The following summary of the judgment in Commissioner of Taxation v. Word Investments Ltd is provided to help you self-assess if your club is a society, association or club established for the encouragement of a game or sport. For a copy of the published case judgment see Commissioner of Taxation v. Word Investments Ltd.
End of attention
Word Investments Ltd was a company with objects which advanced religious purposes and others which aided those purposes, such as carrying on any business. Word operated a business of conducting funerals and, as set out in its rules, passed on surpluses from the business to a charitable institution. It also retained earnings to continue the business.
The High Court found that Word Investments Ltd was itself a charitable institution, as its objects were confined to advancing religious charitable purposes. Although the commercial fundraising activity (the funeral business) was not intrinsically charitable it was charitable in character because it was carried out in furtherance of a charitable purpose.
A comparison between Word and Cronulla and South Sydney Juniors may be drawn as the clubs in these cases provided surplus funds for the encouragement of sport.
An essential element in the Word judgment was that Word Investments Ltd had one set of objects confined to advancing religion. In Cronulla and South Sydney Juniors, the objects in the constitutions included both sporting objects and social or recreational objects. In both cases the provision of the social amenities was found to be a purpose in itself and not carried on only in furtherance of the sporting object.
Further, there is no evidence in the Word decision that benefits or services were provided to members of Word Investments Ltd. The Word decision does not disrupt the Cronulla or South Sydney Juniors decisions.