Consideration: the proper construction of 'school'
84 The central question in the Review is whether the Commissioner's interpretation of the ordinary meaning of 'school' is supported by the authorities. If it is not, then the Commissioner proceeded on a misunderstanding of the law in making the Objection Decision and thus committed an error of law. The Commissioner says a building must have as its primary function the provision of regular, ongoing and systematic instruction in a course of non-recreational education and further, that its use for this purpose must be 'substantial'. The Society contends that nothing in the authorities was intended to narrow or alter the 'ordinary meaning' of 'school', and that the reasoning in Leeuwin and Australian Airlines simply applied the principles from Cromer Golf and was specific to the very different facts considered in each case.
85 As a preliminary point, Item 2.1.10 (and the broader statutory regime) provides that DGR Status is available for a building fund if the building is 'used, or to be used, as a school or college'. Although it was not submitted otherwise in this case, it is to be observed that the co-location of the words 'school' and 'college' does not have the effect of narrowing or confining the types of buildings that are schools. An argument to that effect was rejected by the Full Court in Leeuwin (at 203D-203F per Northrop and Finn JJ and at 210F-210G per Carr J). The reasoning of Northrop and Finn JJ is illustrative of the point:
We turn now to the effect of the collocation of the words "university" and "school". Even if the word "university" is suggestive of one particular type of educational institution performing a relatively accepted core function in the educational arena (ie the provision of a range of tertiary qualifications to students and the conduct of research), we are unable to accept that the consequence should follow that in construing Item 109 we should strive to isolate an activity or function more narrow than is suggested by the dictionary/Cromer Golf Club definitions to which we have referred for no more obvious purpose, it would seem to us, than to give a meaning to the two words which overall would describe little if anything more than the traditional primary, secondary and tertiary institutions of educational instruction in this country.
It has not been suggested to us that there is something inherent in the purpose of this particular exemption from sales tax which should incline us to such a view. It is not at all apparent why in any event we should seek to dissect in an arbitrary way the types and forms of educational instruction provided by what are "schools" in the sense in which that term is used in the OED and Cromer Golf Club.
If Parliament had intended that the beneficiaries of the Item 109 exemption in the educational sector were to be constituted only by universities and by schools having particular attributes, it could have said so. It has not.
86 The High Court's decision in Cromer Golf concerned the resumption of land owned by a golf course in the Northern Sydney for the purpose of establishing a 'National Fitness Camp'. The exercise of the relevant statutory power required the resumed land to be resumed, inter alia, 'for school sites'. The National Fitness Camps provided facilities where students from primary and secondary schools could attend over a number of days for the purpose of physical education and instruction in the physical and social sciences. Those activities were described in detail by the judge at first instance in Cromer Golf Club Ltd v Downs [1971] 1 NSWLR 963 (at 967C-968B):
The activities carried on at most of the national fitness camps, and in particular at the Narrabeen National Fitness Camp, on and before May 1967, fell into various classes. In the first place, primary and secondary school camps were conducted at the camp sites. The primary school camps were normally held over a period of five days, and primary schools from both metropolitan and country districts of New South Wales sent pupils to these camps together with a group of their own teachers, one primary school making use of the centre at a time. The permanent staff of the centre, which at Narrabeen comprised its director, one other permanent teacher, and a number of recreation officers, helped give instruction to the pupils, the rest of the instruction being given by the teachers who came to the camp from the primary school with its pupils. The instruction included courses in physical education and physical sciences, and also in what have been called the social sciences. The secondary school camps were conducted on a fairly similar basis, with an emphasis on geology and geography as well as physical instruction. In addition what are called vocational guidance camps for secondary pupils were held. These appear to have been primarily for country schools which sent their pupils to the camp as a centre in which to live over the relevant period and at which to hear lectures from Commonwealth vocational guidance officers. As well as these lectures at the camp itself, the pupils were shown over factories and similar institutions as part of the vocational guidance course.
In addition to these educational camps, all of which were held during school terms, vacation camps were held during school holiday periods, including sports coaching camps and recreational activities camps. Special purpose training camps were also held from time to time for the purpose of training officers and leaders, including students at teachers colleges. The activities I have described were all activities relating to special aspects of education, and were organized by or in conjunction with the Department of Education. Once a camp had been designated as a school for specific purposes, much the same course was followed and the same work done, but the instruction was given by the permanent staff of teachers appointed to the camp rather than by teachers from the primary or secondary schools from which the pupils came.
Apart from these educational activities, there was and still is much activity at the camps, including the Narrabeen camp, which is not directly related to or organized by the Department of Education, although all of it is carried on with the Department's consent. Thus the centre at Narrabeen has been used for a Girl Guides Jamboree, for Rotary camps at which youth seminars are conducted and for the training and sometimes the housing of Olympic and other athletic teams. Bowling greens have been constructed which are used by old-aged pensioners and members of an organization called the Wakehurst Foundation, which raises funds for and otherwise assists the centre. There are tennis courts which are let out to local women's groups when not being used for the camp, and various adult organizations play basket ball in the arena in the gymnasium. At times hockey games have been played by outside groups, and the Outward Bound Movement has made use of the camp. There is a picnic area near the lake which is regularly let out to organizations for the holding of picnics. In general, weekend activities at the camp are conducted by adult groups quite outside the Department of Education. However, all these activities are carried on so as not to interfere with the basic activities of the camp which I have described above.
(Emphasis added.)
87 In assessing whether the National Fitness Camp was a 'school' Barwick CJ (with whom McTiernan and Stephen JJ agreed) said in Cromer Golf (at 221-222):
It seems to me that a "school" is a place where people, whether young, adolescent or adult, assemble for the purpose of being instructed in some area of knowledge or of activity. Thus there are drama schools, ballet schools, technical schools, trade schools, agricultural schools and so on.
In my opinion, the activities of the National Fitness Camp at Narrabeen as described in the evidence predominantly involve the instruction of young and adolescent people in the care and improvement of the body, broadly an area of knowledge and expertise generally described as physical fitness. The form of the instruction no doubt varies and includes demonstrations and practice, but the character of the camp as so evidenced is, in my opinion, that of a place to which young and adolescent people resort in considerable numbers for the purpose of being instructed. That, it seems to me, makes the camp predominantly a school within the meaning of s. 40 (1) (c) of the Public Works Act.
(Emphasis added.)
88 The High Court's decision in Cromer Golf was subsequently applied by a Full Court of this Court in Leeuwin in respect of a foundation that was held to conduct a school providing training programs in relation to sailing ships. In Leeuwin, Northrop and Finn JJ held (at 203) that the definition of 'school' given by Barwick CJ in Cromer Golf was intended to be the ordinary meaning of that word, and that their Honours should not dissect in an arbitrary way the types and forms of educational instruction provided by what are 'schools' in the sense in which that term is used in Cromer Golf and in The Oxford English Dictionary (2nd ed, 1989), the latter providing definitions that included a 'place or establishment for instruction', and 'an institution in which instruction of any kind is given'. Their Honours noted (at 203) that those dictionary definitions 'clearly encompassed' the activities of the foundation.
89 In his separate judgment in Leeuwin, Carr J had regard to specific characteristics of the activities of the foundation and applied Cromer Golf in assessing whether it was a school. His Honour also rejected a submission put by the Commissioner which mirrors to some extent that which is now contended (at 211E-212D):
On behalf of the Commissioner it was submitted that:
"It is not enough that an institution educates or gives instruction for it to be identified as a school in common concepts. A school in common concepts is an institution which promotes learning through a set curriculum taught by a professional body of teachers and subject to formal assessment. The common notion also includes regular attendance over a substantial period of time so as to ensure that students are provided with adequate educational opportunities to equip them for living in today's society."
The facts in Cromer Golf Club and Australian Airlines Ltd were to be distinguished, so it was put, from the facts in the present matter. In his supplementary notice of appeal the Commissioner went so far as to assert that the Tribunal should have found that the word "school" in the present context was confined to those institutions recognised by relevant Education Acts, specifically, "efficient schools" registered under the Education Act. In the alternative the meaning of "school" was to be confined to institutions which satisfied all or some of the learning areas referred to in the Hobart Declaration.
This was an approach specifically rejected by Barwick CJ in the Cromer Golf Club case. In my view the same approach should be taken to the present matter. Whether the respondent was registered under the Education Act or whether it satisfied all or some of the learning areas referred to in the Hobart Declaration should not decide whether it is a "school" for the purposes of the Act, being a Commonwealth Act designed to encourage, reward or protect a particular class of activity. Having regard to the following factors:
• the fact that the first principal object, set out above, of the respondent is to promote the education of young men and women by the provision of an adventure sail training scheme using a traditional sailing ship;
• the provision of a training manual and pre-voyage preparatory material prior to each voyage;
• the selection and training of the crew and the nature of their duties as instructors;
• the giving of instruction in basic seamanship, catering, marine engineering, maritime history, meteorology, navigation, pilotage, oceanography and oceanology;
• participation in structured problem solving and learning activities; and
• the assessment of each participant for the purposes of deciding whether they should be awarded a "Certificate of Achievement".
90 In conclusion, his Honour held that:
I consider that the evidence establishes that STS Leeuwin was a ship where people, whether young, adolescent or adult, assembled for the purpose of being instructed in areas of knowledge which included in particular seamanship and the like, and personal development in general. A sailing ship is a logical place in which to give instruction in such maritime and other studies. Over 70 per cent of the time is devoted to supervised training.
…
In my view, the activities conducted by the respondent are strongly analogous to the activities conducted at the National Fitness Camp as described in Cromer Golf Club Ltd v Downs [1971] 1 NSWLR 963 at 966-968 by Hope J at first instance and referred to by Barwick CJ on appeal.
(Emphasis added.)
91 The ordinary definition of 'school', namely, a place where people come together for the purpose of being instructed in an area of knowledge or of activity, applied in both Cromer Golf and Leeuwin, was again applied by a Full Court in Australian Airlines per Lockhart J (at 454) and Sundberg and Merkel JJ (at 463). In that case, the respondent operated a flight training centre which supported its commercial operations by allowing pilots to receive training in compliance with regulatory standards imposed by the Civil Aviation Safety Authority. The only basis upon which the training centre's character as a 'school' was contested was that its purposes were specifically directed to, and were a necessary incident of the respondent's commercial operations. The second issue the Full Court considered was the additional requirement in the relevant statutory scheme that the school (or the organisation operating it) not be 'carried on for the profit of an individual'. The respondent airline in the case was a company whose sole shareholder was the Commonwealth. This case is not concerned with either of these issues.
92 In a brief analysis which the Commissioner draws on heavily in the relevant parts of TR2013/2, Sundberg and Merkel JJ said (at 463):
In any event, whatever may be the position with Item 22, Item 63A looks, in our view, to what the educational institution in fact does, and not to the purpose for which it was brought into existence. On the evidence before the primary judge, the centre was plainly a school in the sense described in the dictionary, in Cromer and in Leeuwin. It had defined syllabuses for each course of instruction provided. It had defined programs of instruction and qualified instructors. There was external certification by the Civil Aviation Authority of the syllabuses, the training exercises, the instructors and the equipment. The centre had a physically identifiable location, its own administration, and was established for the sole purpose of instruction. Qualifications obtained at the conclusion of training were portable - within Australia, a pilot could, without further qualification, work with any domestic airline operating aircraft of the type in respect of which the qualification was obtained. The flight training centre conducted by the respondent was therefore a school within Item 63A.
(Emphasis added.)
93 Finally, in NIDA White J made the following observations about the meaning of 'school or college', having first considered the three decisions discussed above (at [37]-[39]):
37 Cromer Golf Club, Leeuwin and Australian Airlines provide a consistent body of authority attributing a wide meaning to the word "school" to which the Parliamentary draftsman might be expected to have had regard in the drafting of the relevant provisions of the Payroll Tax Act.
38 NIDA submitted that cl 4 of Sch 1 uses the words "school or college" in the traditional sense, rejected by the Full Court in Leeuwin, of an educational institution that promotes learning through a set curriculum taught by a professional body of teachers and subject to a formal assessment, and encompassing the notion of regular attendance over a substantial period of time…
…
39 In my view the word "school" in cl 12(1)(c) is to be given the wide sense that the word has been given in the Australian cases referred to above as being a place or institution where people, whether young, adolescent or adult, receive instruction in some area of knowledge or of activity… I do not accept that in cl 12(1)(c) the words "school or college" refer only to an educational institution that promotes learning through a set curriculum taught by a professional body of teachers and subject to a formal assessment encompassing the notion of regular attendance over a substantial period of time. The National Fitness Camp in Cromer Golf Club and the training ship in Leeuwin would not be a school (or college) on that more limited definition.
(Emphasis added.)
94 Two important observations are readily apparent from the survey of the authorities above. Cromer Golf and the cases which have followed it have adopted the ordinary usage of the term 'school' and have avoided any gloss on the dictionary definition. They have avoided superimposing additional requirements such as appear in TR 2013/2. They have simply applied this very broad 'ordinary meaning' to a diverse range of facts and circumstances. Barwick CJ's statement that a school is 'a place where people, whether young, adolescent or adult, assemble for the purpose of being instructed in some area of knowledge or of activity' has not been doubted. That statement, in my view, aligns comfortably with the various dictionary definitions cited in the authorities above. Particularly, a school is 'an institution in which instruction of any kind is given'.
95 The second is that none of the cases referred to above employed the phrase 'regular, ongoing and systematic instruction' in considering whether an entity was operating a 'school'. Thus, the Commissioner faces the difficult task of convincing the Court that such words now form part of the 'ordinary meaning' of 'school' by necessary implication from the reasoning in the previous cases, despite the absence of the express words.
96 In my view, this central contention cannot be accepted. There is no warrant to read any of the authorities as establishing this additional requirement that goes to the nature of the instruction that is provided at a school. Nor can it be said that this description of the type of instruction arises by necessary implication from the Cromer Golf and dictionary definitions or their application in the subsequent cases. While it may be the case that many schools do provide 'regular, ongoing and systematic instruction', those words simply do not form part of the 'ordinary meaning' of 'school' and are therefore not a necessary quality that every school must possess. To the extent that the Commissioner imposed this requirement in the Objection Decision, I consider that he proceeded on a misunderstanding of the law.
97 Similarly, I consider that the adoption by the Commissioner of the 'factors' identified by Sundberg and Merkell JJ in Australian Airlines and those expressed at [18] of TR2013/2, as prerequisites of any school is, with respect, misplaced. It is clear from both judgments that the Full Court applied the ordinary meaning of 'school' by reference to the Cromer Golf and dictionary definition. The ratio of the case is to be found in this consistent application of the ordinary meaning test. The identification of factors or indicia such as a 'defined syllabus', 'qualified instructors' and portable qualifications (at 463C) should not be understood as anything more than the application of the ordinary meaning test to the facts of that particular case; the Court's reasons do not suggest any broader general application of the factors. Indeed, it was not at all contentious in that case that the flight training centre was in fact a school, due to the presence of those rather obvious factors; the real issues in the case concerned whether the centre was operated 'for the profit of an individual'.
98 Thus, while it is appropriate for the Commissioner to have regard to the factors as identified by Sundberg and Merkel JJ when applying the ordinary meaning test, those factors should not be taken to form part of the test themselves, and must not supplant a proper and fulsome consideration of Cromer Golf and the dictionary definition. Those factors may be indicators that a building is a school, but their absence cannot be conclusive of the converse result. I consider, therefore, that the Commissioner erred at [50] of the Objection Decision when he said:
None of the Dhammaloka Buddhist Centre's activities, apart from perhaps the Childrens' Dhamma Class, is a school or college according to the factors put forward by Sundberg and Merkell JJ in Australian Airlines. Neither do the centre's activities satisfy the majority of the factors for a school listed in paragraph 18 in TR 2013/2…
Neither the factors set down in Australian Airlines, nor those expressed at [18] in TR 2013/2 form part of the ordinary meaning of 'school'. Those factors are the result of an application of the ordinary meaning test to particular factual circumstances and should not be elevated to the level of prerequisites or inherent requirements forming part of the ordinary meaning test in all cases.
99 The ordinary meaning of 'school' also does not require the course of education to be vocational as opposed to recreational. The Commissioner says that a school is to be contrasted with places that offer recreational courses of instruction which the Commissioner says is a conclusion reached by application of Cromer Golf. I disagree. The sorts of schools identified by the Chief Justice expressly included schools which were quite clearly recreational education, such as ballet or drama. There may be some who ultimately pursue the vocation, but many will not. Indeed, in my view, except in the most obvious of cases such as the flight training centre in Australian Airlines, a consideration of whether a course of instruction is recreational or vocational misdirects attention to the intention and subjective state of mind of the student who is receiving the instruction. The focus must remain steadfastly on the activities carried out at the purported school, to reach a view as to whether instruction is given in an area of knowledge.
100 The Society contends, and I accept, that the assertions in TR 2013/2 that a school must satisfy non-recreational or vocational requirements are inconsistent with Australian law, in that a school may provide both recreational and non-vocational instruction. I also accept its submission that 'regular, ongoing and systematic' instruction is far less appropriate as a yardstick for assessing recreational forms of education as opposed to vocational education. This is another reason why the Commissioner's contention as to the ordinary meaning of 'school' cannot be accepted. It does not accord with the legislative purpose in Item 2.1.10 of providing DGR Status for building funds that are established 'otherwise than for the purposes of profit or gain to the individuals members of the society or association' because not-for-profit organisations are for more likely to provide non-vocational types of instruction.
101 What the authorities establish is that a school must be providing education. It is not a requirement under Cromer Golf that the person receiving the education must receive a certificate or some other recognition for completion of a course. That element of the qualification prescribed by the Commissioner in TR 2013/2 is not based on any statement of principle in the authorities. It may have been a feature of some of the other facilities examined in the authorities but it is not a prerequisite having regard to Cromer Golf and the plain meaning of school. There is no requirement for a formal examination and or test to qualify to be a school.
102 The Commissioner's view that the Dhammaloka Centre does not provide regular, ongoing and systematic instruction has proceeded on a misunderstanding of the law. That is not the test required under the ordinary meaning test set down in Cromer Golf and the cases which have followed that decision. It may be that schools often have those qualities but it is not a requirement for identification as a school that such a prerequisite exist. A school must be a place where people assemble for the purpose of being instructed in some area of knowledge or activity.
103 As to whether the Dhammaloka Centre was 'used, or to be used, as a school' the Commissioner concluded that 'less than 5% of the total hours of the operation of the Dhammaloka Buddhist Centre are dedicated to activities that resemble teaching or instructing.' The Commissioner contends that, as a matter of principle, a building that is 'used as a school' must be 'substantially' used as a school. Again, although this statement appears in TR 2013/2 (at [31]) and is relied upon by the Commissioner in the Objection Decision (at [59]) it is not a proposition that is explicitly reflected in any of Cromer, Leeuwin or Australian Airlines. Barwick CJ used the relatively similar phrase 'predominantly' in Cromer, and the Full Court in Leeuwin found that 70 per cent of the operational use of the sailing ship was devoted to school activities. However, in neither case was the question of whether enough of the activities carried out were school-related activities squarely in issue.
104 In my view, consideration of whether a building is 'used, or to be used as a school' cannot proceed simply by comparing the total number of hours that the building is put to both school and non-school activities and ascribing a percentage value (of total operational time) to the school activities. Regard must also be had to the overall purpose (or purposes) for which the building has been established and maintained, and the importance of each of the activities carried out to that purpose. Further, it will also be necessary to consider any connection that the non-school activities may have to the school activities carried out, and the extent to which both pursuits contribute to the furtherance of that purpose. Considering the present case, the presence of non-school administrative activities that are clearly connected to the school activities carried out at the Dhammaloka Centre and other school sites operated by the Society, is to be distinguished from a situation where the bulk of a building's activities are administrative in nature with no relevant connection to the school activities carried out and where the importance of the school activities to the overall purpose is limited.