SGH LTD v FC of T

Judges:
Gleeson CJ
Gaudron J
McHugh J
Gummow J
Kirby J
Hayne J
Callinan J

Court:
High Court of Australia

MEDIA NEUTRAL CITATION: [2002] HCA 18

Judgment date: 1 May 2002

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Gleeson CJ, Gaudron, McHugh and Hayne JJ

SGIO Building Society Limited was formed, as a building society, under the Building Societies Act 1886 (Q), and later changed its name to Suncorp Building Society Limited. Still later, by operation of law, ^[1] State Financial Institutions and Metway Merger Facilitation Act 1996 (Q), ss 35 and 37. it became SGH Limited and provision was made for it to become a company governed by the companies legislation. It is convenient to refer to it as ``SGH'' even though the transactions and events which give rise to this matter took place before the entity was given this name.

2. In March 1995, the respondent, the Commissioner of Taxation, issued an assessment of the income tax payable by SGH for the year ended 30 June 1994. SGH objected

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against the assessment contending that two payments (the first in an amount of $23,002,000, and the second in an amount of $2,011,095) should not be included in its assessable income. SGH contended that the prohibition in s 114 of the Constitution against the Commonwealth imposing any tax on property belonging to a State applied. It alleged that it was, at the relevant time, the State of Queensland or was carrying on business as an agent of the State, and that the receipt of these sums, being in each case a capital receipt, constituted property for the purposes of s 114. The Commissioner wholly disallowed the objection. Pursuant to Div 5 of Pt IVC of the Taxation Administration Act 1953 (Cth), SGH appealed to the Federal Court of Australia against the disallowance of the objection.

3. The part of the cause pending in the Federal Court which involved the questions:

• (a) whether SGH Limited is the ``State'' for the purposes of s 114 of the Constitution; and
• (b) whether the tax in question is a ``tax on property'' for the purposes of s 114 of the Constitution,

was removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth). The two questions which we have identified were reserved for consideration of a Full Court on a Case Stated.

4. At the conclusion of argument, the Court ordered that the questions reserved be answered:

• (a) No
• (b) Unnecessary to answer

and indicated that reasons would be published at a later date. What follows are our reasons for joining in the order that the questions be answered as they were.

Section 114

5. Section 114 provides that:

``A State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force, or impose any tax on property of any kind belonging to the Commonwealth, nor shall the Commonwealth impose any tax on property of any kind belonging to a State.''

What was said to be the relevant property in this case were two sums of money which had been received by SGH in the course of the year of income in question. The first sum, $23,002,000, was paid to SGH pursuant to the Building Societies Fund Act 1993 (Q), from the Consolidated Fund established by s 34 of the Constitution Act 1867 (Q). The Building Societies Fund Act 1993 provided for payments to building societies totalling $49,995,000. It also provided that the amount of the gross assets standing to the credit of the Contingency Fund established under the Building Societies Act 1985 (Q) (less $500,000) were to be paid into the Consolidated Fund.

6. The Contingency Fund had been established to provide protection to persons who subscribed, contributed, lent or deposited money with building societies and SGH, and all other building societies in Queensland, were bound to and did make contributions to the Contingency Fund according to their share capital and the amount of deposits they held. When the Building Societies Act 1985 repealed the Building Societies Act 1886, a new Contingency Fund was established and the funds of the old fund were transferred to the new fund. It was the assets of this fund that were paid into the Consolidated Fund.

7. For reasons which do not now matter, the transfer of assets from the Contingency Fund to the Consolidated Fund did not take place as quickly as it was thought it would. Interest accrued on the assets of the Contingency Fund in the meantime and the assets transferred to the Consolidated Fund were more valuable than had been expected. The Building Societies Fund Act 1993 did not provide for that event (except by providing that all assets of the Contingency Fund, less $500,000 should be transferred to the Consolidated Fund). Amounts totalling the accrued interest were distributed to the building societies (including SGH) as ex gratia payments under s 106 of the Financial Administration and Audit Act 1977 (Q). It is that payment, of $2,011,095, that is the second of the sums said to be relevant property.

8. Whether income tax levied upon the taxable income derived by a taxpayer during a year of income can amount to a tax on particular sums which are received during the relevant year is, at the least, open to serious doubt. ^[2] South Australia & Anor v The Commonwealth & Anor 92 ATC 4066 at 4071, 4074-4075, 4076; (1991-1992) 174 CLR 235 at 251-252 per Mason CJ, Deane, Toohey and Gaudron JJ, 257 per Brennan and McHugh JJ, 260 per Dawson J. Income tax is not levied upon particular receipts of a taxpayer or upon the assessable income of a taxpayer. It is levied upon the amount which remains after deducting from a taxpayer's assessable income all allowable deductions. ^[3] Income Tax Assessment Act 1936 (Cth), s 6(1), definition of ``taxable income''. This, however, is a question which

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it is not necessary to decide in determining the first of the questions reserved.

9. Section 114 speaks of one polity (in this case the Commonwealth) imposing ``any tax on property of any kind belonging to'' another polity (here, the State). At least three kinds of issue may arise. First, what is meant by ``tax on property''? That requires consideration of what constitutes a tax and what constitutes a tax on property. Secondly, what is meant by ``property... belonging to'' a State? Thirdly, how is ``State'' to be understood? The question, whether SGH is the ``State'' for the purposes of s 114, focuses upon the third of the issues we have identified. Nevertheless, it is essential to bear in mind the context in which the question arises - a context which requires identification of a connection between a tax and property (a tax on property) and a connection between the property and a ``State'' (property belonging to a State).

10. The property which was said to be taxed in this case was money received by SGH. That is, the property in question was property received by, and held in the name of, SGH. Is SGH to be treated as the relevant polity (the State of Queensland), or an ``emanation'' of the State, <sup>[4]</sup> Inglis v Commonwealth Trading Bank of Australia (1969) 119 CLR 334 at 342 . or an ``agency'' or ``instrumentality'' of the State ^[5] DFC of T v State Bank of New South Wales 92 ATC 4079 at 4083; (1991-1992) 174 CLR 219 at 230 . ? (It is not necessary, in this case, to consider whether, or when, it is apt to use these last three terms.)

11. Both the expression used in s 114, ``property... belonging to a State'', and similar expressions, are to be found elsewhere in the Constitution. Section 85 which deals with `` [ w]hen any department of the public service of a State is transferred to the Commonwealth'' refers to ``all property of the State of any kind, used exclusively in connexion with the department'' and to ``any property of the State, of any kind used, but not exclusively used in connexion with the department''. At least in that context, ``property of the State'' is used to refer to property over which the executive government of the State has power of disposition, being property which is used, at least in part, in connection with the department of the public service of that State.

12. Sections 98 and 104 refer, in the former case, to ``railways'', and in the latter to ``a railway'', ``the property of'' a State. Given that ``before 1890 all the six Colonies had established State railways, the control of which formed a very large and important part of State administration'' ^[6] The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employes Association (``the Railway Servants Case'') (1906) 4 CLR 488 at 534 per Griffith CJ. and that, in at least some cases, the colonial railway commissioners had been incorporated, <sup>[7]</sup> Railway Servants Case (1906) 4 CLR 488 at 535 per Griffith CJ. See also, for example, Railways Act 1854 (NSW) (18 Vict 40), s 3; The Victorian Railways Commissioners Act 1883 (Vic), s 4. it is clear that, as recognised in The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employes Association (``the Railway Servants Case ''), the interposition of a corporation did not take the particular railways outside the constitutional reference to railways, ``the property of'' a State. Similarly, banking activities were conducted by corporations under legislation enacted by the colonial legislatures <sup>[8]</sup> See, for example, the Savings Banks Act 1890 (Vic) discussed in Commissioners of the State Savings Bank of Victoria v Permewan, Wright & Co Ltd (1914) 19 CLR 457 and its legislative predecessor The Savings Banks Statute 1865 (Vic). and in s 51(xiii) this activity was referred to as ``State banking''. ^[9] Section 51(xiii) states the relevant head of legislative power as ``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 banking referred to ``banks established and conducted by a State or by an authority established under State law and representing a State'': Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 52 per Latham CJ.

13. Against the background of these other provisions of the Constitution, it is evident that references in s 114 to the Commonwealth and a State are not to be understood narrowly. Reinforcement for that view comes from other provisions of the Constitution and, in particular, s 75. It was in the context of s 75, and its provisions for the original jurisdiction of this Court, that Dixon J referred to the Constitution going ``directly to the conceptions of ordinary life'' and said that: ^[10] Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 363 .

``From beginning to end [ the Constitution] treats the Commonwealth and the States as organizations or institutions of government possessing distinct individualities. Formally they may not be juristic persons, but they are conceived as politically organized bodies having mutual legal relations and amenable to the jurisdiction of courts upon which the responsibility of enforcing the Constitution rests.''

14. Section 114 is a prohibition, albeit a prohibition which affects both the Commonwealth and the States. In Attorney- General (Vict); Ex rel Black v The Commonwealth , ^[11] (1981) 146 CLR 559 at 615. Mason J said of s 116, and its prohibition on the Commonwealth making any law for establishing any religion, that:

``As a prohibition is a restriction on the exercise of power there is no reason for enlarging its scope of operation beyond the mischief to which it was directed ascertained in accordance with the meaning of the prohibition at the time when the Constitution was enacted.''

Subsequently, however, in DFC of T v State Bank of New South Wales (``the State Bank Case '') ^[12] 92 ATC 4079 at 4082-4083; (1991-1992) 174 CLR 219 at 229. in a judgment of the whole Court, the contention that the same approach should be

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adopted in construing s 114 was rejected. It was said that the argument just identified ``may have some strength in the context of a prohibition which is clearly directed against an identifiable mischief'', but that ``to give a strict construction to s 114 would be more likely to frustrate than to achieve the attainment of its object, namely, the protection of the property of the Commonwealth and the States from the imposition of taxation by each other in the interests of their respective financial integrity''. Argument of the present matter proceeded from an acceptance of what was said in the State Bank Case and it is, therefore, unnecessary to embark upon the troubled waters of more general questions about the preferable approach to constitutional interpretation.

15. In the State Bank Case , ^[13] 92 ATC 4079 at 4083; (1991-1992) 174 CLR 219 at 230. the Court also rejected a submission that the question raised by s 114 is to be determined by asking whether a body is entitled to the privileges and immunities of the Crown, in accordance with the approach adopted in Townsville Hospitals Board v Townsville City Council . ^[14] (1982) 149 CLR 282. There, Gibbs CJ had referred ^[15] (1982) 149 CLR 282 at 291. to a strong tendency to regard statutory corporations as distinct from the Crown unless Parliament has expressly provided to the contrary, pointing out that the principle of equality before the law dictates such an approach. When a question arises under s 114, the answer depends upon the meaning and operation of the Constitution.

16. In considering whether an entity, in whose name property said to belong to a State is held, falls within the description ``the State'' in s 114, it is, no doubt, relevant to consider the activities undertaken by that entity. Similarly, it will be relevant, and usually very important, to identify the legal relationship between the entity and the executive government of the State and to identify what rights or powers the executive government of the State has over the use and disposal of the property in question. Not only will those inquiries be necessary for the purpose of deciding whether the property belongs to ``the State'', they will also bear upon whether the entity in whose name the property stands is properly regarded as the State. Adopting what was said in the State Bank Case : ^[16] 92 ATC 4079 at 4085; (1991-1992) 174 CLR 219 at 233.

`` [ t]he question then is whether [ in this case, SGH] is discharging governmental functions for the State or, to put it another way, is the State carrying on [ the relevant business] through its statutory corporation.''

It is convenient to begin the examination of the relationship between SGH and the State by considering the circumstances in which SGH was formed.

The circumstances of the establishment of SGH

17. It was agreed that SGH was formed ``as a matter of State governmental policy in order to provide stability in the building society industry in Queensland and to provide investor confidence, in that the establishment of [ SGH] averted the collapse of seven building societies and the consequent loss of depositors' funds''. To that end, amendments were made in 1976 to the Building Societies Act 1886 allowing the transfer of engagements or property of building societies at the direction of the Registrar of Building Societies. ^[17] Building Societies Act Amendment Act 1976 (Q), s 40. In addition, a Contingency Fund was established to which (some) persons who suffered loss on default by a building society could resort.

18. In May 1976, what is now SGH was formed under the name SGIO Building Society Limited. It was formed under the Building Societies Act 1886 by not less than 100 adult persons, qualified by the rules of the proposed building society, meeting, approving the rules and signing an application for membership of the proposed society and then proceeding to elect the first directors of the society. ^[18] Building Societies Act 1886, s 3(2). Application for registration of the society having been made ^[19] s 3A. the Registrar of Building Societies, being satisfied that the society had complied with the requirements of the Act, registered the society. ^[20] s 3B. Upon registration of the society and notification of registration in the Gazette , ``the then present members of the Society, together with such other persons as may from time to time become members of the Society'' became a body corporate. ^[21] s 10.

19. The Building Societies Act 1886 provided that in that Act, unless the context otherwise indicated, the terms ``Building Society'' or ``Society'' should have the meaning:

``A Society having for its object, or one of its objects, the raising of a fund by payments, subscriptions, or contributions made by its members, and the application of such fund in assisting its members to obtain freehold or leasehold property, or in the making of loans or advances to its members or others, upon the security of freehold or leasehold property with the periodical repayment of principal and interest by instalments.'' ^[22] s 2.

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SGH, when formed, was such a body. The objects of SGH, stated in its rules, were:

``(a) to raise funds by subscription or otherwise as authorised by the Act;

(b) to apply those funds, subject to the Act and these Rules, in making advances and in such other ways as are authorised by the Act and these Rules; and

(c) to render such services to its members and depositors as are incidental to attaining the objects specified in paragraph (a) or (b).''

20. Building societies were originally unincorporated and terminating mutual associations. Later they became permanent. Members subscribed by investing in shares, but the share capital was withdrawable and subject to fluctuation. ^[23] Halsbury's Laws of England , 4th ed, vol 4(2), par 701; Cuthbertson v Maxtone Graham (1905) 43 SLR 17 . The nature of a building society, as an association of persons in whose mutual interests the affairs of the society are conducted, strongly tends against a conclusion that such a society is the State.

21. In 1976, after SGH was incorporated, seven Queensland building societies that were at least in danger of failing were directed by the Registrar of Building Societies to transfer their engagements to SGH. That direction to transfer, made under s 38C of the Building Societies Act 1886, required the approval of the relevant Minister, the Treasurer. Pursuant to the direction, the assets and liabilities of the seven building societies passed to SGH. It was an agreed fact that the application for SGH's registration as a building society ``was made so that it could accept the transfers from these building societies''. It was further agreed that, at the time SGH was created, the State Government Insurance Office, to which further reference will be made shortly, took a mortgage debenture over the assets of SGH to secure a standby facility (up to a maximum of $43 million) to maintain liquidity reserves at the agreed level.

22. SGH submitted that the circumstances of its establishment were of an ``essentially public character''. If by that expression it is intended to indicate that SGH was established because those who promoted its establishment saw that as being in the public interest, it is a proposition that may readily be accepted. So much would follow from the agreed fact that SGH was formed as a matter of State governmental policy in order to provide stability in the building society industry in Queensland and to provide investor confidence. But whether SGH was ``the State'' requires demonstration of more than government policy favouring or facilitating the creation of the entity in pursuit of some aspect of the public interest. No doubt it requires consideration of the circumstances and purposes of the entity's creation, but it also requires consideration of every feature of the entity which bears upon its relationship with the polity. That is why cases about s 114 ^[24] Superannuation Fund Investment Trust v Commissioner of Stamps (SA) 79 ATC 4429 ; (1979) 145 CLR 330 ; DFC of T v State Bank of New South Wales 92 ATC 4079 ; (1991-1992) 174 CLR 219 . See also Inglis v Commonwealth Trading Bank of Australia (1969) 119 CLR 334 ; State Bank of NSW v Commonwealth Savings Bank of Australia (1986) 161 CLR 639 . have focused upon the ownership and management of the entity and the purposes the entity was required to pursue. It is those features which will most often reveal the relationship the entity has with the State, and if it is revealed by examination of them that the entity is wholly owned and controlled by the State concerned, and must act solely in the interests of the State, the conclusion that it is the State or, as was said in Inglis v Commonwealth Trading Bank of Australia , ^[25] (1969) 119 CLR 334 at 342. an ``emanation'' of the State will readily follow. We turn, therefore, to consider the ownership and management of SGH.

Ownership and management

23. To understand the structure of the ownership and management of SGH, it is necessary to say something about the State Government Insurance Office (Queensland). That entity was established as a statutory corporation under The State Government Insurance Office (Queensland) Act 1960 (Q). The Act provided ^[26] s 8. that the corporation represented the Crown and that due performance by the corporation of all contracts entered into by it, or on its behalf, was deemed to be guaranteed by the Crown. By s 7 of the Suncorp Insurance and Finance Act 1985 (Q), the corporation was continued in existence under the name ``Suncorp Insurance and Finance'' (``Suncorp''). This Act provides ^[27] s 11. that Suncorp represents the Crown and has all the immunities, rights and privileges of the Crown. The parties agreed that Suncorp ``is the State for the purposes of s 114'' of the Constitution.

24. Suncorp controlled the organs of management of SGH. It appointed three of the six directors and could nominate both the Chairman and the Deputy Chairman of the board. The rules governing voting at directors' meetings enabled Suncorp's nominees to carry any motion they proposed.

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25. There were two classes of shares in SGH - A class and B class. At the relevant times, Suncorp held all B class shares. All A class shares were held by depositors. Holders of A class shares had limited rights to vote at general meetings. If in any financial year SGH made a loss, each holder of A class shares present at the Annual General Meeting had one vote on the resolutions for consideration of the accounts and the Directors' Report. At every General Meeting each holder of A class shares present had one vote on each resolution for the election of directors in the place of those retiring by rotation. Otherwise, holders of A class shares were not entitled to vote at any General Meeting of SGH.

26. In these circumstances it is plainly right to say that Suncorp controlled SGH. But that control was not absolute. Suncorp could not lawfully require SGH, or its board, to act in disregard of the interests of A class shareholders, and it could not use its powers to control General Meetings of SGH in disregard of the interests of those A class shareholders. In the present context the nature and extent of the objects of SGH and of the consequential limitations on the powers of Suncorp over the organs of SGH are very important. It is convenient to identify the limitations on Suncorp's powers by reference to the legislation that governed the affairs of building societies in Queensland in 1993, when the payments which are in issue in the taxation appeal in the Federal Court were made. That legislation (the Building Societies Act 1985) applied to SGH as a permanent building society that was registered under the repealed Act, the Building Societies Act 1886, and was deemed by the new Act to be registered under that Act. ^[28] Building Societies Act 1985, s 16.

The objects of SGH and the powers of Suncorp

27. Section 82 of the Building Societies Act 1985 required officers of building societies to act honestly in the exercise of their powers and the discharge of the duties of their offices, ^[29] s 82(1). to exercise a reasonable degree of care and diligence in the exercise of those powers and the discharge of those duties, ^[30] s 82(2). not to do any act or thing directed to an object that is not an object of the society ^[31] s 82(3). and not to make improper use of certain information ^[32] s 82(4). or the position held. ^[33] s 82(5). These provisions of s 82 were to have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person by reason of the office held or employment in relation to a building society. ^[34] s 82(9).

28. For present purposes it is of particular importance to emphasise the prohibition against doing any act directed to an object that is not an object of the society. The objects of SGH did not include any reference to advancing any interests of the State. Rather, they focused upon the interests of members and depositors. That this should be so is hardly surprising when regard is had to the nature of a building society revealed by the definition of that term contained in the Building Societies Act 1886, and referred to earlier in these reasons.

29. Moreover, the control of a General Meeting of SGH, which Suncorp could undoubtedly assert, was control that could not be exercised for purposes foreign to the purposes of the society as a whole. As was said in Ngurli Ltd v McCann : ^[35] (1953) 90 CLR 425 at 438 per Williams ACJ, Fullagar and Kitto JJ. See also Howard Smith Ltd v Ampol Petroleum Ltd [ 1974] AC 821 at 837-838 per Lord Wilberforce; Whitehouse & Anor v Carlton Hotel Pty Ltd (1987) 5 ACLC 421 at 424; (1987) 162 CLR 285 at 289-290 per Mason, Deane and Dawson JJ.

`` [ T]he powers conferred on shareholders in general meeting and on directors by the articles of association of companies can be exceeded although there is a literal compliance with their terms. These powers must not be used for an ulterior purpose. `The term fraud in connection with frauds on a power does not necessarily denote any conduct on the part of the appointor amounting to fraud in the common law meaning of the term or any conduct which could be properly termed dishonest or immoral. It merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power', per Lord Parker in Vatcher v Paull . ^[36] [ 1915] AC 372 at 378. ... Voting powers conferred on shareholders and powers conferred on directors by the articles of association of companies must be used bona fide for the benefit of the company as a whole.''

Although Ngurli Ltd v McCann concerned a company limited by shares, the same principles apply, with equal force, to the powers given to the directors and General Meeting of SGH.

30. Nor would it have been an answer to an allegation that a director of SGH had not acted in the interests of the society as a whole for that director to say that he or she had acted according to the wishes of the person who had, directly or indirectly, brought about the appointment of that director to the board. The position of nominee directors has given rise to

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some debate. It is not necessary to attempt, in this matter, to resolve all of those issues. It is enough to say that the fact that a director of a body corporate is nominated to office by another does not permit the director to act in disregard of the interests of the corporation as a whole. ^[37] See the discussion by Street J in Bennetts v Board of Fire Commissioners of New South Wales (1967) 87 WN (Pt 1) (NSW) 307 at 310-311 . Whether the statements by Jacobs J in Re Broadcasting Station 2GB Pty Ltd , ^[38] [ 1964-1965] NSWR 1648. about what must be shown to establish a breach of duty by such a director, are accepted (a question we need not consider) nothing in that decision, or other cases which have considered the matter, ^[39] See, for example, Berlei Hestia (NZ) Limited & Ors v Fernyhough & Ors (1980) CLC ¶ 40-633 at 34,223-34,224; [ 1980] 2 NZLR 150 at 165-166 per Mahon J. can or should be understood as denying the more basic proposition about the duty that we have earlier described: that directors may not act in disregard of the interests of the corporation as a whole.

31. Similarly, it is not necessary to consider the particular questions that may be presented where the constitution of the body corporate may positively permit account to be taken of other, external, interests. ^[40] Whitehouse & Anor v Carlton Hotel Pty Ltd (1987) 5 ACLC 421 at 425; (1987) 162 CLR 285 at 291 ; Levin v Clark [ 1962] NSWR 686 . The rules of SGH made no such provision. That is a matter of particular significance for present purposes. Unlike the body considered in Inglis v Commonwealth Trading Bank of Australia , ^[41] (1969) 119 CLR 334. or the body considered in both State Bank of NSW v Commonwealth Savings Bank of Australia ^[42] (1986) 161 CLR 639. and the State Bank Case , ^[43] 92 ATC 4079 ; (1992) 174 CLR 219. there was no provision in the rules of SGH, or its governing statute, that it should pursue the interests of the State or the public or that its policies could be determined by the executive government.

32. It follows that the control which could be exercised by Suncorp over the affairs of SGH (whether through the board or at a General Meeting) was hedged about by the obligation not to disregard the interests of persons other than the State. Those other persons were corporators but it is not the presence or absence of corporators which is of critical significance to the application of s 114 in this case. There may be cases in which a corporation, which has corporators, is within the operation of s 114. ^[44] cf R v Portus; Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 in which it was held that Qantas Empire Airways Ltd, a company limited by shares, all of which were held by or on behalf of the Commonwealth, fell within the description ``corporation employing persons ... on behalf of the ... Commonwealth'' where that was a description used in the rules of a registered organisation of employees. What matters, here, is that there were corporators who did not hold their interests on behalf of the State but did so because they were depositors. As a result, the body, in whose name stood the property on which it was said that the Commonwealth had imposed a tax was a body whose organs of management, in making decisions about that property, could not disregard the interests of persons other than the State.

33. In this case, that requires the conclusion that the entity concerned, SGH, was not the State for the purposes of s 114. Other features of the relationship between SGH and the State to which reference was made in argument - Suncorp's provision of a standby facility, the audit of SGH's financial statements by the Auditor-General, ^[45] Financial Administration and Audit Act 1977 (Q), s 73, and the definition of ``controlled entity'' in ss 5(1) and 5A. Suncorp's power to direct SGH to change its name - do not permit, let alone require, the opposite conclusion. At the relevant time, SGH was not the ``State'' for the purposes of s 114 of the Constitution.