The Latvian Co-operative Society Limited v. Commissioner of Land Tax (Vic.)

Members:
G Gibson M

Tribunal:
Administrative Appeals Tribunal of Victoria

Decision date: 1 August 1989.

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G. Gibson (Member)

The main issue in this case is whether land used by The Latvian Co-operative Society Limited (``the society'') is used exclusively for charitable purposes within the terms of sec. 9(1)(d) of the Land Tax Act 1958.

2. The substance of the evidence is as follows:

(1) Most of the original members of the Latvian community arrived in Australia after World War II. They had left their homeland after the Baltic States, including Latvia, were assumed into the Soviet Union.

(2) The society's principal assets are the properties at 3 Dickens Street (``Latvian House''), and 51 Brighton Road, Elwood. The properties are adjacent although separated by a laneway. The Brighton Road property is used almost exclusively as school classrooms. The Commissioner has allowed an exemption in respect of that land. The Dickens Street property has more wide-ranging uses. Number 3 Dickens Street was acquired by the society in 1956. Extensions were added between 1963 and 1966 and further improvements carried out in 1972. Number 51 Brighton Road was acquired in 1975.

(3) The society is incorporated under the Co-operation Act 1958 and was registered under the law relating to Industrial and Provident Societies. The society is reorganising

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as a Community Advancement Co-operative pursuant to the Co-operation Act 1981. It will be known as Latvian Co-operative Limited.

(4) The rules of the society include the following:

``2. Objects and powers: The objects of the Society are:

• (a) To establish and to conduct the production and sale of products of home industries (Sloyd) in shops throughout Victoria.
• (b) To purchase or take in exchange or on lease or to rent or otherwise acquire any land, buildings, easements, or other interests in real estate and to sell, exchange, mortgage, lease and otherwise deal in or dispose of same. One of the buildings should serve for concerts, theatrical performances, divine services, a Sunday School and social gatherings; a portion of the building to be used for the office of the Society and another portion for a Library. The land and buildings of the society may be used by Society or other persons or organisations.
• (c) To erect, maintain, alter, demolish or reconstruct any building or fixture on any land acquired or occupied by the Society.
• (d) To make arrangements with persons engaged in any trade, business or profession for any concessions or benefits obtainable for the Society or its members.
• (e) To provide, subscribe to and maintain funds for charitable or other purposes.
• (f) To print and publish any newspapers, periodicals, books or leaflets for sale or distribution to members or non-members of the Society.
• (g) To do all such other things which are lawful under the law relating to Industrial and Provident Societies, and which may appear to be incidental or conductive [sic] to the attainment of any of the above objects or any other specified throughout these Rules.''

The rules include the normal provision prohibiting the distribution of income. Shares are very rarely redeemed.

(5) Approximately 25,000 Latvians emigrated to Australia in the years immediately following the Second World War. The members of the Latvian community in Melbourne (including both the children and grandchildren of the original emigrants) who have chosen to maintain their cultural ties number approximately 4,000 or 5,000. Migration of Latvians from Europe's displaced persons' camps, unlike migration from other European countries, was strictly limited to a short period between approximately 1947 and 1952. There has been almost no migration since 1952, with the result that the Australian Latvian community is very rapidly decreasing.

(6) Latvia is one of the small Baltic republics. It has a population of about 2,000,000. Latvians and their language have a separate and distinct history extending back at least to the first centuries of our era. Riga, the capital of Latvia, was established in 1200 and was always a significant northern European seaport. Latvians have a rich and varied cultural history and have always been interested in education and the arts. The Latvian language, together with the Lithuanian, have close similarities and are related to the Indo-European language Sanskrit. Latvia, before the war, had one of the highest literacy rates in Europe, Latvians have a long tradition in music, dancing, theatre and the visual arts.

(7) The furtherance of those cultural pursuits was of paramount importance to the Latvians who settled in Melbourne after the war. Of equal importance was the education of their children in the language, traditions and history of their country of origin. Language was seen as the key to the maintenance of the national culture and of communication with other Latvians, including those still living in Latvia and those who had emigrated, primarily to Western Europe and North America.

(8) A formal education program was soon established using the society's facilities. It presently ranges from kindergarten age to the end of secondary school. Latvian is a subject available for Higher School Certificate. It is also offered at university level by Monash University. Many of the children have language skills because they have learnt Latvian as their first language in the home. For other families, particularly where one parent is non-Latvian, the education process provides reinforcement and, in some cases, the sole contact with the

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language. The Latvian School of Modern Languages (secondary school) is the only course of this type to be permitted to operate outside the Victorian Education Department schools' premises. This is because of the suitability of the premises at Dickens Street and the availability of library services.

(9) The society also provides facilities for the children of Latvians to participate in scouting and guiding, drama, singing, folk dancing and other cultural pursuits. These activities are generally conducted in the Latvian language. Language courses are also available to non-Latvians, and many participate in the cultural programs at Latvian House.

(10) The principal activities of the Latvian community in Melbourne are conducted at Dickens Street. Other major facilities in Melbourne include the Latvian Lutheran Church in Warrigal Road, Surrey Hills, a church camp at Daylesford, an old people's village and hostel housing 80 people at Knox, the War Veterans' Association headquarters at North Melbourne, social facilities at Emerald, a scout camp at Kilmore, the Latvian Credit Co-operative in Little Collins Street, Melbourne, the arts and crafts shop in Elizabeth Street, Melbourne, and the honorary Latvian Consul and the editorial facilities of the Australian Latvian Newspaper at Ivanhoe.

(11) In addition to the provision of educational facilities the society provides facilities, generally in its small and large halls, for a variety of artistic and cultural pursuits including concerts usually by Latvian artists whether local, interstate or overseas. They include opera, lieder, classical, choral, folkloric and popular music, theatre, arts and crafts exhibitions, lectures in literary, artistic, folkloric or other subjects relating to life in Latvia or Latvian traditions, conferences by groups such as teachers or to provide information about Latvian history or current events in Latvia, films and videos.

(12) Three rooms are set aside permanently for the Latvian library and reading room. The library is reputed to have the largest collection of Latvian literature outside Latvia and access to the facilities is freely available.

(13) The society purchased the properties and developed them by raising money through the sale of shares, gifts and donations, and the use of considerable voluntary labour. For a number of years the facilities have remained substantially the same and have been maintained from the society's income. No major acquisitions, extensions or renovations have been undertaken since approximately 1975.

(14) The society and its facilities operate almost entirely with voluntary labour. The income of the co-operative is derived from hire charges for facilities and the ladies' auxiliary from the kiosk and the provision of catering services. Rental income is derived from a number of users including the following: junior school and kindergarten, $250 per annum; senior school - School of Modern Languages, $250 per annum; Australian Latvian Theatre, about $1,000 per annum; Melbourne Latvian Choirs, $2,000 per annum; and Library, $250 per annum.

(15) These groups are involved in the provision of educational or cultural services. The junior school provides classes each Saturday afternoon during school term between 1.00 p.m. and 4.15 p.m. for children between the ages of six to 14 and from grades 1 to 8. There are currently 14 teachers and 90 students at the school. The senior school provides classes each Saturday morning during school term between 8.45 a.m. and 11.45 a.m. for years 9, 10, 11 and for H.S.C. In addition, two language classes are held for non-Latvian speaking students. The participants in these latter classes are usually mature age students who, although of Latvian parentage, have not maintained their language, or students whose spouse or partner is Latvian. The school forms part of the School for Modern Languages under the auspices of the Education Department. There are currently eight teachers and 60 students at the school. The facilities at Dickens Street are an integral part of the operation of the school on the premises at Brighton Road, to the extent that the chairman of the society said that the school could not function without the premises at Dickens Street.

(16) The Australian Latvian Theatre produces plays in Latvian and usually by Latvian playwrights. It generally has two or three productions each year. Each production has a number of rehearsals and usually two or three performance. Each performance is attended by approximately 300 or 400 people. Approximately 24 people are involved as actors or stage assistants in the theatre company.

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(17) There are three choirs in Melbourne, the Melbourne Latvian Choir (``Rota''), the Melbourne Latvian Choir (``Dziesmuvara'') and the Youth Choir (``Daina''). Rota has approximately 70 members, Dziesmuvara has about 45 members and Daina 32 members. The senior choirs regularly perform in Melbourne and also participate in interstate festivals and, as individuals, in international Latvian song festivals. The members of the Youth Choir also participate in interstate festivals and many of its members form part of an international touring group ``Saules Josta'' a folk dancing and singing group which has performed in Western Europe and Northern America in 1976, 1979, 1982, 1985, 1987 and will again tour in 1990 including, as presently planned, to Latvia.

(18) On occasion, the facilities are hired for private functions. Generally these functions are either fund-raising activities by Latvian groups such as the schools or the cultural groups, or private functions such as weddings or confirmations where the traditional ceremonies are conducted and the specialised catering of the ladies' auxiliary is employed.

(19) The major users of Latvian House are the original members of the community, who were born in Latvia and migrated to Australia. All such persons are now at least 60 to 65 years of age and have strong emotional ties with their country of birth and to the local community. Their involvement in the activities at Latvian House, whether as participants or as members of an audience, or by helping in the kiosk, is of great importance to them. The social contact from these activities is a significant feature of life for the older Latvians in Melbourne.

(20) The surplus derived by the ladies' auxiliary from the kiosk provides the financial means for the society to continue to run the facilities. The kiosk is staffed entirely by voluntary labour - usually women already in their sixties or seventies. Refreshments are provided after choir rehearsals and during interval at concerts and theatre performances. Each Saturday morning the ladies on roster bake fresh Latvian cakes and savouries and the kiosk is open all day for students, staff and parents.

(21) The society is managed by a committee. It meets monthly. Two older members of the community act as caretakers for each building.

(22) On occasions the hall has been let to groups outside the Latvian community. This practice has been virtually discontinued in recent years because of problems of control. Some of the uses were of a similar nature to those of the Latvian community (school activities, concerts, religious activities) whilst others were of a purely social nature. In all cases however the income derived from such rentals was applied by the society in the maintenance of its facilities and in the pursuit of its objectives. The society is accumulating its surplus to undertake major repairs to the building.

(23) There are strong links between the Latvian communities in all States and each year between Christmas and New Year a cultural festival is held by rotation in a particular State. Cultural festivals have been held since 1952, every four or five years in Melbourne. This year the festival will also be held here. During the week a program including church services, art and craft exhibitions, folk dancing, concerts, conferences of teachers, writers, and scout and guide leaders, and plays, is conducted with participation by approximately 2,000 people. Whilst not all of these activities are held at the society's premises the primary focus for the week is Latvian House. In addition, each year other cultural activities are held by rotation with other States including a writers' weekend, a theatre festival, a youth congress or a youth cultural festival.

(24) The Commissioner issued land tax assessment notices in respect of the land for the years 1986 and 1987 (SO107017/8657 and SO107017/8737) to the society on 31 March 1988. The disallowance of objections to those assessments has been referred to this Tribunal. Notwithstanding the period to which the assessments related, documentary evidence relating to the use of the premises was produced in respect of the year 1988. It was said (and I accept) that the earlier books were unavailable when the affidavit material was prepared, and that there has been little, if any, change in substance to the use of the premises over the whole of the period. A summary of the activities of Latvian House for 1988 prepared by the applicant is as follows:

      Schools                            42
      School Council


         6

      Scouts/Guide Leaders etc.          10
         (also meet every second
         Saturday during school term)
      Library and Reading Room
      Choir Concerts                      4
      Choir Rehearsals                  154
      Concerts/Rehearsals                12
      Plays                               6
      Play Rehearsals                    68
      Lectures                           16
      Art/Photography Exhibitions         8
      Films                               4
      Fraternity/Sorority Meetings       26
      Committee Meetings                 40
      Management Committee Meetings       9
      Senior Citizens' Gatherings         8
      Celebrations                        7
      Fund Raising                        5
      Sporting                            2
      Anglers' Club                      10
      Balls                               9
      Christmas Parties                   3
      Wedding (1) Funerals (2)
         Confirmations (1)                4
      Private Meetings                   14
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                                        467
      

3. The applicant submitted that the evidence disclosed that the land was used for educational purposes, and for cultural purposes, and that the social or fund-raising activities on the land should property be characterised as incidental. It was submitted that the authorities show that trusts for the development of cultural objects are plainly charitable; reference was made to the authorities referred to by Powell J. in
Perpetual Trustee Co. Ltd. v. Groth (1985) 2 N.S.W.L.R. 278 at pp. 284-287, and to the judgment of Latham C.J. in
Monds v. Stackhouse (1948) 77 C.L.R. 232 at pp. 240-242. It was further put that the activities of the society are for the relief of the needs arising from old age, including the need for social intercourse to provide protection against the damages and distress incident to living alone, and are accordingly charitable, reference being made to
City of Hawthorn v. Victorian Welfare Association (1970) V.R. 205 at p. 209. The above authorities indicate that for these purposes ``education'' has been held to include the provision of facilities for education, kindergarten facilities, scouting and guides, drama, music and choral singing and art and that ``other purposes beneficial to the community'' have been held to include the provision of a library and reading room, a public hall or theatre, and facilities for recreation. On the question of whether or not the land might be said to have been used exclusively for charitable purposes, reference was made to
Salvation Army (Victoria) Property Trust v. Shire of Fern Tree Gully (1952) 85 C.L.R. 159, and
Stratton v. Simpson (1970) 125 C.L.R. 138. On the interpretation of the word ``used'' reference was made to
Stephen v. Federal Commissioner of Land Tax (1930) 45 C.L.R. 122;
Thompson v. F.C. of T. (1959) 102 C.L.R. 315; and
Ryde Municipal Council v. Macquarie University (1978) 139 C.L.R. 633. Additionally, the society placed reliance on sec. 9(1)(da) which exempts:

``land which is vested in any person or body and which is leased to be used for out-door sporting recreation or cultural purposes or similar out-door activities where the proceeds from the leasing are applied exclusively by that person or body for charitable purposes...''

For the meaning of ``recreation'', reference was made to
Hamilton Island Enterprises Pty. Ltd. v. F.C. of T. 82 ATC 4088; (1982) 1 N.S.W.L.R. 113. Finally, the society relied on sec. 9(1)(g) which exempts:

``land which is vested in any body corporate or unincorporate (not being a body that promotes or controls horse racing, pony racing or trotting racing in Victoria) that exists for the purpose of providing or promoting cultural or sporting recreation or similar facilities or objectives and that applies its profits in promoting its objectives and prohibits the payment of any dividends to members and which is used for out-door sporting recreation or cultural purposes or similar out-door activities...''

4. Counsel for the respondent submitted first that the society is not in terms of its objects capable of being characterised as a charitable body. This was conceded by counsel for the applicant. Counsel for the respondent then submitted that the usage of the relevant land was not charitable because it involved no element of public benefit. The property is not dedicated to charity in the sense that it is held on a charitable trust; rather, it was said, the society is a private non-charitable body engaged in its premises for its own purposes and that, legally speaking, it carries on its

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activities for the benefit of its members. Members of the Latvian community come on to the premises with the leave or licence of the members of the society, and not pursuant to the discharge of any public charitable duty. It was then submitted that the activities of the society could not be characterised as purely cultural, but were a mix of social contact, recreation, general entertainment, indoor sports, culture and education. It was said that activities other than cultural activities, in particular the hiring of the hall, could not be characterised as ancillary or incidental to charitable activities. Reference was made to
SSAU Nominees Pty. Ltd. v. F.C. of T. (1986) V.R. 355 at pp. 371-372;
Williams Trustees v. I.R. Commrs (1947) A.C. 447;
I.R. Commrs v. Baddeley (1955) A.C. 572;
Attorney-General v. Cahill (1969) 1 N.S.W.R. 85;
Re Wilson's Grant (1960) V.R. 514; In
re Income Tax Acts (No. 1) (1930) V.L.R. 211;
Oxfam v. Birmingham City District Council (1976) A.C. 126; and
City of South Melbourne v. Y.M.C.A. (1960) V.R. 709, in addition to other cases that were referred to on behalf of the society. As to sec. 9(1)(da) it was put that the society could only succeed if it showed that the land was used for charitable purposes, and that this issue therefore turned on the fate of the objection under sec. 9(1)(d). On sec. 9(1)(g), it is, I think, sufficient to say that stress was placed on the epithet ``out-door'' where it twice occurs in the final part of that statutory provision.

5. It was common ground between the parties that the question of whether the land of the society is used for charitable purposes within the terms of sec. 9(1)(d) of the Land Tax Act 1958 is to be determined by reference to the law of charitable trusts. This law may be difficult to apply. Before looking at the particular case, it may be as well to recall some basic propositions.

(1) According to English and Australian law, trusts can be divided into two classes: trusts for the benefit of named individuals or groups of individuals, and trusts for purposes, not persons:
Bowman v. Secular Society Ltd. (1917) A.C. 406 at p. 441 (Lord Parker of Waddington);
Attorney-General (New South Wales) v. Perpetual Trustee Co. Ltd. (1940) 63 C.L.R. 209 at p. 222 (Dixon and Evatt JJ.).

(2) For there to be a valid trust for purposes, the purposes must be charitable, in the legal sense of that term, and, as a consequence of that requirement, public in character and beneficial to the community (except for some anomalous cases relating to relief of poverty):
Re Hummeltenberg (1923) 1 Ch. 237;
National Anti-Vivisection Society v. I.R. Commrs (1948) A.C. 31. The critical distinction between the two kinds of trusts, the one private and the other public, is that charitable trusts have an essentially public character. If there is a beneficiary of a charitable trust, it is the public: Maitland, Lectures on Equity (Brunyate, ed.) at p. 51. It follows that although charitable trusts are trusts for purposes, not people, they must be for purposes that benefit people in the community. The public element is expressed by saying that the charitable trust must exist for the benefit of the community or an appreciably important section of it. The criterion has been variously expressed: the possible beneficiaries must not be numerically negligible, and the quality that distinguishes them from other members of the community must not depend on their relationship to a particular individual (
Oppenheim v. Tobacco Securities Trust Co. Ltd. (1951) A.C. 297 at p. 306, Lord Simonds); a charitable trust has no bar which admits some members of the public and rejects others: the trustee does not take power to itself to admit or exclude members of the public according to some arbitrary test which it sets up in its rules or otherwise: (In re Income Tax Acts (No. 1) (Lowe J.); Thompson v. F.C. of T. at p. 323. Although the essential contrast is to private advantage, it is acknowledged that the cases give rise to some difficulty: Thompson v. F.C. of T. at p. 321 (Dixon C.J.).

(3) Each kind of trust must comply with certain rules in order to be enforceable. In each, there must be certainty as to the intention to create a binding trust. In trusts for people, there must be certainty of the subject matter and objects (beneficiaries). In trusts for purposes - charitable trusts - the trusts must be such that the court can identify them as charitable, and nothing but charitable, and superintend their due execution. This is done at the instance of the Attorney-General representing the public, or, as it is put, the Crown as Parens patriae, and the Attorney-General may be obliged to formulate a scheme for the execution of a charitable trust: Anti-Vivisection case at p. 62. The language of a trust must be such that ``a court of equity could carry into execution'':
Dunne v. Byrne (1912) A.C. 407 at p. 411

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(Lord Macnaghten); Williams Trustees v. I.R. Commrs at p. 456 (Lord Simonds); Ashburner's Principles of Equity (2nd ed.) at pp. 89-90. Charitable trusts do not fail for uncertainty, but this should not obscure the requirement (subject to sec. 131 of the Property Law Act 1958) of a trust that can be applied only for charitable purposes:
Morice v. Bishop of Durham (1805) 10 Ves. 522.

(4) In the eye of the law, charitable purposes are defined by reference to the preamble of the Statute of Elizabeth I (43 Eliz. C. 4) and include the specific items referred to in the preamble, and four categories derived from it as a sort of index or chart by judicial exposition: the relief of poverty, the advancement of education, the advancement of religion, and other purposes beneficial to the community:
Income Tax Special Purpose Commissioners v. Pemsel (1891) A.C. 531 at p. 580 (Lord Macnaghten). It is generally accepted that the legal notion of ``charitable'' is wider than the popular: Salvation Army case at pp. 174-175 (Dixon, Webb and Williams JJ.) and at pp. 183-184 (Fullagar J.); cf. Anti-Vivisection case at p. 41 (Lord Wright). The requirement that the trust be of a public character derives not from the statute, but the course of decisions upon the statute.

(5) As to the classes of charitable purposes, two things must be remembered: first, a trust for purposes beneficial to the community is not charitable unless it is within the spirit and intendment of the statute (
Roman Catholic Archbishop v. Lawlor, Catholic Newspaper case (1934) 51 C.L.R. 1 at pp. 31-36 (Dixon J.); Williams Trustees v. I.R. Commrs;
Royal National Agricultural and Industrial Association v. Chester (1974) 48 A.L.J.R. 304; and
Council of Law Reporting (Qld) v. F.C. of T. 71 ATC 4206; (1971) 125 C.L.R. 659); and, secondly, the mere fact that a trust is for purposes beneficial to the community does not put it within the fourth category of charitable trusts: Williams v. I.R. Commrs at p. 455; Catholic Newspaper case at p. 31. Sir Frederick Jordan said (Chapters in Equity at p. 37) that trusts in the first three categories of Lord Macnaghten should be in intention and in the fourth actually beneficial to the community, or some appreciably important part in the community. Another way of putting it is that public benefit may be assumed or inferred in the first three categories, but must be affirmatively proved in the fourth: Anti-Vivisection case at p. 52 (Lord Wright) and at p. 65 (Lord Simonds). (The cases upholding trusts ``to my country'' or for the inhabitants of a particular area are anomalous and must depend on some implication by the court of a charitable purpose - Williams Trustees v. I.R. Commrs at pp. 459-460 (Lord Simonds) - or be characterised ``as a splendid effort of equitable imagination'':
Harris v. Earl of Chesterfield (1911) A.C. 623 at p. 633.)

(6) The laws of charity have evolved since 1891 (Pemsel's case) and of course since the time of the first Elizabeth, and different times may require different results:
Taylor v. Taylor (1910) 10 C.L.R. 218 at p. 238 (Isaacs J.); Jordan, Chapters in Equity at p. 37;
Scottish Burial Reform and Cremation Society v. Glasgow Corporation (1968) A.C. 138 at p. 154 (Lord Wilberforce); Perpetual Trustee Co. Ltd. v. Groth at p. 285 and
Re Koeppler's Will Trusts (1985) 3 W.L.R. 765 at p. 776.

(7) There is no generally accepted definition of what is within the spirit and intendment of the Statute of Elizabeth I. In
Re Belcher (1950) V.L.R. 11 at p. 13, Fullagar J. referred to ``purposes whose fulfilment may reasonably be thought to minister to the safety or happiness or well-being or good conscience of the community and which might reasonably be the subject of outlay at the public expense... could fairly be regarded as a possible subject of public responsibility''. In
Re Lowin (1965) N.S.W.R. 1624 at p. 1626, Jacobs J. referred to ``a trust which to some extent satisfies an obligation of the community recognised generally in the community''; cf.
Lander v. Whitbread (1982) 2 N.S.W.L.R. 530 at p. 540. In Council of Law Reporting (Qld) v. F.C. of T., supra, at ATC p. 4211; C.L.R. p. 669, Barwick C.J. referred to ``the provision of some of the indispensables of a settled community'' and to instances that are ``socially fundamental''.

6. The Crown did not argue that the objects and activities of the society were not beneficial. But, as appears from the matters referred to above, this is far from being the end of the matter. The nature of the evidence and the course of the argument gave rise to three issues: first, whether the functions of the society as a whole on the relevant land come within the spirit and intendment of the statute; secondly, whether the purposes of the society have the

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public element required by the law, that is, whether they are of benefit to the community or an appreciably important section of the community; and, thirdly, whether the land may be said to be used exclusively for charitable purposes. The primary difficulty facing the society on each of these issues is the nature and diversity of the functions for which the relevant land is used.

7. The development of the law relating to charitable purposes has proceeded by a process of analogy from the terms of the statute and from cases found to come within the terms of the statute. In my view, the diversity of the uses to which Latvian House is put (as summarised in para. 2(24) above), combined with the fact that the school premises at Brighton Road are separately exempted, precludes a finding that the relevant activities are educational, under the second head of Lord Macnaghten. That leaves the fourth head, or, perhaps, a combination of the second and fourth heads, as was found for example in Re Belcher, above. I have not been referred to any decisions which would afford me any real comfort in finding that the activities of the society as a whole could be classified as either educational or for other purposes beneficial to the community. In my view, the cases most closely in point are against any such finding. It is I think sufficient to refer to three of them. In Williams Trustees v. I.R. Commrs, supra, a trust was established with the object of promoting Welsh interests in London by social intercourse; discussing all questions affecting Welsh interests; fostering the study of the Welsh language by lectures on Welsh history, literature, music and art; maintaining a library of literature in the Welsh language or relating to Wales, and the trustees were empowered to maintain an institute and meeting place for the benefit of Welsh people in London with a view to creating a centre to promote ``the moral, social, spiritual and educational welfare of Welsh people''. Lord Simonds made some of the general observations at pp. 455 and 457 that I have referred to above and having referred to
Keren Kayemeth v. I.R. Commrs (1932) A.C. 650 (where a gift to settle Jews in Palestine was held not to be charitable), and an observation that the law had been stretched in favour of charities almost to bursting point, said (at p. 459):

``That point would be reached if your Lordships held that this trust deed has a purpose which falls within the spirit and intendment of the preamble. It clearly does not, and, if it does not, let the community be what you will, let the purpose be as beneficial as you like; here is no charity.''

In I.R. Commrs v. Baddeley, supra, the House of Lords was concerned with trusts for the use of Methodist missions in particular localities, for the promotion of the religious social and physical well-being of persons resident in localities by the provision of facilities for religious services and instruction and for the social and physical training and recreation of such persons who were or were likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided by the trust, and by the provision of facilities for religious, social and physical training and recreation as were calculate to contribute to the health and well-being of such people. Viscount Simonds said that the case was governed by the decision in Williams Trustees and, having referred to the terms of one of the trusts, said (at p. 586):

``My Lords, I do not think it would be possible to use language more comprehensive and more vague. I must dissent from the suggestion that a narrow meaning must be ascribed to the word `social': on the contrary, I find its use confirmation of the impression that the whole provision makes upon me, that its purpose is to establish what is well enough called a community centre in which social intercourse and discreet festivity may go hand in hand with religious observance and instruction. No-one will gainsay that this is a worthy object of benevolence, but it is another question whether it is a legal charity, and it appears to me that authority which is binding on your Lordships puts it beyond doubt that it is not. Here we are not concerned to consider whether a particular use to which the trust property may be put is a charitable use: that is a question upon which different minds might well come to different conclusions. On the contrary, we must ask whether the whole range of prescribed facilities or activities (call them what you will) is such as to permit uses which are not charitable: if it is, it is not

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such a trust as the court can execute and it must fail.''

In Re Wilson's Grant, supra, Hudson J. had to consider the purposes of a ``Girls' Friendly Society'' the constitution of which provided that it was a society of girls and women who accept the Christian faith and seek in the fellowship of worship, work and play to serve God and extend His Kingdom. Its objects were said to be to reunite girls and women in a fellowship of prayer, service and purity of life for the glory of God, to offer to its members friendly comradeship and opportunities of service to others and arrange introductions from branch to branch from one country to another, and to encourage its members in loyalty, faithfulness in work and home life and self-control in all things. His Honour described the course of the argument (at p. 518) and after referring to the decision of the House of Lords in Baddeley, supra, said:

``Though I think that what Mr Aickin claims for the Society may be true, its direct objects and immediate activities go a great deal further than the teaching and application of Christian principles. It seeks not only to do this and to widen and improve the mental outlook of its members, but it also seeks, and in my view not merely incidentally, to promote the moral, social and physical development of its members, and to improve them in these respects, and to these ends provides them with the opportunities of friendly association and healthy recreation and with interests and occupations that will be not only of practical use to them, but will assist in the development of character. All of this is admirable and, indeed, praiseworthy but, unfortunately, it has been held by the highest authority that purposes such as these are not charitable in the eye of the law.''

8. I am conscious of the dangers of seeking to draw too much in terms of principle from decisions on particular facts, and of judicial observations to the effect that the cases are hard to reconcile, and that a search for logic in the course of precedent in this area may prove unrewarding. I acknowledge also that the law of charity is in a continual state of development and, if I may say so, that the requirements for Australians in dealing with community services available to ethnic groups toward the end of this century may involve different considerations to similar questions arising in England at about the middle of this century. But in my view the authorities that I have referred to preclude a finding that the purposes of the society are charitable in the legal sense. I have no doubt that the objects of the society would fairly be regarded as wholly admirable. It seems to me that the Australian community might well wish to encourage the provision of cultural reinforcement and social comfort to migrants, particularly those in the condition of the Latvians. But the analogy between this line of authority and the evidence disclosed in this case is in my view far too close for anyone at the level of this Tribunal to ignore or seek to distinguish. In my view, the society does exist to provide a community centre to meet the cultural and social needs of the Latvian community, and it seems to me that it is just this kind of community centre that the above line of authority shows not to be charitable in the legal sense, as being outside the spirit and intendment of the statute. To adopt the language of Sir Edward Hudson, the direct objects and immediate activities of the society go a great deal further than educational and cultural activities: it seeks not only cultural enrichment, but it also seeks, and in my view not merely incidentally, to promote the moral and social development of its members and to these ends provides them with opportunities of friendly association and healthy recreation. In my view the law has not reached the stage where the mantle of legal charity can be put upon a community centre that provides for the cultural and social needs of an ethnic group in as diverse a fashion as does this society.

9. I do not think that I could seek to advance the legal argument with any degree of comfort by asking whether the provision of the kind of facilities offered by the society might ``fairly be regarded as a possible subject of public responsibility'' or as ``to some extent satisfying an obligation of the community recognised generally in the community'', or as ``the provision of some of the indispensables of a settled community'', or as ``socially fundamental''. While various people may have strong views on those questions, and while I may have a strong view that some of the individual activities of the society would clearly be regarded as charitable, I very much doubt whether the decision of this case as a matter of law could properly be advanced by embarking

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on any such enquiries. Rather, I think that the issue must be decided by the law as it is found in the decisions, and I think that those decisions are squarely against the society.

10. I have formed the view that on the law as presently stated the society cannot be said to be conducted for purposes that come within the spirit and intendment of the statute. For my part, I think that that result is clearly dictated by the authorities. That being so, I would prefer not to express a view on the other substantive parts of the case put on behalf of the Crown, arising from the test proposed by Sir Charles Lowe in (In re Income Tax Acts (No. 1), supra, the submissions relating to the private nature of the rights of members of the society, and the cases dealing with the perceived dichotomy between incidental and collateral functions. Those submissions, which were put forcefully, raise difficult questions of legal analysis. I would prefer to defer any decision on those submissions until they were necessarily raised for decision by an organisation that otherwise might be said to have been clearly charitable. This case, involving as it does community services being provided to an ethnic group, may be said to raise enough difficulties of its own. It is I think presently sufficient to note that in Taylor v. Taylor, supra, at p. 237, Sir Isaac Isaacs referred with evident approval to the following remarks of Wigram V.-C. made in 1847:

``I agree with Lord Langdale, that many things of general utility may not fall within the definition of charity, as the term is understood in the Court; for many things of general utility may be strictly matters of private rights, although the public may indirectly derive a benefit from them. The expenditure of money to promote the construction of railroads or canals (for example), which are private property, in no respect under the control of the Attorney-General, might often be an expenditure in the encouragement of things of general utility, but could not be said to be an expenditure for a charitable purpose.''

It seems to me that those observations may have considerable application to a case like this.

11. As indicated above, it was conceded that the claim for exemption under sec. 9(1)(da) would fail unless the society established that the relevant proceeds were applied exclusively for charitable purposes. In view of my finding above, this cannot be done.

12. There is a difference in the wording of the relevant parts of sec. 9(1)(da) and sec. 9(1)(g), but in my view the claim for exemption under that latter provision fails here because of the final requirement which is that the land be ``used for out-door sporting recreation or cultural purposes or similar out-door activities''. In my view, it would be stretching linguistic gymnastics further than may be decently allowed to conclude that such a stipulation can relate to any activity that is not out-door. The stipulation occurs twice, and in my view it is clear that the relevant activities must take place out-door. On that basis, this claim for exemption cannot succeed in this case.

13. Although the society has failed to make good its objections, there was no dispute that its objects were beneficial, and no attack was made on its bona fides. This is a difficult and technical part of the law. The case raises difficult questions. In my view there should be no order as to costs.

14. For the reasons given above, the decision of the Tribunal is:

• (1) the assessments under reference are affirmed; and
• (2) there is no order as to costs.