van Gelder, Vivian --- "Charitable Status of an Aboriginal Corporation: Gumbangerii Aboriginal Corporation v Nambucca Shire Council" [1996] AboriginalLawB 41; (1996) 3(81) Aboriginal Law Bulletin 19

• Charitable Status Of An Aboriginal Corporation: Gumbangerii Aboriginal Corporation V Nambucca Shire Council
• Meaning Of 'Public Benevolent Institution'
• Incidental Non-Beneficial Objects
• 'Use Or Occupation Of Land For The Purposes Of A Public Benevolent Institution'
• Appeal Allowed

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Charitable Status of an Aboriginal Corporation:
Gumbangerii Aboriginal Corporation v Nambucca Shire Council

Casenote by Vivian van Gelder

Gumbangerii Aboriginal Corporation ('the Corporation') brought an appeal in the Land and Environment Court against the levying of rates by Nambucca Council on land owned by the Corporation. The Corporation claimed that its land is exempt from rating by virtue of s132(1)(d) of the Local Government Act 1919 (NSW), which exempts from rating land which belongs to any ... public benevolent institution, or public charity, and is used or occupied by the ... charity ... for the purposes thereof'. The equivalent section of the Local Government Act 1993 (NSW), s556(h), is in similar terms. The appeal was brought under s133(2) of the 1919 Act (equivalent to s574 of the 1993 Act).

Therefore, two questions fell to be determined by Stein J in awarding or denying the exemption: is the Corporation a 'public benevolent institution or public charity'; and is the Corporation's land used 'for the purposes' of a public benevolent institution or charity?

Meaning of 'public benevolent institution'

In answer to the first question, Stein J began by noting that 'the question of whether the applicant constitutes a public benevolent institution or charity is principally answered by reference to the terms of its constituting documents' and 'not by reference to the applicant's activities' (Toomelah Co-operative Ltd v Moree Plains Shire Council, 4 March 1994, unreported-see casenote in Vol 3, 80 Aboriginal Law Bulletin 27 and Vol 1, 3 Australian Indigenous Law Reporter).

Examining the Corporation's constituting documents, Stein J drew attention first to its objects and then to several sections of the Aboriginal Councils and Associations Act 1976 (Cth), under which the Corporation was incorporated.

Its objects are fivefold: to foster, advance, improve and maintain the general wellbeing and welfare of Aboriginal persons; to provide facilities and amenities for Aboriginal persons; to promote sporting activities for Aboriginal persons; to maintain and promote Aboriginal culture and society; and to do any or all of these things within the Shire of Nambucca. In a similar vein is clause 15 of the Corporation's Rules, which set out that 'no portion [of the property and funds of the Corporation] shall be paid or applied directly or indirectly by way of dividend bonus or otherwise howsoever by way of profit to any member'. Further Rules set out public accountability requirements, such as the requirement in clause 17 that auditors' reports draw attention to 'any irregularities in the Corporation's financial affairs'.

Stein J then drew attention to relevant provisions of the Aboriginal Councils and Associations Act. These include s62A(2)(e), which provides that an Aboriginal corporation may be wound up if (inter alia) 'the members of the Committee of the [corporation] have acted in the affairs of the [corporation] in their own interests rather than in the interests of the members as a whole'. Also in point is s65(2), governing the distribution of a corporation's surplus assets by an order of the Court and providing that the order be made 'having regard to the objects of the [corporation]'. Other provisions of the same Act were cited in order to demonstrate the degree of public accountability to which the Corporation is subject under the Act.

Having set out relevant provisions of the Corporation's constituting documents, Stein J then considered whether they indicate that it is a 'public benevolent institution' as defined by judicial authority. That phrase was defined in the leading case on the issue, Perpetual Trustees Company v FCT ((1931) [1931] HCA 20; 45 CLR 224) to mean 'an institution organized [sic] for the relief of poverty, sickness, destitution or helplessness' (per Starke J at 232). Poverty 'need not be destitution' (Lemm v FCT [1942] HCA 31; (1942) 66 CLR 399; FCT v Launceston Legacy (1987) 75 ALR 122).

The question was therefore whether the Corporation could be said to be an institution organised for the relief of poverty. Stein J pointed out that both the courts and Parliament have now recognised that 'Aborigines as a class of people [are] severely disadvantaged and impoverished in Australian society' and are 'a class which, generally speaking, is in need of protection and assistance'(page 9). On construction, the Corporation's primary objective is 'to foster, advance, improve and maintain the well-being of and welfare of Aborigines by providing low-cost housing (and thus relieve poverty)' (page 11). The Corporation thus appeared to fulfil the test of 'public benevolent institution' laid down in Perpetual Trustee.

Incidental non-beneficial objects

However, Nambucca Council argued not all of the Corporation's objects are designed to relieve poverty through the provision of housing, and that the Corporation is therefore prevented from being classified as a public benevolent institution or public charity. Stein J agreed (page 10) that it is 'well established that non-benevolent objects and purposes that are not incidental or ancillary to the main benevolent purpose can result in the organisation losing its benevolent status' (Stratton v Simpson (1970) 126 CLR 138). He pointed out (page 9) that it is established that 'benevolence' may extend beyond material assistance, to the promotion of culture (Tangentyere Council Inc v Commissioner of Taxes [1990] NTSC 14; (1990) 99 FLR 363). However Stein J found that, on construction, and following Nungera Co-operative Society Ltd v McLean Shire Council ((1991) 73 LGRA 178), the other objects are ancillary or incidental to the benevolent purpose in the primary object, and thus not a barrier to the classification as a public benevolent institution or public charity. Stein J held that, upon the evidence of the Corporation's objects and upon the public accountability provisions contained in the Aboriginal Councils and Associations Act and in the Corporation's own Rules, the Corporation is a public benevolent institution. Having established the Corporation's status as a public benevolent institution, Stein J did not consider it necessary to examine the issue of whether it is also a public charity (page 12).

Thus the answer to the question as to whether the Corporation is a 'public benevolent institution or public charity' was 'yes'.

'Use or occupation of land for the purposes of a public benevolent institution'

Stein J held that this second requirement is to be determined by comparing the purposes of the institution (as evidenced in the constituting documents) with the 'actual use to which the land is put' (per Nader J, Aboriginal Hostels v Darwin City Council (1985) 75 FLR 197). After examining the criteria used by the Corporation in allotting housing (on the basis of need and in order to further the Corporation's object of fostering the well-being of Aboriginal persons; see page 6) Stein J held that the land in question is used 'to provide low-cost accommodation for needy Aborigines in the Nambucca Heads and Macksville area' (at page 12). The Council submitted that the presence of 6 or 7 housing recipients who were in fact employed (out of a total number of 68 residents, most of whom were welfare recipients) meant that the land was not being used for the purpose of alleviating need and that the Corporation could not therefore claim the exemption. Stein J, following Bannon J in Nungera Co-operative Society Ltd, responded that the presence of such (low) income earners 'does not mean that the land is not used in the manner required by [s132(1)(d)/ s 556(h)]'.

Appeal allowed

Stein J allowed the appeal on the basis that the Gumbangerii Aboriginal Corporation is in fact a public benevolent institution, and that it uses land owned by it for the purposes of benevolence. He thus granted the Corporation an exemption from Nambucca Council rating the land.

In this judgment, Stein J gave judicial recognition to the fact that Aboriginal people in Australian society are severely disadvantaged, and that efforts to alleviate their poverty and improve their well-being are performing an essential function for society, which ought to be assisted, not hindered, by relevant authorities.