Chaff and Hay Acquisition Committee v J A Hemphill and Sons Pty Ltd
[1947] HCA 20(Decision by: Starke J)
Chaff and Hay Acquisition Committee
vJ A Hemphill and Sons Pty Ltd
Judges:
Latham CJ
Starke JMcTiernan J
Williams J
Judgment date: 12 June 1947
Melbourne
Decision by:
Starke J
Appeal on the part of the Chaff and Hay Acquisition Committee and others by special leave from an order of the Supreme Court of New South Wales in Full Court which allowed an appeal from an order setting aside the writ of summons dated 10th March 1946 in the action brought by the respondents, J. A. Hemphill & Sons Pty. Ltd. against the Chaff and Hay Acquisition Committee.
The question that arises in the appeal is whether it is competent for the respondent here to sue the Chaff and Hay Acquisition Committee, in its collective name, for moneys due to the respondent in respect of hay purchased in New South Wales for the Committee. Although the Committee objected that the action brought against it in its collective name was not competent, still it claims, under its collective name, against the respondent a considerable sum of money by way of cross-action.
The Chaff and Hay Acquisition Committee was constituted under the Chaff and Hay (Acquisition) Act 1944 of South Australia. The preamble of the Act sets forth that it was expedient in view of the drought then prevailing in the State to make extraordinary provisions for ensuring sufficient supplies of chaff and hay for the use of persons requiring the same. A committee called the Chaff and Hay Acquisition Committee was constituted under the Act. It consisted of four members appointed by the Governor upon the nomination of the responsible Minister. They hold office for such term as is from time to time fixed by the Minister and upon such conditions as are from time to time fixed by him. The Committee, it was provided, should be deemed an instrumentality of the Crown. Subject to certain limitations imposed by the Act, which are immaterial for present purposes, the Committee was authorized to acquire any chaff or hay and also any standing crop within the State capable of being harvested as hay. The Committee was also authorized to purchase any hay or chaff outside the State.
But these authorities were not, it was provided, to be exercised after 30th September 1945.
Upon the purchase of any chaff, hay or standing crop the same vested absolutely in the Committee and subject to any disposition thereof made by the Committee under the Act remained the property of the Committee for the pur-pose of the Act. The Committee was also authorized to sell chaff or hay to any person.
It is also provided that all legal proceedings by the Committee with respect to any matter arising out of the Act shall be commenced in the name of the Committee and all proceedings against the Committee or any member of the Committee shall be instituted against the Committee in the name of the Committee. The Treasurer of the State, it is provided, shall, from the moneys appropriated for the purpose of the Act, satisfy all orders made by any court against the Committee in any such legal proceedings.
The South Australian Act has no extra-territorial force or effect. It is not in force in New South Wales. But it has long been settled that a foreign corporation may sue and be sued by its corporate name in English courts (Dutch West-India Co. v. Henriques Van Moses [10] ; Henriques v. Dutch West-India Co. [11] ; Newby v. Von Oppen and Colt's Patent Firearms Manufacturing Co. [12] ; La Compagnie Générale Trans-Atlantique v. Thomas Law & Co.; La "Bourgogne" [13] ). "There is no technical objection to suit in England by a foreign corporation or other artificial person" (Westlake, Private International Law, 6th ed. (1922), s. 305, at p. 373). "It is obviously only by a comity of nations, in the strictest sense of the word, that this recognition (of an artificial person) can be given" (Foote, Private International Law, 5th ed. (1925), p. 161). The existence of this artificial person depends upon the law of the place of its creation but its capacity is limited both by the law of its constitution and by the law of the country where a given transaction takes place (Von Hellfeld v. Rechnitzer and Mayer Frères & Co. [14] ; Dicey, The Conflict of Laws, 4th ed. (1927), pp. 520, 521). The right, however, of such an entity to sue and be sued in English courts "nec-essarily depends on the extent to which recognition is accorded to the law of such State" (Foote, Private Interna-tional Law, 5th ed. (1925), p. 162; Westlake, Private International Law, 6th ed. (1922)).
According to English law corporations are said to exist either: (1) at common Law, (2) by prescription, (3) by Act of Parliament, (4) by charter, (5) or by implication (Grant, The Law of Corporations (1850) p. 6; The Case of Sutton's Hospital [15] ). The South Australian Act does not explicitly create the Chaff and Hay Acquisition Committee a cor-poration. The characteristics of an English company appear to be perpetual succession, a name, a common seal, au-thority to hold property in its corporate name, to sue and be sued in that name, and to make by-laws (Grant, The Law of Corporations (1850) pp. 4, 5; Lloyd's Law of Unincorporated Associations, p. 193). The South Australian Act does not confer upon the Chaff and Hay Committee all these characteristics or attributes either explicitly or by im-plication. "It is sufficient if the intent to incorporate be evident" but "if it had been intended to incorporate the" Chaff and Hay Acquisition Committee "one would have expected the well-known precedents to be followed with express words of incorporation" (Mackenzie-Kennedy v. Air Council [16] ; Borough of Salford v. Lancashire County Council [17] ).
The Committee is a statutory body authorized to acquire certain property which is vested in it in its collective name, to dispose of that property and to sue and be sued but it has not been created a corporation according to the require-ments of English law in force in South Australia.
But that is not decisive, for recognition is given in the case of companies or artificial persons which have come into existence in countries whose law of incorporation is based on principles different from those of England and Austra-lia. The law of the forum determines whether the company or artificial person is recognized. Thus in the case of the Liverpool and London Life and Fire Insurance Co. v. Massachusetts [18] an English joint stock company, which several Acts of the Imperial Parliament expressly declared should not be so construed as to incorporate the com-pany, the Supreme Court of the United States, speaking through Miller J., (Bradley J. dissenting) said:-"But what-ever may be the effect of such declaration in the courts of that country, it cannot alter the essential nature of a corpo-ration or prevent the courts of another jurisdiction from inquiring into its true character, whenever that may come in issue. It appears to have been the policy of the English law to attach certain consequences to incorporated bodies, which rendered it desirable that such associations as these should not become technically corporations. Among these, it would seem from the provisions of these Acts, is the exemption from individual liability of the shareholder for the contracts of the Corporation. Such local policy can have no place here in determining whether an associa-tion, whose powers are ascertained and its privileges conferred by law, is an incorporated body. The question before us is, whether an association, such as the one we are considering, in attempting to carry on its business in a manner which requires corporate powers under legislative sanction, can claim, in a jurisdiction foreign to the one which gave these powers, that it is only a partnership of individuals. We have no hestitation in holding that, as the law of corporations is understood in this country, the Association is a Corporation" (Liverpool Insurance Co. v. Massachu-setts [19] ; cf. Beale, The Conflict of Laws (1935), vol. 2, pp. 736-739, ss. 154, 155; cf. Edwards v. Warren Linoline and Gasoline Works & Trustee [20] ). Be this as it may "the essence of incorporation according to English law is the bringing into existence of an entity with status as a person and capacities distinct from those of its members": (Young, Foreign Companies and other Corporations (1912), p. 218) or in other words ownership and liability sepa-rate and distinct from its members (Lloyd, Law of Unincorporated Associations).
In the present case, as already mentioned, the Chaff and Hay Acquisition Committee has many of the characteristics and attributes of a corporation. It has a collective name and property vested in it in that name. It may make pur-chases and sales in that name in and outside South Australia, subject to certain limitations upon the power of acqui-sition. It may sue and be sued, in its collective name, and regulations may be made by the Governor in Council for the conduct of its affairs (cf. The Taff Vale Railway Co. v. Amalgamated Society of Railway Servants [21] ).
But it is said that the Committee is not a corporation in the strict technical sense according to the principles of Eng-lish law in force in both South Australia and New South Wales and that the difficulties which arise from the differ-ent principles of foreign law do not affect the case.
This may be admitted but it is not, I think, decisive.
The Chaff and Hay Acquisition Committee is a statutory body endowed with the essential characteristics and attrib-utes of a body incorporated by English law. It is an "artificial person," to use the description of Westlake, Private International Law, 6th ed. (1922), s. 305, p. 373, and therefore entitled to recognition "in accordance with what is called 'comity'". It would be anomalous, I think, that the Chaff and Hay Acquisition Committee can be sued in that name in South Australia and yet in respect of transactions which it is expressly authorized to enter into outside South Australia, in its collective name, the Committee cannot be so sued outside South Australia.
Further, it was contended that the Chaff and Hay Acquisition Committee is a governmental board for the purpose of administering the Chaff and Hay (Acquisition) Act: in short a mere government department (Mackenzie-Kennedy v. Air Council [22] ). The Act declares that the Committee shall be deemed an instrumentality of the Crown. It is true enough that corporate bodies may be set up as departments of government, for instance a Board of Land and Works in Victoria (Public Works Act 1928, (Vict.), s. 4) or entirely separate and independent of any department of gov-ernment, for instance the Victorian Railways Commissioners (Railways Act 1928 (Vict.), s. 50). The Chaff and Hay Acquisition Committee is not a department of government: it is an independent statutory body set up to control the acquisition and distribution of supplies of chaff and hay for the relief of persons affected by drought. Its activities are more nearly related to commercial transactions than to transactions of government departments.
Therefore, in my judgment, the Chaff and Hay Acquisition Committee is an artificial person which may be sued, in its collective name, in the Supreme Court of New South Wales, which is all that is now decided.
The question whether the Committee is entitled to any and what immunity from suit as an instrumentality of the Crown and what are its obligations towards and its rights against the respondent do not fall for decisions in this ap-peal and remain open for consideration and determination in the action.
The appeal should be dismissed.