2009 WAIRC 01149

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2009 WAIRC 01149

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

HEARD
:
FRIDAY, 18 SEPTEMBER 2009

DELIVERED : MONDAY, 2 NOVEMBER 2009

FILE NO. : FBA 6 OF 2009

BETWEEN
:
SHIRE OF RAVENSTHORPE
Appellant

AND

JOHN PATRICK GALEA
Respondent

ON APPEAL FROM:

JURISDICTION: WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
CORAM: COMMISSIONER JL HARRISON
CITATION: 2009 WAIRC 00455
FILE NO: U175 OF 2008

CatchWords:
Industrial Law (WA) – Leave to appeal to the Full Bench – Appeal raises important questions of law and jurisdiction – Leave to appeal granted

Appeal against finding in relation to jurisdiction – Whether appellant is a trading corporation – Application of ‘activities test’ – Significance of statutory functions of local government – Character of trading activities carried out in the public interest – Importance of profit – Trading – Particular activities considered – Relevance of work of employees – Lack of evidence at first instance – Correction order issued; appeal otherwise dismissed


Legislation:
Bush Fires Act 1954 (WA): Part IV Division I
Cemeteries Act 1986 (WA); s5, s6; s53(i); ss54-55.
Constitution: s52(xx); s109
Constitution Act 1889 (WA): s52
Dividing Fences Act 1961 (WA): s24
Dog Act 1976 (WA): s9
Emergency Management Act 2005 (WA): s36
Fair Work Act 2009 (Cth): s26
Fire and Emergency Services Authority of Western Australia Act 1988 (WA): s36J
Health Act (WA): s26
Heritage of Western Australia Act 1990 (WA): s45
Industrial Relations Act 1979 (WA): s7; s26(1)(a); s26(1)(b); s29(1)(b)(i); s49
Judiciary Act 1903 (Cth): s78B
Litter Act 1979 (WA): Part V
Local Government Act 1995 (WA): s1.3(3), s2.1(1)(a), s2.3(1), s2.4(1), s2.5, s2.6(1), s2.6(3), s2.7, ss2.8-2.10, ss2.11-2.16, s2.17, s2.19, s2.28, ss3.1-3.68, s3.1, s3.2, s3.4, s3.5(1), (3) and (4), s3.10, s3.18, s3.21, s3.27, ss3.28-3.36, ss3.37-3.48, s3.59, ss4.1-4.99, ss5.1-5.125, s5.36(1), ss6.1-6.82, s6.2, s6.4(1), s6.7(2), s6.9, s6.14, s6.15, s6.16, s6.17(2), s6.17(3)
Main Roads Act 1930 (WA): s27A
Planning and Development Act 2005 (WA): s72
Workplace Relations Act 1996 (Cth)
Result:
Correction order issued, appeal otherwise dismissed
REPRESENTATION:
Counsel:
APPELLANT: MR S WHITE, AS AGENT
RESPONDENT: MR J ATKINSON (OF COUNSEL), BY LEAVE
Solicitors:
APPELLANT: NOT APPLICABLE
RESPONDENT: HAYNES ROBINSON BARRISTERS AND SOLICITORS


Case(s) referred to in reasons:

Aboriginal Legal Service of Western Australia (Inc) v Lawrence [No 2] (2008) 89 WAIG 243
Aboriginal Legal Service of Western Australia Inc v Lawrence (2007) 87 WAIG 856
Australian Workers’ Union of Employees, Queensland v Etheridge Shire Council (2008) 171 FCR 102
Ballina Shire Council v Ringland (1994) 33 NSWLR 680
Bank of New South Wales v Commonwealth (1948) 76 CLR 1
Bell v Shire of Dalwallinu (2008) 88 WAIG 1867
Bysterveld v Shire of Cue (2007) 87 WAIG 2462
Clark v Commissioner of Taxation (2009) 258 ALR 623
Cole v Whitfield (1988) 165 CLR 360
Derbyshire County Council v Times Newspapers Ltd [1993] AC 534
E v Australia Red Cross Society (1991) 27 FCR 310
Educang Ltd v Queensland Industrial Relations Commission (2006) 154 IR 436
Fencott v Muller (1983) 152 CLR 570
Gerhardy v Brown (1985) 159 CLR 70
Glew v Shire of Greenough [2006] WASCA 260
Guest v Kimberley Land Council (2009) 89 WAIG 2063
Hardeman v Children’s Medical Research Institute (2007) 166 IR 196
Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10
J S McMillan Pty Ltd v Commonwealth (1997) 77 FCR 337
Jazabas Pty Ltd v City of Botany Bay Council [2000] NSWSC 58
Mid Density Development Pty Ltd v Rockdale Municipal Council (1993) 39 FCR 579
Mid Density Development Pty Ltd v Rockdale Municipal Council (1993) 44 FCR 290
Murdoch University v Liquor Hospitality and Miscellaneous Union, Western Australian Branch (2005) 86 WAIG 247
New South Wales v Commonwealth (2006) 229 CLR 1
Pavlakis v Council of the City of Shoalhaven [2005] NSWSC 436
Pellow v Umoona Community Council [2006] AIRC 426
R v The Judges of the Federal Court of Australia; ex parte Western Australian National Football
League (Inc) (1979) 143 CLR 190
Quickenden v O’Connor (2001) 109 FCR 245
Re Ku-ring-gai Co-operative Building Society (No, 12) Ltd (1978) 36 FLR 134
Ritchie v Mosman Municipal Council (2000) 107 LGERA 187
Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Western Australia (1989) 69 WAIG 1873
SGS Australia Pty Ltd v Taylor (1993) 73 WAIG 1760
State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282
Victoria v Commonwealth (1996) 187 CLR 416
XYZ v The Commonwealth (2006) 227 CLR 532



Reasons for Decision

RITTER AP:
Introduction
1 This is an application for leave to appeal and an appeal if leave is granted against a decision made by the Commission on 17 July 2009. The application/appeal is made under s49 of the Industrial Relations Act 1979 (WA) (the Act). (For ease of reference I will refer to the applicant/appellant as “the Shire”).

The Decision
2 The order made by the Commission on 17 July 2009 was not contained in the appeal book. Instead there was a minute of proposed order dated 15 July 2009. A perusal of the records of the Commission has confirmed however that an order, in the terms of the minute, was made on 17 July 2009. Although it is this document which should have been contained in the appeal book, nothing turns upon that in this matter.
3 The orders made on 17 July 2009 were that the Commission:-
“1. ORDERS THAT application U 175 of 2009 be and is hereby accepted out of time.

2. DECLARES THAT during the time the applicant was employed by the respondent, the respondent was not a trading corporation.”

4 The “application” in order 1 was made under s29(1)(b)(i) of the Act, seeking a remedy for alleged unfair dismissal. The “respondent” in order 2 is the Shire.
5 The Shire does not seek to appeal against the first order made, but only the second. The effect of that order was that the Commission has jurisdiction to hear and decide the respondent’s application. If the Shire is a trading corporation, the parties agreed that pursuant to the provisions of the former Workplace Relations Act 1996 (Cth) and s109 of the Constitution, the Commission does not have that jurisdiction. (See Aboriginal Legal Service of Western Australia (Inc) v Lawrence [No 2] (2008) 89 WAIG 243 (ALS) at [14]). The outcome is the same if the Fair Work Act 2009 (Cth) now applies to the present matter. (See s26). Accordingly it is unnecessary to decide that point.

Section 78B Notices
6 The application/appeal involves the interpretation of the Constitution. Accordingly, at the request of the Full Bench, the Shire issued notices pursuant to s78B of the Judiciary Act 1903 (Cth) to the Attorneys General of the Commonwealth and each of the States (see ALS at [8], and in the Full Bench, Aboriginal Legal Service of Western Australia Inc v Lawrence (2007) 87 WAIG 856 at [10]). None of the Attorneys General has decided to intervene.

Leave to Appeal
7 The decision by the Commission at first instance, that the Shire was not a trading corporation, 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 Shire faces the hurdle of s49(2a) of the Act in seeking to appeal against the finding. Section 49(2a) provides that:
“(2a) 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.”

8 In a schedule to the notice of appeal the Shire set out “public interest grounds” supporting the grant of leave under s49(2a) of the Act. Although there were nine numbered paragraphs in this section of the schedule, they may be summarised as arguing that the issue of whether or not local government bodies are trading corporations, and accordingly outside the jurisdiction of the Commission, is a matter of public importance for all local government bodies throughout the State and potential applicants against such bodies. Accordingly, guidance from the Full Bench as to the approach to take in deciding that issue is within the public interest.
9 The respondent opposed the application for leave, although this was more upon the ground that the appeal should not succeed rather than that the issue before the Full Bench was not one of public importance. The respondent’s counsel conceded the latter.
10 The principles guiding the Full Bench in determining whether leave to appeal should be granted were discussed in my reasons in Murdoch University v Liquor, Hospitality and Miscellaneous Union, Western Australian Branch (2005) 86 WAIG 247 at [12]-[15] (Gregor SC and Smith C agreeing with those reasons).
11 In my opinion leave to appeal should be granted. This is because the appeal raises important questions of law and jurisdiction affecting the Commission. A decision of the Full Bench will be of assistance to other Commissioners who are required to determine whether a local government body is a trading corporation, as well as to local government bodies themselves and putative applicants throughout the State. It is, to paraphrase the words of the Full Bench in Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Western Australia (1989) 69 WAIG 1873 at 1879, quoted in Murdoch University at [13], a case where the appeal raises issues which because of their generality, are in the public interest to decide.
12 In my opinion an order should be made granting leave to appeal.

The Hearing at First Instance
13 A hearing before the Commission to determine both the trading corporation issue and whether the respondent should be granted an extension of time to file his application, was heard on 19 March 2009. At the hearing the respondent did not lead any evidence on the trading corporation issue. The Shire led evidence from Mr Ian Dickinson, who is the Supervisor of the Shire who had responsibility for the respondent and Mr Pascoe Durtanovich, the acting Chief Executive Officer of the Shire. It was only the evidence of the latter which was relevant to the trading corporation issue. Mr Durtanovich gave oral evidence and through him a number of documents were received as exhibits, including a witness statement and financial records of the Shire for the financial year 1 July 2007 to 30 June 2008. It was partly during this period that the respondent was employed by the Shire. The respondent was employed between May and November 2008 but later financial records were not available. At the completion of the hearing, directions were made to enable the Shire to file and serve an amended witness statement of Mr Durtanovich and the filing and service of closing written submissions. The Commissioner reserved her decision on that basis. An amended witness statement of Mr Durtanovich was duly filed. The reasons for decision of the Commissioner were published on 15 July 2009. As I have said earlier, the order appealed against was then made on 17 July 2009.
14 The evidence adduced by the Shire was within a narrow focus. It provided evidence about the income received by the Shire and sought to establish that a number of the activities which produced income for the Shire were “trading activities”. It was argued that these activities produced approximately 25% of the income received by the Shire over the 2007-2008 financial year. It was therefore submitted that the trading activities of the Shire were significant and consequently the Commissioner should find that it was a “trading corporation”.
15 In summary, this was not accepted by the Commissioner. In particular the Commissioner did not agree with the assessment that a number of the sources of income of the Shire were produced by trading activities. The Commissioner held that those activities which did involve trading were not a sufficiently significant part of the activities of the Shire overall to make it a trading corporation.

The Grounds of Appeal
16 The grounds of appeal, contained in a schedule to the notice of appeal, were unnecessarily prolix. They were set out over nine pages and read more like an outline of submissions than grounds of appeal. Nevertheless it is possible to discern those aspects of the reasons of the Commissioner which the Shire contends were in error. The respondent did not complain about the way in which the grounds of appeal were set out. In summary, the complaints of the Shire are as follows:
(a) The Commissioner incorrectly characterised activities of the Shire as not being trading activities.
(b) Accordingly the Commissioner was in error in deciding the trading activities of the Shire were peripheral and minor.
(c) The Commissioner erred in deciding there was a requirement to make a profit before an activity could be characterised as trading.
(d) The Commissioner wrongly decided that an activity conducted in the public interest was a gratuitous provision of a public welfare service and not a trading activity.
(e) The Commissioner erred in her assessment of the relevance of “commerciality to trading activity”.
(f) The Commissioner erred in her assessment of the relevance of the Local Government Act 1995 (WA) (the LGA) in deciding whether the shire was a trading corporation.

17 The grounds of appeal and also the written and oral submissions of the Shire addressed the activities of the Shire which were said to constitute trading.

The Reasons for Decision
18 In her reasons for decision the Commissioner summarised the evidence given by Mr Durtanovich. He said that the Shire is located 536 kilometres from Perth, covers 12,872 square kilometres and has approximately 2,300 residents. Mr Durtanovich said the Shire operates trading activities in addition to performing its statutory functions.
19 The Commissioner set out a table provided by Mr Durtanovich which contained the income produced by activities of the Shire which were asserted to be trading. The table set out by the Commissioner, which was in Appendix A to Mr Durtanovich’s amended witness statement, was as follows:
Shire of Ravensthorpe Operating Accounts


2006-2007
2007-2008
Ref#
Name
Trading Income
Trading Income
1
Sale of Council Publications
$546.00
$111.27
2
FESA - Bush Fires
$35,700.00
$38,000.00
3
FESA - Administration Charge
$4,000.00
$4,000.00
4
Fire Map Sales
$30.00
$474.55
5
Grant - Emergency Services Collocation

$1,600,000.00
6
Rent - Martin St, Ravensthorpe

$5,352.00
7
FESA - State Emergency Service
$11,200.00
$11,600.00
8
Crime Prevention Grant


9
Business Refuse Charges
$17,708.24
$22,045.81
10
Business Tip Charges
$11,113.32
$11,017.40
11
Building Sites Tip Charges
$15,008.53
$20,782.56
12
Mine Site Refuse Charges
$188,320.45
$116,671.09
13
Sale of Refuse Bins
$2,070.00
$534.73
14
Cemetery Charges
$499.54
$930.00
15
HalI Hire Charges
$3,617.01
$5,172.17
16
Swimming Pool Admission Charges
$7,934.91
$7,931.05
17
Ravensthorpe Entertainment Centre Charges
$9,065.00
$6,876.73
18
Ravensthorpe Sports Pavilion Hire Charges
$4,700.00
$1,952.50
19
Gym Memberships
$6,321.35
$6,734.06
20
Camping Fees
$7,822.00
$5,306.00
21
Landing Fees and Charges
$39,300.00
$32,715.00
22
Ravensthorpe Nickel Operation Contribution
$185,680.62
$194,621.06
23
Gate Registrations

$270.00
24
Hopetoun Caravan Park lease
$10,000.00
$21,200.00
25
Other Minor Revenue

$500.00
26
Tectonic Resources Lease
$6,545.00
$6,750.00
27
Standpipe Administration Charge
$864.50
$1,759.00
28
Airport Farmland Lease
$25,000.00
$25,750.00
29
Power Connection Morris Camp


30
Private Works Revenue
$27,193.30
$80,618.91
31
Staff Housing Rent - Works

$9,525.73
32
Westpac Banking Corporation In-Store Commission
$55,814.83
$51,925.92
33
Department for Planning & Infrastructure Commission
$33,230.16
$37,965.37
34
Safe Custody Charges
$1,008.02
$854.87
35
Westpac Training

$592.20
36
Rate Search Fees
$15,454.55

37
Profit on Sale of Asset
$1,119.63

38
Reimbursement Fire Fighting Expenses
$28,720.30

39
Rent - Medical House
$872.72

40
Medical Practice Review
$9,090.91

41
Tip Entry Fees
$435.54

42
Sewerage Fees


43
Hopetoun Recreational Facilities
$34,583.00

44
Landcorp Street Tree Project
$87,385.18

45
Subdivision Admin & Supervision
$40,449.99

46
Western Power - Lease of Depot
$12,000.00

47
Ravensthorpe Sewerage Charge
$42,032.47
$48,181.89
48
Ravensthorpe Sewerage in Lieu
$6,588.97
$8,919.35
49
Munglinup Sewerage Charge
$1,849.87
$1,942.60
50
Reimbursement Fire Fighting Expenses


51
Ravensthorpe Sewerage Extensions
$70,072.20
$122,979.34
52
Hopetoun Effluent Cartage
$375,000.00

53
Waste Effluent Dump Charge

$71,649.79






$1,435,948.11
$2,584,212.95


$6,118,024.00
$10,538,817.00


23.47%
24.52%

20 Accordingly, as stated earlier, the position of the Shire was that 24.52% of its income was generated from trading activities in the 2007-2008 financial year. The relevant evidence by Mr Durtanovich about each of these activities was also summarised.
21 The Commissioner then summarised the submissions of both the Shire and the respondent. In doing so the Commissioner noted the reliance by the Shire on the decisions of a single Commissioner in Bell v Shire of Dalwallinu (2008) 88 WAIG 1867 and Bysterveld v Shire of Cue (2007) 87 WAIG 2462.
22 Under the heading “Findings and conclusions” the Commissioner set out her reasons leading to the conclusion that the Shire was not a trading corporation. At [73] the Commissioner said that she did not doubt the veracity of the evidence given by Mr Durtanovich, but did not accept his “characterisation of some of the income received by the [Shire] as being from trading activities”. The Commissioner said she would base her findings on the income received by the Shire in the 2007-2008 financial year, as this was the only complete financial record available as at the date of the hearing.
23 The Commissioner then referred to and set out the relevant sections of the Workplace Relations Act.
24 At [77] the Commissioner said:
“77 The issue to be determined when deciding if a corporation is a trading corporation is the character of the activities carried out by a corporation at the relevant time within the context of the purpose of the organisation and whether or not the corporation engaged in significant and substantial trading activities of a commercial nature such that it can be described as a trading corporation for the purposes of the WR Act.”

25 The Commissioner then quoted paragraphs [68]-[74] of the reasons of Steytler P (agreed with by Pullin J) in ALS.
26 The Commissioner next referred to the “corporate status” of the Shire under the LGA. Sections 1.3(3) and 3.1(1) of the LGA were referred to and quoted. I will later refer to these and other provisions of the LGA.
27 At [82] the Commissioner said the Shire’s role “was to carry out its statutory functions in addition to conducting a range of what [Mr Durtanovich] described as ‘trading activities’. On this basis I find that [the Shire’s] main role is to provide a range of infrastructure and other services to the residents of the Shire for their benefit”.
28 At [83] the Commissioner found that the services provided by the Shire were funded from income received from rates and service charges as well as, in the main, from grants.
29 The Commissioner then discussed each of the items contained in the table set out earlier and discussed the evidence about each item.
30 The Commissioner then considered whether the Shire engaged in substantial trading activities. At the commencement of this part of her reasons the Commissioner set out in tabular form, the income received and the percentage of the total income of the Shire for 2007-2008, of each item relied upon by the Shire as being a trading activity. The table contained in the reasons is as follows:
Ref#
Name
2007-2008
Income
Percentage of total income for 2007/2008
1
Sale of Council Publications
$111.27
0.001
2
FESA - Bush Fires
$38,000.00
0.360
3
FESA - Administration Charge
$4,000.00
0.038
4
Fire Map Sales
$474.55
0.004
5
Grant - Emergency Services Collocation
$1,600,000.00
15.182
6
Rent - Martin St, Ravensthorpe
$5,352.00
0.051
7
FESA - State Emergency Service
$11,600.00
0.110
8
Crime Prevention Grant


9
Business Refuse Charges
$22,045.81
0.209
10
Business Tip Charges
$11,017.40
0.104
11
Building Sites Tip Charges
$20,782.56
0.197
12
Mine Site Refuse Charges
$116,671.09
1.107
13
Sale of Refuse Bins
$534.73
0.005
14
Cemetery Charges
$930.00
0.008
15
HalI Hire Charges
$5,172.17
0.049
16
Swimming Pool Admission Charges
$7,931.05
0.075
17
Ravensthorpe Entertainment Centre Charges
$6,876.73
0.065
18
Ravensthorpe Sports Pavilion Hire Charges
$1,952.50
0.018
19
Gym Memberships
$6,734.06
0.064
20
Camping Fees
$5,306.00
0.050
21
Landing Fees and Charges
$32,715.00
0.310
22
Ravensthorpe Nickel Operation Contribution
$194,621.06
1.847
23
Gate Registrations
$270.00
0.002
24
Hopetoun Caravan Park lease
$21,200.00
0.201
25
Other Minor Revenue
$500.00
0.005
26
Tectonic Resources Lease
$6,750.00
0.064
27
Standpipe Administration Charge
$1,759.00
0.017
28
Airport Farmland Lease
$25,750.00
0.244
29
Power Connection Morris Camp


30
Private Works Revenue
$80,618.91
0.765
31
Staff Housing Rent - Works
$9,525.73
0.090
32
Westpac Banking Corporation In-Store Commission
$51,925.92
0.493
33
Department for Planning & Infrastructure Commission
$37,965.37
0.360
34
Safe Custody Charges
$854.87
0.008
35
Westpac Training
$592.20
0.006
36
Rate Search Fees


37
Profit on Sale of Asset


38
Reimbursement Fire Fighting Expenses


39
Rent –Medical House


40
Medical Practice Review


41
Tip Entry Fees


42
Sewerage Fees


43
Hopetoun Recreational Facilities


44
Landcorp Street Tree Project


45
Subdivision Admin & Supervision


46
Western Power – Lease of Depot


47
Ravensthorpe Sewerage Charge
$48,181.89
0.457
48
Ravensthorpe Sewerage in Lieu
$8,919.35
0.085
49
Munglinup Sewerage Charge
$1,942.60
0.018
50
Reimbursement Fire Fighting Expenses


51
Ravensthorpe Sewerage Extensions
$122,979.34
1.167
52
Hopetoun Effluent Cartage


53
Waste Effluent Dump Charge
$71,649.79
0.680





Respondent’s total income for 2007/2008
$10,538,817.00


31 The Commissioner then said that after reviewing the principles outlined by Steytler P in ALS and reviewing the nature of the funds received by the Shire, and when taking into account the activities of the Shire as a whole and the purpose and role of the Shire, the Shire was not a trading corporation “at the relevant time” ([107]).
32 In the next paragraph the Commissioner found that when considered collectively most of the activities claimed by the Shire to be trading activities were “conducted in the main for the public benefit” of the residents of the Shire and “did not have the requisite commercial character one would normally associate with the activities of a trading corporation”. The Commissioner found that “most of these activities were inconsequential and incidental to the primary activities and functions of the [Shire]”.
33 The Commissioner then made an assessment of each of the items contained in the table to decide whether they were trading activities. The Commissioner’s conclusion was that only the income generated by items 30, 51 and 53 was from trading.
34 Accordingly, the Commissioner concluded that the Shire was not a trading corporation. The Commissioner then said that the substantive application would be listed for hearing on a date to be fixed. I understand that the hearing of the substantive application has been deferred pending the resolution of the present appeal.
35 The case presented by the Shire and the submissions it made at first instance were very narrow. The focus was upon the sources of income received by the Shire. The evidence and submissions of the Shire did not look at all of the activities of the Shire. Additionally, in my opinion, there was inadequate consideration of the status and role of the Shire as a local government body.

Constitution of Western Australia, the Local Government Act and other Legislation
36 The Shire is part of the arm of government constituted by local government bodies.
37 Section 52 of the Constitution Act 1889 (WA) provides as follows:
“52. Elected local governing bodies
(1) The Legislature shall maintain a system of local governing bodies elected and constituted in such manner as the Legislature may from time to time provide.
(2) Each elected local governing body shall have such powers as the Legislature may from time to time provide being such powers as the Legislature considers necessary for the better government of the area in respect of which the body is constituted.”

38 As stated by Wheeler JA in Glew v Shire of Greenough [2006] WASCA 260 at [25]:
“25 In Western Australia, s 52 of the State Constitution imposes a positive duty on the State government to maintain a system of local governing bodies.”

39 The State of Western Australia presently complies with the obligation under s52 of the Constitution Act, by and through the enactment of the LGA.
40 Section 1.3 of the LGA provides as follows:
“1.3. Content and intent
(1) This Act provides for a system of local government by — 
(a) providing for the constitution of elected local governments in the State;
(b) describing the functions of local governments;
(c) providing for the conduct of elections and other polls; and
(d) providing a framework for the administration and financial management of local governments and for the scrutiny of their affairs.
(2) This Act is intended to result in — 
(a) better decision-making by local governments;
(b) greater community participation in the decisions and affairs of local governments;
(c) greater accountability of local governments to their communities; and
(d) more efficient and effective local government.
(3) In carrying out its functions a local government is to use its best endeavours to meet the needs of current and future generations through an integration of environmental protection, social advancement and economic prosperity.”

41 Section 2.1(1)(a) of the LGA provides that the Governor, on the recommendation of the Minister, may make an order declaring an area of the State to be a district.
42 Section 2.3(1) of the LGA provides that such an order is to include an order naming the district.
43 Section 2.4(1) of the LGA provides that such an order is to include an order designating the district a city, town or shire. It can be inferred that these sections have been complied with for the Shire.
44 Local governments are created as bodies corporate. Section 2.5 of the LGA provides:
“2.5. Local governments created as bodies corporate
(1) When an area of the State becomes a district, a local government is established for the district.
(2) The local government is a body corporate with perpetual succession and a common seal.
(3) The local government has the legal capacity of a natural person.
(4) The corporate name of the local government is the combination of the district’s designation and name.
Example: City of (name of district)
(5) If the district’s name incorporates its designation, the designation is not repeated in the corporate name of the local government.
Example:
district’s name : Albany (Town)
corporate name : Town of Albany
(6) Proceedings may be taken by or against the local government in its corporate name.”

45 Pursuant to s2.6(1) of the LGA, each local government is to have an elected council as its governing body. Section 2.6(3) provides that the offices on the council of the local government of a shire are those of president, deputy president and councillors.
46 Section 2.7 of the LGA sets out the role of the council as follows:
“2.7. The role of the council
(1) The council — 
(a) directs and controls the local government’s affairs; and
(b) is responsible for the performance of the local government’s functions.
(2) Without limiting subsection (1), the council is to — 
(a) oversee the allocation of the local government’s finances and resources; and
(b) determine the local government’s policies.”

47 Sections 2.8-2.10 set out the roles of mayors/deputy mayors, presidents/deputy presidents and councillors. The election of office bearers is prescribed in ss2.11-2.16 of the LGA.
48 Section 2.17 of the LGA sets out the membership and size of the council of a local government. Section 2.19 of the LGA provides for the qualifications for election to council. Terms of office and vacation of office are set out in s2.28 of the LGA.
49 Part 3 of the LGA, comprised by ss3.1-3.68, sets out the functions of local government. The general function of a local government is set out in s3.1 as follows:
“3.1. General function
(1) The general function of a local government is to provide for the good government of persons in its district.
(2) The scope of the general function of a local government is to be construed in the context of its other functions under this Act or any other written law and any constraints imposed by this Act or any other written law on the performance of its functions.
(3) A liberal approach is to be taken to the construction of the scope of the general function of a local government.”

50 In my opinion this section is very important. It sets out the reason for existence of a local government and its overriding function. Section 3.2 of the LGA provides that the “scope of the general function of a local government in relation to its district is not limited by reason only that the Government of the State performs or may perform functions of a like nature”.
51 Section 3.4 of the LGA provides:
“3.4. Functions may be legislative or executive
The general function of a local government includes legislative and executive functions.”

52 The legislative functions of local governments are set out in Division 2 of Part 3 of the LGA, comprised by ss3.5-3.17. Section 3.5(1), (3) and (4) set out the general legislative power of local governments as follows:
“3.5. Legislative power of local governments
(1) A local government may make local laws under this Act prescribing all matters that are required or permitted to be prescribed by a local law, or are necessary or convenient to be so prescribed, for it to perform any of its functions under this Act.
…
(3) The power conferred on a local government by subsection (1) is in addition to any power to make local laws conferred on it by any other Act.
(4) Regulations may set out — 
(a) matters about which, or purposes for which, local laws are not to be made; or
(b) kinds of local laws that are not to be made,
and a local government cannot make a local law about such a matter, or for such a purpose or of such a kind.”

53 Section 3.10(1) of the LGA confirms that a local law made under the LGA can establish that contravention of a provision of the local law is an offence, and provide for the offence to be punishable on conviction by a penalty not exceeding a fine of $5000. Section 3.10(2)-(6) provides for other powers in relation to penalties and the payment of fines.
54 Sections 3.11-3.16 provide for procedures in relation to local laws.
55 The executive functions of local governments are set out in Division 3 of the LGA comprised by ss3.18-3.60.
56 The general performance of executive functions is set out in s3.18 of the LGA as follows:
“3.18. Performing executive functions
(1) A local government is to administer its local laws and may do all other things that are necessary or convenient to be done for, or in connection with, performing its functions under this Act.
(2) In performing its executive functions, a local government may provide services and facilities.
(3) A local government is to satisfy itself that services and facilities that it provides — 
(a) integrate and coordinate, so far as practicable, with any provided by the Commonwealth, the State or any public body;
(b) do not duplicate, to an extent that the local government considers inappropriate, services or facilities provided by the Commonwealth, the State or any other body or person, whether public or private; and
(c) are managed efficiently and effectively.”

57 Section 3.21 of the LGA is about the duties of a local government when performing its executive functions. The section contains limitations, to the extent that is reasonable and practicable, upon the performance of executive functions by local government. They include the non-obstruction of the lawful use of land; minimisation of harm, inconvenience or damage; minimisation of danger to any person or property; not damaging buildings and other structures and not physically damaging land. Pursuant to s3.27 of the LGA a local government may do any of the things prescribed in Schedule 3.2, even though the land on which it is done is not local government property and the local government does not have consent to do it.
58 Sections 3.28-3.36 provide for powers of entry of local government bodies. Sections 3.37-3.48 provide for the impounding of abandoned vehicles and goods and the holding of them and disposal of sick or injured animals.
59 Section 3.59 of the LGA is about commercial enterprises by local governments. Section 3.59(1) defines a “trading undertaking” to include an activity carried on with a view to producing profit. Limitations are imposed upon a local government before it commences what are described and defined in s3.59(1) as a “major trading undertaking”, “major land transaction” or entering into a “land transaction that is preparatory to entry into a major land transaction”. Section 3.59(2) provides that before this occurs a local government is to prepare a business plan. The contents of the business plan are to be in accordance with the requirements of s3.59(3) of the LGA. Notification requirements are contained in s3.59(4) of the LGA. Whilst this section contemplates that local governments will trade and indeed may engage in a “major trading undertaking”, it is noted that there are restrictions upon the latter. (I note that there was no evidence that the Shire had been involved in such an undertaking).
60 Part 4 of the LGA provides for the elections to the offices of a local government (ss4.1-4.99).
61 Part 5 of the LGA, constituted by ss5.1-5.125, is about the administration of a local government. It provides for the taking place of council meetings and committee meetings, local government employees, annual reports, disclosure of financial interests, access to information, the payment of expenses and allowances to those holding council offices and the conduct of certain officials.
62 Section 5.36(1) of the LGA provides that a local government is to employ a person to be its Chief Executive Officer and such “other persons as the council believes are necessary to enable the functions of the local government and the functions of the council to be performed”. It is presumably pursuant to this subsection that the respondent was employed by the Shire.
63 Part 6 of the LGA, comprised by ss6.1-6.82, is about financial management. Pursuant to s6.2 a local government is to prepare an annual budget. Pursuant to s6.4(1) a local government is to prepare an annual financial report. Pursuant to s6.7(1) of the LGA all money and the value of all assets received or receivable by a local government are to be held and brought to account in its municipal fund. Section 6.7(2) provides that money held in the municipal fund may be applied towards the performance of the functions and the exercise of the powers conferred on the local government by the LGA or any other written law. In addition, s6.9 of the LGA requires a local government to hold a trust fund. Pursuant to s6.14 money held in a municipal fund or the trust fund of a local government, which is not required for any other purpose, may be invested in accordance with Part III of the Trustees Act 1962 (WA).
64 Division 5 of Part 6 of the LGA is about the financing of local government activities. Sections 6.15 and 6.16 of the LGA are as follows:
“6.15. Local government’s ability to receive revenue and income
(1) A local government may receive revenue or income — 
(a) from — 
(i) rates;
(ii) service charges;
(iii) fees and charges;
(iv) borrowings;
(v) investments; or
(vi) any other source,
authorised by or under this Act or another written law; or
(b) from — 
(i) dealings in property; or
(ii) grants or gifts.
(2) Nothing in subsection (1)(a) authorises the making by a local government of a local law providing for the receipt of revenue or income by the local government from a source not contemplated by or under this Act.

6.16. Imposition of fees and charges
(1) A local government may impose* and recover a fee or charge for any goods or service it provides or proposes to provide, other than a service for which a service charge is imposed.
* Absolute majority required.
(2) A fee or charge may be imposed for the following — 
(a) providing the use of, or allowing admission to, any property or facility wholly or partly owned, controlled, managed or maintained by the local government;
(b) supplying a service or carrying out work at the request of a person;
(c) subject to section 5.94, providing information from local government records;
(d) receiving an application for approval, granting an approval, making an inspection and issuing a licence, permit, authorisation or certificate;
(e) supplying goods;
(f) such other service as may be prescribed.
(3) Fees and charges are to be imposed when adopting the annual budget but may be — 
(a) imposed* during a financial year; and
(b) amended* from time to time during a financial year.
* Absolute majority required.”

65 Section 6.17(1) of the LGA provides considerations which are to be taken into account in setting the amount of a fee or charge for a service or for goods. They include the cost to the local government of providing the service, the importance of the service or goods to the community, and the price at which the service or goods could be provided by an alternative provider. Section 6.17(3) of the LGA provides that other than for services which are set out, the basis for determining a fee or charge is not limited to the cost of providing the goods or service. The power to borrow and restrictions upon borrowing are provided for in Subdivision 3 of Division 5 of Part 6 of the LGA.
66 Division 6 of Part 6 of the LGA provides for rates and service charges. This includes the basis of rating, the recording of rating, the imposition of service charges, the payment of rates and service charges and their recovery. Subdivision 6 of Division 6 of Part 6 of the LGA provides that actions may be taken against land where rates or service charges remain unpaid.
67 Part 7 of the LGA provides for the auditing of the financial accounts of local governments. Part 8 provides for the scrutiny of the affairs of local governments, and Part 9 is about objections to and the review of decisions made by local governments, legal proceedings and other miscellaneous matters.
68 It can be seen from this review that the Shire, as a local government, is no ordinary corporation. As I have said a local government is part of an arm of government which must act for the benefit of its community. It is controlled by a council which is elected by the public and governs within its district. As such, it has a variety of legislative, executive and regulatory functions. The way these functions are carried out is, in turn, constrained by the provisions of the LGA.
69 Local governments also have numerous functions and powers under other legislation in force in Western Australia. This includes, for example, the Planning and Development Act 2005 (WA) (under s72, the preparation and adoption of a local planning scheme); the Bush Fires Act 1954 (WA) (under Part IV Division 1, controlling bush fires); the Dog Act 1976 (WA) (under s9, the administration and enforcement of the Act), the Dividing Fences Act 1961 (WA) (under s24, the prescription of a “sufficient fence”); the Emergency Management Act 2005 (WA) (under s36, providing for emergency management); the Fire and Emergency Services Authority of Western Australia Act 1998 (WA) (under s36J, the determination and assessment of an emergency services levy); the Health Act 1911 (WA) (under s26, the carrying out of the provisions of the Health Act); the Heritage of Western Australia Act 1990 (WA) (under s45, maintaining an inventory of buildings of cultural heritage significance); the Litter Act 1979 (WA) (under Part V, the enforcement of the Litter Act), the Main Roads Act 1930 (WA) (under s27, the responsibility for roads in the district) and the Cemeteries Act 1986 (WA) (under s5, the control and management of cemeteries as vested by the Governor and under s54-s55, making local laws in respect thereof).
70 The role which local governments have under each of these Acts, including the regulatory, executive and service functions provided for, are all part of what a local government does or can do. They are part of a local government’s activities as the governing body for its district.

Legal Analysis
71 The relevant authorities were comprehensively summarised by Steytler J in ALS. It is unnecessary to repeat that exercise. His Honour also distilled relevant principles from the cases which were set out at [68]. In R v The Judges of the Federal Court of Australia; ex parte Western Australian National Football League (Inc) (1979) 143 CLR 190 (Adamson), Mason J at 233 said that the expression “trading corporation” 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”. This was, his Honour said, a “question of fact and degree” (234). His Honour also said that not every corporation which is engaged in trading activity is a trading corporation and that “the trading activity of a corporation may be so slight and so incidental to some other principal activity … that it could not be described as a trading corporation” (234). These observations were referred to with approval by three members of the High Court in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 303-304. The relevant passages of the reasons of Mason J were also quoted with approval by Steytler P in ALS at [46]; (and see also [68]).
72 As set out by Steytler P at [69] of ALS, s51(xx) of the Constitution does not give the Commonwealth the power to legislate with respect to trading, or even to trading by corporations. The power to legislate is with respect to some, but not all, corporations, including those classified as trading corporations.
73 At [74], Steytler P concluded that what was done by the Aboriginal Legal Service did not have a “commercial character” and that in all but exceptional cases its services were provided free of charge and for altruistic purposes not shared by ordinary commercial enterprises. Accordingly, and for the other reasons stated by Steytler P, the Aboriginal Legal Service was not a trading corporation.
74 As stated by Pullin J at [82] of ALS, the “decision about whether a corporation is a trading corporation is a qualitative judgment which involves the balancing of many factors which, taken individually, may point either to or against the conclusion that the particular corporation is a trading corporation”.
75 In Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10 Toohey J at 22-23 accepted a submission that to determine whether a corporation is a trading corporation involves “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”. Using this methodology, his Honour determined that the incorporated district clubs of the Western Australian Cricket Association were not trading corporations despite the fact that between 32% and 63% of their income was obtained by bar trading and other trading sales. His Honour concluded at 29 that the clubs’ trading activities were not “so significant so as to impose on the clubs the character of a trading corporation”. His Honour said that this type of revenue and the percentage of income derived from it was “relevant but not overly persuasive”. His Honour said this did “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.” His Honour said that none of the clubs carried on the game of cricket as a trade.
76 The question of whether a local government is a trading corporation has not been considered by the Industrial Appeal Court. There are however two decisions of single justices of the Federal Court of Australia which have considered this question. In both cases it was decided the local government was not a trading corporation for the purposes of the Constitution. These cases are Australian Workers’ Union of Employees, Queensland v Etheridge Shire Council (2008) 171 FCR 102 and Mid Density Development Pty Ltd v Rockdale Municipal Council (1993) 39 FCR 579. In Etheridge Shire Council the local government body was constituted under the Local Government Act 1993 (Qld) and in Rockdale Municipal Council the local government body was constituted under the Local Government Act 1919 (NSW).
77 In Etheridge Shire Council, Spender J reviewed the relevant authorities of the High Court, which were also discussed by Steytler P in ALS. At [42] Spender J said that it was important in the resolution of the case to recognise that the Etheridge Shire Council has jurisdiction under the Local Government Act 1993 (Qld) “to make local laws for, and to otherwise ensure, the goodwill and government of its local government and geographical area …” At [44] his Honour referred to the other powers and responsibilities held by the Etheridge Shire Council including the making of local laws which create offences for the contravention of other local laws and fixing penalties for those offences. His Honour noted at [47] the dearth of authority upon whether a “municipal corporation” is or can be a trading corporation. His Honour referred to the decision of the High Court in R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533. His Honour said however that that decision was not on point because although the St George County Council had been established under the Local Government Act 1919 (NSW) for “local government purposes”, it “was empowered within its district to supply electricity and to supply and install electrical fittings and appliances, and these were its only activities” (emphasis in original). This is set out in, for example, the reasons of Barwick CJ at 539 and Gibbs J at 561. Stephen J at 567 said the St George County Council “has none of the regulatory or governmental functions associated with ordinary local government bodies”.
78 In Etheridge Shire Council at [71]-[74] Spender J discussed the analysis by Toohey J of the district cricket clubs in Hughes. His Honour then said at [75]:
“75 Such trading activity of the Etheridge Shire Council is quite insignificant in relation to the overall consideration of the activities of the Etheridge Shire Council, which, as a local government, exercises extensive legislative and executive functions in the local government area, and is its raison d’être.”

79 His Honour then referred to the Rockdale Municipal Council decision and said there was no case in any superior court in which it had been accepted that a local government corporation, with the powers and responsibilities of the Etheridge Shire Council, was a constitutional corporation.
80 His Honour then went on to look more closely at the characteristics of the Etheridge Shire Council. His Honour noted:
(a) The power of the council to make by-laws.
(b) The objects of the Local Government Act 1993 (Qld).
(c) The power of a local government to fix regulatory fees.
(d) The jurisdiction of a local government to make laws and its executive role.
(e) Section 25 of the Local Government Act 1993 (Qld) which provides that a local government has jurisdiction to make local laws for, and otherwise ensure, the good rule and government of its territorial unit. (I note the similarity to s3.1 of the LGA).
(f) The general powers of a local government.
(g) The funding of activities of local governments by grants.
(h) The legislative provisions for the qualification and disqualification of membership of local government, obligations of councillors and the election for membership of local governments.
(i) The general operation of local governments under the Local Government Act 1993 (Qld).
(j) The preparation of an annual report.
(k) The obligations upon local governments with respect to a “business activity”.
(l) The control of roads by local government authorities.

81 At [129] his Honour said:
“129 I have set out a review of the powers and activities of a local government at some length to indicate that a local government, including the Etheridge Shire Council, has extensive legislative and executive functions of a governmental kind in relation to the relevant local government area.”

82 With respect, in my opinion the same applies to the Shire as constituted under the LGA.
83 Spender J then considered the activities of the Etheridge Shire Council which were argued to be trading. They included the operation of a visitor information centre and tourist facility, road works, “private works”, hostel accommodation, operating a child care centre, office space rental, residential property rental, the sale of land, the hire of halls, the sale of water and the provision of services by the Shire to the Federal government. His Honour then reviewed the evidence about each of these items.
84 Relevantly, his Honour at [144] said:
“144 Mr Herbert of counsel for the applicants in QUD 481 of 2006 drew attention to the record of the constitutional debates on 17 April 1897, at 793, where Mr Symon said, ‘In the original Act corporations simply are mentioned. Why this difference?’ To which Mr Barton, later an original judge of the High Court, said:

‘The reason of making the difference was this: It having been seen that the word ‘corporations,’ as it existed, covered municipal corporations, the term was changed to ‘trade corporations.’”

85 This suggests that in using the expression “trading corporation”, the framers of the Constitution did not intend that it would include “municipal corporations”.
86 At [150] and [151], Spender J concluded:
“150 I have set out in detail the evidence in relation to what is said to be the trading activities of the council.
151 All of them, in my opinion, including even the road works aspect of the activity of the council, after close analysis, entirely lack the essential quality of trade. Almost all of them run at a loss. They are all directed, in my view, to public benefit objectives within the shire. Their scale, even in monetary terms (putting to one side the non-monetary significance of the legislative and executive activity of the shire council), are so inconsequential and incidental to the primary activity and function of the council as to the deny to the council the characterisation of a ‘trading corporation’ or a ‘financial corporation’.”

87 His Honour also made observations about whether it could be intended by the framers of the Constitution that the Commonwealth could have legislative power over the local governments of a State. It is plain however that these observations were not central to the decision reached by Spender J and I do not find it necessary to consider them for the purposes of the present decision.
88 As I have said, in Rockdale Municipal Council, Davies J concluded that the council was not a trading corporation. His Honour’s decision was reversed on appeal, but this issue was not addressed. (See Mid Density Development Pty Ltd v Rockdale Municipal Council (1993) 44 FCR 290). After a review of the authorities, Davies J said that the issue was whether the trading activities of the Rockdale Municipal Council “formed a sufficiently significant proportion of its overall activities as to justify its description as a trading or financial corporation”. (584) His Honour said that the Council was typical of “municipal councils in that it concerns itself with matters of local government”. (584) His Honour then referred to and set out the revenue which was earned by the council. Primarily it was derived from rates, garbage levies and the rent from properties which it owned. Other fees for services such as libraries and the rubbish tip were also referred to.
89 His Honour decided that the provision of certain certificates under the Local Government Act 1919 (NSW) and the carrying out of a statutory function such as the provision of garbage services, were not trading activities. His Honour said that the “carrying out of a function of government in the interests of the community is not a trading activity”. (585) His Honour also decided that although the council earned “substantial rents, its activity would not be characterised as a business”. (585) His Honour concluded that he would not describe the Rockdale Municipal Council as a trading corporation. His Honour said that its “trading activities as a whole seem to me to be too insignificant in relation to the totality of Rockdale’s activities to confer the requisite character”. (585)
90 It is notable that Rockdale Municipal Council was cited with approval by Steytler P in ALS at [60] and [68]. At [60] his Honour said the observation by Davies J that the carrying out of a function of government, in the interests of the community, was not a trading activity, was important.
91 Rockdale Municipal Council has also been followed by the Supreme Court of New South Wales in the single judge decisions of Jazabas Pty Ltd v Botany Bay Council [2000] NSWSC 58 at [192]-[209], Ritchie v Mosman Municipal Council (2000) 107 LGERA 187 at [22] and Pavlakis v Council of the City of Shoalhaven [2005] NSWSC 436 at [108], [117]. The reasons in these decisions do not however, and with respect, take the analysis of the issue much further.
92 Steytler P at [62] of ALS also cited and quoted from J S McMillan Pty Ltd v Commonwealth (1997) 77 FCR 337 at 355. There, Emmett J contrasted the functions of government which are purely governmental or regulatory with those which involve the carrying on of business, such as the providing of services for remuneration, like any private trader may do.
93 In Ballina Shire Council v Ringland (1994) 33 NSWLR 680, the New South Wales Court of Appeal decided that, unlike other corporations, a local government body could not sue for defamation. Gleeson CJ at 689 quoted with approval the reasons of Lord Keith in Derbyshire County Council v Times Newspapers Ltd [1993] AC 534 at 547, including the following:
“There are, however, features of a local authority which may be regarded as distinguishing it from other types of corporation, whether trading or non trading. The most important of these features is that it is a governmental body”.

94 Despite the different context, in my opinion this point has applicability to the present issue.
95 In the article “The meaning of ‘trading or financial corporations’: Future directions”, Mr Nicholas Gouliaditis, (2008) 19 PLR 110, the author considers whether “municipal corporations” should be characterised as trading corporations. (I note however that the article was published before the decisions of ALS in the Industrial Appeal Court and Etheridge Shire Council).
96 At 119 Mr Gouliaditis said that a perceived problem with the activities test as it has been enunciated by the High Court is that it could apply to bodies that the drafters of the Constitution would not have expected to be trading corporations. An example given was “municipal corporations”, by reference to the comments of Sir Edmund Barton during the Convention Debates. (This was quoted above in the reasons of Spender J in Etheridge Shire Council). Mr Gouliaditis considered a number of possibilities for the evolution of or change to the activities test. One alternative considered was the application of the activities test more stringently. It was noted at 127 that although the State Superannuation Board case decided that trading did not have to be the predominant and characteristic activity of a corporation to be characterised as a trading corporation, the case did not say that trading did not have to be a characteristic activity.
97 At 127 Mr Gouliaditis then said:
“As Gibbs CJ noted in Fencott v Muller:
a corporation cannot take its character from activities which are uncharacteristic, even if those activities are not infrequently carried on. It may indeed be wrong to insist on finding activities that are ‘primary’ or ‘predominant’, but it is equally wrong to be satisfied with activities that are ‘substantial’, if the latter activities do not, in all the circumstances, show that the corporation has a character which the Constitution requires [Fencott v Muller (1983) 152 CLR 570 at 588].
… it is noted that the majority of cases generally approach the activities test by comparing trading revenue to non-trading revenue. But whether trading is a sufficiently significant proportion of a corporation’s activities to mark the corporation as a trading corporation does not depend solely on the proportion of income derived from its trading activities. Revenue data is only relevant in so far as it provides a reasonable indication of the relationship between trading activities and overall activities. For example, a body could earn 100% of its income from trading activities and still not be a trading corporation if that income-generating activity was only a small part of what the corporation did. It is accepted, however, that ‘there are difficulties involved in comparing economic and non-economic activities (Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10 at 23 (Toohey J))”.

98 In the sentence prior to the passage quoted from the reasons of Gibbs CJ in Fencott, the Chief Justice said the character of a corporation “may be discovered by considering what it does and what it is intended to do”. In my opinion the observations made by Mr Gouliaditis are pertinent. I do not however necessarily think that the courts should apply the activities test more stringently; but need to follow the process described by Mason J in Adamson and Toohey J in Hughes. Such an analysis will proceed in the way Steytler P reasoned in ALS; and produce the “qualitative assessment” referred to by Pullin J. The analysis should not just take into account the activities of a corporation which produce income to decide whether it should be characterised as a trading corporation. As stated by Toohey J in Hughes at 25: “A trading activity may represent a significant part of a [corporation’s] income but be relatively insignificant in an overall consideration of the [corporation’s] activities”. For a local government, a consideration of its activities must have full regard to its statutory function.

Trading
99 As I have said a major plank of the appeal was the argument by the Shire that the Commissioner erred in deciding that a number of its income producing activities were not trading. I will shortly consider this submission. It is important to recognise however that each of the activities conducted by the Shire occurs because of its overriding functions and duties under the LGA and other state legislation. In particular, the activities of the Shire must be viewed within the paradigm of its general function under s3.1(1) of the LGA being to “provide for the good government of persons in its district”.
100 In ALS, Steytler P at [68] set out relevant principles to be drawn from the High Court and other decisions he had earlier analysed. With respect to trading, the following points were made, omitting citations:
(a) Trading is not to be given any narrow construction. It extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trading services.
(b) The making of a profit is not an essential prerequisite of trade, but it is a usual concomitant.
(c) The fact that trading activities are conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as trade.
(d) The commercial nature of an activity is an element in deciding whether the activity is in trade or trading.

101 Le Miere J, although dissenting in the outcome in ALS, relevantly said at [103]:
“103 The commercial nature of an activity may be an element in deciding whether the activity is a trading activity. But in that context commercial refers to activities which earn revenue and are conducted in a businesslike way rather than with a view to profit.”

The Commissioner’s Characterisation of the Activities of the Shire
102 The Shire did not contend that the Commissioner had erred in her summary of the evidence about each of the activities which were asserted to be trading. It was submitted that the Commissioner fell into error in the characterisation of those activities. Accordingly, regard may be had to the Commissioner’s summary of the evidence in considering the argument of the Shire.

(a) Items 1 and 4 – Sale of Council Publications and Fire Maps
103 The publications sold by the Shire included Council minutes and agendas. The costs charged to the public for the publications covered the cost of printing them. A majority of the publications were also available, without charge, on the website of the Shire. The Commissioner found at [86] that the charges for the publications were levied on a cost recovery basis. At [110] the Commissioner found that the income from these activities, together with the supply of refuse bins, was minor and peripheral to the main functions of the respondent. They were services provided by the respondent to support the local community. The funds from publications sold by the respondent were not generated on a commercial basis. I see no error in the Commissioner’s conclusion that the revenue received from the sale of publications was not from trading. It was a community service to keep people informed and to provide information by way of the “fire maps”. The activities were not conducted in a business like way in that they did not generate a profit. The lack of commerciality of the activities is also evident from the fact that the publications were available without charge from the website of the Shire.

(b) Items 2, 3 and 7 – Fire and Emergency Services
104 The total amount of these items for the 2007-2008 financial year was $53,600. Mr Durtanovich asserted that this revenue should be considered as trading income as it enabled the Shire to undertake a State Government responsibility that would not be carried out by the Shire if the payment was not made. More specifically, the payment listed at item 2 was from an emergency services levy allocated to the Shire on a needs basis for fire control. The income was used for purchasing items including fire units and protective clothing for brigade members. The payment at item 3 also came from the emergency services levy and the income was used to purchase items including office equipment, vehicles and protective clothing for the Shire’s State Emergency Service.
105 At [87] the Commissioner said that the income paid to the Shire under item 3 was a commission paid for collecting the statutory emergency services levy imposed on the ratepayers of the Shire. At [110] the Commissioner said that this activity was provided by the respondent as a community service and was “incidental and peripheral” to the main activities of the Shire. Earlier in that paragraph the Commissioner said that many of the activities which the Shire relied upon as being trading were to “provide services for the benefit of the local community as one would expect of the activities of a Local Government entity given its charter under the LG Act”. At [82] the Commissioner had said that the main role of the Shire was “to provide a range of infrastructure and other services to the residents of the Shire for their benefit”.
106 I am not convinced that it is correct to characterise the collection of the levy as incidental and peripheral. In my opinion it is a component part of what the Shire does as the local governing body. In my opinion however the Commissioner was not in error in deciding that this income was not generated by trading activities. The applicable statutory regime, about the raising of the levy and the payment therefore by the State, under the Fire and Emergency Services Act, is set out in the reasons of Smith SC. This activity lacks a commercial character in that what was done was provided for by statute and involved a community service, funded by the State Government. That the funding enabled the Shire to undertake a State Government responsibility in my opinion supports the characterisation that the activity was not trading. The income received was in the nature of a grant by the State Government for performing important services for the benefit of the residents of the Shire and the community as a whole.

(c) Item 5 – Grant – Emergency Services Collocation
107 This was a grant to facilitate the construction and fit-out of a new building in Hopetoun for the housing of fire and emergency services. A building company was used to undertake much of the work and was chosen through a tender process. The Shire was reimbursed out of the grant for administration costs associated with the project. At [88] the Commissioner noted that details had been requested from the Shire about the amount it received from the grant in return for administering the project, but no information was forthcoming.
108 At [109] the Commissioner said that this income was not received as result of a trading activity as the money from the grant was mainly used to fund contractors to construct a community facility. The Commissioner said that she was, due to a lack of evidence, unable to determine the amount the Shire received to facilitate the construction of the building.
109 In my opinion the conclusion of the Commissioner was not in error. Steytler P in ALS at [74] indicated that engaging in a public welfare activity pursuant to an agreement with Government, under which there will be reimbursement for most of its costs, is not trading. There will be a lack of a “commercial aspect”. In my opinion this applies to the present item. A grant was received from the Government to fund the building of something which was for the benefit of the community. The building was not to be used for any commercial purpose. Although the Commissioner could have obtained additional evidence from the Shire about the amount of the grant which was provided for administering the project, non receipt of this evidence does not in my opinion lead to the conclusion that the Commissioner erred in her characterisation of this item. The type of analysis by Steytler P that I have referred to still leads to the conclusion that the item was not a trading activity.

(d) Items 6 and 31 – Rent
110 This income was received from the leasing by the Shire of properties owned by it. The majority of the premises were rented to Shire employees at non commercial rates and the Shire paid for the upkeep of these properties. At [110] the Commissioner said there was no evidence the Shire made a profit from this activity and that lower than commercial rents were charged to employees to enable them to reside and work in the Shire.
111 In my opinion the Commissioner was not in error in not characterising this activity as trading. The activity was engaged in for the benefit of the community. It was plainly part of an employment package to attract employees to work for the Shire and which was for the benefit of the community. It was not a commercial arrangement. Indicia of this were the lack of charging of commercial rates and the purpose of the activity.

(e) Items 9, 10, 11 and 12 – Collection of Business Refuse and Business Tip Charges, Building Site Tip Charges and Mine Site Refuse Collection
112 These items did not include income from domestic refuse collection. These activities were optional services provided by the Shire to businesses. At [90], the Commissioner said that it was unclear if these services were provided on a cost recovery basis or if a profit was made. If this point was significant to the decision to be made by the Commissioner, additional evidence should have been ordered to be provided. At [110] the Commissioner accepted that the income received was for activities over and above those which the Shire normally provided. The Commissioner said there was however no evidence that the services were undertaken on a profit making or commercial basis.
113 I accept that evidence about whether these services were provided on a profit making basis is relevant. There was in my opinion however, contrary to the conclusion of the Commissioner, evidence that these services were carried on a commercial basis. The services provided were in addition to those provided to the general community and were provided to businesses in exchange for income. Although there was clearly a community benefit in providing these services, this did not itself mean that the activity was not one of trade.

(f) Item 13 – Sale of Refuse Bins
114 This income was received for the sale of additional refuse bins required by residents and businesses. The bins were not sold for a profit.
115 The Commissioner’s finding on this activity was grouped with her finding about items 1 and 4 at [110]. The Commissioner said that the income received was minor and the activities were peripheral to the main functions of the Shire. They were services provided to support the local community and the refuse bins were sold at cost.
116 In my opinion these findings were not in error. The sale of the bins lacked a commercial character in that they were provided as a service for members of the community and were not sold to generate a profit. There was no business aspect to the sale of the bins.

(g) Item 14 – Cemetery Charges
117 These were fees for burials performed by employees of the Shire. The statutory scheme which allows the Shire to perform burials and charge for this under the Cemeteries Act, is set out in the reasons of Smith SC. Mr Durtanovich said the rates charged were commercial. At [92] the Commissioner said that it was unclear if the Shire made a profit from the provision of the service. Again, additional evidence could have been obtained if this was crucial to the decision made by the Commissioner. It is perhaps likely however that if the services were charged using commercial rates then a profit was made. The Commissioner found that this activity (and those constituted by items 15-20) was incidental and peripheral to the main activities carried on by the Shire and in the main were provided as services to the local community. The Commissioner also referred to the lack of evidence about the services being provided on a cost recovery or profit making basis.
118 In my opinion, if this service was charged for at commercial rates, including a profit, it did constitute trading. This is because although a service was being provided to members of the community, it was done in a business like way. In my opinion this was so even if, as explained by Smith SC, the entitlement to charge a fee and the recovery thereof are statute based. The same may be said about the supply of electricity by the St George County Council, but nevertheless that was held to be a trading activity by Barwick CJ and Stephen J, whose approach on the way to decide whether a corporation is a constitutional corporation was later followed in Adamson. I note however that the amount of the income generated for burial services in 2007-2008 was only $930. This suggests that this was not a significant activity of the Shire. Accordingly, any mischaracterisation of this item by the Commissioner is of limited significance overall.

(h) Items 15, 17 and 18 – Income Received from the Hire of Halls, the Ravensthorpe Entertainment Centre and the Sports Pavilion
119 This income was derived from the hire of buildings and facilities owned, operated and maintained by the Shire. The Commissioner said it was unclear if a profit was made from conducting the activities. There was also no evidence that commercial rates were charged. The Commissioner’s conclusions on these activities was grouped with the cemetery charges item which I have earlier referred to.
120 These activities were clearly engaged in for the benefit of the local community. That is relevant to but not necessarily determinative of whether something is a trading activity. Whether the activity was engaged in by the charging of commercial rates and whether a profit was made are also relevant. In the absence of evidence about that, I am unable to decide whether the Commissioner erred in her characterisation. If the lack of this evidence was crucial to the Full Bench being able to decide whether the Commissioner erred in finding that the Shire was not a trading corporation, the appeal would need to be allowed and the matter remitted to the Commissioner to obtain additional evidence. This is because the Commissioner would have erred in making the finding she did, in the absence of obtaining the additional evidence. (See generally Guest v Kimberley Land Council [2009] WAIRC 00668; (2009) 89 WAIG 2063).

(i) Items 16 and 19 – Swimming Pool Admission Charges and Gymnasium Memberships
121 This income was obtained by charges to enter the Ravensthorpe swimming pool, owned and maintained by the Shire and for gym memberships for residents to use a gymnasium operated by the Shire. At [94] the Commissioner said that there was no evidence that the Shire made a profit. The Commissioner’s finding on these items was grouped with her findings on items 14, 15, 17, 18 and 20. I have the same opinion about the Commissioner’s finding on these items as those expressed in the previous paragraph.

(j) Items 20 and 23 – Camping Fees and Gate Registrations
122 Members of the public were charged fees to use camping facilities provided by the Shire. Gate registration charges were nominal fees collected for the right of land owners to put gates across public thoroughfares. At [95] the Commissioner said it was unclear if the camping fees covered the costs of maintaining the camping facilities. The Commissioner also said that there was no evidence of any service or good being provided in return for the putting of the gates across public thoroughfares. For this reason the Commissioner at [109] held that item 23 was not a trading activity. The Commissioner’s conclusion on item 20 was included in the discussions and findings about items 14-19. To that extent therefore my observations about these items, set out earlier, apply.
123 With respect to the gate registrations, the evidence was that a nominal amount was charged. This suggests the lack of any commercial character to this activity. This is despite the fact that the money was paid by the farmers in exchange for the permission to erect the gates.

(k) Items 21 and 22 – Landing Fees and Charges and Ravensthorpe Nickel Operation Contribution
124 The evidence was that BHP Billiton’s Ravensthorpe Nickel Operation contributed to the operating costs of the Ravensthorpe airport, which is run by the Shire. Landing fees were also charged to users of the airport. Some of the equipment used at the airport was paid for out of grant funding and capital works costs relevant to the airport were paid for by BHP.
125 At [109] the Commissioner said the funds paid to the Shire did not represent income from trading activities, as details were not provided about how the contribution made by BHP towards the cost of operating the airport was used and whether or not this contribution was paid in return for the provision of goods and/or services by the Shire. Again, if the lack of this evidence was significant, the Shire should have been ordered to provide it. The consideration and relevance of these items is complicated by the notorious fact that BHP has now closed its nickel mining operation in Ravensthorpe. Accordingly, the inference may be made that BHP no longer contributes towards the cost of operating the airport. Therefore, even if the income received from BHP was by way of trading, it is no longer relevant to an assessment of whether the Shire is a trading corporation.
126 With respect to item 21, the Commissioner at [110] said that although this income represented a significant amount in return for the provision of the service, it was only a small proportion of the costs of operating the airport. The Commissioner also said that the operation of the airport was not conducted on a commercial basis as some of the costs for establishing and operating the airport were met by grant funding and contributions from BHP. In my opinion the Commissioner was not in error in her finding with respect to grant funding. With respect to contributions from BHP, the lack of evidence to some extent makes the finding by the Commissioner problematic. As BHP has ceased its Ravensthorpe operations however this item is no longer relevant in determining whether the Shire is a trading corporation by reason of the activities it engages in.

(l) Item 24 – Hopetoun Caravan Park Lease
127 The caravan park is on Shire vested land and a commercial operator pays the Shire for the lease of the land. At [97] the Commissioner said it was unclear if the lease arrangement generated a profit for the respondent. At [110] the Commissioner found that although the income from the lease was not insignificant it was a minor and peripheral activity of the Shire.
128 Whilst I agree with the latter conclusion by the Commissioner, in my opinion the evidence suggested that the leasing of the land to the caravan park operator was a commercial activity. It was a rental received so that the operators could carry on a business. Insofar as the Commissioner based her findings upon a lack of evidence, the observations I have made earlier are relevant.

(m) Item 25 – Minor Revenue
129 The Shire did not provide any evidence as to how the amount of $500 was generated in the 2007-2008 financial year. At [109] the Commissioner said that she was unable to determine if the income received was as a result of trading. Given the very small amount of this income I cannot see any error in the Commissioner proceeding in that way.

(n) Items 26 and 28 – Lease of Land Owned by the Respondent
130 These were commercial leases for the use of land as farm land at the airport and for a campsite for the use of “Tectonic Resources” employees. At [110] the Commissioner said that although the income was not insubstantial it resulted from activities which are incidental and peripheral to the respondent’s main activities.
131 In my opinion this reasoning is problematic. Whether or not the activities were incidental and peripheral to the main activities of the Shire was relevant to the characterisation of the Shire as being a trading corporation or otherwise. This did not mean however that these particular activities were not trading activities. In my opinion the evidence suggested that the leasing was of a commercial character and should have been found to be a trading activity.

(o) Item 27 – Standpipe Administration Charge
132 The Shire received this income for the sale of standpipe water from facilities maintained by the Shire. At [99] the Commissioner said it was unclear if the fees charged covered the costs of operating the standpipes. At [110] the Commissioner found the income received was minor and resulted from an activity which is incidental and peripheral to the respondent’s main activities. It was also unclear if the activity was operated on a commercial basis.
133 This reasoning is problematic for the reasons earlier set out. On the evidence I accept that the Commissioner was unable to determine whether this activity was trading. If this possible trading was significant to the Commissioner’s decision, then additional evidence should have been obtained. I note however that the amount of income received in 2007-2008 was only $1,759. Accordingly, even if this was a trading activity, it was one which did not generate much income.

(p) Item 31 – Staff Housing Rent
134 This income was generated by rent paid by Shire employees for Shire owned houses. The rents were not levied at a commercial rental rate. Mr Durtanovich estimated that the rent the employees paid was 50-60% less than market rates.
135 I have earlier referred to the Commissioner’s finding about this item which in my opinion was not in error.

(q) Items 32 – 35 – Westpac Banking Commission, Department for Planning and Infrastructure Commissions, Safe Custody Charges and Westpac Training
136 The commissions received from Westpac were for the Shire running a bank agency on its behalf. A safe custody service was also provided for “Westpac Items”. In addition the Shire was reimbursed by Westpac for training staff to work in the bank agency. The income noted at item 33 was for commissions for operating an agency for vehicle licensing on behalf of the Department for Planning and Infrastructure (DPI).
137 At [110] the Commissioner found that the banking and DPI services were engaged in by the Shire for the public benefit. It was also inferred by the Commissioner that these were not major activities as the services would be attended to by the employees of the Shire on an intermittent basis. The Commissioner said that income for providing safe custody was minor and was incidental and peripheral to the main activities of the Shire.
138 Again this reasoning is somewhat problematic for the reasons earlier expressed. In my opinion the operating of a banking service for Westpac in exchange for receiving commissions had the hallmarks of and was a trading activity. Although the activity was provided for the benefit of members of the community, the Shire received a commercial income for doing so. This would seem to also apply to the provision of safe custody. With respect to the training of employees, the description by Mr Durtanovich of a “reimburse[ment]”, suggests that the amount received from Westpac simply covered the cost of training employees. On this basis the Shire did not make a profit, which is ordinarily a concomitant of trade. However, the activity of having employees trained was, I infer, necessary to obtain the commissions received by Westpac and accordingly part of that trading activity.
139 In my opinion the provision of services of vehicle licensing for DPI is more difficult to characterise. This was the provision of a Government service. It was engaged in by the Shire as an arm of Government. The Shire did however receive a commission from the State Government for providing the service. The service undoubtedly had a public element about it. It was a service which could only be provided by or with the authority of the DPI. For these reasons I incline to the view that it was not a trading activity. Even if it was a trading activity, I agree with the Commissioner that overall the work which was done to generate this income was incidental to the activities of the Shire.

(r) Items 36 – 46
140 The Commissioner did not consider these items because no income was generated by these activities for the 2007-2008 financial year. The appellant did not submit that this was in error. In my opinion, the income received for the 2007-2008 financial year provided the best evidence of the present amount of income from the activities which the Shire asserted were trading.

(s) Items 47 – 49 - Ravensthorpe and Munglinup Sewerage Charges
141 Residents who chose to connect to the sewerage system provided by the Shire were charged an annual rate for this service. At [103] the Commissioner said that no details were provided about whether the service was profit making. On this basis it seems, at [110], that the Commissioner concluded that it was unclear if the activity was operated on a commercial basis. Accordingly, it was not a trading activity.
142 As I have said earlier, determining the characterisation of the activity on the basis of a lack of evidence is somewhat problematic. However these fees were generated by the Shire operating a service for the benefit of members of the community. It was a governmental service. It was a service which only the Shire could provide. Accordingly, I am inclined to the view that it was not a trading activity.
143 I now turn to the three activities which the Commissioner found were trading activities.

(t) Item 30 – Private Works Revenue
144 This income was received for carting waste water for BHP and for constructing a gravel pit using the Shire’s plant and equipment. At [100] the Commissioner said that these works were undertaken on the basis of a fee being charged over and above the cost of providing the service and that the Shire made a profit. On this basis the Commissioner found at [111] that the income received was as a result of trading activity. I agree with this finding.

(u) Item 51 – Ravensthorpe Sewerage Extension
145 This amount was paid to the Shire by the Department of Industry and Resources to upgrade the sewerage treatment plant. At [104] the Commissioner said the Shire had a license to operate the Ravensthorpe sewerage system. Some of the work involved in the project was done by contractors. The Commissioner said that it appeared on the evidence and documentation that the activity was conducted on a commercial basis. At [111] the Commissioner found that as the Shire received income on a commercial basis in return for the provision of the activity, it was a trading activity. I do not think this conclusion was in error.

(v) Item 53
146 This was an amount paid to the Shire by the Water Corporation for the cost of disposing of effluent at the Shire’s licensed facility at Ravensthorpe. It was part of a contract which the Shire had with the Water Corporation to cart effluent from Hopetoun to Ravensthorpe. At [105] the Commissioner said it appeared the Shire conducted this activity on a commercial basis. For this reason the Commissioner found at [111] that this was a trading activity. Again I do not think this conclusion is erroneous.

Analysis
147 From my review of the items considered by the Commissioner it can be seen that I think there were errors in the characterisation of some items as not being trading. In addition, there are items where the Commissioner could or should have ordered that additional evidence be provided before a proper characterisation could be made. The issue on appeal is not however whether the Commissioner erred in her consideration of individual items. It is whether she erred in her characterisation of the Shire as not being a trading corporation. If I was of the opinion that the Commissioner had found the Shire was not a trading corporation when she could not properly do so in the absence of obtaining additional evidence, I would allow the appeal. In my opinion however this is not the present position.
148 Even if all of the items where the reasoning of the Commissioner is in error or problematic, were to be characterised as trading activities, it remains that the substantial majority of the income received by the Shire is not from trading activities. The substantial majority of its income is, as a local government body, received by way of grants, rates, ordinary service charges and the like. This may be gleaned from the first table set out earlier, where the total revenue received by the Shire for 2007-2008 is in excess of $10.5 million and also exhibit R1, which shows the revenue of the Shire for 2007-2008.
149 Additionally, the trading activities are generally incidental to the activities of the Shire as a whole – functioning as a local government body for the “good government of persons in its district”. A good example is the activity of the Shire running a Westpac Bank agency. This involves the intermittent time of some of the employees of the Shire. Also, the activity would, I infer, be engaged in, overwhelmingly, for the benefit of the residents of the Shire. It is not an activity which on its own, or together with other activities, makes the Shire a trading corporation.
150 Some of the activities of local government, which the Shire engages in, can be obtained from the Statement of Financial Performance for 2007-2008. (Exhibit R1). This shows that, amongst other things, the Shire was engaged in the collection of rates, administering the council, general administration, fire prevention, animal control, enhancing law and order, health services, aged care services, providing resource centres, sanitation, planning and development, supporting regional libraries, “other culture”, protecting the environment, cleaning and maintenance, tourism and area promotion, building control, community development and public works. Most if not all of these activities do not involve trading.
151 As I have earlier stressed, the Shire is part of that arm of government constituted by local government. Pursuant to its Constitution, the State is obliged to maintain a system of local governing bodies. As set out earlier at length, local government bodies under the LGA and other State legislation have numerous legislative, regulatory, prosecutorial, executive and service providing functions. These activities do not involve trading, the running of a business or commerciality. The way in which it conducts its activities is also controlled by the provisions of the LGA which I have earlier discussed. In my opinion, the observations by Spender J in Etheridge Shire Council at [75] are applicable to the Shire. That is, the Shire “as a local government, exercises extensive legislative and executive functions in the local government area, and is its raison d’être”. In my opinion the analysis which I have undertaken about the Shire does not resort to the “purpose” test rejected by the High Court. The focus has been upon function and not purpose. A bodies’ function is descriptive of its actions and what it does. A function is the kind of action or activity which is proper to a person, body, or institution (Macquarie Dictionary, Online edition, 30 October 2009). By contrast, the purpose of a corporation is the object for which something is done, or its aim (Macquarie Dictionary, Online edition, 30 October 2009). The Shire, as a local government body, is distinguishable from other corporations. The function of the Shire, what it does, is set out in the LGA and other legislation I have referred to. Its function is to govern a local district. This, in my opinion, stamps the character of the Shire. The activities which it engages in which do or might constitute trading, do not change this. They are incidental to what the Shire does.
152 In my respectful opinion, the decisions of Bell and Bysterveld are of limited assistance. With respect, I do not think that in either there was a comprehensive review of the function, role and activities of the local governments, in accordance with the LGA and other legislation. They were also both decided before ALS by the Industrial Appeal Court and Etheridge Shire Council.
153 Also, in my opinion it is not necessary to, as Smith SC has suggested, try to obtain evidence about the number of employees of the Shire and characterise whether the employees do or do not work in the trading activities of the Shire. This was not considered necessary in Etheridge Shire Council, Rockdale Shire Council or Hughes. Such information would not include details about the work done by the elected officers of the council, who are not employees. The time taken in their work, as the controlling body of the council, is unlikely to be recorded. I accept that the number, and nature of the work, of employees of a corporation can be relevant to deciding if it is a trading corporation. In the present appeal however, even with this information, it would not change the fact that the activities which are or could be trading are incidental to the Shire’s overall function and activities, as the local governing body.
154 As stated by Pullin J in ALS at [82], a qualitative judgment is necessary in deciding whether a corporation is a trading corporation. This usually does not just involve an assessment of whether the income received by the corporation is mainly from trading. The type of analysis which is required is, as I have set out above, that explained in the reasons of Mason J in Adamson and applied by Toohey J in Hughes and Steytler P in ALS. With respect to local governments however, the analysis must be undertaken with a close eye to their particular characteristics and functions under the LGA and other legislation.
155 After engaging in this analysis, in my opinion, the activities of the Shire which are trading are incidental and peripheral to its primary activities and functions as a local government body, with all that entails. Overall, the Shire does not exist for, function, or conduct activities which are of a commercial character.
156 For these reasons, in my opinion, the Commissioner was not in error in characterising the Shire as not being a trading corporation. The Shire’s complaints about the Commissioner’s reasoning, set out earlier, do not lead to this conclusion.

Orders
157 Ordinarily this conclusion would lead to the dismissal of the appeal. There is one aspect of the order made by the Commissioner however which I think is problematic. This is that the declaration was made that, during the time that the respondent was employed by the Shire, the Shire was not a trading corporation. This is problematic in that if the Shire was a trading corporation at the time when the Commission would otherwise be seized of the matter, it would not have jurisdiction to hear and determine it. This involves the unlikely prospect that the Shire or another corporate body could change its character from not being a trading corporation to being a trading corporation between the time when an applicant was employed by it and the time when the Commission would otherwise hear and determine an application. Nevertheless, in my opinion, the order of the Commission should be accurate. Accordingly, in my opinion, the appeal should be allowed to the extent that the second order made by the Commission is deleted and replaced by an order declaring that the Shire is not a trading corporation.
158 Accordingly, in my opinion, the following orders should be made:
1. Leave to appeal is granted.
2. The appeal is allowed, to the extent that order 2 made by the Commission on 17 July 2009 is deleted and replaced with the following:
2. DECLARES THAT the respondent is not a trading corporation.
3. The appeal is otherwise dismissed.

159 In accordance with s35 of the Act, in my opinion, the above should be published as a minute of proposed order. If the parties wish to do so, they should make submissions about the terms of the order to be made within four days.

BEECH CC:
Introduction
160 The background to this matter is set out in the Reasons for Decision of his Honour the Acting President. I too would grant leave to appeal and dismiss the appeal.
161 On behalf of the Shire of Ravensthorpe it was submitted that there is uncertainty over the workplace relations jurisdiction for local government in WA following the Commonwealth’s “Work Choices” amendments to the Workplace Relations Act, 1996 (“WR Act”) in March 2006. The submission is that the decisions of Smith SC in Bysterveld v Shire of Cue [2007] WAIRC 00941; (2007) 87 WAIG 2462, 165 IR 186 and in Bell v Shire of Dalwallinu [2008] WAIRC 01269; (2008) 88 WAIG 1867 have provided a “level of consistency” for local government in dealing with this uncertainty and that this consistency will be lost if the decision in this appeal is allowed to stand.
162 In response to this submission, it should be pointed out that those two decisions are first-instance decisions and they are not binding on this Full Bench. Further, it is not open to the Full Bench to decide this appeal on the basis of following those decisions to ensure a “level of consistency” for local government. This is because, as the Shire of Ravensthorpe itself recognises, since those two first-instance decisions, the Industrial Appeal Court in Aboriginal Legal Service of Western Australia (Inc) v. Lawrence [No. 2] [2008] WASCA 254; (2008) 89 WAIG 243 (“the ALS decision”) has considered the principles to be applied in this jurisdiction when considering whether a corporation is a trading or financial corporation and that decision, and those principles, are binding upon this Commission unless the decision is able to be distinguished. I do not think it is able to be distinguished and there is no submission before us that it should be distinguished.
163 Therefore, it is primarily the principles arising out of the ALS decision which are to be applied in considering the facts of this matter and not those two first-instance decisions.
164 It should also be pointed out that it is not the function of this Full Bench to resolve the uncertainty over the workplace relations jurisdiction for local government in WA following the Commonwealth’s “Work Choices” amendments to the WR Act. This is an appeal against the decision of the Commissioner at first instance that the Shire of Ravensthorpe is not a trading corporation and the issue before the Full Bench is to decide whether the Commissioner erred in reaching that conclusion for the reasons advanced by the Shire of Ravensthorpe in its grounds of appeal.

The Relevant Principles to be Applied
165 The Shire of Ravensthorpe’s first ground of appeal is that the Commissioner incorrectly interpreted the nature of activity conducted by it by not applying the accepted principles contained within the ALS decision, resulting in an inaccurate assessment of the Shire of Ravensthorpe’s trading activity and the significance of that activity to it.
166 This ground requires an identification of the principles contained within the ALS decision. It is important to note at the commencement that in the ALS decision, the issue whether the Aboriginal Legal Service of WA (Inc.) was or was not a trading corporation involved an examination of all of the circumstances and not just an examination of those activities which were said to be trading activities. At [16], Steytler P, with whom Pullin J agreed, stated under the heading “Is the appellant a trading corporation?”:
“That brings me to the question whether there was an error of the kind contended for. In order to answer that question, it is necessary to give some attention to the appellant's constitution, its activities, the nature of its funding arrangements and the contract entered into with the Department.”

167 The “appellant” referred to was of course the Aboriginal Legal Service of WA (Inc.) but applying that statement to the circumstances of this case means that in order to consider whether “the Commission incorrectly interpreted the nature of activity conducted by the Shire of Ravensthorpe by not applying the accepted principles contained within the ALS decision” will require a consideration of all of the circumstances of the Shire of Ravensthorpe and not just the activities which it says constitute its trading activities. That is, attention needs to be given to its “constitution” in the sense of its structure and purpose under the Local Government Act, 1995 (WA) (the LG Act), its activities and where relevant, its funding arrangements This is not intended to be an exhaustive list.
168 That is not to say that the Shire’s legislative structure and purpose under the LG Act will be determinative. It cannot be determinative because the connection of a corporation with the government of a State does not take it outside s 51(xx) of the Constitution (per Steytler P in the ALS decision at [53]). Further, again as stated by Steytler P at [68](5) (citations omitted):
“(5) The ends which a corporation seeks to serve by trading are irrelevant to its description. Consequently, the fact that the trading activities are conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as ‘trade’.”

169 Nevertheless, the ALS decision at [16] is authority for the proposition that when examining whether the Shire is a trading corporation, some attention must be given to the Shire’s legislative structure and purpose under the LG Act.
170 This was also the approach in Australian Workers’ Union of Employees, Queensland & Ors v. Etheridge Shire Council & Anor (2008) 171 FCR 102; 250 ALR 485 (Etheridge). This decision is a recent case before the Federal Court concerning precisely the issue of whether a local government council is, or is not, a trading or a financial corporation and I consider it both helpful and relevant in the context of this appeal. In Etheridge, Spender J considered what is the proper test to apply and stated the question as being (at [85], ALR 501):
“I therefore proceed to inquire whether the Etheridge Shire Council is a trading corporation or a financial corporation, by considering whether, on the evidence, ‘the predominant and characteristic activity of the Etheridge Shire Council is trading, whether in goods or services’, or whether ‘the predominant and characteristic activity of the Etheridge Shire Council is in finance’.”

171 Spender J noted that there is no High Court, and very little superior court, authority directly relevant to the question of whether a “municipal corporation” is, or can be, a financial or trading corporation within the meaning of the Constitution. His Honour stated at [42] that it is important in the resolution of the question whether the Etheridge Shire Council is a trading or financial corporation to recognise that under the relevant Queensland local government legislation the Etheridge Shire Council has jurisdiction to make local laws for, and to otherwise ensure, the goodwill and government of its local government and geographical area in Far North Queensland. Such local laws, upon commencement, have the force of law of the State of Queensland. His Honour stated at [86] that it is necessary to have regard not only to whether the predominant and characteristic activity of the Council is trading or finance, but also the extent of that activity and its relative significance in the affairs of the Etheridge Shire Council.
172 I consider the approach of Spender J in giving attention to the jurisdiction of the Etheridge Shire Council under the relevant Queensland local government legislation is consistent with the approach of the majority in the ALS decision in giving attention to all of the circumstances of the corporation and not just the activities which it says constitute its trading activities, and that approach is to be applied here.
173 Further support for this approach is to be seen in the test applied by Davies J in Mid Density Development Pty Ltd v. Rockdale Municipal Council (1992) 39 FCR 579 (Rockdale) at [19] (FCR 584) which itself was quoted by Steytler P in the ALS decision at [60]:
“The issue is, therefore, whether Rockdale’s trading activities or financial activities formed a sufficiently significant proportion of its overall activities as to justify its description as a trading or financial corporation. The adjectives ‘significant’ and ‘substantial’ were considered in the context of characterisation in Deputy Commissioner of Taxation (Cth) v. Stewart [1984] HCA 11; (1984) 154 CLR 385 at 390, 397 and 399-400. The activities must be of a sufficiently significant or substantial scale as to confer the character of ‘trading’ or ‘financial’ upon the corporation. The relationship between the activities relied upon and the overall activities of the corporation, and the extent of those activities in comparison to the extent of the corporation’s activities overall are relevant.”

174 As well as being referred to by Steytler P, Rockdale has also been referred to with apparent approval by the New South Wales Supreme Court in Tom Pavlakis and Anor v. The Council of the City of Shoalhaven [2005] NSWSC 436 (9 June 2005). I therefore attach some significance to this decision for the purposes of this matter. In my view, the statement of Davies J above that the relationship between the activities relied upon and the overall activities of the corporation, and the extent of those activities in comparison to the extent of the corporation’s activities overall, is consistent with the approach of the majority in the ALS decision of giving attention to all of the circumstances of the corporation and not just the activities which it says constitute its trading activities. In my view, the expression “all of the circumstances of the corporation” means that evidence about the number of employees and officers of the corporation who are engaged in its activities or the extent of their engagement in or the time spent on its activities may be helpful in the task of characterising a corporation as a trading or financial corporation, although no single factor is likely on its own to be determinative.
175 The structure and function of the Shire of Ravensthorpe is to be found in the relevant provisions of the LG Act which are set out in the reasons for decision of his Honour the Acting President and I gratefully adopt them here (and see too Smith SC in Bysterveld v. Shire of Cue [2007] WAIRC 00941 at [34] – [40]; (2007) 87 WAIG 2462 at 2467). The activities of the Shire of Ravensthorpe, other than those which the Shire itself deemed as trading activities, were not the subject of direct evidence from Mr Durtanovich. However, the range of its overall activities may be measured in a financial sense from the various categories of expenditure in the Shire’s statements of financial performance which became exhibits R1 and R2 (AB 98 - 113, 114 – 131).
176 The Commissioner at first instance recognised the relationship between the activities relied upon and the overall activities of the Shire. After noting s 1.3(3) and s 3.1(1) of the LG Act, the Commissioner noted Mr Durtanovich’s evidence that the Shire of Ravensthorpe’s role was to carry out its statutory functions in addition to conducting a range of what he described as “trading activities” and found that the Shire’s main role was to provide a range of infrastructure and other services to the residents of the Shire for their benefit.
177 She observed (at AB 32) that the LG Act creates a duty on the Shire of Ravensthorpe to focus on the environment, social advancement and economic prosperity of community members residing within the Shire. The Commissioner noted this statutory obligation on the Shire of Ravensthorpe in carrying out its functions to use its best endeavours to meet the needs of current and future generations through an integration of environmental protection, social advancement and economic prosperity, together with its general function to provide for the good government of persons in its district. In doing so, the Commissioner at first instance correctly followed the approach of the majority in the ALS decision and to the extent the Shire’s grounds of appeal suggest otherwise they are not made out.

Assessing the Activities of the Shire
178 The grounds in paragraph 2 contain the submission that the Commissioner assessed a trading activity as peripheral and minor in nature on an individual basis as opposed to evaluating the trading activity collectively and that the Commissioner failed to recognise that various items were conducted as part of the one activity area, for example recreational services, refuse services or banking.
179 In my view, the ground that the Commissioner did not evaluate the trading activity collectively cannot be made out. After concluding at [107] that the Shire of Ravensthorpe was not a trading corporation at the relevant time for the purposes of the application before her, the Commissioner stated at [108]:
“I find that when considered collectively the nature of most of the activities undertaken by the respondent which generated income in the 2007/2008 financial year which it claims were trading activities were conducted in the main for the public benefit of residents in the Shire and did not have the requisite commercial character one would normally associate with the activities of a trading corporation. I also find that most of these activities were inconsequential and incidental to the primary activities and functions of the respondent.”

180 This reasoning shows that the Commissioner at first instance did consider the activities collectively. It is evident that she also considered them individually and I am not persuaded that there is merit in the submission of the Shire that various items should be considered as being part of the one activity area. In this context, Pullin J in the ALS decision at [82] stated that the decision about whether a corporation is a trading corporation is a qualitative judgment which involves the balancing of many factors which, taken individually, may point either to or against the conclusion that the particular corporation is a trading corporation. I find that it was entirely appropriate that the Commissioner at first instance evaluated activities individually, whether or not they might have been part of the one activity area, and also evaluated them collectively.

The Activities
181 The emphasis in the Shire’s grounds, and the essence of its case at first instance, is aimed more at what it says is the incorrect characterisation of at least 38 activities listed variously in grounds 2.3, 3.2, 4.3 and 9. These have been examined by his Honour the Acting President and set out comprehensively by him. I respectfully agree with the conclusions he has reached in relation to each of those activities. In my view his Honour has correctly applied the relevant principles set down by Steytler P in the ALS decision at [68]. In this context, I am referring to the principle at [68](5) to which I referred earlier in my Reasons:

“(5) The ends which a corporation seeks to serve by trading are irrelevant to its description. Consequently, the fact that the trading activities are conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as ‘trade’.”

and to the principle at [68](7):

“(7) The current activities of the corporation, while an important criterion for determining its characterisation, are not the only criterion. Regard must also be had to the intended purpose of the corporation, although a corporation that carries on trading activities can be found to be a trading corporation even if it was not originally established to trade.”

182 In my respectful opinion, there is an inherent tension between, on the one hand the statement that the ends which a corporation seeks to serve by trading are irrelevant to its description and that the trading activities conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as 'trade', and on the other hand that regard must also be had to the intended purpose of the corporation. If the intended purpose of the Shire is local government in the interests of the community, how are its trading activities conducted in the public interest or for a public purpose to be characterised if the ends which the Shire seeks to serve by trading are irrelevant to its description?
183 A resolution of this tension for present purposes may be achieved by recognising that there is a qualification in principle (5): trading activities conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as ‘trade’ (my emphasis). Further, notwithstanding the importance of the activities test in determining whether a corporation is a trading or financial corporation, principle (7) itself recognises that the current activities of a corporation (in this case the Shire) are not the only criterion for determining its characterisation.
184 Accordingly, although trading activities conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as ‘trade’, there remains scope in some circumstances for trading activities conducted in the public interest or for a public purpose to exclude that categorisation. I am inclined to the view that those circumstances do exist in this case, given that after quoting from Rockdale Steytler P at [60] stated:
“Importantly, [Davies J] also said that the ‘carrying out of a function of government in the interests of the community is not a trading activity’.”

185 It is for these reasons that I agree with the conclusions his Honour the Acting President has reached in relation to each of the activities which the Shire emphasises in its appeal. I find it is not necessary in this case to resolve the differences in approach between the Acting President and Smith SC to activities, such as item 14 Cemetery Charges, because of my ultimate conclusion that the substantial majority of the income received by the Shire is not from trading activities, and that the activities of the Shire which are trading activities are not substantial and are peripheral to the Shire’s activities as a whole under the LG Act. I do not consider the Shire of Ravensthorpe has made out its grounds of appeal. The Commissioner at first instance did not err.
186 For the above reasons, I would grant leave to appeal and dismiss the appeal. I agree with the publication of a minute in the terms referred to in the reasons of his Honour the Acting President, and with his reasons for that minute.

SMITH SC:
Leave to Appeal
187 I agree with the Acting President for the reasons he gives that an order should be made granting leave to appeal.
Onus
188 By operation of s 109 of the Constitution this Commission does not have jurisdiction to hear and determine claims for unfair dismissal where the employee in question is employed by a constitutional corporation. The Commission must have material before it from which it can be legitimate to draw a conclusion as to whether it has jurisdiction to hear and determine a claim. No question of jurisdiction can be conceded at first instance or conferred on a court or tribunal when it does not have it: SGS Australia Pty Ltd v Taylor (1993) 73 WAIG 1760.
189 Whether the onus of proof arises and whether it lies on a party in a matter where an issue arises whether an employer is a constitutional corporation was recently considered by the Full Bench in Guest v Kimberley Land Council [2009] WAIRC 00668; (2009) WAIG 2063. Acting President Ritter (with whom Scott & Mayman CC agreed) held that the question of whether an aboriginal land corporation is a constitutional corporation did not involve an onus of proof but is a factual enquiry in which it is the first duty of a statutory court or tribunal to decide whether it has jurisdiction [71], [75 - 82]. As Brennan J in Gerhardy v Brown (1985) 159 CLR 70 said:
“When a court, in ascertaining the validity or scope of a law, considers matters of fact, it is not bound to reach its decision in the same way as it does when it tries an issue of fact between the parties. The validity and scope of a law cannot be made to depend on the course of private litigation. The legislative will is not surrendered into the hands of the litigants. When the validity of a State law is attacked under s 109 of the Constitution and the scope of the Commonwealth law with which it is thought to be inconsistent depends on matters of fact (which I shall call the statutory facts) the function of a court is analogous to its function in determining the constitutional validity of a law whose validity depends on matters of fact (141 – 142).”

190 Where a company is a charitable body or a local government organisation, a real question arises whether the body in question can be characterised as a trading or financial corporation within the meaning of s 51(xx) of the Constitution. In matters before this Commission if an employer simply asserts that they are a trading corporation without being prepared to lead sufficient evidence of the facts on which a finding of the constitutional issue can be made, the Commission should direct that such evidence be put by the employer. Or where such knowledge is in the knowledge or control of the applicant, the applicant should be required to produce evidence. In most matters relevant evidence is more likely to be in the possession or control of the employer. It is not only appropriate for the Commission to make an order requiring an employer (and/or the applicant) to provide evidence of the employer's activities but also for the Commission, when considering those activities, to make enquiries of the parties if it is not satisfied that there is sufficient information before it to make a determination whether a corporate body is or is not a constitutional corporation. To use the words of Brennan J, in Gerhardy v Brown such a determination should not be left in the hands of the litigants. This approach to hearing and determining such a matter is in my view inherent in the warrant given to the Commission in s 26(1)(a) and s 26(1)(b) of the Industrial Relations Act (1979) (WA) (the Act) which requires the Commission in the exercise of its jurisdiction to 'act according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms' and not to 'be bound by any rules of evidence, but may inform itself on any matter in such a way as it thinks just'.
191 It is my view that the legal consequence that follows from the principle that no onus of proof arises where a court or tribunal is called upon to find constitutional facts, is the Full Bench in this matter is required to be positively satisfied that there was sufficient evidence before the Commission at first instance on which a finding can be made that the Commission has jurisdiction to hear and determine the respondent's claim.

Legal Principles – Trading
192 If the appellant is a 'trading corporation' by operation of the now repealed s 4, s 6 and s 16 of the Workplace Relations Act 1996 (Cth) (the WR Act) the jurisdiction of the Commission to hear and determine these claims is excluded by s 16(1) of the WR Act by operation of s 109 of the Constitution. The principles to be applied were summarised by Steytler P (with which Pullin J agreed [80]), in ALS at [68] as follows:
“(1) A corporation may be a trading corporation even though trading is not its predominant activity: Adamson (239); State Superannuation Board (303 - 304); Tasmanian Dam case (156, 240, 293); Quickenden [49] - [51], [101]; Hardeman [18].
(2) However, trading must be a substantial and not merely a peripheral activity: Adamson (208, 234, 239); State Superannuation Board (303 - 304); Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10, 20; Fencott (622); Tasmanian Dam case (156, 240, 293); Mid Density (584); Hardeman [22].
(3) In this context, 'trading' is not given a narrow construction. It extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trade in services: Ku-ring-gai (139, 159 - 160); Adamson (235); Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169, 184 - 185, 203; Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325, 330; Quickenden [101].
(4) The making of a profit is not an essential prerequisite to trade, but it is a usual concomitant: St George County Council (539, 563, 569); Ku-ring-gai (140, 167); Adamson (219); E (343, 345); Pellow [28].
(5) The ends which a corporation seeks to serve by trading are irrelevant to its description: St George County Council (543, 569); Ku-ring-gai (160); State Superannuation Board (304 - 306); E (343). Consequently, the fact that the trading activities are conducted is [sic] the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as 'trade': St George County Council (543) (Barwick CJ); Tasmanian Dam case (156) (Mason J).
(6) Whether the trading activities of an incorporated body are sufficient to justify its categorisation as a 'trading corporation' is a question of fact and degree: Adamson (234) (Mason J); State Superannuation Board (304); Fencott (589); Quickenden [52], [101]; Mid Density (584).
(7) The current activities of the corporation, while an important criterion for determining its characterisation, are not the only criterion. Regard must also be had to the intended purpose of the corporation, although a corporation that carries on trading activities can be found to be a trading corporation even if it was not originally established to trade: State Superannuation Board (294 - 295, 304 - 305); Fencott (588 - 589, 602, 611, 622 - 624); Hughes (20); Quickenden [101]; E (344); Hardeman [18].
(8) The commercial nature of an activity is an element in deciding whether the activity is in trade or trading: Adamson (209, 211); Ku-ring-gai (139, 142, 160, 167); Bevanere (330); Hughes (19 - 20); E (343); Fowler; Hardeman [26].”

193 In considering what activities can be said to constitute trading in Bell v Shire of Dalwallinu (2008) 88 WAIG 1867 and Bysterveld v Shire of Cue (2007) 87 WAIG 2462 I applied the principles enunciated by the Full Bench in Aboriginal Legal Service of Western Australia v Lawrence (2007) 87 WAIG 856. When the ALS decision was delivered by the Industrial Appeal Court although the majority of the Court said that ‘trading’ is not to be given a narrow construction they took a narrower view than the Full Bench of the type of activities that constitute 'trading' within the meaning of s 51 (xx) of the Constitution [68](3) (Steytler P), [79] (Pullin J). They followed Barwick CJ’s view in R v The Judges of the Federal Court of Australia; ex parte Western Australian National Football League (Inc) and West Perth Football Club (1979) 143 CLR 190 (Adamson) (209) and found that the commercial nature of an activity is an element in deciding whether the activity is in trade or trading ([68], [74] (Steytler P), [82] (Pullin J)). The Full Bench in ALS had taken a different view. It determined that an activity could be considered trading without any requirement for commerciality providing there is an exchange of personal property for value [286](e). This view was not accepted by the Industrial Appeal Court. In light of the Industrial Appeal Court decision in ALS it is appropriate that my reasoning in Bell and Bysterveld as to how the activities of a local government corporation should be analysed must be reconsidered.
194 In New South Wales v Commonwealth (2006) 229 CLR 1 (Work Choices), the High Court upheld the constitutional validity of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), including its reliance on the corporations power in s 51(xx) of the Constitution. Chief Justice Gleeson, Gummow, Hayne, Heydon and Crennan JJ in a joint judgment said that any debate about what kinds of corporations fall within the constitutional expression 'trading or financial corporations formed within the limits of the Commonwealth’ must await a case in which they properly arise [58]. They however noted [157] - [158] that the view of Barwick CJ in R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533 that 'a corporation whose predominant and characteristic activity is trading whether in goods or services' (543) was accepted by the majority in Adamson where Mason J said that:
“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 (233).”

195 When considering whether Etheridge Shire Council was a constitutional corporation, Spender J in The Australian Workers' Union of Employees, Queensland v Etheridge Shire Council [2008] FCA 1268; (2008) 250 ALR 485 analysed in detail what was said by each judge in St George County Council [48] - [66]. Justice Spender noted that the majority of the court in Adamson favoured the minority reasoning of Barwick CJ in St George County Council [67]. Justice Spender went on to consider the judgment of Toohey J in Hughes and observed:
“The comment by the majority in the Work Choices case that the view of Barwick CJ ‘did not then command the assent of the majority of the court’ is to be understood as indicating that the ‘activities test’ propounded by Barwick CJ was later accepted by the High Court in Adamson as the applicable test, and is the proper test to apply.
Mason J, in Adamson, said of a ‘trading corporation’ (at CLR 233; ALR 472):
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.
With respect, there is an element of circularity in this observation, but it is not inconsistent with the view of Barwick CJ in St George County Council, set out above: at [55].
It is to be noted that Gibbs J in St George County Council said (at CLR 561; ALR 392):
The word ‘trading’ forms part of a composite expression and indicates the essential attribute of the kind of corporation to which it refers. It is common to describe corporations according to their nature …
And later, in the same paragraph:
… the words ‘trading corporations’ … in their natural meaning, as well as in the context of the placitum, refer to corporations of a particular kind.
Both Barwick CJ (at CLR 543; ALR 377-8) and Gibbs J (at CLR 561; ALR 392) thoroughly rejected the contention that a corporation which to any extent engages in trade is a trading corporation.
I therefore proceed to inquire whether the Etheridge Shire Council is a trading corporation or a financial corporation, by considering whether, on the evidence, ‘the predominant and characteristic activity of the Etheridge Shire Council is trading, whether in goods or services’, or whether ‘the predominant and characteristic activity of the Etheridge Shire Council is in finance’.
In that inquiry, it is necessary to have regard not only to whether the predominant and characteristic activity of the council is trading or finance, but also, as Barwick CJ indicated in St George County Council (at CLR 543; ALR 377-8), the extent of that activity and its relative significance in the affairs of the Etheridge Shire Council [79] - [86].”

196 Justice Spender reviewed the powers and activities of the Council in the Local Government Act 1993 (Qld) and concluded that a local government, including the Council, had 'extensive legislative and executive functions of a governmental kind in relation to the relevant local government area' [129]. His Honour then went on to analyse each activity said to be in trade. Whilst he did not apportion a percentage of these activities against total revenue, in respect of most items Spender J noted whether the item returned a profit and examined the scale of the trading activities when compared to the total revenue of the Council. The activities claimed to be trading activities included operation of a visitor centre; road works; hostel accommodation; childcare centre; hire of halls; renting office space and the sale of land and water. Many of the activities considered were similar to the activities claimed by the appellant in these matters to be trading activities.
197 Justice Spender held the Etheridge Shire Council was not a trading corporation on several grounds. Firstly he regarded all of the activities as entirely lacking the essential quality of trade. He noted:
“Almost all of them run at a loss. They are all directed, in my view, to public benefit objectives within the shire. Their scale, even in monetary terms (putting to one side the non-monetary significance of the legislative and executive activity of the shire council), are so inconsequential and incidental to the primary activity and function of the council as to the [sic] deny to the council the characterisation of a ‘trading corporation’ or a ‘financial corporation’ [151].”

198 In this paragraph Spender J appears to have concluded the activities do not constitute trade on two grounds. Firstly, he expressed the view that the activities are run at a loss and are directed to the public benefit objectives of the Council. Secondly, he concluded that the scale of the activities were inconsequential and incidental to the primary activity and function of the Council. It could be said that in making a finding that the activities were in fact not trading activities within the meaning of s 51(xx) of the Constitution Spender J gave too much weight to the fact that the activities claimed by the Council as trading were run at a loss and that the activities were directed to public benefit objectives. It could be said that his view is inconsistent with the finding made by Steytler P in ALS who pointed out in his summary of relevant principles that profit is not an essential prerequisite to trade, but a usual concomitant and that the fact that trading activities are conducted in the public interest or for a public purpose will not necessarily exclude categorising these activities as 'trade': [68](4) - (5); (see also the cases cited therein). Steytler P also said at [70] - [71] that the fact that the Aboriginal Legal Service was set up to perform public welfare services was not of itself, determinative. Justice Spender's view could also be said to be inconsistent with the conclusion reached by Barwick CJ in St George County Council who said that: 'the identification of the corporation which falls within the statutory definition will be made principally upon a consideration of its current activities' (543). Chief Justice Barwick also added in the next paragraph:
“It seems to me that the reason why a corporation trades as its sole or predominant and characteristic activity is irrelevant to the description of the corporation for present purposes, that is to say, the ends which such a corporation seeks to serve by trading are irrelevant to its description. As I have indicated, the purpose of the grant of legislative power includes the control of the corporate activities of the corporation: it is not so concerned with the motives which prompt those activities, nor the ultimate ends which those activities hope to achieve. If, upon that consideration, the corporation can fairly be described by reason of those activities, their extent and relative significance in the affairs of the corporation as a 'trading corporation' it will, in my opinion, be nothing to the point that it is also a government or State or municipal corporation (543).”

199 As O'Callaghan SDP pointed out in Pellow v Umoona Community Council Inc [2006] AIRC 426 in relation to the Umoona Community Council [29]:
“The fact that the Council is incorporated in accordance with its constitution to undertake activities directed at the public good does not automatically take it outside the scope of being a trading corporation. Rather, consistent with the authorities, it is the activities in which it is involved which will determine whether it is, or is not, a trading corporation.”

200 It is well known that whilst local government authorities have a wide variety of powers under the LGA some engage in more trading activities than others and the degree to which they each engage in trading activities varies. It is notable that the extent of activities said to constitute trading in Etheridge Shire Council could have established a basis on which a finding could be properly made that the Etheridge Shire Council was not a constitutional corporation because the scale of the activities were as a whole insignificant, as to deny the Etheridge Shire Council the characterisation of a 'trading corporation' or a 'financial corporation' because of its trading activities were overall insignificant in relation to its overall activities [75]. For this reason whilst I have some difficulties with the reasoning applied by Spender J in Etheridge Shire Council, in [151] of his reasons, I do not disagree with the conclusion that he reached that the Etheridge Shire Council was not a trading corporation.
201 Justice Spender also put forward another ground (in the alternative), that the Etheridge Shire Council was not a trading corporation. His Honour said:
“If contrary to my view, the Etheridge Shire Council was a trading corporation, the Commonwealth government would have the powers that I have set out above: at [21]. Such powers would annihilate any concept in the Constitution of a federal balance, and in a very significant way, permit the Commonwealth to nullify the right of the state to govern in its local government areas.
I am of the view that all five judges in St George County Council would have determined that the Etheridge Shire Council is not a trading corporation [153] - [154].

202 Earlier in his decision Spender J had said:
“If it is, the acceptance by the majority in the Work Choices case of the ambit of the power of the Commonwealth under s 51(xx) as described by Gaudron J in Pacific Coal would mean that the Commonwealth has power to regulate the activities, functions, relationships and the business of the Etheridge Shire Council; the creation of rights and privileges belonging to the Etheridge Shire Council; the imposition of obligations on it; and, in respect of those matters, the regulation of the conduct of those through whom it acts, its employees, and also the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business.
In my opinion, it is inconceivable that the framers of the Constitution and the parliament which enacted it intended that the Commonwealth should have the powers described above (at [21]) in respect of a local government, which is a body politic of a state government, having legislative and executive functions [21] - [22].”

203 If this view is accepted then it is doubtful whether any local government corporation in Australia could be characterised as a constitutional corporation if each has had conferred on them (by operation of State law), the full spectrum of legislative and executive local government functions. This reasoning would not apply to local government organisations that are established solely to trade. The Council in St George County Council can be distinguished as the Council in that matter was formed for one purpose only and that was to buy and sell electricity.
204 In making these observations it appears that Spender J relied upon a 'intentionalism' approach to constitutional interpretation. The learned authors Hanks, Keyzer and Clarke in Australian Constitutional Law Materials and Commentary (7th Edition, 2004) explain that there are three approaches to constitutional interpretation:
§ textualism (or literalism or legalism);
§ intentionalism (or originalism or sometimes called legalism); and
§ progressivism (or dynamism or organicism).
The textualists emphasise the importance of referring to the text of the Constitution itself to deduce the meaning of a constitutional term: see, for example, McGinty v. Western Australia (1996) 186 CLR 140 at 235. Textualism is closely related to intentionalism. The intentionalist school calls for judges to decide questions of constitutional law according to the intentions of the framers: see, for example, the High Court’s unanimous judgment in Cole v. Whitfield (1988) 165 CLR 360 [10.4.27C]. Finally there are those who ascribe to a progressive or dynamic interpretation of the text, according to which the Constitution ought to be interpreted in the light of changes in historical standards: see, for example, Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 [11.3.2C] at 173-4 (Deane J).
The textualist-intentionalist-progressivist divide is overlaid with a distinction between the claim that judges declare the law and the acknowledgement that they make the law. Hence, those adopting the declaratory approach tend to rely on a combination of textualism and intertionalism, and those who acknowledge that there is judicial laws-making are more likely to be progressivists [1.2.14].”

205 Whist it seems that all members of the High Court have from time to time considered each of the three approaches, in Cole v Whitfield (1988) 165 CLR 360 Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ (in relation to construing s 92 of the Constitution) unanimously stated in relation to the "intentionalism" approach that:
Reference to the history … may be made, not for the purpose of substituting for the meaning of the words used the scope and effect – if such could be established – which the founding fathers subjectively intended the section to have, but for the purpose of identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged (385).

206 Consequently any inquiry by a Court about what was meant by any words in question in the Constitution when the document was framed is a linguistic exercise where the original debates can be used to draw a conclusion about the meaning of words in question: XYZ v. The Commonwealth (2006) 227 CLR 532 [153] (Callinan & Heydon JJ).
207 It is notable that the scope of activities of local government in Western Australia could undertake at the time the Constitution was framed did not specifically contemplate the power to enter into commercial enterprises (see The Municipal Institutions Act 1895 (59th Vic, No 10)). Unlike the local government authorities in Queensland considered by Spender J in Etheridge Shire Council local government authorities in Western Australia for some time have been empowered under s 3.59 of the LGA to enter into 'major trading undertaking'. Trading undertakings are defined under s 3.59 as an activity carried on 'with a view to profit' and any other prescribed activities. Local government authorities in Western Australia are also empowered under s 3.59 to enter into major land transactions. To carry out these activities a local government authority must prepare a business plan, give Statewide public notice and consider any submissions made about the proposed undertaking or transaction before deciding to proceed. The minimum expenditure of a major trading undertaking is required to be more than $500,000 or 10% of the lowest operating expenditure within a specified period of time (reg 9 Local Government Functions and General) Regulations 1996). The minimum value of any major land transaction is $1,000,000 or 10 % of the operating expenditure incurred by the local government organisation from its municipal fund in the last completed financial year (reg 7 Local Government (Functions and General) Regulations 1996). There is no evidence that in this matter that the appellant has entered into any commercial undertaking as contemplated by s 3.59 of the LGA. If the appellant had just been established and had barely established its activities then the fact that the appellant is authorised by law to engage in commercial enterprises is a matter that the Commission could consider as material in considering the character of the appellant: Fencott v Muller (1983) 152 CLR 570 (602) (Mason, Murphy, Brennan & Deane JJ). However once a corporation begins it activities, its character must be assessed by its current activities: Adamson (208) (Barwick CJ).
208 It is also notable in St George County Council Barwick CJ (whose view of trading Spender J applied) expressed a view the textualism approach to constitutional interpretation had no place in interpreting s 51(xx) of the Constitution. He said:
“[T]he words to be construed being drawn from an organic instrument, the purpose of the vesting of the power in the Parliament must bear on the assignment of meaning to the cryptic expressions of the instrument.
Of course, it must be recognized that words which were generally used with an artificial meaning in the period of the formation of the Constitution may in some circumstances need to be given that meaning now. But nothing of that kind, in my opinion, is present in this case. No doubt during and at the end of the nineteenth century, corporations were classified for various purposes and, on occasions, special rules made applicable to corporations in one category which were not applicable to corporations in another. Trading corporations were both known and referred to as such. But there does not appear to have been any generally accepted definition of a trading corporation. It was assumed, I think that such a corporation could be identified by its activities. If its nature was being sought, it was to be found in what it did. It seems to me that no assistance in the solution of the present problem is to be derived from the undoubted statement that, as at 1900, there were trading and non-trading corporations or that consequences were attached to such descriptions or classifications. But it is certain that the community of that day were aware of the influence which the activities of foreign and local trading and financial corporations could have on the Australian community and its affairs. The framers of the Constitution appear to have concluded that the power to control those activities should be included in the powers given to the Parliament concurrently with the residual powers of the several States. Thus, the question in this case should be approached bearing in mind the purpose of the grant of the power and without any special or technical meaning of the description ‘trading corporation’ derived from nineteenth century usage (541 - 542).”

209 When Spender J in Etheridge Shire Council stated that the corporations power should not be used to cover local government corporations who have conferred on them the full ambit of local government functions and powers he also relied upon a principle of statutory interpretation that seeks to maintain the 'federal balance' of constitutional power between the Commonwealth and the States. The High Court has in some matters read down the effect of Commonwealth legislation or found legislation invalid or inoperative in so far the legislation applies to the particular essential functions of the States because of a principle that recognises an implied limit on Commonwealth legislative power (see for example Victoria v Commonwealth (1996) 187 CLR 416). This limitation recognises the co-existence of State and Federal Governments as entities and is sometimes known as the Melbourne Corporation doctrine. In the Work Choices case Callinan J (who was in the minority) explained the basis of the doctrine. In his view the text, whole structure of the Constitution mandates the co­existence of the Commonwealth and the States. He said:
“Let me make clear what I mean by the ‘federal balance’ before I continue. It is, essentially, a sharing of power, even of power which the Commonwealth can monopolise under a specific constitution grant if and when it chooses to do so, and can successfully invoke s 109 of the Constitution, and the exercise of different powers of varying importance by each of the Commonwealth and the States, but not so that, relevantly for present purposes, that essential functions and institutions of the States, for example, internal law and order, their judiciaries, and their Executives are obstructed, impeded, diminished, or curtailed [777].”

210 The Melbourne Corporation doctrine was very recently discussed and applied by the High Court in Clarke v Commissioner of Taxation [2009] HCA 33; (2009) 258 ALR 623 where French CJ explained:
“The constitutional implication considered in Austin and its precursors means that the Commonwealth cannot, by the exercise of its legislative power, significantly impair, curtail or weaken the capacity of the States to exercise their constitutional powers and functions (be they legislative, executive or judicial) or significantly impair, curtail or weaken the actual exercise of those power or functions. The Constitution assumes the existence of the States as ‘independent entities’. This implies recognition of the importance of their status as components of the federation. The ‘significance’ of a Commonwealth law affecting the States’ functions is not solely to be determined by reference to its practical effects on those functions. This is not a return to any generalised concept of inter-governmental immunity. It simply recognises that there may be some species of Commonwealth laws which would represent such an intrusion upon the functions or powers of the States as to be inconsistent with the constitutional assumption about their status as independent entities [32].”

211 Whether this doctrine could be applied to State legislation that establishes local governments is not a matter that it is open for this Commission to speculate about. However in the absence of any recent consideration by the High Court of the scope of the corporations power insofar as it applies to local government the opinion of Spender J on this point must in my respectful view be regarded with some caution.
212 Whether the High Court would find favour with an argument that the scope of the corporations power should be read down in s 51 (xx) or construed so that it does not apply to local government corporations that have a statutory duty to exercise legislative and administrative powers of government by operating under a State law is not clear (see the discussion by Nicholas Gouliaditis in 'The meaning of 'trading or financial corporations': Future directions' (2008) 19 PLR 110). Nor is a matter that it is appropriate for this Commission to consider.
213 One of the important issues in this appeal is what weight, if any, could be given to whether the appellant carried on many of its activities without regard to making a profit and whether a conclusion could be drawn that to do so is to lack a necessary element of commerciality. When considering the element of commerciality Steytler P said in ALS that '[t]he making of a profit is not an essential prerequisite to trade, but it is a usual concomitant' [68](4). Justice Pullin Jalso stated that '[w]hether the operations or activities of a corporation produce a profit or are intended to produce a profit may not be determinative, but it will often be an important relevant factor' [82]. However Steytler P and Pullin J did not specifically analyse the requirements of 'commerciality' in ALS. It might be said that it was not necessary to do so in that matter as it was plain that no element of commerciality arose on the facts as the provision of services by the Aboriginal Legal Service was essentially free of charge. President Steytler (with whom Pullin J agreed), however, considered a number of authoritative decisions in which the element of commerciality was discussed.
214 One of the authorities considered by Steytler P in ALS was Re Ku-ring-gai Co-operative Building Society (No. 12) Ltd (1978) 36 FLR 134. In that matter the applicants were terminating building societies who raised funds from banks to loan to their members. It did so to provide public welfare housing. All funds were used by the members who were the ultimate borrowers and purchasers of homes. The applicants could not use the funds for their own advantage and they did not administrate a revolving fund. When the societies had run their course they were to be wound up. Bowen CJ, whose decision was in the minority held that the context in which the building societies carried on their business of providing loans to members and the restrictions on the way in which it could be done showed that lending of money to members, which was the principal activity of the building society, was not a trading activity (142). Bowen CJ made this finding by having regard to the principle of 'mutuality' in the law of taxation. He also observed that there was a degree of 'mutuality' on the part of the building societies and their members. He then went on to explain that:
“The presence of that mutuality may be derived from a whole complex of factors, not solely the absence of profit. It excludes the commercial element which is a necessary part of ‘trade or commerce’.
Some guidance in discovering the presence of ‘mutuality’ is gained from a consideration of the application of the mutuality principle in taxation law. That principle is based upon the simple notion that a person cannot make a profit out of himself (Bohemians Club v. Acting Federal Commissioner of Taxation (1918) 24 CLR 334) (142).”

215 Both Brennan and Deane JJ found that the building societies were financial corporations within the meaning of s 51(xx) of the Constitution. Justice Deane expressed an opinion that they were not trading corporations but qualified his opinion by saying that he did not express a concluded view on that question (159). Justice Brennan found that it was not necessary to determine that issue (150). Justice Deane found that at the heart of the business of the building societies were commercial dealings in finance (160). His Honour said in relation to the commerciality aspect of dealings that can be regarded as trading:
“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 [sic] 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. I have already expressed the conclusion that, notwithstanding the particular nature of the applicants and the particular character of their activities, their lending to their members are commercial or business dealings in finance. In my view, that lending is, for the purposes of s 47 of the Act, in trade or commerce (167).”

216 Justice Deane also said a corporate body can to be categorised as a financial corporation where it occasionally has dealings in finance (158). In the passage in Bank of New South Wales v Commonwealth (1948) 76 CLR 1 referred to by Deane J, Dixon J made this point about the meaning of 'trade' in the context of s 51(i) of the Constitution where he said:
“In s.51 (i.) they coupled the word ‘trade’ with the word ‘commerce’, which stood alone in the United States Constitution to define the subject matter of the power of Congress to regulate commerce with foreign nations and among the several States. Not content with the expression ‘trade and commerce’ for the purposes of s 92, they there added the word ‘intercourse’.
It has been said that “trade” strictly means the buying and selling of goods. That, however, is a specialized meaning of the word. The present primary meaning is much wider, covering as it does the pursuit of a calling or handicraft, and its history emphasizes rather use, regularity and course of conduct, than concern with commodities (381).”

Chief Justice Bowen in Re Ku-ring-gai had regard to this passage and said (139):
“The terms ‘trade’ and ‘commerce’ are ordinary terms which describe all the mutual communings, the negotiations verbal and by correspondence, the bargain, the transport and the delivery which comprise commercial arrangements (W. & A. McArthur Ltd. v. State of Queensland (1920) 28 C.L.R. 530, at p. 547). The word ‘trade’ is used with its accepted English meaning: traffic by way of sale of exchange or commercial dealing (Commissioners of Taxation v. Kirk [1900] A.C. 588, at p. 592 per Lord Davey; W. & A. McArthur Ltd v. State of Queensland (1920) 28 C.L.R 530). The commercial character of trade was mentioned more recently by Lord Reid in Ransom v. Higgs [1974] 1 W.L.R. 1594. His Lordship there said: ‘As an ordinary word in the English language trades has or has had a variety of meanings or shades of meaning. Leaving aside obsolete 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 [FN2]’. Moreover, the word covers intangibles, such as banking transactions, as well as the movement of goods and persons, 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 C.L.R. 1, at p. 381).”

217 Another decision referred to by Steytler P in ALS was the decision of Davies J in Mid Density Development v Rockdale Municipal Council (1992) 39 FCR 579. In that matter Davies J decided that the issue by Rockdale Council of three certificates pursuant to s 149 of the Environmental Planning and Assessment Act 1979 (NSW) was not in trade or commerce. He also decided that the council’s trading and financial activities did not form a sufficiently significant proportion of its overall activities to justify its description as a 'trading' or 'financial corporation'. Davies J said:
“Rockdale is typical of municipal councils in that it concerns itself with matters of local government. There is no evidence that it carries on trading activities under Pt XVII of the LGA. Most of its revenue is derived from rates, garbage levies and the rent from properties which it owns. I assume that fees may be charged at Rockdale's lending libraries or at its tip and the like. In the 1990 Annual Report, the following income was disclosed, inter alia:
Rates
$14,692,680
Garbage Levy
$3,357,847
Government Grants & Subsidies
$4,202,248
Contributions towards Works
$1,546,399
Rents
$374,286
Interest on Investments
$1,692,472
Fees, Charges & Sundry Income
$1,526,917

Fees etc provided only 5 per cent of total income. Some fees would have been charged for trading activities. A report, ‘The Year in Review’, refers to, inter alia, ‘increasing fees, for carnivals, circuses, planning, large picnics and organised sport’. Many of the fees, however, would have been derived from activities other than business or trading activities. For example, fees were charged and received for the grant of s 149 certificates. In addition to the prescribed fee, an urgency fee of $50 was charged if a certificate was sought within 24 hours. It was submitted by Mr R C McDougall QC, with whom Mr I M Jackman of counsel appeared for the applicant, that, as the imposition of a charge for an expedited certificate was discretionary, the provision of s 149 certificates was a trading activity. In my opinion, it is not a trading activity but the performance of a statutory duty in respect of which the EPA permitted the charging of fees: see Lismore City Council v Stewart (1989) 18 NSWLR 718.
Mr McDougall further submitted that Rockdale engaged in trading because it contracted out its garbage collection service. However, it seems to me that this is not a trading activity. It is the nature of the activity so far as Rockdale is concerned that matters. From Rockdale's point of view, the carrying out of a statutory function, the provision of garbage services, is not a trading activity, whether Rockdale uses its own employees, subcontractors or a contractor to perform the whole or part of the works. The carrying out of a function of government in the interests of the community is not a trading activity.
On the other hand, Rockdale earned some income from carrying out tasks within its municipal responsibility. The report, ‘The Year in Review’, records that ‘Council undertook kerb and gutter reconstruction ... for the Roads and Traffic Authority ... which earned income for the Council’. Mr McDougall submitted that Rockdale carried on the business of leasing out property. However, notwithstanding that the Council earned substantial rents, its activity would not be categorised as a business. The letting of premises may be a business, but would not ordinarily be so described (584-585).”

218 Importantly Davies J said in this passage that charging fees in performance of a statutory duty was not trading. He also said that the carrying out of a function of government in the interests of the community is not a trading activity such as contracting out its garbage collection service. When I expressed an opinion in Bysterveld that I did not think this was correct [64], my view was predicated on the principle that commerciality was not an element to be considered. The majority of the Industrial Appeal Court in Lawrence has subsequently ruled that the approach (which I applied in Bysterveld) is wrong. This means that the principles applied and the findings made in respect of particular activities of local government authorities in Bysterveld and Bell can no longer be regarded as good law and should not be followed.
219 Following a discussion about the observations of Davies J in Mid Density Developments, Steytler P referred to another decision of the Federal Court, J S McMillian Pty Ltd v Commonwealth (1997) 77 FCR 337. The AGPS was the primary publishers, printers and distributors of government information. Part of the information it published was core parliamentary printing such as bills, legislation and passport production. Justice Emmett in J S McMillian Pty Ltd distinguished activities of the AGPS that could not be regarded as trading with those that could be regarded as trading. After citing Mid Density as an example Emmett J said:
“Clearly, there is a distinction between those functions of a Government which are purely governmental or regulatory and those functions which entail the carrying on of business. However, that contention appears to confuse the two aspects of the Commonwealth's involvement in the package 3 services. Insofar as the Commonwealth, in the guise of the Department of the Senate, the Department of the House of Representatives and other departments, utilises the services provided or procured by AGPS, it does so in the carrying out of governmental functions. It could not be said that the Commonwealth in those guises is carrying on a business. It is acquiring the services systematically and regularly, but only for the purpose of governing.
However, in its guise as AGPS, the Commonwealth is doing what any citizen or private trader might do, namely, providing those services for remuneration. That remuneration may or may not be a commercially adequate remuneration. Further, those services are being provided to the Commonwealth in its governmental guises. Nevertheless, I consider that the Commonwealth, in providing those services, is carrying on a business within the meaning of s 2A (355).”

220 In ‘The meaning of “trading or financial corporations”: Future directions’ the author said:
Although Davies J in Mid Density made a general statement that ‘[t]he carrying out of a function of government in the interests of the community is not a trading activity’, this was in the context of the provision of garbage services which the council was required by statute to provide and which was one of the services for which rates were paid. It is likely that providing services on this basis is not trading. But the statement made by Davies J can not be taken as holding that functions of government carried out in the interests of the community can never be trading activities. Many functions, such as the collection of garbage and maintenance of roads, can be carried out by government or by private companies or persons. They are not inalienably governmental functions. Government can provide services in the same way as a private provider, with freedom to set prices in competition with a private provider. Davies J was not dealing with this situation. The difficulty is to distinguish between the trading and non-trading forms of the services provided by local government and other statutory corporations. This can be problematic because governmental non-trading activities may sometimes superficially resemble trade. At one extreme, receipt of grants from the Commonwealth or State government for the provision of services is unlikely to involve trading. At the other extreme, provision of services which a corporation is statutorily authorised, but not required, to provide and which it chooses to provide at a cost of its choosing in competition with other providers is more likely to be a trading activity (128).

221 Another authority considered by Steytler P in ALS was Quickenden v O’Connor [2001] FCA 3003; (2001) 109 FCR 245, in which Black CJ, French and Carr JJ held that the University of Western Australia was a trading corporation because it engaged in substantial trading activities in which the provision of services within a statutory framework was discussed. President Steytler relevantly pointed out [64]-[65]:
“[B]lack CJ and French J considered it questionable whether the provision of educational services within the statutory framework of the Higher Education Funding Act 1988 (Cth) (HEF Act) amounted to trading. They said, in this respect [50] - [52]:
The University also submitted that the fees charged by it for courses are fees for services notwithstanding that they are regulated by legislation and ministerial guidelines. So it was said that under the Higher Education Funding Act the regulation of fees is a condition of receiving Commonwealth grants and not a requirement imposed directly by law. The guidelines themselves, it is said, do not limit the University in such a way as to deny the fees the character of payment for services and facilities provided in the courses offered by the University. No limits are imposed on the number or content of the courses nor on their promotion or design, nor on ancillary matters such as accommodation and other student benefits which may attract potential students. Specifically, in respect of payments made by the Commonwealth to the University under the Higher Education Funding Act it is said that they should properly be characterised as revenue from trading activities. The argument is put thus. Some students pay HECS contributions directly to the University. That is, they pay a fee for services rendered to them. In 1995 fees paid in this way amounted to $8.849 million. HECS payments by the Commonwealth to the University in that year amounted to $17.318 million. Those payments, it was submitted, should also be characterised as revenue derived from trading.
It is questionable whether the provision of educational services within the statutory framework of the Higher Education Funding Act amounts to trading. The Act creates a liability for each student to the University in respect of each course of study undertaken in a semester. The amount is not fixed by the University but rather by the Minister under published guidelines. The concept of 'trading' is a broad one. It is doubtful, however, that it extends to the provision of services under a statutory obligation to fix a fee determined by law and the liability for which, on the part of the student, appears to be statutory. For present purposes, however, this aspect of the claimed trading activities can be disregarded. For it is plain that the other activities cited are trading activities and are a substantial, in the sense of non­trivial, 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.
It may be added that the characterisation of a body corporate as a trading corporation is a matter of fact and degree. Dr Quickenden has been unable to point to any error in that assessment on the part of the learned primary judge. As to the status of the University as a financial corporation that too is established on the evidence. His Honour's reasons and findings in that respect also are not shown to have been in error.
Carr J disagreed with the majority as regards the provision of educational services under the HEF Act. He said [106]:
Although it is not necessary for me to decide, in my view there were other aspects of the University's activities which could be characterised as trading. Judicial notice can, I think, be taken of the fact that these days universities compete for students. The competition may be more intense within a particular State, but it certainly extends overseas and probably extends interstate. The Higher Education Contribution Scheme, in essence, works as follows. Relevantly, if the University wishes to participate in the Scheme it is obliged to charge fees to the students for the provision of education. If a student elects to pay those fees to the University directly and immediately out of his or her own funds the student gets a discount of 25 per cent, with the Commonwealth paying the balance to the University. Otherwise the student borrows the amount of the fees from the Commonwealth (which the Commonwealth pays to the University on the student's behalf) and subsequently repays that loan when he or she earns certain levels of income. The evidence was that the University derived, in the year ended 31 December 1997, an amount of $29.5 million under the Higher Education Contribution Scheme. I would regard that as being a trading activity.”

222 When Steytler P held in ALS that the commercial nature of an activity is an element in deciding whether the activity is in trade or trading his Honour also had regard to a recent decision of the New South Wales Industrial Court in Hardeman v Children’s Medical Research Institute (2007) NSWIRComm 189; (2007) 166 IR 196. In a joint judgment Wright, Walton and Boland JJ held that the Institute was not a trading or financial corporation within the meaning of s 51(xx) of the Constitution. The Court stated that [18] (g):
“‘trading activities’ generally connote the activities of a commercial nature involving, in essence, the exchange of goods or services for reward: see Adamson at 209 per Barwick CJ, Hughes at 19-20 and Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139, 167. Trading activities are not, however, confined to dealings or communications within open markets or between strangers and are not limited to profitable activities: Re Ku-ring-gai Cooperative at 167 per Deane J.”

The Court did not discuss the commercial nature of the trading activities except to say that in relation to a 'Jeans for Genes Auction' it was a charitable activity that lacked a commercial aspect [26]. The Court however analysed in some detail in what circumstances should financial activities be characterised as commercial for constitutional purposes and whether the Institute engaged in commercial dealings in finance within the meaning of s 51(xx) of the Constitution The Court asked and answered two questions:
“First, are commercial dealings in finance an appropriate prerequisite to a finding that a corporation of the respondent's ilk is a financial corporation for constitutional purposes? Secondly, if so, in what circumstances should the financial activities be characterised as commercial for constitutional purposes?
We consider that the first question should be answered in the affirmative for the reasons given under the next heading. When Deane J was resolving the question in Re Ku-ring-gai as to whether the Societies were financial corporations, he did so in a context in which the organisations had overall benevolent functions in the provision of low cost housing, but engaged in financial activities constituted by the borrowing from a bank at interest and lending to members at interest and the subsequent payments and receipt of money pursuant to obligations and rights resulting from those dealings. It was those financial dealings that ultimately led his Honour to the conclusion that, notwithstanding their altruistic motives, the organisations were financial corporations. However, as the extract from his Honour's judgment makes clear, that conclusion was not reached merely because the Societies engaged in some form of financial dealings. Rather, his Honour's reasoning makes clear that further qualifiers were necessary in order to be classified as a constitutional corporation. The criterion which we consider his Honour settled upon in his reasoning, and by its application to the activities of the Societies, was that their financial dealing had a commercial or business flavour. His Honour stated (at 160):
Notwithstanding the restricted scope and limited duration of their activities of their activities, each applicant in my view carries on a business. At the heart of that business are the commercial dealings in finance constituted by the relevant applicant's borrowing and lending of money and the subsequent payments and receipt of money pursuant to obligations and rights resulting from those dealings. Each applicant was formed to carry on a business. The activities of each applicant are confined to carrying it on. The business which each applicant carries on and which it was formed to carry on is a financial business. Each applicant, being formed to carry on a business of dealing in finance and in fact carrying on such a business, is, in my view, properly to be categorised as a financial corporation within the meaning of the phrase as used in s 51 (xx) of the Constitution...
That approach was, in our view, adopted by the High Court in State Superannuation. On close analysis the judgment of the Federal Court in Quickenden offers no different view.
We should pause to also state briefly (before later development) our view as to the requirements of ‘commerciality’ in answer to the second issue we have formulated. In our view, for an organisation to be engaged in commercial dealings in finance, the activities must do more than merely touch on finance. The activities must, of course, be a sufficiently significant proportion of the corporation's overall activities and they must involve transactions or dealings in the nature of business where the subject of the transactions is finance [64]-[67].”

223 The Court then went on to analyse what were the indicators of activity that could be characterised as 'commercial dealing in finance'. They said:
“In Re Ku-ring-gai it was apparent that the predominant benevolent motive underpinning the Societies' activities was outweighed by the commercial nature of the activities. It was the commercial element to the dealing in finance, the commercial dealing in finance, which characterised the Societies as financial corporations for the purposes of s 51(xx). Hence, the importance of the reference point.
The relevant commercial activities were the borrowing and lending of money and the subsequent payments and receipts of money pursuant to obligations and rights resulting from those dealings. Despite the commercial activities being severely curtailed because the loans were moderate interest loans, limited in amount, and that the activities of the loans served an important social function, commercial financial activity was present in the form of borrowing from the bank at interest and lending to members at interest and payments and receipt of money pursuant to obligations and rights resulting from those dealings. Thus, the financial dealings were transactions in the nature of business.
It was the integral nature of the financial activities to the Societies, the borrowing and lending, and payment of receipt of money by them, that established the commercial nature of the activities. The activities themselves were transactions in the nature of business because they were consistently carried on, being the corporation's primary activity.
Deane J stated (at 160):
Whatever may have been the motivation of borrower or lender or of those involved in making or assisting in making the relevant funds available, the borrowing from the bank by each applicant was a secured borrowing at interest and was a commercial dealing in finance. Praiseworthy and altruistic though the motives of those associated with the promotion and management of the applicants may, to no small extent, be, the lending by the applicants to members upon security and at interest are, likewise, commercial dealings in finance. Neither the borrowing nor the lending can be seen in isolation from one another. Neither can they be seen as merely incidental or ancillary to some other and predominant activity. The lending to members is the raison d'etre of the applicants and both the purpose and the culmination of their operations. Their borrowing is so that they may lend.
It is acknowledged that borrowing and lending constituted commercial dealing, however, this was so because interest and security were integral to the borrowing and lending engaged in by the Societies. The activities could not be carried on without the inherent commercial aspects of interest payment and lending upon security. The carrying on of the activities necessarily involved a commercial or business dealing. Commerciality was an ever-present aspect of the financial activities in which the Societies engaged, activities that were at the heart of the Societies' operations.
By their recurring nature as the Societies' primary activities, coupled with their necessary commerciality, the activities of the Societies in Re Ku-ring-gai demonstrate that financial activities must do more than touch on finance [69] to [74].”

224 The principles that can be drawn from these cases are in my respectful opinion as follows:
(a) Trade is sale of exchange or commercial dealing marked by use, regularity and course of conduct: Bank of New South Wales (381) (Dixon J). 'Trade' is not an expression restricted to dealings at arms length in an open market. Trade includes commercial or business dealings which are commercial in character, are marked by a degree of altruism which are not compatible with a dominant objective of profit-making: Re Ku-ring-gai (167) (Deane J).
(b) There is a distinction between the functions of a government which are purely governmental and those which entail the carrying on a business. Both can entail the provision of services which are systematic and regulatory. However the provision of services that are systematic and regulatory constitutes the carrying on a business where the government does what any citizen or private trade might do, namely providing service for remuneration which may or may not be commercially adequate remuneration: McMillian (355) (Emmett J). This is because when the activity in question is a governmental function which can not be carried out by a private provider in competition with the government provider, the activity can not be characterised as trade, as the element of commerciality is not present.
(c) Trade or trading does not extend to the provision of services under a statutory obligation to provide the service and fix a fee: Mid Density (585) (Davies J); (see also Quickenden [50] - [52] where Black CJ & French J expressed this principle as a tentative view).
(d) For an organisation to be engaged in commercial dealings in finance and thus to be characterised as a financial corporation, the activities must do much more than merely touch on finance, they must be a significant proportion of an organisation’s overall activities and they must involve transactions or dealings in the nature of business where the subject of the transaction is finance: Hardeman [67]. Activities identified as those that more than “touch on finance” are those that are consistently carried on: Hardeman [71], [94]. It is my view that the same principles that apply to examining whether an organisation engages in commercial dealings in finance should be applied to ascertain whether the activities of an organisation are trading activities (see State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 (303) (Mason, Murphy & Deane JJ)).
225 Whether a corporation is a trading corporation is ultimately a question of fact and degree which depends upon whether its current trading activities are substantial and not peripheral: Adamson (234) (Mason J) or form a sufficiently significant proportion of the corporation’s overall activities: Adamson (233) (Mason J) (237) (Jacobs J concurring); applied in ALS [68] (6) (Steytler P) [80] (Pullin J concurring). In Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10 Toohey J adopted a ‘three-stage test’ proposed by counsel for the respondents. This test:
“[I]nvolved 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 (22 - 23).”

Application of Principles
226 To apply the test enunciated in Hughes the first task is to identify the totality of activities of the appellant. The evidence in these matters has concentrated on the activities the appellant says are trading activities and little if any evidence has been given about other activities. For the reasons set out below I am of the opinion it is not possible to identify the totality and extent of all of the activities of the appellant to assess whether the trading activities of the appellant form a significant proportion of the appellant's overall activities. However it is patently clear from the provisions of the the LGA and other legislation that the appellant engages in many legislative, regulatory and governmental functions that are not trading activities. Pursuant to s 3.1 of the LGA the general function of government is to provide good government of persons in the district and the scope of this function is to be construed in the context of its other functions under the LGA or any other written law. The appellant has legislative functions under div 2 of pt 3 of the LGA to make local laws including the creation of penalties and prescribing penalties. Under s 3.18 it is to perform executive functions including providing services and facilities that integrate and coordinate so far as practicable with any services and facilities provided by the Commonwealth, the State or any public body. Other executive functions include controlling and managing land reserved under the Land Administration Act 1997 (s 3.54 the LGA). Other principal provisions of the LGA that are of importance in this matter are set out in some detail in the reasons for decision of the Acting President.
227 The second task in the three step process is to identify what activities of an organisation can be characterised as trading activities. When regard is had to the principles referred to in [224](a) to [224](c) of these reasons, it can be said that in identifying the activities which can be characterised as trading activities of a local government organisation it would be clear in most matters that the following categories of activities could not be regarded as trading activities as these activities do not carry with them any of the characteristics or incidents of trade or trading:
(a) Legislative and executive functions of government which are purely governmental and are not activities that any private citizen or trader might do. An example of this would be processing of applications for building licences. Others include the provision of bush fire services under the Bush Fires Act 1954 (WA), or the provision of water services under the Water Boards Act 1904 (WA);
(b) The provision of services where the right to be paid a fee for carrying out the service is created by legislation. Such services may include vehicle licencing commissions paid by the Department of Transport pursuant to s 6B of the Road Traffic Act 1974 (WA), and commissions paid by the Fire and Emergency Services Authority (FESA) for collection of the Fire and Emergency Services levy pursuant to s 36J of the Fire and Emergency Services Authority of Western Australia Act 1998 (WA) (FESA Act);
228 The third step is to evaluate the trading activities against the totality of activities. The respondent’s counsel has made a submission that is critical of the approach of looking at percentage value of trading activities against total revenue. This approach has however been adopted when considering the trading activities of non-profit organisations in Pellow v Umoona Community Council Inc [2006] AIRC 426 and Educang Ltd v Queensland Industrial Relations Commission (2006) 154 IR 436. As Carr J pointed out in Quickenden 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 [101] (7). His Honour cited Murphy J in Adamson (239) as one judge who put forward the former view. Whilst Carr J applied the view of Murphy J, the majority judges in Quickenden did not (Black CJ & French J). They applied a qualitative approach and determined that the trading activities of the University of Western Australia were substantial in the sense of non-trivial [48]-[51]. Justice Wilcox in E v Australia Red Cross Society (1991) 27 FCR 310 examined not only the financial value of the trading activities of the Red Cross Society but had regard to the scale of those activities. In Hardeman the Court took a relative approach and assessed the actual activities by the performance and acts of the organisation [56]. They regarded the size of the organisation’s financial investments and amount of income generated as only partly indicative of whether the organisation’s financial activities were a sufficiently significant proportion of its overall activities [54].
229 An assessment of whether the trading activities of an organisation are substantial by only comparing the percentage of income received from trading activities to the income received from non-trading activities in many matters will not result in a proper assessment of whether the trading activities of an organisation form a sufficient proportion of its overall activities. However, I am of the opinion that it is relevant to ascertain the monetary value of trading activities as one factor that is to be examined. As Pullin J said in ALS a qualitative judgment involves the balancing of many factors [82]. It is also necessary to examine all of the activities (including all non-trading activities) of an organisation. As Toohey J recognised in Hughes there are difficulties involved in comparing economic and non-economic activities (23). That is why it is necessary to look at other factors which is part of the task of making a qualitative or relative assessment. The facts in Hardeman illustrate that the total percentage value of financial activities may be large but the efforts or activities of an organisation to generate the funds from trading activities may occupy little time of the total number of those engaged in work for the organisation in question. In Hardeman only three out of 161 members of staff engaged in identifiable trading activities on more than a part-time basis [23]. Yet the medical research organisation on one view generated 31.369 % of its income from investment activities in one year and 45.544 % of its revenue from its investment activities in another year [36].
230 In my opinion when applying the third step of the test in Hughes to an organisation such as a local government organisation it may be necessary to consider among other matters, the following matters:
(a) The number of persons employed by the local government organisation and the nature of work and their activities;
(b) The activities of the council itself;
(c) The number of persons whose work requires them to be engaged in work on trading activities and the extent of the work on or in relation to trading activities in proportion to their work on non-trading activities;
(d) Whether income is generated from work of persons or bodies contracted to work for the local government organisation and whether the work of the contractors is supervised or controlled to any degree by the local government organisation;
(e) The frequency and regularity of each category of trading and non-trading activity.
Did the Commission at first instance err
231 When regard is had to the authorities and the principles discussed in these reasons of decision in my respectful opinion is it is clear that there was insufficient evidentiary material before the Commission on which a proper finding could be made at first instance or on appeal about the nature, scope and extent of the whole activities of the appellant on which a conclusion can be drawn as to whether the appellant is a trading corporation and thus a constitutional corporation. To make such a finding a relative assessment of the nature, scope, extent and regularity of the trading activities must be made by having regard to the nature, scope, extent and regularity of the non-trading activities of the appellant.
232 The Commissioner at [107] of her reasons for decision stated that she took into account the principles outlined by Steytler P in ALS at [79]. She then reviewed the nature of the activities the appellant claims are trading activities and said that she took into account the activities as a whole and the purpose of the activities of the appellant. In my respectful opinion the Commissioner made a number of errors in fact and in law. Firstly she made an error of fact because there was insufficient evidence before the Commission on which a finding could be made about the activities of the appellant as a whole. The only activities which were the subject of evidence were activities the appellant claims are trading activities. It is apparent from the provisions of the LGA and from exhibit R1, titled 'Statement of Financial Performance' that the appellant engages in many activities that were not claimed to be trading activities. Some of the activities listed in exhibit R1, include law, order and public safety; animal control; ranger administration; planning and development; creation and maintenance of parks, gardens, beaches, boat ramps; regional library schemes; museums; protection of the environment; maintenance of streets, roads, lights signs and parking bays; rural services; tourism; building control; maintenance of saleyards; community development; other economic services and public works. Apart from a list of these items and credit and debit amounts for these items no evidence was given about the nature, scope and regularity of these activities. Nor was any evidence given about the number of employees of the appellant who are engaged in these activities or the extent of their engagement in or the time spent on activities of the appellant. As discussed below such evidence may be of particular importance in respect of activities that are claimed to be non-trading activities.
233 The Commissioner went on to say at [108] that when the activities the appellant claims are trading activities are considered collectively they were conducted in the main for the public benefit and did not have the requisite commercial character. She also found that most of these activities were inconsequential and incidental to the primary activities and functions of the appellant which she found at [82] to provide a range of infrastructure and other services to the residents in the shire. The findings made at [107] and [108] determined her findings at [109] – [111] whether particular activities were trading activities. She also gave great weight to the findings that she made (which she made in respect of most items) that there was no evidence that particular items generated a profit or it was unclear whether items generated a profit.
234 The appellant in written submissions (AB 90 of 145) stated that it is acknowledged that Items 1 to 5, 7 and 36 (Sale of Council Publications, FESA - Bush Fires, FESA - Administration Charge, Fire Map Sales, Grant – Emergency Services Collocation, FESA – State Emergency Service and Rate Search Fees) arise as a result of the statutory obligations of local government. If the principles set out in [224](a) – [224](c) and [227] of these reasons are applied to each of these activities it would be difficult to characterise these activities as trading. Although the Commissioner found each of these activities were not trading activities she made those findings on a different basis. She found that there was no evidence that these activities generated a profit or were conducted on a commercial basis. She also found that these items to be incidental or peripheral the appellant's main functions.
235 Whilst, I am of the opinion that the Commissioner did not give too much weight to whether there was evidence that particular activities generated a profit, I am of the view that she erred in law by wrongly having regard to or giving weight to the fact that most of the activities were carried out for the public benefit. The fact that an activity may not generate a profit is only one factor that can be taken into account. As Steytler P pointed out in ALS the making of a profit is not an essential prerequisite to trade and the fact that trading activities are conducted in the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as trade [68] (4) and [68] (5). Although whether the activities produce a profit or are intended to produce a profit will be a relevant factor: ALS [82] (Pullin J). Whether each activity claimed to be a trading activity generated a profit or was intended to generate a profit and the extent of the profit or loss in the relevant window of time, is a matter that should have been the subject of evidence, as it is one relevant factor to be considered when determining whether activities are trading activities.
236 The specific purpose of each activity is irrelevant. Motive for carrying out activities does not matter: E v Australian Red Cross Society (343) (Wilcox J). For example in relation to Item 15 (Hall Hire Charges) it is immaterial that this activity is carried on for the benefit of the community. This principle was explained by Mason, Murphy and Deane JJ in State Superannuation Board v Trade Practices Commission where their Honours said:
“[T]he judgments ‘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’ (cf. p. 213 per Gibbs J.). Barwick C.J.(208)  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.(234)  said that it ‘is very much a question of fact and degree’ having earlier stated (233)  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.(239)  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 these activities 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 (304).”

Item 15 (Hall Hire Charges) however may not be able to be characterised as a trading activity if the activity of hiring halls cannot be said to be conducted on a basis that is commercial in character. Whether it is so may depend upon whether the halls are hired for a peppercorn rent on an ad hoc basis or whether there is some assessment of the value of the service provided on a basis that could be expected if the halls were hired by a private enterprise.
237 I am also of the opinion that the Commissioner erred in characterising most of the activities claimed as trading activities as inconsequential and incidental to the primary activities and functions of the appellant. For example it is not correct to characterise the collection of the fire and emergency services levy (Items 2, 3 and 7) as incidental and inconsequential to the primary activities of the appellant. What the appellant does is collect the fire and emergency levy on behalf of FESA. They are obliged to do so by operation of a statute and are entitled to payment by operation of law. Pursuant to s 36W of the FESA Act the Minister responsible for the administration of the FESA Act determines the fee to be paid by FESA to the appellant. The appellant is able to receive fees by any source authorised by the Local Government Act on any other written law (s 6.15(1) the LGA). Under s 36J of the FESA Act, a local government authority is required to assess the amount of the levy on each person who owns leviable land in its local government district and service notice of the assessment on that person as part of the rate notice. A sum is paid to the local government authority for collection of the levy. The provision of the service by the appellant to collect the levy and the fee paid by FESA raise no incidents associated with the concept of 'trade' or 'trading'. Clearly the obligation to collect the levy and the right to payment of that service is created by statute.
238 Other activities regulated by statute that are claimed by the appellant as trading activities are Item 14 (Cemetery Charges) and Item 33 (Department for Planning and Infrastructure Commission). Mr Durtanovich gave evidence that the cemetery charges are set on a commercial basis. However that evidence is irrelevant. The right to obtain income from cemetery charges is also regulated by statute and cannot be characterised as trading as the service is purely regulatory and the right to payment for the service is created by statute and not by any negotiations, bargain or agreement that has the hallmarks or incidents of "trade". Under s 5 of the Cemeteries Act 1986 (WA) the Governor may vest the care, control and management of a cemetery in a local government. Under s 6 of the Cemeteries Act once vested the appellant is empowered to exercise the conferred on Boards under the Cemeteries Act. Pursuant to s 53(i) of the Cemeteries Act the appellant is empowered to set a fee among others for digging a grave. All fees set under s 53 are payable to the appellant and recoverable as a debt in a court of competent jurisdiction. The fact that the fees are deemed payable by statute to be recoverable as a debt raises the inference that such fees can not be regarded as monies owing pursuant to a contract for services. The appellant also performs a State Government function of licensing of vehicles and licensing persons to drive. The performance of these functions is vested in the appellant pursuant to agreement with the Director General of the Department of Transport made under s 6B of the Road Traffic Act. Whilst it may be open under s 6B to the appellant to negotiate the commission it is paid to perform this function, there is no evidence that this has occurred. In any event this function has no element of commerciality so as to characterise this activity as in trade or trading as it is truly a regulatory governmental function.
239 However some activities the Commissioner did correctly characterise as incidental to activities that are not trading activities. Staff housing (Items 6 and 31) can be said to be incidental to employment of council staff in the same way as income from interest that is earned from funds received as rates and held in a bank account. Also the sale of refuse bins (Item 13) can be said to be incidental to the collection of refuse (an activity that is not trading).
240 It is also doubtful whether the funds received for the Emergency Services Collocation Grant (Item 5) whilst used to engage subcontractors to build a community centre can be regarded as a trading activity as there is no evidence on which a finding could be made that the purpose of the building is to engage in trade by letting parts of the building to others for reward on a basis that has an element of commerciality. The evidence of Mr Durtanovich is that the only monetary return for the appellant was that it was reimbursed for the administration costs of managing the construction project. Such an arrangement is unlikely to be regarded as a business like arrangement. Even if I am wrong in reaching this view given that this activity was one single project this is a matter that would have to be taken into account when determining whether the appellant's trading activities form a substantial portion of its entire activities. In addition in relation to the value of the item, the only amount that should be taken into account is the amount the appellant received as income for the administration of this contract.
241 Unless evidence can be produced that the activities relating to the collection of business refuse, business tip charges, building site tip charges and mine site refuse collection are activities that a private citizen or trader could carry out for reward, these activities could not be characterised as trading activities (Items 9, 10, 11 and 12).
242 On the evidence before the Commission it is clear that some items are trading activities. These would include income from the lease of the caravan park (Item 24), private works (Item 30), income received in relation to the running of the Westpac Bank agency (Items 32, 34 and 35). All of these items are functions that could be carried out by a private business. The same could be said about the income received for the running of the airport (Items 21 and 22) and the associated commercial leases (Items 26 and 28) as those activities appear to have an element of commerciality. As discussed above the income received from the hire of halls, the Ravensthorpe Entertainment Centre, the Sports Pavilion, swimming pool admission charges, gymnasium memberships (Items 15, 16, 17, 18 and 19) could be characterised as trading activities if those activities are engaged in a way that a private individual could run such activities. Even if all of those activities can be said to be trading activities, the nature, extent, regularity and scope of these activities will be relevant as to whether the appellant can be said to be a trading corporation.
243 In my opinion further evidence of some activities is required to be put before the Commission to determine whether they are, in law, trading activities. It is not clear from the evidence provided to the Commission whether any of the activities relating to the collection and treatment of sewerage and effluent (Items 47, 48, 49, 51, 52 and 53) are legislative and executive functions which are purely regulatory and not activities that any private citizen or trader might do. If only nominal charges are made for Items 20 and 23 (Camping fees and Gate registrations) it would be difficult to conclude that these items were in trade.
Conclusion
244 As discussed in the Acting President's reasons for decision the grounds of appeal read like submissions rather than grounds. As I understand the crux of ground 1 of the appeal the appellant contends that when regard is had to the decision of the majority in ALS the Commissioner inaccurately assessed the appellant's activities and significance of the trading activities to it. For the reasons set out above I would uphold that ground of appeal and suspend the operation of the decision and remit the case to the Commission for further hearing and determination.
245 Whilst I have reached the conclusion that the Commission at first instance erred, my findings in relation to each of the activities claimed by the appellant as trading activities are not significantly different to the conclusions reached by the Acting President. However, I am of the opinion that until further information is provided in respect of Items 9, 10, 11, 12, 15, 16, 17, 18, 19, 20, 23, 47, 48, 49, 51, 52 and 53 it cannot be said definitively whether these items are trading activities or not. An evaluation would have to be made as to whether these activities are carried on in a business like way and whether some of these activities are purely regulatory, governmental activities. Even if these activities are trading activities, a conclusion would not necessarily be able to be drawn as to whether the appellant is a trading corporation as the extent of these activities together with the other activities would have to be examined in a qualitative assessment. Even if all of the activities claimed by the appellant to be trading activities it does not mean that at law the appellant can be regarded as a trading corporation. As set out above the trading activities of the appellant should be evaluated against the total activities of the appellant. An activity is a collection of duties and functions which may be difficult to quantify. One useful exercise may be to ask whether the appellant's activities as a whole simply 'touch on trading' (to use the expression in Hardeman). Another question to ask would be whether the appellant has delegated particular activities to third parties and relied upon their expertise or have activities been conducted partly or wholly 'in house'. Time spent on activities may be a useful indicator. Whilst it may be helpful to have regard to the percentage value of the trading activities, other factors such as the number of employees and or the hours of work of full time equivalents positions engaged in trading activities and non trading activities may be of assistance. This could be of particular importance in relation to activities such as the maintenance and operation of the airport. Not only would it be relevant to ascertain how many of the appellant's employees are engaged in this work but also the percentage of their working hours that they spend on such work. The scale of the trading activities would be of importance, including the frequency of each activity. For example, if the appellant employs 50 people whose full time work each week can be quantified as 50 full time equivalents (FTE's) and the equivalent of only five or six FTE's are engaged in work on trading activities each week and the remainder of the hours of work of the remaining FTE's work solely on non-trading activities it is highly unlikely that the appellant could be characterised as trading corporation. At the other end of the scale if 25 FTE's of a total of 50 FTE's are engaged in full time work on trading activities each week, it is likely that the appellant could be characterised as a trading corporation. However, before such a conclusion could be drawn it would be appropriate to have regard to all factors that are relevant to a qualitative assessment.


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