Carney, Gaby --- "Status of a Co-operative as a Charity of a Public Benevolent Institution: Toomelah Co-operative Ltd v Moree Plains Shire Council" [1996] AboriginalLawB 31; (1996) 3(81) Aboriginal Law Bulletin 27

• Status Of A Co-Operative As A Charity Of A Public Benevolent Institution: Toomelah Co-Operative Ltd V Moree Plains Shire Council
• The Background
• The Decision
• A Public Charity
• A Public Benevolent Institution
• Used Or Occupied For Public Or Benevolent Purposes
• Objects And Powers Of The Co-Operative
• Conclusion

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Status of a Co-operative as a Charity of a Public Benevolent Institution:

Toomelah Co-operative Ltd v Moree Plains Shire Council

Toomelah Co-operative Ltd v Moree Plains Shire Council

Land and Environment Court, Stein J

Unreported, 4 March 1996

Casenote by Gaby Carney

The case concerned an action by Toomelah Co-operative Ltd under s132(1)(d) of the Local Government Act 1919 (NSW) ('the Act') against the levying of rates on land owned by the Co-operative by Moree Plains Shire Council. (The matter was brought under the 1919 Local Government Act because the relevant rate notices were issued by the Council prior to the commencement of the Local Government Act 1993 (NSW). However, the relevant sections discussed below are virtually the same in both Acts).

The applicant had written to the Council in 1992 seeking an exemption from payment of rates under s132(1)(d) of the Act, on the basis that it is a public charity or public benevolent institution. The Council refused the exemption, referring to s133 of the Act, which refers to appeals against levying of rates, but without giving further reasons.

Stein J upheld the applicant's claim. His Honour found that the Co-operative could be characterised as both a public charity and a public benevolent institution, and it is therefore entitled to exemption from rates under s132(1)(d) of the Act.

The background

The applicant was incorporated as a community advancement society in 1977 under the Co-operation, Community Settlement, and Credit Act 1923 (NSW). It owns and rents out 11 houses to needy Aboriginal families in the Toomelah and Boggabilla area on a needs basis, at a rent covering only the cost of necessary repairs to the premises, water, sewerage and insurance. It also runs a Community Development Employment Project (CDEP), in which Aboriginal people work in community projects for a sum equivalent to the unemployment benefit. The CDEP scheme is funded by grants from the Aboriginal and Torres Strait Islander Commission and the Department of Employment, Education and Training. No other money is distributed by the Co-operative to its members. The Co-operative has in the past conducted commercial activities, but with limited success. The Australian Taxation Office has granted an exemption from sales tax to the applicant, apparently on the basis that it is form of public benevolent institution.

Evidence was submitted by the applicant that 95% of the 900 or so Aboriginal people living in the Toomelah and Boggabilla area are unemployed; indeed only two members of the community are currently employed.

The decision

Stein J held that under s132(1)(d) of the Act, the applicant must show that the land in question belongs to it, that the applicant is a public charity or public benevolent institution, and that its land is used for benevolent or charitable purposes.

His Honour considered it settled that the land belongs to the Co-operative, and stated that whether the Co-operative should be characterised as a public charity or public benevolent institution depends upon the terms of its constituting documents, rather than its activities.

His Honour found that the primary object of the Co-operative, according to its statement of objects and rules, is to provide and maintain buildings and land for the purpose of benefiting its members and the Aboriginal community in general. His Honour considered that other enunciated objects 'emphasise activities undertaken for the use, benefit or development of the [Co-operative], its members or the Aboriginal community in general' (at page 3).

A public charity

Stein J held that the relevant definition of charity is the legal, technical one, rather than the popular one. His Honour stated that in order to establish a charity there must be a charitable trust. This trust must be enforceable and of a public nature.

Stein J considered that the overall object of the Co-operative, which is to provide assistance to its members and to the Aboriginal community in general, is charitable in nature. His Honour concluded that it is not a bar to benevolent or charitable status if the Co-operative charges rent for houses, nor if it conducts activities of a commercial nature.

His Honour found that there is a constructive charitable trust. The Co-operative's rules relating to the disposal of its income and property are evidence that the company acts as a trustee of its assets for the objective of assisting the Aboriginal community. Stein J held that the trust is of a public character. He rejected the respondent's submission that the class of public eligible for benefits is not limited to the needy. His Honour considered that the fact that some members of the Aboriginal community do not need assistance does not detract from the charitable nature of the Co-operative's primary purpose, and also that 'poverty' need not mean 'destitution'.

A public benevolent institution

His Honour concluded that the Co-operative's primary object is to relieve poverty through the provision of housing, and was therefore satisfied that the Co-operative is a public benevolent institution.

Used or occupied for public or benevolent purposes

Stein J stated that whether the land is used or occupied by the applicant for charitable or benevolent purposes is determined by comparing the objects of the trust with the actual use to which the land is put. His Honour held that the land is used for charitable purposes.

Stein J rejected the respondent's submission that because two members of the Co-operative are employed, and thus are not in need, the land is not being used for charitable or benevolent purposes. His Honour stated that the majority of the members of the Co-operative are not employed, and that poverty need not mean abject poverty or destitution. Trusts are not the less charitable because they incidentally benefit people who are not impoverished.

Objects and powers of the Co-operative

Stein J rejected the respondent's submission that certain of the Co-operative's objects are 'independent' and thus disqualify it from the status of a public charity or public benevolent institution.

His Honour concluded that the object of strengthening and fostering the development of Aboriginal and Islander identity and culture is integral to any program aimed at assisting the Aboriginal community. As such, it is an incidental, rather than an independent object. Moreover, His Honour considered that even if it were an independent object, this would be insufficient to disentitle the applicant of its status as a public charity or public benevolent institution.

His Honour reached the same conclusion regarding the Co-operative's object of promotion of land rights and other legal and cultural rights of the Aboriginal community. Stein J considered that given the disadvantaged position of Aboriginal and Islander people in society, such efforts by organisations are benevolent and charitable according to the law.

Conclusion

The applicant is both a public charity and a public benevolent institution, and the land subject to the appeal is used for benevolent or charitable purposes. The applicant is therefore exempt under s132(1)(d) of the Act from the levying of rates on the land by the respondent.

Applied: Nungera Co-operative Society Ltd v Maclean Shire Council (1991) 73 LGRA 178; Aboriginal Hostels Ltd v Darwin City Council (1985) 75 FLR 197; and College of Law (Properties) Pty Ltd v Willoughby City Council (1978) 38 LGRA 81.