Chaff and Hay Acquisition Committee v J A Hemphill and Sons Pty Ltd [1947] HCA 20

Chaff and Hay Acquisition Committee v J A Hemphill and Sons Pty Ltd [1947] HCA 20 - HCA 1947 case summary — Zoe

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Taylor K.C. (with him Burdekin), for the appellants. The com- mittee is not a corporation. It has no independent legal existence to permit it to be sued in New South Wales. The provisions of the Chaff and Hay (Acquisition) Act 1944 (S.A.) are procedural, Even if there is a type of committee or association which may be sued in the name of the association in some circumstances, the circumstances of this case are not such that this committee may be sued in New South Wales. Reliance is placed upon the committee's relation to the Crown. It is conceded that the committee has all the charac- teristics of a corporation except that there is not the ordinary pro- vision that there shall be a corporation with a common seal and perpetual succession. The absence of those very material features is vital, in the sense of being fatal. Section 14 is effective only in South Australia. No doubt a judgment obtained in New South Wales could under the Service and Execution of Process Act 1901-1934 be registered in South Australia but it could not be enforced against the property of that State. Prima facie the words "any court " in s. 14 (2) mean any court of the State of South Australia. The intent to incorporate the Air Council was more evident than is shown in respect of the committee in this case yet it was held in Mackenzie-Kennedy v. Air Council (1) that the Air Council was not a corporate body : See also Rowland v. Air Council (2) and Rowland v. Air Council (3). The intention of the legislature was to give a summary remedy for compensation claims, and possibly for other claims, therefore the intention was that these statutory provisions should be procedural only to provide a convenient remedy and there was no real intention to create a statutory body having a distinct legal existence such as a corporation. On the authority of Mac- kenzie-Kennedy v. Air Council (4) the committee was not a corporation in any strict sense; there was no intention to incorporate it. The only intention was to create a Crown agent and give a summary

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Barwick K.C. (with him Windeyer), for the respondent. The question involved ultimately resolves itself into one as to the con- struction of the Chaff and Hay (Acquisition) Act 1944 (8.A.). The liability of a defendant to be sued is determined by the lex loci contractu, but it is part of that law, so far as New South Wales is concerned, that the Courts of New South Wales will recognize any legal entity capable of suing or being sued in the country of its creation. Any legal entity, if it is capable of being sued in the country of its creation will be recognized in New South Wales as a plaintiff or a defendant (Von Hellfeld v. Rechnitzer and Mayer Freres & Co. (1) ). In General Steam Navigation Co. v. Guillow (2) there is a recognition that what is recognized by comity is the entity no matter whether it has all the other attributes of a corporation or not. The form of the precedent in Bullen and Leake's Precedents of Pleading, 3rd. ed. (1868), p. 30, is that all that is required to be alleged is the consti- tution of the corporation abroad and liability to be sued, and to sue. It is shown in La Banca Nazionale sede di Torino v. Hamburger (3) that comity extends where there is an entity recognized abroad ; that the entity there concerned had a right to sue in a particular way and although the statutory provision might be regarded as procedural nevertheless comity allowed the entity there concerned to sue for the bank in the form in which that bank would sue abroad. In Alivon v. Furnival (4) the basis of the decision was put on the same footing as one would recognize locally a foreign corporation. In Taff Vale Railway Co. vy. Amalgamated Society of Railway Servants (5) a trade union was regarded as a statutory body which was not incorporated and yet had a legal entity. The corporation under discussion in Stevens v. Keogh (6) is illustrative of corporations created by statute which still have not the characteristics of common law corporations. So long as the persona is able to be sued it is sufficient. Whether or not it is a persona is tested by two cardinal principles: (i) Has it separate liability from that of its constituent members ; and (ii) Has it separate ownership of property as distinct from its members (Von Hellfeld v. Rechnitzer and Mayer Freres & Co. (1)). Even if our local law recognizes a number of entities which are not corporations, the legislature is free to create any persona it desires with any attributes it thinks fit. The legislature of South Australia was entitled to create any persona it thought fit and it was not limited to creating such persona as known to the

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common law (Taff Vale Railway Co. v. Amalgamated Society of Railway Servants (1)). The organization in that case is an illustration of an entity created without corporate existence. This was recognized in Brisbane Shipwrights' Provident Union v. Heggie (2) and Egan vy. Barrier Branch of the Amalgamated Miners' Association (3): see also Maitland's Collected Papers (1911), vol. m1, pp. 210, 305, 390. Although the persons concerned in Jefferys v. Gurr (4) were not regarded as a corporation for all purposes they were regarded as a corporation for some purposes. In Conservators of the River Tone vy. Ash (5) the right to sue for a corporate body could be got only by first deciding it was a corporation ; one got to the liability for suit by means of deciding that it was a corporation. Here there is no such necessity. The corporate character of the associations created or registered under foreign law is recognized as a matter of inter- national comity (United Service Insurance Co. Ltd. (In Liq.) v. Lang (6) ; Re Transfer of Land Act 1915 (7) ; Bateman v. Service (8) ). Apart from its own intrinsic difficulties there are two factors in Mackenzie-Kennedy v. Air Council (9) which differentiate it very much from the present case, namely (a) that the function there being performed was a function of the Department of State, and (5) that there were other duties in pari materia which assisted the con- struction that there was no intention to incorporate. The Act contemplates that there may be a variation in the personnel of the committee, and it provides for perpetual succession. The Act shows a sufficient intention to incorporate the committee, e.g. corporate liability, members not individually liable, perpetual succession, liability to suit under the committee name, and, over all, the intention of creating a body able to go abroad as a persona to purchase chaff and hay (Conservators of the River Tone v. Ash (10); Borough of Salford v. Lancashire County Council (11)). An illustration of a statutory corporation without a seal is shown in Ex parte Annesley (12). The fact that a corporation has not a seal is unimportant (South of Ireland Colliery Co. v. Waddle (13) ).

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creates any legal personality other than a corporation. The intention which it is necessary to find in the words of this Act, is to make the four members of this committee the corpus or substratum of a new legal personality other than a corporation. The intention to invest the committee as a body with the status of a corporation is not evident in the Act. I am unable to find in the words of the Act the intention to constitute, besides the visible committee consisting of the four members appointed by the Governor, a fictitious person also called " the committee." Tt was not necessary for the legislature to invest the committee with the status of artificial legal personality to make the Act work. The committee is not constituted to stand over against the members of the committee as an incorporated company stands over against its shareholders. The Act confers powers upon the committee and also empowers a member of the committee to do certain things. For example, the power of com- pulsory acquisition is conferred upon the committee : the power to purchase is conferred upon any member of the committee. The intention of the legislature is that in one case the power should be exercised by the four members of the committee collectively or by as many of them as would be a quorum, and in the other case that the power should be exercised by one of those visible persons. The members of the committee do not exercise the powers conferred upon "the committee " as the executants of a legal personality called the Chaff and Hay Acquisition Committee : they exercise those powers in their own right. They do not stand in the position of directors of a quasi-corporate " committee " of which they are also members. The four members of the committee are collectively the instrumen- tality of the Crown. They are not appointed to act as agents of some new persona juridica. . If the Act did not otherwise provide, any chaff or hay purchased or acquired would vest in and become the property of the Crown. Section 5 (2) says that upon purchase or acquisition the chaff or hay " 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 purposes of this Act." This provision gives the committee the rights of property in the chaff and hay acquired or purchased pending its distribution under the Act. It does not warrant the conclusion that the committee is by implication a legal personality. The provision vests the chaff and hay in and gives the rights of property to the four members collectively. They become trustees for the Crown of the chaff and hay for the purposes of the Act. Section 5 (2) does not raise any question of whether there is a quasi-corporation or a different legal entity from the members of the committee. This

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provision vests the property only in the persons of whom the com- mittee consists and creates rights of property only in those persons. It is not necessary that the committee should be a legal personality to avoid the transmission of any legal interest of a member of the committee. That result is avoided by the terms of the section. If a member dies or the appointment of a member terminates, he would cease to be a member of the class to which s. 5 (2) applies. The vesting and rights of property brought about and conferred by s. 5 (2) depend upon membership of the committee. It oper- ates to vest property in and to give rights of property to the persons who are from time to time the members of the committee. Although the committee has not permanent legal unity like a cor- _ poration, s. 5 (2) gives the committee in respect of the ownership of property the advantages of a corporation: the Parliament can do this without making the committee a persona juridica of any kind. Section 14 regulates proceedings with respect to matters arising out of the Act. The committee is an instrumentality of the Crown: amemberis also in that position when exercising any powers conferred upon him by the Act. Proceedings by or against the committee or a member, in such a case, are really proceedings by or against the Crown. In the absence of s. 14 such proceedings would need to be taken in the way in which the Crown sues or is sued in South Australia. Section 14 (1) provides that with respect to matters arising out ot the Act all legal proceedings by the committee are to be commenced in the name of the committee and all legal proceedings against the committee or any member are to be instituted in the name of the committee. The effect of s. 14 (1) is that the committee is empowered in proceedings arising out of the Act to represent the Crown either as plaintiff or defendant. In the former case they displace the Attorney-General: in the latter case the committee act as a nominal defendant: s. 14 (1) supplants the procedure of petition of right. Section 14 (1) lends no support to the argument that the committee is an artificial person. The object of this provision is not to make the liability of the committee separate from the liability of the members of the committee. There is here no analogy to the position of a company vis-a-vis its members. Further, s. 14 (1) does not authorize proceedings which bind any assets of the committee. Section 14 (2) says that the Treasurer of South Australia shall, from the moneys appropriated for the purposes of the Act, satisfy all orders made by any court against the committee in any such legal ' proceedings. This provision demonstrates that s. 14 (1) makes the committee a nominal plaintiff or defendant for the Crown. It follows that the committee cannot be sued or sue by the name of

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Judgment (116 paragraphs)

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