Uniting Church Homes (Inc) and City Of Stirling

[2005] WASAT 191

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   DEVELOPMENT & RESOURCES

ACT:   LOCAL GOVERNMENT ACT 1995 (WA)

CITATION:   UNITING CHURCH HOMES (INC) and CITY OF STIRLING [2005] WASAT 191

MEMBER:   JUSTICE M L BARKER (PRESIDENT)

MR D R PARRY (SENIOR MEMBER)
MR P McNAB (MEMBER)

HEARD:   2 AND 3 JUNE 2005

DELIVERED          :   19 AUGUST 2005

FILE NO/S:   RD 6 of 2004

BETWEEN:   UNITING CHURCH HOMES (INC)

Applicant

AND

CITY OF STIRLING
Respondent

FILE NO/S              :RD 7 of 2004

BETWEEN              :UNITING CHURCH HOMES (INC)

Applicant
AND

CITY OF STIRLING
Respondent

FILE NO/S              :RD 338 of 2005

BETWEEN              :CHURCHES OF CHRIST HOMES AND COMMUNITY SERVICES (INC)

Applicant

AND

CITY OF STIRLING
Respondent

Catchwords:

Local Government ­ Rating ­ Exemption ­ Whether land used exclusively for charitable purposes ­ Aged housing ­ Independent living units ­ Lease-for-life ­ Minimum age for entry 55 years ­ Average age of residents significantly older than 55 years ­ Entry and on-going payments generally required ­ Entry payment determined by market value ­ Whether land was used exclusively for relief of the aged

Legislation:

Aged Care Act 1997 (Cth), s 2.1(1)(j)

Charitable Uses Act 1601 (Eng), preamble

Local Government Act 1995 (WA), s 6.26(1), s 6.26(2)(a)(i), s 6.26(2)(g), s 6.26(6), s 6.39, s 6.41, s 6.44, s 6.76, s 6.77

Result:

1. Applications for review of the decisions of the City of Stirling to disallow Uniting Church Homes (Inc)'s objections to the City's rate record for the 2004 ­ 2005 financial year in relation to property no. 205879, Chrystal Halliday Homes, 61 Jeanes Road, Karrinyup, and in relation to property no. 107407, Rose Mount, 21 Dianella Drive, Dianella, and the decisions of the City of Stirling to disallow Churches of Christ Homes and Community Services (Inc)'s objections to the City's rate record for the 2004 ­ 2005 financial year in relation to property nos. 120298 and  120297, Carinya Village, 2 and 20 Plantation Street, Menora, and in relation to property no. 131264, Geneff Village, 39 Hertha Road, Innaloo, upheld.

1. Uniting Church Homes (Inc)'s objections and Churches of Christ Homes and Community Services (Inc)'s objections allowed on the ground that there are errors in the City's rate record for the 2004 ­ 2005 financial year on the basis that the land is not rateable land under s 6.26 of the Local Government Act 1995 (WA).

1. Rate notices given by the City of Stirling to Uniting Church Homes (Inc) (ref 1020587953 and ref 1010740721) and to  Churches of Christ Homes and Community Services (Inc) (ref 1012029889, ref 1012029769 and ref 1013126482), each dated 13 August 2004, set aside insofar as they require the payment of "residential and other rates" specified in the notices.

Category:    A

Representation:

RD 6 of 2004

Counsel:

Applicant:     Mr MJ McCusker QC with Mr JS Hudson

Respondent:     Mr GR Donaldson SC with Mr CA Slarke

Solicitors:

Applicant:     Jackson MacDonald

Respondent:     McLeods

RD 7 of 2004

Counsel:

Applicant:     Mr MJ McCusker QC with Mr JS Hudson

Respondent:     Mr GR Donaldson SC with Mr CA Slarke

Solicitors:

Applicant:     Jackson MacDonald

Respondent:     McLeods

RD 338 of 2005

Counsel:

Applicant:     Mr MJ Buss QC with Mr PL Harris

Respondent:     Mr GR Donaldson SC with Mr CA Slarke

Solicitors:

Applicant:     Ilberys Lawyers

Respondent:     McLeods

Case(s) referred to in decision(s):

City of Hawthorn v Victorian Welfare Association [1970] VR 205

Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531

D V Bryant Trust Board v Hamilton City Council [1997] 3 NZLR 342.

Hilder v Church of England Deaconess' Institution Sydney Ltd [1973] 1 NSWLR 506

Joseph Rowntree Memorial Trust Housing Association Ltd v Attorney-General [1983] 1 All ER 288

News Limited v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563

Royal Choral Society v Commissioners of Inland Revenue [1943] 2 All ER 101

Ryde Municipal Council v Macquarie University (1978) 139 CLR 633

Salvation Army (Vic) Property Trust v Shire of Fern Tree Gully (1952) 85 CLR 159

Shire of Ashburton v Bindibindi Community Aboriginal Corporation [1999] WASC 108

The Incorporated Council of Law Reporting for England and Wales v Attorney-General [1971] 3 All ER 1029

Trustees of Church Property of the Diocese of Newcastle v Lake Macquarie Shire Council [1975] 1 NSWLR 521

West Australian Baptist Hospital & Homes Trust Inc v City of South Perth [1978] WAR 65.

Case(s) also cited:

Anglican Homes Inc v Town of Mosman LVT, WA, Appeal No 47 of 1981/82, 18 May 1982, unrep)

City of Hawthorn v Victorian Welfare Association (1969) 24 LGRA 289

Commissioners of Taxation v Trustees of St Mark's Glebe [1902] AC 416

Diethelm Manufacturing Pty Ltd v Federal Commissioner of Taxation (1993) 116 ALR 420

Mayor and Councillors of the Municipality of North Fremantle v Saw (1906) 8 WALR 164

Minister for Immigration and Ethnic Affairs v Sciascia (1991) 103 ALR 307

NSW Nursing Service and Welfare Association for Christian Scientists v Willoughby Municipal Council [1968] 2 NSWR 791

Nunawading Shire v Adult Deaf and Dumb Society of Victoria (1921) 29 CLR 98

Oxfam v Birmingham City Council [1976] AC 126

Presbyterian Church (NSW) Property Trust v Ryde Municipal Council [1978] 2 NSWLR 387

Public Service Association of New South Wales v Industrial Commission [1985] 1 NSWLR 627

R v Connors (1990) 20 NSWLR 438

Re Alcan Australia Ltd; ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 123 ALR 193

Re Cottam's Wills Trust - Midland Bank Executor and Trustee Co Ltd and Anor v Huddersfield Corporation and Ors (1955) 3 All ER 704

Re Estlin, Pritchard v Thomas (1903) LJ Ch 687

Royal National Agricultural and Industrial Association v Chester (1974) 48 ALJR 304

Sisters of Mercy Property Association v Town of Newtown (1944) 69 CLR 369

Sydney Grammar School v Sydney City Council (1957) 3 LGRA 68

Tak Lau Kwa v City of Stirling (SC, WA 17 June 1998, unrep)

Uniting Church in Australia Property Trust (NSW) v Kogarah Municipal Council (1986) 61 LGRA 154

REASONS FOR DECISION OF THE TRIBUNAL: 

Summary of Tribunal's decision

1. Uniting Church Homes (Inc) and Churches of Christ Homes and Community Services (Inc) applied for review by the Tribunal of the decisions of the City of Stirling to disallow their objections to the City's rate record for the 2004-2005 financial year in relation to four properties.  The properties comprised or included "independent living units", which were self-contained, supported residential units, available for occupation by people aged 55 years or older.

2. The properties in question were rated for the first time in the 2004-2005 financial year, together with six other properties which provided aged persons' accommodation in the City's local government area.  In total, four applicants sought review by the Tribunal of the City's decisions in relation to the rating of nine properties.  The Tribunal identified and case-managed all of these proceedings together.  The representatives of the parties identified the four properties in question in the present proceedings as appropriate "test" cases, the determination of which was likely to result in the resolution of the other proceedings, without the need for a hearing.  The identification of the "test" cases and the case management considerably shortened the hearing.

3. The critical question was whether the land on which the independent living units were erected was exempt from rates for the 2004-2005 financial year, on the basis that it was used exclusively for the charitable purpose of relief of the aged.

4. The Tribunal determined that the land was used exclusively for the charitable purpose of relief of the aged.  "Charitable", in this context, had a legal meaning, not a popular meaning.  Accommodation of aged persons was "relief of the aged".  The residents in occupation of the independent living units, who had an average age in their 80's, were "aged".  The applicants operated their facilities on a not-for-profit basis.  The fact that residents were generally required to purchase the right to occupy their unit, in some cases at market value, and pay maintenance fees, did not alter the "charitable" characterisation of the use, as a matter of law.

5. The Tribunal, therefore, upheld the applications for review, and allowed the applicants' objections to the rate record on the basis that the land was not rateable land.  The Tribunal set aside the City's rate notices insofar as they required the payment of rates.

Introduction

1. These proceedings involve applications for review of the decisions of the City of Stirling to disallow objections made by Uniting Church Homes (Inc) and by Churches of Christ Homes and Community Services (Inc) to the City's rate record for the 2004 ­ 2005 financial year, on the ground that certain land included in the rate record is not rateable land.  The land in question is known as:

   Chrystal Halliday Homes, 61 Jeanes Road, Karrinyup (Uniting Church Homes);

   Rose Mount, 21 Dianella Drive, Dianella (Uniting Church Homes);

   Carinya Village, 2 and 20 Plantation Street, Menora (Churches of Christ Homes); and

   Geneff Village, 39 Hertha Road, Innaloo (Churches of Christ Homes).

2. These properties comprise or include "independent living units", which are self­contained, supported, residential units, "in a village atmosphere", operated by Uniting Church Homes or Churches of Christ Homes.  The independent living units may only be occupied by people aged 55 years or older, who are relatively mobile and independent, although the average age and, with one exception, the minimum age of the residents of the units in question is significantly older than 55.

3. Except in the case of one facility, where residents occupy units on the basis of a fixed­term lease, residents are generally required to pay a capital sum, determined in a variety of ways, and a fortnightly maintenance fee.  In the case of one facility, an intending resident needs to purchase the right to occupy the unit for life from a former resident or his or her estate, at market value.  In the case of another facility, the amount of the entry contribution is determined on the basis of market value.

4. Uniting Church Homes and Churches of Christ Homes are each non­profit organisations.  Their object is to provide aged­care residential and other services.  In doing so, they do not aim to make a profit.  Any surplus which is achieved from a particular facility is used to fund the capital or operating costs of providing aged-care residential and other services.

5. The critical question in these proceedings is whether the land on which the independent living units are erected is exempt from rates for the 2004 ­ 2005 rating year, on the basis that it is used exclusively for the charitable purpose of relief of the aged.

6. Section 6.26 of the Local Government Act 1995 (WA) (the Act) provides, in part, as follows:

   "6.26.  Rateable land

   (1)Except as provided in this section all land within a district is rateable land.

   (2)The following land is not rateable land ­

   (a)land which is the property of the Crown and ­

   (i)is being used or held for a public purpose; … [or]

   (g)land used exclusively for charitable purposes; …

   (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."

7. Section 6.39(1) of the Act provides that, as soon as practicable after a local government has resolved to impose rates in a financial year, it is to ensure that a rate record is compiled, for that financial year, of all rateable land in its district.  Section 6.41(1) requires a local government to give the owner of rateable land a rate notice.  Section 6.44 obligates the owner of land on which a rate has been imposed to pay the rate to the local government.

8. Section 6.76(1) of the Act confers a right on a person to lodge an objection with the local government in relation to the rate record on certain grounds, including that it contains an error in that land is not rateable land. Section 6.76(5) states that the local government may either disallow an objection or allow it, in whole or in part.  Section 6.77 provides that any person who is dissatisfied with the decision of a local government on an objection made by that person under s 6.76, may apply to the State Administrative Tribunal for a review of the decision.

9. In these reasons, we will, at first, set out the background to the proceedings, and the reasons put forward by the City for its decision to rate the land in question.  Next, we will refer to important aspects of the management and conduct of the proceedings.  We will then refer to key elements of the evidence, before considering what is meant by the expression "land used exclusively for charitable purposes", whether the land in question is used exclusively for the charitable purpose of relief of the aged with respect to the 2004 ­ 2005 financial year.

10. For reasons set out below, the Tribunal has determined that the land in question is not rateable land for the purposes of the 2004 ­ 2005 financial year, as it is used exclusively for the charitable purpose of relief of the aged.  Accommodation of aged persons is "relief" of the aged.  There is little doubt that the residents in occupation of the independent living units on the land are relevantly "aged".  The applicants operate on a "not­for­profit" basis.  The fact that residents are required to purchase the right to occupy their unit, and pay fees, does not alter the charitable characterisation of the use.

11. The question as to whether a person aged 55 years is "aged" does not arise for determination in the proceedings, as the land in question is not in fact used, for the purposes of the 2004 ­ 2005 financial year, to accommodate residents of that age.  However, it is arguable that the accommodation of persons aged at least 55 years in the facilities in question would constitute relief of the "aged" and, therefore, a charitable purpose.  While a 55­year­old may not be "aged", the fact that that is the minimum age for entry into the facilities in question, and that some 55­year­olds may occupy independent living units until they become aged and thereafter for the remainder of their lives or until they require a higher level of care, does not mean that the land is used for a collateral purpose of simply providing residential accommodation.  Arguably, in the facilities in question, the accommodation of 55­year­olds, if that ever occurs, is either reasonably necessary to the fulfilment of the charitable purpose of relief of the aged or is an inevitable concomitant of the pursuit of that purpose.

Background to the proceedings and the City's reasons

1. The City filed and served reasons for its decisions to disallow the applicants' objections to the rate record under s 24 of the State Administrative Tribunal Act 2004 (WA). According to the City's reasons, although the land in question appeared on land valuation rolls supplied by the Valuer General under the Valuation of Land Act 1978 (WA), the City had not, prior to the 2004 ­ 2005 financial year, included the land in its rate record. Consequently, prior to the 2004 ­ 2005 financial year, the City had not given rate notices in relation to the land.

2. The scope of the rating exemption for charitable purposes has been a topic for discussion at informal gatherings of local government rating and finance officers for some time.  At the request of the Minister for Local Government and Regional Development, the Local Government Advisory Board is undertaking an inquiry in relation to this issue.  The City prepared a background document for the Board, which includes the following:

   "WHY WEREN'T THE LEASE-FOR-LIFE RETIREMENT VILLAGES RATED PRIOR TO 2004?

   Retirement villages and the facilities that they offer have changed considerably over the last 20 years or so.  Lease-for-life villages seem to have developed over the last 10 ­ 12 years but have only just been identified as having changed the use of properties previously exempt under charitable provisions of the current and previous Local Government Act.  Prior to their development into their current form, most properties consisted of low cost or subsidised housing which was means tested, provided crisis accommodation, was only occupied by aged persons and prioritised by need.  Occupancy was routinely provided on a rent-paying basis.

   Current and previous rates officers have been unaware of the change in 'nature' of these retirement villages and the changes in the method of operating and quality standards they present.

   Awareness of the evolution of these properties was raised through advertisements in the general real estate pages of 'The West Australian'.  There, one can often find offers to purchase a 'lease for life'.  Once the awareness had been raised, further details were sought to consider the exemption issue.

   Research was undertaken by various means including the promotional material provided by the developments and the Internet.  Where previously there was some supportable claim to using the properties for providing charity, this had changed to providing developments with many features and facilities to anyone who has the money to 'buy' a lease for life.  The conclusion reached was that the change in use was such that the exemptions previously given by the City were no longer valid.

   Although many of these lease-for-life retirement villages are owned and operated by charities or church-related incorporated bodies, it was clear that they were being operated as a business and generating profit.  Accordingly, it was determined that rates were applicable and it was determined that rate notices would be issued.

   So far, the City has rated 10 retirement villages where 4 of the village operators are church-related bodies.  Each has vigorously objected to being rated and each continues to claim that because the village owner is church­related it must mean that the use of the property is therefore charitable.

   The fact remains that these villages are expensive forms of housing and if you do not have the money to 'buy' a lease and to pay the weekly or monthly service fees charged by these villages you cannot move in.

   The City of Stirling has concluded that the 'use' of these properties is not charitable ­ it is simply residential.

   Residents of independent living units must be able to be self­supporting and as such will make full use of Council services."

3. According to the City's reasons, the "research" it undertook for the purpose of deciding whether to rate the ten retirement villages for the first time in 2004 ­ 2005 was "informal" and "limited", and was not "specifically documented".  It "involved an identification of properties believed to be such facilities through local knowledge and the City's GIS system, the examination of newspaper advertisements offering places for accommodation at such facilities, the browsing of internet sites and the external inspection of properties".  The only documentary "research" produced was extracts from Uniting Church Homes' and Churches of Christ Homes' web sites.

4. The City also produced a schedule of 50 properties containing "aged persons' accommodation" in its local government area.  These include 10 private facilities, which have been historically rated, and 40 facilities, operated by a variety of religious and community organisations, which have not been historically rated.  The schedule indicates that 11 of these 40 properties, comprising 10 aged­care residential facilities, were rated for the first time in the 2004 ­ 2005 financial year.  Nine of the 11 properties are the subject of these or other proceedings pending before the Tribunal.

5. According to the City's reasons, its "internet research" had indicated that the 11 properties "offered 'lease­for­life' arrangements to residents at what appeared to be commercial rates" and appeared "to be operating in a commercial way".  However, the extracts from Uniting Church Homes' and Churches of Christ Homes' web sites, which were attached to the City's reasons, do not support this conclusion.

1. According to the City's reasons, a further 10 properties "have been identified for the issue of rate notices subject to the outcome of these appeals".  Twelve other properties "have been identified for further investigation".

2. The City's reasons state that:

   "From the limited inquiries made, the City's administration has formed the view that, on the face of it, [the properties in question in these proceedings] are being used to provide residential accommodation for people above a certain age and that this does not provide a justifiable basis for the administration continuing to simply assume that the use is charitable and that the land is, therefore, not rateable."

3. A decision was, therefore, made by the City to include the properties in question in its rate record for the 2004 ­ 2005 financial year, and to give rate notices for that year. The notices were given on 13 August 2004, and require the payment of "residential and other rates" of $13,917.28 (Chrystal Halliday), $33,046.58 (Rose Mount), $62,014.19 (Carinya Village) and $11,342.58 (Geneff Village). Each applicant objected to the rate record on the ground that the land is exempt from rates under s 6.26(2)(g) of the Act. Churches of Christ Homes provided detailed factual and legal submissions from its solicitors.

4. The City disallowed each objection.  The City accepted that relief of the aged is a recognised charitable purpose, but said that it is "not convinced that the provision of accommodation on its own is 'relief' of any kind or that persons over the age of 55 are necessarily aged in contemporary society".

Case management and conduct of the proceedings

1. While all matters in the Tribunal are case-managed, the Uniting Church Homes proceedings and three other related proceedings were identified at the initial directions hearing for special case management before two members, who subsequently formed part of the panel which determined the proceedings.  At the first special directions hearing, the solicitors for Uniting Church Homes and the City drew the Tribunal's attention to the existence of other proceedings, which had been, or were about to be commenced, arising out of the City's decision to rate properties comprising or including independent living units for the first time in the 2004 ­ 2005 financial year.

2. The Tribunal identified proceedings brought by four applicants in relation to 10 properties (including one in a different local government area), which raised common issues, and then case managed these proceedings together.  The Tribunal also indicated the firm view that the matters should be heard, if at all possible, on the basis of agreed statements of facts, rather than witnesses being called to give evidence in the traditional way.  Directions were made for the parties to prepare agreed statements of facts.  This process was then kept under review by the Tribunal.

3. At the next directions hearing, the solicitors representing the four applicants and the City identified these proceedings as appropriate "test" cases, the determination of which is likely to result in the resolution of the other proceedings, without the need for a hearing.  As will be seen, the characteristics of the facilities selected by the parties are quite varied, in terms of the particular aged­care residential and other services provided on site, the basis on which residents occupy independent living units, and the method of determination and the quantum of the capital and maintenance payments required from residents.

4. The City's solicitor indicated that her client also wished to rely on valuation evidence.  The Tribunal made directions for the City's valuer to provide a statement to the applicants' valuer and for the valuers to confer and prepare a joint statement of matters agreed, matters not agreed, and the reasons for any disagreement.  While the applicants' solicitors maintained that valuation evidence is irrelevant in relation to the matters in issue, they co­operated between themselves, by retaining a common valuer, and with the City's solicitor, by ensuring that the valuers conferred and prepared the joint statement.

5. Ultimately, the Tribunal held four short special directions hearings.  The parties produced separate, agreed statements of facts and documents in relation to the Uniting Church Homes and the Churches of Christ Homes proceedings, with the latter document incorporating part of the former.  At the final hearing, the valuers gave evidence on the basis of their joint statement, concurrently.

6. As a result of the identification of appropriate test cases, case management, use of agreed statements of facts and documents, and the conferral and concurrent evidence of the experts, a final hearing which might well have occupied up to two weeks, took the equivalent of one hearing day.  The parties and their representatives are to be congratulated for the co­operative and sensible approach they took in relation to the preparation of the statements of facts and documents, and generally in relation to the preparation and conduct of the proceedings.

What are independent living units?

1. The term "independent living unit" is used in Australia to refer to supported housing provided for older people, which is typically purpose­built so as to be largely "barrier­free", with appropriate railings, bathroom and other facilities.  Independent living units are often, although not necessarily, co­located with a hostel and/or nursing home.  "Support" can take a variety of forms, including delivered services from a hostel/nursing home, on­site staff, or community services, and the provision of an emergency alarm system.

2. Independent living units are designed to permit "ageing in place" as a resident's care needs increase.  This is consistent with an object of the Aged Care Act 1997 (Cth), "to promote ageing in place through the linking of care and support services to the places where older people prefer to live": s 2.1(1)(j). The "ageing in place" model of aged­care is motivated by research which indicates that mental and physical deterioration occurs when frail, older people are moved from one setting to another.

3. In the United Kingdom, the term "sheltered housing" is used to describe the same type of accommodation as that provided by independent living units in Australia, while in the United States of America, the terms "assisted living" and "congregate housing" are used.  According to the agreed facts in the Uniting Church Homes proceedings, these alternative terms "probably more accurately reflect the role that [independent living units] are fulfilling, particularly now, in Australia".  While independent living units are "independent", compared to institutional care, they are occupied by older people increasingly "dependent" on support services.  People currently entering independent living units tend to be more dependent than in earlier times, because of the increasing emphasis on more extensive community care services.  They are also more likely to remain in their independent living units for the rest of their lives, and not "transfer" to a higher level of care in a hostel or nursing home.

4. In addition, it is often the case with couples that one spouse is still relatively independent, while the other spouse is more frail and dependent.  A move to an independent living unit can permit the couple to remain together, and avoid the need for the more dependent spouse to move into a higher-care residential facility.

5. A considerable amount of research has been undertaken in relation to the reasons why people move into retirement villages, and their levels of satisfaction once in that environment.  A Curtin University report published in 1994 found that, although two­thirds of those interviewed said that they had health problems or disabilities that restricted their normal daily activities in some way, the overall level of satisfaction with life in their independent living unit was reasonably high.  The study also found that 73 per cent of those interviewed expressed a desire to stay in their own unit, with extra help, rather than move to a higher level of care.

6. A report entitled "Living In a Retirement Village ­ Attitudes, Choices and Outcomes", published by the Australian Housing and Urban Research Institute in 1999, indicates that the four most consistently reported reasons why people move into retirement communities are the need for increased security in the sense of peace of mind, maintenance and upkeep of the resident's former home, children having moved away, and the death of a spouse.

7. A report published by Arthur Andersen in 2000, entitled "Issues and Impacts of Longevity ­ Do Residents in Retirement Villages Live Longer?", found that the five most important benefits of retirement villages are security, sense of community, village location, access to medical support and better health management.  It indicates that the average length of stay in an independent living unit is 10 to 12 years, which represents a longer life expectancy than the average for non­residents.

8. In this context, according to the agreed facts, independent living units, "with their congregate or grouped setting represent a desirable choice for some older people, with the potential for mutual support in a situation where an older person would otherwise be isolated in the community, with an increased risk of loneliness".  Other benefits include actual and perceived security, improved nutrition through being able to access meals cooked in the village, and increased physical activity.

9. The agreed facts, in relation to the independent living units at Chrystal Halliday Homes, include the following:

   "Residents of the independent living units have the companionship of other residents and sense of community and security whilst maintaining a flexible and independent lifestyle.  Typically, residents feel more secure living in an independent living unit than if they lived alone in the wider community.  Typically, the cognitive ability of the residents in the independent living units is greater than if they were living alone in the wider community."

10. It was agreed that there are similar benefits for the residents at Rose Mount.  The Tribunal infers that residents of Churches of Christ Homes' facilities also enjoy similar benefits.

Uniting Church Homes and Churches of Christ Homes

1. Uniting Church Homes was incorporated by the Uniting Church in Australia to operate its aged­care facilities.  The stated "Mission" (Constitution cl 2) and "Object" (Constitution cl 3) of Uniting Church Homes is "to journey with elderly people in maximising their independence and enjoyment of life through the provision and support of quality care and associated services as an expression of Christian values and within a Christian environment".  Uniting Church Homes has 17 residential aged­care facilities in Western Australia.

2. Uniting Church Homes operates its facilities for the sole purpose of providing services to the aged, in accordance with its Mission and the laws of the Church.  It is a non­profit organisation, and all of its income and property are applied to the provision of aged­care accommodation and other services.  It is registered as a public benevolent institution by the Australian Taxation Office, and approved as a charitable institution by the State Taxation Department.  It does not consider the wealth of any resident as relevant to their aged­care needs.

3. Each facility operated by Uniting Church Homes is run as a separate "cost centre" for the purpose of financial administration and reporting.  Each performs differently on a financial level.  Rose Mount is operated as a single cost centre, whereas Chrystal Halliday contains six cost centres (nursing home, hostel, day therapy centre, community care programme, independent living units and serviced units).  The cost centres report separately, and their financial results feed into Uniting Church Homes' consolidated accounts.  Ideally, Uniting Church Homes aims for each cost centre to break even on an operating basis.  However, current or future fees paid by residents are not affected by whether a cost centre runs at an operating deficit or surplus in any given year.  Similarly, services at a cost centre which runs at a deficit in any given year will not be cut in order to "break even" in the next year.  Such "commercial" considerations, according to the agreed facts, "are not relevant to Uniting Church Homes, which is operated to meet the needs of its residents and not to make a commercial gain".  Any surpluses are retained in order, first, to partly offset the accumulation of deficits, and second, to fund ongoing capital expenditure programmes.

4. Churches of Christ Homes was established by the Churches of Christ of Western Australia as a welfare outreach service.  Its "Objects" (Constitution cl 3) include "for charitable purposes and as a public benevolent institution … to provide accommodation for aged persons and disabled persons …".  It specialises in the development and management of accommodation facilities designed to cater for the aged and disabled.  It owns 15, and operates 18, residential aged­care facilities in Western Australia.

5. Churches of Christ Homes is a non­profit organisation.  Any surplus generated by its aged­care operations is spent on aged­care service delivery or the creation of new or additional aged­care services and facilities.  It is registered as a public benevolent institution and as a charitable institution by the Australian Taxation Office.

6. Except in cases of disability, residents of Churches of Christ Homes' facilities must be at least 55 years of age and need the type of accommodation in question.  However, the average age of all independent living unit residents in its facilities is 85 years.

The facilities on the land in question

Uniting Church Homes' facilities

1. Chrystal Halliday Homes occupies two parcels of land, Karrinyup Lot 465 and Portion of Swan Location 7445.  Karrinyup Lot 465 is held under a Crown Grant on trust for use solely for "aged persons facilities".  The facility includes 36 independent living units, a 24­bed nursing home, a 41­bed hostel, 20 serviced units, a day care centre for the elderly, and a community care office for the provision of community care programmes.  The independent living units are arranged in nine, two­storey blocks of four units each, which are located close to one another and connected by footbridges.  With the exception of one two­bedroom unit, all units are one­bedroom.  The units were described by Mr GB Whyte, a valuer who gave evidence for the City, as "very old and very small with very dated standards of appointment inside".  From the photographs in evidence, they appear to have been built in the early 1970's.  There are currently 45 residents in the independent living units, not including three residents who physically live in the units, but are treated as part of the serviced unit programme.

2. The independent living units are occupied by residents on the basis of a non­exclusive licence.  While the units are available to people aged 55 years or older, the youngest resident is 72, and the average age of the residents is over 82.  The oldest resident is 96 years of age.

3. Uniting Church Homes provides each resident of the independent living units at Chrystal Halliday with a mobile call button to enable help to be obtained in an emergency.  The call buttons are connected through a wireless system to a 24­hour monitoring service, provided by a contracted security company.  If the button is pressed, the security company will telephone the resident's unit in the first instance.  If there is no response, its staff will immediately attend the resident's unit, and telephone the manager of the independent living units.

4. If a resident has particular concerns over his or her security or frailty, he or she can request a staff member from the administration staff, during the week, and from the nursing home, at weekends, to give a morning phone call to check on the resident's well-being.  Meals prepared in Chrystal Halliday's central kitchen are available to residents of the independent living units at a fee.  The residents of the independent living units have a social committee which organises outings.

5. While residents of the independent living units are encouraged to be as independent as possible, as the care needs of a resident increase to a point where it is required, the manager will arrange for the provision of a "community aged­care package".  These packages offer a co­ordinated set of services for frail, older people, to assist with matters such as personal care, bathing, dressing, housework and laundry, meal preparation and assistance, transport to shops or medical appointments, companionship/social activities, respite care, medication prompts and supervision.  The packages are provided, and mainly funded by the Commonwealth, although recipients are required to contribute up to a certain percentage of income.  Currently seven residents in the independent living units at Chrystal Halliday receive a community aged­care package.

6. Rose Mount is a residential facility comprised exclusively of independent living units.  There are 75 units, arranged in single­storey and two­storey buildings, spread across a large site.  There are one­, two­ and three­bedroom units.  The evidence does not disclose precisely when these units were built, although from the photographs in evidence, it was probably in the mid-1980's.  As at 16 March 2005, there were 85 residents.

7. There is also a central "club area", which contains the dining room, library (used variously as a chapel, music room and quiet area), a self­service kiosk, an activities room (with an exercise area and pool table), hairdressing salon, and the office of the village co­ordinators.  Lunch, afternoon tea and dinner, prepared by external contractors and available at a fee, is served in the dining room.  There is also a swimming pool and barbeque area.  The residents at Rose Mount have a social committee which organises outings and on­site activities.

8. Residents occupy units at Rose Mount on the basis of a lease for life.  The minimum age for entry is 55 years.  However, the youngest resident is 62, and the average age of residents is 81.  The oldest resident is 93 years of age.

9. Rose Mount is managed by a husband and wife team who live on site.  They provide "emotional, physical and social" support for the residents.  All the units have call buttons for use in the event of an emergency which are responded to by the managers.  If a resident is unwell, the managers will check on them two to three times a day.  The managers also organise functions, outings and concerts.  Where necessary, the managers arrange for community aged­care packages.  Currently, 17 residents at Rose Mount receive a community aged­care package.  In addition, approximately 21 residents receive some form of private home help.

10. Church services are held at both Chrystal Halliday Homes and Rose Mount, in the Uniting Church and Anglican traditions, as well as in the Catholic tradition at Chrystal Halliday.  Services take place twice a week at Chrystal Halliday and twice a month at Rose Mount.  In addition, a Uniting Church Homes chaplain visits the residents three times a week at Chrystal Halliday and twice a month at Rose Mount.  Both facilities are open to all members of the community, irrespective of their religion.

Churches of Christ Homes' facilities

1. The facilities at Carinya Village comprise Churches of Christ Homes' head office and administration building for Western Australia, 70 self­contained units, a 44­room hostel, a 38­room nursing home, a clubhouse, and a day therapy centre.  The units include 27 independent living unit duplex cottages with a single garage, 32 independent living unit apartments in two­storey security buildings, an apartment for the caretaker of the independent living units, and 10 units which are currently used as offices for head office staff or in connection with redevelopment.  The 27 duplex cottages were built in 1991, and the 32 apartments were built in 1995.  The units were described by the valuers who gave evidence as "modern".  Approximately 40 other units have been demolished to enable the redevelopment of part of the site into a new, 160­place, aged­care facility, to replace the existing hostel and nursing home, and construction of new independent living units.

1. Services provided at the day therapy centre include physiotherapy, counselling and podiatry.  As at 3 May 2005, 25 independent living unit residents were active clients of the day therapy centre, although the majority of clients came from the wider, aged community.

2. The average age of residents in the independent living units at Carinya Village is 84.  With three exceptions, the youngest resident is over 70.  The exceptions are a 65­year-old spouse of an older partner at the facility, and two people, one of whom is less than 55 years old, who have developmental disabilities and whose ageing parents reside in the facility.

3. The facilities at Geneff Village comprise 69 independent living units and a 32­place hostel.  The independent living units were constructed in the 1980's.  The average age of residents in these units is 83.  With two exceptions, the youngest resident is over 70.  The exceptions are a 65­year old spouse of an older partner at the facility, and a person, aged over 55, who has profound hearing and speech disabilities.

4. At both facilities, the independent living units include one­ and two­bedroom units.  Churches of Christ Homes provides, without charge, a 24­hour emergency call service with a security call centre for the benefit of residents at all its facilities.

5. Each facility has a "clubhouse" for use by residents of the independent living units.  At Carinya Village, the clubhouse contains a fireplace, café, gymnasium, heated swimming pool, bowling green, computer facilities, craft room, beautician, hairdressing salon, meeting and function rooms and a barbecue area.  At Geneff Village, the clubhouse, which is physically part of the hostel, contains a residents' social room, library, small gymnasium and spa, and hairdressing salon.  The clubhouse at each facility is used to provide social, recreational and counselling services.  These services combat common ailments of ageing, such as frailty and loneliness, increase morale, and promote a community atmosphere.

6. Management at each Village facilitates volunteer services for the residents.  Volunteers assist with transport, for example, to enable residents to go shopping, swimming or attend medical appointments, with social activities, and lead walking and keep­active programmes.

7. Residents occupy independent living units at Churches of Christ Homes' facilities on the basis of a lease for life, an interest­free loan with non­refundable component arrangement, or a fixed­term lease under a rental contract.  At Carinya Village, only the first two of these options are available.  The 27 duplex cottages are occupied on an interest­free loan basis, whereas the 32 apartments are occupied on a lease­for­life basis.  Historically, at Geneff Village, the interest­free loan and fixed­term lease options have been available.  However, since March 2005, all new residents of independent living units at that facility have entered into occupation on the basis of a fixed­term lease.

8. Regular visits are made to residents at Carinya Village by an on­site caretaker and chaplain, particularly if a resident is unwell.  Regular visits are made to residents at Geneff Village by a client liaison officer and chaplain, particularly if a resident is unwell.  When a resident's care needs increase to a point where additional services are required, Churches of Christ Homes either offers its own community­based care services or organises the provision of services through other providers.

9. If a resident of an independent living unit ceases to be sufficiently independent and mobile to be able to live in such a unit, and requires higher care, Churches of Christ Homes endeavours, if possible, to transfer the resident to hostel or nursing home accommodation on the same site as the independent living unit.

How much do residents pay?

1. The nature and calculation of the capital and on­going payments generally required from residents varies between the facilities in question.

2. Residents of the independent living units at Chrystal Halliday are generally required to make an "entry contribution" of $100,000 for a one­bedroom unit, $110,000 for a one­bedroom unit with a view, and $120,000 for a two­bedroom unit.  An entry contribution is an interest­free loan to Uniting Church Homes from which it "draws down" a monthly retention amount, on the basis of a reducing, sliding-scale, that totals $29,017 over a ten­year period.  There is a lower scale of entry contributions and monthly draw­down fees for residents who cannot afford the full entry contribution.  Residents who cannot afford to make any entry contribution are generally required to make a fortnightly "rental" payment in lieu of the contribution, which is currently $51.65.  The balance of the entry contribution is refunded to the resident, or to his or her estate, when he or she ceases occupation.  Residents are also generally required to pay fortnightly maintenance fees, based on a budget which is presented to residents for comment each year.  Currently, the fortnightly fee per unit is $128.00.

3. Residents at Rose Mount are required to pay a "deferred management fee" to Uniting Church Homes when the life tenancy of their unit is sold after they cease occupation.  The resident or estate is obliged to offer the unit for "sale" to Uniting Church Homes in the first instance.  Uniting Church Homes usually has a waiting list of people who wish to move to Rose Mount, and the unit will be offered, first, to people on the waiting list.  If no­one on the waiting list wishes to "buy" the unit, the seller is free to offer it for "sale" on the open market.  The deferred management fee is 2.4 per cent of the sale price of the life tenancy for each year of residence, up to a maximum of 15 years, that is, up to a maximum of 36 per cent of the sale price.  The former resident or his or her estate receives the balance of the sale price, after the deferred management fee and any sale costs have been paid or deducted.  The balance received may be more or less than the amount that the resident paid to his or her predecessor.

4. The annual costs of administration, staffing and upkeep of Rose Mount are funded by the residents through the payment of the "club and care centre services fee" (CCCS fee).  The CCCS fee is made up of "club and care" costs, which are apportioned on a per resident basis, and "property group" costs, which are apportioned to units on the basis of floor area.  The fortnightly CCCS fee per unit currently varies from $95.60, for a single­occupancy apartment, to $181.60, for a couple occupying a 3­bedroom unit.

5. Residents at Churches of Christ Homes' independent living units, who occupy their unit on the basis of a lease for life, are generally required to pay an "ingoing donation", ranging from a lower rate of $80,000 to market value.  The ingoing donation for the 33 independent living units at Carinya Village occupied on this basis ranged from $245,000 to $285,000.  Residents who occupy a unit on the basis of an interest­free loan with non­refundable component, are required to pay a capital amount to Churches of Christ Homes when they enter into occupation, of which Churches of Christ Homes repays a part when they cease occupation.  At Carinya Village, the capital contribution is $150,000, of which two­thirds is ultimately repaid, whereas at Geneff Village the contribution is $95,000 for a one­bedroom unit and $120,000 for a two­bedroom unit, of which 60 per cent is repaid.  The non­refundable component may be reduced in instances of hardship or shorter than anticipated residence.Residents who occupy a unit at Geneff Village on the basis of a fixed­term lease, pay a fortnightly rental fee of $168.70 for a single person or $185.60 for a two people.  These residents do not pay any capital contribution.

6. Residents who occupy an independent living unit at Churches of Christ Homes on the basis of a lease for life or an interest­free loan with non­refundable component are also generally required to pay a fortnightly maintenance fee.  For residents occupying on the basis of a lease for life, the fortnightly maintenance fee ranges from $126.74 for one person in a one­bedroom unit to $167.72 for two people in a two­bedroom unit.  For residents occupying an independent living unit on the basis of an interest­free loan, the fortnightly maintenance fee ranges from $108.52 to $112.40 at Carinya Village, and from $95.22 to $125.90 at Geneff Village.  The maintenance fee covers the upkeep of the common areas and gardens of the facility.  In addition, if a resident is no longer able to maintain his or her own garden space, Churches of Christ Homes assumes that responsibility.

7. Residents of independent living units at Churches of Christ Homes may request a waiver or reduction in both the capital amount and fortnightly fees, based on their ability to pay.  Approximately 25 per cent of Churches of Christ Homes' independent living units are occupied by people who could not afford to make a capital contribution.  Residents who are unable to make a capital contribution are generally required to pay a "rental" payment in lieu of that contribution.  The current rental payment is a fortnightly amount of $168.70 for one person and $185.60 for two people.

Valuation evidence

1. The City's solicitors retained a licensed valuer, Mr GB Whyte, to prepare and give evidence "indicating whether or not the accommodation provided by Uniting Church Homes [and Churches of Christ Homes] at the facilities in question can be said to be subsidised in the sense that the accommodation is provided for less than a comparable market value".  Uniting Church Homes and Churches of Christ Homes each retained Mr David LeCoultre, a licensed valuer and aged­care development consultant, to respond to Mr Whyte's evidence.  As noted earlier in these reasons, the Tribunal had directed that the valuers confer and prepare a joint statement of matters agreed between them, matters not agreed, and the reasons for any disagreement.  Ultimately, the Tribunal had the benefit of a statement of evidence by Mr Whyte, a joint statement by Mr Whyte and Mr LeCoultre in relation to matters agreed between them, and a statement of evidence in response to Mr Whyte's evidence by Mr LeCoultre, which set out the reasons for disagreement, as well as calculations by the experts and other documents relied on by them.

2. In his oral submissions to the Tribunal, Mr GR Donaldson SC, who appeared with Mr CA Slarke for the City, did not place any reliance on the valuation evidence.  However, the City had earlier filed written submissions in relation to that evidence, which contended that "subsidisation … goes to the question of whether or not the predominant purpose of the land uses are to produce a profit".

3. Over the applicants' objections, the Tribunal allowed the City to rely on the valuation evidence, on the basis that it could potentially have been relevant to the question of whether the land, or part of the land, in question was used for the predominant or primary purpose of producing a profit, rather than relief of the aged.  However, the City's valuation evidence did not demonstrate that the independent living unit facilities in question were profitable, much less that they were operated for the predominant purpose of producing a commercial gain, for each of five reasons.

4. First, although it was Mr Whyte's evidence that certain of the facilities in question were "not subsidised", in that they generate revenue streams to the operator which are broadly consistent with the return to a private, "for profit" retirement village operator, the St Ives Group, in respect of five of its retirement villages, as Mr LeCoultre observed, "a proper consideration as to whether any good or service is 'subsidised' must necessarily take into account both the income derived from providing such a good or service, and the cost of providing it".  Mr Whyte had regard to the income element, without regard to the cost element.  Indeed, under cross-examination, Mr Whyte freely conceded that "the whole thrust of the question I was asked was not really whether these developments or other developments make a profit but whether the revenue or the occupancy cost for different people at for-profit organisations and the ones to be compared bear reasonable resemblance".

5. Mr LeCoultre has extensive experience in relation to aged­care development and financial analysis, commencing with eight years in the Valuer General's office, in the specialist field of nursing homes, in the early 1980's.  Since then, he has done a great deal of work for both "for­profit" and "not­for­profit" retirement villages.  Over the last eight years in particular, he has prepared strategic plans and long-term goals for boards and management in not­for­profit organisations, and has assisted in the development of retirement villages for private operators.  On the basis of this experience, Mr LeCoultre identified an important difference in approach and emphasis between aged­care facilities operated by not­for­profit organisations such as Uniting Church Homes and Churches of Christ Homes, on the one hand, and aged­care facilities operated by private operators, on the other hand.  He summed up the difference in approach and emphasis as follows:

   "In my experience, the not for profit organisations are motivated to meet the residents' needs, as opposed to making a commercial gain."   

   and:

   "I guess the crux of the issue is that commercial operations require a commercial return and not­for­profit tend to put the resource back into people."

6. Mr LeCoulter expanded on this difference in approach and emphasis as follows:

   "In my opinion, the services provided by Uniting Church Homes at Chrystal Halliday provides the residents with real benefits in terms of sense of community, companionship, and sense of security (both in terms of physical security and the support umbrella provided by Uniting Church Homes).

   In my experience, this is not always the case in the 'for-profit' sector.  The resources provided by Uniting Church Homes and the mission of Uniting Church Homes which guides the application of these resources, support the needs of the residents.  This should be considered in drawing any comparisons of services and benefits from the 'for-profit' sector."  

7. Although Mr Whyte observed, and Mr LeCoultre acknowledged, that all retirement villages need to respond to residents' needs in terms of matters such as sense of community, companionship, and security, Mr LeCoultre's evidence, that there is an important difference in approach and emphasis between the "for­profit" sector and the "not-for-profit" sector, was not seriously challenged or contradicted.

8. It is certainly, therefore, arguable, that costs might differ between facilities operated by organisations motivated to make a commercial gain and facilities operated by organisations motivated to meet the residents' needs.  However, no evidence was presented in relation to the costs of providing the facilities on the land in question or the costs of providing the commercial facilities referred to by Mr Whyte.

9. The second reason why the City's evidence did not demonstrate profitability was that Mr Whyte had simply assumed that the St Ives facilities he considered were profitable.  As he conceded in cross-examination, he did not make any enquiry of the St Ives Group in relation to the profitability of any of its retirement village developments.

10. Third, although Mr Whyte considered, on the basis of his experience, that the St Ives facilities he relied on were "reasonably representative of the commercial for-profit market", in response to Mr LeCoultre's criticism that "at least three comparables from different 'for-profit' organisations would need to be considered in reaching a view as to market price", Mr Whyte considered that "it would have been better to have looked at a broad range from a number of different operators".

11. Fourth, Mr Whyte's analysis does not appear to have taken into account the fact that, at Chrystal Halliday, residents who cannot afford to pay full entry contributions, or any entry contributions, are not denied accommodation in the independent living units, or that residents of independent living units at Churches of Christ Homes may request a waiver or reduction in both the capital amount and the fortnightly fees, based on their ability to pay.

12. Finally, even assuming that the costs of providing "for­profit" and "not­for­profit" aged­care services are equivalent, that the private facilities referred to are profitable and reasonably representative, and that the applicants' waiver or reduction in charges has no effect, the City's evidence of "non­subsidisation" is, at its highest, equivocal.  In relation to Chrystal Halliday, Mr Whyte maintained that the revenue stream for Uniting Church Homes is "broadly consistent with 'market value' in comparison with revenue streams generated from other retirement village developments undertaken as commercial, profit-making enterprises".  He acknowledged, however, that there is "a significant level of subjectivity involved in this opinion as the quality of the independent living facilities provided at Chrystal Halliday is far inferior to that within modern retirement villages".  The experts also agreed that the entry contribution amount at Chrystal Halliday is "substantially lower than the comparables from St Ives".

13. In relation to Rose Mount, the valuers agreed that, adopting the methodology employed by Mr Whyte, and making the assumptions which he made, the revenue to the operator is consistent with market.  However, Mr LeCoultre's evidence was that, on the basis of an 11-year period of occupation, Rose Mount units generated an income lower than four of the five St Ives facilities relied on by Mr Whyte.  Given that the occupation period selected by Mr LeCoultre is consistent with the Arthur Andersen finding that the average length of stay in an independent living unit is 10 to 12 years, the Tribunal accepts Mr LeCoultre's evidence.

14. In relation to Carinya Village, the valuers agreed that, on Mr Whyte's methodology and assumptions, the 27 duplex cottages "can be reasonably said to be subsidised in the sense that the accommodation is provided for less than market value", whereas the 32 apartments are not "subsidised in that they are provided at market level".

15. In relation to Geneff Village, although Mr Whyte considered that the interest-free loan basis of occupation produced a result for Churches of Christ Homes which is reasonably representative of market, he acknowledged that this conclusion is "very subjective in that it's an arrangement that is not generally consistent with the basis upon which retirement village units are occupied in the current market".  The valuers agreed that the income generated from the fixed-term leases at Geneff Village is below market value for such accommodation (in Mr LeCoultre's opinion, substantially below market value).

16. However, it is to be noted that, even if the valuation evidence had demonstrated that the land, or part of the land, in question produced a surplus of income over expense, on a consistent basis, and was, therefore, "profitable", such a finding would not dictate a conclusion that the land was not used for the primary purpose of relief of the aged.  The ultimate analysis would be informed by all relevant matters, including the important difference in approach and emphasis referred to by Mr LeCoultre in his evidence.

Legal issues

1. The principal question posed in these proceedings is whether the land described above "is land used exclusively for charitable purposes", thus leading to an exemption from a classification as rateable land.  Two issues present themselves for resolution:

   1.whether "land [is] used exclusively" and, if so,

   2.whether it is used for "charitable purposes".

   Neither of these terms is relevantly defined in the Act.

2. Convenience, as much as anything, dictates that the process of resolving these issues ought to commence with an enquiry into the applicants' alleged "charitable purposes" in relation to the land.  Moreover, as will be seen below, the real opposition of the City appears to revolve around the question of the exclusivity of use of the land.  Nevertheless, as will appear from a discussion of the authorities where similar principles can determine both issues, such a neat dichotomy has an element of abstractedness about it; it remains, however, a convenient way to consider the principal question posed.

Land used for "charitable purposes"

1. If there is an island in the sea of uncertain principle in the area of taxation statutes and their application to charities, it is that an enquiry into whether "the purposes of any given trust or institution are charitable" is to be decided by "reference to the preamble of the Charitable Uses Act 1601 ­ 'the Statute of Elizabeth I' ".  That this has been the case "[f]or the best part of four centuries", and continues to be the case, is a situation described as "almost incredible to anyone not familiar with this branch of the … law": The Incorporated Council of Law Reporting for England and Wales v Attorney-General [1971] 3 All ER 1029 at 1037, per Sachs LJ, also citing at 1038, the Scottish Burial case [1968] AC 138 at 151, per Lord Upjohn.

2. The very first charitable purpose referred to in the Statute of Elizabeth I was "for releife of aged impotent and poore people".  It is universally acknowledged that the "modern" interpretation and application of the preamble to the Statute of Elizabeth I is to be found in the following guidance of Lord Macnaghten in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 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."

1. There is no doubt that, in the present context, the expression "charity" and its alternative or related word forms are words of art with a technical legal meaning, not a popular meaning, and are determined by the application of the principles set out above: see, for example, Salvation Army (Vic) Property Trust v Shire of Fern Tree Gully (1952) 85 CLR 159 at 173 ­ 175; West Australian Baptist Hospital & Homes Trust Inc v City of South Perth [1978] WAR 65 at 68 (FC). Thus, a housing scheme for the aged that charged "an economic consideration for a charitable service" does not cease, thereby, to be considered as charitable: Joseph Rowntree Memorial Trust Housing Association Ltd v Attorney-General [1983] 1 All ER 288 at 299 (Peter Gibson J).

2. Insofar as charities for aged persons are concerned ­ putting to one side, for the moment, what is precisely meant by "the aged" ­ a clear line of authority exists (mostly in analogous local government rating cases) that relieving the disabilities of old age by itself and "of its very nature falls within the ambit of the preamble to the [Statute of Elizabeth I]": West Australian Baptist Hospital & Homes Trust Inc v City of South Perth [1978] WAR 65 at 72 (FC). See also: City of Hawthorn v Victorian Welfare Association [1970] VR 205 at 209 (FC); Trustees of Church Property of the Diocese of Newcastle v Lake Macquarie Shire Council [1975] 1 NSWLR 521 at 524 (Moffitt P), 533 ­ 534 (Hutley JA); and Hilder v Church of England Deaconess' Institution Sydney Ltd [1973] 1 NSWLR 506 at 512 (Street CJ).

3. In West Australian Baptist Hospital & Homes Trust Inc v City of South Perth (supra), at 72, the Full Court said:

   "The disabilities of old age are too well known to require proof; as Hutley JA stated in Trustees of Church Property of the Diocese of Newcastle v Lake Macquarie Shire Council [supra, at 533]: 'The burdens of the aged, including the well-to-do and wealthy aged are many: loneliness, inability to usefully employ their superannuated leisure, being but a few.' "

4. It has been suggested in New Zealand that aged persons' facilities of the requisite kind are:

   "charitable under the head of poverty; or the relief of the aged; or even (arguably) under the fourth head of Pemsel [supra] (other purposes beneficial to the community).  Lord Wilberforce’s observation [in the Scottish Burial case [1968] AC 138, at 154: "the law of charity is a moving subject"] that the categories are not watertight is particularly pertinent … ": D V Bryant Trust Board v Hamilton City Council [1997] 3 NZLR 342 at 348 (Hammond J); affirmed: [1999] 1 NZLR 41 (CA).

5. It is unnecessary, however, in these proceedings, to resolve these further issues as raised by this New Zealand case, by reason of the clear finding that we have reached below on the questions of charitable status and exclusivity by application of the orthodox tests discussed above.  Likewise, it then becomes unnecessary to consider the alternative submissions made on behalf of Uniting Church Homes that charitable status is achieved by the advancement of religion on its part, or that an exemption is obtained because part of its land is Crown property used or held for a public purpose.

6. It is important to note that, although these cases have often set out such matters as the age, circumstances, admission policies, fees and disposal of any surplus of institutions in relation to aged residents (as we have done above), such matters, in effect, inform an overall judgment that needs to be made, one that particularly focuses on the constating instruments, namely whether the subject land, or any part, is being used for the purpose of the relief of an aged person.  We will now undertake that overall judgement in this review on the first issue of charitable purposes.

7. For the purposes of the first issue identified at par [92] above, namely whether the land is used for "charitable purposes", by reason of the findings made or the matters referred to at par [38] ­ [41] (on the benefits flowing to aged persons by reason of residency in independent living units), par [42] ­ [46] (referring to the constating instruments of the applicants), and par [48] ­ [67] (referring to the facilities on the various parcels of land), on the orthodox tests posited above, the applicants are not only charitable institutions, but, in providing the facilities on the land in question, including the independent living units, are each clearly engaged in charitable relief of the aged.  To the extent that the City has made partial concessions dealing with any of these matters, they were properly made.

8. We should, however, briefly address three matters in particular.

9. First, whatever the precise meaning is of "aged" (see, for example, the note "When does a person become aged?" in (1998) 72 ALJ 190), here the residents' ages (see the average ages described at par [49] 82 years, par [55] 81 years, par [60] 84 years and par [61] 83 years) leads to a conclusion that, manifestly, the applicants are engaged in the relief of "aged" persons (cf D V Bryant Trust Board v Hamilton City Council [1997] 3 NZLR 342 at 350 where a similar finding of fact avoided the need to discuss at what particular age charitable principles could apply).

10. Secondly, the integrated nature of the facilities under review (for example, the transfer from independent living units to hostel or nursing home accommodation referred to at par [67]; and see the facilities listed at par [48] and par [58]) indicates that each parcel of land is, in fact, devoted to, as part of a scheme, relief of the aged.

11. Thirdly, we should state that, in our view, particular finance models, which, by their very nature, will change over time (depending upon, for example, such variables as government financing, retirement incomes and the rate of age pension), and which appear in particular cases, are not determinative of the issue.  Thus, to take one example, the five schemes considered together in Joseph Rowntree Memorial Trust Housing (supra), are not prescriptive of what is permissible, but rather indicative of what is possible.  In any case, the evidence here indicates a not-for-profit model without commercial gain: see par [77] and par [90].

12. Finally, to the extent that charitable status itself is said to be affected by allegations of a dual purpose in the use of the land (for example, a separate "use" of the land for alleged profit-making), the discussion that immediately follows in relation to exclusivity represents the views of the Tribunal on this argument.  In addition, the related issue of whether the fact of having potential residents aged only 55 years old in independent living units destroys the applicants' charitable status, is similarly dealt with below. 

Land "used exclusively"

1. As has been foreshadowed, the City's real opposition to the applicants' claims for a rating exemption is centred around the use of the land, in particular, a suggestion that "the primary purpose [is] creating income [ie, profit], as opposed to the primary purpose of relieving disabilities associated with age".  Such income is derived, according to the City, from independent living units (where residents can be as young as 55 years old).  As is demonstrated above, the evidence falls far short of sustaining that allegation.  And, even if evidence were available to indicate that "income" was produced, the discussion that follows indicates that such income production is not, in itself, incompatible with charitable status.  It is, however, unnecessary to pursue this matter further.

2. If we assume, for the purposes of argument, that the City is correct on the second point, and that a person aged 55 can never be the subject of a charity for the relief of the aged, it does not necessarily follow, given the conclusions that we have reached above about average ages, that this is fatal to the applicants' claims.  This is because "exclusively" has a legal meaning which can also include (as, in effect, appears below from the Australian cases) "substantially all or for the greater part", as well as meaning "apart from all others; only; [and] solely": Black's Law Dictionary (6^th ed, 1991) 565.

3. In this, as in other areas of the law, it will be necessary to formulate a test that allows the decision-maker (in this case, the Tribunal) to "characterise" the relevant activities carried on by the applicants in such a way that allows an answer one way or the other to the question of "exclusive" use.  This task is undertaken in the light of activities occurring on the subject land which, taken by themselves, might not be regarded as necessarily charitable, but, when viewed in context, might not offend exclusivity.  Here it is suggested that "profit" derived from real or potential 55 year olds, or even their very existence in the facilities, would offend that exclusivity of use.

4. Before considering that task, it might be useful to record what Gleeson CJ said in News Limited v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 573 on "characterisation" in the context of questions of purpose:

   "Purpose is to be distinguished from motive.  The purpose of conduct is the end sought to be accomplished by the conduct.  The motive for conduct is the reason for seeking that end.  The appropriate description or characterisation of the end sought to be accomplished (purpose), as distinct from the reason for seeking that end (motive), may depend upon the legislative or other context in which the task is undertaken."

5. In Salvation Army (Vic) Property Trust v Shire of Fern Tree Gully (supra) ­ a case both parties agreed was central to their arguments ­ three members of the High Court (Dixon CJ, Williams and Webb JJ) spoke in terms of "collateral purpose" (at 170) and "dual use" (at 171) as negating a claim for an exemption from rates which was available where land was "used exclusively for … [c]haritable purposes".  On the other hand, a "subsidiary and incidental benefit flowing from the carrying out of that [principal charitable] use" would not destroy the claim for exemption (at 170).  Thus, the Court said (at 171):

   "There is nothing in the evidence [in that case] to suggest that the [charitable institution] is carrying on the [subsidiary] activities to a greater extent than is reasonably necessary to achieve the [principal charitable] purpose or that under the cloak of this purpose it is really engaged in carrying on [a] business … for the purposes of gain."

6. The Court (at 172) endorsed the test of Lord Greene MR in Royal Choral Society v Commissioners of Inland Revenue [1943] 2 All ER 101 at 106 (emphasis added) as follows:

   "It is true that you have to find the purpose of the alleged charitable establishment.  It may very well be that a purpose which, on the face of it looks to be the real purpose, on close examination, is found not to be the real purpose.  A body of persons may purport to set themselves up for educational purposes; but, on a full examination of the facts, it may turn out that their purpose is nothing of the kind, and is one merely to provide entertainment or relaxation to others, or profit to themselves.  In other words, the presence of the element of entertainment or pleasure may be either an inevitable concomitant of a charitable or educational purpose, or it may be the real fundamental purpose, and education may merely be a by-product.  Whether a case falls within one class or the other is, no doubt, a question of fact, save and so far as it may depend upon the construction of written documents."

7. Fern Tree Gully was cited and followed by Gibbs ACJ and Stephen J (with whom Murphy J agreed) in Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 at 643 and 650, a case concerning whether, by reason of the commercial and shopping facilities offered (for convenience and for profit) on university land, the land ceased to answer the description of land used and occupied by the University "solely for the purposes thereof". The majority held that the land answered the description. On the exclusivity question, Gibbs ACJ had this to say (at 644):

   "Was [the land] used 'solely' for those purposes?  The question must be considered from the point of view of the University ­ was the use, by the University, solely for its purposes?  The fact that the University derives some subsidiary and incidental benefit from using the land for its purposes does not mean that the land is not used exclusively for University purposes: Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation [supra, at 170].  In Randwick Corporation v Rutledge [(1959) 102 CLR 54 at 94], Windeyer J said:

   'When such words [as "exclusively" or "solely"] are present, it is a question of fact whether the land is being used for any purpose outside the stipulated purpose ... As Kitto J said in Lloyd v Federal Commissioner of Taxation [(1955) 93 CLR 645 at 671] such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use.'

   The word 'solely' may do no more than add emphasis, or perhaps precision.  The present is not one of those cases in which part of the land in question was used for one purpose, and part for another."

8. In the same case, Stephen J also found (at 651, Murphy J concurring at 653) "no element of collateral or independent purpose" which destroyed exclusivity by reason of the facilities being offered to non-university traders for profit.  Further, his Honour was content to generally adopt certain English authority, reading "use" broadly as akin to "carrying on the activities of" the university (see the discussion at 651).

9. Finally, in Shire of Ashburton v Bindibindi Community Aboriginal Corporation [1999] WASC 108, Wheeler J (as she then was) was faced with an argument that certain businesses with the object of training residents of the relevant land in certain business skills "would have the result of changing the character of the defendant's use and occupation of the Land so that it could no longer be said to be used 'exclusively' for charitable purposes". Her Honour continued as follows, at [38] ­ [39] (emphasis added):

   "As Fullagar J pointed out in the Ferntree [sic] Gully Corporation case (at 187): 'The whole character and atmosphere of the place must be of vital importance.'  In his judgment, Fullagar J was concerned with the atmosphere of an institution designed to rehabilitate delinquent boys.  However, clearly the same observations would apply in relation to attempts within [an Aboriginal] community such as that administered by the defendant to improve living standards of residents over a long period of time by providing practical training in the skills necessary for self care and for employment and for the generation of self reliance and self respect.  The relationship between what may appear to be commercial enterprises and a charitable purpose is a matter of fact in each case, but in the present case activities of the kind which I have described plainly appear to me to be directed towards serving the dominant charitable purposes." 

10. For the purposes of the second issue identified at par [92] above, namely, whether the "land [is] used exclusively" for charitable purposes, applying the tests referred to at par [111] - [115], there is no question that, in the relevant sense, such use is other than "exclusive". 

11. In short, there is no evidence that a collateral or independent purpose exists that relevantly detracts from the purpose of the relief of the aged or from the exclusivity required by the statutory exemption.  To the extent (if any) that it can be suggested that any activity on the subject lands can be seen as standing outside of the principal charitable purpose (for example, the potential arrival of someone aged 55), we are of the view that such activities may be arguably either reasonably necessary to the fulfilment of the main purpose or an inevitable concomitant of pursuit of that main purpose.  Such subsidiary purposes are, from the point of view of the applicants, done for and in connection, and are not inconsistent with their principal charitable purpose. 

12. It is, however, unnecessary in this review to express a concluded view on these matters.  It is sufficient to say that the existing "whole character and atmosphere of the place[s]" under review is relevantly charitable under the present tests and, therefore, the applications for review should be allowed.

13. No doubt the actions of the City are part of a revisiting by society of the question of what it means to be aged, and where the burdens should lie in terms of an indisputably "greying population".  Interesting as these questions might be, they are essentially tangential to this review, for the legislature has not sought to address them by, say, narrowing or limiting the charitable status that relief of the aged confers.  As that which constitutes both "relief" and "the aged" will change over time, some legislative adjustment might be necessary.  However, unless and until such changes in the statute law are made, in our view, the charitable concepts applicable to the aged as developed by the courts, as we understand them, will continue to apply, leading to the results set out above.

Orders

1. The Tribunal makes the following orders:

In proceedings RD 6 of 2004

1.The application for review of the decision of the City of Stirling to disallow Uniting Church Homes (Inc)'s objection to the City's rate record for the 2004 ­ 2005 financial year in relation to property no. 205879, Chrystal Halliday Homes, 61 Jeanes Road, Karrinyup is upheld.

2.Uniting Church Homes (Inc)'s objection to the City's rate record for the 2004 ­ 2005 financial year in relation to property no. 205879, Chrystal Halliday Homes, 61 Jeanes Road, Karrinyup is allowed on the ground that there is an error in the rate record on the basis that the land is not rateable land under s 6.26 of the Local Government Act 1995 (WA).

3.The rate notice given by the City of Stirling to Uniting Church Homes (Inc) dated 13 August 2004 in relation to property no. 205879, Chrystal Halliday Homes, 61 Jeanes Road, Karrinyup (ref 1020587953), is set aside insofar as it requires that Uniting Church Homes (Inc) pay the "residential and other rates" specified in the notice.

In proceedings RD 7 of 2004

1.The application for review of the decision of the City of Stirling to disallow the Uniting Church Homes (Inc)'s objection to the City's rate record for the 2004 ­ 2005 financial year in relation to property no. 107407, Rose Mount, 21 Dianella Drive, Dianella is upheld.

2.Uniting Church Homes (Inc)'s objection to the City's rate record for the 2004 ­ 2005 financial year in relation to property no. 107407, Rose Mount, 21 Dianella Drive, Dianella is allowed on the ground that there is an error in the rate record on the basis that the land is not rateable land under s 6.26 of the Local Government Act 1995 (WA).

3.The rate notice given by the City of Stirling to Uniting Church Homes (Inc) dated 13 August 2004 in relation to property no. 107407, Rose Mount, 21 Dianella Drive, Dianella (ref 1010740721), is set aside insofar as it requires that Uniting Church Homes (Inc) pay the "residential and other rates" specified in the notice.

In proceedings RD 338 of 2005

1.The application for review of the decisions of the City of Stirling to disallow Churches of Christ Homes and Community Services (Inc)'s objections to the City's rate record for the 2004 ­ 2005 financial year in relation to property nos. 120298 and 120297, Carinya Village, 2 and 20 Plantation Street, Menora, and in relation to property no. 131264, Geneff Village, 39 Hertha Road, Innaloo, is upheld.

2.Churches of Christ Homes and Community Services (Inc)'s objections to the City's rate record for the 2004 ­ 2005 financial year in relation to property nos. 120298 and 120297, Carinya Village, 2 and 20 Plantation Street, Menora, and in relation to property no. 131264, Geneff Village, 39 Hertha Road, Innaloo are allowed on the ground that there are errors in the rate record on the basis that the land is not rateable land under s 6.26 of the Local Government Act 1995 (WA).

3.The rate notices given by the City of Stirling to Churches of Christ Homes and Community Services (Inc) dated 13 August 2004 in relation to property nos. 120298 and 120297, Carinya Village, 2 and 20 Plantation Street, Menora (ref 1012029889 and ref 1012029769), and in relation to property no. 131264, Geneff Village, 39 Hertha Road, Innaloo (ref 1013126482), are set aside insofar as they require that Churches of Christ Homes and Community Services (Inc) pay the "residential and other rates" specified in the notices.

I certify that this and the preceding [120] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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JUSTICE M L BARKER, PRESIDENT