Link: Case Summary Document
Citation:  NZHC 1153 (New Zealand High Court, Williams 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.
The Foundation for Anti-Aging Research (FAAR) and the Foundation for Reversal of Solid State Hypothermia (FRSSH) applied to the Charities Commission of New Zealand (now the Charities Registration Board (the Board) for registration as a charitable entity under the Charities Act 2005 (the Act). Both applications were rejected. This was the appeal from those rejections.
The Foundations jointly applied for:
(a) leave to adduce further evidence;
(b) leave for evidence to be given orally;
(c) service of the appeal on the Attorney General; and
(d) leave to cross-examine an analyst from the Department of Internal Affairs.
The Board opposed all these applications. The appeal dealt mainly with technicalities of appeal process in New Zealand. However, of interest was the court’s decision in relation to service on the Attorney General of New Zealand in the light of the purposes of the entities involved.
FAAR was established by deed executed on 20 September 1999 and incorporated under the Charitable Trusts Act 1957 on 27 October 1999. Its objects were set out in clause 3 of its deed as follows:
a) to establish and fund the operation of a non-profit making hospital (the Hospital) to treat ageing human beings with therapies that are substantiated by peer-review published scientific studies; and
(b) to provide for funding of scientific research at the Hospital aimed at discovering medical therapies that will alleviate and eliminate degenerative diseases in human beings;
(c) to provide other funding of scientific research projects outside the Hospital for the purpose of discovering medical therapies that will alleviate and eliminate degenerative disease in human beings;
(d) to establish and support a facility to accept anatomical specimens for the purpose of conducting research aimed at reversing disease, senescence, traumatic injury and deanimation; and
(e) to support other non-profit organisations involved in conducting research aimed at reversing disease, senescence, traumatic injury and deanimation.
FRSSH was more recently established by deed executed on 14 July 2011 and incorporated under the Charitable Trusts Act 1957 on 13 September 2012. FRSSH’s primary function was to fund research in areas similar to those of FAAR. Specifically, clause 3 of the deed establishing FRSSH stated:
The fruits of the scientific research funded may be used for the general benefit of all of mankind, including individuals who may benefit from advancements in organ and tissue transplantation, regenerative medicine, genetic engineering, cloning, DNA transplant engineering, cell colony cloning, immunologic engineering, molecular engineering (nanotechnology) during their lifetime, and including deceased individuals who have been placed into cryopreservation or individuals who have made legal arrangements to be placed into cryopreservation or who may wish to make legal arrangements to be placed into cryopreservation for the purpose of future reanimation.
In considering charitable registration, the Board found that FAAR’s overwhelming purpose was to fund cryopreservation and reanimation research. The Board assessed those purposes under such of the orthodox Pemsel Heads of Charity as were referred to in the registration application: education, relief of the aged and the generic “any other analogous benefit” head. The Board decided that the proposed research purpose was not education because it was not a “useful subject of study” in terms of the decision in McGovern v Attorney-General  1 Ch 321. Cryopreservation and reanimation lacked sufficient academic credibility and was too speculative to have an educative purpose. In addition, there was no New Zealand authority dealing with this question.
The Board also rejected “relief of the aged” as a purpose on the basis that the clients of cryopreservation were already deceased when preserved in that manner, so they were by definition not “aged”. Under the Pemsel analogous benefits category, the Board concluded that cryopreservation was too expensive – between $150,000 and $200,000 for whole body preservation and between $50,000 and $80,000 for neuro preservation. These prices led to the conclusion that this service would be narrowly available and essentially private. The Board’s conclusions in respect of FRSSH were materially identical to those for FAAR. Thus, the two entities were held to have no charitable purposes and were refused registration as charities.
On appeal, the court held that leave to adduce further affidavit evidence (but not oral evidence) should be granted. On service on the Attorney General as the protector and guardian of charities, the appellants argued that the appeals raised a number of issues that might potentially impact on New Zealand’s charities law “well beyond the factual situation pertaining to the Foundations themselves”. The Crown contended that New Zealand courts have, in the past, decided broad principles of charities law without appearance by the Attorney General. His Honour said (at ):
I agree with the appellants that the appeal does raise novel issues around the treatment of “new science” (I use that term neutrally) in charities law. I see no harm at all in directing that the appeal be served on the Attorney-General in light of the issues raised. Whether the Attorney-General wishes then to apply to intervene is a matter entirely for him.
Therefore, the appellant Foundations were successful in their appeal on grounds (a) and (c).
The case may be viewed at: http://www.nzlii.org/nz/cases/NZHC/2014/1153.html
Implications of this case
This case was decided before the appeal decision in Re Greenpeace of New Zealand Inc  NZSC 105 regarding charitable purposes. The invitation made by His Honour here was for the Attorney General to become involved in a further re-examination of charitable purposes in New Zealand with respect to what His Honour referred to as “new science” and whether investigation and research into speculative frontiers of science can be charitable.