BARCLAY & ORS v TREASURER OF QUEENSLANDJudges:
Supreme Court of Queensland
This is an application to review decisions of the respondent not to declare the Queensland Construction Training Fund to be an exempt institution to which s. 59E(1)(d) of The Stamp Act 1894 applies and that the Fund is not an institution whose principal object and pursuit is fulfilling of a charitable object or an object promoting the public good in accordance with s. 59E(1)(d).
Further or alternatively, review is sought of the failure of the respondent to be satisfied that the principal object and pursuit of the Fund is the fulfilling of a charitable object or an object promoting the public good and the failure of the respondent to declare that the Fund is an institution to which s. 59E(1)(d) of The Stamp Act applies. The principal source of the funds of the trust is the Building Employees Redundancy Trust a fund from which redundancy payments to workers in the construction industry are paid. The objects of the foundation are to be found in the following paragraph of the Trust Deed:-
``3.3 Objects of the Foundation
The objects of the Foundation are to generally foster promote encourage advance and assist in the acquisition and enhancement of the knowledge, skills, training and education (both theoretical and practical) of those persons employed in or otherwise providing services in and to the Construction Industry within the State of Queensland and also to foster, promote, encourage, advance assist organizations involved in such training and educational activities as aforesaid for such persons
AND without limiting from the generality of the foregoing for that general purpose or object and to that end, specifically:
- (a) to generally foster, promote, advance and assist the acquisition and enhancement of the knowledge skills education and training (both theoretical and practical) of persons employed or otherwise providing services in and to the Construction Industry and to otherwise foster, promote, encourage, advance, assist tripartite organizations involved in such training and educational activities for such persons thereby benefiting and advancing the education
ATC 4498of such persons and benefiting the industry and the public by the provision of beneficial and more efficient Industry services and products;
- (b) to encourage and promote the enhancement and creation of training and skills by such persons as aforesaid by the provision of any one or more of the following:
- (i) training schemes;
- (ii) assistance programs;
- (iii) advice;
- (iv) assistance in the establishment of facilities for training in the Construction Industry and associated skills and for the gaining of practical experience therein and other educational activities in furtherance of this object;
- (v) demonstrations to students, trainees, apprentices and others employed or otherwise engaged in the Construction Industry of skills trades work and job methods and techniques of the Construction Industry;
- (vi) publication and distribution of books, pamphlets or brochures calculated to promote education and interest in all facets of the Construction Industry by the participants therein (including owners, managers, employers, employees, subcontractors and professional advisers) and the public and to arrange for lectures and discussions for these purposes;
- (vii) grants for scholarships or other forms of financial assistance to selected students and workers to pursue their studies and training in any appropriate field or trade within the Construction Industry;
- (viii) to otherwise make provisions for the training of persons employed or engaged or to be employed or to be engaged in the Construction Industry;
- (c) to generally advance and promote the acquisition of knowledge of skills, trades, work and job methods and techniques of the Construction Industry.''
Section 59E(1)(d) is concerned with:-
``an institution, or the trustees thereof, declared by the Minister in the Minister's discretion to be an institution to which this paragraph applies, the principal object and pursuit of which is the fulfilling of a charitable object or an object promoting the public good (not being an object or pursuit that is a sporting, recreational, leisure or social pursuit or object or an object or pursuit declared by Order in Council for the purposes of this paragraph).''
The qualifying factor is that the institution has the benefit of a declaration, in the Minister's discretion, that it is an institution the principal object and pursuit of which is fulfilling of a charitable object or an object promoting the public good. It is common ground that the Fund is an institution for the purposes of this section. On 18 October 1994 the respondent in rejecting the application for a declaration said, amongst other things, the following:-
``I am advised that an object promoting the public good is really a class of charitable object. The word charitable has a technical or legal meaning which establishes four categories of charity: the relief of poverty, the advancement of education, the advancement of religion and purposes beneficial to the community not falling under any of the preceding categories. Section 59E of the Stamp Act lists the first three categories and the discretion which it gives is in relation to the fourth category. The words `object promoting the public good' really adds nothing to `charitable object' - that is, the former is a category of the latter.
The objects of the Trust are to foster and promote the acquisition and enhancement of skills, training and education (both theoretical and practical) of workers in the construction industry. While I readily acknowledge that these objects are commendable, they are essentially business oriented rather than charitable.''
When further representations were made he replied on 18 November 1994 in the following terms:-
``Although I have a discretion in the matter, such discretion does not allow me to make the requisite declaration if the objects in question are not `charitable' or do not
ATC 4499promote the public good. I am not satisfied that the objects of the Fund can be said to promote the public good without taking a view so broad as to effectively mean that any industry specific training, or even training support, or training in general skills would qualify for the exercise of my discretion. Given Parliament's clear intention in limiting an educational object in paragraphs (a) and (c) of section 59E(1) to tertiary, secondary, primary, preschool/ kindergarten education and to rural training schools, I am not prepared to so widen the scope of the exemption.''
Mr Russell referred to the characteristics of a charitable institution as discussed in
Incorporated Council of Law Reporting (Qld) v. FC of T 71 ATC 4206, 4210; (1967-1971) 125 CLR 659, 666 and
Congregational Union of New South Wales v. Thistlethwayte (1952) 87 CLR 375. He submitted that the word ``charitable'' where used in paragraph 59E(1)(d) is used in its technical legal sense (
Commissioners for Special Purposes of Income Tax v. Pemsel (1891) AC 531;
Chesterman v. FC of T (1926) AC 128 and Incorporated Council of Law Reporting (Qld) v. FC of T (supra)). He submitted that the general object in cl. 3.3 was the principal object of the trust and could be characterised as the promotion of the acquisition and enhancement of knowledge and skill and the training and education of persons employed in or providing services in or to the construction industry in Queensland.
In submitting that the Treasurer was incorrect in not having regard to the English cases (
Re Mair (1964) VR 529) Mr Russell placed particular emphasis on the decision of Pennycuick VC. in
Construction Industry Training Board v. Attorney-General (1971) 3 All ER 449 where it was held that a board established by statute, to provide courses and facilities for the training of persons employed or intended to be employed in the construction industry was a charity. By the time the matter reached the Court of Appeal ((1973) Ch 173) it was common ground that the Board was a charity. Mr Russell also relied on
IRC v. Yorkshire Agricultural Society (1928) 1 KB 611 where it was held for the purposes of a particular statute that the society which was formed with the object of holding an annual meeting for the exhibition of farming stock and implements and for the general promotion of agriculture was established for a charitable purpose, notwithstanding some private benefit for members. Reference was also made to
Institution of Civil Engineers v. IRC (1932) 1 KB 149 where the question whether an object of promotion of a profession was merely incidental to the main object of fostering and increasing knowledge of the art and science of civil engineering or was a collateral or independent objective was resolved in favour of the former. Reference was also made to
Crystal Palace Trustees v. Minister of Town and Country Planning (1951) 1 Ch 132 where, in the context of a statute, an object of promoting industry and commerce was held to intend benefit to the community or public rather than the furtherance of the interests of individuals.
The purpose of the references to those four cases was to deal with the notion in the respondent's correspondence that because there was an element of potential commercial beneft the Trust was not charitable. I will return to that aspect later. Mr Russell drew attention to the fact that the Trustees were representative Trustees drawn from industry, the unions and government and the power to appoint the Trustees was vested in a council controlled by the government. He submitted that the training and education of workers in the construction industry and the improvement in standards and safety procedures would not only benefit the participants within the industry but be of general benefit to the community. He submitted that because of the width of the expression ``construction industry'' as defined, it was reasonably clear that the benefit was for a section of the community or a section of the public and not merely a private benefit for individuals.
He also submitted that the purpose of the trust had some real educative value (
Re Pinion (1965) Ch 85;
Re Elmore (1968) VR 390). It was submitted that the questions whether the fund is or may be operative for the public benefit or has educative value is a question of impression for the court on the evidence before it. The onus lay on the applicants to establish this. Mr Russell accepted that the reference in paragraph 59E(1)(d) to ``an object promoting the public good'' added little to the concept of ``charitable object''. He submitted that the principal pursuit of the Trust is its charitable object and not some other noncharitable or invalid object.
Mr Dutney for the respondent submitted that it was not sufficient for the fund to have a charitable object. The charitable object must be the principal object and pursuit. The Minister's decision was that the objectives of the Fund, whilst commendable, were essentially business orientated rather than charitable. It was submitted by reference to certain of the objects in the trust deed that the fostering and promotion of training and education was for purposes such as:-
- (a) benefiting and advancing the education of participants in the industry;
- (b) benefiting the industry; and
- (c) benefiting the public by the provision of beneficial and more efficient industry services and products.
It was submitted that the Fund's own perception could be gleaned from certain other evidence in the case. It was submitted that by reference to that material the true objects of the Fund were to increase the overall competitiveness and efficiency of the building and construction industry through training and education. That resulted in the principal object being a commercial one rather than a charitable one. It was acknowledged that monies from the fund were used for training and education of persons employed in or otherwise providing services to the construction industry but it was submitted that it could not be said that this was the ``principal object and pursuit of the fund''. The object in paragraph 3.3(b)(vi) concerning the publication and distribution of written materials was designed to create interest in the public at large. As such the object was commercial gain. It was also submitted that paragraph 3.3(c) not only promoted the advancement of education within the industry but also promoted a greater competitiveness and efficiency within the industry. Other examples were referred to which were submitted to support the proposition that advancement of efficiency and competitiveness in the building industry rather than advancement of education was a significant object of the fund. It was submitted that the creation of a more efficient and competitive construction and building industry was not merely an ancillary or incidental object to the charitable object but was the principal object of the fund.
Mr Russell's submission on this aspect of the case was that the authorities to which he referred were not dissimilar from the present situation. The Institute of Civil Engineers case dispelled the notion that because there was a professional advantage conferred by the existence of the body it was not charitable per se. It was submitted that the question was whether there was something which the fund did which was higher and larger than the mere obtaining of commercial benefits to the building industry flowing from a better educated workforce and a more efficient and productive workplace. He also submitted that the Yorkshire Agriculture Society case and the Crystal Palace Trustees case were other examples where promotion of industry and commerce in the broad sense was capable of being charitable and not merely of benefit to the industry itself.
The observation by Danckwerts J. in the Crystal Palace Trustees case that there was a degree of uncertainty as regards promotion of industry and commerce and that it was not unreasonable for the Minister to have felt difficulty in finding such purposes to be charitable is equally applicable to the present case. Further, it is necessary to find in the present case what the principal object and pursuit of the Fund is.
Having considered all of these aspects of the matter and formed an impression of the way in which the body operates and is intended to operate, I am satisfied that it fits the statutory test. The underlying premise in the objects of the Fund is that the level of skills of those engaged in the building and construction industry will be enhanced by enhancing their level of education and training through the medium of facilities assisted by the Fund and that thereby the public would benefit from better and more efficient services and products. It is true that the industry as a whole may benefit by reason of its enhanced efficiency but what is the principal object and pursuit of the fund is to be determined by an overall view of its structure and operation. In my view, any benefit to any particular individual in the industry or the industry generally is incidental rather than the principal object and pursuit of the Fund.
Mr Dutney also put one other argument based on the structure of s. 59E. It was submitted that in s. 59E(1), the categories of educational bodies entitled to an exemption from duty were exhausted by paragraphs (a) and (c). It was submitted that paragraph (d) could not be applied to any other educational
ATC 4501body because of the specific references in (a) and (c). I can see no persuasive reason why, if a body otherwise fits the criteria, the fact that it has an educational purpose excludes it from (d).
As the respondent has a residual discretion to exercise I think the appropriate outcome is to make a declaration that the Fund is an institution the principal object and the pursuit of which is the fulfilling of a charitable object or an object promoting public good (not being an object or pursuit that is a sporting, recreational, leisure or social pursuit or an object or pursuit declared by Order-in-Council for the purposes of this paragraph). The matter will be remitted to the respondent for consideration whether he ought to exercise his residual discretion and make a declaration. I order that the respondent pay the applicant's costs of and incidental to the application to be taxed.