Adoption Privacy Protection Group Incorporated and Commissioner of Taxation
[2004] AATA 1121
•28 October 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1121
ADMINISTRATIVE APPEALS TRIBUNAL )
) No QT2003/357
TAXATION APPEALS DIVISION ) Re ADOPTION PRIVACY PROTECTION GROUP INCORPORATED Applicant
And
COMMISSIONER OF TAXATION
Respondent
DECISION
Tribunal Deputy President Don Muller Date28 October 2004
PlaceBrisbane
Decision The Tribunal affirms the objection decision that for the tax year ending 30 June 2002, the Adoption Privacy Protection Group Incorporated was not a “public benevolent institution” for the purposes of being endorsed as a “deductible gift recipient” within the meaning of those terms in the Income Tax Assessment Act 1997. (SIGNED)
D.W. MULLER
DEPUTY PRESIDENT
CATCHWORDS
TAXATION – applicant not a “public benevolent institution” – decision affirmed
Income Tax Assessment Act 1997: ss 30-15, 30-45, 30-125, 30-130
Perpetual Trustee Co Ltd v FC of T (1931) 45 CLR 224
Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute 90 ATC 4752
Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute 92 ATC 4307
Marriage Guidance Council of Victoria v Commissioner of Pay-roll Tax (Vic) (1990) 90 ATC 4770
REASONS FOR DECISION
Deputy President Don Muller 1. The Adoption Privacy Protection Group Incorporated, APPG, incorporated under the Associations Incorporation Act (Qld) 1981 on 21 October 1991, claims that it is a non political non sectarian, community based organisation that provides information, referral and support services without charge to members of the public on adoption matters. It is financed by unsolicited membership fees, donations and fund raising activities.
2. On 10 December 2001, APPG applied for endorsement as a deductible gift recipient (DGR) on the basis that it is a public benevolent institution (PBI) under item 4.1.1 of the table in section 30-45 of the Income Tax Assessment Act 1997 (ITAA 1997).
3. On 22 March 2002, APPG was notified of a refusal to endorse the organisation as a DGR because it was determined that APPG did not qualify as PBI for the following reasons:
·“It is not sufficient that your operations be directed towards categories of people who could be in need of relief; it must be for the relief of suffering and distress experienced by people requiring relief.
·The retrospective adoption laws creating the hardship have not put adopted children, adoptive parents and birth parents in a position where they need benevolent relief.”
4. On 23 May 2002, APPG objected in writing to the refusal to endorse the organisation as a DGR.
5. On or about 30 June 2003, the representative of APPG, received an undated decision from the ATO to disallow the objection in full, for the tax year ended 30 June 2002.
6. On 29 August 2003, APPG made application to the AAT for review of the objection decision. The decision relates to the tax year ending 30 June 2002.
7. At the hearing, APPG was represented by Mrs. McCullagh and Mrs. Carroll, who both gave oral evidence and supplied documentary evidence about the aims and activities of APPG. The Commissioner was represented by Mr. Curran.
8. The Tribunal accepts the evidence of Mrs. McCullagh and Mrs. Carroll and the material put into evidence by them. The Tribunal finds as follows:
(a)APPG was formed in 1990 and later incorporated in October 1991.
(b)The foundation members believed that it was necessary to form a body such as APPG for the following reasons:
“Without public consultation or notification, State governments passed laws, which retrospectively opened adoption records and removed privacy protection from all parties to an adoption. Previously birth parents, adoptive families and governments had entered into legal agreements entailing an undertaking of lifetime confidentiality. Following a groundswell of public support, APPG was formed in 1990 to represent the mainstream adoption community who had not been consulted. APPG gives a united voice to those affected by adoption and support to those whose lives are adversely affected by the retrospective changes to Adoption laws.
Current legislation varies in each state and offers limited measures of privacy and control. Objections or Vetos may be lodged, to prevent contact only and/or the release of identifying information and contact.”
(c)The aims of APPG were to ensure:
· “That privacy protection is afforded to all persons involved in adoption.
· That no party to an adoption is discriminated against.
· That the mainstream adoption community is extensively consulted regarding any changes to the Adoption Act and participates in the formulation of these legislative changes.
· That confidential and identifying adoption information is released only with the prior written consent of the persons concerned.
· That counselling, when requested, is supplied by fully qualified professionals with extensive adoption experience.”
(d)APPG has a web-site and also produces written material to explain the group philosophy on various aspects of adoption. The following passage probably best sums up the philosophy.
“APPG is not opposed to contact as long as it is with the voluntary written consent of both parties. Contrary to public opinion the majority of birth mothers and adoptees DO NOT seek reunions. Figures provided by the Reg. of Births Deaths and Marriages show that only a small percentage have applied for information, which will allow contact. APPG supports an official and government controlled ‘Contact and Information Register”. These Registers would enable adults to exchange information and meet, without intruding into the privacy and lives of others; a dignified and cost effective way of arranging reunions.”
(e)The records of APPG contain a number of case studies which provide examples of the distress which unwanted contact can have. (I will not repeat those examples here.) The nature of some of the counselling work done by the members of APPG can be gleaned from the following statement.
“In 1990 following an advertisement placed in the newspapers titled ‘Adoption Privacy Lost’ APPG (not yet incorporated) was inundated with telephone calls from hundreds of distressed people devastated by the retrospective opening of confidential Adoption records. Many people affected by adoption found that they had no rights under the amended legislation. E.g. most birth fathers, adoptive parents, siblings of adoptees, subsequent children born to the birth mother.
Following incorporation in October 1991, APPG has provided a continuous telephone answering service for those in need of assistance. The Group has received over 4,500 calls from Queensland citizens seeking help. APPG provides a service to the public not provided by any other NGO or government department. People traumatized and harassed by unwanted contact have nowhere else to turn. Pro reunion bureaucrats do not want to hear from these people. The Minister has confirmed that the penalties in the Act have proved to be ineffectual.
One in five people in Australia are affected by adoption if immediate relatives are included. Providing assistance and advice to distressed persons is a valuable service. Volunteers who take long calls from these distressed and sometimes weeping people often feel drained by the experience. Many calls will stay in the volunteer’s minds forever.
Systematic documentation of each incoming telephone call, in a non-identifying form has provided valuable data. Annually, the categories of callers, the content and nature of these incoming calls are classified. This analysis provides valuable information regarding the effects on the community of the retrospective opening of adoption records. Independent researchers and academics have expressed interest in these findings.
This analysis of incoming calls shows that on average, at least once a week, a call is received from a person whose life has been adversely affected by the retrospective opening of adoption records. APPG has always supported a Contact and Information Register as a dignified and cost effective way of facilitating reunions, and of updating non-identifying information.”
(f)Out of over 4,500 calls received between 1991 and June 2002, the telephone counsellors received 469 calls reporting severe family destabilisation as a result of contact. Counsellors receive about one “trauma” call per week. A trauma call usually lasts for many hours – some can continue on and off for days.
(g)The current financial circumstances of APPG have been set out in the following statement.
“APPG is funded by voluntary membership fees, donations and fund raising activities. APPG’s expenditure has never exceeded its income. Fundraising activities such as garage sales became necessary as the demand on funds of APPG are considerable. APPG has never received any government funding to assist with day to day running expenses of its office and telephone answering service and correspondence. A constant membership over 8 years has provided the main support for this organisation.
All office bearers and volunteer telephone answerers are unpaid. Committee members personally bear many of the minor day to day costs associated with the telephone answering service and correspondence.
The importance of attending Adoption conferences has meant that some committee members have personally had to bear inter-state travel and other associated costs.
The only funding APPG has received was a grant from the Gaming and Community Benefits Fund in 1998, after many years of unsuccessful applications. This grant allowed APPG to purchase a much needed computer and photocopier.”
(h)The total annual income of APPG is usually about $3,000.
(i)In 2002, APPG received a “one-off” grant of $6,000 from the Queensland Department of Families.
(j)The character of the work done by the APPG volunteers has evolved from originally being heavily involved in lobbying to prevent changes to the adoption legislation in relation to privacy, to acceptance that the changes are now a fact of life, to counselling people who have been traumatised by events which have arisen as a result of the legislative changes.
(k)As a result of passing an amendment to the rules of APPG on 21 November 2002, relating to the “objects”, the Registration of Amendment of Rules occurred on 19 February 2003. The new “objects” section became:
“2. The objects of the Association are:
(1)to take such steps as may be necessary to provide personal assistance to those adversely affected by the nullification of the legal confidential agreements between the persons who were party to an adoption order; so as to ensure that:
(a) all persons adversely affected by the retrospective opening of adoption records who suffer any form of discrimination, harassment or invasion of their privacy are provided with help in alleviating their suffering.
(b)accurate and informed assistance is provided to relieve the distress of those who are seeking help.
(2)to create an understanding and acceptance in the community in general and government of the issues involved in adoption.
To ensure that:
(a) the privacy of all parties to the adoption process including all members of birth and adoptive families are protected and that the U.N. Covenants on Civil and Political Rights (Art. 26) and on Economic, Social and Cultural Rights (Art. 12) are upheld.
(b)the welfare and interests of adopted children are paramount;
(c)the rights of all parties who are affected by the adoption process are protected and respected;
(d)for legal and any other purposes, upon adoption:
(i) the adopted child becomes and remains the child of its adoptive parents as if the adopted child had been born to its adoptive parents in lawful wedlock; and
(ii) the adopted child ceases to be a child of any person who was a parent of the child prior to the adoption.”
9. In so far as they are relevant to this case the provisions of the ITAA 1997 are:
·30 – 130: An entity may apply for endorsement as a deductible gift recipient
·30 – 125 sets out the criteria for entitlement to endorsement, and provides that if the entity is a fund, authority or institution, the entity is entitled to be endorsed as a deductible gift recipient if the entity:
(a) has an ABN (30-125 (1)(a)); and
(b) is described in item 1, 2 or 4 of the table in section 30-15.
·Item 1 in section 30 – 15 specifies “A fund, authority or institution covered by an item in any of the tables in Subdivision 30-B”.
·Sub-division 30-B contains a table in subsection 30-45(1) which sets out general categories of welfare and rights recipients.
·Item 4.1.1 of 30-45(1) specifies “a public benevolent institution”.
10. It is not disputed by the Respondent that APPG is a non-profit organisation, nor that APPG is a public institution, nor that APPG has an ABN.
11. There is no issue between the parties about any of the above criteria or requirements, other than whether APPG is “a public benevolent institution”.
12. The meaning of the term “a public benevolent institution” has been the subject of a number of reported cases. It has been established that the starting point in any analysis of this topic is in the High Court case of Perpetual Trustee Co Ltd v FC of T (1931) 45 CLR 224, where it was held that “a public benevolent institution” means:
Starke J (at 232): “an institution organised for the relief of poverty, sickness, destitution, or helplessness”.
Dixon J (at 234): (organisation which promote) “the relief of poverty, suffering, distress or misfortune”.
Evatt J (at 235, 236) “There are, however, very many bodies which readily answer the description of ‘benevolent institutions’. The Benevolent Society of New South Wales provides food and clothing for those in poverty and distress, the Scarba Home takes care of deserted babies, many organizations of Church and State provide for the maintenance, housing and relief of the aged poor, orphans and those suffering from bodily or mental disease. A characteristic of most of these organizations is the absence of any charge for services or the fixing of a purely nominal charge.
Such bodies vary greatly in scope and character. But they have one thing in common : they give relief freely to those who are in need of it and who are unable to care for themselves.
Those who receive aid or comfort in this way are the poor, the sick, the aged, and the young. Their disability or distress arouses pity, and the institutions are designed to give them protection.”
13. An extensive analysis of the reported cases was undertaken by McGarvie J of the Victorian Supreme Court in two appeals which he heard at the same time. In one of the cases, Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute (29 June 1990) 90 ATC 4752. McGarvie J held that the organisation was a “public benevolent institution” (later upheld by the Full Supreme Court of Victoria (92 ATC 4307)). In the other case, Marriage Guidance Council of Victoria v Commissioner of Pay-roll Tax (Vic) (29 June 1990) (90 ATC 4770), McGarvie J held that the organisation was not a “public benevolent institution”.
14. In the Cairnmillar Institute case, McGarvie J said (at 4761, 4762):
“My examination of the decisions of the courts on the meaning of ‘public benevolent institution’ since the Perpetual Trustee Co. case in 1931 indicates that it has never been regarded as a necessary criterion that relief be provided only to those in financial need. The poor have been regarded as one category of persons to whom benevolent institutions provide relief: but other categories include those who are sick, suffering, helpless or in distress, or subject to misfortune or the disabilities of the aged or the young.
In my opinion the authorities establish that a public institution which provides relief in a direct way to persons suffering from some unfortunate disability or condition is a public benevolent institution. The plight of such persons is sufficiently serious to arouse pity or compassion within the community and they are regarded as in need of benevolent relief. While in that sense they may be described as ‘needy’ it is not necessary that their need be financial need. Their need for benevolence might arise from poverty but it might arise from sickness, suffering, helplessness or other distress or misfortune. Relief given to those suffering distress or misfortune through causes other than poverty falls within the concept of benevolence. Of course it often occurs that people suffering distress or misfortune from a cause other than poverty also suffer from poverty.
The descriptions of persons as poor, sick, suffering, helpless, in distress, or subject to misfortune or disability are relative descriptions: a person may be moderately or severely so. I consider that the test for whether relief to such persons amounts to benevolence is whether their disability or condition is of such seriousness as will arouse community compassion and thus engender the provision of relief.
It is important, I think, constantly to bear in mind that this appeal is not concerned with either a statutory or a judicial definition of public benevolent institution. One looks at the decisions and takes account of expressions commonly and currently used in the community. From that comes an indication that public benevolent institutions are those which direct their work to the relief of those whose unfortunate disability or condition arouses compassion within the community. The tenor of the word ‘benevolent’ in this context owes more to an understanding of humanity than to legal analysis.”
15. In the Marriage Guidance Council of Victoria case, McGarvie said (at 4775):
“The evidence is that about one marriage in four now ends in divorce in Australia. The conditions and attitudes of today must be regarded as presenting particular difficulties to satisfactory and successful marriage. I am satisfied that the work done by the Council in marriage counselling is work of great social value and utility to those who receive its services and to the community generally. It’s counselling enables many adults and children to derive or recover benefit from a satisfactory marriage. That, however, is not the issue before me. That issue is whether the Council fits the description of a species of institution on which parliament has conferred the benefit of an exemption from taxation: a public benevolent institution.
There could be no doubt that the emotional stress and pain of an unsatisfactory marriage, a separation or a divorce is typically of a severe order. The counselling work of the Council commonly operates to prevent this stress and pain arising, to reduce or eliminate it or to enable people to reconcile themselves to living with its memory. I consider, however, that the community regards such emotional stress and pain as falling within the ambit of the stress and pain encountered in ordinary human experience associated with such things as failure, deception, loss of status and reputation, and bereavement. Most healthy people of their own volition recover from such hurtful experiences with the passage of time.
I am satisfied that the counselling work of the Council in many cases, by eliminating strife in marriage or preventing marriage breakdown, avoids the undesirable secondary consequences of the type to which I have referred. While entirely commendable socially, this is preventative work and different from the work of a benevolent institution. It is akin to training, education or improvement. With respect I do not agree with the view of Brereton J of the Supreme Court of New South Wales in his unreported judgment delivered on 27 June 1957 in Federation of N.S.W. Police Citizens Boys Clubs v Council of the City of Greater Wollongong:
‘Put briefly, it is difficult to see why prophylaxis should not be regarded as an activity just as benevolent as therapy. Certainly from the point of view of public benefit, prevention is a great deal better than cure.’
I disagree with that view for reasons similar to those of Mr A.P. Webb in Case 121 (1960) 11 T.B.R.D. 117 at pp 124-125.
‘Unlike the work being done by the Cairnmillar Institute in the appeal just decided, it cannot be said of the ordinary run off persons who receive counselling from the Council that they receive psychotherapy or any other treatment to cure a psychological disorder or abnormality. Most of them are normal persons facing difficult situations who need and receive expert counselling and guidance. Typically, that is the service for which the fee of about $24-$25 is charged.
The question to be decided is not one which benefits from prolonged analysis. Essentially the question is whether in the common language of this community the service which the Council provides to those who seek its assistance falls, by and large, within the description of benevolent, used in the relevant sense. In my opinion the bulk of marriage counselling provided by the Council is not to be regarded as benevolent in that sense.
In my opinion the community does not regard those who are, or have been, in marriage, successful or unsuccessful, as a general category of people with an unfortunate disability or condition arousing compassion. The same conclusion is reached if one confines attention to those of that category who seek counselling from an organisation such as the Council. They do not in my opinion fall directly or by analogy within the descriptions given in the cases of categories for which public benevolent institutions may be organised to provide relief.”
16. In my view the analysis by McGarvie J of the type of work done by the Marriage Guidance Council of Victoria, its effect on the community, and its relevance to the question as to whether or not an institution is a PBI, applies equally to the APPG in this case. With respect I agree with it and apply it to the APPG.
17. I have no doubt that the work done by the APPG is work of social value and utility to those who receive its services and to the community generally. I accept that the counselling work done by the members of the APPG operates to prevent or alleviate the stress and pain of unwanted contact between adoptees and birth parents. However, most of the people who seek the services of APPG, including the 10% of users referred to as “trauma” callers, are normal persons facing difficult situations who for a time, need and receive counselling and guidance. They are not typically people who need medical treatment for a psychiatric/psychological disorder, disease or abnormality. They will usually get over their shock or trauma and eventually get on with their lives (with or without the assistance of the APPG). They are not necessarily helpless or unable to look after themselves.
18. As for the victims of harassment or stalking, they should be seeking assistance from some legal institution.
19. APPG does not specifically operate for the purpose of assisting people who are unable to care for themselves. That is, their target group are not necessarily poor, sick, aged or young, even if some of their callers may also fit into this group.
20. I find that APPG is not a “public benevolent institution”.
21. The objection decision is affirmed.
I certify that the 21 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President Don Muller
Signed: .....................................................................................
R. Link, AssociateDate/s of Hearing 22 July 2004
Date of Decision 28 October 2004
Applicant Mrs. McCullough and Mrs. Carroll
Respondent Mr. M. Curran, departmental advocate
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