Commissioner of Taxation v Hunger Project Australia

Federal Court of Australia (Full Court)|2014-06-13|Before: Mr J, Wigney JJ

The appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1604 of 2013

AND: THE HUNGER PROJECT AUSTRALIA (ACN 002 569 271)

REASONS FOR JUDGMENT THE COURT: 1 The Hunger Project Australia (HPA) is a not-for-profit company which is part of a global network of entities that operate under the name "The Hunger Project". The principal objective of the Hunger Project is the relief of global hunger. The activities of HPA are mainly directed at raising funds which are then disseminated to Hunger Project members in the developing world. It is those entities that directly perform charitable acts to relieve hunger. 2 The question raised by this appeal is whether HPA is a "public benevolent institution" within the meaning of s 57A(1) of the Fringe Benefits Tax Assessment Act 1986 (Cth) (FBTA Act). The Commissioner contends that an entity that merely engages in fund raising activities and does not materially perform charitable works directly for the benefit of the public is not a public benevolent institution. At first instance the primary judge rejected that contention and found that HPA was a public benevolent institution even though it was predominately engaged in fund raising. 3 For the reasons that follow the primary judge was correct in so finding. On the facts as found, it was open to the primary judge to conclude that HPA is a public benevolent institution. The Commissioner's appeal must accordingly be dismissed.

Factual background 4 It is necessary to provide only a brief outline of the facts. Whilst there was some dispute about the facts in the Court below, there is no challenge on appeal to the findings of fact made by the primary judge. 5 HPA is a company limited by guarantee. Its exclusive objective is the relief of poverty, sickness, suffering, destitution and helplessness, particularly in the developing world. It is part of a global network of entities that operate under the name "The Hunger Project". 6 The Hunger Project network is administered by a global office in New York funded by the network's United States operations. Individual members of the network operate either in developed countries (called "partner countries") or developing countries (called "program countries"). Australia is a partner country. The global office coordinates fund raising by member entities in partner countries. Funds raised in partner countries are then disseminated to member entities in program countries and expended by those entities on hunger relief programs. 7 The directors of HPA are prominent Australian business people, philanthropists and consultants. HPA has a Chief Executive Officer and at the relevant time had a full time staff of three. 8 Whilst HPA engages in a wide range of activities, its most substantial activity is fund raising. HPA is involved in some aspects of the strategic decision making of the global network and makes its own decisions as to where the funds it raises are to be directed. HPA also has some involvement in various programs running in different program countries. The primary judge found, however, that HPA's "direct charitable activities are negligible when viewed in the overall scheme of its operations."

Relevant statutory provisions 9 At all times relevant to the proceedings ss 57A(1) - (3) of the FBTA Act provided as follows: (1) Where the employer of an employee is a public benevolent institution endorsed under subsection 123C(1) or (5), a benefit provided in respect of the employment of the employee is an exempt benefit. (2) Where: (a) the employer of an employee is a government body; and (b) the duties of the employment of the employee are exclusively performed in, or in connection with: (i) a public hospital; or (iii) a hospital carried on by a society that is a non-profit society for the purposes of section 65J or by an association that is a non-profit association for the purposes of section 65J; a benefit provided in respect of the employment of the employee is an exempt benefit. (3) A benefit provided in respect of the employment of an employee is an exempt benefit if: (a) the employer of the employee is a public hospital; or (b) the employer provides public ambulance services or services that support those services and the employee is predominantly involved in connection with the provision of those services. 10 At the relevant time s 123C(1) of the FBTA Act required the Commissioner to endorse an entity as a public benevolent institution if the entity was entitled to, and had applied to be, so endorsed. Subsection 123C(2) provided that an entity was entitled to be endorsed as a public benevolent institution if the entity is a public benevolent institution, had an ABN (Australian Business Number) and was not an employer in relation to which "step two of the method statement in subsection 5B(1E) applies". Only the first of the s 123C(2) requirements - whether HPA is a public benevolent institution - is in issue in these proceedings. 11 The expression "public benevolent institution" is not defined in the FBTA Act.

Procedural history 12 On 12 November 2010, HPA applied to the Commissioner for endorsement as a public benevolent institution under s 123C of the FBTA Act. This application was refused on 11 February 2011. HPA lodged an objection to the decision on 12 April 2011. That objection was refused on 16 August 2011. The basis of the refusal was that HPA was not a public benevolent institution because, whilst its principal aim was to provide relief from hunger, it was not involved in "the direct provision of relief". 13 The proceeding before the primary judge was an appeal against that objection decision pursuant to s 14ZZ of the Taxation Administration Act 1953 (Cth).

The judgment of the primary judge 14 The main issue before the primary judge was whether an entity can be a public benevolent institution if it is not involved in the direct provision of relief for those in need. 15 His Honour analysed a number of authorities that have considered the meaning of the expression "public benevolent institution" in different statutory contexts. The principal authorities considered by his Honour include: Perpetual Trustee Co Ltd v Federal Commissioner of Taxation (1931) 45 CLR 224 (Perpetual Trustee); Australian Council of Social Service Inc v Commissioner of Pay-roll Tax (NSW) (1982) 13 ATR 290; on appeal (1985) 1 NSWLR 567 (ACOSS); Commissioner of Taxation (Cth) v Royal Society for Prevention of Cruelty to Animals [1993] 1 Qd R 571 (RSPCA); and Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute (1990) 21 ATR 665 (Cairnmillar Institute). 16 It is unnecessary to rehearse the primary judge's analysis of these authorities. The main authorities are considered later in this judgment in the context of the Commissioner's arguments on appeal. It is sufficient to say at this stage that the primary judge found that the authorities support the proposition that the expression "public benevolent institution" must be given its ordinary meaning, but are inconclusive as to whether the ordinary meaning includes a requirement that the institution provide relief directly to those in need. His Honour did not consider himself bound in any particular direction by the state of authorities on the question at hand. 17 Most of the primary judge's analysis of the meaning of the expression "public benevolent institution" was responsive to arguments advanced on behalf of the Commissioner in support of the proposition that a public benevolent institution was an entity that dispensed or provided relief directly. Those arguments involved the statutory history of the expression and its consideration in the authorities, as well as some textual and contextual considerations. The Commissioner advanced essentially the same arguments on appeal. They are addressed later in this judgment. Suffice it to say at this stage that the primary judge was not persuaded that any of the Commissioner's arguments supported a finding that an institution could not be a public benevolent institution, within the ordinary meaning of that expression, unless it provided relief directly. 18 On the other hand, the primary judge found that there was at least one good reason for rejecting the suggested requirement of direct provision of relief. That good reason was the decision of the High Court in Federal Commissioner of Taxation v Word Investments (2008) 236 CLR 204 (Word Investments). 19 Word Investments was concerned with whether the entity in question was a "charitable institution" entitled to be endorsed as an entity exempt from income tax under subdivision 50-B of the Income Tax Assessment Act 1997 (Cth). The relevant entity accepted deposits from the public for which it paid little or no interest. It then used those funds in commercial activities for profit. The profits were provided to an associated charitable organisation which conducted charitable activities overseas utilising those funds. The High Court, by majority, rejected the Commissioner's contention that the entity was not a charitable institution. The majority eschewed an approach to the question which focused entirely on the form an organisation took, rather than its substance. They reasoned that it would be unsound to distinguish between a case where a company with charitable objects gave its profits to other organisations which spent them on those charitable objects, and the situation where a company with the same charitable objects organised itself into two divisions, one which employed the company's assets to make profit, and the other which spent the profits on those objects. 20 The primary judge considered that Word Investments powerfully supported the argument that an entity can be a public benevolent institution even if it was primarily involved in fund raising and did not directly provide aid or relief. His Honour rejected the Commissioner's attempt to distinguish Word Investments on the basis that it concerned a different statutory expression in a different statutory context.

The Commissioner's argument on appeal 21 The Commissioner advances essentially four arguments in support of his contention that a public benevolent institution must directly provide aid and that the primary judge erred in concluding to the contrary. 22 First, he contends that the ordinary meaning of the composite expression "public benevolent institution" is an institution that gives or provides relief directly to those in need. The Commissioner points to particular passages from the judgments of Evatt and McTiernan JJ in Perpetual Trustee, where their Honours gave their understanding of the meaning of the expression in terms which, on the Commissioner's argument, suggest that the institution itself must give relief. The Commissioner submits that an institution that raises funds for use by separate entities to provide relief does not itself "give relief." 23 Second, the Commissioner contends that contextual considerations support a construction of the expression which requires the direct provision of relief. He points, in particular, to the fact that s 57A(3)(b) of the FBTA Act provides FBT relief for employers who provide public ambulance services or "services that support those services." Similarly he points to s 8(5) of the Estate Duty Assessment Act 1914 - 1928 (Cth) (EDA Act), in the form it took when considered in Perpetual Trustee, which provided an estate duty exemption not only to a public benevolent institution, but also to a "fund established and maintained for the purpose of providing money for use for such institutions." The Commissioner submits that these provisions reflect an understanding that there is a difference between a public benevolent institution and an entity or fund that provides services or money to such an institution. The Commissioner argues that it would have been easy for Parliament to provide for an analogous extension in s 57A(1) of the FBTA Act if it had been intended that an entity which merely raised funds was entitled to FBT relief. 24 Third, the Commissioner submits that a number of authorities support his contention in relation to the requirement of the direct provision of aid. He places particular reliance again on the judgments in Perpetual Trustee, the decision of Rath J in ACOSS, which the primary judge accepted provided some direct support for the Commissioner's contention, and the judgment of Street CJ on appeal in ACOSS. Some reliance is also placed on the decision of Fitzgerald P in RSPCA and McGarvie J in Cairnmillar Institute. With the exception of the decision in Perpetual Trustee, the Commissioner does not contend that this Court is bound to determine the question in his favour. He submits, however, that the authorities show a relatively consistent understanding of the ordinary meaning of the expression that supports his construction. 25 Fourth, the Commissioner submits that the primary judge erred in relying on Word Investments in rejecting the Commissioner's construction and upholding HPA's case. The Commissioner maintains that Word Investments is distinguishable because it concerns a different statutory expression in different legislation. The Commissioner points in particular to the fact that the expression "charitable institution" has a technical legal meaning which is not directed or controlled by the scope or purpose of the statute in which it is contained. The expression "public benevolent institution," on the other hand, has no technical legal meaning and must be given its ordinary meaning. The Commissioner also relies on factual differences between the relevant organisational structures and activities in Word Investments. He contends that the facts in Word Investments are far removed from the facts of this case.

Consideration 26 In our opinion the primary judge was correct to reject the Commissioner's contention in relation to the meaning of the expression public benevolent institution. None of the Commissioner's arguments supports the imposition of a definition or test that requires a public benevolent institution to directly dispense relief. There is no good reason to read such a requirement or limitation into the ordinary meaning of that expression.

Ordinary meaning 27 The Commissioner correctly accepts that the expression public benevolent institution does not have any technical legal meaning and that, in the absence of a statutory definition, it must be given its ordinary meaning. He contends, however, that it is possible to glean from observations made in some of the judgments in Perpetual Trustee that the ordinary meaning requires the direct provision of aid. 28 We do not consider that the judgments in Perpetual Trustee support the Commissioner's restrictive interpretation of the ordinary meaning of the expression. 29 The matter in issue in Perpetual Trustee was whether the Royal Naval Home in Sydney was a public benevolent institution for the purposes of s 8(5) of the EDA Act. The Royal Naval House provided accommodation and recreation for petty officers and lower ratings of the navy when onshore. Because the relief provided by the Royal Naval House was provided directly, the issue whether an institution could be a public benevolent institution if it did not itself directly provide relief did not arise for consideration by the Court. 30 Starke J said (at 232) that in ordinary English usage a public benevolent institution means "an institution organized for the relief of poverty, sickness, destitution or helplessness." Dixon J (at 233) similarly gave a meaning to the expression which focused on the objectives or purpose of the relevant institution: an institution fell within the expression if it "organised", or was "conducted for" or "promoted" the relief of poverty or distress. 31 The Commissioner relies primarily on passages in the judgments of Evatt J and McTiernan J. Evatt J said the following about public benevolent institutions (at 235): Such bodies vary greatly in scope and character. But they have one thing in common: they give relief freely to those who are in need of it and who are unable to care for themselves. 32 The Commissioner places emphasis on the word "give" in this passage and submits, in effect, that this means that the relief must be directly given. He argues that an institution that simply raises funds does not "give" relief. In our opinion this reads far too much into the words used by Evatt J. Read in context his Honour was simply emphasising that the relief must be given or provided free of charge. His Honour was not suggesting that an institution cannot be a public benevolent institution if it does not itself directly give relief to those in need. 33 McTiernan J dissented on the facts. Before turning to the passage relied on by the Commissioner, it should be noted that in his lengthy judgment McTiernan J emphasised (at 237) that there did not appear to be any definite understanding of the precise meaning of the expression. His Honour also said that the question whether a particular institution was a public benevolent institution should not be approached by propounding a single or irrefutable test or definition, and then considering whether the institution in question meets each element of that test or definition. 34 Yet that is essentially the approach that the Commissioner urges in this matter. 35 Later in his judgment, McTiernan J noted that s 8(5) of the EDA Act had, prior to its amendment, exempted from estate duty gifts for "religious, scientific, charitable or public educational purposes". His Honour then said (at 242): A comparison of the two sub-sections appears to show that the Legislature intended to exclude from the benefit of the exemptions granted by the Act a number of gifts which, though good charitable gifts in the technical sense, were not for religious or scientific or for public educational purposes or were not made upon the principle of giving direct relief or assistance to mankind in sickness or in need. 36 The Commissioner emphasises the words "direct relief or assistance" in this passage. Again, however, when read in context we do not consider that this passage provides any support for the Commissioner's contention in this case. His Honour's use of the word "direct" was not addressed to the nature of the institution that received the relevant gifts, but rather to the purpose or character of the gifts themselves. The point his Honour was making was that as a result of the amendment, only gifts that were eleemosynary in nature, that is gifts that provided aid to those in need, were exempt. Gifts that were charitable only in the technical legal sense (cf. Chesterman v Federal Commissioner of Taxation (1926) 37 CLR 317 at 319) were no longer exempt. His Honour was not in any way propounding a single or irrefutable test for a public benevolent institution which involved the direct provision of relief. 37 There is a further difficulty with the Commissioner's reliance on what was said in the various judgments in Perpetual Trustees. Even if there could be divined from the various judgments a single expression of the common understanding of public benevolent institution, the Commissioner's approach suggests that the common understanding in 1931, when Perpetual Trustee was decided, must forever fix the common understanding or meaning of the expression. We doubt that is the correct approach. 38 Whilst past judicial statements concerning the ordinary meaning of a word or expression can often assist in divining the meaning of the word or expression, the common understanding of the meaning of an expression may change over time depending on the particular expression in question. When the question is whether a particular institution is a public benevolent institution, the answer depends on the common or ordinary understanding of the expression at the relevant time. The question is not to be approached as a legal question to be dealt with by the mechanical application of past authority, irrespective of the present current understanding of the expression in the currently spoken English language: Ambulance Service (NSW) v Deputy Commissioner of Taxation (2002) 50 ATR 496 at [40]-[42] (Ambulance Service). 39 There is much to be said for the proposition that the common understanding or usage of the expression in question here has expanded or changed since Perpetual Trustee was decided; ACOSS at 575C-E (per Priestley JA); Ambulance Service of New South Wales v Deputy Commissioner of Taxation (2003) 130 FCR 477 at [44]. It is unlikely that global aid networks comprising separate fundraising entities such as the Hunger Project were prevalent when Perpetual Trustee was decided. Even if it was the case that the common understanding of a public benevolent institution in 1931 involved the institution directly dispensing relief, we can see no reason why that common understanding may not have changed over time to encompass organisations that may be structured in ways that separate fund raising entities from entities that dispense relief or aid using those funds.

Statutory context 40 The Commissioner's submissions based on statutory context are in our opinion at best unpersuasive and at worst misconceived. 41 As for the reliance on s 8(5) of the EDA Act, it is difficult to see how the terms of a different Act dealing with a different taxation regime can assist in divining the common or ordinary meaning of the expression public benevolent institution in the FBTA Act. The fact that in 1928 the legislature chose to separately exempt from estate duty, inter alia, a "public benevolent institution" and a "fund established and maintained for providing money for the use of such institutions" does not mean that the common understanding of a public benevolent institution over eighty years later cannot include an institution that is primarily involved in fund raising. In our opinion the terms of s 8(5) of the EDA Act do not provide a relevant contextual consideration in working out the contemporary understanding of the meaning of a public benevolent institution as that expression is used in the FBTA Act. 42 We also do not consider that the primary judge erred in dismissing the Commissioner's contextual argument based on s 8(5) of the EDA Act. His Honour was right to conclude, in effect, that the apparent legislative intent in s 8(5) was to ensure that gifts to a fund, such as a trust fund, which "structurally" might not be an institution, also obtained the estate duty exemption. A fund (as distinct from a body set up to administer the fund) would not ordinarily be considered to be an institution: cf. Stratton v Simpson (1970) 125 CLR 138 at 158. The separate exemption of a fund in s 8(5) of the EDA Act does not, in our opinion, reflect some understanding on the part of the legislature that an institution that primarily raises funds cannot be a public benevolent institution. The primary judge was correct to conclude that this says nothing about the nature of the ordinary meaning of a public benevolent institution. 43 The terms of s 57A(3)(b) of the FBTA Act also provides no assistance in determining whether an institution which primarily raises funds for benevolent purposes can be a public benevolent institution. We are unable to see how the fact that the legislature chose in s 57A(3)(b) to extend the relevant exemption not only to employers who provide ambulance services, but also to employers who provide services that support ambulance services, sheds any light on the meaning of the expression public benevolent institution in s 57A(1). It cannot be inferred or deduced from this that an entity that raises funds to be used by another entity for the relief of hunger cannot be a public benevolent institution. We agree with the primary judge that there is no relevant analogy or correspondence between the concept of an employer who provides particular services (services that support ambulance services) and an institution that raises funds for the purpose of the funds being used by another institution to relieve hunger or poverty. 44 The Commissioner's submission that it would have been a straight forward exercise for the legislature to include "an analogous extension" in s 57A(1) is not to the point. Putting aside the fact that in our view there is no real analogy, it might equally be said that such an extension was unnecessary because an institution which is predominantly involved in fund raising can in any event be a public benevolent institution. 45 We should add that we do not consider that it is correct to approach the issue of the ordinary meaning or common understanding of an expression used in a statute as if the answer can necessarily be gleaned from the apparent intention of Parliament in the statute, or other statutes that may use the expression. As Allsop J, as his Honour then was, put it in Ambulance Service at [80], the inquiry is not "a legal question based on defined criteria or a question the answer to which is capable of being divined from the intention of Parliament in a statute, but, rather, to be part of an enquiry as to the meaning or usage of a phrase in the language, though one illuminated by legal authority."

Prior authority 46 In relation to prior authority, the Commissioner relies, as he did before the primary judge, primarily on the judgment of Rath J at first instance and the judgment of Street CJ on appeal in ACOSS. 47 In ACOSS, the relevant institution, the Australian Council of Social Service, was an umbrella organisation the primary objective of which was to promote the social welfare of all Australians, with particular reference to poor and disadvantaged persons. It did so by providing services to its member organisations, conducting research into areas of concern and publishing materials on topics related to social welfare. 48 At first instance Rath J found that the Council was not a public benevolent institution for the purposes of s 10 of the Pay-roll Tax Act 1971 (NSW). His Honour gave essentially two reasons for so finding. One of the reasons was that ACOSS sought to promote relief from poverty by promoting social welfare in the country generally. Because its central activity involved seeking well-being not only for the poor, but for the public generally, his Honour doubted that its objects were those of a public benevolent institution. 49 The second and perhaps main reason given by Rath J was that a body which was merely organised to promote, as opposed to administer, aid and comfort, could not fall within the ordinary English meaning of the expression public benevolent institution. This finding in turn was based on his Honour's finding (at 299) that the reasoning of the Court in Perpetual Trustee: … is based on the proposition that an institution, claiming the character of a public benevolent institution, must itself dispense relief to the needy. When the judges in that case [Perpetual Trustee] are referring to the organisation of the institution it is the organisation of aid in a direct and immediate sense that is contemplated. 50 Two points may be made about his Honour's reasoning in this respect. First, as we have indicated earlier, we doubt that any of the judges in Perpetual Trustee intended to provide an irrefutable test or definition that required the direct provision of aid. We therefore doubt that Rath J was correct in finding that the reasoning of the Court in Perpetual Trustee was based on the proposition that a public benevolent institution must itself dispense relief to the needy. 51 Second, it appears to be central to his Honour's reasoning that the activities of ACOSS were limited to the promotion of the relief of poverty generally. Its functions of promotion were not directed to the furtherance of the objects of any particular benevolent institution. In our opinion Rath J's observations concerning the requirement that a public benevolent institution must itself dispense relief to the needy must be read in light of the particular facts his Honour was considering, namely an institution that provided general advice, information, research and advocacy services. Such services did not amount to dispensing relief to the needy. His Honour was not considering whether an organisation which raised funds for use by particular public benevolent institutions could not itself be said to be organised "in a direct and immediate sense" for the relief of poverty, sickness, destitution or helplessness. 52 In any event, the judgment of Rath J went on appeal to the Court of Appeal. The lead judgment was delivered by Priestley JA. Mahoney JA agreed with Priestley JA. Street CJ agreed with the conclusion reached by Priestley JA, but added some additional observations concerning the import of the decision in Perpetual Trustee. The Commissioner's argument relies on those additional observations. The Commissioner accepts that the observations were obiter. 53 There could be little doubt that the judgment of Street CJ provides support for the Commissioner's contentions. His Honour considered (at 568D) that the words "public benevolent institution" have an established scope "one of the elements of which involves the ascertainment of the identity of the persons to benefit from the benevolence of the institution in question". His Honour then reasoned that it is natural to imply from this element that "there will be direct beneficiaries of such benevolence." Street CJ also noted that the "element of direct dispensation of benefits" was found within the factual context of all but one of the reported cases and that this provided (at 568G) "a strongly persuasive basis for holding that, over the passage of years, this element has now become built into the concept of a public benevolent institution." His Honour found (at 569E) that there was at least a "tacit" acceptance that direct dispensation was an essential element. 54 There are two difficulties with the Commissioner's reliance on these obiter observations of Street CJ. 55 First, nothing said by Priestley JA (with whom Mahoney JA agreed) indicates any support for the observations made by the Chief Justice or provides any support for the Commissioner's case. Insofar as Priestley JA addressed the meaning of public benevolent institution, his Honour said: To me, the word "benevolent" in the composite phrase "public benevolent institution" carries with it the idea of benevolence exercised towards persons in need of benevolence, however manifested. Benevolence in this sense seems to me to be quite a different concept from benevolence exercised at large and for the benefit of the community as a whole even if such benevolence results in relief of or reduction in poverty and distress. Thus it seems to me that "public benevolent institution" includes an institution which in a public way conducts itself benevolently towards those who are recognizably in need of benevolence but excludes an institution, which although concerned, in an abstract sense, with the relief of poverty and distress, manifests that concern by promotion of social welfare in the community generally. 56 Because ACOSS exercised benevolence at large and for the benefit of the community as a whole, his Honour concluded that it was not a public benevolent institution. Accordingly his Honour did not need to decide whether public benevolent institutions are limited to those who give direct relief. That said, his Honour's understanding of the meaning of the expression as articulated does not incorporate or suggest any such limitation. 57 There are also some indications in the judgment of Priestley JA that his Honour had at least some doubts that there was such a requirement. In particular, his Honour observed (at 575D) that there "might well be some force in [the] submission" that Perpetual Trustee should not be "mechanically applied" and that the content of the words public benevolent institution had expanded since the time Perpetual Trustee was decided. His Honour's understanding of the meaning of the composite expression included an institution which conducts itself benevolently towards those in need of benevolence, or which exercises benevolence to such persons "however manifested". The last words are quite contrary to the restrictive construction urged by the Commissioner. 58 The second difficulty the Commissioner faces in relying on the judgment of Street CJ is that in our view there is, with respect, reason to doubt some of Street CJ's reasoning. First, we doubt that it follows from the fact that it may be necessary to ascertain the identity of the persons who will benefit from the benevolence of the institution that there must be a direct dispensation of aid to those beneficiaries. It may in some circumstances be possible to identify the beneficiaries, even if the aid is to be provided to them indirectly. Second, we doubt whether there has been any "tacit acceptance" in the authorities that an institution cannot be a public benevolent institution unless it directly provides aid. We also doubt that the fact that most cases have in fact involved the direct provision of aid provides a "strongly persuasive basis" for holding that this is an essential element. 59 We do not consider that the judgment of Rath J at first instance and Street CJ on appeal provide a persuasive basis for upholding the Commissioner's contention that an institution cannot be a public benevolent institution if it does not dispense aid directly. 60 Nor are we persuaded that the other authorities relied on by the Commissioner support his contention. 61 The judgment of Fitzgerald P (with whom Thomas J relevantly agreed) in RSPCA provides little or no assistance to the Commissioner. The question in that case was whether the RSPCA was a public benevolent institution. Fitzgerald P referred to each of the judgments in Perpetual Trustee and to the judgments of both Priestley JA and Street CJ in ACOSS. His Honour concluded that for the reasons given by Street CJ, the Court should accept the meaning of the expression "public benevolent institution" which has been adopted for many years. His Honour did not, however, expressly state that the meaning that had supposedly been adopted for many years was the meaning given to the expression by Street CJ, which included the element of the direct provision of aid. Ultimately the Court found that the RSPCA was not a public benevolent institution because it provided benefits to animals, not to the community or a section of the community. The matter did not turn on the question whether the relief that was provided by the RSPCA was provided directly or indirectly. 62 The final authority relied on by the Commissioner also did not concern any issue relating to the direct provision of relief. In Cairnmillar, McGarvie J had to decide whether the Cairnmillar Institute was a public benevolent institution. The services provided by the institute were predominantly the treatment of mental conditions or disability by psychotherapy. It levied a charge for those services from those who were able to pay. McGarvie J rejected the submission of the Commissioner for Pay-roll Tax that to be a public benevolent institution it was essential that services only be provided to those in financial need or for no charge. His Honour reviewed the authorities and found no such requirement. This finding was upheld on appeal: [1992] 2 VR 706. His Honour's statement (at 675) that "the authorities establish that a public institution which provides relief in a direct way to persons suffering from some unfortunate disability or condition is a public benevolent institution" must be understood in that context.

Word Investments 63 We do not consider that the primary judge erred in any way in relying on aspects of the reasoning of the High Court in Word Investments. There is no doubt that his Honour was conscious that Word Investments was concerned with the technical concept of charitable purposes or a charitable institution. His Honour accepted (at [123]) that the expression "public benevolent institution" was introduced in s 8(5) of the EDA Act to "move away from the technical complexities of the concept of charitable purposes". His Honour found, however, that the High Court's reasoning concerning the unredeeming nature of an approach which focused on the structure of an organisation rather than its substance "did not turn on any of these technical matters". We agree. 64 The point his Honour was making was that, by parity of reasoning, an approach to determining whether a particular institution is a public benevolent institution which focused on the structure of the organisation, as opposed to the substance of its objectives and activities, would be erroneous. His Honour's reasoning was directed to determining the ordinary meaning of the relevant expression and whether HPA fell within that ordinary meaning. We see no error involved in that reasoning. 65 Contrary to the Commissioner's submissions, the primary judge was not in any respects equating the different meanings or concepts of a charitable institution and a public benevolent institution. Nor was he doing anything other than construing the expression public benevolent institution as used in the FBA Act in accordance with its ordinary meaning. The Commissioner's submission that in adopting this reasoning his Honour somehow exceeded the Court's proper judicial function has no merit and is rejected.

Conclusion and Disposition 66 In our opinion, whilst there is no single or irrefutable test or definition, the ordinary meaning or common understanding of a public benevolent institution includes (to adapt the words of Starke and Dixon JJ in Perpetual Trustee) an institution which is organised, or conducted for, or promotes the relief of poverty or distress. To adapt the words of Priestley JA in ACOSS, such an institution conducts itself in a public way towards those in need of benevolence, however that exercise of benevolence may be manifested 67 The ordinary contemporary meaning or understanding of a public benevolent institution is broad enough to encompass an institution, like HPA, which raises funds for provision to associated entities for use in programs for the relief of hunger in the developing world. The fact that such an institution does not itself directly give or provide that relief, but does so via related or associated entities, is no bar to it being a public benevolent institution. Such an institution is capable of being considered to be an institution organised or conducted for the relief of poverty, sickness, destitution and helplessness. 68 It was accordingly open to his Honour to find that HPA was a public benevolent institution on the facts as found. His Honour made no error in so finding. Accordingly the appeal must be dismissed. The parties agree that as the proceedings are test case funded there should be no order as to costs. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Edmonds, Pagone and Wigney.

Pay-roll Tax Act 1971(NSW)

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