Australasian Temperance And General Mutual Life Assurance Society Limited v Howe [1922] HCA 50

Australasian Temperance And General Mutual Life Assurance Society Limited v Howe [1922] HCA 50 - HCA 1922 case summary — Zoe

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not permanent things, but variable qualities. They are elusive, not necessarily conveying precisely the same meaning to any two per- sons, and they are constantly used to express imperfect analogies. For example, the words " attendant," "incumbent," " coadjutant," "respondent," "dependent," when used as substantives always denote an individual, while the same words used as adjectives are subject to no such restriction. This divagation has taken place in the use of the word " resident." Its meaning when used as a noun is, according to the Oxford Dictionary, " one," thatis, a natural person, "who resides permanently in a place." But according to the same authority the adjectival form, while primarily applying to individuals, may also be used in relation to corporeal things and abstract ideas. Corporations are not residents in any literal sense, because they cannot perform the essential function which the term connotes: they cannot live in some particular part as distinguished from all other parts of the earth. But it sometimes happens that words lose their literal meaning when used in popular speech. Is that so with the word " resident " when used as a substantive? If one read in a gazetteer or year-book a statement that in the High Court residents of one State may sue residents of another State, and a resident of one State may sue or be sued by another State, would he think that the statement had any reference to corporations ; or, if he did so think, would it be because of the natural meaning of the words or because in his opinion no sufficient reason existed to justify the Legislature in conferring jurisdiction on the Court with respect to natural, and withholding it with respect to artificial, persons ? If such a one read in a newspaper that the residents of Lille had suffered great pecuniary loss owing to the occupation of that city by the German Army, what meaning would he attribute to the word "yesidents''? Would he suppose that it included corporations ? We think not, unless he allowed himself to be swayed by the con- sideration that the statement would be much more complete if it included them than if it did not. Counsel for the plaintiff company

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whether the Imperial Ottoman Bank " resided " in England. It - was incorporated in Turkey and established as a State bank for the Ottoman Empire with its central administration in Turkey, Unquestionably it had a branch or agency in London, conducted, not by strangers, but by a committee of the bank and an English sub-committee in the bank's own premises, and the business done there was the ordinary business of bankers. But upon the con- struction of the word "residing" in the Income Tax Act it was held that the bank was not residing in England. Kelly ©.B. said (1): '' Now, I am clearly of opinion that upon the case now before the Court, the Imperial Ottoman Bank cannot be said to be 'resident' in this country; that the business carried on in Lon- don is a mere branch or agency, and not the bank itself; and that London is not the chief seat of carrying on the business of the bank." He refers to the charter of incorporation, and says: ~ If, therefore, this corporation can be said to be resident anywhere, I am of opinion that it must be resident in Constantinople, where alone it has its ' seat,' under the express terms of the charter; and the branches or agencies, which it establishes in London, Paris, or elsewhere, are not the establishment, the bank itself, but only branches of that bank which has its seat at Constantinople." Cleasby B. (2) thought the bank was not even " carrying on its business " in London, but con- ceded that " some of its business is carried on here " and, nevertheless, thought it was not " resident " for the purpose in hand. <Ampihilett B. said (3) : - '' What, then, is the reasonable meaning of a corporation residing anywhere ? It appears to me that it is this, that a corpora- tion may be said to reside wherever it has its seat." The Court there- fore decided that the "seat" of the company - not necessarily the place of incorporation, because the Court looked further into the facts to find the actual seat of the company - determined its place of "residence " in the sense appropriate to the Income Tax Act. The Cesena Case (4) is doubly important because it has been approved by the House of Lords. Huddleston B. (5) referred to Alex- ander's Case, and followed it. His words (6) - '" The artificial (1) (1874) L.R. 10 Ex., at p. 30. (4) (1876) 1 Ex. D., 428.

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residence which must be assigned to the artificial person called a corporation is the place where the real business is carried on. The difficulty is in applying that principle to the facts of each case"" - are manifestly subsequently adopted in the De Beers Case (1). The learned Baron proceeds to deal with the onus of proof, and indicates what it is the Court must be satisfied of as a matter of fact. He states it thus : "* Then I have to ask myself where was the place where the real and substantial business was carried on - where was le centre de Ventreprise, the central point ?"" And he answers it for that case on the facts. I emphasize that portion of the learned Baron's judg- ment because by and since the De Beers Case it seems to be finally accepted as the law - the principle of law determining the true "tesidence" of a company, apart from the so-called "residence " for territorial submission to the territorial jurisdiction of a Court and in respect of its acknowledged judicial power. Jones's Case (2) is notable for two reasons: first, because for the purpose in hand an individual carrying on business was regarded as " residing " at the principal place where he carried it on and not at his branches ; next, by analogy, a Scottish insurance company having its principal place of business in Scotland with several branches in England and even a chief office for England in London, was held not to come within the words "ordinarily resident" in England. (Judicature Rules, Order XI., r. 1.) In the San Paulo Case (3) the observations of Lord Halsbury L.C. at pp. 38-39, of Lord Watson at pp. 41-42, and of Lord Davey at p. 43, are to the same effect, and support the Cesena Case (4). They show the two senses in which the expression "carry on business " is used ; and they show very distinctly that the meaning to be given to " resides " when interchanged with " carrying on busi- ness " depends on the particular sense in which the latter expression is used. The De Beers Case (5) is most valuable, and, as I think, decisive. Collins M.R., after referring to cases of the La Bourgogne type as wholly opposed to the argument of counsel that a foreign corporation could not in any sense reside in England, proceeded (6): "It may

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5th ed. (1902) he says, at pp. xlv. and xlvi., speaking of Pitt's Act of 1799 : - " The tax was charged throughout Great Britain, upon: ;

Absentees . 2. Residents . . . ." Then "Absentees were - defined as British subjects not resident in Great Britain; Residents, : as persons residing in Great Britain, and every body, politic or cor- porate, company, fraternity or society of persons, whether corporate or not corporate, in Great Britain." That is repeated in the 8th ed. (1919), at p. xv. The "noun" resident was not used in the Act, nor was the word "resident" even as an adjective attached to corporations. Now I turn to Judges; and these references are practically taken at haphazard. In the De Beers Case (1) Lord Collins (then Collins M.R.), speaking of corporations with reference - to Order IX., r. 8, says of the cases as to service upon them: "It 3 was necessary, in order to establish the right to treat the foreign cor-_ poration as within the jurisdiction, to bring it within the law applic able to residents in this country." The learned Master of the Rolls apparently saw no inaccuracy in including corporations among "yesidents"" for that purpose. In 1912, in American Thread Co. v. Joyce (2), Fletcher Moulton L.J. says : - '* Now the question where an artificial person like a corporation resides is clearly not a pure question of fact. It would not be so even in the case of an individual. It is a pure question of fact whether an individual was in a house on a particular day or on a particular series of days, _ but you cannot say whether those acts or presence are sufficient to make him a resident in that house until you know what in the eye of the law is sufficient and is necessary to constitute residence. If that is true of an individual, it must be still more evidently true in the case of a corporation in which the word residence cannot in any very natural sense be applied." There, although the words "a resi- dent" are not directly attached to the corporation, there is sufficient to indicate that they are used indiscriminately with " resident" as an adjective, in relation to both individuals and corporations. In Mitchell v. Egyptian Hotels Ltd. (3) Lord Sumner is even more direct. He says: - 'My Lords, where a resident in the United Kingdom is proprietor of a profit-earning business wholly situate

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resident of a Territory cannot sue in the High Court a resident of a State. So, too, sec. 117 does not prevent a State from imposing disabilities on subjects resident in the Territories ; and it would seem that, as in the United States, a State may impose disabilities on cor- porations created in another State though not on citizens of the other State (Ducat v. Chicago (1) ). But it is not for this Court to add to the Constitution what we may think to be desirable for sym- metry. If we could consider what is desirable, we might think that if a resident of New South Wales or of Tasmania can sue this Victorian company or be sued by it in the High Court, a resident of Victoria should have the same privilege or burden. We might think that the jurisdiction given in matters "' between residents of different States " is a piece of pedantic imitation of the Constitution of the United States, and absurd in the circumstances of Australia, with its State - Courts of high character and impartiality. According to Story and Black (Constitutional Law, 2nd ed., p. 140), the reason for giving to the Federal Courts jurisdiction of controversies between citizens of different States was the apprehension that a citizen sued in Courts of his own State by a non-resident might be able to prevail unjustly in consequence of his local influence, or the prejudice against citizens of other States, or State pride and jealousy. The result of sec. 75 is that an action on a bill of exchange or for breach of promise of marriage may be brought in the High Court if one party happens to be a resident of Wodonga and the other of Albury, but not if one party lives at Albury and the other at Ballina. It appears that actions " between residents of different States" far outnumber all other classes of actions in the Circuit Courts of the United States. But it is not for us to improve the Constitution in either direction ; we must act on the words of the Constitution as they stand. If the High Court is to entertain actions "' between residents of different States,'' whatever be the nature of the action, it must do so; but

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Judgment (355 paragraphs)

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