Decision Date: August 6, 2014
Link: Case Summary Document
Citation: Supreme Court of New Zealand
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 important appeal in New Zealand to settle the question of whether purposes which are political, including those that advocate certain views, can be charitable. The Supreme Court of New Zealand, by a majority of three to two, held that there should no longer be a political purpose exclusion applied to New Zealand charities.  This finding accords with the legal position in Australia.

Greenpeace of New Zealand Inc (Greenpeace) is an incorporated society which sought registration as a “charitable entity” under Part 2 of the Charities Act 2005 (the Act). Societies or institutions qualify for registration under section 13 of the Act only if they are “established and maintained exclusively for charitable purposes”. At the time of application, the decision on registration was made by the Charities Commission, which no longer exists in New Zealand. Following statutory amendment, that decision is now made by the chief executive of the Department of Internal Affairs and the Charities Board.

The Charities Commission originally declined to register Greenpeace as a charity because two of its objects were not charitable. The objects found to be not charitable were the promotion of disarmament and peace and the promotion of “legislation, policies, rules, regulations and plans which further [Greenpeace’s other objects] and support their enforcement or implementation through political or judicial processes as necessary”.

In distinguishing between charitable objects and those that are “political”, the Commission followed Molloy v Commissioner of Inland Revenue [1981] 1 NZLR 688 (CA) in which the Court of Appeal of New Zealand adopted the view that “a trust for the attainment of political objects has always been held invalid” (at [695]).  This followed the decision in Bowman v The Secular Society [1917] AC 406 (HL). The Commission found that the political purposes of Greenpeace were not merely ancillary to its charitable purposes but were independent purposes. In addition, the Commission concluded that the direct action which it found to be “central” to the activities carried on by Greenpeace could entail illegal activity, which also could not be said to be in the public interest and charitable.

In this appeal to New Zealand’s highest court, Greenpeace challenged the Court of Appeal’s view that political objects could not be charitable unless they were patently ancillary to the main objects of the charity. It argued that the exclusion of political purpose should no longer be applied in New Zealand following the High Court of Australia decision in Aid/Watch Inc v Commissioner of Taxation [2010] HCA 42. In Aid/Watch, the majority opinion treated contribution to public debate concerning charitable ends (in that case the relief of poverty abroad and education about poverty) as of public benefit and charitable in itself, while leaving open the question whether generating public debate in relation to other matters could also be charitable.

Greenpeace argued that there was no proper basis for a free-standing prohibition on political purposes in New Zealand. Rather, the only question was whether the purposes of an entity were charitable within the sense accepted by the common law. The majority (Elias CJ, McGrath, Glazebrook JJ) held that a political purpose exclusion should no longer be applied in New Zealand. They concluded that a blanket exclusion of political purposes is unnecessary and distracts from the underlying inquiry about whether a purpose is of public benefit within the sense the law recognises as charitable. They rejected the conclusion of the Court of Appeal that section 5(3) of the Charities Act enacted a political purpose exclusion with an exemption if political activities are no more than “ancillary”. Rather, section 5(3) provided an exemption for non-charitable activities if ancillary.

The majority concluded that political purposes and charitable purposes were not mutually exclusive (at [59], [62]):

We do not think that the development of a standalone doctrine of exclusion of political purposes, a development comparatively recent and based on surprisingly little authority…has been necessary or beneficial…More importantly, it is difficult to see that all advocacy for legislative change should be excluded from being recognised as charitable. Promotion of law reform of the type often undertaken by law commissions which aims to keep laws fit for modern purposes may well be properly seen as charitable if undertaken by private organisations even though such reform inevitably entails promotion of legislation. Such advocacy may well constitute in itself a public good which is analogous to other good works within the sense the law considers charitable.

Charity law should change in response to social conditions, and as such it would not be proper for an inflexible approach to be taken (at [69]):

It is difficult to construct any adequate or principled theory to support blanket exclusion. A political purpose or advocacy exclusion would be an impediment to charitable status for organisations which, although campaigning for charitable ends, do not themselves directly undertake tangible good works of the type recognised as charitable. As well, a strict exclusion risks rigidity in an area of law which should be responsive to the way society works. It is likely to hinder the responsiveness of this area of law to the changing circumstances of society. Just as the law of charities recognised the public benefit of philanthropy in easing the burden on parishes of alleviating poverty, keeping utilities in repair, and educating the poor in post-Reformation Elizabethan England, the circumstances of the modern outsourced and perhaps contracting state may throw up new need for philanthropy which is properly to be treated as charitable.

However, there was still the need for caution (at [73], [74]):

Advancement of causes will often, perhaps most often, be non-charitable. That is for the reasons given in the authorities – it is not possible to say whether the views promoted are of benefit in the way the law recognises as charitable. Matters of opinion may be impossible to characterise as of public benefit either in achievement or in the promotion itself…It may be accepted that the circumstances in which advocacy of particular views is shown to be charitable will not be common, but that does not justify a rule that all non-ancillary advocacy is properly characterised as non-charitable.

The Court of Appeal had accepted that the promotion of nuclear disarmament and the elimination of weapons of mass destruction, one of Greenpeace’s objects amended to meet the charity test, was charitable because it was uncontroversial.  The Supreme Court did not agree (at [75]):

We are unable to agree with the Court of Appeal suggestion that views generally acceptable may be charitable, while those which are highly controversial are not… Such thinking would effectively exclude much promotion of change while favouring charitable status on the basis of majoritarian assessment and the status quo. Just as unpopularity of causes otherwise charitable should not affect their charitable status, we do not think that lack of controversy could be determinative. We consider that the Court of Appeal was wrong to place such emphasis in the present case on the acceptance in New Zealand legislation and society of the ultimate goal of nuclear disarmament and popular support in New Zealand for the elimination of weapons of mass destruction.

Instead, the Supreme Court said that assessment of whether advocacy or promotion of a cause or law reform is a charitable purpose depends on consideration of the end that is advocated, the means promoted to achieve that end and the manner in which the cause is promoted in order to assess whether the purpose can be said to be of public benefit within the spirit and intendment of the 1601 Statute (at [76]).

The majority were not convinced that the object so readily accepted by the Court of Appeal as charitable was indeed so (at [87]):

Perhaps because of the course taken by the litigation, the essential point of the charitable status of the objects in issue was in our view inadequately addressed. The Commission and the High Court applied a strict political purpose exclusion and dealt with the Greenpeace objects before amendment. And in the Court of Appeal, the conclusion that the purpose of promoting nuclear disarmament and the elimination of weapons of mass destruction was charitable was made on two bases we think to be suspect – the view that the promotion of peace is established by the authorities to be a charitable purpose and the assumption that avoidance of the political purpose exclusion (on the basis that the objects were not controversial) made it unnecessary to consider more closely the manner of promotion.

The objects needed to be reassessed (at [102]):

It is the case that it will usually be more difficult for those who promote ideas they consider to be of public benefit to show charitable purpose as readily as those who can show tangible utility in the good they do. There is truth in the point that where a charity promotes an abstraction, such as “peace” or “nuclear disarmament”, the focus in assessing charitable purpose must be on how such abstraction is to be furthered. The Court of Appeal treated lack of controversy in New Zealand about the goals of nuclear disarmament and the elimination of weapons of mass destruction as determinative of the question whether the promotion of these ends was charitable. We consider that it was necessary to focus rather on the manner of promotion.

Thus the matter of the charitable status of Greenpeace had not been considered on the correct basis (at [104]). Therefore, the matter was remitted for consideration by the Board and the relevant government chief executive (at [104]):

If it is concluded that the object of promoting nuclear disarmament and the elimination of weapons of mass destruction is not shown to be charitable, then the question whether the activities undertaken by Greenpeace are no more than ancillary to its charitable purposes will require further assessment by the chief executive and Board, as the Court of Appeal required. In all the circumstances, the best course seems to us to be to remit the application for reconsideration in the light of the changes to the Greenpeace objects and in the light of the reasons in this Court.

Also considered in this case was the question of illegal activities.  The Supreme Court unanimously dismissed the appeal by Greenpeace against the Court of Appeal’s finding that purposes or activities that are illegal or unlawful preclude charitable status. It was held that an illegal purpose is disqualifying and that illegal activities may disqualify an entity from registration as a charity when such activities indicate a purpose which is not charitable (at [111]):

It may be accepted that an illegal purpose is disqualifying. It does not constitute a charitable purpose and would mean that the entity is not “established and maintained exclusively for charitable purposes”. While illegal activities may indicate an illegal purpose, breaches of the law not deliberately undertaken or coordinated by the entity are unlikely to amount to a purpose. Isolated breaches of the law, even if apparently sanctioned by the organisation, may well not amount to a disqualifying purpose. Assessment of illegal purpose is, as the Court of Appeal recognised, a matter of fact and degree. Patterns of behaviour, the nature and seriousness of illegal activity, any express or implied ratification or authorisation, steps taken to prevent recurrence, intention or inadvertence in the illegality, may all be relevant. On the other hand, we are unable to accept the submission by Greenpeace that only serious offending, such as would permit sanction under the legislation on a one-off basis even if not indicative of any system or purpose, is required before illegal conduct amounts to a purpose of the entity.

The conclusions of the majority were therefore (at [113]-[116]):

1.      “Charitable purpose” is not established where objects are of benefit to the community unless the benefit is also shown to be charitable within the sense used by the common law. A single test of public benefit alone loses the concept of charity which authority establishes as essential. The traditional method of analogy to objects already held to be charitable is better policy.

2.      Since charity is generally concerned with matters of tangible public utility, it will be difficult to show that the promotion of an idea is itself charitable. But “charitable” and “political” purposes are not mutually exclusive if the political purpose is itself charitable because of public benefit within the sense the law regards as charitable. A “political purpose exclusion” as a matter of law is not necessary.

3.      Section 5(3) of the Charities Act does not enact a political purpose exclusion, codifying the common law. It provides that non-charitable purposes do not affect charitable status if no more than ancillary and includes “advocacy” as an example of such ancillary non-charitable purpose. It does not deal with the case where promotion of views is properly regarded as charitable in itself. Such cases are likely to be unusual.

4.      If the object of an entity is the promotion of a cause which cannot be assessed as charitable because attainment of the end promoted or the means of promotion in itself cannot be said to be of public benefit within the sense treated as charitable, the entity will not qualify for registration as charitable. That is because it will not be “established and maintained exclusively for charitable purposes”. Even if an end in itself may be seen as of general public benefit (such as the promotion of peace) the means of promotion may entail a particular point of view which cannot be said to be of public benefit.

The minority of the Court (William Young and Arnold JJ) held that section 5(3) of the Act codified the position that advocacy in support of a charitable purpose is non-charitable unless it is merely ancillary to that charitable purpose. They took the view that the rule that political advocacy is not charitable is defensible not only on the basis of the authorities but also as a matter of policy and practicality. There was accordingly no requirement to depart from the ordinary language approach to section 5(3).

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Implications of this case

This case aligns New Zealand law with the High Court of Australia’s approach in the Aid/Watch case in relation to advocacy by a charity. Thus a “political” purpose can now be a charitable purpose in New Zealand. However, the position of Greenpeace has yet to be determined since the consideration of its application for charitable status was remitted by the Supreme Court for further review.