Central Bayside General Practice Association Ltd v Commissioner of State Revenue

[2006] HCATrans 238

[2006] HCATrans 238

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M3 of 2006

B e t w e e n -

CENTRAL BAYSIDE GENERAL PRACTICE ASSOCIATION LIMITED FORMERLY KNOWN AS CENTRAL BAYSIDE DIVISION OF GENERAL PRACTICE LIMITED

Appellant

and

COMMISSIONER OF STATE REVENUE

Respondent

GLEESON CJ
KIRBY J
CALLINAN J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 17 MAY 2006, AT 10.22 AM

Copyright in the High Court of Australia

MR B.J. SHAW, QC:   If the Court pleases, I appear with my learned friends, MS J.J. BATROUNEY, SC and MS L.G. DE FERRARI, for the appellant.  (instructed by Health Legal)

MR I.J. HARDINGHAM, QC:   If the Court pleases, I appear with my learned friends, MR S.G. O’BRYAN, SC and MS R.J. ORR, for the respondent.  (instructed by Solicitor to the Commissioner of State Revenue)

MS M.M. GORDON, SC:   May it please the Court, I appear with my learned friend, MR P.R.D. GRAY, on behalf of the Commonwealth of Australia seeking leave to be heard as amicus in this matter.  (instructed by Clayton Utz)

GLEESON CJ:   Yes, you have that leave, Ms Gordon.  You will follow Mr Shaw, I assume, Ms Gordon? 

MS GORDON:   We will, your Honour.

GLEESON CJ:   Yes, Mr Shaw. 

MR SHAW:   We have agreed on a division of time, if the Court pleases.  I do not know whether Ms Gordon is actually very satisfied with what was agreed but she has agreed.

The question in this case is whether the wages payable by the appellant are excluded from liability to payroll tax by section 10(1)(bb) of the Pay‑roll Tax Act (Vic) because it is a charitable body. In the Court of Appeal it was held that it was liable for payroll tax because it was not a charitable body. The court was divided on that matter. Two members thought it was not a charitable body and one thought it was. One of the members of the majority thought that it was not a charitable body because it performs the work or functions of government. The other member of the majority thought it was not a charitable body because it was a creature or agent of government. My learned friends say that those two tests amount to the same thing and what they amount to is that the appellant’s activities:

are so controlled or influenced by government that the body can be seen to be acting in furtherance of government objectives rather than, or as well as, in furtherance of its own objects. 

That appears in paragraph 6 on page 6 of their outline.

KIRBY J:   They say more than that.  They say also that the wellsprings of the motivation are not charitable, they are governmental, and that the type of control that the Attorney‑General would normally exercise over charity is not apt for government activities.  You remember in the letter to the Corinthians it was interpreted in the King James version as “faith, hope and charity” and in the New English Bible it is “faith, hope and love” and it is said that love is missing.

MR SHAW:   Your Honour is, I suppose, right in one sense.

KIRBY J:  You seem lost for words for once, Mr Shaw.  The Corinthians has thrown you off your path.

MR SHAW:   Your Honour, it was just that there seemed to be not much love lost in this contest and I wondered why we were being so ill‑treated by the unkind Commissioner of State Revenue.  In the appeal book the appellant’s constitution appears at page 50.  It will be seen at page 51 in the first column in clause 3 that the appellant has one object, namely:

to improve patient care and health, primarily in the Central Bayside area of Melbourne -

in nine particular ways.  The Court may accept, for present purposes, that that object as stated is charitable in a legal sense for reasons which appear in paragraph 31 of our outline.  In paragraph 4 it is provided that:

The company has:

(a)      the legal capacity and powers of an individual, and

(b)      all the powers of an incorporated body –

but in clause 4.2 at the top of the next column at about line 5 it is provided that:

The company may only exercise its powers for its object.

In clause 5 it is provided that:

5.1      The company may only use its income, assets and profit for its object.

5.2      The company must not distribute any of its profit, income or assets directly or indirectly to its members.

At page 52 in clause 12 in the second column, about line 36 or so, limited liability is provided, it is a company limited by guarantee.  At page 56 in the second column at the top of the page there is a provision for the election of directors:

(a)      9 elected directors, and

(b)      up to 1 co‑opted director -

and there is a provision that:

Only primary members entitled to vote at the annual general meeting are eligible to be elected as directors.

Primary members are required to be general practitioners practising in the Bayside area.

The provision for co‑option of a possible further director on page 57 in clause 31, then at page 58 it is provided in clause 42.1 at about line 38 in the second column that:

The Board is responsible for the management of the company –

and in clause 41 that:

The members of the Board are the directors of the company.

Then on page 60 it is provided in clause 53 at line 27 that:

The funds of the company may be derived from grants, fund‑raising activities, subscriptions, interest and any other sources approved by the Board.

At page 61 it is provided in clause 62 in the first column at about line 40 that:

62.1If the company is wound up, its remaining assets must not be distributed to any member.

62.2Instead the remaining assets must be given to a body, trust or fund that:

(a)     has a similar object to the company; and

(b)also prohibits the distribution of profit, income and assets to its members to at least as great an extent as this constitution.

The appellant is described in a way consonant with those clauses in paragraphs 5 and the following paragraphs of our outline.  The body is not a statutory body except in the sense that it is a company incorporated under the Corporations Act and it was incorporated by private citizens.  It has no governmental members and no governmental directors.  The government is given no power over the appellant by the terms of its constitution or by the terms of the Corporations Act.

Further, despite the abolition of the doctrine of ultra vires by section 124 of the Corporations Act, there is a provision in section 125 that permits the constitution of a company to prohibit the exercise of any of the powers of the company and to make provision for an object.  It is perfectly clear when one looks at the terms of the constitution that although externally there may be no restriction on the powers of the company, the directors are bound internally by the terms of the constitution.  That means they are bound to apply the assets of the company only in furtherance of its object. 

That analysis is consistent with the analysis which appears in Ford’s Principles of Company Law at paragraphs [12.100] and the following paragraphs, especially at [12.130] and [12.180].  Moreover, it appears that the cy‑près clause directing the application of the assets on a winding‑up to another similar company would be given effect to.  That appears in Ford and Lee, Principles of the Law of Trusts at paragraph 2050, especially the reference to the case of Liverpool and District Hospital for Diseases of the Heart [1981] Ch 193.

In the appeal book at pages 119 to 129 is an extract from a Commonwealth publication called General Practice in Australia which deals with some aspects of the setting up of divisions and at page 68 and at page 129 there appears the annual report of the appellant for 2001 and 2002 with the general description of its activities and if one looks, for example, at pages 74 and 75 we can see a great deal of activity by the appellant with no reference to the government at all.  Apparently, the respondent seeks to rely in support of its argument on the terms of the outcomes-based funding agreement which appears at page 202 of the appeal book and I should take the Court ‑ ‑ ‑

KIRBY J:   What page is that?

MR SHAW:   Page 202.  The whole of the agreement is not there, unfortunately, but if I could first refer the Court to page 203, there is a definition of “Business Plan” as “the document at Attachment 2” and at the next page, 204, there are definitions of “Outcomes”, “Outcomes‑Based Funding” by reference to schedule 2 ‑ ‑ ‑

HEYDON J:   Where is attachment 2?  Is that one of the parts that is not there?

MR SHAW:   It is not there.

HEYDON J:   Not in evidence at all?

MR SHAW:   No.

HEYDON J:   Does that matter?

MR SHAW:   In our submission, no.  But I would accept that it was a ‑ ‑ ‑

CALLINAN J:   Was it before the tribunal?

MR SHAW:   It was not, your Honour.  No.  That is why it is not there.

CALLINAN J:   So it has never been in the evidence?

MR SHAW:   Never been there, no.  There is a definition of “Programs of Activity” by reference to schedule 1 and a reference to “Strategic Plan” by reference to attachment 1.  Then in clause 2 it is provided that – this is an agreement between the Commonwealth of Australia and the appellant or, rather, a draft of it.

KIRBY J:   What is the reason for these agreements?  Is it that before they were made, and I think they came in in 1992 or something, it was found to be difficult to get practices of general practitioners in particular areas.  Is that – or, was it to co‑ordinate a series of ‑ ‑ ‑

MR SHAW:   The reason for the agreement is that the Commonwealth made funding available for certain objectives and ‑ ‑ ‑

KIRBY J:   But it does not normally do so for general practitioners, does it?  I do not know.

MR SHAW:   Your Honour, what it wanted to do was improve patient health and it wanted to do it through general practitioners.

KIRBY J:   But all private practices ‑ ‑ ‑

MR SHAW:   It made the funds available pursuant to these agreements of this kind so that it could be assured that the divisions were doing what they said they would do.

GLEESON CJ:   If this was a body set up for the education of general practitioners it would be clearly charitable.

MR SHAW:   Yes, it would.

GLEESON CJ:   I think the history of this is set out by Justice Nettle from page 261.

MR SHAW:   Yes, it is, your Honour.

CALLINAN J:   At paragraph 13 at 267 he talks about, “continuing professional education and specialist development”.

MR SHAW:   There are certainly educational aspects to what they do, but for some reason or other it has been accepted that the – I suppose because the tribunal dealt with it in this way – that the object of the appellant, as stated, was for public benefit within the fourth class in Pemsel’s Case and not in the education class.

GLEESON CJ:   As I understand it, the tribunal made a finding of fact in your favour, with which some of the judges in the Supreme Court of Victoria were uncomfortable, but about which they could not do anything.

MR SHAW:   Yes, that is right, your Honour.

GLEESON CJ:   That was that this was not an association for the advancement of its members.

MR SHAW:   No, that is right, your Honour.

CALLINAN J:   That was Justice Nettle’s at least tentative finding at paragraph 13.  He said:

I have difficulty equating that sort of organisation ‑ ‑ ‑

MR SHAW:   He did exactly what your Honour the Chief Justice said.  He sort of said, “I’m rather uncomfortable about this but I suppose I have to accept it”.

GLEESON CJ:   They are stuck with the findings of fact of the tribunal, are they not?

MR SHAW:   Yes.

CALLINAN J:   What he had said earlier seems to me inconsistent with any discomfort of making the finding because he talked about enhancement by “professional education” and their ability to look after people.

MR SHAW:   He seems to allow that perception of things to affect what he did.

CALLINAN J:   In a sense, lots of charitable activity will also be for the benefit of the people undertaking them.  That just follows.  They often get paid to undertake them.

CRENNAN J:   It is like pro bono work by barristers, they become better barristers during the course of doing it.

MR SHAW:   Teachers in non‑Government schools, I suppose.

GLEESON CJ:   A body established for continuing legal eduction would be charitable, would it not?

MR SHAW:   Yes, it would.  There is no question here about whether the object is charitable.  One starts off on the basis that it is charitable and the question is, is that object which is otherwise charitable not charitable because of, as it turns out, the terms of the outcomes‑based funding agreement?

GLEESON CJ:   It cannot be because of the funding.  I cannot think of anything more obviously charitable than a public hospital, which I think would be fully government funded and the government funding would come with many strings attached.

MR SHAW:   Yes, but it is the strings that apparently cause the problem, not the fact of funding but the strings.  As I understand what the Commonwealth says, we cannot hand out money without making sure that it is spent in the way it is meant to be spent.

KIRBY J:   But that is then said to contaminate the charity and to sever the link with love.  You are doing it because you are getting public money.

MR SHAW:   Yes.  I was about to take the Court to page 204, clause 2.1 at line 35 which provided:

The Division shall conduct the Programs of Activity –

and the programs of activity are the programs of activity as described in Schedule 1 –

in accordance with the requirements as set out in Schedule 1.

On the top of the next page:

2.3The Division will comply with the requirements regarding identified Outcomes for Outcomes-Based Funding as specified in Schedule 2.

2.4The Division will notify the Department in writing of any alteration to the Strategic Plan.

Then if you go over to pages 218 and 219 in Schedule 1, it says in paragraph 1:

The Division shall conduct the Programs of Activity as described in the following documents:

·the Division’s extended Strategic Plan for the period . . . 

·The Division’s approved Business Plan for –

a specified period.  So what is being required is that the division comply with its own strategic plan and business plan.

Then there are other provisions about the programs of activity and they are to be undertaken:

in accordance with the requirements set out in the Implementation Guide for Outcomes Based Funding . . . 

5.The Division shall prepare a Business Plan that is consistent with the extended Strategic Plan for each year of operation of this Agreement.

6.The Division’s approved Annual Business Plan for 2002‑2003 . . . appears as Attachment 2 to this Agreement.

If you go to Schedule 2:

(A)The Division shall conduct activities within recognised programs that are designed to achieve the identified Outcomes as set out in the Division’s extended Strategic Plan 1999-2003 and current Business Plan.

(B)     The identified Outcomes shall be in keeping with:

(i)the Current Aims and Intended Outcomes of the Divisions of General Practice Program as set out in this Schedule –

and they are set out beneath, and

(ii)the Implementation Guide –

Then in Schedule 3 there are certain reporting requirements.  In Schedule 4 there is a provision about how the funding is to be provided.  So what the agreement provides is in effect that the division will act in accordance with its own business plan and strategic plan.

If I might now go to a number of authorities, we refer to these in ‑ ‑ ‑

KIRBY J:   Well, the starting point is the statute, is it not?  I mean, we have to ‑ ‑ ‑

MR SHAW:   The starting point is the statute, yes, your Honour.

KIRBY J:    ‑ ‑ ‑ start with the Act and how this fits into the scheme of the Act and is it common in other States of the Commonwealth, similar ‑ ‑ ‑

MR SHAW:   Some States do have an exemption for wages paid to charitable bodies.  Some of them have an exemption for salaries paid by public benevolent institutions.

KIRBY J:   What is the overall purpose of providing those exceptions in those limited categories of cases in the statute?

MR SHAW:   It does not say so, your Honour, but I guess it is because the State or States do not wish to place tax burdens on, depending on what the exception is, for charities or public benevolent institutions.

GLEESON CJ:   It may be important not to confuse charity and benevolence.

MR SHAW:   Indeed, yes.  We have set out the terms of the section in paragraph 29 of our outline and in paragraph 33 we refer to a case of Robison v Stuart (1891) 12 NSW Eq 47, a decision of the Chief Judge in Equity.  At the top of page 49, the terms of the bequest which was in question was set out:

“to the Fever Hospital at Little Bay, Sydney, or to the trustees or treasurer of that hospital . . . In the statement of claim, which must be taken as admitted, the hospital is thus described:- “The Fever Hospital at Little Bay is not a duly constituted charitable institution:  the only thing at all answering the description is a building called the Little Bay Hospital, which was founded by the Government of New South Wales, and is entirely supported by the Government out of funds voted by Parliament from time to time in the annual estimates.  The building is an iron‑built movable one, built on Crown land as a smallpox hospital, and is now, and was at the date of the will, used as a fever hospital by the Government, but may be discontinued for that use at any time the Government may see fit to do so.”

KIRBY J:   I am sorry to be annoying about this, Mr Shaw, but the Court has said many times in recent years that we have to start with the statute and try to understand its history and objects and purpose, and not plunge into what judges said on other statutes for other purposes at other times.  Now, is there anything in the subcategories that appear in the annexure to your submissions which have the various exemptions that are relevant?

MR SHAW:   Yes, the whole of the section is set out behind our ‑ ‑ ‑

KIRBY J:   Yes, I have that.  Did they all come in a – I see (ba) came in at a later time and (bb) presumably as well.

MR SHAW:   Yes.

KIRBY J:   Is there anything in the history of these exemptions that throws any light on the purpose?  How long has the charitable body exemption been there, and was anything said when it was introduced as to why it was introduced and why the special provision was made about instrumentalities of the State?

The answer to your Honour’s question is, not that I am aware of. What everybody has accepted, your Honour, is this, that when one sees in section 10 an exemption for wages “paid or payable” by a charitable body, what one is concerned to discover is whether or not the relevant body is a charitable body in the legal sense.

GLEESON CJ:    Which is the reprint of the Pay-roll Tax Act that we should be using?

MR SHAW:   It is No 8, your Honour.

GLEESON CJ:   Thank you. 

KIRBY J:   You say that there is nothing in the terms of the section looked at as a whole or the history of the introduction of the paragraph which we are focusing on or anything in the structure of the Act that throws any light on the problem that we have before us.

MR SHAW:   No, I do not say that, your Honour.  There is ‑ ‑ ‑

KIRBY J:   I am merely telling you that the Court has said, you know, that barristers love cases, they love judges and they do not like statutes.

MR SHAW:   Your Honour should not mind that.

KIRBY J:   So I am starting at statutes. 

GLEESON CJ:   Mr Shaw, was the Pay-roll Tax Act (Vic) a successor to Commonwealth legislation?

MR SHAW:   Yes, is the answer.

GLEESON CJ:   I recollect that Commonwealth legislation for payroll tax was introduced with free milk or something was to provide a certain form of social service.  They then transferred this tax from the Commonwealth to the States in order to give the States a growth tax. 

MR SHAW:   Yes, your Honour.

GLEESON CJ:   Presumably the exemptions in the Victorian Act mirror, do they, those in previous Commonwealth legislation.  The history of payroll tax legislation is outlined in the judgment of Chief Justice Barwick in the Payroll Tax Case which I think is called Victoria v Commonwealth.

MR SHAW:   At least the Act in the form, that is to say the Commonwealth Act in the form I have it – the Act was originally enacted in 1941 and the compilation that I am looking at was prepared in 2000, taking into account amendments up to 1996 – that contained an exemption for wages paid by a religious or public benevolent institution or a public hospital and then, various sorts of hospitals, schools and colleges and I think nothing else is relevant. 

GLEESON CJ:   No reference to charity?

MR SHAW:   No, your Honour.

GLEESON CJ:   Thank you.

KIRBY J:   If there is anything in the ‑ ‑ ‑

MR SHAW:   Your Honour asked me whether there was anything in the form of the Act which might throw light on the question that the Court is faced with.  The answer to that is, yes, there is something.  It is in subparagraph (bb) itself.

KIRBY J:   If you say the postulate that required them to provide an exception, assume that otherwise they were in.

MR SHAW:   Yes indeed.  Apart from that, no, your Honour.

GLEESON CJ:   According to a side note in the print that I have, the relevant paragraph was inserted in 1992.

MR SHAW:   Yes, your Honour.  The second reading speech in November 1992 said this on the subject:

An exemption from payroll tax will be given to charitable bodies other than educational institutions, schools, government departments and public statutory bodies.

GLEESON CJ:   But was paragraph (ba) introduced earlier?  It is not quite clear from this print.  It says it was inserted by No 9305 but it does not say of when.

MR SHAW:   I will see if I can find the answer to that, your Honour.

GLEESON CJ:   The only reason I ask the question is that you might infer from their juxtaposition that charitable body is something different from a public benevolent institution.

MR SHAW:   Yes, indeed.

KIRBY J:   And, indeed from the fact that in the federal legislation it referred to public benevolent institutions apparently, and then it was thought necessary in the State Act to introduce this wider category of exemption, which is wider and different.

MR SHAW:   Your Honour, 9305 was an Act of 1979.

KIRBY J:   So this paragraph came in in 1979?

MR SHAW:   Yes, your Honour.

GLEESON CJ:   No, this paragraph came in in 1992.

MR SHAW:   It is (ba) that came in in 1979.

GLEESON CJ:   The exemption for public benevolent institutions came in in 1979 and the exemption for charities came in in 1992.

MR SHAW:   Yes, your Honour.  If I might go back to page 49 of Robison v Stuart his Honour says, after referring to the terms of the statement of claim, at about point 5 of the page ‑ ‑ ‑

KIRBY J:   This is all for the purpose of interpreting a will.  What light can it throw on the purposes of a statute?

MR SHAW:   Your Honour, the statute exempts from wages wages paid by a charitable body.  The question therefore, it is accepted that when a reference is made to a charitable body it is referring to a body which is charitable in the legal sense.

KIRBY J:   Can we be sure that the Parliament of Victoria was using “charitable” in 1992 in a special and technical sense?  Why would they not just be using it in the ordinary sense as that word develops and evolves over time in society?

MR SHAW:   Well, your Honour, so far everybody has thought that the word was used ‑ ‑ ‑

KIRBY J:   I realise that, but I am asking the question.

MR SHAW:   Well, I was going to go on and answer it, your Honour.  The answer to your Honour’s question is that in Chesterman’s Case the High Court had decided that a reference to “charity” was a reference to “charity” in the popular sense, but the Privy Council said that the High Court was mistaken.

KIRBY J:   Well, we might need to revisit that and tell their Lordships they were wrong.

MR SHAW:   Since that time it has generally been accepted that where a reference is made in a statute to “charity” it is “charity” in the legal sense that is referred to unless there is some strong indication to the contrary and there does not seem to be that here.  What is more, your Honour, after the ‑ ‑ ‑

KIRBY J:   A wider, popular sense is helpful to you.

MR SHAW:   Indeed.  So it is, your Honour.  What I was about to say was the consequence of Chesterman’s Case was the introduction into the statute which had been in question in Chesterman’s Case of the concept of “public benevolent institution”, the reason being that that was regarded as a much more limited concept than “charity” in the legal sense, which is a very broad one.

GLEESON CJ:   But “charity” in the legal sense is different from “charity” in the popular sense in one important respect.

MR SHAW:   Yes, it is.

GLEESON CJ:   The popular sense of “charity” involves almsgiving and judges have been at pains to say over and over again that that is not an essential element of “charity” in the legal sense.

MR SHAW:   No.  They have said it again and again.  Chief Justice Barwick said it in the Incorporated Council of Law Reporting Case.  He said that there is no necessary eleemosynary character in charities and you can tell that by looking at the preamble to the Statute of Elizabeth because it talks about moneys being given to build roads or set up poinds or all sorts of things of that kind which have no eleemosynary character at all.

So, your Honour Justice Kirby, why I am referring to this case is because it is a case which deals with what is a charitable body.  The point about the case is that it held that the Fever Hospital at Little Bay was a charitable body despite the fact that it was apparently entirely government run.  In other words, it was completely under government control but, nevertheless, it was regarded as a charitable body.  If you look at point 5 on page 49 his Honour said:

It is usual in order to determine what is or is not a charity, to refer to the preamble of the statute 43 Eliz. c. 4, which refers particularly to various charitable purposes, but it is not necessary to limit the definition in that preamble, if the case comes within the spirit and equity of the Act.  A gift to a hospital is prima facie a gift to a charity, but it was contended that as this hospital was not built or supported by gift or subscriptions of private persons, but out of funds voted by Parliament from year to year, and as the buildings are described as of a somewhat temporary nature, the bequest is not a gift to a charity at all.

Then he goes on and discusses whether that is correct or not and at page 50 at about line 6 or 7 he says:

There are many cases in which the Courts have held as valid charitable bequests, gifts in support of Government institutions, and in furtherance of national objects and in reduction of national burthens.

At about point 5 of the page he refers to a statement by Sir John Leach, the Vice‑Chancellor:

“I am of opinion that funds supplied from the gift of the Crown, or from the gift of the Legislature, or from private gift, for any legal public or charitable purpose –

and for some reason or other it says “charitable purpose”; in the report it actually says “general purpose” –

are charitable funds to be administered by Courts of Equity.”

Then he goes on and refers to the provision made after the fire of London for the imposition of a duty on coal for use ‑ ‑ ‑

KIRBY J:   We are back to the Statute of Elizabeth and the Great Fire of London to interpret a statute of the State Parliament of Victoria in 1992.  I just question the assumptions on which this argument is advancing.

MR SHAW:   The reason for that is, your Honour, that charity in the legal sense has an established meaning.

KIRBY J:   If that is a proposition, then that can perhaps be established by reference to authority or to what was said in the second reading speech in this case.

MR SHAW:   Your Honour, charity in the legal sense has an established meaning.  The established meaning it has depends on, as was held in Pemsel’s Case in 1891 on the terms of the preamble to the Statute of Elizabeth and since Pemsel’s Case it has been accepted that charity in the legal sense falls into the four categories distilled by Lord Macnaghten from the preamble to the State of Elizabeth and in this particular case it is accepted that the stated purpose in the object of the appellant falls within the fourth class.

KIRBY J:   I know it has been accepted.  I am just questioning whether that acceptance is a correct approach.

MR SHAW:   Well, if I might refer your Honour to what was said by Justice Fullagar in the Salvation Army Victoria Property Trust Case 85 CLR 159 at 181. His Honour said:

From the time of the decision in Swinburne’s Case –

which was in 1920 –

it is fairly safe to say that there was thought to exist in Australia a rule that the word “charitable”, when used in a statute, was prima facie to be understood in its “popular” sense, and that that popular sense was connected, primarily at any rate, with the relief of poverty.  Chesterman’s Case, however, was taken on appeal to the Privy Council, and the decision of this court was reversed.  Lord Wrenbury, who delivered the judgment of their Lordships said:-  “The appellants contend that the word ‘charitable’ in the Act bears its technical legal meaning as in the statute of Elizabeth.  The respondent contends that it bears its popular meaning, which involves the idea of assisting poverty or destitution and which may perhaps be expressed by the word eleemosynary.  In approaching this question the starting‑point is found in Commissioner for Special Purposes of Income Tax v Pemsel in the House of Lords, and in Lord MacNaughten’s words:  ‘In construing Acts of Parliament, it is a general rule . . . that words must be taken in their legal sense unless a contrary intention appears’.”

KIRBY J:   Yes, but we have made enormous progress in statutory interpretation since those days.  We now look for the purpose of the legislature.

MR SHAW:   Well, your Honour, I can do no more than submit that it is an established rule accepted in this Court that prima facie if the word “charity” is used in a statute, it is to be given its technical legal meaning unless there is some very good reason to the contrary, and here there is no such reason.

GLEESON CJ:   What is the case in which this Court held that the Incorporated Institute of Law Reporting was a charity?

MR SHAW:   Your Honour, that case is referred to in our submissions ‑ ‑ ‑

CRENNAN J: At 125 CLR 659, and the points you were just making, Mr Shaw, I think are all set out by the Chief Justice at pages 666 and 667.

MR SHAW:   It is The Incorporated Council of Law Reporting of the State of Queensland v Commissioner of Taxation 125 CLR 659.

GLEESON CJ:   Well, unless we are prepared to overrule that case, that presumably is the end of any notion that charity involves alms giving.

MR SHAW:   Yes.

KIRBY J:   It is not necessary that the word “charity” in the popular sense is confined to alms giving.  It is not so confined in my conception of it.  Alms giving itself is antique language and refers to things at the time of the Great Fire of London.  I am simply telling you that in the 30 years since The Incorporated Council of Law Reporting Case was decided, this Court has taken important steps in the general construction of legislation and as far as I am concerned I would need good reason why this statute should be interpreted in a different way.  I find it difficult to believe that the elected representative of the people in Victoria in the Parliament of Victoria were aware of the Statute of Elizabeth or of the Great Fire of London Case or anything else.  They would have just thought they were enacting a law in relation to charity.

However, you say this is the basis on which this matter is being progressed and I am just flagging for you that as far as I am concerned it is just another statute and it has to be interpreted consistently with the way in which this Court interprets legislation today and that the starting point of this problem is to start with the statute, try to find out what is the purpose of the Parliament of Victoria and to give effect to that purpose.  That is our constitutional duty.

MR SHAW:   Your Honour, I hope I made a submission to the Court which is consistent with that.  What I submitted to your Honour and the Court was that here we have a statute which refers in express terms to a charitable body and it is submitted that it is established by authority that where a reference is made in a statute to charity, then, prima facie at any rate, the legal meaning of the word is to be given to it.  What I was endeavouring to show is that ‑ ‑ ‑

KIRBY J:   Words said in a will in 1891 are relevant to the meaning of the legislation of Victoria in 1992, a hundred years later, and in a context of tax and relief from tax.

MR SHAW:   What I am submitting to your Honours is this, that of course the terms of the will might be given a different meaning now to the one that they were given then, but the way in which the Court treated the question on that occasion was to ask whether or not the Fever Hospital at Little Bay in Sydney was a charitable body, and it held that it was.  That has nothing to do with the terms of the will.  What it has to do with is, it is submitted, the meaning of the term “charity” in the legal sense.

KIRBY J:   The legal category being applied was the legal category of either a common law or equitable principle about what is necessary to be a charity but that is not, as it seems to me, governing what a statute of 1992 of the State of Victoria says.  However, I just have to express my view about this and one day it may prevail but at the moment you should just proceed on the common assumptions of everybody that this is a matter of a word which is used in a technical sense.  It may well be that that is what it was.  If the Minister said that to Parliament, I will be content.

MR SHAW:   In the second reading speech it does not say it is used in the legal sense but, in our submission, one would ‑ ‑ ‑

KIRBY J:   I suppose you can say that the common assumption of parliamentary counsel when they prepare legislation of this kind is that they are dealing in a specialist area with a specialist body of learning and that, unless there is some reason to the contrary, this is how it will be interpreted by courts.

MR SHAW:   Our submission is that Robison v Stuart does help because it does demonstrate that in that case at least a body was regarded as a charitable body despite the fact that it was wholly funded by government and apparently subject to complete government control.

GLEESON CJ:   I wonder to what extent.  However, that decision turned upon the fact that what was involved was a hospital and therefore the relief of suffering.  One of the points that has been repeatedly made in the cases is that relief of suffering is not confined to relief of suffering of poor people.

MR SHAW:   Your Honour, it is certainly true that his Honour says that a gift to a hospital is prima facie a gift to charity, but your Honour will see from the way in which his Honour approaches the matter that the cases he refers to refer to all different sorts of charity, not simply to hospitals or treatment of the sick.  It seems to be a perfectly general proposition he is dealing with.  Indeed, he refers to the statute after the Great Fire of London where the funds were devoted to rebuilding of St Paul’s.  He refers to what Sir John Leach says in Heelis’ Case and comes to the conclusion on page 51 point 5 that:

These cases appear to me to establish clearly that if the object of the gift be for the benefit of the public it is a valid charitable bequest, notwithstanding that the object is supported wholly or in part out of the public funds ‑ ‑ ‑

HEYDON J:   Mr Hardingham’s main point seems to be not so much whether it comes out of public funds, but whether there is governmental control.  You rely on Robison v Stuart not so much for anything specifically that the Chief Judge said, but because it was founded by the government, supported by the government out of annual parliamentary grants and therefore there was implicitly some control.

MR SHAW:   Yes and, your Honour, that becomes explicit in Re Sutherland [1954] St R Qd 99, which is a case in the Full Court of the Supreme Court of Queensland, and I am reading from the headnote:

By his will a testator gave the residue of his estate to trustees to invest and stand possessed of the residuary trust moneys . . . upon trust to pay certain annuities and . . . “Subject to the said annuities my trustees shall stand possessed in perpetuity . . . to apply the income arising therefrom for such public charities or charity or public hospitals in Queensland as my trustees shall select –

So it was a gift in perpetuity to pay income to “public charities or charity or public hospitals in Queensland as my trustees shall elect”.

HEYDON J:   The key question is question 5.

MR SHAW:   Yes, it is.

HEYDON J:   And the answer to that question?

MR SHAW:   It is question 3 and question 5, which hospitals are entitled to participate.  Question 5 on page 101:

Whether hospitals which are wholly maintained at the public expense and are subject to the entire control of government officers are qualified for selection by the plaintiffs to participate in the said income?

The question is again set out at page 105 in the judgment of Chief Justice Macrossan.  His Honour says:

Mr. Gibbs has cited three authorities for the proposition that a gift that is otherwise a charitable gift does not cease to be so merely because the object of the gift is one that is maintained entirely out of Government funds.

There is a reference to what is called Robinson v Stuart and two recent cases in England.  Those two recent cases in England arose out of the nationalisation of the Health Service in England and it was held that hospitals which were nationalised, if they had been charitable before, remained charitable.

GLEESON CJ:   Mr Shaw, there is a little problem with relying on this case as authority though, is there not?  It is what in another context is called a boat race.  If you look at the argument of counsel, there is no contra dicta, is there?

MR SHAW:   That is true, your Honour, but what I am pointing out is that although it seems to have been assumed that if the purpose was charitable, then the institution was charitable, government control or not, and the English cases certainly do lead to that conclusion.  My learned friends say that they are influenced by the terms of section 59 of the National Health Act which is set out in In re Morgan [1950] Ch 637. It is in a footnote. That section, although it renders the hospitals capable of maintaining trusts, it does not make the trusts charitable.

Finally, with the Australian cases, if I could refer to Chester’s Case and what is set out in our submissions at paragraph 38 on page 11.  That was a case in which money had been left to foster the breeding of racing pigeons and the question was whether the gift was a charitable one.  This Court said at line 21:

To justify an affirmative answer, it seems to us that it must, at least, be found that the breeding of racing pigeons is a purpose both beneficial to the community and within the spirit and intendment of the preamble to the statute 43 Eliz. 1, c. 4.  The House of Lords’ decisions in Williams’ Trustees v. Inland Revenue Commissioners, [1947] A.C. 447, and Scottish Burial Reform and Cremation Society v. Glasgow Corporation, [1968] A.C. 138, provide modern authority that the existence of these two elements is both necessary and sufficient to warrant the conclusion that a particular purpose is charitable in law.

This Court so decided in the case your Honour referred to about the Law Reporting.

CALLINAN J:   Mr Shaw, if you want to complete a trilogy of Queensland cases, there is Brisbane City Council and Another v Attorney-General (Queensland) [1978] 3 All ER 30. The gift there was not even a complete gift because there was some consideration it was for showground purposes but nonetheless the Supreme Court, the Full Court and the Privy Council held that it was a gift for charitable ‑ ‑ ‑

MR SHAW:   Thank you, your Honour.  If I might lastly refer to a case which we have not referred to in our outline, the case of Construction Industry Training Board v Attorney-General [1973] 1 Ch 173, and that was a board created by statutory instrument subject to the control of the Minister. The terms on which the board operated are set out in the judgment of Lord Justice Russell at page 182 and at page 185 to 186 and it was held there – “held” is exaggerating things. The case was a case about the Charities Act in England and the question at issue was whether or not the board was exempt from the charitable jurisdiction of the Court of Chancery because that had been introduced as a requirement for the new version of what a charity is in England, but it was accepted and not contested that the Construction Industry Training Board was a charitable institution ‑ ‑ ‑

GLEESON CJ:   Would a gift to the National Judicial College be a gift to a charitable institution?

MR SHAW:   I suppose it would be charitable, your Honour, yes.

GLEESON CJ:   I would have supposed so.

KIRBY J:   You seem a little reluctant.

MR SHAW:   No, your Honour.  I was just remembering that I love judges.

KIRBY J:   No, I was not referring to you.  I know you have had too much experience, but many barristers just love to read us judges and not statute.  Can I just mention that I have glanced at Chesterman in this Court and the Court divided in Chesterman and Justice Isaacs, Justice Rich and Justice Starke took the view that charity had to be released from what they quoted I think it was Lord Justice Fry as saying that English law had developed along a curiously technical path whereas Chief Justice Knox and Justice Higgins dissented and said it had to be given the technical meaning, but the net result was that since Chesterman was overruled by the Privy Council we have locked ourselves into a curiously technical English approach and it may be time that Australian law, and especially the law of Parliament, was released from that curiously technical approach and I would not want you to assume that I will necessarily take that curiously technical approach.

What the Court said in 1923 would undoubtedly be upheld today.  We would not necessarily feel ourselves locked into the English approach on the word “charity” which is and has been very curious and has been criticised strongly in the academic literature.  I know it is convenient for you and for the parties because it has been argued along these lines and I fully understand that and I understand the argument that it is a technical word and it has been used in that sense, but if you read Chesterman in this Court in 1923, you will see that the issue was very well debated, especially by Justice Isaacs, and I must say I think there are very strong reasons for the approach he took then and maybe we should release ourselves from the shackles.  After all, it is a hundred years since our independence.

MR SHAW:   Your Honour, I suppose it all depends on what the popular meaning of “charity” is.

KIRBY J:   Exactly.  We would have to develop our own jurisprudence on this subject according to a statute of the Victorian Parliament elected by the people of Victoria.

MR SHAW:   What I was about to say, your Honour, is so far as we are concerned, as long as your Honour’s concept of “charity” includes us, it is okay.

KIRBY J:   But that is not a very intellectual or satisfying way to approach it, Mr Shaw, and I will not approach it that way at all.

MR SHAW:   But, your Honour, if one is driven to a popular meaning of “charity”, then here you have a body which is set up, as it says in the objects of the appellant, to improve patient care and health primarily in the central Bayside area.

KIRBY J:   Quite.  Prima facie, I think it favours you.  So was the view taken in Chesterman.

MR SHAW:   All I am saying, your Honour, is that it would seem to be on that view of things a charitable body anyway. 

KIRBY J:   I think it is important every now and again, especially, if I can say so, in tax law, for those who appear at the Bar table to really reconsider the assumptions on which things have developed.  It is just another statute of a Parliament of Australia.  Anyway, I have had my say and I will fall into a deep silence now, Mr Shaw, you will be pleased to know.

MR SHAW:   I should refer to the cases about public benevolent institutions on which my learned friends rely.  As your Honour the Chief Justice observed, it is a different concept, but the cases relied on are the Ambulance Service Case, the Mines Rescue Board Case and the Metropolitan Fire Brigades Board Case.  In each of those cases the body in question had been set up by statute either to represent the Crown or as a governmental body and there is absolutely nothing of that kind here.  So those cases, it is submitted, are of no assistance to my learned friends because this is a body set up simply as a company limited by guarantee and it is run by doctors.

GLEESON CJ:   I have to admit to you, Mr Shaw, that I am still not very clear in my own mind what this body actually does.  I have read the judgments of members of the Supreme Court of Victoria and the reports and the mission statement and so forth, but there is an educational aspect to it.

MR SHAW:   Yes, certainly.

GLEESON CJ:   It trains GPs in information technology, I can recognise that; but what else does it do actually?

MR SHAW:   Well, your Honour, if I could take your Honour to page 78 which is in the annual report for – perhaps I should go back to page 74.

HEYDON J:   You get something a little concrete on page 75.  I share the Chief Justice’s difficulty, but at the bottom of the first column it says that:

Sarah Hawkins was involved in the planning and delivery of training in Anxiety and Depression to 38 GPs as part of –

et cetera, so training doctors.

CALLINAN J:   There are a lot of programs, are there not, and they are set out – undertakes research ‑ ‑ ‑

CRENNAN J:   Justice Byrne at 316 and 317 of the appeal book at the bottom of 316 and over to 317, on the basis of looking at the annual report, does attempt to describe a range of activities, although I must say it is not clear to me whether the collaborative projects referred to – are they instituted by the doctors, the members?

MR SHAW:   By the division, your Honour.

CRENNAN J:   By the division?

MR SHAW:   Yes.  After page 75 there are a whole number of reports about various activities that have been undertaken by the division.

CALLINAN J:   Mr Shaw, perhaps the best insight, when you can cut through the bureaucratic jargon, the language, is given by the recitals to the agreement at page 202, which refers to the Commonwealth program and the role that the appellant is to have in that program and hence there are various ‑ ‑ ‑

MR SHAW:   Various things they undertake.

CALLINAN J:   Yes, which they call programs and they seem to be mainly different sorts of research.

MR SHAW:   And different sorts of training.

CALLINAN:   Yes.

MR SHAW:   In order that patients’ health can be improved one way or another.

CALLINAN J:   Yes, and it is really to that agreement, I suppose, that one has to look ‑ ‑ ‑

MR SHAW:   Indeed, your Honour.

CALLINAN J: ‑ ‑ ‑ to see what the measure of control by the Commonwealth is, and it seems to be substantial, but that does not answer the final question whether it is a body under section 10(1)(bb).

MR SHAW:   Well, your Honour, it is submitted that your Honour is not right about substantial.  It is true – well, first of all, the body has been set up in a way which enables it to obtain funds from the Commonwealth for various things it undertakes, and it chooses to undertake various things of various kinds.

CALLINAN J:   They have to be approved, do they not?

MR SHAW:   It depends, your Honour.  Under the outcomes‑based funding they have to be in accordance with the business plan and the strategic plan.

CALLINAN J:   Does it not have to be approved?

MR SHAW:   It is approved, yes, your Honour.  Yes, it is, your Honour.

CRENNAN J:   But it belongs to the division.  It is their plan.

MR SHAW:   But it is the division - yes.

CALLINAN J:   It is referred to in the agreement.

MR SHAW:   Yes, it is.

CALLINAN J:   There must be compliance with it and it must be submitted for approval.

MR SHAW:   Yes.

CALLINAN J:   I am not saying that that resolves the case against you but that seems to be the principal manner that the respondent relies upon for its control point, but even if its control point is right that may not be the end of the matter or is not the end of the matter.

MR SHAW:   It is submitted that just because the division agrees to do things which will enable it to obtain funds does not mean that it is agreeing to carry out government policy.  What it is agreeing to do is whatever it has agreed to do.

CALLINAN J:   It may or may not be.  In fact, it will become a policy, but that is by the by.

MR SHAW:   Yes, it will be.  It will accord with government policy because the government, obviously, is not going to find something which ‑ ‑ ‑

CRENNAN J:   It is not going to approve the business plan otherwise.

MR SHAW:   No.

CRENNAN J:   So it is consonant with government policy.

MR SHAW:   Yes, it is consonant with government policy.

CRENNAN J:   It would not matter if it were an implementation of government policy, would it?

MR SHAW:   No, in our submission it would not matter, as long as the object of the division was not to carry out government policy but rather to improve patient health, and its object is to improve patient health.  What we submit will be found first of all in paragraph 43 on page 13 of our initial outline ‑ ‑ ‑

CALLINAN J:   Just returning to what it does, Mr Shaw, if you go, for example, to page 145, that seems to be a “Falls Prevention” program which I suppose is designed to prevent old people from falling and things of that kind.  There are reports on the various activities, an “Integrated Care Program” at 142 - one would think all pretty worthy objects.  There is a “Pharmacy and General Practice Disease Management Collaboration Project” at 144.

MR SHAW:   What we submit is that what – this appears in our reply in paragraphs 6 and 7.  What we point out is that there is an ambiguity in the proposition that a body is not a charitable body if it is acting in furtherance of government objectives because you may be asking whether the objectives or purposes of the body are the same as one or other of the objectives of government or it may be asking whether it is a purpose or objective of the body to give effect to government objectives, whatever they are.

GLEESON CJ:   I imagine a practical consideration behind this – and I do not know whether it is discussed in the evidence or the judgments – is that government programs involving doctors, rather like government programs involving judges, are only going to be affected if they are run by the doctors or by the judges.

MR SHAW:   Yes.

GLEESON CJ:   That is why I asked you the question earlier about the National Judicial College.

MR SHAW:   And they want to do it.

GLEESON CJ:   Plainly, a gift to the Attorney‑General’s Department to be applied for the advancement of judicial education may not be charitable.

MR SHAW:   Your Honour, it might be because if the Attorney‑General’s Department was bound by the nature of the gift to apply the moneys in that way, then it might very well be charitable.

GLEESON CJ:   You mean the State Attorney‑General might control the application by the federal Attorney‑General of the funds?

MR SHAW:   No, I was not really thinking of the difference between the Commonwealth and the State.  All I was thinking was that you can give moneys to a government department.  Indeed, this is what happened in Re Cain and it is held that those moneys are given for a charitable purpose because the department or whatever it is is bound to apply them in a particular charitable way.  If it is just given for the general purposes of the department, of course it would not be charitable, but if its use is restricted to some charitable purpose, then it would be, we submit. 

We go on in paragraph 7 of our reply to say that it is submitted that to establish that the purposes or objective of a body is the same as a purpose or objective of government is not sufficient to establish that the body’s purpose or objective is to give effect or to further government policy in the second sense, that is a purpose or objective of the body to give effect to government objectives, whatever they may be.  Then we submit that there is a confusion in the way in which the respondent’s argument proceeds.  They say your objective is the same as an objective of government.  What you do furthers in that sense not only your own objects but government objectives because they are the same and you then conclude that the object or purpose of the division is to give effect to government policy.  It is submitted that just does not follow.

GLEESON CJ:   I am not sure whether there is a body corresponding to this in Victoria, but I have in mind the New South Wales body.  Would a gift to the College of Law be a charitable gift?

KIRBY J:   The Leo Cussen Institute.

MR SHAW:   Yes, your Honour.  I do not know about the College of Law.  I do know about the Leo Cussen Institute.

HEYDON J:   A gift to the University of Melbourne would be charitable.  It would depend on whether the Leo Cussen Institute carried on anything outside the four classes.

MR SHAW:   Yes, it would, but speaking in a general sort of way, I suppose you could say I expect it would be, or something like that.  It simply does not follow from saying that the following of the objectives of the appellant furthers, in the sense of assists, the achievement of government policy because government policy is the same as the objectives - past government policy is the same as the objectives of the appellant that the appellant’s object is to give effect to government policy.

One can, it is submitted, reinforce that thought by remembering that under the terms of the constitution of the appellant the division cannot use its assets or funds for any purpose except its object and what is being said that the directors are acting in breach of their duty, that cannot be so.  It is submitted that one thing is clear.  It is this; that the directors in doing what they are doing are complying with the terms of the constitution of the appellant and if that is correct then the respondent has no case.

HEYDON J:   Do you know of any cases where it has been held that to supply money to an otherwise charitable institution pursuant to contract prevents the gift being a charitable gift or prevents the subvention being a charitable subvention?

MR SHAW:   I know of no such case, your Honour, no.  If the Court pleases.

GLEESON CJ:   Thank you, Mr Shaw.  Yes, Ms Gordon.

MS GORDON:   May it please the Court.  The question posed by the respondent on page 1 of their submissions is a question which requires an answer to this question.  When discharging the outcomes-based funding agreement is the appellant acting so much under the control or influence of the Commonwealth Government that is to be seen to be acting in furtherance of the Commonwealth Government’s objectives rather than its own?  It is not surprising then that what the Commonwealth wants to address is to say something about that agreement and its concept of control or influence it appears the respondent relies on so much.

There are three things we would like to say about the outcomes‑based funding agreement.  First, as my learned friend, Mr Shaw, has pointed out, if Central Bayside does not prepare itself and submit a plan to the government it is not even considered for funding and it does not get funding.  In other words, there can be and will be no outcomes‑based funding agreement unless the appellant themselves prepares and submits it.  It is a decision for the appellant alone whether it does that.  The Commonwealth does not draft them.  As Justice Callinan pointed out, of course, it approves them, but the division itself must submit them; drafted by reference consistent with its objects, identifying the local needs it wishes to address and those local needs will vary depending upon the region, the age of the population in their region, socio-economic considerations and the like.  The programs identified at pages 145 and following of the appeal book are the sorts of programs that this division undertook.

KIRBY J:   Can I just mention that that is the sort of consideration which is in my mind for the need to relook at the word “charitable” because ‑ ‑ ‑

MS GORDON:   Can I address your Honour on that?

KIRBY J:    ‑ ‑ ‑ of the points you have made in your submissions concerning the – which are in any case a matter of judicial notice and common knowledge ‑ that the outsourcing and the activities in the relationship between government and the private sector are not as rigid as they were 70 or 80 years ago, or even 30 years ago.

MS GORDON:   The difficulty is, your Honour, that not everybody has your Honour’s perspective on life.  The reason why the courts have just ‑ ‑ ‑

KIRBY J:   That is a big difficulty, I agree.

MS GORDON:   It is a difficulty in this context.  If you spoke to the person in the street, they will think of charity being the relief of poverty.  That is how ‑ ‑ ‑

KIRBY J:   But it would be for the law to give meaning to the word “charity” - it is not the popular in the sense of the person in the street.  It would be released from the four categories of the English law.  The question, and the only question, I really wanted to ask you - because I found the comparative material at the end of your submissions very helpful indeed - was whether Canada or any other Commonwealth country has taken a step to release itself from what it was Justice Farwell said was the curiously technical meaning of the word “charity” that had been adopted in England.

MS GORDON:   No, your Honour, for the reason I just outlined, that is, the person in the street understands “charity” in a very narrow sense.

KIRBY J:   I am not talking of the person in the street - I am talking of the judges.

MS GORDON:   I understand, but the reason why the law has imposed what it describes as the technical meaning is to recognise that it extends beyond the giving of alms.  That might be an unsatisfactory answer but that is the explanation for it.

KIRBY J:   The giving of alms is not my conception of charity; even those words are very antique.  I would certainly not conceive of charity in such terms.  I have an idea in my mind – and this is looking back to 20 years ago in the Law Reform Commission - that for some purpose I did look at this question of charity and that there had been developments in other countries of the common law which had released themselves form the curiously technical approach of the English law on this subject. 

MS GORDON:   We did not identify any and what the comparative law analysis showed was that a large part of it has been dealt with by statute.

KIRBY J:   I realise that, but in the United States, for example, have they accepted that “charity” is, prima facie, to be given the English technical meaning of the four categories?

MS GORDON:   The approach primarily adopted across the US - you know it is difficult in the United States to give any general answer - is to draw a distinction - and let us get rid of the words “technical” and “non‑technical” – that the concept of charity extends beyond the relief of poverty.  It is nothing more than that.  So when you talk about the technical meaning it is nothing more than acknowledging, as your Honour does, it means something more.

KIRBY J:   It is the word “curiously” in Justice Farwell’s – this is 100 years ago that makes one question whether we should continue to accept the Privy Council’s reversal of Chesterman because it is a very well‑reasoned series of judgments in this Court by Justice Isaacs and the other judges in the majority - Justice Starke and Justice Rich.  It was slapped on the head by the Privy Council and we then took a different turning in this area and it is a question of whether we should still be hidebound to the four categories of the English law in construing a statute of the Victorian Parliament. 

MR SHAW:   So it is, but that does not alter the fact that the purpose in carrying out the program is not to give effect to government policy in the very general sense of giving effect to government policy, but to give effect to the policy of trying to stop elderly people falling over.  In our submission, when my learned friends seek to go back so far, they are confusing the motive of the donor, if you like, with the purpose of the giving of the funds and the purpose of the appellant in carrying out the programs.

Lastly, may we say this.  It seems a rather curious outcome that here we have my learned friend saying, in effect, the appellant is acting as a surrogate for the Department of Health, but they do not then say what your Honour Justice Kirby said, that if that is so, it is the Commonwealth and they are not taxable.  It is a very strange and illogical submission that is submitted.  If the Court pleases.

KIRBY J:   They do not have to push it so far, of course.  All they have to do is – could I ask, Mr Shaw, do you have anything to say on the issue about the respective roles in chasing the funds of the federal Minister and his officers and the State Attorney-General regulating a charity.  Is not that another indicium that it is difficult to marry these two schemes together?

MR SHAW:   No.  The answer to your Honour’s question is no, it is not. Each of them have their role to play.  There is the contract, that is to say, the OBF contract, which might have some effect.  The Attorney may take some steps because of the charitable character of the body.  If your Honour looks at the Construction Industry Training Board Case that I referred to this morning, there the question was whether the charitable jurisdiction of the Court was excluded because of all the powers of the Minister and the

answer was the answer which your Honour Justice Heydon gave:  if the directors pinch the money, the Attorney might seek to get it back.  If the Court pleases.

GLEESON CJ:   Thank you, Mr Shaw.  We will reserve our decision in this matter and we will adjourn until 10.00 am tomorrow.

AT 3.36 PM THE MATTER WAS ADJOURNED