Australian Indigenous Law Reporter
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Australian Indigenous Law Reporter |
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4 March 1996, Sydney
Rating - Exemption - Land owned by Aboriginal housing co-operative - Whether a public benevolent institution - Whether a public charity - Construction of objects - Whether used or occupied of benevolent or charitable purposes
In December 1992, the Toomelah Co-operative Ltd wrote to Moree Plains Shire
Council, requesting
an exemption from rates levied on land owned by the
Co-operative. The application was made under
subs. 132(1)(d) of the
Local Government Act 1919, on the basis that the Co-operative was exempt
as a public benevolent institution or a public charity. The Council refused the
exemption.
The Co-operative appealed the Council's decision under s. 133 of the Act. The application was successful on the grounds that:
(1) the applicant was both a public benevolent institution and a public charity; and
(2) the land the subject of the appeals was used for benevolent and charitable purposes.
See also (1996) 3(80) Aboriginal Law Bulletin 27.
These are appeals by Toomelah Co-operative Ltd under s. l33 of the Local Government Act 1919 (the Act) against the levying of rates by Moree Plains Shire Council on land owned by the applicant. Each application relates to a separate rate assessment notice but they have been dealt with by consent as a single application and heard together.
By letter dated 24 December 1992, the applicant sought an exemption from rates under subs. l32(l)(d) of the Act on the basis that it is a public benevolent institution or public charity. Enclosed with the letter was a supporting submission, a copy of the Society's rules and a copy of Bannon J's decision in Nungera Co-operative Society Ltd v Maclean Shire Council (1991) 73 LGRA 178. Rates were subsequently levied on 18 January 1993 and, by letter dated 2 February 1993, the Shire Clerk informed the applicant that Council had resolved not to grant the exemption sought. Reference was made to s. l33 of the Act. No reasons for the Council's decision were given.
Subsection 133(2) of the Act gives a right of appeal against the levying of
rates by any person holding an estate
or interest in land on the ground
that the land (or part thereof) is not rateable or not rateable to any
particular rate. Subsection
132(l)(d) of the Act exempts from rating:
land which belongs to any public hospital, public benevolent institution, or public charity, and is used or occupied by the hospital institution or charity as the case may be for the purposes thereof,
At the outset it should be noted that the appeals are brought under the 1919 Act because the rate notices (the subject of the applications) were issued by the respondent Council prior to the commencement of the Local Government Act 1993. The words of subs. l32(l)(d) do, however, appear in virtually the same form in the new Act: subs. 556(h) exempts 'land that belongs to a public benevolent institution or public charity and is used or occupied by the institution or charity for the purposes of the institution or charity'. (The exemption for land belonging to public hospitals is now found in a separate paragraph - s. 556(i)).
On 7 July 1977, the applicant was incorporated as a community advancement society under the Co-operation Act 1923 (NSW). Section 14 of that Act provides that a 'community advancement society may be formed for the object of providing any community service or benefit'.
Clause 5 of the rules governing the applicant sets out the objects of the Society as follows:
(a) To acquire land for the use, benefit and development of members, the society and the Aboriginal community in general.
(b) To acquire, construct, manage and maintain housing and other buildings for individual members or for the use, benefit or development of the society or the Aboriginal community in general.
(c) To carry out agricultural, pastoral, fishing, forestry, mining and any other primary producing activities or projects for the benefit of individual members, or for the use, benefit or development of the society or the Aboriginal community in general.
(d) To process, manufacture or distribute any products of the above or any other enterprises, activities or projects deemed to be of use, benefit or for the development of individual members, the society or the Aboriginal community in general.
(e) To train members or other people in the Aboriginal community in any of the above activities or in any other areas necessary for their individual or the society's or the Aboriginal community's benefit or development.
(f) To provide any services for the use, benefit or development of members, the society or the Aboriginal community generally.
(g) To strengthen and foster the development of Aboriginal and Islander identity and culture.
(h) To promote Land Rights and other legal and cultural rights of the Aboriginal community.
As can be seen, the objects emphasise activities undertaken for the use, benefit or development of the society, its members or the Aboriginal community in general.
The applicant's primary object is set out in Exhibit A. By resolution of 26 September 1990, the applicant amended its rules so as to include the following 'Active membership provisions' in accordance with Part IIIA of the Act (inserted in 1987):
(13A) In accordance with Part IIIA of the Act:
(a) to provide and maintain buildings and land for the purpose and benefit of its members and the Aboriginal community in general
is a primary object of the club;...
The amendment was registered on 22 May 1991, prior to the issue of the rate notices the subject of these appeals.
The powers by which the Society is to achieve its objects are set out in clause 6 (see also cll 6A, 6B and cll 7 - 10). Clause 6 states that the Society has power to do the things described as 'incidental to its objects'. Most of the Society's powers are identical or similar to those set out in s. l5 of the Co-operation Act (Part 1 Division 5) relating to community advancement societies. Clause 6(i) gives the Society power to 'raise money on loan for any objects of the society up to $500,000, in accordance with ss. 65 and 66 of the Act'. Clause 6A states that 'the society may let land other than land for dwellings to its members and may sell or let land to any other society which is controlled by and for the benefit of the Aboriginal community'.
Clauses 65 and 66 limit the manner in which the applicant's funds and property may be used. They provide as follows:
65. The funds, income and property of the society shall be applied to carrying out the objects of the society. Any surplus resulting from its operations during a financial year, after providing for depreciation in value of the society's property or for contingent liability or loss, shall be applied:
(a) to carrying out the objects of the society;
(b) to any charitable purpose or for promoting co-operation, or any community advancement, but the part to be so applied shall not exceed eighty percent of that surplus.
66. No part of the income or property of the society shall be paid or referred to the members of the society directly or indirectly by way of profit otherwise than as payment in good faith of any commensurate remuneration of any member or servant of the society or other person in return for services actually rendered to the society or by way of payment of reasonable interest on money lent or reasonable or proper rent for property determined or let to the society by any member.
Importantly, cl 74 deals with the process to be followed on a winding up of the society. It states:
74. (a) The winding up of the society shall be in accordance with Part V of the Act.
(b) On the winding up of the society a member shall not in respect of any shares held by him be entitled to receive an amount in excess of the amount paid thereon. Any surplus shall be devoted to the promotion of co-operation or to such community purpose and in such manner as a general meeting shall determine.
(c) Upon the winding up of the society any assets shall be transferred only to a fund or association established for the benefit of, and controlled by the Aboriginal community, and any land shall be held in perpetuity for the use and benefit of the Aboriginal community in Australia.
The characterisation of the applicant as a public benevolent institution or public charity is determined not by reference to the applicant's activities but by reference to the terms of its constituting documents: McGarvie Smith Institute v Campbelltown Municipal Council (1965) 11 LGRA 321. It is, however, necessary to briefly set out the activities undertaken by the applicant for the purpose of determining whether the lands the subject of these appeals are used for benevolent or charitable purposes.
Mr Warren Barnes, the coordinator of Toomelah Co-operative Ltd from January 1991 to 10 November 1995, described the operations of the Co-operative. It owns 11 houses which are rented to needy Aboriginal families in the Toomelah and Boggabilla area. The houses are allocated on a needs basis. There is a waiting list for the houses but only one transfer has occurred since 1987. The weekly rent received ranges from approximately $40 to $75 and this covers necessary repairs to the premises, water, sewerage and insurance. According to Mr Barnes, most of the houses are over populated - indeed, 'totally overcrowded': one three bedroom house in Boggabilla houses between 7 and 15 people. The houses have no sewerage connected but are served by an antiquated septic tank system.
In addition to providing housing, the applicant runs a 'Community Development Employment Project' (CDEP), a scheme whereby 'Aboriginal people work in community projects for a sum equivalent to Unemployment Benefits. Those who are employed in such projects are not entitled to travel concessions or pharmaceutical benefits so they in real terms receive less than unemployment benefits. There are occasions, however, where the Applicant can pay those participants in the project an extra days pay from revenue obtained by the project' (par 5 of Mr Barnes' affidavit). No income from the applicant is distributed among its members except as wages for those participants of the CDEP who are also members of the applicant: par 13.
Mr Barnes gave evidence that the Society has in the past conducted activities with a commercial bent - such as a market garden which had limited success and closed down in late 1994 and, after a brief renaissance in early 1995, closed again in mid-1995.
Of the 900 or so Aboriginal people living in Toomelah and Boggabilla, over 95% are unemployed. Of the members of the society, only two are currently in employment. Mr Alex Gillon has been a labourer for the RTA since July or August 1995 and Mr Robert Hippi has worked as an Aboriginal Liaison Officer with the Police Department for approximately six years. Mr Barnes gave evidence that Mr Gillon presently earns $19,000 p.a. Evidence led by the respondent Council shows that Mr Hippi's income is in the vicinity of $33,000 p.a. Apart from these two, the vast majority of the residents are on social security benefits, pensions, TAFE or ABSTUDY benefits, or employment subsidies.
On behalf of the applicant Mr Barnes sought, and the Australian Taxation Office granted, an exemption from sales tax apparently on the basis that the applicant is a public benevolent institution. A 'certificate of registration for sales tax', effective 1 July 1993, is annexure 'F' to Mr Barnes' affidavit. Also attached to the affidavit is an Auditor's report of the applicant Society for the year ended 30 June 1994. The accounts show grants from ATSIC, some for the CDEP, and some for specific disbursements. Mr Barnes gave oral evidence that the CDEP is funded by grants from ATSIC and the Department of Education, Employment and Training (DEET).
In order to benefit from the exemption in subs. l32(i)(d) of the Act, the applicant must show that the land belongs to it, that it is a public benevolent institution or public charity, and that the land is used for benevolent or charitable purposes. There is no question that the land, the subject of these appeals, belongs to the applicant. So much is admitted by the respondent in its points of defence. It remains to determine whether the applicant is a public benevolent institution or public charity and whether the land is used for the purposes thereof.
It goes almost without saying that the relevant meaning of 'charity' is its legal, technical sense rather than its popular meaning: Chesterman v Federal Commissioner of Taxation [1925] UKPCHCA 2; (1925) 37 CLR 317 and Salvation Army (Victoria) Property Trust v Shire of Fern Tree Gully [1952] HCA 4; (1952) 85 CLR 159.
In order for the applicant to enjoy the privileges which the status of 'charity' confers it must be shown that there is a charitable trust which is within the spirit and intendment of the preamble to the statute of Elizabeth (43 Eliz. c.4). Lord Macnaghten classified charity in its legal sense into four principal divisions ( The Commissioners for Special Purposes of the Income Tax v Pemsel [1891] UKHL 1; [1891] AC 531 at 583) and Mr Friend, on behalf of the applicant, submits that the Society falls within the first such division - trusts for the relief of poverty. He also submits that conferring benefits on the individuals who occupy the housing has the effect of conferring a benefit on the whole of the Aboriginal community of Boggabilla and Toomelah. I am of the view that the fourth category set out in Pemsel can also be relied on to ground the applicant's status as a public charity.
Lord Simonds in Williams' Trustees v Inland Revenue Commissioners [1947] UKHL 1; [1947] AC 447 stated (citing Lindley L.J. in In re Macduff [1876] 2 Ch. 451 at 466) that 'it is not enough to say that the trust in question is for public purposes beneficial to the community or for the public welfare; you must also show it to be a charitable trust': at 455. He went on to note (at 457) that 'a trust in order to be charitable must be of a public character. It must not be merely for the benefit of particular private individuals ... [One must inquire] whether it is public - whether it is for the benefit of the community or of an appreciably important class of the community'. I turn to consider whether these tests are satisfied in the present case.
The question of whether a trust falls within the spirit and intendment of the preamble to the statute of Elizabeth was at issue in Williams' Trustees. The House of Lords held that 'the property [was] not vested in the appellants for charitable purposes only': per Lord Simonds at 458. Lord Normand concluded that, 'while certain features of the institute conformed to the idea of charity, they were not so dominating nor was the general character of the institute such as effectively to distinguish it from an ordinary social club': at 460. This cannot be said of the applicant in the present case.
Reference may be had to the judgment of Nader J in Aboriginal Hostels Lid v Darwin City Council (1985) 75 FLR 197, a case concerning subs. l75B(3)(c) of the Local Government Act 1954 (NT) which is in similar terms to subs. l32(l)(d) of the NSW Act. His Honour was there asked to decide whether three hostels were exempt from rates on the basis that the land was used for the purposes of a public benevolent institution or public charity. Nader J held that the land was used for the purposes of a public charity and therefore found it unnecessary to decide the point in relation to a public benevolent institution.
Addressing the question of whether the applicant constituted a public charity, Nader J set out (at 209) the preamble to the statute of Elizabeth (noting that 'the courts also regard purposes analogous to these as charitable'), together with the four categories enunciated in Pemsel. He then referred to the 'ever widening scope' of charitable trusts and their extension from time to time to 'novel objects': Taylor v Taylor (1910) 10 CLR 218 at 238. At 211-2, His Honour said:
I would not have regarded authority as necessary for the proposition that 'Australian Aborigines are notoriously in this community a class which, generally speaking, is in need of protection and assistance'... I think that no right person could quarrel with the general proposition that Aboriginals are in need of special consideration and assistance ... Although it may not be correct to regard this activity [providing hostel accommodation] as being for the relief of poverty or for one of the expressed traditional charitable purposes, I regard it as sufficiently analogous to those purposes to be held to be a charitable purpose. The fact that some payment must be made for the accommodation or that some of the purposes referred to in the Charter are not per se charitable does not detract from the general proposition.
Although Nader J was concerned with the provision of hostel accommodation in Darwin, the facts of the present case are such that the above statement is applicable.
A similar approach was taken by Bannon J in Nungera at first instance. Although not satisfied that the subject lands were 'held upon an enforceable charitable trust as distinct from being owned by a public benevolent institution', he expressed the view that 'the overall purpose of the objects of Nungera is charitable, and this is not voided in my opinion by the means pointed out in r. 5(c) [addressed at arresting social disintegration]': at 182. The approach adopted by Nader and Bannon JJ is apposite in the present case.
It is not a bar to benevolent or charitable status that the Society charges rent for the houses, nor that it conducts activities of a commercial nature: Aboriginal Hostels at 212, Salvation Army at 173-7, Tangentyere Council Inc v The Commissioner of Taxes [1990] NTSC 14; (1990) 99 FLR 363, YMCA v Sydney City Council (1954) 20 LGR (NSW) 35.
Mr Rigg, on behalf of the Council, submits that there is no enforceable trust as required. This question was at issue in the Aboriginal Hostels case. The applicant there argued (at 207) that, although there was no express trust, it was a constructive trustee in much the same way as the applicant. in College of Law (Properties) Pty Ltd v Willoughby Municipal Council (1978) 38 LGRA 81. Nader J accepted this submission stating:
So long as the company exists ... it is trustee of its assets for its objects. ... I think the reasoning in the College of Law case (supra), is sufficiently apposite to be followed here ... I am satisfied there is a constructive trust, the terms of which are sufficiently defined by the memorandum of association of the Company and the agreement and Charter: at 208.
Rath J in the College of Law case held that, although there had been no formally constituted charitable trust, the applicant was to be regarded as a constructive trustee. He cited the description of a constructive trust given by Cardozo J in Beatty v Guggenheim Exploration Co. (1919) 122 Northeastern Reporter 378 at 380 and the following passage from Scott, The Law of Trusts, 2nd ed at 3109-10:
In the last analysis the term constructive trust connotes the idea that although there is not an express trust there is a situation which more or less resembles that which arises where there is an express trust.
Applying the College of Law case to the present situation and noting the rules relating to (inter alia) the disposal of the applicant's income and property, I am satisfied that a constructive trust is created. Further support for this conclusion comes from Maclean Shire Council v Nungera Co-operative Society Ltd (1995) 86 LGERA 430 where Handley JA in obiter remarks disagreed with Bannon J's finding at first instance as to the absence of an enforceable charitable trust. His Honour referred (at 434) to the Nungera rules regarding the winding up of the society, stating:
The requirement that any land be held in perpetuity for the use and benefit of Aborigines makes it clear that such land must be held on a charitable trust. In my opinion the current disadvantaged position in Australia of Aboriginals is such that any valid charitable trust for their benefit must also be for public benevolent purposes ... In terms surplus personality need not be transferred to a charitable trust but may be transferred to 'a fund or association ... for the benefit of ... Aboriginals'. While in theory this might appear to authorise an application of the Society's surplus funds to some fund or association whose purposes were not strictly benevolent, the context of the rules as a whole and the provision dealing with the disposal of surplus land make it sufficiently clear that the fund or association must be for the benefit of Aboriginals in need. The principle of construction illustrated by the charity cases ... is sufficient to support this construction. [emphasis added]
Accordingly, I am of the opinion that the applicant satisfies the requirement of an enforceable trust which must be met in order to constitute a public charity.
As noted above, 'a trust in order to be charitable must be of a public character': per Lord Simonds in Williams' Trustees at 457. This question was dealt with by Nader J in Aboriginal Hostels and I adopt His Honour's finding since it is relevant to the present case. At 209, Nader J stated that:
The mere fact that only a limited number of persons can benefit from the trust does not preclude the purpose from being a public one. The potential beneficiaries must not, however, be negligible numerically. The character that marks the potential beneficiary must not be a relationship to a particular person or persons such as one of blood or employment.
See also Maughan v Federal Commissioner of Taxation [1942] HCA 32; (1942) 66 CLR 388, Lemm v Federal Commissioner of Taxation [1942] HCA 31; (1942) 66 CLR 399, O'Farrell v Bathurst Municipal Council (1923) 40 W.N. (NSW) 78.
In the present case, membership of the Society is governed by cl 13 which states (in part) that 'every member shall (i) be a person of Aboriginal or Islander descent or the spouse of such a person; and (ii) live at Toomelah, or have customary or kinship ties with Toomelah or the former Euraba Aboriginal community'. As noted earlier, the objects set out in rule 5 are expressed to be for the use, benefit or development of the society, its members or the Aboriginal community in general. Mr Friend submits, and I accept, that any member of the Aboriginal community of Toomelah and Boggabilla is eligible for the benefits given by the applicant. There can be no doubt in the present case that the class of persons who may benefit from the trust satisfies the requirement that a charitable trust be of a public character.
Mr Rigg submits that the class of public on whom the Society's funds is expended is not limited to the needy. I reject his submission on an analysis of the evidence and, further, note the words of Nader J in Aboriginal Hostels where he states at 212:
The fact that a number of individuals not actually in need of assistance may succeed in taking advantage of facilities intended for the great majority of the class does not detract from the charitable nature of purposes otherwise charitable.
See also the Salvation Army case at 174 and the words of Lord Macnaghten in Pemsel at 583 (set out below).
Handley
JA in Nungera held that the applicant in that case satisfied the
criteria for a public benevolent institution as set out in Perpetual Trustee
Co v Commissioner of Taxation (Cth) [1931] HCA 20; (1931) 45 CLR 224 at 233-6. He
referred
(at 432) to the decision of Bannon J at first instance where His
Honour said that he did not believe that the Council 'seriously contested
that
the objects of Nungera sufficiently showed it to be a public benevolent
institution within the meaning of the Act'. Handley
JA noted that 'the Council
did not contend otherwise in this Court' and that 'this attitude was entirely
proper and no more than a recognition of the inevitable' (emphasis
added).
While the wording of the Toomelah Co-operative Society's rules is different to that employed in the Nungera rules, the underlying object of the two societies is the same. I am satisfied that the applicant in the present case meets the requirements laid down by the High Court in Perpetual Trustee that a public benevolent institution be one organised for the relief of poverty, sickness, destitution or helplessness. I am of the opinion that the applicant's primary object is to relieve poverty through the provision of housing. I note that 'poverty' need not be destitution (Lemm v FCT, Commissioner of Taxation (Cth) v Launceston Legacy (1987) 75 ALR 122) and I reject Mr Rigg's submission that some of the applicant's objects are independent, so as to disentitle the Society from benevolent status. In this regard see further below.
The question arises: is the land used or occupied by the applicant for charitable or benevolent purposes? The answer is clearly 'yes'. The test to be applied is set out by Nader J in Aboriginal Hostels at 210. He said:
The question whether the land is used or occupied for the purposes of a public charity is determined by comparing the purposes of the trust as evinced in the relevant instruments with the actual use to which the land is put. If the land were used for purposes falling outside the ambit of the trust it could not be said to be used for the purposes of the charity even though its legal title might be vested in the trustee: see generally Joyce v Ashfield Municipal Council (1959) 4 LGRA 195.
A comparison of the objects set out in cl 5 and the activities of the Society as described by Mr Barnes shows that the lands are being used for charitable purposes.
On behalf of the respondent Mr Rigg submitted that this was not the case.
Evidence was led by the Council (Ex 1) showing that Mr
Hippi had a taxable
income for the year ended 30 June 1995 of $33,549. The respondent suggests that
Mr Hippi is not in need and that
the land is not used for charitable or
benevolent purposes. I reject the submission. The fact that two members of the
Society are
employed (while the majority are on social security benefits,
pensions, TAFE or ABSTUDY benefits, training or employment subsidies)
does not
mean that the land is not used in the manner required by subs. l32(l)(d).
Bannon J so found in Nungera (at 183) and this was confirmed by Handley
JA on appeal
(p. 435). Handley JA noted 'whether particular persons are in
need is a question of fact' and there is ample authority for the proposition
that 'poverty' need not be abject poverty or destitution: see above.
In any event, Lord Macnaghten himself in Pemsel stated that 'trusts for
other purposes beneficial to
the community' (the fourth category) are 'not
the less charitable in the eye of the law, because incidentally they benefit
the rich
as well as the poor, as indeed, every charity that deserves the narne
must do either directly or indirectly': at 583.
On the evidence, Mr Hippi's income is not such as to disentitle the applicant
to the exemption provided by
subs. l32(l)(d) of the Act.
Nader J observed in Aboriginal Hostels (p 211) that 'not all of the objects of a trust need be charitable if those that are not are ancillary to those that are'. Handley JA in Nungera stated (at 432) that:
It is well established. that the existence of ... independent and collateral objects and powers can result in an institution or association losing some status it would otherwise possess such as being charitable, religious, benevolent or scientific ...
Mr Rigg asserts that the objects in cll 5(g) and (h) are independent, thereby disqualifying the applicant from the status of a public charity or public benevolent institution. Mr Friend on the other hand submits that they are incidental to furthering the Society's primary object.
The applicant's primary object is stated to be the provision and maintenance of buildings and land for the benefit of members and the Aboriginal community in general (cl 13A). Similarly, the objects set out in cl 5 of the rules are expressed to be for the use, benefit and development of members, the society and the Aboriginal community in general. While each object is the subject of a separate clause, it is clear that they are all directed at benefiting the Aboriginal community. 'The Aboriginal community' is defined in the rules to include 'any person of Aboriginal or Islander descent or the spouse of any such person': cl 1.
Mr Rigg submits that Nungera should be distinguished because there are no introductory words in the present case such as were employed in the Nungera rules. I reject this submission. While it is true that the opening words in rule 5 of Nungera's constitution are not employed in the Toomelah rules, substance should prevail over form. As with all the other objects, the aim is to benefit the Aboriginal community. The benefit does not stem from the use of any particular words but from the overall purpose of the Society.
In relation to cl 5(g), I am of the opinion that strengthening and fostering the development of Aboriginal and Islander identity and culture is integral to any programme aimed at benefiting the Aboriginal community. Such a clause should not be seen as an independent object such as to disentitle the applicant to its status as a public benevolent institution or public charity.
It has been widely recognised by the Courts and Australian parliaments that the Aboriginal community is (at least presently) in need of protection. Handley JA in Nungera acknowledges the 'current disadvantaged position in Australia of Aboriginals'. Even if one were to construe cl 5(g) as an independent object, which I do not, I do not accept that the aim of strengthening and fostering the development of Aboriginal and Islander identity and culture is such as to disqualify an institution from being a public benevolent institution or public charity.
Bannon J, at first instance, said of rule 5(c) in the Nungerra constitution that 'it bears a close analogy to the purpose of promoting 'Welsh interests in London' held to be noncharitable in Williams' Trustees v Inland Revenue Commissioners'. Similarly, Handley JA on appeal referred to Williams' and stated that 'one may readily accept that an institution with an independent object of fostering the cultural values of a particular group would not be a public benevolent institution': at 433. While Williams' did not determine the matter, either at first instance or on appeal (Handley JA finding that 'arresting social disintegration' was ancillary to the Society's main object of relieving poverty etc), its particular facts should be examined. This is necessary lest the case be relied on in future as authority for the proposition that an Aboriginal housing cooperative which includes amongst its objects the fostering of Aboriginal and Islander culture is not entitled to 'charitable' status.
In Williams' Trustees it was held that a trust was not exempt from income tax because 'the property [was] not vested in the appellants for charitable purposes only': per Lord Simonds at 458. The case concerned a trust created 'for the purpose of establishing and maintaining an institute and meeting place in London ... for the benefit of Welsh people resident in or near or visiting London with a view to creating a centre in London for promoting the moral, social, spiritual and educational welfare of Welsh people and fostering the study of the Welsh language and of Welsh history, literature music and art': at 449.
The activities undertaken by the trustees included public lectures and debates, a music club, literary and educational classes, the maintenance of a lounge and writing room, library, billiard room, tea and games room, badminton and table tennis clubs, the organisation of 'dances, whist and bridge drives, and annually a dinner and a garden party' as well as a 'weekly social and dance': at 452. These matters are spelt out to emphasise the difference between the trust there in question and that in the present case. While the trustees were concerned to foster Welsh culture by means of whist parties etc, the object set out in Nungera's rules was to arrest social disintegration by strengthening and fostering the development of Aboriginal and Islander identity and culture. Similarly in the present case, cl 5(g) states that one of the Toomelah Co-operative's objects is 'to strengthen and foster the development of Aboriginal and Islander identity and culture'.
In neither case is the object analogous to that considered in Williams' Trustees. The position of Aboriginal and Islander people in Australia is patently different to that of Welsh people living in London. The Aboriginal and Islander population of this country were forced off their land. Of this there can be no doubt. This wrong has been recognised by the highest court in Australia. The position of Welsh people living in London (rather than their native Wales) is not apposite: the niceties of socials and whist parties are far removed from the contemporary situation and needs of Australia's indigenous peoples. Williams' Trustees can therefore be distinguished on the facts. Accordingly, if I be wrong in finding that the object of strengthening and fostering the development of Aboriginal and Islander identity and culture is incidental, rather than independent, I am of the opinion that such an aim - even if it be an independent object - should not disentitle the applicant to the status of a public benevolent institution or public charity.
I arrive at the same conclusion with respect to cl 5(h) concerning the promotion of 'Land Rights and other legal and cultural rights of the Aboriginal community'. Such an object is incidental to or concomitant with the applicant's overall charitable and/or benevolent purposes (see Tangentyere Council). Indeed, I think that such an object itself falls within the fourth (and possibly also the first category enunciated by Lord Macnaghten in Pemsel. Mabo v Queensland [No 2] (1992) 175 CLR I at 108 acknowledged 'the environment in which the Aboriginal people of the continent came to be treated as a different and lower form of life whose very existence could be ignored for the purpose of determining the legal right to occupy and use their traditional homelands': per Deane and Gaudron JJ at 108-9. Given the disadvantaged position of Aboriginal and Islander people in Australian society, efforts by organisations such as the applicant are, in my opinion, benevolent or charitable as required by law.
Another
question which arises is whether the power to apply the Society's funds to
'promoting co-operation' in
cl 65(b) is an independent power such as to
disqualify the applicant from its status as a public benevolent institution or
public
charity. I do not believe that it is. The words of the clause are taken
from s. 48 of the Co-operation Act concerning the disposition of
societies' surpluses. It is a provision stemming from the fact of incorporation
as a community advancement
society under that Act and should not be seen as
disentitling the applicant from the rating exemption under the Local
Government Act. The co-operation which is sought to be promoted is, in
my opinion, that elucidated in s. 5A of the Co-operation Act, setting
out the cooperative principles adopted by the International Co-operative
Alliance. Handley JA noted that 'not all charitable
purposes are benevolent'
and 'the promotion of co-operation' although socially useful, is not limited to
benevolent purposes either':
Nungera at 433. However, His Honour went on
to state that 'the Society's constitution, like any other written instrument,
should be read as
a whole ... '' (at 434).
At first instance Bannon J stated:
Rule 65(b) raises a difficulty by reason of the residuary surplus provision to be applied 'to any charitable purpose or for promoting co-operation'. If the society holds property on trust for charitable purposes, I see no real problem in r 65(b) for the Attorney-General representing the Crown as parens patriae may take action to enforce the trust Joyce v Ashfield Municipal Council (at 205, 207) per Owen J. If Nungera be a public benevolent institution and not a charity, I do not see a residuary clause of this nature as defeating the overall purposes of the Society. Two views may be taken of the words 'promoting co-operation'. One that it is uncertain and fails with the result that the residue is to go only to a charitable purpose. The other view is that it is some reference to the purposes referred to in s 5A of the Co-operation Act 1923 (NSW). In that event s 37D of the Conveyancing Act 1919 (NSW) may have some operation. I am inclined to the latter view, but in any event do not regard such subsidiary provision as overriding the public purpose set out in r 5.
While the wording of the Nungera Co-operative's constitution is slightly different to that in the present case, the substance of the rules is comparable. The power in 65(b) is part of a set of rules which should be read in the context of the Society's objects. It is, in my opinion, incidental to those objects and not such as would disqualify the Society from charitable or benevolent status.
The provisions of cll 6(h) and (i) lend support to this conclusion. They provide:
6. The society shall have power to do the following things as incidental to its objects:
(h) promote and carry out any charitable undertaking;
(i) raise money on loan for any objects of the society up to $500 000 ...
I note these provisions simply to emphasise the inter-relationship between the Society's objects and the powers granted by cl 6(h) and cl 65(b) in relation to charitable undertakings and, similarly, the limits placed on its financial dealings by reference to the objects of the society.
Since reserving judgment my attention has been drawn to the decision of Bignold J in Dareton Local Aboriginal Land Council v Wentworth Council (unreported decision of 22 December 1995). While the case concerned an application for a rate exemption under subs. 556(h) of the Local Government Act 1993, the factual circumstances are different to those in the present case and I derive no assistance from the decision.
I conclude that the applicant is both a public benevolent institution and a public charity and that the land the subject of these appeals is used for benevolent or charitable purposes. The applicant is therefore entitled to the exemption provided by subs. l32(l)(d) of the Local Government Act. All questions of costs are reserved. l
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URL: http://www.austlii.edu.au/au/journals/AUIndigLawRpr/1996/72.html