Commissioners for Special Purposes of Income Tax v Pemsel
[1891] A.C. 531(Judgment by: Lord Bramwell)
Between:Commissioners for Special Purposes of Income Tax - Appellants
And: John Frederick Pemsel - Respondent
Judges:
Lord Halsbury LC
Lord Watson
Lord BramwellLord Herschell
Lord MacNaughten
Lord Morris
Subject References:
REVENUE
INCOME TAX
Allowances
'Charitable Purposes'
Certificate
Procedure
Mandamus to Commissioners
5 & 6 Vict. c. 35, Sched. A, s. 61, No. VI., s. 62
Judgment date: 20 July 1891
Judgment by:
Lord Bramwell
My Lords, I agree that the respondent is entitled to judgment as to one half of the tax paid. As to the other half I entirely agree in the opinion of the Lord Chancellor, his reasons and conclusions, and the way he has applied his authorities. But I have some observations of my own to make.
The question that remains is whether lands with a trust to apply income for the purpose of "maintaining, supporting, and advancing the missionary establishment among heathen nations of the Protestant Episcopal Church known by the name of Unitas Fratrum or United Brethren," are "for charitable purposes" within 5 & 6 Vict. c. 35, s. 61. It is said that they are on two grounds; first, that the natural meaning of the words "charitable purposes" includes such a trust; secondly, that whether it does or not, "charitable purposes" have a technical meaning, and include everything that would have been administered in Chancery under 43 Eliz. c. 4, or which had been administered, as I understand it, by the Court of Chancery, upon the same principle, before the passing of that Act.
It is somewhat remarkable that some of the opinions in favour of the respondent are so on the first ground, and think the other wrong; whilst others are in their favour on the second ground and not on the first. Some are against them on both, my Lord chancellor, Lord Coleridge, the Scotch Judges in Baird's Case, and I must add myself.
I hold that the conversion of heathens and heathen nations to Christianity or any other religion is not a charitable purpose. That it is benevolent, I admit. The provider of funds for such a purpose doubtless thinks that the conversion will make the converts better and happier during this life, with a better hope hereafter. I dare say this donor did so. So did those who provided the faggots and racks which were used as instruments of conversion in times gone by. I am far from suggesting that the donor would have given funds for such a purpose as torture; but if the mere good intent makes the purpose charitable, then I say the intent is the same in the one case as in the other. And I believe in all cases of propagandism there is mixed up a wish for the prevalence of those opinions we entertain, because they are ours.
But what is a charitable purpose? Whatever definition is given, if it is right as far as it goes, in my opinion this trust is not within it. I will attempt one. I think a charitable purpose is where assistance is given to the bringing up, feeding, clothing, lodging, and education of those who from poverty, or comparative poverty, stand in need of such assistance: see per Lord Coleridge. That a temporal benefit is meant, being money, or having a money value. This definition is probably insufficient. It very likely would not include some charitable purposes, though I cannot think what, and include some not charitable, though also I cannot think what; but I think it substantially correct, and that no well-founded amendment of it would include the purposes to which this fund is dedicated. Todd's Johnson gives the meaning
"kind in giving alms, liberal to the poor, kind in judging of others, disposed to tenderness, benevolent."
But of course the word must be construed in the sentence where it is found, and the question is whether this trust is for charitable purposes within the Income Tax Act. The first meaning alone is applicable. Indeed, the word "benevolent" seems to me to have caused the difficulty. The purposes of this trust are doubtless "benevolent;" good was wished to others; but certainly every benevolent purpose is not charitable. I think there is some fund for providing oysters at one of the Inns of Court for the Benchers; this, however benevolent, would hardly be called charitable; so of a trust to provide a band of music on the village green. I cannot quite accept Lord Esher's definition; he says,
"allowances are to be made when the rents and profits are given in trust to be expended in assisting people to something considered by the donor to be for their benefit."
But that would include such cases as I have put, which I do not think his Lordship would consider charitable purposes. He proceeds, and I agree with him,
"and which assistance the donor intends shall be given to people who in his opinion cannot without such assistance by reason of poverty obtain that benefit."
Be it so, but that excludes this trust; there is no poverty contemplated in those who are to be benefitted, nor any notion that an addition to their means would procure them that benefit. What of a trust for the conversion of the Jews? Is that a charitable purpose? If so, what of a trust for the reconversion? It seems to me, that the extended meaning of "charitable purposes" would include every case of amusement and pleasure that could be thought of. I cannot think this was the intention of the Legislature. It is suggested that a fund for the saving of shipwrecked sailors would be for a charitable purpose. That is not this case. But would it? If so, would jumping into the sea to save a sailor be an act of charity? We say,
"He takes a charitable view of its conduct,"
"kind in judging of others,"
using the word as equivalent to "benevolent." It is confounding the two words that seems to me to lead to the difficulty. What was the intention, and why the exemption is made in the Act, is of course very much guess-work. But something like a reasonable ground may be suggested in this: that when the gift is of such a character as I have suggested in my definition, to tax the charity is to tax the poor, or take from the poor who would otherwise get the amount of the tax.
It is to be remembered, as has been mentioned, that to exempt any subject of taxation from a tax is to add to the burthen on taxpayers generally, and a very large exemption must be made if the respondent is right for the benefit of so-called charities, many of which are simply mischievous. On these considerations I hold that the natural meaning of the words "charitable purposes" excludes one-half of the income of these funds.
I now come to the other ground on which the exemption is claimed. It is said that whether or no the natural meaning of "charitable purposes" includes the purposes of this trust, those words have an artificial meaning, of a meaning given by statute or use, and must be interpreted accordingly. The argument, as I understand it, is this: The 43 Eliz. c. 4, is entitled, "An Act to redress the Misemployment of Lands, Goods, and Stocks of Money heretofore given to Charitable Uses." It then enumerates a variety of uses or purposes, some of which are not charitable according to any ordinary definition of the word; therefore, "charitable uses" in the title means charitable uses, and more than those, benevolent uses, and uses for the public or general good, or that of portions of the public, or of individuals. Then it is said that this interpretation of "charitable uses" has been followed by other statutes, and by decisions from the passing of the statute hitherto, and so "charitable purposes," when those words occur in any statute, must be understood as including whatever would be held to be within the statute of Elizabeth, and that the purposes here would be so held.
I cannot follow this reasoning. It would fall to the ground if the title of the statute had been "charitable and other benevolent uses," or some similar expression, as it ought to have been, in strictness. Because, as I have said, I think it is certain that some of the purposes mentioned in the preamble are in no sense charitable. I cannot agree with Fry L.J. It is a strange thing that the title should make things "charitable" which are not so, rather than that the preamble should be understood as going beyond the title, which compendiously and conveniently spoke of charitable uses only. I believe that all that has been done is what I have said, viz., that following decisions and statutes have spoken of cases as "charitable uses," meaning cases within or dealt with as though within the statute of Elizabeth. An example of this will be seen in the Charitable Trusts Act 1853, the interpretation clause of which (sect. 66) says,
"charity shall mean every endowed foundation and institution taking or to take effect in England or Wales, and coming within the meaning, purview, or interpretation of the statute of 43 Eliz. c. 4, or as to which, or the administration of the revenues or property whereof, the Court of Chancery has or may exercise jurisdiction."
I have said that some cases within the 43 Eliz. could not, according to any reasonable definition of the words, be said to be "charitable purposes." I take, for example, "schools of learning" not limited to the poor, "repair of sea-banks," "relief, & c., for houses of correction," which is in aid of rates not paid by the poor. So, also, a bequest for keeping chimes in repair has been held to be within the statute (Turner v. Ogden), perhaps because causing a lessening of church rates, if, indeed, they could have been applied to such a purpose, which I do not know. So, also, a bequest upon trust to pay, divide or dispose thereof for the benefit or advancement of societies, subscriptions or purposes having regard to the glory of God in the spiritual welfare of his creatures: Townsend v. Carus. So, also, a school for the sons of gentlemen: Attorney-General v. Lord Lonsdale. Let it not be supposed that I find any fault with Courts of Equity for calling every trust within the statute of Elizabeth a charity. It was not strictly accurate, but was concise, and saved a circumlocution.
There is a very difficult and embarrassing matter to be considered. Every one admits, I believe, that the construction of the Income Tax Act ought to be the same in Scotland as in England; but the Scotch Courts say that the natural meaning of the words "charitable purposes" does not include such purposes as these, and that those words have not acquired a technical meaning to that effect. What answer is it to say that by English law it is so called for certain purposes? I do not agree it is so called; but suppose it were, what answer would it be? Suppose the case arose in England, and we were asked to interpret a statute, not according to its ordinary meaning, but according to some mode of expression used in Scotland? On the other hand, your Lordships have the advice of my noble and learned friend, Lord Watson, who says the words ought to be interpreted in favour of the respondent in Scotland. I cannot think so. Fry L.J. says the words are technical, and should be interpreted in Scotland as in England. I cannot see why. Lord Esher and Lopes L.J. do not agree. I do not know that they have a right to express an opinion on Scotch law, though we must. It seems to me that the argument shews that that has happened in Scotland which has happened in England, viz., that everything charitable, godly, pious came to be compendiously called "charitable." I think this appears from the instances cited by my noble and learned friend Lord Watson. Take the case of the University of Aberdeen v. Irvine, where "a trust for college bursars who did not necessarily belong to the class of indigent persons" was dealt with as a charity. It was benevolent, doubtless, but not charitable.
I think the judgment on this should be reversed. As the majority of your Lordships think otherwise the State will be a subscriber of £17 a year to supporting, maintaining, and subsidising "the missionary establishment among heathen nations of the Protestant Episcopal Church known by the name of the Unitas Fratrum, or United Brethren." Whether this was meant by the authors of the Income Tax Act, if it was, why, and whether it will be continued, are questions not before us.