Towards Harmonised Company Legislation — ‘Are We There Yet’?
| Date | 01 June 2012 |
| DOI | 10.22145/flr.40.2.1 |
| Author | RI Barrett |
| Published date | 01 June 2012 |
| Subject Matter | Article |
TOWARDS HARMONISED COMPANY LEGISLATION —
'ARE WE THERE YET'?
R I Barrett*
ABSTRACT
The enactment of uniform companies legislation in 1961 –2 was a significant
achievement for a country in which, a century earlier, multiple incorporations of the
one body was the norm and a court of one colony questioned the ex istence of corporate
personality created b y the law of another. After Federation, business interests
increasingly sought uniform St ate laws. They opposed centralised regulation which, in
any event, was beset b y constitutional difficulties. Commonwealth legislation
eventually beca me the prefer red model as shortcomings of uniform and co-operative
mechanisms were progressively exposed. Yet fully harmonised corporations
legislation still does not exi st. In this paper presented to the 2011 Hartnell Colloquium
at the Centre for Commercial Law, Australian National University t o mark the fiftieth
anniversary of the Uniform Companies Acts, the author sketches the develo pment of
Australian companies legislation over the last 150 years.
INTRODUCTION
Very few lawyers practising today experienced the transition to so-called 'uniform'
companies legislation that was achieved in 1962. This colloquium
1
marking fifty years
since that a chievement provides an opportunity to reflect on the events that led to
uniformity and to ask whether Australia yet has harmonised company legislation.
THE COLONIAL ERA
In the beginning, each colony adopted its own Compa nies Act, modelled on the English
legislation of 1862 which was, in turn, an extension of the Joint Stock Companies Act
1856, the brainchild of the Vice-President of the Board of Trade, the brilliant Robert
Lowe who had spent a decade in New South Wales public life during the 18 40s.
Queensland led the way with a compre hensive Companies Act in 1863. Victoria and
South Australia followed in 1864 and Tasmania in 1869. New South Wales moved
slowly. Its legislation was passed in 1874. Western Australia ad opted its own version
_____________________________________________________________________________________
* A Judge of Appeal, Supreme Court of New South Wales.
1
This pa per was presented to the 2011 Hartnell Colloquium, 'A Half Century of
Harmonisation? The 50th Anniversary of Harmonised Company Legislation in Australia',
Centre for Commercial Law, Australian National University, Canberra, 18 November 2011.
142 Federal Law Review Volume 40
____________________________________________________________________________________
of the English Act of 1862 in 18 93, having earlier enacted the Joint Stock Companies
Ordinance 1858 modelled on the English Act of 1856.
While these separate enactments were inspired by English innovation, they were
passed against the background of particular preconceptions about colonial
corporations.
In the mid-nineteenth century, special Acts of colonial legislatures had incorporated
certain joint stock companies and put their members under a bond of incorpora tion.
But incorporation by a statute of one colony was seen to be subject to a territorial
limitation. Thus, in The N ational Bank of Australasia v Cherry
2
in 1870, for example, the
Privy Council had before it as a litigant a body inco rporated by a South Australian
enactment
3
and descr ibed as 'The South Australian Branch of the National Bank of
Australasia'. The bank of which it was said to be a 'branch' was The National Bank of
Australasia, an incorporated body created by an Act of the legislature of Victoria.
4
In
the same way, the proprietors of shares of the joint stock of the Bank of New South
Wales were made 'one body politic and corporate' by the Bank of New South Wales Act
of 1850,
5
a New South Wales statute,
6
and also by a New Zealand statute of 1861.
7
The
colonial legislatures were subordinate legislatures and particular views were taken
about their extraterritorial competence.
8
There were two strands to this theory of territorially c onfined corporate existence.
In the first place, the creation of a corporation by statute was generally accompanied
by a statutory licence or concession to carry on a particular business. There was no
doubt good reason to think that permission of that kind conferred by local legislation
did not extend beyond the legislature's territory. But a second idea was at work. It had
found clear expression in the United States where, by the first quarter of the nineteenth
century, courts had had to come to grips with the status in one state of a corporation
created by the law of another. The matter was dealt with by the Supreme Court in 1839
in Bank of Augusta v Earle.
9
Chief Justice Taney put the matter thus:
It is very true that a corporation ca n have no legal existence out of the boundaries of the
sovereignty by wh ich it is created. It exists only in contemplation of law and by force of
the law, and where that law ceases to operate and is no longer obligatory, the corporation
can have no existence. It must dwell in the place of its creation, and cannot migrate to
another sovereignty.
10
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2
(1870) LR 3 PC 299.
3
An Act to regulate and provide for the management of the South Australian Branch of the National
Bank of Australasia, and for other purposes (22 & 23 Vict,. 1859)
4
The National Bank of Australasia Act 1859 (Vic),
5
Bank of New South Wales Act 1850, 14 Vict.
6
The New South Wales Act later became part of the statute law of Victoria (by virtue of the
Australian Constitutions Act 1850 (Imp) 13 & 14 Vict c 59) and Queensland (by virtue of the Order
in Council of 6 June 1859 establishing that colony).
7
The Bank of New South Wales Act 1861 (NZ).
8
The proposition that colonial legislatures could not make laws having extra-territorial operation was
later held by the High Court to be erroneous: see, eg, Wacando v Commonwealth (1981) 148 CLR 1,
21 (Mason J).
9
13 Pet 519 (1839).
10
Ibid.
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