Commonwealth v Bogle
89 CLR 229(Judgment by: McTiernan J) Court:
Judges:
Dixon CJ
McTiernan JWilliams J
Webb J
Fullagar J
Kitto J
Taylor J
Judgment date: 13 March 1953
Judgment by:
McTiernan J
The management and conduct of a hostel is not ordinarily a function of government unless the hostel provides for special classes of people in whom the Executive has a special interest. The people living in the hostels, managed and conducted by Commonwealth Hostels Ltd , came to Australia under a migration scheme conducted by the Executive. The provision of food and shelter for these people fell within the sphere of the Executive's responsibility. Although it may be said that it did not become an essential function of government, the hostels which the Minister for Labour and National Service handed over to Commonwealth Hostels Ltd were established by the Government to meet the needs of the migrants.
The question which arises is whether the company manages and conducts these hostels merely under its status as a company incorporated according to State law and as non-governmental enterprises, or whether the company is an agency conducting these hostels as governmental institutions. I should think that Commonwealth Hostels Ltd is in the latter situation.
It is obvious that the company was formed solely for the purpose of filling departmental needs. The fact that the company was incorporated under the Companies Act 1938 (Vict.), does not prevent it from carrying out its objects in the capacity of a departmental agency. The memorandum of association confines the objects of the company to the provision of accommodation for migrants, members of the forces and their dependants, and persons in the service of the Commonwealth or of an authority of the Commonwealth and their dependants, and to the provision of accommodation only for such members of these classes as the Minister for Labour and National Service requires the company to provide accommodation.
The company plainly owes its incorporation to an executive decision; all the corporators are public servants; otherwise, the special character of its objects could not be explained. The memorandum of association provides that upon the winding up of the company any property remaining after payment of debts is not to be distributed among the members but to be transferred to the Minister for Labour and National Service. The articles provide that each director shall be appointed by an instrument in writing under the hand of the Minister and that the remuneration of a director is subject to the Minister's control. The articles require that the accounts of the company shall be audited by the Commonwealth Auditor-General. These articles also provide that the company shall take steps to wind up its affairs as soon as practicable after receiving a written notice from the Minister that in his opinion such a course is in the circumstances necessary or desirable. The finances of the company are provided out of moneys appropriated by Parliament for the services which the company undertakes; it can undertake them only at the Minister's request: its objects extend to no other services.
The relationship of the company to the Commonwealth is settled not only by the terms of its Constitution, but by the agreement dated 20th November 1951 made between the Commonwealth and the company. This agreement recites the objects mentioned above for which the company was formed and that the memorandum of association is framed to preclude the company from paying any portion of its income or property directly or indirectly in any form by way of profit to the members of the company. The agreement provides that the company shall have no right, title or interest in any of the real or personal property of the Commonwealth comprised in the hostels. The company is not entitled under the agreement to manage and conduct any hostel unless it is specified by the Minister. Practically, the company has little if any discretion of its own in the management of any hostel specified by the Minister. It must not act without the Minister's approval in matters of policy and many matters of detail. Nominally the company employs the managers and staff of the hostels committed to it by the Minister, but this authority is granted under the terms of the agreement. The paymaster of all the personnel ranking as employees of the company is, in truth, the Commonwealth. In my opinion the company, by reason of its Constitution and the relationship created by the agreement with the Commonwealth, manages and conducts the hostels in the capacity of an agency of the Commonwealth. I think that, if an unincorporated committee of persons were appointed by the Executive to manage and conduct these hostels upon the terms of an agreement similar to that made with this company, there could be no doubt that it would be an agency of the Commonwealth and the provision of sustenance and shelter to the people admitted to the hostels would retain the character of services rendered by the Executive.
Commonwealth Hostels Ltd owes its corporate status to State law. It does not follow that it is not a mere instrumentality of the Commonwealth while exercising its powers as a corporation. The question whether it is a mere instrumentality of the Commonwealth depends upon the control which the Minister may exercise over it through its Constitution and the conditions, stipulated by the agreement, upon which it managed and conducted the hostels. In my opinion it managed and conducted the hostels committed to it by the Minister as departmental establishments and as manager the company was an agency of the Executive. It would be difficult to contemplate this company in its capacity of manager of the hostels as a taxpayer of a State if it decided to impose a company tax.
In my opinion none of the State Acts regulating prices, with which the cases are concerned, manifests an intention to control the price of any service rendered by the Commonwealth. A service rendered by any agency of the Commonwealth is not therefore within the purview of the Act. It follows that each of these cases should be determined against the defendant.