City of South Melbourne v. Young Men's Christian Association of Melbourne VR 709
(Judgment by: Herring CJ)
Between: City of South Melbourne
And: Young Men's Christian Association of Melbourne
Claim for exemption
Land used for charitable purposes or in control of religious body
Charity to be considered by reference to objects in by-laws
Objects charitable in technical legal sense
Buildings used partly for social and residential purposes and in producing income
Local Government Act 1946 (No. 5203) - s 249(1)(b)(ix)
Local Government Act 1958 (No. 6299) - s 251(1)(b)(xi)
Judgment date: 28 July 1960
In this action the plaintiff sought to recover from the defendant, the Young Men's Christian Association of Melbourne (hereinafter referred to as the YMCA.), the sum of 1188 pounds 15s. and interest thereon at the rate of 6 pounds per cent per annum from 2 December 1957. The said sum was claimed as rates due and payable to the plaintiff for the year commencing 1 October 1957, as to 1031 pounds 5s., in respect of land situate at and known as 1-7 City Road, South Melbourne, of which at all material times the YMCA was the owner and occupier, and as to 157 pounds 10s., in respect of property consisting of a neon sign that is erected on the roof of the building erected upon such land. The said land and the said property were rated separately.
The YMCA for its part resisted the claim on the ground that it is not liable to be rated in respect of such land or such property, for the reason that such land and property are land used exclusively for charitable purposes within the meaning of s249(1)(b)(ix) of the Local Government Act 1946. The word "charitable" for the purposes of this sub-paragraph is to be understood in its technical legal sense. This was decided by the High Court in Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159;  ALR 85.
Alternatively, s249(1)(f) was relied upon and it was contended that such land and property is not ratable as being land in the occupation of or under the management and control of a religious body and upon which is situated a hall or other building used in connexion with a church exclusively for purposes connected with or in support of the objects of such religious body.
The land in question is situated at the junction of City Road and Sturt Street, South Melbourne, and is triangular in shape, the apex of the triangle being at the point where the said two streets join. On the land there stands a substantial building with a basement and five floors. This building was erected by the YMCA in 1926 to its own design and has been occupied and used by it ever since. In this building its headquarters have been located and its activities have been directed and controlled.
For the YMCA, Mr. Menhennitt has submitted that the building has been used exclusively for charitable purposes, the word "charitable" being used in its technical legal sense. His contention is that the YMCA is itself a charity, its objects and purposes being themselves charitable in the relevant sense, and that its activities in the building should, therefore, be viewed in their totality, and when so viewed, will be found to promote its charitable objects or purposes. On the other hand, Mr. Lush for the plaintiff submitted that the YMCA is not a charitable organization but merely a benevolent body and that consequently its activities should be examined separately and that when so examined the bulk of them will be found not to be charitable. He submitted further that even if the YMCA is a charity, it has used the building for collateral purposes that are not charitable, and he referred particularly in this connexion to the scale upon which residential accommodation is provided and to the maintenance of a dining room that is open to the public. The YMCA is an association that was incorporated on 15 March 1892 under s19 of the Hospitals and Charities Act 1890 (No. 1099) as a philanthropic institution. It made by-laws under s10 of the Act, which were gazetted in 1892 and re-gazetted in 1907, and stand today, so far as is material in the present case, substantially in the form in which they were originally gazetted. These by-laws are divided into sections. SI reads:--
- The name of the association is 'the Young Men's Christian Association of Melbourne'.
- The association is based upon the declaration which was adopted at the Paris Conference of the Young Men's Christian Associations of all lands, in October 1855, and is the bond which unites YMCA.'s throughout the world. This declaration, known as the 'Paris Basis', is as follows: 'The Young Men's Christian Association seeks to unite those young men who, regarding the Lord Jesus Christ as their God and Saviour according to the Holy Scriptures, desire to be His disciples in their doctrine and their life, and to associate their efforts for the extension of His Kingdom amongst young men'."
- The object of the association is the improvement of the spiritual, intellectual, social and physical condition of young men".
SIII then goes on to deal with membership; by-laws (4), (5), (6) and (7) read:--
- The association shall comprise active, associate, sustaining, and honorary members, but active members only shall be entitled to hold office, and only active members and others qualified under by-law (9) shall be entitled to vote at business meetings of the association.
- The qualification for active membership shall be as follows:-- Any man over 16 years of age, who is a member in good standing of any Evangelical Church or Body, which holds the doctrine of 'Justification by faith in Christ alone', may, upon signing an application [in a form approved by the board], and having obtained the endorsement in writing of two active members, and paid his subscription, be admitted by the board as an active member.
- The qualification for associate membership shall be as follows:-- Any male of good moral character, upon signing an application [in a form, approved by the board] and paying his subscription, may be admitted by any committee appointed by the board to inquire into applications for membership.
- The qualification for sustaining membership shall be as follows:--Any person subscribing to the ordinary revenue of the association not less than five guineas annually, or such other minimum sum as the board may from time to time determine, shall become a sustaining member."
SIV then deals with management, sIV(a) with branches, sV with meetings, sVI with seal, and sVII with the alteration of by-laws.
General control of the affairs of the YMCA is in the hands of a board of directors who work through committees and a carefully selected and fully qualified staff. The chief executive officer is the general secretary and he has to assist him an assistant general secretary and other officers on the administrative side and the 14 members of the programme staff with the various activities that are arranged for the boys and young men who join the YMCA. The directors and all these officers are required to be active members of a Christian Church, as are also all those young men who seek to join as active members.
[His Honour then proceeded to consider the evidence in regard to the layout of the building of the YMCA in relation to its administrative set up and to consider the evidence in regard to various activities of the YMCA, the personnel in charge of the same and the general organization, objects and functions of the YMCA, and their social, religious and educational aspects. His Honour then continued:--]
I pass now to a consideration of the question whether the YMCA is a charity, and the answer to this question depends upon whether or not its objects are charitable in the technical legal sense. Both Mr. Lush and Mr. Menhennitt agreed that it is to the by-laws one must look for the objects: Metropolitan Borough of Battersea v British Iron and Steel Research Association,  1 KB 434 (CA); Berry v St. Marylebone Borough Council,  CH 406 (CA);  3 All ER 677. They differed, however, as to their construction and in particular with regard to the relative importance of by-laws (2) and (3) in determining the objects of the YMCA. This question of interpretation depends upon the actual language of the by-laws. No help with its solution can be derived from the actual activities of the YMCA.
Mr. Menhennitt for his part submitted in the first place that the dominant purpose of the YMCA is to be found in by-law (2) and that it is the advancement of religion, and so charitable in the technical legal sense, as falling within the third head of Lord Macnaghten's classification of charity set out in Income Tax Commissioners v Pemsel,  AC 531, at p. 583. He relied upon the language of by-law (2) and maintained that in the declaration set forth therein and known as the "Paris Basis" is to be found the fundamental rock or basis upon which the YMCA is founded. What follows in by-law (3), he submitted, is governed and controlled by what appears in by-law (2) and must be read in the light thereof. By-law (3) in other words, according to his submission, sets forth an object, which is ancilliary to the main and dominant purpose set forth in by-law (2) and provides the means by which that main and dominant purpose is to be achieved. He further submitted that no other construction of the by-laws is open in this Court in view of the decision of the High Court in Young Men's Christian Association of Melbourne v Federal Commissioner of Taxation (1926) 37 CLR 351; 32 ALR 97. In that case, the High Court had to consider the very same by-laws and according to Mr. Menhennitt placed the construction upon them for which he contended. Mr. Menhennitt further submitted that the objects of the YMCA, if contrary to his submission it could be said they were not charitable as being for the advancement of religion or in so far, if at all, as they went outside or beyond the advancement of religion, could properly be held to be charitable in the technical legal sense as falling either under the second head of Lord Macnaghten's classification as being for the advancement of education in a broad sense, or under the fourth head as coming within the spirit and intendment of the preamble of the Statute of 43 Eliz. c.4, and being for a purpose beneficial to the community.
Mr. Lush, for his part, submitted that the objects of the YMCA are not charitable in the technical legal sense and that the most that can be said for the YMCA is that it is a benevolent body with benevolent objects, albeit with a Christian background and therefore concerned to maintain and encourage high standards of conduct amongst Christian young men and to provide them with an opportunity of associating together. He submitted that the main object of the YMCA is to be found in by-law (3) and not as Mr. Menhennitt contended in by-law (2). He contended the by-laws mean what they say, when they state in sII. (by-law (3)) that "the object of the association is the improvement of the spiritual, intellectual, social and physical condition of young men", and so it is to by-law (3) and to it alone that you must look for the object and purpose of the YMCA. By-law (2), according to his submission, when it declares that the association is based upon the declaration... known as the "Paris Basis", is not really concerned with objects at all. Mr. Lush concedes that the declaration is no doubt of fundamental importance and regarded as such by those associated with the YMCA. But it is not a statement of objects or purposes at all, so runs his argument. It is rather a proclamation of the principles and standards of conduct for which the YMCA is to stand, and if you want to find out what it is going to do, what is its object or purpose, you must go to by-law (3). The "Paris Basis" is in other words, according to Mr. Lush's argument, simply a matter of background, more like a motto to indicate the standards sought to be achieved or perhaps a description of qualification for membership. The language used, moreover, he submitted, was (apart perhaps from the last sentence) not apt language to describe an object.
Mr. Lush sought to support this argument by reference to the form of the initiation ceremonies to which references has already been made. He submitted that they illustrated his point that the YMCA was not really concerned with the advancement of religion, and that really religion did no more than provide the background against which its activities were carried on. No help on the question of construction can of course be derived from the form of such ceremonies, and I think there is no need for me to do more than refer to what I have already said about them and their distinctly religious character.
In my opinion, Mr. Menhennitt is right in his contention that the question of construction is definitely concluded in his favour by the decision of the High Court in Young Men's Christian Association of Melbourne v Federal Commissioner of Taxation, supra, and that it is consequently not open before me.
In that case the YMCA appealed to the High Court against an assessment for Federal income tax, and a case was stated for the opinion of the Full Court on the question whether the YMCA had been rightly assessed for income tax in view of s11(1)(d) of the Income Tax Assessment Act 1915-1918, under which the income of a religious, scientific, charitable or public educational institution is exempt from tax. The Full Court answered the question in the case in the negative. Isaacs, J. (as he then was), Gavan Duffy, J (as he then was), and Rich, J, all decided that the YMCA was a "religious institution" within the meaning of the sub-paragraph and that, therefore, it was unnecessary to consider whether it was also a "charitable institution" within such meaning. Higgins, J, went further, he held it was religious and also that it was charitable for the purposes of the sub-paragraph. He decided that the word "charitable" in the sub-paragraph should be read in its technical legal sense and not in any popular or eleemosynary sense. He considered that the judgment of the Privy Council in Chesterman v Federal Commissioner of Taxation,  AC 128, given just four months earlier, required the word being read in this way. Knox, CJ, and Isaacs, J, both referred to Chesterman's Case but did not decide whether it required the word "charitable" in the sub-paragraph being so read. Knox, CJ, said he did not dissent from the view taken by his learned brothers that the YMCA was a "religious institution" for the purposes of the sub-paragraph.
This decision of the High Court is naturally of great importance in this case. So far as I am concerned, I am of course bound by it. It is, therefore, necessary to consider just what it was their Honours decided and also how they arrived at that decision. They had to consider the character of the YMCA as an institution and in order to determine this matter they examined its constitution as set forth in the by-laws. They decided that the YMCA was a religious organization and they did so, because I think they all regarded the declaration known as the "Paris Basis" as the "basic idea" or "cardinal principle of the association", to use the words of Rich, J (37 CLR, at p. 362). I think also they were all in agreement with Rich, J, when he said that ancillary to this "basic idea" or "cardinal principle" is "the improvement of the spiritual, intellectual, social and physical condition of young men" (by-law (3)).
Isaacs, J, put it in this way (at p. 357): "My conclusion rests on the essentially 'religious' character of the institution. To repeat an observation I made during the argument, the association is an institution with a very broad religious platform carried out in an extremely practical manner". At p. 360, Higgins, J, said: "That basic declaration shows, in my opinion, that the association is religious; and I am inclined to think that the mere fact that the object includes the improvement of the intellectual, social and physical condition of young men does not detract from the fundamental religious character of the association". Gavan Duffy, J, for his part (at p. 361) described the YMCA in this way: "In my opinion, the appellant is substantially an association of persons holding specific religious views, and acting together for the purpose of comforting and encouraging one another, and of inducing others to adopt these religious views and join the association".
In my opinion, the decision of the High Court is decisive on this question of the construction of the by-laws. The fundamental purpose of the YMCA is the religious purpose set forth in the "Paris Basis" and the object set forth in by-law (3) must be regarded as ancillary thereto and as pointing out means by which it is anticipated that the fundamental purpose may be carried into effect. The object set forth in by-law (3) should therefore not be looked at as if it stood alone (Congregational Union of New South Wales v Thistlethwayte (1952) 87 CLR 375, at pp. 441-3;  ALR 729).
In view of what I have said it is strictly speaking unnecessary for me to express any opinion of my own upon the question of construction of the by-laws. I should say, however, that had I to decide the question for myself, I should with respect place the same interpretation upon the by-laws as the judges of the High Court did. The language of by-law (2) is explicit and does make the "Paris Basis" the fundamental basis upon which the YMCA is founded.
Mr. Lush for his part was not prepared to concede that the High Court decision established that the YMCA was charitable in the technical sense as being for the advancement of religion and so falling under Lord Macnaghten's third head of legal charity. He pointed out that it was not necessary on the view their Honours (other than Higgins, J) took to decide the point. It was sufficient for them to decide that the main purpose of the YMCA was religious without having to concern themselves with the further question whether there was present that element of public benefit, which is a necessary ingredient of a purpose that is charitable in the technical legal sense (Gilmour v Coats,  AC 426;  1 All ER 848).
That not all religious purposes are charitable in this sense is of course clear from the authorities. Thus it has been held that religious communities whose members are enclosed in convents and engage in no exterior works, devoting their lives to contemplation and penance, are not charitable in the technical legal sense, as not being within the letter or the spirit of the preamble to 43 Eliz. c. 4 (Gilmour v Coats, supra, and Cocks v Manners (1871) LR 12 Eq 574). In the latter case, Wickens, VC, said, at p. 585:
"A voluntary association of women for the purpose of working out their own salvation by religious exercises and self-denial seems to me to have none of the requisites of a charitable institution, whether the word 'charitable' is used in its popular sense or in its legal sense. It is said, in some of the cases, that religious purposes are charitable, but that can only be true as to religious services tending directly or indirectly towards the instruction or the edification of the public; an annuity to an individual, so long as he spent his time in retirement and constant devotion, would not be charitable, nor would a gift to ten persons, so long as they lived together in retirement and performed acts of devotion, be charitable".
Mr. Menhennitt, for his part, submitted that as regards the first three heads of Lord Macnaghten's classification benefit to the community may be prima facie assumed, unless the contrary appears. He referred to a statement to this effect by Lord Wright in National Anti-Vivisection Society v Inland Revenue Commissioners,  AC 31, at p. 42;  2 All ER 217. See too Halsbury 3rd ed., vol. 4, p. 213; Re Ward,  CH 308 (CA);  2 All ER 125, and Re White,  2 CH 41. He submitted that in this case not only does the contrary not appear, but that in fact the religious purpose of the YMCA as appearing in its constitution does tend "towards the instruction or the edification of the public". That religious purpose is described in the "Paris Basis" as being the uniting of young men who regard the Lord Jesus Christ as their God and Saviour according to the Holy Scriptures, and desire to be His disciples in their doctrine and life; and the association of their efforts for the extension of His Kingdom amongst young men.
This purpose does, I think, clearly tend "towards the instruction or the edification of the public". It is in the first place not confined to members of the YMCA, but reaches out to young men generally. Then secondly, there is involved in it not only the bringing together of Christian young men, whatever their denomination may happen to be, but also their acting together for their mutual comfort and encouragement in their faith and in addition for the extension of God's Kingdom amongst young men. This purpose contemplates for its fulfilment positive action by young men to sustain and increase one another's faith and, what is more, their embarking together on the missionary task of spreading their faith amongst young men generally and so winning souls for Christ. There is involved, I think, in such a purpose a sufficient element of public benefit to satisfy the tests laid down in such cases as Gilmour v Coats, supra; Re Smith (1938) 54 TLR 851, and United Grand Lodge of Ancient Free and Accepted Masons of England v Holborn Borough Council,  3 All ER 281.
In the last-mentioned case Donovan, J, in delivering the judgment of the court said, at p. 285:
"When one considers the work done by organizations which admittedly do set out to advance religion, the contrast with Masonry is striking. To advance religion means to promote it, to spread its message ever wider among mankind; to take some positive steps to sustain and increase religious belief; and these things are done in a variety of ways which may be comprehensively described as pastoral and missionary. There is nothing comparable to that in Masonry. This is not said by way of criticism. For Masonry really does something different. It says to a man, 'Whatever your religion or your mode of worship, believe in a Supreme Creator and lead a good moral life'. Laudable as this precept is, it does not appear to us to be the same thing as the advancement of religion. There is no religious instruction, no programme for the persuasion of unbelievers, no religious supervision to see that its members remain active and constant in the various religions they may profess, no holding of religious services, no pastoral or missionary work of any kind".
Reference may also be made to Gilmour v Coats, supra, in the Court of Appeal ( CH 340;  1 All ER 521), and to the passage in the judgment of Lord Greene, MR, in which his Lordship said (at p. 347):
"Save to the extent which I shall presently mention, no English authority has been quoted to us, and I know of none, in which the existence of a benefit of the necessary public character has, when challenged, been shown to exist otherwise than by proof of works which have a demonstrable impact on the community or a section of it. I use the word 'impact' for want of a better word as covering the benefits conferred by teaching and ministration, by the performance of religious services, by the provision of repair of churches and church ornaments, and so forth. I use the word 'demonstrable' as meaning that the benefit must be capable of proof in a court of law".
The tests laid down in these cases are, I think, clearly satisfied in the religious purpose of the YMCA that is to be found in the "Paris Basis". Mr. Lush sought to derive some comfort from the judgment of Higgins, J, in the High Court case. He suggested that his Honour, after referring to the fundamentally religious character of the YMCA, found it charitable in the technical legal sense not by reason of that religious character but by reason of the object set forth in by-law (3) and that, therefore, he must be taken to have been of the opinion that it could not claim to be charitable in the technical legal sense by reason of its religious purpose. No such view should, I think, be attributed to his Honour. If his judgment is read with care, I think that what appears is this: his Honour recognized the fundamental religious character of the YMCA and consequently its concern about improving the spiritual condition of young men. He found, however, in by-law (3) an object which went beyond the improvement of the spiritual condition of young men and included the improvement of their intellectual, social and physical condition, and so might be said not to fall within the scope of the religious purpose of the YMCA. He says three things, first, that this addition does not in his view detract from the fundamental religious character of the YMCA, secondly, that in any event the aim under by-law (3) is to improve all four aspects, including the spiritual, the condition of young men generally and not merely of those who happen to be members of the YMCA and, thirdly, that such an aim is charitable as being for the good of young men generally. No more should I think be attributed to his Honour than that he is saying that it consequently matters not whether the aim set forth in by-law (3) is treated as a matter of construction as going beyond the religious purpose of the YMCA or as being merely ancillary to that purpose.
In either event the purpose or purposes of the YMCA are charitable in the technical legal sense. His Honour was not, I think, concerning himself with the question under what head the purposes could most fittingly be classified, it was enough for him that they were all charitable. And, of course, it is true that the purposes of an organization like the YMCA may well fall under more than one head, or partly under one and partly under another. It depends very largely upon where the emphasis is placed. If one thinks of a theological college, the main purpose may well be considered to be the advancement of religion. At the same time it is an educational establishment and its religious purpose is advanced by the advancement of education. So too in the present case, where the main dominant purpose is religious, the ancillary purpose, which is contained in by-law (3) and provides the method of advancing that religious purpose, does I think involve the advancement of education in the broad sense, and would, were it necessary, justify the YMCA being held to be charitable under the second head, just as the Boy Scouts Movement has been held to fall under that head: Re Webber,  3 All ER 712; and the Navy League Sea Cadets; Re Belcher,  VLR 11;  ALR 138.
In the last-mentioned case Fullagar, J, held that a trust for the Navy League Sea Cadets was primarily and essentially a trust for the advancement of education. And then he went on, at p. 13:
"And, in so far (if at all) as its purposes go beyond the 'educational' scope of the preamble, it is, in my opinion, a trust for purposes beneficial to the community which fall within the 'spirit and intendment' of the preamble".
The same, I think, can be said of the ancillary purpose of the YMCA, and indeed Higgins, J, so decided, and so did Sugerman, J, in Young Men's Christian Association v Sydney City Council (1954) 20 LGR (NSW) 35.
In that case Sugerman, J, had to decide whether the Young Men's Christian Association of Sydney was a "public charity" within the meaning of s132(1)(d) of the New South Wales Local Government Act 1919. The Young Men's Christian Association of Sydney was incorporated in 1906 by a special Act of Parliament of New South Wales. Its articles of constitution, which were set out in the Second Schedule to the Act, do not include the "Paris Basis", and his Honour dealt with the case on the basis that the predominant object of the association was the "promotion of the religious moral social and intellectual welfare of young men". He held that this object was charitable in the technical legal sense. He relied upon the judgment of Higgins, J, and also upon the Court of Appeal's decision in Baddeley v Inland Revenue Commissioners,  CH 504;  2 All ER 233. This decision was later reversed by the House of Lords  AC 572;  1 All ER 525, and Mr. Lush relied strongly upon the House of Lords decision and submitted that in the light of that decision Sugerman, J.'s decision as to the charitable nature of the predominant object of the association should be treated as overruled, and that Higgins, J.'s decision with regard to the object contained in by-law (3) should fall with it.
The trusts under review in Baddeley's Case were contained in two conveyances to the trustees of certain lands.
The first conveyance provided:
"The trustees shall permit the said property to be appropriated and used by the leaders for the time being of the Stratford Newtown Methodist Mission for the promotion of the religious social and physical well-being of persons resident in the County Boroughs of West Ham and Leyton...by the provision of facilities for religious services and instruction and for the social and physical training and recreation of such afore-mentioned persons who for the time being are in the opinion of such leaders members or likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided by these presents and by the provision of facilities for religious social and physical training and recreation and by promoting and encouraging all forms of such activities as are calculated to contribute to the health and well-being of such persons...."
The second conveyance directed the trustees to permit the property thereby conveyed to be appropriated and used
"...for the promotion of the moral social and physical well-being of persons resident in the County Boroughs of West Ham and Leyton...who for the time being are in the opinion of such leaders members or likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided by these presents by the provision of facilities for moral social and physical training and recreation and by promoting and encouraging all forms of such activities as are calculated to contribute to the health and well-being of such persons...".
The House of Lords held that the trusts did not fall within the first three heads of charities stated by Lord Macnaghten, nor did they fall within the fourth head, because they were expressed in language so vague as to permit the property to be used for purposes which the law did not regard as charitable and which did not satisfy the necessary element of public benefit.
Mr. Lush submitted that this decision of the House of Lords established conclusively that an object couched in the language of by-law (3) is not to be regarded as charitable under the fourth head or at all. In my opinion, it decides no such thing as it was a decision upon a very different provision or set of provisions. Mr. Lush seized on the words "for the promotion of the religious social and physical well-being of persons resident in the County Boroughs of West Ham and Leyton..." in the first conveyance, and the words "for the promotion of the moral social and physical well-being of persons resident in the County Boroughs of West Ham and Leyton..." in the second, and compared them with the language of by-law (3). But these words, though at first sight they may appear to resemble the words of by-law (3), have several points of variance, which are of great importance. In the first place no reference is made in them to "intellectual" welfare, and then further it is not "young men generally" who are to benefit thereunder, but the residents of any age presumably and only the residents of two named County Boroughs. The words selected, moreover, must be read in their context. And that context contains nothing like the "Paris Basis" with its emphasis on religion and youth. It contains, however, a number of vague provisions and it was largely the vagueness of these provisions taken as a whole that led their Lordships to decide as they did.
In my opinion, Mr. Lush can derive no assistance from Baddeley's Case, supra. And I think, for the reasons I have given, his contention that the YMCA is not a charitable body in the technical legal sense fails. And it follows, as indeed Mr. Lush himself conceded, that the activities of the YMCA, including those which in themselves are quite neutral, will take colour from the charitable nature of the YMCA. Thus the provision of meals, for example, a neutral thing in itself, may assume a charitable garb, if dispensed by a charitable body. So too with residential accommodation--the provision of board and lodging by a boarding school for its pupils--may well be regarded as furthering the school's educational purposes.
I proceed now to deal with the purposes for which the building is actually used. Mr. Lush's argument on this part of the case falls under two heads. First of all he says that even on the basis that the YMCA. is a charitable body in the technical legal sense, the purposes for which the building is used cannot be regarded as charitable in this sense, because they lack the public quality which a charitable use must have. Then, secondly, he submitted that the land is not entitled to rating exemption, because, in addition to such uses as may be held charitable, it is used for collateral purposes that are not charitable, and so it is not used exclusively for charitable purposes.
So far as the first contention is concerned, he referred to and relied upon authorities which, he submitted, established the proposition that to confer benefits on a body of persons bound together by voluntary ties in an association, is never charitable, no matter what kind of benefit is conferred. The authorities he referred to were: Re Income Tax Acts (No 1),  VLR 211; 36 ALR 192, a decision of the Full Court; Re Searisbrick's Will Trusts,  CH 622 (CA);  1 All ER 822; and Thompson v Federal Commissioner of Taxation,  ALR 184.
In the last-mentioned case Dixon, CJ, read a judgment in which Fullagar and Kitto, JJ, concurred, and which consequently became the judgment of the majority of the Court. McTiernan and Menzies, JJ, dissented. In his judgment Dixon, CJ, held that a gift to "the William Thompson Masonic Schools, Baulkham Hills" was not charitable. These schools comprised schools and hostels providing free education and maintenance for children of deceased Freemasons or of Freemasons who were prevented by permanent incapacity from supporting their children. Membership in the Masonic Order depended upon the vote of members of the Lodge. At p. 187, his Honour said:
"For myself, I would reject the view that a trust in favour of the William Thompson Masonic Schools and Hostels is to be considered a charitable trust because it is for the advancement of education. I would reject it because such a trust would lack the 'public' element, the element of public benefit or advantage that is necessary".
On the same page Dixon, CJ, pointed out the difficulty involved in the conception of "public" benefit and that the contrast is private advantage. He referred to the judgment of Jenkins, LJ, in Re Scarisbrick, supra, and quoted from it the passage in which his Lordship said:
"An aggregate of individuals ascertained by reference to some personal tie [e.g. of blood or contract] such as the relations of a particular individual, the members of a particular family, the employees of a particular firm, the members of a particular association, does not amount to the public or a section thereof for the purposes of the general rule".
Dixon, CJ, italicized the words "or contract" and the words "the members of a particular association" as applicable to the facts of the case then before him.
On p. 188, his Honour goes on:
"Large as is the membership of the Masonic Order in New South Wales it forms but a society of persons bound together as a voluntary association into which members are admitted by the election of the existing members as provided by the rules adopted contractually for the government of the society. The size and importance of the order cannot give it any different character. It is true that the benefit of the William Thompson Masonic Schools and Hostels is enjoyed by the children of deceased or incapacitated Brethren, not the Brethren themselves. But as was remarked by Lord Normand in refusing to regard as material a similar distinction in Oppenheim's Case,  AC 297, at p. 310;  1 All ER 31, there is no public relationship between parent and child. On the same point Lord Simonds said in that case, at p. 306:'I can make no distinction between children of employees and the employees themselves. In both cases the common quality is found in employment by particular employers'.
The fact is that it is part of the advantages which a member of the Masonic Order obtains in virtue of his membership that his child should become eligible thus to be provided with part of his education and upkeep."
His Honour then referred to the decision of the Full Court in Re Income Tax Acts (No 1),  VLR 221; 36 ALR 192, as directly in point, said it was correct in his opinion and quoted from the judgment of Lowe, J, a passage, which appears at pp. 222-3. In this passage his Honour differentiated between a particular calling, a particular faith or residence within a particular area on the one hand, and a club, a literary society or a trade union on the other. His Honour then proceeded:
"The distinguishing feature of each of these latter bodies is that it is an association which takes power to itself to admit or exclude members of the public according to some arbitrary test which it sets up in its rules or otherwise. Each of them does oppose a bar to admission. It is not one of the groups into which the community as a matter of necessary organization or by convention is divided, but it is in a sense an artificial entity which exists for the benefit of its members as members thereof and not as members of the public".
The application of these tests has given rise to a considerable conflict of judicial opinion. In Thompson's Case itself Menzies, J, reviewed at some length the more recent decisions and dissented from the majority of the court. And no less an authority than Viscount Simonds, who has delivered the leading judgment in most of the recent House of Lords cases dealing with charitable trusts, has described the proper application of the principle relating to public benefit in such trusts as "the most difficult of the many difficult problems in this branch of the law": Baddeley's Case,  AC 572, at p. 589;  1 All ER 525. In that case his Lordship concluded (at AC p. 592) that a "trust cannot qualify as a charity within the fourth class in Income Tax Commissioners v Pemsel,  AC 531, if the beneficiaries are a class of persons not only confined to a particular area but selected from within it by reference to a particular creed". Lord Porter and Lord Tucker expressed no opinion on the point. Lord Reid dissented strongly. He would not have it that the limitation to Methodists in the trusts before the court vitiated their charitable character. At  AC, p. 612, he said: "Of course the appellants do not contend that" a trust solely for the advancement of religion or of education would not be a charitable trust if limited to members of a particular church: "they could not but admit that the members of a church are a section of the community for the purpose of such trusts. But they maintain that they cease to be a section of the community when it comes to trusts within the fourth class.... Poverty may be in a special position, but otherwise I can see no justification on principle or authority for holding that when dealing with one deed for one charitable purpose the members of the Methodist or any other Church are a section of the community, but when dealing with another deed for another charitable purpose they are only a fluctuating body of private individuals".
Lord Somervell of Harrow, on the other hand, was prepared to differentiate between trusts in the different categories. Ibid, at p. 615, he said:
"I cannot accept the principle submitted by the respondents that a section of the public sufficient to support a valid trust in one category must as a matter of law be sufficient to support a trust in any other category. I think that difficulties are apt to arise if one seeks to consider the class apart from the particular nature of the charitable purpose. They are, in my opinion, inter-dependent. There might well be a valid trust for the promotion of religion benefiting a very small class. It would not at all follow that a recreation ground for the exclusive use of the same class would be a valid charity, though it is clear from the Mortmain and Charitable Uses Act 1888 that a recreation ground for the public is a charitable purpose".
Viscount Simonds also seemed to incline to this view. At p. 590 he said:
"It is indeed, an essential feature of all 'charity' in the legal sense that there must be in it some element of public benefit, whether the purpose is educational, religious or eleemosynary: see the recent case of Oppenheim v Tobacco Securities Trust Co Ltd,  AC 297;  1 All ER 31, and, as I have said elsewhere, it is possible, particularly in view of the so-called 'poor relations' cases' the scope of which may one day have to be considered, that a different degree of public benefit is requisite according to the class in which the charity is said to fall".
However, whether any such differentiation is proper or not, I have to deal with the matter now before me, on the basis of the opinion expressed by Dixon, CJ, in Thompson's Case,  ALR 184. His Honour was there considering a gift to certain schools who were giving education to the children of deceased or incapacitated members of a voluntary association. It was the fact that members are admitted on election of the existing members as provided by the rules adopted contractually for the government of the society, that his Honour seized upon as giving the society its "private" character and preventing the body of its members from being regarded as a section of the "public". The same discrimen had been stated by Lowe, J, in his judgment in Re Income Tax Acts (No. 1),  VLR 211; 36 ALR 192, in the passages quoted by Dixon CJ.:
"The distinguishing feature of each of these latter bodies is that it is an association which takes power to itself to admit or exclude members of the public according to some arbitrary test which it sets up in its rules or otherwise. Each of them does oppose a bar to admission within it".
This test did not go far enough for Mr. Lush in view of the evidence in this case which was to the effect that applications for membership in the YMCA are never in fact refused, and that consequently there is really no restriction on membership save that which is due to limitations of space. Mr. Lush consequently sought to supplement the test by introducing an additional element, namely, the fact that members have to pay a subscription, and that as a result the use of the premises is largely restricted to subscription paying members. And in the final analysis what he was putting, I think, was that if the facts be examined, it would be found that the right to enter and use the building was in large measure a right that had to be paid for by the payment of a subscription. He also likened the club facilities that members enjoy in the building to those enjoyed by the members of a social club.
In my opinion, these additional elements do not assist the argument. The question is whether or not, assuming as one must for the purposes of the argument that the YMCA is using the building for charitable purposes in the technical legal sense, there is present the necessary public element in the beneficiaries. There is no question that a number of facilities and activities are open to and are used by members of the public who are not members of the YMCA. There is the residential accommodation, the cafeteria, certain educational facilities, and strangers also, it will be recalled, come to the building to receive advice and counsel. Then again the fellowship club is open to all and there is a special welcome for Asian students and for migrants. Most if not all of these may be classed as beneficiaries of the YMCA.'s charitable purposes, and they certainly introduce a public element.
Mr. Lush, however, confined his attention to the position of those who become members of the YMCA. But even if attention is confined to members of the YMCA, the argument cannot succeed once it is established that there is no restriction on membership save that due to limitations of space. The fact that a charge is made for benefits received in the form of a membership subscription or otherwise does not, I think, affect the position; Brighton College v Marriott,  AC 192, at p. 204;  All ER Rep 600. Nor does the fact that the facilities provided are of a high standard and include facilities such as members of a social club might enjoy. The YMCA seeks to carry out its purposes amongst young men by attracting them to the building and enrolling them as members. It is the field from which the members come that is all important on this aspect of the case. The position of the YMCA in this regard is similar, I think, to that of such bodies as the Boy Scout Movement and the Sea Cadets.
I pass now to the question whether in fact the building is used for charitable purposes in the technical legal sense. In reviewing the evidence I have attempted to cover the various activities that are carried on in the building, and all I need do now is to express shortly my reasons for concluding that the building is used for the charitable purposes of the YMCA, in the technical legal sense, for the advancement of religion, its main purpose, and for its subsidiary purpose, the fourfold development envisaged in by-law (3). The position was, I think, accurately summed up by Isaacs, J, in the passage already cited, when he said:
"The association is an institution with a very broad religious platform carried out in an extremely practical manner".
And I think it is true to say that the building is used for the purposes of carrying out the YMCA.'s "very broad religious platform". All the activities of the YMCA, whether carried on in the building or outside it, are directed and controlled in it. In it the members of the staff and the active members, all active Christians, seek to promote the "Paris Basis" and to do so by means of the fourfold development, which Isaacs, J, regarded as "extremely practical". It is in the building that they seek to persuade more and more of their members and also of those non-members who come into it for whatever reasons, whether for a meal, a bed, a lecture or advice, to take an ever increasing interest in the activities of the YMCA until they finally become active members of the YMCA and members of a church They do attempt, I believe, to help all those who come into the building along the Christian road that Moodie referred to.
In the clubs of the young men's department, the boys' department, the fellowship clubs and the leadership courses, positive action is taken to promote the Christian faith. There are the regular devotional periods, the services of initiation graduation and consecration, there are the church services which members and non-members are encouraged to attend together, and the world-wide week of fellowship and prayer in the chapel. There is the religious instruction at the leadership courses. There is the special Christian witness of the fellowship club. And all this action is planned and supervised by the programme staff, and except for the church services in churches outside, takes place in the building. And all the time efforts are being made by staff and active members to reach out and bring others in. Christian example and Christian practice are thus to be seen, I think, at work in the building. It is in the building that there is planned the acts of community service, which the members of the clubs of the young men's department are encouraged to perform outside as an expression of their Christian principles. It is no doubt true to say of the YMCA what Sugerman, J, said of the Sydney association in Young Men's Christian Association v Sydney City Council (1952) 20 LGR (NSW) 35, at p. 47:
"There are, as I have said before, specifically religious activities. But, as regards teaching and training, the methods employed by the YMCA consist not so much of direct or formal instruction in religious principles and practices as of activities of numerous kinds so conducted as to provide opportunities for the 'development of Christian personality' by experience, practice and example".
But I venture to think that this is a very practical and satisfactory way to spread and promote the Christian faith. It mush be borne in mind that the programmes of the YMCA are designed to lead young people on ultimately to active membership in a church, where they may be expected to receive somewhat more specific religious teaching and training.
It is in the building in the rooms set apart for it that the education department conducts its courses for members and non-members and provides personal instruction for backward young people. It is in the building, in the gymnasiums and swimming pool, that a great deal of the physical education is given. It is in the building in their contacts with one another, in residence, in classes, at meals or games, that members and other young men, who use the building, learn to become better members of human society so that their "social condition" in the sense in which Higgins, J, thought (and with respect I agree with him) these words should be read, is improved. These educational activities take their place as a part of the fourfold development plan.
In view of what I have said it is clear, I think, that the building is used for the charitable purposes of the YMCA. The next question is whether it is used exclusively for such purposes. And the way this question is to be approached is determined for me by the decision of the High Court in Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159;  ALR 85.
In that case the High Court was concerned with the question whether certain lands in the Shire of Fern Tree Gully were ratable under s249 of the Local Government Act 1946. In that case, as in the case before me, it was claimed that the lands were exempt from rates, because they were "exclusively for charitable purposes" within the meaning of s249(1)(b)(ix) of the said Act. The lands were used for the purpose of conducting a boys' training farm for delinquent boys and homes for difficult, wayward or underprivileged boys. This was a charitable purpose in the technical legal sense. As part of the activities of the training farm, however, pigs and cattle were raised, fruit and flowers were grown, and a herd of milking cows was kept and milked. The surplus produce of the farm was sold, realizing an annual sum of approximately 4000 pounds. This sum was applied in reduction of the costs of conducting the farm and the boys' homes, which were in fact conducted at a loss. It was held by the court that the lands were used "exclusively for charitable purposes" within the meaning of s249(1)(b)(ix). The contention of the shire that the business or commercial activities involved in the sale of surplus produce constituted an activity separate from and independent of the charitable purpose, was overruled.
Dixon, J (as he then was), Williams and Webb, JJ, gave a joint judgment. In the course of their judgment they decided the word "exclusively" in s249(1)(b)(ix) should be construed in the same way as that word had been construed in the English cases under the Scientific Societies Act 1843. At 85 CLR p. 169, they said:
"In these cases it was decided that a society lost the exemption unless it was instituted for scientific, etc., purposes exclusively but that it was still so constituted although it had other purposes provided the other purposes were merely a means to the fulfilment of its scientific, etc. purposes and incidental thereto but that the exemption was lost if the other purposes ceased to be a means to an end and became collateral and additional purposes".
Ibid., at p. 173, their Honours said they could see no reason for dissenting from the finding of the magistrate that "the whole purpose of the appellant in engaging in farming activities on the land was charitable and that the sale of the surplus products derived from these activities was a mere incident in the execution of that purpose". At p. 172, they had said:
"If the land is used for a dual purpose then it is not used exclusively for charitable purposes although one of the purposes is charitable. But if the use of the land for a charitable purpose produces a profitable by-product as a mere incident of that use the exclusiveness of the charitable purpose is not thereby destroyed".
And at p. 171 they adverted to the fact that there was nothing in the evidence to suggest that the appellant was carrying on the farming activities to a greater extent than was reasonably necessary to achieve its charitable purpose or that under the cloak of that purpose it was really engaged in carrying on the business of a farmer for gain.
Fullagar, J, in his separate judgment first determined that the word "charitable" in s249(1)(b)(ix) must be read in its technical legal sense, and then went on to say that this conclusion tended to simplify to some degree the question whether the land was to be regarded as used exclusively for charitable purposes, because the approach to this question differs according as the word "charitable" is used in its popular or its technical legal sense. His Honour then went on to say (85 CLR, at p. 184) that "there is a subjective element in the term as used non-technically, which is absent when it is used technically. The characteristic of a charitable act or purpose in this sense is that it possesses a certain moral quality... . On the other hand, when we ask whether the act or purpose is charitable in the technical sense, the test to be applied is wholly objective. The whole question is whether the act or purpose itself falls within a particular class which we say is to be defined by reference to the Statute of Elizabeth".
He then went on to say that this difference is bound to affect the approach in any particular case to the question whether land is being used "exclusively for charitable purposes". In such a case as that then before him (where the land was admittedly being used for a charitable purpose) his Honour said that if the person who approaches the question "is using the word 'charitable' in its popular sense, he will tend to analyse the various activities carried on upon the land, with a view to seeing whether there is any one or more which is not directly and immediately actuated by a 'charitable' intention. And, if he finds that things are being produced on the land with the intention of selling them he will tend to say that this intention constitutes a 'purpose' for which the land is being used, and that, therefore, the land is not used exclusively for a charitable purpose. If, on the other hand, he is thinking of the technical conception of a charitable purpose, he will look rather at the totality of what is being done on the land without regard to any particular intention and will ask himself whether any separate and independent activity is being carried on which does not fall within the intendment of the Statute of Elizabeth. And, if he finds that things are being produced on the land with the intention of selling them, he will say that this does not necessarily affect at all the character of the totality of what is being done".
If one looks again at the building, there are parts of it, like the office accommodation, which are clearly used for the promotion of the YMCA.'s charitable purposes. Other parts are equally clearly used for purposes that are ancillary to such charitable purposes.
Thus, on the ground floor apart from offices, gymnasiums, kitchen and store rooms, there is the main lounge, the recreation room and the cafeteria. The main lounge and the recreation room are, I think, admittedly necessary adjuncts to the carrying out of the YMCA.'s charitable purposes. They provide facilities, which the young people who join the YMCA can reasonably expect. The purposes, for which they are presumably used, may reasonably, I think, be regarded as ancillary to the charitable purposes of the YMCA. The cafeteria stands on a different footing. The provision of some dining facilities for those who use the building is no doubt also properly to be regarded as ancillary to such purposes. Mr. Lush, however, contends that greater dining facilities have been provided than are reasonably necessary.
So far as the basement is concerned, it houses the boys' department, the swimming pool, the club meeting rooms and the lounge dining room used by the clubs of the young men's department. These are all rooms in which the charitable purposes of the YMCA are carried out and no further comment is necessary.
On the first floor there is the chapel, the offices of the national council of the Young Men's Christian Association of Australia, the office of the director of education and the rooms used for educational purposes, the social hall and 26 bedrooms. Nothing is sought to be made by the plaintiff of the offices used by the national council. Apart from the 26 bedrooms, no comment is I think necessary about the other rooms, all of which including the social hall are reasonably required for the fulfilment of the YMCA.'s charitable purposes.
The bedrooms on this floor have to be considered with those on the second, third and fourth floors. The provision of some bedroom accommodation may undoubtedly be regarded as ancillary to the charitable purposes of the YMCA in much the same way as the lodging and feeding of scholars in a school is ancillary to the school's educational purposes. But here, too, Mr. Lush submits that more accommodation has been provided than was reasonably necessary in the circumstances. His main submission on this part of the case was based upon such bedroom accommodation. A provision of 300 beds was, he contended, on such a liberal scale that it went far beyond what could be regarded as incidental to the charitable purposes of the YMCA, or as a means to the fulfilment thereof. He pointed to the fact that three and a half floors out of six are devoted to bedrooms, and that it is income that comes from their use that keeps the whole establishment reasonably solvent from an income point of view. He referred to the fact that the YMCA has advertised their bedroom accommodation in country centres and submitted that the substantial use of the bedroom floors is difficult to distinguish from a use of comparable premises as a guest house, albeit one where high standards of behaviour are called for and where there is a decent and Christian atmosphere. He maintained, therefore, that three and a half floors, or at any rate a substantial part of the building, were used for a separate and distinct purpose of a non-charitable character, a purpose that could not on any view be said to be ancillary, concomitant or incidental to the charitable purposes of the YMCA. He put a similar argument with regard to the cafeteria.
Mr. Lush did not suggest and, indeed, it could not be suggested that the YMCA is really engaged in carrying on the business of guest-house proprietor for purposes of gain under the cloak of its charitable purposes. His concession that some bedroom accommodation can properly be regarded as ancillary to the fulfilment of such charitable purposes leads to the inquiry how much can properly be so regarded and to the further inquiry how one is to determine such amount. In the Salvation Army Case, supra, there is the suggestion that the answer to the first inquiry may be found in determining how much accommodation is reasonably necessary for the fulfilment of the charitable purposes. But how is one to determine how much is reasonably necessary? Mr. Menhennitt suggested that this was a practical question that could be best left to a competent body like the YMCA to determine for itself. The accommodation in question was actually provided when the building was erected over 30 years ago and all that the YMCA is now doing is using the accommodation it has available to it. Of this accommodation, it will be remembered, a little over one-third was provided at the request and at the cost of the Commonwealth of Australia, so that young sailors from the RAN might have suitable accommodation available to them in a decent Christian atmosphere, whilst on leave in Melbourne. The YMCA has undertaken to continue this service to the RAN and its young sailors, and it is a service that has a distinctly charitable ring in the technical legal sense. It did not appear how much this service is availed of at the present time but it did appear that 100 beds are always reserved for young people who are not members of the YMCA.
It was suggested that the YMCA could only claim exemption from rates if it closed down a considerable portion of its residential accommodation. This is rather like the suggestion in the Salvation Army Case, supra, that the land there could only be exempted from rates if the surplus farm produce were destroyed and not sold. So here no doubt there would be no contest about accommodation if half of it was closed down. But this would hardly seem a very sensible course to pursue. And, I think, the right way to approach the matter is that suggested by Fullagar, J, in the Salvation Army Case, supra. You look at the general mass of activities carried on in the building, and view them as a totality, and then ask yourself whether the activity that consists in the provision of accommodation, on perhaps a somewhat liberal scale, is being carried on as separate and independent activity; that is to say separate from and independent of the fulfilment of the charitable purposes of the YMCA to which fulfilment the general mass of activities is directed.
It is impossible, I think on the evidence, to hold that the provision of accommodation by the YMCA in this case constitutes a separate and independent activity in this sense. Some accommodation is on any view reasonably necessary for the fulfilment of the YMCA.'s charitable purposes. There is undoubted value for the purpose of such fulfilment in bringing young men together in a common residence where there is a decent Christian atmosphere, as is the practice in boarding schools and residential colleges. The question is whether with 3000 members and accommodation for 200 permanents and 100 casuals is more than is reasonably necessary in all the circumstances. In considering this matter it has to be borne in mind that the more accommodation there is available within limits, which I will explain in a moment, the more young men, students and country boys and others, who would or might not otherwise come within the influence of the YMCA, will be brought within that influence. It is the accommodation in wholesome Christian surroundings that undoubtedly attracts a number of young people to the building and leads to their becoming members. It is such accommodation that leads parents of boys and young men in the country, who are coming to Melbourne to study or take a job, to seek residence for them in the building. So far as the YMCA is concerned, it welcomes them all as additions to the raw material upon which it may work out its charitable purposes. Far from dealing with them as a guest-house proprietor might be expected to do, it provides a special officer of the programme staff, the residential secretary, and a deputy residential secretary, whose duty it is to make and keep contact with every one who takes up residence in the building. They pass on their names and room numbers to the director of young men's work, and he and the voluntary leaders in the young men's department call on them and try to persuade them to join the Young Men's Clubs, and this a number of them do. But whether they join the clubs or not, all who reside in the building are brought into contact with the administrative and programme staffs who try to reach every man who comes into the building with the main purpose of the YMCA. In this way the provision of accommodation is made to serve the charitable purposes of the YMCA. There are limits of course (and these are the limits I mentioned a moment or two ago) to the number of young people, with whom the staff and their voluntary helpers can be expected to make satisfactory contact at any one time. But it did not appear that the accommodation at present available led to these limits being exceeded.
It follows I think from what I have said that the provision of residential accommodation takes its place amongst the totality of activities that are directed to the fulfilment of the charitable purposes of the YMCA. It is in fact an activity that is intimately associated with that fulfilment and ancillary to it. It would be wrong, I think, to regard the residential accommodation or any part of it as being devoted to a different purpose from that to which the rest of the building is put, or as being the subject-matter of a separate and independent activity.
The fact that it is an activity that produces a substantial revenue does not, I think, really affect the matter: Salvation Army (Vic.) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159, at p. 173; Young Men's Christian Association v Sydney City Council (1954) 20 LGR (NSW) 35, at p. 45. This is a factor no doubt to be taken into account in deciding how a particular activity is to be regarded, and I have taken it into account in coming to the conclusion I have on the matter.
So far as the casual residents are concerned, it may well be said that as a rule but little influence can be brought to bear upon them in view of the length or should I say the brevity of their stay, and that consequently the service to casuals should be regarded as one that is supplied by the YMCA for what can be got out of it. In my opinion, such a view cannot really be justified on the evidence. There is first of all the special obligation to the young sailors of the RAN. And then there are the young Asian students and migrants whom the YMCA befriends; and in housing them till they are able to find accommodation elsewhere, the YMCA renders a real community service. Similar considerations apply to many others taken in as casuals, and I think looking at the evidence that the service to casuals viewed as a whole should be regarded as a means of extending the influence of the YMCA amongst young men generally, and therefore as ancillary and incidental to the main purposes. It certainly cannot, I think, be said that this service is furnished as a separate independent activity.
For these reasons, I think, Mr. Lush's argument with regard to accommodation fails. And so does his argument about the cafeteria. It is impossible to say on the evidence that greater dining facilities are provided than is reasonably necessary or that the cafeteria is run as a separate independent activity. It takes its place as one of the mass of activities that further the charitable purposes of the YMCA.
Mr. Menhennitt put an alternative argument on this aspect of the case. He contended that even if contrary to his submission (and to the view I have taken) it were proper to hold on the evidence that the building is not used exclusively for charitable purposes because more residential accommodation and more meals are provided in the building than are reasonably necessary for the fulfilment of the YMCA.'s charitable purposes, the case would be governed by s249(2) of the Local Government Act 1946, and that the effect of that sub-section would be that the building here is not by reason of such excess to be deemed not to be used exclusively for charitable purposes under s249(1)(b)(ix). This sub-section reads as follows:
"Land shall not be deemed not to be used exclusively for any of the purposes referred to in sub-paragraphs (iii) (vii) or (viii) or (ix) of paragraph (b) of subs(1) of this section by reason only of the fact that any building on such land is used not only for any purpose referred to in the said sub-paragraphs but also for any purpose connected with or in support of the objects of any religious educational or charitable body or authority occupying or controlling such land".
On the plain reading of the sub-section it would appear to apply on the hypothesis stated. The YMCA is a religious body or authority. The High Court has so held. It occupies and controls the land on which the building stands. The building is used for charitable purposes. In so far as it is used as well for purposes that are not charitable, viz. for residential accommodation and meals in excess of what is reasonably necessary for the fulfilment of the YMCA's charitable purposes, such purposes would seem to be connected with or in support of its objects. It would seem to follow, therefore, that despite such non-charitable uses, the building would still be deemed to be used exclusively for charitable purposes by force of the sub-section.
Mr. Lush for his part submitted the section did not apply for two reasons. In the first place he said that the sub-section presupposes the building referred to therein being put to a dual use and that it has no application where one part of a building is used for charitable purposes and the rest of it for non-charitable purposes. Then secondly he contended that the sub-section contemplates the primary use of the building for the appropriate one of the purposes referred to in sub-paragraphs (iii), (vii), (viii) and (ix) of s249(1)(b), in this case "charitable purposes", and then a subordinate use for connected purposes, in this case non-charitable purposes, and that in the present case the use for non-charitable purposes is too large to constitute such a subordinate use.
As to the first ground it is clear, I think, that the sub-section is dealing with "any building" on the land sought to be rated. It is only when such a building is used not only for charitable purposes, if the case comes under sub-paragraph (ix) as does this case, but also for some non-charitable purposes, that the sub-section can apply. It has no application when one building on the land is used for charitable purposes and another distinct building on the land is used for non-charitable purposes. It must be the same building that is used for the charitable and non-charitable purposes. Here the charitable and non-charitable purposes are according to the argument admittedly carried on in the YMCA building, but it is said that for the purposes of the sub-section it should be regarded as being two distinct buildings one of which includes the residential accommodation and that is allegedly in excess of the YMCA's requirements for the fulfilment of its charitable purposes, and the other the rest of the building. This argument must of necessity be limited to residential accommodation. It cannot apply, so far as the service of meals is allegedly in excess of those reasonably required for the fulfilment of the YMCA's charitable purposes, for all meals, those not in excess and those allegedly in excess, are cooked in the same kitchen and served in the same cafeteria.
The argument concedes, as I understand it, that as a matter of construction the words used by the Legislature in the sub-section "any building" mean what they say and cannot be construed as if the Legislature had used the words "any building or part of a building". Had the Legislature intended to include "a part of a building", it could quite easily have made this clear.
The argument requires that the YMCA building should be treated as if it consisted of at least two distinct buildings, the bedrooms in excess of requirements being treated as forming one building and for the argument's sake as being comprised may be in one floor, which is to be regarded as used only for non-charitable purposes and so excluded from the operation of the sub-section. On the evidence I can see no justification for treating the building in this way. I have to deal with it as it stands. Different considerations might apply if there were five more floors of bedrooms above those already there, But taking the building as it stands and the use to which it is now put by those who use it and reside in it, it stands I think as one complete building, and any such division, as that contended for, would necessarily be entirely artificial. The residents of the "non-charitable" floor, if one floor is treated as isolated in the way suggested, make use of the rest of the building, e.g. lounges, cafeteria, recreation rooms, etc., in just the same way as the other residents do. And indeed I should think it unlikely that occupiers would be found for such "non-charitable" floor if the use of the rest of the building were denied them. The fact is that it is impossible to divide the building as it stands into two distinct buildings. In my opinion, this argument fails.
As to the second argument, it is concerned both with the construction of the sub-section and also its application to the facts. As to its construction, the sub-section is concerned, I think, with cases where land is being used primarily for the purposes referred to in sub-paragraphs (iii), (vii), (viii) or (ix), that is to say for public worship (iii); primary schools in which education is given free to the scholars (vii); institutions or schools for technical instruction which receive in aid of their funds any sums from the consolidated revenue (viii); or charitable purposes (ix). The sub-section is then meant to deal with the case where a building on the land is used not only for the primary purpose but also for some other subordinate purpose of the kind specified in the sub-section. In such a case rating exemption is not to be lost on the ground that the land is not used "exclusively" for the primary purpose, whichever it is.
It is when one turns to the facts that this second argument encounters difficulty. It proceeds on the assumption stated with regard to the facts. But on this assumption it cannot be said, I think, that the YMCA building is not used primarily for the promotion of its charitable purposes. It was for the promotion of such purposes that the YMCA was founded in Victoria and that it ultimately erected the building. It might have erected a building with so many floors of bedrooms that it could not be said of it that the primary purpose for which the building was to be used was other than the running of a substantial guest house. But the matter must be judged on the building as it stands, and it comprises the type of accommodation that the YMCA needs for the promotion of its charitable purposes, chapel, club rooms, educational rooms, gymnasiums, swimming pool, games rooms, cafeteria, offices, etc. And it is conceded that a certain number of bedrooms are a proper adjunct. In the circumstances it cannot be said, I think, on the evidence that if there has been a provision of residential accommodation in excess of what was reasonably necessary, it has been made on such a scale as to make the use of such accommodation the primary purpose, for which the building is used, and the fulfilment of the YMCA's charitable purposes merely subordinate thereto or as to prevent such fulfilment from being the primary purpose for which the building is used. This argument, in my opinion, therefore also fails.
It was not suggested that the use of residential accommodation, if and in so far as it was provided in excess of what was reasonably required for the fulfilment of the YMCA's charitable purposes, did not on the facts of this case constitute use for a "purpose connected with or in support of the objects" of the YMCA. And so it follows that the sub-section applies to the facts of this case and can be relied upon by the YMCA, if it be the case that the building has not been used "exclusively" for charitable purposes by reason of its use in providing accommodation in excess of what was reasonably required for such fulfilment.
Mr. Lush, in support of his argument, referred to a decision of Lowe, J, in Association of the Franciscan Order of Friars Minor v City of Kew,  VLR 199;  ALR 230. There is nothing in that case, however, which affects the view I have expressed. His Honour considered the sub-section and pointed out that before it can operate in favour of a ratepayer it must be the same building, which has the double use contemplated by it, but further than this he did not go. He was concerned in that case with the operation of what is now s249(1)(f) of the Local Government Act 1946, which provides that there shall be exempted from the payment of rates "land in the occupation of or under the management and control of any religious body and upon which is situated any hall or other building used in connexion with any church exclusively for any purposes connected with or in support of the objects of such religious body".
Mr. Menhennitt relied upon this paragraph in the alternative. He submitted that the memorial chapel is a church within the meaning of the paragraph and that the YMCA building is used in connexion with the memorial chapel exclusively for purposes connected with or in support of the objects of the YMCA. As the building is admittedly in the occupation of and under the management and control of the YMCA, which is a religious body according to the High Court, Mr. Menhennitt submitted that the land, on which the building stands, is exempt from rates by reason of the paragraph.
In my opinion, this contention fails for the reason stated by Lowe, J, in the Franciscan Friars Case, supra. His Honour there decided that the exemption from ratability provided by the paragraph only exists if the church is the dominant building and the hall or other building referred to in the paragraph is subsidiary to or an adjunct of the church. I would feel bound to follow this decision even if I did not agree with it, as I in fact do.
The question then is whether or not it can be said of the Memorial Chapel that it is the dominant building and that the rest of the building is subsidiary to or an adjunct of it. In my opinion, it is quite impossible as a matter of fact to regard the chapel, however important it may be, as being the dominant building in the sense required by the paragraph. The chapel plays its part, important as it is, in the building along with all the rest of it, just as does the school chapel in a church secondary school. But the paragraph does not, as Lowe, J, pointed out, at p. 202, exempt the building of such a school, even though attached to it there be a chapel which its scholars attend. In my opinion, the alternative case for exemption based upon the paragraph is not made out.
I turn now to the neon sign on the roof of the building which has been erected there by Glazebrooks Paints (Aust.) Pty. Ltd. under what is described as a lease from the YMCA at a rental of 1200 pounds a year. The property comprised in the sign has been separately rated and it is agreed by both parties should be dealt with separately.
Mr. Menhennitt contended that it should be regarded as a profitable by-product of the use the YMCA makes of the land and building for its charitable purposes and as, therefore, a mere incident of that use which did not destroy its exclusiveness. Alternatively he relied upon s249(2) of the Local Government Act 1946 and maintained that if the erection of the neon sign could not be regarded as a charitable use of the building, it was a use for a purpose connected with or in support of the objects of the YMCA under the sub-section.
The submission that the neon sign should be regarded as a profitable by-product of the use of the YMCA makes of the land and building for its charitable purposes is based upon the statement quoted above from the judgment of Dixon, Williams and Webb, JJ, in the Salvation Army Case (1952) 85 CLR 159, at p. 172;  ALR 85. In that case their Honours were concerned with the proceeds of sale of the surplus produce of the training farm, in the running of which the charitable purpose of the institution was carried into effect. Such proceeds of sale were consequently a profitable by-product produced as a mere incident of the use of the farm for charitable purposes. No such thing can be said of the neon sign here. It has nothing whatever to do with the carrying into effect of the charitable purposes of the YMCA, except in so far as it provides income to further such purposes. It is not the product of the carrying of such purposes into effect. It is no doubt a good business proposition from the point of view of the YMCA to derive income in this way from a lease of the roof of the building for the erection of an advertising sign, but such income is not produced by reason of anything the YMCA does in the building. It would be forthcoming, whatever use was made of the building, so long as the lessee is allowed to have its sign on the roof. The fact that the income is devoted to the charitable purposes of the YMCA does not mean that the roof is used for the charitable purposes of the YMCA. It is not so used any more than the piece of vacant land referred to by Fullagar, J, in the Salvation Army Case (85 CLR, at p. 188) was used for a charitable purpose. His Honour said with reference to it:
"It remains only to refer to the land coloured red on the plan which was put in evidence. This land is some distance away from the land on which the three homes stand, and it is obvious that there is separate ratable occupation. It is 'vacant' land, and the only 'use' that is made of it is to be found in the fact that firewood is cut upon it and is used at the boys' home. I do not think that this constitutes a use for a charitable purpose any more than would the letting at a rent of the land, if it were let at a rent and the rent devoted to the purposes of the boys' home".
In my opinion, what his Honour has said about the piece of vacant land can properly be applied to the lease of the roof in this case, and it follows that it cannot be said that the letting of the roof at a rent constitutes a use of the roof for the charitable purposes of the YMCA just because the rent is devoted to such purposes.
So far as Mr. Menhennitt seeks to rely upon s249(2) of the Local Government Act 1946, I think, his argument with regard to the neon sign also fails. In my opinion, the sub-section on its proper interpretation is not concerned with a case of this kind at all. It is concerned with the use to which a building may be put in the ordinary course by people who occupy and use it. Buildings are erected to be used by people. They have roofs to keep out the weather. But roofs as a rule are not meant to be and are not used by the occupants of the building, except when a flat roof is provided for this very purpose. The putting of a neon sign on the roof of a building is not in other words such a use of the building as, in my opinion, contemplated by the sub-section.
It follows, therefore, that the neon sign is ratable, and the plaintiff is entitled to judgment in respect of it for the sum of 157 pounds 10s. The rest of the building is exempt from rates as being used exclusively for charitable purposes. This means that the YMCA has substantially succeeded in the case. The amount of time devoted to the neon sign was extremely small when compared with that devoted to the rest of the building, and for this reason I think that though the plaintiff is entitled to judgment in respect of the neon sign it should pay four-fifths of the YMCA's taxed costs.
There will be judgment for the plaintiff for 157 pounds 10s., but the plaintiff will pay four-fifths of the YMCA.'s taxed costs.
Judgment for plaintiff.