Courts made ‘something of a hash’ of charities definition – senior judge

Stuff co.nz 20 January 2021
Family First Comment: “The trust is among many organisations, including environmental protection group Greenpeace and conservative family values group Family First NZ, to have gone to court in support of a claim for charitable status… He welcomed the move away from excluding political purposes as charitable. A new definition of charity was needed based on a combination of a provable public benefit and lack of private benefit.”

Family First is back in the Supreme Court this year, still fighting, because the politicians won’t fix the legislation which defines charity – despite all this confusion in the courts!

A top judge who says courts might have made “something of a hash” of charities status cases for about a century, will start the new year with a chance to put things right.

The President of the Court of Appeal, Justice Stephen Kos, will sit with two other judges in one of the first cases of the year where Better Public Media Trust is fighting for charitable status.

The trust is the latest organisation to have failed to convince the Charities Registration Board that they qualify to be legally recognised as a charity.

The trust’s stated purpose was to advance public media, educate New Zealanders about public media, and promote informed debate about public media issues.

But a High Court judge said the trust’s advocacy for public media could not show a public benefit that legally amounted to a charitable purpose.
READ MORE: https://www.stuff.co.nz/national/politics/124002008/courts-made-something-of-a-hash-of-charities-definition–senior-judge

President Court of Appeal – Charity Law conference November 2020

                             “Murky waters, muddled thinking, charities, & politics”

Pleasure ah, to introduce our keynote speaker, the Honorable Justice Stephen Koash. Um, Justice Koash is one of New Zealand’s most um Senior Judicial officers. Ah, since 2016, ah he has been the President of the Supreme Court of the court of appeal of New Zealand apologies. Ah, but he was ah appointed first to the High Court of Justice in 2011.

Then to the Court of Appeal in 2015. Ah, prior to being elevated to the bench Justice Koach had a long & very distinguished career as a solicitor, & then at the independent. Ah, being made Queen’s counsel in 2007. I now invite Justice Koach to deliver the keynote address to us this afternoon, on the evocative topic of murky waters, muddled thinking, charities, & politics. Thank you, Justice Koash.

Thank you, Matthew. Tena Koutou Katoa.

As it happens. I’m speaking to you today on election day in the United States. Perhaps the most momentous election in that country since 1932, is a contest between Herbert Hoover & Franklin Roosevelt. Because today’s election & body is such a dramatic clash of opinion & approach. It feels like a referendum on democracy itself. One by no means confined to the constitutional borders of the United States.

It seems also an appropriate day to express some views to you about the relationship between the law of charity & extensively charitable organizations that have a political dimension.

I’ll make some introductory remarks, look briefly at three important cases, & then offer some observations about the mess the law has got into & how it might extricate itself.

Now, charity laws exclusionary political purpose doctrine excluded a political purpose from being a charitable purpose. It emerged in the House of Lords decision in Bowman & secular society, where Lord Parker said that equity had always refused to recognize such objects as charitable because the courts had no means of judging whether the advocated reform would be for public benefit & thereby charitable.

Well, the accuracy of that statement was questionable from the outset. The Rosetta Stone of the modern law of charity the statutes of Elizabeth 1601 contain no political purpose exclusion.  Hardly surprising, given the time & politically charged contexts in which it was enacted.

A statute was passed to encourage private philanthropy in the wake of the ousting of the Catholic Church & English reformation. From inception, the modern law of charity has been tied to the state & political action.

Indeed, in the 19th century, organizations advocating for social change, were held to advance charitable purposes. One such example was William Wilberforce’s society for effecting the abolition of the slave trade. Known more snappily as the anti slavery society.

Although advocating both reform of the law & the disposition of personal property rights, could a more charitable purpose really be imagined.

Yet even today, it has been doubted, at least judicially, that organizations whose primary purposes the achievement of international peace or nuclear disarmament, may not be charitable.

The 19th century was less cautious. recognizing as charitable the Howard society for penal reform which sought reforms of a liberal nature. The Lord’s Day Observant Society, which of course sought reforms of a conservative nature, & certain societies advocating for temperance law reform, or the abolition of vivisection. There was no bright line between politics & charity.

Despite that body of case law, Bowman considered the political purpose exclusion beyond doubt. To borrow the words of poor Michelle from Bowman the political purpose doctrine sprang fully grown like Athena from Zesus Forrad, & due course, Lord Parker’s dictor found favor with the House of Lords & the National anti vivisection society & in the revenue commissioners. In that case, Lord Simon’s consider the proposition lacked authority, simply because it was so clear that little authority was needed. The society in that case had the political aim of preventing Cruelty to Animals through the political means of effecting legislative change. And so it was held its purpose could not be charitable.

An admirable dissent was entered by Lord Porter, in which he famously observed this, I cannot accept the view that the anti slavery campaign or the enactment of the Factory Acts or the abolition of the use of boy labor by chimney sweeps will be charitable so long as the supporters of those objects have not in mind or indeed did not advocate a change in the law, but became political & therefore non charitable if they did so. To take such a view, would to me, be to neglect substance for form.

Greater specificity as to what acts political can be found in the case called Mcgovern & the Attorney General with which you will be familiar. In it, Justice Slade set up five categories of trusts for political purposes that would not be charitable

Ones that further the interests of the political party. Procured changes in domestic or foreign laws. Or procured the reversal of domestic or foreign government policy. That doctrine was adopted in Australia, albeit with some reluctance, so to New Zealand, although with slightly less reluctance. In the 1940s promotion of New Zealand’s acceptance of the League of Nations & of temperance through a legislative change, were both ruled both political & non charitable.

In 1981, in Malloy & the Commissioner of Inland Revenue, the Court of Appeal considered both advocacy for & against law reform, on issues of controversial character to be political & non charitable purposes.

That case, of course concerned the deductibility of donations to a society called SPUC, which opposed the greater availability of abortion.

What then was the justification for the political purpose doctrine?

First, deciding whether the political act advocated was for the public benefit was considered to be beyond the institutional competence of the courts. Courts were judged ill equipped to determine the merits of proposed law or policy change.

Secondly, & rather mystifyingly, it was said that the law would saltify itself by holding it was for the public benefit for the law itself to be changed. Both justifications were the subject of significant commentary & criticism.

The political purposes doctrine is framed as neutral. But it is anything but. With rare exceptions like Molloy, the underlying policy of the doctrine supports organizations seeking preservation of the status quo. Such entities tend to be free of the taint of advocacy, or law reform sentiment, despite the imminent 19th century charitable model of the anti slavery societywhich did both.

More over, the implication of traditional competence to determine public benefit, despite the explicit terms of the fourth pencil head led to the remarkable consequence of a court refusing to rule on the public benefit of advocacy to abolish torture.

So I turn just ah, as briefly as I can to three important cases that touch on this topic. There is Australia’s Aid Watch case, a decision of the High Court of Australia which found political purposes no longer mutually exclusive to charitable purpose. That society involved the delivery of humanitarian aid, research into the effectiveness of aid & campaigning to improve aid delivery.

Prominent in the reasoning of the majority in that court was the importance of Australia’s constitutional arrangements. It was said that those required communication between electors, elected legislators & officers of the executive, that they demanded the very agitation for legislative & political change for the doctrine had foreclosed from charitable status.

Justice Kiefel, now the Chief Justice of Australia dissented. She also rejected the political purpose doctrine. But she held that the public benefit of the Trust’s activities must still be proven. The mere assertion of views as practiced by Aid Watch was not charitable without proof of those those views were of benefit the public.

It’s, It’s a very significant decision. Not only did it remove the political purpose doctrine, but also accepted the political advocacy had a public benefit. But the extent of the public benefit was not clear from the judgment. Was it purely in the generation of debate, or in the charitable purpose debate at all, both? The majority sidestepped that issue. But I think it is strongly arguable that although the constitutional underpinning of the majority reasoning was important to that decision, it does not necessarily amount to a distinguishing consideration from New Zealand law. Given the terms both of our Bill of Rights Act & other elements of our supposedly unwritten constitution.

The second case is a New Zealand decision. Um, the Greenpeace a decision which is a decision of the Supreme Court. That concerned Greenpeace’s bid for registration under the ah Charities Act of 2005. The majority reasoning delivered by Chief Justice Elias also rejected the political purposes doctrine. It considered that not all advocacy for legislative change could be excluded from charitable status.

Advocacy held the majority was to be considered as part of the public benefit test, but cause advocacy would often perhaps most often be non charitable, & the majority adopted the dissenting approach taken by Justice Kiefel.

In Aid Watch, they put the overall test on these terms. Assessment of whether advocacy or promotion of a course, or law reform as a charitable purpose depends on consideration of the end that it advocated, the means promoted to achieve that end & the manner in which the course is promoted in order to assess whether the purpose can be said to be a public benefit within the spirit & attainment of the 1601 statute.

As a consequence, Greenpeace has created the inevitable possibility that future courts will have to assess the public benefit of more controversial cause advocacy.

Without the public and political purpose doctrine, they may, may be led into what my friend Matthew Harding has called murky & unfriendly waters.

The Supreme Court implied in its decision that it was unlikely when it remitted the issue back to the charities board, that Greenpeace would, in fact qualify ah, as a charitable organization particularly in relation to the most substantial purpose that Greenpeace stood for which was protection of the environment. And following the Supreme Court’s judgment, the charities registration board, again denied Greenpeace’s registration, as a charity. But on appeal, the High Court held Greenpeace’s advocacy for the protection of the environment was a charitable purpose.

So there we are, that is the Greenpeace decision which involved what might be described as a liberal charity. More recently, my court has had to deal with what could be described as a more conservative one. Family First decision which was delivered by ah the Court of Appeal earlier this year. I did not sit on that case.

It too was a long running affair. Ah, it had been ah, denied ah, charitable status – the High Court had had turned down its appeal. But Family First advocates for on issues on families & marriage from a decidedly conservative & traditional perspective.

My court by majority allowed Family Firsts appealed & held that it had both educational & general generally charitable purposes.

It did the fact that it promoted traditional family values did not prevent that in being a public good. In particular, because there were a large number of traditional families in New Zealand.

Advocacy on a specific position regarding euthanasia could be charitable, though not on other issues, such as abortion, which were considered to fall outside what the majority called the penumbra of the recognized public good. That is supporting institutions of marriage & family.

In a reasonably stinging dissent, Justice Gilbert considered the Family First advocacy provided no tangible public benefit to families & ah, considered therefore that it was not a charitable organization. Leave has been sought to appeal from that decision to the Supreme Court & I’m not going to indicate ah, my view of that case. And even more so, will I not comment on the Better Media Trust decision of the high court because that case is on its way to my court.

But I want to make at this point, some observations. My first is that the abandonment of the exclusionary doctrine of political purpose in Aid Watch & in Greenpeace is to be welcomed.

The attempted creation of a bright line between charity & politics in the early part of the last century was traditional legislation undertaken in defiance of history.

William Wilberforce of anti slavery society undertook inherently political work, but patently for the general public benefit. This was a great cause. Its work was done at an abstract level through advocacy, rather than through more tangible direct action.

Secondly, tangibility of benefits should not obscure the analysis. The Supreme Court appeared tempted by the concept of tangibility, in Greenpeace. And it is true that public benefit is more easily discern by, for example, direct acts of generosity to say the poor. These are both publicly beneficial & self-denying, which are the twin hallmarks of charitable endeavor.

But why should tangibility determine the metes & bounds of what is charitable? What is the public benefit gained from exposing charities to loss of status because they move from direct or tangible treatment of symptoms, to more systematically addressing causes?

Should a society devoted to the Prevention of Cruelty to Children not be permitted to enlarge its focus from dispensing aid, to discouraging family violence, including by legislative reform. And, is not the debate itself something of great public benefit, as the majority in the High Court of Australia recognized in Aid Watch.

Thirdly, there is something rather unsatisfactory about the reasoning in cases like Greenpeace & its successors, focusing not only on ends, but also means and nature of the promotion and of means. As Justice Mellon observed in the second Greenpeace decision, this is where all the difficulty lay in that case. The charities board & then the courts are placed in the unhappy task of policing the methodologies of an organization, for instance, devoted to preservation of the environment & reducing climate change & marking them according to unhappily vague criteria that at the end of the day, encourage conservative policymaking & the appeal after appeal, because so very much depends on the eye of the beholder.

And yet the juris-prudential basis for this ends means & ways analysis, is itself obscure. For myself, I do not find means & ways particularly illuminating & deciding whether an entity serves charitable purposes which historically at least focused upon the existence of demonstrable public benefit & the ends pursued.

Fourthly, one can only wonder why we have tied ourselves up in juris-prudential knots from which we now struggle to release ourselves over politics as an overlay to three of the four pencil heads when the other head. religion, gains a comparatively free pass. In many respects, it is hard to distinguish between religious proselytizing & political advocacy. Religion tells people how to live their lives & informs their values & priorities, which one might think are inherently political objects. True Religion involves a particularly spiritual dimension, but established churches now increasingly participate in the secular world & what might be thought of as politics, even party politics.

Just two weeks ago, the Archbishop of Canterbury & the Archbishop, the Archbishop’s of Scotland, Wales & Northern Ireland wrote to the Financial Times. (you’ll note that they didn’t write to the Church Times, but the Financial Times presumably had a larger audience) condemning the Brexit related Internal Market Bill legitimizing domestically, at least, potential breaches of international law, as the Archbishop’s put it a “disastrous precedent”.

Fifthly, it is tempting & no less accurate for that, to say that the courts have made something of a hash of things since Bowman. The muddled thinking I refer to in my title involves the familiar story of the common law seeking to give definition to equity, & then making a mess of the exercise. That I think describes exactly Bowman & McGovern. In the process we have lost any sort of cohesive theory of what charity is. Charity is not, & never has been, confined to the fulfilling of particular needs tangibly.

A fifth of the way through the 21st century, the great causes continue to mount up. And notably slavery remains one of them, albeit least prominently. The task of equity now is to restate a cohesive theory of charity based on a combination of a demonstrable public benefit, & lack of private benefit. The former will continue to depend on evidence that the task continues to fall to the courts. The latter offers at least some constraint on direct political enterprise, & the pack funds that have come to dominate the United States political activism. But further constraints here really work for Parliament to accomplish.

But finally, Parliament itself has rather sat on the sidelines here watching equities turmoil.

As the Supreme Court noted, in Greenpeace, Parliament avoided any sort of fundamental reform of charitable status & the Charities Act 2005.

That might I suppose connote some approval of the current law. But another view is that if it was proving too hard for the courts – Parliament thought better in joining the millay.

But this leaves untended what Justice Glazebrook has called the “elephant in the room” – the benefits of being deemed a charity. Charitable status carries both the legal & tax benefits, as well as a mark of societal approval, which may in turn help the trust raise funds. The benefits of charitable status is not abstract. In short, courts ultimately determine the extent of charitable status. But it is the executive & then the public, ultimately, who foot the bill.

All the more reason, then ladies & gentlemen for equity to grasp the nettle & rediscover a cogent cohesive theory of just what is in this century to be a charity. For my part, at least, & taking as I do a long view, I think there is more to be said for the majority approach in Aid Watch for all its tentativeness, rather than the half measured revision advanced by the minority & applied here in this country in Greenpeace.

So I wish you all the very best for this conference. My thanks to the organizers & for all for your kind attention today. Kiaora Rawa Atu.