Charitable Trusts and Political Purposes: Sowing the Seeds of Change? Lessons from Australia

AuthorJuliet Chevalier-Watts
PositionSenior Lecturer in Law, Te Piringa ? Faculty of Law, University of Waikato, New Zealand
J   C   -W *
I. I
e recent case of Aid/Watch v Commissioner of Taxation1 has created
sea changes in Australia in relation to charitable trusts, and as a result our
Antipodean neighbours appear to be bla zing trails in the e volution of charitable
trusts, whils t at the same time, New Zealand resolutely remains entrenched in
the annals of charitable trust history. Can, and indeed should, New Zea land
continue this traditional approach, as pressure mounts to explore more
liberal interpretations of charitable trusts and political purposes? is article
explores the two jurisdictions and considers critica lly, in light of very recent
controversial judgments, the diverging paths being ta ken by the jurisdictions.
Before any analysis of the proposition, there must rst be a contextualisation
of the legal position of charitable trusts and political purposes.
II. T L C
e philosophy of charity is rooted rmly in the annals of history and
the oldest active charity on record in the United Kingdom is documented as
A D5 9 7.2 However, it would take many more centuries before an ocia l system
of regularisation would take eect; this bega n ocially with the Statute of
Elizabeth k nown otherwise as the Statute of Charitable Uses 1601. is Act
was primarily intended as “an accountability tool to ensure that charitable
assets were applied to charitable ends”3 and has long since been repealed,
although in the modern context it is its Preamble that is the cornerstone
of that which may be construed as t he principle of charitable law, and the
yardstick against which charitable purposes a re measured; if a purpose falls
* Juliet Cheval ier-Watts, Senior Lecturer i n Law, Te Piringa – Faculty of L aw, University of
Waikato, New Zea land.
1 Aid/Watch Incorporated v Commissioner of Taxation [2010] HCA 42.
2 Gareth Morgan “e Spirit of Ch arity” (pap er presented at Professor ial Lect ure, Sheeld
Hallam Unive rsity, England, April 2008) at 5.
3 Oongah Breen “Pemsel Plus?: Ch aritable Purp oses – An Iri sh Perspective” (UC D Working
Papers in Law, Criminolog y & Socio Leg al Studies , University Colle ge Dublin, Rese arch
Paper No 43/2010) at 2.
within the spirit and intendment of the Preamble,4 then prima facie, it is
charitable. e Preamble sets out the non-exhaustive list of purpose s that are
deemed to be charitable and these purposes include:
e relief of the aged, poor and impotent;
e maintenance of sick and maimed soldiers and mariners;
e repair of bridges and churches;
e marriage of poor maids.
In the now seminal case of Commissioners for the Special Purposes of Income
Tax v Pemsel,5 Lord McNaghten set out the four heads of charity under which
all charitable trusts must fall and “these head s are still the very foundation of
charitable trusts in contemporary times.”6 e four heads of charity are most
certainly well docu mented, although no review of charity is complete without
their citation; they are as follows:
e relief of poverty;
e advancement of religion;
e advancement of education;
Any other purposes benecial to the community not fallin g under any
preceding heads.
ese four heads of charity have now been codi ed in New Zealand in the
Charities Act 2005 as follows:7
In this Act, u nless the contex t otherwise r equires, cha ritable purpose i ncludes every
charitable purp ose, whether it relate s to the relief of povert y, the advancement of
education or religion, or any ot her matter benecial to the commu nity.
A trust may fall w ithin one or more of the four heads, however, there
are still fur ther tests that must be satised before a trust may be construed
as being charitable under the Act. Sec tion 5(2) of the Act requires that the
purpose must be for the public benet:
(a) the purpose of a trus t, society, or institution i s a charitable pur pose under thi s Act
if the purpose wou ld satisfy t he public benet requirement apa rt from the fact that the
beneciaries of t he trust, or the memb ers of the society or i nstitution, are rel ated by
4 Morice v Bishop of Du rham (1804) 9 Ves 399 at 405, 32 ER 656 at 658.
5 Commissioner for Special P urposes of Income Tax v Pemsel [1891] AC 531 at 583.
6 Juliet Chevalier-Watts “Charit able Trust and Politica l Activity: Time for a Chang e?” (2011)
19(2) WLR 145 at 145.
7 Charities Ac t 2005, s 5(1).

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