Mellenger v New Brunswick Development Corporation
| Jurisdiction | England & Wales |
| Judge | THE MASTER of THE ROLLS,LORD JUSTICE PHILLIMORE |
| Judgment Date | 16 February 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J0216-2 |
| Date | 16 February 1971 |
| Court | Court of Appeal (Civil Division) |
[1971] EWCA Civ J0216-2
The Master of the Rolls (Lord Denning)
Lord Justice Salmon and
Lord Justice Phillimore
In The Supreme Court of Judicature
Court of Appeal
Appeal of defendants from order of Mr. Justice Kilner Brown dated 21st December, 1970.
Mr. J. G. WILMERS, Q. C., and Mr. B. SHAW (instructed by Messrs. Beaumont & Son) appeared on behalf of the Appellant Defendants.
Mr. H. E. I. KEMPSTER, Q. C., and Mr. GORDON BISHOP (instructed by Messrs. Pritchard Englefield Leader Henders) appeared on behalf of the Respondent Plaintiffs.
We need not trouble you, Mr. Wilmers.
In this case Mr. Mellenger and Mr. Levin, both Canadian citizens, seek to sue the New Brunswick Development Corporation. They claim a sum of a quarter of a million pounds. They say that it is commission which has been earned by them for introducing an important commercial enterprise into New Brunswick.
In January 1969 the British Match Corporation Ltd., through a subsidiary, Airscrew Weyroc Ltd., were proposing to set up a new plant for the manufacture of chipboard. That is a material made out of chips of wood and used for making furniture and other articles. Airscrew Weyroc were in negotiation with concerns in Sweden and Finland, where large quantities of timber were available. Airscrew Weyroc proposed to set up a manufacturing plant in those countries, or, alternatively, to buy materials from those countries. But then at a critical and important point Mr. Mellenger and Mr. Levin saw an opportunity for New Brunswick. They were instrumental in diverting the proposal to New Brunswick, instead of Sweden or Finland. It so happened that in January 1969 the Prime Minister of New Brunswick, Mr. Robichaud, was staying at the London Hilton Hotel. Mr. Mellenger and Mr. Levin went to see him. They suggested that the Province of New Brunswick might be a suitable place from which the materials should be obtained; whereupon the Prime Minister of New Brunswick went even further. He suggested that the very plant itself might be set up in New Brunswick. That introduction was most fruitful. It was followed by many meetings and much going to and fro between England and New Brunswick. Representatives came here from the Government of New Brunswick, and also Mr. Keate, the Business Manager of the New Brunswick Development Corporation. Eventuallya contract was made whereby Airscrew Weyroc were to set up a plant in New Brunswick and make the chipboard there for export to England and elsewhere. The agreement was made between Airscrew Weyroc Canada Ltd. and Airscrew Weyroc England Ltd. and the Province of New Brunswick. The Airscrew Weyroc Company was to acquire the site and build the factory. If they needed to raise money for the purpose, the Province of New Brunswick agreed to guarantee the bond issue. All seems to have gone well, and the factory, we are told, is nearing completion.
Now Mr. Mellenger and Mr. Levin seek commission for this very important introduction. They have issued a writ against the New Brunswick Development Corporation. It was issued on the 24th November, 1969. But the New Brunswick Development Corporation has no place of business in this country. So the plaintiffs had to apply for service of the writ out of the jurisdiction. For that purpose an affidavit was sworn by the plaintiffs' solicitor. He asserted that there was a contract made in England by the Corporation to pay commission to the plaintiffs.
The New Brunswick Development Corporation entered a conditional appearance and applied to set aside the writ. They said It was not a proper case for service out of the jurisdiction on these grounds:- First, that the affidavit was not as full and frank as it ought to have been. Second, that the plaintiffs had not shown a good arguable case against the Corporation. Third, that the convenient forum was not England, but New Brunswick.
Mr. Justice Kilner Brown examined all the circumstances. He held that it was a proper case for service out of the jurisdiction. He allowed the writ to stand. The New Brunswick Development Corporation appeal to this Court. Only a day or two ago, just before this appeal came on, the plaintiffs delivered astatement of claim in which they put their case rather differently from what they did originally. They rely a great deal on a meeting with Mr. Robichaud, the Premier of New Brunswick, and assert that he was acting on behalf of the New Brunswick Development Corporation. They also rely on an interview on a visit to Weighbridge, and so forth. Mr. Wilmers took us through all these matters and submitted again that it was not a proper case for service out of the jurisdiction on the same grounds, namely, that the original affidavit was not full and frank, that there was no good arguable case, and that the convenient forum was not England but New Brunswick. On all these points we were against Mr. Wilmers and did not wish to hear Mr. Kempster.
But Mr. wilmers took a new point before us. He says that the New Brunswick Development Corporation is an arm of the Government of the Province of New Brunswick, and cannot be sued in this country. It is entitled to sovereign immunity. He produced two affidavits, one sworn by Mr. Paterson, the Agent-General in London of the Province of New Brunswick, the other by Mr. Hoyt, the solicitor for the Corporation, who has come over from Canada. They produced the statute under which the Corporation is established, which showed, they say, that it is an arm of the Government.
On this point I must mention a preliminary matter. It was suggested by Mr. Kempster that the Province of New Brunswick does not qualify as a sovereign state so as to invoke the doctrine of sovereign immunity. But the authorities show decisively the contrary. The British North American Act 1867 gave Canada a federal constitution. Under it the powers of government were divided between the Dominion Government and the Provincial Governments. Some of those powers were vested in the Dominion Government. The rest remained with the Provincial Governments. Each Provincial Government, within its own sphere, retained its independence and autonomy, directly under the Crown. The Crown is sovereign in New Brunswick for provincial powers, just as it is sovereign in Canada for Dominion powers: see Maritime Bank of Canada (Liquidators) v. Receiver-General of New Brunswick (1892) A. C. 437. It follows that the Province of New Brunswick is a sovereign state in its own right, and entitled, if it so wishes, to claim sovereign immunity.
The next point is whether the New Brunswick Development Corporation can avail itself of the doctrine of sovereign immunity. If it is part and parcel of the Government of New Brunswick - so much so as to be identified with it like a Government Department - It can clearly claim immunity. For this purpose we must turn to the statute which set it up. It was established by the New Brunswick Development Corporation Act of 11th April, 1959. Clause 1 says:-
"There is hereby constituted on behalf of Her Majesty in right of New Brunswick a body corporate under the name of The New Brunswick Development Corporation."
Then follow clauses which show the close connection of the Corporation with the Government. The Minister of Industry is an ex officio director. The other Directors are appointed by the Lieutenant-Governor in Council. There is no issued capital. It has no stocks or shares. Its principal power is: "…to assist, promote, encourage and advance the industrial development, prosperity and economic welfare of the Province.
It is true that there is a later clause which gives the Corporation power… "subject to the approval of the Lieutenant-Governor in Council, to carry on any business of an industrial commercial or of any agricultural nature".
But the evidence shows...
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