| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : LOCAL GOVERNMENT ACT 1995 (WA) CITATION : MOTOR INDUSTRY TRAINING ASSOCIATION OF WESTERN AUSTRALIA (INC) and CITY OF JOONDALUP [2013] WASAT 14 MEMBER : JUSTICE J A CHANEY (PRESIDENT) HEARD : 22 NOVEMBER 2012 DELIVERED : 31 JANUARY 2013 FILE NO/S : DR 74 of 2012 BETWEEN : MOTOR INDUSTRY TRAINING ASSOCIATION OF WESTERN AUSTRALIA (INC) Applicant
AND
CITY OF JOONDALUP
Respondent
Catchwords: Rating - Land used for charitable purposes - Whether land used for advancement of education - Nonprofit organisation - Training scheme for apprentices in motor industries - Public benefit - Benefit to individuals Legislation: Charitable Uses Act 1601 (Imp)
Local Government Act 1995 (WA), s 6.77, s 6.26, s 6.26(2)(g)
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Result: Exemption from rates granted
Summary of Tribunal's decision: The Motor Industry Training Association of Western Australia sought a review of a decision of the City of Joondalup to refuse an exemption for rating purposes in relation to land on which MITA carried out its training program for apprentices. MITA contended that its use of the land was for a recognised charitable purpose, namely the advancement of education. The City of Joondalup argued that although vocational training might amount to a charitable purpose, the educational services offered by MITA were too limited in their scope, and offered to too narrow a group of the public, to satisfy the requirement of public benefit necessary to make the use of the land charitable.
The Tribunal examined the object and purposes of MITA, its activities on the land and its notforprofit structure. It concluded that the use of the land satisfied the requirements of public benefit, and amounted to a use for the advancement of education. Accordingly, the decision to refuse the exemption was set aside, and a declaration made that, in the relevant years, the land was exempt from local government rates.
Category: B
Representation: Counsel:
Applicant : Mr G Rabe and Mr T Ford
Respondent : Mr J Skinner
Solicitors:
Applicant : Arns and Associates
Respondent : Jackson McDonald
Case(s) referred to in decision(s):
Aid/Watch Inc v Federal Commissioner of Taxation (2010) 241 CLR 539
Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531
Federal Commissioner of Taxation v Cooperative Bulk Handling Ltd (2010) 189 FCR 322
Incorporated Council of Law Reporting (Qld) v Federal Commissioner of Taxation (1971) 125 CLR 659
Incorporated Council of Law Reporting of Queensland, and Tasmanian Electronic Commerce Centre Pty Ltd v Commissioner of Taxation (2005) 142 FCR 371
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Incorportated Council of Law Reporting (Q) v Federal Commissioner of Taxation (1971) 125 CLR 659
Independent Schools Council and the Charity Commission for England and Wales & Ors [2011] UKUT 421 (TCC)
Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645
National Anti-vivisection Society v Inland Revenue Commissioners [1948] AC 31
Nelan & Another v Downes & Others (1917) 23 CLR 546
O'Hanlon v Logue (1906) 1 IR 247
Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297
Retirees WA (Inc) and the City of Belmont [2010] WASAT 56
Shire of Derby-West Kimberley v Yungngora Association Inc [2007] WASCA 233
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 The applicant, Motor Industry Training Association of Western Australia (Inc) (MITA) seeks a review under s 6.77 of the Local Government Act 1995 (WA) (LG Act) of a decision of the City of Joondalup (City) to refuse objections to the City's rate record for the 2010/2011 and 2011/2012 rating years. The objections were based on MITA's contention that the property which it owns at 10 Injune Way, Joondalup (the Land) ought to be exempt from rates under s 6.26(2)(g) of the LG Act on the basis that, during the relevant periods, the land was used exclusively for charitable purposes. 2 Section 6.26 of the LG Act relevantly provides: (1) Except as provided in this section all land within a district is rateable land. (2) The following land is not rateable land - … (6) Land does not cease to be used exclusively for a purpose mentioned in subsection (2) merely because it is used occasionally for another purpose which is of a charitable, benevolent, religious or public nature. 3 The parties were able to agree the relevant facts. They also agreed that the term 'charitable' in s 6.26(2)(g) of the LG Act is used in its legal or technical sense, which requires that the purpose in question must: 4 In order to determine whether the Land was used, at the relevant time, exclusively for charitable purposes, the parties identified the following issues: (Page 6)
ISSUE 2 If the answer to ISSUE 1 is 'Yes', is there a presumption that any use of land for the advancement of education is directed to the benefit of the public? ISSUE 3 If the answer to ISSUE 2 is 'No', is the MITA Use of the Land directed to the benefit of the public, having regarding the following sub-issues? Sub-Issue 3 A What is the benefit to the public that is said to arise from the MITA Use of the Land? Sub-Issue 3B Is any benefit identified in response to Sub-Issue 3A made available to the general community or a sufficient section of the community to constitute the 'public'? Sub-Issue 3C Does the MITA Use of the Land also provide direct benefit to individuals and, if so, what is that benefit? Sub-Issue 3D To the extent that the MITA Use of the Land provides direct benefit to individuals, is any such direct benefit to individuals subordinate, incidental or subsidiary to any public benefit arising from the MITA Use of the Land?
The facts 5 MITA is a notforprofit organisation. Its purposes and objects are set out in clause 2 and clause 3 of the statement of purposes contained within its constitution. Those clauses read as follows: 2. PURPOSES OF THE ASSOCIATION The Association is a not-for-profit organisation the purposes of which are:
• To provide training for apprentices and trainees wishing to pursue a career in the automotive industry as determined from time-to-time. (Page 7)
• Facilitate the implementation and operation of the Group Training Scheme in accordance with the legislative requirements, policy objectives and guidelines which may be established form time-to-time by Commonwealth and Western Australia Governments. 3. OBJECTS OF THE ASSOCIATION 3.1 To employ and indenture apprentices/trainees in the Automotive and Allied Trades and to place such apprentices with Host Employers for the statutory period of their training. - 3.2 To administer training matters in relation to those apprentices/trainees and employers referred to above. 3.3 To encourage, promote and undertake the training of employers and employees in the Automotive Industry. 3.4 To participate in curriculum development, accreditation and registration and, where required, in conjunction with the National Automotive Industry Training Board. 3.5 To promote, design and implement education, training and employment for the industry. 3.6 To advance the quality of education and training in all areas of the industry; in particular to complement the training and retraining activities of secondary education institutions, and industrial and commercial enterprises. 3.7 To record training qualifications and provide appropriate certification of training undertaken. 3.8 To participate in other recognised employment and/or training programmes as the Board may determine from time-to-time. 3.9 To undertake any activity in relation to training, the employment of apprentices, trainees and other employees as the Board may from time to-time decide. 3.10 To provide a consultancy services to industry in any areas that the Board may from time-to-time decide. 6 MITA was incorporated in April 1990. Between that time, and 2006, it operated from a series of properties with each consecutive property catering for an expansion of its operations. It acquired the Land on (Page 8)
14 September 2007 and after construction of the facilities on the Land, has operated there since. The Land occupies approximately 4.9 hectares of which 1 hectare is presently vacant land. 7 MITA is controlled by a board which comprises eight elected industry representatives. Financial accountability is the responsibility of the Chief Executive Officer and the Accountant/Financial Controller who, together with the Chairperson and Deputy Chair, constitute a Finance Committee. Budget surpluses are utilised to pursue the organisation's purposes and objectives. 8 MITA employs eight lecturers and three field officers. The field officers are responsible for the pastoral care of, and monitoring the progress and well being of, apprentices participating in the Group Training Scheme discussed below. 9 MITA is an association of its members, with membership being at the board's discretion. Entities eligible for membership include: a) all host employers of the Group Training Scheme; b) all employers with employees currently in training programmes at MITA; c) all companies that use MITA for their training; d) any employer or company in the automotive industry that expresses an interest in joining MITA. 10 Members receive no financial benefit from their membership of MITA. 11 MITA provides automotive education and training services to apprentices, trainees, entry level candidates (unemployed persons) and school students. Its education and training services are provided through a combination of offthejob training and onthejob training. MITA's offthejob training is conducted by MITA's Institute of Automotive Training (IAT), a business name which it owns. 12 The building complex housing the IAT is located on the Land and it comprises the facilities where offthejob training is provided. The IAT also has an administrative office for MITA's involvement with the Group Training Scheme. (Page 9)
13 The Group Training Scheme is an employment and training arrangement whereby an organisation employs apprentices and trainees under an Apprentice or Traineeship Training Contract and places them with host employers. The Group Training Scheme is an initiative jointly funded by the State and Federal Governments under what is known as the Joint Policy Funding arrangement. It is a means of providing trainees and apprentices with practical onthejob training. Apprentices and trainees are indentured to an 'Incorporated Group Employment' company rather than to individual employers. The apprentices and trainees then undergo planned rotations with various employers, exposing them to a wider variety of skills. As an Incorporated Group Employment Company, MITA employs the apprentices or trainees directly. The labour of the apprentices and trainees is then hired or subcontracted out to a particular host employer working in the required trade or occupation. MITA places apprentices with host employers in the Group Training Scheme and not vice versa. Host employers are required to pay an hourly rate for apprentices and trainees, which provides the funds by which MITA employs the apprentices and trainees. Approximately 2 % of the hourly rate is retained by MITA and put towards its budget in running the IAT. 14 MITA structures and monitors host employer placement and training progress to ensure all apprentices and trainees receive instruction in accordance with the accredited training programme. This supervision by MITA combined with National Competency Standards and Assessment methods ensures that all the required competencies are achieved within the training period. 15 Some of the apprentices who have undertaken an apprenticeship through the Group Training Scheme would otherwise have been unable to secure an employer to provide employment to him/her for the full term of an apprenticeship to a single employer. Similarly, some of the employers who have provided onthejob training to apprentices and trainees for limited periods of time under the Group Training Scheme would have been unable to sustain an apprentice or trainee throughout the period of the apprentice's or trainee's apprenticeship or traineeship. 16 Construction of MITA's facilities on the Land commenced on 14 September 2007 and was completed on 1 February 2011. MITA started its operations on the Land on 3 February 2011. The Land was rated 'commercial improved' from 1 February 2011. From that period on, the use of the Land was described in the statement of agreed facts as follows: (Page 10)
2011 - 2012 rating period 38. MITA used the Land during this period to operate its education and training services. Those services comprised: a. practical and theoretical training services from entry level to post trade across 91 suburban areas in the northern corridor of Perth; b. off-the-job training to 311 apprentices and trainees on a day release basis in the areas of Automotive Mechanical (Light Vehicle), Panel Beating and Spray Painting and across 7 nationally registered Traineeship areas; c. on an annual basis, two pre-apprentice Programs, three Australian Apprentice Access Programs, three Group Training in the Trades Prevocational Programs, and a school-to-work CareerLink Program; and d. Certificate I, II and III courses in 14 different skilled areas including automotive vehicle servicing, electrical technology, administration and spare parts sales. 39. In providing those services, MITA provided courses in the following areas: a. Australian Apprenticeship Access Program (AAAP) Automotive Induction program; and b. Group Training in the Trades Prevocational Programme (GTTPP). MITA provided Certificate II courses in the following areas: a. (Pre-apprenticeship) automotive Vehicle Body; b. (Pre-apprenticeship) automotive Vehicle Servicing; c. automotive Administration; d. automotive Vehicle Servicing; e. automotive Mechanical; f. automotive Vehicle Body; and g. Automotive Sales (Replacement Parts & Accessories). MITA provided Certificate III courses in the following areas: a. automotive Mechanical Technology; (Page 11)
b. automotive Vehicle Body (Painting); c. automotive Vehicle Body (Panel Beating); and d. automotive Retail, Service and Repair. MITA provided post training courses in: a. automotive Electrical; b. automotive Engine Management Systems; and c. automotive Diagnostics. 40. MITA delivered training in Motor Mechanical (Light Vehicle), Autobody Repair and Autobody Refinishing. 41. MITA provided an entry level training program which assists high school students' transition to full time employment. 42. As part of entry level training, MITA conducted a PreApprenticeship Certificate II Course twice in that year, as it does every year. The course is approximately 6 months in duration and includes extensive work-based training. Competencies achieved during these courses are credited on articulation into an Apprenticeship or Traineeship. 43. The number of Apprentices and Trainees enrolled at MITA during the 2010/11 and 2011/12 periods are set out in the table below: | Course | Students enrolled in | Students enrolled in | 2010/11 | 2011/12 | | Light Vehicle | 222 | 295 | | Heavy Vehicle | 0 | 14 | | Panel beating | 31 | 31 | | Spray painting | 32 | 28 | | Pre-Apprentices | 47 | 50 | Australian Apprenticeship
Access Program | 24 | 21 | Group Training in Trades
Prevocational Programme | 29 | 49 | | Career Link | 16 | 15 | | Schools | 53 | 48 | Total | 454 | 551 | (Page 12)
44. MITA provided for approximately 25% of the automotive apprenticeship and training in the Perth Metropolitan area during this rating period. The remainder was provided by the colleges formerly known as TAFEs (about 70%) and other RTOs (about 5%). 45. In the areas that MITA provides the same training courses as TAFE Colleges, MITA is approved to train participants to the same level as TAFE Colleges. MITA's registration as a Registered Training Organisation is the same registration that is given to TAFE Colleges. … 46. The education and training services MITA provides at the IAT include teaching classes and lectures for all theoretical aspects of the automotive training courses, as well as practical training in the workshops. 47. MITA's IAT's facilities during the rating period included: a. 4,860 square meters of training workshops, divided into 9 workshops comprising; (Page 13)
50. MITA also leased a vacant workshop at the IAT to the College of Electrical Training (a similar organisation to MITA in the electrical industry), who are constructing a training workshop in the City of Joondalup. … 17 In 2012, MITA's Group Training Scheme employed 330 apprentices and trainees across 18 skilled areas in the automotive industry. Since 1990, MITA has been responsible for the education and training of over 1,230 qualified apprentices. 18 Although MITA's constitution (at clause 3.10) allows for the provision of consultancy services to industry, such a service has only been provided on one occasion in the 2003/2004 financial year and involved providing consultancy services to regional group training schemes. 19 MITA's funding is predominately provided by the State Government and, as mentioned earlier, it operates on a nonprofit basis. The parties in their statement of agreed facts set out considerable detail in relation to funding arrangements, but nothing was made of those in the course of submissions, and it is not necessary to recount those matters in detail. It was common ground that MITA's assets and income could only be applied to provide and improve its education and training services, and that, since its inception, MITA has used surplus income to expand and improve training and apprenticeship services, relocate to more suitable premises where necessary, purchase the Land and construct the buildings for the operation of the IAT. 20 MITA's training services are available to any permanent Australian resident over the age of 15 years subject to some minor limitations set out in MITA's agreement with the funding authority. That agreement also requires selection of students in a manner that promotes equity in the access to training in accordance with the Equal Opportunity Act 1984 (WA). MITA has not refused a single applicant to any training programme during the 2010/2011 and 2011/2012 rating periods. Successful applicants can only be expelled on grounds set out in a discipline procedure. 21 MITA enjoys a charitable status for various State and Federal taxation purposes. It has obtained an exemption from land tax, a general exemption from water rating, concessions as a charitable institution relation to the Income Tax Assessment Act 1997 (Cth), GST and fringe benefits tax. It has also received a stamp duty exemption for the Land and for vehicles purchased for training purposes. (Page 14)
Issue 1- Does the use of the Land fall within 'advancement of education'? 22 This question arises because the 'advancement of education' is one of the recognised divisions of a charity described by Lord Macnaghten in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 (Pemsel). The parties accepted, correctly in my view, that in order to be charitable, the purpose in question must fall within the spirit and intent of the preamble to the Charitable Uses Act 1601 (Imp) and must be for a purpose beneficial to the public: Incorporated Council of Law Reporting (Qld) v Federal Commissioner of Taxation (1971) 125 CLR 659; Shire of Derby-West Kimberley v Yungngora Association Inc [2007] WASCA 233 (YungngoraAssociation) at [44]. 23 In Pemsel, Lord Macnaghten said at [583]: 'Charity' in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly. 24 The applicant relies upon the purposes and objects set out in clause 2 and clause 3 of its constitution. It argues that the agreed facts support the contention that the applicant uses the land exclusively for the purposes and objects set out in those clauses, all of which are directed exclusively to the advancement of education. 25 The respondent concedes that the Land is used for the purposes of 'education' but argued that it was a limited scope of education. It contrasted the use with a normal 'school' dealing with the general education of children, a TAFE college providing education or training across a range of different fields, or an institution advancing any branch or field of knowledge in the sense of carrying out research or experiments. Rather, the respondent argued that the Land was used to provide vocational training for a particular and specific commercial industry or business. In his oral submissions, counsel for the respondent argued that the focus should be on the precise use of land, which in this case was for the training of individuals in a particular skill. Counsel accepted that vocational training was capable of amounting to an educational purpose, and was capable of providing a public benefit, but argued that the limited scope of operations carried out by MITA led to the conclusion that the Land was not being used for the advancement of education. (Page 15)
26 In my view, the use of the Land by MITA, as set out in the agreed facts clearly amounts to the advancement of education. The fact that the field of education is limited to matters related to the motor industry does not detract from that proposition. The fact that schools or TAFE colleges might offer a more general education, or a broader range of courses, is, in my view, of no moment. Putting aside questions of public benefit, which will be dealt with under Issue 2, there is no support in the authorities for the proposition that the field of education offered by the organisation in question must encompass any particular range or type of courses. As Kitto J observed in Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645 (Lloyd) at 675: In Chesterman v Federal Commissioner of Taxation, Isaacs J spoke of the general understanding of the words 'public education' in the context of s 8 as having the sense of 'imparting knowledge or assisting and guiding the development of body or mind'; and Starke J said that 'the essential idea of education is training or teaching'. The conception is unquestionably much wider than mere book-learning and wider than any category of subjects which might be thought to comprise general education as distinguished from education in specialized subjects concerned primarily with particular occupations. 27 Although in dissent on the application in the facts in Lloyd, Dixon CJ said (at 661) of the expression 'public educational purposes': The central or basal characteristics to which the exemption is directed may be seen in the schools, colleges, universities, technical schools and schools of art which are so familiar to us. It may be conceded that the application of the exemption is not restricted to such institutions. Instruction and training of the young may take many different forms and no doubt the expression 'public educational purposes' will find applications to systematic methods or procedures for the inculcation of knowledge whether scholastic or vocational, for the cultivation of the mental and physical powers and for the development of character although they may vary widely from those practised or illustrated in the examples of formal education that are more familiar to the community. 28 In my view, those words are apposite to the concept of the advancement of education as used in Pemsel. 29 The Land is used exclusively for the purposes set out in clause 2 and clause 3 of MITA's constitution. Those purposes and objects are clearly directed to the advancement of education in fields related to the automotive industry. The answer to the question posed as the first issue is yes. (Page 16)
Issue 2 - Is there a presumption that any use of land for the advancement of education is directed to the benefit of the public? 30 The parties were agreed that the question as to whether the advancement of education is directed to the benefit of the public involves two elements. The first is whether there is a benefit, in the sense that the use of the Land must involve or result in something which is good for the public. The second is whether there is a public benefit, in the sense of a benefit to either the general community or a sufficient section of the community to amount to the public. 31 Neither party contended that there was a presumption to be applied in relation to the second element. The issue between the parties was as to whether the first element is presumed where a purpose of advancement of education is presumed. 32 The respondent argues that the only division of charity in respect of which there is a presumption of a benefit to the public is that of the relief of poverty. Support for that proposition can be found in Oppenheim v Tobacco Securities Trust Co Ltd [1951] AC 297 where, at 305, Lord Simonds said that a trust is not charitable if it confers only private benefits, and continued: With a single exception, to which I shall refer, this applies to all charities. We are apt now to classify them by reference to Lord Macnaghten's division in Income Tax Commissioners v. Pemsel(20), and, as I have elsewhere pointed out, it was at one time suggested that the element of public benefit was not essential except for charities falling within the fourth class, 'other purposes beneficial to the community'. This is certainly wrong except in the anomalous case of trusts for the relief of poverty with which I must specifically deal. In the case of trusts for educational purposes the condition of public benefit must be satisfied. The difficulty lies in determining what is sufficient to satisfy the test, and there is little to help your Lordships to solve it. 33 More recently, the question was considered in the United Kingdom by the Upper Tribunal (Tax and Chancery Chamber) (Upper Tribunal) in Independent Schools Council and the Charity Commission for England and Wales & Ors [2011] UKUT 421 (TCC) (Independent Schools Council). The Upper Tribunal referred to Lord Wright's statement in National Anti-vivisection Society v Inland Revenue Commissioners [1948] AC 31 at 41 41 where his Lordship said: …. and trusts for the advancement of learning or education may fail to secure a place as charities, if it is seen that the learning or education is not of public value. The test of benefit to the community goes through the (Page 17)
whole of Lord Macnaghten’s classification, though as regards the first three heads, it may be prima facie assumed unless the contrary appears. 34 The Upper Tribunal said, at [67]: It is important to read Lord Wright’s dictum that a trust within the first three of Lord Macnaghten’s categories is prima facie for the benefit of the community in context. He was looking at the categories as concepts and saying that, when a particular purpose within a category comes to be examined, benefit to the community can prima facie be assumed unless the contrary appears. He does not, at least expressly, say that there is a presumption which can be rebutted. Nor does he say that evidence is necessary to displace the assumption. … We think that Lord Wright’s approach was simply a recognition of how a judge would deal practically with a particular case before him. He would start with a predisposition that an educational gift was for the benefit of the community; but he would look at the terms of the trust critically and if it appeared to him that the trust might not have the requisite element, his predisposition would be displaced so that evidence would be needed to establish public benefit. But if there was nothing to cause the judge to doubt this predisposition, he would be satisfied that the public element was present. 35 In Retirees WA (Inc) and the City of Belmont [2010] WASAT 56, Judge Pritchard (as Her Honour then was), at [156] considered whether public benefit was required to be established in relation to the charitable purpose of relief of the aged and the impotent. She said at [156]: In the case of gifts or charities for the relief of poverty, the longstanding historical approach has been that the requirement of a public benefit which is ordinarily required for a charitable purpose is not essential: Dingle v Turner [1972] AC 601. Although the relief of the poor appears in the same sub-category within the preamble to the Statute of Elizabeth I as relief of the aged and of the impotent, the disjunctive construction of those terms has meant that the exception from the rule regarding public benefit has been confined to relief of the poor: see G. Dal Pont, Charity Law in Australia and New Zealand, 2000, at 123 and the cases cited at footnote 106; see also the discussion in H. Picarda, The Law and Practice Relating to Charities, (2nd ed, 1995) at 39. It has therefore been held that charitable gifts for the relief of the aged must satisfy the requirement of public benefit: City of Hawthorn at 207 (Smith J, Pape J and Gillard J agreeing). 36 On the basis of those authorities, the respondent contends that there is no presumption of a benefit to the public in relation to the use of the Land for the advancement of education. 37 The applicant argues that, at least in Australia, the position is different from that explained in Independent Schools Council. (Page 18)
38 It relies for that contention on Nelan & Another v Downes & Others (1917) 23 CLR 546 (Nelan) at 559 and at 574, and on an observation of Keifel J in Aid/Watch Inc v Federal Commissioner of Taxation (2010) 241 CLR 539 (Aid/Watch). The latter case concerned whether the appellant was a charitable institution under the fourth of Lord Macnaghten's categories. The question of benefit for the community was thus squarely in issue. In her dissenting judgment, Keifel J said at [75]: The law assumes that the purposes of the relief of poverty and the advancement of education, the first and second classes referred to in Pemsel113, are for the public benefit. Such an assumption does not apply to the fourth class there referred to - 'other purposes beneficial to the community, not falling under any of the preceding heads'. A likely benefit to the public must be evident from the stated purposes and activities of an organisation. 39 Nelan concerned whether a gift to a priest to say masses was a charitable gift. Both Barton J (at 559) and Powers J (at 574) made reference to a judgment of Walker LC in O'Hanlon v Logue (1906) 1 IR 247 where he said: '… that in applying this principle [that a gift for the advancement of religion is a charitable gift], the Court does not enter into an inquiry as to the truth or soundness of any religious doctrine, provided it be not contrary to morals, or contain nothing contrary to law. All religions are equal in the eye of the law, and this especially applies since the abolition in this country of a State Church. Whether the subject of the gift be religious or for an educational purpose, the Court does not set up its own opinion. It is enough that it is not illegal, or contrary to public policy, or opposed to the settled principles of morality.' 40 None of the cases to which I have been referred suggests that an irrebuttable presumption of public benefit exists where a use (or gift or trust) for advancement of education is established. In my view, the 'assumption' referred to by Keifel J in Aid/Watch is no more than the prima facie assumption referred to by the Upper Tribunal in Independent Schools Council. It is always open, in any particular case, to consider whether the advancement of education does not confer a public benefit. An example given by the respondent, namely the establishment of a school for pickpockets, demonstrates the point. All of the authorities suggest, however, that the starting point where advancement of education is established is that a public benefit is present. That starting point may, however, be displaced in particular circumstances, or on examination of (Page 19)
the particular trust, or in this case, on examination of the particular purpose for which the Land is used.
Issue 3(a) - What is the benefit to the public that is said to arise from the MITA use of the Land? 41 MITA provides comprehensive vocational training in fields related to the motor vehicle industry. The respondent argued that 'the provision of automotive servicing or repairs is not, by its essential nature, of good to the community in any relevant sense. Contrast, for example, vocations such as nursing, teaching or social work. A use of land to provide for the training of nurses, teachers or social workers could readily be accepted as satisfying the first element of public benefit, as both the availability of training in these areas, and the product of such training, could easily be accepted as being for the good of the community'. (Original emphasis) 42 In my view, that distinction cannot be drawn. 43 First, it must be noted that the eighth item in the preamble to the Charitable Uses Act (1601) refers to 'the supportation, aid and help of young tradesmen handicraftsmen and persons decayed'. 44 Secondly, there are many fields, outside of what might be considered 'white collar occupations', where there is a very obvious need within our community for able and competent tradespeople. The passages set out above from Lloyd illustrate the law's acceptance of the proposition that vocational training is as much an educational activity as education conducted in schools, colleges and universities. (I acknowledged that Lloyd was concerned with the words of the particular statute concerned, but the principle is still applicable.) The respondent's submission recognised that there were two possible ways that MITA's use of the Land might be for the good of either the general community or a sufficient section of the community. The first was the availability of such training for those who wish to pursue a vocation in automotive servicing or repairs. The other is the product of that training - persons who, as a result of the training, are able to carry out automotive servicing or repairs. It is benefits of that general nature which the law assumes from the advancement of education. Those benefits provide the answer to subissue 3(a). 45 The respondent also submitted that the use of the Land by MITA is not limited to providing training and automotive servicing or repairs to persons who are 'in need'. That submission ignores the well accepted position in relation to the legal and technical sense in which the term (Page 20)
'charitable' is used as explained by Barwick CJ in Incorportated Council of Law Reporting (Q) v Federal Commissioner of Taxation (1971) 125 CLR 659 (Incorporated Council of Law Reporting Queensland) at 669 where he said: Yet it must be considered whether that benefit is charitable in the Elizabethan sense. Out of certain of the instances given in the preamble to the Act of 1601 a broad concept emerges of the kind of object of public utility which will satisfy the quality of charity. Any notion that that concept is of an eleemosynary nature is seen to be untenable by some of those very instances themselves, e.g. the repair of bridges, havens, causeways, seabanks and highways and the setting out of soldiers. Further, these instances seem to regard the provision of some of the indispensables of a settled community as charitable. 46 It is not necessary that, in order to be considered a charitable purpose by way of providing for the advancement of education that the education be offered to persons in need or that those who benefit from the availability of the person so educated are themselves in need.
Issue 3(b) - Is the benefit available to the general community or a sufficient section of the community to constitute the public? 47 It can be noted that the respondent made two significant concessions. The first is that it did not dispute that the training provided by MITA by way of the use of the Land is open and made available to anyone who wishes to undertake such training, in the sense of not being limited to persons who are members of MITA or by reference to any other limitation or criteria. 48 The second was that the fees charged by MITA for the training that it provides by way of the use of the Land do not, of themselves, preclude satisfaction of either element of the public benefit requirement. This is particularly so, the respondent accepted, as the fees are largely set by the Department of Training and Workforce Development, are not prohibitive and are the same for all registered training organisations, and also because there are provisions for the reduction or waiver of fees in circumstances of need. 49 Notwithstanding those concessions, the respondents argued that the limited and specialised areas of the training, amongst the broad scope of possible vocations or employment, is such that any benefit or good that flows from the availability of training in these areas is not a direct benefit to the general community. That was said to be because 'only a limited number of people will have any desire for such training' and that 'there is (Page 21)
no evidence to support a finding that the section of the community that does desire training in these particular areas, and therefore obtains a direct benefit from the use of the Land, is itself sufficient to amount to the public'. 50 The numbers of apprentices and trainees enrolled during the relevant years are set out above. In total there were 454 students enrolled in 2010/2011, and 551 students in 2011/2012. That is a significant number of students. The MITA courses are open, subject to some exceptions which are not relevant for present purposes, to anyone who seeks to undertake a course. They are, in that sense, available to the public generally. The fact that not every member of the public seeks employment in the motor industry, hardly sets MITA apart from any other institution providing vocational training. 51 The question as to whether a purpose is a public one was discussed by Newnes AJA in YungngoraAssociation at [50] - [51] where he said: 51 In Thompson v Federal Commissioner of Taxation, Dixon CJ (at 323 - 324) referred with approval to the following description by Lowe J in Re Income Tax Acts (No 1) [1930] VLR 211 of what, in this context, constitutes the public or a section of the public: Having regard to the composition of the public, certain large groups may readily be recognised, the members of which have a common calling or adhere to a particular faith or reside in a particular geographical area. There is no bar which admits some members of the public to those groups and rejects others. Any member of the public may, if he will, follow a particular calling, adhere to a particular faith, or reside within a particular area. Of the members of such a group it may be said in a real sense that they are primarily members of the public, and such a group may well constitute a section of the public. They stand on one side of the line. Each group, it is true, may consist of many individuals, but number alone is not the criterion by which to determine whether the group constitutes a section of the public. A club, a literary society, a trade union may all have numerous members, but I think that none of these could properly be called a section of the public. They stand on the other side of the line. The distinguishing feature of each of these latter bodies is that it is an association which takes power to itself to admit or exclude members of the public according to some arbitrary test which it sets up in its rules or otherwise. Each of them does oppose a bar to admission within it. It is not one of the groups into which the community as a matter of necessary organization or by convention is divided, but it is in a sense an artificial entity which exists for the benefit of its members as members thereof and not as members of the public (222 - 223). 52 The fact that some individuals who do not fall within the class sought to be benefited may succeed in taking advantage of the benefits intended for that class, does not detract from the charitable nature of purposes which are otherwise charitable: Pemsel, 583, Salvation Army (Vic) Property Trust v Shire of Fern Tree Gully, 174. (Page 22)
52 It cannot be said that, in any sense, MITA exists as a body for the benefit of its members or, in any relevant sense, seeks to admit or exclude members of the public to its courses according to some arbitrary test. The answer to subissue 3(b) is that the benefit provided by the education services carried on by MITA is available to the general community
Issue 3(c) - Does MITA provide a direct benefit to individuals? 53 Clearly those who undertake the education and training offered by MITA receive the direct benefit of that education and training by obtaining accreditation in their field within the automotive industry. That is a benefit which accrues to any person who successfully undertakes an education course. That consequence does not mean that the use of the Land by MITA is not for a charitable purpose. The objects of MITA are directed primarily to the provision of educational services. Beyond making that observation, it is not necessary to deal further with subissue 3(c).
Issue 3(d) - Is the direct benefit to individuals subordinate, incidental or subsidiary to any public benefit? 54 This question appears to be based on the proposition that where a use of a land is both charitable and noncharitable, it will not enjoy charitable status unless the noncharitable use is subsidiary or subordinate or incidental to the charitable use. There are many cases which wrestle with that question - see for example Federal Commissioner of Taxation v Cooperative Bulk Handling Ltd (2010) 189 FCR 322, Incorporated Council of Law Reporting of Queensland, and Tasmanian Electronic Commerce Centre Pty Ltd v Commissioner of Taxation (2005) 142 FCR 371. 55 In my view, the nature of the private benefit, namely the conferral of accreditation on the participants in training, is clearly an incident of the carrying out of the charitable purpose. There are many charitable activities, in both the ordinary sense of that expression, and in the legal or technical sense, which result in a tangible benefit being conferred on an individual. It is the very product of the charity. 56 The benefit to the public is the provision by MITA of educational services to the public generally. It is that purpose for which the Land is used. The fact that individuals benefit by receiving vocational education is a necessary incident to the carrying out of that charitable purpose.
Conclusion 57 For the foregoing reasons, the respondent's decision to refuse the objections to its rate record for the 2010/2011 and 2011/2012 rating years should be set aside. There should be a declaration that the applicant's land at 10 Injune Way, Joondalup is exempt from rates under s 6.26(2)(g) of the LG Act.
Orders |