Case: Roman Catholic Archbishop of Melbourne v Lawlor [1934] HCA 14 ; (1934) 51 CLR 1
Outcome: distinguished
The Commissioner argued that, consistently with the judgment of Dixon J in Roman Catholic Archbishop of Melbourne v Lawlor [1934] HCA 14 ; (1934) 51 CLR 1, it is necessary to draw a distinction between purposes of religion and things conducive to the good of religion. He characterised the generation of funds and distribution of those funds to Wycliffe as possibly being conducive to the good of religion, but as not being for the purposes of religion. The distinction is derived from the decision of the Privy Council in Dunne v Byrne [1912] AC 407, where it was held that an activity may be conducive to the good of religion but not itself be charitable. An example, taken from the judgment of Griffith CJ in the High Court in the same case ((1910) [1910] HCA 75 ; 11 CLR 637), is of advances made to government bodies for the purposes of obtaining funding to be used for religious purposes. Such advances would not themselves be for the purpose of religion although they might be conducive to the good of religion. 44 I do not think the distinction referred to by Dixon J in Lawlor assists the Commissioner. It is clearly directed at the difference between activities that have a direct religious purpose and other activities that are incidental and beneficial to the religious purpose but are not themselves directly religious in purpose. The distinction that the Commissioner really calls for is one between an activity that is clearly religious in purpose and that, on the one hand, is conducted by the taxpayer itself and, on the other hand, is conducted through an intermediary such as Word. That is a wholly artificial distinction. The charitable purpose of an activity cannot depend on whether it is conducted from start to finish by one entity or whether two or more entities with different skills join together to jointly conduct it. The Commissioner's argument is inconsistent with the corporate structure of many contemporary charities which are complex and involve the use of separate legal entities to perform separate functions. Where they are all working together to pursue a common, charitable purpose it is artificial to consider the purpose of each entity separately. 45 The final question of law which the Commissioner contends was wrongly answered by the Tribunal in the paragraph cited above at [29] concerns the place where Word conducted its business. It will be remembered that s 50-50 of the Act requires a charitable institution to satisfy one of four alternative tests, one of which (paragraph (a)) is that the institution "has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia" . The Tribunal held that Word satisfied this test. It is not suggested that Word could satisfy any of the other tests in s 50-50. 46 Paragraph (a) of s 50-50 is curiously drafted. It requires three tests to be met: (a) that the institution has a physical presence in Australia; (b) that the institution incurs its expenditure principally in Australia; and (c) that the institution pursues its objectives principally in Australia. Each of these tests is, of itself, relatively straightforward to apply. The difficulty is the words "to that extent" that connect requirement (a) to requirements (b) and (c). The words appear to cover the situation of an institution that has a presence both in Australia and elsewhere. In such a case, it seems that the institution is only required to incur its Australian expenditure principally in Australia and pursue its Australian objectives principally in Australia. In other words, were an institution to have an office in Australia and a similar office in New Zealand, and the expenditure of the Australian office was incurred principally in Australia and the objectives of the Australian office were pursued principally in Australia, then the fact that the New Zealand office may incur expenditure and pursue objectives principally in a place that is not Australia, does not disqualify the institution from satisfying the paragraph.