Grain Elevators Board (Vic) v Dunmunkle Shire
[1946] HCA 13(Decision by: Latham CJ)
Grain Elevators Board (Vic)
vDunmunkle Shire
Judges:
Latham CJRich J
Starke J
Dixon J
McTiernan J
Williams J
Judgment date: 31 May 1946
Decision by:
Latham CJ
The question which arises upon this appeal is whether the Grain Elevators Board constituted under the Grain Elevators Act 1934 Vict. is entitled to exemption from municipal rating under the Local Government Act 1928 Vict. by reason of s. 249 (1) of that Act, which is as follows: -
All land shall be ratable property within the meaning of this Act save as is next hereinafter excepted (that is to say): -
- (1)
- Land the property of His Majesty which is unoccupied or used for public purposes.
The Board was rated for the year ending 30th September 1943 by the Shire of Dunmunkle in respect of land owned and occupied by the Board upon which were grain elevators and other machinery necessary for the bulk handling of grain. Herring C.J. held that the Board was liable and ordered that judgment be entered for the amount claimed, £158 6s. 8d., with interest.
The Board is a body corporate ( Grain Elevators Act , s. 4 (3)). It is the registered proprietor of the land in question. It is contended on behalf of the Board that it holds the land as trustee for either the Commonwealth Government or the State Government, or that the Board is simply an agency of the Commonwealth Government or is a part of the State Department of Agriculture.
An arrangement was made between the Commonwealth Government and the Government of Victoria whereby the Board undertook the duty of storing wheat on behalf of the Commonwealth during the war. This arrangement resulted only in the Board being employed by the Commonwealth for the purposes mentioned subject to the terms of the arrangement. The argument was not pressed that the Board was in any sense entitled to any immunity as representing the Government of the Commonwealth. The question which was argued upon the appeal was whether the land which the Board owned and occupied and in respect of which it was rated was land the property of His Majesty in right of the State of Victoria.
If the Board held the land merely as a trustee for the Government of the State the land would be the property of the State and the exemption contained in the Local Government Act , s. 249 (1), would apply: Perry v. Eames [ [1] ]; Hornsey Urban District Council v. Hennell [ [2] ]. But it would in my opinion be wrong to hold that the Board holds land upon any trust. There is no provision in the Act which makes the Board a trustee for the Crown of the land vested in it. It holds its land subject to the provisions of the statute by which the Board is constituted. It is by these provisions and not by any part of the law of trusts that the rights and duties of the Board are determined.
The substantial defence to the claim is that the Board is a Government department acting for and on behalf of the State of Victoria - that it is a servant of the Crown, its acts being part of "the use and service of the Crown."
Various tests have been proposed and applied from time to time for the purpose of determining whether a person or a body is entitled to the privileges and immunities of the Crown. The fact that an authority discharges public functions and makes no private profit is not sufficient to identify it with the Crown: Mersey Docks v. Cameron [ [3] ]. In order to be entitled to the immunity of the Crown an authority must show that the functions which it discharges are governmental in character. There are cases in which it has been held that some functions are inalienable functions of government, so that any body which discharges them is necessarily entitled to the privileges and immunities of the Crown. Coomber v. Justices of Berks [ [4] ] has from time to time been referred to in this Court as establishing a fundamental distinction between certain governmental functions which are "inalienable" and other functions: See e.g. Federated Municipal and Shire Council Employees' Union of Australia v. Melbourne Corporation [ [5] ]; Merchant Service Guild of Australasia v. Commonwealth Steamship Owners' Association [ No. 2 ][ [6] ]; The Commonwealth v. Colonial Combing, Spinning and Weaving Co. Ltd .[ [7] ]. But it is not necessary to determine in this case whether there are governmental functions which are "inalienable." It is not suggested that the storage of grain is such a function. The argument for the appellant is that it has, in Victoria, been made a governmental function by statute.
It is necessary to consider all the circumstances of each case in which the question arises. The fact that a 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. No-one would doubt, for example, that ordinary State departments such as the Lands Department or the Chief Secretary's Department were departments of government in the fullest sense and that what was done by their officers in the course of their duties was done on behalf of the Government. An incorporated body may be a government department and entitled to Crown immunity: Public Works Commissioners v. Pontypridd Masonic Hall Co. Ltd .[ [8] ]. The fact that financial control is in the Crown - that revenues of an authority go into consolidated revenue and that its expenditure is made out of consolidated revenue - is another element which helps to show the identity of an authority with the Crown: Fox v. Government of Newfoundland [ [9] ]; Metropolitan Meat Industry Board v. Sheedy [ [10] ]. Where persons or an incorporated authority are subject to direct ministerial control so that they act under the direction of a Minister, such persons or authorities act on behalf of the Crown and any provision, whether express or implied, for Crown exemption is applicable to them: Marks v. Forests Commission [ [11] ]; Repatriation Commission v. Kirkland [ [12] ].
But if a board is a body independent of the Government with discretionary powers of its own, so that it is not a mere agent of the Government, then such a body does not represent the Crown. This was the criterion which was applied in Fox v. Government of Newfoundland [ [13] ] and by this Court in Repatriation Commission v. Kirkland [ [14] ]. See also Ex parte Graham : Re Forestry Commission [ [15] ]. The question was put in the following form in Roper v. Public Works Commissioners [ [16] ] - whether the persons in question were acting as servants of the Crown or merely as a statutory body invested with public rights, duties and liabilities like the trustees of a public dock or public park. Were they Government servants doing the work of the Government? In Metropolitan Meat Industry Board v. Sheedy [ [17] ], their Lordships of the Privy Council described the Board there under consideration as "a body with discretionary powers of their own. Even if a Minister of the Crown has power to interfere with them, there is nothing in the statute which makes the acts of administration his as distinguished from theirs." I proceed, therefore, to examine the terms of the relevant statutes independently of any preliminary presumption that the storage of grain is or is not itself a governmental function.
In the first place, the Local Government Act , s. 249 (3), contains a number of exemptions from rating of statutory bodies discharging public functions. These are the Victorian Railways Commissioners, the Minister of Public Instruction, the Board of Land and Works, the Commissioners of the Melbourne Harbour Trust, the Melbourne and Metropolitan Board of Works, the Commissioners of the Geelong Harbour Trust and the Geelong Waterworks and Sewerage Trust. When the Grain Elevators Act was passed no provision was made to add the Board to the class of exempted statutory authorities specifically mentioned in s. 249 (3).
In the next place, the Grain Elevators Act , s. 44, contains an express provision exempting the Board from liability for income tax. There is no corresponding provision exempting the Board from liability for municipal rates.
Further, the Grain Elevators Act 1942 Vict., which came into operation on 21st December 1942, provided in s. 3 that, "notwithstanding anything in any Act, land used exclusively for any grain elevator under the Principal Act shall not be deemed to be rateable property within the meaning of any Act." (This provision is not applicable to the rates claimed in these proceedings because the rate was levied before the Act came into operation.) This provision exempts land used for grain elevators for the future, but it has no reference to the past. Moreover, it is limited to land used for grain elevators, a term defined in s. 3 of the Principal Act, and does not apply to other land occupied or owned by the Board.
These three facts - the failure to include the Board within the express exemptions applying to similar bodies by virtue of s. 249 (3) of the Local Government Act , the express exemption of the Board from income tax with no reference to liability for municipal rates, and the limited character of the exemption from rates created by the Grain Elevators Act 1942 - all tend to show that the Board was not, by reason of its constitution and functions, entitled to the immunity which it now seeks to establish.
If, however, the Grain Elevators Act showed that the Board was a Crown agency, the considerations mentioned would have to yield to the terms of the Act. I proceed, therefore, to examine that Act.
On the one hand there are many provisions which emphasize the public nature of the functions of the Board and which associate the Board with the Government of the State. I refer to s. 6 (6), copies of decisions of the Board to go to the Minister: s. 6 (7), a Government financial officer to attend meetings of the Board; s. 10, acquisition of elevators, arrangements for use of existing elevators, construction of elevators and operation of elevators by the Board require the approval of the Minister, that is, the Minister of Agriculture (s. 3); s. 10 (2) introduces a control of delivery of wheat within proclaimed areas which can give to the Board a monopoly of storage of wheat within those areas and therefore excludes private enterprise; s. 11 (1) and s. 45, the Board reports upon certain matters to the Minister; s. 11 (4), the Board may, with the approval of the Minister and of the Minister for Railways, arrange for certain work to be done by the Railway Construction Branch of the Board of Land and Works; s. 33, contracts involving over £1,000 require the approval of the Governor in Council; s. 35, consent of the Governor in Council required for the borrowing of money by the Board; the Principal Act and amending legislation provide for the Governor in Council raising money on the credit of the State for the purposes of the Board (see Act No. 4379); s. 45, the Board to report to the Minister as directed upon any matter relating to the handling of the grain. These provisions show a close association with the Government, but the question is whether they are sufficient, having regard to other provisions in the statute, to make it proper to hold that the acts of the Board are the acts of the Government of the State.
In my opinion consideration of other provisions shows that this is not the case. The business of the Board in the storage of wheat is carried on under authority conferred upon the Board principally by ss. 17 and 18. Section 17 authorizes the Board to acquire land. Section 18 provides that the Board may store grain in elevators, handle such grain, sell surplus grain and buy grain in cases specified. This section relates to the ordinary day to day work of the Board. In relation to this work there is no provision authorizing ministerial control, or even requiring ministerial approval. Other provisions to which reference has already been made show that certain things can be done by the Board only with the approval of the Minister, so that the Minister has a veto. But there is no provision in the Act which entitles the Minister to give directions to the Board in the performance of its statutory function of storing grain. In performing its ordinary functions the Board acts at its own discretion.
Several provisions of the Act emphasize the separation of the Board from ordinary governmental services controlled by Ministers. For example, under s. 22 (3) an officer of the Department of Agriculture, nominated by the Minister, may determine disputes as to dockages between the Board and owners of wheat or their agents. Under s. 22 (5) that officer may make a determination the result of which is that the Board shall pay moneys to the Department of Agriculture. Such a provision assumes that the Board is not a part of the Department of Agriculture.
The finances of the Board are kept separate from the finances of the Government. Section 35 provides that the Board may, with the consent of the Governor in Council, borrow money. Here it is the Board, and not the Government, which borrows. Under the Grain Elevators (Financial) Act 1936 the Government may make money borrowed by the Government available for expenditure by the Board. The distinction between the two forms of borrowing emphasizes the fact that the Board is separate from the Government. Further, under s. 37 (9) of the Principal Act the Government of Victoria guarantees the due repayment of moneys secured by debentures issued by the Board. This provision shows that acts of the Board are not treated by the statute as acts of the Government. The same observation applies to the provision in s. 38 (2) which enables the Treasurer to guarantee overdrafts of the Board. The Grain Elevators (Financial) Act , s. 7, requires the Board to pay to the Treasurer of Victoria as they become due such sums as the Treasurer may require in order to provide for the payment of interest and contributions to the National Debt Sinking Fund in respect of loan moneys raised under the Act. If the moneys of the Board were the moneys of the Government, no such provision would be necessary. Here again the separation of the Board and the Government of the State is apparent.
Under s. 27 of the Principal Act it is the Board which may demand and receive charges in respect of services rendered by the Board. Under s. 29 the Board may enter into contracts for the purposes of the Act. Section 31 provides that contracts made according to the provisions of the Act shall be effectual in law and binding on the Board. It is plain that the Board would be the person to sue and be sued upon such contracts. Section 48 refers to writs or other processes against the Board. The Crown would have no right of suit upon contracts made by the Board and would not be liable to proceedings in respect of such contracts by petition of right.
I am therefore of opinion that the Board is a statutory body, the powers, rights and duties of which are defined by the Grain Elevators Acts ; that it is a body which in doing its business exercises an independent discretion of its own; and that, though a Minister of the Crown may prevent the Board acting in certain cases, he does not control or direct the acts of the Board. The acts of the Board are therefore not the acts of the Crown, and land the property of the Board cannot be described as the property of His Majesty within the meaning of the Local Government Act , s. 249 (1). I am therefore of opinion that the decision of the Chief Justice was right and that the appeal should be dismissed.