The Incorporated Council of Law Reporting for England and Wales v. Attorney-General and another

[1971] 3 All ER 1029

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(Judgment by: Sachs LJ)

The Incorporated Council of Law Reporting for England and Wales
v Attorney-General and another

Court:

Judges: Russell LJ

Sachs LJBuckley LJ

Hearing date: 28, 29, 30 June, 1 July
Judgment date: 14 October 1971

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Judgment by:
Sachs LJ

The right of the Incorporated Council of Law Reporting to be registered as a charity under s 4 of the Charities Act 1960 depends on whether it is one 'which is established for charitable purposes' (see the definition of 'charity' in s 45(1)). By s 46 'charitable purposes' is defined as meaning 'purposes which are exclusively charitable according to the law of England and Wales'. For the best part of four centuries the question whether the purposes of any given trust or institution are charitable has been decided by reference to the preamble of the Charitable Uses Act 1601-'the Statute of Elizabeth I'. Since 1891 the courts have followed the guidance given in the classic speech of Lord Macnaghten in Income Tax Special Purposes Comrs v Pemsel where it is stated that '"Charity" in its legal sense comprises four principal divisions'. In every case since then the issue has been whether the purposes of any given trust or institution fell within one of those divisions. The result of the present case depends on whether the purposes of the council fall within the second-'trusts for the advancement of education', or alternatively within the fourth-'trusts for other purposes beneficial to the community' not falling within any of the other heads.

To come to a conclusion whether those purposes fall within either of the two above divisions-and, in particular, whether it falls within the fourth-it is necessary to have regard to what, since the judgment of Sir William Grant MR in Morice v Bishop of Durham ((1804) 9 Ves 399 at 405) in 1804, has been termed 'the spirit and intendment' of the above preamble, words commonly regarded as having the same meaning as 'the equity of the statute'. It so happens that there are available to us through judgments given in open court the contents of two documents substantially contemporaneous with the Statute of Elizabeth I which throw useful light both as to the spirit and intendment of that statute in relation to administration of the law in general and to the word 'education' in reference thereto: the charters of an Inn of Chancery (Clifford's Inn) ^[d] and an Inn of Court (Inner Temple) ^[e] dated respectively 1618 and 1608. It is, however, preferable first to approach each of the questions that arise in the instant case apart from what can be learnt from these documents.

Before considering more closely what are the answers to these questions with the aid of the education to be derived from studying the judgments in the 41 reports cited to us and the mass of learning shown to have been devoted, at any rate, over the last two centuries to the relevant problems, it is convenient at the outset to mention some points which have often been repeated in those judgments. First, the word 'charity' is of all words in the English language ... one which more unmistakeably has a technical meaning in the strictest sense of the term ... peculiar to the law' (per Lord Macnaghten in Pemsel's case ([1891] AC at 581, [1891-94] All ER Rep at 55)), one that is 'wide and elastic' (per Lord Ashbourne ^[f] ), and one that can include something quite outside the ordinary meaning the word has in popular speech (cf Lord Cozens-Hardy MR, Re Wedgwood, Allen v Wedgwood ([1915] 1 Ch 113 at 117, [1914-15] All ER Rep 322 at 324)). It is thus necessary to eliminate from one's mind a natural allergy, stemming simply from the popular meaning of 'charity', to the idea that law reporting might prove to be a charitable activity. Secondly, it is clear that the mere fact that charges on a commercial scale are made for services rendered by an institution does not of itself bar that institution from being held to be charitable-so long, at any rate, as all the profits must be retained for its purposes and none can enure to the benefit of its individual members (cf Scottish Burial Reform and Cremation Society Ltd v Glasgow City Corpn ). Thirdly, that there have, over at any rate the past century, been a number of references to the oddity that the tests by which the courts decide whether an institution is charitable depend entirely on the preamble of the Statute of Elizabeth I. The most recent is one opining that this state of affairs was 'almost incredible to anyone not familiar with this branch of the English law' (per Lord Upjohn in the Scottish Burial case ([1967] 3 All ER at 221, [1968] AC at 151)). To this I will return later.

Turning now to the points of substance argued before us, there came in limine the question as to what material we were entitled to look at to determine whether the purposes of the council were charitable. Counsel for the Crown contended that in substance the court could and should only look at para 3 of the memorandum of association and in particular at its important first sub-paragraph:

'The Objects for which the Association is established are: 1. The preparation and publication, in a convenient form, at a moderate price, and under gratuitous professional control, of Reports of Judicial Decisions of the Superior and Appellate Courts in England.'

This contention involved the proposition that we could neither look at any of the facts to which the trial judge ( [1971] 1 All ER 436 , [1971] Ch 626) referred under the heading of 'the historical background' nor at any available evidence as to what at any time since July 1870 had been the use to which the Law Reports are put. That in effect would mean looking at para 3(1) as if it were situate in a vacuum. That cannot be right.

Moreover he went on to submit that (a) the courts cannot look at the motives of the founders in order to show the purposes of an institution-at any rate, when those purposes as otherwise ascertained might be shown not to be charitable, and (b) the absence in the opening phrase of para 3 of general words such as 'for the purpose of the advancement and promotion of the science of law' was fatal to the council's claim even if on the facts it was shown that that was the exclusive purpose of their activities and that that purpose was charitable. Whilst the first of those submissions was correct (cf Keren Kayemeth Le Jisroel Ltd v Inland Revenue Comrs ( [1931] 2 KB 465 at 484) per Lawrence LJ), the second was not. The courts look at the substance of what is being effected.

A further question discussed was whether the use of the words 'is established' in the s 45(1) definition of 'charity' is to bind the court to look only at facts as existing at the date the 1960 Act came into force, or whether the court could or should look at the facts as at the date of the incorporation of the council. It makes no practical difference in the present case whether one looks at the circumstances of 1870 or of 1970, but to my mind it is the foundation date that matters when considering whether an institution is established for charitable purposes.

Whilst appreciating what has been said as to the courts not being permitted, where plain language is used in a charter or memorandum, to admit extrinsic evidence as to its construction, it is yet plain from the course adopted by the courts in many cases that they are entitled to and do look at the circumstances in which the institution came into existence and at the sphere in which it operates to enable a conclusion to be reached on whether its purposes are charitable. Such matters were likewise regularly taken into account over the 117 years of the operation of Scientific Societies Act 1843, when the issue was whether buildings belonged 'to any Society instituted for purposes of science, literature or the fine arts exclusively'.

The necessity for this course is all the more obvious when the purposes of an ancient institution become the subject of examination, remembering that if it started as a charity it so remains. An example of the above approach is to be found in Smith v Kerr (the Clifford's Inn case) where at first instance Cozens-Hardy J ([1900] 2 Ch 511) fully examined the circumstances affecting Clifford's Inn, and Sir Richard Henn Collins MR on appeal ([1902] 1 Ch 774) followed the same course, to ascertain the purpose to which the funds were to be applied. (The question whether in fact it has applied or is applying some of its funds to non-charitable purposes is, of course, a separate issue which arises when tax or rate exemptions are under consideration.)

As to the circumstances in which the council came into existence and the sphere in which it has since operated, the facts are admirably marshalled in the affidavit of Professor Goodhart with the accustomed lucidity of that eminent jurist. Reference can also be made to the 1853 Report ^[g] of the Society for Promoting the Amendment of the Law, an extract from page 4 of which is aptly cited in the judgment of Foster J ([1971] 1 All ER at 442, [1971] Ch at 640). In the main the relevant circumstances and sphere are within judicial knowledge and need no detailed exposition in this judgment. The kernel of the matter is the vital function of judge-made law in relation not only to the common law and to equity, but to declaring the meaning of statutory law. No one-layman or lawyer-can have reasonably full knowledge of how the law affects what he or his neighbours are doing without recourse to reports of judicial decisions as well as to the statutes of the realm.

What in that state of affairs is the purpose of law reports? There is in substance only one purpose. To provide essential material for the study of the law-in the sense of acquiring knowledge of what the law is, how it is developing and how it applies to the enormous range of human activities which it affects.

At this juncture it is apposite to recall that the profession of the law is a learned profession. It was one of the earliest to be recognised as such, well before the Statute of Elizabeth I: to establish that point there is no need to have recourse to examples of this recognition such as the traditional House of Commons appellation 'honourable and learned' to members of the profession. Similarly it is plainly correct to speak of law as a science and of its study as a study of science in the same way as one speaks of the study of medicine or chemistry. If further exemplification were needed of the categories of learning and science the pursuit of which have been held to be charitable, one can turn to the names of the institutions listed in Tudor on Charities ^[h] : there one finds such diverse names as the Royal Literary Society, the British School of Egyptian Archaeology, and the Institution of Civil Engineers. That the law is such a science happens to be illustrated by Sir Frederick Pollock's celebrated essay on 'The Science of Case-Law' ^[i] ; but this merely provides from within the profession an authoritative view which plainly accords in principle both with the decisions affecting the above cited institutions and that under the Scientific Societies Act 1843 (see Westminster City Council v Royal United Service Institution ( [1938] 2 All ER 545 at 549)). It may at this point be of relevance to note that Lord Macnaghten's phrase 'advancement of education' has consistently been taken to be an enlargement of the phrase 'advancement of learning' used by Sir Samuel Romilly for his second division of charities in Morice v Bishop of Durham ((1805) 10 Ves 522 at 531): in other words, there can be no question but that the latter is included in the former, as is illustrated by the authorities.

Against that background I turn to the question whether the council's purposes are educational. It would be odd indeed and contrary to the trend of judicial decisions if the institution and maintenance of a library for the study of a learned subject or of something rightly called a science did not at least prima facie fall within the phrase 'advancement of education', whatever be the age of those frequenting it. The same reasoning must apply to the provision of books forming the raw material for that study, whether they relate to chemical data or to case histories in hospitals; and I can find no good reason for excluding case law as developed in the courts. If that is the correct approach, then when the institution is one whose individual members make no financial gain from the provision of that material and is one which itself can make no use of its profits except to provide further and better material, why is the purpose not charitable?

On behalf of the Attorney General the only point taken against this conclusion was that the citation of the reports in court cannot be educational-in part, at any rate, because of the theory that the judges are deemed to have complete knowledge of the law. For the Crown the main contention was that the use by the legal profession of the reports was in general (not merely when in court) a use the purpose of which was to earn professional remuneration-a use for personal profit; and that it followed that the purpose of the council was not charitable.

Taking the latter point first, it is, of course, the fact that one of the main, if not the main, uses to which law reports are put is by members of the legal profession who study their contents so as to advise clients and plead on their behalf. Those reports are as essential to them in their profession as the statutes; without them they would be ill equipped to earn professional fees. Does it follow, as submitted by counsel for the Crown, that a main purpose of the reports is the advancement of professional interests and thus not charitable? The argument put thus is attractive, not least to those who, like myself, are anxious not to favour or to seem to favour their one-time profession. But the doctor must study medical research papers to enable him to treat his patients and earn his fees; and it would be difficult indeed to say that because doctors thus earn their emoluments the printing and sale of such papers by a non-profit making institution could not be held to be for the advancement of education in medicine.

Where the purpose of producing a book is to enable a specified subject, and a learned subject at that, to be studied, it is, in my judgment, published for the advancement of education, as this, of course, includes as regards the Statute of Elizabeth I the advancement of learning. That remains its purpose despite the fact that professional men-be they lawyers, doctors or chemists-use the knowledge acquired to earn their living. One must not confuse the results flowing from the achievement of a purpose with the purpose itself, any more than one should have regard to the motives of those who set that purpose in motion.

As to the point that the citation of reports to the judiciary is fatal to the council's claim, this, if independent of the contention concerning professional user to earn fees, seems to turn on the suggestion that as the judges are supposed to know the law the citations cannot be educative. That, however, is an unrealistic approach. It ignores the fact that citation of authority by the Bar is simply a means by which there is brought to the attention of the judge the material he has to study to decide the matter in hand; in this country he relies on competent counsel to quote the extracts relevant to any necessary study of law on the points in issue, instead of having to embark on the time-consuming process of making the necessary researches himself. Indeed, it verges on the absurd to suggest that the courteous facade embodied in the traditional phrase 'as, of course, your Lordships know' can be used to attempt to conceal the fact that no judge can possibly be aware of all the contents of all the law reports that show the continuing development of our ever changing laws. The Law Reports (including vol 1 of the Weekly Law Reports) for 1970 alone contain some 5,200 pages; incidentally, if one confined one's views to the three volumes of the Weekly Law Reports there would still remain over 4,000 pages. For my part I feel no diffidence in expressing my indebtedness to counsel in the instant case, as I have done in other cases this term dealing with other subjects, for educating me in the law of charitable purposes by the citation of the 41 authorities previously mentioned.

For these reasons I reject the contention that the user of the Law Reports by the legal profession for earning fees of itself results in the purposes of the council not being charitable and thus return to the question whether they are charitable on the footing that their substantially exclusive purpose is to further the study of the law in the way already discussed. Such a purpose must in my judgment be charitable unless the submission that the advancement of learning is not an advancement of education within the spirit and intendment of the preamble is upheld; but for the reasons already given that submission plainly fails. Accordingly, having regard to the fact that the members of the council cannot themselves gain from its activities, its purposes in my judgment fall within the second of Lord Macnaghten's divisions.

Despite the above conclusion, it seems desirable to consider as compactly as is practicable whether had the council's purpose not fallen within the second division it would nonetheless have come within the fourth as being beneficial to the community. The Charity Commission, after a year's consideration of the council's application to be registered as a charity, wrote a letter dated 6 December 1967 which contained the following phrase:

'The Commissioners did not dispute that the advancement of the administration of law was a charitable purpose.'

The Attorney General supports that view: the Crown opposes it. Foster J ( [1971] 1 All ER 436 , [1971] Ch 626) rejected the Crown's contention.

Being myself convinced that the correct approach is that which the learned first instance judge ([1971] 1 All ER at 448, [1971] Ch at 647) referred to as Lord Wilberforce's wider test (see Scottish Burial case ([1967] 3 All ER at 224, [1968] AC at 156))-a test that clearly also attracted Lord Reid ([1967] 3 All ER at 218, [1968] AC at 146, 147) with whom Lord Guest ([1967] 3 All ER at 219, [1968] AC at 148) agreed-I do not propose to consider the instant case on the basis of analogies. The analogies or 'stepping stones' approach was rightly conceded on behalf of the Attorney General not to be essential; its artificiality has been demonstrated in the course of the consideration of the numerous authorities put before us. On the other hand, the wider test-advancement of purposes beneficial to the community or objects of general public utility-has an admirable breadth and flexibility which enables it to be reasonably applied from generation to generation to meet changing circumstances; it has thus such patent advantages that for my part I appreciate the wisdom of the legislature in refraining from providing a detailed definition of charitable purposes in the 1960 Act and preferring to allow the existing law to be applied. Any statutory definition might well merely produce a fresh spate of litigation and provide a set of undesirable artificial distinctions. There is indeed much to be said for flexibility in such matters.

The first question to be considered in relation to the wider test is whether the advancement of the administration of the law in its broad sense (which would include the elucidation, proper application, and betterment of the law) is something beneficial to the community. To pose that question to one whose function it is to administer the law provokes unease and a tendency to lean over backwards to avoid giving an affirmative reply. But such a mental posture is no more conducive to a balanced view than to elegance. Looking at the issue squarely and attempting to use the eyes of the generality of subjects of either Elizabeth I or Elizabeth II there is, however, manifestly only one answer-of course it is beneficial to the community. The answer being eminently a matter of first impression derived from an overall view of the preamble coupled with the general trend of some centuries of decisions, no useful purpose can be served by citation of specific authorities. It is an impression formed without reference to the contents of either of the two previously mentioned charters ^[j] , to which I will, however, return.

Next comes the question whether the particular purpose of the council's activities sufficiently contributes to that advancement. Does it benefit a sufficiently wide section of the community? As satisfactory administration of the law in practice depends on there being a proper system of law reporting, it can well be said that the whole community benefits from the purposes of the council: but even if the benefits were confined to those who have to make judicial decisions and to the members of the legal profession advising clients and appearing for them in court, nonetheless a sufficiently large section of the community would derive the relevant benefits.

Adopting the test propounded by my brother Russell LJ, I next turn to consider whether there is any reason for excluding these benefits from the range of those that are capable of being classified as charitable, and can find no such reason.

Finally as regards this head comes the question whether the contribution is made in a charitable manner. This point having been fully discussed in the judgments of my brethren to an effect with which I agree it is not necessary to go over the ground again. In my judgment, the way in which the council operates qualifies it for inclusion amongst charities as defined by the 1960 Act once it is shown that its purposes can properly be said to be charitable if operated in a charitable manner.

Accordingly if, contrary to my view, the purposes of the council do not fall within the second division, they are nonetheless charitable because they would then fall within the fourth.

In conclusion it seems appropriate to return to the contents of the two chartersj the charters of Clifford's Inn and the Honourable Society of the Inner Temple set out in part at pp 1048, 1049 and p 1049 respectively granted within a score of years of the enactment of the Statute of Elizabeth I. On the footing that it is permissible to refer to them-and quite rightly, to my mind, no objection was taken before us to this being done-we are in the same position as was this court in Smith v Kerr ([1902] 1 Ch at 778), where Sir Richard Henn Collins MR said:

'... we are not left to speculation, nor have we to look for obscure hints from remote times, because ... we have a most authoritative contemporary record ... '

There he referred to Lord Coke's account of the functions of Clifford's Inn; here we can look at the accounts in two royal charters of what was regarded as beneficial to the 'Commonwealth' and 'Realm of England'.

Rather than merely cull selected extracts from these two charters, it has seemed best to append to this judgment a full note of so much of them as has been set out and discussed in the respective judgments of Sir Richard Henn Collins MR in Smith v Kerr and the deputy judge of the Mayor's and City of London Court in Thomson v Trustees of the Honourable Society of the Inner Temple . The passages in the Clifford's Inn charter sidelined 1, 2 and 4 and in the Inner Temple charter 5 and 8 speak for themselves; not least the last mentioned reference to 'the welfare of this Realm of England, flourishing for so many ages by the administration of the said Laws'. Taken as a whole these documents in my judgment of themselves provide compelling and perhaps conclusive evidence that advancement of the administration of the law was regarded as beneficial to the community in the first quarter of the seventeenth century.

Though the contents of these charters have been cited primarily in relation to Lord Macnaghten's fourth division, they also may be said to provide material touching the second. The references in the Inner Temple charter (sideline 10) to the 'Entertainment and Education of the Students and Professors of the Laws' when coupled with the earlier passages (sidelines 6 and 7) and phrases in the Clifford's Inn charter such as the 'furtherance of the Practisers and Students of the Common Law' (sideline 3) are in point, having regard to the fact that 'professors' appears to mean 'those who profess the law'.

Accordingly I would dismiss this appeal ^[k] .