LEGAL AID COMMISSION OF VICTORIA v COMMISSIONER OF PAY-ROLL TAX (VIC)

Members:
G Gibson M

Tribunal:
Administrative Appeals Tribunal of Victoria

Decision date: 7 April 1992

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G Gibson

Introduction

Two questions may arise about the Legal Aid Commission and pay-roll tax. One question is whether the Commission is wholly or partly exempt on the ground that it is a public benevolent institution within the terms of s. 10(1)(ba) of the Pay-roll Tax Act 1971. The other question is whether it should be exempt. The first is a legal question; I doubt whether the second could much aspire to the status of a political question - if anything it appears to be a question of arithmetic. The Government of Victoria both funds and taxes the Commission. For example, in the 1991 financial year the Government provided some $7 million by way of grants and took back $1 million in pay-roll tax. It is I think notorious that the Commission is short of money, and ultimately the issue is how much is the Government prepared to give it. The legal question involves difficult issues. I do not think that could be said of the other question, whether you regard it as political or arithmetical.

It is of course clear that I have only to decide the legal question, and I hope it will be clear that the answer to that question will provide little or no assistance in answering what I regard as the real question. I must say that I regard the determination of the legal question as a sterile exercise, in which one arm of Government is asking another arm of Government to express an opinion upon its relations with an authority set up under an Act of Parliament, when the real issue, the amount of money the Government is prepared to provide the Commission, must in any event be determined elsewhere. But since the issue is validly before the Tribunal, I have to deal with it.

The Facts

The evidence consisted mainly of written statements and documents tendered on behalf of the Commission. Nevertheless, because of matters put in issue by the respondent, two officers of the Commission had to be called to give evidence and be cross-examined. In the end, there was not I think any issue about any contention of fact asserted on behalf of the Commission. Rather, the argument was about the proper characterisation of those facts, and their ultimate legal significance.

The functions of the Commission are set out in s. 9(1) of the Legal Aid Commission Act 1978, which provides that the Commission shall provide legal aid in accordance with the Act, and control and administer the fund set up by the Act. Legal aid is defined in s. 2 of the Act to mean education, advice or information in and about the law, any legal services that may be provided by a legal practitioner, and any other matter within the scope of s. 10 of the Act, including the provision of duty lawyer services, legal advice and legal assistance. Duty lawyer services are defined as legal services provided by a practitioner attending a Court, being legal services consisting of appearing on behalf of persons or giving legal advice to a person in that Court otherwise than by prior arrangement with the person.

In carrying out its functions, the Commission is required by s. 10 of the Act to ensure that legal aid is provided in the most effective, efficient and economical manner, and in a manner which dispels fear and distrust. The Commission is also empowered to enter agreements with the Commonwealth in relation to the provision of legal aid, and under s. 10(f) to establish guidelines for the provision of legal aid.

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The Commission is made a body corporate by s. 3 of the Act. It consists of ten members representing the profession and the community as set out in s. 10 of the Act. Pursuant to s. 15 officers and employees are not by virtue of their office or employment subject to the Public Service Act 1974, but their conditions of employment and remuneration are fixed by reference to the Public Service Board. One of the principal functions of the Commission (set out in s. 41) is to control the Legal Aid Fund, which receives interest on solicitors' trust funds. The Act does not provide for any direct ministerial intervention in the operation of the Commission.

The Commission has established the following Mission Statement:

``To ensure justice is obtained by those in need by providing in a responsible, equitable and caring manner high quality legal assistance, duty lawyer services, advice, information and education and by promoting the reform of laws and procedures which inhibit justice.''

An understanding of the work of the Commission can be obtained by reading the various Statutory Reports which it is obliged to publish. Its principal activities can be characterised as follows: the provision of duty lawyers at most Victorian Magistrates' and Children's Courts either directly or by payment to private practitioners; the granting of legal assistance to clients so that their cases can be handled, whether by practitioners employed by the applicant or by referral to a private practitioner; the provision of free legal information and advice; and a variety of community legal education and law reform activities, normally through the Commission's Education and Information Division. Exemption is sought under the Pay-roll Tax Act for all staff except those employed in the last category.

The income of the Commission is currently derived in approximately the following manner: 37.2% from the Commonwealth Government, 24% from the State Government via the Solicitors' Guarantee Fund, 9.4% from State Government grants, 18.6% recovered from clients, 7.8% from costs recovered, 0.8% from the Appeals Cost Fund, and 2.2% from interest on investments.

The provision of legal assistance is subject to stringent guidelines which are set out in Chapter 2 of the Commission's Legal Aid Handbook. Persons charged with serious criminal offences are given priority for legal assistance pursuant to s. 24 of the Act. In addition the Commission has a further priority list. The first priority is to assist people who would be more severely disadvantaged than others if legal aid was not provided.

In 1991 about 60% of assistance was for criminal matters, 23% for family law matters, and 17% for civil matters. The acceptance rate fell from 79% to 67%. More were rejected because of a tightening of the guidelines. Both the Commission and its clients are feeling the pinch of the recession.

In determining guidelines for the allocation of work between public and private practitioners, the Commission is required by s. 10(1)(e)(i) of its Act to have regard primarily to the need for legal assistance services to be readily available and easily accessible to disadvantaged people.

The guidelines reveal why the concentration is on criminal and family law matters. Assistance is not normally provided for conveyancing or probate matters, wills, internal disputes within organisations, commercial or business ventures, bankruptcy, residential tenancy disputes, or town planning, and no assistance is provided for defamation. People do not generally consult a lawyer for pleasure. Lawyers may be involved in positive work to assist their clients in developing or acquiring some object or relationship of value, but legal aid is not available for this sort of thing: the legal work for which legal aid is available is firmly at the pathology end of the spectrum.

Pursuant to an agreement with the Commonwealth dated 5 May 1989, the Commission is required in relation to matters covered by that agreement to have regard to certain objects in relation to the conduct of its operations. Those objects include the provision ``in a responsible, equitable and caring manner'' of high quality legal aid ``for all persons who have a need for such services but who are unable to afford the full cost of obtaining those services''; to ascertain the most efficient and desirable means of maximising rights and remedies under applicable law in Victoria, and to ensure as far as possible that disadvantaged persons in Victoria have access to the law and the legal system in Victoria that is no less than the access enjoyed by other

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persons in Victoria. Pursuant to a schedule to that agreement, the Commission is required to provide free legal aid to veterans.

The Act makes provision for the observance of ethical standards by lawyers employed by the Commission (s. 16). Other lawyers are called upon to contribute by working for 80% of the normal fee (s. 32).

A client profile for 1991 prepared for the Commission shows that in the survey that was taken, 70.19% of all applicants and 75.16% of assisted applicants had household incomes which were below the poverty line; 46.32% of all applicants for legal assistance had net assets amounting to less than $500, and 25.14% were in a net debt position. Less than 5% of assisted applicants had a net weekly household income of over $400.00; 56% of applicants were on a pension or benefit, 19% had no income and 25% were employed. Of those granted assistance, 60% were on a pension or benefit, 19% had no income and 15% were in employment. The Commission contends that the client profile represents a statistically valid sample of the users of its services, and that overwhelmingly those users are from the lower socio-economic and disadvantaged groups within the community. Most of the clients of the Commission (83%) are not charged, and the Commission is obliged by s. 26 of the Act to provide certain services (duty lawyer services and legal advice) free of charge.

Legal assistance is not always provided free of charge. Contributions toward legal costs may be required by the Commission by way of a lump sum or instalments, which may be requested at the commencement of a grant of legal assistance, or later. Contributions are assessed pursuant to a means test or guidelines. As a result, the Commission recovers only a minor proportion of its expenditure on legal assistance by way of contribution from clients. The principle which it applies to recovery from clients is that assisted persons shall be required to contribute toward the cost of providing assistance according to their ability to pay without undue hardship, and shall be placed in a position which, so far as possible, is no better and no worse than that of unassisted persons in relation to payment of costs on the completion of proceedings.

In 1990/1991 the percentage of those assisted subject to an initial contribution was 7.4%. Even where the client makes an initial contribution, the Commission is unable in a large proportion of cases to recover the full cost of provision of legal assistance. Only in a small proportion of cases does the assisted person actually pay the full amount of costs. This is usually in cases where the Commission has taken a security interest in property in which the assisted person has an interest, or the assisted person has recovered money as a result of the legal proceedings.

The guidelines contain stringent exclusions from eligibility for aid subject to cases of individual hardship. The Commission contends that the result of the application of the guidelines in the generality of cases is that an assisted person is already in a position of hardship before aid is extended. The Commission also contends that it is well known that poorer people are more likely to come to the attention of the police, are more likely to be exploited and generally to lack the mechanisms for legal redress without the assistance of organisations like the Commission.

The Commission is treated as exempt on the ground that it is a ``public benevolent institution'' for federal income tax purposes. The Legal Aid Commission of South Australia is partially exempt and that of Western Australia is fully exempt under the relevant pay-roll tax legislation as public benevolent institutions. The predecessor body, the Legal Aid Committee, had obtained an exemption under the Stamps Act as a charitable institution. The respondent admits these facts, but says they are irrelevant.

The question that comes before the Tribunal is not as a consequence of a specific assessment of pay-roll tax, but as a consequence of the disallowance by the Commissioner of an objection put in quite general terms. The Commission objected to the payment of pay- roll tax on the wages of 388 personnel made up as follows: Directorate 22; Audit 1; Criminal Law 41; Assignments 50; Finance and Administration 88; General Law 50; Family Law 25; and Regionals 111. As indicated, the Commission paid over $1 million in pay-roll tax for 1991. The Commission did not seek exemption for 14 staff involved in law reform and community legal education. The question is therefore whether the Commission can bring itself within the terms of s. 10(1)(ba) of the Pay-roll Tax Act 1971 which is as follows:

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"10(1) The wages liable to pay-roll tax under this Act do not include wages paid or payable-

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(ba) by a public benevolent institution to a person during a period in respect of which the institution satisfies the Commissioner that the person is engaged exclusively in works of the institution of a public benevolent nature."

The Law

The relevant law has recently been considered in detail both at this Tribunal and on appeal in the Court in
Marriage Guidance Council of Victoria v Commissioner of Pay-roll Tax (Vic) 88 ATC 2080; (1988) 2 VAR 499 and on appeal 90 ATC 4770, and in
The Cairnmillar Institute & Anor v Commissioner of Pay-roll Tax (Vic) 89 ATC 2001; (1988) 2 VAR 516 and on appeal 90 ATC 4752. I do not think it is here necessary to rehearse in detail the analyses there made. In light of those decisions, and the submissions in this case, I think I should proceed on the footing of the following propositions.

(1) The question is to be answered by reference to the ordinary use of English language in this community today and the statutory context of the relevant phrase: Cairnmillar at ATC 4757. (A consideration of the present statutory context may be found in Cairnmillar at VAR 528.)

(2) Determinations of the same question relating to other institutions in other times should be considered now by reference to the usage of the words then as compared to now, and to the difference in the manner in which various institutions may go about the way of achieving their objects now as compared to then: Marriage Guidance Council at VAR 508, Cairnmillar at VAR 528-529, and ATC 4769.

(3) Various criteria have been developed from the judgments in
Perpetual Trustee Company Limited v FC of T (1931) 45 CLR 224, which referred to relief of poverty, suffering, distress or misfortune or, in the words of Evatt, J (at 235-236) to institutions which ``give relief freely to those who are in need of it and who are unable to care for themselves''. The propositions which now bind me are those of Mr Justice McGarvie that a public institution which provides relief in a direct way to persons suffering from some unfortunate disability or condition is a public benevolent institution, and that the test for whether relief to such persons amounts to benevolence is whether the disability or condition is of such seriousness as will arouse community compassion and thus engender the provision of relief: Cairnmillar at ATC 4761. (In the AAT the position was put as follows in Marriage Guidance Council at VAR 514: the factors that bodies that have been held to be public benevolent institutions appear to have in common are, first, that help is being given to people who are for one reason or another not able to help themselves, secondly, that help is given not just out of feelings of concern that ordinarily affect people when seeing other people in difficulty, but out of a commitment to do something to help such people as a matter of principle, and, thirdly, that so far as possible help is given in return for nothing.)

(4) The issue is to be determined by reference to the objects and constitution of the relevant institution as well as its activities: Marriage Guidance Council at VAR 508, Cairnmillar at ATC 4761.

(5) Relief of poverty is not an essential element in the notion of a public benevolent institution: Marriage Guidance Council at VAR 513, Cairnmillar at ATC 4757. Poverty is in any event a relative term, as are the other categories of misfortune referred to in the cases.

(6) The fact that an institution charges for its services does not preclude it from being characterised as a public benevolent institution: Cairnmillar at ATC 4769.

(7) A substantial and not insignificant part of the activity of the organisation must be devoted exclusively, or at least predominantly, to the relevant benevolent purposes: Marriage Guidance Council at VAR 512.

(8) It may be necessary to distinguish between an institution which in a public way conducts itself benevolently towards those who are recognisably in need of benevolence, and an institution which although concerned in an abstract sense with the relief of poverty and distress, manifests that concern by the promotion of social welfare in the community generally:

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Australian Council of Social Service Inc & Anor v Commissioner of Pay-roll Tax (NSW) 85 ATC 4235 at 4241-4242; (1985) 1 NSWLR 567 at 575; Cairnmillar at ATC 4759-4760.

(9) The taxpayer does of course carry the onus of establishing that the institution comes within the relevant exemption: Pay- roll Tax Act, s. 33A(1)(b).

The Issues

On the face of it, the Commission is an institution which is both public and benevolent. But that is only the beginning. The core issue is whether the Commission is a public institution which provides relief in a direct way to persons suffering from some unfortunate disability or condition, and whether according to ordinary contemporary usage, the disability or condition of those served by the Commission is of such seriousness as to arouse community compassion and so engender the provision of relief.

Rather than summarise the submissions which were made, I think it is sufficient if I identify the four issues that the course of argument elicited.

(1) Is it the function of the Commission to relieve a degree of misfortune such as would attract compassion in this community?

(2) Does the Commission proceed to provide direct relief to such condition, having regard to its extensive reliance upon outside lawyers?

(3) Does the amount that the Commission receives by way of contributions take it out of the class of public benevolent institutions?

(4) Does the level of government involvement and compulsory acquisition of funds mean that the Commission is in some way carrying out a government function with the consequence that the Commission should not be characterised as a public benevolent institution?

The Objects of the Commission

On looking at the provisions of the Legal Aid Commission Act as a whole, I am left in no doubt that its purpose is to provide help to those who need it. There are recurrent references in the legislation and the constituent documents of the Commission to need and disadvantage. Those concepts are developed in the guidelines that have been developed by the Commission pursuant to the Act. It would not, I think, be unduly tart to remark that if the Commission is not providing help for those who need it, the ordinary taxpayer would be entitled to ask why all this time, trouble and money is being devoted to the objects of the Commission.

This conclusion is reinforced by reference to the Second Reading Speech (Hansard, Legislative Assembly, 25 October 1978, 5127ff). The Minister said that the Government was firmly committed to the principle of legal aid, and this meant that ``no person should be denied legal assistance because of inability to afford it''. The Minister said that legal aid involved more than the provision of legal assistance, and encompassed aspects such as community education, to enable people to be aware of the law and their rights under it, and the provision of a system of legal aid that is close and accessible to those who need it. The basic concept was said to be ``the provision of legal services to those who are in need of assistance because they cannot afford the full cost of obtaining private legal services''. Notwithstanding the commitment of the Government to the principle, the Commission was not seen to be directly under the control of the Government: in keeping with the intention that the Commission be independent, the Bill did not impose any requirement of ministerial or other approval of expenditure.

The same conclusion follows I think from a review of the way in which the Commission carries out its work. I am satisfied that the client profile represents a proper basis on which to make the findings about the nature of the work of the Commission. It follows that for the relevant period I find that about 75% of assisted applicants had household incomes below the poverty line, less than 5% of assisted applicants had net weekly household income over $400, 56% of applicants were on a pension or benefit, 19% had no income, and 25% were employed. Only about 7% are able to pay an initial contribution. It follows, I think, that the Commission is predominantly concerned with helping the poor and that but for the poor, we probably would not have legal aid. It also follows from a review of the kind of legal work that is the subject of legal aid - what might be referred to as the pathology cases - that such work is being done in respect of some misfortune suffered by the recipient of aid, such

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as a criminal charge, a matrimonial breakdown, or a wrong causing injury.

I do not think there is any substance in the objection that the range of activities of the Commission may expand or contract depending upon the level of demand made on it and its capacity to satisfy that demand. Nor do I think there is any substance to the objection that various criteria - the guidelines, the means test, and a merits test - have to be invoked by the Commission in order that it may continue to carry on its activities. It cannot be the law that a public benevolent institution loses its status as such merely because it does not have the means to service everyone it would wish to service. What has plainly happened is that because of a shortage of funds the Commission has had to contract its services to a level which it regards as undesirable. I do not think that as a consequence it should be regarded as less benevolent. On the contrary, it seems to me that because of its enforced contraction, it is more clear than ever that the Commission is only providing what aid it can to those who truly need it.

It seems to me to be plain from the kind of legal work that the Commission funds that it is predominantly engaged in assisting people who have a dual problem, a need for legal assistance, and an inability to afford it. I accept the contentions of the Commission that those who qualify for legal aid are generally suffering from hardship and that the poor are likely to have difficulties in dealing with the police and other arms of Government, and to be put in a position where they need legal assistance. I find no difficulty in describing as unfortunate the condition of those who are therefore in need of the services of the Commission. Is this the kind of misfortune which attracts compassion so as to engender the provision of the relief? If not, why did Parliament pass the Act?

I do not think that the Tribunal should get bogged down in this notion of ``compassion'', lest it involve itself in the heresy of treating a gloss on the statute as having the same force as the statute itself. There must inevitably be a subjective element in what one person would regard, and what another person would not regard, as a proper object of compassion. If you are being confronted with a protagonist, and the machinery of the state, and you are facing long imprisonment in respect of an alleged offence, or the prospect that you will not be compensated for the loss of your livelihood, or the loss of access to your children because of some alleged defect of character, or deportation following the loss of refugee status, and you need help from a lawyer, but you cannot afford it, then I think your position is helpless such that most people would feel sorry for you. I am not assisted by an emotive inquiry into the possible reaction of some within the community to the fact that community resources have been devoted to the defence of the Russell Street bombers or Walsh Street murderers; although I have not forgotten that some were acquitted, and that until any was convicted, all were innocent.

While I doubt whether it is appropriate to try to come to a concluded view on each of these issues in isolation, my present inclination is that the objects and activities of the Commission are such that it ought to be regarded as providing help to the helpless and therefore benevolent within that term as it is currently understood. It is I think clear that just as the categories of misfortune are not closed, neither are the means that may be invoked out of benevolence to help those suffering from misfortune. Having considered again the cases on this subject, I am not certain that I have a clear impression of what may or may not be regarded as being within the current usage of a public benevolent institution, but on what I have seen, it would not offend my understanding of that term to see the Commission so described, and I think that it probably would be so described. In truth I doubt the utility of the elephant test in this context, since I have a clear impression that it is easier to identify that sort of pachyderm than this sort of institution.

If it be thought that this conclusion is an example of the softening of attitude to what comes within the concept of ``benevolent'' in this context (as identified by Mr Justice Northrop in
FC of T v Launceston Legacy 87 ATC 4635 at 4646; (1987) 15 FCR 527 at 541), I do not regard it as an impermissible example. Rather I regard it as an instance of attempting to ensure that the connotation of the term remains in touch with changing circumstances. The authorities show that benevolence in this context is not to be reduced to answering needs arising only from material want.

Direct Relief

The degree to which the Commission should carry out its functions by the use of its own

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staff, as compared to their retainer of outside lawyers, is the subject of continuing discussion within the Commission. It is also dealt with in the Act. For the 1991 financial year, the Commission paid out more than $15 million in barristers' fees, more than $26 million in solicitors' costs, more than $5 million in disbursements, and its own salaries and wages were less than $14 million. In terms of its outgoings, the bulk of the legal services it provides are therefore delivered by others.

In my view the authorities provide no hard and fast rule by which this division of labour in delivering aid may be said of itself to disqualify the Commission from characterisation as a public benevolent institution. It is true that the authorities contain references to the direct provision of aid, but in my view those references are directed to the kind of issue that arose in the ACOSS Case, above. That was a very different case, of an umbrella organisation providing propaganda, rather than actual assistance.

What seems to me to be critical in this case is that the Commission is involved in delivering aid to those who need it, and I do not think for relevant purposes that aid should be regarded as any less direct simply because the aid is delivered by an outside rather than an inside lawyer, by an agent rather than an employee. The Commission can of course ultimately only operate through agents, and what seems to me to be critical is not the degree of control that the Commission has over the agents who actually provide the relief, but whether or not what those agents do may be characterised as providing direct relief. In my view it can and should be so characterised.

The decision of Acting Chief Justice Connor in
Australian Council For Overseas Aid v FC of T 80 ATC 4575; (1980) 49 FLR 278 demonstrates, in my opinion, that a public institution may be properly characterised as benevolent notwithstanding that it performs only one of the steps in the relevant process. True it is that the taxpayer there operated through other institutions which were conceded to be public benevolent institutions, but I do not regard that factor as determinative. If a public institution were set up out of benevolence to treat those suffering from AIDS, I do not think it would necessarily lose its status as a public benevolent institution if instead of operating mainly through its own employee doctors it changed to operating mainly through doctors brought in from time to time from the profession at large.

Financial Contributions by Clients

As indicated above, client contributions account for less than 20% of the income of the Commission, and only about 7% of clients are able to pay an initial contribution. As also indicated above, it is I think clear that the fact that an institution charges for its services does not preclude it from being characterised as a public benevolent institution. This has been clear since at least the decision in
Lemm & Ors v FC of T (1942) 7 ATD 138; (1942) 66 CLR 399. In that case elderly ladies in straitened circumstances, most of whom were pensioners, were charged the then substantial amount of one pound a week for the right to remain in a home run by the Presbyterian Property Trust, which was held to be a public benevolent institution. This issue again raises a question of judgment and degree, but I do have a very clear view that the contributions raised by the Commission do not provide a ground for disqualification. It is I think only necessary to refer to the remarks of Mr Justice McGarvie in Cairnmillar at ATC 4769 about the need to consider in a practical manner the way in which public benevolent institutions must ordinarily conduct their affairs in contemporary conditions.

Governmental Involvement

In an area of evanescent distinctions, it is not surprising to come across an argument about what may be the difference between a ``public'' institution and a ``government'' institution, or a ``benevolent'' activity and a ``governmental'' activity. It is in my view clear that there is no necessary contradiction between an activity that may be described as governmental and one that may be described as public, and it is also obvious that the mere fact that the Government concerns itself with an object (such as poverty) does not mean that that object is one that is therefore removed from the realm of ordinary compassion. Indeed, some may say that the welfare state was built on compassion.

Attention here was concentrated on the decision of the Full Federal Court in
Metropolitan Fire Brigades Board v FC of T 91 ATC 4052. In that case the Court held that a fire brigade set up under relevant legislation fell well beyond the limits of ``public benevolent

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institution'', whatever they may be. Funds required for capital and operating expenditure of the Board were predominantly derived from the State Government, and a mandatory levy imposed on prescribed property owners. The Court held that the Board was a body constituted, funded and controlled by Government, and was performing functions on behalf of Government. It went on to hold that a purely Government body was hardly ever likely to satisfy the tests of public benevolent institution status. The argument had been put that people whose buildings are being or have been destroyed by fire may be in need of urgent help and may be in personal danger, so being suitable objects of benevolence. Presumably a similar argument could be made in favour of the armed forces if this country got invaded. The Court held that doubtless the bulk of recipients of moneys disbursed by way of pension payments and other assistance to Commonwealth pensioners are in need also, but that is not to say that the Commonwealth in making those payments is acting as a public benevolent institution: the Commonwealth is simply, like the relevant Fire Brigades Board, using Government funds to exercise a function of Government. The Court did not apply the criteria laid down in Cairnmillar (at ATC 4761), but I have no doubt that the result would have been the same if it had done so.

The Commission is plainly in a different category. It is only partly funded by Government. It does not appear to be subject to the same degree of Government control. (I refer to those parts of the Second Reading Speech set out above.) Indeed many, if not most, of its clients are pitted against the Government. It is publicly accountable, but not solely dependent on Government for funds. It is easier to regard protection from fire as a function of Government than the provision of legal aid. More importantly, even assuming that a guaranteed level of legal aid is now an established function of Government, it appears to me that a legal aid provider operates differently to a fire brigade board. True it is that anyone can be put in a position of misfortune where he or she needs a lawyer, just as anyone can be hit by fire, but it seems to me that the Commission properly directs its activities to an established and reasonably well-defined group within the community whose misfortune is not just that they need a lawyer, but that they cannot afford one. As such, it appears to me that the object of the Commission is to benefit an appreciable and needy section of the public, being those people who cannot afford a lawyer when they are put in a position where they truly need one.

In the course of its judgment, the Full Court remarked (at ATC 4055) that the connection of a body with Government may in some circumstances assist toward a conclusion that it is a public benevolent institution. Government involvement in an institution may be the best evidence that that institution is public in the required sense. I incline to think that may be so here, as was the case in the decision of the Supreme Court of the Northern Territory in
Tangentyere Council Inc v The Commissioner of Taxes (NT) 90 ATC 4352. In that case an Aboriginal housing association which was funded almost entirely by Government was held to be a public benevolent institution.

It does not seem to me at all surprising that a Government wanting to do something about providing legal aid should avail itself of funds that may be available through interest on solicitors' trust accounts. That is just a more painless way of raising money. Nor, given the degree of need for legal aid which the evidence shows, does it seem surprising that a Government would be interested in ensuring that that legal aid was delivered as well as possible, and be administered by a body that the Government regarded as adequate for that purpose, and one that is publicly accountable for its decisions. It seems to me to be naive to contemplate the possibility of legal aid in this State being left to be delivered by private benefactors uncontrolled and unfunded by Government. But I do not think that the fact that Government is bound to be involved entails as a consequence that the relevant activity or chosen instrument cannot be regarded as benevolent.

In my view the Commission ought not be characterised as ``a purely governmental body'' so as to come within any general proscription that may have been put forward by the Federal Court, and I do not think that the amount of Government control or funding in the case of the Commission is sufficient of itself to preclude what may otherwise be a characterisation of the Commission as a public benevolent institution. Indeed, if you were to regard the Commission as a purely governmental body, carrying out a purely

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governmental function, this present contest would be even more bizarre.

Nor do I think that the manner in which the Commission is funded, or the extent of Government involvement in its activities, are such of themselves to entail that the Commission does not have that eleemosynary character of charity in the popular sense that is referred to in the authorities. As indicated above, I do not think that an activity is removed from considerations of ordinary humanity just because it becomes the object of Government attention.

Conclusion

After consideration, I am left with the impression that the Commission ought properly be characterised as a public benevolent institution. During the course of argument, such a conclusion appeared to me to be difficult, but so did the contrary conclusion. The fundamental problem is, I think, to try to find some logical criteria upon which the relevant legal liability can be predicated. This has not as yet been achieved, and probably never will be. As Mr Justice McGarvie remarked (in Cairnmillar at ATC 4761) the issue does not turn on a statutory or judicial definition of the relevant concept.

If the question is whether ordinary people would regard the Commission as a public benevolent institution, I think the answer is yes, but I am not certain of the extent of the connotation of that term in current usage. If the question is whether ordinary people would regard those who need help from the Commission as being proper objects for compassion, my impression is that this is so, but that is only an impression. In the end, it is my opinion that the Commission is providing freely, as best it can, help to people who are suffering from such a serious disadvantage that their misfortune requires the provision of such help, and that the matters raised on behalf of the Commissioner are not sufficient to take the Commission out of the class of public benevolent institutions.

I also think that the Commission comes within the criteria identified by this Tribunal in Marriage Guidance Council (at VAR 514) in that I conclude that the Commission is giving help to people who are for one reason or another not able to help themselves; that help is given not just out of feelings of concern that ordinarily affect people when seeing other people in difficulty, but out of a commitment to do something to help such people as a matter of principle; and that so far as possible the help is given willingly in return for nothing. I should also say that this conclusion is not at all out of place when you look at the other bodies exempted by s. 10(1) of the Pay-roll Tax Act.

The Commission is, I think, close to the borderline. It is obvious that the questions raised here may produce varying responses. They do not permit of logical hard and fast answers. But to finish where I began, they do not appear to me to have much if any bearing on the real question, which must be how much is Government, federal and State, prepared to give to the Commission to enable it to discharge what is obviously believed to be an important function. I do not, of course, suggest what the answer might be; rather I state the obvious, that the question must be answered.

Many people, and not just lawyers, would regard the provision of adequate legal aid as being one of the indispensables of a civilised community. It struck me as being odd that part of the case of the Commissioner in arguing against the exemption of the Commission from pay-roll tax was that the Commission is ``a governmental body administering funds provided by government'': if that is so, what is the point of taking back part of those funds by way of a tax? I may say that the Crown (including the Commonwealth) may wish to take some care before committing itself to the proposition that the provision of adequate legal aid is now an established function of Government; on the evidence before this Tribunal, a question would arise about the extent to which that function is being performed.

It also seemed to me to be odd that the Commissioner was basing arguments against exemption from tax on circumstances that seem to me to have arisen because the Commission has not been provided with enough funding. On the evidence before this Tribunal, the capacity of the Commission to discharge its activities has been seriously impaired by a lack of funding from the various sources available to it. In the scheme of things the answer to the present legal question seems irrelevant.

Accordingly, during the course of the argument, which was short, I was from time to time provoked to contemplate the inevitability of the exegesis of Job Chapter 1, Verse 21, or

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ATC 2063

of the true significance of the signs which I understood were carried on the trains during the last world war: ``Is this journey really necessary?'' The evidence before this Tribunal suggests that something has to be done about the funding of the Commission, and that the conclusion of this present juristic minuet will afford no assistance in solving that problem.

Summary

In summary, my opinion is as follows.

(1) The Commission provides freely, as best it can, help to those people who are suffering from such a serious disadvantage that their misfortune requires the provision of such help, and this is an exercise in community compassion which satisfies the criteria identified by Mr Justice McGarvie in Cairnmillar at ATC 4761.

(2) In the ordinary use of language in the Victorian community today, the Commission would be regarded as a public benevolent institution.

(3) The Commission is not a purely governmental body, and the level of Government involvement in the Commission is not such as to preclude it from being characterised as a public benevolent institution.

(4) Neither the fact that the Commission receives financial contribution from some clients, nor the fact that most of the legal services that are funded are provided by private practitioners, precludes the Commission from being characterised as a public benevolent institution.

(5) It follows that the Commission ought properly be characterised as a public benevolent institution, and that the objection to payment of pay-roll tax should be allowed.

Decision

For the reasons given above, it is my view that the relevant objection should have been allowed on the ground that the Commissioner should have been satisfied within the terms of s. 10(1)(ba) of the Pay-roll Tax Act 1971 that the Commission is a public benevolent institution engaged exclusively in works of the institution of a public benevolent nature. On the basis of that determination, the parties will have to confer as to how it should be implemented. If there is no agreement, the differences will be resolved here. Each side agreed not to seek costs. Accordingly, the only order is that the application for review be adjourned for further mention at a time convenient to the parties, and that there be no order as to costs.