2007 WAIRC 00435

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2007 WAIRC 00435

CORAM
: THE HONOURABLE M T RITTER, ACTING PRESIDENT
CHIEF COMMISSIONER A R BEECH
SENIOR COMMISSIONER J H SMITH

HEARD
:
THURSDAY, 22 FEBRUARY 2007, THURSDAY, 1 MARCH 2007

DELIVERED : FRIDAY, 11 MAY 2007

FILE NO. : FBA 1 OF 2007

BETWEEN
:
ABORIGINAL LEGAL SERVICE OF WESTERN AUSTRALIA INCORPORATED
Appellant

AND

MARK JAMES LAWRENCE
Respondent

ON APPEAL FROM:

JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
CORAM : COMMISSIONER S J KENNER
CITATION : 2006 WAIRC 05849
FILE NO : U 477 OF 2006

CatchWords:
Industrial Law (WA) - Appeal against decision of the Commission - Whether the Commission had jurisdiction to hear and determine the application at first instance - Effect of the Workplace Relations Act 1996 (Cth) on the jurisdiction of the Commission in relation to 'constitutional corporations' - Consideration of relevant High Court authorities on the issue of the meaning of 'trading corporation' - Whether the appellant is a 'trading corporation' - Examination of the meaning of 'trading' and 'trading corporation' - Whether contract with the Commonwealth government was 'trading' - Leave sought by Minister to intervene - Appeal dismissed.

Legislation:
Industrial Relations Act 1979 (WA) (as amended), s7, s29(1)(b), s30(1), s49(2a), s49(4)

Judiciary Act 1903 (Cth), s78B

Workplace Relations Act 1996 (Cth), s4, s5, s6, s16

The Commonwealth Constitution, s51(xx), s109


Result:
Appeal dismissed
REPRESENTATION:
Counsel:
APPELLANT : MR T CASPERSZ (OF COUNSEL), BY LEAVE
RESPONDENT : MR T BORGEEST (OF COUNSEL), BY LEAVE
Solicitors:
APPELLANT : BLAKE DAWSON WALDRON
RESPONDENT : SLATER AND GORDON LAWYERS


Case(s) referred to in reasons:

A-G (Qld) v AIRC (2002) 213 CLR 485
Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR
169
Application for Approval to Implement an Enterprise Flexibility Agreement, AIRC, 13 June
1996, Print N2535
Attorney-General v Sillem (1864) 10 HLC 704 (11 ER 1200)
Bank of New South Wales v The Commonwealth (1948) 76 CLR 1
Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325
BHP Billiton Iron Ore Pty Ltd v CFMEU (2006) 151 IR 361
Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616
Burrows v Shire of Esperance (1998) 86 IR 75
CFMEU v Perrott (2002) 83 WAIG 17
Commissioner of Police v Civil Service Association of WA Incorporated [2002] WASCA 19
Commonwealth v Tasmania (1983) 158 CLR 1
Conference and Exhibition Organisers Pty Ltd v Australian Beauty Trade Suppliers (1990) 96
ALR 439
Crown Scientific Pty Ltd v Clarke (2007) 87 WAIG 598
Dinsdale v R (2000) 202 CLR 321
E v Australian Red Cross (1991) 99 ALR 601
Educang Ltd v Queensland Industrial Relations Commission (2006) 154 IR 436
Eleven Fellow Members of the McLeod Country Golf Club v McLeod Country Golf Club (1995)
EOC 92-739; [1995] HREOCA 25
FCU v George Moss Ltd (1990) 70 WAIG 3040
Federal Commissioner of Taxation v Citylink Melbourne Ltd (2006) 80 ALJR 1282
Fencott v Muller (1983) 152 CLR 570
Forbes and Another v Australian Yachting Federation Inc (1996) 131 FLR 241
Fowler v Syd-West Personnel Ltd [1998] IR Comm 904
Fox v Percy (2003) 214 CLR 118
Harmer v Shoalhaven Community Housing Scheme [2006] NSWIR Comm 1165
Harris v Amery (Law Rep. 1 C.P. 148)
Hughes v Western Australian Cricket Association (Inc) and Others (1986) 19 FCR 10; 69 ALR 660
McCarthy v Australian Rough Riders Association Inc and Biloela Rodeo Association, Unreported, Federal Court of Australia, Qld G167/1987, 3 November 1987
Murdoch University v LHMU (2005) 86 WAIG 247
National Association of Local Government Offices v Bolton Corporation [1943] AC 166
New South Wales v Commonwealth of Australia (2006) 81 ALJR 34 (231 ALR 1)
Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) Inc
(2002) 120 FCR 91
Pellow v Umoona Community Council Inc [2006] AIR 426
Quickenden v O’Connor (2001) 184 ALR 260
R v Heagney and Another; ex parte ACT Employers Federation and Others (1976) 137 CLR 86
R v Judges of the Federal Court of Australia and Another; ex parte The Western Australian
National Football League (Inc) and Another (Adamson) (1979) 143 CLR 190
R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533
Re Bolton and Another; Ex parte Beane (1987) 162 CLR 514
Re Ku-Ring-gai Co-operative Building Society (No. 12) Ltd (1978) 22 ALR 621
Re University of Wollongong (Academic Staff) Enterprise Agreement (1997) 74 IR 308
Sewell v Glenn Brown- CTI Logistics (2006) 86 WAIG 3278
Smith v Anderson (1880) 15 CH D 247
State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282
United Firefighters’ Union of Australia v The Metropolitan Fire & Emergency Services Board
(1998) 83 FCR 346
Vetter v Lake Macquarie City Council (2001) 202 CLR 439
Warren v Coombes and Another (1979) 142 CLR 531
Weiss v R (2005) 224 CLR 300


Case(s) also cited:

Maggbury Pty Ltd v Hafele Aust Pty Ltd (2001) 210 CLR 181

Reasons for Decision

THE FULL BENCH:

1. The Issue
1 This is an application for leave to appeal and an appeal if leave is granted, about whether the Commission at first instance erred in not finding the appellant to be a trading corporation and therefore a “constitutional corporation”. (For ease of reference, both the application and appeal may be collectively referred to as “the appeal”). The consequence of this finding was that the Commission had jurisdiction to hear and determine the respondent’s application for a remedy in respect of his alleged unfair dismissal.
2 It was not in contest between the parties at first instance or on appeal that if the appellant was a trading corporation the Commission would not have jurisdiction because of the contents of s5, s6 and s16 of the Workplace Relations Act 1996 (Cth) (the WRA) and s109 of the Constitution. (See Sewell v Glenn Brown – CTI Logistics (2006) 86 WAIG 3278 per Kenner C at paragraphs [15]-[19]).

2. The Proceedings at First Instance
3 The application was filed on 18 August 2006, pursuant to s29(1)(b) of the Industrial Relations Act 1979 (WA) (the Act). It contended that on or about 21 July 2006 the respondent’s employment as a solicitor with the appellant was terminated harshly, oppressively and unfairly.
4 The appellant filed a notice of answer and counter proposal which opposed the respondent’s claim. The answer did not raise any objection to jurisdiction. This occurred subsequently following a change in the appellant’s solicitors. The appellant’s new solicitors, who remained their solicitors for the appeal, advised the Commission that the appellant intended to raise as a preliminary issue, that it is a trading corporation for the purposes of s51(xx) of the Commonwealth Constitution and s4 of the WRA.
5 As a result, the original dates listed to hear the application at first instance were vacated and directions were made to hear the objection to jurisdiction. This included the service of notices pursuant to s78B of the Judiciary Act 1903 (Cth).
6 The evidence before the Commission on the preliminary issue, was primarily in the form of affidavits filed by the parties which annexed relevant documents. For the appellant, affidavits were sworn/affirmed by Mr Dennis Eggington, the Chief Executive Officer of the appellant, and Mr Andrew Grist, the in-house accountant of the appellant. The respondent also affirmed an affidavit.
7 The Commission heard the preliminary issue on 17 November 2006. At the hearing the affidavits were formally received into evidence and Mr Eggington was cross-examined. The Commission reserved its decision.
8 On 19 December 2006 the Commission published its reasons for decision. It concluded that the appellant was not a trading corporation and accordingly the application should be re-listed for the hearing of the substantive claim.
9 As stated the appeal is against the decision of the Commission that it had jurisdiction to determine the substantive claim, on the basis that the appellant was not a trading corporation.

3. Section 78B of the Judiciary Act 1903 (Cth) and Intervention by the Minister
10 As instructed, my associate wrote to the appellant’s solicitors, with a copy to the respondent’s solicitors, on 25 January 2007 to request that notices be issued to Attorneys General under s78B of the Judiciary Act 1903 (Cth). This request was complied with by the appellant’s solicitors on 31 January 2007. By the time of the hearing of the appeal, all of the Attorneys General had advised the appellant that they did not wish to intervene in the appeal.
11 On the day before the hearing of the appeal, however, the Full Bench received notice from the State Solicitor’s Office, acting on behalf of the Minister for Employment Protection, that the Minister was going to seek the leave of the Full Bench to intervene. This was pursuant to s30(1) of the Act. An outline of submissions on behalf of the Minister was received later that day. At the commencement of the hearing, leave was granted to the Minister to intervene. There was no opposition to the Full Bench taking this course and the Full Bench considered, given the subject matter of the appeal, that it was appropriate to grant leave.

4. Leave to Appeal
12 The decision by the Commission at first instance that the appellant was not a trading corporation and therefore the Commission had jurisdiction, was a “finding” as defined in s7 of the Act. This is because the decision made by the Commission did not finally decide, determine or dispose of the respondent’s application. As such, the appellant faces the hurdle of s49(2a) of the Act in seeking to appeal against the finding.
13 Section 49(2a) provides that an “appeal does not lie under this section from a finding unless, in the opinion of the Full Bench, the matter is of such importance that, in the public interest, an appeal should lie”.
14 In the schedule to the notice of appeal, the appellant said that the matter of what constitutes a trading corporation for the purpose of the definition of constitutional corporation in the WRA is now central to whether the Commission has jurisdiction in relation to corporations in unfair dismissal matters. The schedule said that of itself, further and alternatively because the Full Bench has not previously considered the matter, it is of such importance that it is in the public interest that leave to appeal be granted.
15 In their written outline of submissions, the appellant contended that leave ought to be granted for an additional reason. This was that it was desirable in the public interest for the appellant’s attention and resources to be directed to and expended on continuing to perform the contract which it had with the Commonwealth, to provide services to indigenous persons, without the inconvenience of having to further engage in litigation in this matter. The submissions added that the appellant would in any event be entitled to appeal against the final decision of the Commission on the ground raised in the appeal. (This probably assumes the substantive application would be decided against the appellant).
16 The respondent opposed the granting of leave. The first basis for this was a submission that the issue on appeal was a fairly narrow one and did not involve an issue so broadly relating to the jurisdiction of the Commission as described by the appellant. The second basis was that the additional or alternative contention of the appellant offended the notion of all parties being equal before the law.
17 The Minister made no submissions on this issue.
18 In our opinion on the basis of the first ground argued by the appellant, it is appropriate to grant leave to appeal. This is because the appeal requires the Full Bench to consider the correctness of the approach taken by the Commission in determining the question of whether the appellant is a trading corporation. Also in our opinion the appeal does involve a consideration of what is meant by trading corporation and trading. These issues are all important because of the consequence of a determination of whether a corporation is a trading corporation, for the jurisdiction of the Commission.
19 In Murdoch University v LHMU (2005) 86 WAIG 247 we set out, with the agreement of Gregor SC and Smith C, the meaning of the public interest requirement contained in s49(2a) of the Act as follows:-
“12 The appellant accepted that the order made by the Commission was a “finding” as defined in s7 of the Act. This was because the order did not finally dispose of the matter before the Commission at first instance. Accordingly, the appellant also accepted that s49(2a) of the Act applied to the appeal. This subsection provides that an appeal does not lie from a finding unless, in the opinion of the Full Bench, the matter is of such importance that, in the public interest, an appeal should lie. The subsection focuses the attention of the Full Bench upon “the matter”. It seems that a determination is to be made as to whether the matter, as opposed to individual appeal grounds, is of such importance that, in the public interest, an appeal should lie. Accordingly, it seems that the Full Bench may not form the opinion that an appeal should lie on only some of the grounds.

13 In RRIA v AMWSU and Others (1989) 69 WAIG 1873, the Full Bench at 1879 said that the words “public interest” in s49(2a) of the Act should not be narrowed to mean “special or extraordinary circumstances”. As stated by the Full Bench, an application may involve circumstances which are neither special nor extraordinary but which are, because of their very generality, of great importance in the public interest. The Full Bench, on the same page, went on to say that important questions with likely repercussions in other industries and substantial matters of law affecting jurisdiction can give rise to matters of sufficient importance in the public interest to justify an appeal. The RRIA decision was cited with approval and applied in the recent Full Bench decision of CSA v Shean (2005) 85 WAIG 2993 at 2995-2997.

14 The forming of the opinion referred to in s49(2a) of the Act involves a value judgment and is clearly a matter which the Full Bench needs to assess on a case by case basis, having regard to the issues which the proposed appeal will give rise to.

15 In my opinion, the issues raised by ground 1 of this appeal are of sufficient importance to lead to the conclusion that an appeal should lie under s49(2a) of the Act with respect to this matter. This is because this ground raises important questions of law and jurisdiction affecting the Commission.”

20 In our opinion the same considerations in this application lead to the granting of leave. A decision of the Full Bench on this appeal will be of assistance to other Commissioners who are required to determine whether a corporation is a trading corporation.
21 It is accordingly unnecessary to consider the second basis on which leave was sought.

5. The Ground of Appeal and Strike Out Application
22 The notice of appeal contains the following as its only ground:-
“The Commission erred in fact and in law in determining that the appellant was not a trading corporation for the purposes of the definition of constitutional corporation in the Workplace Relations Act 1996 when the Commission failed to appreciate and give effect to the fact that the 3 year contract between the Commonwealth Government and the appellant for the purchase by the Commonwealth Government of the appellant’s services to indigenous persons, and the corresponding sale by the appellant to the Commonwealth Government of such, constituted trading activity engaged in by the appellant.”

23 Prior to the hearing of the appeal the respondent applied to have the notice of appeal struck out. It was on the basis that the ground lacked meaning or understanding. The strike out application was heard at short notice on 22 February 2007. The Full Bench dismissed the application but only after seeking clarification from the appellant’s counsel as to the meaning of the ground of appeal. In addition, the appellant had by then filed its written outline of submissions which also provided greater understanding of the ground of appeal.
24 During the hearing of the application, the appellant’s counsel, after making some submissions, agreed with my summary that the intent of the appeal ground was as follows: the fact of the contract, described in the ground, ought to have been properly characterised as being evidence of trading activity and had not been adequately taken into account by the Commissioner in reaching his conclusion that the appellant was not a trading corporation.
25 The appellant’s counsel also relied on the assertion that the ground of appeal was amplified and explained in the outline of submissions. He said that it would be open to the respondent’s counsel, if he thought it appropriate to do so, to argue at the hearing of the appeal, that the written or oral submissions went beyond the ground. (No such submission was made by counsel for the respondent).
26 In dismissing the strike out the application, we observed on behalf of the Full Bench that the ground could have been better drafted, but was capable of being understood after the clarification from counsel and because of what was contained in the outline of submissions.
27 Due to the application to strike out and the discussion which ensued at the hearing the following is pertinent. Although it is the ground of appeal that must be considered and adjudicated upon, the ground is to be taken as explained at the strike out application hearing and in the written and oral submissions of the appellant on the appeal. Therefore these submissions should also be considered fully in the disposition of the appeal. The way in which the appeal was argued by the respondent was not inconsistent with this approach.

6. Process of Determining the Appeal
28 Although this will be later elaborated upon, the appellant argued that the Commissioner erred in his reasoning on whether the appellant was a trading corporation. The reasoning will therefore need to be analysed. It will also need to be considered whether the contract referred to in the ground of appeal involved trading and if so whether the Commissioner failed to give this evidence adequate weight and as a consequence erred in his conclusion. Inherent within this is a consideration of what is a trading corporation and trading. It will be necessary to examine and apply the authorities on these topics.

7. The Key Documents
29 The contract referred to in the ground of appeal is entitled “Legal Services Contract 2005-2008 Contract for the Provision of Legal Aid Services for Indigenous Australians in Western Australia”. The parties to the contract are the appellant and the Commonwealth represented by the Attorney General’s Department (the department). The contract is dated 13 April 2005. (It will be referred to as the contract in the balance of our reasons).
30 Apart from the contract there were other documents which were in evidence and referred to in the reasons of the Commissioner and the submissions on appeal. These were:
(a) “Request for Tender No. 04/29 for the Provision of Legal Aid Services to Indigenous Australians in Victoria and Western Australia” dated November 2004 (the RFT). This was published by the department.
(b) “Policy Directions for the Delivery of Legal Aid Services to Indigenous Australians” dated March 2005 (the policy directions document). This was also published by the department. The policy directions document was annexed to the contract and incorporated into it by virtue of clause 3.2 of the contract.
(c) “Policy Framework for Targeting Assistance Provided by Aboriginal and Torres Strait Islander Legal Services” (the policy framework document). This was dated July 2005 and published by the Indigenous Law and Justice Branch of the department.
(d) “Policy Directions for the Delivery of Legal Aid Services to Indigenous Australians”. This was dated May 2006 and was downloaded and printed by the respondent from the department’s website. In his reasons, the Commissioner said this document appeared to be in the same terms as the policy directions document. No-one questioned this on appeal. Accordingly, this document does not require separate consideration from the policy directions document.
(e) A media release issued by the Attorney General of Australia dated 12 November 2004 (the media release).
(f) The appellant’s constitution.
(g) The 2005 and 2006 annual reports of the appellant.

31 The documents will be summarised after a description of the contents of the affidavits which were in evidence.

8. The Affidavit Evidence Before the Commissioner
32 We have earlier referred to the people who swore/affirmed affidavits which were in evidence before the Commission. The documents referred to above were annexed to the affidavits and were therefore part of the evidence. The following summary is largely taken from the facts as set out by the Commissioner in his reasons. There was no challenge to the Commissioner’s summary of the affidavits and oral evidence, on appeal.

(a) Mr Eggington’s Evidence
33 Mr Eggington is the Chief Executive Officer of the appellant and has been so for 11 years. Before this he was a member of the appellant’s board for about six years.
34 Mr Eggington said the appellant is an association which was incorporated under the Associations Incorporations Act 1895 (WA) (now repealed). A copy of the relevant certificate of incorporation dated 7 January 1975 was annexed to Mr Eggington’s affidavit. A copy of the appellant’s present constitution, registered (presumably under the Associations Incorporations Act) on 8 November 2000 was annexed to the affidavit.
35 Mr Eggington described the main activity of the appellant as being the provision of civil and criminal legal services to indigenous persons in Western Australia. The appellant also does other things consistent with the promotion of the rights of indigenous people within the Australian legal system.
36 Mr Eggington said there were approximately 30 legal practitioners employed by the appellant throughout 18 locations in Western Australia. The terms and conditions of employment of these employees are covered by industrial instruments under the WRA.
37 The appellant also employs court officers who although not legal practitioners provide assistance to the clients of the appellant on more minor matters. They also assist the appellant through their understanding of local knowledge and language.
38 Mr Eggington said prior to 2003 the appellant received funding from ATSIC. ATSIC was then abolished. In the period 2003 to 2005 it received funding from ATSIS, which was the successor body to ATSIC. In 2004 to 2005 a tender process for funding by the Commonwealth was commenced, for the provision of legal services to indigenous people throughout Australia. The RFT was annexed to Mr Eggington’s affidavit. The appellant successfully competed in this tender process. Mr Eggington said the appellant did not tender on the basis of any lower figures for the provision of services. Mr Eggington did not know of any other tenderers for the provision of legal services in Western Australia. Mr Eggington said the contract was entered into in April 2005.
39 Mr Eggington said the appellant received little funding from the State. It was also not generally funded by charging indigenous clients for its services.
40 Mr Eggington said the major change resulting from the contract was that formerly the appellant decided what it was going to do within its overall charter and obtained funding for that work. Subsequently, however, the Commonwealth requires work to be done and the appellant tenders for it accordingly.
41 Also annexed to Mr Eggington’s affidavit was the 2005 Annual Report of the appellant, in which the tender process and contract were described in his report.

(b) Mr Grist
42 Mr Grist said the appellant is a registered business name and also registered for the purposes of the Goods and Services Tax. The department pays the 10% Goods and Services Tax under the contract.
43 The contract was annexed to Mr Grist’s affidavit. Mr Grist referred to the requirement in the contract for the appellant to submit a tax invoice to the department, monthly in arrears. A sample copy of an invoice was annexed to the affidavit.
44 Also annexed to Mr Grist’s affidavit was a copy of the appellant’s 2006 Annual Report which contained a summary of the 2006 Consolidated Annual Reports. From these documents Mr Grist referred to the income for the year to date (as at 30 June 2006) from the “Commonwealth” as being $7,264,521.00 with “extra funds” of $956,197.00. These payments were said to have been received by the appellant in accordance with the contract. Other amounts noted in Mr Grist’s evidence included interest receipts of $67,103.00 to 30 June 2006 and costs “recovered and retained”, relating to “costs and fees charged to clients in accordance with” the contract being $205,933.00. Mr Grist also referred to sundry income of $84,193.00 comprising grants to subsidise wages, refunds on car lease agreements and other miscellaneous amounts. The appellant also owns land and buildings valued at $352,632.00.

(c) The Respondent’s Evidence
45 The respondent, like Mr Eggington annexed to his affidavit a copy of the appellant’s constitution.
46 The respondent also annexed to his affidavit documentary evidence of the appellant’s tax concession status as a public benevolent institution. The respondent also deposed to the appellant’s endorsement for various tax concessions including a GST concession, an FBT exemption and an income tax exemption. The appellant is also endorsed as a deductible gift recipient.
47 The respondent also annexed the policy framework document.

9. The Contractual Documents
48 In order to decide the appeal it is necessary to understand the relevant terms of the contractual documents, which we will now summarise.

(a) The Appellant’s Constitution
49 The constitution refers to the appellant as the “Association”. Clause 1 states the name of the Association shall be the “Aboriginal Legal Service of Western Australia (Inc)”.
50 Clause 2 provides that the “Association is an association incorporated pursuant to the Associations Incorporations Act 1895 of Western Australia”.
51 Clause 4 sets out the objects of the Association. These are set out by means of a description of the objects and then a list of 20 stated methods by which the objects may be achieved. The objects of the Association are:-
“To provide direct relief to all Aboriginals from poverty, suffering, destitution, misfortune, distress and helplessness caused directly or indirectly by their involvement with the laws of the Commonwealth or States of Australia and all matters ancillary thereto including, but without limiting the generality of the foregoing, by the provision of …”

52 The first of the 20 methods is “legal assistance to Aboriginals in Western Australia”. The other 19 of the stated methods of achieving the objects involve other ways to assist Aboriginals in their interaction with the law and to obtain the resources necessary to pursue their objects. For example, clause 4(n) says “for the purpose of carrying out its Objects to request, raise, borrow, invest, and expend funds; acquire and dispose of any form of property; employ staff, enter into contracts and establish companies …”. This would include entering into the contract.
53 Clause 5 provides for the general powers of the Association. This clause states that the Association shall have certain powers for “the purpose of carrying out its Objects”. Fourteen powers are listed. Clause 5(b) is:-
“(b) To enter into any arrangements with any Government or authority, that may seem conducive to the Association’s Objects, or any of them; and to obtain from any such Government or authority any rights, privileges and concessions which the Association may think it desirable to obtain; and to carry out, exercise and comply with any such arrangements, rights, privileges, and concessions”.

54 It seems clear therefore, and was not disputed by anybody, that the entering into of the contract was within the powers of the appellant and for a named object or objects of the appellant.
55 Clause 6 of the constitution provides that the income and property of the Association will be applied solely and exclusively towards promotion of the objects and no portion shall be paid or transferred directly or indirectly to members of the Association.
56 The membership of the association is dealt with in clauses 7 and 8. There are four types of membership of which the most numerically substantial is no doubt ordinary membership. This is open to any “Aboriginal persons aged eighteen (18) years or more, normally resident in Western Australia whose application for Membership has been approved at a General Meeting or at a meeting of the Executive Committee”. “Aboriginal” is defined in clause 3 of the constitution to mean a “person who is a member of the Aboriginal race of Australia or a descendant of an Indigenous inhabitant of the Torres Strait Islands”.
57 Clause 13 provides for the executive committee and office bearers of the Association. The powers of the executive committee are set out in clause 14. Clause 15 provides for the administration of the Association and states the executive committee shall appoint the chief executive officer who will manage the Association. Clause 15(2) provides the chief executive officer shall be an Aboriginal person.
58 Clause 30 of the constitution provides for the common seal of the Association. The clause says every document to which the common seal is affixed shall be countersigned by the president and secretary of the Association, or any two other persons as the executive committee shall appoint for that purpose. The clause also states the way in which the common seal shall be described when affixed to a document.
59 Clause 34 of the constitution provides that the funds of the Association shall be applied in carrying out its objects.
60 Clause 37(2) provides that upon winding up or dissolution any remaining property or money after the satisfaction of debts and liabilities shall not be paid to or distributed amongst members of the Association, but shall be transferred or paid to another company, institution or association having objects similar to the Association and one which prohibits distribution of funds or assets to its members, provided that it satisfies the requirements of Item 81(1)(c) of the First Schedule to the Sales Tax (Exemptions and Classifications) Act and is an approved company, institution or association under s78(1)(a) of the Income Tax Assessment Act.
61 The rest of the constitution is not relevant to an understanding of the appellant for the purposes of the appeal.

(b) The Contract
62 The contract has two unnumbered preliminary clauses and then 27 numbered clauses. There are two schedules to the contract.
63 The two preliminary unnumbered clauses are:-
“What is this Contract about?
A. The Commonwealth wishes to engage organisations to provide the Services with the aim of improving the access of Indigenous Australians to high-quality and culturally appropriate legal aid services, so that they can fully exercise their legal rights as Australian citizens.
B. The Provider has fully informed itself about the Services and has submitted a response to the Legal Services Contract Request for Tender dated 13 November 2004 (‘the RFT’).
C. The Commonwealth has agreed to engage the Provider to provide the Services upon the terms and conditions contained in this Contract.

Terms and Conditions
In consideration of the mutual promises contained in this document, the parties to this Contract agree as follows …”.

64 At the end of the inverted commas in the “Terms and Conditions” clause the numbered clauses commence, starting with a dictionary as clause 1.1.
65 In clause 1.1 “Services” is defined to mean:-
“a. the activities described in clause 3; and
b. any other obligations that relate to the activities referred to in paragraph a
that the Provider is required to perform under this Contract.”

66 Clause 2 of the contract provides that unless terminated or brought to an end earlier, the contract is in force for three years from the commencement date, which is defined in clause 1.1 to mean 1 July 2005 unless otherwise agreed in writing. Clause 2 also provides that the department at its discretion may offer to extend the contract for a further period or periods of up to three years.
67 Clause 3 of the contract is headed “Services”. Although a little lengthy, it is appropriate to set out clauses 3.1 and 3.2 in full, as follows:-
“3. Services
3.1 The Provider must:
a. assess whether each person applying to the Provider for provision of legal assistance under this Contract (applicant):
1. is an Eligible Client; and
2. meets the requirements of the Means Test;
b. ensure that the following Services are made available, according to tables 2 to 4 inclusive specified in Item A of Schedule 1 [Services], from the Service Outlet(s) and in the Geographical Unit(s) for each year of the Contract Period:
1. Information, initial legal advice, and minor assistance and referral, delivered in an appropriate format, including by:

A. face-to face contact on a Provider’s premises;

B. telephone, using a 1800 reverse charge number;

C. outreach arrangements, including through field officers;

2. Duty lawyer assistance;

3. Legal casework services, including representation and assistance, covering criminal, civil and family law matters; and

4. any other activities agreed between the parties in writing from time to time; and

c. in providing the Services, give first priority to Eligible Clients whose circumstances fall within one or more of the following categories:

1. the person may be detained in custody;

2. there is a real risk to the person’s physical safety;

3. cultural or personal well being is at risk;

4. a family member of a person who died in custody seeks representation at an inquiry into the death, unless other appropriate assistance is readily available for that person; or

5. the client would be significantly disadvantaged if assistance is not provided.

3.2 When providing the Services, the Provider must:
a. comply with the conditions, priorities, procedures and other requirements specified in the Policy Directions;
b. ensure that the Services are provided in an appropriate and culturally sensitive manner;
c. ensure that the Services are delivered in the most efficient and effective manner possible;
d. ensure that the Services are of the highest possible quality and delivered in accordance with the Service Standards; and
e. effectively publicise, to the Department’s satisfaction, the existence of its complaints policy and the mechanisms for managing complaints about the Services.”

68 The expression “eligible client” is defined in clause 1.1 and generally means an indigenous person. The expression “means test” is also defined in clause 1.1 to mean “the procedures specified in section 7 of the Policy Directions to identify the relatively small minority of Indigenous people who have the personal means to finance their own legal aid assistance without suffering undue hardship”. As was the evidence before the Commissioner, this was a very small minority of the clients of the appellant.
69 The expression “Policy Directions” is defined in clause 1.1 to mean the “Policy Directions for the Delivery of Legal Aid Services to Indigenous Australians (including all appendices) at Schedule 2 of this Contract as amended and notified to the Provider by the Department from time to time”. This is the policy directions document. Clause 3.2 of the contract incorporates the policy directions document by reference, by stating that the provider must when providing services “comply with the conditions, priorities, procedures and other requirements specified in the Policy Directions”.
70 Clause 3.1(b) refers to the services set out in tables in Schedule 1 to the contract. Table 1 sets out as the geographical unit, the State of Western Australia. The table also lists as “service outlets”, Perth and 15 cities and towns as full-time service outlets and Fitzroy Crossing as a part-time service outlet. Tables 2, 3 and 4 set out the services to be provided. There is a breakdown of the number of clients/cases to be handled in each of the metropolitan, regional and remote areas. There are three different types of services listed for each of the metropolitan, regional and remote areas. These are “Information, initial legal advice, minor assistance and referral”; “Duty lawyer assistance”; and “Legal casework representation and assistance”, comprised by “Criminal law cases”, “Family law cases”, and “Civil law cases”. There is also a list of the total minimum number of clients/cases to be handled in a separate column headed “Volume of services”. As an illustration of the information contained in table 2, for criminal law cases for 1 July 2005 – 30 June 2006 there is as a minimum number of clients/cases to be handled of 9100 in metropolitan, 3816 in regional, and 8984 in remote, providing a total volume of services of 21900.
71 Tables 3 and 4 provide the same information about services for the years 1 July 2006 – 30 June 2007 and 1 July 2007 – 30 June 2008. The tables are in the same format and indicate a gradual increase in the minimum number of clients/cases to be handled.
72 Clauses 3.3 – 3.13 set out other things which the appellant must do under the contract, including the assessment of applicants and provision of services, documentation to be kept, liaison with the contract manager and responsibility for the performance of the services.
73 Clause 4 of the contract sets out the department’s and appellant’s obligations in relation to fees. Clause 4.1 provides that subject to clause 4, payment of fees by the department will be in the instalments specified in clause 1, Item B of Schedule 1. Item B sets out a table which provides for how fees will be paid. The instalments are to be an establishment payment and then monthly services payments (in arrears) for the three years of the duration of the contract with each year having 12 payments. For the establishment payment the invoice date is the commencement date. For the monthly service payments the invoice date is the last day of each month during the contract period, starting from the end of the first month after the commencement date. The establishment payment fee is $1,448,441.00. The 12 payments for the first year are $482,813.50. The 12 payments for the second year are $651,654.08. The 12 payments for the third year are $698,153.25. The table sets out that the total contract value is $23,439,890.96. Item B also provides that the fees will be paid by electronic transfer to the stated bank account of the appellant.
74 Clause 4.2(b) provides that the department may adjust the fees annually during the contract period in line with indexation rates.
75 Clause 4.3 provides that the due date for payment of the fees will be 30 days after receipt of a correctly rendered invoice by the department.
76 In clause 4.5 there is set out an obligation for the appellant to submit an invoice to the department within 14 days of the “invoice date specified in clause 1, Item B, of Schedule 1 [Fees]” for each instalment of the fees. Clause 4.6 sets out details which must be included in the invoices submitted. One of these is the inclusion of any requirements specified in the GST Act in relation to tax invoices. Tax invoices is defined in clause 1.1 of the contract to have the same meaning as it has in the GST Act.
77 Clause 4.8 provides the department with rights to defer, reduce, refuse or reclaim payments of the fees in circumstances including the appellant not completing or delivering in the manner required under the contract, that part of the services to which the instalment relates.
78 Clauses 4.9 – 4.13 are about taxes, duties and government charges.
79 Clause 5 and other clauses set out other obligations of the appellant. For example, clause 5 is about the provision of nine listed types of reports to the department. The clause also includes a requirement to maintain records. There is also the requirement for fraud prevention (clause 12), a complaints policy (clause 15), audit and access (clause 16), insurance (clause 17), a no subcontractors clause (clause 18), and notification of changes to the structure of the appellant (clause 19).
80 Clause 11 is about the termination of the contract. Clause 11.1 provides the department may, at any time by notice, terminate all or part of the contract immediately “for any reason”.
81 Clause 11.2 states that as a consequence the appellant must stop or reduce work as specified in the notice; take all available steps to minimise loss resulting from the notice; if requested by the department provide all reasonable assistance necessary to assist the department and/or any incoming providers designated by the department to deliver the services that the department has asked the appellant to stop providing with a minimum of disruption to clients; and to continue to work on any part of the services not affected by the notice. There are subclauses in clause 11 about the consequences of the issuing of a notice under clause 11.1.
82 Clause 11.6 also sets out the consequences if the appellant fails to satisfy any of the terms and conditions of the contract. It provides for sanctions which the department may apply which includes the termination of the contract, suspension of parts of the contract, variation to fees, services, geographical units or the volume of services.
83 Clause 20.1 states the appellant “acknowledges that it is not by virtue of this Contract an officer, employee, partner or agent of the Department, nor does the Provider have any power or authority to bind or represent the Department”.
84 Clause 27 is entitled “Transition”. It provides for co-operation with other organisations providing services for the Commonwealth which are the subject of the contract; the claiming of eligible fees accumulated during the contract period after its completion and at the cessation of the contract period including any extension of the period the appellant complying with any directions from the department about transferring clients to another provider while ensuring continuity of services.

(c) The Policy Directions Document
85 This is a detailed document comprising 88 pages, and as stated was incorporated into and annexed to the contract.
86 Paragraph 1 is headed “Introduction”. Paragraph 1.1 sets out that Aboriginal and Torres Strait Islander people experience higher rates of adverse contact with the justice system, are incarcerated at significantly higher rates than non-indigenous people, and are “one of the most profoundly disadvantaged groups in Australian society …”. Paragraph 1.2 provides that as part of a “broader strategy designed to address both the causes and the effects of Indigenous disadvantage, the Attorney-General’s Department (the Department) administers a number of inter-related programs in the broad field of Law and Justice”. There is then set out a number of programs including, as the subject of the policy directions the “National Program of Legal Aid for Indigenous People”. The objectives of this program are set out in paragraph 1.3 as follows:-
“Objectives

1.3 The primary objective of the Legal Aid for Indigenous People program is to improve the access of Indigenous Australians to high-quality and culturally appropriate legal aid services, so that they can fully exercise their legal rights as Australian citizens. It is the role of other programs and policy strategies - administered variously by the Department, other Commonwealth agencies and State and Territory Governments - to deal with the underlying sources of Indigenous disadvantage and thereby to reduce the incidence of adverse contact with the justice system. The leaders of all Australian Governments have committed themselves to a program of strategic policy action designed to reduce the level of Indigenous disadvantage in Australian society.” (Footnote omitted)

87 Paragraphs 1.4 – 1.7 of the policy directions document were quoted in the reasons of the Commissioner. They are:-
“Legal Aid Services Program
1.4 Under the grant arrangements to be gradually phased out from 1 July 2005, the Department has provided grant funding of some $42.9m annually to a national network of 25 Aboriginal and Torres Strait Islander Legal Services (ATSILS). This network has delivered legal aid services at some 94 separate service sites across Australia, and in 2002-03 provided legal representation to 69,292 Indigenous people in 113,698 case and duty matters. Grant funding to ATSILS has been provided on an annual basis and has been subject to a range of specified terms and conditions, including compliance with the terms of a Legal Services Policy Framework.
1.5 The former Aboriginal and Torres Strait Islander Commission (ATSIC), ATSIS and the Department have pursued a series of reforms to Indigenous legal aid services since 1996. The primary objective of these reforms has been to improve both the quality and efficiency of service delivery, to the ultimate benefit of Indigenous clients. Among other reforms, changes have been made to the targeting of legal aid services, to the service standards to be met by legal service providers, and to arrangements for data collection, monitoring and evaluation.
1.6 In line with broader Government policy, an important feature of the reform process has been a commitment to contestability and competitive tendering for legal aid services. The prime objective here is to better prioritise and target available resources, to ensure that services are responsive to established policy priorities and community needs, and to provide the best possible quality of service to individual clients. Related objectives are to strengthen the accountability of service providers for the quality of services delivered and outcomes achieved, and to provide greater continuity and funding certainty to service providers than annual grant funding arrangements have allowed.
1.7 From 1 July 2005 the program of grant funding to ATSILS will gradually be replaced by a program under which legal aid service providers are selected by means of a competitive tender and engaged by the Department under contract for a three-year funding period. The Exposure Draft of a Request for Tender was released in March 2004, providing information about the tendering and contracting process and inviting comments and feedback from interested parties.” (Footnote omitted).

88 The policy directions document deals with eligibility for assistance, priorities for assistance, geographical definitions of remoteness, relationships with other service providers, means testing and client contributions, recovery of costs, managing conflicts of interest, administrative requirements, review of decisions and performance and accountability requirements.
89 In paragraph 4 the services to be provided are referred to. The scope of the services in this paragraph are consistent with the contract. Paragraph 4.2 provides for the exercise of control over costs incurred in an individual case, having regard to the complexity of the case, the potential consequences for the client, and the relative needs of other applicants for assistance.
90 The administrative requirements set out in paragraph 10 refers to the maintenance of client files, general records and accounts.
91 Paragraph 11 provides for a set of procedures to give an applicant for legal assistance a process to seek the review of any decision made by the appellant directly relating to that person. The review procedure must involve both an internal and external review.
92 Paragraph 12.1 provides that the appellant must meet the various performance and accountability requirements laid down in the contract, including those described, relating to reporting, data collection, service standards audits, performance monitoring, client satisfaction surveys and program evaluation and review.
93 There are 11 policy directions annexed as appendices to the policy directions document. They are entitled respectively, “Service Standards”; “Sample Application Form for Indigenous Legal Aid”; “Means Test – Schedule of Client Contributions”; “Progress Reports”; “Data Reports”; “Client Satisfaction Survey”; “Annual Accrual Budget”; “Income and Expenditure Reports”; “Annual Report and Audited Financial Statements”; “Certificate of Compliance” and “Due Dates for Submission of Reports”.

(d) The Policy Framework Document
94 The policy framework document dated July 2005 refers to the purpose of funding, by the department, of Aboriginal and Torres Strait Islander Legal Services (ATSILS). Paragraph 1.4 of the policy framework document is:-
“1.4 The Attorney General’s Department (AGD) requires ATSILS to adopt the Policy Framework as part of the 2005-2006 Program Specific Conditions for Legal Aid Service Program Funding Agreements (PFA). This Policy Framework is deliberately designed to encourage discretionary application of its guiding principles. Therefore there is no need for individual ATSILS to vary the guidelines to suit particular circumstances.”

95 The purpose of the funding is set out in paragraph 2.1 which is as follows:-
“2. PURPOSE OF FUNDING

2.1. ATSILS must use PFA funds:

a. to strive to:
i. promote social justice for Indigenous Australians;
ii. ensure that Indigenous Australians enjoy their legal rights, are aware of their responsibilities under the law and have access to appropriate representation;
iii. reduce the disproportionate involvement of Indigenous Australians in the criminal justice system; and
iv. promote the review of legislation and other practices which discriminate against Indigenous Australians.

b. by:
i. providing legal aid and legal aid related services to Indigenous Australians;
ii. in the relevant region; and
iii. in accordance with all other terms which apply to the PFA.”

96 The policy framework document also contains paragraphs about clients, priorities, conflicts of interest, brief out arrangements, notice of decisions and review and appeal procedures, disbursements on in-house files, costs awarded against assisted persons and service provision issues. As an attachment it has four standards. They are professional practice requirements; planning, monitoring and evaluation; access and equity; and complaints, appeals and client feedback.

(e) The RFT
97 The RFT is comprised by four parts and seven appendices. Including appendices, the document is 257 pages long.
98 The foreword to the RFT says that “the Australian Government is seeking to purchase a range of legal aid services for Indigenous Australians which: …”. There is then listed in dot point form seven characteristics. These include characteristics about quality, ethical standards, cultural sensitivity, the promotion of the objectives “in the policy directions”, co-ordination of services and offering “excellent value for money”. Appendix A to the RFT is a document entitled “Policy Directions for the Delivery of Legal Aid Services to Indigenous Australians” published by the department and dated November 2004. It is clearly an earlier version of and at least similar to the policy directions document.
99 In the key information section of the RFT, which is after the foreword, it again refers to the “purchase” of services. The same applies to paragraph 1.1 headed “Preliminary”. In paragraph 1.5 the services are described as “legal aid services for Indigenous Australians”.
100 In paragraph 1.6, with respect to the term of the services, there is reference to the “contracts arising from these purchasing arrangements”. A copy of a draft contract is appendix E. Paragraph 2.1 provides for the services which the department wishes to “purchase” under the contract.
101 In paragraph 2.2 the objective of the services is described in terms very similar to the policy directions document. Paragraph 2.7 sets out the funds available for the “purchase” of services with an allocation breakdown between Victoria and Western Australia. For Western Australia the total funding allocation is $23,439,891.00.
102 The RFT also deals with the conditions of tender, the tender proposal, accompanying material and the responses to selection criteria.
103 In paragraph 3.2 the status of the RFT is described as not being the subject of any process contract or any contractual obligations and no tender will be taken to have been accepted unless and until the department and the tenderer have executed a contract.
104 Paragraph 3.6.5 sets out the selection criteria as to which the highest ratings are for the capacity to deliver high quality and efficient legal aid services and the capacity to provide accessible and culturally sensitive legal services to indigenous Australians.

(f) The Media Release
105 The media release referred to the purpose of the tendering process, the amount of the finance to be provided, and that selected providers were expected to start delivering services on 1 July 2005. The purpose of the process was then described, in terms not inconsistent with those referred to earlier.

(g) 2005 Annual Report
106 In the appellant’s Annual Report for 2005, Mr Eggington in his report referred to the tender process culminating in the signing of the contract and the operation of the appellant under the new arrangements from 1 July 2005. Mr Eggington referred to the contract resulting “in some changes to the way we do business, including the means testing of potential clients, policy changes to ensure services to rural and remote areas are prioritised and an expected increase in the representation of women and children”. He also referred to the positive aspect of winning the tender which was that the appellant is “no longer subject to the many restrictions of being a government grant recipient. The winning of the public tender in our own right has given us the ability to create more flexible ways to manage the organisation. In some aspects the tender has also given us a clearer path on what services we are expected to provide. We are no longer expected to ‘be all things for all people’.”

(h) 2006 Annual Report
107 In the appellant’s Annual Report for 2006, Mr Eggington in his report said that after the winning of the public tender the “most fundamental change has been the positive shift from annual funding cycles to the signing of a three-year contract. This consolidation has given [the appellant] a level of security that could never have been realised under the previous funding regime. This financial security has given us greater flexibility in managing the service and means that we are now equal partners within the contract. This contract has provided a level of funding that has enabled us to fulfil a long time commitment to establishing an office in the remote township of Warburton and identifying several other country areas for [the appellant’s] offices. Service delivery to rural and remote areas is a priority of the Commonwealth Government. We have been able to put more resources into services for women and children with a dedicated team working in the Children’s Court and the allocation of two Women’s Contact Officers.” Other benefits arising out of the appellant being the successful tender are also described.
108 We will next say something about the nature of the appeal, the jurisdiction of the Commissioner at first instance and the Full Bench on appeal and the issue of the onus of proof. We will then discuss the Commissioner’s reasons for decision.

10. Nature of the Appeal
109 The determination of the preliminary issue depended on whether the appellant was a trading corporation. To decide this question the Commissioner needed to understand the law about what a trading corporation and trading is and then apply that to the facts. Whether the question, overall, is one of law or fact, or mixed law and fact is a vexed question. (See Vetter v Lake Macquarie City Council (2001) 202 CLR 439 and BHP Billiton Iron Ore Pty Ltd v CFMEU (2006) 151 IR 361 per Le Miere J at [103]-[107]). It is not, however, one which needs to be decided by the Full Bench because appeals to the Full Bench may be grounded on errors of law or fact.
110 The appeal ground, referred to earlier, asserts an error of characterisation of the contract and insufficient weight being placed on the contract by the Commissioner. It is, as part of this contention, asserted the Commissioner erred in his approach to deciding the relevant question and the conclusion reached.
111 The determination of the preliminary issue by the Commissioner did not in any sense depend upon an assessment of the credibility of competing versions of facts by witnesses. Indeed, as the Commissioner quite accurately recorded in his reasons, there was very little if any, dispute between the parties about the facts. The area of dispute was about the conclusion which the Commissioner ought to draw from the evidence which was before him.
112 The Full Bench is fully able to consider and determine whether the Commissioner erred in his approach to the issue, the construction and weight given to the contract and other documents, and in deciding whether the appellant is a trading corporation.
113 The appeal is accordingly analogous to the type of appeal described by a majority of the High Court in Warren v Coombes and Another (1979) 142 CLR 531 at 551, quoted with approval by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy (2003) 214 CLR 118 at [25]. The relevant passage of Warren v Coombes and Another is as follows:-
"[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it."

114 Their Honours in Fox v Percy in the same paragraph also quoted from the majority in Warren v Coombes and Another where their Honours said that the approach they described in the previous paragraph quoted was “not only sound in law, but beneficial in ... operation”. (See Warren v Coombes and Another also at page 551).
115 This approach is consistent with the obligations of an appeal court in conducting a re-hearing. In Fox v Percy at page 124, paragraph [20], Gleeson CJ, Gummow and Kirby JJ referred to an appeal as being a creature of statute. A number of authorities were cited for this proposition, commencing with Attorney-General v Sillem (1864) 10 HLC 704 at 720-721 (11 ER 1200 at 1207-1208).
116 Their Honours also referred to the observations made by Mason J in Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 619-622 about four different types of appeals. Two of these types of appeals were an appeal by re-hearing on the evidence before the trial court and an appeal by way of re-hearing on that evidence, supplemented by such further evidence as the appellate court admits under a statutory power to do so.
117 The contents of s49(4) of the Act would seem to lead to the conclusion that an appeal before the Full Bench is of the first type just mentioned. Despite this, decisions of the Full Bench, including fairly recent decisions, have concluded that an appeal before the Full Bench may be supplemented, exceptionally, by evidence which was not before the Commission at first instance. (See CFMEU v Perrott (2002) 83 WAIG 17 and FCU v George Moss Ltd (1990) 70 WAIG 3040). Whether this is correct need not be considered in the present appeal.
118 Both of the parties to the present appeal submitted that it could be disposed of in accordance with the principles just set out, and summarised by a majority of the High Court in Warren v Coombes and Another. Additionally, the Minister did not suggest any different approach.
119 It is therefore on this basis that the present appeal should be determined by the Full Bench.

11. Jurisdiction of the Commission at First Instance
120 It was not in contest that the Commission’s jurisdiction to hear and determine the substantive claim depended on the resolution of the issue of whether the appellant was a trading corporation. No-one has submitted the Commission did not have jurisdiction to attempt to decide this jurisdictional question. In our opinion the Commission had this jurisdiction for the reasons set out by the Full Bench in Crown Scientific Pty Ltd v Clarke (2007) 87 WAIG 598.

12. Onus of Proof
121 There was some discussion at the hearing of the appeal as to whether any party had the onus of proof in the jurisdictional question which had to be determined by the Commission.
122 The appellant asserted it was a trading corporation and therefore the Commission did not have jurisdiction, but this does not necessarily mean the appellant has an onus to establish that fact. Some consideration of an analogous question was provided by Barwick CJ in R v Judges of the Federal Court of Australia and Another; ex parte The Western Australian National Football League (Inc) and Another (Adamson) (1979) 143 CLR 190 at 202-204 and in R v Heagney and Another; ex parte ACT Employers Federation and Others (1976) 137 CLR 86 at 89.
123 It was conceded by the appellant that if a party to an application before the Commission which was a corporation, made a bare assertion that it was a trading corporation, the Commission would not then have before it sufficient evidence to decide the jurisdictional question. The appellant’s counsel therefore submitted that there was at least an evidential onus upon such a party to place before the Commission sufficient evidence to allow it to determine, as a question of fact, the issue of whether that party was a trading corporation. The position of the Commission in a situation where there was before it some, but in the opinion of the Commission insufficient, evidence to allow it to determine the jurisdictional question was also discussed with counsel.
124 The Minister submitted that in such a situation the Commission had the power to and should seek additional evidence and direct the parties to provide it. In support of this, counsel for the Minister, after the hearing and as invited by the Full Bench, cited the decision of the Industrial Appeal Court in Commissioner of Police v Civil Service Association of WA Incorporated [2002] WASCA 19.
125 Although this issue may become relevant in another application before the Commission, or an appeal before the Full Bench, it is not necessary to further consider in the present appeal.

13. The Commissioner’s Reasons
(a) The Parts of the Commissioner’s Reasons
126 The Commissioner’s reasons for decision comprise 45 paragraphs. They may be divided into the following parts:-
(a) Introduction and procedural background (paragraphs [1]–[2]).
(b) Contentions of the parties (paragraphs [3]–[7]).
(c) Summary of the evidence (paragraphs [8]–[18]).
(d) Consideration of the meaning of a trading corporation (paragraphs [19]–[21]).
(e) Consideration of whether the appellant is a trading corporation (paragraphs [22]–[44]).
(f) Conclusion (paragraph [45]).

127 It is the Commissioner’s reasoning and conclusion in paragraphs [19]-[45] which are material to the appeal.

(b) The Commissioner’s Statement of Principles
128 At paragraph [20] the Commissioner said:-

“20 Whether a corporation is a trading corporation for these purposes is a question of fact and degree. There are a number of guiding principles which have fallen from several judgments of the High Court to which reference should be made in order to determine whether in any particular case, a corporation can be so characterised. If trading activities form a significant or substantial part of a corporation’s activities, and trading is not precluded by the organic rules of the corporation, then the conclusion that the corporation is a trading corporation is one that is open: R; ex parte The Western Australian National Football League (1979) 143 CLR 190 per Barwick CJ at 208; per Mason J at 233. It has been said that “It is the acts of buying and selling that are at the very heart of trade: as Lush J said in Higgins v Beauchamp [1914] 3 KB 1192 at 1195, “a trading business is one which depends on the buying and selling of goods”. The word “trade” was said by the Lordships in Commissioners of Taxation v Kirk [1900] AC 588 at 592, to mean primarily “traffic by way of sale or exchange or commercial dealing”. The Shorter Oxford English Dictionary gives, as meanings of ‘trading’, the ‘carrying on of trade; buying and selling; commerce, trade, traffic’: E v Australian Red Cross (1991) 99 ALR 601 per Wilcox J at 632.”

129 The Commissioner next cited R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533 per Stephen J at 569-570 to support the contention that the attainment of profit is not necessary for a corporation to be a trading or financial corporation. The Commissioner also said the motive or object of a corporation does not necessarily condition the conclusion as to whether it is a trading corporation. ([21])
130 The Commissioner cited State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 per Mason, Murphy and Deane JJ at 303-304 to support the contention that trading activities do not cease to be trading because they are entered into in the course of carrying out some other primary undertaking, not characterised as trade, as long as the carrying on of that undertaking requires or involves the engaging in trading activities. ([21])
131 The Commissioner also cited Quickenden v O’Connor (2001) 184 ALR 260 and said it involved a general discussion of these principles. ([21])
132 Neither party, nor the Minister, took issue with the Commissioner’s discussion of these principles. All counsel agreed with the Full Bench, however, that the Full Bench was not bound by what the parties considered or agreed was the appropriate legal principles to apply. The legal principles will be considered later in these reasons.

(c) The Commissioner’s Application of Principles to the Facts
133 At paragraph [22] the Commissioner said there was little contest about the facts. The Commissioner said the issue to be resolved was how the activities of the appellant, the focus of the inquiry, are to be characterised. The Commissioner referred to the appellant’s contention that the provision of legal services to indigenous persons in this State, in return for which the Commonwealth pays the appellant, is trading. This was contrasted to the submission of counsel for the respondent that the activities of the appellant were a gratuitous provision of welfare services, with the means by which those services were funded being a matter of form and peripheral to the essential inquiry to be undertaken by the Commission.
134 The Commissioner referred to the emphasis placed by both counsel on the reasons of Wilcox J in E v Australian Red Cross (1991) 99 ALR 601. The Commissioner summarised the issue in that case and quoted from the reasons of Wilcox J at page 343. The Commissioner then referred to the conclusion reached by Wilcox J. The Commissioner said it was not the essential, primary or dominant activity of the Australian Red Cross which led to the conclusion that it was a trading corporation. It was the ancillary activities, being the sale of goods through retail shops and the sale of other items and services that constituted trading.
135 At paragraph [26] the Commissioner said the question must focus on the activities of the appellant at the time of the respondent’s dismissal. The Commissioner posed the question of whether the appellant at that time engaged in significant or substantial trading activities such that it could be described as a trading corporation.
136 In paragraph [27] the Commissioner summarised the appellant’s argument again. In paragraph [28] the Commissioner either reiterated some of the respondent’s arguments or adopted them. The latter construction was contended for by the appellant. This will be later considered.
137 At paragraph [29] the Commissioner restated the question to be determined. The Commissioner said in this paragraph:-
“In this case it is common ground that except in a very small minority of cases, where there may be some contribution made by clients to costs, the [appellant] provides its legal aid services to the Indigenous community free of charge. It does not sell its services as a commercial law firm would do.”

138 In the same paragraph the Commissioner referred to “one view” that the appellant does not sell anything to its clients but rather the Commonwealth “‘purchases’ the provision of legal services to the Indigenous community via organisations such as the” appellant. The Commissioner referred to there being in effect a tripartite arrangement between the Commonwealth, the appellant and the clients of the appellant, on whose behalf the services are delivered.
139 The Commissioner then referred to an argument that it could be said that the system of annual grants previously in place, through ATSIC, also involved, at least indirectly, the Commonwealth purchasing the provision of such services albeit in a different form. That is the Commonwealth was “funding an organisation to provide a service that it did not provide directly itself”.
140 The Commissioner then referred to what was described as many examples of arrangements where governments fund programmes for particular groups in the community which deliver those programmes. The Commissioner said depending on the particular arrangements entered into, some of the activities may be regarded as trading and some not. Some specific examples were referred to.
141 At paragraph [31] the Commissioner said an issue arose as to whether the way in which the provision of the appellant’s services to the indigenous community were financed, and any surrounding conditions or form of that financing, can fundamentally dictate the characterisation of the appellant’s activities. The Commissioner said this was so because it cannot be said that the appellant’s “sells” its legal services to members of the indigenous community, and “certainly, they do not buy them”.
142 The Commissioner then referred to the objects of the appellant set out in its constitution, to the effect that it is established to promote the welfare of members of the Aboriginal community in their dealings with the justice system administered by laws of the Commonwealth and the State. The Commissioner said that this has an overall welfare or charitable type of flavour to it. The Commissioner then referred to the appellant’s registration as a Public Benevolent Institution for taxation purposes but said that does not mean the appellant could not be a trading corporation, as long as its trading activities were not prohibited by its constitution and the trading activities were a significant or substantial component of its overall activities.
143 At paragraph [32] the Commissioner referred to the tender process and said it was clear the appellant did not bid for the contract on the basis of a competitive price tender. The Commissioner said the Commonwealth set the amount of funding available over the term of the contract. “The total sum payable is divided into three funding years and payments are made in equal monthly instalments”. The Commissioner said this was clear from paragraph 2.7 of the RFT. The Commissioner also said it was not insignificant that the monies available are described in the RFT as “funding”.
144 The Commissioner then noted other aspects of the documentary evidence. The Commissioner referred to and quoted paragraphs 1.4–1.7 of the policy directions document, which referred to the “Legal Aid Services Program”. ([32]).
145 The Commissioner then quoted from paragraph 2.2 of the RFT. ([33]). He then referred to the policy framework document and quoted paragraphs 1.1 to 1.6. ([34]).
146 At paragraph [35] the Commissioner said the policy framework document set out the purpose of the Program Funding Agreement (PFA) funds and the targeted use to which the funding is to be directed. The Commissioner said it was clear from these provisions that the Commonwealth intends that the PFA is to be very specifically targeted, consistent with its overall programme objectives and be the subject of tight controls.
147 Finally, the Commissioner referred to the media announcement. ([36]). A passage of the media announcement was quoted.
148 The Commissioner then reasoned at paragraph [37] as follows:-
“37 From the documentary evidence before the Commission, it is clear that the provision of monies by the Commonwealth to the [appellant] is a part of the Commonwealth’s overall program of Legal Aid Services for Indigenous Australians. It is related to a number of other programs, which are set out at clause 2.2 of the tender documents and they include Law and Justice Advocacy, Prevention, Diversion and Rehabilitation and Family Violence Prevention Legal Services. Additionally, from the tender documents, the Commonwealth’s primary objective in the Legal Aid Services program is stated to “improve the access of Indigenous Australians to high-quality and culturally appropriate legal aid services, so that they can fully exercise their legal rights as Australian citizens.” That this is a social welfare objective is in my opinion, undeniable.”

149 At paragraph [38] the Commissioner referred to the contract. The Commissioner said the provision of legal services to the indigenous community was to be targeted in ways perhaps different to the arrangements of the past. The Commissioner said, however, he did not consider the detail of the funding and service arrangements as being inconsistent with the activities undertaken by an organisation that is not a trading corporation.
150 Paragraphs [39] and [40] of the Commissioner’s reasons were as follows:-
“39 As to the terms of the funding contract itself, I do not consider many of the provisions of the contract relied on by the [appellant] as conclusive of a commercial contract only. Provisions as to GST, insurance, both professional indemnity and public liability, are of themselves unexceptional. The engagement of legal practitioners requires the [appellant] by law, to have in place mechanisms imposed by the Legal Practice Act 2003. Also the fact that the arrangement may be terminated for breach is again not decisive. Mr Eggington, in his testimony, referred to the prior grant funding arrangements also being able to be terminated for a breach of conditions.
40 The fact that there is some limited means testing of clients is in my opinion consistent with the Commonwealth’s objective of greater targeting of the services and usage of the funding available being put to the best use. Many government assistance programs are means tested; for example, family support. Whilst the provision of invoices may suggest some commerciality, in substance they appear to me to be the administrative mechanism by which the monthly allocation of funding is dispersed to the [appellant] in accordance with the agreement. The [appellant] does not, in reality, “charge” fees to the Commonwealth for the services it provides.”

151 At paragraph [41] the Commissioner referred to a submission by the respondent that there were features of the arrangement that would appear to be at odds with the purely commercial delivery of a service. An example in the policy directions document in paragraph 11 was for the appellant to have an internal and external review mechanism so that a client could appeal against certain decisions of the appellant. The Commissioner said this was “consistent with general administrative law principles and would be unusual to see in a commercial contract”.
152 Paragraph [42] of the Commissioner’s reasons was:-
“42 The funding for the [appellant] over the three year contract is in my view, clearly directed towards a social welfare objective in improving the access to and participation in legal services for Indigenous people who are involved in the civil and criminal justice system. There is no “on selling” of those services to Indigenous clients of the [appellant]. This is not a case where a legal services provider is contracting to a client to provide legal services to it on commercial terms the price of which the provider sets. In this case the Commonwealth has a pool of funding available which it has allocated to the provision of legal services to the Indigenous community as a part of its general legal aid programme for such activities. Detailed provision is made for how that funding is to be targeted consistent with the Commonwealth’s programme objectives set out in the evidence before the Commission. This funding allocation is part of the Commonwealth’s wider Legal Aid Services programme for the Indigenous community. In effect, in my opinion, the [appellant] bids for the available funding from the government. Presumably also, and by inference from the evidence, the provision of the services and the engagement of the staff of the [appellant] is entirely dependant on the continuation of this funding source.”

153 At paragraph [43] the Commissioner said, by reference to the documents that the “funding arrangements for the provision of legal services to the Indigenous community seems to be a further refinement of existing funding arrangements. The Commonwealth describes the process in parts of the documents as a further “reform” of pre-existing funding arrangements. In my opinion the financial arrangement between the Commonwealth and the [appellant] is a variation of a funding model by which the Commonwealth clearly wishes to see improvements in the targeting of service delivery and greater accountability by the provider of these services. It does not fundamentally alter the character of the activities of the [appellant] itself.”
154 At paragraph [44] the Commissioner said that the characterisation of the appellant’s activities as argued by the respondent was to be preferred. This in effect incorporated by reference the submissions made by the present respondent to the Commissioner which he had earlier summarised in paragraphs [6] and [7] of his reasons. In list form they were:-
(a) The activities undertaken by the appellant were “the gratuitous provision of a public welfare service, substantially at government expense” as described by Wilcox J in Australian Red Cross.
(b) The nature of the funding arrangement, albeit in contractual terms, cannot alter the essential nature of the activities undertaken by the appellant, which do not involve activities in trade.
(c) The tender process was part of the Legal Aid Services Program and a “manifestation of one of many funding arrangements for the provision of like services throughout Australia”.
(d) The current financial arrangements do not differ greatly to the previous arrangement whereby the appellant’s activities were funded through ATSIC.

155 The Commissioner also said in paragraph [44] said that he did “not regard the provision of legal services by the [appellant] to the Indigenous community, in the terms of the activities of the [appellant], as being a commercial business, trading or mercantile activity in the sense used in the authorities”.
156 At paragraph [45] the Commissioner concluded the matter would be re-listed for the hearing of the substantive application.

14. The Submissions of the Parties on Appeal
157 At the conclusion of the hearing, on behalf of the Full Bench we thanked all counsel for the high standard of their oral submissions. It is appropriate to formally reiterate this.
158 We will set out below, in summary form, the key arguments of each of the parties and the Minister.

(a) The Appellant
159 The major arguments of the appellant were:-
(a) The Commissioner erred by not considering whether the appellant was a trading corporation from the perspective of its current activities. Instead he had considered the prior activities of the appellant by reference to the funding situation before the contract was in place; and to ask whether the contract had materially changed that funding arrangement and therefore whether the appellant was or was not a trading corporation.
(b) The prior funding arrangements of the appellant were irrelevant.
(c) The contract should have been “the beginning and the end” of the Commissioner’s consideration. This was because it showed the appellant was substantially engaged in trading activity.
(d) The appellant was so engaged because the contract involved the sale and purchase of services. The services sold were those of the appellant, in providing legal representation for indigenous people in Western Australia, in accordance with the contract. The Commonwealth, represented by the department, purchased these services by agreeing to pay the appellant in excess $23 million for their provision, over three years. Reference was made to the “Terms and Conditions” clause in the preamble to the contract, which referred to “consideration” and “mutual promises”.
(e) The activities of the appellant must be viewed by looking at their activities in agreeing to the contract and what they did because of the contract.
(f) The Commissioner erred because he effectively hived off the contract from his consideration of the appellant’s activities.
(g) The legal representation provided to indigenous persons was not “free” or “gratuitous” because the appellant, in effect, charged the department for these services. The observations of Wilcox J in Australian Red Cross at 633-634 were distinguishable from the facts of the present case, because of the presence of the contract.

(b) The Respondent
160 The major arguments of the respondent were:-
(a) Although the contract must be taken into account, the non commercial aspects of the contract should also be considered. These were emphasised by the respondent.
(b) The appellant was not in the business of providing services. The observations by Wilcox J in Australian Red Cross at 633-634, about the gratuitous provision of services with the assistance of Government funding not being trading, were entirely apposite. The legal services were “gratuitous”, as if the client satisfies the eligibility criterion, the service must be provided under the contract with no fees charged except in rare cases on the basis of means testing.
(c) Properly considered there was no price paid (or consideration in a general sense) for the activities of the appellant in providing legal representation to indigenous people. There was therefore no trading.
(d) Although, via the contract, the department exercised strict control over how the appellant performed its services, this did not transform the funding of a public welfare service into trading activity.
(e) The fact that there was a tender process leading to the awarding of the contract to the appellant by the department did not take things much further. Although a tender process is commonly used in a commercial arrangement this did not make the present arrangement commercial or provide evidence of trading activity.
(f) The same may be said of the use of the word “purchaser”, in the contract, in describing the department. The word must be considered in the context of the contract as a whole and should not be assumed to be a word necessarily denoting trading or commercial activity.
(g) To argue, as the appellant had, that the contract was the “beginning and the end” of what the Commission should have considered was an incomplete analysis and therefore unhelpful.
(h) Due to the structure of the contract, the appellant must conduct itself in a manner analogous to a public sector agency, with a “mandate to deliver public welfare services”. This was because of the provision to the appellant, under the contract, of a fixed sum of funding (contract clause 4 and table B in Schedule 1); the requirement to provide for merits review of its decisions (policy directions document paragraph 11); the requirement to adhere to information privacy principles as if an agency (contract clause 8.2); the requirement to comply with policy directions including government variations (contract clause 1.1, definition “Policy Directions”); and the services to clients cannot be withheld or provided on the basis of commercial consideration (policy directions document parts 2, 3 and 7).

(c) The Minister’s Submissions
161 The major arguments of counsel for the Minister were:-
(a) Support for the submissions of the respondent.
(b) Some provisions of the contractual documents supported the proposition that the department provided “funding” for the gratuitous services of the appellant.
(c) Examples were paragraphs 1.6 and 1.7 of the policy directions document and appendix I to it, about audited financial statements, which used the word “funding” in the context of the arrangement between the department and the appellant.
(d) The amount of money provided by the department did not of itself dictate whether the activities of the appellant were trading.
(e) This factor needed to be considered when looking at the present applicability of the eight principles distilled from authorities, in considering “the notion of a trading corporation” set out by Toohey J, when a member of the Federal Court, in Hughes v Western Australian Cricket Association (Inc) and Others (1986) 19 FCR 10; 69 ALR 660 at 20-21 (FCR), 671-672 (ALR). Counsel also quoted from pages 674 and 676 of Hughes. (Hughes had not been cited by the parties or the Minister in their outlines of submissions and was brought to their attention by the Full Bench, just prior to the hearing, for comment. Both the appellant and respondent said the “Hughes principles” remained good law, despite the fact that they were enunciated more than 20 years ago).
(f) The Minister also cited Fowler v Syd-West Personnel Ltd [1998] IR Comm 904, AIRC, McIntyre VP and Harmer v Shoalhaven Community Housing Scheme [2006] NSWIRComm 1165, Connor C, and said they supported the conclusion reached by the Commissioner. (The appellant said Fowler was distinguishable).
(g) The Minister’s counsel read from paragraph [15] of Harmer to the effect that “community based organisations” of which examples were given, would therefore “escape Work Choices”.

(d) The Appellant in Reply
162 The major arguments of the appellant in reply were:-
(a) The reference by the Minister to the passage read from Harmer was misplaced as views would differ on whether it was “unfortunate” that “Work Choices catches something”.
(b) The commercial aspects of the contract should be taken at face value.
(c) A lack of profit motive was not determinative of whether a corporation was a trading corporation.
(d) A “price” as such was not necessary for a commercial contract or “trading activity”. For example, barter would suffice. (This example was raised by the Acting President during submissions. The respondent agreed it could constitute trading.)
(e) In any event, the appellant would not be in the “business of doing what it does if it couldn’t earn money from it”. The contract remains one of the purchase of services despite the occasional reference to “funding”.
(f) There was no evidence of what a “public sector agency” was. In any event, some corporations which might be given this description had been found to be trading corporations; for example the State Superannuation Board of Victoria and the Hydro-Electric Commission of Tasmania. (See State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 and Commonwealth v Tasmania (the Tasmanian Dam case) (1983) 158 CLR 1).

15. Refinement of the Issues on Appeal
163 The disposition of the appeal, necessitates an analysis of and decision about the following issues which arise from the ground of appeal and the submissions of the parties and the Minister:-
(a) Whether any errors were made by the Commissioner in his reasoning on how to determine the jurisdictional issue, given the evidence.
(b) Whether any error in approach or misunderstanding of the nature and effect of the contract led the Commissioner to wrongly decide the jurisdictional issue.
(c) As part of issues (a) and (b):-
(i) The way in which a court should determine the question of whether a corporation is a trading corporation.
(ii) What trading and a trading corporation are.
(iii) Whether the observations made by Wilcox J in Australian Red Cross are applicable to or determinative of the issue before the Commission.
(iv) The impact of the decisions of Fowler, Harmer and Hughes, each being cases relied on by the parties and/or the Minister.
(v) The terms and effect of the contract and whether it constitutes trading.
(vi) What services the appellant engaged in, the relationship of the provision of those services to the contract and whether the provision of the services was trading.
164 Each of these issues will need to be considered. Issue (a) is determined by a critical analysis of the Commissioner’s reasons, which will follow.

16. Critical Analysis of the Commissioner’s Reasons
165 In this analysis, we will refer to the relevant paragraphs of the reasons of the Commissioner and where relevant cite the number of the paragraph in our reasons, which quoted or discussed them. The relevant paragraph number of our reasons will where convenient be set out in brackets.
166 The appellant does not complain about the Commissioner’s statement of the issues and summary of the position of the parties at paragraph [22] ([133]). The appellant also does not cavil with the Commissioner’s statement of the question in paragraph [26] ([135]). The appellant submits, however, that this is not what the Commissioner did. That is he did not focus on the activities of the appellant at the time of the dismissal and determine whether it then engaged in significant or substantial trading activities.
167 In our reasons at paragraph [136] we referred to paragraph [28] of the Commissioner’s reasons and the submission of the appellant that the Commissioner adopted the contentions of the respondent in this paragraph. In particular, the appellant focuses on and is critical of the following sentence:-
“It is said that the only change that has occurred in recent times, is to the method of funding the [respondent], which has gone from the provision of grant funding on an annual basis from ATSIC, to funding on a three yearly basis from the Commonwealth, in accordance with detailed program requirements, as a result of an open tender process.”

168 In our opinion, however, the Commissioner was not adopting the submissions of the respondent in this paragraph. This is because of the context of paragraph [28] in the reasons and also the words used by the Commissioner in the paragraph. In paragraph [27] the Commissioner outlines, once again, the present appellant’s argument. In the following paragraph he sets out the present respondent’s contentions. In paragraph [28] the words and expressions used by the Commissioner are relevantly “the applicant contends”, “submitted”, it “is said”, and the respondent’s “submission”.
169 In paragraph [137] of our reasons we have quoted from paragraph [29] of the reasons of the Commissioner. In the first sentence of this paragraph, the Commissioner restates the “question”. The appellant submitted that the statement of the question was incomplete, as it seemed to hive off the fact of the appellant’s contract with the department. We accept, with respect, this criticism of the sentence. This is because the fact and impact of the contract upon the activities of the appellant is relevant to an understanding of its activities. The activities of the appellant cannot in our opinion be reduced to simply the provision of legal services to the indigenous community. The way in which the appellant obtains its funds to provide these legal services is relevant to an understanding of its activities. This approach is consistent with the authorities which will be later referred to. It is inappropriate, however, to look at this sentence in isolation and be overcritical of it. What is more significant is whether the Commissioner erred in his overall approach.
170 In the next two sentences in paragraph [29] there is reference to the appellant, except in a very small minority of cases, providing its legal aid services to the Indigenous community free of charge. This is of course relevant to an understanding of the activities of the appellant. In the next sentence, however, the Commissioner said that it does not sell its services as a commercial law firm might do. As to this sentence, the appellant enjoins “so what”. We accept that the comparison to a commercial law firm does not of itself define the activities of the appellant, but this is not what the Commissioner reasoned.
171 In paragraph [29] the Commissioner also refers to the submission of the present appellant that the Commonwealth “purchases the provision of legal services to the Indigenous community via organisations such as the [appellant]”. The appellant is critical of the final two sentences in paragraph [29]. It submits that it reflects the error made by the Commission in looking at the past funding arrangements of the appellant and not the present situation.
172 In our opinion the past activities, including the funding arrangements of the appellant, were not irrelevant to a determination of its present activities. On the other hand, however, the past funding arrangements were not determinative of the issue. The issue was not a determination of whether the appellant had traded in the past and if so whether that situation had fundamentally changed by the present arrangements which circumscribed how the appellant received the money it did to perform legal services for the indigenous community. In our opinion however, this paragraph, on its own, does not demonstrate the error as submitted by the appellant. The Commissioner refers to what could “be said”. Also, in paragraph [31] the Commissioner clearly refers to the present financing arrangements of the appellant. The Commissioner, with respect, correctly refers to the relevance of the way in which the appellant’s services to the indigenous community are financed and any surrounding conditions or form of that financing and whether this could fundamentally dictate the characterisation of the appellant’s activities. The Commissioner then said that it could not be said that the appellant “sells” its legal services to members of the indigenous community and certainly they do not buy them. The appellant submitted that this was irrelevant given the terms of the contract. We do not accept this. The services provided by the appellant to the indigenous community are part of the activities of the appellant. If it did not sell these activities to the indigenous community, this was relevant to an understanding of whether its activities involved trading or not.
173 In paragraph [29] the Commissioner also refers to a “tripartite arrangement”. In our opinion this is an accurate description of the arrangement.
174 In the concluding sentences of paragraph [31] of the Commissioner’s reasons, summarised in paragraph [142] of our reasons, the Commissioner refers to the objects of the appellant. As will be set out later, by reference to the authorities, the objects of the appellant remain a relevant consideration to a determination of whether it was a trading corporation. As also noted by the Commissioner in this paragraph, this did not mean the appellant cannot be a trading corporation as long as its trading activities are not prohibited by its constitution and the trading activities are a significant or substantial component of its overall activities. As will be later set out, this is also in accordance with the authorities.
175 The Commissioner then commenced his discussion about the process by which the appellant entered into the contract and the terms and effect of that contract. The effect of the financing arrangement, in the context of what the appellant does, was also discussed. In our opinion, with respect, this was a correct approach.
176 The Commissioner first referred to the tender process at paragraph [32]. It was said that the appellant did not bid for the contract on the basis of a competitive price tender and also that it was not insignificant to note the monies in the tender documents were described as “funding”. In our opinion the basis upon which the appellant tendered for the contract and how the financing was to be made available under the contract, as stated in the tender documents, was not irrelevant to an understanding of the activities of the appellant. This is because they helped to determine what the appellant currently does.
177 The Commissioner in paragraph [32] also referred to the policy directions document. As the policy directions document is incorporated by reference into the contract, the Commissioner cannot be criticised for making reference to and quoting from the policy directions document. As stated in paragraph [87] of our reasons, the Commissioner quoted from paragraphs 1.4-1.7 of the policy directions document. They are in our opinion material paragraphs. They set out the background to and purpose of the present financing arrangement.
178 The Commissioner in paragraph [33] then referred to and quoted paragraph 2.2 of the “tender documents”. (This was a reference to the RFT). The paragraph refers to the description of the services to be provided pursuant to the contract to be awarded to the successful tenderer. As will be later set out, in our opinion reference to the RFT was relevant to an understanding of the arrangement between the appellant and the department.
179 In paragraph [34] the Commissioner referred to the policy framework document. Paragraphs 1.1 to 1.6 of the policy framework document were quoted.
180 As will be set out later the policy framework document is in our opinion relevant to understanding the terms and effect of the contract. Paragraph 1.2 contained a description of ATSILS (which would include the appellant) playing “a leading role” in promoting and protecting the legal rights and interests of indigenous Australians, in promoting access to justice, and in resolving many disputes. “ATSILS deliver extensive legal assistance to Indigenous Australians and undertake important welfare roles related to these legal activities”. In our opinion this description by the department of at least part of the activities of the appellant was not irrelevant.
181 The Commissioner at paragraph [35] then considered the policy framework document as setting out the purpose of the PFA funds and the targeted use to which the funding is to be directed. The Commissioner said it was clear from these provisions that the Commonwealth intends the PFA funding to be very specifically targeted consistent with its overall programme objectives, set out earlier by the Commission, “and be the subject of tight controls”. This description was not in error.
182 The Commissioner at paragraph [36] next referred to the media announcement about “the tendering process that led to the [appellant’s] funding”. Given the timing and nature of the media release, we regard this document as being only marginally relevant. In referring to the nature of a media release we mean the general understanding that a media release is often, including in the present instance, used to describe in a broad brush way the policies of the government. The way in which the Commissioner used the media release in his reasons, however, was not in our opinion demonstrative of error.
183 We have quoted paragraph [37] of the Commissioner’s reasons in paragraph [148] above. The appellant was critical of this paragraph as it was submitted the paragraph showed the Commissioner in error in again “drawing the link between the funding under the ATSIC grants and funding by the Commonwealth, the contract simply being a conduit for money rather than recognising the contract for what it was, which is a trading arrangement in its own right, or evidence of a trading arrangement”. (T34). The Commissioner in this paragraph refers to the documentary evidence before the Commission, but not the contract itself. References to the terms of the contract were very material to an understanding of the way in which the appellant was financed and whether it traded, but this was considered in paragraphs [38]-[42] by the Commissioner. We do not accept the criticism that in this paragraph the Commissioner was again drawing a link, erroneously, to the previous funding under the ATSIC arrangements. This is because all of what the Commissioner refers to in paragraph [37] are documents relevant to the present relationship between the department and the appellant and therefore the current activities of the appellant.
184 As stated, in paragraphs [38]-[42] the Commissioner refers to at least some of the terms and effect of the contract. It is relevant, in the submission of the appellant, that the Commissioner in paragraph [38] says that the “services are to be targeted in ways perhaps different to arrangements of the past”. Reference is also made in this paragraph to “changing the funding”. The Commissioner then says that he does not “consider the detail of the funding and service arrangements as being inconsistent with activities undertaken by an organisation that is not a trading corporation”. This indicates the Commissioner was considering the present situation of the appellant and not simply whether the present arrangement differed from the previous arrangement, as contended for by the appellant.
185 In paragraph [39] the Commissioner refers directly to the terms of the “funding contract”. We quoted this paragraph and paragraph [40] in our reasons at paragraph [150]. The appellant is critical of the use of “funding contract”. The appellant submitted that this was indicative of error because the contract has been relegated into the category of a funding mechanism and no more. We do not accept this criticism of the expression “funding contract”. The effect of the contract was that funds, in the sense of money, were provided to the appellant.
186 The appellant was also critical of the final two sentences of paragraph [40]. It was argued the final sentence “goes completely contrary to what the contract says”. The appellant said the effect of the contract was: “You are obliged to provide services, in return for which you get paid fees, drawn down in instalments subject to satisfactory performance” (T34). Whether this submission is correct will need to be later considered.
187 At paragraph [41], referred to in our reasons at paragraph [151], the Commissioner mentions some features of the arrangement that would appear to be “at odds with the purely commercial delivering of a service”. The Commissioner referred to the internal and external review mechanism specified in the policy directions document, so that a client can effectively appeal certain decisions made by the appellant. The Commissioner said this was “more consistent with general administrative law principles and would be unusual to see in a commercial contract”. The appellant submits that there was no evidence before the Commissioner to entitle him to draw this conclusion. The sentence reads however as if the Commissioner is drawing upon his general experience to state a fairly general proposition. We do not regard this as necessarily problematic and in any event even if it was, the sentence is not so important to the overall determination of the issue by the Commissioner that it would constitute a basis upon which to allow the appeal.
188 We have quoted paragraph [42] of the Commissioner’s reasons at paragraph [152]. With respect to the first sentence of this paragraph, the appellant submits, because of its context, it is again referrable to the funding arrangement under the previous ATSIC grants. We do not accept this. The sentence is clearly directed to the three year period of the contract. As earlier indicated the mere description of the “funding” of the appellant is not of itself problematic.
189 The appellant did not submit that the balance of paragraph [42] contained any error and in our opinion it was correct not to do so. In our respectful opinion, these sentences do not inaccurately describe the activities of the appellant and its relationship with the department.
190 Paragraph [43] of the Commissioner’s reasons have been described and quoted from in paragraph [153] of our reasons. The appellant did not specifically attack the reasoning in this paragraph although there is reference to the variation of the funding model of the Commonwealth and that this does not fundamentally alter the character of the activities of the appellant itself. This may support the appellant’s contentions that the present activities of the appellant were partly characterised by reference to its activities in the past. As expressed earlier, however, in our opinion this is not of itself demonstrative of error.
191 The Commissioner’s conclusion of the issue is at paragraph [44] of his reasons which is referred to and quoted in paragraphs [154]-[155] of our reasons.
192 We have critically reviewed the Commissioner’s reasons to see if any specific criticism of them by the appellant has been born out. In our opinion they have not, save and except for the prospect that the Commissioner may have incorrectly categorised the contract, as not being evidence of trading or failed to give the contract adequate weight in determining whether the appellant was a trading corporation. In other words, whether, in terms of the ground of appeal as explained, the Commissioner’s characterisation of the contract and the weight given to it in determining the activities of the appellant, was in error. This necessitates a consideration of what a trading corporation and trading is. This analysis will satisfy the requirement to determine issues (c)(i) – (v) as identified in paragraph [163] above.

17. What is a Trading Corporation?
(a) The Context of the Issue
193 Given the importance of this question to the appeal, the present jurisdiction of the Commission and that this is the first opportunity the Full Bench has had to make observations about it, the issue will be considered in some detail.
194 From the way in which the WRA is structured the jurisdiction of the Commission is excluded when an employer is, amongst other things, a “constitutional corporation”. This is defined in s4 of the WRA to mean a corporation to which s51(xx) of the Constitution applies. This includes a trading corporation.
195 The expression “trading corporation” in the WRA is therefore a constitutional expression, the meaning of which is finally determinable only by the High Court, whose decisions are of course binding on the Commission. As the expression “trading corporation” or “constitutional corporation” has also been used in the WRA before the 2005 amendments and the Trade Practices Act 1974 (Cth), other courts and tribunals have discussed the meaning of trading corporation and applied it to the facts and issues of the cases before them. The Commission is not bound by those decisions, as a matter of precedent, but they may be informative and persuasive.

(b) The High Court Decisions
196 The High Court has considered the issue of the meaning of trading corporation in a number of cases including St George County Council; Adamson; State Superannuation Board; Fencott v Muller (1983) 152 CLR 570, the Tasmanian Dam case, and Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169.
197 The issues which have mainly occupied the High Court is how to decide if a corporation is a trading corporation when:-
(a) It is not incorporated for the purpose of trading but does so; and
(b) It has mixed purposes and activities, some of which are trading and some not.

198 As stated, trading corporation is a constitutional expression and this is “a circumstance which must influence the construction placed on the statutory formula”. (Barwick CJ in St George County Council at 538). At page 540 Barwick CJ elaborated that “the words must be given their full import without any constraint derived from the circumstance that so construed the constitutional power they express will affect State power, legislative or executive, or that the exercise of the constitutional power so construed will or may affect the exercise of State power”. This observation is relevant at least by analogy when the effect of characterisation of an employer as a trading corporation leads to the exclusion of the Act in relation to it.
199 Stephen J in St George County Council pointed to the nub of one of the issues we referred to above in saying at page 568 that when s5 of the Restrictive Trade Practices Act 1971-1972 (Cth), (the Commonwealth statute under consideration) “speaks of "trading corporations” the use of the participle "trading” necessarily involves reference to function, either to the activities which a corporation is intended to undertake or to those which it in fact does undertake”. Murphy J in Adamson at page 239 said “a corporation which trades is a trading corporation …”, a simple and perhaps obvious point and one which steers the direction of the answer to the issues identified as (a) and (b) above.
200 Before considering in more depth the effect of the High Court authorities three points should be made:-
(a) There seems to be no disagreement with the proposition that determining whether a corporation is a trading corporation is a question of fact and degree (Mason J in Adamson at 234). Accordingly, the way in which previous cases have been decided is no more than a guide to how an instant case must be decided. (See also Barwick CJ in St George County Council at 538).
(b) In construing and applying the statutory and constitutional words trading corporation and trading it is the meaning of those words which must of course be the primary reference point. (See Weiss v R (2005) 224 CLR 300, per Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ at [31]). It is important to keep this in mind and in particular not seek to just apply judicial observations about examples of what trading or a trading corporation is, divorced from an understanding of the meaning of the words themselves. (See Federal Commissioner of Taxation v Citylink Melbourne Ltd (2006) 80 ALJR 1282 at [13]; A-G (Qld) v AIRC (2002) 213 CLR 485, per Kirby J at [113]; Dinsdale v R (2000) 202 CLR 321 per Kirby J at [77], [84], Gaudron and Gummow JJ agreeing at [26]); Re Bolton and Another; Ex parte Beane (1987) 162 CLR 514 at 518 per Mason CJ, Wilson and Dawson JJ).
(c) In New South Wales v Commonwealth of Australia (2006) 81 ALJR 34 (231 ALR 1), a majority of the High Court (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ) upheld the constitutional validity of the amendments to the WRA effected by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). This Act inserted ss5, 6 and 16 of the WRA, insofar as they enact the exclusion of the Act with respect to employers who are constitutional corporations (including trading corporations). The reasons of the majority expressly did not consider the meaning of a trading corporation. For example, at paragraph [158] their Honours quoted from the reasons of Mason J in Adamson at 233 and said “the correctness of this proposition is not in issue in these matters”. This observation was significant as what Mason J there said has considerably shaped the jurisprudence about the meaning of trading corporation. Mason J said, as quoted by the High Court at [158] in New South Wales v Commonwealth, amongst other things, that a “‘trading corporation’ … is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities …”. Although the meaning of trading corporation was not in issue in New South Wales v Commonwealth, comments like those we have just referred to give the impression that the previous decisions of the High Court may not be the last word on the subject. In the meantime, however, courts such as the Commission are bound by what the High Court, including in Adamson, has said.

(c) St George County Council
201 In St George County Council, a majority of the High Court decided the council was not a trading corporation. At least two members of the majority (Menzies and Gibbs JJ) did so because it was not formed for the purpose of trading. (eg Menzies J at 551, Gibbs J at 562) Barwick CJ and Stephen J dissented. They differed from the majority in their approach to the issue by focusing on the present activities of the corporation. We have already quoted short passages from their Honours’ reasons. Despite being in dissent, their observations have significance because a majority of the High Court in Adamson adopted the same approach as the dissenters in St George County Council. Barwick CJ adhered to the view he expressed in St George County Council (Adamson at 208). Mason J, with whom Jacobs J agreed, expressly said he preferred the minority view (233), and Murphy J said St George County Council should be overruled. (239).
202 Relevantly, Barwick CJ in St George County Council made the following points, other than those mentioned earlier:-
(a) The council traded because it bought and sold electricity and electrical products. (539; 545).
(b) Although by statute the council was directed to supply electricity as cheaply as possible, and therefore it could not make “the utmost profit attainable” this did not mean it was not engaged in trading activities. (539).
(c) “Though profit-making is perhaps not of the essence of trading, it is a usual concomitant, and it can be said that the applicant trades at a profit”. (539).
(d) The current activities of a corporation will principally determine if it is a trading corporation (543) and it will be so where trading is its “predominant and characteristic activity”. (543).
(e) The ends which a corporation seeks to serve are irrelevant to its description (543) and a government, State or municipal corporation may be a trading corporation. (543).
(f) The performance by the council of a public service, in “reticulating electricity” did not deny its status as a trading corporation. (544).

203 Stephen J, in addition to what we have referred to earlier, relevantly said:-
(a) Local government bodies in NSW undertake what are accurately described as trading activities, the supply of goods and services. (567).
(b) Trading corporation is a description of actual or intended activities. (568).
(c) There is a strong element of profit making present in the concept of trading and this element will usually be possessed by a trading corporation. (569). But another motive will not alter the character of trading. (569).
(d) The council’s status might not be a trading corporation “if it distributed electricity free of charge but so long as its activity is that of buying and reselling rather than distributing by way of gift it is in my view, engaged in trading …”. (569).
(e) Stephen J then made observations about buying and selling and trade, quoted by Wilcox J in Australian Red Cross and the Commissioner in paragraph [20] of his reasons. (569-570).
(f) Every corporation which happens to trade is not a trading corporation. (572).

(d) Adamson
204 In Adamson, a majority of the court decided the Western Australian National Football League (WANFL) and the West Perth Football Club were both trading corporations, because of the nature and extent of their trading activities.
205 Barwick CJ at 208 made the point cited by the Commissioner in paragraph [20] of his reasons. Barwick CJ at 209 also said:-

“I now consider what the Club and the State League were in fact engaged in doing. Trade for constitutional purposes cannot be confined to dealing in goods or commodities. Its full parameters may be difficult of definition. But the commercial nature of an activity is an element in deciding whether the action is in trade or trading.”

206 At 211 Barwick CJ referred to the trading activities of “the presentation of a football match as a commercial venture for profit” and other commercial activities of the WANFL and West Perth Football Club which emphasised the “trading quality” of how they promoted football.
207 We have already quoted from the reasons of Mason J in Adamson, quoted in NSW v The Commonwealth and referred to his Honour’s important observation that whether a corporation trades is a question of fact and degree. Mason J also said a trading corporation may well be inspired by “altruism” or “loftier motives”. (236, 237).
208 Stephen J (although dissenting) said at page 218 that the income producing activities of the WANFL were in the nature of trade and it was of little significance that the spectacle which West Perth promoted involved teams of footballers. Murphy J at page 239 said that trading was a term of very wide scope, citing Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at page 381 and National Association of Local Government Offices v Bolton Corporation [1943] AC 166 at pages 184-185. At page 240 his Honour concluded that both West Perth and WANFL were trading corporations. His Honour referred to trade now being centred around tertiary industry. His Honour said most Australian workers now work in the areas of entertainment, information, education, health, tourism, leisure, sport, transport and similar services. His Honour also referred to the commercialisation of sport, education, religion, medicine and other social or professional activities and that this was a world wide phenomenon.
209 In Bank of NSW at 381 (cited by Murphy J in Adamson) Dixon J in the context of s92 of the Constitution said although trade strictly means buying and selling of goods, this was a specialised meaning and the “present primary meaning” covered the pursuit of a “calling or handicraft” and “its history emphasises rather use, regularity and course of conduct, than concern with commodities”.
210 The majority in Adamson did not express in the same way the extent of trading activities required to make a corporation a trading corporation. Any differences however were said by a majority of the Court in State Superannuation Board, to be “one of emphasis only” (Mason, Murphy, Deane JJ at 304).

(e) State Superannuation Board
211 In State Superannuation Board the majority decided the board was a financial corporation for the purposes of the Trade Practices Act, which defined “corporation” in the terms of s51 (xx) of the Constitution. Their Honours said the same process was involved in determining whether a corporation was a financial corporation, as for a trading corporation. (303). Their Honours also summarised the state of the law following St George County Council and Adamson.
212 There is no subsequent authority of the High Court which undermines what was said by the majority in State Superannuation Board, which remains binding. By reference to Adamson, their Honours confirmed that whether a corporation had the character of a trading corporation was by reference to its activities and the court will look beyond its “predominant and characteristic activity”. (304; cf Gibbs J at 213 of Adamson). Their Honours also said there was nothing in Adamson to support the view that a corporation that carries on independent trading activities on a significant scale will not result in proper categorisation as a trading corporation, if other more extensive non-trading activities also warrant it being categorised as a corporation of some other type. (304). As to the different emphasis of the majority in Adamson, the majority in State Superannuation Board summarised at page 304:-

“Secondly, the judgements of the majority in Adamson make it clear that, in having regard to the activities of a corporation for the purpose of ascertaining its trading character, the Court looks beyond its “predominant and characteristic activity”. Barwick C.J. spoke of making a judgment "after an overview" of all the corporation's current activities, the conclusion being open that it is a trading corporation once it is found that "trading is a substantial and not a merely peripheral activity". Mason J. said that it "is very much a question of fact and degree" having earlier stated that the expression is essentially "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.

Murphy J. said "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". Indeed, it was essential to the majority’s approach and to its rejection of St. George that a corporation whose trading activities take place so that it may carry on its primary or dominant undertaking, e.g., as a sporting club, may nevertheless be a trading corporation. The point is that the corporation engages in trading activities and do not cease to be trading activities because they are entered into in the course of, or for the purpose of, carrying on a primary or dominant undertaking not described by reference to trade. As the carrying on of that undertaking requires or involves engagement in trading activities, there is no difficulty in categorizing the corporation as a trading corporation when it engages in the activities.

Indeed, we would go on to say that there is nothing in Adamson which lends support for the view that the fact that a corporation carries on independent trading activities on a significant scale will not result in its being properly categorized as a trading corporation if other more extensive non-trading activities properly warrant its being also categorized as a corporation of some other type.”

(f) Fontana Films
213 In Fontana Films, the High Court upheld the validity of s45D(1)(b)(i) of the Trade Practices Act, about secondary boycotts, insofar as it legislated about a trading corporation. Gibbs J at 183 said it was within the power of s51 (xx) of the Constitution to legislate to prohibit conduct calculated to damage the trading activities of a trading corporation. His Honour did not, however, discuss the nature of trading activities. Gibbs CJ at 185 only said that it “is the business of a trading corporation to trade, and its business is its trading”.
214 Mason J at 203 referred to an argument that s45D(1)(b)(i) referred to loss or damage to the “business” and that “the business of a corporation” is a concept very much wider than its trading activities. Mason J did not accept the argument, as the opening words of s45D(1) “confine the operation of the prohibition to conduct that hinders or prevents trading activities, ie the supply or acquisition of goods or services”.
215 His Honour also referred to Smith v Anderson (1880) 15 Ch D 247, per Jessel MR at 258 and said in some circumstances business may be wider than trading activities. The issue in Smith v Anderson was whether there had been a contravention of s4 of the Companies Act 1862. One of the words used in this section was “business”. Jessel MR at 258 said it was “a word of large and indefinite import”, and from a dictionary definition said “anything which occupies the time and attention and labour of a man for the purpose of profit is business”. At 259, Jessel MR, quoted from the reasons of Willes J in Harris v Amery (Law Rep. 1 C.P. 148 at 154) where his Honour said “business has a more extensive signification than trade”. Willes J then gave examples, saying that farming and banking were not trades. It is apparent that the discussion of the use of the term “trade” in Smith v Anderson is not of assistance in determining what trading activities are or a trading corporation is, in the present appeal. (The decision of Jessel MR was successfully appealed, although not on his definition of “business”. See pages 273ff of the report).

(g) The Tasmanian Dam Case
216 In the Tasmanian Dam case a majority of the High Court (Mason, Murphy, Brennan and Deane JJ) held, amongst other things, that the Hydro-Electric Commission of Tasmania (HEC) was a trading corporation. Mason J at 155-157 listed seven points which supported this conclusion, relying on the earlier authorities of the court. Relevant in particular are points 2, 4, 5 and 6. In summary, these were:-
(a) A connection of the corporation with the government of a State does not mean it is not a trading corporation. (2).
(b) The trading activities of the HEC formed a less prominent feature of its overall activities than was the case with in St George County Council. The HEC had an important policy making role, was engaged on a large scale in the construction of dams and generating plants and “in this respect its operations are largely conducted in the public interest”. (4).
(c) These considerations do not exclude the categorisation of trading corporation. The majority in State Superannuation Board pointed out that a corporation whose trading activities take place so that it may carry on some other primary or dominant undertaking may nevertheless be a trading corporation. (5).
(d) The facts showed the HEC sells electrical power in bulk and by retail on a very large scale. “This activity in itself designates the [HEC] as a trading corporation”. (6).

217 Murphy J at 179, found the HEC to be a trading corporation for not dissimilar reasons to Mason J. Brennan J at 240 cited Adamson and State Superannuation Board and concluded that as trading activities were a substantial part of its overall activities if not the predominant part, “the HEC must be held to be a trading corporation”. To reach this conclusion Brennan J at 239-240 referred to the nature and amount of income received from the trading activities of the HEC.

(h) Fencott v Muller
218 In Fencott v Muller, a majority of the High Court (Mason, Murphy, Brennan and Deane JJ) at 601-602 referred to Adamson and said the decision did not suggest that trading activities were the sole criterion of character. Their Honours said a company’s constitution will never be completely irrelevant and it assumes particular significance as a guide where a corporation has not begun or barely begun to carry on business.

(i) Hughes
219 The effect of the High Court decisions was considered by Toohey J, in Hughes, cited above. His Honour was required to determine whether the Western Australian Cricket Association (WACA) and incorporated cricket clubs in Western Australia (the WACA clubs) who were responsible for cricket in particular districts, were trading corporations. At pages 20-21 (FCR), 671-672 (ALR) his Honour set out eight principles which he said emerged from “several decisions, particularly by the High Court, in which the notion of a trading corporation has been examined”. The principles were as follows:-
“1 The mere fact that a corporation trades does not mean that it is a trading corporation: R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533 at 543, 562 (St George County Council); R v Federal Court of Australia; Ex parte Western Australian National Football League (1979) 143 CLR 190 at 219, 234 (Adamson).
2 The purpose of incorporation, propounded in St George County Council, is no longer a valid test. The test is one of the current activities of the corporation: Adamson; State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 304; (1982) ATPR 40-326 at 43,976-43,977 (State Superannuation Board).
3 But the current activities test is not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not completely irrelevant: Fencott v Muller (1983) 152 CLR 570 at 602; (1983) ATPR 40-350 at 44,218.
4 Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick CJ in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J in Adamson at 233, with Jacobs J concurring at 237); the trading activities should not be insubstantial (Murphy J in Adamson at 239); the corporation must carry on trading activities on a significant scale (Mason, Murphy and Deane JJ in State Superannuation Board at 304; 43,976-43,977; Deane J in Commonwealth v Tasmania (1983) 57 ALJR 450 at 559-560.
5 An incorporated sporting body can be a trading corporation if its activities meet the required test: Adamson.
6 In particular, incorporation under a statute such as the Associations Incorporation Act does not prevent a corporate body from being a trading corporation if its activities warrant that description: Adamson at 232.
7 Trading denotes the activity of providing, for reward, goods or services: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139; St George County Council 569–570; Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325 at 330–331; (1985) ATPR 40-565 at 46,568.
8 The Trade Practices Act itself draws a distinction between trading corporations and financial corporations; nevertheless the two classes are not mutually exclusive: State Superannuation Board at 303.”
(Where there is a difference in case citations between FCR and ALR reports, FCR version used)

220 At page 22-23 (FCR), 674 (ALR), his Honour said:-
“While the authorities to which I have referred seek to define or describe a trading corporation, they do not in express terms offer a process by which the question whether a corporation is a trading corporation may be determined. Mr Archer, of counsel for the respondents, suggested what he described as a “three-stage test”. This involved identifying the totality of the activities of the corporation, identifying those activities properly characterised as trading activities and then evaluating the extent of the trading activities against the totality of activities.
That approach seems to me consistent with what the High Court said in Adamson and other cases and I am content to adopt it. But as I shall point out, especially in relation to the clubs, there are difficulties involved in comparing economic and non-economic activities.”

221 By applying this process his Honour decided the WACA was a trading corporation but not the WACA clubs. The WACA was a trading corporation as it engaged in substantial trading activities, in promoting and controlling cricket in Western Australia and providing services to its members and the public. This involved receiving and disbursing large sums of money. The WACA had expanded its activities beyond cricket to other forms of entertainment and it charged admission to its ground for cricket and other activities.
222 With respect to the WACA Clubs his Honour said at 25 (FCR), 676 (ALR):-
“With the clubs, a comparison of activities is more difficult than in the case of the WACA. Where all activities are income producing, it may not be hard to single out some as trading activities and quantify their significance, even if only in a broad way. But where some activities are income producing and others are not, the exercise is not so straightforward. For instance, it is apparent that most of the time spent by members of the clubs is on the playing of cricket, whether at training sessions or at matches. This is an activity which does not directly produce income at the club level though of course it has incidents such as sponsorships which are income producing. How then is the comparison to be made? The amount of revenue produced from a particular activity may not be a satisfactory guide. A trading activity may represent a significant part of a club's income, but be relatively insignificant in an overall consideration of the club's activities. There is no ready answer to these difficulties; in the end, I must come back to what Mason J said in Adamson at 233: “'Trading corporation’ is not and never has been a term of art or one having a special legal meaning …. 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.””

223 Toohey J analysed the trading activities of the WACA clubs. They did not charge entrance fees so that anyone could watch without payment. They operated licensed bars and bar trading represented 19 per cent to 63 per cent of their income. Their income was otherwise derived from grants from the WACA, prize money from competitions, donations, fund raising, interest on investments, sponsorship and advertisements. In determining whether the trading activities of the WACA clubs were significant, Toohey J looked at the totality of their activities. His Honour did not differentiate between the various WACA clubs on the basis of the percentage of total income received from bar trading. After considering their sources of income his Honour said at 28-29 (FCR), 679 to 680 (ALR):-
“It is clear from Adamson that the fact that a corporation’s trading activities are related to its character as a club in the provision of social functions, amenities and services for its members does not prevent it from being a trading corporation. Nevertheless there are important differences between the situation in Adamson and that existing here. Underlying the decision in Adamson is the acceptance by the High Court that the playing of football by West Perth was a means of ensuring large financial returns, that its players were all paid and that the club’s principal activity was its participation as a member of the WA League in the competitions which it ran.
The cricket clubs are basically amateur bodies and their activities are essentially directed to the playing of cricket. They make no charge for admission to matches. Except in the case of someone who is a player coach, the general rule is that payments are not made to players other than to those in A grade. Within A grade some clubs pay an incentive related to runs scored, wickets taken or the like. But the amounts involved are small indeed and in no way capable of providing a living for a player. The evidence revealed cases of particular players in particular clubs who were paid a fixed annual fee.
…
The principal activity of the clubs is the playing of cricket, a game which is played for pleasure rather than reward, though the playing of district cricket is undoubtedly the means by which players are selected for shield matches and in turn for test matches, at which point reward becomes an important consideration. Although the clubs have activities which are of a trading nature, in particular the provision of bar facilities, I do not regard these as so significant as to impose on the clubs the character of a trading corporation. To point, as the applicant did to the revenue of particular clubs and the percentage of that income derived from bar sales is relevant but not overly persuasive. It does not sufficiently account for the time spent by the clubs in activities that are not income producing, viz the playing of cricket which is their primary function.
None of the clubs carries on the game of cricket as a trade.”

224 As quoted the key conclusion was that the WACA club’s trading activities were not “so significant as to impose on the clubs the character of a trading corporation.”

(j) Quickenden
225 Quickenden is a decision of the Full Federal Court in which the principles emergent from the High Court decisions were also summarised. (See per Black CJ and French J at [44] – [47]; Carr J at [101]). Their Honours’ discussion was in the context of whether the University of Western Australia was a constitutional corporation for the purposes of the WRA. Each member of the court decided the primary judge had not erred in deciding it was.
226 A number of the trading activities of the University were referred to by Black CJ and French J at paragraph [49]. Their Honours said that in 1995 and 1996 more than $44 million was derived from these activities and investment income represented more than 16% of the revenues for these two years. At paragraph [51] their Honours said it was “plain” that the trading activities of the University “are a substantial, in the sense of non-trivial, element albeit not the predominant element of what the university does. The university was not established for the purpose of trading and at another time, closer to the time of its creation, it may not have been possible to describe it as a trading corporation. But at the time relevant to this case and at present, it does fall within that class”.
227 Their Honours added at paragraph [52] that the characterisation of a body corporate as a trading corporation is a matter of fact and degree. Although the conclusion reached by Black CJ and French J is not surprising, their Honours did not analyse in detail what it was about the trading activities which was “substantial”. For example, was it the scale in the sense of the amount of money generated from trading, the percentage of the income of the University derived from trading, or something else? Also, although their Honours used the expression “non trivial”, this does not feature in any of the High Court decisions. Their Honours do not explain why this expression is used.
228 Carr J in his separate reasons at paragraph [101] summarised the effect of the High Court decisions in 7 numbered paragraphs. They are:-
“1. Once it is found that trading is a substantial and not merely a peripheral activity, not forbidden by the organic rules of a corporation, the conclusion that the corporation is a trading corporation is open: per Barwick CJ in R v Judges of Federal Court of Australia; Ex parte Western Australian National Football League (Inc) (1979) 143 CLR 190 ; 23 ALR 439 (Adamson).
2. A corporation may be a trading corporation even though trading is not its predominant activity: Adamson; State Superannuation Board; Commonwealth v Tasmania (1983) 158 CLR 1 at 156; 46 ALR 265.
3. In this context “trading” is not given a narrow interpretation. It extends, beyond buying and selling, to business activities carried on with a view to earning revenue and includes trade in services: Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 184–5, 203; 40 ALR 609; Adamson at CLR 218, 235.
4. The description “trading corporation” is merited when the activities of a corporation form a sufficiently significant proportion of its overall activities: Adamson at CLR 233.
5. The trading activities of a corporation may be so slight and so incidental as not to merit the description of it as a “trading corporation”. Whether the trading activities are sufficient is very much a question of fact and degree: Mason J in Adamson at CLR 234 (Jacobs J agreeing).
6. The activities test is not the sole criterion for determining the character of a corporation. Consideration has to be given both to current activities and to the intended purpose of a corporation: Fencott v Muller (1983) 152 CLR 570 at 588; 46 ALR 41 and generally, Superannuation Board at CLR 304–5.
7. It has not yet been decided whether trading is a substantial activity when measured in absolute dollar terms or whether substantiality is a relative term. Murphy J in Adamson (at CLR 239) appears to have regarded substantiality as being an absolute rather than a relative concept. See also Wilcox J in E v Australian Red Cross Society (1991) 27 FCR 310; 99 ALR 601 at 633 and 635.”

229 Of particular relevance are principles 3, 4, 5 and 7. At paragraph [103] his Honour said:-
“I think that there is some merit in the appellant's submission that it may not be sufficient in the process of characterisation in a particular case, simply to make a mathematical calculation of the trading revenues generated by a corporation and compare that figure with the total of its receipts. However, that exercise would be consistent with cases such as Adamson and E v Australian Red Cross Society (1991) 27 FCR 310; 99 ALR 601.”

230 His Honour did not however explain why such an approach would be consistent with either Adamson or Australian Red Cross.
231 At paragraph [109] Carr J said “substantiality” does not mean, when measured in dollars, a large absolute figure but was a “relative measure, that is compared to the total income generated by the corporation.” Carr J referred to the primary judge’s calculation that trading activities comprised about 18% of the total operating revenues of the University in 1997 and to his own assessment of at least 28%. Carr J said this was “substantial and formed a significant proportion of its overall activities.” A difficulty with this analysis is that it converts “activities” to dollars earned, when it is not clear this is warranted. It is an approach inconsistent with Hughes, which was not cited in Quickenden.

(k) Effect and Application of Decisions
232 It is appropriate to summarise the following which is relevant to this appeal:-
(a) Whether the appellant is a trading corporation involves questions of fact, to be determined upon the evidence before the Commission.
(b) The primary focus is on what the appellant does. This determines what its activities are.
(c) The appellant is a trading corporation if it substantially engages in trading activity. This necessitates a close analysis of what the appellant does, and whether this in whole or part constitutes trading. If all of its activities are trading, it is a trading corporation. If a portion of its activities are trading then it is necessary to consider whether that portion is a substantial or significant portion of its overall activities. If so it is a trading corporation.
(d) It is immaterial if a corporation has a non profit, benevolent or charitable object; if its trading activities are nevertheless substantial then it will be a trading corporation. This is particularly relevant to the appellant whose objects and purposes for existence are of this character.

233 With respect to (c) above, in subsequent authorities there has been a divergence of views on how substantiality should be determined. The issue was to some extent addressed in the High Court cases mentioned as well as Hughes and Quickenden. There is however no clear line of subsequent authority on the issue.
234 This can be seen from decisions of courts and the Australian Industrial Relations Commission (AIRC) where the issue has arisen as to whether corporations whose purposes could be described at least in part as benevolent are trading corporations. For example, Forbes and Another v Australian Yachting Federation Inc (1996) 131 FLR 241 (found by Santow J not to be a trading corporation); Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) Inc (2002) 120 FCR 191 (the RSPCA found by Weinberg J to be a trading corporation – see in particular [148], [162], [164] and [161] where his Honour described the test as “essentially quantitative”); United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board (1998) 83 FCR 346 (The Metropolitan Fire and Emergency Services Board, established pursuant to the Metropolitan Fire Brigades Act 1958 (Vic) found by Marshall J to be a trading corporation); Burrows v Shire of Esperance (1998) 86 IR 75 (the Shire of Esperance found to be a trading corporation); Re University of Wollongong (Academic Staff) Enterprise Agreement (1997) 74 IR 308 (The University of Wollongong found to be a trading corporation); Kirinari Residential Services also found to be a trading corporation (Application for Approval to Implement an Enterprise Flexibility Agreement, AIRC, 13 June 1996, Print N2535, Commissioner O’Shea) and Conference and Exhibition Organiser Pty Ltd v Australian Beauty Trade Suppliers (1990) 96 ALR 439, (Foster J found the respondent, whose main function was the organisation of a trade show, to be a trading corporation); Eleven Fellow Members of the McLeod Country Golf Club v McLeod Country Golf Club (1995) EOC 92-739; [1995] HREOCA 25 (McLeod Country Golf Club found by WJ Carter QC not to be a trading corporation) and McCarthy v Australian Rough Riders Association Inc and Biloela Rodeo Association, Unreported, Federal Court of Australia, Qld G167/1987, 3 November 1987 where Spender J in an application for an injunction, decided that the BRA but not the ARRA was a trading corporation.
235 Although there are some common strands in the facts of some of these cases the decisions at the very least demonstrate that the issue is a matter of fact and degree. Also, with respect, some of the reasons do not contain a detailed analysis of principle or application of principle.
236 Each of Australian Yachting Federation, McCarthy and McLeod Country Golf Club as in Hughes, approached the issue by considering the activities of the corporation and the place of trading activities in the context of the activities of the corporation as a whole. Santow J in Australian Yachting Federation, for example, said at [291] that the “activities of the corporation must also be looked at as a whole in order to determine whether the proportion of trading carried out is substantial (in accordance with the tests in Adamson).” His Honour held the amount of income generated by trading activities was “overshadowed by the general activities of the Australian Yachting Federation”. (See also McCarthy at [60]).
237 In McLeod Country Golf Club, Carter QC referred to what Mason J said in Adamson and Toohey J in Hughes and said what was involved was “an evaluation of the corporation’s ‘overall activities’ and the relative position [sic - portion] of those activities which are of a trading nature”. (Page 6).
238 The facts of Australian Beauty Trade Suppliers are too individual to give the authority any general application.
239 Others of the cases cited refer to the scale or amount in dollar terms of the amount of money generated by trading activities. These cases include RSPCA, Metropolitan Fire and Emergency Services Board and University of Wollongong, although in each of them other factors were also considered. In each, some reliance was placed on Australian Red Cross, which is considered below. It is presently sufficient to recall the view of Carr J in Quickenden that scale of trading income is not determinative of trading corporation status.
240 Others of these cases emphasise, in some instances, the percentage of income raised from trading activities as opposed to income obtained from non trading activities. These cases include the three mentioned in the previous paragraph plus Shire of Esperance and Kirinari. The reasons of Carr J in Quickenden are consistent with such an approach but it is at odds with Hughes, Australian Yachting Federation and McLeod Country Golf Club, all of which draw support from Adamson. We will later consider the merits of this approach in more detail but at present we note that a problem with it is that the focus is solely on income generation. The generation of income in a particular case may not constitute all of what a corporation does. That is, some of its activities may not produce any income. Therefore if the requirement is to consider all of the activities of a corporation, in the proportional dollar method non income producing activities will not, in error, be taken into account.
241 It is next relevant to consider what was decided in Australian Red Cross.

18. Australian Red Cross
242 The statement and application of principle by Wilcox J in Australian Red Cross was at the heart of the reasoning of the Commissioner and cited by counsel for the parties and the Minister in the appeal. In considering this appeal, it is important to remember, as already stated, that the issue is not whether the present situation does or does not fit within the words used by Wilcox J. It is whether there was “trading” and whether the appellant is a “trading corporation” as properly understood, which is fundamental. In their submissions, the parties tended at times to focus too closely on the words used by Wilcox J.
243 For the purposes of a claim made under the Trade Practices Act, Wilcox J had to decide whether the Australian Red Cross Society (the Red Cross), the Australian Red Cross Society New South Wales Division (the NSW division) and the Royal Prince Alfred Hospital (the hospital) were trading corporations. His Honour decided that each of them was a trading corporation. In the appeal, emphasis was placed by all counsel upon a passage of the reasons of Wilcox J at 633-634 about the blood supply activities of the Red Cross and the NSW division. The passage is as follows:-
“The applicant accepts that neither respondent makes any charge for the blood which it supplies. Neither “trades” in blood, in the usual sense of that term. But, say counsel, the reality is that the blood transfusion activities of the respondents constitute substantial businesses by which they supply valuable commodities, blood and blood products, in return for large payments. In the year 1984-85, the Society (including its divisions) received from governments a total of $44,965,328 in respect of its blood transfusion services. Of this, the NSW Division directly received more than $10 million. (The exact figure is not ascertainable from the Division's annual report.) These were, of course, substantial sums. They were earned only because the respondents are prepared to carry on blood transfusion services at a scale, in terms of labour and resources, greater than that of many organisations which are undoubtedly “trading corporations”. But I do not think that it is appropriate to describe the gratuitous provision of a public welfare service, substantially at government expense, as the conduct of a “trade”. It is pertinent to recall the words of Stephen J in St George County Council, “It is the acts of buying and selling that are at the very heart of trade”, and also to remember the distinction he made in respect of the distribution of electricity free of charge. In relation to the supply of blood, it seems to me that the first and second respondents do not engage in trading activities. They engage in a major public welfare activity pursuant to agreements with the Commonwealth and the various State governments under which they will be reimbursed most of their costs.” (Emphasis added)

244 The emphasised sentences in particular were relied on by both parties to the appeal. The respondent, supported by the Minister, submitted these observations by Wilcox J aptly described the activities of the appellant so as to lead to the conclusion that it was not a trading corporation. On the other hand, the appellant endeavoured to distinguish those sentences, on the basis that the services provided by it were not “gratuitous”, because they were purchased by the department through the contract. It was on this basis and for this reason, the submission went, that the services were provided to indigenous persons. As stated earlier the appellant submitted therefore that the entering into the contract was an act of trading.
245 After making the observations quoted above, Wilcox J referred to the sale of goods by both the Red Cross and the NSW division. His Honour said that in 1984-1985 the Red Cross earned over $2 million in this way. His Honour also referred to financial information about the NSW division and concluded that trading was a major contributant to its income. His Honour said that the scale of the NSW division’s trading activities met any of the tests enunciated in Adamson. As a result both the Red Cross and the NSW division were trading corporations. (Page 634).
246 With respect to the hospital, his Honour accepted a submission by counsel that it was still relevant to take into account the purpose for which the corporation was created. (His Honour cited Barwick CJ in Adamson). On this issue it was noted the hospital was created by statute, publicly owned and that the hospital was to have a close association with the faculty of medicine at the University of Sydney. His Honour said, however, at page 635 that in light of the Tasmanian Dam case it was difficult to see that these matters stood in the way of finding that the hospital was a trading corporation if in fact it traded on a substantial scale at the relevant date. His Honour said that the HEC was a statutory corporation, undertaking important public functions at public expense. It was subjected to a high degree of ministerial control, although it had previously been held not to be a servant or agent of the Crown. Yet it was held to be a trading corporation because of the extent of its trading activities.
247 Wilcox J then said:-
“It seems to me that the critical question is the nature of the Prince Alfred Hospital's activities at the relevant time. Accepting that its predominant activity was the provision of medical and surgical care to patients, they were not objectives antithetical to the notion of trade. Many trading corporations supply services rather than goods. Many privately owned hospitals provide medical and surgical care for reward with the purpose of thereby trading profitably. There was nothing in the intrinsic nature of the Prince Alfred Hospital's activities to disqualify it as a trading corporation.” (Page 635)

248 His Honour then referred to the tests in Adamson as being whether the scale of the corporation’s trading activities was “substantial”, “a sufficiently significant proportion of its overall activities” or “not insubstantial”. His Honour noted that in the financial year ending 30 June 1985 the hospital received in excess of $14 million in patient’s fees in return for services rendered by it. It also received about $3.7 million from business activities. His Honour said although these amounts were “dwarfed by its State Government subsidy of” in excess of $112 million, “that does not matter. Trading activities yielding some $18 million per year can only be described as substantial. It seems to me that the scale of the hospital's trading activities in 1984-85 was such that it should be regarded as then being a trading corporation”.
249 The comments of Wilcox J in the previous paragraph have been relied on in some of the authorities referred to earlier as supporting a “scale” or proportional dollar approach to determining if a corporation is a trading corporation. In our opinion however Wilcox J was not by these comments intending to set out some overarching tests. His Honour’s comments focus on the facts specific to the application before the Court.
250 Furthermore, in our opinion the reasons of Wilcox J in Australian Red Cross at 633-634 do not guide the resolution of the issue in this appeal because:-
(a) His Honour did not explain in detail why the provision of public welfare services, at “government expense” or “pursuant to agreements with” State and Commonwealth governments was not trade.
(b) As mentioned, his Honour’s reasoning is specific to the facts of the case. In particular monies were obtained by the society from a number of sources. One source which provided considerable income to the society was the day to day sale of goods. In this matter the appellant obtains its funds from one source only, and it must be used in a particular way.
(c) His Honour did not of course analyse a relevant issue in this case – whether the entering into of and performance under this particular contract, constitutes trading activity with the department.
(d) His Honour did not, because it was unnecessary to do so, very closely examine the nature of the arrangements between the Red Cross and the NSW division and the government to see if it constituted trading or what impact this had on the activities of the Red Cross as a whole.
(e) Finally, the observations by his Honour at 633-634 are obiter as they did not form an essential part of his Honour’s reasons for the decision made. (See MacAdam A and Pyke J, Judicial Reasoning and the Doctrine of Precedent in Australia, Butterworths, 1998, paragraphs [3.17] and [3.24]; The Hon Sir Anthony Mason, The Use and Abuse of Precedent, Australian Bar Review, Volume 4, Number 2, at 103). Also, they are not binding on the Commission; albeit they are relevant and persuasive, as far as they go.

251 With respect to (d), Wilcox J did at 628-630, to some extent trace the history of the funding of the Blood Transfusion Service (BTS) which was funded in NSW by the NSW division. His Honour referred to a 1953 agreement by which the Commonwealth made a grant to each State, of an amount equal to 30% of the operating expenses of “the Society”, “subject to satisfactory accounting arrangements” and the relevant State agreeing to pay an amount equal to 90% of the cost of the BTS in that State. However, as his Honour described, this funding arrangement changed over the years, so that the Commonwealth increased its contribution to 35% and “the Society” contributed 5% of the cost of the BTS or 10% of the previous year’s income from specified donations and appeals, whichever was the lesser. His Honour did not say whether the “satisfactory accounting” requirement remained. His Honour summarised that it was impossible for “the Society” to make a profit out of the operation of the BTS and it “does not make any charge for its blood products”.
252 At page 633, as quoted above, Wilcox J said the blood transfusion services of the Australian Red Cross and the NSW division, involved the supply of “valuable commodities” in return for large payments. Also that the amounts received by “the Society” and the NSW division were “earned”, because of their actions in carrying on “blood transfusion services”. At page 634 his Honour referred to engaging in “major public welfare activity” pursuant to “agreements” with governments. In our opinion however the nature of the agreements were not elaborated on or discussed in sufficient detail to discern whether they were analogous to the appellant’s situation or not. This is of course not to say or even suggest that the decision made by Wilcox J was in error. It is just that his Honour did not need to consider the issues which are necessary to do so in this appeal.

19. Other Relevant Authorities about Trading Corporations
(a) Fowler
253 In the appeal, the Minister also relied on the decision of Fowler v Syd-West Personnel Ltd, a decision of McIntyre VP of the AIRC. The issue was whether the respondent was a trading corporation within the WRA. The respondent was created to establish and operate a long term employment programme for people with intellectual disabilities and additionally to place other workers in employment. It was also engaged in training work and marketing of its operations. It did not charge for its services. It had offices at Parramatta and Springwood and employed seven people. By far the largest proportion of its income was comprised by grants from the Commonwealth Department of Health and Family Services, being grants of financial assistance under the Disability Services Act 1986 (Cth).
254 The relationship between the respondent and that department was governed by a contract. Clauses 9.1, 9.3, 9.4 and 10.1 of the contract were quoted in the reasons. These clauses were as follows:-
“9.1 The Organisation shall use the Funding only for the provision of the Service to Consumers in the Target Group as defined in section 8 of the Act, and in accordance with the Minister's funding priorities.

. . .

9.3 Moneys earned by the Organisation through the application of the Funding shall be used and dealt with by the Organisation as if those moneys earned were part of the Funding and are to be fully disclosed in the required acquittal documentation.

9.4 Moneys covered by the previous clause include:

i. bank interest
ii. revenue from the rent of part or all of any land or buildings
iii. proceeds from the sale of any land, buildings or equipment
iv. moneys paid under previous agreements.

10.1 The Organisation shall repay all the Funding, or pay amounts equivalent to the Funding, which the Organisation has not used in accordance with the Agreement.”

255 For the year ending 30 June 1997 the respondent had income of about $454,000, of which recurrent grants totalled nearly $399,000, interest $6,600, other income $1,200, rents received nearly $7,000, job subsidies in excess of $3,000 and “gain on cars sold/traded in” about $38,000. The latter item was income received from the trading in of motor vehicles owned by the respondent. The profit was made because the respondent was exempt from paying stamp duty on the purchase of vehicles.
256 McIntyre VP cited and quoted seven of the principles stated by Toohey J in Hughes and also cited and quoted from Australian Red Cross. McIntyre VP concluded that the respondent was not a trading corporation. This was because the “essence of what SWP does is to use grants from the Department to operate its long term employment program for people with intellectual disabilities and, also, to place other workers in employment. It is engaged in, to use Wilcox J’s words in the Red Cross Case, “the gratuitous provision of a public welfare service, substantially at government expense”. As Wilcox J said, this is not the conduct of a “trade”.”
257 McIntyre VP found that although some of what the respondent did constituted trading activities, it was not a trading corporation because of its activities as a whole and taking into account the provisions of the contract between it and the relevant department.
258 Counsel for the appellant sought to distinguish this authority on the basis that the money which the appellant received from the relevant department was not in the nature of a grant. It was submitted, as stated earlier, to be a purchase of services under the contract. The contract in Fowler, however, has some similarities to the contract in this appeal in that the use of the funds provided was required to be used for a particular purpose and in accordance with the Minister’s funding priorities.
259 Despite this in our opinion, substantially for the same reasons as (a), (b) and (c) in paragraph [250] above, with respect to Australian Red Cross (mutatis mutandis), the reasoning and decision in Fowler does not point the way to how this appeal must be decided. However, the fact that the source of funds in Fowler were substantially obtained from government sources to use for activities which were not “trading” can in our view be material in determining whether a corporation is a trading corporation. We will later elaborate on this.
260 It is also relevant to refer to three cases on the issue of whether a corporation is a trading corporation, decided since the 2005 amendments to the WRA. These are: Educang Ltd v Queensland Industrial Relations Commission (2006) 154 IR 436; Pellow v Umoona Community Council Inc [2006] AIRC 426 and Harmer. In each of these cases, the relevant corporation was found to be a trading corporation.

(b) Educang
261 Educang was a decision of Hall P of the Queensland Industrial Court. Educang Ltd was a public company limited by guarantee under the Corporation’s Law. The members of Educang were the Corporation of the Synod of the Diocese of Brisbane and The Uniting Church in Australia Property Trust (Q). Educang was the vehicle by which members sought to give effect to a joint venture members’ agreement. The joint venture members’ agreement articulated that the main purpose of Educang was to be the conduct of colleges on land specified in a schedule. The constitution of Educang envisaged that school fees would be a principal revenue source and the colleges would participate in commercial activities.
262 Hall P summarised the purpose of Educang to be the conduct of co-educational schools for the purposes of developing a community of faith based on a belief in God and a Christian way of life. His Honour referred to the fact that each of the colleges used marketing and promotional material developed by Educang to advertise its activities and that one of the colleges owned and operated an FM radio station for promotion.
263 The operating income of Educang for the year ended 31 December 2005 was set out in an affidavit which was before the court. This showed that nearly 36% of income was earned from tuition and other fees and 31% was earned from Commonwealth recurrent grants. Fees from full paying international students approximated 9% of income, State recurrent grants provided 12% of income and there were five other sources of income although none of these contributed greater than 4.3% of the total income. Of these, income from trading accounts was the largest, which provided nearly $1 million. The total of the items of tuition and other fees and full fee paying international student fees was in excess of $10 million. This compared with the total of State recurrent grants and Commonwealth recurrent grants of $9.8 million.
264 After considering the relevant authorities, Hall P concluded that the percentage of operating revenue derived from trading activities and the large size of the sums involved led to the conclusion that Educang was a trading corporation.

(c) Pellow
265 This was a decision of O’Callaghan SDP of the AIRC. The issue was whether the Umoona Community Council Inc (the council) was a trading corporation. The council’s main activities involved providing a housing programme, a youth programme, an alcohol strategy, a childcare centre, a Centrelink agency, an advocacy service, a homemaker programme, emergency relief, a school bus service and furniture services. O’Callaghan SDP said that a significant proportion of the council’s income was from State and Federal “grants”.
266 At [26] O’Callaghan SDP quoted from paragraphs [44] to [47] of the reasons of Black CJ and French J in Quickenden. At [27] he then said the constitution of the council made it clear that its “primary purpose is not directed at trading functions”.
267 At [28] O’Callaghan SDP referred to what trading involved. Citing the Macquarie Dictionary, O’Callaghan SDP said trading involves “buying and selling, or exchanging, of commodities, either by wholesale or by retail”. O’Callaghan SDP said the “making of a profit whereby the return on the invested cost is exceeded is not an essential prerequisite although for most organisations, continued failures to achieve at least a break even position limit the capacity of the organisation to continue to operate. On this basis I have excluded federal and state sourced grant funding where this is directed toward social or civic services which do not involve a charge to the recipients for the provision of that service. It appears to me that such activities are not able to be regarded as trading for these purposes. There is no capacity through the operation of those activities for the Council to generate any form of income and its functions simply involve the delivery of community services in accordance with a grant of money for a particular purpose”. It is noted that O’Callaghan SDP did not analyse whether the entering into of the arrangement with the government was trading.
268 At [29] O’Callaghan SDP distinguished between “grant funded social service activities”, “and the provision of services on an agency basis for Government instrumentalities such as Centrelink”. O’Callaghan SDP said:-
“The Centrelink services appear to be undertaken by the Council on an agency basis and must be regarded as trading activities notwithstanding that the Council may have entered into these arrangements with the objective of improving social services for the local community. They differ from a grant in that the agency arrangement involves a charge on a Government department for the provision of a designated service which the department would be otherwise required to provide at its own cost. This is consistent with common arrangements for the delivery of traditional government services through private providers. For instance, the provision of job search services by a private provider involves trading as the provider makes a charge or even bids to the Government for the right to provide that service. In these instances the trade is actually constituted by the provision of the commodity or service. It reflects a commercial undertaking. In contrast, grant funding is provided for defined purposes which cannot be defined as commercial activities.”

269 In our opinion and with respect, there are weaknesses in this analysis, including:-
(a) There is no clearly articulated reason why the distinction between trading and not trading depends on an “agency arrangement”.
(b) Further, such an analysis directs attention to trying to determine whether there is or is not an “agency arrangement”. This is a diversion from the task of trying to determine if there is trading.
(c) The issue is not whether there is or is not “commercial activities” but whether there is trading.
(d) In any event, it is not explained why “grant funding” for “defined purposes” “cannot be defined as commercial activities”. Nor is this, with respect, a clear sentence. Regard needs to be had to not only whether those funds are used to trade or involved in trade but to the way in which the funds are provided to allow the service to be provided. The use of the word “grant” does not mean very much divorced from a close understanding of the arrangement by which the money is received. It may be that the “grant” itself involves trading, although for reasons set out later, in our opinion even if it does and results in a large amount of money being received by a corporation, this does not necessarily lead to its characterisation as a trading corporation.

270 At [30] O’Callaghan SDP said the trading of the council included the provision of child care services to the extent that it involved income from fees. Referring to Quickenden at paragraph [51], O’Callaghan SDP said that grant funding to underpin the provision of child care may be excluded from the concept of trading. Similar to our comments above, O’Callaghan SDP does not really explain why this was so. In Quickenden at [51] Black CJ and French J were discussing a particular statutory scheme. It is not apparent how that was applicable to the council. O’Callaghan SDP also referred to some grant funding which required a levy to be charged to the users of the services and said that it was unlikely that grants of this nature could be excluded from the concept of trading activities.
271 O’Callaghan SDP decided which of the different activities of the council involved trading on the basis of whether the council charged for the service or whether the service was provided, free of charge, from government funding.
272 O’Callaghan SDP decided at [46]-[47] that the council was a trading corporation, having regard to the percentage of its income derived from trading activities, the importance of this income to the provision of “the activities” of the council and the percentage of the asset value of the council constituted by a commercial venture.

(d) Harmer
273 In Harmer, Connor C of the NSWIRC discussed whether the Shoalhaven Community Housing Scheme Limited (the SCHS) was a trading corporation. It was a public company. Connor C said that the SCHS was a non profit organisation, providing housing to low income families. It had seven employees. Connor C referred to a number of authorities and without descending into the detail of the activities of the SCHS, said that all of its activities were trading activities. The reason why Connor C succinctly stated this was probably because the matter was settled by conciliation. (See [18]).
274 In his submissions on behalf of the Minister, counsel brought to our attention paragraph [15] of the reasons of Connor C as follows:-
“That having been said, some - possibly many - community based organisations with mixed activities may still escape Work Choices notwithstanding the fact that they have some trading and/or financial activities. I have in mind particularly local government authorities, many church run educational bodies, welfare organisations or small recreational clubs whose activities will always be predominantly directed towards providing a service to the community they serve and only incidentally and peripherally involved in activities of a trading and/or financial character. It would be most unfortunate if the valuable community service those organisations provide is reduced to being categorised simply as no more than trading and financial concerns. It should be more than that. Also, I do not believe that simply calculating the activities of any corporation in percentage terms of its revenue earnings necessarily provides an accurate picture of its true character and what may ultimately make it either a trading and/or financial corporation or some other type of corporation.”

275 In his reply, counsel for the appellant said that there may well be mixed views as to whether or not it was a good thing that a corporation may or may not “escape Work Choices”. We accept this submission insofar as it encapsulates the point that the effect of a determination of whether or not a corporation is a trading corporation, and what one might think of that conclusion, in terms of the jurisdiction of the Commission, is not relevant to the issue to be determined.
276 In our opinion neither Educang, Pellow or Harmer point the way to determining the appeal. Educang is too different from the present appeal. Harmer involves an incomplete analysis. Pellow suffers, in the analysis by O’Callaghan DP and with respect, from the shortcomings we identified when discussing the decision. It is also not particularly helpful for reasons analogous to (a) – (d) set out about Australian Red Cross at paragraph [250] above.
277 Also to the extent that the issue of whether a corporation is a trading corporation is entirely determined by a consideration of the percentage of income received from trading as opposed to non trading activities, we do not find the analysis in Educang, Pellow or the other decisions cited earlier to be persuasive. As stated earlier, the analysis has the effect that non income producing activities may not be taken into account. Also, the comparative dollar analysis may ignore the activities which a corporation engages in as a result of the receipt of the funds from trading. This is relevant to an assessment of the activities of the corporation as a whole. In our opinion, the more persuasive approach is that taken by Toohey J in Hughes, when determining the status of the WACA clubs. This method was applied in the cases cited earlier and draws support from Mason J in Adamson.

20. Trading
278 In our opinion the determination of the appeal depends in part upon the meaning of “trading” and whether the entering into, performance of and payment under the contract constitutes trading. If it is not then the appeal must fail.
279 Trading is said in the Macquarie Dictionary, 4th edition, 2005 to be the verb, of the noun “trade”. Trade is relevantly defined as:-
“1. the buying and selling, or exchanging, of commodities, either by wholesale or by retail, within a country or between countries: domestic trade; foreign trade.
2. a purchase, sale, or exchange.
3. a form of occupation, pursued as a business or calling, as for a livelihood or profit …”

280 What is encompassed by trading has been considered in some of the authorities analysed earlier; notably St George County Council, Adamson, Fontana Films, Hughes in principle 7 at 20 (FCR), 672 (ALR) and Quickenden per Carr J. None of these observations were, in our opinion, intended to lay down an all encompassing test of what is meant by trading. Toohey J in Hughes in principle 7 at 20 (FCR), 672 (ALR), as well as citing St George County Council, cited Re Ku-ring-gai Co-operative Building Society (No. 12) Ltd (1978) 22 ALR 621 at 624-625 and Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325 at 330-331.
281 In Ku-ring-gai, the Full Federal Court was, amongst other things, considering the applicability of s47(1) of the Trades Practices Act. The sub-section said, relevantly a “corporation [defined to include a trading or financial corporation] shall not, in trade or commerce engage in the practice of exclusive dealing”. (640). The Full Court decided Ku-ring-gai was a financial corporation and also considered the concepts of “trading” and “trade” in the context of “trade or commerce”. Although Bowen CJ was in the minority in deciding that Ku-ring-gai was not engaged in “trade or commerce”, his Honour’s observations about “trade” are not in conflict with the majority. His Honour said at 625:-
“The word “trade” is used with its accepted English meaning: traffic by way of sale of exchange or commercial dealing: Commissioner of Taxation v Kirk (1900) AC 588 at 592 per Lord Davey; W & A McArthur Ltd v State of Queensland, supra at 548. The commercial character of trade was mentioned more recently by Lord Reid in Ransom v Higgs [1974] 3 All ER 949 at 955 His Lordship there said: “As an ordinary word in the English language ‘trade’ has or has had a variety of meanings or shades of meaning. Leaving aside obsolute or rare usage it is sometimes used to denote any mercantile operation but is commonly used to denote operations of a commercial character by which the trader provides to customers for reward some kind of goods or services.” Moreover, the word covers intangibles, such as banking transactions, as well as the movement of goods and person for historically its use has been founded upon the elements of use, regularity and course of conduct: Bank of New South Wales v Commonwealth (1948) 76 CLR at 381.”

282 Deane J at 642 said:-
“It was but faintly submitted on behalf of the Commission that the present applicants are trading corporations. Even accepting, as I do, that a much more extended scope should be given to the concept of “trade: and “trading” than the buying and selling of goods (see Bank of New South Wales v Commonwealth, supra, at 381; Strickland v Rocla Concrete Pipes (1970-71) 124 CLR 468 at 489; [1972] ALR 3 at 9–10), I incline to the view that neither applicant can properly be categorized as a trading corporation. It is, however, unnecessary that I express any concluded view on that question.”

283 Further at 648-649 his Honour said:-
“The terms “trade” and “commerce” are not terms of art. They are expressions of fact and terms of common knowledge. While the particular instances that may fall within them will depend upon the varying phases of development of trade, commerce and commercial communication, the terms are clearly of the widest import: see, generally, W & A McArthur Ltd v State of Queensland (1920) 28 CLR 530 at 546ff; Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 284ff and 381ff. They are not restricted to dealings or communications which can properly be described as being at arm's length in the sense that they are within open markets or between strangers or have a dominant objective of profit-making. They are apt to include commercial or business dealings in finance between a company and its members which are not within the mainstream of ordinary commercial activities and which, while being commercial in character, are marked by a degree of altruism which is not compatible with a dominant objective of profit-making.”

284 Brennan J, the third member of the Court, expressed general agreement with Deane J except where his reasons departed from those of Deane J (631). On the issues of “trading” and “trade” they did not do so.
285 In Bevanere, in the context of s52 of the Trades Practices Act, the joint reasons of the Full Federal Court at page 330, accepted and quoted the description of “trade” articulated by Bowen CJ in Ku-ring-gai at 625. At the same page, their Honours also referred with approval to the observation of Deane J that “trade” and “commerce” are words “of the widest import”. Further at page 331, their Honours rejected an argument that a corporation must engage in multiple transactions to engage in “trade or commerce”.
286 A summary of points about “trading” emerging from the authorities, together with our observations about them is as follows:-
(a) The word is of wide import (Murphy J in Adamson at 239; Deane J in Ku-ring-gai at 648-649; The Full Federal Court in Bevanere at 330).
(b) Although “buying and selling” may be the clearest example of trading, it is not restricted to this (Stephen J in St George County Council at 569-570; Barwick CJ in Adamson at 209; Mason J in Fontana Films at 203; Toohey J in Hughes principle 7 at 20 (FCR), 672 (ALR); Carr J in Quickenden at [101]; Deane J in Ku-ring-gai at 649; Dixon J in Bank of NSW at 381). The appellant’s counsel’s submissions, tended to focus on clauses of the contract that referred to “purchase” and “sale”. We did not however take his submissions to be to the effect that it was for only this reason that the entering into and performance under the contract was trading. Nor on the authorities, would so restrictive an approach be required.
(c) Although the desire to earn profit may ordinarily be part or an element of trading, trading does not always require the attainment of profit (Barwick CJ in St George County Council at 539; Stephen J in St George County Council at 569; O’Callaghan SDP in Pellow at [28]; Deane J in Ku-ring-gai at 649). For example, a person who sells his or her shares at a loss, is nevertheless engaging in trading.
(d) In our opinion, with respect, the most apt general description of trading is that succinctly stated in principle 7 at 20 (FCR), 672 (ALR) by Toohey J in Hughes: the activity of providing, for reward, goods or services. This does not mean we regard this as an all encompassing definition. To so describe what Toohey J has said would ignore point (a) above. The description of Toohey J is supported by Bowen CJ in Ku-Ring-gai at 625, as cited with approval by the Full Federal Court in Bevanere at 330. It is also consistent with the Macquarie Dictionary, 4th edition, 2005 definition of trading as “exchange for reward”. The word “reward” in this context means “something given or received in return or recompense …”. (Macquarie Dictionary, 4th edition, 2005). In the present context an appropriate synonym would be “for value”. Therefore broadly speaking in our opinion trading generally involves an exchange, or the provision of goods or services, for value. Both the provider and the receiver of the goods or services will, when this occurs, be trading. Barter, referred to earlier, could therefore be trading. There is an exchange of goods where the “value” is represented by the receipt of the goods from the other.
(e) Some of the authorities refer to “commerciality”. (Barwick CJ in Adamson at 209; Bowen CJ in Ku-ring-gai at 625 and the Full Federal Court in Bevanere at 330). Carr J in Quickenden at [101] referred to the earning of “revenue” and O’Callaghan SDP in Pellow at [28] to the earning of “income”. We have considered whether commerciality is a separate requirement for trading to occur. In our opinion it is not. This stems from a consideration of what was precisely said in the High Court and Federal Court authorities just cited, the relevant passages of which were earlier quoted. (We have deliberately excluded Pellow from this because of our respectful opinion about the weaknesses in the analysis). Also, in our opinion, if there is an exchange of goods or services for value this is in itself trading without the necessity of considering if there is an independent element of commerciality about the transaction. For example, a private purchase and sale of a car advertised in a newspaper is trading even though it is essentially a domestic arrangement. There is an exchange of personal property for value. The requirement of an exchange for value of itself supplies any requirement for commerciality in the arrangement for it to constitute trading.
(f) Wilcox J in Australian Red Cross and O’Callaghan SDP in Pellow suggest that the gratuitous provision of a public welfare service, where the money to engage in the service is supplied by government funding, is not trading. In our opinion, and with respect, so broad a proposition is not supported by the decisions of the High Court or the other authorities cited above which discuss the meaning of “trade” or “trading”. In a situation where there is in effect, a tripartite arrangement involving the government it is necessary to look at the basis on which the money is received to provide services to ascertain if any or all of this constitutes trading. This approach is not inconsistent with the authorities, which establish the relevant principles. There is no reason in principle why a tripartite arrangement may not constitute trading. The fact that government funds are used for a public welfare service, does not necessarily have the effect that the means by which the funds were received, or the arrangement overall, is not trading. The correct approach in our opinion is to carefully consider, on a fact specific basis, the means by which the government funds are provided to a corporation, to see if it is trading. Accordingly, the provision of funds by government to a corporation may or may not constitute trading. Furthermore, as we will explain more fully later, even if it is trading this does not necessarily mean the corporation is a trading corporation. In our view, to determine if it is, a holistic appraisal must be made of the activities of the corporation. This will allow a conclusion to be made about whether the trading component of its activities are sufficient to lead to characterisation as a trading corporation.

287 In the present appeal there is a tripartite arrangement of the type discussed above. The department provides funds to the appellant, which provides services. We do not think that any aspect of the tripartite arrangement can be ignored in considering the appellant’s activities as a whole. Furthermore although it is necessary to consider whether the entering into of the contract constitutes trading, which is the analysis we will next engage in, this will not necessarily be determinative of the issue of whether the appellant is a trading corporation.

21. Does the Appellant’s Activity in Entering into and Acting in Accordance with the Contract Constitute Trading with the Department?

(a) Preliminary
288 Consistent with our earlier analysis the issue is to be resolved by whether there is trading in the sense of an exchange for value, or provision of services for reward. The relevant documents have been summarised earlier.
289 In considering the contract and other key documents, the following are important:-
(a) It is not the use of particular words which is determinative but the effect of the arrangement as a whole. Accordingly, the issue does not turn on whether the word “purchaser”, “sell”, “promises”, “consideration”, “funding” or “grant”, for example, are or are not used. At times, in our opinion, the submissions sought too readily to try and find words in the documents that did or did not resemble a trading contract, rather than look at the substance of the arrangement as a whole. The words used in the contract and other documents need to be considered in context and not as part of some assumed trading/commercial or non-trading/non-commercial meaning.
(b) As part of considering the arrangement as a whole, it is material to see how the contract links the policy directions document, the policy framework and the RFT. This enables the full effect of the arrangement to be considered.

(b) The Links Between the Documents
290 The policy directions document is incorporated into the contract by clause 3.2 and accordingly is to be considered as part of the contract. From its terms it seems clear that the policy framework document is required to be complied with by the appellant as an ATSILS (Aboriginal and Torres Strait Islander Legal Services). It is at least arguable that the policy framework document is within the definition of “Policy Directions” in clause 1.1 of the contract. Paragraph 2.1(b)(iii) of the policy framework document would include in our opinion the terms of the contract and policy directions document.
291 In clause B of the preliminary unnumbered clause headed “What is this Contract about?” in the contract, there is reference to the provider (appellant) submitting a response to the RFT. Although the RFT is not expressly part of the contract, the substance of it remains relevant to an understanding of the relationship of the appellant with the department. This is because the contract arises out of the submission provided by the appellant in response to the RFT. This is not to say that merely because there is a tender process, and this process is often engaged in by government in commercial or trading contracts, the present contract is necessarily of that type. Again it is the substance of the documents and the relationship which needs to be considered rather than any assumption as to the nature of the relationship based upon the use of some words.

(c) Analysis of Documents
292 We will first consider the contract. In our opinion the two unnumbered clauses of the contract are important because there is an express statement of the purpose of the contract. It is an engagement of the appellant by the Commonwealth. The appellant is to provide the “Services”. The purpose or aim of this is to improve the access of indigenous Australians to high quality and culturally appropriate legal aid services.
293 The appellant emphasised in the “Terms and Conditions” clause the words “consideration” and “mutual promises”. It was submitted in effect that there was an exchange of obligations, of value, consistent with an ordinary commercial contract and constituting trade. In our opinion as stated it is not the words by themselves that are important but the obligations which the contract creates.
294 The “Services” is as defined and specified in the contract as quoted earlier. From the combination of the interrelated clause 3.1(b) and tables 1-4 in Schedule 1 to the contract, there is an obligation for the appellant to provide a fairly tightly defined set of services in terms of both nature and quantity.
295 The other obligations which the appellant is required to comply with as set out in clauses 3.3-3.13 are also quite specific and extensive.
296 Further, when looked at in combination clauses 3 and 4 of the contract establish what services are to be provided by, and the obligations of, the appellant, for a period of three years, and that there will be large payments made by the department for the provision of those services.
297 Clause 4.3 sets out specifically when the due date will be for the payment by the department of the fees into the appellant’s bank account, after the receipt of a correctly rendered invoice. The due date for the payment of the fees is therefore predicated upon receipt of a correctly rendered invoice. The obligation to provide an invoice is, as stated earlier, in clause 4.5 of the contract and clause 4.6 sets out what must be included in an invoice. The payment of fees for services on an instalments basis, in consequence of receiving an invoice within a specific period of time and containing specific information, is consistent with trading.
298 We referred earlier to the definition of “tax invoices” in clause 1.1, as referred to in clause 4.6 of the contract. This definition was emphasised by the appellant as being indicative of the commerciality of the contract. Whilst we accept this to be so, it is in our opinion of itself not of much assistance in determining whether there is trading between the appellant and the department.
299 Other clauses of the contract demonstrate that what the appellant must do to comply with the contract is tightly controlled and extensive. We referred earlier to clauses 5, 12, 15, 16, 17, 18 and 19. These clauses in combination with each other and the other clauses referred to have this effect.
300 The termination clause 11 is also important in understanding the nature of the relationship created by the contract. It provides the department with extremely broad powers to terminate the contract or suspend the operation of it in whole or in part. In our opinion this is consistent with a relationship of exchange. The fees to be provided under the contract are in exchange for the performance of the services and a set of tightly controlled and extensive obligations. If the obligations are not met, the services not provided, or for any other reason the department may terminate the contract.
301 Turning now to the policy directions document, the “Introduction” in paragraph 1 is important because it sets out the objectives and purpose of the Legal Aid for Indigenous People Program. In looking at this and other paragraphs it is again important not to have any assumed understanding of the expression “legal aid” as being consistent with non-trading. Perhaps more specifically it might be said that the expression does say something about whether there is trading between the appellant and its indigenous clients, but not whether there is trading between the appellant and the department.
302 Paragraph 1.2 places the “National Program of Legal Aid for Indigenous People” within the broader strategy administered by the department to address “the causes and the effects of Indigenous disadvantage …”.
303 Paragraph 1.3 sets out the objectives of the program. It is to “improve the access of Indigenous Australians to high-quality and culturally appropriate legal aid services …”.
304 Paragraphs 1.4-1.7 of the policy directions document were quoted earlier. They set out relevant background to the legal aid services program and again indicate the purpose of the program which includes the contract. Paragraph 1.6 links the tender process to “broader Government policy”. The “prime objective” is set out. It is to “better prioritise and target available resources, to ensure that services are responsive to established policy priorities and community needs, and to provide the best possible quality of service to individual clients”. The process of “competitive tender” and engagement under a contract for a three year funding period are referred to again in paragraph 1.7.
305 The other paragraphs of the policy directions document also set out in some detail the obligations and requirements of the appellant, which are extensive.
306 The contents of paragraph 11 of the policy directions document were commented upon by the Commissioner in his reasons and referred to by the respondent in its submissions as being more consistent with a type of administrative review than a commercial or trading contract. It is correct that a review process of the type referred to is consistent with administrative review or an internal review process within a government department. This does not of itself, however, lead to a characterisation that the relevant activities of the appellant are not trading. It is also one of a number of specific obligations which the appellant must comply with to comply with the contract.
307 Paragraph 12 of the policy directions document and the 11 policy directions annexed as appendices are again indicative of the very tight controls which the department places upon the performance of the contract by the appellant.
308 Looking now at the policy framework document, as stated a little earlier, it is clear that this is directed to the appellant as an ATSILS and therefore its requirements are to be complied with by the appellant.
309 Paragraph 2 of the policy framework document is important in understanding the purpose of the provision of program funding agreement funds to ATSILS. This includes to “ensure that Indigenous Australians enjoy their legal rights, are aware of their responsibilities under the law and have access to appropriate representation …”. This is consistent with the government policy articulated in paragraph 1.6 of the policy directions document.
310 In combination, the contract, the policy directions document and the policy framework document give an indication of what the government obtains by the engagement by the department of the appellant to perform the services set out in and controlled by the contractual documents. It is the provision of specific, extensive and tightly controlled services to a particular part of the community, for a particular purpose and in line with a broader government policy.
311 We have set out earlier the relevant aspects of the RFT. The seven characteristics set out in dot point form to the foreword to the RFT are consistent with the engagement of the appellant under the contract for the purposes and on the basis set out earlier. It is relevant that one of the characteristics is the provision of “excellent value for money”. Although in this instance it is clear from Mr Eggington’s evidence that the appellant did not tender on the basis of any lower figures for the provision of services, this dot point is still relevant to ascertaining the nature of the appellant’s activities arising out of the contract. Having said this, it does not assist a great deal as it is separate to and not incorporated by reference into the contract. The status of the RFT is made clear by paragraph 3.2 of it.
312 We have noted earlier that in a number of places the RFT refers to the “purchase” of services. The use of the word “purchase”, particularly in the RFT, does not of itself provide the answer to whether there is trading between the department and the appellant. As emphasised earlier it is the substance of the activity rather than the nomenclature which is important.
313 The same may be said for the use of the word “funding” in some of the documents, which was highlighted in the Minister’s submissions. In our opinion it is not particularly important whether the money that is provided by the department to the appellant is described in the documents as a “grant”, “funding”, or being provided for the “purchase” of services.
314 Earlier we quoted from aspects of what Mr Eggington said in the 2005 and 2006 Annual Reports. There he provides his opinion about the changes and benefits for the appellant, from the “winning of the tender” and the “signing of a three year contract”. Although this provides some understanding of the effect of the contract upon the operations of the appellant, we do not think these passages assist in determining the nature of the activities of the appellant. To reiterate, it is the terms and effect of the contractual documents which determine this.
315 Whilst the administration of the contract requires activity which is incidental to trade such as invoicing, auditing and receipt of monthly instalments of funds, payment of GST and maintenance of records, that does not render that activity in itself “trade” or “trading”. These are simply steps that the appellant’s officers and employees are required to take to ensure the terms of the contract are adhered to.
316 The other document which we referred to at length earlier was the appellant’s constitution. We have already made the point that its benevolent purposes do not mean that the appellant cannot be a trading corporation. In addition, the appellant entering into and performing the contract with the department is clearly within its objects and powers under the constitution.

(d) Conclusion on Trading
317 As we have said, in our opinion the best general description of trading is an exchange for value or the provision of goods or services for value. In this instance there is certainly value being provided by the department to the appellant; in terms of the fees paid pursuant to the contract. The more difficult question is whether there are services provided by the appellant to the department in exchange for that value. We have earlier set out that for there to be an exchange for value services do not need to be provided directly to the person who is providing the value.
318 In our opinion the entering into and performance of the contract by the appellant does constitute trading with the department. This is because of the combined effect of the contractual documents.
319 What the appellant provides for the department and therefore the government, under the contract, are specifically directed and tightly controlled services which enhance a particular, albeit broadly stated, policy. The department and therefore the Commonwealth government obtain the benefit of the appellant carrying out a service for a part of the community in attempting to fulfil, in part, this policy of the government. The performance of the services under the contract is not only for the benefit of the indigenous persons who obtain legal assistance, but also to the government in partially carrying a policy into effect.

22. Is the Appellant a Trading Corporation?
320 As stated above, the conclusion that the appellant trades with the department does not inevitably lead to the conclusion that the appellant is a trading corporation. This is because all of the activities of a corporation need to be assessed. In this instance they include the provision of legal representation to indigenous people for which they are not charged. This arm of what the appellant does is clearly not trading. There is no exchange for value between the appellant and its indigenous clients.
321 The authorities establish that at least in some circumstances the performance of trading activities to support a non-trading purpose or activity may constitute trading. Mason J referred to this in the Tasmanian Dam case at page 157 and cited State Superannuation Board at 304. The relevant paragraphs of State Superannuation Board are quoted in paragraph [212] above.
322 We note the following about these paragraphs:-
(a) Observations are made about when a conclusion that a company is a trading corporation is “open” or “may” occur.
(b) This ties in with the observations of Barwick CJ and Mason J in Adamson which are quoted in these paragraphs of State Superannuation Board. An “overview” is required and the question is one of “fact and degree”. The overview is of all of the corporation’s current activities, to determine if trading activities are a “sufficiently significant portion”.
(c) The last sentence of the quoted paragraphs is not elaborated upon so as to be capable of application in all cases. This is not surprising of course.
(d) The earlier reference however, with approval (as noted by Toohey J in Hughes at 22 FCR), to the reasons of Mason J in Adamson and “trading activities” forming a “sufficiently significant portion”, suggest that where a corporation engages in some trading activities and some non trading activities, a qualitative assessment of the trading activities of a corporation as against its activities as a whole is required.

323 A review of the facts of High Court authorities is not inconsistent with this approach. In the Tasmanian Dam case and St George County Council the trading activities of the HEC and the council in selling and supplying electricity were extensive. In Adamson the WANFL and the West Perth Football Club presented football matches to generate profit. In State Superannuation Board the board engaged in financial activities to augment superannuation benefits for its members. In each of these cases the trading activities of the corporations occurred with frequency, were a significant part of the overall activities and produced a large amount of income. Given this combination of circumstances the conclusion that they were trading corporations is not surprising.
324 In our opinion as set out earlier and with respect a proportional dollar value approach on its own is not particularly helpful. It is not supported by the High Court authorities and is inconsistent with the persuasive analysis of Toohey J in Hughes.
325 The reasons of Stephen J in St George County Council at 569 also contained the suggestion that if the council was not “buying and reselling” electricity but distributed it “free of charge” or “by way of gift” this might not be “trading” and the council not a “trading corporation”. This resonates to an extent with this appeal where there is trading in the appellant’s obtaining of funds from the department but no trading with its clients in the provision of services.
326 Aspects of this point were made in the written submissions of the respondent:-
“The provision of legal aid services by the appellant to any individual client is ‘gratuitous’ in the sense that, if that claimant upon the service satisfies the eligibility criteria, then the service must be provided to that claimant, and the claimant will not pay professional fees for the service. The appellant does not receive any particular funding, fee or reimbursement from the Commonwealth attributable solely to the service that it is obliged to render to that particular claimant. The funding received for that particular period of time, pursuant to the Contract for the provision of legal aid services, will be the same regardless of whether that particular claimant had sought and obtained the services of the appellant.”
(emphasis in original)

327 The process by which Toohey J decided whether the WACA clubs were trading corporations also assists. To reiterate, his Honour’s approach, drawing support from Mason J in Adamson was to consider all of the activities of the corporation(s) and make a qualitative assessment of what they were and what the corporation did. This was to an extent a holistic approach – but dependant too on considering the activities comprising the whole; and assessing the nature and extent of trading activities within the whole. This allowed for an assessment of the role of trading in the activities of a corporation and in turn whether on this basis it can be properly characterised as a trading corporation.
328 This does not mean as stated earlier that the mere description of what the appellant does for its indigenous clients as a “public welfare service” determines whether it is a trading corporation. It is all of the activities of the appellant, including the contract with the department, which determines this. On the other hand therefore as the respondent pointed out and contrary to the appellant’s submission the contract is not the “beginning and the end” of what the Commission should have considered; or the sole basis on which a conclusion or characterisation reached. The submission constitutes an incomplete analysis.
329 Also the fact that the appellant must pursuant to the contractual documents conduct itself in a manner which might generally be described as being similar to a “public sector agency”, although relevant, in looking at what its activities are, does not determine the status of the appellant. Also as we have tried to point out earlier simply looking at the amount of money obtained from trading sources is not determinative.
330 In our opinion, when funds are provided by government to a corporation there are some features of this that are relevant which may not apply when non government sources of funds are involved. This is because of the nature of government in that it, in particular, may require funds to be used for non trading activities. There are the following interrelated questions, issues and comments which in our opinion are relevant to determine whether a corporation in receipt of government funds is a trading corporation. (Although this is not intended to be an exhaustive or all encompassing check list).
(a) Whether the basis on which the funds are provided constitutes trading.
(b) The use that is made of the funds.
(c) Related to (b) there may be a purpose specified by the government for the use of the funds. For example the funds may be required to be used for the provision of particular services.
(i) If so, it is relevant to consider whether the specified use does or does not involve the provision of services to recipients which does not constitute trading.
(ii) Even if a use is not specified it is still relevant to consider how the corporation uses the funds and if so whether that use in whole or in part constitutes trading with another or others.
(d) The link between the provision of the funds, the use made of the funds and the activities of the corporation as a whole. There are a number of elements involved in this which are relevant and although the particular facts will need to be considered it is unlikely that a consideration of only one will be determinative of trading corporation status. The elements include:-
(i) Whether the government has placed any restriction as a condition of the provision of the funds; such as that they can or must be used for particular activities and if so what.
(ii) What the activities of the corporation are, in the sense described in the authorities. That is, overall, what it does. To assess what it does, it is artificial to split the receipt of government funds from what the corporation does with them. The accumulated or combined effect of the basis of receipt and the use of the funds is important in assessing what the corporation does as a whole and whether any trading activity is a sufficiently significant proportion of its overall activities to lead to a conclusion that it is a trading corporation.
(iii) The proportion that the government funds received by the corporation bears to its income as a whole.
(iv) The size of the amount of the funds received.

331 A consideration of these issues in combination leads, in our opinion, to the conclusion that the appellant is not a trading corporation. This is because:-
(a) The way the funds are provided constitutes trading. However, the use made of the funds, as specified by the government is the provision of legal services without charge to clients. This does not constitute trading with the client recipient(s) of the service. The service which is required to be provided is in accordance with a government policy to redress social disadvantage. This reinforces the point that the activity in providing the service is not trading.
(b) Upon the completion of administrative requirements and continued satisfactory performance, the funds from the government are provided on a regular basis over three years in accordance with a single contract.
(c) The funds provided by the government are large in size and by far the majority of the total income received by the appellant.
(d) There is no specific nexus between the provision of legal services for the clients of the appellant and the receipt of funds from the government in accordance with the contract.
(e) The providing of the legal service is not just the predominant activity of the appellant. It permeates through and enshrouds all that it does. The obtaining of funds from the department, although involving trading, is not an independent trading activity to enable the appellant to carry out a non trading activity. The two are inextricably linked. The funds obtained are required to be used for an activity which is not trading. This affects the extent, in a qualitative sense, of the trading with the department as against the activities of the appellant as a whole. When the activities of the appellant are considered as a whole, in the words of Mason J in Adamson trading activities do not “form a sufficiently significant proportion of its overall activities to merit its description as a trading corporation”. Put slightly differently, to use the process of Toohey J in Hughes, from evaluating the extent of the trading activities against the totality of activities, we have reached the conclusion that the trading activities are not so significant to give the appellant “the character of a trading corporation”.

22. Conclusion and Orders
332 For these reasons in our opinion the Commission did not err in the conclusion that the appellant is not a trading corporation and there was jurisdiction to hear the respondent’s substantive application.
333 We will publish a minute of proposed orders that:-
1. Leave is granted to the Minister to intervene.
2. The appellant is granted leave to appeal.
3. The appeal is dismissed.
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