State Superannuation Board v Trade Practices Commission [1982] FCA 52

Superannuation Act 1958 (Vict.) - Trade Practices Act 1974 (Cth.) ss. 2A, 4, 155.

STATE SUPERANNUATION BOARD and TRADE PRACTICES COMMISSION

Qn appeal from a single Judge of the Federal Court of Australia.

ORDERS JUDGES MAKING ORDERS: Franki, Northrop and Ellicott Jud. WHERE MADE: Melbourne. DATE OF ORDERS: 15 April 1982.

2. The appellant is to pay the respondent's costs of the appeal.

) ) VICTORIA DISTRICT REGISTRY ) No. V.G. 12 of 1981 ) )

On appeal from a single Judge of the Federal Court of Australia

I coirtify thet this pase is a true ceny of the S Reasons fer Judguient bogcan of bis Eouour ~ Mr. Justico fia ky, Corr oro! &sseclato .

BETWEEN: STATE SUPERANNUATION BOARD Appellant (Applicant) and TRADE PRACTICES COMMISSION Respondent (Respondent)

CORAM: Franki, Northrop and Bllicott JJ. NORTHROP J. - REASONS FOR JUDGMENT 15 APRIL 1982

The Trade Practices Commission (the Commission) claims that the State Superannuation Board of Victoria (the Board) isa corporation as defined by s.4 Trade Practices Act 1974, The Commission, having reason to believe that the Board was capable of furnishing information and providing documents relating to matters that constitute or may constitute contraventions of s.47(1) 'of the Trade Practices Act, namely that the Board nad engaged in the practice of exclusive dealing in the course of lending money on the security of mortgages of land, served on the Board a notice

under s.155 of the Trade Practices Act dated 19 November 1979

requiring the Board to furnish the information and to produce the documents specified in the notice. The Board, claiming that it was not a corporation within the Trade Practices Act and thus could not engage in conduct in contravention of s.47(1) of that Act, made application to the Court under S.163A of that Act seeking declarations that it was_not a corporation as defined by s.4 of that Act, that the notice under s.155 was invalid and that its failure or refusal to comply with the requirements of the notice would not be in contravention of s.155. The Board sought also an injunction restraining the Commission from taking any steps to enforce compliance with that notice. On 19 December 1980, the Court, constituted by Brennan J., by judgment dismissed that application. The Board appeals from the whole of that judgment. The grounds of the appeal were stated in the

i. "The learned Judge erred in fact and in law in finding and holding that the Appellant was a 'financial corporation' within the meaning of that expression in the Trade Practices Act 1974 (Cwlth)."

2. "The learned Judge should have found and held that the Appellant was not a

'corporation' within the meaning of that expression in the said Act."

The Board is a body corporate constituted by the Superannuation Act 1925 (Vic.) and continued under the Superannuation Act 1958 (Vic.), see definition of "the

Board" in s.3{1) of the 1958 Act. The 1925 Act established a

-3- Superannuation Fund (the Fund) and in the 1958 Act "the Fund" is defined in s.3 as meaning the Superannuation Fund

established under the 1925 Act and continued under the 1958 Act. .

Practices Act and a detailed reference to the provisions of

the 1958 Acc, it will be useful to make some observations of a general nature concerning the relationship between the Fund, the Board and the contributors to the Fund. The object of the Superannuation Act is to make provision for payment of pensions and other benefits to members of the services and the statutory bodies of the State of Victoria referred to in the 1958 Act and their dependants on death or retirement. The Act establishes the Fund into which are to be paid the contributions to be made by the officers and employees, the payments by the State of Victoria and the income derived from the investment of the Fund. The Fund is to be managed and controlled by the Board which is incorporated and at present consists of six members who, subject to the Act, manage and control the Board which in turn manages and controls the Fund. To that end the Act imposes duties and confers powers upon the Board. This analysis may be compared with the

analysis of the provisions of the Superannuation Act

1938-1950 (Tas.}) by the High Court in Fouche v. The

Superannuation Fund Board (1952) 88 C.L.R. 609 per Dixon, McTiernan and Fvllagar JJ. at p.628. In that case the

members of the Tasmanian Board had invested some Fund property in a manner which constituted a breach of trust. Subsequently, those members were replaced and the High Court held that they were liable at the suit of the Board to make

good to the Fund the loss which the Fund incurred by reason

of the breach of trust. In that case, the High Court was considering the nature of the relationship between the members of the Board and the Board itself. They were not concerned to determine the nature of the relationship between contributors and the Fund or whether the members of the Board were trustees, or the nature of the Board itself. At p.640

"We do not think, indeed, that the contributors are beneficiaries in the proper sense : they have, of course, an interest in the trust fund which would probably give them standing in a court of equity, but they have not such a beneficial interest in the fund as has an ordinary cestui gue trust. The trust is not a trust for persons but for statutory purposes. ... we can see no escape from the view that the individual members of the board owed a duty to the corporation which they constituted and whose property and affairs they controlled and managed. Nor can we doubt that this duty is enforceable in equity. ... the plaintiff board is seeking an equitable remedy, and, the administration of a trust fund being involved, it is clear that there 1s ample jurisdiction in equity to give appropriate relief if a breach of duty is proved."

• In s.4 Trade Practices Act the relevant part of the

definition of "corporation", unless a contrary intention

"'corporation' means a body corporate that ... (b) is a trading corporation formed within the limits of Australia or is a financial corporation so formed;"

In the same section "financial corporation" is defined as

"a financial corporation within the meaning of paragrapn 51(xix) of the Constitution and includes a body corporate that carries 'on as its sole or principal business the business of banking (other than State banking not extending beyond the limits of the State concerned) or insurance (other than State insurance not extending beyond the limits of the State concerned);"

"47.(1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing."

During the course of the hearing of the appeal, the

Court gave leave to the Board to contend that the Trade

Practices Act does not apply to or bind it because it is an instrumentality or agent or authority of the Crown in right of the State of Victoria. The two issues raised by the

1. whether the Board is a corporation within the Trade

2. whether the Board has the protection of what was

"An Act to make provision on a Contributory Basis for Superannuation Benefits for certain Public Officers and Employees and Benefits for certain of their Dependants, and for other purposes."

That Act established the Fund, s.5(1), which provided:

"5.(1) There shall be established a Fund to

• • be called 'The Superannuation Fund,' into which shall be paid the contributions of officers and the payments and repayments into the Fund by the Treasurer under this Act; and from which shall be paid the benefits provided for in this Act."

Superannuation Board, s.61({1), the relevant parts of which

"61.(1) There shall be a State Superannuation Board which shall consist of four members who shall be appointed by the Governor-in Council..."

The Act then made provision for the term of office of the Members, their removal, their remuneration, and their meetings. Under s.70 the Board was constituted a body

corporate by the name "The State Superannuation Board". .

Since 1925 the Superannuation Act has been amended on very many occasions and was consolidated in 1928 and 1958 but the substance of the structures of the Fund and the Board as established by the 1925 Act have been retained, see the 1958 Act as amended and in particular the definitions of "the Board" and "the Fund" in s.3, the establishment of the Fund, s.5, the establishment of the Board, s.49(1), the constitition of the Board, s.49(2), the continuity of the Board, s.49(7) and the incorporation of the Board, s.58. See also s.9(2) and (3) of Act No. 779 of 1968. Hereinafter the

words "the Act" are used to refer to the 1958 Act in force as

In his reasons for judgment now reported in 49 F.L.R. 216, Brennan J. made a detailed examination of the provisions of the Act and the relevant facts, see pp.218-225. That examination and those facts were not challenged on

appeal and I incorporate them in these reasons. The main functions of the Board are to receive

contributions, to receive the Government subvention, to

Manage and invest the Fund and to pay the pensions and other

benefits to the persons entitled thereto. The obligations and privileges of the contributors to the Fund are set out in the Act and regulations made under the Act. The Board performs the administrative tasks to service those obligations and privileges. The administrative functions of the Board are performed by clerical staff who are employed under the provisions of the Public Service Act 1958 (Vic.) and their salaries are paid by the State of Victoria, s.61 and s.62. In addition, the Board employs specialist staff,

Particularly in the investment area, whose Salaries are paid out of the Fund. One object of the Board is to obtain the best possible return on investments of the Fund for the benefit of contributors. Monies of the Fund not invested are to be banked by the Board in accordance with the Audit Act 1958 (Vic.) and held as monies of the Crown, s.7. Investments of the Fund are in the name of the Board. The accounts relating to the Fund are audited by the Auditor-General, (Vic.), s.8. The Board is empowered to borrow from the Treasurer for the purposes of the Fund, s.9, but normally no monies are borrowed. fThe Board is required to report annually to the Treasurer and the report is tabled

In considering the principles of law to be applied in determining whether the Board is a corporation under the

Trade Practices Act, Brennan J. analyzed R. v. Trade

Practices Commission; Ex parte St. George County Council

(1974) 130 C.L.R. 533 (hereinafter called "St. George"), R.

ve Judges of the Federal Court of Australia; Ex parte The Western Australian National Football League (Incorporated)

(1979) 143 C.L.R. 190 (hereinafter called "Adamson") and Re

Ku-ring-gai Co-operative Building Society (No. 12) Ltd.

(1978) 36 F.L.R. 134 (hereinafter called "Ku-ring-gai"). After referring in some detail to St. George and Adamson, at p.227 he said:

"In the light of the judgments in Adamson's case, it appears to me that the balance of judicial opinion would categorize as a trading corporation a corporation whose trading activity is its substantial activity or is among its substantial activities. Trading need not be the corporation's predominant or principal activity, but the substantiality of its trading activity cannot be determined without reference to the other activities of the corporation, if any. Trading activity which is merely incidental to a predominant or principal activity is prima facie insufficient to confer the character of a trading corporation. To state the test in this way may not reflect the breadth of the test expressed in the judgment of Barwick C.J., and

is more restrictive than the test propounded by Murphy J.; but I apprehend that the tests

expressed in those judgments go further than the tests expressed in the judgments of the other members of the court."

The Solicitor-General for Victoria, who appeared for the Board, submitted that that principle was incorrect, that Adamson had not directly or by implication overruled St.

George and that the Federal Court was bound to apply the principles enunciated by the majority in St. George and in

particular to have regard to the purpose of the Board as

A careful reading of the judgments in St. George and in Adamson suggests to me that the principles enunciated

by the majority in St. George cannot be regarded as being binding vpon the Federal Court except insofar as they apply

to the particular facts of that case. With respect, I would

adopt what was said by Mason J. in Adamson at pp.232-3:

the Court is required to consider exclusively the purpose for which the association was incorporated, not its current activities, whatever they may be, in resolving that question. Despite its invocation by the prosecutors I do not think that the St. George County Council Case is authority for this proposition, though there are statements in -the majority judgments which tend to support it ({1974) 130 C.L.R., at pp.551-552, 562). The case decided no more than that a county council created under the Local Government Act, 1919 (N.S.W.)}, as amended, for local government purposes was not a 'trading corporation' for the purposes of s.51 (xx.) and the statutory definition of that expression contained in the Restrictive Trade Practices Act. Of the majority, McTiernan J. said that a trading corporation was a trading company which was incorporated ((1974) 130 C.L.R., at p.548). Menzies and Gibbs JJ. denied that a 'trading corporation' in s.51(xx.) is 'a corporation which is trading' ((1974) 130 C.L.R., at pp.551-552, 561).

We are not constrained to accept a view which commended itself to three members only of this Court, however influential their opinion may be. The interpretation and application of the expression 'trading corporation' is not foreclosed by that opinion or by a majority constitutional decision in which no more than five members of this Court participated. For

my part, I prefer the minority view as expressed in the St. George County Council Case; in particular the remarks of Barwick C.J. ((1974) 130 C.L.R., at pp.542-543), 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."

In any event there were a number of significant factors present in St. George which are absent in the present case. Possibly the most important factor was that in St. George there was an express statutory power which authorized the Governor by proclamation to constitute municipalities, shires or parts thereof as a county district for local government purposes (emphasis added), and for each county district so constituted to provide for a county council which became the body corporate. Generally, see Gibbs J. at pp.555-560 and 563-4, and Menzies J. at pp.549-552. The concept of "municipal corporations" was well known at the

time of the Constitution and their trading activities were

always subordinate to their community purposes. The council

had a power to raise revenue by imposing a rate on land which

waS more compatible with municipal corporations than with trading corporations. The council was constituted to engage in trading activities and in fact engaged in those activities, but was constrained to so conduct its trading activities as to avoid making a profit. McTiernan J. expressed the view that the definition of "corporation" contained in the then Act did not purport to be co-extensive with the meaning of the words "trading corporations" as contained in s.52(xx) of the Constitution, but was directed

In the present case, the Act establishes the Fund for the purposes of providing pensions and other benefits to officers and employees of the State of Victoria and certain Statutory bodies created under State law. The Act establishes the Board as a body corporate to manage and control the Fund. The main functions of the Board have been referred to and each of those functions is substantial. The purpose of the Board is to perform those functions, the

The Commission did not suggest that the Board was a trading corporation within the meaning of those words and the definition of "corporation" in the Act. The issue is whether

it is a financial corporation. A Full Court of the Federal

Court in Ku-ring-gai considered the nature of a financial corporation. That case was decided after St. George and

before Adamson. In that case Bowen C.J. said at p.138:

"In my opinion a financial corporation is one which borrows and lends or otherwise deals in finance as its principal or characteristic activity or, depending on which approach one takes, it is a corporation formed for the purpose of borrowing and lending or otherwise dealing in finance. If it does so in the way of trade it may also be a trading corporation, but that is not a necessary feature of a financial corporation."

"In the present case the relevant inquiry is whether either of the applicant corporations is a financial corporation. Unless some _feature of its constitution, or purpose of "incorporation, or management, would place it in a category which is exclusive of the category of financial corporation, its

predominant activity must be regarded in order to ascertain whether it answers the relevant description. Its predominant

activity is the activity which it was formed to undertake - the borrowing of moneys to iend to its members, the lending of those moneys, the receipt of repayments and the ultimate repayment of the moneys to the source from which they came. These are money dealings. ~ The activities of borrowing in order to lend and lending at interest are financial activities which give to each corporation the character, and place it within the category of financial corporation. It is no doubt right to describe the applicant societies as co-operative societies or, more fully, as co-operative terminating building societies, but that description neither places them in, nor removes them from, the category of financial corporations. Nor do the features of each society - its constitution, Organization and management, the source and

mature of its borrowings, its subjection to governmental controls - identify it as falling within some category of corporation which excludes financial corporations."

"The phrases 'trading corporation' and "financial corporation' in the context of both s.51(xx) of the Constitution and _ the definition of 'corporation' in the Act are composite ones. Each phrase refers to a corporation which can appropriately be categorized by reference to activity whether actual or intended. The fact that a corporation was formed for purposes or with objectives that might legitimately be advanced through trading, or that it in fact trades, will not necessarily mean that it can be appropriately categorized as a trading corporation. Nor will the fact that a corporation was formed for purposes or with objectives that might legitimately be advanced by involvement in financial transactions or that it occasionally has dealings in finance necessarily mean that it can appropriately be categorized as a financial corporation. Trading activity or dealing in finance (whether actual or intended) will be decisive of categorization only where the overall circumstances are such that the corporation can appropriately be categorized by reference to such activity."

",.. the phrase 'financial corporation' is a composite one. It does not refer to solvency. An obvious reference point is to the activity of commercial dealing in finance. Another possible reference point is the provision of

management or advisory services in relation to financial matters. I use the words 'dealing

in finance', for want of a better expression, to refer to transactions in which the subject of the transaction is finance (such as borrowing or lending money) as distinct from transactions (such as the purchase or sale of particular goods for a monetary consideration) in which finance, although involved in the Payment of the price, cannot properly be seen as constituting the subject of the

transaction. A common but not invariable characteristic of the relevant type of transaction is that the obligation on each side is to pay money."

In determining whether the Board is a financial corporation it must be remembered that in the definition of "corporation" the words "financial corporation" are to be given the same meaning as those words in s.51(xx) of the Constitution. The word "financial" forms part of a composite expression which is used to describe corporations of a particular kind rather than the activities engaged in by those corporations. The words "financial corporation" do not constitute a term of art having a special meaning. Likewise, despite references to the contrary contained in the submissions of the Solicitor-General, there was no generally accepted definition of the meaning of those words at the end of the 19th Century. Essentially, it is a description or label given to a corporation when its financial activities form such a significantly large proportion of its overall activities as to merit its description as a financial corporation, c.f. Mason J. in Adamson at p.233. For present purposes it is not necessary to consider the definition of the words "financial corporation" contained in the Act. That definition is designed to include not only financial corporations coming within s.51(xx) of the Constitution, but also any body corporate that engages in activities of the kind described in s.51(xiii) and (xiv) of the Constitution

even if that body corporate is not a financial corporation

within s.51(xx). Although the connotation of the words "financial corporation" remains constant, their denotation may change, see Ku-ring~gai per Bowen C.J. at p.138. In the present case the real difficulty is to determine whether the Board, at the present time, comes within the meaning of the words "financial corporation", or in other words its financial activities form such a significantly large proportion of its overall activities to merit it being

a corporation being a financial corporation is that it performs the function or engages in the activities of dealing in finance in the sense expressed by Deane J. in Ku-ring-gai. t is not necessary that a corporation acquires capital for the purpose of lending money nor is it necessary that the corporation borrows money for the purpose of lending. The Board manages or invests the Fund. In performing that function the Board engages in the activity of dealing in finance insofar as it engages in the activity of investing the funds including the investment of monies on the security "of mortgage. Those activities constitute a commercial Gealing in finance and form a significantly large proportion of the Board's activities. In my opinion the Board is a

Solicitor-General for the State of Victoria contrasted the provisions of s.5l(xiii) and (xiv) of the Constitution with

s.51(xx). Placita (xiii), (xiv) and (xx) are set out: .

"(xiii) Banking other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks and the issue of paper money:

(xiv) Insurance, other than State insurance; also State insurance extending beyond the limits of the State concerned:"

"(xx) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth:"

He contended that the meaning to be given to the words

"financial corporations" in placitum (xx) and in the Trade

Practices Act had to be determined in the light of placita

(xiii) and (xiv). Otherwise, he contended, corporations carrying on the business of banking or insurance would be financial corporations and the express provisions of placita

(xiii) and (xiv) would be rendered unnecessary, particularly

the exclusion of State banking and State insurance not

extending beyond the limits of the State concerned.

Those contentions are rejected. In any one case it is a question of characterization to determine whether a particular law comes within a particular power conferred by the Constitution, and in that context the powers conferred by the various placita in s.51 of the Constitution are not to be

treated as being mutually exclusive, see for example

Strickland v. Rocla Concrete Pipes Ltd. (1971) 124 C.L.R.

468. The relevant provisions of the Trade Practices Act are

dependent upon placitum (xx) and are not directed to the activities of corporations whose activities otherwise come within the activities referred to in placita (xiii) and (xiv). This principle is recognized and applied in the

definition of "financial corporation" in s.4 of the Trade

Practices Act. A corporation created by a State for the purpose of enabling that corporation to engage in the activity of commercial dealings in finance does not cease to be a corporation under placitum (xx), because under placita (xiii) and (xiv) specific activities are excluded from the power when those activities are carried on by a State except

when extending beyond the limits of the State concerned. For present purposes, the relevant provisions of the Trade

Practices Act are directed to corporations and those

Provisions are within the powers conferred under placitum (xx) of s.51 of the Constitution. The fact that the Board

was incorporated by the State of Victoria and engages in the

activity of commercial dealings and finance does not prevent the Board from being "a financial corporation" under the Trade Practices Act and under placitum (xx).

Pursuant to leave, the Solicitor-General contended as a quite distinct proposition that the Board was an instrumentality or agent of the Crown in right of the State of Victoria and was entitled to all its rights, powers and privileges, and that the Trade Practices Act does not bind

the Crown in the right of a State. He relied upon _Bradken

Consolidated Ltd. v. The Broken Hill Pty. Co. Ltd. (1979) 53

A.L.J.R. 452 (hereinafter called "Bradken"). Peculiar features associated with that case make the decision in some respects unsatisfactory. A number of the Justices adverted to that fact. It is sufficient to say that in that case the

applicants conceded that the Commissioner for Railways for

the State of Queensland, although a body corporate, was not a

_ trading corporation and thus not a corporation under the

Trade Practices Act. Likewise, it was conceded that the

Commissioner was an instrumentality or agent of the Crown in the right of the State of Queensland and thus was entitled to all its rights, powers and privileges including immunities. The Trade Practices Commission was not a party to those

proceedings. The Court, by majority, held that the Trade

Practices Act did not apply to bind the Crown in right of a State and, by implication, that even though a body corporate

nevertheless, if it was entitled to the immunities of the Crown, it was not bound by the Act. In this regard, no reference was made to the definition of "financial corporation" contained in the Trade Practices Act which expressly purports to bind a State with respect to corporations referred to therein. Further, Stephen J. indicated that the whole question of the nature of the principles of immunity of the Crown under a Federal system of government should be considered after having the benefit of full argument on the point from both sides on the record,

being argument which had not been put in that case.

In order to protect the interests of the respondent, counsel argued that Bradken was wrongly decided insofar as it was decided that the Crown in right of a State was not bound under the Trade Practices Act. He argued also that Bradken did not bind this Court to hold that the immunity applied to a corporation where that corporation was

a trading or financial corporation as defined in the Trade

Practices Act, even though it was an instrumentality or agent of the Crown in right of a State. Although this latter argument was persuasive, based as it was on the definition of "financial corporation" and the provisions of s.2A of the frade Practices Act which had been inserted into the Act in 1977, in my opinion this Court is bound to follow Bradken. Accordingly, only one issue arises for determination by this

Court, namely whether the Board is an instrumentality or

Fund's assets, the Fund is yielding annually a fraction over 10% on the total investment. In the management of the Fund, the appellant draws on its indigenous expertise in forming its financial judgments and it receives advice from a budget investment officer, property consultant, accountant and other staff skilled in matters of finance. The appellant's main powers of investment are found in s.@ of the Act. They include-power to invest in trustee's securities, semi-government debentures, loans guaranteed by the Government of Victoria and loans secured by mortgage. In the last-mentioned case, the aggregate amount that may be invested therein is determined by the Treasurer. With his consent the appellant may expend money standing to the credit of the Fund in purchasing land in Victoria, constructing buildings,

repair and maintenance or alteration and paying outgoings uncurred

in connection with the management of the land or buildings.

Although there is no evidence of a specific policy determining the investments made by the appellant there are some factors which are taken into account in making them. Thus with inflation, the appellant decided to invest in the purchase of property for rental. By an understanding with the Government, the

appellant has not withdrawn support from semi-government loans.

Although the appellant is statutorily independent, the Government has sometimes exercised influence upon the appellant when 1t thinks a particular investment ought to be made. Housing loans to contributors are an authorised investment. Rates of

interest are fixed in lane with prevailing market rates.

AR LL TPN PY OL RTE WAT LETTE RT CSI EE IN EI TEN NEL EO EES

discretion within the limits of its powers as to the kinds of

investment 1t makes and the persons with whom it deals.

The longer term investments fall into four main classes -

semi-government and local government loans, housing loans and property purchases. are invested in the short term money market. the funds in investments stood at $487M.

commercial loans, In addition available- funds As at 30 June 1980

substantial proportion of its time to management of the Fund, as

The statistics of the longer term investments newly made

1977 1978 1979 1980 (To nearest Investment in - - Semi-Government and Local Government loans 5,500 37,082 38,420 29,370 Commercial loans 17,556 16,879 28,651 46,024 Housing loans 8,041 10,431 10,869 13,760 Property purchases 3,470 4,094 6,048 324 Total: 34,567 68,486 83,988 89,478

w 9ST Rear cerh Se ea Sep ae Wg aS RENE rear peal wel le ae YER, ~ . i." p LTTE, dread

Commercial loans originate in applications made by prospective borrowers. The appellant does not advertise but is well known as a lender of money on the security of mortgage and a large number of applications are received each year. Between 1 January 1980 and 3 December 1980 it considered 144 applications, 66 of which it rejected... As at March 1980 current commercial

loans had been made to 300 borrowers who had borrowed

Housing loans are made available to contributors. These are processed by the appellant's staff. There are approximately

400 applications a year and loans totalling approximately $13M

The funds for longer term investments are derived from three sources, namely, a surplus of contributions received over amounts paid out, from interest on funds invested and from maturing investments or moneys repaid. In 1980 approximately $89mM was invested in longer term investments. Of this the surplus on contributions accounted for $18M, interest and return on funds for $39.6M and matured investments and repayment of moneys lent for

$33M. The Fund generated a surplus on its operations of the order

The large cash flow which 1s a feature of the Fund's Management leaves the appellant with cash surpluses from time to time and these are invested each working day on the short term money market. The available surplus varies greatly, depending on the appellant's commitment to make particular investments, the maturing of investments, the receipt of contributions and

government's subventions and the fortnightl ayment of pensions. Y paym P

The Solicitor-General for Victoria, appearing for the

appellant made three major submissions - that the court 1s bound

in the light of the decision in The Queen v. Trade Practices

Tribunal & Ors. Ex parte St. George County Council ((1974) 130

c.L.R. 533) to find for the appellant, that the financial activities of the appellant were not such as to make it a "financial corporation" within the meaning of the Trade Practices Act, and that in any event, the appellant is an agency of the Crown or within the shield of the Crown and therefore because of

the decision of the High Court in Bradken Consolidated Limited v.

B.H.P. ((1979) 53 A.L.J.R. 452) the Trade Practices Act does not

Is the appellant a financial corporation within the meaning of the Trade Practices Act 1974.

corporation in trade or commerce from engaging in the practice of exclusive dealing. "Corporation" is defined in s.4(1) as meaning, inter alia, a body corporate that 1s a trading corporation formed

within the limits of Australia or is a financial corporation so

; - . - - 9. formed. The terms "financial corporation" and "trading

corporation" are also defined by s.4(1) which provides:-

4(1) "financial corporation" means a financial corporation within the meaning of paragraph 51(xx) of the Constitution and includes a body corporate that carries on as its sole or principal business

the business of banking (other than State banking not extending beyond the limits of the- State

concerned) or insurance (other than State insurance not extending beyond the limits of the State concerned) ;

"trading corporation" means a trading corporation within the meaning of paragraph 51(xx) of the Constitution.

Section 51 (x111) (x1v) and (xx) of the Constitution

"The Parliament shall, subject to this Constitution,

have power to make laws for the peace, order, and good government of the Commonwealth with respect to:-

(x1i1) Banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money:

, State insurance extending beyond the Limits of the State concerned

(xx) Foreign corporations, and trading or financial corporations formed within the limits of the Commonvealths

Subject to the other provisions of the Act, these definitions rely heavily on the scope of the legislative power

conferred by s.51(xx) on the Commonwealth. The full extent of

that power has not yet been defined by the High Court. In

Strickland v. Roclia Concrete Pipes Ltd. ((1971) 124 C.L.R. 468)

(Concrete Pipes Case) the High Court held that it was sufficiently wide to cover the regulation of the trading activities of trading and financial corporations but expressly declined to define the limits of the power (see e.g. at pp.490-491). It has not, for instance, since disapproving Huddart, Parker & Co. Pty. Limited v. Moorehead (1909) 8 C.L-R. 330) in that case, decided whether s.51(xx) empowers the Commonwealth Parliament to regulate the incorporation or the internal affairs of trading or financial corporations or whether it extends beyond regulation of their trading activities to other matters such as the effect on the environment of their activities or industrial relations with their employees. There are dicta in High Court decisions preceding the

Concrete Pipes Case which touch on these questions. However, most

of them are obiter and are found either in Huddart Parker's Case

(supra) or in cases such as Bank of N.S.W. v. The Commonwealth

(1948) 76 C.L.R. 1 which were decided at a time when that case had

The extent of the power, therefore, remains to be determined in future cases. In determining the meaning of "trading corporation" and "financial corporation" in pl. (xx) one must do so without the assistance that might otherwise have been

derived from a fuller exposition of what aspects of corporate life

PUTT ES SPE Pe Re RE ag oo aN Se a I i apie ar s TOR LY RS MC agin Meek Se A eet Rt 1i.

in the Constitution, will not be construed narrowly (The Queen v.

Federal Court of Australia; Ex parte W.A. National Football League

(Adamson's Case) (1979) 143 C.L.R. 190 at pp. 201-208) that it covers corporations however incorporated e.g. whether under the ordzrnary companies law of a State or Territory or as a statutory corporation under its own act. As a result of decisions of the

High Court including and since the Concrete Pipes Case and, in

particular, Adamson's Case (supra) it is aiso clear that a corporation 1s not a trading corporation simply because it trades or carraes on financing activities irrespective of the extent thereof. (e.g. Adamson's Case at p. 234). What is in issue here is whether the nature of a corporation as a trading or financial corporation is only to be determined by considering the purposes for which it was formed or whether it is determined as well or solely by reference to what it in fact does. Put another way 1t raises the question whether the words refer to a particular type

of corporation or whether they refer to what a corporation does.

There has been a degree of judicial disagreement on this question. The appellant's counsel, as already indicated,

contends, in the light of the St. George County Council Case

(supra), that the placitum describes a particular type of corporation, that this is determined by reference to the purposes for which it is formed and that it does not matter that in

fulfilling those purposes 1ts main or even sole activity 1s

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trading. The appeilant, therefore, it is argued, being formed for the purpose of providing superannuation benefits to government and related employees, is not a trading or financial corporation whether for the purpose of doing so it engages in trading or

• In my opinion, this court is not bound by the-decision

in the St. George County Council Case to hold, as the appellant

contended, that it is not a financial corporation. The subsequent

decision of the High Court in Adamson's Case makes that clear.

The St. George County Council Case involved a majority

decision by McTiernan, Menzies and Gibbs JJ. Although they agreed in the conclusion, there was, in my view, no consistency of approach. What the appellant seeks to extract from the decision as that the High Court decided that a governmental corporation could not be "a financial corporation" within the meaning of the Act. In determining whether it does so it should be borne in mind that it was a decision on the Restrictive Trade Practices Act 1971 and that there are differences between the relevant provisions in

McTiernan J. clearly formed the view that the Act was directed to corporations which he described as "free enterprise corporations". He did not attempt to define the constitutional lamits of the phrase "trading corporation" ain pl. (xx). This clearly emerges from the following passage in his Honour's

"The words of the definition are 'a trading corporation' not any trading corporation. It can hardly be contended that the legislature intended any corporation which trades. The preamble of the Restrictive Trade Practices

Act 1971 (Cth) expressed an object with which the Act

, was made. The object is: 'To preserve Competition in Trade and Commerce to the extent required by the Public 1 Interest'. This is naturally an object directed to -

that is, pertaining to - private enterprise." His Honour went on to indicate that in the operative : provisions of the Act, Parliament intended to legislate with respect to "a free enterprise corporation". Although the Council i conducted a municipal trading undertaking this was not sufficient to put it into the category of a trading corporation and even though it produced revenue this did not change its character from public to private. His Honour at p. 547, expressed the view that the legislation was not auntended to include within the jurisdiction of the Trade Practices Tribunal "a body within the central government of a State or a local authority" which was by

legislation a supplier of goods or services within the State.

' trades was clearly insufficient by itself to bring it into the classification of a trading corporation. His analysis of the

provisions which governed the St. George County Council led him to

the view that 1t was unquestionably a corporation established for

local government purposes which had defined trading powers. His

Honour felt that in 1900 trading corporations and municipal

' corporations were well categorised classifications. He concluded . that trading corporations did not comprehend corporations for

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Gibbs J's approach was similar to that of Menzies J. He regarded the word "trading" as forming part of a composite expression and as indicating the essential attribute of the kind of corporation to which it refers. The words "foreign corporation" and "financial corporation" describe corporations of a particular kind rather than corporations of any kund - which

corporation" (ibid p. 561). In his view a trading corporation is

one formed for the purpose of trading (ibid p. 562). He thought that the St. George County Council was formed for the purpose of conducting a trading undertaking, that this was its main, if not only activity, and that it's activities could properly be described as trading even though it was required to endeavour so to conduct its undertaking as to avoid making a profit. However, he nevertheless concluded that it was not a trading corporation.

His view 1s contained in the following passage (at p.564):-

"To say that the County Council was formed for the purpose of trade seems to me to state a half truth and ignore a number of significant circumstances that reveal its true nature.....When all these facts are considered the proper conclusion, in my opinion, 1s that the County Council 1s a corporation constituted for the purpose of local government to provide an essential service to the inhabitants of an aggregation of local authority areas, under conditions thought most likely to appear

beneficial to then. It is properly described as a municipal corporation".

"When all the circumstances are considered it 1s incomplete and misleading to describe the County Council as a corporation formed for the purpose of trading. The purpose of the formation is more properly described as that of fulfilling a function of local government."

I do not think this case can be relied upon as authority

for any proposition other than that a corporation (such as the St. George County Council) ais not a trading corporation within the

I am unable to derive from it a conclusion that a governmental corporation cannot be a trading or financial corporation within the meaning of the Act. Even if the views of Menzies J. and Gibbs J. (as he then was) were the views of a majority of the court, they should not, in my opinion, be regarded as supporting so broad a proposition as - no corporation formed for what might be described as "governmental purposes" is capable

of being a trading or financial corporation within placitum (xx).

This conclusion is, I think supported by the subsequent

decision of the High Court in Adamson's Case. Indeed, in the

latter case, the Court, in my view, has thrown considerable doubt on whether the St. George County Council Case can now be regarded as correctly decided. I make the Latter comment because many of

the statements of the majority in Adamson's Case (a bench of 7

justices) appear to me to be inconsistent with what the Court held

in the St. George County Council Case (a bench of 5).

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in order to appreciate the effect of the decision in

Adamson''s Case it is necessary to refer to the views of Barwick

c.J. and Stephen J. (the minority in the St. George County Council

• Barwick C.J. (St. George County Council Case supra at p.

539. said that the description of "trading corporation" in his opinion referred not to the purpose of corporation but to the activities of the corporation at the relevant time. At p.54l1 he

"No doubt during and at the end of the nineteenth century, corporations were classified for various

purposes and, on occasions, special rules made applicable to corporations in one category which were not applicable to corporations in another. Trading

corporations were both known and referred to as such.

But there does not appear to have been any generally accepted definition of a trading corporation. It_was assumed, I think, that such a corporation could be

identified by its activities. If its nature was being sought, 1t was to be found in what it did." (underlining added).

His Honour thought it would be a misreading of the relevant words in s.51(xx)to treat them as requiring that the corporation be formed for a purpose. The power was not a power to legislate with respect to trading but with respect to some corporations, but a corporation whose predominant and characteristic activity was trading, whether in goods or services, would satisfy the description and the ends which such a corporation seeks to serve by trading are irrelevant to its description. His Honour summarised it in this passage (at

"If, upon that consideration, the corporation can fairly

be described by reason of those activities, their extent and relative significance in the affairs of the

corporation as a 'trading corporation' it will, in my opinion, be nothing to the point that it 1s also a government or State or municipal corporation. The effect of the trading activities of such a corporation upon and in the community will not be lessened or necessarily affected by the fact that it is a State or municipal instrumentality." .

Stephen J. (ibid at p.568) thought that the use of the word "trading" necessarily involved reference to function, either to the activities which a corporation was intended to undertake or to those which it in fact did undertake. He thought that in that case there was no distinction to be drawn between the two. He

"The description 'trading corporation', like that of "banking corporation' or 'mining company', is a description of actual or intended activities...."

"It may be proper to describe the distribution of gas, water and electricity as traditional incidental functions of local government and in this sense the activity of the County Council is a typical activity of

local government. This does not, however, make it inappropriate to describe the County Council as a

trading corporation." His Honour emphasised however that every corporation which happens to trade is not a trading corporation and that

engaging in trading activities ancillary to some other principal

This analysis clearly shows that even as between the

minority justices in the St. George County Council Case there was

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Adamson's Case was concerned with the Trade Practices Act 1974. In that case a majority of four of seven justices held that the Western Australian National Football League and the West Perth Football Club were trading corporations within the meaning of the Act. In that case Barwick C.J. reaffirmed the view he had

expressed in the St. George County Council Case. He thought that

the only sure guide to the nature of the company was a purview of uts current activities and that a corporation would satisfy the description of trading corporation if trading was a substantial

"Tts activities rather than the purpose of its incorporation will designate its relevant character. But so to say assumes that such trading activities are

within 1ts corporate powers, actual or imputed. It 1s 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 1s

found that trading 1s a substantial and not a merely

peripheral activity not forbidden by the organic rules

of the corporation, the conclusion that the corporation

His Honour concluded that in that case each of the companies in question, in promoting football matches, was engaged

in a commercial venture for profit which was an activity of trade.

His Honour refused to regard the St. George County Council Case as

requiring him to hold otherwise. Indeed, he thought the Court as

composed in Adamson's Case was free to reconsider and, if need be,

to depart from the views expressed in the St. George County

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Mason J. (with whom Jacobs J. agreed) regarded the St.

George County Council Case as authority for no more than that a

County Council so created was not a trading corporation. For himself he preferred the minority view of Barwick C.J. in that case when the Chief Justice said (ibid. at pp. 542-3) 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 1s said to operate

upon it will determine whether or not it satisfies the statutory and therefore the constitutional description". (See Adamson's

In applying the principle to the facts of that case

"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."

Murphy J. thought that the constitutional description "trading corporation" includes those bodies incorporated for the purposes of trading and also those corporations which trade. His

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"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 1s 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."

• Gibbs J. (as he then was), one of the mainorzrty in

Adamson's Case, reaffirmed the view he had expressed in the St.

Stephen J. also dissented because he thought that both the predominant object and the sole activity of the corporation in question was remote from trading and from profit making. He did however reaffirm his view that functions bot intended and actually undertaken were of prime importance in deciding whether a

corporation was a trading corporation. Aickin J. agreed with him.

In my opinion, an analysis of Adamson's Case shows that

the majority of the Court regarded what a corporation in fact did as determining whether it is a trading corporation within s.51(xx). At the same time not every corporation which trades is a "trading corporation" nor will trading activity which is purely incidental be sufficient to characterise it as such. On the other hand the purpose for which it is formed is not decisive. Thus in that case the fact that the corporations were established to promote a particular sport did not prevent each of them from being

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I think it is also clear from the decision of the majority in that case that neither the fact that a corporation is established under a special Act of Parliament nor for a purpose which could be described as "a governmental purpose" would prevent

Adamson's Case was concerned only with the term "trading

corporation". However, in my opinion, similar considerations should be applied in determining whether a corporation is a

It follows that, in my view, this Court is not bound by

the St. George County Council Case to hold that the appellant is

not a fanancial corporation. Senior Counsel for the applicant

submitted that this Court was bound by the St. George County

Council Case and that case determined the result of the issue whether the applicant was a financial corporation. I do not

agree. I consider that the St. George County Council Case is an

authority binding on this court only in relation to the position of a municipal corporation such as the St. George County Council incorporated under a local government act. The fact that the applicant is established under a special act of the Victorian Parliament, was so established for the purposes of giving government employees superannuation benefits and might be described as a government corporation, does not prevent it from

also being a financial corporation. In deciding whether it is

RIE RTT OEE RR ERED NE A RES LSS PL ROT AR ER PRE TE SR ee ea AR RT incti ery yay ame F : 2 . . 4

such a corporation the determining factor is what it actually does. The critical question in the light of the authorities is whether financing in the sense I will shortly mention ls a

substantial and not a mere ancillary part of its activities.

This does not mean that the Act under which and the purpéses for which it was established, are irrelevant.- "Indeed, the Act provides a framework within which it conducts its activities and 1s of some assistance in determining whether those activities which point to it being a financial corporation are a substantial as distinct from an ancillary or incidental part of

Brennan J. held that its activity of managing and investing the Fund was a substantial activity not merely incidental to some other and was sufficient to characterise 1t as

a financial corporation. With respect, I agree with his Honour's

It 2s unnecessary for present purposes to define the full extent of those activities which are contemplated within the

expression "financial corporation". I think it clearly includes,

as this court held in Re: Ku-ring-gai Co-operative Building Society (No. 12 Ltd.)v (1978) 36 F.L.R. 134, commercial dealing in

finance such as the borrowing and lending of money.

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Sections 5 and 6 of the Act make it clear that the investment of the Fund into which the contributions of officers are paid and out of which benefits are provided was intended to be a primary and essential part of the appellant's functions. The income from the investment of the Fund forms part of it. The calculation of the benefits which officers were likely to receive no doubt depended on the surpluses which it was expected the Fund would receive. Indeed, -ss.6(3) and 10 make this abundantly clear. Furthermore, the investment of the Fund in loans was clearly intended to be a major source of income. Investment in land is permitted but only with the consent of the Treasurer (s.6A). Moneys held uninvested may be lodged for the time being at call or

on fixed deposit with the Treasurer or a Bank (s.7).

The provision of pensions and benefits to officers was clearly the purpose of establishing the appellant but the receipt of contributions and the investment of the Fund so created was

And so it has turned out in practice. As at 30 June 1980 there were approximately 90,000 contributors who during the previous year paid contributions totalling over $67M. As at that date 27,000 pensions were being paid and the amount paid to pensioners during the previous year was about $80M. At 30 June 1980 the Fund's investments stood at approximately $487M and

during the previous year almost $90M was invested. Of this

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approximtely $89M was invested ($29.37M in semi-government and

local government loans, $46M in commercial loans and $13.76M in housing loans). During the year 1980 the interest and return on funds invested was $39.6M. In addition the appellant 1s left with temporary cash surpluses from time to time and these are invested from day to day on the short term money market. Taking account of the~enhancement in the value of the Fund's assets, the Fund is yielding annually slightly over 10% on the total investment. The management and investment of the Fund involves a large number of

individual transactions and a great deal of sound financial and

I have referred mainly to the year ended 30 June 1980

but the figures for earlier years show a similar pattern.

Thus, not only is it an intended major function of the appellant to invest the Fund in loans, but, in practice, large amounts are invested by it at commercial rates of interest with a view, one must assume, to obtain the maximum return on the Fund

reinvesting the Fund in loans of various descriptions and receiving income therefrom and the capital repayments thereof are activities which characterise the appellant as a financial corporation. They are an essential part of its functions and they

are appropriately described as commercial dealings in finance.

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securities. There is power to invest in land in Australia but this is conferred subject to and in accordance with the

Although they differ 1n their conclusions, there is no

discernable difference between the four Justices as to the

principles which should be applied in a case such as this. - Their

Honours disagreed however as to the emphasis to be placed on the

various factors. Barwick C.J. agreed with Mason J. who said at

"Although the Trust is a separate corporate entity the control which the Crown has over its membership and its activities shows that 1t 1s an alter ego of the Crown. Thus its members are appointed and liable to removal by the Executive Government, it is bound to furnish information to the Treasurer at his request and it must submit its annual report and financial statements to the Treasurer after they have been audited by the Auditor-General. The Trust, in determining the investment policy which it will pursue within the prescribed investments which it is authorized to make (see s.42(2) and (4)), is free of directions by the Treasurer and the Government, but this in itself does not show that it has been established as a body undependent of the Crown."

In coming to this conclusion his Honour relied on the

decision of the court in Goodfellow v. Commissioner of Taxation

of the Commonwealth of Australia ((1977) 51 A.L.J.R. 437)v.

Stephen J. (at p.619) said he had placed most weight upon the entire independence of the members of the Trust in relation to their investment function. This appeared to him to be of considerable importance and to have been so treated in many of

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"The importance of the presence or absence of control by the executive government in ascertaining whether or not a statutory corporation possesses a particular immunity or privilege of the Crown is a consequence of the very nature of that inquiry, concerned as it is with the nexus between the corporation and the Executive. Ifa corporation is no more than the passive instrument of the Crown, subject in a high degree to control by the

Executive, it is appropriate enough that its acts be viewed as those of its master and that it be itself

• treated as the alter ego of the Crown, enjoying accordingly those immunities and privileges with which the Crown is clothed. If, on the contrary, a statutory corporation 1s essentially autonomous, its acts being in no sense the outcome of directions by the Executive but truly its own, there will be lattle reason to clothe it with any of those immunities or privileges...... it is the existence of the statutory ability to control, or 1ts absence, that 1s to be looked at."

On the question of governmental functions his Honour (at

p. 618) referred to the fact that the Trust was an integral part

of a scheme created to provide superannuation for Commonwealth

"The appellant relied upon this circumstance as demonstrating an intimate connexion between the Trust's activities and matters central to government. In a sense this 1s true: but not in the sense in which it has been said in the past that there exist certain traditional functions of central government to which the shield of the Crown w1il most readily be applicable, functions such as the maintenance of law and order and

the defence of the realm. The superannuation of employees, viewed as a subject-matter, has no such

inherent governmental character. That in the present case the employer will usually be the Commonwealth is of course a relevant consideration, indeed it is the genesis of this appeal and provides the reason for this superannuation scheme being the subject of elaborate Commonwealth legislation. But it does not of itself appear to me to provide any firm ground for concluding that the legislative intent was that because the Trust had the duty of investing moneys of the Fund it should therefore attract the so-called shield of the Crown".

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Aickin J. relied on the absence of any power to control the activities of the Trust and the nature of its function as an investment manager which function was not, in his view, an

ordinary or usual function of Government. At pp.626-627 he said:~

"T am, however, satisfied that where a body has

• committed to it only one narrowly defined function. (that

1s the investment and management of investments) in respect of which it has any discretion at all, and the

Parliament has provided a scheme in which in the performance of that function the executive government 1s precluded from the exercise of any control or influence whatever, then there is no basis for saying that the body 1s an organ of, part of, or an agent of the executive government, that is of the Crown. The mere

power of appointment of the persons who will together exercise this one discretionary function does not appear to me to constitute control of the Trust or of its function, there being no power to dismiss except for misconduct or incapacity."

These references demonstrate that cases such as this raise questions of degree and, in borderline cases, minds may

In this case I am of the opinion that the appellant is not the Crown or an emanation of the Crown in relation to any of its functions. Even if I were of the view that 1t was an emanation of the Crown in relation to the function of collecting contributions and paying benefits, I would not regard it as the

emanation of the Crown with regard to the management and

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Here the Board consists of six members appointed by the Governor in Council (s.49(2)). Three of these, however, must be contributors elected by contributors unless there is no candidate or no person has been elected (s.49(2)). Members are appointed for five years and are eligible for reappointment (s.50(1)). A member may be suspended by the Governor in Councid for misbehaviour or incompetence but must be restored unless each House of Parliament within twenty-one days of a statement being laid before it about the member requests the Governor to remove the member from office (s.53). If it does the member is removed upon the passing of a resolution by the Governor in Council

(s.53(3). The remuneration of members of the board is fixed by

These provisions demonstrate that the Board is not appointed or removed at the whim of the executive and is largely independent of executive control. The Board's powers of investment in relation to the Fund are not subject to any control or direction except in relation to the purchase of land and the proportion which may be invested in loans on the mortgage of land (ss.6({1C),6A). Moneys held unanvested may be lodged on call or on fixed deposit pursuant to s.7 and while so lodged in a bank shall be held to be moneys of the Crown. There is no provision to the effect that otherwise moneys or investments held by the Board are

Although until recently the staff of the Board had to be appointed under and be subject to the provisions of the Public Service Act in 1975 the Board was empowered to employ such persons as it considered necessary for or in relation to the management of lands or buildings and might at any time dismiss any such person

and such a person is not to be subject to the Public Service Act

The cost of the administration of the Act which would include the management and investment of the Fund are paid out of moneys appropriated from time to time by Parliament (s.62). The

accounts of the Board in relation to the Fund are to be audited

The Board in each year must submit to the Minister to be

laid before both Houses of Parliament a report dealing with the general administration and working of the Act. (s.63). There 1s no other requirement for the provision of information to the

In my opinion the legislature's intention was to establish a board which was independent of the control of the executive government in most respects. Although the Governor in Council appoints the members three of them must be persons elected by contributors unless the electors have failed or declined to do so. The members must include an actuary and the Government

Statist. It seems to me that the Victorian Parliament, in these

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provisions, has decided to rely on the skill and expertise and representative character of members of the board to ensure the proper administration of the Fund rather than subjecting it to the

So far as investment is concerned the Parliament has left the board with a "wide discretion as to the particular investments. As already indicated, the Treasurer can f1x an upper limit in relation to housing loans and can control investment in and expenditure on land but 1t does not follow from this that the executive is thereby controlling the investment of the Fund by the

board. The board is left with a very wide discretion.

The Board is also required to report annually to Parliament through the Minister but this is not in itself an undicia that the body is an emanation of the Crown. If it were required to provide information at the request of the Minister this would be a more significant circumstance in favour of ut representing the Crown. The functions which it performs clearly extend beyond those conferred on the Superannuation Trust under the Commonvealth Act and no doubt the 'provision of superannuation benefits 1s part of the remuneration of the Crown employees and other associated employees covered by the Victorian Act. They are also functions which it would be appropriate for the Crown to undertake even though they are not what one might regard as part of the traditional functions of government. However the fact that

the appellant receives the contributions and administers the

provisions relating to benefits as well as managing and investing the Fund does not, in my opinion, require the conclusion that it 1s in so doing, the representative of the Crown. It is clearly appropriate for the Crown to vest those functions in an independent statutory body and in my view the real test as to whether it has done so depends on the degree of control which the

executive has over the exercise of those functions.

For the reasons I have given, the Victorian "Parliament, in this case, has established a body which is relatively

independent of such control and one which is not the Crown or an

It follows therefore that although I feel constrained to

hold in light of Bradken's Case that the Crown in right of a State

1s not bound by the Trade Practices Act 1974 the appellant is not the Crown or an emanation of the Crown and is therefore not entitled to that ummunity. It is therefore bound by the Act and 1s mot, for the reasons I have given, entitled to a declaration

that 1t is not a corporation within the meaning of the Trade

preceding pages are a true copy of the Reasons for Judgment herein of his *vuwur Mr. Justice Ellicott.