YWCA Australia v Chief Commissioner of State Revenue - [2020] NSWSC 1798 - NSWSC 2020 case summary — Zoe

NSWNSWSC

YWCA Australia v Chief Commissioner of State Revenue

[2020] NSWSC 1798

Supreme Court of NSW|2020-11-11|Before: Payne JA

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2020-11-11

Before

Payne JA

Catchwords

[1950] HCA 19 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
[1997] HCA 2 City of Mandurah v Australian Flying Corps & Royal Australian Airforce Association (WA Division) Inc (2016) 50 WAR 466
[2016] WASCA 185 Commissioner of Taxation v Co-operative Bulk Handling Limited (2010) 189 FCR 322
[1999] NSWCA 113 Downing v Federal Commissioner of Taxation (Cth) (1971) 125 CLR 185

Source

Original judgment source is linked above.

Catchwords

[1950] HCA 19 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384[1997] HCA 2 City of Mandurah v Australian Flying Corps & Royal Australian Airforce Association (WA Division) Inc (2016) 50 WAR 466[2016] WASCA 185 Commissioner of Taxation v Co-operative Bulk Handling Limited (2010) 189 FCR 322[1999] NSWCA 113 Downing v Federal Commissioner of Taxation (Cth) (1971) 125 CLR 185[2012] HCA 55 Federal Commissioner of Taxation v Tasman Group Services Pty Ltd (2009) 180 FCR 128[2009] FCAFC 148 Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204[1985] HCA 48 Kostka v The Ukranian Council of NSW Inc [2013] NSWSC 222 Lemm v Federal Commissioner of Taxation (1942) 66 CLR 399[1942] HCA 31 Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645[1978] HCA 58 Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119[2018] NSWSC 128 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362[2017] HCA 34 Taylor v Taylor (1910) 10 CLR 218[1910] HCA 4 The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404

Judgment (79 paragraphs)

[1]

Introduction

The Young Women's Christian Association was established in England in 1865. A branch was created in Sydney in 1880 with the initial object of providing safe hostel accommodation for female immigrants arriving by ship. By the time of the scheme of arrangement which gave rise to the present dispute, YWCA had evolved into a secular organisation having as its object the provision of benevolent relief to people (in particular, women and children) experiencing poverty, homelessness, violence or disadvantage.
Prior to the scheme of arrangement which gave rise to the present dispute, the YWCA in Australia was organised on a State by State basis. In the 1920s, the NSW organisation, YWCA NSW, acquired the "Y Hotel" on Liverpool Street in Sydney's CBD. Originally, the Y Hotel operated as a hostel for women and girls in need of accommodation. The Y Hotel subsequently became a commercial operation generating profits used solely to support YWCA NSW's charitable activities. The original Y Hotel site was transferred to Wentworth Avenue, on the fringe of the CBD. A second hotel was acquired by YWCA NSW in Redfern in 2006. Both hotels were operated as a commercial operation whose profits were used solely to support YWCA NSW's charitable activities. The hotels are now called the "Song Hotel Sydney" and "Song Hotel Redfern" respectively.
By 2018, the various State and Territory YWCA organisations decided effectively to amalgamate their interests. This was to be effected by a scheme of arrangement under which all of the assets and liabilities of the various State and Territory YWCA organisations would be transferred to a newly incorporated body, the plaintiff, YWCA Australia. The scheme of arrangement was designed, in the language of the explanatory statement to the scheme, to "ensure the future sustainability and growth of the YWCA movement in Australia" by "simplify[ing] our structure, creating a platform for us to leverage our strengths and improv[ing] our efficiency and effectiveness" in delivering support to marginalised and at-risk women and children.
On 22 May 2018, by order under s 411(4)(b) of the Corporations Act 2001 (Cth) made by the Federal Court, the assets and liabilities of each State and Territory YWCA organisation were transferred to YWCA Australia. The transfer of the "Song Hotel Sydney" and the "Song Hotel Redfern" to YWCA Australia occurred by reason of this order of the Federal Court. Under the scheme of arrangement, the assets and liabilities of two organisations, YWCA Housing (formerly Social Housing Victoria) and YWCA National Housing (formerly YWCA Queensland) were only indirectly transferred to YWCA Australia. Under the scheme of arrangement those two entities became wholly owned subsidiaries of YWCA Australia. Each subsidiary is a company limited by guarantee and YWCA Australia is the only member of each. The reason that the assets and liabilities of these two entities were not directly transferred to YWCA Australia was that the real property assets of each entity were subject to community housing regulations in Victoria and Queensland and there was a concern that seeking to transfer the registration with the relevant department of YWCA Housing to YWCA Australia may have created unnecessary issues with the regulator.
I find on the evidence that YWCA Australia was created and the scheme of arrangement conducted to address difficulties faced by the separate State and Territory YWCA member organisations in competing for funding, together with the preference of philanthropists and the Commonwealth Government for dealing with single national charitable organisations.
YWCA Australia lodged an application for an exemption from duty on the transfers effected by the scheme of arrangement on the basis that it was an "exempt charitable or benevolent body" for the purposes of s 275(3)(a) of the Duties Act 1997 (NSW). The Chief Commissioner of State Revenue (NSW) refused YWCA Australia an exemption from ad valorem duty.
Duty in the aggregate amount of $3,326,195.48 ($3,380,653.83 together with interest) at ad valorem rates was charged on the transfer of real property in NSW to YWCA Australia, principally comprising duty payable on the transfer of the Song Hotel Sydney and the Song Hotel Redfern from YWCA NSW.
YWCA Australia appeals both the Commissioner's decisions not to grant an exemption in whole or in part pursuant to ss 275 and 275A of the Duties Act (Proceeding No 2018/336819) and appeals against the assessments issued by the Commissioner (Proceeding No 2019/223120). It was agreed by the parties that having regard to the nature of the Court's role and the extent of its powers in addressing the validity of the assessments which have been issued (Proceeding No 2019/223120), no separate issue was raised by the challenge to the decision (Proceeding No 2018/336819).

[3]

Evidence relied upon

The following lay evidence was read by YWCA Australia: 1. Affidavit of Shannon Maree Wright affirmed on 9 April 2019. Ms Wright is the director of National Service Delivery for YWCA Australia's programs. Ms Wright annexed copies of the objects of the YWCA member organisations prior to the merger in May 2018, annual reports and financial statements of the member organisations prior to May 2018 and documents describing the programs run by the member organisations prior to May 2018. 2. Affidavit of Shannon Maree Wright affirmed on 24 October 2019. In this affidavit Ms Wright provided additional information as to the expenditure and budgeting of YWCA Australia programs. 3. Affidavit of Shannon Maree Wright affirmed on 24 October 2019. Ms Wright explained that she is responsible for overseeing the YWCA Australia regional offices, including offices at the Nowra, Goonellabah, Campbelltown and Broken Hill properties. Ms Wright listed and described the programs carried on or coordinated at each of the properties. Ms Wright also annexed the floor plans of each property and provided descriptions of the use of the various spaces within the properties. 4. Affidavit of Shannon Maree Wright affirmed on 17 August 2020. In this affidavit Ms Wright described several of the programs run by YWCA Australia and provided more information about the activities conducted at each of the YWCA Australia properties. 5. Affidavit of Janet Margaret Berriman affirmed on 12 April 2019. Ms Berriman was then the director of National Housing for YWCA Australia. Ms Berriman explained that during the amalgamation of YWCA member organisations into YWCA Australia, she did not consider it prudent to transfer the regulated community housing assets of YWCA Housing to YWCA Australia. Instead, YWCA Australia become the only member of its new subsidiary, YWCA Housing. YWCA Australia also became the parent and only member of YWCA National Housing which is now YWCA Australia's subsidiary. 6. Affidavit of Jessica Frances Watkinson affirmed on 16 April 2019. Ms Watkinson is the National Director of Development of YWCA Australia. Ms Watkinson explained that from 2015 to 2018 she was the Executive Director and then CEO of YWCA Darwin and explained the principal activities of YWCA Darwin during that time. Ms Watkinson affirmed that following the merger of YWCA member organisations, YWCA Australia has continued to carry on each of those programs. Ms Watkinson also explained that she is responsible for maintaining records of YWCA Australia's funding contracts and annexed copies of funding contracts and letters of agreement for YWCA programs. In a second affidavit affirmed on 24 October 2019, Ms Watkinson explained the steps she had taken to identify further funding material and annexed funding material. In a third affidavit affirmed on 22 January 2020, Ms Watkinson provided further funding material. Ms Watkinson was not cross-examined and I accept Ms Watkinson's evidence. 7. Affidavit of Michelle Maree Philips affirmed 24 October 2019. Ms Philips is the CEO of YWCA Australia. Ms Philips explained that YWCA Australia's financial records and accounting system, NetSuite, was used to prepare YWCA Australia's 2019 financial statements. The financial data was extracted from NetSuite and exported into excel spreadsheets which created the "YWCA spreadsheet" (tab 1 in the excel file titled "tab 1 and 2" in exhibit "MMP-1") and the "programs spreadsheet" (tab 2 in the excel file titled "tab 1 and 2" in exhibit "MMP-1"). Ms Philips explained the construction of the YWCA spreadsheet from YWCA Australia's business records as containing financial data for the 2019 financial year by activities and income and expenditure, including corporate services, hotels and rentals, national service delivery, fundraising and events and the National Disability Insurance Scheme (NDIS). The YWCA spreadsheet also records information for the activities identified such as aggregate income or revenue, aggregate cost of sales, aggregate total expenses, aggregate "other expenses", operating profits and net profits. The programs spreadsheet provides a program-by-program revenue and expenditure breakdown by cost centre. 8. Affidavit of Michelle Maree Philips affirmed on 17 August 2020. Ms Philips affirmed that YWCA Australia's profit-for-purpose operations of the Song Hotels were forced to close in April 2020 and were still struggling to return to previous levels of operations. Ms Philips also included a number of mapping corrections and corrections to the spreadsheets. I accept Ms Philips' evidence. 9. Affidavit of Nitika Bhala affirmed on 11 March 2020. Ms Bhala is an accountant employed by YWCA Australia. In her first affidavit, Ms Bhala explained preparation of the YWCA spreadsheet. The YWCA spreadsheet records financial data for YWCA Australia for the financial year ended 30 June 2019. In March 2019, YWCA Australia commenced using NetSuite as a centralised accounting system. She and other members of YWCA Australia's Financial Department manually allocated data in the YWCA spreadsheet that was not allocated to a particular business activity in NetSuite as part of the data migration. The data recorded in the programs spreadsheet was successfully migrated and allocated to the relevant program and cost centre, as verified by an audit of the migration process. In her second affidavit affirmed on 20 August 2020, Ms Bhala identified some mapping errors in the spreadsheets and explained her corrections. Ms Bhala affirmed further clarifications in her third affidavit affirmed on 24 August 2020. Ms Bhala was not cross-examined. I accept her evidence and find that it, together with the unchallenged evidence of Ms Philips, is sufficiently reliable for the Court to draw conclusions based on the YWCA spreadsheet. 10. Affidavit of Helen Maree Schell sworn 17 August 2020. Ms Schell is the president and Chair of YWCA Australia. She is also the Chair of YWCA National Housing and YWCA Housing. Ms Schell annexed reports by the Australian Council of Social Services (ACOSS), Mission Australia, YWCA National Housing, the Workplace Gender Equality Agency, Western Sydney University and the Victorian Council of Social Services (VCOSS) and discussed how the reports addressed poverty as well as gender-specific challenges for women in Australia. I accept Ms Schell's unchallenged evidence which I found most helpful. 11. Two affidavits, of 1 November 2018 and 16 July 2019, were sworn by Benjamin Davis, the solicitor on record for YWCA Australia in the proceedings, proving formal matters relating to the dispute with the Commissioner and annexing copies of the assessments, the Commissioner's decision in relation to the assessments, YWCA Australia's objections to the assessments and the decision of the Commissioner disallowing the objections dated 20 May 2019. There was no challenge to Mr Davis' evidence.
Of the lay witnesses, only Ms Berriman and Ms Wright were cross-examined and each only briefly. Each witness was clearly very knowledgeable about the particular activities of YWCA Australia. No credit submission was made in relation to their evidence. I accept the evidence of Ms Berriman and Ms Wright in whole.
The following expert evidence was relied upon by YWCA Australia: 1. Affidavit of Sally Louise Davitt affirmed on 20 March 2020 exhibiting an expert report of dated 20 March 2020. 2. Affidavit of Sally Louise Davitt affirmed on 28 August 2020 exhibiting an expert report dated 28 August 2020.
The following expert evidence was relied upon by the Commissioner: 1. Affidavit of Anthony Bryn Samuel affirmed on 12 May 2020 exhibiting an expert report dated 12 May 2020.
The parties relied on the joint report of Ms Davitt and Mr Samuel dated 12 October 2020.
The experts gave concurrent oral evidence based on their joint report dated 12 October 2020. As I will explain, I found the approach of the experts and the considerable co-operation they displayed helpful in isolating issues. The only issues between them are ones based on different assumptions about the underlying facts and correct operation of the Duties Act, which are not questions that either could assist me in resolving.
Ten volumes of documentary evidence became Exhibit A before me at trial. All evidence was admitted subject to the rulings on objections identified in MFI 1. The Guidelines approved by the Treasurer for the purposes of s 275(3)(b)(iii) of the Duties Act became Exhibit B.

[4]

Relevant provisions of the Duties Act

Before descending into the detail of the evidence and resolution of the issues raised by the parties, it is helpful first to identify the statutory questions here engaged. It was common ground that but for the operation of a statutory exemption, duty was chargeable to YWCA Australia in this case.
The relevant exemption provision of the Duties Act, s 275, provided at the relevant time as follows: 275 Charitable and benevolent bodies (1) Duty under this Act is not chargeable on the following - (a) a transfer, or an agreement for the sale or transfer, of dutiable property to an exempt charitable or benevolent body, (b) a declaration of trust over dutiable property held or to be held on trust for an exempt charitable or benevolent body, (c) a surrender of an interest in land in New South Wales to an exempt charitable or benevolent body, (d) a vesting of dutiable property in an exempt charitable or benevolent body, (e) a lease of dutiable property to an exempt charitable or benevolent body, (f) a mortgage given by or on behalf of an exempt charitable or benevolent body. (1A) Duty under section 58 (Establishment of a trust relating to unidentified property and non-dutiable property) is not chargeable on an instrument that declares a trust over property held or to be held on trust for an exempt charitable or benevolent body. (2) (Repealed) (2A) Landholder duty is not chargeable on the acquisition of an interest in a landholder by an exempt charitable or benevolent body. (3) In this section - exempt charitable or benevolent body means - (a) any body corporate, society, institution or other organisation for the time being approved by the Chief Commissioner for the purposes of this paragraph whose resources are, in accordance with its rules or objects, used wholly or predominantly for - (i) the relief of poverty in Australia, or (ii) the promotion of education in Australia, or (b) any body corporate, society, institution or other organisation that, in the opinion of the Chief Commissioner, is of a charitable or benevolent nature, or has as its primary object the promotion of the interests of Aborigines and if - (i) (in the application of this definition for the purposes of subsection (1) or (1A)) the dutiable transaction or instrument is for such purposes as the Chief Commissioner may approve in accordance with guidelines approved by the Treasurer, or (ii) (Repealed) (iii) (in the application of this definition for the purposes of subsection (2A)) the land holdings of the landholder are being used or are to be used for such purposes as the Chief Commissioner may approve in accordance with guidelines approved by the Treasurer, or (c) any person acting in the person's capacity as trustee for a body corporate, society, institution or other organisation referred to in paragraph (a) or (b). landholder duty means the duty chargeable under Chapter 4.
The principal issue here is whether YWCA Australia is an "exempt charitable or benevolent body" within the meaning of s 275. This, in turn, raises the issues of whether YWCA Australia: 1. is a body corporate, society, institution or other organisation for the time being approved by the Chief Commissioner for the purposes of s 275(3)(a); 2. whose resources are, in accordance with its rules or objects, used wholly or predominantly for: 1. the relief of poverty in Australia, or 2. the promotion of education in Australia.
As s 275(3)(a) (the principal focus of these proceedings) makes clear, one of the elements a taxpayer must demonstrate is that it is a body "approved by the Chief Commissioner for the purposes of this paragraph". Section 101 of the Taxation Administration Act 1996 (NSW) provided: 101 Powers of court or tribunal on review (1) The court or tribunal dealing with the application for review may do any one or more of the following: (a) confirm or revoke the assessment or other decision to which the application relates, (b) make an assessment or other decision in place of the assessment or other decision to which the application relates, (c) make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid, (d) remit the matter to the Chief Commissioner for determination in accordance with its finding or decision, (e) make any further order as to costs or otherwise as it thinks fit. (2) Nothing in this section limits the application of the following provisions in respect of an application for review before the Civil and Administrative Tribunal: (a) Division 3 of Part 3 of Chapter 3 of the Administrative Decisions Review Act 1997, (b) section 60 (Costs) of the Civil and Administrative Tribunal Act 2013.
Although YWCA was not "approved by the Chief Commissioner for the purposes" of s 275, it was common ground that the requirement that an organisation be approved "for the time being" may be satisfied by approval being given after the dutiable transaction by the Commissioner or the Court standing in the Commissioner's shoes. That was the conclusion of Ward CJ in Eq in Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119; [2018] NSWSC 128 at [153]-[155] in like circumstances. The Commissioner accepted that Salvation Army correctly stated the law in this respect.
The subsidiary issue raised by s 275A only arises if YWCA Australia is not an "exempt charitable or benevolent body" within the meaning of s 275(3)(a). The issues in relation to the possible contingent operation of s 275A are very limited. At the relevant time s 275A provided: 275A Partial exemption for certain transactions by charitable and benevolent bodies (1) If the Chief Commissioner is satisfied, in relation to any dutiable transaction by which an exempt charitable or benevolent body acquires land or an interest in land, that the land concerned is used or to be used by the charitable or benevolent body partly for an exempt purpose, the dutiable value of the land concerned is, for the purposes of charging duty under Chapter 2 or 2A, to be reduced by the portion of that dutiable value that is referable to the portion of the land used or to be used for an exempt purpose. (2), (3) (Repealed) (4) If the Chief Commissioner is satisfied, in relation to a mortgage given by or on behalf of a charitable or benevolent body, that the land the subject of the mortgage is used or to be used partly for an exempt purpose, the amount secured by the mortgage is, for the purpose of charging duty under Chapter 7, to be reduced by the proportion of the amount secured that is referable to the portion of the land used or to be used for an exempt purpose. (5) If the Chief Commissioner is satisfied, in relation to an acquisition of an interest in a landholder by a charitable or benevolent body, that any of the land holdings of the landholder are used or to be used for an exempt purpose, the unencumbered value of that land holding is to be disregarded when calculating the duty chargeable on the acquisition under Chapter 4. (6) This section does not limit section 275. (7) In this section - charitable or benevolent body means any body corporate, society, institution or other organisation that, in the opinion of the Chief Commissioner, is of a charitable or benevolent nature, or has as its primary object the promotion of the interests of Aborigines. exempt purpose means a purpose approved by the Chief Commissioner under section 275.
The reason that the issues in relation to the possible contingent operation of s 275A are so limited follow from the acceptance of YWCA Australia that if it failed in relation to s 275(3)(a), to succeed in relation to s 275A, 275(3)(c) applied and the Guidelines issued by the Commissioner which applied in relation to that section and s 275A had the effect that only a limited number of the properties transferred to YWCA Australia were capable of qualifying for exemption under this alternative route.
Before leaving this initial overview of the legislation, s 275A(6) should be noticed. That section provides, in terms, that "this section does not limit section 275". Despite that clear statutory mandate, at least some of the Commissioner's submissions sought to do precisely that; to use s 275A to limit s 275(3)(a). These submissions must be rejected.

[5]

YWCA Australia's objects

One of the matters addressed by the definition in s 275 of the Duties Act, of an "exempt charitable or benevolent body", is whether the resources of the body are used wholly or predominantly, in accordance with its rules or objects, for the relief of poverty in Australia, or the promotion of education in Australia.
That raises an initial question about the identification of YWCA Australia's rules or objects. YWCA Australia's objects are set out in clause 6 of its Constitution which was adopted upon the implementation of the scheme of arrangement on 31 May 2018. Clause 5 ("vision") gives context to the objects: "Vision and Object 5. Vision YWCA Australia is a secular women's membership movement based on feminist principles. It is affiliated with and is an active, engaged supporter of World YWCA, which has its historical foundations in the Christian faith. It is today sustained by the richness of many beliefs and values. Strengthened by diversity, the organisation draws together members wherever they are located, to work for gender equality and to create opportunities for growth, leadership and empowerment of women, young women and girls in order to attain a common vision of peace, justice, freedom and dignity for all people. YWCA Australia is committed to indigenous recognition and reconciliation and the active involvement of Aboriginal and Torres Strait Islander women in the organisation. YWCA Australia is a participatory organisation, which seeks to encourage, promote and support its members and beneficiaries in its activities, and particularly seeks to advance the leadership of young women and their involvement in the governance of the organisation. YWCA Australia maintains supportive relationships with YWCA organisations internationally and in Australia pursuant to an Affiliate Deed. The Affiliate Deed outlines the terms by which YWCA Australia will engage with the Affiliates [YWCA Canberra and YWCA Hunter Region] to recognise the role of the Affiliates in the YWCA movement and the engagement between YWCA Australia, World YWCA and the Affiliates. The Affiliates will remain separate legal entities and operate autonomously and will not have any obligation to merge with YWCA Australia. YWCA Australia will work cooperatively with the Affiliates to carry out the Objects [set out in clause 6] and purposes of the Company [being YWCA Australia]. The Affiliates will be responsible for operating within their respective territories to support and promote the YWCA movement. YWCA Australia's membership with World YWCA acknowledges the Affiliates as affiliate associations of YWCA Australia. 6. Object of the Company The Object of YWCA Australia is to provide benevolent relief to people experiencing poverty, homelessness, violence or disadvantage, in particular women and children, and to achieve this relief by activities including, but not limited to: (a) providing services for the safety and empowerment of women, young women and girls, including housing, childcare, counselling, education, training, mentoring, development, support and assistance across urban, regional and remote Australia; (b) providing emergency, social, affordable and community housing and associated support services for the relief of homelessness; (c) promoting gender equality through the social, economic, intellectual and physical empowerment of women, young women and girls; (d) advancing the leadership of women and girls as a step towards improving the wellbeing, participation and empowerment of women, young women and girls; (e) conducting and promoting research and advocacy for the benefit and safety of women, young women and girls; (f) being affiliated with and an active, engaged participant and supporter of the work of World YWCA to harness and develop the leadership and collective power of women and girls throughout Australia to achieve justice, peace, health, human rights, freedom, reconciliation and environmental sustainability for all people; and (g) doing any other activities incidental to the attainment of the Object or otherwise identified by the Board from time to time as being necessary or desirable to facilitate or advance the Object."
Clause 68 of the Constitution puts beyond doubt that payments or distributions may not be made to members and that upon winding up the assets of YWCA Australia must be paid or distributed to a body having similar objects: "68. Winding up On a winding up of the Company, any surplus of the following assets of the Company remaining after the payment of its debts: (a) Gifts; (b) contributions made to the Company in relation to an eligible fundraising event held for the Object; and (c) money received by the Company because of such Gifts or contributions, must not be paid to or distributed among the Members, but must be given or transferred to: (d) one or more bodies corporate, associations or institutions (whether or not a Member or Members) selected by the Members by resolution at or before the dissolution of the Company: (i) having object similar to the Object of the Company; (ii) gifts which are allowable deductions pursuant to the ITAA 1997; and (iii) whose constitution prohibits the distribution of its or their income or property to no lesser extent than that imposed on the Company pursuant to Article 7; or (e) if there are no bodies corporate, associations or institutions which meet the requirements of Article 68(d), to one or more bodies corporate, associations or institutions selected by the Members by resolution at or before dissolution of the Company: (i) the objects of which are the promotion of charity; and (ii) gifts which are allowable deductions pursuant to the ITAA 1997; or (f) if the Members do not make a selection pursuant to Article 68(d) or 68(e) for any reason, to one or more bodies corporate, associations or institutions meeting the requirements of either Article 68(d) or 68(e) selected by the Board, subject to Board obtaining court approval pursuant to the Corporations Act to exercise this power."
The submission advanced by the Commissioner was that the objects of YWCA Australia as expressed in its Constitution are consistent with the predominant component of YWCA Australia's activities (and concomitantly the use of its resources), falling within the fourth class of charity in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 (Pemsel), with the balance of the activities falling variously within the first three classes in Pemsel. As I will explain, I reject the Commissioner's characterisation of the activities of and use of resources by YWCA Australia as falling within the fourth class of charity in Pemsel. I find that the objects of YWCA Australia as expressed in its Constitution fall comfortably within the purposes identified in s 275(3)(a).

[6]

Principles of interpretation

In Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39] the High Court said: "[39] 'This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text' [Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 [47]]. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself."
In SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 Kiefel CJ, Nettle and Gordon JJ at [14] said about ascertaining the meaning of a statutory provision: "[14] The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected." (Footnotes omitted.)
In SZTAL, Gageler J emphasised, at [35], the observation of Mason J in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309; [1985] HCA 48 at 315 that the modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might arise and, at [36], Gageler J emphasised the observations of the plurality in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 at 408. At [37], Gageler J said: "[37] Both of those passages have been 'cited too often to be doubted'. Their import has been reinforced, not superseded or contradicted, by more recent statements emphasising that statutory construction involves attribution of meaning to statutory text. The task of construction begins, as it ends, with the statutory text. But the statutory text from beginning to end is construed in context, and an understanding of context has utility 'if, and only in so far as, it assists in fixing the meaning of the statutory text'." (Footnotes omitted.)

[7]

The relief of poverty

Whilst the Commissioner's submissions criticised YWCA Australia about the meaning of the "relief of poverty" in s 275(3)(a) as travelling outside of the accepted meaning of the term in charity law, the Commissioner's submissions also tended to approbate and reprobate about the meaning of the term in context.
As the High Court has explained on many occasions, concepts such as "charitable purposes" and "charitable institution" are derived, as explained in Pemsel, from the Statute of Charitable Uses 1601, 43 Eliz I, c 4 which gave rise to a technical meaning of these phrases. The "four heads" of charity identified in Pemsel at 583 are as follows: "'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."
Whilst, of course, the question of construction begins and ends with the words of the statute, as the High Court has explained, text in context is also important. I agree with at least one strand of the Commissioner's submission that in context, it is tolerably clear that in defining an "exempt charitable or benevolent body" as being any body corporate, society, institution or other organisation for the time being approved by the Chief Commissioner for the purposes of s 275(3)(a) whose resources are, in accordance with its rules or objects, used wholly or predominantly for "the relief of poverty in Australia", or "the promotion of education in Australia", the legislature was intending to refer to two of the heads of charity described in Pemsel. To the extent that both parties, in different parts of their submissions, suggested the contrary I reject the submission.
As Isaacs J observed in 1910 in Taylor v Taylor (1910) 10 CLR 218; [1910] HCA 4 at 238: "An historical review of the growth of charitable trusts will disclose their ever widening scope. The earliest were religious, these were followed by educative, and gradually they increased until by the time of Elizabeth they were so numerous as to embrace the 21 enumerated in the Statute of that reign, besides others that can be collected from precedents anterior to the Act."
"Poverty" is a relative term. It is not limited to destitution: Re Gillespie [1965] VR 402 at 406. Poverty connotes the notion of "going short". The reference to going short appears to derive from Lord Evershed MR's judgment in Re Coulthurst [1951] Ch 661 at 666 where it was observed that poverty was a term: "of wide and somewhat indefinite import; it may not unfairly be paraphrased for present purposes as meaning persons who have to 'go short' in the ordinary acceptation of that term, due regard being had to their status in life and so forth".
"Poverty" encompasses the circumstances of a person who is unable independently to achieve the status of being self-supporting: Re Central Employment Bureau for Women and Students' Careers Association Incorporated [1942] 1 All ER 232 at 233; Re Clarke [1923] 2 Ch 407 at 411-412. Inferential reasoning about the likely status of people using a service is permissible. In Re Niyazi [1978] 3 All ER 785, Megarry VC reasoned that a trust to establish a working men's hostel in Cyprus was for the relief of poverty as any person who was compelled by circumstance to reside in the hostel was likely to be poor.
Perhaps the high point, from the Commissioner's perspective, of cases giving a limited meaning to "relief of poverty" is the speech by Lord Reid in Inland Revenue Commissioners v Baddeley [1955] AC 572. It may be accepted that in Baddeley, his Lordship decided that "no one could say 'relief of the poor' if he meant to include relief of disabled people irrespective of their means" (emphasis added).
In Re Central Employment Bureau Simonds J in the Chancery Division in 1941 held at 233: "It is clear from the cases which have been cited to me that a gift may be a good charitable gift, as in relief of poverty, although the recipients of the gift are not in destitution, or even on the borderline of destitution. 'Poverty,' it has been said, is a relative term. I think here that the implication of the gift to enable the recipients to become self-supporting is a sufficient indication that they stand on the poverty side of the borderline - that is to say, that they are persons who could not be self-supporting, in whatever enterprise they embarked, without the assistance of this fund."
Walsh J said in Downing v Commissioner of Taxation (Cth) (1971) 125 CLR 185; [1971] HCA 38 at 193, with the agreement of Menzies and Gibbs JJ, that "a person may be in need without being destitute". His Honour continued at 193-194: "The word 'poverty' and similar expressions, as used in the law in relation to charities, refer to persons who, although they may not be in abject poverty, are subject to some degree of financial necessity."
The same point was made in Lemm v Federal Commissioner of Taxation (1942) 66 CLR 399; [1942] HCA 31 at 410-411 by Williams J, with whom the other members of the Court agreed.
Poverty, being a relative term, cannot be measured by any absolute standard. In modern Australia, the bare essentials of life are, for most people who cannot provide for themselves, provided by Government welfare payments. The relief of poverty is not limited solely to people who have fallen through the cracks in the welfare system, although it certainly encompasses those people. Professor Chesterman's text, Charities, Trusts and Social Welfare [1] dealt with this issue in 1979.
The circumstances of Australia's first nations people are relevant here too. In 1985 Nader J in Aboriginal Hostels Ltd v Darwin City Council (1985) 33 NTR 1 held as charitable a company incorporated to run hostels for Aboriginal people. His Honour found that "aboriginal persons in the Northern Territory are, in general, in considerable need of special consideration and assistance". On the evidence in this case, this statement is as correct in 2020 as when it was made.
In Common Equity Housing Ltd v Commissioner of State Revenue (Vic) (1996) 33 ATR 77 Ashley J held at 93 that providing rental accommodation at low cost to people in needy circumstances relieved poverty. This was because the overwhelming proportion of tenants had been and were persons of low income by community standards.
In Community Housing Ltd v Clarence Valley Council (2015) 90 NSWLR 292; [2015] NSWCA 327, the NSW Court of Appeal held that the objects of a company limited by guarantee to acquire or manage land so that "housing may be provided to low income persons" and "households in need" conveys the notion of relief of poverty and the provision of relief to people "subject to some degree of financial necessity".
I have concluded that "the relief of poverty in Australia" in this statutory context includes at least the provision of the necessities of life, both directly and indirectly, but is not so limited. The modern concept of the "relief of poverty in Australia" encompasses assistance given to benefit persons whose lot needs improvement or who are "subject to some degree of financial necessity".
In Ballarat Trustees Executors and Agency Co Ltd v Federal Commissioner of Taxation (1950) 80 CLR 350; [1950] HCA 19 the question was whether persons could be said to be in necessitous circumstances if nothing was known of their financial position other than that, in need of hospital attention, they were unable to pay the requisite fee. At 355, Kitto J held: "The expression 'necessitous circumstances' is not defined by the Act, nor has it been judicially interpreted in its present or a comparable context. It does not admit of definition in terms so precise as to provide a yardstick for the determination of every case which may arise. Yet it is an expression which is familiar in common speech, not as limited to cases of abject penury, but as conveying the notion which the Oxford Dictionary endeavours to express as 'having little or nothing to support oneself by; poor, needy; hard up.' None of these words or phrases can be selected as by itself precisely defining the expression. 'There are degrees of poverty less acute than abject poverty or destitution, but poverty nevertheless': Lemm v Federal Commissioner of Taxation, per Williams J; and 'necessitous circumstances' refers in my opinion to some degree of poverty. 'In such matters one must often be guided to a great degree by one's own experience in the use of terms': Perpetual Trustee Co Ltd v Federal Commissioner of Taxation, per Dixon J. Approaching the matter in that way, I should say that a person is in necessitous circumstances if his [or her] financial resources are insufficient to enable him [or her] to obtain all that is necessary, not only for a bare existence, but for a modest standard of living in the Australian community. Such an attempted explanation of the expression is perhaps hardly less vague than the expression itself; but it serves to bring out what I think is important in this case, namely, that s 8 (5) refers to inability to afford what may fairly be regarded as necessities for persons living in Australia, as distinguished from things which are merely desirable advantages. On this view of the matter, I should not be prepared to apply the expression 'in necessitous circumstances' to that class of persons in Australia who enjoy a modestly comfortable existence and yet are unable to afford hospital treatment at a cost equal to the fees charged at St Andrew's. There is a considerable margin between necessitous circumstances and affluence, and in my opinion within that margin fall many cases of inability to afford as much for hospital treatment as a privately-conducted hospital like St Andrew's has to charge under modern conditions, even though not carried on for profit." (Footnotes omitted.)
It is clear that a person may be within Kitto J's description of "falling short" even if that falling short is only in the sense of being unable to meet the costs of necessary hospital treatment. That is the relief of poverty in Australia. The Commissioner's submission to the contrary that the notion of "going short", so far as it relates to the concept of poverty, is not concerned with crisis relief or relief of distress should be rejected. In this respect, I accept YWCA Australia's submission that poverty is a complex state of affairs linked to various societal issues including drug and alcohol misuse and family violence.
It may be accepted, as the Commissioner submitted by reference to City of Mandurah v Australian Flying Corps and Royal Australian Airforce Association (WA Division) Inc (2016) 50 WAR 466; [2016] WASCA 185 at [61] (in the context of "relief of the aged"), that "relief" connotes a need which requires alleviating, and which those persons could not alleviate, or would have difficulty in alleviating, themselves from their own resources. It is, however, unrealistic and inconsistent with the purpose of s 275 of the Duties Act to treat crisis relief for people subject to some degree of financial necessity who are suffering problems linked to various societal issues including drug and alcohol misuse and family violence as outside the concept of the relief of poverty.
In Downing, Walsh J addressed an argument having at least some important similarities with a critical part of the Commissioner's case here. The relevant clause of the will in question in Downing, after listing a number of obviously charitable purposes including "for the relief of persons in necessitous circumstances", provided "or for the amelioration of the condition of the dependants" of members or ex-members of the navy or air force. The submission rejected by the High Court at 193 bears some similarity to that advanced by the Commissioner here: "It was argued that the word 'amelioration' does not convey necessarily the notion of providing relief from poverty nor does the word 'dependants' point necessarily to persons who are impoverished."
Walsh J rejected the submission (at 194): "When the clause refers to the amelioration of the condition of dependants, I think it is right to regard those words, in their context as part of the whole trust which, in my opinion, has a character which is predominantly charitable, as indicating that the object of the amelioration clause is to benefit persons whose lot needs improvement."
The phrase here engaged, "relief of poverty in Australia" must, in context, have regard to contemporary conceptions of poverty in Australia. I make the following findings about contemporary conceptions of poverty in Australia based on the unchallenged evidence of the president and chair of YWCA Australia, Ms Helen Maree Schell. Ms Schell explained the complex and inter-related causes of poverty in modern Australia. As I have said, I accept her evidence about the sophisticated and coordinated responses from government and charitable organisations necessary to address the myriad of issues that cause disadvantaged people, families and communities to enter into and remain in poverty.
I find no difficulty in concluding that a program focused on providing housing solutions for people who are facing a real risk of homelessness is a program to "benefit persons whose lot needs improvement" and is thus one "for the relief of poverty". The Mission Australia report, explained in context by Ms Schell, emphasised that the population at risk of homelessness includes people suffering a range of problems including domestic and family violence, elder abuse and deteriorating physical and mental health disabilities. Ms Schell gave evidence, which I accept, that addressing these endemic social and economic problems amongst people from disadvantaged backgrounds and regions of Australia is the objective of YWCA Australia's programs.
Ms Schell also drew attention to the ACOSS Poverty Report 2020. The Commissioner in final address sought to use the ACOSS Poverty Report in support of a submission that as, for example, women and girls as a group comprised 53% of all people in poverty, it somehow followed that YWCA Australia's programs aimed at addressing the urgent needs of women and children fleeing family violence were somehow not "for the relief of poverty".
I find that programs providing relief by YWCA Australia to women fleeing family violence who, at least temporarily, have nothing, having fled from their abusive partner, is "for the relief of poverty". Temporary financial relief given to women and children fleeing family violence is the relief of "poverty" as that term is properly understood in the cases I have cited above. The temporary financial assistance provided is to meet their immediate needs, which would otherwise not be met. The recipients of aid are "subject to some degree of financial necessity". I infer that if users of YWCA Australia's services had any realistic choice, they would not choose to leave their homes with nothing and live in crisis accommodation. If they were truly not "persons whose lot needs improvement" they would surely decide to reside elsewhere.
I do not think that attempts by the Commissioner to adopt the "poverty line" defined by the Organisation for Economic Cooperation and Development referred to by ACOSS provides any firm or reliable guide for me to determine whether YWCA Australia's programs were for the relief of poverty. The evidence before me described real and systemic poverty among some groups of Australian women. Women made up 60% of people who presented at specialist homelessness services in 2015. A large group of women not represented in that statistic were forced to stay with friends, live in cars and in some extreme cases sleep in public toilets. The Mission Australia Report also noted particular problems for some older women maintaining stable housing.
The evidence before me identified housing challenges and structural barriers for women living in regional Australia. The evidence before me is that women living in regional Australia are much more likely than men to experience economic insecurity because of a relationship breakdown, separation and divorce, and are more likely to reach retirement with a much lower superannuation balance than men. The YWCA Housing Report found that a staggering percentage of women, one in eight living in regional Australia on a low or moderate income, had been homeless in the past five years.
I will address each of YWCA Australia's programs below by reference to these findings about the meaning, in context, of "for the relief of poverty in Australia".
Before leaving this topic, and in deference to the parties who spent considerable time on them, I will explain why I approach the Canadian cases relied upon by both parties with care. This is for two principal reasons.
First, as Kirby J, in dissent (but not on this point), explained in the High Court in Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204; [2008] HCA 55 at [107] the Canadian approach to tax exemption for charities is one of "strict construction". As the cases I have cited above demonstrate, no such principle applies in Australia. Secondly, having regard to the clear principles permitting the attribution of meaning to the phrase "the relief of poverty in Australia" explained by Australian courts which bind me, I respectfully doubt that the Canadian cases add anything to the consideration of the question I am faced with.
To the extent that the most important of the Canadian cases referred to, Family Service Association of Metropolitan Toronto v Ontario Regional Assessment Commissioner, Region No 9 [1995] 23 OR (3d) 382; and Re Canadian Centre for Torture Victims (Toronto) Inc v Regional Assessment Commissioner, Region No 9 [1998] 36 OR (3d) 743, provide any assistance, they are broadly in line with the law about the relief of poverty in Australia.

[8]

Promotion of education

The charitable concept of education historically focused on "the improvement of a useful branch of human knowledge" (Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] Ch 73 at 102). This is not a static concept. It extends to general education and all branches of human knowledge: Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645 at 675; [1955] HCA 71; Inland Revenue Commissioners v McMullen [1981] AC 1 at 18.
Promotion of education is a very broad concept. In Lloyd the High Court described at 675 education in charity law as "wider than any category of subjects which might be thought to comprise general education as distinguished from education in specialized subjects concerned primarily with particular occupations".
In Kostka v The Ukranian Council of NSW Inc [2013] NSWSC 222, Young AJ upheld as charitable a trust in favour of women of Ukrainian ethnicity to assist those women and "spread that culture to further the community purposes of a group of Australians of a certain ethnic origin".
Numerous authorities have indicated that education is not limited to formal education of an academic or technical kind. Education extends to information or training provided in a structured manner for a genuinely educational purpose, that is, to advance the knowledge or abilities of the recipients. In Greater Wollongong City Council v Federation of New South Wales Police Citizens Boys Clubs (1957) 2 LGRA 54 at 63, Brereton J held that the respondent federation, directed as it was to the provision of healthy recreation for boys and their instruction in good citizenship was charitable under the education head.
Perhaps ironically, whilst the Commissioner accepted that the meaning of "promotion of education" was reasonably broad, he called in aid a Canadian case which it was submitted had held that counselling services related to pregnancy testing, prenatal and postnatal care, were not the "promotion of education": Alliance for Life v Minister of National Revenue [1999] 3 FC 504. I have already explained that I approach these Canadian cases with care. In any event the part of this case to which the Commissioner referred is actually authority only for the presently irrelevant proposition that a telephone service that offered information that, it was alleged, focused on the provision of anti-abortion information was not: "[52] … by itself … involving clearly proven allegations of non-charitable activities but, rather, falling within paragraph 2 of the appellant's stated objects as promoting public health and charitable under the fourth head of Pemsel …"
On the basis of the authorities, I have concluded that structured programs that involve imparting skills to women and girls to enable them to become better functioning members of society fall into the category of "promotion of education in Australia".

[10]

Statutory text

The "use" of resources draws attention to how resources are expended. Ward CJ in Eq observed in Salvation Army (at [146] and [149]) that the requirement that resources be used predominantly for the specified purposes was satisfied in that case because "approximately 75% of the financial and personnel resources of [the relevant organisations] combined [were] expended on social work programs with the object of relieving poverty". I reject the Commissioner's submission that her Honour was thereby limiting the circumstances whereby resources of an organisation were used predominantly for the specified purposes as limited to 75% of the total resources of that entity.
I agree with her Honour that the concept of "resources" encompasses financial resources and share her Honour's doubts (at [150]) about the proposition that the concept of "resources" in context encompasses the personnel of the institution or organisation as well.
Ryde Municipal Council v Macquarie University (1978) 139 CLR 633; [1978] HCA 58 at 643 is authority for the proposition that if the use which the charity makes of the land is wholly ancillary to or directly facilitates the carrying on of its charitable objects, that is sufficient to satisfy the requirements that premises are used for charitable purposes. As I will shortly explain, the Song Hotels are being used for a purpose which directly facilitates the charitable objects of YWCA Australia. YWCA Australia operates the Song Hotels for the purpose of raising funds to pursue its charitable objects. YWCA Australia's use of the land for these hotels is directly facilitating its carrying on of its charitable objects and is within the principles that these cases accept as being a relevant use of the land.
Word Investments was a case about whether Word Investments Ltd could be endorsed as exempt from income tax on the basis that it was within one of the categories in s 50-52 of the Income Tax Assessment Act 1997 (Cth). To determine whether a body is within a category entitling it to endorsement, the Court examined not just the objects but also the activities of the body. Having done that, the Court concluded at [26] that the focus is on how the objects are being pursued: "[26] The inquiry, so far as it is directed to activities, must centre on whether it can be said that the activities are carried on in furtherance of a charitable purpose."
In Word Investments it was accepted that conducting activities of that nature for the purpose of funding charitable activities is to be seen as a charitable purpose, that is the purpose of a charitable nature to which those revenues and profits are to be directed.
I will return to Word Investments below but note that the Commissioner submitted that the case was wholly distinguishable here. I disagree. Taking into account what at the very least is carefully reasoned dicta from the High Court of Australia is not to fall into the error of reading the words to be defined in the phrase "charitable or benevolent body" as relevant to the process of construction: The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404; [1994] HCA 54. In the present case, the defined term commences by identifying "any body corporate, society, institution or other organisation" which predominantly uses its resources in accordance with its constitution for the identified purposes. The Commissioner's submission that Word Investments is irrelevant because it addresses only the question of whether a body is within a category entitling it to endorsement as a charity should be rejected. Word Investments is of assistance in addressing the question of construction posed here.
The correct approach in the present context is to understand the phrase "wholly or predominantly" as importing an evaluative standard. This is a question of characterisation; does YWCA Australia conduct its activities, as shown by the way it uses (i.e. expends) its resources, wholly or predominately for the exempt purposes?
The Commissioner submitted that the phrase "wholly or predominantly" is a single composite phrase conveying a single concept. "Wholly or predominantly" in s 275(3)(a) was submitted to mean that the relevant body must wholly use its resources for the specified purpose(s), which nevertheless apprehends some incidental or ancillary (otherwise) non-qualifying purpose or use of its resources. The Commissioner, however, accepted that this identical submission was rejected by Ward CJ in Eq in Salvation Army. The Commissioner in writing expressly disclaimed any submission that this Court should not follow Ward CJ in Eq in this respect: "[107] It is acknowledged that this approach was rejected by the Chief Judge in Equity in Salvation Army and it is not submitted that in these proceedings, the Court should not follow the Chief Judge."
In any event, I agree with Ward CJ in Eq that for resources to be used "predominately" for specified purposes the purpose must be "the most dominant of the purposes of the institution or organisation": Salvation Army at [148]. Ward CJ in Eq in Salvation Army rejected the Commissioner's argument in that case that a use or purpose will only be predominant if no other use or purpose is more than incidental at [90] and [147]-[148]. I do so here.
This conclusion is consistent with the approach taken in analogous contexts: 1. in Cronulla Sutherland Leagues Club Ltd v Commissioner of Taxation (Cth) (1990) 23 FCR 82 Lockhart J at 95 and Foster J at 123 held that a club would fall within s 23(g)(iii) of the Income Tax Assessment Act 1936 (Cth) if its main or predominant purpose was the promotion of sport and the mere fact that it had an independent secondary purpose would not be fatal; and 2. in Word Investments at [17] it was held "… it is necessary to see whether its main or predominant or dominant objects, as distinct from its concomitant or incidental or ancillary objects, are charitable".
In seeking to identify the extent to which YWCA Australia has, in the course of pursuing its charitable objects, used its "resources" for exempt purposes rather than non-exempt purposes, the focus is on YWCA Australia's financial resources.
In relation to the assets held by YWCA Australia's community housing subsidiaries, the Commissioner's contention was that membership of the subsidiaries did not confer a proprietary interest in their property, referring to Dovade Pty Ltd v Westpac Banking Group (1999) 46 NSWLR 168; [1999] NSWCA 113 at [78]. Accordingly, it was submitted that YWCA Australia's relevant "resources" do not include the assets of its subsidiary entities. The argument was advanced by reference to decisions of the Full Federal Court in Federal Commissioner of Taxation v Tasman Group Services Pty Ltd (2009) 180 FCR 128; [2009] FCAFC 148 at [55] and Federal Commissioner of Taxation v Co-operative Bulk Handling Ltd (2010) 189 FCR 322; [2010] FCAFC 155 at [58], [78] and [84] and the subsequent judgment of Black J in Grain Growers Ltd v Chief Commissioner of State Revenue [2015] NSWSC 925 at [74]. Co-operative Bulk Handling was concerned with whether the taxpayer was exempt from income tax by reason that it was an "association established for the purpose of promoting the development of [specified] resources" under s 50-40 item 8.2 of the Income Tax Assessment Act 1997 (Cth): see [5]-[6]. The taxpayer had subsidiaries that carried on commercial operations. Mansfield and McKerracher JJ observed that it was unhelpful to consider the contribution of the subsidiaries because "the Act is considering the purpose of [the taxpayer] not that of other companies of which it is a shareholder": at [78]. The relevant test was concerned with the purpose of establishment of the taxpayer rather than how it used its "resources".
Grain Growers was concerned with the purpose of the organisation rather than how it used its resources. In that case (at [11]), the issue was whether the taxpayer was "a non-profit organisation having as its sole or dominant purpose a charitable … purpose (but not including a school, an educational institution, an educational company or an instrumentality of the State)" as per the Payroll Tax Act 2007 (NSW), s48(1)(c). Black J's observation in that context at [74] that the commercial activities of subsidiary entities could not affect the conclusion as to the relevant purpose of the taxpayer was, with respect, entirely correct. It is however not to the point in the present context.
Whilst I do not regard the authorities referred to by the Commissioner as mandating the answer to the question of identification of YWCA Australia's resources for the purposes of the application of s 275(3)(a), I have nevertheless concluded that the assets of YWCA Housing and YWCA National Housing were not resources used by YWCA Australia. As I will explain, the answer to this question does not affect the outcome of the case in any event.

[11]

Statutory context

The legislative history of s 275 of the Duties Act demonstrates that the purpose of the "predominately" requirement was to ensure that bona fide charitable organisations would be entitled to claim exemption from duty where their activities were wholly or predominantly for the exempt purposes, which is to be evaluated by reference to how the organisation's "resources" are used. The selection of the appropriate methodology in a given case will be determined by the nature of the activities of the charitable entity.
The original antecedent to s 275 was item (24) inserted into the Second Schedule of the Stamp Duties Act 1920 (NSW) by the Stamp Duties (Further Amendment) Act 1980 (NSW) at the time that 1920 Act was amended to abolish the Sixth Schedule which had previously applied to impose a higher rate of ad valorem duty to conveyances of property by way of gift than the usual ad valorem rate under the Second Schedule (where the conveyance was not by way of gift). Under s 66(3), there was an exemption from duty under the Sixth Schedule for "gifts to a public hospital or for the relief of poverty or the promotion of education in New South Wales". The removal of the Sixth Schedule meant that a conveyance of property by way of gift would be liable to duty at the Second Schedule rates and so a new exemption was needed, which took the form of item (24) of the exemptions at the end of the Second Schedule. The terms of item (24) and the relevant passage from the extrinsic materials is found in Salvation Army at [123]-[124].
The form of item (24) follows closely the terms of the exemptions applicable to three other heads of charge in the Second Schedule of the 1920 Act which had been introduced in 1966 by Stamp Duties (Amendment) Act 1966 (NSW). These heads of charge were: 1. bills of exchange, promissory notes and cheques; 2. policies of insurance; and 3. receipts.
Each exemption was enacted in a form similar to what became item (24) and later s 275(3)(a), that is, an exemption was conferred on (inter alia) an approved society or institution "whose resources are in accordance with its rules or objects used wholly or predominantly for" specified purposes including the relief of poverty and promotion of education: see Stamp Duties (Amendment) Act 1966 (NSW), subss 5(b), (c) and (d).
In the Second Reading Speech of the amending Bill in the NSW Legislative Assembly on 6 December 1966, the Premier and Treasurer, the Hon Mr Askin, stated that: "… Broadly, the proposals relate to increases in certain rates of duties, the closing of loopholes … and finally, the granting of several important concessions, including several aimed at simplifying procedures for the payment of duty." [2]
The Premier and Treasurer then continued from 3211-3212 as follows: "Special provisions are also to be made with respect to the payment of duty of charitable and similar organizations on the more common instruments, namely, receipts, insurance policies, and cheques. At present a number of specific exemptions are included in the Stamp Duties Act which provide exemptions for particular instruments such as cheques, receipts, and insurance policies where the party liable for duty is a charitable, educational, or similar body. From time to time various Treasurers have approved of specific organizations or bodies which did not fall within the existing definitions or the legal interpretation of those definitions being deemed to qualify for the exemptions. The position is also complicated by the fact that the Stamp Duties Act at present provides an exemption in respect of all savings bank cheque accounts. In addition, approval was given by the previous Government for cheques drawn by non-profit organizations to be exempt, irrespective of whether such cheques were drawn on savings or trading banks. The expression non-profit organization has no precise legal meaning and over a period of time the exemption on cheques has become far reaching. Investigations carried out by the Stamp Duties Office during the normal inspections under the Stamp Duties Act have revealed that a number of organizations whose cheques have been exempted from duty consider that the same exemption applies to receipts and other instruments. In view of the confusion which has emerged, an amendment to the Act to clarify the position is considered to be essential. It is therefore proposed to include appropriate provisions in respect of the charge on cheques, receipts, and insurance policies so that exemption is granted to any institution or body which is registered as a charity under the Charitable Collections Act or which, in the opinion of the commissioner, warrants exemption being granted because of its charitable nature. The purpose of this latter provision is to ensure that those organizations which are of a charitable nature receive the exemption even though they may not have applied for registration under the Charitable Collections Act. I have in mind various charitable trust which have been set up under a will or settlement and have not sought or are unable to seek registration as a charity under the Charitable Collections Act. I feel that it is essential to make clear that some organizations which at present enjoy an exemption from stamp duty on cheques merely because they are non-profit making in the commercial sense will not be eligible for the exemption under the proposed provisions. I should stress that these organizations have never been granted the exemption in respect of receipts or insurance policies, although banks have conceded the exemption in respect of cheques. The objective of the legislation is to ensure that bona fide charitable organizations are granted the exemption in respect of the three main forms of instruments with which they are associated, and at the same time to remove any doubt as to the eligibility of other organizations for any exemption from stamp duty whatsoever. The deciding factor will be the extent to which an organization's activities may be deemed to be charitable."
These passages indicate that the amendments were intended to achieve three objectives. First, to clarify that organisations do not qualify for the exemption simply because they are non-profit making. Second, to ensure that bona fide charitable organisations are granted exemption from duty on the three main forms of instruments then subject to duty. Third, to remove doubt as to eligibility for the exemption by making the deciding factor in the statutory inquiry "the extent to which an organisation's activities may be deemed to be charitable".
This context supports the conclusions about the construction of s 275(3)(a) based on the text of the provisions that I have identified above.

[13]

The profit-for-purpose hotel businesses

As, in a sense, the profit-for-purpose hotel businesses are at the centre of the dispute between the parties I will commence by making findings of fact relevant to those businesses. It will be necessary when describing how it was that the parties approached the question of proof of the statutory exemption to explain the role of the profit-for-purpose hotel business, comprising the Song Hotels in Wentworth Avenue and Redfern in Sydney.
The evidence is clear that the Song Hotels were used in the past by YWCA NSW to generate revenue for it to give effect to its principal objects. Since 18 March 2018, the date of the scheme of arrangement, I am satisfied that YWCA Australia has used the Song Hotels to generate revenue in furtherance of its objects, being the relief of poverty and the promotion of education. I am satisfied that the Song Hotel businesses are conducted for the sole purpose of earning profit to be spent in pursuit of YWCA Australia's purposes. As I will make clear in what follows, I find that YWCA Australia's purposes are the relief of poverty and the promotion of education. I am satisfied that YWCA has "used" the resources comprised by the Song Hotel businesses for the relief of poverty and the promotion of education. On a broad evaluative approach to the issue raised by s 275(3)(a) that conclusion is sufficient for YWCA Australia to succeed.
The Commissioner's principal submission in this area of the case was that the "use" of resources referred to in s 275 must be the direct and immediate use of resources for the purpose of the relief of poverty and/or the promotion of education. Thus, the Commissioner submitted that what was said in Word Investments in the High Court provides no assistance to me here.
I reject the Commissioner's submission. The relevant question is: what was the purpose for which the Song Hotels were "used" by YWCA Australia? The requirement of direct immediacy is an unwarranted gloss on the statute. In Word Investments an entity was set up to generate income for making gifts to charitable bodies. The question was whether the fundraising entity, a separate company, could be said to be itself a charitable body. The plurality said: "[26] … So far as the actual activities of Word in furtherance of its purposes are relevant, it is plain that, subject to the Commissioner's contentions in relation to the second and third issues, the funds paid out by Word were paid to bodies fulfilling charitable purposes. The activities of Word in raising funds by commercial means are not intrinsically charitable, but they are charitable in character because they were carried out in furtherance of a charitable purpose." (Footnote omitted.)
I accept YWCA Australia's submission that in Word Investments the plurality effectively looked through the intermediate step or purpose, which was to raise money, to the ultimate object or purpose of the activity, which was to raise money to use for charitable purposes. Although the statutory context is different, the approach of four judges of the High Court on a closely analogous question is, at the very least, highly persuasive. No good reason was advanced by the Commissioner for me to depart from that view.
As I will explain in addressing the expert evidence, the Song Hotel businesses here, as in Word Investments, are not inconsistent with the predominant use of YWCA Australia's resources in pursuit of its objects.
In conducting an analysis of YWCA Australia's expenditures to assess whether the resources of YWCA Australia are used solely or predominantly for the relief of poverty or the promotion of education, it does not make any sense to assume the expenditure on the hotel businesses to be a non-exempt purpose in the examination of YWCA Australia's spending on its programs to try and ascertain those charitable purposes. The attempt by the Commissioner to do so led to an unhelpful circularity. A tool to determine the relevant question was thereby sought to be converted into an a priori conclusion.
A subsidiary submission made by the Commissioner was that I could not be satisfied that the funds generated by the Song Hotel businesses were "used" by YWCA Australia for any particular YWCA program and thus I could not be satisfied that the funds generated by these businesses were used for the relief of poverty and/or the promotion of education. As I will explain, the programs conducted by YWCA Australia were, other than in immaterial respects, all conducted for the relief of poverty and/or the promotion of education. I am comfortably satisfied that the funds generated by the Song Hotel businesses were and are "used" by YWCA Australia for the relief of poverty and/or the promotion of education.
As I will explain in dealing with the expert evidence, even if expenditure on the Song Hotel businesses is assumed to be for a non-exempt purpose, YWCA Australia would still be entitled to succeed in having the Commissioner's assessments set aside.

[42]

Domestic Violence Intervention Services

YWCA Australia provides Domestic Violence Intervention Services on behalf of the State of New South Wales acting through the Department of Family and Community Services. This is a crisis support service. YWCA provides support and information services co-located at Nowra police station for victims of family violence. Victims are provided services by specialist family violence caseworkers to support them through the initial crisis or event and to provide specific funding to support the client's needs in the crisis, such as securing emergency accommodation, basic needs and travel to their community of origin. This relief is provided to women and children fleeing family violence who, at least temporarily, have nothing, having fled from their abusive partner. Temporary financial relief given to women and children fleeing family violence is plainly the relief of "poverty" as that term is properly understood in the cases I have cited above. The temporary financial assistance provided is to meet their immediate needs, which would otherwise not be met. All women and children who are experiencing domestic and family violence in the Shoalhaven area are eligible to access the program. In the program, 56 people identified as Aboriginal and Torres Strait Islander, 30 people as culturally and linguistically diverse, and 30 as living with disability.
The Commissioner's principal submission was that the eligibility criteria do not relate to "poverty"; rather eligibility is determined by whether the person has experienced domestic violence. I reject the submission. Counselling, accommodation and money for emergency expenditures provided to women and children who have fled their homes, often terrified and at night, to escape violence is plainly "for the relief of poverty". Any person not truly in need would not flee their home and seek shelter and temporary accommodation at the Nowra police station. No doubt for this reason the NSW Department of Family and Community Services funds YWCA Australia to provide that service to women and children who arrive at Nowra police station in need. This program is for the relief of poverty.

[48]

Medical Accommodation Program

The Medical Accommodation Program consists of accommodation at Barbara James House and Dr Helen Philips Cottages in Darwin. The program provides accommodation to people and their carers who need to travel from remote and regional areas in the Northern Territory to access medical facilities at Royal Darwin Hospital.
Barbara James House provides accommodation for guests accessing cancer-related treatment from remote and rural areas. The facility provides guests three meals per day and is staffed 24/7. Dr Helen Philips Cottages offer guests from remote and regional areas a "home away from home" in one of six three-bedroom houses located within close proximity of the Royal Darwin Hospital. The properties cater to people and approved carers accessing medical or dental treatment.
This program provides accommodation for people who come from remote and regional areas of the Northern Territory to Darwin to attend oncology and other urgent medical appointments. This program is restricted to people who are unable to afford to stay in private accommodation and who would otherwise not be able to get treatment because it is not available in their home community and they have nowhere to stay in Darwin. In addition to accommodation, there are workers who provide referrals, information and support services 24/7.
The Commissioner submitted that the resources used in this program are used to provide accommodation to people who require medical treatment at the Royal Darwin Hospital who need to travel to Darwin from remote and regional areas, as well as the families and carers of those people. The Commissioner submitted that the eligibility criteria makes it clear that it has no criterion which relates to poverty. I reject the Commissioner's submission. The program is limited to people in need of urgent medical care for life threatening conditions which cannot be obtained in their home communities. Their lack of financial means has the effect that they would be unable to access the treatment as they have nowhere else to stay in Darwin. I find that that this program is clearly for the relief of poverty.

[68]

Women of Worth Program

This program aims to empower women involved in the justice system to implement positive lifestyle changes, re-engage with community and reduce reoffending. The Women of Worth team works alongside women and assists with reintegration into the community. This includes pre-release and up to 12 months post-release support, support to develop skills and capacity to gain employment on exiting prison, social and emotional wellbeing and education programs, monthly outreach groups, reconnection with children, family and community, crisis accommodation and long-term housing support, advocacy, domestic violence support and education, training and employment pathways. Ms Wright explained that Women of Worth is a 6-month pre-release, 12-month post-release program of which 83 to 85% of participants are Aboriginal women. As it is a prison program, all participants have been incarcerated. The program also assists the women to get back to community and could include three or four months in Darwin and then working with the women to integrate them back into their communities. The program includes group education around financial management and family and domestic violence. It also includes discussion about reconnection with children. The program also includes an Alcohol Action outreach program consisting of a three-day workshop delivered in five remote communities per year and a mentoring program.
I find that this is educational in the modern concept of that term. I reject the Commissioner's submission that, while the evidence indicates the program aims to educate participants with knowledge and training to gain employment after being incarcerated, it is primarily directed towards assisting women who have been incarcerated to re-engage with community. This includes domestic violence support, advocacy and social well-being and outreach programs. I also reject the Commissioner's submission that the descriptions of "social skills" and "personal development skills" are ambiguous and cannot be concluded to fall within education. This is a program which works with women who have been incarcerated, largely comprised of Aboriginal women, on post-incarceration accommodation, housing support, education, training and employment pathways. It is plainly for the promotion of education and also the relief of poverty.

[73]

Expert evidence

As I noted at the outset, expert accounting evidence was before me. I commend Ms Davitt and Mr Samuel for the co-operative approach each took to the joint expert conclave and report and to the helpful way each gave evidence before me.
The differences between the experts, and they were few, related to different assumptions each was asked to make, in turn based on the different assumed facts and different assumptions about legal issues.
For the assistance of the Court, two ways in which an accountant could measure the "use of resources" by YWCA Australia were identified. The first was the use of assets by YWCA Australia. Mr Samuel's view was that the preferable approach to measuring the use of YWCA Australia's "resources" was to undertake an asset‐based analysis. Ms Davitt agreed. The experts also agreed, however, that there was insufficient material available to conduct such an exercise in this case. About the asset- based approach it was agreed in the joint report that: "2.25 The Experts agree that: a) an asset-based analysis would be an appropriate method of considering 'how an entity's (economic) resources are used' (where economic resources are defined as 'a right that has the potential to create future economic benefits'); b) not all economic resources will be 'used' each period and therefore that an alternative calculation which considered program expenses as a percentage of total assets would likely 'understate the 'use' [TS1 92b]. Depreciation could therefore be a proxy for this for buildings and PPE [TS1 90b]; c) the Experts do not have sufficient information to be able to undertake such an analysis …" (Emphasis in original.)
The second way in which the use of resources by YWCA Australia could be measured was identified by the experts as being to calculate the total expenditures of YWCA Australia in the year in which the exemption was sought and to identify as a percentage the proportion of those total expenditures each separate expenditure comprised. Subject to essentially immaterial qualifications, the experts agreed about those calculations. Whilst there was some limited dispute about the way in which head office or administrative expenditures should properly be attributed to each of the other expenditures (such as individual programs), there was no real dispute about the principles to be applied. The differences in approach led to immaterial differences in the result of the overall calculations, which were essentially agreed. Mr Samuel and Ms Davitt agreed that whilst further information would be desirable, based on the available information, Mr Samuel did not disagree with Ms Davitt's approach to allocating overheads. Mr Samuel's qualification was that he had not seen the material underlying the spreadsheets produced in evidence by YWCA Australia which Ms Davitt relied upon. The construction of those spreadsheets was explained in evidence before me by Ms Bhala and Ms Philips. Those explanations were not challenged by the Commissioner and I accept them.
I find that the underlying data provided to Ms Davitt from which she constructed her models of the total expenditures of YWCA Australia in the year in which the exemption was sought was sufficiently reliable for me to draw firm conclusions about the "use" of YWCA Australia's resources. I reject the Commissioner's submission that YWCA Australia had not discharged its onus of proof about the use of its resources. In particular, I reject the Commissioner's submission that the method of approximation of expenditure of YWCA Australia's resources to various programs and other activities undertaken by Ms Davitt was too limited and constrained to be of genuine assistance to the Court in respect of the statutory task.
The Commissioner's criticism that the exercise Ms Davitt undertook was not based on a relevant accounting standard is misplaced. The experts agreed that the exercise Ms Davitt conducted was a legitimate one to address the question of the use of YWCA Australia's resources. The experts agreed that such an exercise could be undertaken if the YWCA Australia board wanted to see management accounts addressing this issue.
There was also limited disagreement about the correct treatment of certain depreciation: "2.19 Mr Samuel and Ms Davitt are unable to determine from the YWCA Spreadsheet or the Programs Spreadsheet whether the (positive and/or negative) depreciation recorded in the Overhead Cost Centres or Regional Hubs relate to Programs. Ms Davitt's calculations in SD2 under Scenarios A4, A5, A6, B4, B5 and B6 include only depreciation allocated to Programs or NDIS. Mr Samuel and Ms Davitt agree that if the (positive and/or negative) depreciation recorded in the Overhead Cost Centres and Regional Hubs: a) relate to Programs, such expenditure should be allocated to Programs; and b) do not relate to Programs, such expenditure should not be allocated to Programs. 2.20 If Ms Davitt were to allocate those depreciation amounts to Programs on the same basis as set out in her Appendix D (Steps B2 and B3), and Appendix E of SD2, the effect on her Total Program Expenditure would be as follows, on two alternative bases: a) Excluding the National negative depreciation amount: $22.1 million, an increase of 0.4% to 66.1% in her Scenario B1; and b) Including the National negative depreciation amount: $21.7 million, a decrease of 0.8% to 64.9% in her Scenario B1."
Mr Samuel agreed with those calculations. The outcome of that debate is essentially immaterial to the questions I need to decide. I will adopt the relevant valuation which takes into account depreciation and interest as more fairly reflecting an analysis of the use of YWCA Australia's resources.
In her report of 20 March 2020, Ms Davitt summarised the outcomes of her expenditure tables. Ms Davitt included revised tables in her second report, dated 28 August 2020, summarising the various scenarios: Scenario Total Expenditure ($m) Program Expenditure ($m) Proportion (%) Excluding depreciation and interest expense A1 Group expenditure 36.0 25.5 70.8% A2 Group expenditure excluding Hotels/NDIS 25.2 23.2 92.2% A3 Group expenditure excluding Hotels 27.4 25.5 92.8% B1 YWCA expenditure 32.2 21.7 67.4% B2 YWCA expenditure excluding Hotels/NDIS 21.4 19.5 90.8% B3 YWCA expenditure excluding Hotels 23.7 21.7 91.7% Including depreciation and interest expense A4 Group expenditure 37.5 26.0 69.5% A5 Group expenditure excluding Hotels/NDIS 25.7 23.8 92.4% A6 Group expenditure excluding Hotels 28.0 26.0 93.1% B4 YWCA expenditure 33.4 21.9 65.7% B5 YWCA expenditure excluding Hotels/NDIS 21.6 19.7 91.0% B6 YWCA expenditure excluding Hotels 23.9 21.9 91.9%

[74]

The different scenarios accorded with Ms Davitt's instructions to "[c]alculate the amount of total expenditure of YWCA in FY2019 on the alternate bases that the total expenditure" was as follows, and when doing so, to include the amount of expenditure on each of the programs in the 2019 financial year as a percentage. The scenarios were calculated on the basis that total expenditure: 1. includes the expenditure of YWCA Housing and YWCA National Housing (scenario A1 - group expenditure); 2. is group expenditure excluding expenditure on the Song Hotels business and the NDIS (scenario A2 - group expenditure excluding hotels/NDIS); 3. is group expenditure excluding expenditure on the Song Hotels business only (scenario A3 - group expenditure excluding hotels); 4. is group expenditure excluding expenditure of YWCA Housing and YWCA National Housing (scenario B1 - YWCA expenditure); 5. is YWCA expenditure excluding expenditure on the Song Hotels Business and the National Disability Insurance Scheme (scenario B2 - YWCA expenditure excluding Hotels/NDIS); and 6. is YWCA expenditure excluding expenditure on the Song Hotels Businesses only (scenario B3 - YWCA expenditure excluding hotels).
Ms Davitt prepared calculations on two assumptions. In the first, depreciation and interest expenses were excluded. Scenarios A4 to A6 replicated the above calculations in A3 to A4 and B4 to B6 replicated the above calculations in B1 to B3 but included depreciation and interest. As I have said, I propose to take into account depreciation and interest as the experts agreed that this was appropriate in conducting this exercise.
I propose to adopt the approach to expenditure most favourable to the Commissioner and focus on YWCA Australia expenditure and not group expenditure. I do not suggest that it is necessarily inappropriate to test the use of financial resources of a body by reference to consolidated expenditures but in the present case a more focused assessment of the expenditure of YWCA Australia is best conducted by reference to YWCA expenditure rather than consolidated expenditure. Accordingly, it is scenarios B4 to B6 which are most useful.
In selecting which of scenarios B4 to B6 best assists in answering the question of whether YWCA has used its resources predominantly for an exempt purpose, it is important to remember that the accounting evidence provides a tool to answer the statutory question but is not an end in itself. Having said that, I find that on the basis of the accounting evidence, which was essentially agreed, however the percentage of relevant expenditure is calculated, YWCA Australia's resources were predominantly used for the relief of poverty and/or the promotion of education.
It would in my view be a distortion of an exercise seeking to identify what the use of YWCA Australia's resources was "for" to embark on a comparison of expenditures either "exempt" or "not exempt" on the assumption that expenditure by YWCA Australia on the Song Hotels was not "for" an exempt purpose. That would be contrary to my finding and consistent with the submission I have rejected that expenditure of financial resources must be "direct" and "immediate" for it to be "for" an exempt purpose. To so proceed would elevate a tool to assist to identify the "use" of financial resources of YWCA Australia, the expenditure analysis, into a means of applying the Commissioner's construction of resources, which I have rejected.
My findings about the expert evidence may be summarised as follows: 1. I accept the reliability of the underlying data produced in evidence by YWCA Australia; 2. I accept the joint expert evidence that an asset-based analysis cannot be conducted here; 3. I accept the joint expert evidence that an expenditure-based analysis can be conducted here; and 4. I accept that the expenditure-based analysis conducted by Ms Davitt (with which Mr Samuel essentially agreed) is sufficiently reliable to draw conclusions about whether YWCA Australia's resources were used wholly or predominantly for the relief of poverty or the promotion of education.
I reject the Commissioner's submission that YWCA expenditure on the Song Hotels should be taken into account when attempting by use of this methodology to determine the use of YWCA Australia's resources in a particular year. Given my findings about the use by YWCA Australia of the Song Hotels, the expenditure on the Song Hotels should not be assumed to be addressed to non-exempt purposes. The way in which the experts addressed this question is to leave out of the calculation expenditure on the Song Hotels. The expenditure on the NDIS program that YWCA Australia participates in should be included. Accordingly, the most appropriate scenario is B6.
Applying my findings about each of the programs conducted by YWCA Australia at [110]-[204] above, over 90% of the relevant financial expenditures of YWCA Australia were for the relief of poverty and/or the promotion of education. I find that YWCA Australia used and continues to use its financial resources predominantly for the relief of poverty and/or the promotion of education.
I find that the appropriate scenario to use a tool in the way explained by the expert evidence is scenario B6. Adjusting Ms Davitt's results to remove expenditure on those programs which was not for an exempt purpose involves a deduction from total expenditure of 4.21%. Without giving the process spurious precision it is nevertheless clear that over 95% of YWCA Australia's total expenditure was "for" an exempt purpose.
As I have earlier said, I do not accept the critical assumption which underpins the Commissioner's thesis about the Song Hotels that expenditure on those Hotels is not a use of resources "for" the relief or poverty or the promotion of education. Accordingly, I would not adopt scenario B4 as reflecting in any way a correct analysis of the use of resources by YWCA Australia.
Finally, even if I adopted scenario B4 as the correct scenario, the findings I have made about YWCA Australia's programs have the effect that in scenario B4 3.03% of total expenditure was on programs which were not exempt. Accordingly, I find that even if expenditure on the Song Hotels is taken into account and treated as for a non-exempt purpose, 62.7% of YWCA Australia's expenditure in the relevant year was for exempt purposes. I find that this is a predominant use of YWCA Australia's resources for an exempt purpose and that even if the expenditure on the Song Hotels is taken into account as for a non-exempt purpose, YWCA Australia is entitled to succeed. I reject the Commissioner's submission that only 13.93% of total expenditure was used for exempt programs. That submission was based upon an assertion that only those programs described at [115]-[135] above were for an exempt purpose.
Even if contrary to my principal conclusions about the Song Hotels only 62.7% of YWCA Australia's expenditure in the relevant year was for exempt purposes, I conclude that Ward CJ in Eq in Salvation Army was correct at [147] to reject the Commissioner's argument in that case that a use or purpose will only be predominant if no other use or purpose is more than incidental and I do so here. The exempt purpose here was "the most dominant of the purposes of the institution or organisation", even if expenditure on the Song Hotels is taken into account as non-exempt. The predominant use of YWCA Australia's resources was for the relief of poverty and/or the promotion of education.

[75]

Conclusions

YWCA Australia carries out the objects in its Constitution by using its financial resources on the numerous programs which I have concluded are (with immaterial exceptions) carried out for the relief of poverty and/or the promotion of education.
A significant source of funding for those programs is the operation of the profit-for-purpose Song Hotels. I have rejected the Commissioner's principal submission that the "use" of resources to which s 275(3)(a) refers must be a "direct" and "immediate" use. The Song Hotels are financial resources "used" by YWCA Australia for the relief of poverty and/or the promotion of education. YWCA Australia uses all profits of the Song Hotels for programs which provide for the relief of poverty and/or the promotion of education. The conduct of the Song Hotels is ancillary to the achievement of YWCA Australia's exempt objects rather than being an end in themselves: see Word Investments at [24] per Gummow, Hayne, Heydon and Crennan JJ. YWCA Australia's expenditure on the Song Hotels should properly be understood as a cost of funding YWCA Australia's charitable activities for the relief of poverty and/or the promotion of education.
Applying a broad evaluative approach to the statutory question I find that YWCA Australia used and uses its resources for the relief of poverty and/or the promotion of education. In conducting that broad evaluative approach, I accept the Commissioner's submission that the assets of the subsidiary entities YWCA Housing and YWCA National Housing are not to be treated as "resources" used by YWCA Australia. This makes no difference to my conclusion.
Adopting a purely evaluative approach, rather than a mathematical calculation, I conclude that the resources of YWCA Australia are predominantly used for the relief of poverty and/or the promotion of education. That is because, with immaterial exceptions, all of the assets of YWCA Australia are used to provide programs which are for the relief of poverty and/or the promotion of education.
Adopting the method which the expert accountants agree can be applied to the same question, I conclude that YWCA Australia's expenditures on programs directed at the exempt purposes, compared to expenditures on non-exempt purposes, demonstrate the same conclusion. That is, an appropriate methodology for seeking to identify the extent to which YWCA Australia's resources are used for exempt purposes is to examine the extent to which its financial resources are expended (i.e. used) on programs which are directed at either or both of the exempt purposes, compared to expenditures which are not. This examination leads to the conclusion that the expenditure on exempt programs is the predominant use of YWCA Australia's resources.
YWCA Australia uses its resources predominantly for the relief of poverty and/or the promotion of education. I find that YWCA Australia is a body corporate for the time being approved by the Court standing in the shoes of the Commissioner for the purposes of s 275(3)(a) in the way explained by Ward CJ in Eq in Salvation Army at [153]-[155]. The assessments must be revoked.

[77]

It is common ground that YWCA Australia is a charitable or benevolent body for the purposes of s 275A. The real question is what portion of the land in question is used for an exempt purpose.
Exempt purposes approved in accordance with the Guidelines are identified in [17] of DUT034 ("Exemption from Duty - Charitable and benevolent bodies") as follows: "The following are purposes which may be approved in accordance with guidelines approved by the Treasurer: - the relief of poverty - the relief and prevention of sickness and disability - the relief of suffering and distress caused by old age - the promotion of education - the establishment of organisations to assist sections of the community with special needs - the relief of distress caused by natural disasters or sudden catastrophes."
The use of the relevant properties is explained in the affidavit of Shannon Wright affirmed on 24 October 2019 whose evidence, as I have said, I accept.
The Nowra property is the location of the Southern NSW office and is allocated to the Southern NSW Regional Manager. The following programs are conducted or coordinated at the Nowra property: Links to Learning, Youth Protection Education Program, Women's Domestic Violence Court Advocacy Services, Safer Pathways, Domestic Violence Intervention Service and Early Intervention and Placement Prevention Program. The Southern NSW office is located on McGrath Avenue in Nowra. The Domestic Violence Disclosure Scheme and Crisis Assistance Program and Youth Frontiers were carried on or coordinated at the Nowra property in May 2018 and have since ended. The Nowra property consists of offices, a meeting room for program staff, an adjoining office for visiting staff, a kitchen and separate staff kitchen and a client room.
On the contingent hypothesis that I am wrong about s 275(3)(a), I find that the dutiable value of the Nowra Property should be reduced to nil under s 275A by reason that its use, both in terms of program activities and office administration work typically undertaken in a "headquarters", is wholly for approved purposes.
The Goonellabah property is allocated to the Northern NSW Regional Manager. The following programs are conducted or coordinated at the Goonellabah property: Links to Learning - rYse up, Goonellabah Transition Program, Youth Frontiers, Kids 4 LIFE, HIPPY and Communities for Children. The Goonellabah property consists of a basement and patio area used for the Kids For Life and HIPPY programs, an auditorium used as a training room to run training days, a foyer used for Links to Learning, Goonellabah Transition Program and Youth Frontiers, a kitchen used for the HIPPY program and an office used for the Communities for Children program.
On the contingent hypothesis that I am wrong about s 275(3)(a), I find that the dutiable value of the Goonellabah property should be reduced to 5% by reason that its use, both in terms of program activities and office administration work typically undertaken in a "headquarters", is 95% for approved purposes.
The Campbelltown property is allocated to the Western NSW Regional Manager. The following programs are conduct or coordinated at the Campbelltown property: ROAR Homework, Links to Learning, Paths to Possible, Wingecarribee Family Abuse Prevention Service and Y Connect. The Campbelltown property consists of an office space for staff, a unit used for delivery of the programs, a reception area and a kitchen area. The first floor is allocated to be let commercially, with revenue derived from any leases used in accordance with YWCA Australia's profit-for-purpose model.
On the contingent hypothesis that I am wrong about s 275(3)(a), I find that 50% of the Campbelltown property is available for use for YWCA Australia's activities, the balance being available for let at commercial terms. Accordingly, the dutiable value of the Campbelltown property should be reduced to 50% by reason that its use, both in terms of program activities and office administration work typically undertaken in a "headquarters", is for approved purposes.
The Broken Hill property is also allocated to the Western NSW Regional Manager and is used to carry on or coordinate the Girls Almighty Broken Hill Youth Program. The Broken Hill property consists of two offices, two storage rooms and a hall charged out at a small fee for two hours per week to Uniting Healthy Living Seniors to run information sessions and health talks.
On the contingent hypothesis that I am wrong about s 275(3)(a), I find that the dutiable value of the Broken Hill property should be reduced to nil by reason that its use, both in terms of program activities and office administration work typically undertaken in a "headquarters", is 100% for approved purposes.
If it were necessary to do so I would make orders setting aside the assessments and remitting the matter to the Commissioner to make adjustments in accordance with these reasons.

Parties

Applicant/Plaintiff:

YWCA Australia

Respondent/Defendant:

Chief Commissioner of State Revenue

Legislation Cited (9)

Stamp Duties Act 1920(NSW)

Stamp Duties (Amendment) Act 1966(NSW)

Stamp Duties (Further Amendment) Act 1980(NSW)

Duties Act 1997(NSW)

Corporations Act 2001(Cth)

Income Tax Assessment Act 1936(Cth)

Income Tax Assessment Act 1997(Cth)

Payroll Tax Act 2007(NSW)

Taxation Administration Act 1996(NSW)

Cases Cited (43)

ommissioner of Taxation (Cth) (1990) 23 FCR 82 Dovade Pty Ltd v Westpac Banking Group (1999) 46 NSWLR 168; [1999] NSWCA 113 Downing v Federal Commissioner of Taxation (Cth) (1971) 125 CLR 185; [1971] HCA 38 Family Service Association of Metropolitan Toronto v Ontario Regional Assessment Commissioner, Region No 9 [1995] 23 OR (3d) 382 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 Federal Commissioner of Taxation v Tasman Group Services Pty Ltd (2009) 180 FCR 128; [2009] FCAFC 148 Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204; [2008] HCA 55 Grain Growers Ltd v Chief Commissioner of State Revenue [2015] NSWSC 925 Greater Wollongong City Council v Federation of New South Wales Police Citizens Boys Clubs (1957) 2 LGRA 54 Hall v Hall (2016) 257 CLR 490; [2016] HCA 23 Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] Ch 73 Inland Revenue Commissioners v Baddeley [1955] AC 572 Inland Revenue Commissioners v McMullen [1981] AC 1 K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309; [1985] HCA 48 Kostka v The Ukranian Council of NSW Inc [2013] NSWSC 222 Lemm v Federal Commissioner of Taxation (1942) 66 CLR 399; [1942] HCA 31 Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645; [1955] HCA 71 Re Canadian Centre for Torture Victims (Toronto) Inc v Regional Assessment Commissioner, Region No 9 [1998] 36 OR (3d) 743 Re Central Employment Bureau for Women and Students' Carers Association Incorporated [1942] 1 All ER 232 Re Clarke [1923] 2 Ch 407 Re Coulthurst [1951] Ch 661 Re Gillespie [1965] VR 402 Re Niyazi [1978] 3 All ER 785 Ryde Municipal Council v Macquarie University (1978) 139 CLR 633; [1978] HCA 58 Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119; [2018] NSWSC 128 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 Taylor v Taylor (1910) 10 CLR 218; [1910] HCA 4 The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404; [1994] HCA 54 Vancouver Regional FreeNet Association v Minister of National Revenue [1996] 3 FC 880 Texts Cited: G E Dal Pont, Law of Charity (2017, 2nd ed) Michael R Chesterman, Charities, Trusts and Social Welfare (1979, Weidenfeld and Nicolson) New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 6 December 1966 Category: Principal judgment Parties: YWCA Australia (Plaintiff) Chief Commissioner of State Revenue (Defendant) Representation: Counsel: M Richmond SC with C J Peadon (Plaintiff) R Seiden SC with A Gerard and R Raffell (Defendant)

Cited By (4)

Aboriginal Housing Office v Jacky

Wesley Community Services Limited trading as Wesley Mission v Smith

YWCA Australia v Chief Commissioner of State Revenue

Zhang v Chief Commissioner of State Revenue

HEADNOTE [This headnote is not to be read as part of the judgment] YWCA Australia is a secular organisation for the provision of benevolent relief to people (in particular, women and children) experiencing poverty, homelessness, violence or disadvantage. YWCA NSW operated two "Song Hotels" which generated profit used to support YWCA NSW's charitable activities. On 22 May 2018, the assets and liabilities of each state and territory organisation were transferred to YWCA Australia. This included the transfer of the Song Hotels from YWCA NSW to YWCA Australia. In April 2018, YWCA Australia lodged an application to be approved as an exempt charitable or benevolent body. The NSW Chief Commissioner of State Revenue refused the application. In October 2018, the Chief Commissioner assessed duty and interest on the transfer of the Song Hotels and other properties at over $3.3 million. In December 2018, YWCA Australia lodged objections to the assessments which the Chief Commissioner disallowed. YWCA Australia commenced proceedings by way of summons. The principal issue was whether the resources of YWCA Australia were used predominantly for the relief of poverty and/or the promotion of education pursuant to an exemption from duty under s 275(3)(a) of the Duties Act 1997 (NSW). The subsidiary issue was whether, if YWCA Australia was not entitled to the s 275(3)(a) exemption, it was entitled to a partial exemption from duty under s 275A of the Duties Act 1997 (NSW). The Court held, revoking the assessments, setting aside the determination and allowing the plaintiff's objections:

"The relief of poverty in Australia" includes the provision of the necessities of life, both directly and indirectly, but is not so limited. The modern concept of the "relief of poverty in Australia" encompasses assistance given to benefit persons whose lot needs improvement: [49]. Re Gillespie [1965] VR 402; Re Coulthurst [1951] Ch 661; Re Central Employment Bureau for Women and Students' Careers Association Incorporated [1942] 1 All ER 232; Re Niyazi [1978] 3 All ER 785; Inland Revenue Commissioners v Baddeley [1955] AC 572; Downing v Commissioner of Taxation (Cth) (1971) 125 CLR 185; [1971] HCA 38; Lemm v Federal Commissioner of Taxation (1942) 66 CLR 399; [1942] HCA 31.
The promotion of education is a very broad concept which extends to information or training provided in a structured manner to advance the knowledge or abilities of the recipients: [68], [70]. Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] Ch 73; Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645; [1955] HCA 71; Inland Revenue Commissioners v McMullen [1981] AC 1, applied.
The "use" of resources draws attention to how financial resources are expended. To determine whether a body is within a category entitled to exemption, the Court should examine not just the body's objects but also its activities. The inquiry must centre on whether it can be said that the activities are carried on in furtherance of the charitable purposes of relief of poverty and/or promotion of education: [75]-[79]. Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119; [2018] NSWSC 128; Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204; [2008] HCA 55, applied.
For resources to be used "predominantly" for specified purposes the purpose must be "the most dominant of the purposes of the institution or organisation": [81]. Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119; [2018] NSWSC 128, applied.
YWCA Australia used the Song Hotels to generate revenue in furtherance of its objectives, being the relief of poverty and the promotion of education: [103]. There is no requirement that the "use" must be the direct and immediate use of the resources: [98]-[103], [231]. Federal Commissioner of Taxation v Word Investments Ltd (2008) 236 CLR 204; [2008] HCA 55, applied.
Assets held in separate legal entities, YWCA Housing and YWCA National Housing, which are controlled by YWCA Australia, are not resources used by YWCA Australia: [107], [228].
Adopting an evaluative approach, the resources used by YWCA Australia are predominantly for the relief of poverty in Australia and/or the promotion of education in Australia: [112]-[202], [229].
Adopting the method which the expert accountants agreed could be applied, over 95% of the relevant financial expenditures of YWCA Australia were for the relief of poverty and/or the promotion of education: [222], [230].
This is so on the basis that the expenditure on the Song Hotels is not taken into account in conducting this exercise or is taken into account as being a use of resources for the relief of poverty or the promotion of education: [222], [224].
Even if the Song Hotels expenditure is to be taken into account, and that expenditure is assumed not to be "for" the exempt purposes, YWCA Australia's resources are nevertheless predominantly used for the relief of poverty and/or the promotion of education: [225]. Salvation Army (New South Wales) Property Trust v Chief Commissioner of State Revenue (2018) 96 NSWLR 119; [2018] NSWSC 128, applied.