Chaff and Hay Acquisition Committee v J A Hemphill and Sons Pty Ltd

[1947] HCA 20

(Decision by: Latham CJ)

Chaff and Hay Acquisition Committee
vJ A Hemphill and Sons Pty Ltd

Court:
High Court of Australia

Judges:
Latham CJ
Starke J
McTiernan J
Williams J

Hearing date: 2 May 1947, 5 May 1947
Judgment date: 12 June 1947

Melbourne


Decision by:
Latham CJ

The question which arises upon this appeal is whether the Chaff and Hay Acquisition Committee constituted under the Chaff and Hay (Acquisition) Act 1944 (S.A.) can be sued in the Supreme Court of New South Wales. The com-mittee was sued upon a common money count and in assumpsit. An unconditional appearance was entered for it. It pleaded to each count and filed a further plea by way of cross-action claiming damages. A controversy arose be-tween the parties as to whether the case should be heard with or without a jury, and the defendant then took out a summons asking that the writ be set aside on the ground that it was not a legal entity capable of being sued in New South Wales.

Owen J. set the writ aside on the ground that the committee was not a corporation under South Australian Law, and therefore should not be recognized as a corporation in New South Wales. The Full Court set aside this order, the majority, Jordan C.J. and Street J., holding that the committee, though not a corporation, was a legal entity capable of being sued not only in South Australia, but also in other countries. Davidson J. was of the contrary opinion, but his conclusion was based upon the fact that the committee was an instrumentality of the Crown, and he considered that the rule that a foreign sovereign State could not be impleaded without its consent was applicable. This conten-tion, however, was not raised on behalf of the defendant either in the Supreme Court or in this Court. It is not the Government of South Australia, but the committee, which is sued, and the committee has submitted to the jurisdic-tion by appearing unconditionally and by pleading and making a cross-claim.

The committee is constituted under the Chaff and Hay (Acquisition) Act 1944 of South Australia. That Act is pref-aced by a preamble reciting that, in view of the drought prevailing in the State of South Australia, it was expedient to make extraordinary provision for ensuring sufficient supplies of chaff and hay. Under s. 3 it is provided that a committee, to be called the Chaff and Hay Acquisition Committee, is thereby constituted consisting of four mem-bers appointed by the Governor who hold office for such term as is from time to time fixed by the Minister. Section 3 (4) provides that "The committee shall be deemed to be an instrumentality of the Crown." Section 4 provides that the committee may acquire any chaff or hay within the State or any standing crops which are capable of being har-vested as hay. It is also provided that the powers conferred by s. 4 shall not be exercised after 30th September 1945. It should be observed that this limitation upon the powers of the committee refers only to the powers of acquiring chaff, hay and crops. It does not have the effect of bringing the existence of the committee to an end on the date specified. Section 5 provides that the power of acquisition may be exercised by purchase or by compulsion, and that the chaff, hay or standing crop acquired "shall vest absolutely in the committee and shall, subject to any disposition thereof made by the committee under this Act, be and remain the property of the committee for the purpose of this Act." Thus the committee can acquire and hold property. The property is the property of the committee, not of the members of the committee. If a member of the committee died the interest in property acquired by the committee would not be part of his estate. It would remain the property of the committee as constituted under the Act.

Section 7 contains provisions for compensation in cases where the committee acquires chaff & c., and provides that in the absence of agreement the amount of compensation shall be such as is determined in an action for compensa-tion against the committee. Thus compensation is to be determined in proceedings against the committee and not in proceedings against the individual persons constituting the committee. Here is a further recognition that the commit-tee has a personality distinct from that of its members. Section 8 expressly authorizes the committee to purchase chaff or hay outside the State. The section confers authority upon the committee to act extra-territorially. Section 10 provides that the committee may sell chaff or hay. Under these two provisions the committee, but not the persons constituting it, may acquire rights and become subject to liabilities. Section 13 provides that the Treasurer may bor-row, for the purposes of the Act, £250,000 and may apply that money for the purpose of carrying the Act into effect.

Section 14 is in the following terms:-"(1) All legal proceedings by the committee with respect to any matter arising out of this Act shall be commenced in the name of the committee and all proceedings against the committee or any member of the committee with respect to any such matter shall be instituted against the committee in the name of the committee. (2) The Treasurer of the State shall, from the moneys appropriated for the purpose of this Act, satisfy all orders made by any court against the committee in any such legal proceedings. (3) No matter or thing done or suffered by the committee or by any member thereof, bona fide in the execution of this Act, or the exercise or dis-charge, or intended exercise or discharge, of any of its or his powers or duties, shall subject any member of the committee to any liability in respect thereof."

Sub-section (1) of s. 14 expressly deals with procedure and can apply as law only in the courts of South Australia. The legislature of South Australia has no power to prescribe procedure in the courts of other countries. Sub-section (2) of s. 14, providing that the Treasurer shall satisfy all orders made by any court against the committee, is limited to orders made "in any such legal proceedings" and therefore applies only to legal proceedings in South Australia. These two sub-sections make it unnecessary, in order to enforce a claim against the committee, to pursue in South Australia the procedure by petition of right for which the Supreme Court Act 1935-1944 (S.A.) Part V. provides. In the absence of such provisions the declaration in s. 3 (4) that the committee is an instrumentality of the Crown would have imposed procedure by petition of right upon such claimants.

Sub-section (3) of s. 14, however, is a section which deals with more than procedure in actions. It provides that things done by the committee or a member thereof shall not subject any member to any liability in respect thereof. Previous provisions, as already stated, show that the committee may become subject to liabilities which can be en-forced in a court, and s. 14 (3) shows that those liabilities are not the liabilities of the members of the committee but are liabilities of the committee itself, which is treated as a legal person separate from its members.

Section 15 provides that regulations may be made for various purposes, including regulations "(f) Authorizing the acquisition or requisition by the committee of any plant or machinery necessary for the purposes of this Act; (g) Authorizing the acquisition or requisition by the committee of facilities for the storage of chaff and hay acquired by the committee." These also are provisions showing that the committee may own property.

Consideration of the terms of the Act shows, therefore, that the committee is not a temporary body. The Act does not give the committee only a limited life. It continues in existence until it is dissolved by some means. The committee can own property, acquire rights, incur liabilities, and those rights and liabilities are the liabilities of the committee, and not of its members. Accordingly, in my opinion it must be held that the committee is a legal entity in South Aus-tralia distinct from the persons composing it from time to time, with property, rights, and liabilities which belong to it and not to those persons.

The learned judges of the Supreme Court were of opinion that the committee was not a corporation. It was recog-nized that it was not essential that express words of incorporation should be used in order to create a body as a cor-poration (Conservators of the River Tone v. Ash [1] ). But it was pointed out that the ordinary words used for the purposes of bringing about incorporation did not appear in the South Australian Act: Cf. Mackenzie-Kennedy v. Air Council [2] . But even if it should be held that the committee is not a corporation, the provisions of the South Aus-tralian Act show that it is a statutory person, a persona ficta created by law. It is a subject of rights and duties. A body which, as distinct from the natural persons composing it, can have rights and be subject to duties and can own property must be regarded as having a legal personality, whether it is or is not called a corporation.

If the committee is a legal entity in South Australia as distinct from the personalities of the natural persons who con-stitute it, then it is by comity recognized as a legal entity elsewhere. This principle is well established in relation to foreign corporations: Bateman v. Service [3] : Re Transfer of Land Act 1915 [4] , quotation from American and Foreign Christian Union v. Yount [5] : See Halsbury's Laws of England, 2nd ed., vol. 5, p. 860, and the full discus-sion of the subject in Foote, Private International Law, 5th ed. (1925), pp. 161 et seq. The same principle is applied to the recognition of bodies created by foreign law which have rights and liabilities distinct from those of the natural persons who constitute them. In General Steam Navigation Co. v. Guillou [6] the Court stated that "a body estab-lished by the French law and analogous to an English corporation" [7] could be regarded in English law as the em-ployer of the master of a vessel, and it was recognized that such a body was distinct from the individuals composing it.

In Von Hellfeld v. Rechnitzer and Mayer Fr é res & Co. [8] , Phillimore L.J., referring to a foreign partnership, pointed out that it did not satisfy the requirements of legal personality in order to make it possible to regard it in England as a person as distinct from its constituting members. The reason for this statement was that the characteris-tics of the partnership were not enough to show that it was "like a corporation in this respect, not merely that it has a separate persona, but that it has a separate ownership of property and separate liability from the ownership or liabil-ity by or of the persons composing the aggregation" [9] . His Lordship went on to say that in a case where it was doubtful whether a body was a corporation or not it might be sued in England if it were made clear that no relief was sought against any individual composing the entity, but only against the entity itself.

In the present case the committee has, in my opinion, all the attributes of a separate persona. It can own property, it can acquire rights and become subject to duties owed to other persons. These characteristics are conferred upon it by the law of its creation and by comity the committee should therefore be treated as an existing legal personality in New South Wales. I am therefore of opinion that the judgment of the Supreme Court was right and that the appeal should be dismissed.