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Lecture

2.1 [s51(xx)] Corporations.doc

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Department
Law
Course
JSB171
Professor
All Professors
Semester
Spring

Description
Corporations Power—s51(xx) s 51 The Parliament shall have power, subject to this Constitution, to make laws for the peace, order and good government of the Cth with respect to: (xx) foreign corporations, and trading or financial corporations formed within the limits of the Cth Corporations Foreign Corporations • A company incorporated outside the Cth that carries on business within the Cth: NSW v Cth o Includes syndicates, joint ventures formed in countries with different corporation laws: WA Football League per Murphy J Trading or Financial Corporations • Approach the same for Trading & Financial corporations: per Mason, Murphy & Deane JJ in State Superannuation Board Trading Activities • Buying and selling is at the very heart of trade: St George County Council per Stephen J • Not limited to buying and selling—includes any activities which produce revenue (for-profit business): WA Football League v Adamson per Mason J Financial Activities • Transactions with subject of finance (= borrowing & lending money): Deane J in Ku-ring-gai Cooperative Building Society (No.12) Ltd (FC) (Corporation providing low interest loans to members for housing | ancillary objective of making profit  financial corporation) o Common but not essential characteristic is obligation of both sides to pay money Tests • Purpose test (now abandoned) ← What the corporation was incorporated to do: St George County Council (Trading a secondary purpose of the council—used to perform local government functions  not a corporation → TPA did not apply) • Activities Test (since 1979)—judge from the current activities of the corporation: o St George per Minority ((Barwick & Stephen JJ): council earning money from buying & selling  substantial amount of activities → trading corporation → TPA does apply); o Adopted by WA Football League v Adamson (1979) (football clubs involved in advertising, catering, TV rights, renting premises and car parking—arguing they were not corporations to escape rules based on (xx)  substantial portion of activities are trading → trading corporation → rules do apply) Proportion • No agreed form of words • "trading must be a significant part of its overall activities": Mason, Murphy and Deane JJ in State Superannuation Board • Standard: WA Football League v Adamson (1979) o substantial portion: Barwick CJ o not so slight as to be incidental—eg churches & schools are excluded: Mason & Jacobs JJ Andrew Trotter LWB242 2009-1  “a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation”: Mason J in WA Football League o not insubstantial: Murphy J • Over 28% of activities will suffice: Quichenden v O’Conner (UWA—28% of activities = trade  trading company) • For profit hospitals may be corporations: E v Red Cross Society (red cross = trading corporation) o Cf. WAFL v Adamson per Mason J (hospitals & schools not included) • Occasional (bar) trade will not suffice: Hughes v WACA (WACA = trading corp | not Subiaco Cricket Club—only slight bar trade in the context of overall activities) • Local governments, etc—not trading corporations since primary activity is provision of government services: AWU v Ethridge Shire Council • Even if not dominant activity—financial activities entered into for a primary undertaking which does not have reference to trade: State Superannuation Board v TPC per Mason, Murphy and Deane JJ (Government corporation arguing not a financial corporation—not subject to TPA—Activities: administering public servants’ super ← collecting contributions & giving out benefits = primary purpose = not financial | investing money to
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