Decision Date: November 16, 2012
Link: Case Summary Document
Citation: [2012] NZCA 533 (Court of Appeal of New Zealnd, Harrison, Stevens, White JJ)
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 High Court of New Zealand which agreed with the Charities Commission of New Zealand (as it then was) that Greenpeace of New Zealand (Greenpeace) could not be registered as a charity because its main purposes were not charitable, but rather political. The appeal was allowed in the light of certain changes which Greenpeace proposed to its objects and activities.

The decision of the Charities Commission

Greenpeace had applied for registration as a charity in 2008, but was denied charitable status because of its purposes and activities. Before the enactment of the Charities Act 2005 (NZ) (the Act), Greenpeace had enjoyed charitable status, but when it applied for registration as a charity under the Act, the Charities Commission (the Commission) held that Greenpeace was not a society or institution that had been established and maintained exclusively for charitable purposes.

Registration was still possible under the Act, if the non-charitable purposes were ‘merely ancillary to a charitable purpose of the…society’ (section 5(3) of the Act). Ancillary was defined as ‘ancillary, secondary, subordinate, or incidental to a charitable purpose’ and ‘not an independent purpose’: section 5(4).

The Charities Commission took the view that:

·         Although other purposes of Greenpeace were charitable, the purposes of promoting peace and disarmament were political, not charitable.

·         Because of the nature and extent of Greenpeace’s political activities, the purposes which were political amounted to independent, non-charitable purposes.

·         Some of the activities of Greenpeace (such as possible trespass) were illegal and therefore could never be charitable.

The High Court of New Zealand decision: Greenpeace of New Zealand Incorporated [2011] NZHC 77 [see casenote]

The judgement of the High Court of New Zealand was given after the Australian decision in AID/WATCH Incorporated v Commissioner of Taxation [2010] HCA 42 (Aid/Watch) so that the central question as to ‘whether a modern law of charities ought to exclude from registration societies that promote charitable objectives through the use of advocacy, interacting with the executive, legislative and judicial branches of government’ was decided in the context of an affirmative answer to that question having been given in Australia.

While agreeing that some of the purposes of Greenpeace were charitable, the High Court of New Zealand held that the Commission had been correct to deny Greenpeace registration as a charitable entity. The Act did not change the common law meaning of ‘charitable purpose’ as it applied in New Zealand. The case of Bowman v Secular Society Ltd [1917] AC 406 (HL) was still good law in New Zealand, and Molloy v Commissioner of Inland Revenue [1981] 1 NZLR 688 (CA) (Molloy) was held to be binding on the Court.

His Honour considered the conclusions in Aid/Watch but felt that they were reached through an analysis of the particular Australian Constitutional provisions, for a system of representative and responsible government with a universal adult franchise that pertained to Australia, but not New Zealand. His Honour applied the Bowman principle, and the decision in Molloy, though ‘with a degree of reluctance’.

Thus, the findings in the High Court were that:

·         The objects of Greenpeace promoting disarmament and peace were held to be non-charitable, on both a quantitative and qualitative analysis.

·         These objects were not merely ancillary, but rather were independent purposes which disqualified Greenpeace from registration as a charitable entity.

·         His Honour in the High Court made no findings on the issue of illegal activities.

This Court of Appeal decision

The Court of Appeal allowed the appeal in this case on the basis that:

·         Greenpeace proposed to alter its objects to replace the object of ‘promoting disarmament’ with the object of ‘promoting peace and nuclear disarmament and the elimination of all weapons of mass destruction’. The Court of Appeal found that this object enjoyed such wide support in New Zealand that it was not political, but was indeed charitable.

·         Greenpeace proposed to limit its political activities to those which were ancillary.

The decision to register Greenpeace as a charitable entity was remitted to the Chief Executive of the Department of Internal Affairs and the Charities Registration Board (the Board), in lieu of the Charities Commission which no longer exists. The registration is yet to be decided.

The issue of change of objects to facilitate registration as a charity

The Court of Appeal agreed that most of Greenpeace’s objects were charitable as expressed. However, they sought clarification on two of those objects (objects 2.2 and 2.7) which Greenpeace agreed to amend during the hearing. These objects are to be amended as follows [amendments in bold]:

2.2 Promote the protection and preservation of nature and the environment, including the oceans, lakes, rivers and other waters, the land and the air and flora and fauna everywhere and including but not limited to the promotion of conversation, peace, nuclear disarmament and the elimination of all weapons of mass destruction.

2.7 Promote the adoption of legislation, policies, rules, regulations and plans which further the objects of the Society listed in clauses 2.1–2.6 and support their enforcement or implementation through political or judicial processes, as necessary, where such promotion or support is ancillary to those objects.

Greenpeace submitted that the law as set out in Molloy (that political purposes sought through advocacy were not charitable) was ‘stale’ and should be changed to align with Aid/Watch in Australia. Greenpeace said that disarmament and peace were accepted goals in New Zealand and met the public benefit test. Only ‘contentious’ political advocacy was non-charitable.

The Board of the Charity Commission submitted that Greenpeace’s own website yielded many examples of political advocacy which involved direct action, including activities which might become illegal. These activities could be argued to be at the heart of Greenpeace’s objectives.

The Court of Appeal reviewed the website material and considered whether Greenpeace was ‘established and maintained exclusively for charitable purposes’: section 13(1)(b)(i) of the Act. The requirement that a charitable entity be both ‘established and maintained’ exclusively for charitable purposes reflects the need to focus not only on the objects of the society but also on its activities, current and proposed.

The Court of Appeal confirmed that for New Zealand the following matters had not changed (at [41]–[46]):

·         Section 5(1) of the Act defines charitable purpose in the same manner as the common law:

‘In this Act, unless the context otherwise requires, 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.’

·         Although parliament clearly intended that the four recognised heads of charity remain the law in New Zealand, this is an inclusive definition (by the use of word ‘includes’) which in its terms is not exhaustive.

·         ‘Any other matter beneficial to the community’ brings with it the public benefit test, and defines ‘charitable’ in the sense of coming within the spirit and intendment of the preamble to the Statute of Charitable Uses 1601 (43 Eliz I c 4) (the preamble).

·         The specific reference in section 5(3) of the Act to ‘advocacy’ makes it clear that ‘advocacy’ may be an ancillary, non-independent non-charitable purpose, but not a primary, independent purpose.

·         The specific terms of section 5(4) of the Act clarify that an ancillary non-charitable purpose that is not an independent purpose of a society does not prevent the society from qualifying for registration.

On the section 5(3) point relating to advocacy, the Court of Appeal said that a similar distinction is drawn in the Canadian legislation, but not in the Australian legislation, which does not contain a definition of ‘charitable institution’ (see Aid/Watch at [11] and Income Tax Assessment Act 1997 (Cth), sections 50–1 and 50–5; Fringe Benefits Tax Assessment Act 1986 (Cth), section 65J(1)(baa); and A New Tax System (Goods and Services Tax) Act 1999 (Cth), section 176–1). The absence of this distinction was taken into account by the High Court of Australia in reaching its decision in Aid/Watch (at [26]).

The Court of Appeal held that any changes to the law in relation to lifting the prohibition on political purposes were a matter for parliament. The Court said (at [59]–[60] [emphasis added]):

…while there have been significant developments in the law since the prohibition on political purposes was adopted, the rationale for the prohibition has not necessarily been undermined. There is little doubt that, like Australia and Canada, New Zealand may now be described as a modern participatory democracy with well-developed constitutional arrangements for public involvement. It also has a Bill of Rights protecting freedoms of thought, conscience, religion and expression. It is consequently far removed from the position in England a hundred years ago when the prohibition on primary political purposes was adopted. At the same time, however, it remains important to distinguish between exercising those rights to support purposes which are recognised as primarily charitable and pursuing purely political purposes…. Having reached this view, we proceed on the basis that Parliament did not intend to alter the well-established principles of law relating to the nature and scope of the expression ‘charitable purpose’ in New Zealand. This means in particular that we are not prepared to depart from the decision of this Court in Molloy v Commissioner of Inland Revenue, which has effectively been endorsed by the Act and which established that a society established for contentious political purposes could not be said to be established principally for charitable purposes.

The Court continued (at [63] [emphasis added]):

As the decision in Molloy indicates, the prohibition on political objects is based on the inability of the Court to determine where the public good lies as between competing views of a contentious political nature…. [T]here is also no doubt an underlying concern that taxation benefits should not be available to a society pursuing one side of a political debate. In National Anti-Vivisection Society v Inland Revenue Commissioners Lord Wright pointed out that to enable a society to pursue a controversial purpose as a charitable purpose and to claim the benefit of being immune from income tax ‘would amount to receiving a subsidy from the state to that extent’. While the prohibition has produced some continuing and anomalous results, which have led to criticism and suggestions for reform, and no longer applies in Australia, it remains part of the current law of New Zealand and we were not persuaded that there are good grounds for overriding it.

However, the Court emphasised (at [64]) that the prohibition applied to contentious or controversial objects. Purely ancillary political objects were permissible. Moreover, the law of charity was not static (at [66]). The Court said (at [67] [emphasis added]):

In Aid/Watch Inc the High Court of Australia said that the statutory use of the term ‘charitable’ was to be understood by reference to its source in the general law as it was developed in Australia ‘from time to time’. In our view a similar approach should be adopted in New Zealand, while bearing in mind that the development of the law here must be consistent with and constrained by the provisions of the Act.

On the amendment to Greenpeace’s object 2.2 relating to peace, the court held that (at [72]):

It is uncontroversial and uncontentious today that in itself the promotion of peace is both for the public benefit and within the spirit and intendment of the preamble, either by way of analogy or on the basis of the presumption of charitable status. It is therefore within the fourth head of the definition of charitable purpose under the Act.

However, the means of achieving peace were contentious. Greenpeace had originally mentioned only disarmament in object 2.2. This would not be appropriate since it represented only one side of the debate. Therefore, the Commission and the High Court were correct to say that the object as originally expressed was not charitable.

The Court of Appeal took the view that the amendment of object 2.2 to refer to ‘nuclear disarmament and the elimination of all weapons of mass destruction’ would make a ‘significant difference’. The changed wording would remove ‘the element of political contention and controversy’ (at [76]), and be widely accepted in New Zealand as an uncontroversial public benefit purpose. It would be in line with government treaty obligations, and with overwhelming public opinion. In addition, it would be within the spirit and intendment of the preamble to the Statute of Elizabeth because of its analogy with the promotion of peace, which had long been accepted as a charitable purpose.

Therefore, the change of object 2.2 would make the object charitable.

The issue of change of political activities to be merely ancillary

The Court of Appeal held that the change in the wording of object 2.7 proposed by Greenpeace would make it clear that the political purposes it had were ancillary purposes. There were three significant consequences (at [86]–[90]):

First, the amendments to objects 2.2 and 2.7 when taken together answer the concerns of the Commission and the High Court that object 2.7 was not ancillary to a charitable purpose. Our decision that Greenpeace’s amended ‘peace and nuclear disarmament’ object will be charitable means that the amended ‘political advocacy’ object will no longer be ancillary to a non-charitable purpose. Second, the amendments to object 2.7 record an intention on the part of Greenpeace that its ‘political advocacy’ object will be truly ancillary to its principal objects and not an independent stand-alone object. For present purposes, we should assume that once this object is amended, Greenpeace as both an incorporated society and a registered charitable entity will take steps to comply with it…. As a registered charitable entity, Greenpeace would also be required to ensure that it carried out its activities in accordance with the charitable purposes in its objects and did not elevate its ancillary ‘political advocacy’ object to independent status. Failure on the part of Greenpeace to take these steps would mean that it was not ‘maintained’ exclusively for charitable purposes as required by the Act. This would put its charitable status at risk…. Third, on the basis that once Greenpeace has amended its objects it will take steps to ensure that through its activities it complies at all times with its new objects, we do not consider that it is necessary to focus attention entirely on the past activities of Greenpeace in the same way as the Commission and the High Court were required to. In our view the focus should now be on Greenpeace’s new objects and its proposed activities in light of those objects. The question is whether Greenpeace is now ‘established and maintained’ exclusively for charitable purposes.

This last point meant that the Board should now reconsider the application by Greenpeace for registration as a charitable entity. The Court said (at [103]) that the Board will need to decide:

(a) whether in light of relevant up-to-date information relating to Greenpeace’s proposed activities its new ‘political advocacy’ object is truly ancillary to its principal charitable purposes and is not an independent stand-alone object; and

(b) whether Greenpeace is involved in illegal activities that mean that it is not entitled to registration as a charitable entity.

The case may be viewed at:

Implications of this case

This case dealt with a very important issue in charity law in New Zealand. Whilst the Court of Appeal of New Zealand did not overturn any of the established law relating to the definition of charity or political advocacy and charitable purposes per se, they held that changes proposed by Greenpeace of New Zealand to its objects were sufficient for it to fall within the definition of a charitable entity.

Moreover, they implied that since the law of charity was not static, it should be changed from time to time in a similar manner to that adopted in the Aid/Watch case in Australia. This was entirely a matter for the parliament.

However, the Court made it clear that the decision was based on the altered objects and activities put forward by Greenpeace, and that Greenpeace would be obliged to conform to those changes or face losing its charitable status. This meant avoiding making its political advocacy or activities more than ‘ancillary’, and engaging in illegal activities. The Court said (at [91]):

…Greenpeace should be given the opportunity to provide the chief executive with relevant up-to-date information relating to its proposed activities in light of its new ancillary ‘political advocacy’ object. It is important that Greenpeace should be given this opportunity because we share the concerns of the Commission and the High Court that the information provided by Greenpeace to date does suggest that its ‘political advocacy’ activities when assessed qualitatively were being pursued by Greenpeace as an independent object in its own right. Those concerns were reinforced for us by the material obtained from Greenpeace’s website set out in the submissions for the Board which we summarised earlier in this judgment. If, notwithstanding the amendments to object 2.7, Greenpeace intends to pursue its ‘political advocacy’ role to the same extent as that material would indicate, then in our view the Board could well be justified in reaching the same conclusion as the Commission and the High Court reached.

This may be regarded as fair warning to Greenpeace.