Statutory bodies such as hospital boards do not have Crown immunity from local government building controls unless the constituting statute expressly or clearly impliedly confers such immunity.
Later decisions that cite Townsville Hospitals Board v Townsville City Council
Decisions cited by Townsville Hospitals Board v Townsville City Council
TOWNSVILLE HOSPITALS BOARD v. TOWNSVILLE CITY COUNCIL [1982] HCA 48; (1982) 149 CLR 282
Local Government (Q.)
High Court of Australia
Gibbs C.J.(1), Murphy(2), Wilson(3) and Brennan(4) JJ.
CATCHWORDS
Local Government (Q.) - Building control - Crown immunity - Hospital board - Building to be erected on Crown land - Minister's approval of plans and specifications required before borrowing for building - Building Act 1975 (Q.), s. 4 - The Hospitals Act of 1936 (Q.), ss. 13, 20-24.
HEARING
Brisbane, 1982, June 23;DECISION
September 1.2. The Board is constituted under The Hospitals Act of 1936 (Q.) as amended ("The Hospitals Act"). On 27 March 1980 it entered into a contract under which a construction company agreed to erect for the Board certain buildings required to be erected as Stage 1 of the redevelopment of the Townsville General Hospital. The buildings comprised a four-storey kitchen block and a three-storey energy block, together with a chimney 60 metres in height. The work of construction commenced on 19 April 1980. No plans and specifications were submitted to the Council before the work commenced. The land on which the construction is being done is Crown land which is permanently reserved and set apart for the purpose of a hospital. (at p285)
3. The Standard Building By-laws have force and effect by virtue of s. 6 of the Building Act 1975 (Q). as amended ("The Building Act"). By-law 8.1 requires that before the erection of a building is commenced, plans and specifications of the building, and a written application for approval, be submitted to the local authority. By-law 8.6 requires the local authority to give its approval to the building work if it is satisfied that the proposed work complies with the By-laws, and to refuse approval in other cases. The Council is the local authority for the area in which the buildings are being erected. (at p285)
4. After the work had commenced, complaints were received by the Council from residents about the chimney which was to be erected, and the Council then requested the Board to submit an application for building approval, but the Board refused to do so. An originating summons which was then taken out of the Supreme Court of Queensland raised for the determination of that Court certain questions which arose under the Building Act. When the summons came on for hearing it was agreed that the only question to be determined was whether the Board was bound by the provisions of By-law 8.1. The learned Judge who heard the summons answered that question by declaring that the Board is, and was, not bound by that By-law to submit to the Council for approval plans and specifications in connexion with the buildings in question. However, the Full Court allowed an appeal from that decision and answered in the affirmative the question that now arises for decision. (at p285)
5. Section 4 of the Building Act, as in force when the work was commenced,
provided as follows:
"(1) The provisions of this Act save -Local Authority for its approval of the erection of a building or other structure;
(a) such provisions as relate to the requirement to make application to a
(5) In this section the expression 'the prescribed Minister' means -erection of the building or other structure in question, the Minister of the Crown who administers the department; and
(a) in the case where a Department of Government is responsible for the
6. Sub-section (5) was amended in 1981, inter alia, by including the
following:
"For the purposes of this section -State within the limitations provided for in or under this paragraph (a), that is to say:
(a) the following shall be deemed to represent the Crown in right of the
. . .Council, to the extent (if any) expressed in the order."
(iii) any statutory body declared by the Governor in Council, by Order in
7. Sub-section (2) of s. 4 of the Building Act refers to the erection of a building "on behalf of the Crown", whereas sub-ss. (3) and (4) speak of a building being or to be erected "by or on behalf of the Crown . . . or by or on behalf of a person or body who represents the Crown". Probably no change of meaning was intended by this change of expression. By-law 8.1 does not apply where the building is to be erected by the Crown itself, or on behalf of the Crown, or by or on behalf of a body which, at least so far as the erection of the building is concerned, represents the Crown. (at p287)
8. It was first submitted on behalf of the Board that the buildings were being built on behalf of the Crown because they were being, or were to be, erected on land owned by the Crown and would, for that reason, become the property of the Crown, and because their erection was authorized by the Crown. The land in question is Crown land which was, by Order in Council made on 23 January 1913, and subsequently amended by further Orders in Council, permanently reserved and set apart for a hospital. By Order in Council made on 2 October 1936, the Board was appointed to be trustee of the reserve. These Orders in Council were made under The Land Act of 1910 (Q.), as amended, but they are continued to be in force and are deemed to have been made under The Land Act of 1962 (Q.), as amended: see ss. 4(15)(a) and 334(3) of that Act. There is no doubt that the trustees of a reserve are not the owners of it; the land continues to belong to the Crown. It was so held in Gladstone Town Council v. Gladstone Harbour Board (1964) Qd R 505, at p 517 . That was a case under The Land Act of 1910 (Q.), as amended, but the provisions of The Land Act of 1962 (Q.), as amended, are not different in any material respect. (at p287)
9. Provision is made in The Hospitals Act for land to be vested in a Hospitals Board (see s. 13(5) and s. 12(8)) but the land in question has not been so vested and remains Crown land. The buildings erected on it will therefore belong to the Crown. They are, as will be seen, being erected with the knowledge and approval of the Cabinet of the State of Queensland. It does not necessarily follow that the buildings are being erected on behalf of the Crown. An owner of land may approve of the erection of a building on his land, although the building is not erected by him or on his behalf. Further, Crown land may be reserved for a large number of public purposes, some of which may involve the erection of buildings by persons other than the Crown. (at p288)
10. The alternative submission made on behalf of the Board was that the Board represented the Crown for the purpose of the erection of the buildings. Although the word "represent" is not infrequently used in this context, it would be more precise to say that the question is whether the Board, in erecting the building, enjoys the privileges and immunities of the Crown. It is possible that the Board might be given the immunities and privileges of the Crown for one purpose and not for another: Victorian Railways Commissioners v. Herbert [1949] VicLawRp 39; (1949) VLR 211, at p 213 ; Wynyard Investments Pty. Ltd. v. Commissioner for Railways (N.S.W.) [1955] HCA 72; (1955) 93 CLR 376, at p 394 ; The Commonwealth v. Rhind [1966] HCA 83; (1966) 119 CLR 584, at p 600 . It has been said that in deciding the question whether a person or body is entitled to the privileges and immunities of the Crown it is necessary to consider all the circumstances of the case and that "(t)he fact that function has been a traditional function of government and that no intention of 'alienating' it appears is sufficient to answer the question in many cases": Grain Elevators Board (Vict.) v. Dunmunkle Corporation [1946] HCA 13; (1946) 73 CLR 70, at p 75 . There have been cases in which the fact that the objects which the statutory body was set up to achieve were peculiarly within the province of the Government was regarded as decisive: see, e.g., Repatriation Commission v. Kirkland [1923] HCA 18; (1923) 32 CLR 1 ; see also Superannuation Fund Investment Trust v. Commissioner of Stamps (S.A.) [1979] HCA 34; (1979) 145 CLR 330, at pp 349,356 . However, many functions formerly regarded as matters of private concern are now carried out by instrumentalities of government and the question whether the functions in question are traditionally or peculiarly governmental is likely to be increasingly unhelpful in deciding whether the body formed to carry out those functions enjoys the privileges and immunities of the Crown. However, if it matters, the provision of hospital services is not a traditional function of government, and is still regarded as a matter in which private enterprise as well as governments will play a part. (at p289)
11. The answer to the question must in the end depend upon the intention to
be derived from the statute under which the body in
question is constituted.
Under The Hospitals Act a Hospital Board is a body corporate capable of suing
and being sued (s. 13(5)).
Most of the members of the Board are appointed by
the Governor in Council (s. 13(3)), but that does not mean that they are
subject
to the direction or control of the Governor in Council except in so
far as The Hospitals Act provides. It would not be profitable
to discuss the
provisions of the Act in detail, since we are particularly concerned only with
the functions of the Board, in erecting
buildings, but some of the more
important provisions may be mentioned. The Governor in Council may appoint a
manager of a Board (s.
18(1A)) and the Board may not appoint or dismiss
persons to or from the positions of medical officer, medical superintendent,
nursing
superintendent, or such other position as is prescribed, without the
prior approval of the Director-General of Health and Medical
Services (s. 5).
The Board may however appoint other officers and employees (s. 18(1)). The
Board may within certain statutory limits
enter into contracts (s. 20). The
budget for the General Fund of the Board must be approved by the Governor in
Council (s. 22(5)).
A fund called the Hospital Administration Trust Fund is
kept in the Treasury (s. 21(1a)) and when the income from that fund is less
than the total expenditure from the General Funds of all Boards constituted
under The Hospitals Act the amount of the difference
between that income and
the total expenditure is to be contributed by the Government to the Hospital
Administration Trust Fund (s.
23). These sections show that although the Board
has a close relationship with the Crown it does not in all respects act merely
at
the behest of the Crown. However, the most important section for present
purposes is s. 24, the material provisions of which are
as follows:
"(1) The Governor in Council may authorise the Board to borrow or raise
money or make financial arrangements:
(a) from or with the Treasurer;provision (a) or (b) or approved pursuant to provision (c).
(b) by the sale of debentures, bonds or inscribed stock;
(c) in such other way as is approved by the Treasurer; or
(d) partly in one way and partly in another way or other ways specified in
Beforefurnishing of materials to meet the cost whereof the Board has borrowed or raised money or made financial arrangements or may have to do so, or accepting such tenders submitted; or
(a) inviting tenders in relation to the execution of work or the
the Board shall obtain the sanction thereto of the Minister.proposed work to meet the cost whereof the Board has borrowed or raised money or made financial arrangements or may have to do so, cause to be prepared -
(3) . . .
(b) In every case, the Board shall, in respect of the execution of
(i) plans and specifications of the proposed work;or raised or to be borrowed or raised or the details of financial arrangements made or to be made,
(ii) an estimate of the cost thereof;
(iii) a statement showing the proposed expenditure of the money borrowed
. . .expended for the purpose for which the Board was authorised to borrow or raise the same and not otherwise." (at p290)
(5) The money borrowed or raised pursuant to subsection (1) shall be
12. By s. 24(7)(ix) if default is made by the Board in repaying the holder of
debentures, bonds or stock the creditor may obtain
the appointment of a
receiver who shall have power to collect all moneys payable to the Board. (at
p290)
13. It can be seen from these provisions that if the Board needs to borrow or raise money or make financial arrangements to pay for a proposed work (and it is likely to need to do so in almost every case where the work is of any substance) it must (i) obtain the sanction of the Treasurer before entering upon negotiations to borrow or raise the money or make the financial arrangements; (ii) obtain the sanction of the Minister before inviting tenders or incurring any liability for the preparation of plans and specifications; and (iii) obtain the approval of the Minister to the plans and specifications of the proposed work. In fact, in the present case the Cabinet gave approval to proceed with the preparation of working drawings and specifications, and to the inviting of tenders and to the acceptance of the tender from the construction company. However the approval of the Cabinet was not required by The Hospitals Act. (at p291)
14. Although the Board is subject to quite stringent controls in relation to proposed building work, the Board retains an independent discretion to decide whether to engage in such work. The Board cannot be compelled to engage in the building work and whether it does so lies within its own discretion. However, if it does decide to engage in the work and needs to borrow or raise money or make financial arrangements, it is subject to the controls provided by s. 24. There is nothing to indicate that the purpose of those controls is to achieve any of the objects of the Building Act. The Minister, in deciding whether or not to approve of plans and specifications submitted by the Board, is not obliged to consider whether the Standard Building By-laws have been observed. The Minister in question is the Minister for Health or other Minister for the time being administering The Hospitals Act. No doubt the Minister might be expected to consider whether the building shown in the plans and specifications was a sound financial proposition. It may be assumed that he might also consider whether the building proposed was suitable for hospital purposes. It is unnecessary to decide whether the Minister might consider whether the plans and specifications complied with the Standard Building By-laws, for there is nothing in s. 24 that obliges him to do so. (at p291)
15. 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] HCA 12; (1959) 100 CLR 654, at p 662 ; State Electricity Commission (Vict.) v. City of South Melbourne [1968] HCA 49; (1968) 118 CLR 504, at p 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. 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. Although in some respects a hospitals board is subject to stricter controls than those which governed the statutory bodies in Metropolitan Meat Industry Board v. Sheedy (1972) AC 899 ; Grain Elevators Board (Vict.) v. Dunmunkle Corporation [1946] HCA 13; (1946) 73 CLR 70 and the Gladstone Town Council v. Gladstone Harbour Board (1964) QdR 505 , there is in my opinion no ground of distinction between the present case and those cases. (at p292)
16. For these reasons I consider that The Hospitals Act does not reveal an intention that the Board should have the privileges and immunities of the Crown when it is erecting a building, and that the decision of the Full Court was correct. I would dismiss the appeal. (at p292)
MURPHY J. I agree with the Chief Justice. The appeal should be dismissed. (at p292)
WILSON J. I agree with the reasons for judgment prepared by the Chief Justice, and would therefore dismiss the appeal. (at p292)
BRENNAN J. I have had the advantage of reading the reasons for judgment of the Chief Justice. For those reasons I would dismiss the appeal. (at p292)
ORDER
Appeal dismissed with costs.