Re Greenpeace of New Zealand Inc.

• Jurisdiction: New Zealand
• Court: Supreme Court
• Judge: WILLIAM YOUNG,Arnold JJ,William Young J,Elias CJ,Elias CJ's
• Judgment Date: 06 August 2014
• Neutral Citation: [2014] NZSC 105
• Docket Number: SC 97/2012
• Date: 06 August 2014

In the Matter of An appeal from a decision of the Charities Commission under the Charities Act 2005

Re Greenpeace of New Zealand Incorporated

Appellant

[2014] NZSC 105

Court:

Elias CJ, McGrath, William Young, Glazebrook and Arnold JJ

SC 97/2012

IN THE SUPREME COURT OF NEW ZEALAND

Appeal against the Court of Appeal (CA) determination that a political purpose could not be a charitable purpose and that therefore the appellant could not be registered under the Charities Act 2005 — whether the exclusion of political purpose rule should be applied in New Zealand — whether s5(3) Charities Act enacted a political purpose exclusion — whether the CA applied a correct approach to the assessment of charitable purposes when it concluded that an object “to promote nuclear disarmament and the elimination of weapons of mass destruction” was charitable ” whether illegal activity could disqualify an entity from registration when it indicated a purpose which was not charitable even though such activity would not justify removal from the register of charities under Charities Act.

Counsel:

D M Salmon, L K Simcock and D E J Currie for Appellant

P J Gunn and D Baltakmen for the Charities Board (formerly Charities Commission)

• A The appeal against the Court of Appeal's determination that a political purpose cannot be a charitable purpose is allowed.

• B The appeal against the Court of Appeal's determination that purposes or activities that are illegal or unlawful preclude charitable status is dismissed.

• C The matter of the charitable status of the objects of Greenpeace of New Zealand Inc is remitted to the chief executive of the Department of Internal Affairs and the Charities Board for reconsideration in light of this decision.

REASONS

Elias CJ, McGrath and Glazebrook JJ	[1]
William Young and Arnold JJ	[119]

1 Greenpeace of New Zealand Inc is an incorporated society which has sought registration as a “charitable entity” under Part 2 of the Charities Act 2005. Societies or institutions qualify for registration under s 13 of the Act only if they are “established and maintained exclusively for charitable purposes”. 1 A principal advantage gained by registration as a charitable entity is tax relief. 2

2 The appeal concerns how “charitable purpose” within the meaning of s 5 of the Charities Act is properly assessed. In particular, it is concerned with the extent to which purposes that are “political” (including those that advocate particular views) can be charitable. And it raises questions about the extent to which an entity which engages in illegal activities or has illegal purposes can be charitable.

3 The conclusions reached are:

• •A “political purpose” exclusion should no longer be applied in New Zealand: political and charitable purposes are not mutually exclusive in all cases; a blanket exclusion is unnecessary and distracts from the underlying inquiry whether a purpose is of public benefit within the sense the law recognises as charitable.

• •Section 5 of the Charities Act does not enact a political purpose exclusion with an exemption if political activities are no more than “ancillary” but rather provides an exemption for non-charitable activities if ancillary.

• •The Court of Appeal applied an incorrect approach to assessment of charitable purposes when it concluded that an object “to promote nuclear disarmament and the elimination of weapons of mass destruction” was charitable.

• •llegal activity may disqualify an entity from registration when it indicates a purpose which is not charitable even though such activity would not justify removal from the register of charities under the statute.

Background to the appeal

4 The Charities Commission declined Greenpeace registration on the basis that two of its objects were not charitable. 3 The objects found to be not charitable were the promotion of disarmament and peace and the promotion of “legislation, policies, rules, regulations and plans which further [Greenpeace's other objects] and support their enforcement or implementation through political or judicial processes as necessary”. 4 In distinguishing between charitable objects and those that are “political”, the Commission followed Molloy v Commissioner of Inland Revenue 5 in which the Court of Appeal adopted the view that “a trust for the attainment of political objects has always been held invalid”. 6 The Commission found that the political purposes of Greenpeace were not merely ancillary to its charitable purposes (as would be permitted by s 5 of the Act, in adoption of a similar common law latitude) but were independent purposes. 7 In addition, the Commission concluded that the direct action which it found to be “central” to the activities carried on by Greenpeace could entail illegal activity, which also could not be said to be in the public interest and charitable. 8

5 Greenpeace was unsuccessful on appeal to the High Court. 9 Heath J considered that he was bound by Molloy to find that the two objects of promoting peace and disarmament and advocacy through political and other forums meant that Greenpeace was not “established and maintained exclusively for charitable purposes”. 10 Although he did not need to determine the issue of illegal activity, Heath J expressed “some reservations” about whether there was sufficient evidence for the Commission to find that Greenpeace was deliberately involved in undertaking illegal activity. 11

6 Greenpeace appealed to the Court of Appeal. 12 It indicated that it had resolved to recommend to a general meeting that the two objects which had caused the difficulty be changed. The promotion of “disarmament” would be restricted to the promotion of “nuclear disarmament and the elimination of all weapons of mass destruction” (on the basis that these purposes accorded with New Zealand's international obligations and domestic law and were not controversial) and the advocacy object would be changed to make it clear that it was truly “ancillary” to Greenpeace's charitable objects.

7 The Court of Appeal set aside the decision of the Commission declining to register Greenpeace as a charity. It affirmed the exclusion of “political” purpose. 13 But it held that the foreshadowed amendments to the Greenpeace objects avoided the political purpose exclusion: first, it was not controversial in New Zealand that promoting nuclear disarmament and eliminating weapons of mass destruction are for public benefit; 14 and secondly, the political advocacy object was now expressed to be limited to that which was “ancillary” only to other charitable purpose. 15

8 The Court of Appeal considered however that the advocacy actually carried out by Greenpeace could well be beyond a level merely “ancillary” to its charitable

purposes. 16 If that proved to be the case, Greenpeace would not be maintained exclusively for charitable purposes. The matter had not been considered by the Commission because of the view it had taken that the expressed objects before amendment prevented registration. The Court of Appeal accordingly referred the application for registration for reconsideration by the chief executive of the Department of Internal Affairs and the Charities Board, 17 which now make the decision following amendment to the Act in 2012. 18 The reconsideration was also to cover whether the direct action taken by Greenpeace entails unlawful activities that are inconsistent with charitable status. 19

9 Greenpeace appeals to this Court. It challenges the Court of Appeal's acceptance that the law treats objects which are “political” as non-charitable and prevents registration of an entity with such objects unless they are merely “ancillary” to charitable objects. It argues that the exclusion of political purpose should no longer be applied in New Zealand, especially following the High Court of Australia decision in Aid/Watch Inc v Commissioner of Taxation. 20 In Aid/Watch, the majority opinion treated contribution to public debate concerning charitable ends (in that case the relief of poverty abroad and education about poverty) as of public benefit and charitable in itself, while leaving open the question whether generating public debate in relation to other matters could also be charitable. 21 Greenpeace argues that there is no proper basis for a free-standing prohibition on political purpose. Rather, the only question is whether the purposes of an entity are charitable within the sense accepted by the common law.

10 Greenpeace also contends that illegal purposes or activities, if ancillary or minor, do not disqualify an entity from registration as charitable. It therefore challenges the basis on which the Court of Appeal remitted its application to the chief executive and the Board for reconsideration of the question of illegal means. It argues that the approach of the Court of Appeal in relation to illegal activities which

are minor cuts across the scheme of the Act in which it is only “serious wrongdoing” (as defined in the legislation 22) which justifies removal from the register

11 In the absence of a contradicting party, the Board has appeared to assist the Court.

“Charitable purpose” in the Charities Act

12 The appeal concerns application of the Charities Act. The Act builds on the pre-existing common law understanding of “charitable purpose” and it is necessary to make reference to the case-law on the topic. The Act itself however is the appropriate starting point because it provides the framework for consideration of what constitutes “charitable purpose” in New Zealand law.

13 A society or institution qualifies for registration as a charitable entity under s13(1)(b) (which deals with “essential requirements”) if it:

• (i) is established and maintained exclusively for charitable purposes; and

• (ii) is not carried on for the private pecuniary profit of any individual[.]

14 The purposes of an entity may be...