Court in the Act

Australian cases have dominated the 2024 list, with all but one of the top 10 cases having played out in the nation’s courts.

The ACPNS review analysed and summarised almost 200 cases from charity jurisdictions.

The centre's Professor Myles McGregor-Lowndes said the following 10 case summaries were chosen because they “resulted in significant decisions that developed the sector’s jurisprudence or are otherwise noteworthy.”

Catholic Metropolitan Cemeteries Trust v Attorney General of New South Wales

The New South Wales Court of Appeal ruled on the question of whether a charitable trust existed (and then survived consolidating legislation) over the fees collected by trusts created by statute to administer denominational burial portions of a public cemetery.

The case concerned Rockwood Cemetery in Sydney, established in the 1860s and now the largest cemetery in the southern hemisphere.

The cemetery was initially operated with five denominational trustee bodies and a joint committee managing the shared facilities, but in 2012 it was converted to Crown land, and the trustee bodies amalgamated, except for the Catholic trustee.

With $160 million in assets, the Catholic trustee took the matter directly to the Court of Appeal and argued that a charitable trust was established and continued despite the legislation.

The judges agreed that the proceeds from using the land continued to be held on the same charitable trusts, but expressed no view on whether, on a further hearing, it might be open to the court to alter the charitable purpose.

The ACPNS said the case was tailor made for lawyers tangling with trusts created by statute that can be a charitable trust recognised in equity, or a statutory trust not for a person or charitable purpose but for statutory purposes.

“The case was notable as an illustration of the painstaking attention to historical antecedents often required to trace the journey of a charitable trust from its foundation, and how this narrative can influence the course of a judgment.”

Housing Choices Australia Limited v Attorney General for the State of Victoria

This case involved a cy-près (old French for “as near as possible”) scheme application which allows the wishes of a donor to charity to be carried out even if the original charity no longer exists.

In this instance, the application was for trustee Housing Choices Australia Limited (HCAL) to facilitate government funding to redevelop the trust property.

The 1960s property in question was badly in need of renovation, with promised state government funding conditional upon a cy près order to vary the purposes of the trust to include social and affordable housing not restricted to "aged deserving or infirm" persons as specified in the original Trust Deed.

What is notable in the decision is that the company HCAL was to hold Baxter Homes, together with all other property and funds of the trust, for its general purposes and objects, and for the benefit of the inhabitants of the Victoria.

This was subject to a requirement that HCAL notify the attorney-general of any substantial change to HCAL’s general purposes and objects.

The ACPN said resolution of the application sidestepped the unresolved question in Australian law as to whether the exclusively charitable objects of a company constitute a charitable trust over its assets.

Rather than tackle the issue of the charitable trust deriving from the charitable objects of a company, the court inserted a safeguard of providing notice to the Attorney -General before changing the objects of the company.

It was assumed the attorney general would respond by applying to the court to prevent a breach of trust by changing objects. This would put the question of whether the charitable objects of a company constitute a charitable trust over its assets - a question that has been deferred for now.

The ACPNS said there was a good case for statutory reform to facilitate the Court and attorney general’s supervision of charitable companies under state law.

Gerard Brock Rennick v Benjamin Riley and Ors

The Supreme Court of Queensland considered whether a member of a political party that was an unincorporated association, Senator Gerard Rennick, could seek a declaration that could internally appeal an adverse pre-selection decision.

The court sided with previous legal decisions that found the commonwealth parliament, by conferring legislative recognition upon political parties, had taken them beyond the ambit of mere voluntary associations.

Equality Australia Ltd v Commissioner of the Australian Charities and Not-for-profits Commission

At the heart of this case was whether an organisation (Equality Australia) with the object of advocacy in furthering its goal of changing laws and social practices injurious to LGBTQI+ persons qualified as a Public Benevolent Institution (PBI).

The full court upheld the Administrative Appeals Tribunal (AAT) majority findings that:

• LGBTIQ+ people are persons in relevant distress, who may be relieved by acts of benevolence
  

• Equality Australia’s purpose was to address that distress by a particular means, advocacy
  

• the means selected were directed to achieving law reform, and that this law reform “may,” in turn, relieve the distress of LGBTIQ+ people.

However, while there was a logical connection present, the activities of Equality Australia were deemed not sufficiently connected with the relief of the distress.

The ACNC is seeking comment on a draft ‘Decision Impact Statement: Equality Australia Ltd’ and updates to its "Commissioner’s Interpretation Statement: Public Benevolent Institutions."

The regulator said the changes reflected the judgement of the Full Court of the Federal Court on Equality Australia’s eligibility to be registered as a Public Benevolent Institution.

Automotive Invest Pty Limited v Commissioner of Taxation

The ACPNS said that although this High Court case was not squarely about charities, it did use charity jurisprudence in rating cases and involved the determination of "purpose."

The case concerned an appeal in relation to a prestige used car business operated via a classic car museum, and the application of GST and LCT to trading stock.

It was argued that the cars were not used for “no other purpose” than holding the vehicle as trading stock as each car was also used for a museum exhibit being operated commercially.

The High Court was clear that selling cars was the business intended to be pursued, and the museum was the means of achieving that purpose.

Earlier court decisions on the matter were found to have fallen into error by taking an “objective approach” to the meaning of purpose.

The ACNPS said conjuring collateral purposes out of means adopted to achieve purposes often frustrated applicants for charitable status, and this case may assist regulators in appreciating the difference.

Footscray Football Club Ltd v Kneale

This case heard in the Victorian Court of Appeal concerned an award of damages to a child spectator against a football club where a volunteer allegedly sexually abused the child for five years and trafficked him for abuse by others often at the club on game days.

The Court of Appeal found the jury assessment of general damages for pain and suffering and loss of enjoyment of life at $3.25 million too high.

It was 6.2 times higher than the highest previous verdict in a comparable matter, and 4.6 times the figure recommended by the victim’s counsel.

The ACPNS said the case served as a warning that not-for-profit organisations that do not safeguard children, even if they are not members or participants but merely casual observers, do so at their financial peril.

The case is reportedly headed for the High Court.

Bird v DP (a pseudonym)

The High Court heard an appeal against a finding by the Victorian Supreme Court that vicarious liability applied to a person who was not an employee or an independent contractor.

The ACPNS said the High Court did not follow the law in other jurisdictions, such as the UK and Canada, as the majority was unwilling to expand the boundaries of vicarious liability beyond a relationship of employment to one "akin to employment".

Its reasons included that:

• the court would have to revisit and overrule long-standing authorities
  

• the court rejected overseas expansions of the boundaries, particularly in Canada and the United Kingdom, on principle and difficult subsequent consequences were now arising in those jurisdictions
  

• expanding the threshold requirement to accommodate relationships that were "akin to employment" would produce uncertainty and indeterminacy

The ACPNS said in the absence of legislation, the decision meant Australia now stood apart from England and Canada on the issue of whether an organisation can be found vicariously liable for sexual assaults perpetrated by an employee against a child under its care.

“With respect to churches, financial consequences may, in the end, be the least important issue as they continue to lose public trust and confidence, which, it is argued, might imperil the existence of smaller denominations, and some dioceses or congregations of larger denominations.”

Catholic Charities Bureau, Inc. v State of Wisconsin Labor and Industry Review Commission

The issue in this US case was whether four sub-entities of a charitable faith-based organisation were exempt from unemployment insurance contributions for religious reasons.

The majority of the court held that they were not exempt because whether the entities operated primarily for religious purposes depended on whether their activities were mainly religious and not on whether the activities were conducted for a religious motive or reason.

Dissenting members of the court accused the majority members of legislating from the bench, engaging in religious discrimination and entangling the state with religion in violation of the First Amendment.

The ACPNS said the forceful language of the dissenting members of the court was rarely seen in Australian or English Courts.

“Commentary from the United States indicates that the decision of the US Supreme Court is widely anticipated as important for the constitutional definition of 'churches,' 'religion' and 'religious organisation,' the ACPNS said.

The Catholic Charities Bureau is reportedly planning an appeal in the US Supreme Court.

Save the Children Australia v Minister for Home Affairs

This case involved an unsuccessful bid by charity Save the Children Australia to force the federal government to repatriate Australian women and children detained in Syria.

The charity applied to the Federal Court for a writ of habeas corpus (often translated as "produce the body") issued against the government.

The court was satisfied (on the balance of probabilities) that the government did not have control over the detention of the relevant women and children, and that a writ of habeas corpus should not be issued.

The ACPNS said it was doubtful that the women and children concerned were able to bring the application to return to Australia in their own right, given their circumstances.

It was also notable, it said, that a charity undertaking extensive fruitless consultation with the government could marshal pro bono legal assistance to bring the case and that other countries had completed larger repatriations from the Syrian camps.

The ACPNS said the legal principles that Save the Children Australia had relied on had been developed in a series of UK cases, of which there had been little judicial consideration in Australia.

“Hence, from an Australian legal perspective, the questions of law were novel as well as important.”

Estate of Ahmed Abou-Khalid

Central to this case was an interpretation of a will prepared in accordance with Sharia law and the Islamic form of charitable donation known as Zakat.

The New South Wales Supreme Court considered whether the administrator of a deceased estate would be justified in distributing the proceeds without applying any part towards payment of Zakat, in accordance with a direction in the will of the deceased.

The ACPNS said judicial guidance on applying Sharia law in relation to estates was relatively rare in Australia and the lengthy and well written judgement in the case served as an excellent starting point for lawyers providing estate planning advice to such a group.

“Wills are freely made in Australia and may contain, for example, the forced shares of Sharia law, but that will not prevent a family provision application from being made to alter the 2:1 ratio between sons and daughters provided for in the Qur’an.

“In the same way, Zakat can be provided for in a will but will not be enforced without a pre-existing liability at law or in equity accrued by the deceased during their lifetime.”

More information

Charities on centre court for trendsetting legal decisions