Townsville Hospitals Board v Townsville City Council

High Court of Australia|1980-03-27|Before: Brennan JJ

High Court of Australia Gibbs C.J. Murphy, Wilson and Brennan JJ. Townsville Hospitals Board v Townsville City Council [1982] HCA 48

The question for decision on this appeal is whether the appellant, the Townsville Hospitals Board ("the Board"), was bound by the provisions of By-law 8.1 of the Standard Building By-laws 1975 (Q.) to submit to the respondent, the Council of the City of Townsville ("the Council"), for approval plans and specifications of certain buildings which are being constructed for the purposes of the Townsville General Hospital.

The Board is constituted under The Hospitals Act of 1936 Q. as amended (" The Hospitals Act "). On 27 March 1980 it entered into a contract under which a construction company agreed to erect for the Board certain buildings required to be erected as Stage 1 of the redevelopment of the Townsville General Hospital. The buildings comprised a four-storey kitchen block and a three-storey energy block, together with a chimney 60 metres in height. The work of construction commenced on 19 April 1980. No plans and specifications were submitted to the Council before the work commenced. The land on which the construction is being done is Crown land which is permanently reserved and set apart for the purpose of a hospital.

The Standard Building By-laws have force and effect by virtue of s. 6 of the Building Act 1975 Q. as amended ("The Building Act "). By-law 8.1 requires that before the erection of a building is commenced, plans and specifications of the building, and a written application for approval, be submitted to the local authority. By-law 8.6 requires the local authority to give its approval to the building work if it is satisfied that the proposed work complies with the By-laws, and to refuse approval in other cases. The Council is the local authority for the area in which the buildings are being erected.

After the work had commenced, complaints were received by the Council from residents about the chimney which was to be erected, and the Council then requested the Board to submit an application for building approval, but the Board refused to do so. An originating summons which was then taken out of the Supreme Court of Queensland raised for the determination of that Court certain questions which arose under the Building Act. When the summons came on for hearing it was agreed that the only question to be determined was whether the Board was bound by the provisions of By-law 8.1. The learned Judge who heard the summons answered that question by declaring that the Board is, and was, not bound by that By-law to submit to the Council for approval plans and specifications in connexion with the buildings in question. However, the Full Court allowed an appeal from that decision and answered in the affirmative the question that now arises for decision.

Section 4 of the Building Act, as in force when the work was commenced, provided as follows:

(a) such provisions as relate to the requirement to make application to a Local Authority for its approval of the erection of a building or other structure;

(b) such provisions as relate to the classification of buildings under the Standard Building By-laws so far as that classification regulates the use to be made of such buildings; or

(c) such provisions of the Act, exclusive of the Standard Building By-laws, as confer on a Local Authority any power, authority or discretion or impose on a Local Authority any function or duty,

extend to and bind the Crown in right of the State, subject to the following provisions of this section.

(2) The erection on behalf of the Crown of a building or other structure shall not be unlawful by reason only of the absence of an approval thereof by a Local Authority.

In the application to the Crown in right of the State in respect of any building or other structure being or to be erected by or on behalf of the Crown in right of the State or by or on behalf of a person or body who represents the Crown in right of the State of any provision of the Standard Building By-laws that confers on a Local Authority any power, authority, or discretion or imposes on a Local Authority any function or duty, such provision shall be read and construed as if in every such case it conferred or imposed on the prescribed Minister or on a person authorized by him for the purpose that power, authority, discretion, function or duty in place of the Local Authority.

The prescribed Minister is hereby empowered to authorize, either generally or in a particular case, any person to exercise a power, authority or discretion or to perform a function or duty construed pursuant to this subsection to be conferred or imposed on him.

Where a building or other structure is to be erected by or on behalf of the Crown in right of the State or by or on behalf of a person or body who represents the Crown in right of the State, the Local Authority of the Area in which the building or other structure is to be erected shall be supplied by the prescribed Minister or by a person authorized by him for the purpose with such information as is prescribed by regulations.

The power to make regulations prescribing information to be supplied pursuant to this subsection includes a power to confer a discretion upon one or more persons to prescribe such information in particular circumstances.

(5) In this section the expression "the prescribed Minister" means -

(a) in the case where a Department of Government is responsible for the erection of the building or other structure in question, the Minister of the Crown who administers the department; and

(b) in any other case the Minister of the Crown who administers the Act under or for the purposes of which the building or structure is being or is to be erected.

Sub-section (5) was amended in 1981, inter alia, by including the following:

(a) the following shall be deemed to represent the Crown in right of the State within the limitations provided for in or under this paragraph (a), that is to say:

(iii) any statutory body declared by the Governor in Council, by Order in Council, to the extent (if any) expressed in the order.

I do not think that this amendment, which of course was not made when the erection of the buildings in the present case commenced, is material. It enables the Governor in Council to make an Order in Council whose effect is that a statutory body will be deemed to represent the Crown, but that of course is not inconsistent with the view that under the statute before its amendment some statutory bodies represented the Crown.

Sub-section (2) of s. 4 of the Building Act refers to the erection of a building "on behalf of the Crown", whereas sub-ss. (3) and (4) speak of a building being or to be erected "by or on behalf of the Crown or by or on behalf of a person or body who represents the Crown". Probably no change of meaning was intended by this change of expression. By-law 8.1 does not apply where the building is to be erected by the Crown itself, or on behalf of the Crown, or by or on behalf of a body which, at least so far as the erection of the building is concerned, represents the Crown.

It was first submitted on behalf of the Board that the buildings were being built on behalf of the Crown because they were being, or were to be, erected on land owned by the Crown and would, for that reason, become the property of the Crown, and because their erection was authorized by the Crown. The land in question is Crown land which was, by Order in Council made on 23 January 1913, and subsequently amended by further Orders in Council, permanently reserved and set apart for a hospital. By Order in Council made on 2 October 1936, the Board was appointed to be trustee of the reserve. These Orders in Council were made under The Land Act of 1910 Q., as amended, but they are continued to be in force and are deemed to have been made under The Land Act of 1962 Q., as amended: see ss. 4(15)(a) and 334(3) of that Act. There is no doubt that the trustees of a reserve are not the owners of it; the land continues to belong to the Crown. It was so held in Gladstone Town Council v. Gladstone Harbour Board [1] . That was a case under The Land Act of 1910 Q., as amended, but the provisions of The Land Act of 1962 Q., as amended, are not different in any material respect.

Provision is made in The Hospitals Act for land to be vested in a Hospitals Board (see s. 13(5) and s. 12(8)) but the land in question has not been so vested and remains Crown land. The buildings erected on it will therefore belong to the Crown. They are, as will be seen, being erected with the knowledge and approval of the Cabinet of the State of Queensland. It does not necessarily follow that the buildings are being erected on behalf of the Crown. An owner of land may approve of the erection of a building on his land, although the building is not erected by him or on his behalf. Further, Crown land may be reserved for a large number of public purposes, some of which may involve the erection of buildings by persons other than the Crown.

The alternative submission made on behalf of the Board was that the Board represented the Crown for the purpose of the erection of the buildings. Although the word "represent" is not infrequently used in this context, it would be more precise to say that the question is whether the Board, in erecting the building, enjoys the privileges and immunities of the Crown. It is possible that the Board might be given the immunities and privileges of the Crown for one purpose and not for another: Victorian Railways Commissioners v. Herbert [2] ; Wynyard Investments Pty. Ltd. v. Commissioner for Railways (N.S.W.) [3] ; The Commonwealth v. Rhind [4] . It has been said that in deciding the question whether a person or body is entitled to the privileges and immunities of the Crown it is necessary to consider all the circumstances of the case and that "[t]he fact that function has been a traditional function of government and that no intention of "alienating" it appears is sufficient to answer the question in many cases": Grain Elevators Board (Vict.) v. Dunmunkle Corporation [5] . There have been cases in which the fact that the objects which the statutory body was set up to achieve were peculiarly within the province of the Government was regarded as decisive: see, e.g., Repatriation Commission v. Kirkland [6] ; see also Superannuation Fund Investment Trust v. Commissioner of Stamps (S.A.) [7] . However, many functions formerly regarded as matters of private concern are now carried out by instrumentalities of government and the question whether the functions in question are traditionally or peculiarly governmental is likely to be increasingly unhelpful in deciding whether the body formed to carry out those functions enjoys the privileges and immunities of the Crown. However, if it matters, the provision of hospital services is not a traditional function of government, and is still regarded as a matter in which private enterprise as well as governments will play a part.

[1949] V.L.R. 211, at p. 213. 2. (1955) 93 C.L.R. 376, at p. 394. 3. (1966) 119 C.L.R. 584, at p. 600. 4. (1946) 73 C.L.R. 70, at p. 75. 5. (1923) 32 C.L.R. 1. 6. (1979) 145 C.L.R. 330, at pp. 349, 356.

The answer to the question must in the end depend upon the intention to be derived from the statute under which the body in question is constituted. Under The Hospitals Act a Hospital Board is a body corporate capable of suing and being sued (s. 13(5)). Most of the members of the Board are appointed by the Governor in Council (s. 13(3)), but that does not mean that they are subject to the direction or control of the Governor in Council except in so far as The Hospitals Act provides. It would not be profitable to discuss the provisions of the Act in detail, since we are particularly concerned only with the functions of the Board, in erecting buildings, but some of the more important provisions may be mentioned. The Governor in Council may appoint a manager of a Board (s. 18(1A)) and the Board may not appoint or dismiss persons to or from the positions of medical officer, medical superintendent, nursing superintendent, or such other position as is prescribed, without the prior approval of the Director-General of Health and Medical Services (s. 5). The Board may however appoint other officers and employees (s. 18(1)). The Board may within certain statutory limits enter into contracts (s. 20). The budget for the General Fund of the Board must be approved by the Governor in Council (s. 22(5)). A fund called the Hospital Administration Trust Fund is kept in the Treasury (s. 21(1a)) and when the income from that fund is less than the total expenditure from the General Funds of all Boards constituted under The Hospitals Act the amount of the difference between that income and the total expenditure is to be contributed by the Government to the Hospital Administration Trust Fund (s. 23). These sections show that although the Board has a close relationship with the Crown it does not in all respects act merely at the behest of the Crown. However, the most important section for present purposes is s. 24, the material provisions of which are as follows:

The Governor in Council may authorise the Board to borrow or raise money or make financial arrangements:

(b) by the sale of debentures, bonds or inscribed stock;

(d) partly in one way and partly in another way or other ways specified in provision (a) or (b) or approved pursuant to provision (c).

Such authority, if given, shall be given by way of Order in Council upon such terms and conditions as the Governor in Council thinks fit.

Before entering upon negotiations to borrow or raise money or make financial arrangements pursuant to subsection (1), the Board shall first obtain the sanction of the Treasurer authorising it to enter upon such negotiations.

(a) inviting tenders in relation to the execution of work or the furnishing of materials to meet the cost whereof the Board has borrowed or raised money or made financial arrangements or may have to do so, or accepting such tenders submitted; or

(b) incurring any liability to expenditure for the preparation of plans or specifications of proposed such work,

the Board shall obtain the sanction thereto of the Minister.

(b) In every case, the Board shall, in respect of the execution of proposed work to meet the cost whereof the Board has borrowed or raised money or made financial arrangements or may have to do so, cause to be prepared -

(iii) a statement showing the proposed expenditure of the money borrowed or raised or to be borrowed or raised or the details of financial arrangements made or to be made,

and shall obtain the Minister's approval to such plans and specifications.

(5) The money borrowed or raised pursuant to subsection (1) shall be expended for the purpose for which the Board was authorised to borrow or raise the same and not otherwise.

By s. 24(7)(ix) if default is made by the Board in repaying the holder of debentures, bonds or stock the creditor may obtain the appointment of a receiver who shall have power to collect all moneys payable to the Board.

It can be seen from these provisions that if the Board needs to borrow or raise money or make financial arrangements to pay for a proposed work (and it is likely to need to do so in almost every case where the work is of any substance) it must (i) obtain the sanction of the Treasurer before entering upon negotiations to borrow or raise the money or make the financial arrangements; (ii) obtain the sanction of the Minister before inviting tenders or incurring any liability for the preparation of plans and specifications; and (iii) obtain the approval of the Minister to the plans and specifications of the proposed work. In fact, in the present case the Cabinet gave approval to proceed with the preparation of working drawings and specifications, and to the inviting of tenders and to the acceptance of the tender from the construction company. However the approval of the Cabinet was not required by The Hospitals Act.

Although the Board is subject to quite stringent controls in relation to proposed building work, the Board retains an independent discretion to decide whether to engage in such work. The Board cannot be compelled to engage in the building work and whether it does so lies within its own discretion. However, if it does decide to engage in the work and needs to borrow or raise money or make financial arrangements, it is subject to the controls provided by s. 24. There is nothing to indicate that the purpose of those controls is to achieve any of the objects of the Building Act. The Minister, in deciding whether or not to approve of plans and specifications submitted by the Board, is not obliged to consider whether the Standard Building By-laws have been observed. The Minister in question is the Minister for Health or other Minister for the time being administering The Hospitals Act. No doubt the Minister might be expected to consider whether the building shown in the plans and specifications was a sound financial proposition. It may be assumed that he might also consider whether the building proposed was suitable for hospital purposes. It is unnecessary to decide whether the Minister might consider whether the plans and specifications complied with the Standard Building By-laws, for there is nothing in s. 24 that obliges him to do so.

It has more than once been said in this Court that "there is evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown": Launceston Corporation v. Hydro-Electric Commission [8] ; State Electricity Commission (Vict.) v. City of South Melbourne [9] . All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention. The Hospitals Act does not expressly provide that a board shall have the privileges and immunities of the Crown when engaging in building operations, and in my opinion it does not impliedly so provide. The fact that a number of Ministerial approvals must be obtained if the Board needs to borrow or raise money or make financial arrangements for the purposes of a proposed work does not indicate that the Board in carrying out the work is acting for the Crown. The Board cannot be directed to do the work, and if it does borrow or raise money for the purpose, the Board and not the Crown is liable in case of default. Although in some respects a hospitals board is subject to stricter controls than those which governed the statutory bodies in Metropolitan Meat Industry Board v. Sheedy [10] ; Grain Elevators Board (Vict.) v. Dunmunkle Corporation [11] and the Gladstone Town Council v. Gladstone Harbour Board [12] , there is in my opinion no ground of distinction between the present case and those cases.

(1959) 100 C.L.R. 654, at p. 662. 2. (1968) 118 C.L.R. 504, at p. 510. 3. [1972] A.C. 899. 4. (1946) 73 C.L.R. 70. 5. [1964] Qd.R. 505.

For these reasons I consider that The Hospitals Act does not reveal an intention that the Board should have the privileges and immunities of the Crown when it is erecting a building, and that the decision of the Full Court was correct. I would dismiss the appeal.

I agree with the Chief Justice. The appeal should be dismissed.

I agree with the reasons for judgment prepared by the Chief Justice, and would therefore dismiss the appeal.

I have had the advantage of reading the reasons for judgment of the Chief Justice. For those reasons I would dismiss the appeal.

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