The House of Representatives Legal and Constitutional Affairs Committee met to assess how differences between the legal systems of the states and territories and the Commonwealth affect trade and commerce, as well as issues affecting businesses operating in both Australia and New Zealand.

The differences were the main source of discussion last Tuesday 21 March, when the Committee considered areas including legal procedures, partnership law, evidence law and standards of products, as requested by Attorney General Philip Ruddock.

Dr Nicholas Horne, Inquiry Secretary at the Committee Secretariat, told Lawyers Weekly that last week’s hearing reached no real conclusions; rather, it was an information gathering exercise.

Making judgments on the relative merits of the different systems would be a decision for the governments of the various jurisdictions, said Committee chairman Peter Slipper. “What we aim to do is to identify the areas of difference that are having the greatest impact, see where harmonisation might be possible, and find out if costs can be reduced and duplication avoided,” he said.

“The Committee will also consider the different ways in which harmonisation might be achieved, looking beyond what has occurred in the past, to see if new models might be developed,” Slipper said.

The Standing Committee on Legal and Constitutional Affairs this month discussed a possible harmonisation of legal systems in the House of Representatives. Speaking on March 7, Professor Gordon Walker, professor in commercial law at La Trobe University and head of its law school, discussed the well-reported difficulty Australia is having with the United States — what he called a “tension between nationalism on the one hand and globalisation on the other”.

“There has always been a tension between the desire of a nation or a jurisdiction to uphold the integrity of its own capital markets laws to protect investors and attract investment … and the desire to enter into bilateral or multilateral relationships,” Walker said.

“What we are seeing now in the Australia-US relationship is a kind of version of what we have been observing in the New Zealand-Australia relationship —that is, both countries are saying, ‘We have got laws that protect our investors. We want strong laws because we want to attract foreign investors. We want to be sure of the integrity of our own rules. But, on the other hand, New Zealand and Australia are very close; it is a globalising world and New Zealand and Australia are old friends. Let’s see if we can facilitate things.’ We are going to see that tension playing out, it seems to me, all the way through this law,” Walker said.

An issue for Walker, as well, is the idea that New Zealand has more to gain from this process than Australia, and he noted there had been some push from New Zealand.

Another point, he said, is that in certain key areas New Zealand would have to adopt Australian law, “if not verbatim, then perhaps tweaked to make it a little bit more effective”.

“There has been a lot of talk about harmonisation. The way a lot of lawyers would look at the process so far is to say that if that were the case then when we reframed the Corporations Law why didn’t we look at the New Zealand Companies Act 1993? We did not.”

Slipper noted in the House of Representatives that the best form of harmonisation might be to unify the two countries. “Abolish the states and have a unitary system, one government for Australia and New Zealand. But we have to deal with reality, and that is obviously not going to happen in the short term, if ever.”

Walker agreed that it is unlikely the two countries would achieve a political union, and that the next step is likely to be an economic union.

“We have the free trade agreement. The way I see the phasing — and I am sure this is how the politicians see it, certainly from all the evidence — is that we have pushed this one just about as far as we can go … The next step is whether we can get to an economic union, to some form of common market or whatever. That is really the next step, and a lot of this movement we see on the legal side seems to me to be just another strand moving in that direction.”

In August last year the release of a discussion paper by the Trans-Tasman Working Group, entitled Trans-Tasman Court Proceedings and Regulatory Enforcement, was the result of collaboration between officials from both countries. It was expected to result in better cooperation in civil court proceedings between the countries, Ruddock said at the time.

“This will benefit organisations conducting business across the Tasman and individuals caught up in trans-Tasman legal disputes,” he said.