Case: Glebe Administration Board v Commissioner of Pay-roll Tax (1987) 10 NSWLR 352
Outcome: distinguished
The Tribunal found that "it is difficult to consider a commercial funeral business as having an objective of the advancement of religion" and that "the business was a commercial operation for the purpose of making a commercial profit" . The Tribunal relied on the decision of Priestley JA (with whom McHugh JA agreed) in Glebe Administration Board v Commissioner of Pay-roll Tax (1987) 10 NSWLR 352, where his Honour said, at 365: "In my opinion the Board was not at any relevant time a religious institution. It was a statutory corporation doing commercial work within limitations fixed by reference to religious principles. It was staffed by persons who wished to observe the religious principles giving rise to the limitations on the Board's commercial activities. The property in its ownership both increased in value and gave rise to revenue. Capital was held for the benefit of a religious institution and large amounts of revenue were handed over to that institution. To my mind all these matters result in it being accurate to describe the Board as a legal entity working in a commercial area, guiding its commercial conduct by the principles of a religious institution and, in ordinary language, working for that religious institution. I do not think that this legal entity can either by an ordinary or a technical use of language be accurately called a religious institution." 57 This case does not aid the Commissioner. Its facts are distinguishable from the present case. It concerned a statutory body exercising property ownership and investment powers given to it by statute. The Board was required by statute to hold and invest church property and to deal with any proceeds. Its purposes were thus defined by statute. This is to be contrasted with Word, which is an independent organisation which has chosen to apply funds that it raises to Wycliffe and other religious bodies. The Board's manner of operation was also different from Word's. It lent money for short terms at commercial interest rates and applied funds for church activities generally, rather than the specific activities supported by Word. Finally, the Board claimed to be a religious institution not, as in the present case, a charitable institution. Word concedes that it cannot be a religious institution. 58 In my view, in concluding that the running of a funeral business could not advance religion, the Tribunal fell into two errors. The first was to consider the funeral business in isolation from the remainder of Word's operations. There was no evidence to suggest that, from the commencement of Bethel Funerals, Word ceased receiving money from investors. The entity claiming to be a charitable organisation is Word, not the Bethel Funerals operations of Word. Word's activities as a whole must be considered when determining whether its purposes were charitable. 59 When such a consideration is undertaken, the second error becomes clear. Word's purposes as a whole were to raise money for provision to Wycliffe and similar organisations. This was true both before and after the establishment of Bethel Funerals. It was only the manner of raising the money that changed; the purpose for doing it remained the same. The Tribunal's error appears to have involved drawing an unwarranted distinction between active and passive investment. It seems to have assumed that it may be charitable for an organisation to receive funds from investors who may or may not have been encouraged to support its goals and ideals, but that it cannot be charitable for the organisation to actively establish a business to derive similar income. 60 The Tribunal's distinction is at odds with the practice of contemporary charitable organisations. With the decline of the welfare state, charitable organisations are expected to do more with the same resources. Reliance on donations alone will, in many cases, be insufficient. Hence many charitable organisations have established business ventures to generate the income necessary to support their activities. There may appear to be a vast difference between selling lamingtons at a church f&ecirc;te and selling funeral services, but where the object of raising the funds is the same, I can no see no reason to draw a legal distinction between the two. I again refer in this connection to the cases referred to at [33]-[35]. 61 It follows that, for the period from 1 July 2000 to 1 July 2002, Word was a charitable institution under item 1.1 of the table at s 50-5 of the Act and is entitled to endorsement accordingly. The cross-appeal is therefore allowed. Word's alternative argument that its articles and memorandum of association created an instrument of trust need not be considered. 62 As set out above at [16], Word established the Foundation from 1 July 2002 to carry on the business of Bethel Funerals. This effected a significant change from the position prior to that date, when Bethel Funerals was merely a part of Word rather than run through a separate legal entity. The Tribunal held that "the activities after 1 July 2002, being the same as those prior to 1996, entitle [Word] to endorsement as a charitable institution from that date."