ABORIGINAL LEGAL SERVICE OF WESTERN AUSTRALIA (INC) -v- LAWRENCE [No 2] [2008] WASCA 254 (10 December 2008)

ABORIGINAL LEGAL SERVICE OF WESTERN AUSTRALIA (INC) -v- LAWRENCE [No 2] [2008] WASCA 254 (10 December 2008) - WASCA 2008 case summary — Zoe

[55]

1.1 Aboriginal and Torres Strait Islander people experience far higher rates of adverse contact with the justice system than do other Australians, and are incarcerated at significantly higher rates than non-Indigenous people. They are also one of the most profoundly disadvantaged groups in Australian society, falling well below relevant national benchmarks on virtually every measure of well-being and socioeconomic status (Steering Committee for the Review of Government Service Provision 2003, Overcoming Indigenous Disadvantage: Key Indicators 2003, Productivity Commission, Canberra).

1.2 As part of a broader strategy designed to address both the causes and the effects of Indigenous disadvantage, the Attorney-General's Department (the Department) administers a number of inter-related programs in the broad field of Law and Justice. These include a national program of Legal Aid for Indigenous People (the subject of these Policy Directions for the Delivery of Legal Aid Services to Indigenous Australians (Policy Directions)) and a range of complementary programs in the areas of Law and Justice Advocacy, Family Violence Prevention Legal Services and Prevention, Diversion and Rehabilitation. These programs were previously administered by Aboriginal and Torres Strait Islander Services (ATSIS). Details of these programs may be found in ATSIS' Annual Report for 2003-04.

Objectives

1.3 The primary objective of the Legal Aid for Indigenous People program is to improve the access of Indigenous Australians to high-quality and culturally appropriate legal aid services, so that they can fully exercise their legal rights as Australian citizens. It is the role of other programs and policy strategies - administered variously by the Department, other Commonwealth agencies and State and Territory Governments - to deal with the underlying sources of Indigenous disadvantage and thereby to reduce the incidence of adverse contact with the justice system. The leaders of all Australian Governments have committed themselves to a program of strategic policy action designed to reduce the level of Indigenous disadvantage in Australian society (Council of Australian Governments, Communiqués of 3 November 2000 and 5 April 2002).

Legal Aid Services Program

1.4 Under the grant arrangements to be gradually phased out from 1 July 2005, the Department has provided grant funding of some $42.9m annually to a national network of 25 Aboriginal and Torres Strait Islander Legal Services (ATSILS). This network has delivered legal aid services at some 94 separate service sites across Australia, and in 2002-03 provided legal representation to 69,292 Indigenous people in 113,698 case and duty matters. Grant funding to ATSILS has been provided on an annual basis and has been subject to a range of specified terms and conditions, including compliance with the terms of a Legal Services Policy Framework (Policy Framework for Targeting Assistance Provided by Aboriginal and Torres Strait Islander Legal Services, Law and Justice Group, June 2004 issued by the Aboriginal and Torres Strait Islander Services).

[66]

First, the majority of the Court (Barwick CJ, Mason, Jacobs and Murphy JJ), rejecting the argument that the purpose for which a corporation is formed is the sole or principal criterion of its character as a trading corporation, concluded that the relevant character of the football leagues and the football club was to be ascertained by reference to their established activities ((1979) 143 CLR, at pp 208 - 211, 233 - 237, 239 - 240). In adopting this view their Honours disapproved the approach taken by the majority in St George which placed emphasis on the purpose for which the County Council was formed (see, for example, p 562).

Secondly, the judgments of the majority in Adamson make it clear that, in having regard to the activities of a corporation for the purpose of ascertaining its trading character, the Court looks beyond its 'predominant and characteristic activity' (cf p 213 per Gibbs J). Barwick CJ ((1979) 143 CLR, at p 208) spoke of making a judgment 'after an overview' of all the corporation's current activities, the conclusion being open that it is a trading corporation once it is found that 'trading is a substantial and not a merely peripheral activity'. Mason J ((1979) 143 CLR, at p 234) said that it 'is very much a question of fact and degree' having earlier stated ((1979) 143 CLR, at p 233) that the expression is essentially 'a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation.'

Murphy J ((1979) 143 CLR, at p 239) said 'As long as the trading is not insubstantial, the fact that trading is incidental to other activities does not prevent it being a trading corporation'. Indeed, it was essential to the majority's approach and to its rejection of St George that a corporation whose trading activities take place so that it may carry on its primary or dominant undertaking, eg, as a sporting club, may nevertheless be a trading corporation. The point is that the corporation engages in trading activities and these activities do not cease to be trading activities because they are entered into in the course of, or for the purpose of, carrying on a primary or dominant undertaking not described by reference to trade. As the carrying on of that undertaking requires or involves engagement in trading activities, there is no difficulty in categorizing the corporation as a trading corporation when it engages in the activities.

Indeed, we would go on to say that there is nothing in Adamson which lends support for the view that the fact that a corporation carries on independent trading activities on a significant scale will not result in its being properly categorized as a trading corporation if other more extensive non-trading activities properly warrant its being also categorized as a corporation of some other type.

[99]

Even if AGPS has not been providing services to arms of the Commonwealth Government on a profit-making basis, the services which it has been providing are services of the nature which an entity carrying on a business could well provide. Regularly and systematically providing services of the nature of the services comprised in package 3 is carrying on a business. General printing services, dispatch and distribution services, graphic design services and editorial services are activities comprising the carrying on of business albeit that they are provided in connection with government.

The Commonwealth contended that, in providing those services, AGPS was undertaking functions which are inherently functions of government such that they cannot be considered a trading activity, much less the carrying on of a business: see, for example, Mid Density Development Pty Ltd v Rockdale Municipal Council [1992] FCA 634; (1992) 39 FCR 579 at 585. Clearly, there is a distinction between those functions of a Government which are purely governmental or regulatory and those functions which entail the carrying on of business. However, that contention appears to confuse the two aspects of the Commonwealth's involvement in the package 3 services. Insofar as the Commonwealth, in the guise of the Department of the Senate, the Department of the House of Representatives and other departments, utilises the services provided or procured by AGPS, it does so in the carrying out of governmental functions. It could not be said that the Commonwealth in those guises is carrying on a business. It is acquiring the services systematically and regularly, but only for the purpose of governing.

However, in its guise as AGPS, the Commonwealth is doing what any citizen or private trader might do, namely, providing those services for remuneration. That remuneration may or may not be a commercially adequate remuneration. Further, those services are being provided to the Commonwealth in its governmental guises. Nevertheless, I consider that the Commonwealth, in providing those services, is carrying on a business within the meaning of s 2A.

[102]

The University also submitted that the fees charged by it for courses are fees for services notwithstanding that they are regulated by legislation and ministerial guidelines. So it was said that under the Higher Education Funding Act the regulation of fees is a condition of receiving Commonwealth grants and not a requirement imposed directly by law. The guidelines themselves, it is said, do not limit the University in such a way as to deny the fees the character of payment for services and facilities provided in the courses offered by the University. No limits are imposed on the number or content of the courses nor on their promotion or design, nor on ancillary matters such as accommodation and other student benefits which may attract potential students. Specifically, in respect of payments made by the Commonwealth to the University under the Higher Education Funding Act it is said that they should properly be characterised as revenue from trading activities. The argument is put thus. Some students pay HECS contributions directly to the University. That is, they pay a fee for services rendered to them. In 1995 fees paid in this way amounted to $8.849 million. HECS payments by the Commonwealth to the University in that year amounted to $17.318 million. Those payments, it was submitted, should also be characterised as revenue derived from trading.

It is questionable whether the provision of educational services within the statutory framework of the Higher Education Funding Act amounts to trading. The Act creates a liability for each student to the University in respect of each course of study undertaken in a semester. The amount is not fixed by the University but rather by the Minister under published guidelines. The concept of 'trading' is a broad one. It is doubtful, however, that it extends to the provision of services under a statutory obligation to fix a fee determined by law and the liability for which, on the part of the student, appears to be statutory. For present purposes, however, this aspect of the claimed trading activities can be disregarded. For it is plain that the other activities cited are trading activities and are a substantial, in the sense of non-trivial, element albeit not the predominant element of what the University does. The University was not established for the purpose of trading and at another time, closer to the time of its creation, it may not have been possible to describe it as a trading corporation. But at the time relevant to this case and at present, it does fall within that class.

It may be added that the characterisation of a body corporate as a trading corporation is a matter of fact and degree. Dr Quickenden has been unable to point to any error in that assessment on the part of the learned primary judge. As to the status of the University as a financial corporation that too is established on the evidence. His Honour's reasons and findings in that respect also are not shown to have been in error.

At a glance

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Judgment (197 paragraphs)

ABORIGINAL LEGAL SERVICE OF WESTERN AUSTRALIA (INC) -v- LAWRENCE [No 2] [2008] WASCA 254 (10 December 2008)

Legislation Cited (8)

Cases Cited (18)