Australasian Corporations Bill.

Mr. Griffith, in moving the second reading of this bill, said:—This bill is entitled "a bill to declare the status of joint stock companies and corporations in colonies other than the colony in which they have been constituted, and for other purposes." In the Federal Council Act of Australasia, it is provided that amongst the subjects over which the Federal Council may have jurisdiction, is that of the status of joint stock companies. But the Council has that jurisdiction only when the matter is referred to it by the legislatures of two or more of the colonies of the federation, and the law passed is only to have effect in the colonies by whose legislatures the matter is referred to the Council, or in any other colony that may subsequently adopt the law. The Legislatures of Queensland and Tasmania are the only ones that have referred this matter to the Federal Council, by clause 9 of the Queensland Act, and clause 7 of the Tasmanian Act. The clauses are identical, and are as follows:—"In pursuance of the provisions of the said recited Act, the following matters are hereby referred to the Federal Council, with the intent that so soon as the Legislature or Legislatures of any colony or colonies shall have referred the same matters respectively to the Council the said Council may exercise legislative authority in respect of such matters, and that the Acts of the Council relating to them respectively shall be in force in Queensland (Tasmania in the Tasmanian Act); that is to say, the status of joint stock companies in colonies other than those in which they have been constituted, etc." No other colony has referred the matter to the Federal Council, and, therefore, Mr. President, although we are legally competent to deal with the subject, it may not be expedient for us to do so just yet. As far as Queensland and Tasmania are concerned, they have no large commercial relationship with each other as regards companies incorporated in one colony and carrying on trade in the other, though I have no doubt this relationship will be brought about soon. The difficulties that have arisen with respect to the status of joint stock companies and corporations have arisen, under the existing state of circumstances, more in Queensland than elsewhere, because that is a country that is being rapidly developed, and capital is being introduced, often in the form of joint stock companies formed in the other colonies, In respect to these a serious question has arisen as to their right to hold land, and their status generally in the colony of Queensland. The question is one which arises not only in the colony of Queensland but is a general international or intercolonial question, what is the status in one colony of a corporation incorporated according to the laws of another. Some persons imagine it is the simplest question imaginable, and that the status of a company in one colony must necessarily be its status in another. It may be so decided some day, but there is no decision of that kind up to the present, nor, in my humble page 59 judgment, is it likely there ever will be. The question having arisen in Queensland, various suggestions have been made for settling it. There is a law on the Queensland Statute Book dealing with companies formed in Great Britain, and providing that they may be registered in Queensland, and that companies so registered may have all the privileges of a company formed in Queensland, including the right to acquire and hold land. Some persons are of opinion that this Act has no effect, and that companies have the right to hold land without it. Whether this is so in respect of companies formed under the law of the Imperial Parliament, which for some purposes governs the whole of the Empire, is a nice question which it is not our province to determine. But that Act does not apply to companies formed in the other colonies, or in any country whose legislature has not a paramount authority in Queensland. With respect to the different colonies, I apprehend that the same rules apply as between different countries, and that a corporation, for instance, that is incorporated in "Victoria is entitled to the same recognition in Queensland as a corporation established by France is entitled to in Great Britain. What the extent of that recognition is, is to my mind, Mr. President, a very difficult question, and one that is unsettled by any judicial decision. Though two colonies have remitted the question to us, it is important that so difficult a question should not be settled until it has received the fullest consideration, and that it should be settled really by the representatives of colonies which take a very serious interest in the proper settlement of the matter. Although we have the power accorded us to settle the question, I do not think we ought to rush to a solution of the difficulty. As I have said, it has arisen principally in Queensland. I may say I am to some extent supposed to be responsible for it, having advised some years ago professionally that a corporation not incorporated in Queensland, or some country whose laws are paramount to those of Queensland, is not entitled to all the rights of a company that is incorporated in Queensland, and is not entitled to hold land. Other lawyers, many of them of great eminence, have given opinions to a contrary effect, which I have had the opportunity of reading. I have, myself, been called upon to reconsider the matter on more than one occasion, but I always found myself unable to change the conclusion at which I originally arrived. Perhaps it is just as well that I should state the nature of the difficulty that occurs to my mind, and the minds of many other lawyers, the opinions being pretty equally divided, as far as I can discover, though I naturally attribute most weight to those which agree with my own. What is settled about the law of corporations is this—That a foreign corporation is recognised as a person, to the extent of having the right to hold personal property, to make contracts, and to sue and be sued in the courts of another country. That has been settled for about 100 years; but beyond that, I am not aware that anything has been settled as to the rights of a foreign corporation. It appears to be assumed sometimes that because that right has been conceded to foreign corporations, therefore its right to acquire land must also be conceded. That appears to me to be inconsistent with the well-recognised distinction taken between real and personal property. By international law, personal property is recognised as belonging to its owner, in whatever part of the world it may be situated, so that if a man is adjudicated a bankrupt in Tasmania, his personal property all the world over would pass to the trustees appointed in his estate by the laws of Tasmania. It is equally clearly settled, however, that his real estate out of Tasmania would not pass to his trustees. Supposing a case analogous to the bankruptcy of an individual occurring with respect to a company carrying on business in a foreign country, and the company is allowed to hold land. What would become of the land when the company is wound up? The order of liquidation of one country would not be allowed to affect the real property situated in another country. That would be inconsistent with international law. That seems to indicate that there is a substantial distinction between land and personal property. Many other reasons may be given in reference to landed property, but as they are of a technical nature, relating to tenure, it is unnecessary to go into them in detail. The question is altogether one of serious difficulty, which would take a great deal of argument to satisfactorily settle, and if nothing is settled as to it by us it will have to be ultimately settled by the Privy Council. In the meantime the difficulty exists. I should be glad if the Council could deal with the matter during the present session, but I was not able to prepare and circulate a bill dealing with the subject long enough for it to receive public discussion, and it would be a misfortune if a bill of this kind should become law, or if we were to attempt to settle a question like this until we had an opportunity of having our proposals discussed and commented upon, or indeed had an opportunity of discussing our own proposals, and seeing if they will bear the test of mature reflection. In accordance with the promise I made to Victoria to bring the matter before the Council, I have laid upon the table a bill which attempts to deal with the matter. Whether it is the best thing to do in the matter or not may be a question upon which some difference of opinion may arise. The scheme proposed is simple and intelligible. It provides that any company constituted by the laws of one colony may procure itself to be registered in any other colony under the provisions of the Act The mode prescribed for registration is simple in the extreme. It is simply that a certificate of incorporation should be obtained from the colony in which the company was originally registered, and lodged with the registrar of joint stock companies in the colony in which it is desired it should be registered. For the purpose of dealing with the vexed question of holding land, it is provided that a corporation so registered shall be entitled to the same rights, capacities, and privileges, and be subject to the same obligations, liabilities and disabilities as it would have been if it had been registered under the laws of the colony in which it is registered. It is also provided that it will not be entitled to any greater powers or privileges than it would be entitled to under the law under which it was originally incorporated. The scheme, in short, is this—that if a company is registered in one colony page 60 we will give to it exactly the same powers and privileges as if it had been originally registered there, and no more. To solve the difficulty as to land, it is proposed to declare that within any colony in which the law is in force, a corporation constituted under the law of any other Australasian colony is not competent to take or hold land, unless it has been registered in accordance with the provisions of the Act, or unless an Act of the Legislature of that colony empowers it to do so. That saving clause is necessary, because otherwise it might be said that the Act of this Legislature would be inconsistent with the provisions of a local Act, in which case this Act would prevail. It is also proposed that in the event of the winding up of a corporation, the liquidators appointed by the Courts of the colony in which the company was originally incorporated shall have power to deal with the land belonging to it although it is situated in another colony, I am not prepared to say that some of these provisions will not require amplification; but I believe the scheme of the bill to be complete in itself, and that it would be found to work well. At the same time it is-just as well to point out the consequences which would now from the adoption of such a bill as this at the present time. Of course if the bill only comes into force in Queensland and Tasmania at the present time, it will not make much difference, as there are no Queensland companies trading in Tasmania, nor Tasmanian companies trading in Queensland. But supposing this bill were in force in Victoria. It would at once exclude from many very important privileges companies incorporated in New South Wales, New Zealand, and South Australia, and places them on a worse footing than companies registered in colonies in which the Act was in force. It would, so far as Queensland is concerned, give an enormous advantage to Victorian companies trading there, over those of New South Wales and New Zealand, of which there were a large number carrying on business in Queensland. I am quite prepared, when the proper time comes to take the responsibility of doing that, and of giving greater privileges to companies belonging to colonies which have joined the Federal Union, but I think that should not be done all at once. It should be generally known beforehand throughout Australasia what will be the consequence of such an Act being passed. I think the necessity of solving questions of this kind—commercial questions, and many others of a similar character—will be found before long to be a powerful incentive to colonies to join the union, even if it is only for some such special purpose. For my part, I should be willing to have them come in, though they were not bound by all the Acts of the Council. I should be glad, even on a matter like this, to take the voices of colonies which had not referred the matter to the Council, provided that they were represented in it for other purposes, and as I contemplated this I invited the Parliament of Queensland during last session to refer the question to the Council, even though I did not think the matter was one which would be referred to the Council by all the other colonies represented hero, I new move the second reading of the bill, and I trust it will be carefully considered, although I do not think it expedient to pass it into law during the present session. It ought, however, to receive very careful consideration during the recess, and, I hope most sincerely that the other colonies which have already joined the union will refer it to be dealt with by the Council next session, because it will be more satisfactory for it to be dealt with by representatives of colonies in which the law will be in force after the Act is passed. Otherwise, the other representatives will be in the position of arbitrators to whom the matter is referred, bat who have no personal interest in it, and who have no responsibility to their own colonies in connection with it if they make a mistake. The colonies in which the Act is to be in force will be anxious to know that a matter of so much importance has been dealt with fully by representatives with a full sense of responsibility. I believe I have now said enough on the subject. Attention should be especially directed to it during the recess, and I hope the result will be to lead to a fuller discussion when the matter is next before the Council. I now move that the bill be now read a second time.

Mr. Douglas seconded the motion.

Mr. Dodds, in view of the importance of the subject, and that there was so much difference of opinion upon it, moved the adjournment of the debate until next day.

Dr. Macgregor seconded the amendment.

Amendment put and passed, and debate adjourned.