Case S70

KP Brady Ch

JE Stewart M
DJ Trowse M

No. 2 Board of Review

Judgment date: 13 August 1985.

K.P. Brady (Chairman), J.E. Stewart and D.J. Trowse (Members)

The question for decision in this case is whether an amount of $100 paid to an organisation known as Parents Without Partners - Victoria, qualifies as an allowable deduction under the provisions of sec. 78(1)(a)(ii) of the Income Tax Assessment Act 1936. Section 78(1) provides, so far as is relevant for present purposes, that ``gifts... of the value of $2 upwards of money... made by the taxpayer in the year of income'' to a public benevolent institution (see para. (a)(ii)) shall be an allowable deduction.

2. During the year of income ended 30 June 1982, the taxpayer paid an amount of $100 to Parents Without Partners - Victoria (referred to herein as P.W.P.) and in his return of income for that year he claimed that amount as a deduction in terms of sec. 78(1)(a)(ii). The Commissioner disallowed the taxpayer's claim and his objection to its disallowance, whereupon the matter has come before this Board for review.

3. At the hearing the taxpayer was represented by Mr Bornstein of counsel. The taxpayer did not appear to give evidence. Evidence was given on behalf of the taxpayer by the president of P.W.P. The Commissioner was represented by one of his officers.

4. At the hearing of the reference it was conceded on behalf of the Commissioner that the amount of $100 was paid by the taxpayer during the year in issue, that that amount was a gift for the purposes of sec. 78(1)(a) and that, for the purposes of subpara. (ii) of the subsection, P.W.P. was a public institution. The question for our decision, therefore, is whether P.W.P. falls within the meaning of the word ``benevolent'' which appears in the phrase ``a public benevolent institution'' in subpara. (ii).

5. It seems that P.W.P. (Victoria) was founded in Victoria in October 1967. From the documentary and oral evidence adduced before us, it appears that it is part of an international self-help, non-sectarian, non-profit, welfare and educational organisation which is devoted to the readjustment and interest of lone parents and their children. It also appears from a pamphlet, entitled ``ARE YOU A LONE PARENT? - Look Inside'', tendered in evidence, that a parent, for P.W.P. purposes, is a person who is a natural, adoptive, step or foster parent to a child.

6. It appears that membership of P.W.P. is open to parents of good character who are widowed, separated or divorced, including those who have not married, regardless of who has custody of the children. Further, it appears that, whilst admissibility to membership is generally restricted to lone parents with one or more children under the age of 18 years, membership when attained is not automatically terminated when the only child or the younger or youngest child reaches that age. Furthermore, it appears that there is a special provision in P.W.P.'s constitution which enables any adult citizen interested in the well-being of P.W.P. and prepared to abide by its objects and policy to be admitted as a member. However, such a member may not hold office in P.W.P. and may be called upon to pay a higher membership fee than that usually paid by ordinary members and associate members.

7. P.W.P.'s constitution provides that an applicant for membership shall be accepted provisionally for a period of 90 days where the application for membership is accompanied by one year's fee. Unless the applicant is declared ineligible for membership by the management in that period, in which case he or she will be advised and be refunded the membership fee, he/she automatically becomes an ordinary member after that period has expired. However, a provisional member may not hold office or vote.

8. Under the constitution, an ordinary member is one whose period of provisional membership has been completed and who is a member in good standing. The term ``in good standing'' means that a member is currently financial and is not under suspension or under consideration for suspension because of his or her conduct or alleged conduct which is considered by a fellow member or a branch of P.W.P. to be ``detrimental to the standards of P.W.P.''. Although a description of conduct falling into that category is not spelt out in the constitution, it was said in evidence that examples of such conduct would include disorderly behaviour at meetings because of drunkenness or being a nuisance by acting in an offensive manner to fellow members at meetings or elsewhere. Charges of misconduct are adjudicated upon by a special disciplinary

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subcommittee of P.W.P. and, subject to a successful appeal to the State Council of P.W.P. against the decision, a member found guilty might be simply reprimanded or suspended as a member for any period up to two years or expelled from the organisation. A person who resumes an existing marriage automatically ceases to be an ordinary member and is not eligible to be classed as an associate member.

9. Under the constitution, an ordinary member who remarries or enters into an open de facto marital relationship, which is publicly admitted by both parties, shall cease to be an ordinary member and will become an associate member. An associate member ``in good standing'' has the same privileges as an ordinary member, it seems, and is subject to the same conditions of membership, except that he or she is not entitled to vote at an election or at any meeting or to hold any office in P.W.P.

10. For present purposes, it is not necessary to consider in any great detail special circumstances which, under the constitution, may enable a person to be appointed as an honorary member, as a life member or as a branch associate. Generally, persons so appointed enjoy prestige or have demonstrated special abilities or have contributed outstanding service to P.W.P. Life members retain all the rights of an ordinary member. However, honorary members and branch associates are not required to pay fees and may not hold office or vote.

11. The preamble to the objects of P.W.P., as set out in its constitution, is of assistance in determining the question at issue and is therefore cited in full below:

``As conscientious single parents, it is our primary endeavour to bring our children to healthy maturity, with the full sense of being loved and accepted as persons, and with the same prospects for normal adulthood as children who mature with their two parents together.

From the divorce or separation which divides a family, or the loss of a parent by death, it is the child who suffers most. For children in such circumstances to grow unscarred requires the utmost in love, understanding and sound guidance. To provide these is a responsibility in parenthood. It does not end with separation or divorce, for either parent.

The single parent in our society is isolated to some degree. The difficulties of providing both for ourselves and our children a reasonable equivalent of normal family life is increased by that isolation. The established pattern of community life lacks both means of communication and institutions to enable us to resolve our special problems, and find normal fulfilment.

Therefore, in the conviction that we can achieve this, and through working together, through the exchange of ideas, and through the mutual understanding, help and companionship which we find with one another, we have established PARENTS WITHOUT PARTNERS to further our common welfare and the well-being of our children.''

12. Whilst lengthy, the objects of P.W.P., as set out in its constitution, are also of importance for present purposes and are therefore cited in full below:


2.1 To develop and provide a broad, comprehensive program for the enlightenment and guidance of parents without partners and their children on the special problems they encounter, and for assistance on the various readjustments involved.

2.2 To develop and provide enlightenment and information relative to:

  • (i) the problems and readjustments involved for parents without partners and their children who live alone.
  • (ii) the problems and readjustments involved for parents and their children, where one or both of such partners enter into a new marriage.
  • (iii) the problems and readjustments involved for parents without partners and their children where a broken home is to be re-established.
  • (iv) the preparations of such persons to meet, handle and dispose of such problems.

2.3 To develop and provide broad and comprehensive programs of group activities

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and recreational activities in which participation by parents without partners and their children will be a satisfying experience for its inherent value; and through companionable associations with other parents, provide children with the sense of shared experience and of normal man-woman relationships.

2.4 To encourage and develop the interchange amongst parents without partners of experience and knowledge relating to their special problems; to establish a clearinghouse for the exchange of information, such experience and knowledge; and the affording of assistance on all matters relating to such special problems.

2.5 To print, publish and distribute periodicals, newsletters, books, articles, and other such materials as will enable parents without partners to better fulfil their role as parents; increase the understanding, education, mutual welfare and happiness of their children and themselves, and facilitate participation in rewarding activities with other parents.

2.6 To establish advisory services for assistance and guidance to parents without partners and their children.

2.7 After appropriate investigation and research, to give relief and aid in the form of either financial or other material assistance - to persons in necessitous circumstances in the State of Victoria.

2.8 To ascertain, develop and extend among divorced and separated parents, the best possible practice on visitation and custody, with the happiness and emotional well-being of the child or children as the primary consideration, and accepting as a basic premise that to reach maturity, every child needs the love and guidance of both its (their) mother and father.

2.9 To develop an explicit code of conduct and behaviour for divorced and separated parents with reference to the welfare of their children; to establish professionally approved standards of parental conduct in divided family situations; and to develop acceptable ways and methods by which separated parents can handle problems affecting their children.

2.10 To make the benefit of our experience available at all times to any parents in need of guidance; and to the courts, wherever it may be acceptable, in an `amicus curiae' relationship, with the welfare of the children as the primary consideration.

2.11 To work toward the social and educational enrichment of the lives of parents without partners through such activities as will provide suitable and acceptable ways for single parents to meet one another for discussion, increased understanding and general activity.

2.12 To establish such branches or other units of this organisation as will enable it to serve most effectively the welfare of parents without partners and their children in those communities or areas where there is a need for the program and activities of this organisation.

2.13 To establish a professional advisory panel consisting of experts in various fields of endeavour to provide guidance in our activities, and further sound ties with other organisations, as well as with the communities in which this organisation may operate.

2.14 To appoint as Honorary Members persons who, by reason of stature in the community, organisational ties, learning, personal interest and means, would constitute an asset to the organisation and be of assistance in furthering its aims and programs.

2.15 To co-operate with other institutions and organisations on matters of mutual interest.

2.16 To encourage and develop an increased awareness of the father's role in the growth and development of the child, with particular reference to divided family situations; and to encourage and promote the interest of single fathers in active and positive participation in the growth, education and development and welfare of their children.

2.17 To develop, sponsor and work toward (1) improved legislation on all matters relating to separation, divorce, annulment, custody and welfare of children, and (2) improved facilities for the thorough investigation and determination of the best

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solution with respect to the children in each case of marital failure.

2.18 To support constructive programs and legislation designated to save marriages, particularly where children are concerned.

2.19 To carry out the foregoing through discussion groups, lectures, group and recreational activities, advisory services, scientific studies, collection, publication and dissemination of studies and information; and other activities incidental to the foregoing purposes.

2.20 To maintain a meeting place, or places, and conduct meetings where necessary; to purchase, erect or acquire suitable places for the attainment of all PWP objectives.

2.21 To borrow and raise any moneys required for the objects and purposes of PWP of such manner and on such terms and securities as may be lawfully determined.

2.22 To raise money for such purposes by subscription, public appeal, or other legal means.

2.23 To purchase, take on lease or exchange, hire or otherwise acquire any property, rights or privileges necessary or convenient for the purpose of P.W.P., and to do all things which are lawful and are incidental or conducive to the attainment of the foregoing.

2.24 To affiliate with and fully support the National Organisation of Parents Without Partners in its efforts to better the lives and conditions of Lone Parents.''

13. In the pamphlet referred to earlier, entitled ``ARE YOU A LONE PARENT'', the overall activities of P.W.P. are (with minor adjustments and omitting parts not relevant for present purposes) summarised as follows:

``It holds a wide range of activities for parents and children, both separately and together.

It organises forums and discussion groups for members on a wide range of subjects.

It provides information on the Welfare Rights pertaining to Lone Parents.

It maintains contact with Federal and State Government Departments.

It constantly presses for new and amended legislation in order to obtain pensions and benefits for all Lone Parents.''

14. In the same pamphlet the services provided by P.W.P. to its members are outlined. The following comments, based primarily upon the information provided in the pamphlet, are made under the same headings as those used in the pamphlet:

Monthly magazine

15. A monthly journal, known as ``Solo'', is published and distributed to members. It includes articles and information of general interest and gives details of activities concerned with golf, photography, tennis and music. Branch notes included in the journal relate to dances, art classes and family-orientated programs which appear to be basically of a social nature. It seems that in Victoria some 700 functions of one kind or another are held monthly.

Radio program

16. It appears that P.W.P. conducts an half-hour radio program each Sunday evening for the purposes of providing good music and of disseminating news and views concerned with its activities.

Welfare rights program

17. It appears that welfare rights program workers are available for interviews either personally or by telephone on weekdays.

Free legal service

18. Free legal advice is available to members by appointment.


19. Annual scholarships are made available to children of members. It seems that branches and regions donated some $9,000 for this purpose in the year ended 31 March 1985, and that 157 children received scholarships ranging in amounts from $50 to $175. It appears that the scholarships were granted, not so much in recognition of academic excellence, but rather as a reward for endeavour in learning or as an incentive to pursue studies in the interests of self-improvement, especially in the long-term.

Sherbrooke House

20. P.W.P. owns a property known as Sherbrooke House which consists of three emergency accommodation units. It appears

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that these units are run and funded by the Sherbrooke branch of P.W.P. We were given to understand that the units are constantly in use by members and non-members in need for varying periods which may not, however, exceed six weeks.


21. International Youth Exhibit Awards are said to be P.W.P.'s own arts and crafts program which is run for children of members between the ages of 6 to 17. Children are invited, it is said, to participate in any of the some 31 types of activities which include photography, science, music, arts and crafts, creative writing, sculpture and sewing. It seems that workshops are conducted at branch level throughout the year, finishing with entries submitted for judging, first, at branch level, then on to State through to national and international levels.

Annual picnic

22. An annual picnic is held to enable Victorian members and their children to meet and make new friends.

Fund raising quest

23. Mother of the Year and Father of the Year quests are held each year with branches entering representatives. The awarding of titles is made at the State Annual Ball.

Common interest groups

24. It appears that there are a number of such groups which are referred to in the pamphlet as ``Casuals Group: Inbetweeners Group''. It is said that these groups enable the ``young and young at heart'' members to join together in the pursuit of golf, the arts, music, tennis, photography and entertainment generally.


25. It appears that the basic unit of P.W.P. is the individual branch through which most of its services are provided. It appears from the 1984/1985 annual report, tendered in evidence, that P.W.P.'s Victorian organisation is divided at the present time into 13 regions which control 49 branches and two provisional branches. The annual report also indicates that during the past 17 years the Victorian P.W.P. has had a total of some 93,000 people as members and that the children of the parents totalled some 171,000. The report shows the membership figures as at 31 December 1984 to be made up as follows:

      ``Males                 3,550
      Females               3,890       7,440
                            -----       -----
      Unmarried               153
      Widowed               1,085
      Separated             2,363
      Divorced              3,639       7,240
                            -----       -----
      New Members           3,030
      Renewals              4,410
      Associate Members     100x2
      Children under 18     9,763
      Life Members              7''

26. Whilst it will be observed that the branch and membership details relate to a period subsequent to the year in issue, we were given to understand that a similar position pertained in that year. Therefore, in the absence of precise details concerning that year, we have proceeded to reach our conclusions based upon the information made available to us.

27. A ``Welfare Action Report Form'' for the period December 1984 to May 1985, was tendered in evidence (exhibit E). It appears that this report was compiled by the State welfare co-ordinator (who was not called as a witness) from reports (not in evidence), totalling 103, from some, but not all, of the branches in Victoria. Whilst this report is of general interest, it suffers from some obvious defects for present purposes which include, first, the fact that the report covers a period subsequent to the year in issue, secondly, the details provided concerning hospital and home visits do not indicate whether the same patients and families were visited on more than one occasion, with the consequence that the spread of those activities throughout the P.W.P. membership or community at large cannot be ascertained and, thirdly, the failure to indicate the number of separate members and/or their children who received help in relation to emotional problems. The details provided in this connection give no indication either as to the number of times that help was given in the homes of members, at P.W.P. premises or per the medium of the telephone.

28. Other shortcomings in the report, at least for our purposes, appear to include the lack of

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details concerning the legal assistance apparently provided, the nature and extent of accommodation and material welfare provided, the circumstances surrounding the provision of transport, the sending of cards (and the nature of those items) and the payment of membership fees. We were not advised of the type of action taken under the general heading of ``any other action taken''. However, despite the shortcomings adverted to, and the absence of explanations in the oral evidence concerning those matters, we include the details provided in the form, as follows, in the interests of completeness:

``Report from 103 Branch/Reports

For month of Dec. 1984-May 1985

Where Region Co-ordinator uses this form, please state number of branches included.

                                                    In calls  Out calls  Cost
                                                    --------  ---------  ----
 1. Hospital Visits                                    98
 2. Home Visits                                       102
 3. Emotional problems, including phone calls         689
 4. Legal problems                                     64
 5. Accommodation                                     133
 6. Information re Pensions and Benefits               39
 7. Material Welfare provided                          63
 8. Transport provided                                416
 9. Cards sent                                        102
10. Membership fees paid                               19
11. Any other action taken (please state type)        258
Cost of all material welfare                                         $2218.51
Other expenses                                                         685.07
                                                     ----            --------
TOTAL                                                1983            $2903.58
                                                     ----            --------''

29. From the 1984/1985 annual report referred to earlier, it appears that the incomes and expenditures for P.W.P. for the 1983/84 and 1984/85 accounting periods were as follows:

    INCOME                                 1983/84              1984/85
                                              $                    $
  Donations                                  274                2,461 [Note 1]
  Interest                                 5,077               14,919
  Joining fees and subscriptions         160,214              160,564
  Social income                           21,400               29,510 [Note 2]
  Sundry                                     180                1,143
                                        --------             --------
                                        $187,145             $208,597
                                        --------             --------

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                                                   $           $
      Accounting and audit                         960       1,870
      Branch formation                              -          150
      Donations                                     -        1,000 [Note 3]
      Family activities                          1,537       4,000
      Honorarium                                   400         400
      Insurance                                  1,441       1,586
      Meetings                                   5,536       6,926 [Note 4]
      Membership                                 3,141       4,569
      Public relations and advertising           1,727       6,349
      Rates and taxes                              694         854
      Repairs and maintenance                    8,325       2,680
      Scholarship committee expenses               209         528
      "Solo"                                    38,602      62,217 [Note 5]
      Subscriptions and fees                    11,853      12,239
      Sundry administration and
        legal fees                               5,530       4,865
      Travelling and executive expenses          5,299      10,428 [Note 6]
      Welfare                                       92         177
                                               -------    --------
                                               $85,326    $120,838
                                               -------    --------


                                                   $           $
      Depreciation - office furn.
        & equipt.                                2,543       2,886
      Insurance                                  1,092       1,117
      Interest - mortgage                        3,632       2,806
      Light and power                            1,199       1,285
      Postage                                    3,399       6,116
      Repairs and maintenance                      656         -
      Salaries and wages                        32,065      49,836
      Stationery and office supplies             3,010       4,913
      Sundry expenses                            1,411         711
      Telephone                                  2,127       2,906
      Trading stock                                697          25
                                              --------    --------
                                               $51,821     $72,601
                                              --------    --------

      TOTAL EXPENDITURE                       $137,147    $193,439
                                              --------    --------
      NET SURPLUS ON ACTIVITY                  $49,998     $15,158 *
                                              --------    --------
  • * These amounts found their way, via a net surplus account, into the members' accumulated funds.
  • Note 1: It was explained to us that these were not individual donations to P.W.P. It appears that several branches closed in the 1984/85 period and that their assets were returned to the State body. It also appears that the value of those assets (including some cash) was included in the 1984/85 accounts as donations. The position in relation to the 1983/84 donations of $274 could not be explained.
  • Note 2: The social income comprised receipts from quests and the annual ball, less expenses.

    ATC 509

  • Note 3: It is not clear from the evidence what this item represented. However, it appears possible that this amount was allocated to a ``special welfare'' fund which, together with an opening balance of $3,497.95, was expended during the period in relation to at least one child (to the extent of some $1,100) who was said to be the victim of unfortunate circumstances.
  • Note 4: These expenses were incurred in connection with the State Management Committee and other similar meetings and included the payment of honorariums, totalling $1,200.
  • Note 5: These expenses were associated with the production and distribution of the journal known as ``Solo''.
  • Note 6: It appears that this item represented a reimbursement of travelling expenses incurred by the welfare co-ordinator.

30. For completeness, it should also be mentioned that, apart from the receipts and outgoings above-mentioned, additional funds by way of government grants of $15,500 and $17,500 were received and fully expended on various administrative matters in the 1982/83 and 1983/84 periods, respectively.

31. Turning to a consideration of the meaning of the phrase ``public benevolent institution'' in the context of the evidence adduced before us, it is well to recall that the representative of the Commissioner conceded that P.W.P. was a public institution for the purposes of sec. 78(1)(a)(ii) and that the sole question arising for our consideration was whether its objects and activities, in the light of the evidence and the authorities, brought it within the meaning of the word ``benevolent''. For his part, counsel for the taxpayer conceded that not all parents without partners, and children, are in a situation of poverty or in a situation where they are poor. This was so, in counsel's submission, even though P.W.P. assists many parents and children who are in fact poor and in receipt of benefits of one kind or another. However, in counsel's submission, all parents without partners who are members of P.W.P., and their children, particularly the children, are in a state of ``suffering, distress or misfortune''. This was so, the submission continued, because all the children of members have lost a parent and all members have either lost a partner or are forced to raise children alone or, in the case of a parent who does not have custody, a child has been effectively lost.

32. The importance of the words ``distress, suffering or misfortune'' for present purposes stems from the dicta that emerges from the judgment of Dixon J. (as he then was) in the High Court case of
Perpetual Trustee Co. Ltd. v. F.C. of T. (1931) 45 C.L.R. 224. We respectfully agree with the views expressed by both parties that that is the leading case in the area of interpretation with which we are presently concerned although, in that case, the High Court was concerned with the interpretation of sec. 8(5) of the Estate Duty Assessment Act 1914-1928, which (to the extent considered relevant for present purposes) reads as follows:

``[Estate] Duty shall not be assessed or payable upon so much of the estate as is devised or bequeathed or passes by gift inter vivos or settlement... to... a public benevolent institution...''

33. The Perpetual Trustee Co. Ltd. case concerned a bequest to the Royal Naval House, Sydney, which was built on land made available by the Government and was used for the benefit of petty officers and lower ratings of the navy by providing accommodation and recreation for them when ashore. Its benefits were also extended to the lower ratings of visiting foreign war vessels. It was held (McTiernan J. dissenting) that the Royal Naval House was not a ``public benevolent institution''. At pp. 231-232 (45 C.L.R.), Starke J. said:

``Now we have to consider the expression `public benevolent institution'. It cannot be said that this expression has any technical legal sense, and therefore it is to be understood in the sense in which it is commonly used in the English language. There is no definition in the Act of the composite expression, nor is it to be found in any dictionary. It is, however, found in the Act under consideration in association with such institutions as public hospitals and with funds established and maintained for

ATC 510

the relief of persons in necessitous circumstances in Australia. In the context in which the expression is found, and in ordinary English usage, a `public benevolent institution' means, in my opinion, an institution organized for the relief of poverty, sickness, destitution, or helplessness. The Royal Naval House has none of these characteristics.''

(emphasis added)

Dixon J. at pp. 232-233, said:

``Because of its association with the various Governments, and because it is concerned with the naval forces of the country, it would be difficult, if it be a benevolent institution, to deny it the description `public'. But, in my opinion, it is neither promoted nor conducted for the relief of poverty, distress, suffering or misfortune, and the question is whether for this reason it lacks the qualities necessary to bring it within the meaning of the compound description `public benevolent institution'.''

(emphasis added)

At pp. 233-234, he said:

``Having regard to this history of the legislation and to the considerations I have mentioned, I am unable to place upon the expression `public benevolent institution' in the exemption a meaning wide enough to include organizations which do not promote the relief of poverty, suffering, distress or misfortune.''

(emphasis added)

Evatt J., at p. 235, said:

``There are, however, very many bodies which readily answer the description of `benevolent institutions'. The Benevolent Society of New South Wales provides food and clothing for those in poverty and distress, the Scarba Home takes care of deserted babies, many organizations of Church and State provide for the maintenance, housing and relief of the aged poor, orphans and those suffering from bodily or mental disease. A characteristic of most of these organizations is the absence of any charge for services or the fixing of a purely nominal charge.

Such bodies vary greatly in scope and character. But they have one thing in common: they give relief freely to those who are in need of it and who are unable to care for themselves.''

(emphasis added)

34. The dissenting Judge, McTiernan J., was in substantial agreement with the majority as to the meaning of the phrase ``public benevolent institution''. At p. 241 (45 C.L.R.) he said:

```Public benevolent institution' is, in my opinion, a wider term than `benevolent asylum'. I do not imagine that it is possible to enumerate all the services which may be rendered by human benevolence operating through the agency of a public benevolent institution. While I do not think that the Legislature intended strictly to confine the exemption to gifts to an institution of a strictly eleemosynary character, yet it may be difficult to bring within the scope of the exemption which has been granted in aid of a public benevolent institution, a gift to an institution which is of a public character, but does not exist for the relief of distress or misfortune occasioned by poverty.''

(emphasis added)

35. From the above dicta it emerges, in our opinion, that, to be a ``public benevolent institution'', an institution must be either ``organised for the relief of poverty, sickness, destitution, or helplessness'' (per Starke J.), or it must be promoted or conducted ``for the relief of poverty, distress, suffering or misfortune'' (per Dixon J.), or it must give relief to those in need of it ``who are unable to care for themselves'' (per Evatt J.), or, finally, in the words of McTiernan J., it must exist ``for the relief of distress or misfortune occasioned by poverty''. On the evidence before us, it is clear, in our opinion, that P.W.P. is not organised (at least as a primary objective) for the relief of poverty, sickness, destitution or helplessness of its members and their children and that, similarly, it does not exist for the relief of distress or misfortune occasioned by poverty. Neither does the evidence, in our opinion, support the proposition that P.W.P. is organised, promoted, conducted or exists for the purpose of providing relief to all of, or most of, its members who are unable to care for themselves or that its perceived role is to substitute itself for the parents in caring for the children (or, at least, the younger children) who may not in normal circumstances be capable of caring for themselves. In the circumstances of the instant case, therefore, it is our opinion that the fine question for our determination is whether, in the light of the dicta of Dixon J., in

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his use of the words ``distress, suffering or misfortune'', it might be said that P.W.P. was, in the year in issue, promoted or conducted with those objectives in mind.

36. In considering this question, counsel for the taxpayer directed our attention to the High Court cases of
Public Trustee (N.S.W.) and Ors v. F.C. of T. (1934) 51 C.L.R. 75, and
Maughan v. F.C. of T. (1942) 66 C.L.R. 388. However, apart from citing with approval the decision of the High Court in Perpetual Trustee Co. Ltd., the decisions in those cases appear to have turned largely upon their own particular facts and do not therefore, in our opinion, greatly assist us on the question arising before us.

37. We turn then to consider the decisions of the Supreme Court and Court of Appeal of New South Wales in the case of
Australian Council of Social Service Inc. & Anor v. Commr of Pay-roll Tax (N.S.W.) 82 ATC 4385; 85 ATC 4235. From the headnote in the report in 82 ATC 4385, it appears that, in that case, the taxpayer was an unincorporated association for the promotion of social welfare which had as its main functions and aims the provision of aid for the relief of poverty or distress by performing advisory, informative, research and advocacy functions. The funds of the association were not used for the purposes of direct relief to poor and other disadvantaged persons. In the Supreme Court, Rath J. held, inter alia, that the taxpayer was not exempt as a public benevolent institution under sec. 10(1)(b) of the Pay-roll Tax Act 1971 because, among other things, it promoted welfare generally by means of advice, information, research and advocacy and did not organise its aid in a direct and immediate sense for the relief of poverty, sickness, destitution or helplessness. After examining a number of authorities which need not concern us here, Rath J., at p. 4393 (82 ATC), said:

``When the Judges in that case (Perpetual Trustee Company case) are referring to the organisation of the institution it is the organisation of aid in a direct and immediate sense that is contemplated.''

38. In the New South Wales Court of Appeal, it was held, dismissing the taxpayer's appeal, that the taxpayer did not fall within the description of a public benevolent institution because its activities were only indirectly aimed at the relief of poverty and distress by the promotion of social welfare in the community generally. The main judgment in the Court of Appeal was given by Priestley J.A. who, at p. 4242 (85 ATC), said:

``Thus it seems to me that `public benevolent institution' includes an institution which in a public way conducts itself benevolently towards those who are recognisably in need of benevolence but excludes an institution, which although concerned, in an abstract sense, with the relief of poverty and distress, manifests that concern by promotion of social welfare in the community generally.''

39. Counsel for the taxpayer sought to distinguish that case on its facts from those to be found in the instant case, primarily on the basis that P.W.P. provides direct assistance to parents and children in need which arises, it was submitted, out of the suffering, distress or misfortune which inevitably accompanies the loss of a partner or parent by death, divorce or separation. In this connection, counsel pointed out that, whilst the term ``suffering, distress or misfortune'' has no particular legal definition, the Macquarie Dictionary definition of the term ``to suffer'' includes, among various meanings, the undergoing, or feeling of pain or distress; sustaining injury, disadvantage or loss; undergoing, experiencing, or being subjected to pain, distress, injury, loss, or anything unpleasant. It was also pointed out that the Macquarie Dictionary defines ``distress'' as being great pain; anxiety or sorrow; acute suffering; affliction, trouble; or sorrow; acute suffering; affliction, trouble; a state of extreme necessity. Further, it was pointed out, the same dictionary defines ``misfortune'' as meaning ill or adverse fortune; ill luck; a mischance or mishap.

40. In the light of these various meanings, counsel for the taxpayer submitted that sole parents experience great pain or sorrow on the death of a partner. Similarly, in the case of divorce or separation, they suffer pain because of the separation and where they are granted custody of the children, they also endure anxiety because of the need to raise the children alone. Where they are not granted custody, it was submitted, then suffering flows from the fact of separation as well as from the effective loss of the children. In the case of the children who lose a parent through death or separation,

ATC 512

it was submitted that suffering and distress follow that happening in the normal course of events as well as misfortune in the sense that, compared to children of two parent families, they are disadvantaged by the loss of the usual love and affection and guidance that might ordinarily be expected to be forthcoming to them as children of two parent families. Counsel's overall submission was that P.W.P. is mindful of the various kinds of suffering, distress and misfortune as outlined that afflict its members and their children and that its objects and activities are intended to, and in fact do, provide those forms of relief and assistance which qualify it as a ``public benevolent institution''.

41. In support of this contention, counsel for the taxpayer submitted that, in the circumstances described and having regard, in particular, to the emphasis given in the preamble to the constitution to the welfare of children (see para. 11), P.W.P. is in fact promoted and conducted primarily for the relief of distress, suffering and misfortune in the sense explained by Dixon J. in the Perpetual Trustee Co. Ltd. case and by the High Court in subsequent cases. And, in counsel's submission, even if the definition adopted by Starke J. in that case were to be applied, then, in his submission, the children for whom, it was said, the organisation is primarily intended to benefit, would fall within the ordinary meaning of ``helplessness'' which in ordinary parlance connotes the idea of being unable to help oneself, of being weak or dependent. In the circumstances, counsel submitted, P.W.P. falls within the meaning of the term ``public benevolent institution''.

42. Furthermore, counsel continued, Evatt J.'s reasoning in the Perpetual Trustee Co. Ltd. case also leads to the same conclusion in the circumstances of the instant case because the key words used in his judgment indicate that institutions falling within the meaning of that term are those, as is the case with P.W.P., so it was said, which give relief freely to those who are in need of it and who are unable to care for themselves. Having regard to counsel's concession that not all parents and children are in a situation of poverty, it is not surprising that he omitted (no doubt on the basis of relevance) any reference to McTiernan J.'s comments concerning the difficulties that might be faced by a public institution in being regarded as benevolent unless, it seems, it exists ``for the relief of distress or misfortune occasioned by poverty''.

43. We were greatly impressed by the sincerity of the witness who gave evidence for the taxpayer, and we accept without reservation her evidence that P.W.P. is deeply concerned with the social and economic well-being of its members and their children, particularly the children. We also accept that, in so far as intentions and endeavours may be gauged from her evidence and from a reading of the preamble to the constitution (see para. 11), an important aspect of P.W.P.'s activities is to assist in bringing the children ``to healthy maturity, with the full sense of being loved and accepted as persons, and with the same prospects for normal adulthood as children who mature with their two parents together''.

44. However, we do not accept counsel's submissions, as we would understand them, that the statements made in the preamble are paramount and that they are of themselves, seemingly without regard to the stated objects (see para. 12) and the activities in fact carried on by P.W.P., decisive of the matters in issue. In the light of the authorities, we are of the opinion that in determining those matters it is necessary for us to have regard not only to the statements of intention appearing in the preamble and in the objects, but, more particularly, to the activities which were in fact carried on in the period in issue.

45. Whilst we accept that most, if not all, sole parents and children suffer varying degrees of trauma for varying periods in the circumstances described, we consider that the evidence falls far short of supporting the proposition which appears to underlie the submissions made that all, or most, sole parents and their children in ordinary parlance suffer indefinitely from great pain, distress or anxiety. In our opinion, the evidence also falls short of establishing what appears to be implicit in the submissions made that children of sole parents are, because of that fact alone, necessarily helpless and deprived of that level of love and affection and guidance which might in practice be experienced by children of two parent families. In the circumstances, the evidence does not enable us, in our opinion, to conclude that the relief provided by P.W.P. is, to use the words of Evatt J. in the Perpetual Trustee Co. Ltd. case (supra) (see para. 33), given ``freely

ATC 513

to those who are in need of it and who are unable to care for themselves'' or, to use the words of Priestley J.A. in the case of Australian Council of Social Service Inc. & Anor v. Commr of Pay-roll Tax (N.S.W.) (supra) (see para. 38), that it conducts ``itself benevolently towards those who are recognisably in need of benevolence''.

46. However, putting those aspects to one side (which do not appear to be decisive for present purposes) and again turning to the authorities, we consider that, to qualify as a ``public benevolent institution'', on the basis on which the case proceeded, P.W.P. must show that it is organised, promoted or conducted in such a way that it might be said, in the words of Rath J. (see para. 37), that it is concerned with ``the organisation of aid in a direct and immediate sense'' and that it is not simply, in the words of Priestley J.A. (see para. 38), ``an institution which, although concerned in an abstract way with the relief of poverty and distress, manifests that concern by promotion of social welfare in the community generally''.

47. From the evidence (in particular, see para. 13 to 24 inclusive), it emerges clearly, in our opinion, that P.W.P. is essentially a self-help organisation which, however meritorious and commendable its intentions and its endeavours might be, is predominantly concerned with social, recreational, educational and quasi political activities which do not bring it within the meaning of the term ``public benevolent institution'' as judicially interpreted. Whilst the activities carried on indicate a genuine concern in an abstract sense with the relief of poverty and distress, they manifest that concern for the most part, not by the organisation of aid in a direct and immediate sense, but by the provision of what was described by the courts, of social welfare generally.

48. However, if, contrary to our view of the evidence, substantial elements of benevolence are contained within the activities of several welfare programs, in the provision of the facilities which are apparently made available at Sherbrooke House, and in some of those activities which are referred to in the Welfare Action Report, they would not, in total, in our opinion, amount to a predominance of activity which could be construed as justifying a conclusion that P.W.P. as a whole is substantially or predominantly concerned with the dispensing of benevolence within the meaning of the term ``public benevolent institution'' as judicially interpreted.

49. Finally, we would add two comments in relation to these matters. First, whilst the evidence does not provide us with full details of the various welfare activities carried on, it appears that the assistance of some $1,100 given to the victim of unfortunate circumstances (see Note 3, para. 29) was concerned principally with the provision of a scholarship which was essentially educational in nature.

50. Secondly, of the total amounts of some $215,000 and $219,000 which the accounts would indicate were received by P.W.P. from all sources during the 1983/84 and 1984/85 accounting periods respectively, only the amounts of some $1,000 and $4,000 respectively were allotted to, or expended on, activities which might be considered as possessing a benevolent flavour. Most, if not all, other outgoings appear to have related to the payment of administration and similar expenses. Therefore, whilst these details relate to periods after that in issue, they are the best available to us and indicate in a most positive way, in our opinion, that the activities of P.W.P. in those periods, and by inference in the period in issue, were predominantly concerned with the provision of welfare generally and not with the provision of benevolence in the judicially accepted sense.

51. For the above reasons, we find that P.W.P. was not, and is not, a ``public benevolent institution'' for the purposes of sec. 78(1)(a)(ii) of the Income Tax Assessment Act 1936 and that the taxpayer's claim must therefore fail. In the circumstances, we would uphold the Commissioner's decision on the objection and confirm the assessment in issue.

Claim disallowed

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