Northbuild Const P/L v Lockton [1999] QCA 91

Court of Appeal (Qld)|1999-03-26|Before: Northbuild Const P, Davies JA, Thomas JA, Wilson J, Mr P, Before Davies JA

JOINT REASONS FOR JUDGMENT - DAVIES JA AND WILSON J

1 This is an appeal from a refusal by a Supreme Court judge to order that a claim of charge under the Subcontractors' Charges Act 1974 be cancelled. The applicant for the order, which is now the appellant, is a building contractor, which, on or about 16 June 1997, entered into a contract with the Crown in right of the State of Queensland through the Director-General, Department of Public Works and Housing for the redevelopment of the Salisbury State High School. The respondent, who is a steel fabricator, entered into a contract with the appellant in July 1997 for the supply and affixing of structural steel, metal work and handrails required under the first contract. It was common ground that the appellant was a contractor and the respondent a subcontractor within the meaning of the Subcontractors' Charges Act.

3 For a valid charge to take effect under the Subcontractors' Charges Act there must also have been, at the relevant time, money payable or to become payable to the respondent, in accordance with its contract, for work done by it under that contract: Subcontractors' Charges Act s 5(2). The question whether there was money payable or to become payable in accordance with that contract for work done under it was the central question below and in this Court.

4 The appellant contends that there was no such money payable because of the application to the facts of this case of s 42 of the Queensland Building Services Authority Act 1991. That section relevantly provides:

"(1) A person must not carry out, or undertake to carry out, building work unless that person holds a contractor's licence of the appropriate class under this Act.

(3) A person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.

5 It was common ground below and in this Court that the respondent did not hold a contractor's licence of the appropriate class under that Act. It was also conceded by the respondent that the work which it performed under its contract was building work within the meaning of that Act. It would ordinarily follow from this that the respondent was not entitled to any monetary consideration for the work which it did under its contract and consequently that there was no money payable or to become payable to it in accordance with its contract for the work which it did which could be the subject of a charge under s 5(2) of the Subcontractors' Charges Act.

6 However the respondent submitted below, and the learned primary judge held, that there was nevertheless money payable to the respondent in accordance with its contract for work done by it under that contract. That conclusion was reached on three alternative bases. The first was that the Queensland Building Services Authority Act did not apply to this work because it was performed on Crown land for Government purposes, Crown immunity extending to this work. The second was that if the respondent had no contractual claim, it had a claim on a quantum meruit which would not be an entitlement to which s 42(3) refers. And the third was that the respondent could succeed on an estoppel claim, or at least that it was not abundantly clear that it could not, which also did not come within s 42(3).

7 The third of these was no longer relied on by the respondent in this Court as a basis for sustaining the judgment below. And the respondent also conceded that it was precluded from arguing successfully in this Court that it could succeed on the basis of a quantum meruit because of the decision of this Court in Zullo Enterprises Pty Ltd & Ors v Sutton[1] which held that s 42(3) precludes a restitutionary claim. However it did not abandon its contention in this respect in the event that this matter might go beyond this Court. We should add, however, that there is an additional problem that such a claim is not a claim which comes within s 5(2) of the Subcontractors' Charges Act which, in terms, appears to be limited to securing payment of monies payable in accordance with a contract for work done under it.

8 This leaves for consideration only the first basis for the judgment below. The argument of the respondent was that, by force of s 13 of the Acts Interpretation Act 1954, the Queensland Building Services Authority Act does not apply to building work carried out on Crown land for Government purposes. Section 13 is in the following terms:

"No Act passed after the commencement of this Act shall be binding on the Crown or derogate from any prerogative right of the Crown unless express words are included in the Act for that purpose."

9 At first sight there appears to be an insuperable obstacle to this argument arising from cl 3A(1)(g) of the Queensland Building Services Authority Regulation 1992. This arises in the following way. Section 4, the definitions section of the Queensland Building Services Authority Act, defines "building work" to mean a number of specific kinds of work and then provides that it -

" ... does not include work of a kind excluded by regulation from the ambit of this definition."

"(1) The following work is excluded from the ambit of the definition 'building work' -

(g) work performed by the State or an instrumentality or agency of the State (as distinct from work performed for the State or an instrumentality or agency of the State by an independent contractor)".

11 Plainly the work performed by the respondent here falls within the words in parentheses or is at least excluded by those words from the opening words of paragraph (g). That paragraph expresses a statutory intention that building work was intended to exclude work performed by the State or an instrumentality or agency of the State, in each case by its servants or agents, whilst ensuring that work done for the State by an independent contractor should not be excluded. Indeed the contrary does not appear to have been contended by the respondent in this Court. It contended that cl 3A(1)(g) is invalid because it is repugnant to the Act which indicates an intention not to bind the Crown.

12 The respondent's counsel took us to a number of provisions of the Queensland Building Services Authority Act which, he submitted, indicated that it did not intend to apply to work done on Crown land. These may be stated in a summary way. Section 47 provides that if building work is carried out on land by an unlicensed person and the land is offered for sale within six years the vendor must, before contract, give the prospective purchaser a prescribed notice and warning. Section 48 gives the Authority power to cancel or suspend a licence. Under s 72 the Authority may require rectification of defective work including demolition. Section 74 provides that if rectification in respect of residential construction work, required by the Authority, is not carried out within the time allowed the Authority may have it carried out by another contractor selected by it from a panel. Section 102 provides that the Tribunal established under the Act may prohibit the starting or continuing of building work. Section 107 gives inspectors power to enter and inspect a building site though it must be with the consent of the person in control of that site. The Tribunal to which we have referred may make orders and directions to resolve disputes over domestic building work. Under s 80 the Tribunal may issue summonses requiring persons to give evidence or produce documents. And by s 83 a Tribunal may enter and inspect any building or land for the purpose of proceedings before it. The respondent also referred to ss 58 and 59 which require certain matters to be included in contracts for domestic work and that those contracts be in writing; and to s 68 which requires contractors to take out insurance, the point being that the cost of this would be passed on to the owner.

13 It is true that many of these provisions impose obligations on or otherwise affect the interests of the Crown as the owner of land upon which a contractor performs building work pursuant to a contract with the Crown. But, read in context, the obligations are imposed or interests affected as part of a regime designed to protect consumers of the service of building work against persons who perform defective work[2] and to provide a mechanism for resolving disputes about such work.[3] More generally the Act may be said to be one for the regulation of building work and those performing it. Clause 3A(1)(g) is consistent with those objects and general purpose of the Act and with the power, conferred by the definition of building work in the Act, to exclude from the operation of the Act particular categories of building work. We would therefore conclude that it is not invalid as being repugnant to the Act.

14 The question under s 13 of the Acts Interpretation Act is not whether the Act imposes obligations on or affects the interests of the Crown but whether it binds the Crown or derogates from any prerogative right of the Crown. Construed with the aid of s 13 cl 3A(1)(g) says explicitly what is implicit in the Act; that the Act does not bind the Crown in the performance by it of building work but does not exempt from its operation independent contractors who perform building work for the Crown. In the context of the general purpose and specific objects of the Queensland Building Services Authority Act, that is the relevant sense in which the question whether the Act binds the Crown must be answered: does it bind the Crown in the performance by it of building work? That question must, in our view, be answered in the negative.

15 Nor does it derogate from any prerogative right of the Crown. Mr O'Donnell QC for the respondent, whilst at first disinclined to distinguish between the two limbs of s 13, in the end contended that prerogative rights of the Crown included its right of ownership of land, and it was this right which was derogated from by the Act. It may be accepted, for the purposes of this appeal, that the Crown's right of ownership of the land on which the Salisbury State High School stands is a prerogative right.[4] But it is not that right which it must be asserted is derogated from by the Queensland Building Services Authority Act; it is the right of the Government, in the present case by means of the Director-General, Department of Public Works and Housing, to enter into a contract to redevelop the Salisbury State High School. It is the exercise of that right or power which has resulted in the application of the Queensland Building Services Authority Act to the contract in question. That is not a prerogative right but a statutory one.[5] There can be no doubt that prerogative rights are the residue of rights which the Crown possesses at common law.[6]

16 Mr O'Donnell took us to a number of cases which he submitted supported his contention that the Queensland Building Services Authority Act when construed with the aid of s 13, did not apply to building work by an independent contractor on Crown land. Those upon which he most relied were Lower Hutt City v Attorney-General[7] and Wellington City Corporation v Victoria University of Wellington; Attorney-General (third party).[8] In Lower Hutt City the question was whether a contractor engaged in drainage and plumbing work on a housing project undertaken by the Minister for Works was relieved of the obligation under Local Authority and Plumbing Regulations to obtain a permit from and pay fees to the local authority because the regulations "in [some] manner affect[ed] the rights of Her Majesty". It was held that he was so relieved because those requirements affected the right of the Crown to enjoy its land. That conclusion was reached because of a very wide construction given to a provision in wider terms than s 13.

17 The question in Wellington City Corporation was whether a building permit imposing a height limit on a building which the Crown proposed to erect on its land affected "the interest of Her Majesty in any property of any kind belonging to or vested in Her Majesty" within the meaning of the relevant statute. It is unsurprising that the court held that it did. It should also be noted that the decisions in both of these cases were given at a time when both the common law and statutory provisions with respect to Crown immunity were seen as stating an inflexible principle rather than merely an aid to construction of legislation.[9] We do not think that either of these cases, or any of the other cases to which the respondent took us, assists it in its contention that s 42 of the Queensland Building Services Authority Act did not apply to the respondent in the performance of its work under its subcontract with the appellant.

18 For those reasons in our view, the learned primary judge was wrong in concluding that the Queensland Building Services Authority Act does not apply to the work performed by the respondent. The appeal should therefore be allowed and an order made that the claim of charge made by Peter James Lockton as trustee of the Lockton Family Trust trading as P J Lockton Fabrications, under the Subcontractors' Charges Act 1974, dated 19 May 1998, in respect of monies payable by the Crown in right of the Director-General, Department of Public Works and Housing to Northbuild Construction Pty Ltd be cancelled. We would also order that the appellant have its costs here and below.

19 The respondent submitted that, if this appeal succeeded, it should have its costs under the Appeal Costs Fund Act 1973 because the basis on which the appeal succeeded, cl 3A(1)(g) of the Queensland Building Services Authority Regulation had not been relied on below and consequently the learned primary judge was not made aware of it. Whilst the first part of this contention may not be strictly correct in the sense that that regulation simply confirmed what otherwise appears to have been the relevant meaning of building work under the Act, we think it was sufficiently material to the argument to justify an order under the Appeal Costs Fund Act in this unfortunate case in which a subcontractor, whose expertise and the quality of whose work does not appear to have been in question has been deprived, by a failure to obtain a licence, of a charge to which it would otherwise would have been entitled.

1 The respondent subcontractor performed substantial work for the appellant builder. No issue has at this stage been raised as to the general entitlement of the respondent to be paid, other than the circumstance that because the respondent does not have a contractor's licence he cannot sue for any entitlement. This is the result of a provision in the Queensland Building Services Authority Act 1991 (Qld) (s42) which can only be described as Draconian. That section prohibits the carrying out of "building work" without a "contractor's licence of the appropriate class" and then provides that "[a] person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so"[10]. The number of cases coming before this court where such a defence has been raised long after the performance of very substantial and costly work is a matter for serious concern. Such legislation appears to encourage the cynical lying by of owners and head contractors and is a potential source of serious injustice. One can understand the need for strong disincentives against the performance of unlicensed work, but the provision of a discretion which would enable a court to relieve against total forfeiture in such situations, if necessary upon terms, is a matter which deserves serious consideration by the legislature.

2 In the present matter, the Crown undertook a project for the redevelopment of the Salisbury State High School, and engaged the appellant as contractor. The appellant then engaged the respondent as a subcontractor to perform the necessary steel fabrication work.

3 The respondent's argument shortly put is that by implication the Queensland Building Services Authority Act does not bind either the Crown or persons who perform building work on Crown projects. The learned primary judge upheld that submission, thereby avoiding the Draconian measure referred to above. The rules relating to the so-called shield of the Crown appears to have undergone recent change, and since Bropho's case[11] former dogma has been reduced to the more appropriate status of rules of construction. The historical considerations which gave rise to the common law rules have now been recognised as largely inapplicable to conditions in this country where the activities of the executive government reach into almost all aspects of commercial, industrial and developmental endeavour. Sometimes it happens that when the historical reasons cease, the rule ceases. But the rules with which we are concerned do not easily disappear. While the common law rule of construction has been brought back to what might be described as sensible dimensions following Bropho's case, there remain statutory rules of construction in many jurisdictions, such as s13 of the Acts Interpretation Act 1954 (Qld). Such statutory provisions remain mere rules of construction, but courts are bound to apply them. Section 13 of the Acts Interpretation Act provides:

"No Act passed after the commencement of this Act shall be binding on the Crown or derogate from any prerogative right of the Crown unless express words are included in the Act for that purpose".

Construction of the Queensland Building Services Authority Act:

Can a regulation be used in ascertaining whether the Crown is bound?

4 The works to which and ultimately the persons to whom the provisions of the Queensland Building Services Authority Act apply, are to a large extent dependent upon the definition of "building work" in s4. That term is defined to mean the erection or construction of a building and various other types of work, and the definition concludes with the following exception - "but does not include work of a kind excluded by regulation from the ambit of this definition". Regulation 3A of the Queensland Building Services Authority Regulation 1992 (Qld) provides as follows:

"3A(1) The following work is excluded from the ambit of the definition "building

The words in brackets, if able to be used in construing the Act, show an intention to include work such as that in question in the present case to the extent that it was performed by a contractor such as the appellant or the respondent.

5 On behalf of the respondent it was submitted that it is not appropriate to refer to a regulation in order to determine the proper construction of the principal Act. There is a well established general rule that regulations may not be used for such a purpose[12]. Some dubious exceptions to the rule are sometimes advanced, as for example in the case of legislation which gives regulations a status "as if enacted" in the Act.[13] However the better view of so-called Henry VIII clauses and regulations of this kind is that expressed in Foster v Aloni[14] where it was noted that even a rule validated by such a clause could be held to be meaningless if it conflicted with a provision of its parent Act. In any event, the definition of "building work" in s4 does not give a power of this kind to the regulation-making authority. As a general rule I do not consider that the post-enactment views of the executive through regulations or of subordinate bodies through schemes are a valid source for determining the intention of the legislature in the original Act.

6 Counsel for the appellant submitted that parliament has expressly provided in this Act that the concept of "building work" is to be determined, in part, by regulation. That is true, but says nothing in relation to the wider question whether the Act was intended to bind the Crown, or the supplementary question whether its effect is such that unless persons in the position of the appellant and the respondent are held immune from the requirements of the legislation, the rights and prerogatives of the Crown will be derogated from.

7 In the present Act it was expressly contemplated that the executive might by regulation cut down the definition in the Act to whatever extent it chose to prescribe by regulation. The contemplated regulation might exclude various kinds of work; it might for example exclude work performed by the Crown. But no power was given to pronounce upon such a matter as whether it was intended that the Act should bind the Crown or not, or to bind those with whom the Crown has dealings. The regulation-making authority might, by a process of denotation of kinds of work, affect the scope of persons to whom the provisions of the Act will apply, but it cannot give a different connotation to the principal Act. In particular it cannot make the Act apply to someone to whom the Act is not intended to apply.

8 I would therefore not be prepared to use Regulation 3A as an available source in determining whether on its proper construction the Queensland Building Services Authority Act binds the Crown or derogates from prerogative rights of the Crown.

9 How then should the Act be construed? The general rule of the common law was that the Crown was bound by statute only by express mention or necessary implication. However, as Stephen J observed in Bradken Consolidated Limited v The Broken Hill Proprietary Company Limited[15] "versions of the rule even more favourable to the Crown than the rule itself have found their way onto the statute book in Australian jurisdictions, and s.13 of the Acts Interpretation Act 1954-1977 (Q.) provides one instance of this". (My italics).

10 There are no express words in the Queensland Building Services Authority Act which expressly bind the Crown. Nor are there any words which expressly derogate from any prerogative rights of the Crown. I therefore apprehend that the Crown is not bound by the legislation. But of course it does not follow from this that the respondent is not bound.

11 The respondent's argument is that if the Act is taken to apply to those who perform the building work on this Crown project, the Crown will in turn be subject to the statutory regime, and its prerogative powers will be interfered with by others, and in particular by the Queensland Building Services Authority, the Queensland Building Services Board and its inspectors. In order to determine whether this is correct it is first necessary to examine the Act.

Potential effect of legislation if applied to those engaged on Crown projects

12 When one examines the operation of the Act, there is much to be said in favour of what might seem at first glance an unattractive argument. The Crown is the owner of the land and building comprising the school, and various provisions of the Act would directly affect the Crown in this case if the appellant's construction is upheld.

13 Section 47 of the Act provides that if building work is carried out on land by an unlicensed person, the owner/vendor, if it wishes to sell the land within six years, must give any prospective purchaser a notice detailing the work, along with a warning in a prescribed form. If this is not done, the owner/vendor is taken to have given the purchaser a contractual warranty that the building work has been properly carried out.

14 Section 48 gives the Authority power to suspend or cancel a licence at any time, including in the course of performance of a contract. Thus, the Authority would have the power to interrupt work on a Crown project.

15 Section 72 gives the Authority the power to require rectification of building work if the Authority considers the work done to be defective or incomplete. This power includes, inter alia, the ability to order the demolition and recommencement of work.

16 Section 74 (which concerns residential construction work) empowers the Authority ultimately to take over a project and call for tenders to carry out the work and oversee its performance.

17 Section 102 permits a Tribunal established under the Act to issue a "stop work order". If the Act applies to a Crown project the Tribunal could prohibit a contractor from carrying out work contrary to the wishes of the Crown. The Tribunal also has power to enter and inspect the land or building in question.

18 Under s107 an inspector (appointed by the Authority pursuant to s104) may (by consent of the person in control of the building site or by warrant of a member of the Tribunal) enter and inspect any building site for the purposes of ascertaining whether the Act is being complied with.

19 Other provisions in relation to residential construction contain compulsory requirements as to the form of the building contract. There is also a compulsory insurance scheme (Part 5, especially s68) under which the building contractor must pay an insurance premium in accordance with the regulations.

20 It was submitted by the respondent that the scheme asserts a measure of potentially invasive control over the performance of building work, and if it were to apply to those engaged in the performance of Crown projects, the Crown's enjoyment of its land and its freedom to exercise its prerogatives would be made subject to the control of others.

21 There is no doubt that the Act creates an extensive bureaucratic regime, and although the objects of the Act are mainly to regulate the building industry and provide remedies for defective building work, it achieves this by means of a regime that directly affects not only contractors but also building owners.

22 The decided cases (soon to be mentioned) tend to support the conclusion that such a scheme should not be held to bind the Crown, and further that it should not be held to bind servants, agents or independent contractors on Crown projects who would otherwise be subject to the legislation.

23 Some reliance was placed upon two decisions in New Zealand namely the Lower Hutt case[16] and the Wellington Corporation case[17]. The Lower Hutt case concerned drainage and plumbing regulations. The question was whether such regulations should be enforced against drainlayers and plumbers engaged by the relevant government Ministry to perform work on Crown land. North P referred inter alia to the fact that the local authority engineer could require plans prepared by the Ministry to be submitted to him for approval, and went on to observe:

"In a very real sense then, if the regulations are held to apply to this housing project, the whole of the drainlaying and plumbing work would be subject to the control of the Lower Hutt Municipality and therefore would affect the "rights" of the Crown. In my opinion then, though the matter is not wholly free from doubt, the better view, and the one more consistent with established authority in New Zealand, is that the Drainage and Plumbing Regulations 1959 cannot be enforced against drain layers and plumbers engaged by the Ministry of Works to carry out work on Crown land".[18]

24 In the Wellington Corporation case town planning provisions were held, in the absence of express provision binding the Crown, not to apply to Crown buildings. The case concerned work on land vested in the Crown, although the relevant building contract was with the University. Cooke J (as he then was) stated:

"[A]s the Crown is paying for the work, it seems obvious at first sight that a requirement to obtain a building permit and to submit to a measure of control by the city council, exercised through the council's building inspectors and other officers, must affect the rights and property of the Crown. From the purely financial point of view, it might well be to the advantage of the Crown for the project to be free of all or some of the 21 conditions previously mentioned. Therefore the conclusion seems inevitable that the interest of the Crown in the property in question will be affected if a building permit is required."[19]

25 The considerations implicit in the Queensland Building Services Authority Act in relation to effect upon the Crown would seem to be even stronger than those which persuaded Cooke J to that view in the Wellington Corporation case.

26 In Australia it has been held in the High Court decision of Brisbane City Council v Group Projects Proprietary Limited[20] that the City of Brisbane Town Plan did not bind the Crown, notwithstanding that it was given the force of law by legislation. The Group Projects case was not concerned with the further question of necessary implications concerning those with whom the Crown dealt, but it deserves mention on the question whether such legislation binds the Crown.

27 Wilson J (with whose judgment Gibbs and Mason JJ agreed) observed:

"Notwithstanding that the Town Plan purports to deal generally with Crown land, that a lessee of Crown land may be bound by it, and that the Plan is expressed to have "the force of law", there is nevertheless no adequate basis for a conclusion that the City of Brisbane Town Planning Act binds the Crown. As I have said, the Act does not expressly do so, and the considerations to which I have referred do not supply a necessary implication. It cannot be said that the purposes of the Act would be wholly frustrated unless the Crown were bound: Province of Bombay v Municipal Corporation of Bombay [1947] AC at p63.

The mere legislative prescription in s.4 of the City of Brisbane Town Planning Act that a Town Plan approved by the Governor-in-Council shall have the force of law cannot result in the Crown being bound by the provisions of a Plan unless such an intention appears from the Act itself. In purporting to bind the Crown the present Plan exceeds the authority conferred on the Governor-in-Council to approve Town Plans under the Act. Subordinate legislation cannot validly extend the operation of an Act to persons or objects (in this case, the Crown) that are not within the scope of the Act itself and such legislation will be ultra vires to the extent that it purports to do so notwithstanding that it is given "the force of law"".[21]

28 It may be noted in passing that in that case Wilson J suggested that s13 of the Acts Interpretation Act 1954-1977 (Qld) was a statutory restatement of the common law. If this was correct in 1979, it no longer seems correct since the decision in Bropho v Western Australia[22] which repudiated the common law test that required the necessary intention to be "manifest" upon the terms of the statute or that its purpose would be wholly frustrated before the Crown is bound. However a more accurate statement concerning s13 would seem to be that of Stephen J in Bradken[23] that s13 is more favourable to the Crown than the common law rule. One may also agree with his Honour's further observation that the likelihood of statutory alteration was "perhaps, not great".

29 Nothing turns upon the fact that the appellant and the respondent are independent contractors as distinct from Crown servants or agents. In Roberts v Ahern,[24] which was directly concerned with the question whether the relevant Act of Parliament should have been construed so as to bind the Crown, Griffith CJ, speaking for the court said:

"When an act unlawful at common law is made lawful by Statute, it is clear that the authorization extends to the protection of all persons and agencies employed in doing the act, and it is immaterial whether the persons are so employed under a contract or stand in the direct relationship of servants to the persons who have the statutory authority... Nor can it make any difference whether the act in question is one which, being unlawful at common law, is made lawful by Statute, or is one which, being lawful at common law, is not made unlawful by any Statute."[25]

30 Roberts has been frequently referred to and applied. In Woodlands v Permanent Trustee Company Ltd[26] the Full Court of the Federal Court observed:

"The principle of Roberts seems to be that the immunity that attaches to the Crown itself, from the effect of a statute making unlawful a particular act, extends also to persons retained by the Crown to perform the act, whatever the precise nature of the relationship between the Crown and them[27]."

31 It is not necessary for the purposes of the present case to essay the precise ambit of the prerogative rights of the Crown. They have been said to encompass "the power of the Crown apart from statutory authority"[28]. More specifically the prerogatives of the Crown have been described as "those rights, powers, privileges and immunities which it possesses at common law"[29]. These would seem to include the right to erect buildings on government land for government purposes - Johnson v Kent[30]. Mr Keane QC for the appellant sought to distinguish the observations in Johnson v Kent on the footing that they were made in the context of upholding the executive power of the Commonwealth under s61 of the Constitution. It is plain however that Barwick CJ's observations were with respect to the non-statutory rights and powers of the Crown in right of the Commonwealth and that his Honour's references were specifically to the "traditional executive power broadly embraced in the description of 'the prerogative' exercisable in the Territory"[31]. It is true that his Honour reserved the question whether the position was the same in other parts of Australia, but his Honour plainly regarded the Crown as having certain prerogative rights to use and develop its own land. Jacobs J (who also agreed with Barwick CJ's reasons) further observed:

"I am of the opinion that the executive power of the Commonwealth extends to the doing of acts upon its own lands within a territory surrendered by a State to the Commonwealth without any statutory authority other than the necessary appropriation of funds if those acts are of the kind which lie within the prerogative of the Crown. The erection of a restaurant and viewing facilities on the lands in question fall within such a category"[32].

32 The leading case in Australia dealing with the issue of extending Crown exemption to those with whom the Crown deals is Bradken Consolidated Limited v The Broken Hill Proprietary Company Limited[33]. The Act in question was the Trade Practices Act 1974-1977 (Cth) and the question at issue was whether the Queensland Railways Commissioner (who under Queensland legislation represented the Crown in the right of the State) and other parties who made contracts with the Railways Commissioner were bound by the Act. Gibbs ACJ referred inter alia to the Lower Hutt and Wellington Corporation cases, and stated:

"To hold that the Trade Practices Act applies to transactions which the respondent companies have made with the Commissioner, so as to frustrate those transactions, would be to give that Act an operation which would affect prejudicially the interests of the Crown. Since the Trade Practices Act does not bind the Crown, it does not have that effect[34]."

"Accordingly, since the Act is devoid either of express reference binding the Crown in right of the States or of necessary implication to that effect, it should, I think, be interpreted as not binding the Commissioner for Railways of the State of Queensland.

Once this be concluded it follows that the Act will not only not apply directly to the Commissioner but will also not apply so as to prejudice its interests when in contractual relationship with parties to whom the Act clearly applies or when otherwise interested in transactions affecting those parties (In re Telephone Apparatus Manufacturers' Application [1963] 1 WLR 463; [1963] 2 All ER 302; (1962) LR 3 RP 462).[35]"

"[I]n accordance with such authorities as Wirral Estates Ltd v Shaw and In re Telephone Apparatus Manufacturers' Application, the absence of an intention to bind the Crown in right of Queensland will not only exonerate it from the direct application of the statutory provisions but will also exonerate from the application of those provisions the contracts arrangements or understandings made by that Crown and the other parties thereto as well.[36]"

35 It may be noted that Bradken applied the then understanding of the common law rule of construction. Both the judgment of Gibbs ACJ and that of Upjohn LJ in In re Telephone Apparatus Manufacturers' Application[37] adopted the test whether application of the Act in question to certain other persons' dealings with the Crown "would affect prejudicially the interests of the Crown". That test I think goes further than the terms of s13 of the Acts Interpretation Act require. However it seems to me that the imposition of the Queensland Building Services Authority Act regime upon those engaged to carry out a Crown building project such as the present one would necessarily derogate from prerogative rights of the Crown, and that there are no express words in the statute to indicate that such a result was intended. Accordingly, giving effect to s13 of the Acts Interpretation Act, the respondent did not require a licence to carry out the relevant work that was to be done in redeveloping the Salisbury State High School.

36 In some respects the respondent's argument that the Crown is exempt from legislation that it requires others to observe and that certain other persons with whom the Crown deals are also exempt, is an unattractive one, but in my view it should be upheld. For reasons mentioned in paragraph 1 of these reasons, the imposition of the statutory scheme is not entirely attractive either. In the end such matters are immaterial to the resolution of the issues which must be determined according to law. Such authority as currently exists tends to support the respondent's argument.

37 Mr Keane QC for the appellant urged the court to ascertain the scope of the Act by reference to the Regulations and submitted that Regulation 3(A)(1)(g) was consistent with the proposition that the Crown is not bound by the Act. The respondent's submission that the Regulation is repugnant to the Act was therefore said to be unfounded. However, the words in parenthesis in Regulation 3(A)(1)(g) are plainly repugnant to the necessary implication (as I would hold it to be) that persons in the position of the appellant and the respondent are not bound by the Act. The power to make regulations does not include power to add to the definition of "building work" in the Act. To the extent that it purports to add the work of persons who on the proper construction of the Act are excluded from its application, it is repugnant to the parent Act and is ultra vires.

38 I have the advantage of having read the joint reasons of Davies JA and Wilson J. My point of departure is on the question of recourse to Regulation 3(A) for the purpose of construing the Act. If the Regulation is put to one side, there is nothing in the Act that can satisfy the requirements of s13 of the Acts Interpretation Act. Examination of the operation of the Queensland Building Services Authority Act shows that the Crown's prerogative rights are materially derogated from if the Act is permitted to operate in respect of the work of contractors on Crown projects.

39 Accordingly in my view the respondent did not require a license, and the learned primary judge was correct in declining to cancel the respondent's charge.

[1] Appeal No 8045 of 1998, 15 December 1998.

[2] See Queensland Building Services Authority Act s 3(a)(i), (b).

[4] See Johnson v Kent [1975] HCA 4; (1975) 132 CLR 164 at 170, 174; Century Metals v Yeomans (1988) 85 ALR 29 at 52. It may be however that prerogative rights are referred to in s 13 in a narrower sense; that such a term "can only be applied to those rights and capacities which the King enjoys alone, in contradistinction to others, and not to those which he enjoys in common with any of his subjects": Blackstone, Commentaries on the Laws of England, cited with approval by Brennan J in Davis v The Commonwealth [1988] HCA 63; (1988) 166 CLR 79 at 108.

[5] Education (General Provisions) Act 1989 s 16, the power to establish and maintain state schools; see also s 13.

[6] Re Residential Tenancies Tribunal (NSW); ex parte Defence Housing Authority (1997) 190 CLR 410 at 438.

[9] Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1 at 15, 16.

[11] Bropho v State of Western Australia [1990] HCA 24; (1990) 171 CLR 1, 19.

[12] The Great Fingall Consolidated Limited v Sheehan [1905] HCA 43; (1905) 3 CLR 176, 184; Webster v McIntosh [1980] FCA 128; (1980) 3 A Crim R 455, (1980) 32 ALR 603, (1980) 49 FLR 317, 321; John Burke Ltd v The Insurance Commissioner [1963] Qd R 587.

[13] Minister of Health v The King [1931] AC 494.

[14] [1951] VicLawRp 69; [1951] VLR 481; cf Kwiksnax Mobile Industrial & General Caterers Pty Ltd v Logan City Council [1994] 1 Qd R 291, 304-6.

[16] Lower Hutt City v Attorney-General [1965] NZLR 65.

[17] Wellington City Corporation v Victoria University of Wellington [1975] 2 NZLR 301.

[28] The Amalgamated Society of Engineers v The Adelaide Steamship Company Limited [1920] HCA 54; (1920) 28 CLR 129, 143; referring to Theodore v Duncan [1919] UKPCHCA 3; (1919) 26 CLR 276 at p282.

[29] Re Residential Tenancies Tribunal of New South Wales and Henderson; ex parte The Defence Housing Authority (1996-1997) 190 CLR 410 at 438 per Dawson, Toohey and Gaudron JJ.

[31] Ibid at p170 per Barwick CJ (McTiernan, Stephen and Jacobs JJ agreeing).

Drainage and Plumbing Regulations 1959

At a glance

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Judgment (107 paragraphs)

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Cases Cited (12)