…
102 Again, therefore, the need to construe the statute as a whole is emphasised. As Barwick CJ pointed out in the Kathleen Investments case (at p.128), there is a difference between a statutory corporation's functions and authority and its powers or capacity. While the powers or capacity may be broad, they can be exercised only within the confines of the functions and authority conferred by the statute. The general concept - and the one reflected in the ALR Act - is that statutory corporations are created for purposes and are given powers calculated to enable them to perform their statutory functions in pursuit of those purposes.
103 In the present case, the authority of a Local Aboriginal Land Council is the authority to perform the s.52 functions in pursuit of the s.51 objects or, to put it the other way, to pursue the s.51 objects by performing the s.52 functions. Sections 51 and 52 must be read together to discover the scope of corporate authority. In exercise of that authority - that is, in performing the s.52 functions in pursuit of the s.51 objects or pursuing the s.51 objects by performing the s.52 functions - a Local Aboriginal Land Council may exercise the powers conferred by the ALR Act, including the s.41 power, as well at the power derived from s.50 of the Interpretation Act. But any such power may not be exercised otherwise than as a means of pursuing the s.51 objects and performing the s.52 functions in the ways I have described.
104 What I have just said may be re-cast in the form of three negative propositions: first, a Local Aboriginal Land Council must not do anything that lies beyond the scope of the s.51 objects; second, a Local Aboriginal Land Council must not do anything that does not involve the performance of a s.52 function; and, third, a Local Aboriginal Land Council must not exercise any of the powers conferred by the ALR Act (and s.50 of the Interpretation Act) except in doing things that are within the scope of both the s.51 objects and the s.52 functions. The 'must' in each of these propositions is intended to indicate a limit upon authority and capacity." (emphasis added)
81 He concluded (at [106]) that:
"… DLALC, by making the four payments to DPL, put it out of its power to control and direct the future disposition of the moneys transferred into the ownership of DPL. It is not suggested that DPL contracted with DLALC at the time of receipt that DPL would apply the moneys received in particular ways or would deal with them only as DLALC requested or directed. Any such contract may, in any event, have involved an impermissible fettering of the discretions of DPL as trustee. Nor did the terms of the Trust require DPL, as trustee, to obey any instructions of DLALC, a non-beneficiary whose members were also non-beneficiaries. Once received by DPL, the moneys came under the sole control of DPL and it was DPL alone who could determine what was to be done with them, subject always to the constraints and duties to which it was subject as a trustee (and, as to income, to having regard to any recommendation of DLALC)."
82 He identified (at [107]) the question to be determined by reference to the s 51 objects and the s 52 functions as being "whether DLALC acted within the scope of its statutory authority in transferring money to the trustee of a purpose trust having purposes corresponding, either wholly or in certain respects, with the statutory functions of DLALC".
83 DLALC contended the transfers were an exercise of one or more of its s 52(1)(g)(ii), s 52(1)(k) and/or s 52(1)(m) functions. His Honour rejected that submission as to s 52(1)(k) and s 52(1)(m), holding (at [110] - [111]) that there was no clear and direct connection between any of the payments made by DLALC to DPL and the subjects of those functions.
84 He also rejected the argument that the transfer invoked the s 52(1)(g)(ii) function, concluding (at [117]):
"… that DLALC, in transferring funds to DPL, did not apply any part of those funds in or towards the performance of any of its own functions. It made those funds available to DPL so that DPL might, according to DPL's own decisions, deploy the funds in the furtherance of the purposes for which DPL was permitted to act. Decisions that caused funds to be applied by DPL towards those objects were decisions of DPL alone. And, given its duties as a trustee, it was in no position to accept fetters upon its discretion to make decisions as to the application of trust funds."
85 Accordingly his Honour held (at [118]) that because in parting with its money, DLALC relinquished both ownership of the money and the power to control its application by so doing, it could not be said to be exercising any of the functions upon which it purported to rely.
86 Barrett J then considered (at [120] ff) the argument that the transfer of funds to DPL was inconsistent with the scheme of the ALR Act and accordingly unauthorised, an argument which focussed on DLALC's duties and responsibilities and the public policy to which the ALR Act gives effect. He examined authorities dealing with the purported relinquishment of statutory functions by statutory corporations which he concluded proceeded on the basis of three main principles:
"129… First, it is recognised that a grant of incorporation by Parliament carries with it not only rights and privileges but also duties and responsibilities. Second, the duties and responsibilities, as well as existing for the benefit of the section of the population directly affected, are of a public or quasi-public nature. Third, the corporation may not act to abdicate or evade its statutory duties and responsibilities, even if the means by which it purports to do so otherwise appear to lie within the scope of its objects, functions and powers."
87 In his Honour's view (at [131]), the principles reflected in the statutory relinquishment line of cases applied to DLALC because of its public character as "a body committed to promote the welfare and interests of a section of the public or, as s 51 puts it, to 'improve, protect and foster the best interests of' that section of the public". Accordingly (at [132]) only DLALC could discharge its duties and responsibilities, subject only to the limited power to delegate created by s 82. The consequence was that:
"132 … Any arrangement which causes land council property to be vested in another person for application in accordance with future decisions of that person - albeit in ways that may in whole or in part correspond with the land council's s 52 functions and be consistent with its s 51 objects - entails an impermissible abdication of statutory responsibility, an impermissible shifting of statutory decision-making, an impermissible side-stepping of statutory controls and therefore a subversion of the statutory intention."
88 His Honour accepted (at [135]), accordingly, that "the effect of the trust structure and the transfers of funds by DLALC to DPL for deployment within the trust structure were an impermissible abandonment by DLALC of its statutory duties and responsibilities with respect to a large part of its property". In his view, "DLALC did not purport to delegate any of its own functions… [r]ather, its objective was to put the property in question entirely out of its ownership and beyond its reach and to subject the property to a regime which, while in some respects contemplating applications of funds in ways corresponding with those open to DLALC under the ALR Act, involved decision-making and control otherwise than by DLALC". The transfers were "against the policy of the ALR Act because of DLALC's abdicat[ion] of control and supervision of matters which that Act require[d] to be controlled and supervised by it". His Honour noted (at [137]) that the question whether DPL was "controlled" by DLALC was debated before him, but considered it was not relevant to the matters before him. He did observe, however, that even if DPL was so "controlled", the effect of the transfers of DLALC's funds was that "[t]he funds [were] no longer subject to the wider supervisory regime created by the ALR Act."
89 Accordingly his Honour concluded (at [138]) that attempted evasion of the statutory scheme was an additional ground for holding that the four transfers of funds by DLALC to DPL were not authorised by law.
90 Barrett J next considered (at [139] ff) the argument based on "broad ultra vires" because of an abuse of power, an argument which depended on "the proposition that powers lawfully available were used for purposes other than those for which they were conferred, and that the purposes actually pursued were therefore impermissible purposes". He held (at [153]) that, "the transfers of funds were actuated by the improper purpose of removing the moneys in question from the ambit of decision-making within the statutory confines of DLALC and to place them instead within the decision-making structure based on DPL and the Trust, being a decision-making structure not presided over by members of DLALC."
91 Finally, for present purposes, Barrett J rejected (at [165]) an argument that because the transfer of funds to the Trust involved subversion of the statutory scheme, the Trust must be regarded as illegal. In his view DLALC's action in setting up the Trust did not involve subversion of the statutory scheme. Rather, the action that attracted criticism was the transfer of substantial funds in relation to which DLALC was thereby disabled from performing its statutory duties and responsibilities. Accordingly the question whether the Trust was valid was to be judged against the ordinary criteria applicable to charitable trusts, regardless of the provisions of the ALR Act. He concluded (see [194] - [217], [220]) that "the Trust [was] a charitable trust (in the sense that at least part of the 'Sole Purpose' [was] charitable) but that, to the extent that trust moneys were lent by DPL, as trustee, to CattleCo and the Enterprise Companies (and, in the case of CattleCo, outlaid as subscription moneys for shares), the expenditure was neither made in furtherance of any aspect of the charitable purpose nor made in a form that the Trust Deed permitted the trustee to make".