Victorian Taxation Board of Review
Victorian Taxation Board of Review
1. The reference in this case was received in the Registry of the Board on the 4 August 1983. It was appointed to be heard on the 20 September 1983 and was heard on that and the following day.
2. X is a body originally formed as an unincorporated association in 1969 and subsequently, in 1972, incorporated under the law of Victoria as a company limited by guarantee upon the usual conditions regarding not being profit-earning and the distribution of assets on dissolution.
3. On the 5 January 1982 the Commissioner of Pay-roll Tax (``the Commissioner'') assessed X in the amount of $40,034.94 further pay-roll tax payable for the period 1 January 1974 to 30 June 1980 (inclusive) and by notice also bearing date the 5 January 1982 notified X of that assessment. The assessment was made in accordance with sec. 18(1) of the Pay-roll Tax Act 1971 (``the Act'').
4. By notice dated the 23 February 1982, X objected against the assessment upon the grounds that:
- (1) X is exempt from pay-roll tax by virtue of sec. 10(ba) and/or sec. 10(c) of the Act.
- (2) The amount assessed as that on which pay-roll tax ought to be levied was not wages, or taxable wages, for the purposes of the Act.
5. By notice dated the 10 March 1982, the Commissioner, having considered the notice of objection, gave notice to X that he had wholly disallowed the objection upon the grounds that:
- (1) The amount assessed as that on which pay-roll tax ought to be levied constituted wages liable to pay-roll tax under the Act and, in particular, under sec. 6 and 7 thereof.
- (2) Without limiting the generality of the foregoing:
- (i) that sum is the total of wages, salary, commission, bonuses and allowances paid or payable to employees as such of X and (within the meaning of the Act) the payments are ``taxable wages'';
- (ii) the persons to whom the amounts constituting that sum have been paid by X are (within the meaning of the Act) employees of X for the purpose of the Act and X is their employer for the purpose of the Act;
- (iii) these taxable wages were not wages paid or payable by a ``public benevolent institution'' within the meaning of sec. 10 of the Act. Further, and without limiting the generality of the foregoing, in respect of the period 5 December 1979 to 30 June 1980 (inclusive) he was not satisfied that any person employed by X was engaged exclusively in work of the kind described in the qualification contained in para. (ba) of sec. 10 of the Act;
- (vi) (sic) these taxable wages were not wages paid or payable by a ``hospital which is carried on by a society or association otherwise than for the purpose of profit or gain to the individual members of the society or association'' within the meaning of sec. 10 of the Act. Further, and without limiting the generality of the foregoing, in respect of the period 5 December 1979 to 30 June 1980 (inclusive) he was not satisfied that any person employed by X was engaged exclusively in work of kind described in the qualification contained in para. (c) of sec. 10 of the Act.
6. By letter dated the 4 May 1982 X, being dissatisfied with the decision of the Commissioner, requested him to refer it to this Board.
7. By letter to the Commissioner also dated the 4 May 1982, X applied to add to its grounds of objection:
``3. X is exempt from pay-roll tax in respect of all wages paid by it prior to 5 December 1979 by virtue of the former sec. 10(b) of the Pay-roll Tax Act which was in force up to that date.''
The solicitor to the Commissioner, very properly I thought, did not object, and as there seemed no good reason why, at a hearing on the 20 September 1983, the objector should not be allowed the additional ground, I made the necessary order under sec. 33A(1)(a) accordingly.
8. The Commissioner, by notice dated the 11 May 1982, sought certain further and better particulars of the objection which were supplied on the 28 July 1983. But it is not, it seems to me, necessary to refer to those in any detail, for they were directed to matters largely disposed of by agreements and concessions between the parties announced at the hearing. Thus:
- (1) The Commissioner conceded that X was an institution and an institution of a public character within the meaning of the compound phrase ``public benevolent institution'' used in sec. 10 of the Act.
- (2) X -
- (a) Abandoned its claim to exemption as a hospital under sec. 10(c) of the Act.
- (b) Conceded that the amount assessed by the Commissioner as taxable wages paid or payable by X on which pay-roll tax ought to be levied was, or would be, such unless X could establish the exemptions provided for by the original sec. 10(b) of the Act in respect of wages paid or payable ``by a... public benevolent institution'' or, on and after the 5 December 1979, by sec. 10(ba) of the Act (as amended by the Pay-roll Tax Act 1979, No. 9305, sec. 4) in respect of wages paid or payable ``by a public benevolent institution to a person during a period in respect of which the institution satisfies the Commissioner that the person is engaged exclusively in work of the institution of a public benevolent nature''. (In relation to this latter provision I should add a reference to what might be described as a further conditional concession by the Commissioner, namely, that if X satisfied the requirements of the statutory description ``public benevolent institution'' then the persons to whom it made the payments forming the basis of the assessment of further pay-roll tax payable were engaged exclusively in work of the institution of a public benevolent nature.)
9. As a result of this series of reciprocating concessions or admissions the parties were
ATC 142agreed before me that the contest between them narrowed down simply to the question whether X was, although a public institution, a ``public benevolent institution''; and it becomes unnecessary, and could only be confusing, to refer in any detail to the propositions of law and other matters stated by the parties in their respective reg. 9 documents, except to observe that that of the objector was directed to showing that it is ``an organisation for the relief of poverty, sickness, destitution, helplessness, suffering or misfortune''. For this purpose a substantial body of oral evidence was tendered and also a voluminous mass of documentary evidence embracing the history of X in both its incarnations over a period of some 14 years.
10. The meaning to be given to the phrase ``public benevolent institution'' was first judicially formulated by the High Court in
Perpetual Trustee Company Limited v. F.C. of T. (1931) 45 C.L.R. 224 (Royal Naval House case) in relation to the provision of the Estate Duty Assessment Act exempting from assessment to duty gifts to ``public benevolent institutions''. That interpretation has subsequently been applied or adopted in the Courts (irrespective of context) in relation to other revenue statutes: See
Maughan v. F.C. of T. (1942) 7 A.T.D. 131; (1942) 66 C.L.R. 388 (Boys Brigade case, under the Income Tax Assessment Act);
Australian Council for Overseas Aid v. F.C. of T. 80 ATC 4575;
Australian Council of Social Service Inc. & Anor. v. Commr. of Pay-roll Tax (N.S.W.) 82 ATC 4385. Cp also
Public Trustee (N.S.W.) v. F.C. of T. (1934) 51 C.L.R. 75 at pp. 100 and 103-105;
Lemm v. F.C. of T. (1942) 7 A.T.D. 138; (1942) 66 C.L.R. 399.
11. The terms of the formulation by the members of the High Court in the Royal Naval House case (para. 10 above) were considered in detail by the Board in its decision in Case No. PR/1/82 ((1982) 26 C.T.B.R. (N.S.) V.T.B.R. Case 2, 46) para. 17. But in the present case I think it is really only necessary to refer to the essential aspects of what their Honours said, namely (per Starke J. at p. 232 of the report), that the phrase means ``an institution organised for the relief of poverty, sickness, destitution or helplessness''; (per Dixon J. at pp. 233-234) ``organisations which... promote the relief of poverty, suffering, distress or misfortune''; (per Evatt J. at pp. 235-236) ``such bodies... give relief freely to those who are in need of it and who are unable to care for themselves. Those who receive aid or comfort in this way are the poor, the sick, the aged and the young. Their disability or distress arouses pity, and the institutions are designed to give them protection''.
12. But there remains the question, how is the necessary statutory character of the institution under review to be determined? There would appear to be two ways of ascertaining an answer to that question: one, by considering the objects or purposes of the institution as defined in its constating documents; the other is by examining the activities it is actually engaged in at the relevant times. The two approaches were respectively propounded and argued by the opposing parties before this Board in Case No. PR/1/82; but I there found it unnecessary to choose between them because, it seemed to me, on either test the objector in that case failed to satisfy the character of a ``public benevolent institution'' as that phrase has been judicially defined and applied. But in this present case, for reasons which will appear, I must, I think, so choose.
13. Little or nothing was specifically addressed to this point in the judgments in the ``public benevolent institution'' cases referred to in para. 10 above. But the High Court has, in a number of cases, considered the way in which the question whether some body satisfies some requisite statutory character should be determined, in relation, it is true, to quite disparate legislative provisions, but, with respect, the decisions appear to me to offer some general principles which should guide me in this case. Taking the most recent decisions which I have observed, their drift, if I may so term it, appears to be to this point: In
A. & S. Ruffy Pty. Ltd. v. F.C. of T. (1958) 11 A.T.D. 452 at p. 458; (1958) 98 C.L.R. 637 at p. 656 Fullagar J. said in relation to the question whether a company ``is established'' for some purpose during a relevant period, ``We may of course - and indeed, I think, must - look at the company's memorandum of association, but this cannot be conclusive either way. We must in addition look at the activities actually carried on by the company, and at its history, constitution and control, for all or any of these things may throw light on the purpose of its establishment and the primary object of its business''.
Brookton Co-operative Society Ltd. v. F.C. of T. 81 ATC 4346; (1981) 147 C.L.R. 441
ATC 143it was pointed out that ``is established'', in requiring that the company and its activities be looked at in each relevant taxation period, had the significance of ``maintained'' or ``kept in operation'' (at ATC p. 4358; C.L.R. 461 per Aickin J.). In determining whether a corporation falls within the description of a ``trading'' or a ``financial'' corporation it is the majority view in the High Court that it is sufficient if its activities of a ``trading'' or ``financial'' character were a substantial and not insignificant part of its operations (
Adamson's case (1979) 143 C.L.R. 190;
State Superannuation Board (Vic.) v. Trade Practices Commission (1982) 44 A.L.R. 1). On the other hand, where a corporation has not begun, or has barely begun, to engage in activities, its constitution, including its objects, assumes particular significance as a guide. (
Fencott v. Muller (1983) ATPR ¶40-350; (1983) 46 A.L.R. 41 at p. 62 per Mason, Murphy, Brennan and Deane JJ.)
14. As far as the judgments in the ``public benevolent institution'' cases (para. 10 above) are concerned, they might be thought somewhat ambivalent on the matter. In the Royal Naval House case the formula of Starke J. ``organised for'' might be thought to speak with two vocies on the point, and be equated with the ``is established'' considered in Ruffy and Brookton (para. 13 above). On the other hand, the dicta of Dixon and Evatt JJ. appear directed only to a consideration of the activities of the institution. In the Boys' Brigade case, Lemm's case and the Australian Council for Overseas Aid case, the observations of the learned Judges appear to be directed predominantly to what the institutions did. The same might be said of the Australian Council of Social Service case.
15. It becomes necessary, I think, to examine the facts in relation to which the Courts made their pronouncements in the cases referred to, in order to see to just what circumstances and activities the epithet ``benevolent'' is to be held directed to. Such an examination, it seems to me, goes to show that not only may the stated objects of the institution in question be quite subsidiary to arriving at the appropriate conclusion and the activities carried on by it a substantial determining factor, but also that in this latter connection the vital determinant was the character, conditions and circumstances of the intended beneficiaries of those activities. In the Royal Naval House case (para. 10 above) it was this last consideration which effectually precluded that institution being held to have the required ``benevolent'' character. In the Boys' Brigade case (para. 10 above) it might well be thought that the stated objects of that organisation bore little relation in their terms to the formulae in the Royal Naval House case; it was open to all boys of the prescribed age irrespective of their social or economic situation; but what in fact it did was to provide for the ``ragged urchins'' of the poorest areas of Sydney, the physical environment and material advantages that those better off might find and possess in their own milieus. The forms in which that environment and those advantages might be provided were of less or, perhaps, no significance when set against the character, conditions and circumstances of the beneficiaries. It is with these considerations in mind that one must read the observations of Dixon J. in the Public Trustee (N.S.W.) case (para. 10 above) (1934) 51 C.L.R. 75 at p. 104 ``Institutions connected with the health, upbringing, welfare and education of young children coming within the legal conception of `charitable' may be imagined to which no one would apply the term `public benevolent institution'.'' In Lemm's case (para. 10 above) the decision rested solely on the terms of the objects stated by the testator in his will, that is:
- (1) a home for aged women in straitened financial circumstances, for its upkeep and maintenance and
- (2) for the benefit and/or maintenance of any Home Hospital or Institution... established for or having as its object the relief of pain and suffering and/or physical disability and/or infirmity and/or financial distress.
The first was held to be ``organised'' (i.e. set up) for the relief of poverty and (2) to be for benevolent objects, which at Lemm's case (1942) 7 A.T.D. 138; (1942) 66 C.L.R. 399 Williams J. (with whom Rich and McTiernan JJ. concurred) would be ``homes hospitals and institutions organised to render service of a permanent eleemosynary character to appreciable deserving but needy sections of the community''. In the Australian Council for Overseas Aid case (para. 10 above), which might be thought, with respect, to have stretched the concept as far as it might well go, it being conceded that the Council's members were predominantly givers of aid to poor persons overseas, and thus predominantly
ATC 144public benevolent institutions, Connor A.C.J. said at 80 ATC pp. 4577-4578:
``it seems that nearly everything the taxpayer does is done in the course of and for the furtherance of the relief of poverty even though it is done in conjunction with other institutions.''
Union Trustee Co. of Australia Ltd. v. F.C. of T. (1962) 108 C.L.R. 451 at p. 454 Taylor J. said, referring to the Royal Naval House case (para. 10 above):
``According to this view a benevolent institution is an institution having as its object the relief of `poverty, sickness, destitution or helplessness' or `poverty, suffering, distress or misfortune'. These words of definition are not rigid and inflexible but they do convey the general notion of what constitutes the essential attributes of a benevolent institution.''
If I may venture to build a little upon what Taylor J. there said, on the basis of the view of the cases in the preceding paragraph of this decision, the ``general notion'' he speaks of is the provision, in aid of some presently existing state of circumstances calling for it, of some material means of ameliorating or alleviating the condition brought about in the case of individual members of the community by those circumstances. The collocation of ideas in ``poverty'', ``sickness'', ``suffering'', ``destitution'', ``distress'', ``helplessness'' or ``misfortune'' all seem to convey the concept of material, physical or bodily need, be it for food, clothing, accommodation, medical attention or something else. In the
Royal Naval House case (1931) 45 C.L.R. 224 at pp. 235-236. Evatt J. spoke of benevolent institutions as those ``providing food and clothing for those in poverty and distress, caring for deserted babies, providing maintenance, housing and relief of the aged poor, orphans and those suffering from bodily or mental illness - those who receive aid or comfort are the poor, the sick, the aged and the young... giving relief freely to those who are in need of it and unable to care for themselves''.
17. X, as an unincorporated association, originated in a public meeting held on the 30 October 1969. According to the minutes (Ex. B) it was resolved unanimously to establish X as a branch of the Y Association, and further resolved that the aims and objects of the latter should be adopted by X. These were set out as follows:
- 1. The relief of poverty and ill health and the prevention and mitigation of the consequences in the special fields of family life, marital happiness, and the birth and upbringing of healthy children.
- ``Uncontrolled maternity may be defined as child-bearing which is unrestrained by consideration of the health of the mother, the economic circumstances of the family, the adequacy of housing, and quality of nutrition in the children.''
- 2. For the attainment of the foregoing primary objects, the provision under qualified medical direction of Family Planning Centres and Clinics at which medical advice may be provided for any of the following:
- (a) Family limitation and the spacing of the birth of children by the employment of scientific methods of fertility control.
- (b) Infertility.
- (c) Difficulties connected with marital relationships, for which such advice or treatment is appropriate.
- (d) Further sex education of engaged couples etc.
18. The Constitution of X (unincorporated) (Ex. C) as drawn up in August 1970 in fact stated its objects as follows:
- (1) To promote responsible parenthood, a healthy family life and marital happiness, and the birth and upbringing of healthy children.
- (2) To relieve poverty and to prevent ill-health in the special field of family life.
- (3) To attain the preceding objects by the provision, under qualified medical direction, of Family Planning Centres and Clinics, at which medical counselling, advice and instruction may be given on:
- (a) Family limitation and the spacing of the birth of children by scientific methods of contraception.
- (b) Sub-fertility.
- (c) Difficulties connected with marital relationships for which such advice is appropriate.
- (d) Preparation for marriage in the field of family planning.
- (4) To assist in community education concerning human relationships and marital happiness by means of:
- (a) lectures or courses of lectures given publicly or privately;
- (b) publication and distribution of suitable literature;
- (c) the use of newspapers, television and radio and screening of educational films.
- (5) To co-operate with other societies having similar objects.
- (6) To promote such legislative, social and administrative reforms as may be relevant to the objects of the Association.
19. Upon the incorporation of X as a company limited by guarantee on the 20 September 1972, its Memorandum of Association adopted as its objects those numbered (1) to (6) in the Constitution of the unincorporated association, except for the substitution of ``human'' for ``marital'' in (3)(c), and added:
``(7) To carry on such of the activities of the unincorporated association known as (X) as shall be carried on by that association immediately prior to the incorporation of this Association and are not inconsistent with the objects of this Association.''
- (8) (Which need not be repeated for present purposes); and
``(9) Generally to do all such acts and things as shall be required to ensure that the said activities of the said unincorporated association shall be continued without interruption.''
20. In a booklet (Ex. 1) dated January 1979, entitled Clinic Handbook and, according to the evidence, drawn up for the information, guidance and use of the doctors of X (and other clinic personnel), the aims of X were stated thus:
- 1. To provide medical advice regarding contraception and birth control to any person, married or single.
- 2. To give medical advice and help to childless couples.
- 3. To assist in community education which promotes a full understanding of human relationships and the control of fertility by the provision of speakers, films and publications.
- 4. To promote family planning facilities in Victoria and to co-operate with other organisations which have similar objectives.
- 5. To promote legislative, social and administrative reforms as may be relevant to the objects of the Association.
Sister D (see para. 25 below) said that the aims thus set out embraced the whole range of the activities, and crystallised the purpose of the existence, of X.
21. X was, pursuant to sec. 6 of the Hospitals and Charities Act 1958, declared to be a ``benevolent society'' within the meaning of that Act (Ex. P). It was suggested, but faintly. I thought, that that was some indication that it was a ``public benevolent institution'' within the meaning of the authorities on that phrase. I do not think so, nor can I think that holding X not to be a ``public benevolent institution'' can possibly affect its status as a ``benevolent society'' under the Hospitals and Charities Act. The definition in that Act of ``benevolent society'' is a provision of which it might well be said that ``for equal length and fuliginous obscurity'' it would be difficult to find its superior in the Victorian Statute Book, but it at no point touches, nor is touched by, what has been held to be the essential character of a ``public benevolent institution''.
22. The history of these may best be dealt with in three sections: the clinics, the training and education programs, and a city centre colloquially christened ``a Drop-in'', but bearing for official purposes a much grander-sounding (but no less uninformative) title.
23. Four witnesses gave evidence: the present Medical Director of X (since February 1981), and three others who had all been closely involved in its affairs for some ten years.
24. The Manager (for some seven years) of X considered its Clinic services to be its most important side. Basically, these consisted in the provision of advice and treatment and the means to practise contraception (predominantly the prescribed Pill) in that field, pregnancy tests and counselling, advice in matters of sexuality,
ATC 146matrimonial problems, personal relations and sexually transmitted diseases. It appears from the annual report for 1976/77 (Ex. I) that the services extended also to Rubella immunisation and pathology tests for gynaecological disorders and venereal disease.
25. The Medical Director considered that X had a special and unique role in, and reputation for, helping young single women to avoid unwanted pregnancies with their personal health and general social risks of abortions, premature marriages, family stress and break-up and financial cost in terms of social welfare to the community. (The other doctor (a member of the Executive Committee) who gave evidence referred to the possible future psychological or emotional results of a previous abortion, the fact that marriage difficulties and break-ups are more common with marriages at too early an age when the wife is pregnant, the stress, economic and other, on the single mother and her child, and the stresses if the course of adoption is followed.) The Medical Director regarded the primary achievement of X as being to contribute significantly to making contraception available to young women before they commence having (sexual) intercourse. He said that the majority of those attending the clinic came for contraceptives, ``we are looked on as a contraceptive clinic''. Sister Di, the Training Director and original main Clinic Supervisor, said, ``we regard the services as preventive medicine''. Evidence was given of studies of pregnancy rates among teenagers in Australia, which, if statistically sound (a matter of which I fear I am not competent to judge) suggested that between 30-40% of young single women become pregnant before they are 20. A survey (Ex. Y) of 2,067 (70%) of the new patients at the main clinic of X from August 1981 to April 1982 and showing the age of 17.75 (86%) at the first act of sexual intercourse indicated that the most probable age was 16-18, and only 49% used any method of contraception. The pregnancy rates set out above cannot but seem startling to any mind still, in this so-called ``permissive'' age and society, retaining old-fashioned ideas of moral virtue. Not that that consideration really has anything much, or at all, to say to the problem before the Board.
26. It was made abundantly clear by the witnesses that the services provided by X were available to all, male or female, young or not so, single or married, well-to-do or poor, or any other ground of discrimination. None was denied medical services if they could not afford to pay for them. But, until the introduction of the Health Care Card system with its approximately $110 weekly income as a discrimen, the question whether a patient should be regarded as unable to pay depended very much on her or his answers to a receptionist and the latter's skill, experience and judgment in deciding the matter. The Manager in her evidence said that X did not at all view the question of need in the provision of its services in terms of money; the test was the patients' physiological, psychological or emotional needs and not whether they had the money to pay for it; if they need contraception or pregnancy advice the need is just as great in a wealthy as in a poor person. The charging practices appear to have chopped and changed somewhat with the chops and changes in Government policy linking funding and charging. Some account of this will appear from the Table set out in the next paragraph.
27. The details in the following Table have been compiled (where available) from the Annual Reports of X (Ex. F to O). They incorporate, for convenience and ready putting together, the details relating to the city ``Drop-in'' Centre (for more detail concerning which see para. 33 below).
Clinics History Details D.C. indicates City ``Drop-in'' Centre Year New (Return (Total) Percent Percent Percent Revenue: - (Medical (Cost) ending Patients Visits) Single Under 20 21-30 Medical Sales) 30 June Services 1974 1,063 (1,578 2,641) 10,489 6,069 (6,069) (Fees charged to those able to pay) 1975 N.A. (N.A. 5,554) N.A. N.A. (Fees charged to those able to pay) 1 October 1975 - (w.e.f.) - Free under Federal grant 1976 3,440 (5,196 8,636) 86% 47% 9,446 26,568 (19,706) 1 October 1976 - (w.e.f.) - Free to Standard Medibank patients and ``unbillables'' 6 December 1976 - D.C. opened 1977 4,880 (9,224 14,104) 80% 45% 28,750 53,920 (33,043) Rebateable fee charged to insured patients only. 60% free service D.C. 1,400 (804) 1978 5,288 (11,958 17,246) 78% 41% (under 21) 36,836 71,950 (51,801) D.C. 786 (954 1,740) At contraceptive D.C. 5,997 (3,627) sessions. (1978) (Schedule fee charged to insured and registered uninsured patients. No fee from those unable to pay and ``unbillables''. The latter totalled 20.3%) 1979 5,973 (15,233 21,206) 83% 46% 44.5% 75,622 103,833 (64,541) D.C. 1,056 (1,884 2,940) 93% 73% D.C. 13,655 (9,280) (At contraceptive sessions) (Charging as for 1978. 37% free service) 1980 6,436 (17,503 23,939) 86% 47% 44% 110,444 121,689 (73,937) D.C. 1,203 (2,643 3,846) D.C. 20,815 (9,344) (Free service 38%) 1981 6,691 D.C. 1,619 99% (Free service 37%)
In the years to 30 June 1982 and 1983 there were declines in the number of new patients: suggested in the former year as due to availability of service resulting from a decline in funding; but the latter appears to have increased in 1983.
In 1982 and 1983 years the free service fell to 30% and 33% respectively.
Year Ending 30.6.83 160,351 157,416 (88,339) D.C. 16,153 39,180 (20,987)
28. A survey of the figures and facts in the Table in the preceding paragraph suggests (to my mind, at least) that the best guide to the number of individuals in the community that X supplied its clinic services to year by year is the numbers of new patients; they appear to have increased at a far less progressive rate than the numbers of repeat visits; and allowing for the wide variation over the period covered of the percentage of those services supplied free, it does not seem to me that the numbers of those individuals who were presumably to be judged as being in ``poverty'' could be very substantial in proportion to the size of the age groups in the population under 30 or under 20. It may be convenient here to mention on another aspect of the ``public benevolent institution'' question that the evidence of Sister D was that the majority of patients were well women, demonstrating no pathology for ill-health.
29. Some evidence was given of the incidence of unemployment in the 15 to 19 age group and of their income levels. But in the long run I came to the conclusion that it really did not much assist in deciding whether X was a ``public benevolent institution''. In Ex. Y (see para. 25 above) only 10% of the survey were shown as unemployed, and 30% as students. It may be that even in the 1970s and today, despite the massive contribution by the taxpayer to the costs of their education, students still, as Evatt J. observed in the Royal Naval House case (1931) 45 C.L.R. 224 at p. 235 ``are as a class notoriously impecunious''; but in spite of all that it was in the 1981/82 year that the proportion of free services fell to 30%; and in that year the income of X from Clinic medical services rose to $161,865 from $131,193 the year before (Ex. N). It is just not possible to tell to what degree the proportion of students shown by Ex. Y may have been on the free list. The Table shows, too, that, whatever may have been the attitude regarding medical services, X would seem to have driven a thriving trade on the ``medical sales'' side.
Public Education and Professional Training
30. Compared with the steady and not really very spectacular annual growth in the number of its contacts with new patients, this seems to have been the real area of growth and expansion of its activities by X and to become a very considerable proportion of them, to say nothing of its producing an increasing and not insubstantial income from fees for lectures and courses, book sales and film hire, increasing from $971 in the year ending 30 June 1974 to $69,822 in the year ending 30 June 1980 and $96,452 in that ending 30 June 1983. Indeed, in the 1976/77 Annual Report (Ex. I) it was stated that clinic appointments had increased by 63% (which included repeat visits - see the Table in para. 27 above) while education activities increased by 123%. I do not think that (as was submitted by counsel for the objector in argument) the numerical distribution and allocation of staff among the three branches of the Association's activities is necessarily a determinant of the relative importance and significance of each branch in the activities regarded as a whole. One activity may be ``labour intensive'' and another not, yet the latter be of greater proportionate significance in a whole.
31. Starting in the metropolitan area with the training of doctors and nurses (not only for staff purposes), later embracing third-year medical students and student nurses and then ``community educators''; talks to secondary schools and other institutions, later gradually to cover tertiary students, teacher and parent groups, primary schools, disadvantaged and handicapped groups, the deaf, the blind and disabled; prisons, social workers and interpreters; then extending these activities to country areas; the police, the Pharmacy College, rehabilitation centres, social welfare institutions, professional and ethnic groups; various adult and youth community groups, including the unemployed. Literally hundreds of talks and lectures were given annually to audiences totalling thousands. There was a library established and a collection of films, tapes, charts and birth atlases; film nights and forums were held, schools helped to develop courses in human relationships studies; pamphlets were produced and distributed on the clinic services, sterilisation, vaginal discharges, the pill, the intra-uterine device, the diaphragm, spermicides and condoms, the sexually transmitted diseases, the menopause; so also were posters, stickers and even match boxes; workshops were conducted for the community educators covering menstruation, pregnancy, birth, puberty, contraception, sexuality, sexually transmitted diseases, community attitudes, and implementation of human relationship programs; and other community workshops.
32. From the foregoing it will be seen that the activities of X gradually came to possess a wider and wider sweep. Indeed, after following out in the detail of the Annual Reports the history summarised above, I was left with feeling the impression that, despite the evidence of the witnesses about the pre-eminent importance of the clinic services, they had become, if not of minor, of some (comparatively) subsidiary significance in an overall view of the actual interests and activities. In the 1979/80 Annual Report (Ex. L) it was said (on p. 5):
``The education and clinic services provided by our staff give people the information and opportunity to make choices that might otherwise not be open to them. In the long run this means a happier, healthier and more economically efficient society.''
There the two activities seem at least harnessed in tandem
The ``Drop-in'' Centre
33. The impression referred to at the end of the previous paragraph was strengthened in my mind by the consideration of the declared scope of this Centre. It was opened on 6 December 1976. It was wholly Government funded, and free as far as services were concerned until 1983. (See the Table in para. 27 above.) The Manager of X described it as providing a medical advisory and counselling service for those under 20 needing advice and assistance on medical and personal problems relating to contraception, pregnancy, sexuality, family, marriage and personal problems. A widely distributed and publicised leaflet invited young people to come in or telephone for information or services on personal difficulties of all kinds, boyfriend and girlfriend troubles, sexuality, birth control and contraception, venereal disease, family or school problems, pregnancy testing, getting married, loneliness. The 1976/77 Annual Report (Ex. I) indicates that the personal problems inquiries extended to general health and employment questions. The Table in para. 27 above shows the numbers attending contraceptive sessions, but it seems from the Reports that thousands of others were assisted on even more thousands of questions and problems. A survey (Ex. Z) was made in 1977 at the Centre of all (108) of its clients for a short period and the results tabulated. But, with all respect, the sampling seems to be too small for this Board to proceed with any sense of sureness upon the results, and I do not further trouble this decision with it. Such evidence as there was, however, indicates that females predominate in resort to the Centre.
- 33. (A) For the Objector
- (1) Counsel began with a dictionary anthology of the terms used by the Justices in the Royal Naval House case (see para. 11 above) observing that there was a degree of overlap among them, but each was directed to a different area of benevolence.
- (2) The numerical distribution and allocation of staff showed that the predominant activity was the provision of Clinic services.
- (3) The Centre in the city was directed towards the more vulnerable and tender part of the population, less able to pay for the services. (But as to this there cannot be said to be any really persuasive evidence beyond assumptions, for the condition of its Government funding (see para. 32 above) was free services, and the income from medical sales appears to have been by no means insubstantial (see the Table in para. 27 above).)
- (4) The other activities were of minor significance. (But as to this argument see para. 29 and 30 above.)
- (5) Turning to the objects, Counsel began with those of the Y Association (para. 17 above), as being of a benevolent nature, cl. 2 being merely ancillary to the relief of poverty in cl. 1. The objects were for the relief of poverty and ill-health in the designated fields, to achieve the reduction of poverty and ill-health and prevent and mitigate their consequences. So, also, the objects of the unincorporated X (para. 18 above) were of a benevolent nature.
- (6) X falls within the terms used by Starke and Dixon JJ. in the Royal Naval House case (para. 11 above) which were alternatives: that is, a public benevolent institution need not be concerned solely with one of the matters enumerated. Institutions which exist for the relief of a number of essentially associated problems or the relief of the suffering of people in those situations are benevolent institutions.
- (7) ``Suffering'' can arise from pressure on the emotions or state of mind or well-being in other respects.
- (8) A great percentage was not charged and debts were not actively pursued. (But as to this see the Table in para. 27 and any observations thereon in para. 28, above.)
- (9) A great deal of emphasis seemed to be placed on the extent to which X was funded from the public revenues; but I have great difficulty in seeing what that has to say to its benevolent character.
- (10) The prevention of ill-health and the relief of sickness are much the same thing.
- (11) Both objects and activities are to be considered together, differing weight being given to each according to different cases. Both the objects and activities of X are benevolent, and no particular weight is to be attached to one or the other. (But on this, see para. 12 and 13 above.)
- (12) The primary activity is directed not only at the relief of poverty, but also of distress, suffering, misfortune and sickness.
- (13) The prevention of unwanted children relieves suffering, misfortune, distress or sickness of -
- (a) the mother's health or economic situation:
- (b) her family:
- (c) the child in respect of abortion, health, possible maltreatment, adoption, the problems of single parenthood, nutrition, accommodation and delinquency.
- (14) The provision incidentally of aid to persons not in the appropriate Royal Naval House case categories does not preclude X from being a public benevolent institution.
- (B) For the Commissioner
- (1) Primarily one should look at the objects, and to a lesser degree the activities. (But as to this, see para. 12 and 13 above.)
- (2) Construction of the objects of X reveals a duality, or plurality, of purposes, none being predominant over the other.
- (3) An argument that concentrates on the point of young persons does not go far, unless it is shown that they are in need of relief, that is, direct relief.
- (4) I was also referred to Case P104,
82 ATC 551.
34. I have stated in para. 16 of this decision what appear to me to be the inferences to be drawn from the relevant High Court decisions with respect to the scope of their applicability in determining the ``benevolent'' aspect of the character of a ``public benevolent institution''. It does not appear to me that, looking at the facts before the Board relating to X as an institution and regarding them as a totality of activities, it would be possible for me to conclude, with any feeling of assurance, that in respect of a substantial or not insignificant part (see para. 13 and 14 of this decision) of those activities X either is ``organised for'' or ``promotes'' the relief of ``poverty'' or ``destitution'', and I find it even more difficult to conclude that any such part of its activities is directed to the relief of the ``misfortune'', ``helplessness'', ``distress'', ``suffering'' or ``sickness'' of those to whom the totality of the activities are addressed within the meaning of the decided cases. Its activities would appear, rather, to be directed, in many channels over a wide field, towards providing information, advice and instruction in the method, manner and means of (to put it in plain terms without recourse to the modern addiction to uninformative circumlocutory euphemism) contraception, that is, of engaging in the experience of sexual copulation without incurring the risk of an unwanted pregnancy, as far as that may be possible. If it can be said that X in the case of those of its patients judged unable to afford the fee for medical service relieves their poverty or destitution, or, for that matter, state of ``sickness'', ``suffering'', ``distress'', ``helplessness'' or ``misfortune'', it is by the imparting of information and advice to the ignorant and those wishing to learn or giving comfort to the minds of others by negative results of pregnancy tests. But all that, as I have sought to show (see para. 15 and 16 above) is not the kind of ``relief'' which is contemplated by the decisions discussed in those paragraphs. In any case, also (see para. 27 and 28 above), those not charged over the relevant periods would appear to have been both numerically and proportionately of minor and incidental account amongst all those to whom X addressed the totality of its services. That an institution may incidentally provide to persons in impecunious (or other appropriate) circumstances services
ATC 151gratuitously which it offers to the generality for a charge does not necessarily constitute that institution one of a ``benevolent'' character within the statutory meaning of such a body (cp. Case P104, 82 ATC 551 and Case No. PR/1/82 ((1982) 26 C.T.B.R. (N.S.) V.T.B.R. Case 2, 46)).
35. Accordingly, for the reasons stated at large in the preceding paragraphs of this decision, the Order of the Board is that the subject assessment be confirmed.
36. The Commissioner, having succeeded, is entitled to an amount of costs based upon and properly calculated in accordance with the provisions and directions relating to Scale ``E'' contained in the Schedule of Scale of Costs in the County Court (Costs) Rules 1981 (S.R. 1981 No. 502). But not including any amounts or fees in respect of matters arising prior to the date of the Reference of the Objection to the Victorian Taxation Board of Review or in respect of his representation and presentation of argument at the hearing before the Board by the Solicitor to his Office (in accordance with the decision of the Board in a group of matters relating to a claim for the allowance of such an amount or fee in respect of a State Revenue Authority appearing before the Board by such a Solicitor). If the parties cannot agree on the amount of costs, the Registrar should be advised to that effect and the Board will then make a further Order for the delivery of a Bill and Objections thereto, and thereafter determine the amount of the costs to which the Commissioner is entitled.