Corporation of the City of Unley v The State of South Australia and Julia Farr Services No. SCGRG 96/181 Judgment No. 5700 Number of Pages 19 Local Government Corporations (1996) 67 Sasr 8

[1996] SASC 5700

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J

CWDS
Local government - building control - development consent - incorporated health centre - conversion of building to provide student accommodation - whether the health centre was a State instrumentality or agency - whether consent valid - order refused on discretionary grounds.
Corporations - statutory corporations - powers - ultra vires - health centre converting buildings to provide accommodation for students - whether acting within power.
Development Act, 1993 s49; South Australian Health Commission Act, 1916 s48, referred to. Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1979) 145 CLR 107; Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330; Townsville Hospitals Board v Townsville City Council (1982) 149 CLR
282; Launceston Corporation v The Hydro Electric Commission (1959) 100 CLR 654; State Electricity Commission (Vic) v City of South Melbourne (1968) 118 CLR 504, applied. ETSR v Linterns Ltd (1950) SASR 133, distinguished.

HRNG ADELAIDE, 31 May 1996 #DATE 10:7:1996 #ADD 29:10:1996
Counsel for plaintiff:             Mr A J Besanko QC with
   Ms T Ross
Solicitors for plaintiff:            Minter Ellison Baker
   O'Loughlin
Counsel for respondent SA:         Ms M Panagiotidis
Solicitors for respondent SA:        Crown Solicitor
Counsel for respondent Julia Farr    Mr B R Hayes QC with Services:   Mr J Costello
Solicitors for respondent Julia Farr Services:   Lempriere Abbott Mcleod

ORDER
Declaration ordered.

JUDGE1 DEBELLE J Julia Farr Services operates what used to be known as the Home for Incurables. On 28 September 1995, the Minister for Housing, Urban Development and Local Government Relations granted development consent to Julia Farr Services to use two former nursing homes to provide accommodation for university students. In this action, the Corporation of the City of Unley challenges the validity of the development consent on the ground that the correct procedure has not been followed. It also says that Julia Farr Services does not have power to provide the student accommodation. There are two main questions for determination. They are:
    1. whether the second defendant Julia Farr Services is a State
agency for the purpose of s49 of the Development Act 1993; and

2. whether Julia Farr Services is acting ultra vires in
    permitting some of its buildings to be used for accommodation
    for students. Depending on the answers to those questions, there are other subsidiary issues.
2. The claim that Julia Farr Services is acting ultra vires is made pursuant to the fiat of the Attorney-General. Thus, the action is, in part, a relator action.
The Planning Regime for State Agencies 3. Section 49 of the Development Act establishes a regime by which the Crown or a State agency may obtain the grant of consent for development approval. The regime is separate and apart from the usual regime under the Development Act for dealing with applications for the grant of consent for development approval. It is unnecessary to examine it in detail. Shortly stated, when a State agency seeks consent for a development, it must lodge an application with the Development Assessment Commission. The Commission reports to the Minister who may approve or refuse the development.
A Grant of Development Consent 4. Julia Farr Services ("the Centre") is a health centre incorporated under s48 of the South Australian Health Commission Act 1976 ("the Health Commission Act"). The Centre asserts that it is a State agency within the meaning of s49 of the Development Act. In 1995 the Centre decided to convert two buildings, formerly used for nursing accommodation, for use as student accommodation. The buildings are known as the Ringwood Building and the Gosse Building. In August 1995 the Centre applied to the Development Assessment Commission for consent to the proposed development. On 28 September 1995 the Minister approved the Centre's application.
5. The land on which the Centre conducts its operations and provides its services is within the area of the Corporation of the City of Unley ("the Council"). The Council asserts that the Centre is not a State agency so that the Centre's application was not assessed in compliance with the correct procedures in the Development Act. That is the only ground on which the Council says that the planning consent is invalid. It, therefore, seeks a declaration that the Minister's approval is void and ultra vires and an injunction restraining the Centre from using the Ringwood and Gosse Buildings for student accommodation. The Council also asserts that, in permitting the use of the Ringwood and Gosse Buildings for student accommodation, the Centre is acting ultra vires and on that ground also it seeks an injunction restraining the use of the buildings for student accommodation. I deal first with the question whether the Centre is a State agency.
Is Julia Farr a State Agency? 6. Section 49 of the Development Act defines a State agency in these terms:
    "In this section ...
    'State agency' means -
    (a) the Crown or a Minister of the Crown;
    (b) an agency or instrumentality of the Crown (including a
    Department or administrative unit of the State);
    (c) any other prescribed person or prescribed body acting under
    the express authority of the Crown,
    but does not include a person or body excluded from the ambit of
    this definition by regulation." It is common ground that the only issue is whether the Centre is an agency or instrumentality of the Crown.
7. The Centre was proclaimed as an incorporated health centre pursuant to s48 of the Health Commission Act on 28 June 1984. At that time the Centre was called the Julia Farr Centre. Before it was incorporated pursuant to the Health Commission Act, the Centre had long existed as an association incorporated under the Associations Incorporation Act. It was known as the Home for Incurables Inc. It had been established in 1879. On 27 June 1879 Dr William Gosse and Messrs George W Hawker and Alexander McGeorge executed a deed of trust whereby they held certain land on behalf of "an Association formed for the purpose of providing and erecting thereon a home or homes for incurable persons in the province of South Australia". It was re-named the Julia Farr Centre in about 1982. By proclamation dated 6 April 1995 the name of the Centre was changed to Julia Farr Services.
8. Section 48 of the Health Commission Act provides for the incorporation under that Act of health centres. It authorises the Governor by proclamation to establish an incorporated health centre and assign a name to it: s48(1). An incorporated health centre can take over an existing health centre: s48(2). In that event, the existing health centre is dissolved, the health centre is incorporated under the Health Commission Act, and all the real and personal property and rights and liabilities of the old body are transferred by s48 to and vested in the new incorporated health centre: s48(3). The experience of Julia Far Services is an instance of an existing health centre being taken over by a health centre incorporated pursuant to s48 of the Health Commission Act. By proclamation made on 28 June 1984 the Governor dissolved the incorporation of Julia Farr Centre Inc under the Associations Incorporation Act, established the Centre as an incorporated health centre under the Health Commission Act, and assigned to the health centre the name Julia Farr Centre. The proclamation took effect on 2 July 1984. The Governor has power by proclamation to change the name of an incorporated health centre: s48(5). It was pursuant to that power that a proclamation was made on 6 April 1995, changing the name of the Centre to "Julia Farr Services".
9. Clause 6.1 of the Constitution of the Centre states its objects in these terms:
    "Subject to the provisions of clause 4.1 of this constitution
    the objects of the Centre are to provide:
    . nursing and medical services for persons whose ability to
    live independently is temporarily or permanently impaired or in
    jeopardy as a consequence of a chronic physical ailment;
    . rehabilitation services; and
    . facilities for education, teaching and research relevant to
    the objects of the Centre." Clause 4.1 states:
    "The Centre shall have due regard to the role of the
    Commission as the statutory body responsible for the promotion
    of the health and wellbeing of the people of the State as a
    whole, and shall assist the Commission by giving effect to the
    policies from time to time determined by the Commission and will
    not act in any way adversely to affect the rights or interests
    of the Government of the State of South Australia pursuant to
    the terms of any agreement by virtue of or pursuant to the terms
    of which the Government of the State of South Australia receives
    monies from the Government of the Commonwealth of Australia for
    health or medical service either generally or specifically." Thus the Centre is to act in a way which will give effect to the policies of the Commission.
10. Clause 7 lists the powers and functions of the Centre. For present purposes, it is sufficient to note the following provisions:
    "7.1.2 to accept, hold, acquire, maintain, deal with and
    dispose of land, buildings, real and personal property;

7.1.3 to invest or otherwise deal with the money of the Centre
    not immediately required for the purposes of carrying out the
    objects of the Centre;

7.1.4 to borrow money from the Treasurer or, on terms first
    approved by the Treasurer in each instance, from any other
    person or body corporate for the purpose of carrying out any of
    its objects under this constitution;

...

7.1.8 to receive funds from the Commission or any other source
    whether public or private and to expend the same;

...

7.1.10 to do all such things as are incidental or conducive to
    the attainment of the Centre's objects, powers and functions."
11. The Centre is administered by a management committee called the Board: see Clause 3.1 which also provides that the administration of the Centre is subject to Clause 4.1. Clause 8 provides that the Board shall comprise no more than thirteen persons, eleven of whom are to be appointed by the Minister for Health "after due consideration of the skills they possess with a view to ensuring a balance of expertise". The Minister is assisted by Clause 8 in the goal of ensuring a balance of expertise. It requires the Minister to appoint four members from persons nominated respectively from the Royal Australian College of Physicians, the Royal Australasian College of General Practitioners, the South Australian Council of Social Service and the Heads of Churches in South Australia. The Minister must make two other appointments from persons nominated by residents of the Centre. Another member of the Board shall be an officer or employee of the Centre and the Board has power to nominate one other member. Thus, the members appointed by the Minister constitute a clear majority of the Board. Board members hold office for a term not exceeding three years and are eligible for re-appointment. The Minister and the Board may fill casual vacancies in accordance with the terms of the Constitution of the Centre. However, the Minister has no power to remove any member of the Board.
12. The Centre is a body corporate capable of suing and being sued: s49 of the Health Commission Act. The Board may amend the Constitution of the Centre but no amendment shall take effect until it has been approved by the Commission: see Clause 18 and s49(4) of the Act. It is possible for the Board of the Centre to arrange for the undertaking of the Centre to be transferred to another body corporate. Upon a request to the Governor, the Governor may by proclamation give effect to the request: s49(6) of the Act.
13. The Centre holds its real property in its own name. By s54 the Governor has power to vest in the Centre any unalienated Crown land or land held for or on behalf of the Crown. The evidence of the Chief Executive Officer of the Centre shows that the Board is independent of the direction of the Commission in determining its programs and its activities. It may seek funding from sources other than the Commission.
14. Section 51 of the Health Commission Act vests in the Commission a degree of control over the engagement and dismissal of staff. The Board may appoint the staff of the Centre but upon terms and conditions fixed by the Commission and approved by the Commissioner for Public Employment. The Board must submit a staffing plan to the Commission for the approval and employees cannot be appointed unless provision has been made in the staffing plan: s51(2). The Board of the Centre cannot dismiss its Chief Executive Officer except with the approval of the Commission: s51(2a) of the Health Commission Act. All officers and employees of the Centre are regarded for industrial purposes as being employed by the Commission: see s60(1), (2) and (3) of the Act. The Centre cannot institute or participate in proceedings in the Industrial Court or in any other industrial tribunal nor can it enter into an industrial agreement without the consent of the Commission: s60(4). The Governor may also by proclamation declare that specified provisions of the Government Management and Employment Act 1985 apply with or without modification to officers and employees of the Commission and of designated incorporated hospitals and health centres: s59.
15. The Commission has power to give directions to the incorporated hospitals and incorporated health centres to ensure that they properly perform their functions: s58. The Commission can, therefore, give such directions to the Centre. That power may only be exercised where, in the opinion of the Commission, the Centre has failed in a particular instance properly to perform the functions for which it was established: s58(1). Section 58(2) of the Act requires the Board to comply with the direction of the Commission. Section 58A empowers the Governor by proclamation to remove all members of the Board from office where the Board has been guilty of mismanagement or has persistently failed to perform the functions for which it was established. The Governor many thereupon appoint an administrator who holds office until a new Board has been appointed.
16. The Health Commission Act and the Constitution of the Centre both contain provisions regulating the keeping of accounts. The terms of Clause 17 of the Constitution reflect the provisions of the Act. The Centre must keep proper accounts which must be audited in each year by the Auditor-General: s55 of the Act and Clause 17.1 of the Constitution. The Board must in each year submit to the Commission its budget, details of proposed capital works, details of any proposed variation in its services and its staffing requirements: s57 and Clause 17.4. Although the Commission must approve the staffing plans, it does not have express power to reject the proposed budget, capital works or proposed variation of services. Nevertheless, it is reasonable to infer that the Commission might exercise a degree of control by virtue of the fact that the Centre depends on the Commission for part of its funding, in particular funding for operational expenditure. The Commission may also require the Board of the Centre to supply information relating to the administration or future administration of the Centre: s57(2). The Governor may regulate fees to be charged by the Centre: s57A.
17. Given that the Centre must act in a way to give effect to the policies of the Commission and is subject to certain controls by the Commission, it is relevant to examine the constitution and functions of the Commission. The Health Commission Act provides for the administration of hospitals and health services. Shortly stated, its objects are to rationalise and co-ordinate the provisions of health services in this State. Those objects are set out in detail in s3 of the Act:
    "The objects of this Act are to achieve the rationalisation
    and co-ordination of health services in this State and to ensure
    the provision of health services for the benefit of the people
    of the State upon principles that allow for -
    (a) the provision of health care through a properly integrated
    network of hospitals and health centres; and
    (b) the integration of mental health services within a unified
    system of health care; and
    (c) the provision of medical diagnostic services by existing
    instrumentalities; and
    (d) the establishment of regional authorities and the
    delegation of responsibilities and functions of the Commission,
    insofar as they affect the various regions of the State, upon
    those authorities; and
    (e) the continued participation of voluntary organisations and
    local government authorities in the provision of health care;
    and
    (f) generally the provision of health care upon scientific and
humane principles." The South Australian Health Commission was established by s7 of the Health Commission Act as a body corporate to achieve the goal of co-ordinating the provision of health services. The Commission is charged by s16 of the Health Commission Act "to promote the health and well-being of the people" of South Australia and a list of functions to achieve that end is set out in s16.
18. The Commission consists of five members who are appointed by the Governor on the nomination of the Minister: s8(1). The Governor also appoints the Chairman and Deputy Chairman of the Commission: s8(1a); determines the salary and allowances of members of the Commission: s10; and may remove a member of the Commission from office on the grounds provided in s11 of the Act. The Governor may also appoint deputies for members of the Commission: s9. Members of the Commission hold office for a term not exceeding five years and upon such conditions as are determined by the Governor. Part-time members of the Commission are appointed for a period not exceeding three years and upon such conditions as are determined by the Governor. In addition to this control of the Commission, another significant indicator of control by executive government is that in the exercise of its functions, the Commission is subject to the direction and control of the Minister: s15.. The Commission holds its property on behalf of the Crown: s7(2)(f).
19. The Commission must present its budget to the Minister for approval and the Treasurer appropriates money to the Commission to discharge its functions: s23. The Commission requires the approval of the Treasurer to borrow money or invest money: s24. The Act contains the usual provisions requiring accounts to be audited in each year by the Auditor-General (s25) and the preparation of an annual report to the Minister which must be tabled in the Parliament: s26.
20. The Health Commission Act also empowers the Governor by proclamation to establish incorporated hospitals and incorporated health centres. In all material respects, the provisions relating to incorporated hospitals and incorporated health centres are the same. The Act also includes provisions relating to private hospitals. Private hospitals are required to be licensed and licences are granted by the Commission according to criteria stated in s57D. The Commission may appoint inspectors to examine those aspects of private hospitals as are provided in s57K.
21. The definition of a State agency in s49 of the Development Act picks up the phrase "agency or instrumentality of the Crown". The expression "agency or instrumentality of the Crown" has become a common means of referring to a public corporation that enjoys the attributes of the Crown.
22. When determining whether the Centre is a State agency, it is necessary to ascertain the legislative intent as expressed in the Health Commission Act. An important element of that task will be to examine the extent of control exercised by executive government over the Centre, but reference must also be made to such other indicia as might be gleaned from the Health Commission Act: Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1979) 145 CLR 107 at 115; Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330, 349; and Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 at 289. There is no single test or rule. The task must always be to search for the legislative intent: Superannuation Fund Investment Trust v Commissioner of Stamps (SA) at 349; Townsville Hospital Board v City of Townsville at 289. The question whether the Centre is a State agency is, therefore, to be determined by examining the parliamentary intention as expressed in the Health Commission Act. It is relevant to have regard also to the Constitution of the Centre which was approved by the Commission pursuant to s48(4) of the Health Commission Act.

23. The nature of the functions performed by the Centre is not traditionally a function of a governmental nature. It may be acknowledged that what is a function appropriate to Government might be answered differently in different ages and under the influence of differing social and political theories of the State: Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (supra) at 349. Many functions formerly regarded as matters of private concern are now carried out by instrumentalities of government and the question whether the function in question is traditionally or peculiarly governmental is likely to be increasingly unhelpful in deciding whether the body formed to carry out that function enjoys the privileges and immunities of the Crown: Townsville Hospitals Board (supra) at 288-289. In 1982 the High Court held that the provision of hospital services was not a traditional function of government and was still regarded as a matter in which private enterprise as well as governments will play a part: Townsville Hospital Board at 289. Nothing has occurred since that decision nor is there any provision of the Health Commission Act which requires a different conclusion today. The fact that the Health Commission Act appears to recognise a dichotomy between incorporated hospitals and incorporated health centres on the one hand and private hospitals on the other signifies no more than that the South Australian Government has chosen to engage in the provision of hospital and like services in competition with private hospitals. The Centre does not, therefore, perform a traditional function of government.
24. When ascertaining the intent of the Parliament, a matter of considerable importance is the extent to which the Board of the Centre is autonomous or, alternatively, is subject to control by the executive government: Superannuation Fund Investment Trust v Commissioner of Stamps (SA) at 347, 354, 365. The fact that a Corporation holds its property for and on behalf of the Crown is also a significant factor: Superannuation Fund Investment Case at 363-364.
25. There is very little control of the Centre by executive government. Although eleven of the thirteen members of the Board are appointed by the Minister, the Board is not subject to ministerial control or is otherwise accountable to the Minister. Nor is the Board subject to control by the Commission. Neither the Minister nor the Commission has power to remove any member of the Board. The Board exercises its own independent discretion in the administration and management of the Centre subject only to the requirement that it shall assist the Commission by giving effect to the Commission's policies and will not act in any way adversely to affect the rights or interests of the Government of South Australia in respect of Commonwealth funding for health and medical services. It can decide the manner in which it shall carry out its functions. It can determine its own priorities. It can decide which capital works it wishes to undertake though it might on occasion depend on financial support from government for minor works. In short, neither the Minister nor the Commission can direct or control the administration and management of the Centre. However, there are works it is able to undertake without in any respect being beholden to government. The present development is an instance. Further, neither the Minister nor the Commission can direct the Centre as to how it should conduct its operations. The Centre enjoys a good deal of autonomy in its operations. In that respect it stands in stark contrast to the Commission which must comply with ministerial direction and is subject to ministerial control, and holds its property on behalf of the Crown.
26. The Centre is subject to only one restraint by executive Government when entering into contracts, namely, that borrowings must be approved by the Treasurer. That requirement is contained in Clause 7.1.4 of the Constitution. There is no provision to like effect in the Health Commission Act. While the Board must in each year submit to the Commission its estimates of receipts and expenditure, details of proposed capital works, details of any proposed variations in the services provided by the Centre, and estimates of its staffing requirements, the Board does not have to obtain the approval of the Commission for any of those matters other than its staffing. The undertaking of the Centre is subject to inspection by officers of the Commission and the Centre must produce its accounts for inspection by the Commission: see Clauses 16.1 and 17.2 of the Centre's Constitution. There is no corresponding requirement in the Health Commission Act. In financial matters, there is less control by executive government over the Board than existed in the Townsville Hospitals Board Case.
27. Although the terms and conditions of employment of staff are fixed by the Commission and approved by the Commissioner for Public Employment, the Centre has the power to appoint and dismiss all its staff other than its Chief Executive Officer. The requirement that staff can only be appointed if provision has been made in the staffing plan is not an impairment of independence but, instead, a useful tool of management. I do not think anything turns on the fact that s60 of the Act deems that, for industrial purposes, all officers and employees of the Centre are to be officers or employees of the Commission. No doubt, a number of different arrangements could have been made in respect of industrial matters concerning the officers and employees of the Centre. This is but one such arrangement. It has no significance one way or the other in respect of the independence of the Board.
28. The Commission disburses to the Centre monies received from Commonwealth or State Governments for health purposes. The monies received by the Commission are used to pay wages and salaries, operational and support costs which include medication, food and utility costs, and capital works approved by the Commission. All funding for other projects is derived from the financial resources of the Centre.
29. The Board also has substantial funds over which it is in no respect subject to any control by the Minister or the Commission. I refer to its General Project Fund. This Fund has been gradually accumulated over the long history of the Centre. The Fund has been used to provide revenue for the Centre's programs, and for the plant, equipment and furnishings required for the benefit of its patients. On 30 April 1996 the total sum held by the Fund was about $1.9M. The Fund is maintained and increased by the receipt of private gifts, endowments and bequests. The Centre borrowed from that Fund to provide the money necessary to provide the student accommodation, an amount in excess of $500,000. The rent to be derived from the leasing of the Ringwood and Gosse Buildings will be used to repay that loan from the Fund.
30. In addition to this relative absence of control by executive government, there are two significant facts. The first is that, unlike the Commission, the Centre does not hold its property for or on behalf of the Crown. The Centre holds its property in its own name and could, if it wished, seek the Governor's approval pursuant to s48(6) of the Health Commission Act to transfer its undertaking to another body corporate. There is no legal impediment to prevent the Centre reverting to its status as an association incorporated under the Associations Incorporation Act or transferring its undertaking to another entity which would operate the Centre as a private hospital. The second is that the Centre is not subject to direction or control by either the Minister or the Commission. There is, in short, a separation of functions between the Centre on the one hand and the Commission and the Minister on the other. Although there is a close relationship between the Centre and the Commission, the Centre does not act merely at the behest of the Commission nor does it act in any respect at the behest of the Minister. One instance of the independence of the Centre is its decision to convert two of its buildings to provide student accommodation. These are both important factors which, standing alone, point strongly to the conclusion that the Centre is not a State agency. When combined with all of the factors so far identified, it seems plain that the Centre is not a State agency.
31. The High Court has affirmed on many occasions that "there is evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown": Launceston Corporation v The Hydro Electric Commission (1959) 100 CLR 654 at 662; State Electricity Commission (Vic) v City of South Melbourne (1968) 118 CLR 504 at 510; Townsville Hospitals Board v Townsville City Council (supra) at 291 where the Court added:
    "All persons should prima facie be regarded as equal before
    the law, and no statutory body should be accorded special
    privileges and immunities unless it clearly appears that it was
    the intention of the legislature to confer them. It is not
    difficult for the legislature to provide in express terms that a
    corporation shall have the privileges and immunities of the
    Crown, and where it does not do so it should not readily be
    concluded that it had that intention." The Health Commission Act does not expressly provide that an incorporated health centre shall have the privileges and immunities of the Crown when conducting its operations and, for the reasons already mentioned, it is not possible to discern any implication to that effect. The Centre is not acting for the Crown. Instead, it is but one of a number of health centres, both public and private, which are providing health services to the community in South Australia. While it must give effect to the policies of the Commission, it is an autonomous body and does not have to act at the behest of either the Commission or the Minister. The controls capable of being exercised by executive government are markedly less than those which governed the Townsville Hospitals Board and which were referred to in Townsville Hospitals Board v Townsville City Council (supra). An important factor signifying that it is not a State agency is that the Board can, if it wishes, transfer the undertaking of the Centre to another body corporate.
32. Mr Hayes QC, who appeared for the Centre, relied heavily on the decision in ETSA v Linterns Ltd (1950) SASR 133, a decision which is plainly distinguishable. As Ligertwood J noted (at 140) the key provision which indicated that the Trust was an instrumentality of the Crown was s15 of the Electricity Trust of South Australia Act1946. Section 15 provided that the Trust held its assets for and on account of the Crown and should administer the Act "in such manner as in its discretion it deems to be best in the interests of the general public". Although the Trust had a degree of independence, the fact that it held its assets on behalf of the Crown strongly influenced Ligertwood J in deciding that the Trust was an instrumentality of the Crown: see the reasoning at 140 and 142. Even if the word "instrumentality" has a wider connotation than a servant or agent, the fact that the Centre does not hold its assets for and on behalf of the Crown distinguishes that decision. There is nothing in the reasoning in re Anti-Cancer Council of Victoria
(1992) 175 CLR 442 which requires a different conclusion.
33. For all of these reasons the Act does not reveal any intention that the Centre is a State agency or instrumentality. It is not, therefore, a State agency within the meaning of s49 of the Development Act.
Is the Council Entitled to a Declaration? 34. The grant of both a declaration and an injunction is a discretionary remedy. Now that the Centre has completed all of the building work and the buildings are now accommodating students, is the Council entitled to the orders it seeks? The following are the main steps in the events leading to the commencement of this action.
. On 22 May 1995 the Centre lodged two development applications with the Council. The first sought development consent to use the Ringwood Building as a teaching facility and as office accommodation for agencies providing health services. The second was to use the Gosse Building and another building called the Fisher Building as "multiple dwellings". The expression "multiple dwellings" was intended to describe the use of the buildings to house substantial numbers of persons.
. On 31 May 1995 the Council wrote to the Health Commission advising that it had received the applications and asking if the Centre should be classified as a State agency. On the same day the Council sent a copy of its letter to the Development Assessment Commission.
. On 19 July 1995 the Centre wrote to the Council advising that it did not intend to proceed with the proposed redevelopment of the Ringwood Building as an educational centre but, instead, would continue to be used as a multiple dwelling.
. On 27 July 1995 the Centre wrote to the Council giving additional information in support of its application. By this time the application was limited to redevelopment of the Ringwood and Gosse Buildings to provide accommodation.
. On 7 August 1995 the Centre lodged an application for development consent with the Development Assessment Commission. In its letter the Centre said that it had originally lodged an application with the Council but went on to say that the Centre now believed that the Commission was the correct planning authority to determine the application.
. On 8 August 1995 the Health Commission responded to the Council's letter of 31 May. The letter informed the Council of the fact that while the operating budget of the Centre was funded by the Commission, ownership and control of capital assets was the legal responsibility of the Centre. The letter did not provide a direct answer to the Council's letter of 31 May. On the same day the Centre wrote to the Council informing it that it had lodged its application with the Commission. The letter enclosed some information concerning the application. The letter also stated that the Centre hoped to have the project completed by the end of 1995.
. On 14 August 1995 the Council wrote to the Chairman of the Centre informing it of the two letters it had received on 8 August. It went on to state that the Council had contacted the Development Assessment Commission and informed the Chief Executive of the Centre that both the Council and the Development Assessment Commission were seeking legal advice on the question whether the Council or the Commission was the relevant planning authority.
. On 1 September 1995 the Centre wrote to the Council enclosing a copy of the Heads of Agreement between the Centre and the University of South Australia. The letter provided other information relating to the Centre's planning application.
. On 5 September 1995 the Development Assessment Commission wrote to the Council informing it that the Commission had determined that the Centre was a State agency and that the Commission would, therefore, determine the application made by the Centre for development consent.
. In the meantime, the Council had sought advice from Bone and Tonkin Planners Pty Ltd, town planners. By letter dated 8 September 1995 the Council was informed that the use proposed by the Centre was substantially in accordance with the existing use of the premises.
. On 25 September 1995 the Council considered the letter from Bone and Tonkin.
. By letter dated 26 September 1995 the Council informed the Development Assessment Commission that it had resolved at its meeting on 25 September not to "object in principle to the proposal" but asked that six concerns identified in its letter "be noted and addressed in the approval if this is contemplated". Four out of the six concerns of the Council were expressly made the subject of conditions of the planning approval granted by the Development Assessment Commission. A fifth concern about on-site parking was made the subject of a note in the planning approval. The only matter to which the Planning Assessment Commission did not refer in its grant of development consent was the concern of the Council that "the nature of use for overseas student accommodation and the proposed management of behaviour and controlled car ownership in accord with the supporting information submitted (Bone and Tonkin Planners report and University of South Australia Rules of Residency at Student Residences) be suitably reinforced". This is a reference to rules which have been supplied to Bone and Tonkin by the University of South Australia concerning residency in student accommodation.
. On 28 September 1995 the Minister granted provisional development plan consent subject to four conditions. These conditions were in identical terms to conditions sought by the Council.
. Following the grant of development consent work began on refurbishing both the Ringwood and the Gosse Buildings.
. The Council did not take any positive step to set aside the grant of planning approval. There is no evidence whether it had received by October 1995 any advice from its solicitors concerning the status of the Centre.
. By letter dated 3 October 1995 the Centre informed neighbours of a proposed redevelopment. It stated that a meeting would be held at the Centre on 9 October to answer questions from neighbours. Following that meeting it was decided to reconvene the meeting and ask representatives from the City of Unley to attend. After consultation with the Council, a meeting was held on 30 October. The Chief Executive Officer of the Council, Mr Harmer, and the Chief Executive Officer of the Centre, Mr Firth, were both present at the meeting.
. On 1 November 1995 Mr Harmer met Mr Firth in the Council offices. Also present were Mr Richardson, an officer of the Development Assessment Commission, Mr Brown, Development Manager of the Council, and Mr Johns, the Project Officer at the Centre. Mr Harmer questioned whether the Centre was a State agency. Mr Richardson informed the meeting that the Development Assessment Commission had not in the event sought advice from the Crown Solicitor on the question whether the Centre could be regarded as a State agency for the purpose of the Development Act. Mr Firth provided the meeting with a copy of an opinion from the solicitors for the Centre advising that the Centre could be regarded as a State agency for the purposes of the Development Act.
. On 8 November 1995 the Centre lodged with the Development Assessment Commission amendments of its proposed car parking arrangements. On the same day a copy was given to the Council. The residents in the vicinity of the Centre were informed of the proposal. A number of them registered their opposition to it. On 14 December, the Centre withdrew its application.
. On 21 November 1995 the Council wrote to the Centre informing it that it had received advice as to the status of the Centre. The letter continued:
    "Whilst it was considered Julia Farr Services may be
    regarded as an agency or instrumentality of the Crown, any
    development undertaken by it would be dealt with pursuant to
    Section 49 of the Development Act. However, any independent or
    joint undertaking of development with another non-crown agency
    would not attract such crown agency status.

Council's solicitor has sought more information on the subject
    proposal as to the relationship of the parties involved
    (documentation has described the proposal as being undertaken
    'in conjunction with the University of SA...') and therefore who
    (individually or jointly) is actually undertaking the
    development.

Your early advice would be appreciated. It would be beneficial
    to provide same before 29 November 1995 so that it may be

    considered along with the current amendments to be considered by
    Council at its meetings on 11 and 18 December 1995." The letter is equivocal. The Council was still seeking information.
. On 29 November 1995 the Centre replied to the Council's letter reinforcing its view that it was a State agency. It provided the information sought concerning the arrangements between the Centre and the University of South Australia.
. At a meeting of the Council on 18 December 1995 the Council received a petition from residents opposing the redevelopment by the Centre. The Council resolved to inform the Development Assessment Commission that the:
    "Council, after further deliberations, resident consultation and
    acknowledgment of the withdrawal of the amendment, still holds
    the following concerns in respect to the proposal and would rely
    on the Development Assessment Commission to address same:" Its concerns were the determination that the Centre was a State agency. The Council asked the Development Assessment Commission to obtain legal advice from a Crown Solicitor on that issue. The Council also asked the Commission to address its concerns as to the potential impact of the redevelopment on adjoining properties by taking imposing conditions to improve the car parks and to screen the development by trees and fencing. The Council suggested a number of conditions. The letter from the Council to the Commission informing of its decision was not sent until 21 December. However, by that time the Commission was functus officio.
. On 18 December 1995 the solicitors for the Council wrote to the Development Assessment Commission stating that enquiries by an officer of the Council have led her to believe and to report to the Council that the Commission was obtaining the advice of the Crown Solicitor. On learning that the Commission had not obtained that advice, it asked that the Commission promptly proceed to obtain it. The letter concluded
    "Whilst our client acknowledges that Julia Farr Services
    intends to act upon the Development Assessment Commission
    approval it nonetheless believes a review by the Development
    Assessment Commission is appropriate and critical. Our client
    also considers it appropriate for Julia Farr Services to delay
    implementation pending the Development Assessment Commission's
    consideration. A copy of our client's advice to Julia Farr
    Services is to be forwarded to you under separate cover." Thus, the Council was aware that the Centre was acting on the proposal but was taking no positive steps to prevent it from doing so. Not until 16 January 1996 was the Council informed by an officer of the Development Assessment Commission that advice had been received from the Crown Solicitor. However, the Council was not informed of the content of that advice.
. On 18 December 1995 the Council also wrote to the Centre informing it of its concerns as to the status of the Centre. It asked the Centre to support the Council's request to the Commission to seek clarification on the question whether the Commission was the relevant planning authority to determine the application. The letter continued
    "You will note that Council has supported 'in principle' the
    student housing accommodation development subject to certain
    developments. This currently remains Council's official
    position. However, we believe that there is now sufficient
    evidence to suggest that the Development Assessment Commission
    may have acted inappropriately in treating your application as
    being from a 'State Agency'. We are most surprised the
    Development Assessment Commission did not seek independent
    advice on this issue and did not require some consultative
    process.

We therefore request that as an 'act of good faith' towards the
    Council and the surrounding community that Julia Farr Services
    actively support a review by the Development Assessment
    Commission. By way of information I enclose a copy of our
    correspondence to the Minister for Health and the Chairman of
    the Development Assessment Commission relating to this matter." On the same day the Council wrote to the Minister for Health seeking his support for clarification of the status of the Centre.
. On 20 December 1995 the Centre replied to the Council's letter of 18 December. The Centre stated that it did not believe that it was its role to support or oppose the request of the Development Assessment Commission to determine the correctness of its application. The letter stated that it had acted on the advice it had received that the correct planing authority was the Commission.
. On 28 December 1995 letters were sent to the Centre, to the Chief Executive Officer of the Health Commission and to the Minister for Health. They referred to what was called "a myriad of issues surrounding developments at Julia Farr".
. On 18 January 1996 the Council again wrote to the Centre asking it to co-operate in a review of the development consent.
. On 19 January 1996 the Council instituted these proceedings.
35. To summarise, the Council first questioned the status of the Julia Farr Centre on 31 May 1995. The Council was informed on 5 September that the Development Assessment Commission proposed to deal with the application on the footing that the Centre was a State agency. Although the Council informed the Centre on 14 August that it was seeking legal advice, it did not thereafter take any positive step until it commenced the proceedings on 19 January 1996. Indeed, it was not until 1 November 1995 that the Council informed the Centre that it might object to the Centre being deemed to be a State agency. The Council had every opportunity of challenging the decision and ought to have given early notice of a clear intention to do so. It was not until January 1996 that it gave that clear notice. Until then, it was making representations seeking reconsideration by the Development Assessment Commission. Council had no standing to seek such a reconsideration. It is also open to serious question whether the Development Assessment Commission, having made its decision, could revisit the issues in that way.
36. Although it cannot be said that the Council was sleeping on its rights, it nevertheless did nothing to prevent the Centre from acting on the development consent until 19 January 1996. That was almost seven months after it had first raised the question of the status of the Centre and almost four months after the grant of development consent. Where a person has the benefit of a development consent and another seeks to challenge the validity of the consent, it is important that the challenger acts promptly. Although the rules of this Court allow a period of six months within which to bring an application for judicial review, it does not automatically follow that an application brought within that time will be allowed: R v Herrod ex parte Leeds City District Council
(1976) 1 QB 540, 557, R v Corporation of the City of Tea Tree Gully
(1986) 133 LSJS 277, 283-284. A court usually has a discretion whether to grant the relief sought and in the exercise of that discretion will have regard to the conduct of the parties. As long ago as 1917 Lord Reading CJ noted that, if anything wrong has taken place, the party aggrieved should move at once: ex parte Fricker
(1917) 33 TLR 152, 153. That proposition has been applied continuously since: R v Stafford Justices, ex parte Stafford Corporation (1940) 2 KB 33, 45; R v Herrod ex parte Leeds City District Council (supra); R v Corporation of the City of Tea Tree Gully (supra). This is not, of course, an application for judicial review although it is akin to it. The Court has a like discretion in an application for declaratory relief and again it will consider the conduct of the parties.
37. What is of greater significance is that the Council had informed the Development Assessment Commission that it did not object to the proposal if its concerns were addressed. That decision was made after the Council had considered a report from a town planner commissioned by it. The Development Assessment Commission addressed satisfactorily all but one of the Council's concerns. To that extent the Council has acquiesced in the proposal. It is apparent that it was willing to go along with the process adopted until residents in the vicinity of the Centre began to voice their objections to the development. The Council's present objections are only to the process by which the application was determined. It does not point to any defect in the planning merits of the proposal.
38. Finally, by the time the Council had issued these proceedings, the work involved in refitting and renovating the buildings was almost complete. The work was actually completed in February 1996. Students then began to occupy the building. Thus, a decision setting aside the development consent would substantially prejudice the Centre and the students. The Council was aware from the Centre's letter of 8 August 1995 that the Centre hoped to have the work completed by the end of 1995. It was also aware on 1 November 1995 that the Council had advice to the effect that it was a State agency. Nevertheless, it did not do anything to prevent the Centre from doing the work. Although the Centre did not receive its provisional building rules consent until after the work had been completed instead of delaying the work until the consent had been obtained, this does not alter the fact that the Council must have been aware that the work was proceeding.
39. The fact that late in 1995 the Centre applied for an amendment to its planning consent is of no moment. The amendment concerned car parking managements. It did not relate to the alterations and renovations required to refit the two buildings and can thus be considered.
40. Some matters which point to the fact that discretion should be exercised in favour of the Council are that the Centre knew that the Council was dissatisfied with the fact that it had been treated as a State agency for the purpose of the Development Act. With that knowledge, it nevertheless decided to proceed with the work. It did not at any time seek any clarification from the Council of its attitude. It might be said that it has risked the fact that the Council might not institute proceedings. As the present position is of its own making, it cannot resist a declaration that the consent be set aside.
41. Another relevant factor is that the process adopted has denied residents in the vicinity of the Centre an opportunity to object to the proposal. Had the matter been considered by the Council instead of the Development Assessment Commission, the application for development consent would have been classified as a Category 3 development. That would have required public notice of the application, permitted residents to object, and permitted residents to appeal from the grant of development consent.
42. The issues are finely balanced. In the result, I exercise my discretion against setting aside the grant of development consent. I am persuaded to do so by the fact that the Council had a report from an experienced firm of town planners which did not point to any substantial defect in the planning merits of the proposal and which said that the proposed use was substantially in accord with the existing use. A like consideration is that the Centre is in an area zoned as "Institutional". The substantial uses in that zone are the Centre and Concordia College, which is an educational institution. The first Principle of Development Control for that zone is consistent with the stated objective of the zone, namely, that development "should be primarily for the purposes of existing educational, health, community, or institutional establishments". This is a development of an existing institution for a use very similar to the earlier use of providing accommodation for nurses.
43. For all of these reasons, there will be a declaration that the Centre is not a State agency within the meaning of s49 of the Development Act. However, I will not grant the other orders sought by the Council in relation to the planning consent.
Is Julia Farr Acting Ultra Vires? 44. The Ringwood and Gosse Buildings had originally been constructed to provide accommodation for nursing staff and were used for that purpose. In 1980 that use ceased because of financial constraints. Since then both buildings have been used to provide accommodation for families of patients who reside outside the metropolitan area and transitional living for patients. The Ringwood Building has also been used to provide accommodation for nursing staff and other members of staff on an ad hoc basis. It has also been used for educational purposes in connection with the activities at the Centre.
45. In May 1995 the Centre decided to examine the proposal to use the Ringwood and Gosse Buildings to provide student accommodation. In mid-1995 it entered into an agreement with the University of South Australia to proceed with the proposal. The agreement is evidenced in a document entitled "Heads of Agreement" executed by the Centre on 28 July 1995 and by the University on 14 August 1995. The agreement provides that the parties proposed to proceed with the proposal by appointing a lessee to manage and maintain the facility, by providing an initial lease for a period of three years, and by creating a Management Steering Committee comprising representation from the Centre, the University, the Student Council at the University and the lessee. The lessee is a company called H M Theodoros Nominees Pty Ltd ("Theodoros"), which is also responsible for managing the student accommodation.
46. The objects, powers and functions of the Centre have already been mentioned. The Centre has entered into two leases with Theodoros. There is a separate lease in respect of each of the Ringwood Building and the Gosse Building. The rent payable by Theodoros for the Ringwood Building is $110,000 per annum and for the Gosse Building the rent is $75,000 per annum. In each case the lease provides a formula by which the rent may be increased if prescribed occupancy levels are attained. Theodoros in turn has entered into sub-tenancy agreements with the students who are accommodated in these buildings. One hundred and fifteen students are accommodated in the Ringwood Building and forty-five in the Gosse Building.
47. The Centre has expended more than $512,000 in carrying out alterations and renovations to the buildings and providing other works necessary for the provision of student accommodation. The sum of $201,038 has been spent on the Ringwood Building, $253,025 on the Gosse Building, and $58,109 on the construction and completion of car parking works which are required by conditions attached to the grant of development consent. These monies were borrowed from the General Project Fund of the Centre. The rent received from Theodoros will be used to repay the loan.
48. The Centre has a capacity to provide beds for 530 patients. In May 1996 there were 260 patients under the care of the Centre. Another building has the capacity to accommodate 204 patients but it is currently unoccupied due to the presence of asbestos and the high cost of the removal of that asbestos. Thus, the Centre has sufficient accommodation for its existing level of patients and, on one view, has surplus accommodation.
49. The doctrine of ultra vires should be reasonably understood and applied in relation to statutory corporations so that whatever may fairly be regarded as incidental to or consequential upon what is provided in its constituting statute ought not (unless expressly prohibited) to be held to be ultra vires: Attorney-General v Great Eastern Railway Co (1880) 5 App Cas 473 per Lord Selborne LC at 478, see also Lord Blackburn at 481. A few only of the many examples of what might or might not be held to be fairly incidental are Attorney-General v London County Council (1902) AC 165; Attorney-General v Smethwick Corporation (1932) 1 Ch 562; Attorney-General v Crayford UDC (1962) Ch 575 and Attorney-General v Racecourse Betting Control Board (1935) Ch 34. Comparison with other decisions is unlikely to be very helpful. Each case must be decided according to the general principle and with due regard to the powers of the corporation.
50. The powers of the Centre are set out in s49 of the Health Commission Act and its Constitution. Section 49 provides:
    "(1) An incorporated health centre is a body corporate with
    perpetual succession and a common seal and, subject to its
    approved constitution -
    (a) is capable of holding, acquiring, dealing with, and
    disposing of, real and personal property; and
    (b) is capable of acquiring or incurring any other rights or
    liabilities; and
    (c) is capable of suing and being sued; and
    (d) has the rights, powers, authorities, functions, duties and
    obligations conferred, imposed or prescribed under this Act or
    its approved constitution.

(2) Where an apparently genuine document purports to bear the
    common seal of an incorporated health centre, it will be
    presumed, in the absence of proof to the contrary, that the
    common seal of that health centre was duly affixed to that
    document." There are no other powers in the Act. Section 49, therefore, refers the reader to the Constitution of the Centre. Reference has already been made to the objects of the Centre. Clause 7 of the Constitution sets out the powers of the Centre and those powers must all be exercised for the purpose of attaining the objects of the Centre. The power expressed in Clause 7.1.10 to do all such things as are incidental or conducive to the attainment of the Centre's objects, powers and functions is an express statement of the incidental power which the Centre has at common law to perform its statutory functions.
51. The advantage in deriving revenue from buildings which would otherwise remain empty is apparent. Nevertheless, it cannot be overlooked that it was necessary for the Centre to expend in excess of $500,000 to enable that undertaking. That investment and the interest foregone on that sum will not be recovered for some four years. But it is not for this Court to examine the commercial prudence or reasonableness of the investment. The issue is not whether the Centre is acting reasonably but whether it is acting within its objects and powers, that is to say, whether it is acting in accordance with the objects and powers as provided as in s49 and in its Constitution.
52. Although the Centre has not itself undertaken the provision of student accommodation, it has, nevertheless, expended funds and leased its buildings to enable that undertaking. Nowhere in either the Health Commission Act or in the Centre's Constitution is there express power to engage in such an enterprise. The use of the Centre's buildings to provide student accommodation will be lawful only if it is incidental or conducive to the attainment of the objects of the Centre. I do not think it is. It does not assist in any way the provision of health care to the patients at the Centre. The Centre's powers to hold and deal with land in Clause 7.1.2 must be read as ancillary to the provision of health care at the Centre. It is not an independent head of power enabling the Centre to engage generally in real estate transactions or development. This enterprise is an exercise in land development quite unrelated to the provision of health care. It is an attempt to put to the best possible advantage buildings which are now surplus to the requirements of the Centre. Although one might sympathise with the motives of the Centre and its Board, it is not possible to conclude other than that the provision of student accommodation is not in any respect incidental or conducive to the operations of the Centre. It is a separate and distinct enterprise. For these reasons, the Centre has acted ultra vires in expending its funds for the undertaking. It is appropriate, therefore, to order a declaration to that effect.

53. However, for at least two reasons, I do not think it appropriate at this stage to order an injunction. First, the order will affect third parties. Accommodation has already been let to approximately 160 students of whom about sixty per cent are ordinarily domiciled outside Australia. I infer that the leases are for the period of the academic year of which about one-half has now passed. There will be an obvious hardship to the students, in particular those from overseas, if an order is made requiring the Centre forthwith to cease the use. Secondly, the Centre has already incurred the expenditure in fitting out the buildings for the use of student accommodation. That expenditure is irrevocable. Nothing can be done to recover it. In all the circumstances, the most appropriate course is to order the declaration. If the plaintiff presses its application for an injunction, I will later consider that question. It will then be appropriate to hear all other parties affected.