Central Bayside Division of General Practice Ltd v Commissioner of State Revenue [2005] VSCA 168

"It has been found impossible to give an exhaustive definition of what amounts to a charitable purpose, but the authorities indicate the attributes that are to be looked for. The gift must proceed from altruistic motives or from benevolent or philanthropic motives. It must be directed to purposes that are for the benefit of the community or a considerable section or class of the community. The purposes must tend to the improvement of society from some point of view which may reasonably be adopted by the donor. The manner in which this tendency may be manifested is not defined by any closed category. It is capable of great, if not infinite, variation. It may be by the relief of misfortune; by raising moral standards or outlook; by arousing intellectual or aesthetic interest; by general or special education; by promoting religion; or by aiming at some other betterment of the community. The purposes must be lawful and must be consonant with the received notions of morality and propriety."[3]

3 As Byrne, A.J.A. explains, the Tribunal concluded that the Division's principal purposes are beneficial to the community and are not primarily concerned to improve the position of its members, although, like the judge below, I consider that, on the material before us, one is left with an impression to the contrary. Be that as it may, this point was conceded below by the Commissioner and we are bound to act on the basis of the Tribunal's finding in that regard. Nevertheless, the Tribunal went on to find that the Division operates as part of an integrated scheme of national health care management presided over and funded largely by government, and thus is not just its ally but a part of it. The Tribunal noted that the issue is one of degree, but ultimately concluded that the Division is "too close to being an arm of government to be an organisation whose objects come within the concept of charity." This finding was challenged, but his Honour reached a like conclusion, concluding that the practical reality of the Division's activities, history and control is that of an organisation "formed under the aegis of the Commonwealth's 1992 general practice initiative to carry out government sponsored health care programs as part of the Commonwealth national health care strategy." Thus, as I have noted, the central issue before us is whether his Honour erred in reaching that conclusion.

4 There are many public, non-profit organisations the work of which is carried out principally for the benefit of the public, yet they are not classified as charities (or as public benevolent institutions) because they carry out a function of government and thus lack the element of altruism that is ordinarily a feature of a charity. To say that a body can be a charity even if its objects are not eleemosynary in nature is not to deny that a charity's objects or purposes are, ordinarily, altruistic in character.[4] Another reason for denying the body charitable status on the basis that it performs the work of government is that by doing so it is carrying out or implementing purposes that are political and not charitable.[5] In Re Cain[6], Dean, J. explained the relevant difference between a gift for charitable purposes and one for the performance of a government function. His Honour held, as was noted below, that a gift for carrying on the ordinary activities of a government department pursuant to a statute is not a gift for charitable purposes, even if the activities are such that, if carried on by private persons, they would be charitable. Such activities are simply part of the government of the country. Thus, his Honour said,[7] a gift to the "Children's Welfare Department" would not be a gift for charitable purposes because such activities were simply part of the government of the country "and the Department is performing functions which Parliament, as a matter of public policy, has committed to it." His Honour went on to say, however, that if the Department was able and willing to undertake for the benefit of children under its care some activities over and above its normal duties and would be prepared to apply the gift to that end, then, assuming such a course was within the testator's intention, the gift would be charitable. After examining the circumstances, his Honour concluded that the Department would be able to propose an appropriate scheme for using the gift for the benefit of children and, on that basis, upheld the gift as a valid charitable gift.

5 Similar analyses were undertaken in the context of seeking to determine if certain non-profit bodies were public benevolent institutions. Thus, for example, in Metropolitan Fire Brigade Board v. The Commissioner of Taxation[8], the court drew an analogy with the provision of welfare payments by government in order to illustrate why a government body is not a public benevolent institution.[9] The court said[10]:

"This is not to say that 'public charity' is synonymous with 'public benevolent institution', but the ordinary meanings of the two expressions are rather similar, in our view. It was put for the appellant that people whose buildings are being or have been destroyed by fire may be in need of urgent help and may be in personal danger, so being suitable objects of benevolence. No doubt the bulk of the recipients of the moneys disbursed by way of pension payments ... are in need also, but that is not to say that the Commonwealth in making those payments is acting as a 'public benevolent institution'. It is simply, like the appellant, using government funds to exercise a function of government. We are of the view that, whatever the precise limits of 'public benevolent institution', the appellant falls well beyond them."[11]

6 The test to be adopted in determining whether a non-profit organisation, the principal purpose of which is of benefit the community, is performing the function or work of government has been discussed in a number of cases[12] where such bodies sought immunity from fiscal obligations on the basis that they were public benevolent institutions. It is true that, as Byrne, A.J.A. points out in his reasons, the test for determining whether a non-profit public organisation is a public benevolent institution is different from that to be applied in ascertaining whether it is a charity, given that the legal definition of a public benevolent institution is narrower than that of a charity.[13] Nevertheless, the analysis involved in determining whether such a body is performing the function of government must be the same (or substantially so) irrespective of whether it claims to be a public benevolent institution or a charity. In either case, the process involves the characterisation of the body's activities to see, not only whether they are ordinarily performed by government, but more importantly to ascertain if they are so controlled by it that the body can be properly regarded as carrying out the function or work of government.[14]

7 In Metropolitan Fire Brigade, the brigade, which was staffed in large part by volunteers, obtained its funding from the State government and from compulsory contributions made by property owners, which the court described as being "simply taxes" imposed by the government. Its role was to control and extinguish fires in the metropolitan area, a role that, the court observed,[15] had long been regarded by the community and by government as a responsibility and function of government. The Minister had the power, inter alia, to approve the appointment of the Chief Executive or Deputy Chief Officers, control the budget and recommend dissolution of the Board to the Governor in Council. After considering these factors, their Honours described the board as being "constituted, funded and controlled by government and performing its functions on behalf of government."[16] Thus, despite noting that in some circumstances a connection with government may "assist towards a conclusion that [the body] is a public benevolent institution",[17] their Honours concluded, as I have said, that, in that instance, "whatever the precise limits of 'public benevolent institutions', the [Board] falls well beyond them."[18]

8 In Mines Rescue Board, the body in question was funded by way of compulsory levy paid by mining companies pursuant to a government regulation and the Minister exercised considerable control over the composition of the board. Moreover, the staff of the organisation could be drawn from government entities and its performance was subject to ministerial review. The board's primary function was to provide rescue services to underground coal miners and it was obligated to exercise its functions in accordance with its corporate plan, which was prepared at the behest of, and provided to, the Minister for approval. Having regard to these factors, the court concluded[19] that "the combined effect of these provisions is such as to result in the appellant being characterised as governmental", thereby "precluding" a finding that it is a public benevolent institution.

9 Likewise, in Ambulance Services, the court had regard to factors including the body's funding source, the composition of its board, its having been constituted under the aegis of a statutory body and its functions in determining whether it was properly characterised as governmental in nature and thereby, denied the status of a public benevolent institution. Their Honours agreed[20] with the conclusion of the primary judge that the fact that the service had "been run by a quasi-department of State for nearly 15 years ... reflected a clear recognition in government that the provision of an ambulance service was a responsibility of government" and noted that merely because private organisations such as St John's Ambulance performed the same functions as were administered by the Ambulance Service did not mean that the function was not governmental. The relevant question, said their Honours, was the degree of control the government exercised over the organisation. [21] The fact that, over a considerable period, the service had been recognised, organised, controlled and funded by the government led to the conclusion that it could not be characterised as a public benevolent institution.[22]

10 Thus, the primary factors to which courts seem to have regard in deciding if the public body was performing a function of government include:

- the degree of government control over the appointment of the body's board or directors;

- whether it was created by statute or otherwise under the aegis of government;

- the extent to which government provides funding for the organisation and controls its expenditure;

- the extent to which government can prescribe effectively the level or standard of performance that the organisation is required to achieve;

- whether government has effectively assumed the responsibility for the services in question.

11 It should be noted that although the cases to which I have referred recognise that government funding of an entity may point toward it being viewed as performing the function of government, it was not suggested that this factor alone is determinative of the issue, even where such funding was made available on terms that required that the entity perform its functions to standards set by government. That government funding is not conclusive of the issue is unsurprising, as was explained in Alice Springs Town Council v. Mpweteyerre Aboriginal Corporation[23]. In that case, Mildren, J.,[24] upheld the decision below that Aboriginal corporations, each of which operated a "town camp" for impoverished Aboriginal people, were charities. His Honour said[25]:

"... [i]rrespective of the associations' source of funds, they could not be characterised as agencies or [sic] government. In this case, no ministerial control could be exercised over any of the associations, either by virtue of the Acts under which they are constituted or by the provisions of the constitution. The mere fact that the associations are indirectly government funded does not deprive them of the character of being charities. I do not consider that the argument that the associations are merely carrying out the functions of government can be sustained."

The critical question is not the source of the body's funds but whether its activities are so controlled by government, or are so closely associated with the implementation of its policy, that it should be properly characterised as carrying out the work or function of government. To answer this question in respect of the Division, it is necessary to examine, amongst other matters, its constitution, the control over appointment of its board, how it is funded and its relationship with the Commonwealth government in that regard.

Structure and activities of the Division

12 The legal structure of the Division, as is evident from its constitution that was adopted on 13 November 2001, is described in some detail by Byrne, A.J.A. and there is no need to repeat it here. Similarly, his Honour set out in his reasons, with some particularity, the Division's goals as they are reflected in its Annual Report of 2002, and its principal activities and source of funding. Moreover, it is plain that the government plays no part in the appointment of its board members. It is necessary, however, to examine the context in which the Division came into existence and its relationship with the Commonwealth government.

Establishment and development of Division

13 It is apparent from the materials that have been provided to us that the circumstances in which the Division came to be established can be traced back to the late 1960's when there existed considerable dissatisfaction by a significant body of general practitioners about their role in the provision of health services. As a consequence, a number of bodies of general practitioners were established in the mid-1970's. These bodies were relatively unstructured and informal and were concerned primarily with attempts to resolve these problems. Over the course of the next three decades, these groups expanded in the manner described below and eventually became, under the aegis of the Commonwealth government, part of a national scheme, which is directed and organised by it and is aimed at improving the ability of general practitioners, and other health care professionals, to provide local health care services to a standard determined by government. As will be described more fully later, the work of this and other divisions is relevantly controlled by government, which has assumed responsibility for the nation-wide provision of local health care services and uses the divisions as the vehicle through which it seeks to achieve its national policy objectives.

14 As General Practice in Australia: 2000[26] explains, in the late 1960's there was considerable dissatisfaction and disillusionment amongst general practitioners concerning their role in the overall provision of health care to the community, including, no doubt, dissatisfaction with their working conditions and level of remuneration. In response to this dissatisfaction, the forerunners of the present divisions were established and appear to have been comprised of hospital-based practitioner associations that were concerned primarily with ameliorating practitioner isolation and providing members with professional support and greater inclusion in the overall health care system. Gradually, such bodies became more formalised and grew in number, so that by 1984 the Royal Australian College of General Practitioners had adopted a set of policy guidelines for establishing and operating such divisions. In summary terms, the guidelines described the essential work of the divisions as: "representing GPs in the local hospital and community; negotiated credentials for GP access to hospitals; organising continuing medical education for GPs; implementing peer review and quality assurance; facilitating undergraduate teaching and vocational training; and participating in primary research, health promotion and education ...". The guidelines make it apparent that the early divisions probably existed primarily for the benefit and advancement of their members - in terms of their work, further education and greater organisation - although no doubt an incidental, but important, purpose was the delivery of better health care services to the general community. But, as noted in General Practice in Australia: 2000, lack of infrastructure funding restricted the growth of the divisions in terms of size and number and limited their role and activities. Eventually, most likely due to lobbying by the medical profession, in recognition of this limitation on the work and growth of divisions, the Commonwealth government began to fund them in 1991-92 under its "Divisions and Project Grants Program" on the stated basis that such funds were provided to support "local groupings of GPs in the formation of trial Divisions of general practice ... .".

15 By 1993, as a result of this "injection" of funds by government, the number of divisions had grown from 31 (in 1991) to 100 and divisions "covered" approximately 80 per cent of Australia. By 1994, approximately 60 per cent of general practitioners were members of a division and this number has increased since. Thus, by 2000, there were 123 divisions covering Australia's entire geographic area.

16 The establishment of the divisions' grants program was part of the government's wider policy to reform general practice in Australia and was the result of recommendations made in a number of reviews of general practitioners' practices by bodies that were either part of the government or were closely associated with the implementation of its health care policy, such as the National Centre For Epidemiology And Population Health (NCEPH) and the General Practice Consultative Group. Over the period 1992 to 1997, numerous reviews of divisional operation were conducted by various bodies. This included a review by the General Practice Consultative Group, which recommended in its 1992 publication, entitled "The Future of General Practice", that greater funding be made available "to establish divisions and to support their activities". Also, the Divisions Strategic Group recommended in its 1995 report the establishment of State and Territory support structures for divisions. The Department itself,[27] which in 1992 published an issues paper (also entitled "The Future of General Practice"), put forward a blueprint for the development of general practice in Australia.

17 In the context of this process of ongoing review by government and associated entities of the operations of the divisions, and in order to achieve its policy objective of assisting general practitioners to deliver more efficient and higher quality health care and improved health care outcomes for the community, the government introduced in 1996-97 the "Divisions of General Practice Program". Under this program, the method by which government funded divisions changed materially - moving away from infrastructure and project-based funding (as was provided from 1991 under the "Divisions and Projects Grants Program") to "outcomes-based funding agreements" ("OBF agreements") that were "based on agreed priorities" and "reflected the growing maturity of divisions, both from the perspective of governmental and divisional members." The shift from infrastructure and project-based grants to outcomes-based funding appears to have been made in an attempt to reduce delays in funds being paid to divisions and, importantly, in order to introduce greater accountability for divisions' use of government funds.[28] In short, OBF agreements enabled the Department to exercise more effective control over divisions' operations, albeit generally leaving them to determine how to achieve the aims set out in the agreements. Thus, by 1998, one year after the implementation of this change in the funding mechanism, the Department stated[29] that "Divisions are now more realistically fulfilling the original aim of the Divisions of General Practice Program, that is: 'to improve health outcomes for patients by encouraging general practitioners to work together and link with other health professionals to upgrade the quality of health service delivery at the local level.' " That this was the result of the change in funding policy is unsurprising, given that funding pursuant to OBF agreements is made available only for the purposes of enabling divisions to meet aims that have been "vetted" or approved by the Department and which are set out in specific financial, business and strategic plans that are annexed to the funding agreement. Continued funding by government under such agreements is linked to the satisfactory achievement by the divisions of the objectives stated therein. Put another way, OBF agreements are executed by the government only if a division's indicated "outcomes" are "in keeping with the Current Aims of the DGPP."[30] Thus, as Steven Sant, the Division's Chief Executive Officer, said in his evidence before the Tribunal, in providing block grants to divisions the government stipulates broad "outcome indicators" and tells them, effectively, "You will do a variety of things that will meet these outcomes." In short, divisions are funded by government in order to give effect to government policy.

Government relationship with Central Bayside

18 The Division was established in 1993, by which time divisions were clearly within the purview of the Commonwealth government's health policy and in receipt of infrastructure and project-based grants from the Department of Health and Ageing. Indeed, it is reasonable to assume that the appellant was established using Commonwealth funding. Since the shift in government funding policy in 1996-97, as outlined above, the Division has received nearly all its funds by way of government grants. Approximately 43 per cent of the funds came to it pursuant to the OBF agreements that it executed with the Department. The bulk of the remaining funds also came from the government. Through the OBF agreements (in combination with project-specific grants), the government exercises effective control over the Division's operation and activities in a number of ways, importantly, as part of its national health strategy. As I have said, funding is provided on the basis that the Division will meet objectives set by government policy. Furthermore, under the OBF agreement, the Division is accountable to the Department for the use of grant moneys and is required to report to it every six months, in a prescribed manner, regarding its progress towards achieving stated "outcomes" and concerning its financial position. The agreement also contemplates that the Department's officers will monitor and supervise the operation of the Division and requires it to provide to such officers access to its premises and to permit them to inspect and copy materials pertaining to its operations in relation to the approved budget and business plan. If the Department concludes, on a reasonable basis, that the Division has spent the funds otherwise than in accordance with the agreement it has the right to require the Division to repay them. The Division is also prohibited from sub-contracting any of the work for which the government provides funding without the Department's approval and the government has the right to terminate the agreement before its expiration or to reduce the scope of the Division's funded activities.

19 That the government has assumed responsibility for the establishment and operation of this and other divisions is also reflected in the statement in General Practice: 2000 that in 1997 there was a "devolution of contract management of [Divisions] to State Offices of the [Department]", presumably consequent upon the establishment of State/Territory based "support structures" and the change to outcomes based funding arrangements. The assumption of such responsibility is also evidenced by the letter dated 14 September 2001 from the Department's Director of Health Strategies to the divisions stating that, in contemplation of the renewal of a three-year OBF agreement with the divisions, the Department was conducting an internal review of "the outcomes it would like to see Divisions focus on". The letter notes that "first quarterly payment ... will be contingent upon State/Territory Office approval of draft strategic business plan and a draft budget and the subsequent signing of a new Funding Agreement." Most strikingly perhaps, in October 2002, the Government announced a five month review of the divisions' operations, with the then Minister for Health and Ageing stating that the review would make recommendations to government as to the size, number, governance arrangements, future role and future funding of divisions across Australia. Although not determinative of the issue, it seems clear enough that the Department considers that it has the ultimate control over the direction and continued operation of divisions.

20 Despite the Division's objects being of public benefit, it is apparent from the material that it carries out its functions in order to discharge the responsibility assumed by government to support and ensure the provision of efficient, integrated, quality local health care. The functions performed by divisions fall clearly within the purview of governmental functions, albeit not solely performed by government and, moreover, the government has assumed responsibility for the establishment, direction, funding and control of divisions, not through statute, but through policy and its choice of funding mechanism.

Division not a charity

21 Although, on the face of things, and in light of the Tribunal's relevant finding to which reference has been made, the purposes and objects of the Division can be regarded as falling within the fourth head of Pemsel's case_,_ and whilst the government does not control the Division in terms of determining the composition of its governing body or controlling its day-to-day operations, it is plain enough, as I have said, that it has assumed responsibility, on the national level, for developing the role of general practitioners in providing health care services through the divisions. It has also been noted that, through the use of OBF agreements, the government has relevantly controlled the critical standards and outcomes that must be achieved by the divisions. It is true that, in theory, the Division can decline to accept Commonwealth funds and, thus, be free to pursue its objects independently of Commonwealth control or influence - other than being subjected to laws and regulations as all bodies are - but the reality is that each division is now part of a national operation, such that the lack of Commonwealth funds would, at best, result in a reversion back to the pre-1992 situation. This would clearly be a retrograde step in terms of health care delivery and is not one that any division is likely to take in the interests of its members or the public. To my mind, looking at the facts applicable to this situation, the circumstances are relevantly removed from one where the government provides funding to a non-profit institution, such as an aged care facility operated by a church, and, in return, requires that it meet certain regulatory and accountability standards laid down by it. Similarly, the Division is relevantly unlike public universities, notwithstanding that they are heavily funded by the Commonwealth government on condition that they comply with its many strict guidelines relating to their governance, financial and academic activities. Despite the fact that the government is able to dictate to public universities on such important matters, they conduct their core activities "untainted" by government control so that one could not properly say that they perform the work or function of government. In the case of the Division, however, its core activities are performed pursuant to the dictates of government, as has been explained. Its situation is, therefore, materially different from that of a government-funded aged care facility or public university or a body such as the corporations which were considered in Alice Springs Town Council.

22 As Barwick, C.J. said in The Incorporated Council of Law Reporting of the State of Queensland v. The Commissioner of Taxation of the Commonwealth of Australia[31] "... in the long run ... it is a matter of judgment whether the trust or purpose fairly falls within the equity, or as it is sometimes said, 'within the spirit and intendment' of the preamble to the Charitable Uses Act 1601 ...". I consider that it is also a matter of judgment whether, on a proper characterisation of the facts and circumstances in this

case, the Division performs the work or function of government. For reasons I have given, I consider that the learned judge below did not err in exercising his judgment in that regard. In the circumstances, I would dismiss the appeal.

23 By sub-s. 10(1) of the Payroll Tax Act 1971 certain wages are not liable to payroll tax under that Act. These include wages paid or payable -

"(bb) by a charitable body (other than a school or educational institution or an instrumentality of the State) to a person during a period in respect of which the body satisfies the Commissioner that the person is engaged exclusively in work of the body of a charitable nature."

The appellant, Central Bayside Division of General Practice Ltd ("Central Bayside") is a company whose members and officers are general practitioners carrying on practice in the Central Bayside area[32] and which is incorporated as part of a nation-wide scheme put in place by the Commonwealth government to promote health care at a local level. It seeks a determination that it is such a charitable body and, therefore, potentially exempt from payment of payroll tax.

24 The issue is before this Court upon an appeal by leave from the judgment and orders of a judge of the Trial Division given on 15 August 2003. This judgment was given in an appeal bought by leave from the determination of the Victorian Civil and Administrative Appeals Tribunal given on 22 November 2002. The matter was referred to the Tribunal on 11 October 2002 by the delegate of the respondent, Commissioner of State Revenue, pursuant to s. 106 of the Taxation Administration Act 1997. The procedural steps prior to this were the Commission's rejection by letter dated 14 December 2001 of the request of Central Bayside that it be granted an exemption under s. 10(1)(bb), Central Bayside's objection to this decision by letter dated 29 January 2002 and the Commissioner's determination by notice dated 16 July 2002 to disallow that objection.

25 It is, however, convenient to take up the story upon the hearing of the referral to the Tribunal in November 2003. In rejecting the submissions offered on behalf of Central Bayside, the Tribunal found that Central Bayside was a company incorporated by guarantee which existed principally for purposes beneficial to the community; its ultimate object was to improve the delivery of healthcare. It did not accept the argument advanced by the Commissioner that the main purpose of Central Bayside was to advance the interests of its members: to the extent that its members derived a personal benefit from the activities of Central Bayside that was incidental to the benefit which it provided to the community. The Tribunal, nevertheless, rejected the claim for exemption on the basis that the activities of Central Bayside were part of a national scheme established by government. The Tribunal expressed its conclusion on this point in its reasons for determination as follows:

"... in my view what is critical is that the services provided by the applicant to the community by itself and its members are provided in substance at the expense of the Federal Government and, most importantly, as an integrated part of a scheme of national health management presided over by the Federal Government. The evidence on this issue was thin and it did not feature much in submissions, but the proposition the applicant has to face is that it is not just an ally of government but an essential part of it. It is one thing for the Salvation Army to be an integral part of our provision for the relief of poverty; it is another thing for an organisation to be an integrated part of a national scheme regulated by the Federal Government to provide for the delivery of health care. The issue is one of degree but in my view the applicant is too close to being an arm of government or a part of bureaucracy - they probably mean the same thing - to be an organisation whose objects come within the concept of charity revealed by the Preamble to the Statute of Elizabeth."

26 Before the primary judge, the Commissioner accepted that the finding of the Tribunal, that the purpose of protecting and advancing the interests of its members was not the main purpose of Central Bayside, was a finding of fact that was open to it on the evidence and did not seek to reopen or challenge that finding. Its submission on the second point, that the activities of Central Bayside were part of an integrated government scheme, found favour with the primary judge who upheld the Tribunal's conclusion on that ground.

27 Before us, the Commissioner sought to argue that the finding of the Tribunal on the first point was erroneous and that his Honour might, too, have so found when rejecting the appeal. This argument was predicated upon a contention that the Tribunal's finding, albeit one of fact and one which was open on the evidence before it, might nevertheless have been overturned on appeal to the primary judge. Accepting, without expressing any view as to its correctness, that this contention is well-founded, we nevertheless refused to hear argument on this first point. It was one which was not the subject of argument before the primary judge and one upon which we did not have the benefit of the considered conclusions of his Honour. We were told that, if the position had been otherwise been before the primary judge, argument would have been addressed to it on behalf of Central Bayside. To permit the Commissioner to raise it at this stage would be contrary to principle and would work injustice upon Central Bayside.

28 The only issue for determination, therefore, is whether Central Bayside is a charitable body within the meaning of s. 10(1)(bb) notwithstanding that it plays a role in the policy of the Commonwealth Government for the delivery of health care services in the Central Bayside area. The question requires the consideration of "the nature and the objects and activities" of the body in question[33] and, where these are various, it requires a determination as to which of them is its main or real object or activity.[34] If this object or activity be charitable, then the body is a charitable body notwithstanding that it may have non-charitable ancillary objects or engage in ancillary non-charitable activities,[35] such as the promotion of the interests of its members.

29 What, then, is the relevant characteristics of a charity? It is well established that in a statute such as the present, the concept of charity is a technical one which has its origins in the English Charitable Uses Act 1601[36] which is commonly referred to in this context as the Statute of Elizabeth.[37] This meaning is wider and different from the popular or demotic use of the word "charity". The starting point for any consideration of the legal concept must be the guide[38] provided by the words of Lord Macnaghten in Commissioners for Special Purposes of the Income Tax v. Pemsel[39]:

"'Charity' in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads."

30 We are here concerned with the fourth division or category which, by well established authority, extends to a miscellany of purposes indicated by the listed instances contained in the preamble to the Statute of Elizabeth and established as charitable by subsequent authority. In this area of law, as in others, the jurisprudence is much indebted to the writing of Sir Owen Dixon who has expounded the principles in a series of cases.

31 In 1930 in Hobart Savings Bank and Launceston Bank for Savings v. Federal Commissioner of Taxation[40] his Honour extracted from the authorities the following "modest generality":

"... when, from motives which are altruistic, benevolent or philanthropic, purposes are put in execution for the benefit of the community, or of a considerable section or class, which do in fact tend to the amelioration of mind, manners or morals, or the relief of misfortune and are of a nature allowed by law and consonant with the received notions of morality, then these objects will be considered 'charitable'."[41]

It will be noted that, in this passage his Honour draws a distinction between the motive of the donor and the purposes to which the gift are to be applied. His Honour then continued:

"The occasion for determining what purposes are charitable has, of course, arisen in the administration of the law of property. But once the view is adopted that the word 'charitable' has itself a legal meaning there seems little difficulty in transferring it from the description of the purposes to which property is devoted, and understanding it as a description of the objects for which an institution exists".[42]

In Roman Catholic Archbishop of Melbourne v. Lawlor[43], decided in 1934, the High Court was required to consider whether a gift to establish a Catholic daily newspaper should be characterised as a gift for the advancement of religion within a third of the categories in Pemsel's case. In a decision which equally divided the six judge court, Dixon, J. observed that not every gift for religious uses or purposes is considered charitable.[44] To the extent that such purposes are purely political purposes, a gift for them will not be considered charitable.[45] This is because the purposes of the gift, if it is to be charitable, must be directly and immediately religious. It is not sufficient that the purposes be thought to contribute to the good of religion or to promote objects which the religion supports. In the case of a political purpose, there is the further consideration that the Court has no means of judging whether the purpose is of benefit to the public.[46]

32 To my mind, a gift by a testator or an individual to a trustee of the purposes of promoting the health of the Central Bayside community would be a good charitable gift. The donor has the required motive, that of achieving the purposes of the gift and these purposes are for the benefit of the public within the meaning of the fourth classification in Pemsel's case. By analogy, a not-for-profit entity whose principal object and practice was the promotion of the same objective would fall within the definition of charitable body. This may be contrasted with an entity whose principal object and practices were identical but which lacked the-not-for profit element. This is because the entity lacks the characteristic of philanthropy mentioned by Dixon, J. in the passage quoted above.[47] For these purposes, this not-for-profit characteristic is not lost where the structure of the entity is such that any profit made may not be distributed to members but must be applied for a similar charitable purpose. [48]

33 Similarly, a gift to a government department to be applied by it for the carrying out of its normal governmental functions is not a gift for charitable purposes notwithstanding that these functions may be considered charitable if performed by some other organisation.[49] This is because the mere relief of government expenditure is not a charitable purpose.[50]

34 By analogy it was put that, just as such an entity is not charitable if it lacks a not-for-profit element, so too, even though it may have this element, it will not be a charitable entity if it seeks to achieve its principal object and carries out its practices merely as an creature or agent of government policy. This is because the Court, looking at the substance rather than at the form of the entity and its practices, should characterize it as government.

35 In Auckland Harbour Board v. Commissioner of Inland Revenue[51], the question was whether the surrender of a lease by a lessee in consideration of the Harbour Board's payment of [sterling]37,000 was exempt from conveyance duty under an exemption available for "a conveyance of property to be held on a charitable trust in New Zealand". The argument fastened upon the purposes as set out in the preamble to the Statute of Elizabeth which included the repair of ports and havens. Accordingly, it was said that the activities of the Harbour Board, to the extent that it was concerned with the maintenance and development of the Port of Auckland, was by analogy within the spirit and intendment of the Statute and, being for the benefit of the community, fell into the fourth category of charities mentioned by Lord Macnaghten in Pemsel's case. The Court rejected this contention on a number of grounds including that the Harbour Board was an elective public authority charged with the duty of local government to control an area of land which included wharves. Its assets were to be applied, as directed by Act of Parliament, upon a number of activities unrelated to the maintenance of the port. These included as its principal function the defraying of the cost of local government in the harbour area. This is, therefore, an example of the application of the principle that an entity will not be considered charitable unless its principal objective or activity is charitable.

36 A second ground was given by Shorland, J. for rejecting the Harbour Board's claim to be a charity. This is of present interest, not only because it touches the point presently under consideration, but also because it was relied upon by counsel for Central Bayside as setting the line in cases where the supposedly charitable entity is an creature of government, between those entities which are charitable and those which are not. It was that, in the case of a trust for purposes, the Court must have available to it the means to bring to bear its equitable jurisdiction to enforce the trust. Where the trustee is a government body implementing government policy, no Court could undertake the administration of the trust for this would be to assume the duties of a government and perhaps to override the statute under which the trustee was established or operated.[52]

37 Whether this be correct, it is not necessary that I express a view. I am, however, unpersuaded that any inability of the Court to oblige an entity to act within its charitable objects should mark the line between the entity being a charitable body or not. This would be to introduce into this difficult area of law alien concepts including those of the statutory or other regime under which the entity was established. To my mind, the question is simply whether in the given case, given its structure and its relationship to government, the entity meets the requirements of Pemsel's case when these requirements have been adjusted to make their application to an entity rather than to the purposes of a trust.

38 In Alice Springs Town Council v. Mpweteyerre Aboriginal Corporation[53], the question before the Northern Territory Court of Appeal was whether the corporation was exempt from council rates on the basis that its land was "used or occupied for the purpose of a public hospital, benevolent institution or charity" within the meaning of s. 97 1(d) of the Local Government Act 1985 (NT). The land in question was used for "town camps", that is, it was used for residential accommodation by aborigines visiting Alice Springs and conducted by the corporation which was a not-for-profit entity. Mildren, J., with whom Martin, CJ. concurred, concluded that the land was used for the relief of poverty[54] and to provide housing and facilities for its members and other needy aboriginal people,[55] purposes which will normally fall within the description of charity in Pemsel's case. His Honour then addressed an argument advanced on behalf of the town council that the corporation was a government body simply exercising the functions of government and should therefore be denied exemption as was the conclusion in Metropolitan Fire Brigades Board v. Commissioner of Taxation[56]. His Honour observed that this last-mentioned case was decided on a statutory exemption given to public benevolent institutions, a concept which differs significantly from a charitable institution, a matter to which I shall return. He went on to distinguish the Metropolitan Fire Brigades Board case on the further ground that the corporation could not be characterised as an agency of government:

"In this case no ministerial control could be exercised over any of the associations, either by virtue of the Acts under which they are constituted or by the provisions of the constitutions. The mere fact that the associations are indirectly government funded does not deprive them of the character of being charities."[57]

39 I interrupt myself to make a brief reference to the concept of "public benevolent institution". This is the description frequently given in Australian taxation law to those institutions which are given a statutory exemption from tax. Such an institution differs from a charitable institution in that the latter is characterised by having a principal purpose or activity which is charitable within the legal meaning discussed in Pemsel's case. Following the decisions of the Privy Council in Chesterman v. Federal Commissioner of Taxation (Cth)[58] and Adamson v. Melbourne and Metropolitan Board of Works[59] to the effect that a tax exemption for an entity having charitable purposes is available for purposes which are within the legal definition of charitable rather than within its more narrow popular meaning, the statutory exemption was changed to a new type of entity called a public benevolent institution. This expression has been construed as being limited to purposes promoting "the relief of poverty, suffering, distress or misfortune."[60] The interesting history[61] of the new statutory exemption need not be pursued further, for it is clear that the concept of public benevolent institution is essentially different from that of charitable institution[62] and that this was the intention of parliament when it was first introduced into this area of law. It should be noted, too, that in 1979 an exemption for public benefit institutions was included as paragraph (ba) to the exemptions already provided in sub-s. 10(1) of the Payroll Tax Act 1971 and in 1994 a further exemption was introduced in paragraph (bb) for charitable bodies. This shows that Parliament was alive to this distinction. We were, however, pressed on the point at issue on this appeal with cases in which there was consideration of the applicability of public benevolent institution exemptions to institutions which were close to government. To my mind, the underlying legal concept of charity is so far removed from that of public benevolent institutions that the analogy is not helpful.

40 The solution to the present case lies in the answer to the question of whether Central Bayside is so much a creature or agent of government that it should be treated as the equivalent of a government department which is performing its own functions which, in other respects, fall within the legal concept of charity. This appears to have been the approach adopted by the Tribunal which concluded that Central Bayside "is too close to being the arm of government or a part of bureaucracy ... to be an organisation whose objects come within the concept of charity revealed by the Preamble to then Statute of Elizabeth". The primary judge appears to have reached the same conclusion:

"The practical reality of [Central Bayside's] activities, history and control, in my view, is that of an organisation formed under the aegis of the Commonwealth's 1992 general practice initiative to carry out government sponsored health care reforms as part of the Commonwealth national health care strategy."

41 Having carefully considered the findings of fact of the Tribunal and the evidence referred to at that hearing, before the primary judge and before this Court, I have reached the conclusion that Central Bayside has demonstrated that it is a charitable body notwithstanding its involvement in the implementation of the Federal Government's health policy. I shall now set out why this is so. If I do so in greater length than might otherwise be thought necessary, this is in respectful deference to the views of those in this case who have concluded otherwise.

42 The starting point must be the legal structure of Central Bayside as it appears in its constitution adopted on 13 November 2001.[63] It is a company limited by guarantee established in 1994 under the provisions of the Corporations Law then in force; it is not a statutory body. It has no share capital. Its management is entrusted to its Board of Directors.[64] Its Directors must be primary members eligible to vote[65] elected at its annual meeting.[66] There are no government appointees. The primary judge concluded that it is not a department or other instrumentality of government. It follows, of course, that it is not "an instrumentality of the State" within the meaning of s. 10(1)(bb) of the Payroll Tax Act 1971.

43 Its single object as appears from its Constitution is the following:

"3. Object

The object of the company is to improve patient care and health, primarily in the Central Bayside area of Melbourne, by:

(a) improving communication between general practitioners and other areas of the health care system;

(b) more effectively integrating general practice with other elements of the health care system;

(c) enabling general practitioners to contribute to health planning;

(d) providing better access to available and appropriate general practitioner services for patients, and reducing inappropriate duplication of services;

(e) meeting the special (and localised) health needs of groups (such as Aboriginal and Torres Strait Islanders and those with non-English speaking backgrounds) and people with chronic conditions, particularly where these needs are not adequately addressed by the current health care system;

(f) advancing general practice, and the health and well-being of general practitioners;

(g) enhancing educational and professional development opportunities for general practitioners and undergraduates;

(h) increasing general practioner focus on illness prevention and health promotion; and

(i) improving the effectiveness and efficiency of health services at the local level."

44 By clause 5, Central Bayside is not a for-profit company. The clause provides:

5.1 The company may only use its income, assets and profit for its object.

5.2 The company must not distribute any of its profit, income or assets directly or indirectly to its members.

5.3 Clause 5.2 does not prevent the company from paying its members (including its directors):

(a) reimbursement for expenses properly incurred by them, and

(b) for goods supplied and services provided by them,

if this is done in good faith on terms no more favourable than if the member were not a member."

45 Upon winding up, its assets are to be given to a body, trust or fund with a similar object and which is also a not-for-profit entity.[67]

46 Part 3 of the Constitution deals with its membership. There are two categories: primary members, who are general practitioners who practice in the Central Bayside area and who support the object of the company[68]; and associate members who may be any person who supports the object of the company[69]. Steve Sant, the Chief Executive Officer of Central Bayside, in his affidavit sworn 20 November 2002 and filed in the VCAT proceeding, deposed that there were at that time approximately 180 primary members and 70 associate members. All were general practitioners, the associate members, however, were not carrying on practice within the Central Bayside area. There is provision in cl. 10 for the imposition of subscriptions for membership. Mr Sant deposed that there are currently no membership fees charged. Central Bayside does not charge general practitioners for its services.

47 In its Annual Report of 2002 Central Bayside sets out its vision, its mission statement and its goals.

"VISION

It is the vision of Central Bayside Division of General Practice that General Practitioners in the region:

> will provide a systematic and continuously improving quality of care which will lead to better health outcomes for the community;

> will promote general practice and the role of the general practitioner as the main planners, providers and co-ordinators of medical care;

> will have increased satisfaction in their professional life;

and that the Division itself will be recognised, both by its members and by the broader community, as a key player in helping general practice achieve these improvements in quality, outcomes and satisfaction.

MISSION STATEMENT

Central Bayside Division of General Practice will support local General Practitioners to continuously improve the quality of General Practice and the health of the local community.

GOALS

1. Quality: To assist GPs and practices to continuously improve the quality of the care that is provided to patients.

a) Effective GP and staff education linked to strategies that promote reflection on practice and practice improvement.

b) Support GPs to provide best practice patient and disease management.

c) Improve collaboration between GPs and other local providers in delivering planned, long term care to people with complex health problems.

2. Practice Capability: To build practise capability and capacity to delivery high quality multidisciplinary care.

a) Increase the role of practice nurses and other staff in patient services and practice quality.

b) Improve the quality of clinical and business management systems within practices.

c) Assist with the provision of practice management services.

3. IT/IM: To increase the extent to which GPs are using electronic information management tools for patient care, communication, quality improvement, practice planning and the enhancement of their businesses.

a) Provide IT and IM support to practices.

b) Provide timely data to individuals and practices for peer review.

4. Practice Population Health: To support general practice to manage their practice population in a systematic and long term manner.

a) Increase the capability of practices to analyse their practice population data.

b) Support practices to utilise their population data to assist with practice planning, services, quality improvement and preventive care.

5. Management: To effectively govern and manage the Division and its resources."

The equivalent statements in the 2001 Annual Report are in different terms but essentially to the same effect.

48 I turn now to its principal activities. In their Annual Report of 2002 the Directors state that there have been no significant change in the nature of these activities during the year and it was not suggested that they had relevantly changed since the preceding year. I shall therefore content myself with a description of them as appears in the Annual Report for the year ending 30 June 2002.

49 They cover a range of activities directed to the improvement of health information services to those in general practice, extending the immunisation cover within the Central Bayside area, the professional development of members, assisting and encouraging general practitioners within the Central Bayside area to upgrade their accreditation, the implementation of a model of care program in general practice based on decision support software. In addition, Central Bayside undertook a number of collaborative projects with the Pharmacy Guild of Australia and with other divisions of General Practice.

50 There was no dispute that these activities were within the object of Central Bayside and that they were directed to the improvement of the health of the community within the Central Bayside area. Nor could there be challenge to the finding of fact by the Tribunal that these activities were "an integrated part of a scheme of national health management presided over by the Federal Government". This led the Tribunal to the conclusion set out in paragraph [25] above. The primary judge accepted that an entity which is substantially funded and thereby controlled by the Commonwealth for the purpose of carrying out government sponsored health programs as part of the Commonwealth Health Care strategy may as a consequence not be regarded as a charitable body and that Central Bayside was such an entity.

51 The Constitution of Central Bayside provides that its funds may be derived from grants, fund raising activities, subscriptions, interest and other sources approved by the Board.[70] Its assets, like that of any corporation, are held for its own purposes.

52 The financial statements for 2002 show that the total revenue for the year was $1,048,979. The substantial component (93%) of which is shown as being grants. In his evidence, Mr Sant explained that 43% of the income is from "outcomes based funding grant" from the Federal Government. Other grants are predominantly project based. This was explored in cross-examination before the Tribunal, as a result of which the position is not entirely clear. Mr Sant agreed with the proposition that 57% of the grants received by Central Bayside related to specific projects and that the vast bulk of its funding would probably be traced ultimately to governmental sources. Other income from advertising, sponsorship, and other interest, represented about 8.4% total revenue.

53 Such restraints as may exist upon the obtaining of funds or their application by Central Bayside, within the ordinary limits permitted by Part 2B.1 of the Corporations Act, are imposed upon Central Bayside only by the terms of their receipt. This is not to belittle those restraints, for "the power of the purse" may be a considerable one and, when the purse is that of the Commonwealth Government, this is often a power which is wielded with energy and with considerable intrusion into the activities of the recipient. But, as the primary judge observed, the decision to accept funds which are subject to strings attached is a matter for Central Bayside. It does not appear that the Commonwealth seeks to impose its will upon Central Bayside in any other or more direct manner.

54 Mr Sant in his evidence before the Tribunal said that the initiative for projects undertaken by it is often that of Central Bayside. It might actively pursue funding for a project which it considers important for its community; it might itself devise a project in response to a tender called to remedy a particular health problem. He mentioned the initiative for falls prevention by way of example. It was not clear from his evidence, however, whether the funding for this falls prevention project was provided under a project based funding arrangement or by way of outcomes based funding. There was before the Tribunal a Commonwealth document which included a draft funding agreement dated 1999 between the Commonwealth as represented by the Department of Health and Ageing and the recipient of the funds. The parties treated this as a pro forma of the outcomes based funding agreement entered into between Central Bayside and the Commonwealth and I am content to proceed on that basis.

55 It appears from the funding agreement and from Commonwealth publication "General Practice in Australia: 2000" that the Commonwealth in or shortly prior to 1999 adopted the system of making available what it called "block grants", to GP organisations such as Central Bayside. It appears that the funding agreement was the vehicle for this. Under this system the government would make available to the recipient a given sum which was to be applied by the recipient to \conduct activities to improve integration with other elements of the health system and to address identified local health needs\.[71] The funds were to be expended only for the purposes of performing the Programs of Activity set out in schedule 1 to the funding agreement and in accordance with the terms of that agreement.[72] In schedule 1 the Programs of Activity are described in general terms and must comply with the recipient's own approved annual business plan.

•

A feature and objective of this funding agreement is the achievement by the recipient of specified outcomes in its Programs of Activity.[73] The departmental requirements of these are found in schedule 2 to the funding agreement. These, too, are also expressed in terms of great generality. For example, the main aim of the Divisions of General Practice Program is there expressed to be "to improve health outcomes for patients by encouraging GPs to work together and link with other health professionals to upgrade the quality of health service delivery at the local level." The funding agreement contains elaborate provisions for the recipient to provide reports on the progress and outcome of its funded projects and to provide accounts demonstrating the application of those funds. These are not significant for my purposes.

56 It was not contested before this Court or below that the mere fact that some of the funding for the performance of an entity's charitable activities would lead to the conclusion that it is not a charitable entity.[74] A feature of government social activity in the past 100 years or so has been the extension of this activity into areas which had not previously been seen as an appropriate role for government. These areas might include education, health, social services and the arts. More recently, this has tended to be achieved through non-government organisations using funds provided by government for the purpose. This has had the consequence that the role of these non-government organisations also has changed as they have been drawn closer to government and become more dependent upon government funding. An example offered in argument was the provision by government of funding to a religious order or some other private not-for-profit entity to enable it to conduct a hospital or children's home. It may be that the conduct of the institution is in accordance with government policy, that its conduct by the non-government organisation has the consequence of relieving the government of the burden of doing so itself, and that the provision of the funding is accompanied by all sorts of detailed restrictions and directions as to how the institution must be conducted. To my mind, the claim of such an entity to be classified as charitable will succeed so long as it stands sufficiently distant from government that it is not to be seen as its mere creature or agent. In general, mere economic dependence upon government will not suffice to establish such proximity, any more than the commercial dependence of a business upon a dominant customer will make that business part of the customer in the eye of the law. So long as the institution has independent existence and management and the right to choose how it might conduct its affairs and pursue its objective, it cannot be seen as an creature or agent of the government upon which it may nevertheless be financially dependent.

57 I return once again to the facts of this case. It is clear that Central Bayside is not the mere creature or agent of the Commonwealth government. No government control is exercised over its management. It plays an active role in itself selecting the particular projects which it undertakes for the benefit of its community. These features and the fact that its management is undertaken by its elected members without stipend from the Commonwealth shows that its relationship is more than of

an ally than that of an agent. In this respect it is like any organisation whose principal object and activities are charitable. It is a charitable body.

58 I would therefore allow the appeal.

59 In this matter I have had the considerable advantage of reading the draft reasons for judgment of Chernov, J.A. and Byrne, A.J.A.

60 I agree that the question which arises for determination in this appeal is simply whether the appellant ('the Division'), given its structure and relationship to government, meets the requirements of the fourth head of Pemsel's case[75] when these requirements have been adjusted to make them applicable to an entity rather than to the purposes of a trust. I further agree that the answer to this question turns upon the further question of whether the appellant is so much a creature or agent of government that it should be denied the status of a charity.

61 Despite the fact that the constitutional objects and structure of the Division support the view that it is a charity for the reasons elucidated by Byrne, A.J.A. I have ultimately come to the conclusion that the reality of the Division's formation and continuing activities is that the Division is a creature and agent of government.

62 I respectfully agree with the analysis of Chernov, J.A. which supports this conclusion. I would only add that in my view the evidence given to the Victorian Civil and Administrative Tribunal by Mr Sant, the Division's Chief Executive Officer, makes clear that the activities of the Division are controlled by the purposes of government. The most significant matters emerging from that evidence which support this conclusion are that:

(a) The Division was established in 1993 pursuant to the Commonwealth Department of Health Divisions and Grants Program as part of a nationwide

regional network of divisions providing a vehicle for the implementation of Commonwealth health policy with respect to general practitioners. This program initially funded the activities of the Division by way of infrastructure and program grants.

(b) In 1997-98 the Commonwealth Government introduced the Divisions of General Practice Program which provided funding by way of a system of block grants based on agreed priorities embodied in Outcomes Based Financing agreements.

(c) The activities of the Division were at the time of Mr Sant's evidence almost wholly funded by the Commonwealth Government and controlled by way of grants for specific purposes or the provisions of a core funding agreement which specified outcome indicators.

(d) The very role and organisational form of the Division were at the time of hearing the subject of a Commonwealth Government review. The terms of reference for the review were as follows:

"The review panel will make recommendations on:

(1) The future role of Divisions of General Practice to ensure:

• Divisions contribute as effectively as possible to the achievement of the best possible health outcomes for Australians; and

• Divisions are able to assist general practice in responding to current and emerging developments in Australia's primary health system and the role of general practice in that system.

(2) The implications of this future role for the organisation and structure of Divisions of General Practice including:

• the size and number of Divisions, including considerations of boundaries relevant to other health structures and programs;

• the governance arrangements of Divisions;

• the roles of the Australians Division of General Practice, and the State Based Organisations; and

• future funding arrangements under the DGPP, including the possible development of national key performance indicators, the balance between national performance indicators for all Divisions and scope for individual Divisions to respond to local needs and issues, and the calculation of funding allocations for individual Divisions."

(e) Mr Sant's evidence concerning this review included his understanding of the Commonwealth Government's intentions and was expressed in terms which implicitly accepted that it would be the Commonwealth Government which determined the ongoing role of the Division.

"It is 10 years since divisions were formed. The Minister spoke recently at a conference that I attended. She made it very clear that it was her intention that divisions would continue. They wanted to evaluate the various models of divisions that are in operation and determine what is the most appropriate way of ensuring the best population health outcomes for the Australian population."

63 For the above reasons I agree that the learned judge below was correct in concluding the purpose of the Division's activities does not fall within the spirit of the preamble to the Charitable Uses Act 1601. Accordingly, the appeal should be dismissed.

[1] [1891] UKHL 1; [1891] A.C. 531 at 583.

[2] [1937] HCA 64; (1937) 58 C.L.R. 316 at 324.

[3] See also Hobart Savings Bank and Launceston Bank for Savings v. Federal Commissioner of Taxation [1930] HCA 11; (1930) 43 C.L.R. 364 at 374-375 per Dixon, J.

[4] See Hobart Savings Bank at 373 to 374 per Dixon, J. citing Lord Watson in Pemsel's case at 558.

[5] Roman Catholic Archbishop v. Lawlor [1934] HCA 14; (1934) 51 C.L.R. 1 at 33 per Dixon, J.

[6] [1950] VicLawRp 66; [1950] V.L.R. 382.

[7] At 358.

[8] (1990) 27 F.C.R. 279.

[9] Although the criteria for determining whether a body is a charity is not the same as that applicable to a benevolent institution, there is sufficient similarity between them to regard what their Honours said in that case as being relevant to the present issue.

[10] At 283.

[11] Emphasis added.

[12] Metropolitan Fire Brigade (1990) 27 F.C.R. 279; Mines Rescue Board (NSW) v. Commissioner of Taxation [2000] FCA 1162; (2000) 101 F.C.R. 91; and Ambulance Service of New South Wales v. Deputy Commissioner of Taxation (20030 [2003] FCAFC 161; 130 F.C.R. 477.

[13] See Perpetual Trustee Co. v. Federal Commissioner of Taxation[1931] HCA 20; (1931) 45 C.L.R. 224 at 231 per Starke, J. and at 233 per Dixon, J. Thus, ordinarily, a public benevolent institution may be a charity, but not every charity would constitute a public benevolent body. See Northern Land Council v. The Commissioner of Taxes (20020 141 N.T.R.1 at 5 per Martin, C.J.

[14] Ambulance Service at 491.

[15] At 280.

[16] At 281.

[17] At 282.

[18] At 283.

[19] Nicholson, Lehane and Goldberg, JJ. at 101.

[20] At 487.

[21] At 491.

[22] At 493.

[23] (1997) 115 N.T.R. 25.

[24] With whom Martin, C.J. and Thomas, J. agreed.

[25] At 41.

[26] Published by the Commonwealth Department of Health and Aged Care in May 2000.

[27] Then called the Department of Health, Housing and Community Services, which ultimately became the Department of Health and Ageing.

[28] General Practice In Australia: 2000 at 166.

[29] As per a report of the Department of Health and Family Services (as it then was) published in 1998 quoted in "General Practice in Australia: 2000" at 210.

[30] Outcomes base Funding Agreement Schedule 2 provided to Central Bayside by the Department in April 2002.

[31] [1971] HCA 44; (1971) 125 C.L.R. 659 at 666.

[32] This area, which appears to be centred in Sandringham, covers the postcode areas 3172, 3186-3188, 3190-3196, Constitution cl. 65.1(d) .

[33] Royal Australasian College of Surgeons v. Federal Commissioner of Taxation [1943] HCA 34; (1943) 68 C.L.R. 436 at 444 per Latham, C.J. and at 446 per Rich, J.

[34] At 447 per Rich, J. and at 449 per Starke, J.; Congregational Union of New South Wales v. Thistlethwayte [1952] HCA 48; (1952) 87 C.L.R. 375 at 442 per Dixon, C.J., McTiernan, Williams and Fullagar, JJ.

[35] Royal College of Surgeons of England v. National Provincial Bank Ltd. [1952] A.C. 631 at 642-3 per Lord Normand.

[36] 43 Eliz. I C4.

[37] Hobart Savings Bank and Launceston Bank for Savings v. Federal Commissioner of Taxation [1930] HCA 11; (1930) 43 C.L.R. 364 at 372-3 per Dixon J; Ashfield Municipal Council v. Joyce [1976] A.C. 122.

[38] Hobart Savings Bank and Launceston Bank for Savings v. Federal Commissioner of Taxation [1930] HCA 11; (1930) 43 C.L.R. 364 at 374 per Dixon, J; Roman Catholic Archbishop of Melbourne v. Lawlor [1934] HCA 14; (1934) 51 C.L.R. 1 at 31 per Dixon J.; Incorporated Council of Law Reporting for England and Wales v. Attorney-General [1972] 1 Ch. 73 at 87 per Russell L.J.

[39] [1891] UKHL 1; [1891] A.C. 531 at 583.

[40] [1930] HCA 11; (1930) 43 C.L.R. 364 at 375.

[41] (References omitted).

[42] (References omitted).

[43] [1934] HCA 14; (1934) 51 C.L.R. 1.

[44] At 31 per Dixon J.

[45] At 33 per Dixon J.

[46] At 31- 32 per Dixon J.

[47] Paragraph [31].

[48] Incorporated Council of Law Reporting (Qld) v. Commissioner of Taxation (Cth) [1971] HCA 44; (1971) 125 C.L.R. 659 at 669-70 per Barwick, C.J.

[49] Re Cain [1950] VicLawRp 66; [1950] V.L.R. 382 at 387 per Dean, J.

[50] [1950] VicLawRp 66; [1950] V.L.R. 382 at 388.

[51] [1959] N.Z.L.R. 204.

[52] [1959] N.Z.L.R. 204 at 210.

[53] (1997) 115 N.T.R. 25.

[54] 115 N.T.R. 25 at 39.

[55] 115 N.T.R. 25 at 40.

[56] (1990) 27 F.C.R. 279.

[57] 115 N.T.R. 25 at 41.

[58] [1923] HCA 24; (1923) 32 C.L.R. 362.

[59] [1929] A.C. 142.

[60] Perpetual Trustee Co Ltd v. Federal Commissioner of Taxation (Cth) [1931] HCA 20; (1931) 45 C.L.R. 224 at 233-4 per Dixon, J.

[61] See Perpetual Trustee Company Limited v. Federal Commissioner of Taxation (Cth) [1931] HCA 20; (1931) 45 C.L.R. 224 at 231 per Starke J. The matter is touched upon in Metropolitan Fire Brigades Board v. Commissioner of Taxation (1990) 27 F.C.R. 279 at 282.

[62] As Mildren, J. observed in Alice Springs Town Council v. Mpweteyerre Aboriginal Corporation (1997) 115 N.T.R. 25 at 41.

[63] This Court was, after the conclusion of argument, provided with a copy of the Memorandum of Association and Articles of Association of Central Bayside dated 31 January 1994, which were replaced on 13 November 2001 with the Constitution which was the subject of argument before us. References in this judgment are to the 2001 Constitution which was current for most of the tax year in question.

[64] Constitution cl 42.

[65] Constitution cl 30.2.

[66] Constitution cl 30.1.

[67] Constitution cl. 62.

[68] Constitution cl. 7.1.

[69] Constitution cl. 7.2.

[70] Constitution cl 53.

[71] Recital A.

[72] Clause 4.

[73] Clause 2.3.

[74] This was conceded also in Common Equity Housing Ltd. v. Commissioner of State Revenue (Vic) (1996) 96 A.T.C. 4,598 at 4,610.

[75] Commissioners for Special Purposes of the Income Tax v. Pemsel [1891] UKHL 1; [1891] A.C. 531 at 583.