Dr Matthew Turnour (6 August 2014)
Summary of the Greenpeace decision
The Supreme Court of New Zealand has today handed down its decision in the ‘Greenpeace case’, Re Greenpeace of New Zealand Incorporated [2014] NZSC 105. The question for the court was whether or not engagement in political purposes was inconsistent with pursuit of a charitable purpose. By a majority of three to two, the court decided that the ‘blanket exclusion’ of political purposes was no longer appropriate:
A ‘political purpose’ exclusion should no longer be applied in New Zealand: political and charitable purposes are not mutually exclusive in all cases; a blanket exclusion is unnecessary and distracts from the underlying inquiry whether a purpose is of public benefit within the sense the law recognises as charitable [at paragraph 3 of the decision].
The salient facts
The Charities Commission of New Zealand, before it was folded back into the Department of Internal Affairs, had declined Greenpeace registration on the basis that two of its objects were not charitable. These objects were the promotion of disarmament and peace and the promotion of ‘legislation, policies, rules, regulations and plans which further [Greenpeace’s other objects] and support their enforcement or implementation through political or judicial processes as necessary’ [at paragraph 4].
The political purposes doctrine
What was the political purposes doctrine? It is summarised by Justice Slade in McGovern’s case, which involved Amnesty International, as follows:
Even if it otherwise appears to fall within the spirit and intendment of the preamble to the statute of Elizabeth, a trust for political purposes … can never be regarded as being for the public benefit in the manner which the law regards as charitable… Trusts for political purposes falling within the spirit of this pronouncement include, inter alia, trusts of which a direct and principal purpose is either:
(i) to further the interests of a particular political party; or
(ii) to procure changes in the laws of this country; or
(iii) to procure changes in laws of a foreign country; or
(iv) to procure a reversal of government policy or of particular decisions
(v) of governmental authorities in this country; or
(vi) to procure a reversal of government policy or of particular decisions of governmental authorities in a foreign country.
[at paragraph 37 of the Greenpeace decision]
The majority reasoning on political purposes
The majority comprised Chief Justice Elias and Justices McGrath and Glazebrook, who held that it ‘is difficult to construct any adequate or principled theory to support blanket exclusion’ of a political or advocacy purpose and to do so ‘obscures proper focus on whether a purpose is charitable within the sense used by law’. Further that to do so ‘would be an impediment to charitable status for organisations which, although campaigning for charitable ends, do not themselves directly undertake tangible good works of the type recognised as charitable’ [at paragraph 69].
The majority concluded that, even so, establishing charitable purpose for an entity that pursues that purpose by advocacy may be quite difficult, as ‘“Charitable purpose” is not established where objects are of benefit to the community unless the benefit is also shown to be charitable within the sense used by the common law’, and ‘it will be difficult to show that the promotion of an idea is itself charitable’ [at paragraphs 113 – 114].
For practical purposes the case brings the law of New Zealand and Australia into much greater harmony. The reasoning of the majority expressly affirms ‘the view expressed by Justice Kiefel in Aid/Watch (in dissent in that case) that charitable and political purposes are not mutually exclusive’ and is arguably not inconsistent with the reasoning of the majority in Aid/Watch [at paragraph 74]. Future academic work will no doubt explore distinctions.
The minority
The minority view of Justices William Young and Arnold was that political purposes could not be charitable as ‘the intention of the legislature…was to codify this aspect of the law of charities’ so it followed that if ‘advocacy in support of a charitable purpose is not in itself charitable’, political advocacy could not ever be charitable in its own right [at paragraph 124].
The majority reasoning on illegality
The majority also discussed illegality at some length. The impact of more controversial illegal activities, such as acts of trespass, have always been of concern to a minority in the sector. However, anxiety about illegal activities by a charity and consequent effects on charitable status is spreading through the welfare, education and religious charitable sectors, with a number of government inquiries potentially making findings of significant illegal activity conducted within charities. The reasoning of the majority in Greenpeace may well inform the development of Australian charity law, so a summary paragraph is set out below:
It may be accepted that an illegal purpose is disqualifying. It does not constitute a charitable purpose and would mean that the entity is not “established and maintained exclusively for charitable purposes”. While illegal activities may indicate an illegal purpose, breaches of the law not deliberately undertaken or coordinated by the entity are unlikely to amount to a purpose. Isolated breaches of the law, even if apparently sanctioned by the organisation, may well not amount to a disqualifying purpose. Assessment of illegal purpose is, as the Court of Appeal recognised, a matter of fact and degree. Patterns of behaviour, the nature and seriousness of illegal activity, any express or implied ratification or authorisation, steps taken to prevent recurrence, intention or inadvertence in the illegality, may all be relevant. On the other hand, we are unable to accept the submission by Greenpeace that only serious offending, such as would permit sanction under the legislation on a one-off basis even if not indicative of any system or purpose, is required before illegal conduct amounts to a purpose of the entity. [at paragraph 111]
DISCLAIMER: This update contains general information only. The information is not all inclusive and should not be considered to be legal advice. You should always obtain legal advice for your specific circumstances before relying on general information.