign Judgments Act specifically extends to each external territory.[dccvii] Consequently money judgments of the court of a foreign jurisdiction to which the Foreign Judgments Act applies are prima facie registrable and enforceable in the external territories. As a result of the reciprocal presumption underlying the Foreign Judgments Act, money judgments of superior courts of Australia are recognised in those foreign jurisdictions. This will include the judgments of the relevant superior courts having jurisdiction in relation to each external territory. Consequently the external territories enjoy the same degree of reciprocal acknowledgment and enforcement of judgments as the other States and Territories.

Judicial assistance

10.25 As outlined above, apart from specific federal Parliament enactments and Ordinances, the rules of court and other applicable law are determined for each external territory (excluding Norfolk Island) by the internal territory or State with which it is associated. Consequently the various forms of judicial and legislative assistance may vary between each external territory because of differences in jurisdictional origins. A detailed investigation of these is beyond the scope of this report. However the position in relation to the Federal Court and the New South Wales Supreme and District Courts is outlined in chapter 6 and for most practical purposes can be considered representative of all States and Territories of the Commonwealth.

Service of process

10.26 While not a direct issue in relation to the enforcement of judgments of Australian courts in foreign jurisdictions, the various enactments throughout the Commonwealth in relation to cross border enforcement within the Commonwealth give further insight into the legal position occupied by the external territories. The position is that the external territories receive no different treatment from any other part of the Commonwealth for the service and execution of process or for mutual enforcement of judgments.

10.27 In particular, the Service and Execution of Process Act 1992 (Cth) not only applies to all of the external territories[dccviii] but also sets out its deemed application to certain specified States and internal territories.[dccix] The one exception is Norfolk Island which, as outlined above, does not assume the law of any other State or internal territory. Additionally for the purpose of the Act, the external territories that are not deemed to be part of a State or internal territory, such as Norfolk Island, as well as the internal territories, are to be regarded as States for the purposes of the Act.[dccx] The Act provides for service between different ‘States’ and enforcement of judgments of one ‘State’ in another ‘State’. Consequently the Act applies to each of the external territories as if it were either part of a ‘State’ or a ‘State’ itself. Thus the same rules apply to enforcement of a judgment of a court of a particular external territory in another State, or vice versa, as apply to enforcement of a judgment of a court of one State in another State.

Corporations Law

10.28 The Corporations Law is an example of a law of the federal Parliament being made to apply expressly to the external territories. However this application is not uniform throughout the Corporations Law, and the external territories are in certain respects treated differently from the rest of the Commonwealth.

10.29 In particular, under the definition of ‘foreign company’ in the Corporations Law[dccxi] a body corporate incorporated in an external territory, or an unincorporated body formed in an external territory and not having its head office or principal place of business in Australia, is deemed to be a foreign company. ‘Australia’ is specifically defined to be that area of the Commonwealth excluding the external territories.[dccxii] By contrast the provisions contained in the Corporations Law with respect to listed corporations apply to corporations whether they are listed in Australia or the external territories.[dccxiii]

10.30 In relation to the breach of directors’ duties outlined in chapter 8, the Corporations Law as it applies to each State, the Australian Capital Territory and the Northern Territory makes no distinction between the external territories and the rest of the Commonwealth.[dccxiv] Under s 232(4A) the statutory duties of officers under the Corporations Law apply to any person occupying the position of officer

  • of any corporation (local or foreign) discharging duties in the ‘jurisdiction’ of the relevant State or internal territory

  • of a local corporation discharging duties outside the ‘jurisdiction’ of the relevant State or internal territory, or

  • in any other case, discharging duties outside the ‘jurisdiction’ the relevant State or internal territory but in connection with a corporation carrying on business or doing or not doing things in the ‘jurisdiction’.

The term ‘jurisdiction’ in that section includes the coastal sea of the relevant State or internal territory and, as discussed above, will include where relevant each of the external territories. This is because the external territories are deemed to have the law of and be included in the jurisdiction of a State or an internal territory. As Norfolk Island is not integrated into any State or internal territory jurisdiction, these provisions do not apply to cover that jurisdiction. Furthermore the Norfolk Island Supreme Court is not given jurisdiction to hear matters relating to the Corporations Law.[dccxv]

Bankruptcy Act

10.31 Pursuant to the Bankruptcy Actthe only courts with jurisdiction in bankruptcy are the courts of each of the States, the Federal Court and the Northern Territory.[dccxvi] The courts of the external territories are not included. Consequently it is necessary for a request to be made by an external territory court for a court with jurisdiction under the Bankruptcy Act to aid it in matters of bankruptcy.

10.32 A court with jurisdiction in bankruptcy under the Bankruptcy Act must act in aid of and be auxiliary to the relevant court of an external territory.[dccxvii] Where there is a letter of request from a court of the external territory the recipient court with jurisdiction in bankruptcy must exercise its powers in regard to the matter as if the matter had arisen within its own jurisdiction.[dccxviii] In this respect the Bankruptcy Act operates as a code.[dccxix]