Salvation Army (Vic) Property Trust v Fern Tree Gully, Shire of - [1952] HCA 4 - HCA 1952 case summary — Zoe

CTHHCA

Salvation Army (Vic) Property Trust v Fern Tree Gully, Shire of

[1952] HCA 4

High Court of Australia|1952-07-01|Before: Fullagar JJ, Webb JJ, Victoria Sholl J

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Source facts

Court

High Court of Australia

Decision date

1952-07-01

Before

Fullagar JJ, Webb JJ, Victoria Sholl J

Source

Original judgment source is linked above.

Judgment (48 paragraphs)

[1]

High Court of Australia Dixon, McTiernan, Williams, Webb and Fullagar JJ. Salvation Army (Vic) Property Trust v Fern Tree Gully, Shire of [1952] HCA 4

[2]

ORDER Appeal allowed. Order of Supreme Court set aside. In lieu thereof order that the order nisi be discharged with costs and that the order of the magistrate dismissing the complaint with twenty guineas costs be restored. The respondent to pay the costs of the appeal.

[3]

The question at issue in these proceedings is whether the appellant is liable to be rated under the provisions of the Local Government Act 1946 Vict. in respect of its ownership of about 400 acres of land situated in the area of the respondent shire on which the appellant is carrying on an institution known as "The Salvation Army Bayswater Boys Home Training Farm and Vocational Centre". Section 249 (1) of the Act provides that all land shall be ratable property within the meaning of the Act save as is next thereinafter excepted. A number of exceptions follow, one of which is (1) (b) (ix): "Land used exclusively for - Charitable purposes". The respondent shire sued the appellant in the court of petty sessions for the rates under s. 339 of the Act. The learned stipendiary magistrate was of opinion that the land in question fell within this exception and dismissed the complaint. Upon appeal to the Supreme Court of Victoria Sholl J. set aside the order of the magistrate and remitted the complaint back to him for further hearing as to what portions, if any, of the property were exempted consistent with his Honour's decision. The appeal to this Court is by special leave from the order of the Supreme Court.

[6]

The boys of the No. 1 Home take part in the farming activities of the institution. The boys in the No. 2 Home take part in the cleaning up of their own part of the property but not in the work of the rest of the institution. The institution was founded to care for neglected boys who were becoming a problem in Australian cities and to give these boys a practical and religious training so that they would be encouraged to start life afresh and become useful citizens. In his evidence Brigadier Saunders was asked whether the whole of the work on the property was carried out for the sole purpose of training the boys, and he replied: "Yes, that all the work done in regard to the dairying, vegetable growing, and orchard was done for the purpose of training the lads, and in order that they might, if possible, develop into useful citizens upon their discharge from the institution". He said that they endeavoured whilst the boys were there to instil into them a religious background and to bring them up on right moral principles. The superintendent of the institution Brigadier Leggett was asked the following questions and answered them as follows: "Q. With regard to No. 1 Home you might tell his Worship when a boy comes to the home approximately what is the programme? A. When a boy is committed to us I generally interview him and introduce him to the officers. The whole idea is to establish friendship as soon as possible and confidence between us. Then we show the boy his private room. We show him the dining and other facilities and over the home generally. Q. When he has seen around, what does he do? A. He is placed with about twenty boys and they are in the care of about four officers and the big thing for us is to hold the boy to the place because his whole idea then is to break away, to abscond and get into further difficulties and it takes us all our time to hold him. We try to get him generally occupied. He may go for one or two days perhaps cutting wood, then may be another day they are digging up docks, cutting blackberries, generally cleaning up about the place or if they are too restless they are taken to the gymnasium or cricket field or football. This is what we call bridging the restless period. Q. Do I gather that the whole point is to hold his interest by frequent changes? A. Yes, he usually resents coming and we just have to wait until he is prepared to work. We have to move him about from one place to another to keep his interest and promote friendship. Q. How long does that period generally last? A. We find that settling down and getting him to pay attention and listen, it generally takes about six months. Tremendous patience is necessary, you cannot force the boy. You just have to quietly move him round, keep him occupied as much as you can - it generally takes about six months. This is what we call the most important part, because unless he settles down he won't improve nor be fit to go out. Q. What is the next step in his training? A. We generally have what we call the semi-trust period - when we feel that a lad may be slightly trusted - he won't run away as quickly. He is given an opportunity of being trusted. He will be taken to the dairy or to the orchard or general farming and he will watch the operations, perhaps take a small part in them, clean up the dairy, watch the milking - perhaps he will be taught to strip, maybe in the orchard he will be shown the pruning or the cropping, it depends on the season. He may get a chance to handle the horses. The idea is to trust him a little bit. That period averages about three to four months. Q. What is the final period? A. When a boy is showing some promise we put him to what we call a full trust. Then he goes to the orchard or to the dairy where his training will be a little more intensive. He is given more lectures and opportunities to handle things and generally fit him for some job when we have found what he is most adapted to. Q. For the purpose of adequate facilities for these boys, is it necessary to have each of the various phases of activity that you have there? A. Yes, variety is the thing at Bayswater. We must have it for the type of boy committed to us. Q. It was as a result of the need for more variety that you recently established this workshop? A. Yes, and the flowers &c. Q. Then the whole of the activities in their various phases are directed only to providing training for the boys in some particular vocation? A. The facilities which we have there are to give the boy an opportunity to express himself if he will. We do not feel that we have any chance of making a boy a dairy farmer or a carpenter or any of these trades in just the little time we have at our disposal. The only thing we can hope to do is to create a desire. Q. Is it a fact that behind all this training there is a very strong emphasis on religious training? A. The moral and religious training is paramount because we feel that this is a foundation".

[7]

The magistrate found that the land was being used exclusively for charitable purposes. He said it appeared that certain products resulting from the boys' labour were sold to various people - such as flowers, pigs taken into market, milk and vegetables, and the proceeds devoted to the boys themselves. "Still, I take the view that the mere selling of the surplus proceeds for the purpose of helping to finance the home does not necessarily mean that this land is being used for purposes other than charitable purposes. I think the whole use to which the land is put is charitable in its nature and the surplus proceeds is merely something which is incidental to the training of the boys". He distinguished the Nunawading Case [1] , to which we shall refer later, on the facts, expressing the opinion that it was obvious that the Adult Deaf and Dumb Society of Victoria used the premises for other than charitable purposes. "It allowed outsiders to come in and made charges". On the appeal to Sholl J., it was submitted for the appellant shire (a) that the case fell within the decision in the Nunawading Case [1] and it could not be said, consistently with that case, that the land, even if used for "charitable purposes" within the meaning of that expression as defined by the Full Court in Queen's College v. Melbourne Corporation [1] , was exclusively so used, having regard to the business or commercial activities involved in the sale of surplus produce; (b) that even if the Nunawading Case [2] did not cover this case, the purposes for which the land was used were not exclusively charitable, within the Queen's College Case [1] definition - i.e., they were not limited to purposes charitable in the popular sense, in that they were not solely for the relief of poverty, since boys other than poor boys might be inmates. It was submitted for the respondent, the Salvation Army, that the Nunawading Case [2] was distinguishable in that it turned on a finding of fact by this Court that the use of the land there proved went beyond what was merely a necessary consequence of, or merely an incidental requirement of, the use of the land for the charitable purpose of training deaf and dumb people, whereas in the present case there was no use of the land except what was the necessary consequence of, or (according to the magistrate's finding) a merely incidental requirement of, the use of the land for the charitable purpose of training boys in order to reform or train them morally and socially. It was also submitted that the purposes of the institution were all charitable purposes in the popular sense within the meaning of Hood J.'s test in the Queen's College Case [1] , or alternatively, it should be held, since the decisions of the Privy Council in Chesterman v. Federal Commissioner of Taxation [3] and Adamson v. Melbourne and Metropolitan Board of Works [4] that the Queen's College Case [1] was wrongly decided, and that "charitable purposes" in s. 249 (1) (b) (ix) should now be read as referring to purposes charitable in the legal sense, which the purposes of this institution plainly are. Counsel agreed, however, that he could not pursue this alternative argument before Sholl J. since his Honour was bound by the Full Court decision, and there was no sufficiently direct decision of the Privy Council to enable him to ask his Honour to act on the basis that the Full Court decision had been overruled.

[9]

With respect to the first submission Sholl J. posed for himself the following question: "Is, then, the principle of exemption this, that there is no use for a purpose other than an exclusively charitable purpose, if there is no use save such as is the necessary consequence of, or merely incidental to, an overriding charitable purpose? Or is the principle that the exemption is lost if, upon the facts, it can be said that the land, though used for a charitable purpose, - and, if it be desired to add it, an overriding or primary charitable purpose, - is also used for a non-charitable purpose, at all events one involving public commercial trading activities, notwithstanding it is a necessary consequence of, or merely incidental to, the charitable purpose?" In the course of discussing this question his Honour sought to ascertain the line of demarcation which distinguishes the exclusive from the non-exclusive charitable use of land. He referred to three cases decided in England under the provisions of the Scientific Societies Act 1843 Imp. (6 & 7 Vict. c. 36). This Act provided in effect that no person should be rated in respect of any land &c. belonging to any society instituted for the purposes of science &c. exclusively and occupied by it for the transaction of its business and for carrying into effect its purposes. These cases are Purvis v. Traill [1] ; Borough of Battersea v. British Iron & Steel Research Association; British Launderers' Research Association v. Borough of Hendon Rating Authority [2] . In these cases it was decided that a society lost the exemption unless it was instituted for scientific &c. purposes exclusively but that it was still so constituted although it had other purposes provided the other purposes were merely a means to the fulfilment of its scientific &c. purposes and incidental thereto but that the exemption was lost if the other purposes ceased to be a means to an end and became collateral and additional purposes. His Honour, however, considered that this test was not appropriate to s. 249 (1) (b) (ix) of the Local Government Act 1946 and that it was not consistent with the test adopted by this Court in the Nunawading Case [3] . Of that case his Honour said: "In my judgment, the Nunawading Case involves the conclusion that land ceases to be used exclusively for charitable purposes within the meaning of the exemption if, though the primary and indeed the overriding purpose of its use is and remains charitable within that meaning, the land is used for carrying on commerce with the general public, notwithstanding that such commercial activities are designed solely to obtain revenue for, or are merely incidental to, or even are the necessary consequence of, the pursuit on the land of the charitable objects of the occupier".

[11]

Before us Mr. Campbell for the respondent shire insisted that the present case was indistinguishable from the Nunawading Case [3] . If we acceded to this submission it would be necessary to consider whether that case was rightly decided. But we do not consider that it was more than a decision upon the particular facts, and we do not think that it purports to establish any principle that would constrain us one way or the other in the present case. In the Nunawading Case [1] a flower garden was maintained as a method of treating, training and instructing deaf and dumb persons. The flowers were cut and sold and a substantial income was received which was applied to the upkeep of the institution. There was a lake on the land, and the society habitually allowed boating and picnic parties to use the lake and part of the land, the society making charges therefor, the income from which was substantial and was applied to its upkeep. In the course of its judgment the Court pointed out that the question at issue was whether the land was used exclusively for charitable purposes and that the word "exclusively" could not be disregarded. "The use must be so as to exclude all purposes but the particular purpose". At [2] the Court said: "A flower garden has been made and is maintained as a method of treating, training and instructing these persons (i.e. the deaf and dumb inmates). But the flower-growing scheme went far beyond these purposes. A business, which consisted of selling flowers to the public, was carried on, with the result that a large return accrued to the Society in each year". "It is not enough that the primary or main object of the use of the land was for charitable purposes, unless it can be affirmed that the land was used for these purposes only. The use of the land in the present case was twofold - (1) the treatment and training of the inmates of the Home, and (2) the carrying on the business of growing and selling flowers to assist in the upkeep of the institution. The latter purpose is not in any sense a charitable purpose, and so excludes the exemption claimed. In addition to using the land for a flower garden, the Society habitually allowed boating and picnic parties to enter upon and use portions of the land, charging various sums of money for such use, and the sums received were not inconsiderable. The use of the land as a kind of recreation reserve for boating and picknicking parties is not a charitable purpose, and consequently excludes the exemption claimed by the Society".

[13]

As we understand this judgment the Court decided that the land was not being used exclusively for charitable purposes because it was also being used for another collateral purpose. We do not understand the judgment as deciding that land is not used exclusively for charitable purposes where the charity derives some subsidiary and incidental benefit flowing from the carrying out of that use. In the Nunawading Case [1] the Court found that the society was carrying on upon the land as a distinct purpose the business of growing and selling flowers. In the present case the magistrate found that the sole object of the institution in carrying on the various farming activities on the land was to achieve the charitable purpose of giving the boys committed to its charge an elementary education in these activities. If this finding can be sustained there is in the present case no dual use as there was in the Nunawading Case [1] . Farming activities necessarily result in the production of various forms of primary products. It would be fantastic to hold that the land would not be ratable if the appellant destroyed or gave away the surplus products resulting from such training that remained after satisfying the needs of the inmates but that it would be ratable if it disposed of such surplus at a profit and used that profit in aid of the revenues of the institution. There is nothing in the evidence to suggest that the appellant is carrying on the farming activities to a greater extent than is reasonably necessary to achieve the above purpose or that under the cloak of this purpose it is really engaged in carrying on the business of a farmer for the purposes of gain. There is no reason to doubt the evidence of Brigadier Leggett that it is necessary to pursue a variety of activities to interest the various types of boys sent to the institution. In our opinion Sholl J. went too far when he said that the Nunawading Case [1] involved the conclusion that land ceases to be used exclusively for charitable purposes where it is used for carrying on commerce with the general public notwithstanding that such commercial activities are merely incidental to the pursuit on the land of the charitable objects of the occupier. We can see no reason for not construing the word "exclusively" in s. 249 (1) (b) (ix) of the Local Government Act 1946 in the same manner as that word has been construed in the English cases under the Scientific Societies Act 1843. This construction was accepted in Southport Corporation v. Corporation of the Trustees of the Order of the Sisters of Mercy in Queensland [2] , where the question was whether certain land was used exclusively for a public school within the meaning of par. (vi) of s. 216 of The Local Authorities Acts 1902 to 1932 Q.. It was held however that the premises were used both as a convent and a school, and that the conventual life of the nuns was not a mere incident of the school. The same construction was adopted in the case of the exemption from income tax now contained in the Income Tax Act 1918 Imp. (8 & 9 Geo. 5 c. 40) (s. 37 (1) (b)), re-enacting provisions of the Income Tax Act of 1842 Imp. (5 & 6 Vict. c. 80), which provided in effect that exemptions should be granted from income tax in respect of the income of any body of persons or trusts established for charitable purposes only so far as that income was applied for charitable purposes only. It was pointed out in Royal Australasian College of Surgeons v. Federal Commissioner of Taxation [1] that the English authorities show that an institution qualified for exemption under these provisions if its main purpose was charitable although it might have other purposes which were merely concomitant and incidental to that purpose. To the authorities there cited there can now be added the recent decisions of the Court of Appeal in Tennant Plays, Ltd. v. Inland Revenue Commissioners [2] and In re Bland Sutton's Will Trusts [3] . In Royal Choral Society v. Commissioners of Inland Revenue [4] Lord Greene M.R. said: "It is true that you have to find the purpose of the alleged charitable establishment. It may very well be that a purpose which, on the face of it looks to be the real purpose, on close examination, is found not to be the real purpose. A body of persons may purport to set themselves up for educational purposes; but, on a full examination of the facts, it may turn out that their purpose is nothing of the kind, and is one merely to provide entertainment or relaxation to others, or profit to themselves. In other words, the presence of the element of entertainment or pleasure may be either an inevitable concomitant of a charitable or educational purpose, or it may be the real fundamental purpose, and education may merely be a by-product. Whether a case falls within one class or the other is, no doubt, a question of fact, save and so far as it may depend upon the construction of written documents". In our opinion a similar approach to that exemplified in the English cases under discussion should be adopted in deciding whether land is used exclusively for charitable purposes within the meaning of s. 249 (1) (b) (ix) of the Local Government Act 1946. If the land is used for a dual purpose then it is not used exclusively for charitable purposes although one of the purposes is charitable. But if the use of the land for a charitable purpose produces a profitable by-product as a mere incident of that use the exclusiveness of the charitable purpose is not thereby destroyed.

[17]

This leads us to consider whether the word "charitable" in s. 249 (1) (b) (ix) of the Local Government Act 1946 is used in its legal sense or has a popular meaning. The legal meaning of the word was of course discussed and charity in its legal sense classified in four principal divisions by Lord Macnaghten in Commissioners for Special Purposes of Income Tax v. Pemsel [5] (adopted from the argument of Sir Samuel Romilly in Morice v. Bishop of Durham [6] ). His Lordship said: " "Charity" in its legal sense comprises four principal divisions; trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly". In its legal sense the work of reforming and educating the boys committed to the institution is plainly a charitable purpose as being either for an educational purpose or alternatively for a purpose beneficial to the community. But it was contended that in the context of s. 249 (1) as a whole the words "charitable purposes" should be given a popular meaning and that the work of the institution is not charitable in this sense because the sons of well-to-do parents could participate and its benefits are not therefore confined to necessitous and needy boys. In Queen's College v. Melbourne Corporation [1] , it was held by the Full Court of Victoria that the word "charitable" in s. 246 of the Local Government Act 1890 which exempted from rating lands "used exclusively for charitable purposes" was used in its ordinary colloquial sense. The same exemption was repeated in s. 249 of the Local Government Acts of 1915 and 1928 and now appears in s. 249 of the Act of 1946. It was pointed out that the enumeration of exemptions in s. 249 of the present Act contains categories that would not be required if the word "charitable" is given its legal meaning because they would be comprised within that meaning. The respondent relied on the principle of interpretation that where the language of a statute has received judicial interpretation, and Parliament again employs the same language in a subsequent statute dealing with the same subject, there is a presumption that Parliament intended that the language so used by it in the subsequent statute should be given the meaning which has been judicially attributed to it in the meantime. But this principle affords at most a valuable presumption as to the meaning of the language employed. It should not lead the Court to perpetuate the construction of a statutory provision which it considers to be erroneous (Barras v. Aberdeen Steam Trawling and Fishing Co. Ltd. [2] ); Robinson Brothers (Brewers) Ltd. v. County of Durham Assessment Committee [3] ; Royal Court Derby Porcelain Co. Ltd. v. Russell [4] ). In Chesterman v. Federal Commissioner of Taxation [5] the Privy Council, reversing the decision of this Court, held that in the construction of s. 8 (5) of the Estate Duty Assessment Act 1914-1916, which exempted from the payment of estate duty so much of an estate as was bequeathed "for religious, scientific, charitable or public educational purposes", the word "charitable" was used in its legal sense and should not be given the narrow meaning of "eleemosynary" which it has in popular language. The same arguments as were addressed to us on the importance of adopting a construction which would avoid redundancy and tautology and such like objections were addressed to the Privy Council but did not prevail. There is in this case, as there was in that case, no sufficient indication of intention that the word "charitable" should be given any other than its legal meaning. There has been, perhaps, too great a tendency in the Australian courts, as the Privy Council rather hinted in Adamson v. Melbourne and Metropolitan Board of Works [1] , to depart from the legal meaning of "charitable" on rather slight grounds. Our courts in the future should be slow to do this unless there is a clear indication of a contrary intention.

[20]

This appeal raises the question whether the whole of an area of land is brought within s. 249 (1) (b) (ix) of the Local Government Act 1946 Vict.: that is whether the land is used exclusively for charitable purposes. The appellant holds the land on trust to apply it and the income to the "social work" of the Salvation Army. That body conducts on the land the institution known as the Salvation Army Bayswater Boys Training Farm and Vocational Centre. The social work of the Salvation Army is directed to the social, moral and temporal welfare and improvement of, among other classes, children needing care in reformatories, and the Salvation Army carries on this work by means of this institution. The inmates are boys committed to the institution by the Criminal Courts, the Children's Welfare Department or their parents: the boys consist of three classes: juvenile offenders, neglected and uncontrollable children. By using the land for carrying on their social work for the welfare and improvement of these classes of boys, the Salvation Army uses the land for purposes that are charitable either in the legal or the popular sense. The respondent denied that the word "charitable" in s. 249 (1) (b) (ix) is used in its legal sense, and that the purposes for which the Salvation Army used the land are charitable in the popular sense. Admission to the institution is not refused to boys whose parents are not badly off but most of the boys committed to it come from the impecunious classes of society. The popular meaning of the word "charity" is not definite and it is by no means evident that it is restricted to the relief of poverty; this appears from the observations made by Lord Herschell in Commissioners for Special Purposes of Income Tax v. Pemsel [1] . A boy whose social condition warrants his committal to this institution excites Christian compassion by reason of his moral and material needs; in most cases he would belong to the underprivileged class of society: but, even if he did not, I think it could not be right to say that it is beyond the popular conception of charity, to meet the need of moral and social betterment of such a youth and to save him from the social misery and the material and moral misfortune and ruin towards which he is tending. In my opinion this institution is charitable in the popular sense: I agree with Sholl J. on this point in the case. In this view it does not avail the respondent that the legislature used the word "charitable" in s. 249 (1) (b) (ix) in the popular sense. However, I agree with the respondent's contention that the legislature did use the word in that sense: at any rate that is the intention which the Court ought to attribute to the legislature. The Full Court of Victoria decided in the Queen's College Case [2] , that the word "charitable" in an identical context, and with reference to the same subject matter, was not used in its legal sense. The case was decided upon the meaning of charitable in s. 246 of the Local Government Act 1890 of Victoria. The context, in the opinion of the court, pointed to a legislative intention to use the word in its popular meaning: see per Hood J. [3] . The Parliament of Victoria has since that case, more than once, enacted the exemption now found in s. 249 (1) (b) (ix). A court cannot avoid attributing to the legislature an intention on each occasion and, what is here material, in 1946, to use the word "charitable" in the sense in which the Full Court construed it in the Queen's College Case [2] . In the light of Chesterman's Case [4] and Adamson's Case [5] , the more correct view may be that the context of the Act is not sufficient to displace the presumption in favour of the legal meaning of the word "charitable". The judgment of the Full Court in the Queen's College Case [2] cannot be left out of consideration as it supplies a valuable presumption of what the Parliament meant by the word "charitable". Lord Russell in Barras v. Aberdeen Steam Trawling & Fishing Co. Ltd. [6] cited two clear statements of this principle of construction, one made by Lord Coleridge in Barlow v. Teal [7] , and the other by Lord Loreburn in North British Rly. Co. v. Budhill Coal & Sandstone Co. [8] . It may be difficult, by relying upon considerations of overlapping and arguments from the context, to limit the scope of the word "charitable" in s. 249 (1) (b) (ix) to its popular content: that is not enough to displace the presumption created by the judicial interpretation given by the Full Court to the word; see Barras' Case [1] . The present case is a typical one for the application of this rule of construction. It was applied by the House of Lords in Barras' Case [2] : and that is a precedent for the application of the rule to this case. The House of Lords discussed the value and limitations of the rule: nothing was said which would justify rejecting it in the present case. Lord Buckmaster described it as "a salutary rule" and one necessary to confer some certainty upon Acts of Parliament. The Queen's College Case [3] was decided in 1905 and it has apparently governed the application of the exemption now in question since that time.

[22]

The institution includes, as its name implies, a training farm. Certain types of boys in the institution who are suitable to be trained for farm work are put to work on this farm, not only as a training in useful pursuits but as a form of discipline and correction. The farm is not maintained on a scale which is out of proportion to its use as a medium for training, discipline and correction. The produce of the farm is consumed by the inmates and staff of the institution. There is a surplus, chiefly of milk, and the surplus of all the produce of the farm is sold and the profits are applied to the purposes of the institution. The matter to be considered is what is the effect of this trade on the claim that the land is used exclusively for charitable purposes. The trade in the surplus is put as the bar to the exemption. The fact that the land comprised in the farm was used productively or that a surplus over and above the necessities of the institution was produced is not set up as an answer to the claim. It is conceded, as I understand the argument, that if the institution had given away or destroyed the surplus of produce, instead of trading in it, the land comprised by the farm would not have been diverted to a purpose which is not charitable. The question whether the trade in the produce has any effect in putting the land in the category of ratable property depends upon what is the intended scope and operation of s. 249 (1) (b) (ix). Decisions upon other Acts may not provide safe guidance to the answer to this question. Sholl J. in his careful judgment has shown the difference between the form of s. 249 (1) (b) (ix) and the Acts in which a number of the decisions cited in the argument were decided. It is important to note that this provision does not exclude from its scope land which is applied to a productive use. Such land is within the exemption if the use is solely for charitable purposes. The exemption applies equally to land used exclusively as a training farm for the welfare of delinquent boys and land used exclusively, for instance, as a playing area for their recreation. The case comes down to the point whether the selling of the produce arising in the course of training boys in this institution on its farm prevents the application of s. 249 (1) (b) (ix). The playing fields are clearly exempt; there was no produce obtained in the course of using them and hence no trade. Express words would be necessary to justify a distinction based merely on the difference between productive and non-productive use in the application of the exemption. The commercial disposal of the produce of the training farm is, of course, not irrelevant to the issue whether the institution's land was exclusively used for the charitable purpose of training these boys.

[23]

In the Nunawading Case [1] , where the question was whether a provision identical with s. 249 (1) (b) (ix) applied, the Court said: "It is not enough that the primary or main object of the use of the land was for charitable purposes, unless it can be affirmed that the land was used for these purposes only". This consequence follows from the ordinary meaning of "exclusively" which is a rigid word. The facts in the Nunawading Case [2] have a resemblance to the facts of the present case, but it is distinguishable on the facts. The Court said in the judgment [3] : "A number of unfortunate persons who are deaf and dumb were housed upon the land, and were treated, trained and instructed. A flower garden has been made and is maintained as a method of treating, training and instructing these persons. But the flower-growing scheme went far beyond these purposes. A business, which consisted of selling flowers to the public, was carried on, with the result that a large return accrued to the Society in each year (See Annual Reports of the Society 1910-1918). It is true that the motive for establishing the flower garden was the treatment and instruction of the deaf and dumb". On the issue of the use of the land the Court's conclusions were: "The use of the land in the present case was twofold - (1) the treatment and training of the inmates of the Home, and (2) the carrying on the business of growing and selling flowers to assist in the upkeep of the institution". The Court added: "The latter purpose is not in any sense a charitable purpose, and so excludes the exemption claimed". The evidence in the present case does not prove that the productive activities which yielded the produce sold to the public were upon a scale which exceeded the purpose of training the boys. The scale of the flower-growing scheme in the Nunawading Case [1] obviously contributed to the conclusion that the land was used for the second purpose of carrying on a business of growing and selling flowers to assist in the upkeep of the institution. The evidence in the present case shows that the production of the milk and the other commodities sold to the public was carried on solely for the purpose of training the boys in rural pursuits: it is not the case that the training of the boys was the primary or main object of carrying on the dairy, growing the produce and other productive activities: such training was in truth the only object of these activities. The pecuniary return obtained by the institution is no doubt a pertinent fact to be taken into consideration in determining whether there ran with the charitable purpose of training the boys any other purpose. If there were another purpose, not charitable, it would not matter that it was subordinate to the training of the boys, the exemption would not apply, as the land would not be exclusively used for a charitable purpose. The commercial disposal of the produce resulting from the productive use of land for a charitable purpose is material on the issue whether the use of the land is diverted to another purpose: but it is not always a conclusive fact. If it were decisive the result would be reached that an institution which uses its land for carrying on productive activities solely for charitable purposes would not come within the exemption if it sold the by-products of its charitable work but would do so if it wasted them. It is difficult to imagine that the Parliament intended this absurd result. The language of s. 249 (1) (b) (ix) does not, in my opinion, compel the Court to think that the Parliament did intend it. The condition of the exemption in s. 249 (1) (b) (ix) is a rigid one, but the mere fact that this institution sold the produce of the farm is not sufficient in the circumstances of this case to exclude its land from the exemption.

[29]

In Swinburne v. Federal Commissioner of Taxation [2] it was held in this court that the word "charitable" in the expression "public charitable institution" should be construed in the sense of affording relief to persons in necessitous or helpless circumstances. This case was followed and applied in Kelly v. Municipal Council of Sydney [3] where again what was conceived to be the ordinary or popular meaning was given to the word "charitable" in a statutory provision exempting from rating. The same meaning was again given to the word in question in Chesterman v. Federal Commissioner of Taxation [1] , in which an exempting provision in the Estate Duty Assessment Act 1914-1916 was in question. From the time of the decision in Swinburne's Case [2] it is fairly safe to say that there was thought to exist in Australia a rule that the word "charitable", when used in a statute, was prima facie to be understood in its "popular" sense, and that that popular sense was connected, primarily at any rate, with the relief of poverty. Chesterman's Case [1] , however, was taken on appeal to the Privy Council, and the decision of this court was reversed [3] . Lord Wrenbury, who delivered the judgment of their Lordships said [4] : - "The appellants contend that the word "charitable" in the Act bears its technical legal meaning as in the statute of Elizabeth. The respondent contends that it bears its popular meaning, which involves the idea of assisting poverty or destitution and which may perhaps be expressed by the word eleemosynary. In approaching this question the starting-point is found in Commissioners for Special Purposes of Income Tax v. Pemsel [5] in the House of Lords, and in Lord Macnaghten's words: "In construing Acts of Parliament, it is a general rule that words must be taken in their legal sense unless a contrary intention appears"." It was held that no contrary intention could be found in the particular case. A year or two later a similar question came again before the Privy Council in an appeal from the Supreme Court of Victoria in Adamson v. Melbourne & Metropolitan Board of Works [6] . Anglin C.J., who delivered the judgment of the Board, after referring to Swinburne's Case and Chesterman's Case said [7] : - "From this statement of the effect of the two judgments it is obvious that, although Swinburne's Case is not expressly adverted to in the report of Chesterman's Case, it must be regarded as overruled by that decision. Indeed the principle of construction upon which Swinburne's Case rests is directly opposed to that which forms the foundation of the judgment of this Board in Chesterman's Case".

[41]

The question is indeed the same question as that which might arise in a case where land was devised to trustees for a charitable purpose. It would clearly be a breach of trust to use the land for any purpose which was not charitable in the legal sense: the land must be used exclusively for the charitable purpose. The same question which arises here might arise if the Attorney-General took proceedings for breach of trust. We may take the well-known Milly Milly Case (Attorney General for N.S.W. v. Perpetual Trustee Co. Ltd.) [1] . There the testatrix gave a property known as Milly Milly, which consisted of some 3,800 acres of pastoral and agricultural land, to her trustees "for a training farm for orphan lads, being Australians". The trust was plainly a charitable trust, and required the land to be used exclusively for charitable purposes. It was in fact found impracticable to carry out the trust, and the importance of the case lies in matters remote from this case. But let it be supposed that the trustees had proceeded to carry out the trust according to its tenor, and that they had sold live stock and wool and wheat produced on the property. If the Attorney-General took proceedings for breach of trust, alleging that the land had been used partly for a purpose which was non-charitable, it is impossible to suggest that he could succeed on the mere ground that produce had been sold - even if the station profit and loss account showed a profit. Neither the sale nor the growing for sale, nor even the profit, would of itself show a departure from the terms of the trust, or establish that the land had not been used exclusively for the charitable purpose prescribed by the trust. The position would be exactly the same if the trust were a trust to use the land for charitable purposes, and the particular use chosen was a use as a training farm for orphan lads. The mere fact that produce was grown for sale and sold - even if a profit were made - could not justify a finding that a separate and distinct activity had been carried on which fell outside the scope of the intendment of the statute of Elizabeth. The fact that produce was sold, and, perhaps a a fortiori, the fact that a profit was made, might be used as evidence that the purpose of the totality of the activities carried on upon the land was not the purpose of training orphan lads or was not a charitable purpose, but further and other evidence would be necessary to establish either position.

[44]

Sholl J., however, did not rest his decision merely on the ground negatived above. He said that he did not think it a correct conclusion on the evidence that what he called the "commercial activities" carried on were "at all events to their full extent, necessarily involved in, or merely incidental to, the training of the boys". I do not think that the question thus dealt with is the real question involved in the case, and the use of the expression "commercial activities" more or less assumes that what I do consider to be the real question is to be answered in favour of the municipality by saying that production for sale is an activity separate and distinct from the general mass of activities carried on upon the farm. No doubt, the scale of operations in relation to the number of boys accommodated is a matter relevant both to the question whether the land is really being used at all for charitable purposes and to the question whether production for sale constitutes a separate and distinct activity having a non-charitable purpose. But neither question depends on how many cows or how many acres of wheat it is necessary to have in order to train ten or twenty or fifty boys in dairy-farming or wheat-growing. Such an inquiry would, it seems to me, completely misunderstand the true aims and objects of the Army in maintaining the Boys' Home, taking altogether too narrow a view of them. It is no mere matter of teaching a boy to milk, or plough, or plant flower-seeds. The whole character and atmosphere of the place must be of vital importance, if the ultimate aim of rehabilitating the boys, giving them a new outlook and getting them interested in a healthy occupation, is to have the slightest hope of succeeding. What conduces to the attainment of such an object cannot be measured or estimated in terms of number of cows or of square yards under potatoes. From the Army's point of view it must be absolutely essential to have a real farm run on a fairly substantial scale. On the evidence in the case the whole matter seems to me to stand thus. An undoubtedly charitable purpose attaching to the use of the land is shown. And it is not shown that the nature or scale of any operations carried on is such as to warrant the conclusion that it is used for any separate and distinct purpose of a non-charitable character.