Kinross J. v GIO Australia Holdings Ltd

[1994] FCA 1076

JEREMY KINROSS v. GIO AUSTRALIA HOLDINGS LIMITED, GIO GENERAL LIMITED AND GIO
FINANCE LIMITED
No. G379 of 1993
FED No. 1076/94
Number of pages - 7
Crown - Immunity of the Crown under Trade Practices Act
(1994) 129 ALR 283 (1995) ATPR 41-402

(1994) 55 FCR 210

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
EINFELD J

CATCHWORDS

Crown - Immunity of the Crown under Trade Practices Act - whether Government Insurance Office of New South Wales or holding company with State Government as sole shareholder pending sale to public is Crown - effect of privatisation on status as instrumentality of the Crown - intention of the legislation

Bradken Consolidated Ltd and anor v Broken Hill Pty Co Ltd and ors (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
State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282
Bropho v Western Australia (1990) 171 CLR 1
New South Wales Bar Association and ors v Forbes Macfie Hansen Pty Ltd (1988) 18 FCR 378
State Government Insurance Corporation and anor v Government Insurance Office of New South Wales and ors (1991) 28 FCR 511
F. Sharkey and Company Pty Ltd and others v Fisher and others (1980) 50 FLR 130
Province of Bombay v Municipal Corporation of Bombay 1947 AC 58
Tamlin v Hannaford (1950) 1 KB 18
Gilbert v Corporation of Trinity House (1886) 17 QBD 795
Northern Pipeline Agency v Perehinec (1983) 2 RCS 513
City of Halifax v Halifax Harbour Commissioners (1935) SCR 215
Westeel-Rosco Ltd v Board of Governors of South Saskatchewan Hospital Centre (1977) 2 SCR 238

HEARING

SYDNEY,10 May and 5 August 1994
#DATE 29:11:1994
#ADD 19:5:1995

Solicitor for the applicant P. Cashman of

Cashman Partners

Counsel and solicitor for J. Allsop and J. Griffiths
respondents instructed by S. MacDonald

of Phillips Fox

ORDER

JUDGE1

Introduction
EINFELD J This case is a representative or group proceeding, popularly known as a class action, taken pursuant to Part IVA of the Federal Court of Australia Act 1976. The members of the group are the signatories to agreements for separate loan facilities, called Asset Accumulator Accounts (the facilities) entered into with the first respondent or its predecessor the Government Insurance Office of New South Wales (the old GIO), between the beginning of 1991 and April 1992. As currently apparent and relevant, it is the applicant's case that prior to the entering of each agreement, it was represented to each group member in brochures and promotional material issued either by the first respondent or the old GIO that the interest to be paid for the term of the facility would be set at an invariable rate of 1.25% above the professional money market rate for 90 day funds to be determined at the end of each month (the representations). Subsequent to the applicant and the other members of the group entering their respective agreements, the first respondent advised them by letter of 21 April 1992 of an increase in the interest margin to 2.25% with effect from 1 August 1992. This rate has prevailed since. The applicant's claim is relevantly that the representations therefore amounted to misleading and deceptive conduct in breach of section 52 and other sections of the Trade Practices Act 1974 (TPA), and that the increase represented a breach of each person's contract.

The privatisation
2. Under the Government Insurance Act 1927 (NSW) (the GIO Act) the old GIO was a statutory body representing the Crown: s. 3(3A) of the GIO Act. The Government Insurance Office (Privatisation) Act 1991 (the Privatisation Act), parts of which came into effect on 13 December 1991 with the remainder commencing on 1 January 1992, transformed the old GIO into the publicly owned first respondent in two stages. The first respondent was initially created to acquire the business of the old GIO. Six months later, on 16 July 1992, the first respondent was sold to members of the public. Section 9(4)(a) dictates that the articles of association of the first respondent provide for its first directors to be appointed by the Minister, and they were in fact so appointed in December 1991 to take office on 1 January 1992. On 13 December 1991 the State Of New South Wales became the holder of all 25,000,000 shares of $1 each in the first respondent: s. 5. The business of the old GIO became the business of the first respondent on 1 January 1992: s. 15.

1. Part 7 of the Privatisation Act is headed SPECIAL PROVISIONS A LYING TO GIO DURING PERIOD AFTER CONVERSION INTO PUBLIC COMPANY AND PRIOR TO DISPOSAL OF STATE'S MAJORITY SHAREHOLDING. This heading was explained in the first section of the Part, section 34, which provided that the Part shall apply:
   

during any period after the conversion when a majority of the issued shares in GIO are held by the State of New South Wales...

1. Sections 35 and 36 provided:
   

35. (1) The board of directors of GIO is, in the exercise of its functions, subject to the control and direction of the Minister.

(2) Neither the enactment of this section nor the exercise of the Minister's powers under this section constitutes the Minister as a director of GIO or a person who participates in the management of GIO.

(3) A director of GIO is not personally liable in any civil or criminal proceedings (including proceedings for a breach of any duty under the Corporations Law) for anything done or omitted for the purpose only of complying with a direction of the Minister under this section.

36. (1) GIO (and any GIO subsidiary to which any part of GIO's business undertaking is transferred under this Act) are agencies through which the State of New South Wales engages in State insurance, and for that purpose are public authorities of the State.

(2) However, GIO or any GIO subsidiary:

(a) is not and does not represent the State of New South Wales except by express agreement with the Minister; and

(b) is not exempt from any rate, tax, duty or other impost imposed by or under any law of the State of New South Wales merely because it is a company in which the State holds shares; and

(c) cannot render the State of New South Wales liable for any debts, liabilities or obligations of GIO or any GIO subsidiary, unless this Act or any other Act or law otherwise expressly provides.

1. Under Part 4 of the Privatisation Act the Minister is given power to direct the transfer of business from the first respondent to a subsidiary (such as the second and third respondents), or from one subsidiary to another, subject to the proviso in section 23:
   

... any such order may not be made unless all the shares in GIO are held by the State of New South Wales.

1. Part 5 allows the Minister to make orders transferring the first respondent's assets, rights or liabilities to bodies representing the State of New South Wales: s. 24. Such transfer after conversion to the first respondent is subject to the same proviso as an order under Part 4: s. 25. The uncontroverted evidence suggests that pursuant to ministerial orders the facilities were transferred to either the second or third respondent on 30 June 1992. Prior to that time, neither the second nor third respondent had any part in the marketing, contracting or sale of the facilities.

2. On 19 June 1992 a further 475,000,000 shares were transferred to the State, bringing its total shareholding to 500,000,000 fully paid ordinary shares. On or about the 16 July 1992, the date of the public float of the first respondent, these shares were transferred to the 124,355 successful subscribers to the float. After that date the State of New South Wales ceased to have the majority shareholding, or indeed any shares, in the first respondent. As a result Part 7 of the Privatisation Act ceased to have effect. On 23 July 1992 the first respondent was listed on the Australian Stock Exchange.

The motion for dismissal
8. The respondents to these proceedings have applied by motion dated 10 May 1994 to strike out the applicant's further amended statement of claim filed on 11 August 1993 on a number of grounds. All have been adjourned except one, viz. that as the Crown or emanations of the Crown the respondents are not susceptible to the TPA. The parties have asked for a ruling on this matter first and separately to the other matters raised by the motion. For this purpose only the foregoing facts are agreed or to be presumed.

1. The significance of this question in this case is perhaps worth identifying. Section 33G of the Federal Court of Australia Act 1976 provides:
   

A representative proceeding may not be commenced if the proceeding would be concerned only with claims in respect of which the Court has jurisdiction solely by virtue of the Jurisdiction of Courts (Cross-vesting) Act 1987 or a corresponding law of a State or Territory.

1. That section removes from this applicant the opportunity to proceed with the same substantive rights under section 42 of the Fair Trading Act 1987 (NSW) which is expressed to bind the Crown in right of the State. If commenced in the New South Wales courts, the proceedings could not be cross-vested to this Court and then be or become a representative proceeding. Moreover, whereas the problem of Crown immunity could be avoided if the case were commenced in or cross-vested to the New South Wales courts, they do not currently have jurisdiction to entertain group or representative proceedings and thus each individual claimant would have to launch a separate action. As some claims are apparently small, and there is some difficulty identifying every affected person, this result is regarded as a clumsy and expensive exercise not encountered in this Court.

2. The submissions of the respondents on this point are easily stated. They argued that the TPA did not apply to the old GIO or to the first respondent before 16 July 1992. Therefore even if the representations amount to misleading or deceptive conduct, they would not provide recourse to the TPA for relief.

3. In response the applicant argued first that the first respondent is not entitled to Crown immunity. Second, he said that the cause of action did not crystallise until 1 August 1992 when the interest margin was lifted and damage flowed. Therefore the action is properly available against the first respondent and to the extent that the relevant business of the first respondent had been transferred to either the second or third respondents, against them as well. It is not necessary to decide at this time when the cause of action accrued or whether and to what extent liability has been transferred. This judgment is limited to the applicability of the TPA to its potential contraveners.

4. The members of the group bringing this action fall into two divisions for current purposes. First, there are those who executed a letter of offer for the facilities before the commencement of the Privatisation Act on 1 January 1992. Any breach of the TPA in respect of these members could only possibly have been committed by the old GIO. In the second group are those who executed letters of offer after 1 January 1992 but before they were informed of the intention to increase the rate. It is alleged in respect of these people that the misleading or deceptive conduct was at least partly that of the first respondent.

Crown immunity
14. The issue in this motion concerns the entrenched principle of statutory construction generally referred to as "Crown immunity". In its modern form the principle may be traced back to Province of Bombay v Municipal Corporation of Bombay 1947 AC 58 in which the Privy Council said at 61:

The general principle to be applied in considering whether or not the Crown is bound by general words in a statute is not in doubt. The maxim of the law in early times was that no statute bound the Crown unless the Crown was expressly named therein, "Roy n'est lie par ascun statute si il ne soit expressement nosme." But the rule so laid down is subject to at least one exception. The Crown may be bound, as has often been said, "by necessary implication."

1. In cases such as the present, the relevant inquiry was, with respect, well stated by Justice French in State Government Insurance Corporation and anor v Government Insurance Office of New South Wales and ors (SGIO v GIO) (1991) 28 FCR 511 at 554 as:
   

a two part constructional issue which begins with an examination of the statute which it is sought to apply. The first question in that examination is whether the statute whose application is sought does apply on its proper construction to all or any of the activities of the Crown or its agencies or instrumentalities. And if it does not apply to such activities in whole or in part, the question which follows is whether the activities of the public body claiming Crown immunity are properly classed as activities of the Crown and fall outside the operation of the relevant statute. The answer to that second question will depend upon the proper construction of the legislation by which the public body is constituted.

1. It is necessary to approach each of the two parts identified by his Honour in turn.

DOES THE TRADE PRACTICES ACT BIND THE CROWN?
17. It is clear that the Trade Practices Act does not bind the Crown in right of a State: Bradken Consolidated Ltd and anor v Broken Hill Pty Co Ltd and ors (1979) 145 CLR 107; New South Wales Bar Association and ors v Forbes Macfie Hansen Pty Ltd (1988) 18 FCR 378. This position does not appear to have been altered by the High Court's decision in Bropho v Western Australia (1990) 171 CLR 1 where, although redefining and generally restricting the circumstances in which a statute will be held not to apply to the Crown, their Honours said at 22:

The effect of the foregoing is not to overturn the settled construction of particular existing legislation.

1. See also SGIO v GIO at 557. Thus the first of the two issues formulated by Justice French does not require elaboration in this case. The issue here is whether the respondents, especially the first respondent, is or is an emanation of the Crown. It is not suggested that any of the relevant conduct was directly carried out by either the second or third respondent.

STATUTORY CORPORATIONS
19. Considerable judicial attention has been given to the principles involved in extending crown immunity to statutory corporations. In general, the question is one of construction of the statute creating the corporation. In Tamlin v Hannaford (1950) 1 K.B. 18 the English Court of Appeal dealt with this issue in respect of the British Transport Commission's liability under the Rent Restriction Acts. The Court set out the principle at 22:

In considering whether any subordinate body is entitled to this Crown privilege, the question is not so much whether it is an "emanation of the Crown," a phrase which was first used in Gilbert v Corporation of Trinity House (1886) 17 QBD 795 at 801, but whether it is properly to be regarded as the servant or agent of the Crown.

1. In that case the Court decided that control by the Minister was not enough to establish the body as an agent of the Crown. It was considered that an intention by Parliament that a corporation should act on behalf of the Crown should be expressly stated, and that (at 25):
   

In the absence of any such express provision, the proper inference, in the case, at any rate, of a commercial corporation, is that it acts on its own behalf, even though it is controlled by a government department.

1. However, more recently the nature or function of the body has become less significant, and the control exercised by the executive has become a more important consideration. Certainly this is the case in Canada where the Supreme Court in Northern Pipeline Agency v Perehinec (1983) 2 RCS 513 said at 517:
   

Whether a statutory entity is an agent of the Crown, for the purpose of attracting the Crown immunity doctrine, is a question governed by the extent and degree of control exercised over that entity by the Crown, through its Ministers, or other elements in the executive branch of government, including the Governor in Council.

1. Similar formulations have been made by that Court in City of Halifax v Halifax Harbour Commissioners (1935) SCR 215 at 225, and Westeel-Rosco Ltd v Board of Governors of South Saskatchewan Hospital Centre (1977) 2 SCR 238 at 249.

2. In Australia, the control of the executive has often been used as virtually definitive that a statutory corporation was intended to represent the Crown, but the English "function" test has also remained a relevant criterion. In Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 145 CLR 330 the High Court was faced with the question of whether a public servants' superannuation trust established by the Commonwealth was an instrumentality or agent of the Crown in right of the Commonwealth. The four Judges who considered this issue were evenly divided. Justice Mason, with whom Chief Justice Gibbs agreed on this aspect of the case, having referred to the function of the Trust, concluded at 354:
   

Although the Trust is a separate corporate entity the control which the Crown has over its membership and its activities shows that it is an alter ego of the Crown.

1. The control in that case extended only to appointment and removal of members, and an obligation to supply the Treasurer with financial information. As his Honour acknowledged:
   

The Trust, in determining the investment policy which it will pursue within the prescribed investments which it is authorised to make ..., is free of directions by the Treasurer and the Government...

1. Nevertheless, guided in part by the governmental function performed by the Trust, his Honour concluded that it was an emanation of the Crown.

2. It was the limited nature of this control that led Stephen and Aickin JJ to the opposite conclusion. Stephen J referred to the control of the executive over the activities of the Trust as "a most significant factor, albeit no more than a factor" (at 342) in determining whether the Trust was entitled to Crown immunity. He later concluded at 347 that the Trust was not so entitled:
   

I have placed most weight upon the entire independence of the members of the Trust in relation to their investment function.

1. Stephen J continued at 348:
   

The importance of the presence or absence of control by the executive government in ascertaining whether or not a statutory corporation possesses a particular immunity or privilege of the Crown is a consequence of the very nature of that inquiry, concerned as it is with the nexus between the corporation and the executive. If a corporation is no more than the passive instrument of the Crown, subject in a high degree to control by the executive, it is appropriate enough that its acts be viewed as those of its master and that it be itself treated as the alter ego of the Crown, enjoying accordingly those immunities and privileges with which the Crown is clothed.

1. In relation to the importance of the function of the body, he said at 349:
   

It may be acknowledged that what is a function appropriate to government may be answered differently in different ages and under the influence of differing social and political theories of the State. However, there nevertheless remain some areas ... of which it may confidently be said that, in an Australian context, they are traditionally the province of central government. Where that is so it constitutes a relevant factor in any consideration of the claim of the statutory corporation in question to the benefit of some Crown immunity or privilege.

1. Aickin J also concluded (at 366) that the function of the Trust was non-governmental and decided that the Trust was not sufficiently controlled by the executive to be considered an emanation of the Crown.

2. A few years later, in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282, the High Court decided that there was "no inconsistency in principle between (the Justices in the Trust case) ... they differed in their application to the facts". The majority (Mason, Murphy, Deane JJ) distinguished the Board from the Trust considered in the earlier case on two bases (at 308):
   

For our part the position of the appellant is clearly distinguishable from that of the Trust in the earlier decision. The appellant has a greater degree of independent autonomy, and its funds and property are not dealt with ... consistently with its having the character of the Crown in right of the State of Victoria.

1. Any decision on this subject must heed the general reluctance expressed by the High Court to extend the range of bodies entitled to the shield of the Crown. In Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 at 291, Chief Justice Gibbs, with whom the other three members of the bench concurred, said:
   

It has more than once been said in this Court 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 Hydro-Electric Commission (1959) 100 CLR 654 at 662; State Electricity Commission (Vict.) v City of South Melbourne (1968) 118 CLR 504, at 510. 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.

1. His Honour then went on to decide that the Townsville Hospitals Board was not accorded Crown immunity:
   

The Hospitals Act does not expressly provide that a board shall have the privileges and immunities of the Crown when engaging in building operations, and in my opinion it does not impliedly so provide. The fact that a number of Ministerial approvals must be obtained if the Board needs to borrow or raise money or make financial arrangements for the purposes of a proposed work does not indicate that the Board in carrying out the work is acting for the Crown. The Board cannot be directed to do the work, and if it does borrow or raise money for the purpose, the Board and not the Crown is liable in case of default.

1. It is appropriate to mention briefly the significance to this issue of the High Court's decision in Bropho. That case reflects a different aspect of the High Court's reluctance to extend the principle of Crown immunity. It is authority for the proposition that the presumption that a statute will not be construed as binding the Crown can be displaced without need for the previously authoritative "stringent and rigid" (at 22) requirement, identified in Bombay Province, of a contrary legislative intent "manifest from the very terms" of the statute or a finding that the purpose of the statute would be wholly frustrated. It was, therefore, concerned with the first rather than the second limb identified by Justice French in SGIO v GIO and was consequently of limited assistance in this case.

THE OLD GIO
34. The reasoning in Townsville Hospitals regarding Crown immunity was applied to the old GIO by Justice French in SGIO v GIO at 557 where his Honour held:

The next issue is whether or not the GIO of NSW is an emanation of the Crown whose activities, so far as they are relevant to the present proceedings, are not affected by the Trade Practices Act. As already noted, s 3(3A) of the Government Insurance Act 1927 (NSW) provides that "the Office shall, for the purposes of any Act, be deemed to be a statutory body representing the Crown". It is controlled by a board established under s 3B and in the exercise of its functions the board is subject to the control and direction of the relevant Minister: s 3B(3). Although in practice there appears to have been very little ministerial direction, at least in recent times, it is apparent from the generality of the application of the provisions referred to that the GIO of NSW was intended by the Parliament of New South Wales to be, and is, a Crown instrumentality. There is not, within the legislation by which it is constituted, any relevant area of legal autonomy that would attract considerations of the kind adverted to by Gibbs CJ (Murphy, Wilson and Brennan JJ agreeing) in Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282.

1. I respectfully agree. It is therefore necessary here to examine how and to what if any extent these criteria attach to the first respondent.

THE FIRST RESPONDENT UNDER PART 7
36. The legislation under consideration by Justice Sheppard in F. Sharkey and Company Pty Ltd and others v Fisher and others (1980) 50 FLR 130 contained a similar provision to section 35 of the Privatisation Act. His Honour concluded that the Metropolitan Water Sewerage and Drainage Board was an emanation of the Crown, basing his reasons, at 134, on that provision, as well as the fact that the property of the board was held in trust for the State, and, as an "ancillary" matter, on the functions of the Board. His Honour pointed out at 136:

In the present case all the Board's powers, authorities, duties and functions are subject to the direction and control of the Minister. It is not independent as to any of them. Its property is held upon trust for the Crown.

1. Reconciliation of the various judicial viewpoints in the construction of this statute thus involves balancing the high degree of executive control over the operations and property of the first respondent, with the lack of an express statutory provision conferring Crown status and the non-governmental function of the body. The answer, as Chief Justice Gibbs said in Townsville Hospitals at 289:
   

must in the end depend upon the intention to be derived from the statute under which the body in question is constituted.

1. In this instance the Minister has the power to direct the activities of the corporation, and the board is obliged to act in all matters according to the Minister's instructions if he gives any. On one view such a degree of control would seem to cement the first respondent as the Crown in right of New South Wales even if, to use the words of Justice French, there may be relevant areas of legal autonomy to attract considerations of the kind referred to in Townsville Hospitals. The power of the Minister to control the property of the first respondent is a further significant indication.

THE EFFECT OF SECTION 36
39. On the other hand, the reluctance of the High Court in Townsville Hospitals to extend the range of bodies entitled to the immunity of the Crown in the absence of express statutory provision prompts a closer look at the specific provisions of the Privatisation Act. The applicant particularly relied on section 36. Although a number of words have been used in this section to describe the relationship of the first respondent and the State, there are no express words giving it, as Gibbs CJ adopted from Launceston Corporation, "the character of a servant of the Crown". It has not been given what Stephen J called "the particular immunity or privilege of the Crown", nor is the State made responsible by the Privatisation Act itself for its debts or other legal obligations. The first respondent's directors are only given immunity from criminal prosecution or civil suit when acting in compliance with a ministerial direction, the implication being that the directors will make many decisions on their own for which they will be liable at law. Section 36 describes the first respondent as a "public authority of the State" only for the purpose of its role as the agency through which the State engages in insurance. Even so, it must pay all State taxes and duties and does not ordinarily represent or bind the State in any way: s. 36(2).

SECTION 39
40. The applicant presented a further argument based on section 39 of the Privatisation Act which relevantly provides:

(1) When any part of a business undertaking is transferred by an order to which this Part applies... ...

(b) the rights and liabilities of the transferor comprised in that part of the undertaking become by force of this section the rights and liabilities of the transferee; ...

(d) anything done or omitted to be done in relation to that part of the undertaking before the transfer by, to or in respect of the transferor is (to the extent that it has any force or effect) taken to have been done or omitted to be done by, to or in respect of the transferee;

1. In my opinion this subsection has no impact in this case. Paragraph (d) is only sufficient to make the representations those of the first, second or third respondent to the extent that they have "any force or effect". By reason of the immunity of the old GIO from the TPA, there would be no liability under paragraph (b) or anything else with force or effect as used in paragraph (d) to be transferred from it to the first respondent. Only if the first respondent is liable to the TPA can anything of relevance have been transferred to the second and third respondents along with the facilities. Thus this argument is a classic "bootstraps" proposition which does not assist with the construction of the legislation.

THE RESPONDENTS AFTER FLOAT
42. Part 7 of the Privatisation Act ceased to have effect on 16 July 1992, after which the first respondent clearly lost its character as an emanation of the Crown, not least because of the provisions of section 11(4) which provides, commonly for all respondents:

(4) GIO or a GIO subsidiary is not entitled to use in connection with its business the name "Government Insurance Office" or any other name (apart from "GIO") which suggests that it is associated with the State of New South Wales. This subsection does not apply during any period to which Part 7 applies.

1. After the public float, by virtue of the termination of Part 7 of the Privatisation Act, the whole entity became independent of the State of New South Wales which ceased to have even a shareholding. The Minister lost all control over its activities. As a result it clearly lost any Crown immunity it might have had and became subject to the TPA.

Conclusion
44. In this finely balanced exercise I have been influenced by the overall intent of the legislation to conclude that the first respondent was not the Crown. The Privatisation Act was clearly designed to provide a period during which an entirely new body to the former State-run and controlled entity (the old GIO) was to prepare the State's insurance agency for public sale. In essence this was the task of the directors of the first respondent subject to ministerial direction and control in particular matters thought necessary for the overall purpose. No doubt there was more than one purpose for injecting the intermediate Part 7 status of the first respondent, but no specific purpose was disclosed by the statute for this status at all if ministerial control was at its heart. It would, as Townsville Hospitals suggests, have been simple enough to state such an intent unambiguously.

1. Furthermore, the function of the first respondent was essentially non-governmental -- ie the promotion and sale of insurance policies and the conduct of money market and finance operations. It seems likely that the reserve powers of the Minister were inserted to ensure that the political intention was not subverted and that the best possible presentation of the entity was achieved to ensure its successful public float. It must also be remembered that if the first respondent is immune from liability under the TPA, the second and third respondents, as companies completely independent of the State, are reaping the benefits of what would, on the present assumptions, otherwise have been unlawful conduct by them. This would be a manifestly unfair result which in the absence of express provision, the Parliament should not be presumed to have intended.

2. Notwithstanding the extensive potential, even opportunity, for control by the Minister given by the Privatisation Act, I find the absence of any express conferral of Crown status in Part 7 such as assisted the task of Justice French in his Honour's conclusions on the old GIO, and the manifestly commercial nature of the enterprise, to be decisive in favour of the applicant. Moreover, the first respondent was created as the first stage of the privatisation process, ie divestment of government ownership and control. In adopting the terminology used in Part 7, especially section 36 where it would most obviously have been relevant, the drafters of the legislation deliberately ignored the express terms of section 3(3A) of the GIO Act bestowing Crown immunity on the old GIO. In my view, this was a sufficiently clear demonstration of the legislative intent to separate the first respondent from the Crown.

3. I find that the Trade Practices Act did not apply to the old GIO but did apply to the first respondent after 1 January 1992. As a result any misleading or deceptive conduct by the old GIO did not constitute a breach of the TPA but similar proved conduct by the first respondent would be unlawful. Insofar as the application relies on alleged breaches of the TPA committed by the old GIO it must therefore fail but it may otherwise proceed. It seems to follow that only part of the further amended statement of claim must be struck out but I will permit the parties to bring in or argue for the orders they now wish me to make, including as to costs. If the orders are agreed, they may be filed in the registry. If not, a date for argument should be fixed with my Associate. In either case, this is to be done within 14 days.