A national LGBTIQ+ support organisation has lost its bid to be classed as a “public benevolent institution” (PBI) because of a lack of sufficient connection between its means and its ends.
Equality Australia Ltd (EA) challenged a 2020 decision by the Commissioner of the Australian Charities and Not-for-profits Commission (ACNC) to refuse its application for PBI status, a classification which would have entitled it to tax concessions.
After the Administrative Appeals Tribunal (AAT) affirmed the ACNC decision last year, EA appealed the AAT decision to the Federal Court, and in a 34-page decision published on Thursday, the court dismissed that appeal.
EA, which seeks to “improve the wellbeing and circumstances” of LGBTIQ+ people and their families, and which drove the marriage equality campaign in 2017, was registered as a charity in 2016 under the Australian Charities and Not-for-profits Commission Act 2012 (Cth).
Four years ago, it applied to be additionally registered with the subtype “public benevolent institution”, under Section 25-5 of the Act.
A delegate of the Commissioner refused the application, then the Commissioner disallowed EA’s objection to the refusal. EA then applied to the AAT, which affirmed the Commissioner’s decision. EA then appealed to the Federal Court from the AAT’s decision on a question of law.
The group asked the court to decide whether the tribunal misconstrued the expression “public benevolent institution” as “involving a test of sufficient proximity or directness between the beneficial activities of an entity and the benevolent ends it seeks to achieve, or in holding that Equality Australia did not satisfy such a test because it was organised to advocate, educate and campaign for law reform and social change”. It submitted this would have had the tribunal introducing a qualification of its own.
The AAT had concluded EA did not relieve the distress experienced by LGBTIQ+ people in the required way for it to be afforded PBI status, in that it was focused on advocacy (especially law reform and social change) and policy development.
“We are not satisfied it routinely provides support directly to individuals or groups beyond providing referrals, information exchanges and opportunities for connection except where that support was incidental to other activities that were directed to achievement of its primary mission,” it stated in its findings.
“At some point, even well-intentioned and ultimately beneficial activities might not be sufficiently proximate to the benevolent ends. The relief provided will simply be too indirect.”
EA argued the tribunal erred “by considering that the statutory expression ‘public benevolent institution’ imports a ‘directness’ criterion, according to which an institution’s beneficial activities must be sufficiently ‘proximate’ to its benevolent ends, and not ‘too indirect’”.
It submitted that relief needed to be “calibrated to the causes of the distress, and that advocacy was an appropriate means of relief in this case, given that the relevant distress is caused by laws and practices injurious to LGBTIQ+ people”.
The Commissioner submitted that the AAT’s decision should be affirmed for several reasons. She said EA’s activities:
- did not provide direct relief;
- were “directed towards achieving law reform and social change for LGBTIQ+ people generally, and in this respect were not sufficiently targeted to relieving the distress of such persons experiencing poverty, sickness, destitution, helplessness, misfortune or distress”; and
- were inherently preventative in nature.
She also submitted that the decision required the court to adjudicate an essentially political question – whether the law and policy changes for which Equality Australia advocates are for the public benefit – and this was not for the court to decide.
After examining case law, Justices Wheelahan, Hespe and Kennett concluded that the AAT’s requirement that there be a sufficient connection between an entity’s activities and its objects was not a qualification of its own.
“In proceeding on the understanding that ‘sufficient proximity’ was required between the activities of the organisation and relief from distress, the majority in the tribunal was giving effect to its understanding of the ordinary meaning of ‘public benevolent institution’,” they said.
“It was not treating the ordinary meaning as irrelevant or as supplying only part of the test. Nor, in our view, was the majority giving the phrase ‘public benevolent institution’ a meaning so clearly at odds with its generally accepted meaning as to transgress the ‘bounds of reasonableness’.”
The judges said the tribunal’s majority:
- accepted that LGBTIQ+ people were “persons in relevant distress, which may be relieved by acts of benevolence”;
- found that EA’s purpose was to address that distress by advocacy;
- found that EA’s work was directed to achieving law reform; and
- found that this law reform “may” in turn, relieve the distress of LGBTIQ people.
“To reason that, having made these findings, the majority was bound to conclude that Equality Australia is a public benevolent institution would be to do away with the majority’s understanding of the ordinary meaning of that expression as involving a requirement of sufficiency of connection between ends and means,” they said.
No order was made as to costs.
One Response
Thanks for such a timely article on this important case. Further comments of four charity lawyers and academics about the implications of the case are freely available at https://eprints.qut.edu.au/251899.