Victorian Women Lawyers Association Inc v Commissioner of Taxation
Document type: Decision Impact Statement
Venue: Federal Court of Australia (VID 1369, 1370, 1371 of 2006 and VID 728, 729, 730 of 2007)
Judgment date: 27 June 2008
Date published: 2 June 2011

Summary of decision:
The Victorian Women Lawyers' Association ("VWLA") sought income tax exemption on the basis that it was a charitable institution established for purposes beneficial to the community or alternatively as an association established for community service purposes.

Overview of facts:
The VWLA was an incorporated not for profit association. It lodged tax returns for the 1997 to 2001 income years claiming income tax exempt status or alternatively that certain items of its income were not assessable. | Its general objects are: (a) to provide a common meeting ground for women lawyers; (b) to foster the continuing education and development of women lawyers in all matters of legal interest; (c) to encourage and provide for the entry of women into the legal profession and their advancement within the legal profession; (d) to work towards the reform of the law; (e) to participate as a body in matters of interest to the legal profession; (f) to promote the understanding and support of women's legal and human rights; and (g) such other objects as the Association may in General Meeting decide. | (a) to provide a common meeting ground for women lawyers; (b) to foster the continuing education and development of women lawyers in all matters of legal interest; (c) to encourage and provide for the entry of women into the legal profession and their advancement within the legal profession; (d) to work towards the reform of the law; (e) to participate as a body in matters of interest to the legal profession; (f) to promote the understanding and support of women's legal and human rights; and (g) such other objects as the Association may in General Meeting decide. | It also adopted the following purposes of the Australian Women Lawyers Association: (a) to achieve justice and equality for all women; (b) further understanding of and support for the legal rights of all women; (c) identify, highlight and eradicate discrimination against all women in law and in the legal system; (d) advance equality for women in the legal profession; and (e) create and enhance awareness of women's contribution to the practice and development of the law | (a) to achieve justice and equality for all women; (b) further understanding of and support for the legal rights of all women; (c) identify, highlight and eradicate discrimination against all women in law and in the legal system; (d) advance equality for women in the legal profession; and (e) create and enhance awareness of women's contribution to the practice and development of the law | The activities of the VWLA including seminars, social functions, publication of a quarterly magazine and production of flexible work practice guidelines, were mainly for the advancement and benefit of women lawyers. It also undertook some activities aimed at advancing women's rights generally and contributed to debate on law reform issues. | Issues decided by the court or tribunal | French J was prepared to take judicial notice of the disadvantage of women practitioners in the legal profession (paragraph 116). His Honour also accepted that the existence of sex discrimination laws in Australia is indicative of a longstanding social norm that attaches public benefit to the removal of barriers to the advancement of women in all fields of human endeavour (paragraph 122). | The Commissioner had argued that the VWLA was not a charitable institution because its purposes were not those which are 'beneficial to the community', rather its main objects were for the private advancement of women within the legal profession. However, his Honour concluded that the VWLA's primary purpose of advancing women in the legal profession in Victoria was a purpose 'beneficial to the community', particularly having regard to the social norms reflected in the sex discrimination laws (paragraphs 147 and 148). | His Honour did not consider it necessary to reach a concluded position about whether the VWLA was an association established for community service purposes (paragraphs 163 and 164). | The Incorporated Council of Law Reporting of the State of Queensland v Commissioner of Taxation (1971) 125 CLR 659

Issues decided:
French J was prepared to take judicial notice of the disadvantage of women practitioners in the legal profession (paragraph 116). His Honour also accepted that the existence of sex discrimination laws in Australia is indicative of a longstanding social norm that attaches public benefit to the removal of barriers to the advancement of women in all fields of human endeavour (paragraph 122). The Commissioner had argued that the VWLA was not a charitable institution because its purposes were not those which are 'beneficial to the community', rather its main objects were for the private advancement of women within the legal profession. However, his Honour concluded that the VWLA's primary purpose of advancing women in the legal profession in Victoria was a purpose 'beneficial to the community', particularly having regard to the social norms reflected in the sex discrimination laws (paragraphs 147 and 148). His Honour did not consider it necessary to reach a concluded position about whether the VWLA was an association established for community service purposes (paragraphs 163 and 164). The Incorporated Council of Law Reporting of the State of Queensland v Commissioner of Taxation (1971) 125 CLR 659

ATO view of decision:
The Court followed established jurisprudence regarding what constitutes a "charitable institution". | It also took judicial notice of the disadvantage of women in society and of women practitioners in the legal profession and noted the statutory indications of community recognition of gender based discrimination to conclude that an association established to remove these barriers and increase opportunities was for purposes beneficial to the public. | Having reached this conclusion it was open to the Court to make a finding of fact on the evidence that the association was established for this purpose, taking into account the VWLA's objects and activities. | The decision does not represent a real expansion of the law governing charitable institutions. In light of the findings of fact, it is not inconsistent with the Tax Office view in TR 2005/21 that member benefits will be consistent with charity where the member benefits are no more than incidental or ancillary to the purpose of benefiting the community. Nor is it inconsistent with the view in TR 2005/21 that if an institution's purpose is otherwise charitable its status is not affected by political or lobbying activities which are incidental to the charitable end. In this regard it is to be noted that while the VWLA was an advocate for change, during the income years under consideration they engaged in a range of practical activities directed at the principal purpose of removing barriers and increasing the opportunities for participation by, and advancement of, women in the legal profession in Victoria. | It is also considered appropriate to bear in mind that the question of exemption is one that calls for the application of the relevant law having regard to the objects and activities during each income year. In this case, the finding of charitable purpose is premised on the existence of the particular problem for the legal profession of the substantial under-representation of women, especially in senior positions. This may prove to be an historical phenomenon with on-going change to the profession and the composition of the judiciary. Also, if the association's priorities change, it may evolve into a different organisation in terms of its central focus and this could potentially affect the characterisation of its objects for determining eligibility for exemption. Other organisations that seek exemption on the basis of charitable objects beneficial to the community also need to be aware that changing circumstances may affect their status under the taxation law over time. | The Court found it unnecessary to provide a concluded answer to the question whether the VWLA qualified for exemption as having been established for community service purposes (not being political purposes or lobbying purposes). The comments by His Honour on this issue are clearly obiter. Nevertheless, with respect, we agree with His Honour that the provisions were intended to extend to a range of service organisations that would not qualify as charitable institutions. It is also agreed that the concepts of political purposes and lobbying purposes are not to be construed narrowly.

Administrative treatment:
The decision in this case will be considered in determining the status of other similar organisations claiming exemption as a charitable institution. However, the outcome in each case will depend on the particular facts and circumstances. Whether an organisation is to be characterised as a charitable institution on the ground that it exists for purposes beneficial to the community is to be decided based on an examination of its objects and activities. | Taxpayers who are uncertain whether their particular circumstances qualify for exemption and require greater certainty may apply for a private ruling. Taxpayers are reminded that charities must apply for exemption and be endorsed by the Commissioner in order to become exempt. To apply for endorsement you should complete and forward an Application for endorsement as a tax concession charity or income tax exempt fund. The application forms and instructions may be obtained from the website at http://www.ato.gov.au/nonprofit/ under 'Forms & instructions', 'Endorsement' or by phoning the information line on 1 300 130 248. | Implications on current Public Rulings & Determinations | TR 2005/21 was replaced by TR 2011/D2 as from 11 May 2011. TR 2011/D2 incorporates references to this decision.

Legislative references: Income Tax Assessment Act 1936 23(e) 23(g)(v) Income Tax Assessment Act 1997 50-1 Evidence Act 1995 (Cth) 144 Sex Discrimination Act 1984 (Cth) 3 4A(1) 14
Case references: Barby v Perpetual Trustee Co Ltd 58 CLR 316 11 ALJ 306 [1937] HCA 64 Bowman v Secular Society Ltd [1917] AC 406 [1915] 2 Ch 447 Central Bayside General Practice Association Ltd v Commissioner of State Revenue 2006 ATC 4610 229 ALR 1 63 ATR 220 Chesterman v Federal Commissioner of Taxation 37 CLR 317 32 ALR 9 [1926] AC 128 Gattellaro v Westpac Banking Corporation 78 ALJR 394 [2004] HCA 6 204 ALR 258 Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 Commissioner of Taxation v The Triton Foundation 147 FCR 362 2005 ATC 4891 60 ATR 451 Commissioner of Taxation v Word Investments Ltd 2007 ATC 5164 164 FCR 194 [2007] FCAFC 171 243 ALR 44 Cronulla Sutherland Leagues Club Ltd v Commissioner of Taxation 90 ATC 4215 23 FCR 82 21 ATR 300 Douglas v Commissioner of Taxation 77 FCR 112 36 ATR 532 97 ATC 4722 Gattellaro v Westpac Banking Corporation [2004] HCA 6 78 ALJR 394 204 ALR 258 Halpin v Seear [1977] Ch Com Rep Incorporated Council of Law Reporting of the State of Queensland v Federal Commissioner of Taxation [1971] HCA 44 125 CLR 659 2 ATR 515 71 ATC 4206 National Council of Women of Tasmania v Federal Commissioner of Taxation 38 ATR 1174 98 ATC 2124 Navy Health Ltd v Deputy Federal Commissioner of Taxation 2007 ATC 4568 68 ATR 215 Public Trustee v Attorney-General (1997) 42 NSWLR 600 Re Belcher [1950] VLR 11 [1950] ALR 152 24 ALJ 124 Re Blyth [1997] 2 Qd R 567 Re Inman [1965] VR 238 Re Lowin [1965] NSWR 1624 Re Weave [1963] VR 257 Royal Australian College of Surgeons v Federal Commissioner of Taxation [1943] HCA 34 68 CLR 436 [1943] ALR 377 Royal North Shore Hospital of Sydney v Attorney-General (NSW) [1938] HCA 39 60 CLR 396 Scottish Burial Reform and Cremation Society Ltd v Glasgow City Corporation [1968] AC 138 [1967] 3 All ER 215 Taylor v Taylor [1910] HCA 4 10 CLR 218 16 ALR 129 The Incorporated Council of Law Reporting of the State of Queensland v Commissioner of Taxation [1971] HCA 44 125 CLR 659 2 ATR 515 71 ATC 4206
Subject references: Income Tax Charitable institution Association for the advancement of women in legal profession Purposes beneficial to the public Community services purposes Political or lobbying purposes
Other references: TD 93/190 Dal Pont G. 'Charity Law in Australia and New Zealand' (Oxford University Press, 2000)