Link: Case Summary Document
Citation:  NZHC 1493 High Court of New Zealand, Collins J
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.
This was an appeal against a decision of the New Zealand Charities Board (the Board) not to register Family First New Zealand (FF) as a charity. FF’s trust deed, dated 26 March 2006, set out six purposes:
• to promote and advance research and policy supporting marriage and family as foundational to a strong and enduring society
• to educate the public in their understanding of the institutional, legal and moral framework that makes a just and democratic society possible
• to participate in social analysis
• to produce and publish relevant and stimulating material in newspapers, magazines, and other media
• to be a voice for the family in the media
• to carry out such other charitable purposes within New Zealand as the Trust shall determine.
On 6 April 2006, FF was incorporated under the Charitable Trusts Act 1957. FF was approved as a charitable entity by the then Charities Commission (the Commission) and registered under the Charities Act 2005 (the Act) on 18 May 2007. On 21 February 2008, the Commission enquired as to the extent of advocacy undertaken by FF. In New Zealand at that time, advocacy activities were not a charitable purpose. FF replied that its focus was not on advocacy such as lobbying ministers or others, but rather on education, research and encouraging public debate. The Commission carried out a review of FF’s operations, and concluded on 16 March 2010 that FF was still eligible to be registered as a charitable entity.
On 24 February 2012, the Charities Amendment Act 2012 came into force in New Zealand. The amending Act disestablished the Charities Commission and transferred the functions of the Commission to the Department of Internal Affairs (the Department) and the Charities Board. On 11 September 2012, the Department advised FF that it intended recommending to the Board that FF be removed from the charities register under section 32(1)(a) of the Act. The Department’s position was that FF’s purposes included advocating and promoting a political viewpoint, which was not a charitable purpose. FF was deregistered as a charity on 15 April 2013. FF filed a notice of appeal in the High Court on 27 May 2013. On 17 June 2013, the High Court made an interim order under section 60 of the Act that FF remain on the register of charitable entities pending the outcome of its appeal. The parties then agreed that FF’s appeal be deferred until after the Supreme Court delivered its judgment in Re Greenpeace of New Zealand Inc  NZSC 105 (Greenpeace), which was delivered on 6 August 2014.
In New Zealand, charitable purposes are defined in the same manner as under the common law in Commissioners for Special Purposes of Income Tax v Pemsel  UKHL 1. Section 5(1) of the Act provides that ‘charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community’. To be charitable, the entity’s purpose must be for the public benefit, as established by the relevant case law. It is assumed, unless there is evidence to the contrary, that the charity is for that public benefit when the first three categories of charitable purpose are involved. Where the fourth category of charitable purpose is relied upon, public benefit must be expressly established. Any private benefit derived from an entity’s activities must be a means of achieving an ultimate public benefit.
A non-charitable purpose will not preclude registration if that non-charitable purpose is merely ancillary to a charitable purpose. Sections 5(3) and (4) of the Act provide:
(3) To avoid doubt, if the purposes of a trust, society, or an institution include a non-charitable purpose (for example, advocacy) that is merely ancillary to a charitable purpose of the trust, society, or institution, the presence of that non-charitable purpose does not prevent the trustees of the trust, the society, or the institution from qualifying for registration as a charitable entity.
(4) For the purposes of subsection (3), a non-charitable purpose is ancillary to a charitable purpose of the trust, society, or institution if the non-charitable purpose is—
(a) ancillary, secondary, subordinate, or incidental to a charitable purpose of the trust, society, or institution; and
(b) not an independent purpose of the trust, society, or institution.
The Greenpeace decision in the Supreme Court
Greenpeace NZ Inc (Greenpeace) was refused registration as a charity because it had a ‘political’ purpose which was not charitable. Greenpeace’s objectives included:
• the promotion of conservation, peace [and] nuclear disarmament; and
• the promotion of legislation, policies, rules, regulations and plans which further the objects of the Society…and support their enforcement or implementation through political or judicial processes as necessary.
The Supreme Court held that:
1. To qualify as charitable, a purpose had not only to be for the public benefit, but had also to be a “charitable purpose” as determined by analogy with objects already held to be charitable.
2. Section 5(3) of the Charities Act was directed towards excluding political activity that could not itself be characterised as a charitable purpose.
3. Political purposes and charitable purposes were not mutually exclusive. Whether advocacy or promotion of a cause was a charitable purpose depended on consideration of the end advocated, the means promoted to achieve that end and the manner in which the cause was promoted in order to assess whether the purpose could be said to be a public benefit within the spirit and intendment of the Statute of Elizabeth I.
4. It was not a criterion for registration as a charity that the advocacy undertaken or views expressed by the entity were generally acceptable and not “controversial”. The Chief Justice explained said that the Supreme Court was unable to agree with the NZ Court of Appeal’s suggestion that views generally acceptable may be charitable, while those which are highly controversial are not (at ).
5. The Court had no adequate means of judging the public benefit of the promotion of nuclear disarmament and the elimination of all weapons of mass destruction. The Chief Justice explained that whether the promotion of Greenpeace’s ideas “is beneficial is a matter of opinion in which public benefit is not self-evident and which seems unlikely to be capable of demonstration by evidence” (at ).
The decision of the Charities Board to deregister FF
The decision of the Board to deregister FF was taken before the decision in Greenpeace. The grounds advanced by the Board were:
1. FF’s main purpose was to promote points of view about family life. The Charities Board concluded that this was a non-charitable political purpose that did not have a public benefit.
2. FF had an independent purpose to procure government action consonant with FF’s points of view. The Charities Board said this purpose was also a non-charitable political purpose that was not ancillary to any valid charitable purpose.
3. FF’s purpose of promoting points of view about family life was not a charitable purpose to advance religion or education.
4. FF did not qualify as a charity because its purposes did not come within “any other matter beneficial to the community” in the definition of charitable purpose in section 5(1) of the Act.
The Board said that political purposes could never be charitable because they could never have a public benefit. There were three categories of political purpose:
1. The furtherance of the interests of a political party or representative.
2. The promotion of a point of view, the public benefit of which is not self-evident as a matter of law.
3. The procurement of government action, including legislation.
At issue in this case were the second and third of these types of purpose. The point of view in question was described on FF’s website as follows:
…a ‘natural family’, not the individual, is the fundamental social unit…[a] “natural family” is: … the union of a man and a woman through marriage for the purposes of sharing love and joy, raising children, providing their moral education, building a vital home economy, offering security in times of trouble, and binding the generations.
The Board took the view that this was an opinion or value judgement on what is best for families and civil society, and a “controversial” point of view in the sense used by the Court of Appeal in Greenpeace. In the Board’s view, FF’s activities to promote its point of view did not qualify as dissemination of the results of educational research or provide any other charitable benefit for the community. On the third type of political purpose, the Board said that FF’s promotion of its point of view was propaganda based on opinion rather than research. Procuring government action based on this opinion was political activity.
Therefore, although FF did have charitable purposes under the fourth head of charity in Pemsel (these being improving the moral and spiritual welfare of the community and promoting good citizenship), these were not its primary purposes. The Board was satisfied FF’s main purpose was to promote its point of view about families. It said that this activity was not a charitable purpose and that this role was “so pervasive and predominant it [could] not realistically be considered ancillary to any valid charitable purpose” (at ] of the deregistration decision). Thus, seeking political outcomes was “at the forefront of its overall endeavour” (at  of the deregistration decision).
His Honour in this case followed the decision in Greenpeace, saying that (at -):
The Charities Board’s fundamental position that Family First’s political objectives could never be charitable cannot be reconciled with the approach taken by the majority of the Supreme Court in Greenpeace. The Charities Board’s decision was based upon a fundamental legal proposition that has subsequently been found to be incorrect. The Charities Board’s view that political purposes could not be charitable underpinned its decision. In view of the Supreme Court’s explanation that political purposes are not irreconcilable with charitable purposes, it is appropriate for the Charities Board to reconsider the position of Family First in light of the Supreme Court’s judgment. In addition, the Charities Board’s analysis that Family First’s advocacy role is “controversial” and therefore not self-evidently of benefit to the public will need to be reconsidered in light of the approach taken by the majority of the Supreme Court in Greenpeace.
In determining public purpose, His Honour said that the Board needed to determine this point by analogy (at -):
I am not suggesting the Charities Board must accept Family First’s purposes are for the benefit of the public when it reconsiders Family First’s case. I am saying, however, that the analogical analysis which the Charities Board must undertake should be informed by examining whether Family First’s activities are objectively directed at promoting the moral improvement of society. This exercise should not be conflated with a subjective assessment of the merits of Family First’s views. Members of the Charities Board may personally disagree with the views of Family First, but at the same time recognise there is a legitimate analogy between its role and those organisations that have been recognised as charities. Such an approach would be consistent with the obligation on members of the Charities Board to act with honesty, integrity and in good faith.
FF had also a possible educational purpose which could be classified as charitable. It had undertaken research of a substantive nature. This would need to be taken into account by the Board in reconsidering FF’s case (at -):
The Charities Board concluded Family First advanced its polemic points of view under the guise of research and that it was not genuinely involved in the advancement of education. To be a charitable education activity, the entity must, in addition to conferring a public benefit, promote learning which may be undertaken through a variety of means such as training programmes, conferences or by carrying out or disseminating research that improves knowledge about a particular issue. Mr Gunn [counsel for the Board] submitted that the Charities Board correctly concluded Family First’s purposes did not include the advancement of education because its activities involved indoctrination or dissemination of propaganda. Mr Gunn submitted that with one exception, Family First’s reports had a “tenacious or polemic character”. Mr Gunn properly acknowledged however, that a report Family First commissioned from the New Zealand Institute of Economic Research (NZIER) was a legitimate piece of research. That report, called “The Value of Family: Fiscal Benefits of Marriage and Reducing Family Breakdown in New Zealand” contained significant research which Mr Gunn acknowledged had not been undertaken previously. The NZIER report was not referred to by the Charities Board in its decision. When the Charities Board reconsiders Family First’s case it will need to carefully examine the NZIER report and determine whether that report is sufficient to qualify Family First’s activities as including the advancement of education for the public benefit.
The appeal was allowed. It was held that the Charities Board had to reconsider its decision to deregister Family First. In reconsidering its decision the Charities Board had to give effect to the judgment of the Supreme Court in Greenpeace and this judgment.
The case may be viewed at: http://www.nzlii.org/nz/cases/NZHC/2015/1493.html
The Greenpeace decision may be viewed at: http://www.nzlii.org/nz/cases/NZSC/2014/105.html
Implications of this case
The outcome of this judgement is that the Charities Board has to reconsider its decision to deregister Family First. The decision is that the purposes of Family First are charitable (in the same manner as those in the Greenpeace case), and so it should be registered as a charitable entity in New Zealand. This continues New Zealand’s move to settle the question of whether purposes which are political, including those that advocate certain views, can be charitable.