1
Fair Work Act 2009
s.604––Appeal of decisions
Roads and Maritime Services
v
Leeman
(C2018/3774)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT COLMAN
COMMISSIONER SPENCER SYDNEY, 18 SEPTEMBER 2018
Introduction and statutory framework
[1] Roads and Maritime Services (RMS), a corporation established by s 46 of the
Transport Administration Act 1988 (NSW), has lodged an appeal for which permission to
appeal is required against a decision issued by Senior Deputy President Hamberger on
19 June 20181 (Decision). The Decision arose out of an application made by Ms Victoria
Leeman pursuant to s 789FC of the Fair Work Act 2009 (FW Act) for an order to stop
bullying in relation to her work at RMS. RMS had contended that the Commission had no
jurisdiction to deal with the application because Ms Leeman was not “at work” in RMS, and
in any event RMS was not a “constitutionally covered business”. In the Decision the Senior
Deputy President rejected RMS’s jurisdictional objection, and found firstly that Ms Leeman
was in fact at work at RMS and, secondly, that RMS was a constitutionally covered business
because it was a trading corporation. RMS’s appeal concerns the second of these
determinations.
[2] The statutory framework applicable to the matter before the Senior Deputy President
was as follows. Pursuant to s 789FC of the FW Act, a “worker who reasonably believes that
he or she has been bullied at work” may apply to the Commission for an order under s 789FF.
Section 789FF authorises the Commission, upon application and if it is satisfied that the
worker has been “bullied at work” by an individual or group of individuals and there is a risk
that the worker will continue to be bullied at work by the individual or group, to make any
order it considers appropriate (other than an order for the payment of a pecuniary amount) to
prevent the worker from being bullied at work.
[3] Section 789FD(1) defines when a worker is “bullied at work” in the following terms:
(1) A worker is bullied at work if:
1 [2018] FWC 3584
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DECISION
E AUSTRALIA FairWork Commission
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2
(a) while the worker is at work in a constitutionally-covered business:
(i) an individual; or
(ii) a group of individuals;
repeatedly behaves unreasonably towards the worker, or a group of
workers of which the worker is a member; and
(b) that behaviour creates a risk to health and safety.
[4] The expression “constitutionally-covered business” is defined by s 789FD(3). If a
person is a “constitutional corporation” which conducts a business or undertaking, then the
person falls within the scope of the definition. The expression “constitutional corporation” is
defined in s 12 to mean “a corporation to which paragraph 51(xx) of the Constitution
applies”. The corporations to which s 51(xx) of the Constitution refers are “foreign
corporations, and trading or financial corporations formed within the limits of the
Commonwealth”.
The Decision
[5] It was not in dispute before the Senior Deputy President that RMS conducted a
business or undertaking for the purpose of the definition in s 789FD(3) of a “constitutionally-
covered business”. The Senior Deputy President found that RMS was a constitutional
corporation, and thus satisfied the other element of the s 789FD(3) definition, on the basis that
RMS was a trading corporation within the meaning of that expression in s 51(xx) of the
Constitution.
[6] In reaching that conclusion, the Senior Deputy President applied the principles
concerning the characterisation of a trading corporation stated by Steytler P in the Western
Australian Court of Appeal decision in Aboriginal Legal Service (WA) Inc v Lawrence (No
2),2 by the Federal Court (Wilcox J) in E v Australian Red Cross Society,3 and by Full Courts
of the Federal Court in Bankstown Handicapped Children’s Centre4 v Hillman and United
Firefighters Union of Australia v Country Fire Authority.5 The Senior Deputy President then
said:
“[22] The case authorities use many different adjectives to describe the volume of
trading activity that will be sufficient to characterise a corporation as a trading
corporation. However, it is tolerably clear that when determining if a corporation’s
trading activities are ‘substantial’ or ‘significant’ enough, it is not correct to look only
at the value of those activities in absolute dollar terms. But nor is it correct to wholly
disregard that and look only at their value relative to the value of the corporation’s
activities overall. Rather, some happy medium is required – an assessment that takes
into account both the absolute and relative volume of the corporation’s trading
2 [2008] WASCA 254; 252 ALR 136
3 (1991) 27 FCR 310
4 [2010] FCAFC 11; 182 FCR 483
5 [2015] FCAFC 1; 228 FCR 497
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activities. I understand this to be the ‘question [that] is not without difficulty’ (UFU v
CFA (2014) 218 FCR 210 at [102]) to which Murphy J refers.”
[7] The Senior Deputy President then made factual findings concerning RMS’s revenue
for the 2016-17 financial year which were not the subject of any challenge in RMS’s appeal.
First, he found that RMS’s total funding was $6.47 billion, comprised of $0.9 billion in “own
source funds” and the balance consisting of funding from the Federal and New South Wales
Governments.6 Of the “own source funds”, RMS conceded that a total of $172,859,022 was
derived from trading activities, constituting 2.67% of its total revenue. The Senior Deputy
President considered this to be a significant volume of trading revenue which could not be
characterised as minimal, trivial or insignificant.7 The Senior Deputy President also found that
there were three other categories of “own source funds” which he considered to be derived
from trading activities. These brought the total amount RMS obtained via trading activities to
just under $232 million, which was 3.53% of RMS’s total revenue.
[8] The following conclusions were then stated (footnotes omitted):
“[28] As the Full Federal Court stated in Bankstown, there is no ‘bright line’ test that
determines what proportion of revenue has to come from a corporation’s trading
activities to warrant characterisation as ‘substantial’. There is no magic number above
which those trading activities must be so characterised. However, I do not think that I
can entirely disregard that in UFU v CFA, Murphy J found that the fact that 2.7%
($12.93 million) of the Country Fire Authority’s revenue was derived from trading
activities was sufficient to characterise it as a trading corporation. The absolute
amount that RMS obtains from trading activities is significantly higher than the
Country Fire Authority’s corresponding figure, and, as a proportion of revenue, is at
least similar.
[29] Additionally, as with the Royal Prince Alfred Hospital in E v Australian Red
Cross Society, the fact that the revenue RMS obtains via trading activities is
‘dwarfed’ by the government funding it receives is of itself no bar to characterisation
as a trading corporation.
[30] In all the circumstances, I consider that RMS’ trading activities are substantial
enough to characterise it as a trading corporation for the purposes of s.51(xx) of
the Australian Constitution. In my view, the revenue it generates through those trading
activities cannot reasonably be described as ‘trivial, insignificant, marginal, minor or
incidental’ in either an absolute or relative sense. It follows that the employer is a
constitutionally-covered business for the purpose of s.789FD of the Act.”
Submissions
[9] RMS contends that the Senior Deputy President erred in concluding that it was a
trading corporation, and thus a constitutionally covered business for the purpose of s 789FD.
As earlier stated, RMS did not seek to challenge any finding of fact in the Decision. Nor did it
submit that the principles applicable to the identification of a trading corporation set out in the
6 Decision at [23]
7 Decision at [24]-[25]
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Decision were wrong. Rather it submitted that the Senior Deputy President erred in applying
these principles in that he:
failed to take into account RMS’s public purposes and functions and relationships to
the State of New South Wales in determining whether RMS’s trading activities were
sufficient for it to be characterised as a trading corporation;
failed to take into account that RMS was established as a “public transport agency” by
the Transport Administration Act, that its statutory functions were overwhelmingly
public functions conducted for the public good and were not of a commercial or profit-
making nature;
relied on trading activities which were merely incidental to its core functions, and did
not conduct the required analysis of assessing the relationship between these trading
activities and the overall activities of the corporation, and the extent of those activities
in comparison with the extent of the corporation’s activities overall;
did not consider RMS’s close relationship to the State of NSW as a NSW Government
agency which had the status, privileges and immunities of the Crown; carried out the
activities of the government; was with some exceptions required to pay all funds
received into the RMS Fund, an account held in the Treasury; and was responsible to
particular Ministers in the exercise of its functions and was subject to Ministerial
control and direction; and
placed reliance on the absolute amount of revenue from trading activities earnt by
RMS rather than considering the proportion of trading activities cumulatively with a
qualitative assessment of the nature of those activities.
[10] RMS submitted that permission to appeal should be granted because:
the appeal raised an important jurisdictional issue, and it was the first duty of the
Commission to determine whether it has jurisdiction;
the question of whether RMS, which had a workforce of more than 5,800 FTEs, was a
constitutionally covered business for the purpose of s 789FD was an issue of
importance and general application; and
it had demonstrated an arguable case of appealable error.
[11] Ms Leeman, who was self-represented, declined to make submissions in the appeal.
Consideration
[12] We consider that permission to appeal should be granted on the basis that the appeal
raises a question of potentially wider application. RMS has a substantial workforce (albeit that
it is not the actual employing entity of the persons who comprise its workforce), so that the
question of whether it is a constitutionally covered business for the purpose of s 789FD such
that it may be the subject of anti-bullying applications under s 789FC may well arise in the
future.
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[13] It is necessary at the outset to identify some basic propositions concerning the
characterisation of a trading corporation relevant to the determination of the appeal. The
summary of principles in the judgment of Steytler P in the Western Australian Court of
Appeal decision in Aboriginal Legal Service (WA) Inc v Lawrence (No 2),8 which as earlier
discussed was referred to in the decision, is a useful starting point since RMS accepted that it
represented a correct statement of the relevant principle. Steytler P said (omitting case
references):
“(1) A corporation may be a trading corporation even though trading is not its
predominant activity …
(2) However, trading must be a substantial and not merely a peripheral activity …
(3) In this context, ‘trading’ is not given a narrow construction. It extends beyond
buying and selling to business activities carried on with a view to earning
revenue and includes trade in services…
(4) The making of a profit is not an essential prerequisite to trade, but it is a usual
concomitant…
(5) The ends which a corporation seeks to serve by trading are irrelevant to its
description … Consequently, the fact that the trading activities are conducted
in the public interest or for a public purpose will not necessarily exclude the
categorisation of those activities as ‘trade’…
(6) Whether the trading activities of an incorporated body are sufficient to justify
its categorisations as a ‘trading corporation’ is a question of fact and degree …
(7) The current activities of the corporation, while an important criterion for
determining its characterisation, are not the only criterion. Regard must also be
had to the intended purpose of the corporation, although a corporation that
carries on trading activities can be found to be a trading corporation even if it
was not originally established to trade …
(8) The commercial nature of an activity is an element in deciding whether the
activity is in trade or trading …”9
[14] The first, second, fifth, sixth and seventh propositions are particularly relevant to the
submissions advanced by RMS in its appeal and require some further elucidation. In respect
of the first, second and sixth propositions, the judgment of Murphy J in R v Federal Court of
Australia; Ex parte WA National Football League10 (Adamson) articulates the position in the
following terms (cited by Steytler P in respect of both propositions):
“Even though trading is not the major part of its activities, the description, "trading
corporation" does not mean a corporation which trades and does nothing else or in
8 [2008] WASCA 254; 252 ALR 136
9 Ibid at [68]
10 [1979] HCA 6; 143 CLR 190
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which trading is the dominant activity. A trading corporation may also be a sporting,
religious, or governmental body. As long as the trading is not insubstantial, the fact
that trading is incidental to other activities does not prevent it being a trading
corporation. For example, a very large corporation may engage in trading which
though incidental to its non-trading activities, and small in relation to those, is
nevertheless substantial and perhaps exceeds or is of the same order in amount as the
trading of a person who clearly is a trader. Such a corporation is a trading corporation
and is the subject of the legislative power in s. 51 (xx.).”11
[15] The practical application of these principles was recently discussed in the Federal
Court Full Court decision in United Firefighters' Union of Australia v Country Fire
Authority.12 This matter was an appeal against a decision of a single member of the Court
(Murphy J) in which it was determined that the Country Fire Authority was a trading
corporation.13 The Full Court said:
“[135] We do not accept that the primary judge applied the wrong test, as contended for
by the CFA. An important question is whether the corporation’s trading activities
form a sufficiently significant proportion of its overall activities as to merit its
description as a trading corporation: see Adamson at 233 per Mason J. The same
approach was taken in State Superannuation Board at 305 per Mason, Murphy and
Deane JJ where their Honours referred to the nature and the extent or volume of a
corporation’s activities needed to justify its description as a [trading] corporation. See
also the Tasmanian Dam Case at 156 per Mason J; at 179 per Murphy J, at 240 per
Brennan J and at 293 per Deane J. Substituting the word “trading” for “financial”
follows what their Honours said in State Superannuation Board at 303: the Court’s
approach to the ascertainment of what constitutes a “financial corporation” should be
the same as its approach to what constitutes a “trading corporation”, subject to making
due allowance for the difference between “trading” and “financial”.
[136] Answering that question does not simply involve the application of a formula or
equation nor the substitution of percentages or other measures of monetary value as
between the activities found to be trading activities and the activities not so found. The
purpose for which a corporation is formed is not the sole or principal criterion of its
character as a trading corporation and the Court looks beyond the “predominant and
characteristic activity of the corporation.” We refer again to the nature and the extent
or volume of a corporation’s activities needed to justify its description as a trading
corporation. The relationship between the activities relied upon and the overall
activities of the corporation, and the extent of those activities in comparison with the
extent of the corporation’s activities overall are relevant. In our opinion, this was the
approach taken by the primary judge.
[137] If a corporation, carrying on independent trading activities on a significant scale,
is properly categorised as a trading corporation that will be so even if other more
extensive non-trading activities properly warrant it being also categorised as a
corporation of some other type: see State Superannuation Board at 304. In our view,
this proposition answers in large part the submissions put as to the public purpose of
11 Ibid at 239
12 [2015] FCAFC 1; 228 FCR 497
13 United Firefighters Union of Australia v Country Fire Authority [2014] FCA 17; 218 FCR 210
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the CFA. As we have said, the issue is one of characterisation and is a matter of fact
and degree.
. . .
[139] The CFA submitted that the error by the primary judge was crystallised at the
end of [102] where his Honour said:
In my opinion the CFA undertakes sufficient trading for it to be seen as “not
insubstantial”, not trivial, insignificant, marginal, minor or incidental, and I
find that it is a trading corporation.
In our opinion, the primary judge was considering whether or not the activities he had
found to be trading activities were, proportionately, significant and whether they
should be considered as peripheral so as not to affect the overall question of
characterisation. We see no error. In our opinion the primary judge correctly took into
account the relationship between the trading activities and the non-trading activities in
order to evaluate whether the trading activities were “independent” of the non-trading
and thus might affect the characterisation of the corporation.”
[16] The fifth proposition is particularly pertinent to RMS’s appeal submissions. In support
of the second sentence in that proposition, Steytler P cited two judgments. The first was the
dissenting judgment of Barwick CJ in R v Trade Practices Commission; Ex parte St George
County Council14 in which his Honour relevantly said:
“Further, if the terms of an Act expressed in the language of the constitutional power
properly construed embrace a government or local government instrumentality or
agency, the connexion of the corporation with the government of a State will not of
itself place the corporation outside the scope of the power or the statute: Victoria v.
The Commonwealth [1971] HCA 16; (1971) 122 CLR 353…
. . .
The power quite obviously, in my opinion, is given to the Parliament to enable it by
legislation to control amongst other things at least some of the activities of
corporations which fall within its description. It seems to me that the activities of a
corporation at the time a law of the Parliament is said to operate upon it will determine
whether or not it satisfies the statutory and therefore the constitutional description.
Thus, in my opinion, the identification of the corporation which falls within the
statutory definition will be made principally upon a consideration of its current
activities.
… As I have indicated, the purpose of the grant of legislative power includes the
control of the corporate activities of the corporation: it is not so concerned with the
motives which prompt those activities, nor the ultimate ends which those activities
hope to achieve. If, upon that consideration, the corporation can fairly be described by
reason of those activities, their extent and relative significance in the affairs of the
corporation as a "trading corporation" it will, in my opinion, be nothing to the point
that it is also a government or State or municipal corporation. The effect of the trading
activities of such a corporation upon and in the community will not be lessened or
necessarily affected by the fact that it is a State or municipal instrumentality.
14 [1974] HCA 7; 130 CLR 533
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However, it was said that for a body such as the applicant to reticulate electricity
bought by it in bulk is to perform a public service and not to trade. Of course, one of
the justifications put forward for the entry of government into manufacture, trade or
commerce is that the public will be better served by the government corporation than it
would be by a non-government body seeking only profit or gain. But whatever the
merit of such a claim, the fact that government, or a "government" corporation,
conducts activities which are of their nature manufacturing, trading or commercial
activities does not, in my opinion, alter the nature of those activities. This must
particularly be so in relation to an Act made under a constitutional power which
extends to enable the control of such activities conducted by government, or
"government" corporations.”15
[17] The second judgment referred to by Steytler P is that of Mason J, as he then was, in
the Tasmanian Dam Case,16 in which the Hydro-Electric Commission of Tasmania was
determined to be, by majority, a trading corporation. Mason J commenced his consideration
of this issue by referring to the judgment of Barwick CJ in St George County Council, and
said:
“2. As Barwick C.J. observed in his dissenting judgment in St. George County Council,
at p. 541, the connexion of the corporation with the government of a State will not
take it outside s. 51(xx). In making this statement, his Honour referred to certain
features of the County Council in that case and stated that they did not take the
Council outside the category of "trading corporations". The features were (1) that it
was incorporated under the Local Government Act 1919 (N.S.W.); (2) that it had
power to levy a loan rate; (3) that there was a limitation on profitmaking to ensure that
the council performed a public service for the county district; and (4) that in
reticulating electricity to the district it was performing a public service.
3. The Commission's connexion with the government of Tasmania is certainly closer
than the connexion of St. George County Council with the government of New South
Wales. And the Commission's position in the structure of government is certainly more
important than that of the County Council. The Commission is the State authority
responsible for generating and distributing electrical power in the State. It constructs
and manages the relevant dams, generating plants and other works and makes the
policy decisions and recommendations to the Minister in connexion with its functions.
But in Launceston Corporation v. The Hydro-Electric Commission [1959] HCA 12;
(1959), 100 C.L.R. 654, it was decided that the Commission was an independent
statutory corporation and it was not a servant or agent of the Crown. Since then the
Commission's Act has been amended, notably by the inclusion of ss. 15A and 15B.
Section 15A enables the Minister to notify the Commission of the policy objectives of
the government with respect to any matter relating to generation, distribution, etc. of
electrical energy. Section 15B enables the Minister to give a direction to the
Commission with respect to the performance of its functions, subject to certain
limitations and qualifications. The Commission may object to the direction. If the
Minister does not withdraw the direction or qualify it in a manner acceptable to the
Commission, the matter is then submitted to the Governor for decision (s.15B(4) and
(5)). The Commission is bound to comply with the direction, subject to any withdrawal
15 Ibid at 541-3
16 [1983] HCA 21; 158 CLR 1
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or modification and subject to a decision of the Governor. However, it is specifically
provided that the Minister's power to give a direction does not make the Commission a
servant or agent of the Crown or confer on the Commission any status, privilege or
immunity of the Crown (s. 15B(9)). Accordingly it is not suggested that the decision in
Launceston Corporation has been eroded by legislative developments.
4. The trading activities of the Commission therefore form a much less prominent
feature of its overall activities than was the case with St. George County Council. The
Commission has an important policy-making role. It is the generator of electrical
power for Tasmania for distribution to the public and for this purpose it engages on a
large scale in the construction of dams and generating plants. In this respect its
operations are largely conducted in the public interest.
5. However, W.A. National Football League demonstrates that these considerations do
not exclude the Commission from the category of "trading corporations". The majority
judgement in State Superannuation Board pointed out, at p.96, that the case decided
that a trading corporation whose trading activities take place so that it may carry on
some other primary or dominant undertaking (which is not trading) may nevertheless
be a trading corporation.”17
[18] In relation to the seventh proposition, it may have been more broadly expressed than is
justified by the authorities. In this connection we note the following passage in the joint
judgment of Mason, Murphy and Deane JJ in State Superannuation Board v Trade Practices
Commission18 (cited by Steytler P in support of the proposition):
“Murphy J. ((1979) 143 CLR, at p 239) said "As long as the trading is not insubstantial,
the fact that trading is incidental to other activities does not prevent it being a trading
corporation". Indeed, it was essential to the majority's approach and to its rejection of
St. George that a corporation whose trading activities take place so that it may carry on
its primary or dominant undertaking, e.g., as a sporting club, may nevertheless be a
trading corporation. The point is that the corporation engages in trading activities and
these activities do not cease to be trading activities because they are entered into in the
course of, or for the purpose of, carrying on a primary or dominant undertaking not
described by reference to trade. As the carrying on of that undertaking requires or
involves engagement in trading activities, there is no difficulty in categorizing the
corporation as a trading corporation when it engages in the activities.
Indeed, we would go on to say that there is nothing in Adamson which lends support
for the view that the fact that a corporation carries on independent trading activities on
a significant scale will not result in its being properly categorized as a trading
corporation if other more extensive non-trading activities properly warrant its being
also categorized as a corporation of some other type.
If there be any difference in the comments made by the majority in Adamson it is one
of emphasis only. And it is important to note that they were all directed to the issue as
it arose for decision, an issue relating to a sporting club and the league with which it
was affiliated; they were not aimed at the corporation which has not begun, or has
17 Ibid at 155-6
18 [1982] HCA 72; 150 CLR 282
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barely begun, to carry on business. It might well be necessary to look to the
purpose for which such a corporation was formed in order to ascertain whether it
is a corporation of the kind described.”19 (emphasis added)
[19] Nevertheless, the Full Court of the Federal Court in UFU v CFA appeared to accept
that the purpose for which a corporation is formed may be relevant to its characterisation20
and we proceed on the basis that the seventh proposition is to be applied in the way expressed.
[20] As earlier stated, the RMS did not take issue with the Senior Deputy President’s
finding that RMS derived almost $232 million in revenue from its trading activities,
constituting 3.53% of its total revenue. It is far from clear to us, based on the evidence that
was before the Senior Deputy President, that this represents the totality of the revenue derived
by RMS from trading activities. For example, RMS’s General Ledger shows that it earned
$26,312,604 from “External Revenue – Works & Services”,21 described in the evidence as
“…revenue from the sale of goods and services provided to external parties such as Councils
and utility companies. The services provided include line marking, installation and supply of
Variable Message Signs and CCTV camera maintenance”.22 It is not readily explicable why
this would not constitute revenue from trading activity. Another example is $3.5 million
recouped from another NSW Government agency, Transport for NSW, primarily for payroll
charges expended by RMS for the provision of staff by way of secondment.23 In
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied
Services Union of Australia v Queensland Rail,24 the High Court held that the provision of
labour by one State government entity to another, even at a price which yielded no profit,
constituted trading activity.25 Due to the lack of a contradictor (both in the appeal and at first
instance), these matters were not properly tested. For reasons which will become apparent
however, the appeal is capable of determination on the basis of the factual findings as to
trading revenue made by the Senior Deputy President.
[21] We do not consider that there is any substance to RMS’s submission that the Senior
Deputy President erred by “relying” on the absolute rather than the proportionate amount of
revenue derived from trading activities. It is clear from paragraphs [28]-[30] of the Decision,
which we have earlier set out, that the Senior Deputy President took into account and gave
critical weight to the proportion of RMS’s revenue that was derived from trading activities, to
the extent that he concluded in paragraph [30] that the trading revenue considered in a relative
sense could not be described as trivial, insignificant, marginal, minor or incidental.
[22] It is plain that the Senior Deputy President also took into account, in the same
paragraphs of the Decision to which we have referred, the absolute amount of the revenue
RMS earned from trading activities. RMS did not go so far as to submit that this was not a
relevant consideration, and clearly it was. In assessing the degree of significance of RMS’s
trading activity, it cannot be ignored that this produced $232 million in revenue which is, on
any view, a substantial amount regardless of its proportion to the total. The Senior Deputy
19 Ibid at 304-5
20 United Firefighters Union of Australia v Country Fire Authority [2014] FCA 17, 218 FCR 210 at [136]
21 Appeal book p.499
22 Appeal book p.259
23 Appeal book p.504
24 [2015] HCA 11, 256 CLR 171
25 Ibid at [41]-[43], [74]
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President’s approach in treating this as a relevant consideration was consistent with the
passage from the judgment of Murphy J in Adamson quoted above, and with the “non-
formulaic” approach taken by the Full Court in UFU v CFA.
[23] It may be added that the significance of the $232 million in trading revenue to RMS as
a whole may be analysed in terms other than its proportion to total revenue or its absolute
amount. For example, it is apparent from RMS’s submissions that apart from unspecified
exceptions this revenue is deposited into RMS’s general fund where presumably it is available
for expenditure on any aspect of RMS’s activities including its non-trading activities. If so,
that makes it significant to RMS’s overall operations in a way separate from its relative and
absolute size, and is contrary to the proposition that the trading activities of RMS were
separate and merely incidental to its other activities. It is also apparent that although the
trading revenue constituted only 3.53% of its total revenue, it constituted approximately 25%
of RMS’s “own source” revenue - that is, the revenue RMS generated from its own activities.
These considerations confirm the conclusion reached by the Senior Deputy President that
RMS’s trading activities were of significance to it rather than being peripheral.
[24] The conclusion that RMS’s trading activities are substantial and of significance
permits it to be characterised, on the authorities to which we have referred, as a trading
corporation. Contrary to RMS’s submissions, RMS is not deprived of that character by
reference to the purposes for which it was established, its closeness to the State of NSW, the
fact that it may be subject to Ministerial direction, or the fact that its functions are
predominantly for the public good and not commercially orientated. That is made clear in the
passages from St George County Council and the Tasmanian Dam Case which have been set
out above. Additionally, as State Superannuation Board makes clear, it is not necessary that
RMS’s sole or predominant character be that of a trading corporation; a trading corporation
may equally be able to be characterised as being also a corporation of another type. Reference
to RMS’s statutory description as a “public transport agency” and the predominance of its
public functions does not therefore exclude the proposition that RMS is also a trading
corporation by virtue of the substantial nature of its trading activities. Accordingly we do not
consider that the Senior Deputy President erred by not taking the matters referred to by RMS
into particular consideration once he had found that RMS’s trading activities were
“substantial enough to characterise it as a trading corporation”.26
[25] Further, and in any event, we do not consider that an analysis of the Transport
Administration Act supports the fundamental proposition in RMS’s submissions that it was
established solely or predominantly for the purpose of conducting public transport functions
for the public good and that any trading activity engaged in is therefore merely incidental or
peripheral to those functions. Section 49A of the Transport Administration Act provides that
“RMS has the functions conferred or imposed on it by or under the transport legislation, the
National law (within the meaning of the Marine Safety Act 1998) or any other Act”. Thus
RMS has the functions conferred upon it by the Transport Administration Act and a number
of other statutes.
[26] RMS clearly has statutory functions which may be fairly described as being to provide
public services; for example, s 52A of the Transport Administration Act provides for a
number of functions concerning traffic management and safety, s 52B is concerned with the
functions relating to the safe operation of bus services, and the Roads Act 1993 (NSW)
26 Decision at [30]
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confers on RMS a wide range of functions concerning the construction, maintenance and
management of public roads. A miscellany of other public functions is conferred by other
statutes including the Passenger Transport Act 2014 (NSW), the Marine Safety Act 1998 and
the Heavy Vehicle (Adoption of National Law) Act 2013 (NSW). However, not all of the
statutory functions of RMS are of this nature. In particular, s 53 of the Transport
Administration Act relevantly provides as follows:
53 Miscellaneous functions of RMS
(1) Without limiting any other functions conferred or imposed on it, RMS may:
(a) conduct any business, whether or not related to its activities under this or
any other Act, and for that purpose use any property or the services of any staff
of RMS, and
(b) make and enter into contracts or arrangements for the carrying out of works
or the performance of services or the supply of goods or materials, and
. . .
(2) RMS may exercise its functions within or outside New South Wales.
[27] The functions conferred on RMS by s 53(1)(a) and (b) are clearly concerned with the
conduct of trading activities. RMS did not contend otherwise. These functions are not
expressed as being subordinate or incidental to any of RMS’s “public” functions, and indeed
the words “whether or not related to its activities under this or any other Act” in s 53(1)(a)
make it clear that the RMS is authorised to engage in trading activities in their own right. It is
even authorised to do so outside of New South Wales, as s 53(2) makes clear. RMS, as a
public transport agency (designated as such in s 3(1)) is required to exercise its functions in a
manner which promotes the “public good”-related objectives set out in s 2B(1), but as has
been made clear in a number of decisions, particularly in the passage from the judgment of
Barwick CJ in St George County Council which we have earlier set out, it matters not what
the motives for or the objectives of engagement in trading activity happen to be. The position
is therefore that engagement in trading activity is a statutory function and purpose of RMS.27
[28] For the reasons we have given, we do not consider that the Senior Deputy President’s
conclusion that RMS is a trading corporation, and therefore a “constitutionally-covered
business” for the purpose of s 789FD of the FW Act, was made in error. The appeal must
therefore be dismissed.
Conclusion
[29] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is dismissed.
27 In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v Queensland Rail [2015] HCA 11, 256 CLR 171 at [41], the purpose of a statutory corporation was ascertained from an
analysis of its statutory functions and duties.
[2018] FWCFB 5772
13
VICE PRESIDENT
Appearances:
F. Gordon of counsel on behalf of Roads and Maritime Services
Hearing details:
Sydney.
2018:
22 August.
Printed by authority of the Commonwealth Government Printer
PR700375
OF THE FAIR WORK MISSION THE
