MOERLINA SCHOOL (ENTERPRISE BARGAINING) AGREEMENT 2024 WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2025 WAIRC 00150 CORAM :Commissioner C Tsang HEARD : ON THE PAPERS DELIVERED : FRIday, 7 march 2025 FILE NO. : AG 28 OF 2024 BETWEEN : The Independent Education Union of Western Australia, Union of Employees Applicant AND The Moerlina School Inc. Respondent CatchWords : Industrial Law (WA) – Whether the Commission has jurisdiction over the application to register the Moerlina School (Enterprise Bargaining) Agreement 2024 – Whether the respondent is a trading corporation – Respondent found to be a trading corporation Legislation : Industrial Relations Act 1979(WA) Fair Work Act 2009 (Cth), ss 12, 14(1)(a), 26, 26(1), 26(2), 26(3), 27 Result : Application dismissed Representation: Applicant : Mr M Elliott Respondent : Mr E Callow Cases referred to in reasons: E v Australian Red Cross Society [1991] FCA 20 EDUCANG Ltd v Queensland Industrial Relations Commission [2006] QIC 43 Quickenden v Commissioner O’Connor of the Australian Industrial Relations Commission [2001] FCA 303 R v Federal Court of Australia; ex parte WA National Football League (1979) 143 CLR 190 === REASONS FOR DECISION === Background ¶1 On 4 October 2024, the applicant filed an application to register the Moerlina School (Enterprise Bargaining) Agreement 2024 (Application). ¶2 Section 14(1)(a) of the Fair Work Act 2009 (Cth) (FW Act) defines a national system employer as ‘a constitutional corporation, so far as it employs, or usually employs, an individual’. ¶3 Section 26(1) of the FW Act states that the FW Act applies to the exclusion of all State or Territory industrial laws concerning national system employees and national system employers. ¶4 Sections 26(2) and (3) of the FW Act define a State or Territory industrial law to include the Industrial Relations Act 1979 (WA). ¶5 Section 27 of the FW Act outlines exclusions to the application of s 26 of the FW Act, which does not include the registration of industrial agreements. ¶6 Section 12 of the FW Act defines a constitutional corporation as a corporation to which paragraph 51(xx) of the Constitution applies, which relevantly refers to a trading corporation formed within the limits of the Commonwealth. ¶7 Consequently, as the respondent is a corporation, the Commission can only hear and determine the Application if the respondent is not a trading corporation. The parties’ contentions ¶8 The parties contend that the respondent is not a trading corporation. ¶9 On 17 February 2025, the treasurer of the respondent’s School Council filed an affidavit attaching the following: (a) The respondent’s Constitution as updated on 25 May 2021. (b) The audited financial report for the respondent for the year ending 31 December 2023. (c) A document prepared by the treasurer ‘explaining the operations of the school in the context of the above attached documents’. (d) The 2023 and 2024 Notices of Determination from the federal government identifying the calculation of federal funding for 2023 and 2024. ¶10 On 26 February 2025, the applicant filed submissions, stating: [footnotes omitted] 10. In R v Federal Court of Australia; ex parte WA National Football League [(1979)] 143 CLR 190 (“Adamson”), the majority of the High Court determined that the appropriate test for determining whether an entity was a trading corporation was not to consider the corporation’s objects, but to observe whether its current activities amounted to trading activity. 11. Notably, in his opinion, Mason J considered trading activity as it related to schools: Not every corporation that is involved in trading is a trading corporation. The trading activity of a corporation may be so slight and so incidental to some other principal activity, viz religion or education in the case of a church or school, that it could not be described as a trading corporation. Whether the trading activities of a particular corporation are sufficient to warrant being characterised as a trading corporation is very much a question of fact and degree. 12. Consequentially, not every corporation that engages in trading activity is a trading corporation. However, a corporation will be considered a trading corporation “when its trading activities form a sufficiently significant proportion of its overall activities.” 13. What constitutes a sufficiently significant proportion of trading activity depends [on] “fact and degree…” Trading activity constituting a small percentage of a corporation’s overall activity can be found to be a sufficiently significant proportion if the monetary amount itself is substantial enough. In E v Australian Red Cross Society [[1991] FCA 20] (“Red Cross”), the Federal Court of Australia found that the respondent was a constitutional corporation on the basis that even though only 4.4% of its income was through trading activity, this figure amounted to some $2 million (in 1984 reckoning). 14. However, Wilcox J also opined that public welfare activity for which an organisation receives government funding to deliver could not constitute trading activity, noting that the Respondent “engage(s) in a major public welfare activity pursuant to agreements with the Commonwealth and the various State governments under which they will be reimbursed most of their costs.” 15. The receipt of government funding by a non-profit organisation for the purpose of providing a public benefit cannot constitute trading activity. However, fees charged in exchange for services was considered to constitute trading activity. 16. The Applicant concedes that there is some precedent – albeit at an inferior court level – for finding that a non-government school is a trading corporation. In EDUCANG Ltd v [Queensland Industrial Relations Commission] [2006] QIC [43] (“Educang”), President Hall found that despite receiving significant state and federal government funding for provision of its services as a Christian school, the percentage and monetary volume of trading activity (including tuition fees and other activities) constituted a sufficiently significant proportion of trading activity. WHICH OF THE RESPONDENT’S ACTIVITIES ARE TRADING ACTIVITIES? 17. In considering which of the Respondent’s activities constitute trading activity, the Applicant has regard to the affidavit of Edward Minchin Callow, sworn on 11 February 2025 (“Callow Affidavit”). Mr Callow is the Treasurer of the Respondent’s School Council. The contents of the Callow Affidavit are not contested by the Applicant. 18. The Objects of the Association stipulated in the Respondent’s Constitution do not indicate any trading activity, stating that the objects are: (a) to operate a school called Moerlina School; (b) to provide an educational environment, in accordance with the principles and beliefs of Moerlina School, which is safe, nurturing and stimulating, supports all students in striving for excellence according to their individual potential, and promotes a culture of self-motivated, resilient, creative and inspired learners; (c) to maintain and promote a high standard of education; (d) to comply with all relevant legislation; (e) to maintain an engaged school community; and (f) to participate in the wider community. 19. The Objects also state that “The property and income of the Association shall be applied solely towards the promotion of the objects of the Association.” 20. The Applicant accepts that given the test set out in Adamson, the Respondent’s Objects should not take precedence over a consideration of its current activities in determining trading status. However, the Respondent’s Objects are not without relevance, especially given Mason J’s consideration of fact and degree. 21. The Respondent’s financial reports for the 2023 calendar year indicate that the Respondent’s total receipts from operating activities for [2022] and 2023 amounted to: 2023 2022 Receipts from Fees: $773,356 $833,831 Receipts from Grants: $717,961 $646,077 Receipts from Other Income: $187,838 $152,9007 22. The Respondent explains that the Receipts from Fees is tuition fees levied by the Respondent to meet the cost of educating students which is not met by government grants or other income. The percentage of tuition fees’ overall contribution to the Respondent’s annual income has declined from the 2022 calendar year. 23. Receipts from Grants is indicative of State and Commonwealth Government grants that the Respondent receives for its role in providing primary education as a registered non-government school. The percentage of government grants’ overall contribution to the Respondent’s annual income has increased year on year from the 2022 calendar year. 24. Further, whilst the Respondent does derive some income from other sources – including fee for service tutoring and rental agreements – this income is of a negligible amount compared to the other two categories of income. Further, it does not engage in the types of explicit trading activity other larger non-government schools engage in. For example, the Respondent does not operate a canteen or uniform shop. 25. The Applicant concedes that on the basis of the information provided in the Callow Affidavit, a majority of the Respondent’s income is not from non-trading activity. However, the financial value of the income associated with trading activity is small, being some $976,269 for the 2024 calendar year. It is certainly smaller than the approximately $2,000,000 figure (circa 1984) contemplated by the Federal Court in Red Cross, and smaller than the $12,680,532 value (circa 2006) of trading activity considered in Educang. 26. Having regard for the fact and degree of the Respondent’s circumstances, including: (a) its objects not pertaining to trading activity; (b) the extent of the Respondent’s income deriving from non-trading activity; and (c) the minimal value of the trading activity compared to like cases, the Applicant submits that it is open to the Commission to determine that the Respondent’s trading activity is not of a sufficiently significant proportion to be considered a trading corporation. Consideration ¶11 The applicant relies on the following cases: Adamson, Red Cross and Educang. ¶12 Adamson is a 1979 decision of the High Court of Australia, in which the majority (Barwick CJ, Mason J with Jacobs J agreeing, and Murphy J) found the Western Australian National Football League (State League) and the West Perth Club (Club) to be trading corporations. ¶13 In Adamson, Barwick CJ said (208), (209), (211): I remain of the firm conviction that for constitutional purposes a corporation formed within the limits of Australia will satisfy the description “trading corporation” if trading is a substantial corporate activity. Its activities rather than the purpose of its incorporation will designate its relevant character. But so to say assumes that such trading activities are within its corporate powers, actual or imputed. It is the corporation which satisfies the description which is the subject matter of the power. Thus its corporate capacity or incapacity cannot be ignored. But once it is found that trading is a substantial and not a merely peripheral activity not forbidden by the organic rules of the corporation, the conclusion that the corporation is a trading corporation is open. … I now consider what the Club and the State League were in fact engaged in doing. Trade for constitutional purposes cannot be confined to dealing in goods or commodities. Its full parameters may be difficult of definition. But the commercial nature of an activity is an element in deciding whether the action is in trade or trading. … In my opinion, the presentation of a football match as a commercial venture for profit to the promoting body is an activity of trade. I agree with Lord Russell in thinking that the presentation of a play by a theatrical promoter for reward by admission fees is a matter of trade: see Brimelow v Casson (1924) 1 Ch 302 [(Brimelow)]. I can see little difference between the presentation of a theatrical spectacle and the presentation for reward of the spectacle of a football match played by professionals as a major source of their income and of the income of the promoter. ¶14 In Adamson, Mason J with Jacobs J agreeing, said (233–‍234): [emphasis added] For my part, I prefer the minority view as expressed in [St George County Council], in particular the remarks of Barwick CJ [(542–‍543)], when his Honour said that to fall within s 51(xx) it is not necessary that a corporation be formed for trading or financial purposes and 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”. “Trading corporation” is not and never has been a term of art or one having a special legal meaning. Nor, as the Chief Justice pointed out, was there a generally accepted definition of the expression in the nineteenth century. Essentially it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation. Even if, and this has not been established, the description was somewhat less liberally applied circa 1900 than it is today, this Court should, in applying the expression, give effect to the content which it is recognized as having at this time. The expression was no doubt used in the contemplation that the power would extend to such corporations as should from time to time be described as trading corporations and in accordance with the principle that words in the Constitution are not restricted to the denotations which they had in 1900. In Lansell v Lansell (1964) 110 CLR 353 [(366)] Taylor J said “… although the meaning of these terms does not change, their denotation must extend as new concepts develop”. The distinction between meaning and denotation is not without its difficulties. However, for present purposes they need not be pursued. Suffice it to say that, even if the expression was rather less extensively applied at the turn of the century, it nevertheless denoted a corporation which was engaged in trading activities in the sense already explained. Not every corporation which is engaged in trading activity is a trading corporation. The trading activity of a corporation may be so slight and so incidental to some other principal activity, viz. religion or education in the case of a church or school, that it could not be described as a trading corporation. Whether the trading activities of a particular corporation are sufficient to warrant its being characterized as a trading corporation is very much a question of fact and degree. ¶15 In Adamson, Murphy J said (239–‍240): [emphasis added] The constitutional description of trading corporations includes those bodies incorporated for the purpose of trading; and also those corporations which trade. A corporation which trades is a trading corporation even if it gained incorporation under an Act which forbids trading. The suggestion that such a corporation ceases to be one when engaged in the forbidden activity resembles the submission which was rejected by Fullagar J in Williams v Hursey (1959) 103 CLR 30 where he stated that the notion of qualified legal personality is unintelligible. Trading is a term of very wide scope (see Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 [(381) (Dixon CJ)]; National Association of Local Government Officers v Bolton Corporation (1943) AC 166 [(184–‍185) (Lord Wright)]. 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 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). That power is subject to the Constitution and may be limited by other provisions, for example, s 116 would protect a religious body which was a trading corporation from laws which would prohibit the free exercise of religion. The corporations power may be used not only to protect persons who trade with trading corporations, but also to protect trading corporations in regard to those who deal with them. It follows that in my view [St George County Council] was wrongly decided and should be overruled. The question is not whether the prosecutors and the SA League are sporting clubs (no doubt, they are), but whether any of them is a trading corporation. A few centuries ago trade was mostly centred around primary industry, a generation or so ago mostly around secondary industry; now it is overwhelmingly centred around tertiary industry. Most Australian workers now work in areas of entertainment, information, education, health, tourism, leisure, sport, transport and similar services. Many activities which once would not have been regarded as trade have come to be recognized as trade (see Walker v Crystal Palace Football Club Ltd (1910) 1 KB 87 and [Brimelow]. The commercialization of sport, education, religion, medicine and other social or professional activities is a world-wide phenomenon. The prosecutor, [the State League] and the SA League are engaged in very substantial trading, in charging for admission, putting on public spectacles for profit, selling television rights and selling goods; the [Club] is a trader on a smaller scale. All three are trading corporations. ¶16 Red Cross is a 1991 decision of the Federal Court of Australia, in which Wilcox J found the Australian Red Cross Society (Society) and The Royal Prince Alfred Hospital (Hospital) to be trading corporations. ¶17 In Red Cross [118]–‍[121], Wilcox J refers to Adamson: 118 Upon the next occasion that the High Court had to consider the meaning of “trading corporation”, a different result ensued. That was in [Adamson]. That case arose under the 1974 Act, the question being whether certain corporations concerned with Australian League football were “trading corporations”. By majority, the Court held that they were. The test favoured by Barwick CJ and Stephen J in St George County Council, the activities of the corporation, was adopted by all except Gibbs J; although Stephen J, with whom Aickin J agreed, differed with the majority as to the application of that test to the facts of the case. 119 For the majority, Barwick CJ [(208)] pointed out that, under modern conditions, “the nature of a company may not be discernible from a perusal of its memorandum”. He went on: The only sure guide to the nature of the company is a purview of its current activities, a judgment as to its nature being made after an overview of all those activities. I remain of the firm conviction that for constitutional purposes a corporation formed within the limits of Australia will satisfy the description ‘trading corporation’ if trading is a substantial corporate activity. Its activities rather than the purpose of its incorporation will designate its relevant character. But so to say assumes that such trading activities are within its corporate powers, actual or imputed. It is the corporation which satisfies the description which is the subject matter of the power. Thus its corporate capacity or incapacity cannot be ignored. But once it is found that trading is a substantial and not a merely peripheral activity not forbidden by the organic rules of the corporation, the conclusion that the corporation is a trading corporation is open. 120 Mason J, with whom Jacobs J agreed, expressed agreement [(233)], with the minority approach in St George County Council. He said that “trading corporation” is “a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation”. Murphy J went a little further, saying [(239)]: 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. 121 Adamson was referred to in two cases decided in 1982. In the first, Actors and Announcers Equity Association of Australia v Fontana Films Proprietary Limited (1982) 150 CLR 169, Brennan J [(221)] referred with approval to the test adopted by Mason J in Adamson. In the other, State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 [(303–‍304)], Mason, Murphy and Deane JJ applied the Adamson approach to the determination of what constituted a “financial corporation”. After quoting the tests adopted by each of Barwick CJ, Mason and Murphy JJ in Adamson, their Honours added: 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. ¶18 Applying the principles in Adamson to the Society, Wilcox J said (Red Cross [123]–‍[125]): [emphasis added] 123 It is convenient to deal immediately with a submission made on behalf of the applicant that, in applying these principles to the first and second respondents, account should be taken of their blood supply activities. The applicant accepts that neither respondent makes any charge for the blood which it supplies. Neither “trades” in blood, in the usual sense of that term. But, say counsel, the reality is that the blood transfusion activities of the respondents constitute substantial businesses by which they supply valuable commodities, blood and blood products, in return for large payments. In the year 1984-1985, the Society (including its Divisions) received from Governments a total of $44,965,328 in respect of its blood transfusion services. Of this, the NSW Division directly received more than $10,000,000. (The exact figure is not ascertainable from the Division’s annual report). These were, of course, substantial sums. They were earned only because the respondents are prepared to carry on blood transfusion services at a scale, in terms of labour and resources, greater than that of many organisations which are undoubtedly “trading corporations”. But I do not think that it is appropriate to describe the gratuitous provision of a public welfare service, substantially at government expense, as the conduct of a “trade”. It is pertinent to recall the words of Stephen J in St George County Council: “It is the acts of buying and selling that are at the very heart of trade”, and also to remember the distinction he made in respect of the distribution of electricity free of charge. In relation to the supply of blood, it seems to me that the first and second respondents do not engage in trading activities. They engage in a major public welfare activity pursuant to agreements with the Commonwealth and the various State governments under which they will be reimbursed most of their costs. 124 But, leaving out of account the blood transfusion income, the first and second respondents each earn considerable sums of money from the sale of goods. It is not easy to ascertain the precise figures from the annual reports. But, as I have said, in 1984-1985 the Society earned over $2,000,000 in this way. 125 According to the evidence of Mr John Smith, the Executive Director of the NSW Division, in 1984-1985 the Division received $1,193,024 from “donations from Branches which operate opportunity shops, street stalls and other fund raising activities”, $65,121 for charges made for attendance at its first aid courses and a further $307,082 from its Clarence Street gift shop. Perhaps not all the money received from Branches emanated from trading activities but trading was plainly a major contributant to the Division’s income. The scale of the Division’s trading activities amply meets any of the tests enunciated in Adamson. It is true that the trading activities were not motivated by the hope of private gain but purely to earn the revenue which the Division needed for its charitable activities. But, as Mason, Murphy and Deane JJ made clear in State Superannuation Board, motive does not matter. ¶19 In assessing whether the Hospital engaged in trading activities, Wilcox J said (Red Cross [131]–‍[133]): [emphasis added] 131 It seems to me that the critical question is the nature of [the Hospital’s] activities at the relevant time. Accepting that its predominant activity was the provision of medical and surgical care to patients, they were not objectives antithetical to the notion of trade. Many trading corporations supply services rather than goods. Many privately owned hospitals provide medical and surgical care for reward with the purpose of thereby trading profitably. There was nothing in the intrinsic nature of [the Hospital’s] activities to disqualify it as a trading corporation. 132 If the question be asked whether the scale of the corporation’s trading activities was “substantial”, “a sufficiently significant proportion of its overall activities” or “not insubstantial” – to apply the tests adopted in Adamson – it is relevant to note that, in the financial year ended 30 June 1985 it received $14,584,456 in patients’ fees in return for services rendered by it. It also received $3,736,662 from “business activities”. It is true that these amounts were dwarfed by its State government subsidy of $112,127,706. But that does not matter. Trading activities yielding some $18 million per year can only be described as substantial. It seems to me that the scale of the hospital’s trading activities in 1984-1985 was such that it should be regarded as then being a trading corporation. 133 I should add that the evidence of Mr K R Barker, the Executive Director – Finance and Administration of the New South Wales Department of Health disclosed that charges made to non-public patients at public hospitals are fixed by the Minister by reference to the allowable health insurance rebate under Commonwealth legislation. Mr Barker said that “at no time has the daily accommodation fee exceeded or approximated the actual cost of delivery of those services for each day”. Basing himself upon this evidence, counsel for the New South Wales Attorney General submits that it follows that the hospital is not engaged in trading activities in servicing private patients, so that the corporation conducting the hospital cannot be regarded as a trading corporation. But, of course, this does not follow; the corporation might qualify as a trading corporation because of its other activities. In any event, as Stephen J made clear in St George County Council, it is not necessary that trading activities be profitable, or even intended to be profitable, to constitute the trader a “trading corporation”. ¶20 Educang is a 2006 decision of the Industrial Court of Queensland, in which President Hall found EDUCANG Ltd to be a trading corporation. ¶21 EDUCANG Ltd’s operating income for the year ending 31 December 2005 was: Percentage of Total Tuition and other fees : 35.8% Full fee paying international student fees : 8.9% Overseas study groups : 1.4% Homestay income : 3.7% State recurrent grants : 12.4% Commonwealth recurrent grants : 31.0% Other miscellaneous grants : 1.0% Other income : 1.5% Trading accounts income : 4.3% ¶22 An analysis of the figures at [21] above, indicates that of EDUCANG Ltd’s operating income: (a) 44% was derived from State, Commonwealth and other miscellaneous grants; (b) 45% was derived from tuition and student fees; and (c) 11% was derived from other income. ¶23 In Educang, the court said the following in relation to Red Cross and Quickenden v Commissioner O’Connor of the Australian Industrial Relations Commission [2001] FCA 303 (Quickenden): [emphasis added] The decision in [Red Cross], may be shortly disposed of. For present purposes, the decision should be regarded as an authority upon which an argument may be based that the very large sums received by EDUCANG Ltd from government sources in the return for the provision of educational services to students which might have otherwise been an impost upon the government are, like the sums of money provided to the [Society] in return for the welfare service of distributing blood and blood products, to be disregarded in determining whether or not EDUCANG Ltd is a trading corporation. Counsel for EDUCANG Ltd has, of course, consistently argued that EDUCANG Ltd is to be treated as a trading corporation even if those sums are to be wholly left out of account. The decision of the Full Court in [Quickenden] is (perhaps) of greater assistance. The issue of present relevance was whether the University of Western Australia was a “trading corporation” within the meaning of s 51(xx) of the Constitution. In the result the majority, Black CJ and French J, put aside the University’s argument that the sums of money received pursuant to the Higher Education Funding Act 1988 (Cwth) were to be taken into account in evaluating whether or not the University was a “trading corporation”. Under the legislative scheme established by Higher Education Funding Act 1988 (Cwth) a statutory obligation was imposed on each tertiary institution to require payment from students, a liability was then created for the contribution owed by the student to the tertiary institution, and (finally) provision was made for the Commonwealth to lend the requisite amount to the student to discharge that liability and to pay the sum loaned directly to the tertiary institution. It was understandable that the University, which contended that it was indeed a trading corporation, wished to take those fees into account. In 1995 fees paid directly by students to the University amounted to $8,849,000 whilst fees paid by the Commonwealth pursuant to the loan scheme amounted to $17,318,000. In the result, because of the nature of the quite original legislative scheme, the majority held that the revenue so derived was not revenue from trading. This Court is not concerned with any such legislative scheme. This Court is concerned simply with the levying of fees pursuant to powers within the Constitution of EDUCANG Ltd so as to provide EDUCANG Ltd with sources of revenue to enable it to discharge its immediate purpose of providing co-educational education services: compare the language of the trial judge (Lee J) in [Quickenden (607–‍608)]. Where the decision of the Full Court is of assistance is in its application of the High Court authorities (previously quoted) to the activities of the University. The Full Court found incidental activities that “are a substantial, in the sense of non-trivial, element, albeit not the predominant element of what the university does”, did amount trading activities. The activities looked at were the University’s investment activities, including the buying, selling and renting of property, from which it derived $44,393,000 in 1995 and $48,048,000 in 1996 (16.83% and 16.97% of total operating revenues for the two years respectively). Other business activities relied upon were the Festival of Perth (intentionally not carried on for profit), the sale of publications, parking, provision of student accommodation, and provision of computer services through Winthrop technology. Here, of course, the percentage of total revenue derived from government grants is very much less than the percentage derived from trading activities. So high is the percentage of operating revenue derived from trading activities, and so large are the sums involved, that this Court could not resist the conclusion that EDUCANG Ltd is a trading corporation without failing to discharge its duty to accept and follow decisions of the High Court of Australia. Further if one were to take a global view of the purpose and activities of EDUCANG Ltd, the Company is acting to fulfil its immediate purpose. Even if only the purpose of the Company is considered, the activities confirm that the immediate purpose gleaned from the documents is the immediate purpose and not mere words. ¶24 Applying Adamson, Red Cross and Educang, the determining factor is whether the respondent’s trading activities are substantial in amount or constitute a sufficiently significant proportion of the corporation’s overall activities. ¶25 In Red Cross [123]–[125], the court deemed revenue of approximately $2,000,000 from the sale of goods, as a proportion of total revenue from government grants of $44,965,328 for blood transfusion services, to be both substantial by amount and sufficiently significant by proportion (approximately 4.3%) of the Society’s overall activities: ‘The scale of the Division’s trading activities amply meets any of the tests enunciated in Adamson’. ¶26 In Red Cross [132], the court considered the Hospital’s trading activities, which included both the fees charged to patients for services rendered by it and revenue from business activities. Combined, this amounted to approximately $18 million, which the court said, ‘can only be described as substantial’ and of a ‘scale of the hospital’s trading activities’ such that the Hospital should be considered a trading corporation. The following analysis indicates the amounts the Hospital received in state government grants and from trading activities: % Grants : 86 Trading activity – fees : 11 Trading activity – business activities : 3 TOTAL : 100 ¶27 It is the commercial nature of an activity that is determinative of whether the activity is a trading activity: Adamson (209) (Barwick CJ). ¶28 As Murphy J said in Adamson‍ (239–‍240), as long as the trading is not insubstantial, a trading corporation may be a sporting, religious, or governmental body. Indeed, ‘many activities which once would not have been regarded as trade have come to be recognized as trade’; specifically the ‘commercialization of sport, education, religion, medicine and other social or professional activities’. ¶29 Applying Red Cross [123], an activity would likely only be excluded as a trading activity if it was the ‘gratuitous provision of a public welfare service, substantially at government expense’, such as the distribution of electricity ‘free of charge’. ¶30 As detailed in the applicant’s submissions [18], the primary purpose of the respondent is to operate a school (respondent’s Constitution: cl 3.1(a)). While the applicant argues that cl 3.1 of the respondent’s Constitution, which outlines the respondent’s objects, does not indicate any trading activity; it is equally true that the objects do not forbid the respondent engaging in trading activity. Thus, ‘the conclusion that the corporation is a trading corporation is open’: Adamson (208) (Barwick CJ). ¶31 Indeed, cl 4 of the respondent’s Constitution, which outlines the powers of the respondent, explicitly permits the respondent to engage in activities that are commonly understood as trading: 4. Powers of the Association The Association may do all things necessary or convenient for carrying out its objects and purposes, and in particular may: (a) acquire, hold, deal with, and dispose of any real or personal property related to the School, (b) open and operate bank accounts in the name of the Association; (c) invest, borrow and deal with the funds of the Association; (d) enter into contracts in the name of the Association; (e) purchase or take a lease or licence of premises for student facilities; (f) construct buildings or structures for the benefit of the School; (g) employ, discipline and dismiss staff of the School; (h) set tuition and other fees payable by users of the School services and facilities; and (i) act as a trustee and accept and hold real and personal property upon trust, but does not have power to do any act or thing as a trustee that, if done otherwise than as a trustee, would contravene the Act or the rules of the Association. ¶32 A theatrical promoter charging an admission fee for the presentation of a play, and a promoting body charging an admission fee for the presentation of a football match played by professionals, were considered to be the trading activities of the promoter: Adamson (211) (Barwick CJ). Likewise, charging patients a fee for admission to the Hospital has been determined to be the trading activity of the Hospital: Red Cross [132]. ¶33 In Red Cross [131], the Hospital’s primary activity of providing medical and surgical care to patients was found not to be contradictory to the notion of trade. The court stated that many privately owned hospitals provide medical and surgical care for profit, and that there was nothing in the intrinsic nature of the Hospital’s activities to disqualify it as a trading corporation. ¶34 The same can be said for an incorporated school, providing education. Indeed, the court in Educang specifically referred to ‘the levying of fees pursuant to powers within the Constitution of EDUCANG Ltd so as to provide EDUCANG Ltd with sources of revenue to enable it to discharge its immediate purpose of providing co-educational education services’. ¶35 In Quickenden, the University of Western Australia submitted that the fees charged by it for courses are fees for services, and therefore, should be characterised as revenue from trading activities: Quickenden [50]. The majority did not decide the issue but opined that, while the concept of ‘trading’ is a broad one, it was doubtful that the student fees charged by the University should be considered revenue from trading activities where the fees were regulated by legislation: [51] (Black CJ and French J) It is questionable whether the provision of educational services within the statutory framework of the Higher Education Funding Act amounts to trading. The Act creates a liability for each student to the University in respect of each course of study undertaken in a semester. The amount is not fixed by the University but rather by the Minister under published guidelines. The concept of “trading” is a broad one. It is doubtful, however, that it extends to the provision of services under a statutory obligation to fix a fee determined by law and the liability for which, on the part of the student, appears to be statutory. ¶36 In contrast, the respondent’s Constitution explicitly provides for the respondent setting tuition and other fees: cl 4(h) at [31] above. ¶37 While the applicant argues in its submissions [22] that the respondent only levies tuition fees to cover the costs of educating students that is unmet by government grants, the respondent’s motive for setting the fee is irrelevant: Red Cross [125]. Moreover, it is not necessary for a corporation’s trading activities to be profitable, or even intended to be profitable, for it to be considered a trading corporation: Red Cross [133]. ¶38 In the case of EDUCANG Ltd, the court found that it was a trading corporation in circumstances where the revenue derived from trading activities met both tests in Adamson, being both of a substantial amount and of a sufficiently significant proportion of overall activities. ¶39 Comparing the operating income of EDUCANG Ltd to that of the respondent, reveals that the proportion of income derived from grants, student fees, and other income is almost identical: The Moerlina School Inc. % Grants : 43 Fees : 46 Other : 11 TOTAL : 100 ¶40 In light of all the circumstances, I find that the respondent’s fee revenue and ‘other income’ constitute revenue from the respondent’s trading activities. ¶41 As this trading activity is ‘a substantial and not a merely peripheral activity (Adamson (208) (Barwick CJ); cited in Red Cross [119]), I find that the respondent is a trading corporation. Conclusion ¶42 For the preceding reasons, I find that the respondent is a trading corporation. ¶43 Accordingly, the Commission lacks jurisdiction over the Application. ¶44 Consequently, application AG 28 of 2024 will be dismissed.