The Church of the New Faith v. Commissioner of Pay-roll Tax (Vic.)

Mason ACJ

Murphy J
Wilson J
Brennan J
Deane J

High Court

Judgment date: Judgment handed down 27 October 1983.

Mason A.C.J. and Brennan J.

Pursuant to the provisions of the Associations Incorporation Act 1956-1965 (S.A.), The Church of the New Faith Incorporated was incorporated under that name on 31 January 1969. The corporation was registered in Victoria pursuant to the Companies Act 1961 (Vic.) as a foreign company. Subsequently, a change in name to ``The Church of Scientology Incorporated'' was registered in South Australia. Though no change of name has been registered in Victoria, the corporation uses and is apparently known by its new name in that State.

The corporation was assessed to pay-roll tax under the Pay-roll Tax Act 1971 (Vic.). The wages assessed as liable to pay-roll tax under that Act were paid or payable during the period 1 July 1975 to 30 June 1977. The corporation objected to the assessment upon the ground that the wages were exempt under the provisions of sec. 10(b). At the relevant time (the section was amended in 1979), sec. 10(b) provided:

``10. The wages liable to pay-roll tax under this Act do not include wages paid or payable -

  • (b) by a religious or public benevolent institution, or a public hospital;''

The corporation, contending that it was a religious institution for the purposes of this section, objected to the assessment but the Commissioner of Pay-roll Tax disallowed the objection. The corporation requested the Commissioner to treat its objection as an appeal and to cause the objection to be set down for hearing in the Supreme Court of Victoria. Crockett J. dismissed that appeal [reported at 80 ATC 4667]; the corporation then appealed to the Full Court [reported at 82 ATC 4198]. The Full Court dismissed the appeal and the corporation now applies for special leave to appeal against that dismissal.

The case has been fought throughout as though the answer to the question ``Is Scientology a Religion?'' furnishes the answer to the question whether the corporation was, during the relevant period, a religious institution. That basis has been adhered to in the argument before this Court, and it ought not to be departed from in determining this application. That is not to say that the basis adopted by the parties raised the relevant question for decision. It does not follow that the common religion of

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a group stamps a religious character on an institution founded, maintained or staffed by members of that group or that the purpose or activity of such an institution is religious. The basis adopted by the parties in fighting this case has concealed the factors which are relevant to the character of the corporation, namely, the purpose for which the corporation was formed and is maintained and the activities of the corporation. The question whether those factors are religious in nature has not been judicially considered.

Thus special leave is applied for in order to argue on appeal the question chosen by the parties as the issue: Is Scientology a Religion? Counsel were invited to argue the application fully, so as to canvass the issues of the appeal which would arise if special leave were granted. Accordingly, the question ``Is Scientology a Religion?'' was argued by reference to all the affidavits read and the oral testimony given before the Supreme Court and by reference to tendered exhibits which included a veritable library of books written by one Lafayette Ronald Hubbard. Scientology is said to have been ``discovered, developed and organized'' by Mr. Hubbard alone. The library is large, and the meaning of much of it is obscure. An explanation of some parts of those books was undertaken in the oral evidence given before the Supreme Court, but many other parts - some of impenetrable obscurity - were not referred to in the affidavit and oral evidence. Is the Court to examine and to construe the writings of Mr. Hubbard as though they were ordinary documentary exhibits? The obscurity of some of his writings would make that course particularly difficult. There are, however, compelling reasons for not going into areas of obscurity that have not been explained by the affidavits or the oral evidence. The meaning of obscure passages in writings advanced as religious writings is not necessarily ascertained by taking the ordinary meaning of the words used. The true meaning of such passages - that is, the meaning intended by the author or apprehended by the adherents of the religion - can be furnished by those for whom the passages bear that meaning, but may well be missed by others. Thus it would be erroneous to assume that the account of creation contained in the Book of Genesis is taken literally by many of those who accept its authority as an inspired biblical text. No valid statement can be made as to a tenet of a religion unless its validity as a tenet is recognized by the adherents of that religion. A Court cannot be assured that the meaning of writings said to be of religious significance is the meaning which the ordinary reader would attribute to them. When the tenets of a putative religion are to be ascertained, a Court would be ill-advised to go searching for tenets which are said to inhere in obscure writings without the guidance of those who can explain the meaning which the adherents of the religion accept. It would be ill-advised in this case to take the obscure parts of Mr. Hubbard's writings which have not been illuminated by evidence and, by construing those parts, to find therein the tenets which he intended to teach, or which his followers believe and accept.

Therefore the question which falls for determination by this Court if special leave be granted must be stated anew. The question whether Scientology is a religion cannot be answered, for there seem to be important, perhaps critically important, tenets of Scientology which the parties left without full examination. The question which can be answered is whether the beliefs, practices and observances which were established by the affidavits and oral evidence as the set of beliefs, practices and observances accepted by Scientologists are properly to be described as a religion.

Should special leave be granted in order to consider that question? Two circumstances combine to give an affirmative answer: the legal importance of the concept of religion and the paucity of Australian authority. Freedom of religion, the paradigm freedom of conscience, is of the essence of a free society. The chief function in the law of a definition of religion is to mark out an area within which a person subject to the law is free to believe and to act in accordance with his belief without legal restraint. Such a definition affects the scope and operation of sec. 116 of the Constitution and identifies the subject matters which other laws are presumed not to intend to affect. Religion is thus a concept of fundamental importance to the law. Moreover, although this case does not arise under sec. 116 of the Constitution or under any part of its fourfold guarantee of religious freedom, it is inevitable that the

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judgments in the Supreme Court, so long as they stand without consideration by this Court, will influence the construction placed upon sec. 116 of the Constitution by other Australian Courts.

Hitherto the concept of religion has received little judicial exegesis in Australia, whether under sec. 116 or otherwise. In Adelaide Company of
Jehovah's Witnesses Inc. v. Commonwealth (1943) 67 C.L.R. 116 , only Latham C.J. and McTiernan J. found it necessary to state a view as to the connotation of the term. Since then, the concept has been considered by the Courts of the United States and England. The opinions of those Courts are helpful, but it is time for this Court to grapple with the concept and to consider whether the notions adopted in other places are valid in Australian law. The disadvantage in leaving the concept without examination by this Court was manifested by the course of the argument before us. Counsel for the corporation contended for a wide definition of religion in accordance with the indicia of a religion set out by Adams J. in
Malnak v. Yogi 592 F. 2d 197 (1979) , though it is clear that the formulation of those indicia owed much to the tests adopted by the Supreme Court of the United States in construing particular Acts of the Congress. On the other hand, counsel for the Commissioner contended for a narrow definition which accorded with the test of a religion propounded by Dillon J in In re South Place Ethical Society;
Barralet v. A.-G. (1980) 1 W.L.R. 1565 at p. 1572 , a test which confines the concept to theistic religions. It is undesirable that the clarification of a concept important to the law of Australia should be left to the Courts of other countries when there is an appropriate opportunity for the concept to be clarified by this Court. Of course, when Australian Courts are engaged in clarifying concepts important to Australian law, they may be aided by appropriate citation from the judgments of Courts outside the Australian hierarchy if there is no binding or sufficiently persuasive Australian authority. The differing approaches of the judgments in the Full Court in this case, however, manifest the need for an authoritative Australian exposition of the concept of religion. It is desirable to grant special leave in order to expound, so far as the circumstances of the case require, a concept of religion appropriate to discriminate in law between what is a religion and what is not.

An endeavour to define religion for legal purposes gives rise to peculiar difficulties, one of which was stated by Latham C.J. in Jehovah's Witnesses Inc. at p. 123:

``It would be difficult, if not impossible, to devise a definition of religion which would satisfy the adherents of all the many and various religions which exist, or have existed, in the world.''

The absence of a definition which is universally satisfying points to a more fundamental difficulty affecting the adoption of a definition for legal purposes. A definition cannot be adopted merely because it would satisfy the majority of the community or because it corresponds with a concept currently accepted by that majority. The development of the law towards complete religious liberty and religious equality to which Rich J. referred in Jehovah's Witnesses Inc. (at p. 149) would be subverted and the guarantees in sec. 116 of the Constitution would lose their character as a bastion of freedom if religion were so defined as to exclude from its ambit minority religions out of the main streams of religious thought. Though religious freedom and religious equality are beneficial to all true religions, minority religions - not well established and accepted - stand in need of especial protection (cf. per Latham C.J. in Jehovah's Witnesses Inc. at p. 124). It is more accurate to say that protection is required for the adherents of religions, not for the religions themselves. Protection is not accorded to safeguard the tenets of each religion; no such protection can be given by the law, and it would be contradictory of the law to protect at once the tenets of different religions which are incompatible with one another. Protection is accorded to preserve the dignity and freedom of each man so that he may adhere to any religion of his choosing or to none. The freedom of religion being equally conferred on all, the variety of religious beliefs which are within the area of legal immunity is not restricted.

Of course, the present case is not concerned with a personal freedom of religion; it is concerned with an exemption of a religious institution from a fiscal burden

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imposed upon other institutions, but no narrow definition of religion can be accepted on this account. There can be no acceptable discrimination between institutions which take their character from religions which the majority of the community recognizes as religions and institutions that take their character from religions which lack that general recognition. The statutory syncretism which a Parliament adopts in enacting a provision favouring religious institutions is not to be eroded by confining unduly the denotation of the term religion and its derivatives.

These considerations, tending against the adoption of a narrow definition, may suggest the rejection of any definition which would exclude from the category of religion the beliefs, practices and observances of any group who assert their beliefs, practices and observances to be religious. But such an assertion cannot be adopted as a legal criterion. The mantle of immunity would soon be in tatters if it were wrapped around beliefs, practices and observances of every kind whenever a group of adherents chose to call them a religion (cf.
United States v. Kuch 288 F. Supp. 439 (1968) ). A more objective criterion is required.

That criterion must be found in the indicia exhibited by acknowledged religions, so that any set of beliefs, practices and observances which are accepted by a group of adherents and which exhibit that criterion will be held to be a religion. But what is the range of acknowledged religions from which the criterion is to be derived? The literature of comparative religion, modern means of communication and the diverse ethnic and cultural components of contemporary Australian society require that the search for religious indicia should not be confined to the Judaic group of religions - Judaism, Christianity, Islam - for the tenets of other acknowledged religions, including those which are not monotheistic or even theistic, are elements in the contemporary atmosphere of ideas. But the task of surveying the whole range of Judaic and other acknowledged religions is daunting, as Professor Arnold Toynbee found:

``If we set out to make a survey of the religions that have been practised at different times and places by the numerous human societies and communities of whom have some knowledge, our first impression will be one of a bewilderingly infinite variety.''

( An Historian's Approach to Religion 2nd ed., Oxford, 1979 at p. 16.)

And Sir James Frazer, in a passage in his The Golden Bough (abridged edition 1954 at p. 50) cited by Young C.J. in the present case, confirms the opinion of Latham C.J.:

``There is probably no subject in the world about which opinions differ so much as the nature of religion, and to frame a definition of it which would satisfy everyone must obviously be impossible.''

In the study of comparative religion, various analyses have been attempted, and none appears to have exhausted the rich diversity of the available data (see Sharpe, Comparative Religion, Bristol 1975). The derivation of all the common indicia of religions is thus a task which a Court cannot hope to perform by a detailed analysis of all acknowledged religions. Indeed, Courts are not equipped to make such a study, and the acculturation of a Judge in one religious environment would impede his understanding of others. But so broad a study is not required. The relevant enquiry is to ascertain what is meant by religion as an area of legal freedom or immunity, and that enquiry looks to those essential indicia of religion which attract that freedom or immunity. It is in truth an enquiry into legal policy.

The law seeks to leave man as free as possible in conscience to respond to the abiding and fundamental problems of human existence. In all societies and in all ages man has pondered upon the explanation of the existence of the phenomenological universe, the meaning of his existence and his destiny. An understanding of these problems is furnished in part by the natural and behavioural sciences and by other humanist disciplines. They go far towards explaining the universe and its elements and the relationships between nations, groups and individuals. Many philosophies, however, go beyond the fields of these disciplines and seek to explain, in terms of a broader reality, the existence of the universe, the meaning of

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human life, and human destiny. For some, the natural order, known or knowable by use of man's senses and his natural reason, provides a sufficient and exhaustive solution to these great problems; for others, an adequate solution can be found only in the supernatural order, in which man may believe as a matter of faith, but which he cannot know by his senses and the reality of which he cannot demonstrate to others who do not share his faith. He may believe that his faith has been revealed or confirmed by supernatural authority or his reason alone may lead him to postulate the tenets of his faith. Faith in the supernatural, transcending reasoning about the natural order, is the stuff of religious belief. Augustus N. Hand J. said, obiter, in
United States v. Kauten 133 F. 2d 703 (1943) at p. 708 :

``... the content of the term [religion] is found in the history of the human race and is incapable of compression into a few words. Religious belief arises from a sense of the inadequacy of reason as a means of relating the individual to his fellow-men and to his universe - a sense common to men in the most primitive and in the most highly civilized societies. It accepts the aid of logic but refuses to be limited by it.''

Under our law, the State has no prophetic role in relation to religious belief; the State can neither declare supernatural truth nor determine the paths through which the human mind must search in a quest for supernatural truth. The Courts are constrained to accord freedom to faith in the supernatural for there are no means of finding upon evidence whether a postulated tenet of supernatural truth is erroneous or whether a supernatural revelation of truth has been made. We would respectfully adopt what Douglas J. said in
United States v. Ballard 322 U.S. 78 (1944) at pp. 86 and 87 in reference to the freedom of religious belief:

``It embraces the right to maintain theories of life an of death and of the hereafter which are rank heresy to followers of the orthodox faiths. Heresy trails are foreign to our Constitution. Men may believe what they cannot prove. They may not be put to the proof of their religious doctrines or beliefs. Religious experiences which are as real as life to some may be incomprehensible to others. Yet the fact that they may be beyond the ken of mortals does not mean that they can be made suspect before the law.''

Religious belief is more than a cosmology; it is a belief in a supernatural Being, Thing or Principle. But religious belief is not by itself a religion. Religion is also concerned, at least to some extent, with a relationship between man and the supernatural order and with supernatural influence upon his life and conduct. Clifford Geertz, writing an ``Anthropological Study of Religion'' in the International Encyclopedia of the Social Sciences (London, 1968 vol. 13 at p. 406) concluded that:

``Whatever else religion does, it relates a view of the ultimate nature of reality to a set of ideas of how man is well advised, even obligated, to live.''

Thus religion encompasses conduct, no less than belief. Professor Max Mueller, an early scholar in comparative religion, wrote ( Natural Religion (Collected Works I, 1899 at p. 169) cited by Sharpe, op. cit. at p. 39):

``When... men began to feel constrained to do what they do not like to do, or to abstain from what they would like to do, for the sake of some unknown powers which they have discovered behind the storm or the sky or the sun or the moon, then we are at last on religious ground.''

What man feels constrained to do or to abstain from doing because of his faith in the supernatural is prima facie within the area of legal immunity, for his freedom to believe would be impaired by restriction upon conduct in which he engages in giving effect to that belief. The canons of conduct which he accepts as valid for himself in order to give effect to his belief in the supernatural are no less a part of his religion than the belief itself. Conversely, unless there be a real connection between a person's belief in the supernatural and particular conduct in which that person engages, that conduct cannot itself be characterized as religious.

The canons of conduct which are part of a religion reflect that religion's set of beliefs, and thus a theistic religion typically includes the acceptance of a duty of ritual observance, as well as ethical practice. In Jehovah's

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Witnesses Inc., McTiernan J. said (at p. 156) that:

``The word religion extends to faith and worship, to the teaching and propagation of religion and to the practices and observances of religion.''

Conduct which consists in worship, teaching, propagation, practices or observances may be held to be religious, however, only if the motivation for engaging in the conduct is religious. That is, if the person who engages in the conduct does so in giving effect to his particular faith in the supernatural.

But the area of legal immunity marked out by the concept of religion cannot extend to all conduct in which a person may engage in giving effect to his faith in the supernatural. The freedom to act in accordance with one's religious beliefs is not as inviolate as the freedom to believe, for general laws to preserve and protect society are not defeated by a plea of religious obligation to breach them (cf.
Cantwell v. Connecticut 310 U.S. 296 (1940) at p. 304 ). Religious conviction is not a solvent of legal obligation. Thus, in Jehovah's Witnesses Inc. a prohibition against subversion of the war effort was not circumvented by the pacifist ideals of the Jehovah's Witnesses, and this Court rejected their challenge to the validity of the National Security (Subversive Associations) Regulations, even though sec. 116 protects both freedom of religious opinion and the free exercise of religion. In the United States, where similar constitutional guarantees are to be found in the First Amendment, the free exercise clause was held not to exempt the Mormons from the law forbidding polygamy, though they deemed it to be a religious duty, circumstances permitting, to practice polygamy. In
Reynolds v. United States 98 U.S. 145 (1878) at p. 167 , the Supreme Court held that to excuse polygamy on religious grounds would ``make the professed doctrines of religious belief superior to the law of the land, and in effect... permit every citizen to become a law unto himself. Government could exist only in name under such circumstances''. Conduct in which a person engages in giving effect to his faith in the supernatural is religious, but it is excluded from the area of legal immunity marked out by the concept of religion if it offends against the ordinary laws, that is, if it offends against laws which do not discriminate against religion generally or against particular religions or against conduct of a kind which is characteristic only of a religion.

We would therefore hold that, for the purposes of the law, the criteria of religion are twofold: first, belief in a supernatural Being, Thing or Principle; and second, the acceptance of canons of conduct in order to give effect to that belief, though canons of conduct which offend against the ordinary laws are outside the area of any immunity, privilege or right conferred on the grounds of religion. Those criteria may vary in their comparative importance, and there may be a different intensity of belief or of acceptance of canons of conduct among religions or among the adherents to a religion. The tenets of a religion may give primacy to one particular belief or to one particular canon of conduct. Variations in emphasis may distinguish one religion from other religions, but they are irrelevant to the determination of an individual's or a group's freedom to profess and exercise the religion of his, or their, choice.

The test propounded by Adams J. in Malnak v. Yogi is wider and the test propounded by Dillon J. in South Place Ethical Society is narrower than the test which, in our opinion, is the correct test. Malnak v. Yogi followed upon a line of cases relating to exemption from compulsory military service of persons claiming to be conscientious objectors ``by reason of religious training and belief''. In those cases the Supreme Court of the United States had been faced with the problem of distinguishing between conscientious objections founded on non-religious grounds - a problem which does not arise in Australia: see
R. v. The District Court ; Ex parte White (1966) 116 C.L.R. 644 especially at pp. 659-661 . The Supreme Court held that ``religious'' in this context described an opposition to military service stemming from moral, ethical or religious beliefs about what is right or wrong when the beliefs are held with the strength of traditional religious conviction:
Welsh v. United States 398 U.S. 333 (1970) ;
United States v. Seeger 380 U.S. 163 (1965) ; and see, under an earlier statute, the judgment of the

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Second Circuit Court of Appeals in United States v. Kauten. In Seeger the Supreme Court quoted from the writings of theologian Dr. Paul Tillich in the context of an examination of the place which a system of beliefs occupied in the life of an objector. The Court said (at p. 187):

``We think it clear that the beliefs which prompted his objection occupy the same place in his life as the belief in a traditional deity holds in the lives of his friends, the Quakers. We are reminded once more of Dr. Tillich's thoughts:

  • `And if that word [God] has not much meaning for you, translate it, and speak of the depths of your life, of the source of your being, of your ultimate concern, of what you take seriously without any reservation. Perhaps, in order to do so, you must forget everything traditional that you have learned about God...' Tillich, The Shaking of the Foundations 57 (1948).''

(Emphasis supplied by the Supreme Court.)

The views of the majority of the Supreme Court have been subjected to criticism both judicial and academic (see, for example Harlan J. in Welsh at p. 351; ``Toward a Constitutional Definition of Religion'' 91 Harv. L. Rev. 1056 at p. 1065 n. 60 (1978)); but that controversy need not detain us. What is significant for present purposes is that, although the Supreme Court had resolved the question before it ``solely in relation to the language of sec. 6(j) [of the Universal Military Training and Service Act] and not otherwise'' ( Seeger at p. 174), Adams J. gave the opinions of the Supreme Court a wider currency. He said (at p. 204):

``As a matter of logic and language, if the Court is willing to read `religious belief' so as to comprehend beliefs based upon pantheistic and ethical views, it might be presumed to favor a similar inclusive definition of `religion' as that term appears in the first amendment.''

An earlier decision of the Supreme Court in
Torcaso v. Watkins 367 U.S. 488 (1961) also led Adams J. to a broader definition of religion. There the Court had held that neither a State nor the Federal Government could ``aid those religions based on a belief in the existence of God as against those religions founded on different beliefs'' and added, in a footnote (at p. 495 n. 11):

``Among religions in this country which do not teach what would generally be considered a belief in the existence of God are Buddhism, Taoism, Ethical Culture, Secular Humanism and others.''

The Supreme Court had thus appeared to place within the concept of religion not only non-theistic religions but also systems of belief which had no supernatural element. That observation, together with the opinions in Seeger and Welsh, led Adams J. in Malnak v. Yogi to think that a new definition of religion, though not yet fully formed, could be described as a ``definition by analogy''. His Honour said (at p. 207):

``The modern approach thus looks to the familiar religions as models in order to ascertain, by comparison, whether the new set of ideas or beliefs is confronting the same concerns, or serving the same purposes, as unquestioned and accepted `religions'.''

Adams J. expressed the view that there are ``three useful indicia that are basic to our traditional religions and that are themselves related to the values that undergrid the first amendment'' (at pp. 207 and 208). The first of his indicia was the ``ultimate'' nature of the ideas presented. The term ``ultimate'' seems to be derived from the writings of Dr. Tillich. Adams J. said (at p. 208):

``Expectation that religious ideas should address fundamental questions is in some ways comparable to the reasoning of the Protestant theologian Dr. Paul Tillich, who expressed his view on the essence of religion in the phrase `ultimate concern'. Tillich perceived religion as intimately connected to concepts that are of the greatest depth and utmost importance.''

This approach, however, focuses attention upon the nature of the questions which the set of ideas seeks to answer and diverts attention from the nature of the answers propounded. It furnishes a criterion which looks only to what we described above as the abiding and fundamental problems of human existence. Adams J. clearly identifies the nature of the questions which, if they are addressed by a set of beliefs, indicate the

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religious character of those beliefs. His Honour said (at p. 208):

``One's views, be they orthodox or novel, on the deeper and more imponderable questions - the meaning of life and death, man's role in the Universe, the proper moral code of right and wrong - are those likely to be the most `intensely personal' and important to the believer. They are his ultimate concerns. As such, they are to be carefully guarded from governmental interference...''

To attribute a religious character to one's views by reference to the questions which those views address rather than by reference to the answers which they propound is to expand the concept of religion beyond its true domain. As the decision in Welsh illustrates, such an approach sweeps into the category of religious beliefs philosophies that reject the label of a religion and that deny or are silent as to the existence of any supernatural Being, Thing or Principle.

The other two indicia stated by Adams J. may be briefly mentioned. The second of the indicia is the comprehensiveness of the set of ideas. No doubt a set of religious ideas will frequently be comprehensive, but we would not deny the character of a religion to a set of beliefs and practices which would otherwise qualify merely because its tenets aver or admit that knowledge of the supernatural is partial or otherwise imperfect or because its tenets offer no solution to some of the abiding and fundamental problems of man's existence. The third of the indicia is the existence of ``any formal, external, or surface signs that may be analogized to accepted religions'', such as formal services, a clergy or festivities. No doubt rituals are relevant factors when they are observed in order to give effect to the beliefs in the supernatural held by the adherents of the supposed religion. Thus ceremonies of worship are central to the Judaic religions manifesting their belief in and dependence on God. Mere ritual, however, devoid of religious motivation, would be a charade.

We are thus unable to accept the corporation's submission that this Court should apply the indicia which found favour with Adams J. in Malnak v. Yogi. The second and third indicia are not the criteria of a religion, though they may frequently be found in a religion. On the other hand, we are equally unable to accept the narrower tests which have been propounded in England. In South Place Ethical Society (at p. 1572) Dillon J. said:

``It seems to me that two of the essential attributes of religion are faith and worship; faith in a god and worship of that god. This is supported by the definitions of religion given in the Oxford English Dictionary (1914), although I appreciate that there are other definitions in other dictionaries and books. The Oxford English Dictionary gives as one of the definitions of religion: `A particular system of faith and worship.' Then:

  • `Recognition on the part of man of some higher unseen power as having control of his destiny, and as being entitled to obedience, reverence, and worship;'.''

This test limits religion to theistic religions. A similar test had been applied by the Court of Appeal in
R. v. Registrar General ; Ex parte Segerdal (1970) 2 Q.B. 697 , where it was held that a chapel of the Church of Scientology was not a place of meeting for religious worship. In that case, however, the statutory reference to worship suggested that Parliament had in mind a theistic religion. To restrict the definition of religion to theistic religions is to exclude Theravada Buddhism, an acknowledged religion, and perhaps other acknowledged religions. It is too narrow a test. We would hold the test of religious belief to be satisfied by belief in supernatural Things or Principles and not to be limited to belief in God or in a supernatural Being otherwise described.

We turn next to the beliefs, practices and observances the character of which is to be determined. The findings of the learned trial Judge furnish some but not all of the relevant material. Crockett J. examined the history of the Scientology organization. He found that its predecessor in Australia was the Hubbard Association of Scientologists International (``H.A.S.I.''), and that that Association had published, at some time not earlier than 1961, a magazine which unequivocally asserted ``H.A.S.I. is non-religious - it does not demand any belief or faith nor is it in conflict with faith. People of all faiths use Scientology''. His Honour investigated the

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subsequent history of the development of the cult, and found that a considerable transformation had ostensibly occurred. But his Honour thought that ``the ecclesiastical appearance now assumed by the organization is no more than colourable in order to serve an ulterior purpose'', namely, the purpose of acquiring the legal status of a religion so that the organization might have the fiscal and other benefits of that status in Australia and elsewhere and the purpose of avoiding the legal disabilities to which the organization was subject by reason of the Psychological Practices Act 1965 (Vic.). His Honour expressed his clear conviction that the purported transformation of Scientology to a religion was no more than a sham, the proclaimed belief in the efficacy of prayer was bogus, and the adoption of the paraphernalia and ceremonies of conventional religion was a mockery. He said (80 ATC 4667 at p. 4677):

``The very adroitness - and alacrity - with which the tenets or structure were from time to time so cynically adapted to meet a deficiency thought to operate in detraction of the claim to classification as a religion serve to rob the movement of that sincerity and integrity that must be cardinal features of any religious faith.''

Though his Honour found that at least some parts of Mr. Hubbard's writing contained merely pretended doctrines and practices of Scientology, his Honour found also that members of the Scientology movement are expected to and, apostates excepted, do accord blind reverence to the written works of Mr. Hubbard. Although the sincerity and integrity of the ordinary members of the Scientology movement were not in doubt, his Honour held, at p. 4679, that Scientology was:

``no less a sham because there are others prepared to accept and act upon such aims and beliefs as though they were credible when they cannot see them for what they are. Gullibility cannot convert something from what it is to something which it is not.''

Yet charlatanism is a necessary price of religious freedom, and if a self-proclaimed teacher persuades others to believe in a religion which he propounds, lack of sincerity or integrity on his part is not incompatible with the religious character of the beliefs, practices and observances accepted by his followers. If his Honour had approached the matter from the standpoint of the general group of adherents, he may well have found Scientology to be a religion, for he said, at pp. 4676-4677:

``Quite possibly if I were to accept as genuine the principles, beliefs and practices supposedly now subscribed to by the Scientology organisation, then I, too, might agree readily enough that its institution was religious in character.''

No attack was made upon the sincerity or integrity of the witnesses who stated what the general group of adherents believed and accepted. The question to which the evidence was directed was not whether the beliefs, practices and observances of the persons in ultimate command of the organization constituted a religion but whether those of the general group of adherents constituted a religion. The question which the parties resolved to litigate must be taken to be whether the beliefs, practices and observances which the general group of adherents accept is a religion.

Upon the hypothesis that that is the question to be determined, the findings which Crockett J. made fall short of the findings required to satisfy each of the relevant elements of a religion according to the principles earlier stated. That is not surprising. There were no pleadings, and the facts to be found necessarily depended upon whatever definition of religion was adopted. The Court had to determine both the ambit of the legal concept of religion and whether the subject beliefs, practices and observances fell within that ambit. Defining the issues for determination differently from the issues as we have stated them, the Supreme Court did not need to ascertain some of the facts which now appear relevant. Either further facts must now be found or the matter must be remitted to the Supreme Court.

There is neither a conflict in evidence nor a question of credibility which requires the matter to be remitted to the Supreme Court. However, the finding of further facts by this Court is rendered difficult by the absence of evidence to explain (if explanation be possible) those obscure parts in the library of books in which, it is said, the beliefs,

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practices and observances of the general group of adherents can be found. If any inability to ascertain whether the indicia of a religion are present arises because of the obscurity of the writing or the lack of evidence to explain it, the corporation must bear the consequences. It bears the onus of establishing its entitlement to the exemption specified in sec. 10(b).

Crockett J. made some findings as to the beliefs now expounded in Mr. Hubbard's writings and accepted by his followers (at p. 4678):

``According to the teachings of Mr. Hubbard the existence of a Supreme Being is to be affirmed and life is to be looked at in the terms of eight dynamics. The first is self and the eighth is the Supreme Being. The person himself is not his body but a thetan - equivalent one might say to a soul or spirit. Man's immortality exists in the power of the thetan to undergo infinite reincarnations.... However, despite an occasional reference in Mr. Hubbard's books to a `Supreme Being', or `Divine Being' or God and the placement of the eighth dynamic at the pinnacle of man's awareness of the other dynamics, it does seem apparent, as Winn L.J. observed in Segerdal's case (R. v. Registrar General; Ex parte Segerdal (1970) 1 Q.B. 430), that the doctrines of scientology are more concerned with `the transmigration and education of thetans than they are with God in any shape or form or any concept of a divine superhuman, all powerful and controlling entity'.''

We do not understand that the belief in the thetan or its capacity for infinite reincarnation is consequential upon or bears any relationship to a belief in a Supreme Being. Indeed Mrs. Allen, the senior spokesman for the Church of Scientology in Victoria, said during her cross-examination that there was nothing religious in Mr. Hubbard's discovery of the thetan in 1951 by the use of scientific methods, but she thought that once man is discovered to be a spiritual being the discovery ``can only become religious in its further research''. Belief in a Supreme Being is now a part of Scientology, but there is no tenet of Scientology which expresses a particular concept of a Supreme Being. The name of the Supreme Being is left as a matter of individual choice. Each adherent must make up his own mind what his god is. It may be doubted whether a declaration that a Supreme Being exists is, without more, a mark of a theistic religion. But there is no doubt that a belief in the transmigration or infinite reincarnation of thetans is a belief in a supernatural principle. That belief does not require a concomitant belief in a Supreme Being before it qualifies as a religious belief. It is akin to the beliefs of Buddhism from which a large part of Mr. Hubbard's ideas are said to be derived. The beliefs which, on Crockett J.'s finding, are accepted by members of the cult, satisfy the first criterion of a region. But the second criterion is more troublesome. To satisfy the second criterion, the facts must show the acceptance of canons of conduct in order to give effect to a supernatural belief, not being canons of conduct which offend against the ordinary laws.

Finding Scientology's appearance of religion to be a sham, Crockett J. did not need to examine the relationship between the rituals and other canons of conduct propounded by Mr. Hubbard and accepted by his followers on the one hand, and the supernatural beliefs entertained by those followers on the other. However, a book entitled The Scientology Religion was tendered and it contains chapters headed ``Practices'' and ``Codes of Conduct: Ethics and Right Conduct''. It is appropriate to search there for the relevant canons of conduct and their connection, if any, with belief in the supernatural. Several factors are referred to, the first of which is Ethics. Ethics is said to be ``a rational system adopted by members of the Church, containing rules of conduct intended to promote the obtaining of spiritual betterment''. The content of the ethical system is stated in this way (at p. 44):

``` Ethics is reason and the contemplation of optimum survival', and any ethical decision or calculation considered `right action' would at the same time enhance survival for the maximum area of life (i.e. with regard to the eight dynamic principles), expanding and yet refining the doctrine of `the greatest good for the greatest number' to include all dynamics of existence.''

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According to Mr. Hubbard, the ``Eight Dynamics'' are urges or motivations, the last of which is called the Infinity or God Dynamic. His definition of the Eighth Dynamic is set out in Scientology - The Fundamentals of Thought (at p. 38):

``... the urge toward existence as Infinity. This is also identified as the Supreme Being. It is carefully observed here that the science of Scientology does not intrude into the Dynamic of the Supreme Being. This is called the Eighth Dynamic because the symbol of infinity stood upright makes the numeral `8'.''

Mrs. Allen, the corporation's principal witness, explained her belief in relation to the Eighth Dynamic in these terms:

``... as the Thetan becomes more aware, particularly of the dynamics there is an urge to survive over all those areas and the urge to survive on that particular dynamic is to become aware - to aid the survival of and to be part of the survival of your Supreme Being, however you name that Supreme Being.''

Failing to understand the meaning of the passages cited from Mr. Hubbard's writing, we are unable there to find a connection between Scientology ethics and Scientology belief; but Mrs. Allen seems, however obscurely, to be pointing to some exercise of the will connected with a belief in the survival of a thetan in association with a Supreme Being.

The second factor to which The Scientology Religion refers is the codes of conduct of which it is said (at pp. 44 and 45):

``Like the Buddhist system, the Church of Scientology has prescriptive moral codes intended for adherents; one is a code of pastoral practice, the Auditor's Code; another is the Code of a Scientologist. The Code of a Scientologist is established to provide a covenant of right conduct for adherents of the Church with regard to matters involving the Church itself.

The Auditor's Code imposes definite regulations and ethical standards to be abided by in the counselling situation at all times.

A further code, the Code of Honour has been written for each and every person to follow as he chooses.''

The various codes of conduct are set out in The Creation of Human Ability - A Handbook for Scientologists at pp. 1-8. Auditing is an important aspect of Scientology practice. In The Scientology Religion it is stated (at p. 37) to be:

``the Scientology Pastoral Councelling [sic] procedure by which an individual is helped, in stages, to recover his self-determinism, ability and awareness of self as an immortal being. It is done during a precise period of time called a `session', in which an AUDITOR (literally `one who listens') a trained Scientology minister-counsellor, uses interpersonal communication and carefully devised questions and drills which enable the person audited, called the PRECLEAR, to discover and thereby remove his self-imposed spiritual limitation.''

Auditing appears to be the principal means of fulfilling the stated aim of Scientology (p. 22):

``... it is to help the individual become aware of himself as an immortal Being and to help him achieve and attain the basic truths with regard to himself, his relationship to others and all Life, his relationship to the physical universe and the Supreme Being. Further, we want to erase his sin so that he can be good enough to recognise God.''

If auditing is an exercise in which the auditor and preclear engage in order to give effect to a belief in thetans or in the Supreme Being, it may be a religious exercise, and the ``Auditor's Code'' may thereby take on a religious character. But on its face, ``The Auditor's Code'' seems to be no more than pragmatic advice: for example, ``Keep all appointments once made''; ``Do not process a preclear after 10.00 p.m.''. Or an instruction as to the conduct of auditing: for example, ``Never permit the preclear to end the session on his own independent decision'' or ``Always continue a process as long as it produces change, and no longer''.

Some of the canons in ``The Code of a Scientologist'' are clearly worldly advice: for example, ``To discourage the abuse of Scientology in the press'' or ``To prevent the use of Scientology in advertisements of other

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products''. The seventh canon may be related to the general teachings of Scientology for it says: ``To employ Scientology to the greatest good of the greatest number of dynamics''. Its meaning is impenetrably obscure.

``The Code of Honour'' appears to contain some moral admonitions: for example, ``Never desert a comrade in need, in danger or in trouble'' or ``Never fear to hurt another in a just cause''. And it is possible that two of the canons of this code are related to a belief in the thetan:

``Your self-determinism and your honour are more important than your immediate life''


``Your integrity to yourself is more important than your body.''

However, we can perceive no relevant connection between any canon of the codes of conduct and Scientologists' belief in the supernatural, unless auditing is itself a religious exercise satisfying the second indicium.

The third factor to which reference is made in The Scientology Religion (at p. 46) is ``the Scientology confessional'', a part of auditing, which enables an individual to reveal his transgressions against ``his own moral codes in terms of the Eight Dynamics, and the mores of his society''. If the practice provides a means for an individual to ``regain spiritual integrity and composure'', as Mr. Hubbard claims, it is not stated to be for any reason related to the set of supernatural beliefs accepted by Scientologists.

Other factors to be considered are the rites and ceremonies - weddings, namings and funerals. Their existence is accounted for in this way: ``Scientology has followed all other religions in developing rites and ceremonies'' ( The Scientology Religion p. 40). Mr. Hubbard has written formularies for these ceremonies which contain allusions to the notion of the immortal thetan and the Eight Dynamics. They are set out in a book, Ceremonies of the Founding Church of Scientology. That book opens with the statement: ``In a Scientology Church Service we do not use prayers, attitudes of piety, or threats of damnation'', but Mrs. Allen asserts that a prayer for total freedom is said.

If we do not mistake what Mr. Hubbard has written, he does not specify a connection between a supernatural belief (as to thetans or a Supreme Being) and the ethical rules or the codes or the practice of confession or the organization's ceremonies. One may readily appreciate how Crockett J. was led to the view which he expressed, for the writings of Mr. Hubbard give to the practices and observances of Scientology the appearance of a farrago of imitations of established religions without the characteristic unity between a particular religion's practices and observances and that religion's set of beliefs in the supernatural. It may be that Mr. Hubbard intends the practices and ceremonies to derive their significance from the practice of auditing and the question whether auditing is a religious practice thus assumes a central importance. Is auditing engaged in in order to give effect to a supernatural belief and, if so, is it lawful according to laws which do not discriminate against Scientology or against religion generally?

The service of auditing is rendered for a fee. It is usually sold ``in a block of 12 ½ hours'' for a fee of $650. The selling price of this and 66 other counselling services are displayed in a ``Services Price List'' which comes from the management echelon of the Scientology organization in America. A person who introduces a buyer for a service is paid a commission of 15% after the service is taken. An instruction to students of auditing includes this advice ( The Creation of Human Ability pp. xi, xii):

``That the only scarcity of preclears which will occur is through his own indigence, and his procurement of preclears or groups does not depend upon the industry of other auditors but of himself.''

To become a minister in the church, further training services are required. Unless the trainee is a staff member, he is charged a fee (which is not less than $630) for the service. The fees for auditing and training are the principal sources of the church's income. Sufficient appears in the evidence to have given rise to a real question as to whether Mr. Hubbard or the church organization intends that auditing be practised for religious or for commercial motives or for a mixture of both motives. If the case had been fought on the

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issue whether the corporation's purpose and activities were religious, the question of motivation may have emerged more clearly. The principal object of the corporation is stated in its constitution document to be the promotion of Scientology, and if auditing be the chief means of promotion, the motivation of the corporation in promoting auditing would have borne examination.

In the Full Court, Young C.J. was led away from this enquiry by holding that, as the corporation's principal object is the promotion of Scientology, the principal question in the appeal became: is Scientology a religion? But promotion of a religion is not necessarily undertaken in discharge of a religious duty or to fulfil some religious precept. Promotion of religion is not always the preserve of the religious and it may be motivated by pursuit of pecuniary or other venal advantage quite unconnected with and unmotivated by any belief in the supernatural. A commercial institution which derives its income from the sale of religious objects, the sale of religious services or the organization of church finances can hardly be described as a religious institution merely because its commercial activities incidentally conduce to the advancement of religion.

However, the motivation of the corporation in promoting auditing and the other aspects of Scientology has not been litigated, and it is material to determine whether the general group of adherents engage in auditing in order to give effect to their supernatural beliefs. Mrs. Allen's evidence is that auditing is used to help a person shed the things that are stopping him from being as happy and as good as he wishes to be, and that the preclear is ``handled'' as a spiritual being.

The seeming vagueness of the supernatural beliefs and the obscurity of their expression renders difficult the perception of any connection between those beliefs and the practices and observances followed by the general group of adherents. Yet, as Crockett J. found, adherents, who number between 5,000 and 6,000 people in Victoria, accord blind reverence to what Mr. Hubbard has written and it may therefore be inferred that they perceive some unifying thread which makes the whole intelligible, or which assembles sufficient of a jigsaw to allow them to see themselves and what they do as part of a supernatural reality. We think an inference should be drawn - though the material to support it is not compelling - that the general group of adherents practise auditing and accept the other practices and observances of Scientology because, in doing what Mr. Hubbard bids or advises them to do, they perceive themselves to be giving effect to their supernatural beliefs. The commercial motivation to follow Mr. Hubbard's advice is clear, but the evidence does not permit the conclusion that a desire to give effect to supernatural beliefs is not a substantial motive for accepting the practices and observances contained in his writings.

The Commissioner did not seek to show that auditing is unlawful according to the ordinary law. There was no attempt made to prove that auditing involved a contravention of the ordinary law save for a suggestion, which Mrs. Allen rebutted, that false representations had been made as to the physical cures worked by auditing. Brooking J., in the Full Court, held that the Psychological Practices Act prohibited the beliefs, practices and observances of Scientology from being taught, but that Act (since repealed) discriminated expressly against Scientology. However, the Commissioner did not rely, either here or in the Supreme Court, upon a contravention of the Psychological Practices Act.

It follows that, whatever be the intentions of Mr. Hubbard and whatever be the motivation of the corporation, the state of the evidence in this case requires a finding that the general group of adherents have a religion. The question whether their beliefs, practices and observances are a religion must, in the state of that evidence, be answered affirmatively. That answer, according to the conventional basis adopted by the parties in fighting the case, must lead to a judgment for the corporation.

Our reasons for departing from the conclusions reached by Crockett J. and by the Full Court sufficiently appear in what we have already written. The length of this judgment precludes an analysis of each of the judgments in the Supreme Court, but we would acknowledge the considerable assistance which we have derived from the

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anxious consideration which each of their Honours gave to the difficulties inherent in the case.

We would grant special leave to appeal, allow the appeal and, pursuant to sec. 33C of the Pay-roll Tax Act, reduce the assessment to pay-roll tax to nil. The corporation is entitled to its costs here and in the Supreme Court.

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