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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