Previous refusal set aside
In its decision of 16 November 2012, the Court of Appeal set aside the decision of the Charities Commission declining to register Greenpeace as a charitable entity under the Charities Act 2005, and referred the application by Greenpeace for registration as a charitable entity to the chief executive of the Department of Internal Affairs and the Board for reconsideration in light of the Court?s judgment.
Background
Greenpeace philosophy and goals
Greenpeace is an incorporated society through which the wider Greenpeace organisation operates in New Zealand. Its object is to promote a philosophy that:
- encompasses protection and preservation of nature and the environment,
- ?including but not limited to, the promotion of conservation, disarmament and peace.
The organisation also has the aim of identifying, researching and monitoring issues affecting these objects,
and developing and implementing programmes to increase public awareness and understanding of these and related issues.
It also undertakes, promotes, organises and participates in seminars, research projects, conferences and other educational activities which deal with issues relating to the objects of Greenpeace; and promotes education on environmental issues by giving financial and other support to the Greenpeace New Zealand Charitable Trust (GNZCT).
The organisation also co-operates with other organisations with similar or compatible objects, in particular, it co-operates with Greenpeace International and is to abide by the latter?s determinations, insofar as those determinations are lawful. A further object (2.7) of Greenpeace is to promote the adoption of legislation, policies, rules, regulations and plans which further its objects, and support the enforcement or implementation through political or judicial processes, as necessary.
History of application to be registered as a charity & subsequent refusal
Greenpeace applied to the Charities Commission to be registered as a charity, and the Commission declined the application in April 2010.
What the Commission found ?charitable?
The Commission found that the promotion of the protection and preservation of nature and the environment was a charitable purpose as a matter beneficial to the community, and that the research, programmes and events aimed at increasing public awareness, and undertaking educational activities, were also charitable as matters which were for the advancement of education. Similarly, the promotion of education by way of financial support to the GNZCT was a charitable purpose under the advancement of education head.
What was found ?not charitable?
The Commission found however, by reference to the organisation?s website, that the promotion of disarmament and peace was a political purpose that was not charitable, and nor was it ancillary to a charitable purpose. Further, also by reference to the website, the objects of promoting the adoption of legislation, policies, and supporting enforcement through political or judicial processes, were political activities, or political advocacy, that amounted to an independent non-charitable purpose. In short, Greenpeace?s focus was primarily on lobbying and activism. The Commission further found that Greenpeace, in undertaking non-violent direct action, may involve itself in illegal activities, such as trespass to property, that disqualified it from registration as a charitable entity, and this activity had no element of public benefit. In addition, the object of co-operating with other similar organisations was ancillary to the accepted charitable purposes.
High Court Appeal Result 2011
The High Court held that the Charities Commission had been correct not to register Greenpeace as a charity, and dismissed the appeal: Re Greenpeace New Zealand Inc [2011] 2 NZLR 815.
Heath J?s decision
Heath J applied Molloy v Commissioner of Inland Revenue [1981] 1 NZLR 688, and held that the Commission was correct to characterise the purpose of promoting disarmament and peace as non-charitable. Heath J considered the Australian case of Aid/Watch v Commissioner of Taxation [2010] HCA 42, in which the majority of the High Court of Australia had held that the generation by lawful means of public debate, concerning the efficiency of foreign aid directed to the relief of poverty, was itself a purpose beneficial to the community and therefore a charitable purpose. Although favourably disposed to the decision in Aid/Watch, Heath J held that the High Court was constrained to follow Bowman, on the basis that Bowman had been applied by the Court of Appeal in Molloy.
As to the question of whether Greenpeace?s non-charitable political purposes could be regarded as merely ancillary to its charitable purposes, within the meaning of ss 5(3) and 5(4) of the Charities Act 2005, his Honour concluded that Greenpeace?s political objects, designed to put objectionable activities in the spotlight, were independent of its charitable purposes, and therefore disqualified Greenpeace from registration as a charity. Political advocacy could be seen as independent from the organisation?s charitable purposes, because the promotion of a particular point of view is different from the purpose of generating public debate; and it was clear from information on Greenpeace?s website that non-violent direct action was at the core of its values and work. Heath J held that it was unnecessary to decide the issue of illegal activity, but expressed some reservations about whether there was sufficient evidence to draw an inference that Greenpeace was deliberately involved in taking illegal action, as opposed to some of its members being involved in activities that crossed a legal boundary.
Greenpeace appeals
Greenpeace then appealed. The issue on appeal was whether Greenpeace is entitled to be registered as a charitable entity on the ground that it is established and maintained ?exclusively for charitable purposes?.
Events subsequent to the High Court decision
Since the decisions of the Commission and the High Court were delivered, the Charities Commission was disestablished and its functions taken over by the Department of Internal Affairs and a Board.
Also, following the hearing, a memorandum was filed indicating that Greenpeace proposed to amend two of its objects.
- Greenpeace proposed that object 2.2 of its rules be amended to include, along with its already accepted charitable purposes, the promotion of ?peace, nuclear disarmament and the elimination of all weapons of mass destruction.?
- Greenpeace further proposed that object 2.7 of its rules be amended to read: ?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.?
Submissions to the Court of Appeal
Greenpeace?s submissions
On appeal to the Court of Appeal, Greenpeace submitted;
- ?firstly, that Court should not follow Molloy. The exemption of ?political? activities is no longer a relevant or useful touchstone for what is a charitable purpose in New Zealand?s modern democratic environment; and New Zealand law should be brought into line with Aid/Watch Inc.
- Secondly, Greenpeace?s ?disarmament and peace? activities meet the public benefit test. Political advocacy is acceptable, only contentious political advocacy is non-charitable, and the High Court erred in its approach to these activities.
- Thirdly, object 2.7 complied with the requirements for an ancillary purpose and the High Court was wrong to decide otherwise.
The Board?s submission
The Board (having now replaced the Commission) submitted that a change to the law to permit a charity to have a political object would have far reaching consequences for the way in which charities are viewed in New Zealand, including the possibility that commercial or political organisations would qualify for registration as charities. The wider contextual evidence and argument necessary to support such a law change was not before the Court and any such change would be better considered by Parliament.
?The Decision
The political purposes doctrine
(1)?? The Court stated firstly 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. Accordingly, the Court would not depart from Molloy which has effectively been endorsed by the Charities Act 2005 and which established that a society established for contentious political purposes is not established principally for charitable purposes. Any significant change to the law in this respect should be made by Parliament and not the Court. In particular:
(a)???The amendments made by way of the Charities Act 2005 did not abolish the well-established prohibition on purposes that are primarily political;
(b)??Parliament took no steps to amend the definition in 2012 beyond the addition of a reference to amateur sporting clubs. In particular, Parliament did not take the opportunity to amend the definition so as to reverse the decisions of the Commission and the High Court in the present case.
(c)???The fiscal consequences involved in amending the definition to enlarge its scope mean that it is a policy matter that constitutionally should be left to Parliament.
(d)?? Fourth, although 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.
(2)?? The Court noted in conclusion on this point that while the prohibition on political purposes 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 the Court was not persuaded that there are good grounds for overriding it.
(3)?? The Court also noted that:
- Not all objects with political overtones will necessarily vitiate a charitable purpose; and truly ancillary political objects are permissible. Also other similar objects may still come within one of the four heads of ?charitable purpose.?
- The law of charity is not static and that what may be viewed as charitable in one age may be viewed differently in another.
- Charities law should not stand still and must keep abreast of changing institutions and societal values. This does not mean that new heads of charity should be allowed to spring up overnight without close scrutiny; rather Courts should, in appropriate cases be prepared to entertain adjustments ?to things once advisedly established?.
Peace and nuclear disarmament
(4)?? The Court agreed that promotion of peace is both for the public benefit and within the spirit and intendment of the preamble to the Statute of Charitable Uses Act 1601, either by way of analogy or on the basis of the presumption of charitable status. The Court stated however, that given that there are differing views as to how best to secure peace and avoid war, that courts are in no position to determine that promotion of the one view rather than the other is for the public benefit. The question of whether peace should be achieved through disarmament or through maintaining military strength is contentious and controversial with strong, genuinely held views on both sides of the debate. Therefore an entity seeking to promote peace on the basis of one or other of these views would be pursuing a non-charitable political purpose.
(5)?? On this point, therefore, the Court held that Greenpeace?s object 2.2 prior to its proposed amendment made it clear that Greenpeace sought to promote peace through disarmament. By pursuing this one view in a contentious debate, that originally drafted object was therefore not charitable.
(6)??In the Court?s view, however, the proposed amendments to Greenpeace?s object 2.2, which would replace the reference to ?disarmament? with references to ?nuclear disarmament and the elimination of all weapons of mass destruction?, would make a significant difference. These amendments would remove the element of political contention and controversy inherent in the pursuit of disarmament generally and instead constitute, in New Zealand today, an uncontroversial public benefit purpose. Thus the promotion of nuclear disarmament and the elimination of all weapons of mass destruction is a purpose ?beneficial to the community? within the fourth category in the definition of ?charitable purpose?. The Court?s reasons for reaching this conclusion were, in particular:
(a)?? The promotion of nuclear disarmament is in accordance with New Zealand?s international obligations as a signatory to the Nuclear Non-Proliferation Treaty, which has been signed by 190 countries. Legislation, ? including whether the promotion of nuclear disarmament is for the public benefit and therefore capable of constituting a charitable purpose under the Charities Act 2005 ? should be read so far as possible, consistently with those international obligations.
(b)??The promotion of nuclear disarmament is in accordance with New Zealand?s domestic law as enacted in the New Zealand Nuclear Free Zone Disarmament, and Arms Control Act 1987.
(c)???Reflecting overwhelming public opinion in New Zealand, successive New Zealand Governments have confirmed their intentions to support the Treaty and retain the legislation.
(d)??The reference in object 2.2 to ?the elimination of all weapons of mass destruction? is for the public benefit. It is consistent with New Zealand?s international treaty obligations and the general purpose of the New Zealand Nuclear Free Zone Disarmament and Arms Control Act 1987.
(7)??In summary, the public benefit of nuclear disarmament and the elimination of all weapons of mass destruction is now sufficiently well accepted in New Zealand society that the promotion of peace through these means should be recognised in its own right as a charitable purpose under the fourth head of the definition.
(8)??The Court also considered that this object was a purpose within the spirit and intendment to the preamble both on the basis of analogy and the presumption of charitable status. The purpose was analogous to the promotion of peace, and there were no grounds for holding that it was outside the spirit and intendment of the preamble.
Ancillary political activities
(9)??The Court held that once object 2.7 was amended in the way proposed, it would be clear that the ?advocacy? purpose is intended to be ancillary to and not independent from Greenpeace?s primary charitable purposes. The amended object would then meet the requirements of ss 5(3) and 5(4) of the Charities Act and would support Greenpeace?s contention that it is now established ?exclusively for charitable purposes?.
(10)? The consequences of this amendment for the Commission and the High Court decisions regarding Greenpeace?s political activities would be as follows:
(a)??The amendments to objects 2.2 and 2.7 when taken together answered the concerns that object 2.7 was not ancillary to a charitable purpose. The Court?s decision that the amended ?peace and nuclear disarmament? object is charitable meant that the amended ?political advocacy? object would no longer be ancillary to a non-charitable purpose.
(b)??The amendments to object 2.7 recorded an intention on the part of Greenpeace that its ?political advocacy? object would be truly ancillary to its principal objects and not an independent stand-alone object. The Court noted that the Registrar of Incorporated Societies has statutory responsibility for ensuring that incorporated societies do not carry on any operation which is beyond the scope of the society?s objects as defined in its rules. 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 that it did not elevate its ancillary ?political advocacy? object to independent status.
(c)???On the basis that once Greenpeace amended its objects it would take steps to ensure that through its activities it complies at all times with its new objects, the Court found that it was not 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. The Court stated that the focus should now be on Greenpeace?s new objects and its proposed activities in light of those objects. The question whether Greenpeace is now ?established and maintained? exclusively for charitable purposes had to be considered by the chief executive and the Board. Greenpeace was thus to be given the opportunity to persuade the latter that with the amendments to object 2.7, the focus of its proposed ?political advocacy? activities will be truly ancillary to its principal objects and not independent stand-alone activities. Greenpeace should be given this opportunity because the information provided by Greenpeace to date, and as reinforced by its website, did suggest that its ?political advocacy? activities when assessed qualitatively were being pursued as an independent object in its own right.
Unlawful activities
(11)??The Court stated that the question of whether Greenpeace?s activities might have involved illegal activities, such as trespassing, should be considered by the chief executive and the Board, and not by the Court on a second appeal. The Court noted that whether such involvement will be sufficiently material or significant to preclude registration or justify deregistration will be a question of fact and degree in each case, and likely to be influenced by a range of factors, such as:
(a)??the nature and seriousness of the illegal activity;
(b)??whether the activity is attributable to the society because it was expressly or impliedly authorised, subsequently ratified or condoned, or impliedly endorsed by a failure to discourage members from continuing with it;
(c)???whether the society had processes in place to prevent the illegal activity or has since put processes in place to prevent the activity occurring again;
(d)???whether the activity was inadvertent or intentional; and
(e)????whether the activity was a single occurrence or part of a pattern of behaviour.
(12)??The Court noted further that evidence of illegal activities such as trespass would need to be explained by Greenpeace when its application was reconsidered.
Reference to the chief executive and the Board
In summary, the Court held in conclusion that the appropriate course was to exercise the Court?s power to refer Greenpeace?s application for registration to the chief executive and the Board for reconsideration. This was because, as a result of the proposed amendments to Greenpeace?s objects, the nature of Greenpeace?s application for registration had changed so significantly that Greenpeace ought to be given the opportunity to satisfy the chief executive and the Board that it should now be registered. The chief executive and the Board would then have the opportunity to reconsider the application in light of Greenpeace?s amended objects, the Court?s decision that object 2.2 as amended is a charitable purpose, and up-to-date information relating to Greenpeace?s proposed activities.
Source: http://insider.thomsonreuters.co.nz/2012/11/greenpeaceappeal/
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