Victorian Women Lawyers' Association Inc v Commissioner of Taxation

VICTORIA DISTRICT REGISTRY VID 1369 VID 1370 and VID 1371 of 2006 and VID 728 VID 729 and VID 730 of 2007

REASONS FOR JUDGMENT Introduction 1 In 2000 the Victorian Women Lawyers' Association Inc (VWL), an incorporated not for profit association, applied to the Commissioner of Taxation (the Commissioner) for a private ruling in respect of the years ended 31 December 1996 and successive years up to and including that ended 31 December 2000. It sought a ruling that it was exempt from any obligation to pay income tax on the basis that it is a charitable institution or an association established for community service purposes. The ruling was not forthcoming. Eventually VWL and the Commissioner agreed that VWL would lodge income tax returns claiming exempt status, the Commissioner would reject the claim of exempt status and the question would be taken to the Court for hearing and determination on a test case funded basis. 2 VWL lodged company tax returns for the financial years up to and including the year ending 30 June 2001. The Commissioner issued assessments to which VWL objected and ultimately the Commissioner disallowed those objections. VWL has now commenced these proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth). For the reasons that follow, I am satisfied that VWL is a charitable institution, being an organisation whose purposes are beneficial to the community according to the established definition of a "charitable institution". The appeals will be allowed. The returns and assessments 3 A summary of the essential elements of the returns and the assessments the subject of objection, disallowance and appeal follows: Year of Return Net Profit/(Loss) for Year Assessment Assessable Income and Tax 30 June 1997 $41,320.31 Amended Taxable income $38,710 Gross tax $13,935.60 30 June 1998 ($6,183.63) Amended Taxable income: $14,014 Gross Tax: $5,045.04 30 June 1999 $24,603.47 Amended Taxable income: $40,620 Gross Tax: $14,623.20 30 June 2000 ($3,517.12) Amended Taxable income: $33,247 Gross Tax: $11,968.92 30 June 2001 $19,717.34 Amended Taxable income: $22,405 Gross tax: $7,617.70

4 VWL filed objections against each of the amended assessments claiming that it was exempt from income tax. In respect of the tax year ended 30 June 1997, it claimed exemption under ss 23(e) and 23(g)(v) of the Income Tax Assessment Act 1936 (Cth) (the ITAA 1936). For the subsequent years it claimed its exemption under s 50-1 of the Income Tax Assessment Act 1997 (Cth) (the ITAA 1997). In the alternative, VWL claimed that its assessed taxable income should be reduced by excising in whole or in part specified amounts described in the profit and loss statement included with its return. 5 These amounts, as they appeared for each of the years ended 30 June 1997 to 30 June 2001, were as follows: Year Seminar Revenue Contributions Received Membership Fees Contributions LIV Contract Sponsorship Miscellaneous income Interest Received 1997 $ 7,443.50 $25,500.00 $10,000.00 $21,301.37 $ 834.62 1998 $ 5,147.67 $ 9,000.00 $18,430.00 $5,000 $25,000.00 $ 901.47 1999 $18,809.49 $25,500.00 $18,245.00 $10,000 $25,500.00 $1,758.54 $1,156.25 2000 $ 9,505.00 $26,271.23 $ 1,762.16 $25,500.00 $ 609.39 $1,944.14 2001 $15,191.36 $28,753.42 $35,828.94 $25,136.00 $ 200.00 $2,286.90

In addition, the following deductions were claimed: 1997 Year - A deduction under s 8-1 of ITAA 1997 for $4,978 for sponsorship of the Australian Women Lawyers (AWL), this being paid as a capitation fee based on income from VWL membership fees. Alternatively the sum of $4,978 was received by VWL on behalf of AWL and should not be included as assessable income. 1998 Year - A deduction under Div 36 of ITAA 1997 for a tax loss incurred in the year 30 June 1998 of $63,479.14 comprising amounts of income described in the profit and loss statement included with the returns for the year ended 30 June 1998 less the net loss of $6,183 for that year and any carry forward loss available in respect of the year ended 30 June 1997. A deduction was again claimed for $1,000 for sponsorship of AWL. 6 In the event, the various objections were disallowed. The Commissioner rejected, inter alia, the contention that VWL was exempt as a charitable institution, a public educational institution or as an association established for community service purposes. Applications by way of appeal against the Commissioner's objection decisions were filed in this Court on 14 December 2006 for all years except the year ending 30 June 1998. An application by way of appeal was filed in relation to that objection decision on or about 10 August 2007. Statutory framework - the ITAA 1936 7 Section 23 of the ITAA 1936, which applied to the 1997 income year, relevantly provided: Subject to section 22A, the following income shall be exempt from income tax: … (e) the income of a religious, scientific, charitable or public educational institution which: (i) has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia;… … (g) the income of a society, association or club that: … (v) is established for community service purposes (not being political purposes or lobbying purposes); and is a society, association or club not carried on for the purposes of profit or gain to its individual members which: (vi) has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia; or … 8 Section 22A provides, inter alia, that s 23(e) and 23(g) do not apply to assessments for the 1997-1998 year of income or later years of income. Statutory framework - the ITAA 1997 9 The ITAA 1997 applied to the income years 1998 to 2001. Section 50-1 of that Act provides: The total ordinary income and statutory income of the entities covered by the following tables is exempt from income tax. In some cases, the exemption is subject to special conditions. The tables are set out in ss 50-5 and 50-10 of the ITAA 1997. Section 50-5 provides: Charity, education, science and religion Item Exempt entity Special conditions 1.1 Charitable institution See sections 50-50 and 50-52 1.2-1.3 … … 1.4 Public educational institution See section 50-55

Section 50-10 provides: Community Service Item Exempt entity Special conditions 2.1 Society, association or club Established for community See sections 50-70 Service purposes (except Political or lobbying purposes)

Section 50-50 provides: An entity covered by item 1.1 or 1.2 is not exempt from income tax unless the entity: (a) has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia; (b) - (d) …. Section 50-55 relevantly provides: An entity covered by item 1.3, 1.4, 6.1 or 6.2 is not exempt from income unless the entity: (a) has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia; (b) - (d) …. Section 50-70 of the ITAA 1997 provides: An entity covered by item 1.7, 2.1, 4.1, 9.1 or 9.2 is not exempt from tax unless the entity is a society, association or club that is not carried on for the purpose of profit or gain of its individual members and that: (a) has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia; or (b) - (d) … Constitution and Rules of VWL 10 The VWL was incorporated on 19 September 1996 under the Associations Incorporations Act 1981 (Vic). Its objects were set out in clause 3 of its Constitution which provides: OBJECTS 3.1 The general objects of the Association are: (a) to provide a common meeting ground for women lawyers; (b) to foster the continuing education and development of women lawyers in all matters of legal interest; (c) to encourage and provide for the entry of women into the legal profession and their advancement within the legal profession; (d) to work towards the reform of the law; (e) to participate as a body in matters of interest to the legal profession; (f) to promote the understanding and support of women's legal and human rights; and (g) such other objects as the Association may in General Meeting decide. 3.2 The Association also adopts and endorses the following purposes of the Australian Women Lawyers Association of which the Association shall seek to become a Recognised Organisation: (a) achieve justice and equality for all women; (b) further understanding of and support for the legal rights of all women; (c) identify, highlight and eradicate discrimination against women in law and in the legal system; (d) advance equality for women in the legal profession; (e) create and enhance awareness of women's contribution to the practice and development of the law; and (f) provide a professional and social network for women lawyers. 11 The membership of VWL consists of ordinary, honorary and associate members (clause 4.1). A person is eligible for ordinary membership if admitted to practice as a barrister or solicitor of the Supreme Court of any State or Territory of Australia or any other part of the British Commonwealth or is a graduate in Law of any University within the Commonwealth of Australia (clause 4.2). There is provision for associate membership by persons considered by the committee of VWL to be "supportive of the objects of the Association" (clause 4.3). Honorary membership may be conferred on any person "in recognition of meritorious work in the legal field" (clause 4.4). 12 There is a Committee of Management. It has responsibility for managing the affairs of the Association (clause 21.1). Its functions are described in clause 21.2 thus: The Committee: (a) shall control and manage the business and affairs of the Association; (b) may, subject to these rules, the Regulations and the Act, exercise all such powers and functions as may be exercised by the Association other than those powers and functions that are required by these rules to be exercised by general meetings of the Members of the Association; (c) subject to these rules, the Regulations and the Act, has power to perform all such acts and things as appear to the Committee to be essential for the proper management of the business and affairs of the Association; (d) may form such sub-committee as it thinks fit and co-pt members to such sub-committees; (e) shall have the power to make public statements on behalf of the Association; and (f) may at any time make such by-laws as it thinks conducive to the attainment of any of the objects of the Association or for regulating the business of the Association and may rescind, replace or amend any of the by-laws. 13 The officers of VWL are a Convenor, an Assistant Convenor, a Treasurer and a Secretary, all of whom are required to be ordinary members (clause 22.1). The committee consists of those officers together with two members and any other members as may be appointed from time to time. The retiring convenor is an ex officio member. The members of the committee are elected at the annual general meeting of the association in each year. 14 The income and property of VWL is to be applied solely towards the promotion of its objects and purposes. No portion is to be paid or transferred directly or indirectly to any member of the association except with the authority of the committee (clause 30.1). Nevertheless, the committee may pay to a member of VWL remuneration for services actually rendered or goods supplied to it by the member in the ordinary course of business or reimbursement of expenses incurred by the member on behalf of VWL (clause 30.8). 15 The Rules and the Statement of Purposes of VWL are not to be altered except in accordance with the Associations Incorporation Act (clause 32). 16 In the event of the winding up or cancellation of the incorporation of the association, its assets are to be disposed of in accordance with the provisions of the Associations Incorporation Act (clause 34.5). Classification of VWL's objects 17 The Commissioner submitted a schedule which sought to classify the various objects of the VWL under three headings which are not controversial. It is convenient to reproduce that schedule here. Reference Advancement of women lawyers, including members of VWL Advancement of women generally Other Clause 3.1(a) Provide a common meeting ground for women lawyers Clause 3.1(b) Foster the continuing education and development of women lawyers in all matters of legal interest Clause 3.1(c) Encourage and provide for the entry of women into the legal profession and their advancement within the legal profession Clause 3.1(d) Work towards the reform of the law Clause 3.1(e) Participate as a body in matters of interest to the legal profession Clause 3.1(f) Promote the understanding and support of women's legal and human rights Clause 3.1(g) Such other objects as the Association may in General Meeting decide Clause 3.2(a) Achieve justice and equality for all women Clause 3.2(b) Further understanding of and support for the legal rights of all women Clause 3.2(c) Identify, highlight and eradicate discrimination against women in law and in the legal system Clause 3.2(d) Advance equality for women in the legal profession Clause 3.2(e) Create and enhance awareness of women's contribution to the practice and development of the law Clause 3.2(f) Provide a professional and social network for women lawyers

Formation of VWL 18 Evidence of the formation of VWL was given by Deanne Weir. In 1993 she was the Chair of the Young Lawyers Section of the Law Institute of Victoria (LIV). On 26 November 1993 she attended a seminar organised by the Young Lawyers Section in conjunction with the Law Council of Australia Young Lawyers Section entitled "Women in the Legal Profession". The seminar was chaired by the then Chief Justice of Victoria, the Hon JH Phillips AC. A large number of women lawyers, some hundreds, according to Ms Weir, attended. The theme of the seminar was to consider why an increasing proportion of women, who had been graduating from Law Schools in about the same numbers as men since the 1980s, were leaving the profession. An LIV study demonstrating this trend also showed that women lawyers who stayed in the profession were progressing more slowly and earning less money than their male counterparts. 19 According to Ms Weir a number of issues were highlighted in the seminar, including: . the fact that the proportion of women in the legal profession was not reflected by their corresponding professional advancement; . that there were "glass ceiling" factors inhibiting women's full participation and advancement in the legal profession manifested by: . exclusion from marketing initiatives including client entertainment and promotional presentations; . deprivation of key information; . work allocation of an inferior or limited quality as opposed to more challenging work which would provide greater career opportunities; . poorer supervision and lack of mentoring; . lack of network nurturing which might involve skills not previously promoted or nurtured in aspiring young women lawyers; . the reticence of law firms to come to terms with the flexibility of work practices required to facilitate movement in and out of practice particularly for women lawyers during their child bearing and rearing years; . the desirability of involving women lawyers in the areas of recruitment and performance assessment in order to avoid entrenchment of male values, perspectives, priorities and culture. This was particularly relevant to the allocation of solicitors to practice areas traditionally viewed as "male domains" such as commercial law, taxation, corporations law and litigation; . the prejudiced views held by some junior and senior male lawyers that women lawyers would inevitably put family before career placing themselves in a category which, by definition, would preclude them from effective and committed long term participation in mainstream legal practice with the result that time, opportunities and resources should not be bestowed on them; . the perception that an effective and successful lawyer must be fulltime without personal or family obligations or interruptions; . consideration of the need to redefine acceptable work practices while recognising the commercial imperatives attaching to law firms as businesses. Ms Weir said that at the end of the seminar those attending resolved to form a working party which they called the WILP Working Party. She was a member of it. 20 Initially Ms Weir was not in favour of establishing a separate women lawyers' organisation considering that the issue was a broader one, namely the way in which the law was practiced as a profession in terms of equality and justice. Established patterns of work practices impacted adversely on both men and women. She referred to the publication by the Working Party of an article in 1994 in the Law Institute Journal. The article was entitled "Child care options for solicitors". 21 In October 1994 Ms Weir travelled to London to study for a Masters Degree in commercial law at the University of London. She maintained her interest in problems confronting female legal practitioners. She became less opposed to the idea of establishing a women lawyers' association. Upon her return to Australia in October 1995, she formed the view that there had been little progress in the improvement of women's experience in the practice of the law and work practices. 22 In or about March 1996 Ms Weir attended a meeting in Sydney to discuss the establishment of a national peak organisation for women lawyers. At the time there was a Women Barristers' Association in Victoria, but no association for women solicitors. Ms Weir felt that the time had come to establish an organisation for women lawyers in Victoria. She thought it could be fulfil a need that the LIV could not. A VWL Steering Committee was formed. At a meeting of the committee on 25 July 1996, apparently chaired by Ms Weir, it was reported that the constitution for the proposed VWL would be finalised that coming weekend and would be given to solicitors to proceed with incorporation. The Steering Committee would form the Interim Executive of VWL until a first annual general meeting. 23 The VWL was launched at a ceremony held on 29 August 1996. Its patron was the Chief Justice of the Supreme Court of Victoria, the Hon JH Phillips AC. Also present at the launch were the then Attorney-General of Victoria, Mrs Jan Wade, and Ms E Mahlab AO who delivered the keynote address. The association was incorporated on 19 September 1996 and held its first annual general meeting on 2 December 1996. At that meeting an Executive was elected. Ms Weir was elected convenor, Ms Liz Bishop as treasurer and Ms Kriss Will as an executive member. VWL activities - 1996-1998 24 In the early months following its formation individual members of the Executive of VWL took responsibility for areas of its activities. This occurred until sufficient numbers of members had joined to enable the formation of committees. Eventually the association came to have six standing committees entitled "Networking", "Communications", "Justice", "Work Practices", the "Mature Age Practitioners Group" and "Country Liaison". Through its Communications Committee, VWL began to produce a quarterly publication entitled "Portia". Four copies of the quarterly Portia for the years 1996 and 1997 were exhibited to Ms Weir's affidavit. They gave a snapshot view of the activities and interests of VWL in the years following its formation. 25 Under the heading "Who and What are We?", the first edition of Portia provided an outline of the constitution of VWL. It was stated in that article: VWL aims to promote the interests of women in the profession, in particular by examining issues such as flexible work practices, discrimination, sexual harassment, and by providing networking opportunities both between those within the profession and also with other relevant professional associations. It referred to the Networking, Work Practices and Communications Committees and the Mature Age Practitioners Group. 26 The aim of the Networking Committee was described as: … to provide opportunities for women within the profession to interact with each other as well as women from other relevant professions and organisations. The committee was proposing to establish a mentoring program for women within the profession who might not have another woman lawyer to turn to for guidance or ideas or to act as a sounding board. 27 The Work Practices Committee considered a joint project with the Equal Opportunity Commission on sexual harassment and anti discrimination practices, issues relating to working from home, paid parental leave, the Federal Court Childcare Centre and research into the Victorian Law Foundation Report, particularly the cultural change issue which law firms needed to address. 28 The Mature Age Practitioner Group was concerned with mentoring older women entering or re-entering the profession, younger women in the profession, peer group support and dealing with recruiting problems and networking. 29 The Communications Committee, which was responsible for the production of Portia, investigated the possibility of establishing a website. 30 The second edition of Portia included an article about "Glass Ceilings", a reference to "invisible barriers to promotion and career advancement" facing working women. It made reference to issues of gender bias, sexual harassment, the limited opportunities afforded women lawyers for development of a client base and the costs and consequences of gender bias to law firms. It reported that the Networking Committee had commenced the 1997 year with a Career Issues lunch seminar at the LIV. It reported that the work practices project team had decided to focus its efforts for the first half of 1997 on raising awareness about parental leave and the implications for employees of legal firms. VWL was conducting a joint survey of law firms with the Legal Practice Management Association to inquire about their current practices, the logic behind them and the issues they face when handling parental leave issues with their employees. The results of the survey would be used as an information source and a tool to encourage firms to embrace more progressive policy. A forum on the "Glass Ceiling" issue was announced for 1 May 1997 and conducted on that day. 31 The third edition of Portia was published in the second half of 1997. The cover story related to the proposed Constitutional Convention for an Australian Republic. It raised the question whether or not the Convention would allow for the proper representation of the views of women. In arguing that the Convention was important to women, the article said: As women lawyers we have a special role to play in using our skills and knowledge to contribute to the general debate and to facilitate contributions by other women as well. VWL will be taking an active part in this process on two fronts: . through our involvement with Australian Women Lawyers. You can follow the constitutional and republican debate on the AWL page on the internet … . through our work with the Victorian Women's Trust, the Women's Electoral Lobby and other Victorian women's groups who are working together to ensure the involvement of Victorian women in the debate. This includes the supporting of an all women's ticket for the election portion of the Convention should that go ahead … 32 Committee reports in the third edition of Portia indicated that the Networking Committee organised a luncheon seminar on the financial effects of the Family Law Act on men and women. The Mature Age Practitioners Committee had held a networking evening. The Justice Committee had identified a number of areas of interest including police attitudes to domestic violence and police and judicial attitudes to sexual assault and rape. The committee was contemplating the formation of a liaison group within the Police Force to review and help change attitudes. Access to counselling services to deal with children's issues in family separations was also on the committee's agenda. A review of changes to crimes compensation and the effect on women victims, the effects of proposed changes to the property provisions of the Family Law Act and the provision of information to women and families generally involved with the Department of Human Services were all mentioned. 33 Two sessions organised by VWL and the Victorian Women Barristers at the 30th Australian Legal Convention were promoted, one being a session on Sex, Stereotypes and the System - Equal Opportunity before the Law, and the other on human rights in the context of cultural differences. 34 The fourth edition of Portia included a career profile feature on a particular lawyer, a report on the launch of the AWL which had occurred at the Australian Legal Convention, a general interest guide to the use of the internet for legal research and a report on the establishment of a professional women's networking group set up by a Melbourne law firm. There was more on the Constitutional Convention and the role of women delegates at the Convention. 35 Ms Weir described VWL as seeking to act as an agent for change through education, enforcement and encouragement. It did this through activities and undertakings directed at raising the level of awareness and understanding of women's legal and human rights, whether within or outside the legal profession. During her time as convenor and later as an executive member, VWL directed its activities to women lawyers, law firms, professional associations, human rights and equal opportunity bodies, non-government organisations, governments, universities, schools and the general public. She said: At no time were these activities directed to the community in its capacity as the electorate with the possible exception of support for the work of the women organisations who sought to have women delegates appointed to the Constitutional Convention. 36 Ms Weir was the convenor of VWL from August 1996 until the end of 1997. Georgina Frost succeeded her as 1998 convenor. The report of the second annual general meeting of VWL held on 12 November 1997 indicated that the association then had over 450 members. It identified as a key event the May "Glass Ceiling" forum. It also referred to VWL's "important role" in the launch of the AWL in September. 37 Georgina Frost succeeded Deanne Weir as convenor of VWL in 1998. Her evidence overlapped with that of Ms Weir in relation to the formation of the association and its early activities. She gave evidence of VWL projects in which she had been involved. One was the production and use of a video entitled "Willpower" designed to inspire and encourage secondary school students to seek a career in the law. It was particularly directed to girls. Ms Frost and other members of VWL executive visited secondary schools in Victoria and used the video as part of a presentation to students. 38 The VWL executive also sought to involve law students at its meetings, committee meetings and functions. VWL members spoke to law students at Melbourne and Monash Universities about the realities of legal practice. Ms Frost spoke in 1999, on behalf of VWL, to the Australian Law Students' Association Conference in Hobart. She spoke about her experiences in practising the law and the issues which faced women in the law. 39 Ms Frost gave evidence of VWL's endeavours to involve women practising law in regional Victoria. She referred to her attendance with another VWL member, Angela Clelland, at the Country Legal Practitioners' Convention in Corowa in Victoria in November 1997 and their presentation of a seminar about VWL, its aims and plans. Female practitioners present followed the seminar with a workshop exchange of ideas on how VWL might be of assistance to them. Sometime after this a Country Committee was formed. 40 In September 1998 VWL published a revised report on flexible work practices entitled "Living and Working Together - Looking to the Future". The revised report was published two years after its first edition. It included guidelines setting out practical steps that law firms might take to introduce flexible work practices. The chapter headings of the report were:

1. Leave from work
2. Working part-time
3. Other flexible work arrangements
4. Case Study - Introduction of flexible work practices
5. Model Policies - Sexual Harassment
6. Schedule - Occupational Health and Safety and working from home 41 Some elements of the recommendations were not specifically directed to the position of female lawyers. For example, the report recommended that employees be encouraged to take annual leave regularly and that employers be open to requests by employees to take several weeks of their leave together. Research showed that one longer break per year could be of more benefit to an individual than several shorter breaks. Observations about sick leave, carer's leave, compassionate leave, study and examination leave, special leave and leave without pay appeared to be gender neutral. There was a reference to parental leave and, in particular, unpaid maternity leave. Under the heading "Long Service Leave" it was said: The loyalty of employees is rewarded by offering employees the opportunity of taking their entitlement to long service leave, as accumulated after seven years of continuous service. 42 With respect to part-time work, the report recommended that employers be open to and seriously consider requests by employees to work part-time. Such an approach would help retain long serving staff no longer willing or able to work fulltime due to other commitments. The discussion of part-time work and office sharing, inter alia, again was expressed in a gender neutral way but may have had more practical application to women lawyers. 43 Flexible work arrangements relating to scheduling of meetings, training and client functions, flexible working hours and working from home, while expressed in a gender neutral way, obviously enough reflected the particular concerns of women lawyers with family commitments. 44 The case study referred to in the report concerned the introduction of a flexible work practices policy at a particular law firm, Dunhill Madden Butler, in early 1996. The report discussed the steps taken by women lawyers working at the firm to support and accelerate its development of a flexible work practices policy which was eventually adopted in November 1996. A model policy for dealing with sexual harassment was set out in the report. The schedule dealt with occupational health and safety and working from home. 45 In the course of 1998 Ms Frost and Ms Will co-edited a publication entitled "Taking up the Challenge" which was released in May 1999. Further reference is made to this publication as part of the activities of the association in 1999. 46 In 1998, VWL supported the Women Barristers' Association in their submission to the Victorian Bar Council in response to the report "Equality of Opportunity for Women at the Victorian Bar". That report had found gender bias in the briefing of barristers. VWL also had a number of joint events with the Women Barristers' Association in order to increase its member's knowledge of women barristers so they could possibly brief them in the future once they were acquainted with them and knew their areas of practice. She wrote an article in Issue 8 of Portia entitled "Equality of Opportunity for Women at the Victorian Bar" which referred to the findings of the report. 47 1998 was a Federal election year. VWL did make public comments on cuts to child care rebate, expressed support for the tax deductibility of child care payments and drew attention to the impact of cuts to legal aid on women in the community. It made a submission in September 1998 on a State government draft "Two Year Action Plan for Women 1998-2000" which highlighted the need for equitable access to justice and the detrimental effect of the diminished access to legal aid. 48 In the submission, signed by Ms Frost as convenor, VWL referred to the need to create an environment "where women and families feel safe". Specific reference was made to: (a) legal aid issues; (b) the physical aspects of Victorian courts; and (c) policing issues. VWL agreed with the State draft's observation that it was of crucial importance for women to take up leadership positions in both the private and public sectors. It referred to the male organisational culture within the legal profession. 49 Ms Frost made the point in her evidence that while VWL made submissions to government and other bodies and used the expertise of its members, it did not endorse any political party for a federal or state election nor did it support any particular candidate. She said: VWL was about trying to facilitate change. It was not about lobbying. VWL did not seek to push or force anyone to agree with us or to say that we will not vote for you or will not support you if you do not agree with us. 50 Following her involvement with the "Taking up the Challenge" publication, Ms Frost began working on a further report which culminated in the VWL publication entitled "Flexible Partnership - Making it work in Law Firms". She interviewed members of ten Victorian law firms to determine the experience of those that had flexible working arrangements in place for partners and compared them with other firms that had not introduced similar measures. Perceived inhibitors of part-time partnerships and flexible work arrangements were identified in the report. These included: . lower service levels resulting in disgruntled clients; . demonstrable lack of commitment to the firm and its interest; . sharing in capital without equal contribution; . disgruntled colleagues leading to low staff moral and productivity; . inefficient or under-utilisation of resources; . reluctance to seek part-time arrangements; and . lack of female role models. Solutions to the inhibitors which were identified in the report by firms with successful part-time partnership arrangements included: . policy or guidelines to establish an equitable open process for setting up a flexible work arrangement; . recognition of a balance between the interests and needs of the partnership and the partner; . being open and transparent with clients and colleagues about the work arrangements; . proper management of the arrangement by both the partner and the firm; . method of assessment; . part-time partnership regarded as a permanent arrangement; . establishment of female role models by increasing the number of female partners and women in a firm's management; and . practical assistance to facilitate timely delivery of client service. 51 In her report Ms Frost argued that to assist retention of all lawyers, male and female, firms should: . establish a system of policies to equitably deal with the private needs of all lawyers seeking flexible work arrangements and which would address the issues of status and career advancement; . work out ways to change work practices and job design to enable employees to have control over how, when and where they worked. She concluded that the real inhibitor to part-time partnership was more of a cultural or social problem about the practitioner's commitment to the firm. 52 Overviews of the work of each of the VWL committees were provided in Committee Reports submitted at the annual general meeting on 11 November 1998. In addition to the matters already mentioned, committee activities included the following: Networking Committee 53 Seminars on career options, creating wealth - investment products, family friendly policies at Shell and, the challenges confronting women in the year 2010. The Networking Committee also arranged social events which were listed. The committee appointed a Country Liaison Member who had formed links with country associations throughout Victoria by writing letters to them. Communications Committee 54 The Communications Committee reported on the launch of "Willpower" which had been produced by Video Education Australasia and featured the careers of five prominent Victorian women lawyers. The production of Portia remained the major task of the Communications Committee. It had grown from a 14 page to a 20 page magazine over the preceding 12 months. The aims of the editors as described in the committee report were "… to highlight issues of particular importance to women lawyers - whether those issues revolve around their professional practice or life enjoyment". The editors also sought to present articles of interest to lawyers not featured in other law magazines. The committee had also embarked on the development of the VWL website. A general plan of content had been developed. Work Practices Committee 55 The Work Practices Committee had drafted and published the flexible work practices and policies guide entitled "Living and Working Together - Looking to the Future". It had funding to print the guide from the Victorian Law Foundation (VLF). 56 The Work Practices Committee reported that all members of VWL had been sent a copy of the flexible work practices and policies guide. The committee proposed to follow up the guide with a campaign in 1999 publicising its content and promoting the benefits of adopting flexible work practices. Justice Committee 57 The Justice Committee assisted the Women's Trust in relation to the treatment of female police officers within the force. The committee proposed a Joint Hypothetical in February 1999 with the Children and Youth Issues Committee at the LIV exploring the legal, moral and ethical dilemmas facing the legal and medical communities and the community as a whole in relation to developments concerning reproductive technology. The committee also helped to arrange legal representation for an indigenous family experiencing difficulties in relation to a stolen generation problem. Mature Age Practitioners Sub-committee 58 The committee had decided to set up a register on which members could record their interest in part-time or locum work or their interest in contacting other members who could fulfil those purposes. VWL activities - 1999-2001 59 Elizabeth Bishop became convenor of VWL at the annual general meeting on 11 November 1998. She served as convenor until the next annual general meeting on 25 November 1999. One of the issues with which VWL and Ms Bishop specifically were concerned with in 1999 was the law of provocation. On 21 April 1999 the then Chief Justice, John Phillips, delivered the Lesbia Harford Oration entitled "Women and the Law, Progress and Challenge". In his speech the Chief Justice called for an overhaul of the law of provocation and self defence. As a result of that Oration the Justice Committee started considering the issue of provocation, the so-called battered wife syndrome and the associated issue of domestic violence. It made oral submissions to the Attorney-General. The Justice Committee also organised various VWL International Women's Day Dame Roma Mitchell lunches which were inspired by comments made in a speech delivered by Dame Roma Mitchell on International Women's Day on 3 March 1999. 60 On 9 March 1999 VWL executed a Sponsorship Agreement with the LIV, the terms of which are set out later in these reasons. 61 In March 1999 Ms Bishop, on behalf of VWL, began to organise the production of a child care kit called "Child Care is a Family Issue". This was designed to provide practical assistance and a step-by-step guide for parents when selecting child care services for all women in the legal profession and women generally with dependent children. The child care kit was launched in December 1999 in conjunction with the Community Child Care Association of Victoria. Ms Bishop believed that the production of the kit was important because the issue of childcare very much affected VWL's members. There was a general lack of information in the community at the time on how to evaluate child care options. Shell Australia sponsored the child care kit. 62 As noted earlier the publication entitled "Taking up the Challenge" was launched in May 1999. In the Preface it was described as summarising "… major findings from various research sources to allow VWL to come up with an action plan that addresses the changing nature of work and what this means for lawyers and the law". In the Introduction it noted that, although women were graduating from Law Schools in roughly equal proportions to men, their presence was not reflected at the higher levels of the profession. The balance of work and private and family life commitments became increasing difficult for women as they attempted to progress within the profession. The task of motherhood was seen as particularly difficult to reconcile with a demanding career in the law. 63 The "Background" section of the Introduction observed that the dissatisfaction with the profession's inability to accommodate family and private life was a challenge to be faced by men as well as by women practitioners. Male lawyers as well as female lawyers with less than five years' experience were leaving private firms in ever increasing numbers. The authors claimed that the private profession was losing a highly skilled and valued human resource base on which the future of the private firms relied. They concluded by identifying a number of strategies and areas of future research. In a section entitled "The Way Forward", they said that the identification of barriers and opportunities for change provided a good starting point for strategic planning of future projects. This required a multifaceted approach involving a range of key players and a range of strategies. Reference was made to a New South Wales report: Keys Young, "Research on Gender Bias and Women Working in the Legal System", Report prepared for the New South Wales Department for Women on 6 March 1995. 64 The strategies proposed in the publication included:

A summary of sponsorship moneys paid in 1998 and 1999 and letters sent for renewed sponsorship for the year 2001 indicate that each of the letters for the latter period sought contributions including GST. There were some seven letters which had been sent to various law firms. Financial statements 99 There were a number of financial statements in evidence. They were as follows: 1. Treasurer's report for 8 November 1996 - 30 September 1997. 100 This report disclosed income of $21,658.50 from membership and seminar fees, $33,500 from "Sponsorship Fees" and $834.62 from interest. Expenditure for the period, which was itemised in an attachment, totalled $20,783.95. In addition there were bank charges and duties of $631.96. At the end of the period the association had a balance in its bank account with the Bank of Melbourne of $34,578.18. 2. Treasurer's Report, attached to minutes of annual general meeting, 11 November 1998 101 This report indicated that as at 8 January 2008 VWL had $26,971.20 cash in their bank account. Over that financial year the association received $16,500.00 in "Sponsorship" income, $19,400.00 in "Membership" income, $6,014.44 from seminars and a further $901.41 in interest. The expenditure over the same period was $44,753.72, with an additional $50.00 representing "unpresented cheques". The value of VWL's "total assets" at the end of the reporting period was $25,063.39, expressed to be subject to the possibility of being required to pay income tax. 3. Treasurer's Report, attached to minutes of annual general meeting, 25 November 1999 102 The 1998-99 Treasurer's Report showed the initial bank balance to be $42,291.23, with "Sponsorship", "Membership" and "Seminars" generating income of $32,500.00, $18,360.00 and $19,128.00 respectively. Interest amounted to $594.79, and a further $2,182.12 was received under the heading "Other deposits". Outgoing payments totalled $59,722.22, leaving "total assets" of $55,333.92 as at 30 June 1999. Again, this figure was subject to potential liability for income tax. 4. Treasurer's Report, attached to minutes of annual general meeting, 22 November 2000 103 The 1999-2000 report shows "Cash at bank" as at 1 July 1999 to be $55,333.92. $30,000.00 was received from sponsorship, $19,844.00 from membership fees, $13,915.00 from seminars and $1,001.23 from interest. $955.00 was received as "Other deposits". Total expenditure was $46,984.65. The value of "total assets" was reported at $74,064.50, expressed to be subject both to potential income tax liability and to a GST liability of $757.00 for the period 1 July 2000 to 30 September 2000. 5. Treasurer's Report, attached to minutes of annual general meeting, 28 November 2001 104 This document reports that at the beginning of the 2000-01 financial year VWL had $74,064.50 cash in the bank. The sponsorship income for that year was $35,900.00, membership income $21,980.00 and seminar income $16,710.50. Interest earned was $2,286.90. The report shows $75,743.85 in total outgoing payments, and $75,168.05 in total assets at the end of the financial year. The note about potential tax liability appears again. 6. Treasurer's Report - 2001/2002 Financial Year. 105 The Treasurer's Report for the year ended 30 June 2002 disclosed total income of $66,988.68. This was made up of $7,557.27 from functions, $1,723.23 from interest, $22,708.18 from membership subscriptions and $35,000 from sponsorships. Total expenses were $66,142.41, leaving a net income of $846.27. The largest single item of expenditure was the cost of printing the quarterly magazine Portia, which were $16,605. Surveys conducted by the association cost $12,130.28. Expenses associated with functions put on by the association were $9,185.84. 106 The balance sheet as of 30 June 2002 showed total assets of $81,512.49 and a total "equity" of $54,204.41. General conclusions about VWL activities from formation to the end of 2001 107 The review of the activities of VWL from 1996 to 2001 set out above was derived from the affidavits of various VWL officer holders and documents exhibited to those affidavits. The affidavits were received subject to objection by the Commissioner. The objections for the most part concerned relevance and form. There were also objections that some material was argumentative. The history of the VWL from its formation up to the end of 2001 has been drawn from evidence which is direct and admissible and is, in any event, uncontentious. So too is the account of its activities and the sponsorship arrangements with the LIV and the various law firms which contributed to its finances. 108 The evidence contained much in the way of material arising from reports, inquiries and articles about the position of women in the legal profession in Victoria and, indeed, in other parts of Australia. In some cases these reports provided an impetus for particular activities of the association. It is not necessary to base any findings on the truth of particular factual claims or conclusions offered in them. Speeches made at VWL functions by prominent figures in the judiciary and the profession were also mentioned in evidence. These, along with the reports and other papers exhibited to the affidavits, evidenced a degree of discourse and debate within the profession about the position of women lawyers. They were evidence of that fact rather than the truth of the particular assertions or conclusions offered. That does not prevent the Court from taking judicial notice of the long-standing and yet to be overcome differences between the position and participation of women and men in the legal profession in Australia in general and Victoria in particular. The question of judicial notice is discussed below. 109 The activities of VWL which have been described in these reasons were broadly in accordance with its objects during the relevant years. There was an ongoing emphasis on creating an awareness in the profession and in government of the barriers to participation and career advancement of women practitioners, finding ways of reducing those barriers and creating opportunities for enhanced participation. These included opportunities to practice law in ways that could be consistent with family commitments without prejudice to career advancement. They also included attempts to persuade law firms to brief women barristers with the same frequency as male barristers and initiatives to encourage the appointment of women to judicial office. Some of the activities of VWL in the relevant years were directed to broader human rights issues and women's welfare generally. 110 A comprehensive summary of the activities of the association for each of the relevant years was set out in tabular form in schedules prepared by the Commissioner which accompanied closing submissions. It is not necessary to reproduce it here. It was derived from, and referred to, the various affidavits and exhibits. 111 The Commissioner submitted that the activities of VWL fell into the following classifications: . Professional and social networking . Continuing professional development . Improvement of entry and advancement opportunities for women lawyers in the legal profession . Increased awareness of the contribution of women to the practice and development of the law . Advancement of women's rights/justice . Participation in law reform and matters of interest to the legal profession . Other activities not otherwise classified The position of women in the legal profession 1996-2001 112 VWL made reference in its submissions to the long history of the exclusion of women from participation in the public and economic spheres of society. It pointed to the introduction in Australia of remedial measures such as anti-discrimination and equal opportunity laws. It contended that the adjustment of discriminatory social norms and practices was likely to take some time and that progress towards the full participation of women in the practice of the law would be slow. It submitted that the Court could take judicial notice of the disadvantage of women in society and of women practitioners in the legal profession. This disadvantage may be characterised broadly as a "social fact". 113 Authority for the Court to take judicial notice, without proof, of matters of common knowledge is found in s 144 of the Evidence Act 1995 (Cth). That section provides: (1) Proof is not required about knowledge that is not reasonably open to question and is: (a) common knowledge in the locality in which the proceeding is being held or generally; or (b) capable of verification by reference to a document the authority of which cannot reasonably be questioned. (2) The judge may acquire knowledge of that kind in any way the judge thinks fit. (3) The court (including, if there is a jury, the jury) is to take knowledge of that kind into account. (4) The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced. 114 The High Court in Gattellaro v Westpac Banking Corporation (2004) 78 ALJR 394 said (at [17]): In New South Wales there would appear to be no room for the operation of the common law doctrine of judicial notice, strictly so called, since the enactment of the Evidence Act 1995 (NSW), s 144. That observation was made in a case in which the question whether s 144 of the New South Wales Act displaced the common law was not before the Court. A majority of the Court of Appeal of New South Wales had taken judicial notice of the fact that banking institutions such as Westpac used standard forms of guarantee. The High Court held that to be erroneous. The error was not defended before the High Court and nothing turned on any difference between the common law and s 144. 115 The relationship between s 144 and the common law was not agitated in these proceedings. I am content to act upon the basis that the section states the applicable law, authorising this Court to take judicial notice of matters of common general knowledge. 116 The Court is invited to take judicial notice of the disadvantage of women practitioners in the legal profession as a matter of "common knowledge … generally" within the meaning of s 144(1)(a). VWL, in its written submissions, identified the social fact for which it contended. The Commissioner was thereby on notice and not unfairly prejudiced were the Court to act upon the submission. The social fact propounded was the historical and persisting disadvantage of women in relation to their participation and career advancement within the legal profession. At that level of generality there was no dispute. I am prepared to take judicial notice of it. It informs a consideration of whether the VWL was "established for community service purposes" or otherwise met the public benefit requirement of the common law understanding of a charitable institution. It is not, however, critical to the characterisation of the association for the purposes of the ITAA. Characterisation depends primarily upon the objects and, to a degree, upon the activities of VWL in the relevant years of income. The advancement of women and women practitioners as a public benefit 117 The question whether the purpose of an organisation is "beneficial" or of "service" to the community is relevant to characterisation under the applicable provisions of the ITAA. To the extent that the answer requires assessment of social norms or community values, it may sometimes rest upon an uncertain and shifting foundation. Nevertheless such judgments are often required of the courts in a variety of jurisdictions, civil and criminal. In the present case the task is made easier because there are clear statutory indications of community recognition of historical and persisting gender based discrimination and the need to take positive steps to overcome it. 118 The Sex Discrimination Act 1984 (Cth) sets out its objects in s 3, which include the following: (a) to give effect to certain provisions of the Convention on the Elimination of All Forms of Discrimination Against Women; and (b) to eliminate, so far as is possible, discrimination against persons on the ground of sex, marital status, pregnancy or potential pregnancy in the areas of work, accommodation, education, the provision of goods, facilities and services, the disposal of land, the activities of clubs and the administration of Commonwealth laws and programs; and … (d) to promote recognition and acceptance within the community of the principle of the equality of men and women. 119 The Act makes specific reference to "family responsibilities" in relation to employees, defined in s 4A(1) as: In this Act, family responsibilities, in relation to an employee, means responsibilities of the employee to care for or support: (a) a dependent child of the employee; or (b) any other immediate family member who is in need of care and support. 120 Section 14 of the Act prohibits discrimination in employment and in particular provides: (2) It is unlawful for an employer to discriminate against an employee on the ground of the employee's sex, marital status, pregnancy or potential pregnancy: (a) in the terms or conditions of employment that the employer affords the employee; (b) by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; (c) by dismissing the employee; or (d) by subjecting the employee to any other detriment. … (3A) It is unlawful for an employer to discriminate against an employee on the ground of the employee's family responsibilities by dismissing the employee. Discrimination on the grounds of sex, marital status, pregnancy or potential pregnancy in the performance of functions or the exercise of powers under Commonwealth law or for the purposes of a Commonwealth program is also prohibited by s 26 of the Act. 121 The Convention, which is scheduled to the Act and to which Australia is a party, includes, in Art 11, a commitment by States Parties to take all appropriate measures to eliminate discrimination against women in the field of employment in order to ensure, on a basis of equality of men and women the same rights and, in particular: (c) The right to free choice of profession and employment, the right to promotion, job security and all benefits and conditions of service and the right to receive vocational training and retraining, including apprenticeships, advanced vocational training and recurrent training; 122 Similar legislation exists in the various States. The legislation and the Convention to which Australia is a party can be taken as indicative of a now long standing social norm or community value that attaches public benefit to the removal of barriers to the advancement of women, on an equal basis with men, in all fields of human endeavour, including participation in the professions and in public life. Charitable institution or community service organisation 123 VWL contended that it was: (a) an association established for community services not for political or lobbying purposes and not for profit or gain; (b) a charitable institution; and (c) a public educational institution. It is convenient to commence with a consideration of the "charitable institution" exemption and its application in this case. Charitable institutions 124 The term "charitable institution" used in the ITAA 1936 and the ITAA 1997 is to be understood in its long established technical legal sense. The origin of that technical legal sense appears in the Preamble to the Statute of Charitable Uses Act 1601 (UK) 43 Eliz 1, c 4. Under the Statute commissioners were appointed to supervise the administration of charities and to prevent abuses. The Preamble set out a variety of charitable purposes which, as Dal Pont has pointed out "… could be interpreted to deal with a range of philanthropic activities completely divorced from poor relief": Dal Pont G, Charity Law in Australia and New Zealand (Oxford University Press, 2000) p 47. 125 The concept of charitable purposes was elaborated in a passage, which has literally acquired statutory status, from the judgment of Lord Macnaghten in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 at 583. That case concerned the Income Tax Act 1842 (UK) 5 and 6 Vict. c 35 which provided for special allowances in relation to income tax on rents and profits of lands vested in trustees for charitable purposes so far as they were applied to charitable purposes. Lord Macnaghten said (at 583): "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. It is accepted that purposes which are "beneficial to the community" must also be "within the spirit and intendment of the preamble to the Statute of Elizabeth". 126 The High Court recently reaffirmed the application of the technical meaning to the word "charity" and its derivatives used in statutes unless a contrary intention is evident. In Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 229 ALR 1, Gleeson CJ, Heydon and Crennan JJ referred, in a footnote, to the technical legal sense of "charitable" as that defined by Lord Macnaghten in Pemsel [1891] AC 531 "by reference to the spirit and intendment of the preamble to the Statute of Charitable Uses Act 1601 (UK)". Their Honours referred also to "… the general rule that, the word "charitable" being a word that has a technical legal meaning, when it is used in a statute it should be understood in its legal sense unless a contrary intention appears". They noted that the general rule has been accepted as the law of Australia at least since the decision of the Privy Council in Chesterman v Federal Commissioner of Taxation (1925) 37 CLR 317. They further said (at [18] fn 6): The word is commonly used in statutes. It is reasonable to assume that parliamentary counsel, taxpayers, revenue authorities, settlors, testators and others have acted on the faith of an understanding that the general rule applies. The Full Court of the Federal Court in Commissioner of Taxation v Word Investments Ltd (2007) 164 FCR 194 at [8] accepted, and there was no dispute before it, that the word "charitable" in the relevant provisions of the ITAA 1997 bears its technical legal meaning. It relied upon Bayside 229 ALR 1 for that purpose. Political purposes limitation 127 Charitable purposes generally do not include political purposes. Dal Pont observes that the limitation is largely a product of 20th century jurisprudence emanating principally from the dictum of Lord Parker in Bowman v Secular Society Ltd [1917] AC 406 at 442: a trust for the attainment of political objects has always been held invalid, … because the Court has no means of judging whether or not a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift. 128 The political purposes limitation is not well defined and is more difficult of application today having regard to the change in social conditions since 1917 and the involvement of legislatures in areas unthought of at that time: see Santow GFK, "Charity in its Political Voice - A Tinkling Cymbal or a Sounding Brass?" (1999) 18 ABR 225. In Public Trustee v Attorney-General (1997) 42 NSWLR 600 at 602, Santow J observed of the High Court decision in Royal North Shore Hospital of Sydney v Attorney-General (NSW) (1938) 60 CLR 396 at 426: The High Court's formulation suggests that a trust may survive in Australia as charitable where the object is to introduce new law consistent with the way the law is tending. In his paper in the Australian Bar Review, Santow J also observed that a trust which has an undoubtedly charitable object does not lose its charitable status simply because it also has an object of changing the law or reversing policy (at 248): The question is always whether that "political object" precludes the trust satisfying the public benefit requirement. 129 In my opinion however, despite argument from the Commissioner based on the "law reform" object in the VWL constitution, this is not a significant element of the association's purposes such as to affect its characterisation. The nature of the characterisation inquiry 130 The general nature of the inquiries to be undertaken in ascertaining whether an entity is a charitable institution was discussed by Allsop J in Word Investments Ltd 164 FCR 194. His Honour referred to Royal Australian College of Surgeons v Federal Commissioner of Taxation (1943) 68 CLR 436 and the analysis of the judgments in that case by Lockhart J in Cronulla Sutherland Leagues Club Ltd v Commissioner of Taxation (1990) 23 FCR 82 at 90-93. These authorities demonstrated that the question as to the true nature or character of the entity is to be assessed having regard to its objects, purposes and activities (at [11]). Allsop J formulated the task of characterisation thus (at [14]): The relevant task, as stated in the Surgeons' Case is to assess the true character or nature of the entity by reference to its objects, purposes and activities. It is an integrated, holistic enquiry directed to whether a body of facts and circumstances satisfies a legal category or conception. 131 Importantly, the Commissioner had submitted to the Full Court that a charitable institution could conduct commercial activities but only as incidental or ancillary to its charitable activities. After referring to relevant authorities, Allsop J observed that the cases did not support the submission. He cited Scottish Burial Reform and Cremation Society Ltd v Glasgow City Corporation [1968] AC 138 and The Incorporated Council of Law Reporting of the State of Queensland v Commissioner of Taxation (1971) 125 CLR 659 and said (at [18]): … both stand as authority for the proposition that the making of a profit from the conduct of the charitable activity does not necessarily destroy the charitable nature of the purpose exhibited by the activity. Stone J agreed with Allsop J. 132 The approach taken by the Full Court is consistent with that set out by Kenny J in Commissioner of Taxation v The Triton Foundation (2005) 147 FCR 362. After extensively reviewing the authorities relating to charitable institutions her Honour said (at [20]): It is also settled law that whether a particular corporate body is a charitable institution depends on the central or essential object of the institution as determined by reference to its constitution and activities … If the main purpose of such a body is charitable, it does not lose its charitable character simply because some of its incidental or concomitant and ancillary objects are non-charitable. The public benefit requirement 133 For an association to be characterised as a charitable institution it must exist for a public benefit as distinct from the creation of private benefits. The fourth class of charitable trust in Pemsel [1891] AC 531 brings in the public benefit requirement through the words "beneficial to the community". As Kenny J said in The Triton Foundation 147 FCR at [22]: The public may, however, include a section of the public. An association may have a public benefit purpose although some of its subsidiary or ancillary functions may benefit particular persons such as members of a profession: Royal Australian College of Surgeons v Federal Commissioner of Taxation (1943) 68 CLR 436 at 447 and other authorities cited in The Triton Foundation 147 FCR at [23]. Whether VWL is a charitable institution - the contentions 134 VWL submitted that it fell within the category of charitable institution as having been established for a purpose "beneficial to the community". It identified the relevant community as: (a) the public as a whole; (b) alternatively, the Victorian legal profession; (c) alternatively, Victorian women in the law. It submitted that it was not an association that benefited only its members. The only evidence of benefit received by members, as opposed to non-members, was the journal Portia and, on occasion, discounted entry fees to seminars and functions. The real benefit to VWL members was said to derive from their membership of the section of the community to which VWL's purposes were directed. 135 VWL cited examples of judicially enunciated criteria for identifying purposes falling within the spirit and intendment of the Preamble to the Statute of Elizabeth. According to such criteria qualifying purposes are those: . which "must tend to the improvement of society": Barby v Perpetual Trustee Co Ltd (1937) 58 CLR 316 at 324 (Dixon J); . "whose fulfilment may reasonably be thought to minister to the safety or happiness or wellbeing or good conscience of the community and which may reasonably be the subject of outlay at the public expense … [and] could fairly be regarded as a possible subject of public responsibility": Re Belcher [1950] VLR 11 at 13 (Fullagar J); . which to some extent satisfy "an obligation of the community recognised generally in the community": Re Lowin [1965] NSWR 1624 at 1626 (Jacobs J); . which make "provision of some of the indispensables of a settled community" and are "socially fundamental": Incorporated Council of Law Reporting of the State of Queensland v Federal Commissioner of Taxation (1971) 125 CLR 659 at 669 (Barwick CJ); . which uplift the moral tone of the community: Re Weaver [1963] VR 257; Re Inman [1965] VR 238 at 242; or . which raise the standard of life: Re Blyth [1997] 2 Qd 567 at 581 (Thomas J). 136 VWL argued that its dominant and principal purposes were accurately expressed in clauses 3.1 and 3.2 of the constitution. They were directed to the elimination of discrimination (direct, indirect or systemic) and consequent disadvantage on the ground of gender: (a) in the legal profession in Victoria; (b) in society through the promotion and securing of legal rights and human rights whether political, civil, social, economic or cultural in nature. Its purposes were said to advance the purposes of interests of women lawyers in seeking to redress inequality of opportunity and the removal of obstacles and barriers to the full and effective participation by women in the law. 137 VWL submitted that full participation and contribution by women to the practice of law would benefit women in the community generally and their access to the law. Its stated purposes were said to be aptly described as socially fundamental and indispensable in a society which recognises all persons as equals. 138 The social functions of the association (not including those of an educational nature) were characterised as incidental and ancillary to its dominant purposes. They were carried out to further the esprit de corps of its members and to cultivate the eradication of the discrimination sentiment explicitly in its stated purposes. The functions were said to be necessary in the provision of important networking opportunities to advance employment prospects within the profession. 139 In relation to the political purposes question, VWL submitted that it was not formed for the purpose of changing a specific law or laws or government policy. One of its primary activities have been directed to maintaining and educating the community about and enforcing existing laws. The promotion of humanitarian objects and those relating to basic human rights were said to be charitable even though, on occasion, (although not in this case) they might involve or require a change in policy or law. The judgment of Santow J in Public Trustee v Attorney-General (1997) 42 NSWLR 600 was cited and, in particular, his Honour's observation that: There is a range of activity from direct lobbying of the government, to education of the public on particular issues, in the interests of a climate conducive to political change. The line between an object directed at legitimate educative activity compared to illegitimate political agitation is a blurred one, involving at the margin matters of tone and style. VWL submitted that, to the extent to which any of its purposes could be regarded as political, they were incidental to its principal objects. The organisation would not be eviscerated if any reference to legislative change were removed from its constituent documents. 140 The mere statement of purpose contained in clause 3.1(d) "to work towards the reform of the laws" was said not to be political. No political outcome was specified nor the reform of any law in a manner or by any means contrary to public policy or contrary to existing laws and government policies. 141 Some reliance was placed on the judgment of Whitford J in Halpin v Seear [1977] Ch Com Rep. That case considered the validity of a trust established in 1926 to promote the equality of women with men in political and economic opportunity. Under the trust payments were to be made to the London Society for Women's Service for so long as it should, in the opinion of the trustee, continue to promote the objects of the trust. Whitford J noted that it was not suggested that the society as such was a charity in the eyes of the law although some of the activities would undoubtedly qualify as charitable. The question before him related to the object of the founder of the trust (at 34): So the question is whether the dominant or essential object here revealed is a political one, for it stands accepted in argument before me that if the object be a political object and if this be a purpose trust then it must be invalid. I think that it cannot seriously be contended that the object here is essentially a political object. It seems to me quite clear that the dominant or essential object is the achievement of equality albeit in political and economic fields, that the founder in no sense is concerned with any particular political or economic doctrine or cause; she is concerned merely to ensure that within these fields there should be equality of status between women and men. 142 The Commissioner contended that VWL was not a charitable institution. He argued that not all purposes which are beneficial to the public are in fact charitable. A trust of the fourth class in Pemsel [1891] AC 531 must be of direct and general benefit to the public. The mere fact that it is for purposes which may tend to be of general public utility would not be sufficient. He cited Taylor v Taylor (1910) 10 CLR 218 at 237 and Barby v Perpetual Trustee Co Ltd (1937) 58 CLR 316 at 324. He did not dispute that a trust for the promotion of the mental or moral improvement of the community could sometimes fall within the fourth class. The requirement of benefit to the public was said to commonly exclude from the status of charitable institutions organisations such as professional bodies established to help those persons who furnish the organisation's funds. These would usually be members or persons eligible for membership but could also be contributors or sponsors. If the main objects of an institution were the protection and advancement of persons practicing in a particular profession, the institution would not be regarded as charitable because the element of direct public benefit was lacking. 143 The absence of direct public benefit was said to be evident from various of VWL's objects relating to the provision of a meeting ground for women lawyers, their continuing education and development and providing for their entry and advancement within the legal profession. The direct benefit from these and similar objects was said to be private to women lawyers actual or potential as individual members of the public, rather than a public benefit. 144 The Commissioner submitted that on the facts VWL's main objects related to the advancement of women lawyers, including members of VWL, and that those objects did not manifest a charitable purpose. They were not the same as the second class of its objects for the advancement of women generally. The provision for "such other objects as the Association may in general meeting decide" was not limited to "charitable" objects. 145 The Commissioner also contended that since its purpose was to secure a change in the existing law, VWL's object "to work towards the reform of the law" was not charitable. This object was said not to be merely incidental or ancillary to charitable objects. It was another and separate object of substance in its own right. The character of VWL 146 The characterisation of VWL is to be assessed holistically. In making that assessment the primary focus must fall on its formal objects as stated in its constitution. But they are to be read in light of the history of its formation, together with the activities it has undertaken since its formation. 147 In my opinion, VWL's principal purpose was to remove barriers and increase opportunities for participation by and advancement of women in the legal profession in Victoria. That object was reflected in clause 3.1(c) of its constitution. Some of the other objects in clause 3.1 were incidental to, or in aid of, that object. 148 It was established to overcome a well-known social deficit, namely the substantial under-representation of women in the legal profession, in its upper reaches and in the judiciary. Having regard to the social norms reflected in the Sex Discrimination Act, cognate State legislation and Australia's membership of the Convention for the Elimination of all Forms of Discrimination Against Women, that objective was a purpose "beneficial to the community". It was within the spirit and intendment of the Statute of Elizabeth. The wider purposes of the AWL which were adopted and endorsed by clause 3.2 of the Constitution and also reflected in clause 3.1(f) placed the principal object which I have identified in the context of a larger purpose which is of itself beneficial to the community. 149 The activities of the association, including the social and networking functions, may have benefited its members. They were, however, plainly directed to the larger object and in many cases to a larger audience, the legal profession in Victoria. They were in aid of the principal objective. There was certainly a relentless push by the association for changes to attitudes and practices affecting women within the profession. There were representations and public positions taken from time to time on matters affecting the position of women generally. None of these things translated into a political purpose that would disqualify the organisation from being characterised as a charitable institution. 150 In my opinion the VWL fell within the description of a charitable institution within the meaning of s 23 of the ITAA 1936 and Item 1.1 in s 50-5 of the ITAA 1997. 151 On this basis the appeals of the VWL will succeed. I do not consider that there is any material difference between its activities in the various years of income with which this appeal is concerned that would affect its characterisation as a charitable institution. Community service association 152 Section 23(g)(v) of the ITAA 1936 exempted from income tax the income of an association that: Is established for community service purposes (not being political purposes or lobbying purposes). 153 Item 2.1 of s 50-10 of the ITAA 1997 is to like effect. The term "community service purposes" is not defined. The Explanatory Memorandum to the Taxation Laws Amendment Bill (No 2) 1990, which introduced s 23(g)(v), stated: Among the institutions exempted from income tax under paragraph 23(e) are charitable institutions. However, many organisations that undertake a range of activities for the benefit or welfare of the community are not charitable, and so such bodies as the traditional community service clubs - Apex, Rotary, Lions, Zonta, Quota and the like - have not qualified for exemption. … subparagraph 23(g)(v) … will exempt from income tax the income of not-for-profit bodies established for community service purposes. The words "for community service purposes" are not defined but are to be given a wide interpretation. The words are not limited to those purposes beneficial to the community which are also charitable. They extend to a range of altruisticpurposes. The words would extend to promoting, providing or carrying out activities, facilities or projects for the benefit or welfare of the community, or of any members of the community who have particular need of those activities, facilities or projects by reason of their youth, age, infirmity, or disablement, poverty or social or economic circumstances. An exclusion from the exemption will apply to bodies established for political or lobbying purposes. 154 In Douglas v Commissioner of Taxation (1997) 77 FCR 112, Olney J said of s 23(g)(v) (at 118): The absence of a statutory definition and the very broad ambit of the words "community service" justify resort to the explanatory memorandum to identify more precisely the legislative intention. His Honour held in that case that the trust deeds of a "Protestant Hall" did not fall within the exemption provided in s 23(g)(v) because it held the title to the relevant land and kept a building on it for use by other organisations but did not carry out any activity for the benefit or welfare of the community. 155 In National Council of Women of Tasmania v Federal Commissioner of Taxation (1998) 38 ATR 1174, the Administrative Appeals Tribunal (the AAT) considered whether the National Council of Women of Tasmania fell within the scope of the exemption. It was an unincorporated association, the objects of which included the advancement of the interests of women and children and humanity in general. It also brought together representatives of other women's organisations including the promotion of their activities and projects directed to community welfare. The AAT held that the Council's predominant purpose was not that of a social club or discussion group. Its political and lobbying activities had been minimal. It played an active role in community service activities and not a passive one. 156 The AAT found that the Council would hold one annual general meeting each year, nine monthly general meetings, ten monthly executive meetings and a number of lunches and seminars. One of the "subtle roles" of the Council was to widen the support network of its affiliated organisations. Delegates and members who attended Council meetings and executive meetings would support the activities of affiliated organisations financially and by doing unpaid work. Council delegates and members assisted by donating and collecting goods for the needy such as baby clothes and by knitting items for the needy during general meetings. Most of the member organisations appeared to qualify as community service organisations. 157 The AAT held that the predominant purpose of the Council's meetings involved the coordination of community service work and the provision of exchange of information for the purpose of facilitating such work. It held the Council to be an association established for community service purposes, not being political or lobbying purposes and so exempt from income tax. 158 In Navy Health Ltd v Deputy Federal Commissioner of Taxation (2007) ATC 4,568, Jessup J considered the characterisation of a non-profit single member company providing private health insurance through a fund. Membership of the fund was limited to serving members of the Australian Defence Forces and cognate classes of person. The company contended that its objects promoted the efficiency of the Australian Defence Forces which benefited the community as a whole so that it would fall within the description of a "charitable institution" for the purpose of an exemption under the Fringe Benefit Tax Assessment Act 1986 (Cth). Alternatively, it submitted that it was a "non profit association" established for community service purposes and thereby attracting a life exemption. 159 The fringe benefit tax exemption provision was based on s 23(g)(v) of the ITAA 1936. Jessup J referred to the Explanatory Memorandum and accepted that it was clear that the words of the exemption were not limited to charitable purposes. He said (at [83]): Although a composite expression, I consider that the essence of "community service" is that a service is provided to the community, or a section of the community. Here the word "service" is used in the sense of "health, benefit or advantage", particularly "the action of serving, helping or benefiting, conduct tending to the welfare or advantage of another" (OED 2nd Ed). His Honour held the term "community" to refer not only to the community as a whole but also to any identifiable section of the community. It did not follow that the receipt of a service by any group of persons should be regarded as the receipt of that service by a section of the community. 160 The question of characterisation of the VWL in this respect is not straight forward. It submitted that it provides for the welfare of the community or a section of it. Its purposes included the carrying out of activities and undertaking of projects for women in the law who have a particular need for those projects and activities by reason of their social and economic circumstance, namely their sex. 161 VWL also submitted that it was not involved in the furtherance of political or lobbying purposes. As to the latter it referred to the definition of lobbying in the Oxford English Dictionary: 1. To influence (members of a house of legislature) in the exercise of their legislative functions by frequenting the lobby. 2. To frequent the lobby of a legislative assembly for the purpose of influencing members' votes, to solicit the votes of members. VWL submitted that "lobbying" in its statutory context bore a narrow political meaning tying proscribed political activity to direct interaction with members of parliament for stated ends and purposes. It is not clear to me that the term "lobbying" is to be construed so narrowly given the width of the concept of political purposes. In my opinion it could extend to representations to government or members of parliament for changes in policy as well as changes in the law. 162 The Commissioner submitted that the concept of "community service" is similar to that of "public benefit" in the law of charitable trusts. It would not follow that receipt of a service by any group of persons should be regarded as the receipt of that service by a section of the community. In the Commissioner's submission "community service" requires the community or a section of the community to benefit by way of receipt of some identifiable help, benefit or advantage bestowed or provided directly by the putative benefactor. Such a requirement is not satisfied, it was submitted, merely because an association's activities or some of them might have a tendency to benefit the community as a whole or a section of it. In this regard the Commissioner relied upon the observation of Jessup J where he found that the community service requirement was not satisfied merely because the operations of the organisation had a tendency to promote the efficiency of the armed forces thereby benefiting the community as a whole. 163 In my opinion the concept of "community service" was intended to pick up a broader range of organisations than those covered by the concept of "charitable institution" and in particular that class of charitable institution falling within the rubric "beneficial to the community". However, an organisation may be beneficial to the community without delivering a "community service" in the sense contemplated by that term as explained in the Explanatory Memorandum. For the reasons I have already expressed, I am of the view that the purposes of VWL are beneficial to the community in the sense necessary to qualify it as a charitable institution. The concept of "community service" does seem to import the notion of the delivery of some practical "help, benefit or advantage" in the sense used by Jessup J. That criterion is not necessarily met by an organisation whose purpose is to change practices and attitudes in such a way as to facilitate the entry and advancement of women within the profession generally. 164 The matter is not without difficulty and it is unnecessary to reach a concluded position on it. It is sufficient unto the day that I have found that VWL is a charitable institution, that it attracts the relevant exemption and that its appeals must therefore be allowed. Conclusion 165 Having regard to my conclusions about the status of VWL as a charitable institution, it is unnecessary to make any findings in relation to whether certain elements of its receipts were income in the relevant years. The appeals will be allowed. The orders which were suggested by the Commissioner in that event are the orders which I will make in the following terms: 1. The appeal be allowed. 2. The respondent's notice of assessment the subject of the appeal be set aside. 3. There is no order as to the costs of the appeal. I certify that the preceding one hundred and sixty-five (165) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Associate: Dated: 27 June 2008 Counsel for the Applicant: Ms A Richards QC and Ms K Streckfuss

Counsel for the Respondent: Mr SW Gibbs SC and Mr S Linden