Lydia Patrice Selkirk -v- Lieschke Corp Pty Ltd ACN 003 111 180 [2008] WAIRComm 1381 (4 July 2008)

MR SCOTT LIESCHKE, MANAGING DIRECTOR OF LIESCHKE PTY LTD (ABN 72 003 111 180) AS TRUSTEE FOR THE LIESCHKE PERSONNEL TRUST

CITATION NO. 2008 WAIRC 01381

CatchWords Termination of employment - Harsh, oppressive and unfair dismissal claim - Contractual benefits claim -- Entitlements under contract of employment - Whether Commission has jurisdiction to hear and determine claims - Effect of the Workplace Relations Act 1996 (Cth) - Whether a company who employs a professional to provide services "trades" - Company a trading corporation - A New Tax System (Goods and Services Tax) Act 1999 (Cth ) s 9-5, s 9-30, s 38, s 38-2 and s 38-3; Australian Constitution (Cth) s 51(i), s 51(xx) and s 109; Chiropractors Act 2005 (WA) s 26 and s 84; Industrial Relations Act 1979 (WA) s 29(1)(b)(i) and (ii) and s 32; Small Claims Tribunal Act 1973 (Vic) s 2; Trade Practices Act 1974 (Cth) s 4, s 6 and s 52; Workplace Relations Act 1996 (Cth) s 4, s 6 s 16 and

1. On 14 February 2008 Lydia Selkirk (the applicant) filed two applications in the Commission. The first application is a claim by the applicant that she was harshly, oppressively or unfairly dismissed by Mr Scott Lieschke, Managing Director of Lieschke Pty Ltd (ABN 72 003 111 180) as Trustee for the Lieschke Personnel Trust (the respondent) on 19 January 2008. The applicant claims in the second application that she had not been allowed a benefit by the respondent not being a benefit under an award or order to which she is entitled under her contract of employment.
2. The applicant states in both applications that she was employed as a chiropractic associate to provide chiropractic treatments to patients. She worked in Main Chiropratic at 6 Victoria Street, Midland, Western Australia from 19 November 2007 until 19 January 2008. Both applications state that she worked between 30 to 35 hours a week and was paid on a percentage basis of patients treated. In the claim for unfair dismissal she seeks compensation for loss of wages and entitlements. In the claim for contractual benefits she seeks payment of outstanding wages and other entitlements in the amount of $25,964.54.
3. The respondent filed an notice of answer and counter proposal in both applications and stated in each that the employer of the respondent was Lieschke Corp Pty Ltd ACN 003 111 180 (LC) and it denies each and every allegation made against it in U 17 and B 17 of 2008. In particular the respondent says that LC is not an employer for the purposes of the Industrial Relations Act 1979 ("IR Act") and says that at all material times it was a "constitutional corporation" for the purposes of the Workplace Relations Act 1996 ("WRA") and the WRA excludes the Commission's jurisdiction to hear and determine the matters in the applications.
4. Following the filing of the notice of answer and counter proposal, the Associate to Senior Commissioner Smith wrote to the applicant's solicitor with a copy to the respondent on 11 March 2008. The letter stated as follows:

In the Respondent's Notice of Answer and Counter-Proposal it is stated that this Commission does not have jurisdiction to deal with your client's claims as the Respondent is a constitutional corporation.

Pursuant to s 16 of the Workplace Relations Act 1996 (Cth) ("the WR Act") the WR Act provisions operate to exclude a State industrial law insofar as the State law applies to an employee employed by a constitutional corporation. A State law is defined in s 4 of the WR Act to mean the Industrial Relations Act 1979 and an Act of a State that has its main purpose or purposes to provide for rights and remedies connected with the termination of employment.

In light of these provisions it may be the case that this Commission has no jurisdiction to deal with these claims. Before Senior Commissioner Smith makes a decision as to whether to list this matter for a conference she requires you to provide brief reasons in writing within 28 days of the date of this letter why this Commission may have jurisdiction to hear and determine the claims.

1. On 28 March 2008 the Commission received a letter from the applicant's solicitors Deacons dated 28 March 2008 in which the following submission was made:

We have considered the Workplace Relations Act 1996 (Cwth) (WR Act) as it relates to Lieschke Corp Pty Ltd (ACN 003111180) (ABN 72003111180) having regard to whether the Western Australian Industrial Relations Commission (WAIRC) has jurisdiction to consider our client's claim. We consider that the WAIRC does have jurisdiction to deal with our client's claims and set out our reasoning below.

1. Sections s6(1) (sic) of the WR Act states, inter alia, that the WR Act covers employers that are a constitutional corporation, in so far as it employs, or usually employs, an individual.
2. Section s51(xx) of the Constitution provides, inter alia, that a constitutional corporation is corporation (sic) that is in trade, and that is formed within the limits of the Commonwealth.
3. Section s52 of the Trade Practices Act (Cwth) 1974, and the case R v Federal Court of Australia: exparte National Football League ("Adamson") [1979] HCA 6; (1979) 143 CLR 190: Barwick CJ, Mason, Jacobs and Murphy JJ, establish the parameters of what defines a corporations (sic) conduct as being in trade and commerce, which is established by considering the following four tests:

(1) Its current activities rather than by the purpose of its formation.

(2) Its major, extensive, principle or very substantial activities, which are required to be trading activities.

(3) Its trading activities which need to be substantial activities, or sufficiently significant with respect to the corporations (sic) overall activities, or not insubstantial trading activities, ie conduct in trade needs to be the predominant and characteristic activity of the corporation.

(4) Where a corporations (sic) trade activities are merely peripheral, so slight and so incidental or insubstantial, that corporation (sic) is not a trading corporation.

We do not consider that Lieschke Corp Pty Ltd satisfies the Trading Corporation Tests as:

1. The historical company extract of Lieschke Corp Pty Ltd (copy attached) evidences that Lieschke Corp Pty Ltd only holds fixed and floating charges over chiropractic equipment.
2. The fact that Lieschke Corp Pty Ltd holds fixed and floating charges over chiropractic equipment does not characterise the corporation as being in trade or commerce.
3. The historical company extract of Lieschke Corp Pty Ltd does not cite Main Chiropractic or Morley Chiropractic as businesses that are owned by or run by Lieschke Corp Pty Ltd.
4. Notwithstanding that the business name extracts for Main Chiropractic and Morley Chiropractic (attached) cite Lieschke Corp Pty Ltd as the organisation carrying on those businesses, however the historical company extract of Lieschke Corp Pty Ltd does not support that position.
5. Financial and other records of Lieschke Corp Pty Ltd (including workers (sic) compensation insurance policies etc) need to be sighted to ascertain whether the company engages in trade and commerce and then further evidence is required to ascertain whether it is correctly identified as the employer.
6. Accordingly, we consider that, based on the available information, Lieschke Corp Pty Ltd is not a constitutional corporation in trade and commerce and accordingly the WAIRC does have jurisdiction to consider our client's claim.
7. On 3 April 2008 Mr King from Milner Lawyers in Brisbane wrote to the Commission on behalf of the respondent and responded to the submission made by the applicant's solicitor on 28 March 2008. In that letter Mr King advised the Commission that the respondent was not prepared to participate in a conciliation conference until the preliminary issue of jurisdiction is determined. Mr King stated that it was the respondent's view that LC is a constitutional corporation within the meaning of the WRA. Mr King stated:
   • On Deacon's (sic) own evidence and submission - LC undertakes or carries on the business activities of Main Chiropractic Clinic and Morley Chiropractic Clinic. That is, LC meets the test for a trading corporation.
   • Deacons' letter concedes that Ms Selkirk has no evidence upon which to assert that LC is not a trading corporation. The only basis that Ms Selkirk indicates is that the Extract does not "support" the Business Name Extracts. Such an assertion is a fundamental misunderstanding of the purpose of an historical company extract.

A conference was held on 17 April 2008 to discuss the issue of jurisdiction. At that conference:

• Deacons stated:
  • that it did not know if the Respondent was the employer;

• that it did not know if, it accepted that LC was the employer, that it was a trading corporation for the purposes of the WRA;
• Deacons did not assert a contrary case to LC being the employer or a trading corporation, its only answer to the jurisdiction question was that it "simply didn't know";
• Deacons conceded that if LC was the employer and if LC was a trading corporation, then the Commission did not have jurisdiction; and
• LC was directed to file a list of documents and to provide copies of documents relevant to showing that it was the employer and that it was a trading corporation.

• the LC financial statements show LC derived income - listed as professional fees - from its chiropractic clinics (Main and Morley);
• the billing reports and summary payment reports for Main Chiropractic (remembering that this is a trading name for LC which is the legal entity) show services provided by LC through the applicant - being documentary evidence that LC engages in trade and also that the applicant was employed by LC;
• the bank statements and Netbank transfer slips showed that the applicant was paid by LC - which is evidence that the applicant was employed by LC (a trading corporation);
• the business activity statements for both LC and the Lieschke Personal (sic) Trust (of which LC is the Trustee and therefore the legal owner of the trust property and business activities) shows that LC is engaged in trade (and the fact that LC is subject to trust obligations in relation to some of its trading activities does not detract from it being a trading corporation); (Visser v. Eral Pty Ltd as trustee for the Prestige Products Unit trust trading as Complete (sic) Angler & Camping World Rockingham - 2007 WAIRC 01148)
• the draft employment agreement demonstrates that LC intended that it be the employer and; given the letter from deacons (sic) to LC of 10 December 2007, the applicant intended LC to be the employer and knew that LC was the employer;
• the correspondence with Westscheme shows that LC paid the applicant's superannuation entitlements, which is further documentary evidence that LC was the employer;
• the internal memorandum from Claire Wheeler to the applicant demonstrates that LC and its employees acted in a manner that was consistent with LC being the employer and that the parties believed that LC was the employer.

The documents lead to only one conclusion - that LC was the applicant's employer and that LC was a trading corporation. Absent a contrary case (based on evidence), it is submitted that any further hearing of the applications would be an improper burden to impose on the Respondent.

Sections 27(1)(a) (ii) and (iv) of the Industrial Relations Act 1979 provide the Commission with power to dismiss a matter or refrain from further hearing in the matter if:

• it is not necessary;
• not in the public interest; or

if the Commission believes it ought to dismiss for any other reason.

It is submitted that the Commission ought to exercise its discretion under these sections to dismiss the applications.

• The documents are clear that LC was the employer.
• The documents are clear that LC operates Main Chiropractic Clinic and this means it trades (and is a constitutional corporation within the meaning of the WRA).
• No contrary case is asserted and cross-examination (in the absence of a contrary case) will not benefit the Commission - it is not necessary to go to a hearing.
• It is in the public interest not to allow the Commission to be used for an improper purpose.

By improper purpose, we submit that - given that there is no evidence to indicates (sic) other then (sic) that LC was the employer and was a trading corporation - it is open to the Commission to draw the conclusion that applicant (sic) commenced the applications even though she had no statutory entitlement to do so, so that the applicant could use the costs that LC would incur in defending the applications, as leverage in her dispute with LC.

1. In a response dated 5 June 2008 the applicant's solicitors stated as follows:
   1. Pursuant to section 6(1) of the Workplace Relations Act 1996 (WRA) the WRA covers employers that are constitutional corporations, in so far as it employs, or usually employs an individual.
   2. Section 51(xx) of the Constitution provides that a constitutional corporation is a corporation that is in trade.
   3. The Lieschke Corp Pty Ltd quarterly Business Activity Statement (BAS Statement), dated 28 April 2008, show that Lieschke Corp Pty Ltd only paid $238 in goods and services tax (GST) on approximately $3,118 of total GST sales for that quarter, of which Lieschke Corp Pty Ltd declared a quarterly earning of $260,711 in GST free sales for that quarter.
   4. We understand that the $260,711 GST free sales relate to income generated from the Main and Morley chiropractic clinics professional fees which do not incur GST.
   5. The Lieschke Corp Pty Ltd financial statements list its income as being derived from professional fees, which we understand are generated by the Chiropractors and Associates practicing at Morley and Main Chiropractic.
   6. In Fawke v Holloway and Anor [1986] VicRp 42; [1986] VR 411 ... it was held that the occupation of chiropractor is one which is properly described as a profession, and that a person who carries on the occupation of a chiropractor does not, on that account, engage in trade or commerce.
   7. Accordingly, Lieschke Corp Pty Ltd, which derives its main income from the professional services fees generated by the Chiropractic professionals working at Main and Morley Chiropractic, which are not trading services, is not a company in trade or commerce and is, therefore, not a constitutional corporation as required to invoke the jurisdiction of the .

- The parties concede that Lieschke Corp Pty Ltd is the employer.

- The parties concede that a significant activity of Lieschke Corp Pty Ltd is to provide chiropractic services for reward.

- Deacons relies on a 1985 Victorian decision concerning the SCTA in that State to submit that because a chiropractor is a "professional" and provides "professional services" - chiropractic service and activities cannot be classified as trading activity.

- It is submitted that the line of authority in the Federal Court of Australia and the High Court of Australia is that:

• trading activity must be given a wide meaning;
• there is no basis for distinguishing professional services for reward from any other service for reward in determining trading activity; and
• professional services provided for reward are trading activities and a corporation that provides the services of professionals - such as chiropractors - for reward, is a trading corporation.

- This principle is widely accepted - an example being the Full Bench of the WAIRC concluding that it was because professional services were offered not for reward and at government direction that robbed the services of the characteristic of a trading activity and not the fact that the services were professional.

1. On 27 June 2008 the Commission sent an email to the parties asking what effect does s 26 of the Chiropractors Act 2005 (WA) have on this matter. Section 26 provides that: "Registration under this Act may be granted only to a natural person".
2. On 30 June 2008 Mr King sent a further submission to the Commission on behalf of the respondent. The submission points out that s 84 of the Chiropractors Act makes it clear that an employer of a chiropractor does not have to be a registered chiropractor but an employer must not employ or otherwise engage a person (employee or contractor) to undertake chiropractic work but that any person the employer does employ to practise must be registered.
3. In a submission received from the applicant's solicitors dated 1 July 2008 it contends that:
   1. Section 26 of the Chiropractor's (sic) Act 2005 supports the findings in Fawke that only individuals that have qualified in the profession of Chiropractic can be registered to provide Chiropractic treatments/services. A company cannot provide Chiropractic treatments, only registered individuals can. Accordingly, a Company (ie Lieschke Corp Pty Ltd) cannot claim that it provides the services of a Chiropractor and generates chiropractic professional fees, as only individuals can provide Chiropractic services (ie Chiropractic treatments) and generate such fees.
4. The applicant's solicitors in their submission dated 1 July 2008 also argues that the definition of trading corporation within the meaning of s 51(xx) of the Constitution is to be found in definition of "trade" in of the (Cth) (the TPA). In particular they contend that the definition of trade "commonly denote[s] operations of a by which a trader provides customers some kind of good or service for reward ( ; at 1600 Lord Reid)". They also argues that medical treatment services are distinguishable from medical services that have a commercial character to them such as the sale of medical equipment which might be able to be classified as services in trade and commerce. The submission then goes on to say that such services would attract GST but that medical treatment services do not attract GST. In addition they contend on behalf of the applicant:

The decision of the United Kingdom's House of Lords' in Ransom is irrelevant to a determination of the meaning of trading activities for section 51(xx) of the Australian Constitution. Ransom considered the meaning of trade for purposes of the United Kingdom's Income Tax Act 1952. It did not consider "trade" as an all encompassing legal concept.

The facts in Ransom upon which Lord Reid relied are that Mr Higgs

"...did not deal with any person. He did not buy or sell anything. He did not provide anyone with goods or services for reward. He had no profits or gains. Under this scheme he never could have had any, and it was I think for that reason that it was admitted in this House that he could not be assessed personally. I can find no characteristic of trading in anything which Mr Higgs did.

These facts mean that this decision cannot be relied upon in a case where Lieschke Corp Pty Ltd does provide services for reward and makes a profit. Almost certainly, Lieschke Corp would have been a trader for the UK's legislation.

In any event, what Deacons submits about Lord Reid's judgement is incorrect.

Lord Reid considered "whether Mr Higgs's activities can in law be regarded as trading within the meaning of Sch D [of the UK legislation]". For that purpose, Lord Reid goes on to consider "trade" and says

...the Income Tax Acts have never defined trade or trading farther than to provide that trade includes every trade, manufacture, adventure or concern in the nature of trade. As an ordinary word in the English language 'trade' has or has had a variety of meanings or shades of meaning. Leaving aside obsolete or rare usage it is sometimes used to denote any mercantile operation but it is commonly used to denote operations of a commercial character by which the trader provides to customers for reward some kind of goods or services.

The contexts in which the word 'trade' has been used in the Income Tax Acts appear to me to indicate that operations of that kind are what the legislature had primarily in mind. If I go back to the 1842 Act I find that Sch D covered inter alia the annual profits or gains arising from any profession, trade, employment or vocation and that r 1 of Case I provided that the tax was to be charged on the balance of the profits and gains of such trade, manufacture, adventure or concern in the nature of trade. And I find nothing in later legislation to alter the fundamental conception of trade in that old Act.

Lord Reid does not exclude professions or services offered by a profession from the definition of trade as the Deacons submission suggests. Lord Reid's decision is contrary to the Victorian Fawke decision and is consistent with the High Court's authorities on the wide definition of trading activity.

1. Under s 4 of the WR Act, a constitutional corporation is defined as a corporation to which s 51(xx) of the Constitution applies. Section 51(xx) of the Constitution empowers the Commonwealth to make laws for the peace, order, and good government of the Commonwealth with respect to foreign corporations and trading or financial corporations formed within the limits of the Commonwealth.
2. If a corporation is a "trading corporation" by virtue of ss 4, 6 and 16 of the WR Act the jurisdiction of the Commission to deal with the applicant's claim is excluded by s 16(1) of the WR Act and s 109 of the Constitution (Crown Scientific Pty Ltd v Clarke (2007) 87 WAIG 598). Whether a corporation is a trading corporation is ultimately a question of fact and degree applied by the Full Bench in Clarke and in Lawrence at [207], [235] and [322](b).
3. The issue raised by the applicant that LC only paid $283 GST in the April 2008 quarter and that $260,711 earnings were GST-free is not relevant to whether LC is a trading corporation. With respect, as the respondent points out it is not correct to say that GST is payable on goods traded and services provided that have sufficient commercial character attached to them. Whether goods or services attract GST or are GST-free under the GST Act does not depend on whether the body who supplies the services or goods trades within the meaning of s 51(xx) of the Constitution. The GST Act does not distinguish the requirement to pay GST or not on the basis of trading activities of a body (see s 9-5 and s 9-30 of the GST Act). It is clear when regard is had to the provisions of the GST Act that GST is levied on certain categories of goods and services which do not relate to whether the supplier trades or not. For example the supply of hot food by a supermarket attracts GST whereas the supply of fruit and vegetables does not (see s 38-2 and s 38-3 of the GST Act). This example illustrates clearly that the requirements of the GST Act has no bearing upon whether the corporate owner of a supermarket who largely supplies goods that do not attract GST is a trading corporation. In relation to medical services, including chiropractic services, as the respondent points out, the GST Act requires payment of GST in respect of some medical services but generally exempts most. However, in enquiring whether a company who engages chiropractors in general to provide chiropractic services is a trading corporation, nothing turns on the fact that GST is not payable on most chiropractic services.

(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

1. The provisions of the TPA have been enacted by the Commonwealth pursuant to a number of heads of plenary power under the Constitution. These include the corporations power in s 51(xx) and the trade and commerce power in s 51(i) (see the definitions of corporation, financial corporation, trading corporation and trade and commerce in s 4 of the TPA. Also see s 6 of the TPA).
2. Section 51(i) of the Constitution provides:

The Parliament shall, subject to this Constitution, have power to make laws for the place, order and good government of the Commonwealth with respect to trade and commerce with other countries, and among the States.

1. Section 52 of the TPA is restrictive in scope when compared to the limits of the plenary power in s 51(i) of the Constitution. In Concrete Constructions at 602 to 603 Mason CJ, Deane, Dawson and Gaudron JJ said:

It is well established that the words "trade" and "commerce", when used in the context of s.51(i) of the Constitution, are not terms of art but are terms of common knowledge of the widest import. The same may be said of those words as used in s.52(1) of the Act. Indeed, in the light of the provisions of s.6(2) of the Act which give an extended operation to s.52 and which clearly use the words "trade" and "commerce" in the sense which the words bear in s.51(i) of the Constitution, it would be difficult to maintain that those words were used in s.52 with some different meaning. The real problem involved in the construction of s.52 of the Act does not, however, spring from the use of the words "trade or commerce". It arises from the requirement that the conduct to which the section refers be "in" trade or commerce.

The phrase "in trade or commerce" in s.52 has a restrictive operation. It qualifies the prohibition against engaging in conduct of the specified kind. As a matter of language, a prohibition against engaging in conduct "in trade or commerce" can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business.

1. The power to make laws with respect to trade and commerce among the States is a power to regulate activities in trade and commerce. The power to make laws with respect to trading and financial corporations is different. In addition, whether a corporation is a trading corporation within the meaning of the Constitution does not necessarily involve an analysis of whether a corporate body engages in commerce.
2. In Lawrence the Full Bench reviewed comprehensively a number of decisions of the High Court, the Federal Court and the Australian Industrial Relations Commission in which the concept of "trade" and "trading" has been considered. After reviewing these decisions the Full Bench said at [286]:
   1. A summary of points about "trading" emerging from the authorities, together with our observations about them is as follows:-

(a) The word is of wide import (Murphy J in Adamson at 239; Deane J in Ku-ring-gai at 648-649; The Full Federal Court in Bevanere at 330).

(b) Although "buying and selling" may be the clearest example of trading, it is not restricted to this (Stephen J in St George County Council at 569-570; Barwick CJ in Adamson at 209; Mason J in Fontana Films at 203; Toohey J in Hughes principle 7 at 20 (FCR), 672 (ALR); Carr J in Quickenden at [101]; Deane J in Ku-ring-gai at 649; Dixon J in Bank of NSW at 381). The appellant's counsel's submissions, tended to focus on clauses of the contract that referred to "purchase" and "sale". We did not however take his submissions to be to the effect that it was for only this reason that the entering into and performance under the contract was trading. Nor on the authorities, would so restrictive an approach be required.

(c) Although the desire to earn profit may ordinarily be part or an element of trading, trading does not always require the attainment of profit (Barwick CJ in St George County Council at 539; Stephen J in St George County Council at 569; O'Callaghan SDP in Pellow at [28]; Deane J in Ku-ring-gai at 649). For example, a person who sells his or her shares at a loss, is nevertheless engaging in trading.

(d) In our opinion, with respect, the most apt general description of trading is that succinctly stated in principle 7 at 20 (FCR), 672 (ALR) by Toohey J in Hughes: the activity of providing, for reward, goods or services. This does not mean we regard this as an all encompassing definition. To so describe what Toohey J has said would ignore point (a) above. The description of Toohey J is supported by Bowen CJ in Ku-Ring-gai at 625, as cited with approval by the Full Federal Court in Bevanere at 330. It is also consistent with the Macquarie Dictionary, 4th edition, 2005 definition of trading as "exchange for reward". The word "reward" in this context means "something given or received in return or recompense ...". (Macquarie Dictionary, 4th edition, 2005). In the present context an appropriate synonym would be "for value". Therefore broadly speaking in our opinion trading generally involves an exchange, or the provision of goods or services, for value. Both the provider and the receiver of the goods or services will, when this occurs, be trading. Barter, referred to earlier, could therefore be trading. There is an exchange of goods where the "value" is represented by the receipt of the goods from the other.

(e) Some of the authorities refer to "commerciality". (Barwick CJ in Adamson at 209; Bowen CJ in Ku-ring-gai at 625 and the Full Federal Court in Bevanere at 330). Carr J in Quickenden at [101] referred to the earning of "revenue" and O'Callaghan SDP in Pellow at [28] to the earning of "income". We have considered whether commerciality is a separate requirement for trading to occur. In our opinion it is not. This stems from a consideration of what was precisely said in the High Court and Federal Court authorities just cited, the relevant passages of which were earlier quoted. (We have deliberately excluded Pellow from this because of our respectful opinion about the weaknesses in the analysis). Also, in our opinion, if there is an exchange of goods or services for value this is in itself trading without the necessity of considering if there is an independent element of commerciality about the transaction. For example, a private purchase and sale of a car advertised in a newspaper is trading even though it is essentially a domestic arrangement. There is an exchange of personal property for value. The requirement of an exchange for value of itself supplies any requirement for commerciality in the arrangement for it to constitute trading.

(f) Wilcox J in Australian Red Cross and O'Callaghan SDP in Pellow suggest that the gratuitous provision of a public welfare service, where the money to engage in the service is supplied by government funding, is not trading. In our opinion, and with respect, so broad a proposition is not supported by the decisions of the High Court or the other authorities cited above which discuss the meaning of "trade" or "trading". In a situation where there is in effect, a tripartite arrangement involving the government it is necessary to look at the basis on which the money is received to provide services to ascertain if any or all of this constitutes trading. This approach is not inconsistent with the authorities, which establish the relevant principles. There is no reason in principle why a tripartite arrangement may not constitute trading. The fact that government funds are used for a public welfare service, does not necessarily have the effect that the means by which the funds were received, or the arrangement overall, is not trading. The correct approach in our opinion is to carefully consider, on a fact specific basis, the means by which the government funds are provided to a corporation, to see if it is trading. Accordingly, the provision of funds by government to a corporation may or may not constitute trading. Furthermore, as we will explain more fully later, even if it is trading this does not necessarily mean the corporation is a trading corporation. In our view, to determine if it is, a holistic appraisal must be made of the activities of the corporation. This will allow a conclusion to be made about whether the trading component of its activities are sufficient to lead to characterisation as a trading corporation.

1. As set out above, when examining whether an activity is "in trade" requires an examination of whether a particular activity or activities are in trade within the meaning of s 52 of the TPA. However, when considering whether a corporation is a trading corporation, a Court or Tribunal does not only consider activities which are in trade when a making finding that a corporate body is a trading corporation; all activities of a corporation must be assessed. Where a corporation engages in some trading activities and some non-trading activities, a qualitative assessment of the trading activities as a whole is required (Lawrence at [322]).
2. It can be illustrated that to examine whether a corporation is bound by s 52 of the TPA requires a different analysis to making a determination whether a corporation is a trading corporation by the following analysis. A corporation who is at law a trading corporation such as a local government statutory body buying and selling electricity on a large scale of the kind considered in R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7; (1974) 130 CLR 533 would be bound by the TPA in respect of the acts of buying and selling electricity as those acts would clearly be characterised as in trade and commerce. However insofar as the corporation may be required by a statutory enactment to provide an annual report to parliament each year setting out its proposals to address greenhouse emissions, the preparation and making of such a report may not be in trade or commerce and as such not an activity that would be regulated by s 52 of the TPA. In Concrete Constructions Mason CJ, Deane, Dawson and Gaudron JJ at 602 to 603 observed:

"The phrase "in trade or commerce" in s.52 has a restrictive operation. It qualifies the prohibition against engaging in conduct of the specified kind. As a matter of language, a prohibition against engaging in conduct "in trade or commerce" can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. If the words "in trade or commerce" in s.52 are construed in that sense, the provisions of the section would extend, for example, to a case where the misleading or deceptive conduct was a failure by a driver to give the correct handsignal when driving a truck in the course of a corporation's haulage business. It would also extend to a case, such as the present, where the alleged misleading or deceptive conduct consisted of the giving of inaccurate information by one employee to another in the course of carrying on the building activities of a commercial builder. Alternatively, the reference to conduct "in trade or commerce" in s.52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1, at 381, the words "in trade or commerce" refer to "the central conception" of trade or commerce and not to the "immense field of activities" in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business."

1. To ascertain whether a corporate body is a trading corporation, the enquiry must not be confined to only looking at trading activities. The corporate persona of the body itself must be examined (see The Commonwealth of Australia and Others v Tasmania and Others [1983] HCA 21; (1983) 158 CLR 1, Mason J at 157).
2. In Adamson the majority of the members of the court preferred the reasoning of the minority and overruled the majority in St George County Council. Barwick CJ, a member of the majority in Adamson (and a member of the minority in St George County Council) observed at 208 in Adamson:

I remain of the firm conviction that for constitutional purposes a corporation formed within the limits of Australia will satisfy the description "trading corporation" if trading is a substantial corporate activity. Its activities rather than the purpose of its incorporation will designate its relevant character. But so to say assumes that such trading activities are within its corporate powers, actual or imputed. It is the corporation which satisfies the description which is the subject matter of the power. Thus its corporate capacity or incapacity cannot be ignored. But once it is found that trading is a substantial and not a merely peripheral activity not forbidden by the organic rules of the corporation, the conclusion that the corporation is a trading corporation is open.

1. Mason J at 233 (with whom Jacobs J agreed at 237) in Adamson remarked:

For my part, I prefer the minority view as expressed in the St George County Council Case, in particular the remarks of Barwick CJ, when his Honour said that to fall within s 51(xx) it is not necessary that a corporation be formed for trading or financial purposes and that "the activities of a corporation at the time a law of the Parliament is said to operate upon it will determine whether or not it satisfies the statutory and therefore the constitutional description".

"Trading corporation" is not and never has been a term of art or one having a special legal meaning. Nor, as the Chief Justice pointed out, was there a generally accepted definition of the expression in the nineteenth century. Essentially it is 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.

Not every corporation which is engaged in trading activity is a trading corporation. The trading activity of a corporation may be so slight and so incidental to some other principal activity, viz.religion or education in the case of a church or school, that it could not be described as a trading corporation. Whether the trading activities of a particular corporation are sufficient to warrant its being characterized as a trading corporation is very much a question of fact and degree.

Even though trading is not the major part of its activities, the description, "trading corporation" does not mean a corporation which trades and does nothing else or in which trading is the dominant activity. A trading corporation may also be a sporting, religious, or governmental body. 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. For example, a very large corporation may engage in trading which though incidental to its non-trading activities, and small in relation to those, is nevertheless substantial and perhaps exceeds or is of the same order in amount as the trading of a person who clearly is a trader.

1. These passages in Adamson were cited with approval by Mason, Murphy and Deane JJ in State Superannuation Board v Trade Practices Commission [1982] HCA 72; (1982) 150 CLR 282 at 304 and their Honours observed at 304 that if there were any difference in the comments made by the majority in Adamson it was one of emphasis only.
2. In this matter it is argued that as LC derives its main income from the professional services fees generated by chiropractic professionals working at Main and Morley Chiropractic it does not engage trade or commerce. For the reasons set out above I do not accept that it is relevant to examine whether LC engages in commerce. Essentially at the heart of the applicant's argument is the contention that the chiropractors who generate LC's main income do not engage in trading. Consequently it is argued that LC is not a trading corporation.
3. In support of her argument the applicant relies upon the decision of Beach J in Fawke in which it was held that a chiropractor was not a trader as defined in s 2 of the Small Claims Tribunal Act 1973 (Vic) which defined a trader as a "person who in the field of trade or commerce carries on a business of supplying goods or providing services ...". It was not disputed in that matter that in carrying on a practice as a chiropractor the applicant carried on the business of providing services. However Beach J followed English authority which distinguished the concept of trade or commerce and the practising in a profession. His Honour held that the field of trade or commerce referred to in the Small Claims Tribunal Act 1973 (Vic) meant the shop counter or showroom floor and not the practice of a profession. The point raised in Fawke is not without controversy. Justice French in Thiess took a different view of professional services. In that matter the issue was whether s 52 of the TPA was applicable to the giving of professional advice by a consulting engineer. The argument that the concept of trade or in trade or commerce denoted some form of mercantile or commercial activity not applicable to the activity of a member of a profession was rejected. French J observed that s 4 of the TPA defined the term "services" to expressly include work of a professional nature and he then went on to say at 619-620:

The scope of "trade or commerce" can be considered against the concept of "profession" to determine whether there is anything about the latter that excludes it from the former. The word "profession" is descriptive of a class of occupations. The membership of that class is not rigid or static but shifts with general community perceptions: Bradfield v FCT [1924] HCA 59; (1924) 34 CLR 1 at 7 per Isaacs J. Whether a person carries on a profession in a given case is a question of degree and always of fact: Robbins Herbal Institute v FCT [1923] HCA 28; (1923) 32 CLR 457 at 461 per Starke J.

It has been said that the word involves the idea of an occupation requiring either purely intellectual skill or else manual skill controlled, as is painting and sculpture or surgery, by the intellectual skill of the operator as distinct from an occupation which is substantially the production or sale or arrangement for the production or sale of commodities: Commissioners of Inland Revenue v Maxse [1919] 1 KB 647 at 651.

The concept has created difficulties for social scientists. Theoretical definitions by reference to the crucial characteristics of professions are said to have resulted in "... a confusion so profound that there is even disagreement about the existence of the confusion": Professions and Power, T J Johnson, Macmillan (1972) p 22.

One suggestion for definitive criteria includes the existence of a requirement for formal technical training accompanied by some institutionalised mode of validating both the adequacy of the training and the competence of the trained individual. The training, it is said, must lead to some order of mastery of a generalised cultural tradition in a manner giving primacy to an intellectual component. Skills in some form of the use of the tradition must be developed and there must be some institutional means of ensuring that the skills will be put to socially responsible uses: Parsons, "Professions" (1968) 3 International Encyclopaedia of Social Sciences 536 cited in Partlett, Professional Negligence p 3.

A recent paper in the Modern Law Review speaks of "a specific historical formation in which the members of an occupation exercise a substantial degree of control over the market for their services, usually through an occupational association": R L Abel "The Decline of Professionalism" (1986) 49 MLR 1. The literature on the subject is evidently substantial and reflects conflicts on proper approaches to definition. That question may never be satisfactorily resolved for all purposes. However, where the conduct of a profession involves the provision of services for reward, then in my opinion, even allowing for widely differing approaches to definition, there is no conceivable attribute of that aspect of professional activity which will take it outside the class of conduct falling within the description "trade or commerce". This conclusion flows from both the judicial exposition and the particular statutory context of that term.

It follows that the provisions of s 52 are applicable to the giving of professional advice by a consulting engineer and nothing flowing from the characterisation of that occupation as a profession prevents their application."

1. Whilst Murphy J in Adamson expressed a similar view in relation to professionals, his observations were obiter. In Adamson at 239 to 240 Murphy J said:

The question is not whether the prosecutors and the SA League are sporting clubs (no doubt, they are), but whether any of them is a trading corporation. A few centuries ago trade was mostly centred around primary industry, a generation or so ago mostly around secondary industry; now it is overwhelmingly centred around tertiary industry. Most Australian workers now work in areas of entertainment, information, education, health, tourism, leisure, sport, transport and similar services. Many activities which once would not have been regarded as trade have come to be recognized as trade (see Walker v Crystal Palace Football Club Ltd [1910] 1 KB 87 and Brimelow v Casson ([1924] 1 Ch 302). The commercialization of sport, education, religion, medicine and other social or professional activities is a world-wide phenomenon.

1. Following the decision of French J in Thiess a debate has ensued as to whether only professional activities that are in trade and commerce are covered by s 52 of the TPA (see Prestia v Aknar and Others (1996) 132 FLR 180, LT King Pty Ltd and Another v Besser and Another [2002] VSC 354; (2002) 172 FLR 140 at 147 to 148; Gray v Morris [2004] QCA 5 at [53] per McMurdo J and Shahid v Australasian College of Dermatologists [2008] FCA FC 72 at [179]- [185] per Jessup J). That debate is not helpful to the resolution of this matter as it turns on the interpretation of the express provisions of the TPA and Fair Trading legislation of the States.
2. Even if it is accepted that the occupation of a chiropractor does not engage in trade on grounds that to engage in a profession is not to trade (which is a point of some controversy which has not been definitively resolved and I do not find it necessary to express a view of that issue), it does not necessarily follow that LC cannot be characterised as a trading corporation. In Diskin Chiropractic Health Centre Pty Ltd v PH Molony (In his capacity as a Referee of the Small Claims Tribunal) v Sydney Edward Giles (1992) ASC 56-146 Tadgell J considered the question whether a company that engages a chiropractor to provide chiropractic services to patients cannot be engaged in the field of trade and commerce. In support of the argument for such a finding the applicant relied upon the decision of Beach J in . Tadgell J in rejecting the argument said at [16]:

The fact - if it be the fact - that a chiropractor who performs the chiropractic services is a professional man does not of itself, it seems to me, necessarily mean that the company contracting with the consumer to provide the services is not engaged in trade in relation to those services.

1. It is apparent from Tadgell J's reasoning that what is relevant in considering who, if any person engages in trading, is who enters in the contract with the consumer. Is it the company who employs the professional or the professional who provides the service?
2. In this matter the applicant does not dispute the respondent's submission that LC's financial statements show:

(a) LC derived professional fees from its Main and Morley Chiropractic clinics;

(b) Billing reports and summary payment reports show that services were provided by LC through the applicant.

1. In fact the applicant specifically says that LC's main income is generated by the chiropractors and associates practising at Morley and Main clinics and the documents evidence that substantial fees are generated from the provision of chiropractic services. Given that these propositions are accepted as fact, it is apparent that LC derives its main income from an exchange of money from customers for services LC provides through professionals engaged by LC to provide these services. Plainly, the arrangement is trading in the sense of a commercial arrangement with members of the public to provide services for reward within the meaning of trading discussed in Lawrence. It is not determinative to whether LC is a trading corporation within the meaning of s 51 (xx) of the Constitution that the actual work carried out to provide the services is carried out by a chiropractor who, if carrying on business on their own account, may or may not be regarded as a person who engages in trade.
2. In LC's arrangement, the chiropractor who provides the service on behalf of LC is part of the trading arrangement but only in the sense of a tripartite arrangement as discussed in Lawrence at [286](f) whereby A agrees to provide a service to B through C.
3. LC's main income is received from its customers. Trading occurs between LC and its customers.
4. In Lawrence the ALS' main source of funds was from the Commonwealth pursuant to the terms of a three year contract. The Full Bench found that the transaction by which the funds were received constituted trading. However the Full Bench found that as the use made of the funds was the provision of legal services without charge, the substantial activity of the ALS was not trading and thus not a trading corporation. In Lawrence the contract by which funds were received was one single transaction. In this matter it can be inferred from the documents provided to the applicant and the Commission by the respondent, and from the contentions agreed by the parties, that LC receives its funds through numerous individual transactions with customers who seek chiropractic services. These trading activities would occur with sufficient frequency and form a significant part of the overall activities of LC and produce a substantial amount of income. Consequently I am of the view that LC is a trading corporation and I will make a declaration in each matter that LC is a constitutional corporation within the meaning of s 4 of the WRA.