AUSTRALIAN FLYING CORPS & ROYAL AUSTRALIAN AIR FORCE ASSOCIATION (WA DIVISION) INC

Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA

Citation : AUSTRALIAN FLYING CORPS & ROYAL AUSTRALIAN AIR FORCE ASSOCIATION (WA DIVISION) INC and CITY OF MANDURAH [2015] WASAT 47

Charity - Local government - Rateable property - Exemption for land used exclusively for charitable purposes - Land used for the purpose of housing aged persons in a retirement village - Charitable purpose - Relief of the aged - Public benefit - Whether the charitable purpose of the relief of the aged, in the context of a retirement village, requires at law that the accommodation and other services be subsidised, for the benefit of the community as a whole and of a kind that is not generally available in the community

Local Government Act 1995 (WA), s 6.26

State Administrative Tribunal Act 2004 (WA), s 105

Statute of Charitable Uses 1601 (Imp), 43 Eliz 1, c 4

Aid/Watch Inc v Federal Commissioner of Taxation [2010] HCA 42; (2010) 241 CLR 539

Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc and City of Mandurah [2013] WASAT 89

Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc and City of Mandurah [2015] WASAT 47

Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566

Brisbane City Council v Attorney-General (Qld) [1979] AC 411

Central Bayside General Practice Association Ltd v Commissioner of State Revenue (Vic) [2006] HCA 43; (2006) 228 CLR 168

City of Hawthorn v Victorian Welfare Association [1970] VicRp 25; [1970] VR 205

City of Mandurah v Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc [2014] WASCA 104

Commissioners for Special Purposes of Income Tax v Pemsel [1891] UKHL 1; [1891] AC 531

Congregational Union of New South Wales v Thistlethwayte [1952] HCA 48; (1952) 87 CLR 375

DV Bryant Trust Board v Hamilton City Council [1997] 3 NZLR 342

Gilmour v Coats [1949] UKHL 1; [1949] AC 426

Hamilton City Council v DV Bryant Trust Board [1999] 1 NZLR 41

Helena Partnerships Ltd v Revenue and Customs Commissioners [2012] 4 All ER 111

Hilder v Church of England Deaconess' Institution Sydney Ltd [1973] 1 NSWLR 506

Joseph Rowntree Memorial Trust Housing Association Ltd v Attorney-General [1983] 1 Ch 159

Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390

National Anti-Vivisection Society v Inland Revenue Commissioners [1947] UKHL 4; [1948] AC 31

Oppenheim v Tobacco Securities Trust Co Ltd [1950] UKHL 2; [1951] AC 297

Osland v Secretary, Department of Justice (No 2) [2010] HCA 24; (2010) 241 CLR 320

Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361

R (Independent Schools Council) v Charity Commission for England and Wales [2012] 2 WLR 100

Re Cottam [1955] 1 WLR 1299

Re Glyn's Will Trusts [1950] 2 All ER 1150 (note)

Re Income Tax Acts (No 1) [1930] ArgusLawRp 22; [1930] VLR 211

Re Scarisbrick [1951] 1 Ch 622

Robison v Stuart [1891] NSWLawRp 17; (1891) 12 LR (NSW) Eq 47

Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; (2001) 207 CLR 72

Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation [1952] HCA 4; (1952) 85 CLR 159

Scottish Burial Reform and Cremation Society Ltd v Glasgow Corporation [1967] UKHL 3; [1968] AC 138

Stratton v Simpson [1970] HCA 45; (1970) 125 CLR 138

Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (NSW) [2011] HCA 41; (2011) 245 CLR 446

Taylor v Taylor [1910] HCA 4; (1910) 10 CLR 218

The Incorporated Council of Law Reporting of the State of Queensland v Federal Commissioner of Taxation [1971] HCA 44; (1971) 125 CLR 659

The Mayor and Councillors of the Municipality of North Fremantle v Saw [1906] WALawRp 38; (1906) 8 WALR 164

Thompson v Federal Commissioner of Taxation [1959] HCA 66; (1959) 102 CLR 315

TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175

Trustees of Church Property of the Diocese of Newcastle v Lake Macquarie Shire Council [1975] 1 NSWLR 521

Uniting Church Homes (Inc) and City of Stirling [2005] WASAT 191

Verge v Somerville [1924] AC 496

West Australian Baptist Hospital & Homes Trust Inc v City of South Perth [1978] WAR 65

1 MARTIN CJ: This application for leave to appeal from a decision of the State Administrative Tribunal should be allowed, but the appeal dismissed, for the reasons given by President Buss, with which I agree.

2 BUSS P: The appellant (the City) is a local government. It has applied for leave to appeal from a decision of the State Administrative Tribunal (the Tribunal) in relation to whether land owned by the respondent (RAAFA), being Lots 102, 711 and 712 Oakleigh Drive, Erskine (the Land), is rateable land under s 6.26 of the Local Government Act 1995 (WA) (the LG Act).

3 Between January 2009 and November 2011, RAAFA lodged a number of objections with the City concerning the City's rate records for the 2008/2009, 2009/2010, 2010/2011 and 2011/2012 rating years (the Relevant Rating Years). The objections related to the Land. At all material times, RAAFA has operated on the Land a retirement village known as Erskine Grove. RAAFA asserted in the objections that in each of the Relevant Rating Years the Land was used exclusively for charitable purposes and, pursuant to s 6.26(2)(g) of the LG Act, was not rateable land.

4 On 25 January 2012, the City dismissed RAAFA's objections for these reasons:

Each of the rating objections lodged by [RAAFA] in relation to [the Land] for the [Relevant Rating Years] BE DISALLOWED pursuant to s 6.76(5) of [the LG Act] for the following reasons:

[RAAFA] uses the Land to provide accommodation and services to residents in return for the full cost of so doing;

This use does not constitute a charitable purpose within the meaning of s 6.26(2)(g) of [the LG Act]; and

As a result of this, [the Land] is not being used 'exclusively for charitable purposes' within the meaning of s 6.26(2)(g) of [the LG Act] and is therefore rateable land.

5 On 6 March 2012, RAAFA applied to the Tribunal for a review of the City's decision.

6 Subsequently, the parties prepared a statement of agreed facts and formulated a number of preliminary issues for determination by the Tribunal. RAAFA summarised the preliminary issues as being 'whether or not fees and charges that are payable by residents of Erskine Grove to [RAAFA] are such as to preclude the use of the [Land] being for a

charitable purpose'. The City summarised the preliminary issues slightly differently, namely 'if the Land is used to provide accommodation and other services for the aged and most residents pay the costs associated with the provision of those services to them, is the Land used exclusively for charitable purposes such that it is not rateable land?'.

7 The Tribunal, in determining the preliminary issues, concluded:

Even if the residents of Erskine Grove are required to pay to [the City] the costs associated with the provision of accommodation and other services for the relief of the aged, and even if, on a consistent basis, the amount paid produces a surplus of income over expense, that will not preclude a conclusion that the Land was used exclusively for a charitable purpose. That statement, however, is subject to the following provisos:

1. any such surplus should not be for the private profit of the provider; and
2. the costs of the accommodation and services should not be so great as to exclude the element of public benefit.

See Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc and City of Mandurah [2013] WASAT 89 [57].

8 The City applied to this court, pursuant to s 105 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act), for leave to appeal from the Tribunal's decision in relation to the preliminary issues. Leave to appeal was refused and the appeal dismissed. Martin CJ, Buss and Newnes JJA said:

[The City] sought leave to appeal to this court.

An appeal against a decision of the Tribunal lies only with leave (s 105(1) of the [SAT] Act), on a question of law (s 105(2)).

As is regrettably so often the case, the question of law which [the City] sought to have determined by this court was not clearly identified in the papers before the court. On the hearing of the application for leave to appeal, senior counsel for [the City] was asked to identify the relevant question of law. We were told the question was whether, based on the agreed statement of facts and on the basis that the same services could be obtained from other providers (either not-for-profit organisations or commercial operations), the determination in [57] of the Tribunal's reasons was correct (ts 23).

The difficulty, however, is that whether the same services could be obtained from other providers was neither agreed by the parties before the Tribunal nor determined by the Tribunal. As it emerged, it was also not agreed for the purposes of the application to this court. Senior counsel for [the City] said that the proposition that the same services could be obtained from other providers was essential to [the City's] case and would be asserted as a fact when the proceedings continue in the Tribunal. In the absence of such a finding, there was no appropriate question of law for determination and the application for leave to appeal should be dismissed. The application for leave to appeal was accordingly dismissed.

The determination of the application for leave to appeal renders it unnecessary to express any view with respect to the effect of the Tribunal's purported 'determination' of the so-called 'preliminary issues', or as to whether this was relevantly a 'decision' of a kind which could enliven an appeal under s 105 of the Act, or as to the desirability of the procedural course adopted by the Tribunal.

See City of Mandurah v Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc [2014] WASCA 104 [10] - [14].

9 RAAFA's application was remitted to the Tribunal. The application was heard on 2, 12 and 23 February 2015.

10 On 5 May 2015, the Tribunal decided that RAAFA's application to review the City's decision should be allowed and that RAAFA's objections to the City's rate records for the Relevant Rating Years should be upheld. The Land was not rateable land under s 6.26 of the LG Act because the Land was used exclusively for a particular charitable purpose, namely the relief of the aged in each of the Relevant Rating Years. See Australian Flying Corps & Royal Australian Air Force Association (WA Division) Inc and City of Mandurah [2015] WASAT 47.

11 I would grant leave to appeal, but the appeal must be dismissed. My reasons are as follows.

12 On 27 January 2015, the parties filed in the Tribunal a statement of agreed facts.

13 RAAFA filed witness statements from John Murray, RAAFA's Chief Executive Officer, and Matthew Garmony, a licensed valuer.

14 The City filed a witness statement from David Prattent, the City's Manager, Financial Services, and a report from Martin Langridge, a chartered accountant.

15 The statement of agreed facts, as set out in the Tribunal's reasons, reads:

1. RAAFA's constitution and rules of association provide that RAAFA will:

1. undertake the care and welfare of and to provide facilities for retired, aged, pensioned and infirm persons and for the provision of relief in the form of companionship, mutual activities and security of community living to counter the effects of the isolation and loneliness of old age. This includes, but is not limited to, the provision of homes, accommodation or other care facilities for the infirm, for persons who are by reason of their age, ill-health, accident or infirmity wholly or in part unable to maintain themselves by their own exertion or for aged or retired persons or for persons who in the opinion of the RAAFA's Council are in circumstances which necessitate such care; 2. render homage to God and unswerving loyalty to the Sovereign of Australia;

1. assist and cooperate with kindred ex­service organisations and other organisations and to assist them in attaining any common object; 2. take an active interest in aviation and aeronautical research; and 3. maintain and operate the RAAFA Aviation Heritage Museum of Western Australia for the purpose of conservation of aviation heritage.
2. RAAFA's property and income is to be applied solely towards the promotion of its objects and no part of that property or income may be paid or otherwise distributed directly or indirectly, to members of RAAFA, except in good faith in the promotion of its objects.
3. If, on the winding up of RAAFA, any property remains after satisfaction of its debts and liabilities and the costs, charges and expenses of that winding up, that property shall be distributed to an organisation with similar objects.
4. RAAFA is:

1. a not-for-profit organisation, the income and property of which are applied solely to the promotion of its objects and are not paid directly or indirectly by way of pecuniary profit to a member or any other person; 2. registered with the Australian Tax Office (ATO) as a public benevolent institution;

1. endorsed by the ATO as a deductible gift recipient;

1. endorsed by the ATO as an income tax exempt charity; and 2. licensed as a charitable organisation.
2. RAAFA operates a number of aged care and retirement living facilities in Western Australia, with five estates/villages across the metropolitan area and one in Albany. Four of the estates in the metropolitan area also include residential aged care facilities.
3. Erskine Grove:

1. was constructed by RAAFA at an approximate total cost of between $30,000,000 and $33,000,000 (inclusive of GST, but exclusive of land costs); 2. consists of 197 [independent living units (ILUs)] and the Village;

1. is located next to Halls Head Sporting and Recreation Club (with four bowling greens) and the Halls Head Country Croquet Club; and

1. has discrete parking areas for caravans and boats.
2. The ILUs are operated as a retirement village under the provisions of the [Retirement Villages Act 1992 (WA) (the RV Act)] and in accordance with the Code of Fair Practice for Retirement Villages 2009 (WA).
3. Each ILU is self-contained and:

1. comprises of two bedrooms and a study/third bedroom (in the case of 194 of the ILUs) or two bedrooms (in the case of the other remaining three ILUs), an ensuite, extra toilet, kitchen, dining, lounge, undercover outdoor living area and a wider than normal lock­up garage for a single vehicle; 2. is situated on a discrete piece of the Land, with side and rear fences separating it from other ILUs; and

1. is supplied with a telephone, emergency call system, light fittings and exhaust fan, security doors, smoke detection system, fly screens, stove, hot water system and an air conditioner.
2. RAAFA encourages residents in the ILUs to be independent as far as possible.
3. Residents:
   1. provide their own furniture, cooking utensils, cutlery, crockery, bedding, clothing, cleaning products, medication and personal requirements; and
   2. do their own shopping, cooking, cleaning, laundry and gardening in the rear garden area of their ILU.
4. The Village's common facilities include:

1. an administration office; 2. a community centre (including meetings rooms and offices);

1. an indoor swimming pool; 2. activities rooms; 3. a hairdressers salon; 4. medical and consulting rooms; 5. a library; 6. a computer room; 7. a dining room; 8. a lounge;

1. a workshop.
2. Save for the administration office, and for the matters set in the following paragraph, residents may use the facilities within the Village without paying any additional fee.
3. Residents are required to pay:

1. any fees payable to hairdressers, doctors and nurses for any services provided to them; 2. for any meals consumed in the Village's dining room; and

1. the cost of any materials consumed by them in any of these facilities.
2. The administration office is staffed with a manager (who works 30 hours a week), a part-time administration clerk and a part-time welfare officer, who coordinate all day­to-day operations and running of Erskine Grove. In addition, RAAFA employs a full-time maintenance officer and two full­time gardeners at Erskine Grove.
3. A social committee organised by residents of Erskine Grove and supported by RAAFA organises regular outings and activities for residents. RAAFA's support is via the use of various facilities in the Village for activities organised and provided at Erskine Grove, and the provision of a bus, which may be used by the social committee for activities organized outside of Erskine Grove.
4. Examples of activities organised and provided at Erskine Grove include the following:

1. themed dining events held in the community centre and hall, such as a 'roast night', fish and chips, Hawaiian feast and Irish evenings; 2. craft and hobby activities held in the arts and crafts room;

1. do-it-yourself activities held in the workshop;

1. family events for special occasions such as Mother's Day, Father's Day, Easter and Christmas; 2. speakers to address residents in the community centre and hall; and 3. a weekly 'happy hour' held on Wednesdays in the community centre and hall, to enable new residents to meet existing residents and for the exchange of information, news and tips.
2. Events and activities held at Erskine Grove are usually well attended. For example, the hall at the Village can comfortably accommodate 150 - 165 people for dining and is usually fully booked on the themed dining evenings.
3. Examples of other activities organised outside of Erskine Grove, using the bus provided by RAAFA, include the following:

1. weekly shopping trips to Mandurah Forum; 2. lunch and dinner outings to local restaurants, recent examples of which have been Hot Rocks Cafe, Jolly Frog Restaurant, Mandurah Quays and the Premier Hotel (Pinjarra); and

1. trips to RAAFA's other villages, in particular RAAFA's nearby village at Meadow Springs.
2. RAAFA produces a regular newsletter, 'Air Mail', providing information on activities across all of its aged care facilities and general news about RAAFA and its other activities, as well as articles on healthcare and matters of general interest to residents and other members.
3. Erskine Grove also produces its own internal newsletter with information specific to that estate. The Estate Manager and Welfare Officer in conjunction with residents produce this monthly newsletter.
4. At all material times, RAAFA has:
   1. provided prospective residents of the ILUs with a copy of the Pre­Contractual Disclosure Booklet (Disclosure Booklet); and
   2. granted to each tenant of an ILU a life-long lease (Lease) to occupy that ILU. Residents pay for the preparation, execution and stamping of the Lease.
5. The Lease also provides that the resident agrees to become a member of RAAFA.
6. Further provisions regarding the use of ILUs by residents and the use of certain other facilities forming part of the Village are contained in Erskine Grove Rules & Regulations (Rules).
7. Amongst other provisions, under the Lease and the Rules:

1. RAAFA is obliged to manage the Village in accordance with the terms and conditions of the Lease and the spirit of the Charter of Residents' Rights and Responsibilities (Charter); 2. RAAFA is obliged to maintain and repair all 'Common Facilities' and 'Common Areas';

1. RAAFA is obliged to maintain stoves, cook tops extractor fans air conditioners and hot water services where these are installed in the ILUs;

1. RAAFA is obliged to provide each ILU with an emergency call system, monitored 24 hours a day; 2. Residents must maintain their ILU in good and tenantable repair and condition; and 3. Residents are permitted to have live-in-carers and to have visitors stay with them in their ILU at all times, although prior arrangements must be made with RAAFA for visitors staying longer than a continuous period of 6 weeks or a cumulative period of 10 weeks in any year.
2. An ingoing resident to an ILU must pay an interest free entry loan to RAAFA in consideration of the grant of a Lease (Entry Loan).
3. In exchange for the Entry Loan a resident is given the right to occupy his or her ILU for life, although a resident may terminate his or her Lease on 30 days notice.
4. Upon the termination of the Lease, RAAFA must repay the Entry Loan, less a Retention Sum to the resident or his or her estate (Retention Sum).
5. The Retention Sum:
   1. equals the Entry Loan divided by 480 multiplied by the number of months the resident has occupied the ILU (but this multiplier can not exceed 120); and
   2. is payment for the resident's occupation of the ILU and for the use of the common facilities and common areas.
6. The amount of the Entry Loan is determined by RAAFA and reviewed on an annual basis having regard to matters including the median house price in the locality and equivalent charge being made by other retirement villages in the locality.
7. Since Erskine Grove commenced operations, each resident of an ILU has paid an Entry Loan ranging from $160,000 to $307,000 depending on when the Entry Loan was paid and the nature of the ILU concerned.
8. In effect, by way of the Retention Sum, a resident pays a monthly amount of 1/480th of the Entry Loan, which is fixed for 10 years, for the resident's occupation of the ILU and use of the common facilities and common areas. Save for the interest accruing to RAAFA (and foregone by a resident) on an Entry Loan, after a period of 10 years, a resident pays nothing further for the occupation of the Unit or the use of the common facilities and common areas for the remainder of his or her residency at Erskine Grove, however long that might be.
9. Upon the termination of the Lease:
   1. an ILU will be leased to a new resident, who will pay to RAAFA a new Entry Loan; and
   2. the outgoing resident (or his or her estate) is not entitled to share in any increase, or required to fund any decrease, between the amount of Entry Loan that was paid by the outgoing resident and the amount of the Entry Loan paid by the new resident.
10. From an ongoing costs perspective

1. a resident of an ILU must pay to RAAFA the 'Operating Costs Charge' (Operating Costs Charge) as a contribution to 'Operating Costs' by monthly payments in advance; 2. 'Operating Costs' is defined as meaning 'the total amount of [RAAFA's] outgoings, costs and expenses now or after the date of signing this Lease properly and reasonably assessed, charged or chargeable, paid or payable or otherwise incurred for the maintenance, management and operation of the Village';

1. such costs include but are not limited to all taxes, rates, and water consumption charges; all insurance premiums (for the Village and its plant and equipment, workers' compensation, public risks and liability); all charges for utility services; the costs of cleaning and maintaining the Village and landscaping and maintaining the common garden areas; all reasonable costs of management and administration of the Village; all costs of providing the common services and maintaining the common facilities; all costs associated with fire services, pest control; and all costs of legal, accounting and administrative support; but excludes costs which are otherwise specifically payable by a resident;

1. RAAFA must provide residents with a proposed Operating Costs Budget before the end of the Village's financial year which will be considered at an annual budget meeting; 2. 'Operating Costs Charge' is defined as meaning an annual charge equal to 25% of the Single Aged Pension per annum, where an ILU is occupied by one person (or 30% if an ILU is occupied by two persons), or a greater annual charge as determined under the provisions of the Lease; 3. the 'Operating Costs Charge' may be increased in the following financial year where it is anticipated that there will be a shortfall between this charge and the Village's Operating Costs; and 4. where the actual Operating Costs of Erskine Grove are less than the fees collected by the Operations Costs Charge in any financial year, RAAFA must either apply the surplus against the following financial year's Operating Costs (thereby reducing the monthly Operating Costs Charge) or where the residents so resolve, to a purpose that is of benefit to the residents.
2. Residents are also obliged to pay:
   1. all rents, rates and charges charged to them for the consumption and use of electricity, telephone, gas, second toilet pedestal or other services within their ILU including connection and disconnection charges; and
   2. all costs of external modification to their ILU, all costs of remedying any roof leaks caused by those modifications, the cost and maintenance of any equipment they have added to the ILUs, the cost of installing and removing wallpaper, the cost of cleaning carpets, tiles, curtains and the ILU generally and the costs associated with light bulbs, drains and tap washers.
3. From the commencement of operation of Erskine Grove to date, including throughout the Relevant Rating Years the Operating Costs Charge has remained at 25% of the Single Aged Pension where an ILU is occupied by one person or 30% where an ILU is occupied by two persons.
4. A summary of the income and expenses for each of the Relevant Rating Years is as follows:

1. The reference to 'Resident fees' is the total amount of the Operating Costs Charge paid by the residents of Erskine Grove.
2. The reference to 'Other income' comprises outdoor pool receipts, room/hall hire income, bus use income, administration recovery, telephone recovery and sundry income received by RAAFA in relation to Erskine Grove.
3. The surplus in 2008/2009 was credited to residents' maintenance accounts for 2009/2010 in accordance with the provisions of clause 6.3(a) of the Lease.
4. The surplus in 2009/2010 was applied to the cost of installing solar electricity panels at Erskine Grove in accordance with a special resolution of the residents in accordance with the provisions of the Lease.
5. The surplus in both 2010/2011 and 2011/2012 were credited to residents' maintenance accounts in accordance with the provisions of the Lease.
6. During the 2008/2009 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. occupancy levels of approximately 99% were maintained; and
   2. RAAFA's unit selling price remained steady at $124,000 (one bed unit) to $295,000 (three bed unit).
7. During the 2009/2010 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. occupancy levels were maintained although there were some noticeable delays in filling vacancies; and
   2. RAAFA's unit selling price remained steady at $124,000 (one bed unit) to $295,000 (three bed unit).
8. During the 2010/2011 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. occupancy levels were maintained across RAAFA's estates, although there was a slight increase in the vacancy rates; and
   2. RAAFA's unit selling prices have been kept at a sustainable level at $140,000 (one bed unit) to $319,000 (three bed unit).
9. During the 2011/2012 rating year, across all of RAAFA's estates, including Erskine Grove:
   1. reasonable occupancy levels were maintained across RAAFA's estates, despite the slowdown in the real estate market; and
   2. RAAFA's unit selling prices have been kept at a sustainable level at $140,000 (one bed unit) to $324,000 (three bed unit).
10. The following numbers of residency agreements commenced during each of the Relevant Rating Years:

1. 2008/2009 - 11 (including two that commenced on 1 July 2009); 2. 2009/2010 - 12 (excluding two that commenced on 1 July 2009);

1. 2011/2012 - 8.
2. During the Relevant Rating Years:
   1. all vacancies at Erskine Grove were advertised and offered to the general public by way of:
      1. advertisements in 'Lifestyle/Retirement Village Guide' published in the Saturday edition of The West Australian newspaper;
      2. advertisements on RAAFA's website; and/or
      3. signage at the front entrance to the Erskine Grove property; and
   2. all vacancies at Erskine Grove were filled by members of the general public who responded to the advertisements referred to above.
3. In accordance with the requirements of the RV Act, at least one of the proposed residents of an ILU at Erskine Grove must be aged 55 years or more.
4. The average age of the residents in the ILUs at Erskine Grove is 76 years.
5. During the Relevant Rating Years, RAAFA did not receive any new requests for concessions in relation to the Entry Loan from people wishing to take up residency at Erskine Grove but who were unable to pay the full amount of the Entry Loan due to their financial circumstances or a shortfall in the sale price of their previous home. RAAFA had received several such requests prior to the Relevant Rating Years, all of which were agreed to and were still in effect during at least some of the Relevant Rating Years.
6. The following concessions were agreed to by RAAFA, by reference to ILU numbers at Erskine Grove:

1. Unit 22 - concession of $10,000.00 [request made during September 2003 for the 2003/2004 rating year]; 2. Unit 161 ­ concession of $43,200.00 [request made during March 2005 for the 2004/2005 rating year];

1. Unit 122 ­ concession of $22,000.00, which was paid back approximately two years after entry [request made during July 2004 for the 2004/2005 rating year]; and

1. Unit 68 ­ concession of $60,000.00 [request made during December 2003 for the 2003/2004 rating year].
2. In addition, in October 2008 (during the Relevant Rating Years), RAAFA received a request from the resident of Unit 24 at Erskine Grove to draw an amount of $5,000 from that resident's Entry Loan in order to meet the cost of unexpected medical expenses. RAAFA agreed to this drawdown.
3. RAAFA has also received and agreed to a number of similar requests for concessions to the amount of the Entry Loan and to draw amounts from Entry Loans in respect of other villages that it operates. Each request is considered on its merits.
4. During the Relevant Rating Years, RAAFA also agreed to a request from two residents at RAAFA's Bullcreek Village to transfer to Unit 54 at Erskine Grove. Due to the financial circumstances of the residents, RAAFA agreed to a concession in respect of the Entry Loan for the transfer to Erskine Grove and also agreed to the residents paying the Operating Costs Charge at the single rate of 25% of the Single Aged Pension rather than at the couples rate of 30% of the Single Aged Pension.
5. During the Relevant Rating Years, RAAFA did not receive any other request for any concession or waiver in relation to the Operating Costs Charge from any resident of Erskine Grove who was unable to pay the Operating Costs Charge. Had any such requests been received, they would have been considered on their merits.
6. RAAFA did not receive any funding from the Commonwealth or State Governments for the acquisition of the Land or for the construction of the ILUs and the Village at Erskine Grove, and does not receive any funding from the Commonwealth or State Governments, or from any other external source, for the day-to-day operations or maintenance of Erskine Grove.
7. It is an agreed fact that the admitted sources of funding for RAAFA in relation to Erskine Grove comprise:
   1. the Retention Sum from the Entry Loans paid by residents of Erskine Grove; and
   2. the Operating Costs Charge paid by residents of Erskine Grove.

16 It is unnecessary to set out or summarise any of the witness statements or Mr Langridge's report.

The approach of the parties upon RAAFA's application being remitted to the Tribunal

17 On 12 February 2015, when RAAFA's application was before the Tribunal after it was remitted, counsel for the City conceded that 'having regard to what we seek to adduce, even if everything was found as we seek to have it found, application of the law as has been expressed will lead to the City's decision being set aside' [30].

18 Both counsel for RAAFA and counsel for the City informed the Tribunal that they did not wish to cross-examine any of the witnesses and requested the Tribunal to make a final determination of RAAFA's application based on the statement of agreed facts filed on 27 January 2015 and the written evidence of the four witnesses.

19 Section 6.26(1) of the LG Act provides that, except as provided in s 6.26, all land within a local government's district is rateable land.

20 By s 6.26(2)(g), 'land used exclusively for charitable purposes' is not rateable land.

21 The expression 'charitable purposes' is not defined in the LG Act.

22 The Tribunal said the relief of the needs and disabilities of the aged is a charitable purpose [58] - [59].

23 It noted that aged persons have a variety of needs attributable to their being aged, including:

(a) relief from isolation, loneliness and insecurity;

(b) the risk of being without prompt medical or other help in case of need;

(c) inability to employ their superannuated leisure;

(d) protection against the dangers and distresses incident to living alone;

(e) fraternity, belonging, respect, mutual activities, interaction and security; and

(f) stability and security of long-term accommodation which is affordable, which will permit independent living for as long as possible, which is low maintenance or which involves assistance with maintenance, and which offers a supportive social environment [63].

(a) the 'use' of the Land was to be determined by looking objectively at its actual use during the Relevant Rating Years;

(b) when considering what the Land was being used for, regard must be had to a range of factors, including the facilities on the Land, the benefits flowing to aged persons by reason of residency in the kind of accommodation provided (including the independent living units (ILUs)) and other factors relevant to the purposes for which the Land was used, including RAAFA's objectives, the charitable nature of RAAFA and the not-for-profit basis on which Erskine Grove is operated; and

(c) those factors will then inform an overall judgment as to whether the Land was being used for the purpose of the relief of aged persons [60] - [62].

25 The Tribunal referred to an earlier decision of the Tribunal (differently constituted) in Uniting Church Homes (Inc) and City of Stirling [2005] WASAT 191. In Uniting Church, findings were made as to the benefits flowing to aged persons by reason of residency in ILUs. Those benefits were, in essence, security, sense of community, village location, access to medical support and better health management. It was found that the ILUs represented a desirable choice for some older people, with the potential for mutual support in circumstances where an older person would otherwise be isolated in the community, with an increased risk of loneliness. Other benefits included actual and perceived security, improved nutrition through being able to access meals cooked in the village and increased physical activity.

26 The Tribunal inferred that the residents of Erskine Grove enjoyed similar benefits to those enjoyed by the residents in Uniting Church.

Erskine Grove is situated in close proximity to sporting and recreational facilities and has parking for caravans and boats. It consists of 197 ILUs and the Village. The ILU's are self-contained with side and rear fencing. Most of the ILUs comprise two bedrooms and a study or third bedroom, an ensuite bathroom, extra toilet, kitchen, dining, lounge, undercover outdoor living area and parking for a single vehicle. Each ILU is supplied with, amongst other things, an emergency call system, security doors and smoke detection systems. RAAFA encourages residents in the ILUs to be as independent as possible.

The facilities within the Village include a community centre, a gymnasium, an indoor swimming pool, a hairdresser's salon, a library, an arts and craft room and a workshop. Although residents are required to pay any fees payable to hairdressers, doctors and nurses and for meals consumed in the Village's dining room, most of the facilities are available to residents without paying any additional fee. Activities are organised for residents and a bus is provided by RAAFA for outings and shopping trips.

It is clear from the agreed facts that, according to RAAFA's constitution and rules of association, RAAFA is to undertake the care and welfare of and to provide facilities for, retired, aged, pensioned and infirm persons. RAAFA will also provide for the provision of relief in the form of companionship, mutual activities and security of community living to counter the effects of the isolation and loneliness of old age. It is a not­for­profit organisation and is registered with the ATO as a public benevolent institution. All of its income and property are applied solely to the promotion of its objects and are not paid directly or indirectly by way of pecuniary profit to a member or any other person.

Even though, during each of the Relevant Rating Years, RAAFA generated a small surplus, I do not consider that this means that RAAFA is operating for commercial gain. Those surpluses were credited to the residents' maintenance accounts or applied to repairs or improvements to the property. Any surplus generated by RAAFA from the operation of Erskine Grove was not for the private profit of RAAFA [66] - [69].

(a) By reason of the Tribunal's findings as to the benefits to aged persons derived from residency in the ILUs, the constating instruments of RAAFA and the facilities at Erskine Grove, RAAFA, in providing the facilities (including the ILUs) on the Land, used the Land for the relief of the aged [70].

(b) The benefits to aged persons from the provision of accommodation at Erskine Grove had 'the requisite element of a public benefit which is necessary for that use of the Land to constitute a charitable purpose' [71]. Although 'the cost of a place in Erskine Grove may be high enough to preclude persons of modest means, there is no evidence to suggest that those costs are so great that they could be afforded only by the very wealthy' [71].

(c) All vacancies at Erskine Grove are offered to the general public and are not restricted to members of RAAFA, even though 'all residents must subsequently become members of RAAFA' [72].

29 The Tribunal rejected counsel for the City's submission that the principal use of the Land was to provide aged accommodation and there was no relief of the aged in relation to the provision of the accommodation. The Tribunal said that '[t]he nature of the ILUs and the integrated nature of the other facilities at Erskine Grove indicate that the Land is, in fact, devoted to, as part of a scheme, the relief of the aged' [74].

30 The Tribunal also rejected several other submissions put on behalf of the City. It held that, contrary to the City's submission:

(a) it was not necessary that, to be charitable, relief must be by way of bounty rather than by way of bargain;

(b) it was not necessary for the accommodation to be of a kind not generally available in the community; and

(c) the fact that the residents of Erskine Grove are required to purchase the right to occupy their ILUs, and pay fees, does not alter the charitable character of the use [75] - [77].

31 Finally, the Tribunal decided that there was no evidence that the Land was used for any other purpose than the relief of the needs and disabilities of the aged, and accordingly RAAFA used the Land exclusively for charitable purposes.

33 Ground 1 alleges that the Tribunal erred in law in:

(a) finding that there was no requirement that relief of the aged be given at no cost or at a cost less than the value of the relief in order to be charitable;

(b) finding that there was a public benefit in the provision of relief of the aged despite the level of charges to be paid by recipients unless the level of charges was so great as to exclude all but the very wealthy; and

(c) reaching a conclusion that the Land was used exclusively for charitable purposes, within s 6.26(2)(g) of the LG Act, without considering the main purpose for which the Land was actually used (which was providing the direct benefit of accommodation to aged persons who paid for all the costs of providing that benefit);

(d) there could be no charitable relief of the aged if the purpose was to provide services directly to recipients and that was carried out without any form of subsidy;

(e) to be charitable there must be a benefit to the community as a whole;

(f) if there is no charitable relief of the aged by providing a direct benefit to recipients then there must be a benefit to the community as a whole and the purpose must be within the spirit and intendment of the Preamble to the Statute of Charitable Uses 1601 (Imp) 43 Elizabeth 1 c 4;

(g) if the main purpose of an activity is the provision of services directly to recipients then there can be no charitable purpose based upon an alleged benefit to the community as a whole; and

(h) in order for land to be used exclusively for providing relief of the aged, within s 6.26(2)(g) of the LG Act, it is necessary to consider the main purpose for which the Land was used in the Relevant Rating Years.

34 Ground 2 alleges that the Tribunal erred in law by failing to take into account considerations that the Tribunal was required to take into account, namely:

(a) whether there was any subsidy in respect of the services provided to residents of Erskine Grove;

(b) whether the main purpose of the use of the Land was to provide the direct benefit of accommodation to individual residents who paid all the costs of providing that benefit; and

(c) whether the accommodation provided to residents of Erskine Grove had been shown to be of a kind that is not generally available in the community.

35 Section 105 of the SAT Act provides, relevantly:

(1) A party to a proceeding may appeal from a decision of the Tribunal in the proceeding, but only if the court to which the appeal lies gives leave to appeal.

(2) The appeal can only be brought on a question of law.

36 A number of propositions may be enunciated about the jurisdiction and powers of this court under s 105 in relation to an 'appeal', with leave, 'on a question of law'. It is unnecessary to consider the position where s 105(13) applies and an appeal under s 105 may be brought on any ground, 'whether it involves a question of law, a question of fact or a question of mixed law and fact'. In the present case, s 105(2), and not s 105(13), applies.

37 Section 105 confers jurisdiction on this court to examine for legal error what has been done in the Tribunal. Despite the description of the proceedings in this court as an 'appeal', s 105 confers original not appellate jurisdiction. The proceedings are in the nature of judicial review. They are not an 'appeal' by way of rehearing. Where a statute confers what is described as an 'appeal' from an administrative decision, and the 'appellate' court's jurisdiction is enlivened, it is necessary to identify the nature of the jurisdiction and the duties and powers of the 'appellate' court. See Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; (2001) 207 CLR 72 [15] (Gaudron, Gummow, Hayne & Callinan JJ); Osland v Secretary, Department of Justice (No 2) [2010] HCA 24; (2010) 241 CLR 320 [18] (French CJ, Gummow & Bell JJ); Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 [27] (French CJ); Tasty Chicks Pty Ltd v Chief Commissioner of State Revenue (NSW) [2011] HCA 41; (2011) 245 CLR 446 [5] (French CJ, Gummow, Crennan, Kiefel & Bell JJ).

38 This court's jurisdiction under s 105(1) is, by s 105(2), confined to an 'appeal' 'on a question of law'. Section 105(9), which confers powers on this court in aid of the exercise of its jurisdiction, does not enlarge that jurisdiction. See Osland [19]. Section 105 does not qualify or circumscribe the nature or character of the questions of law on which an 'appeal' may lie.

39 A question of law, for the purposes of s 105(2), is not to be distilled from the ground or grounds of appeal. See Osland [21]. The existence of a question of law is both a qualifying condition to the invoking of this court's jurisdiction under s 105 and the subject matter of the 'appeal' itself. See TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175, 178 (Gummow J); Osland [21]. It is essential that the question of law relied on for the purposes of s 105(2) be identified with precision. In Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361, I said (Wheeler and Pullin JJA agreeing) in relation to the limitation in s 105(2):

An appeal 'on a question of law' is narrower than an appeal that merely 'involves a question of law'. Where an appeal lies 'on a question of law' the subject matter of the appeal is the question or questions of law. If a question raised by a litigant, properly analysed, is not a question of law, linguistic gymnastics in the formulation of the grounds of appeal cannot convert it into a question of law. A question of mixed law and fact is not a question of law within s 105(2). See, in the context of s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), the observations in TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation (Cth) (1988) 82 ALR 175 at 178; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; (2003) 38 AAR 55 at 58 - 60 [10] - [18]; Comcare v Etheridge [2006] FCAFC 27; (2006) 149 FCR 522 at 527 [13] - [17]. Section 44(1) of the Administrative Appeals Tribunal Act provides that an appeal from a decision of the Administrative Appeals Tribunal may only be made 'on a question of law'. That provision is not materially different from the provisions of s 105(1) and (2) of the Western Australian Act [53].

40 The questions of law on which the City relies were clarified at the hearing of the appeal.

41 The questions are: does the charitable purpose of the relief of the aged, in the context of a retirement village, require at law that any accommodation and other services made available to the relevant aged persons be:

(b) for the benefit of the community as a whole; and

(c) of a kind that is not generally available in the community?

42 The practice of the courts has been to determine, by reference to the Preamble to the Statute of Charitable Uses, whether a purpose is charitable in law. The Preamble does not contain a definition of charitable purposes. Rather, it lists numerous purposes. Those purposes and all other purposes which, by analogy, 'are deemed within [the Preamble's] spirit and intendment' are, in law, charitable. See Gilmour v Coats [1949] UKHL 1; [1949] AC 426, 442 - 443 (Lord Simonds; Lord Normand & Lord Morton of Henryton agreeing); Scottish Burial Reform and Cremation Society Ltd v Glasgow Corporation [1967] UKHL 3; [1968] AC 138, 146 - 148 (Lord Reid; Lord Guest & Lord Pearson agreeing), 154 (Lord Wilberforce; Lord Guest & Lord Pearson agreeing).

43 The spirit and intendment of the Preamble should not be given a narrow or archaic construction. Also, the understanding of judges in the community in which they live of what a particular activity involves may be accepted as a proper understanding of the nature of that activity. See Brisbane City Council v Attorney-General (Qld) [1979] AC 411, 422 - 423 (Lord Wilberforce, delivering the advice of the Privy Council); Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566 [34] (Gaudron, McHugh, Gummow, Hayne & Callinan JJ).

44 The legal concept of charitable purposes must be ascertained from 'the conditions of the [contemporary] age' and an historical review reveals 'the ever widening scope' of purposes which are charitable in law: Taylor v Taylor [1910] HCA 4; (1910) 10 CLR 218, 238 (Isaacs J). See also Scottish Burial Reform (147, 154). The range of charitable purposes is dynamic, not static.

45 In Commissioners for Special Purposes of Income Tax v Pemsel [1891] UKHL 1; [1891] AC 531, Lord Macnaghten noted that a technical legal meaning is attached to the word 'charity', and to the word 'charitable' in such expressions as 'charitable purposes' (580). His Lordship discussed the technical legal meaning of 'charitable' by reference to the Preamble, and classified charity in its legal sense into four principal divisions; namely, 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 (583).

46 A disposition will not be within the fourth principal division unless its purpose is:

(b) listed in the Preamble or, by analogy, within the Preamble's spirit and intendment.

See The Incorporated Council of Law Reporting of the State of Queensland v Federal Commissioner of Taxation [1971] HCA 44; (1971) 125 CLR 659, 667, 669 (Barwick CJ; McTiernan J agreeing).

47 In Scottish Burial Reform, Lord Wilberforce observed in relation to the Preamble and Pemsel:

The purposes in question, to be charitable, must be shown to be for the benefit of the public, or the community, in a sense or manner within the intendment of the preamble to the statute 43 Eliz 1, c 4. The latter requirement does not mean quite what it says; for it is now accepted that what must be regarded is not the wording of the preamble itself, but the effect of decisions given by the courts as to its scope, decisions which have endeavoured to keep the law as to charities moving according as new social needs arise or old ones become obsolete or satisfied. Lord Macnaghten's grouping of the heads of recognised charity in Pemsel's case ([1891] AC 531, 583) is one that has proved to be of value and there are many problems which it solves. But three things may be said about it, which its author would surely not have denied: first that, since it is a classification of convenience, there may well be purposes which do not fit neatly into one or other of the headings; secondly, that the words used must not be given the force of a statute to be construed; and thirdly, that the law of charity is a moving subject which may well have evolved even since 1891 (154).

48 In my opinion, the word 'charitable', in the undefined expression 'charitable purposes' in s 6.26(2)(g) of the LG Act, bears its technical legal meaning by reference to the Preamble or the four principal divisions stated by Lord Macnaghten in Pemsel. That reflects the general rule that, 'charitable' having a technical legal meaning, the word is to be understood in its legal sense when used in a statute (by reference to its source in the general law as it is developed in Australia from time to time), unless a contrary intention appears. See Central Bayside General Practice Association Ltd v Commissioner of State Revenue (Vic) [2006] HCA 43; (2006) 228 CLR 168 [18] (fn 28) (Gleeson CJ, Heydon & Crennan JJ); Aid/Watch Inc v Federal Commissioner of Taxation [2010] HCA 42; (2010) 241 CLR 539 [23] - [24] (French CJ, Gummow, Hayne, Crennan & Bell JJ). No contrary intention appears in s 6.26 or any other provision of the LG Act.

49 In The Incorporated Council of Law Reporting of the State of Queensland, the appellant's only substantial purpose was the production of law reports. Its articles of association prevented the application of its income or property otherwise than for the purposes of law reporting or for the benefit of the libraries of the Supreme Court of Queensland. The High Court held that the appellant was a 'charitable institution' for the purposes of s 23(e) of the Income Taxation and Social Services Contribution Assessment Act 1936 (Cth). Barwick CJ said:

Out of certain of the instances given in the preamble to the Act of 1601 a broad concept emerges of the kind of object of public utility which will satisfy the quality of charity. Any notion that that concept is of an eleemosynary nature is seen to be untenable by some of those very instances themselves, eg the repair of bridges, havens, causeways, seabanks and highways and the setting out of soldiers. Further, these instances seem to regard the provision of some of the indispensables of a settled community as charitable. The ability to move from place to place and to do so without let of rivers and streams, protection of the land from the ravage of the sea, security against enemies, are fundamentals of the society seen to be within the concept of charitable public benefit as much as assistance to the needy and as education of the generations. Consistently with the spirit and width of this concept of charity the promotion of agriculture is seen to be charitable (Inland Revenue Commissioners v Yorkshire Agricultural Society ([1928] 1 KB 611): and even the promotion of horticulture (Re Pleasants ((1923) 39 TLR 675). Agriculture partakes of that fundamental social quality which can give a charitable nature to a trust or purpose relating thereto which is beneficial to the community. So it would seem does horticulture. On occasions, a benefit of that kind to a section of the public less than the whole community by the trust or purpose may be enough: but, as I mentioned before, I am not here concerned with such a case. The sustenance of the law is a benefit of a material kind which enures for the benefit of the whole community. Is not its administration, with regularity, and with as much consistency as a system based on human judgment can attain, as socially fundamental as the instances which I have taken from the preamble? Surely it is (669). (emphasis added)

50 That passage, and the speech of Lord Wrenbury (delivering the advice of the Privy Council) in Verge v Somerville [1924] AC 496, 502, demonstrate that the technical legal meaning of the word 'charitable' is broader than, and does not necessarily coincide with, eleemosynary purposes.

51 It is the use to which money or property is to be put, as distinct from the source of the money or property or the identity of the person who contributed it, that must be evaluated in determining whether there is a charitable purpose. See Robison v Stuart [1891] NSWLawRp 17; (1891) 12 LR (NSW) Eq 47, 49 - 50 (Owen CJ in Eq).

52 A purpose will not be charitable unless the carrying out of the purpose will be of benefit to the public or an appreciable section of the public. See Verge (499); Congregational Union of New South Wales v Thistlethwayte [1952] HCA 48; (1952) 87 CLR 375, 443 (Dixon CJ, McTiernan, Williams & Fullagar JJ). Neither the Statute of Charitable Uses nor the Preamble expressly refers to public benefit, but this element is inherent in the concept of charity.

53 The word 'public' in this context means 'the community'. See Pemsel (580); Verge (499); Re Income Tax Acts (No 1) [1930] ArgusLawRp 22; [1930] VLR 211, 222 - 223 (Lowe J; Irvine CJ agreeing generally); Thompson v Federal Commissioner of Taxation [1959] HCA 66; (1959) 102 CLR 315, 323 - 324 (Dixon CJ; Fullagar & Kitto JJ agreeing); Stratton v Simpson [1970] HCA 45; (1970) 125 CLR 138, 159 (Gibbs J; Barwick CJ & Menzies J agreeing).

54 The requirement that the carrying out of the purpose be of benefit to the public (that is, the community) or an appreciable section of the public involves, in general, a qualitative evaluation of the nature of the purpose in the context of the Preamble and the four principal divisions stated by Lord Macnaghten in Pemsel and the class of persons eligible to benefit (in particular, any limitations on the class). See Re Income Tax Acts (No 1) (222 - 223); Oppenheim v Tobacco Securities Trust Co Ltd [1950] UKHL 2; [1951] AC 297, 306 (Lord Simonds; Lord Oaksey agreeing & Lord Morton of Henryton relevantly agreeing); Thompson (321 - 324).

55 In Re Scarisbrick [1951] 1 Ch 622, Jenkins LJ said, in the course of setting out five general propositions on the element of public benefit:

An aggregate of individuals ascertained by reference to some personal tie (eg, of blood or contract), such as the relations of a particular individual, the members of a particular family, the employees of a particular firm, the members of a particular association, does not amount to the public or a section thereof for the purposes of the general rule: see In re Drummond ([1914] 2 Ch 90), In re Compton ([1945] Ch 123), In re Hobourn Aero Components Ld's Air Raid Distress Fund ([1946] Ch 194), and Oppenheim v Tobacco Securities Trust Co Ld ([1951] AC 297) (649).

56 More recently, in R (Independent Schools Council) v Charity Commission for England and Wales [2012] 2 WLR 100, the Upper Tribunal (Tax and Chancery Chamber) distinguished between three categories of benefit in considering whether an alleged charitable purpose had the requisite element of public benefit:

(a) Direct benefits: 'benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons as recipients of the main service which the charity provides';

(b) Indirect benefits: 'benefits to persons whose needs it is a purpose of the charity to relieve which are received by such persons otherwise than as recipients of the main service which the charity provides'; and

(c) Wider benefits: 'benefits other than direct and indirect benefits which are received by the community at large from the activities of the charity' [37].

57 In Helena Partnerships Ltd v Revenue and Customs Commissioners [2012] 4 All ER 111, the Court of Appeal of England and Wales referred with approval to that classification in the Independent Schools Council case. Lloyd LJ (Black & Lewison LJJ agreeing) made these comments:

(a) there are charities which provide 'direct benefits' to individuals (for example, by way of the relief of the poor, the elderly or the infirmed);

(b) those charities which provide 'direct benefits' are justified as being for the public benefit 'on the basis that it is desirable that there should be such provision for those in particular need'; and

(c) in the case of charities within the 'direct benefits' category, 'it is seen as for the public benefit that the direct benefit to individuals should be available for, and provided to, those in need' [78].

58 In Helena Partnerships, Lloyd LJ noted that the element of public benefit in most charitable purposes involves the provision of particular benefits to individuals [75]. That statement is consistent with the following analysis of Peter Gibson J in Joseph Rowntree Memorial Trust Housing Association Ltd v Attorney-General [1983] 1 Ch 159:

The third objection was that the schemes were for the benefit of private individuals and not for a charitable class. I cannot accept that. The schemes are for the benefit of a charitable class, that is to say the aged having certain needs requiring relief therefrom. The fact that, once the association and the trust have selected individuals to benefit from the housing, those individuals are identified private individuals does not seem to me to make the purpose in providing the housing a non-charitable one any more than a trust for the relief of poverty ceases to be a charitable purpose when individual poor recipients of bounty are selected (176).

59 The relief of poor people and the advancement of education and religion will be presumed, unless the contrary is proved, to be of public benefit, but in other cases public benefit must be proved. See National Anti-Vivisection Society v Inland Revenue Commissioners [1947] UKHL 4; [1948] AC 31, 42 (Lord Wright), 65 (Lord Simonds). Public benefit may be indirect as well as direct. See Re Resch's Will Trusts [1969] 1 AC 514, 544 (Lord Wilberforce, delivering the advice of the Privy Council). Public benefit may be proved by direct evidence or by inference.

60 The first purpose set out in the Preamble is 'relief of aged, impotent, and poor people'. The word 'impotent', in this context, means physically weak, disabled or helpless. It is well-established that the words 'aged, impotent, and poor' are to be read disjunctively, not cumulatively. Accordingly, the relief of the aged may be charitable independently of impotence and poverty. See Re Glyn's Will Trusts [1950] 2 All ER 1150 (note) (Danckwerts J); City of Hawthorn v Victorian Welfare Association [1970] VicRp 25; [1970] VR 205, 208 - 209 (Smith J; Pape & Gillard JJ agreeing); Hilder v Church of England Deaconess' Institution Sydney Ltd [1973] 1 NSWLR 506, 512 (Street CJ in Eq); Trustees of Church Property of the Diocese of Newcastle v Lake Macquarie Shire Council [1975] 1 NSWLR 521, 524 (Moffitt P), 533 - 534 (Hutley JA); West Australian Baptist Hospital & Homes Trust Inc v City of South Perth [1978] WAR 65, 68 (Lavan SPJ, delivering the judgment of the Full Court).

61 The word 'relief' in the expression 'relief of the aged' must be emphasised. See City of Hawthorn (209); Trustees of Church Property (524), (533). 'Relief' connotes, in context, that the aged persons in question have a need attributable to their condition as aged persons which requires alleviating, and which those persons could not alleviate, or would have difficulty in alleviating, themselves from their own resources. The word 'relief' is not equivalent to 'benefit'. See Joseph Rowntree (171).

62 Aged persons are generally recognised as vulnerable members of society. A retirement village for aged persons will ordinarily relieve those persons from the burdens and disadvantages associated with the ageing process. Their burdens and disadvantages include the need for 'fraternity, belonging, respect, mutual activities, interaction, and security': DV Bryant Trust Board v Hamilton City Council [1997] 3 NZLR 342, 349 (Hammond J); affirmed in Hamilton City Council v DV Bryant Trust Board [1999] 1 NZLR 41. See also Trustees of Church Property (524), (533) and the variety of needs attributable to being aged set out at [23] above. Disabilities of that kind experienced by aged persons are too well known to require proof. See West Australian Baptist Hospital (72).

63 As to the first question of law relied on by the City, I am of the opinion that the charitable purpose of the relief of the aged, in the context of a retirement village, does not require, at law, that any accommodation and other services made available to the aged persons in question be subsidised.

64 First, as I have mentioned, the relief of the burdens and disadvantages attributable to old age may be charitable without any additional element of poverty. Those burdens and disadvantages may be suffered by aged persons who are 'well-to-do and wealthy': Trustees of Church Property (533); West Australian Baptist Hospital (72).

65 Secondly, if a purpose is otherwise charitable, the purpose will not cease to be charitable merely because benefits or services are received on a contractual basis.

66 In Re Cottam [1955] 1 WLR 1299, a testator created a trust fund for the provision of a flat or flats to be occupied by persons over the age of 65 years. The testator directed that the flats should be let at economic rents. Danckwerts J held that the trust was for the benefit of aged persons and therefore prima facie charitable, although his Lordship found that 'the intention of the testator was that homes of a cheap character should be provided so that the economic rent ... is such as might properly be paid by people falling within the class' (1302).

67 In Joseph Rowntree, Peter Gibson J rejected a submission that schemes for the provision of housing for the aged were not charitable in law because the schemes made provision for the aged on a contractual basis and not by way of bounty:

This objection is sometimes expressed in the form that relief is charitable only where it is given by way of bounty and not by way of bargain: see Halsbury's Laws of England, 4th ed, vol 5 (1974), para 516. But as the editors recognise this does not mean that a gift cannot be charitable if it provides for the beneficiaries to contribute to the cost of the benefits they receive. There are numerous cases where beneficiaries only receive benefits from a charity by way of bargain. In re Cottam [1955] 1 WLR 1299 and In re Resch's Will Trusts [1969] 1 AC 514 provide examples. Another class of cases relates to fee-paying schools: see for example Abbey Malvern Wells Ltd v Ministry of Local Government and Planning [1951] Ch 728. Another example relates to a gift for the provision of homes of rest for lady teachers at a rent: In re Estlin (1903) 89 LT 88. It is of course crucial in all these cases that the services provided by the gift are not provided for the private profit of the individuals providing the services (174).

68 His Lordship said, correctly in my respectful opinion, that the fact that the benefit given to the applicants for dwellings under the schemes was in the form of a contract was 'immaterial to the charitable purpose in making the benefit available' (175).

69 Thirdly, if a purpose is otherwise charitable, the purpose will not cease to be charitable merely because the persons who receive benefits or services make significant or substantial payments to the entity which provides the benefits or services, provided that the entity is a non-profit making organisation or any profits must be retained by the entity for the purpose in question and none can be distributed to the members of the entity or applied for a non-charitable purpose.

70 In The Mayor and Councillors of the Municipality of North Fremantle v Saw [1906] WALawRp 38; (1906) 8 WALR 164, the plaintiffs claimed against the defendant amounts for rates on property owned by the defendant. The premises in question were occupied by the Salvation Army and used as a maternity home for young single girls. The girls admitted to the home paid certain sums when they could do so. While in the home the girls worked, and the proceeds of their work were applied for the purposes of the Salvation Army. In some cases, the Salvation Army recovered from the putative fathers the costs of maintaining the girls in the home. The Full Court of the Supreme Court of Western Australia held that the property was used exclusively for charitable purposes and was therefore not rateable. McMillan J (Parker CJ agreeing) said that 'a person does receive charity although he or she may contribute something - a smaller amount than that which the article which is being given costs - towards the cost of the article. It matters not whether it is maintenance, as in this case, or whether, as happens in the case of many charitable institutions, it is the supplying of something to poor people at a less cost than it actually takes to make the article' (166). His Honour added that, in his opinion, 'the building is none the less used exclusively for charitable purposes because it is found that some of the inmates contribute a proportion of the sum which is necessary for their keep, when we find from the evidence that in no single case does any one of the inmates contribute the whole of the amount which is required' and, under those circumstances, 'the building in question was occupied exclusively for charitable purposes and therefore was not rateable' (167 - 168).

71 In Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation [1952] HCA 4; (1952) 85 CLR 159, the appellant used land of which it was the registered proprietor for the purpose of conducting a training farm for 'delinquent' boys and providing homes for 'difficult, wayward or underprivileged' boys. As part of the activities of the training farm, pigs and cattle were raised, fruit and flowers were grown and dairy cows were kept and milked. The produce of the farm was sold. The sale proceeds were applied in reduction of the costs of conducting the farm and providing the homes. The operation was in fact carried on at a loss. The High Court held that the land was used 'exclusively for charitable purposes' within a local government rating statute. Dixon, Williams and Webb JJ were of the opinion that there is 'no distinction in principle between selling the surplus proceeds of a charitable activity and making a charge for supplying a charitable activity such as an educational performance or meals and beds in a hostel for the needy' (173).

72 In Re Resch's Will Trusts, a testator directed his trustee to pay income from his residuary estate to a specified private hospital to be applied for the general purposes of the hospital. The hospital charged substantial fees but was not run for the profit of individuals. The issue was whether the purposes for which the private hospital was conducted were charitable.

73 It was contended that the private hospital was not carried on for purposes 'beneficial to the community' because it provided only for persons of means who were capable of paying the substantial fees required as a condition of admission (542). The Privy Council rejected that contention. Lord Wilberforce observed:

It is not a condition of validity of a trust for the relief of the sick that it should be limited to the poor sick. Whether one regards the charitable character of trusts for the relief of the sick as flowing from the word 'impotent' ('aged, impotent and poor people') in the preamble to 43 Eliz c 4 or more broadly as derived from the conception of benefit to the community, there is no warrant for adding to the condition of sickness that of poverty. As early as Inland Revenue Commissioners v Pemsel Lord Herschell was able to say ([1891] AC 531, 571, HL):

'I am unable to agree with the view that the sense in which "charities" and "charitable purpose" are popularly used is so restricted as this. I certainly cannot think that they are limited to the relief of wants occasioned by lack of pecuniary means. Many examples may, I think, be given of endowments for the relief of human necessities, which would be as generally termed charities as hospitals or almshouses, where, nevertheless, the necessities to be relieved do not result from poverty in its limited sense of the lack of money.' (542)

To provide, in response to public need, medical treatment otherwise inaccessible but in its nature expensive, without any profit motive, might well be charitable: on the other hand to limit admission to a nursing home to the rich would not be so. The test is essentially one of public benefit, and indirect as well as direct benefit enters into the account. In the present case, the element of public benefit is strongly present. It is not disputed that a need exists to provide accommodation and medical treatment in conditions of greater privacy and relaxation than would be possible in a general hospital and as a supplement to the facilities of a general hospital. This is what the private hospital does and it does so at, approximately, cost price. The service is needed by all, not only by the well-to-do. So far as its nature permits it is open to all: the charges are not low, but the evidence shows that it cannot be said that the poor are excluded: such exclusion as there is, is of some of the poor - namely, those who have (a) not contributed sufficiently to a medical benefit scheme or (b) need to stay longer in the hospital than their benefit will cover or (c) cannot get a reduction of or exemption from the charges (544).

75 In West Australian Baptist Hospital, the appellant was a non-profit making organisation which administered land and improvements on behalf of the registered proprietor, the Baptist Union of Western Australia Inc. The improvements included two existing buildings which together contained 54 units for the accommodation of aged persons. Each building also incorporated laundries and social or recreational rooms. The criteria for selecting residents from among the applicants for the accommodation and services were, first, that they were aged persons able to look after themselves and, secondly, the actual need of each applicant for the accommodation and services. On being selected, each applicant was required to pay an 'in-going donation' of between $3,500 and $6,500, depending on the type of unit applied for. In addition, all residents were required to make a weekly payment at a level fixed by the appellant, which was intended to cover the cost of management of the facilities, including depreciation on the buildings and equipment. The appellant's constitution ensured that no part of its income from the land and improvements 'shall be paid or transferred directly or indirectly by way of dividend, bonus or otherwise howsoever by way of profits to any other body or any person or persons'. The Full Court rejected a submission by the respondent that the receipt of the payments from the applicants deprived the appellant of the right to claim that the purpose for which the homes were established possessed a charitable element (69). Lavan SPJ said he entertained 'no doubt that the aged persons homes are used by the appellant for a purpose which is exclusively "charitable"' (69).

76 In each of the cases I have examined (in particular, Saw, Fern Tree Gully, Re Cottam, Re Resch's Will Trusts, West Australian Baptist Hospital, Joseph Rowntree and DV Bryant) there was either an element of bounty (that is, the recipients of the benefits or services were not paying the whole of the costs of the provision of the benefits or services) or it is unclear from the reports of the cases whether there was an element of bounty. There are comments in some of the cases (for example, Saw) to the effect that the existence of an element of bounty was a factor to be taken into account, as an aspect of the facts and circumstances of the particular case as a whole, in determining whether the relevant purpose was charitable. However, in none of the cases was it held that the charitable purpose of the relief of the aged requires, at law, that any accommodation and other services provided to aged persons be subsidised or that the absence of a subsidy will render the purpose non-charitable.

77 Fourthly, the critical point, for present purposes, is whether the provision of accommodation and other services for the purpose of the relief of the aged, in the context of a retirement village, is directly or indirectly for the benefit of the public (that is, the community) or an appreciable section of the public.

78 The purpose of the relief of the aged, in the context of a retirement village, will not be charitable at law unless the carrying out of the purpose will be, directly or indirectly, for the benefit of the public (that is, the community) or an appreciable section of the public.

79 The retirement village known as Erskine Grove offers benefits to those persons who are eligible to apply to become residents. The village relieves the aged persons who reside there from the burdens and disadvantages associated with the ageing process. The burdens and disadvantages that are relieved by the accommodation and other services which RAAFA makes available include the need for 'fraternity, belonging, respect, mutual activities, interaction and security': DV Bryant Trust Board (349). See also [23], [25] - [26] above.

80 RAAFA is a non-profit organisation. All of its income and property must be applied solely to the promotion of its objects, and none of it can be paid or transferred, directly or indirectly, to any of its members or any other person. During each of the Relevant Rating Years RAAFA generated a small surplus from its operations at Erskine Grove. Those surpluses were credited to the residents' maintenance accounts or applied towards the repair or improvement of the retirement village.

81 It would be beyond the capacity of each of the applicants for admission to Erskine Grove to alleviate, from his or her own resources, the relevant burdens and disadvantages by the construction, operation and maintenance of a similar facility or otherwise.

82 The range of aged persons who may apply to become residents is not restricted in a manner which is inconsistent with the required element of public benefit. Although persons of modest means may be unable to afford the cost of securing accommodation and other services at Erskine Grove, the cost is not affordable only by the wealthy.

83 As I have mentioned, aged persons are generally recognised as vulnerable members of society. There is a demand in Western Australia for accommodation and other services of the kind made available at Erskine Grove.

84 That demand will, no doubt, grow as aged persons increasingly constitute a proportionally larger part of the Australian population and their life expectancy increases. A benefit to the community of facilities of the kind made available at Erskine Grove results from a reduction in the political and social pressure that would otherwise be imposed on government agencies to provide, and the cost to the State of providing, similar facilities (see Dal Pont, Law of Charity (2010) [1.16] - [1.18]) and a reduction in the moral obligation of families to alleviate the burdens suffered by relatives which are attributable to the ageing process.

85 I am satisfied that the provision by RAAFA of the accommodation and other services at Erskine Grove is for the benefit of the public or the community or an appreciable section of the public or the community.

86 The second question of law relied on by the City, namely whether the charitable purpose of the relief of the aged, in the context of a retirement village, requires, at law, that any accommodation and other services made available to the aged persons in question be 'for the benefit of the community as a whole', has been formulated, in part, by reference to the fourth principal division stated by Lord Macnaghten in Pemsel. The fourth principal division is trusts for other purposes 'beneficial to the community' not falling under the first, second or third principal divisions.

87 The test in relation to 'the relief of the aged, impotent', within the first purpose set out in the Preamble, has been expressed as, in essence, one of 'public benefit'. See Re Resch's Will Trusts (544). There is no material difference, for the purposes of the second question of law, between 'public benefit', on the one hand, and 'beneficial to the community', on the other. As I have mentioned, the purpose of the relief of the aged, in the context of a retirement village, will not be charitable at law unless the carrying out of the purpose will be, directly or indirectly, for the benefit of the public (that is, the community) or an appreciable section of the public.

88 I have already concluded, in dealing with the first question of law, that the provision by RAAFA of the accommodation and other services at Erskine Grove is for the benefit of the public or the community or an appreciable section of the public or the community.

89 As to the third question of law relied on by the City, I am of the opinion that the charitable purpose of the relief of the aged, in the context of a retirement village, does not require, at law, that any accommodation

and other services made available to the relevant aged persons be of a kind that is not generally available in the community.

90 It is true that, in Joseph Rowntree, Peter Gibson J noted:

(a) it has been recognised that 'the elderly do have special housing needs and that it is desirable to have housing specially designed for the elderly' (167);

(b) a 'particular need has emerged' in relation to elderly owner/occupiers of dwellings (167); and

(c) the plaintiffs had identified 'a particular need for special housing to be provided for the elderly in the ways proposed and ... that is a charitable purpose' (174).

91 However, those observations concerned factors to be taken into account, as an aspect of the facts and circumstances of the particular case as a whole, in determining whether the relevant purpose was charitable. His Lordship did not hold that the charitable purpose of the relief of the aged requires, at law, that any accommodation and other services provided to aged persons be of a kind that is not generally available in the community.

92 As I have mentioned, in dealing with the first question of law, the test in relation to 'the relief of the aged, impotent', within the first purpose set out in the Preamble, is in essence one of public benefit or benefit to the community.

93 It follows, from my answers to the first, second and third questions of law relied on by the City, that each of the grounds of appeal fails.

94 RAAFA filed and served a notice of contention. It is unnecessary to deal with the issues raised in the notice.

95 I would grant leave to appeal, but the appeal must be dismissed.