Morrison v O'Brien

The High Court of Australia heard an appeal concerning the registration of an unincorporated joint stock company, the Defiance Milling Co., under Queensland's Companies Acts 1931 to 1942. The appellant, one of the partners, sought to restrain the other partners (the respondents) from registering the partnership as a company limited by shares. The partnership was formed by a deed of association in 1919, had more than seven members, and its business activities and capital structure aligned with the definition of a joint stock company under the relevant legislation.

The central legal issue before the High Court was whether the Defiance Milling Co., as a company constituted solely by agreement between its members, qualified as a company "otherwise duly constituted by law" within the meaning of section 342(1)(ii) of the Companies Acts 1931 to 1942 (Q.). This provision allows for the registration of certain companies formed after 1 September 1863, including those formed in pursuance of an Act of Parliament, letters patent, or "being otherwise duly constituted by law." The High Court had to determine the scope of this latter category and whether it encompassed purely contractual partnerships.

The High Court, allowing the appeal, held that an unincorporated joint stock company constituted solely by agreement between its members is not "otherwise duly constituted by law" for the purposes of registration under section 342(1)(ii). The Court reasoned that the phrase "duly constituted by law" implies a constitution derived from a source beyond mere consensual agreement, such as an Act of Parliament or letters patent, or something analogous. This interpretation was supported by the historical context of the legislation, including the inclusion of specific categories of companies like those operating under the Stannaries jurisdiction in the equivalent English Act, and the long-standing practice of registrars in refusing registration to purely contractual companies following the decision in *Reg. v. Registrar of Joint Stock Companies; Ex parte Johnston* (1891) 2 Q.B. 598. The Court found that the natural grammatical meaning of the words did not extend to companies whose constitution arose solely from the mutual agreement of the parties.

Consequently, the High Court allowed the appeal, set aside the order of the Full Supreme Court of Queensland, and restored the judgment of Philp J., which had granted the injunction sought by the appellant. The respondents were ordered to pay the costs of the appeal to the High Court and the costs of the appeal to the Full Supreme Court.