In Attorney-General v Family First New Zealand [2022] NZSC 80 the NZ Supreme Court has overturned the decision to grant haritable staus under the Charities Act 2005 (NZ) to the Family First party, referring to the 'thin line' between education and propaganda.
The judgment states
[1] The Attorney-General, in his capacity as Protector of Charities, appeals against a judgment of the Court of Appeal in which it allowed an appeal to that Court by Family First New Zealand (Family First) and made a declaration that Family First qualifies for registration under the Charities Act 2005. The Court of Appeal also set aside the decision of the Charities Registration Board | Te Rātā Atawhai (Charities Registration Board) to remove Family First from the Charities Register.
[2] Family First gave notice under r 20A of the Supreme Court Rules 2004 of its intention to support the judgment of the Court of Appeal on grounds not relied on by that Court.
[3] The Charity Law Association of Australia and New Zealand (CLAANZ) was given leave to intervene and its counsel made both written and oral submissions.
Background
[4] Family First was established by a trust deed entered into on 26 March 2006. We will call this the Trust Deed. It was incorporated under the Charitable Trusts Act 1957 on 6 April 2006. It was originally known as “Family First Lobby”, but changed its name to Family First New Zealand later in 2006. It applied for registration under the Charities Act in February 2007 and was registered on the Charities Register with effect from 21 March 2007. The Trust Deed provides that the trustees govern Family First, but there is also a Board of Reference, which is not referred to in the Trust Deed. One of the founding trustees, Mr McCoskrie, is the National Director of Family First.
[5] On 15 April 2013, the Charities Registration Board resolved to de-register Family First as a charity under s 32(1)(a) of the Charities Act. From the perspective of the Board, Family First no longer qualified for registration as a charitable entity for three reasons. First, its main purpose was political and thus non-charitable — it sought to advance points of view about family life which had no self-evident public benefit as a matter of law. Second, its viewpoint expression was not a charitable purpose for the advancement of religion or education. Nor was it generally beneficial. Third, the Board considered Family First had an independent purpose of procuring governmental action consonant with Family First’s own viewpoints.
[6] On 27 May 2013, Family First appealed to the High Court. The hearing of that appeal was deferred until after the delivery of this Court’s decision in Re Greenpeace of New Zealand Inc, which took place on 6 August 2014. After delivery of the Greenpeace (SC) decision, Family First’s appeal was heard by the High Court. The appeal was allowed and the matter was referred back to the Charities Registration Board for reconsideration.
[7] The Charities Registration Board then reconsidered its earlier decision that Family First be de-registered, as directed by the High Court, but concluded again that Family First should be de-registered. Family First appealed against the second deregistration decision to the High Court, but its appeal was dismissed. That High Court judgment was reversed by the Court of Appeal in the decision under challenge in the present appeal. ...
Issues
[15] The lower Courts differed on whether Family First qualified for charitable status. To summarise, the High Court determined that Family First was not charitable under the fourth purpose identified in Pemsel (objects of general utility). Nor did Family First qualify under the second purpose (advancement of education). We call these the second and fourth heads respectively. By majority, the Court of Appeal reversed the High Court decision in respect of both heads, making a declaration that Family First qualified for registration under the Charities Act.
[16] On appeal to this Court, there are three major issues for resolution:
(a) While the principal focus of the argument for Family First in the lower Courts was the fourth head, its case before this Court was firmly based on the second head. Therefore, the principal issue on appeal is whether Family First’s objects qualify as being for the advancement of education. A related issue is whether what we will call “viewpoint expression” (dissemination of materials that adhere to a particular viewpoint) can legitimately qualify as charitable within the meaning of the second head.
(b) Regarding the fourth head, the question is whether Family First’s object of promoting and supporting the institutions of family and marriage qualifies as advancing objects that are beneficial to the community.
(c) The appellant submits that even if Family First’s objects come within either or both of the second and fourth heads, it has other non-charitable objects that are not ancillary to any purpose found to be charitable. On the appellant’s view, this would be disqualifying. The issue is whether that contention is correct.
[17] Several preliminary issues were also raised by the parties. First, Family First argues that, in determining whether its objects meet the requirements of the second or fourth heads, only the objects set out in its constitutional document, the Trust Deed, should be considered. So a preliminary question is whether the inquiry should be confined in that way, or whether the Court can go beyond the deed to consider evidence of Family First’s activities and publications. Second, the appellant’s written submissions included a colour-coded table headed “Assessment of material in case on appeal” that summarised by category and number the material in the case on appeal regarding Family First’s activities. Family First submitted that we should not take into account the information derived from this table, or its subsequent iterations. The question is whether that submission should be accepted (although, it largely turns on how this Court resolves the first preliminary issue).
[18] Finally, a number of other issues were raised, but were not ultimately the subject of extensive submissions, so we deal with them only briefly. These are:
(a) whether the observation in Greenpeace (SC) that the decision of the Court of Appeal in Molloy v Commissioner of Inland Revenue seems correct should be reconsidered (raised in Family First’s r 20A notice); (b) whether the fiscal consequences of a finding that an entity has charitable objects should be ignored by decision-makers (a point raised by CLAANZ); and
(c) whether the withdrawal of charitable status from an entity that engages in political advocacy interferes with the entity’s freedom of expression under s 14 of the New Zealand Bill of Rights Act 1990 (Bill of Rights) (also raised by CLAANZ). ...
[39] As mentioned earlier, the case for Family First was advanced in this Court on the primary basis that it qualified as a charity under the second head, the advancement of education. Family First argued that this could be taken from the purposes in its Trust Deed. In the event that this Court determined the activities of Family First were also to be considered, Family First argued that its publication of 17 reports of educational value, its conduct of annual family forums and its provision of a virtual reading room on its website together substantiated its claim that its purpose was the advancement of education.
[40] Mr Gunn accepted that the 17 reports relied on by Family First as illustrating a purpose of advancing education meet the minimum standard set out in case law for what qualifies as being of educative value. But he argued they were, in truth, advocacy of a particular viewpoint or propaganda, which did not meet the requirements for a charity with the purpose of the advancement of education.
High Court
[41] Although a secondary ground of appeal in the High Court, Family First challenged the decision of the Charities Registration Board that it did not qualify for registration under the second head. The Board had found that the material disseminated by Family First was advocating a particular point of view, which was not an educational purpose.
[42] The High Court Judge said he understood it was conceded by Family First that its purpose was to promulgate a singular view of family (the traditional family). And if the point was not conceded, the Judge concluded that it was plainly the case that Family First’s purpose was to promote the traditional family unit.
[43] The Judge said it was not necessary to address the education/advocacy issue in detail. This was because it was clear that Family First advocated for law change in a variety of areas, some of which were for the public benefit and some of which were not. He saw those purposes as independent purposes rather than as purposes ancillary to an educational purpose. In fact, he thought the opposite was the case: education was undertaken to persuade people to Family First’s point of view and garner support for its efforts to effect the changes for which it advocated.
[44] The Judge considered that, apart from one report (prepared by the New Zealand Institute of Economic Research (NZIER), to which we will refer later) the publications of Family First, which were the best evidence that the trust was for the advancement of education, were all written from the same viewpoint, and promoted a cause favoured by Family First. This did not qualify for the advancement of education in a charitable sense.
Court of Appeal
[45] The majority of the Court of Appeal, Clifford and Stevens JJ, approached their analysis on the basis that the purposes of Family First should be determined primarily from the Trust Deed, adopting the approach of Ellis J in the Anti‑Aging case. They saw a common thread of the advancement of education and research running through the objects in the Trust Deed.
[46] The majority said the objects had a central theme, namely giving support to “marriage and family”. They also noted that one object specifically refers to educating the public on the institutional, legal and moral framework of a just and democratic society. Thus, they considered the objects on their face promoted the advancement of education by facilitating research on, and public understanding of, the roles of marriage and the family in society. The majority Judges were satisfied that the answer to the fundamental question, namely whether the charitable purposes of promoting and disseminating research about the family are “for a public good”, was yes. The majority then analysed the reports commissioned by Family First and the manner in which Family First commissioned, distributed and promoted those reports. They concluded that Family First’s clear purpose in relation to those reports was stimulating public debate and participating in public discourse on important social issues relevant to families. They considered the research materials commissioned by Family First illustrated that its activities were broadly consistent with the objects in the Trust Deed.
[47] The majority said the High Court Judge gave too much weight to the activities of Family First and too little to its objects in concluding that Family First’s activities were aimed at promoting causes.
[48] The majority concluded as follows: The evidence we have reviewed establishes Family First recognised the importance of its objects and purposes to commission research on, and educate the public about, the importance of marriage and family life (including core family values) in New Zealand society. Such research is valuable in promoting public knowledge about marriage and families and the many issues that affect the family. Public discussion and debate about such important issues is desirable to encourage the development of related policies and laws. The NZIER report is but one of many examples showing how Family First went about fulfilling its education and research objects.
[49] Gilbert J, in dissent, said the High Court Judge was correct to deal with the second head (advancement of education) only briefly because the principal argument for Family First was that it qualified under the fourth head. He noted Family First’s response to an inquiry from Charities Services was that it spent 75 per cent of its time on advocacy for specific causes and 25 per cent on administration, fundraising and supporter/database management. The response did not mention education. He also noted that in its 14 years of existence, Family First had published only 21 reports.
Legal test to be applied
[50] Family First’s essential case is that the objects set out in the Trust Deed include the promotion and advancement of research, educating the public and publishing material affecting families, all of which it says exhibit a purpose that falls within the advancement of education. This is assumed to be of public benefit unless the contrary is shown. To evaluate this we will consider not only the objects set out in the Trust Deed but also the publications and activities of Family First.
[51] In Re Collier, Hammond J summarised the law in respect of the second head of charity as follows:
It seems to me that for a publication bequest of this kind to be upheld, it must first confer a public benefit, in that it somehow assists in the training of the mind, or the advancement of research. Second, propaganda or cause under the guise of education will not suffice. Third, the work must reach some minimal standard.
[52] This echoes the formulation outlined by Iacobucci J in the majority judgment of the Supreme Court of Canada in Vancouver Society:
... the purpose of offering certain benefits to charitable organizations is to promote activities which are seen as being of special benefit to the community, or advancing a common good. In the case of education, the good advanced is knowledge or training. Thus, so long as information or training is provided in a structured manner and for a genuinely educational purpose – that is, to advance the knowledge or abilities of the recipients – and not solely to promote a particular point of view or political orientation, it may properly be viewed as falling within the advancement of education.
[53] The formulation set out in Vancouver Society was endorsed in New Zealand by Ronald Young J in Re Draco Foundation (NZ) Charitable Trusts.
[54] The Court of Appeal considered the Vancouver Society formulation was narrow and contrasted it to the comments of Wilberforce J in Re Hopkins’ Will Trusts:
... the word “education” ... must be used in a wide sense, certainly extending beyond teaching, and that the requirement is that, in order to be charitable, research must either be of educational value to the researcher or must be so directed as to lead to something which will pass into the store of educational material, or so as to improve the sum of communicable knowledge in an area which education may cover ...
[55] We agree that education should not be interpreted narrowly, although we do not share the Court of Appeal’s belief that the Vancouver Society test is necessarily narrower compared to the English position. In part, that is because Iacobucci J’s judgment actually sought to widen the meaning of ‘education’ by reference to the “more expansive approach taken by the English courts”. Leaving that issue to one side, we consider that a helpful definition, endorsed by the majority in the Court of Appeal, is contained in Law of Charity as follows, and we are also content to adopt it: Overall, the advancement of education may be taken to mean the “advancement of education for its own sake in order that the mind may be trained” or that it assists in the training of the mind or advances research, which can include obtaining a commercial education. It is also evident that “this branch of law is not confined to teaching in the conventional sense. It extends to all branches of human knowledge and its dissemination”. This reflects the notion that “education”, and its advancement is a broad concept.
[56] For the purposes of this appeal, however, the major question is whether Family First qualifies as advancing education in a charitable sense when its research reports, together with other supposedly educative material, put forward a singular viewpoint on the subject-matter. Charities law has long recognised a distinction between valid educational objects and merely political or propaganda-based objects. CLAANZ referred us to an article by Professor L A Sheridan, which illustrated the line between education and propaganda in these terms:
There is a thin line, difficult to discern and possibly without great legal significance, but there all the same, between trying to convert people to a point of view and informing them of its existence and of the reasons for it – between propaganda and education.
[57] Later, Professor Sheridan added: Nevertheless there is a valid distinction between a trust whose funds are to be spent converting people to a specified political objective and one whose funds are to be used to make knowledge of the arguments for a specified political objective more readily available.
[58] Before elaborating on that distinction, it is first necessary to determine what effect (if any) this Court’s judgment in Greenpeace (SC) may have on what qualifies as “education” within the meaning of the second head. As we will come to later when discussing the fourth head, in Greenpeace (SC), this Court decided that the political purpose exception (which meant advocacy for political purposes was, of itself, a disqualifying factor for an applicant for charitable status) should no longer apply in New Zealand. Although that case concerned the fourth head rather than the advancement of education, it raises the question as to whether the hard-and-fast distinction between education and propaganda or political advocacy should still apply in relation to the second head. To the extent that the distinction was solely based on the political purposes exclusion, there may have been grounds for reconsideration. However, we consider the better view is that the distinction is not solely founded on the former exclusionary rule. Rather, the distinction exists because propaganda does not provide the public benefit that comes from education (to which we revert below). Consequently, the distinction between education and propaganda remains relevant following Greenpeace (SC) and is not substantially affected by it.
[59] Having resolved that preliminary issue, we turn to discuss the test governing the line between education and propaganda. For the most part, the case law illustrates a significant degree of confusion about how best to delineate between those objects. The line has become blurred. In Public Trustee v Attorney-General of New South Wales, Santow J observed: The cases on charities also involve some confusion between means and ends when it comes to their persuasive activities. There is a range of activity from direct lobbying of the government, to education of the public on particular issues, in the interests of contributing to a climate conducive to political change. The line between an object directed at legitimate educative activity compared to illegitimate political agitation is a blurred one, involving at the margin matters of tone and style.
[60] This echoes Professor Sheridan’s comment about the thin line between education and propaganda. It also brings to mind this Court’s observation in Greenpeace (SC) (in relation to the fourth head) that determining whether advocacy qualifies as charitable will depend on a consideration of the end that is advocated, the means promoted to achieve that end and the manner in which the cause is promoted.
[61] Part of the disagreement between the lower Courts turned on whether putting forward a singular viewpoint is compatible with education. To summarise, on the High Court’s view, a second-head charity will ordinarily be disqualified where its educative materials are all written from one viewpoint. Expressing a view (or promoting a cause) will typically constitute advocacy, bringing the charity beyond the contours of the second head. The Court of Appeal’s reasoning allows more room for expressing a view, so long as the objects stated in the trust’s constitutional document are sufficiently education‑focused.
[62] We think it is too simplistic to say that expounding a particular viewpoint on a topic will, of itself, rule out an educational purpose. As the majority in Greenpeace (SC) remarked in relation to the fourth head of charity, a blanket exclusion based on whether a trust’s objects are characterised as political or advocacy obscures focus on the true question — that is, whether the entity’s purposes qualify as charitable in the sense generally understood by law. For second head charities, therefore, the relevant inquiry is whether the entity’s purpose is capable of securing the public benefits said to accrue from education even though the entity expresses a view on the subject-matter. As Professor Sheridan said in the article referred to earlier, “[e]xpounding important points of view, religious and otherwise, is part of the advancement of education”. Similarly, Professor Dal Pont noted that a trust propagating reports containing a viewpoint may still be capable of educating the intended audience by increasing learning, understanding, skills or capabilities where the material allows recipients to “make up their own minds” on the subject-matter.
[63] In Vancouver Society, the Supreme Court of Canada (as mentioned above) held that so long as information or training is provided for a “genuinely educational purpose” and not “solely to promote a particular point of view”, the entity may qualify as charitable under the second head.[72] Later in its decision, the Court clarified that viewpoint expression will disqualify an entity where its true object is “persuasion or indoctrination”. In addition, where the entity’s purpose is educational there must be a “coherent relationship” between the means and the end, that is the activities undertaken to further the purpose and the purpose itself, “such that the activity can be said to be furthering the purpose”. Similarly, the Federal Court of Appeal in Canada has ruled that educating from a “particular political or moral perspective” can qualify as charitable where the teaching does not cross into true advocacy. The authors of Tudor on Charities summarise the means required in these terms: The public must be presented with neutral information so that they can choose for themselves and not be presented with slanted and selective information in support of a pre-conceived point of view. ...
[65] Propagating general views on the subject-matter to help provoke study has also been found to be charitable in Australia. In her dissenting judgment in the Aid/Watch case, Kiefel J commented that asserting one’s views may be “capable of being characterised as for the advancement of education” where the trust’s ultimate object is to advance education, not to persuade. The distinction between education and propaganda was also discussed by Heydon J in his dissenting judgment in Aid/Watch. He described the function of the entity in that case as “not educative, but polemical” given that its main objective was to persuade people into a particular frame of mind.
[66] In summary, we consider that expounding a viewpoint will not necessarily disqualify an entity from charitable status. Viewpoint expression is not fundamentally incompatible with legitimate education — entities that expound a viewpoint may nevertheless have the purpose of bringing about the benefits generated by education, to which the presumption of charitability attaches. For example, they can “advance the knowledge or abilities of the recipients” per Vancouver Society, or achieve the public benefit of what Professor Dal Pont refers to as the “value to society of having an educated population”. However, where an entity which espouses a particular viewpoint claims an educative charitable purpose, the following principles will assist in assessing that claim:
(a) The entity’s purpose must genuinely be to educate rather than advocate for a cause. Where an entity’s direct purpose is to advocate not educate, its ends will not qualify as charitable under the second head. The cases recognise that persuasion is a feature common to both education-based and advocacy-based purposes. However, the question for the court will always be whether the relevant purpose crosses the line between mere education about the existence of a viewpoint and the case for it (with the hope that people may reach their own view on the merits to agree with the disseminator) and propaganda actively seeking to persuade, indoctrinate or “convert” the recipient to the disseminator’s view. Propagating a single viewpoint will be a strong indicator that the entity seeks to advocate not educate, but it is not an automatic disqualifier.
(b) The means adopted will typically be the most helpful guide to assessing whether the relevant purpose is to educate or advocate. They must bear a coherent relationship to the purpose of providing charitable education. Where the means by which education is said to be advanced do not involve balance or general objectivity but are instead characterised by bias towards a particular outcome, that may indicate that the line between education and advocacy has been crossed. If it has, the entity will not qualify for registration as a charity under the second head, either because the means do not legitimately support any educative purpose, or because they illustrate the entity’s true purpose is advocacy.
[67] Where a purpose runs afoul of the above principles, it does not automatically follow that the entity cannot qualify for registration as a charity — rather, it means its qualification or otherwise will be determined under the fourth head, as recently modified by this Court’s decision in Greenpeace (SC).
[68] We now turn to the application of the law to the present case. ...
High Court judgment
[110] Leaving to one side any attempt to limit the definition of family, the High Court Judge considered that a purpose of promoting the benefits of a stable unit for society would likely be charitable. He noted that the NZIER research into the fiscal cost of family breakdown and decreasing marriage rates estimated a cost of upwards of $1 billion a year. Reiterating the qualification regarding Family First’s purpose, the Judge said the NZIER report was independent, peer reviewed research, highlighting various societal problems associated with family breakdown — this lent considerable strength to Family First’s claim to charitable status.
[111] However, the Judge ultimately considered that the true purpose of Family First was to promulgate a singular view of family, which it called the “traditional family”. The Judge did not consider that the evidence established that the achievement of the objective of promoting the traditional family would be a benefit to the community in the sense required by charity, particularly if it came at the expense of other forms of family. He observed that the advocacy cases where charitable status had been acknowledged were scarce, and seemed to be limited to purposes of almost universal acceptance. He did not consider promotion of the traditional family unit, if achieved, would be a public benefit, meaning it did not fall into this category.
[112] The Judge also considered that Family First’s purpose of promoting life by reducing access to abortion and opposing euthanasia was a non‑charitable purpose that disqualified Family First from achieving charitable status, even if its main purpose could be said to be charitable. In this respect, he relied on the decision of the Court of Appeal in Molloy. In Greenpeace (SC), this Court observed that the decision in Molloy “seems correct”. He did not consider that Molloy could be distinguished. And he considered that similar concerns could be raised about other law changes promoted by Family First in relation to parental smacking, prostitution reform and censorship.
Court of Appeal
[113] The majority of the Court of Appeal said the assessment of whether there is a public benefit in a charitable sense requires consideration of the end being promoted and the means and manner of that promotion, referring to this Court’s decision in Greenpeace (SC). It considered the effect of supporting the role and importance of families and marriage was self‑evidently beneficial in an analogously charitable sense as a public good. It drew support for that conclusion from the international instruments referred to earlier.
[114] Unlike the High Court Judge, the majority of the Court of Appeal considered the focus on the “traditional family” did not mean that Family First lost the necessary advancement of a public, charitable benefit. In this respect, they took judicial notice of the fact that by far the larger part of the social groups constituting families in contemporary New Zealand, at least in the nuclear family sense, are those based on civil or religious marriages between men and women. They saw this conclusion as consistent with the progressive approach taken to the question of charitable benefits under the fourth head and also as analogous with the moral and mental improvement cases referred to it in Family First’s submissions before that Court.
[115] The majority then turned to consider whether Family First had purposes of a non‑charitable nature that were more than merely ancillary. They said this question had not been considered in any detail by the Charities Registration Board or the High Court because both had found the “traditional family” focus of Family First disentitled it to charitable status. They considered remitting the matter to the Board but decided not to.
[116] The majority considered that Family First’s engagement in the deliberations of the community on issues such as abortion, euthanasia, anti‑smacking laws, prostitution reform and censorship “is properly characterised as part of its broader purpose of supporting marriage and family as being foundational to a strong and enduring society”. They accepted that Family First’s advocacy activities in relation to divorce, prostitution, abortion, smacking, cannabis reform and euthanasia were also related to specific issues where reasonable and informed views may differ so that no one position could self‑evidently be said to be in the public interest. However they did not see this as precluding charitable status, particularly in light of Greenpeace (SC).
[117] Having said that, the majority did, however, observe that there are issues on which Family First advocates for particular positions, which, while consistent with the values which underpin its support of the institutions of marriage and family, are ones that may fall outside the penumbra of the advocacy of the public goods of family and marriage as currently recognised. They said that Family First needs to bear this in mind when determining its priorities and activities for the future.
[118] In his dissenting judgment, Gilbert J rejected the majority’s conclusion that the institutions of the family and marriage are self‑evidently beneficial as a “public good”. On his reading, the majority conflated two separate limbs required under the fourth head. The first is that the purpose must be such as to confer a benefit on the public or a section of the public (the benefit component). The second is that the class of persons eligible to benefit must constitute the public or a sufficient section of the public (the public component). Supporting traditional families is the public component, not the benefit component. He considered that Family First’s advocacy provided no tangible benefit to families, and thus it was necessary to consider whether in advocating its specific viewpoints or causes, the ends promoted, or the means and manner of promotion, were of public benefit in a charitable sense.
[119] Gilbert J noted the endorsement of Molloy by this Court in Greenpeace (SC). He considered that if the entity in issue in Molloy did not qualify under the fourth head even after Greenpeace (SC), it was hard to see how Family First could do so, given the obvious parallels. He questioned the majority’s conclusion that Family First’s advocacy on issues of the day was merely ancillary to its main purpose, highlighting also that the majority appeared to accept that such advocacy was non-charitable. He concluded that Family First’s cause advocacy was not of self‑evident or established public benefit such that it qualified under the fourth head of charity.
Self-evident benefit?
[120] In the present case, the end of Family First is support of the traditional family and marriage as foundational to a strong and enduring society. It argues this is self‑evidently a purpose beneficial to the community. It supports the view of the majority of the Court of Appeal to that effect. It also refers to Object B of the Trust Deed, which refers to educating the public on, among other things, the moral framework of society. It says this is analogous to the decision of the Court of Appeal in Latimer v Commissioner of Inland Revenue, where supporting the machinery and harmony of civil society (in that case by assisting Māori in relation to Treaty of Waitangi claims) was found to be a charitable purpose, and analogous with the cases on mental and moral improvement.
[121] The appellant argues there is no analogy with Latimer. There, the purpose was to provide tangible research assistance to claimants, which produced wider public benefits to society. There is no such tangible assistance in this case. We agree the analogy is flawed.
[122] In relation to the mental and moral improvement cases, the appellant argues the Court of Appeal majority and Mr Bassett in his submissions are wrong to rely on an obiter observation by Dixon J in Barby v Perpetual Trustee Co (Ltd) to the effect that an object of “raising moral standards or outlook” would be charitable. The majority of the Court of Appeal considered object B of the Trust Deed (education about the moral framework of a just and democratic society) had a clear common character with the tangible public benefits broadly classified under the “moral and mental improvement” banner. They considered Family First sought to fulfil that purpose by engaging in issues relevant to the role of families in society and core family values.
[123] In contrast, Gilbert J saw object B as involving Family First promoting its particular viewpoints, including its view that the traditional family (as opposed to other forms of family) is the fundamental social unit.
[124] When object B is considered in light of the research papers published by Family First and the evidence of its activities, it becomes clear that the means by which this object is put into effect is by Family First advocating for its viewpoint on a number of moral issues, to achieve outcomes in policy or legislative terms that reflect its values. We do not consider that is analogous with the mental and moral improvement cases relied on by Family First. To that, we add that leading commentators have questioned the correctness of the mental and moral improvement cases, describing Scowcroft as “almost certainly wrongly decided” and the other judgments as failing to provide a “reasoned argument for the promotion of mental and moral improvement as a general charitable purpose”. Rather, we will address the question of whether advocacy of this kind comes within the fourth head, applying the approach outlined by this Court in Greenpeace (SC).
Legal test to be applied: Greenpeace (SC)
[125] This Court’s decision in Greenpeace (SC) addressed the position of an entity seeking charitable status that undertakes advocacy of particular causes. As we have found that Family First’s activities fall on the advocacy side of the division between education and advocacy, its claim for charitable status under the fourth head requires the application of the approach outlined in Greenpeace (SC) in relation to advocacy.
[126] An entity claiming charitable status under the fourth head (any other matter beneficial to the community) must establish both that there is a public benefit (or, to use Mr Bassett’s term, a benefit to the community) and that the purpose is charitable by analogy with objects already held to be charitable in earlier cases.
[127] In Greenpeace (SC), this Court determined by a majority that the political purpose exception should no longer apply in New Zealand. Formerly, this rule meant advocacy for political purposes was, of itself, a disqualifying factor for an applicant for charitable status or already registered entities. The majority in Greenpeace (SC) determined that s 5(3) of the Charities Act did not have the effect of confirming by statute the common law political purpose exception.
[128] The majority considered that it was difficult to construct any adequate or principled justification for the political purposes exception. They did not consider that political purposes and charitable purposes were mutually exclusive. They also considered it was difficult to justify the promotion of legislative reform as being disqualifying, when advocacy will in some cases constitute a public good analogous to other good works considered charitable. They considered a strict exclusion “risks rigidity in an area of law which should be responsive to the way society works”. The majority continued: Just as promotion of the abolition of slavery has been regarded as charitable, today advocacy for such ends as human rights or protection of the environment and promotion of amenities that make communities pleasant may have come to be regarded as charitable purposes in themselves, depending on the nature of the advocacy, even if not ancillary to more tangible charity. ... Protection of the environment may require broad-based support and effort, including through the participatory processes set up by legislation, to enable the public interest to be assessed. In the same way, the promotion of human rights (a purpose of the New Zealand Bill of Rights Act 1990, as its long title indicates) may depend on similar broad-based support so that advocacy, including through participation in political and legal processes, may well be charitable.
[129] The decision to move away from a blanket political purpose exception was, however, qualified as follows: 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. ... Furthermore, the ends promoted may be outside the scope of the cases which have built on the spirit of the preamble, so that there is no sound analogy on which the law might be developed within the sense of what has been recognised to be charitable. Even without a political purpose exclusion, the conclusion in Molloy (that the purpose of the Society for the Protection of the Unborn Child was not charitable) seems correct. The particular viewpoint there being promoted could not be shown to be in the public benefit in the sense treated as charitable.
[130] The majority concluded as follows on this issue: Instead, 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.
Application to Family First
[131] The end that is advocated by Family First is the promotion of traditional (man/woman) marriage and the fundamental nature of the traditional family. And, as just discussed, it has an end of education about the moral framework for a just and democratic society. We do not consider that advocacy for these ends is analogous with the ends described in Greenpeace (SC) as ends that have come to be regarded as charitable purposes in themselves (advocacy for such ends as human rights or protection of the environment and promotion of amenities that make communities pleasant). High Court and Court of Appeal
[132] The High Court Judge observed that Family First’s end of seeking recognition of the pre-eminence of the traditional family unit also involves seeking a legislative framework that protects that unit, including making divorce more difficult. He said this would not be a benefit to the community in the charitable sense and could be seen to run counter to anti-discrimination provisions in human rights law. This was rejected by the majority of the Court of Appeal on the basis that a policy that was in tension with human rights law was not illegal.
Appellant’s submission
[133] Mr Gunn argued for the High Court position. He said the majority of the Court of Appeal misunderstood the High Court Judge’s position, which did not turn on whether the purpose was illegal. He said promoting the heterosexual married family as the only authentic sexual bond or the best environment to raise children illustrates the issue. An object that involves advancement of the proposition that single, unmarried or homosexual parents are not “authentic” or optimal cannot be considered charitable. He said this ran counter to advocacy for human rights, which Greenpeace (SC) suggested might be a charitable purpose.
Family First’s submission
[134] Mr Bassett noted that the Marriage Act 1955 accommodates legitimate differences of view about marriage. And he argued that support of the traditional family as foundational to a strong and enduring society is a public benefit to the sectors of the public that affirm the traditional family and man/woman marriage and wish to receive educative materials about them, underpinned by Judeo-Christian values.
Our assessment
[135] We agree with the High Court Judge that an object of promoting the family as foundational to a stable society could be a charitable object. But we do not agree with the Court of Appeal majority that Family First’s advocacy of the role and importance of this particular version of the family and of marriage between a man and a woman is self‑evidently beneficial in a charitable sense.
[136] As we see it, pursuing support for the traditional family by advocating against law reform which would recognise or support other forms of family can be seen as discriminatory. That is problematic for the reasons advanced by the appellant. It is true, however, as the Court of Appeal majority noted, that advocating such changes is not illegal.
[137] However, Family First’s purposes are themselves discriminatory. As is made clear in its Principles on Family, Family First affirms the traditional man/woman family to be “the natural family”; that this natural family “cannot change into some new shape” or be “re-defined by social engineering”; and that the marital union is “the authentic sexual bond, the only one open to the natural and responsible creation of new life”. As the High Court Judge noted, Family First advocates for measures to prefer the traditional family and disadvantage others, such as amending tax and welfare law to eliminate disincentives to marriage. It also advocates a fault-based law for dissolution of a marriage, placing the weight of the law on the side of the spouse resisting dissolution.
[138] None of this is self-evidently beneficial. Nor do we consider that Family First can establish benefit. As Professor Dal Pont observes, where the putative benefit is intangible, a court will need to be convinced that the entity exhibits sufficient public benefit to be characterised as charitable. And any benefits must be weighed against any detrimental effects. We consider it is highly debatable that the benefits outweigh the detriments in this case.
[139] We also consider the High Court Judge was correct when he took into account the discriminatory aspects of Family First’s purposes. He was not just referring to Family First’s advocacy for law changes that would, if enacted, be discriminatory, as the majority of the Court of Appeal seemed to think. Rather, he was noting the fact that a purpose to discriminate (or a purpose that includes discriminatory elements) is not compatible with a charitable purpose. We agree with his analysis.
[140] For these reasons, we are not persuaded that Family First’s purposes are charitable under the fourth head. Even if we had not reached that view, we would still have found against Family First, as we now explain.
[141] Turning to the means and manner used to promote Family First’s end, we come to a different view from that of the majority of the Court of Appeal. The majority of the Court of Appeal considered that Family First’s engagement in the deliberations of the community on issues such as abortion, assisted dying, prostitution reform and censorship is properly characterised as part of its broader purpose of supporting marriage and family as being foundational to a strong and enduring society. We disagree. We do not see engagement with those issues (or others such as alcohol reform and gambling) as merely ancillary to that broader purpose. That means that, in order to maintain its charitable status, Family First must establish that advocating for or against reform of the law relating to abortion, euthanasia and the like is, itself, charitable.
[142] It cannot do this. These are free-standing political issues. To use the words of the majority in Greenpeace (SC), a standalone object that is not merely ancillary “must itself be an object of public benefit or utility within the sense used in the authorities”. These are issues on which there are differing views: they involve the advancement of causes. It is not possible to say whether the views that are promoted are of benefit in the way the law recognises as charitable; they are matters of opinion. Nor is it possible to characterise their promotion or even the achievement of what is advocated for as charitable.
[143] Unlike the situation discussed in Greenpeace (SC), advocacy of these causes is not advocacy for ends that are themselves charitable, like human rights, the protection of the environment or public amenities.[165] That is an important difference between the present case and Greenpeace (SC).
[144] The quantitative information in the appellant’s table illustrates the focus of Family First on activities that are not pursuit of the advancement of traditional families. While the shortcomings of this information are acknowledged, the table illustrates that topics which, in our assessment, are not ancillary to the advancement of the traditional family and marriage are a significant part of Family First’s activities. This was the conclusion also reached by Gilbert J in the Court of Appeal, the High Court Judge and the Charities Registration Board, none of whom had before them the appellant’s table.
[145] The majority of this Court in Greenpeace (SC) said they considered that the decision of the Court of Appeal in Molloy “seems correct”, notwithstanding the fact that the political purpose exception was no longer good law. The entity in issue in that case was the Society for the Protection of the Unborn Child (SPUC). It opposed any change in the law to make abortion more freely available. It claimed charitable status, but the Court of Appeal ruled that it did not qualify.
[146] There is some similarity between the objects of SPUC and those of Family First. The objects of SPUC included to “encourage and promote study and research and the collection and dissemination of information on the moral, medical, legal, political and social implications of pregnancy” and to “inform and educate the public on the need for legal and other safeguards for protecting and preserving the rights of unborn children”.
[147] As Gilbert J noted in his dissenting judgment, Molloy is the New Zealand case that is most closely analogous to the present case. Even the majority in the Court of Appeal in the present case acknowledged this position. They said:
... there are issues on which Family First advocates for particular positions which, whilst consistent with the values which underpin its support of the institutions of marriage and family, are ones that may fall outside the penumbra of the advocacy of the public goods of family and marriage as currently recognised. Issues such as divorce, alternative forms of marriage and, as the Supreme Court recognised when acknowledging the apparent correctness of the decision in Molloy v Commissioner of Inland Revenue, abortion, may fall within that category. Family First will need to bear that in mind as it determines its priorities and activities for the future.
[148] We agree with Gilbert J that, if SPUC in Molloy would not qualify under the fourth head even after Greenpeace (SC), it is hard to see how Family First could do so. We would delete the word “may” where it appears in the quotation from the majority judgment in the Court of Appeal set out above. As we see it, the advocacy purpose and activities of Family First cannot be distinguished from those of SPUC in Molloy and we do not think they can be said to be within the penumbra of advocacy for the traditional family and marriage. As Gilbert J notes, the majority do not explain why they considered these activities were ancillary to that purpose. In effect, their conclusion was that one advocacy purpose was ancillary to another advocacy purpose.
Conclusion
[149] We conclude that Family First does not qualify as a charity under the fourth head.
Rule 20A notice: Molloy
[150] Family First gave notice that it supported the judgment under appeal on another ground, namely that this Court should overrule Molloy and depart from the observation in Greenpeace (SC) that Molloy seems correct, notwithstanding the demise of the political purpose exclusion. Mr Bassett submitted the Court should reconsider Molloy in such a way that permits education regarding abortion and discourages the use of the Molloy decision in lower courts as an exclusionary rule of general application. He described the decisions of the Charities Registration Board and the dissent in the Court of Appeal (and by extension the High Court judgment) as seeking “to close down all conservative education and debate on the issue of abortion by charities”. He pointed out that an entity on the other side of the abortion debate was found to have charitable objects in Auckland Medical Aid Trust v Commissioner of Inland Revenue.
[151] We do not intend to revisit Molloy or the observation about its correctness in Greenpeace (SC). The observation in Greenpeace (SC) recorded that the majority in that case did not see the change that had been made to the political purpose exclusion as affecting the analysis in Molloy in a way that would call into question the outcome in Molloy. We do not consider that observation was in error or needs correction.
[152] We do not intend to engage in the debate about the Auckland Medical Aid Trust case. That decision cannot fairly be characterised as simply a decision to confer charitable status on an entity advocating for more liberal abortion law when Molloy denied it for an entity advocating for a more restrictive regime. The facts of the case and the analysis leading to the conclusion are more complex and nuanced than that. Neither case is before us. The majority in Greenpeace (SC) expressed no view about the correctness of the Auckland Medical Aid Trust case. Neither do we.
[153] More generally, one of the affidavits of Mr McCoskrie filed after the Court of Appeal hearing identified a number of other entities that have taken an opposing position to that of Family First on issues such as abortion, cannabis law reform, gender identity and gay marriage, all of which are registered charities. We do not know the basis on which these entities achieved charitable registration or under which head they qualified. It may be that in their cases, the advocacy they undertook was ancillary to a recognised charitable purpose or was undertaken to advance a recognised charitable end such as advancement of human rights. If the purpose of presenting this information was to suggest that entities that have the object of advocating for the liberal side of a political debate are regarded as charitable while those that have the object of advocating for the conservative side are not, we do not accept that proposition. In principle, an entity that has non-ancillary purposes of advocacy on free-standing political issues will not be entitled to charitable status, whatever side of the debate it is on. It is the lack of any means available to the Court to judge the public benefit of a political issue that will usually count against charitable status. That applies equally to both sides of any political debate.
Fiscal considerations
[154] CLAANZ submitted that the fact that obtaining charitable status has tax implications favouring the entity on which the status is conferred should not influence decision-makers in determining whether to recognise a new type of purpose as charitable in law. Mr Bassett supported that submission. CLAANZ argued that this assumes the tax advantages for a charity are concessions from tax law, when it can equally be argued the non-taxability of charities is part of the definition of the tax base. We do not see that as altering the fact that there is a more favourable tax position for an entity that has charitable status than for an entity that does not.
[155] CLAANZ’s submission challenges the approach taken in Greenpeace (SC), where the majority observed that determining what constitutes a charitable purpose by the method of analogy to objects already held to be charitable was “the safer policy since charitable status has significant fiscal consequences”. We do not consider any correction of that statement is required. The fiscal consequences are a reality that cannot be ignored. The Court in Greenpeace (SC) was not suggesting the fiscal consequences are a controlling factor, but rather that changing the analogical approach that has been followed may be outside what Parliament intended when it effectively determined that the pre-existing law should continue to apply. The only reason to reverse the statement made in Greenpeace (SC) would be if we were minded to abandon the analogical approach. We do not consider there is any good reason to depart from this methodology, which is long standing, was confirmed so recently in Greenpeace (SC) and reflects the common law method of incremental development of the law to adjust to societal changes.
Section 14 of the Bill of Rights
[156] CLAANZ submitted that the withdrawal of charitable status from an entity that engages in political advocacy may be an impermissible interference with the entity’s freedom of expression under s 14 of the Bill of Rights. This is said to arise because the entity loses the tax advantages that go with charitable status if that status is withdrawn. This argument was raised in the Court of Appeal, but the Court did not engage with it.
[157] The same argument (in the context of a case about registration) was rejected by the Court of Appeal in Re Greenpeace of New Zealand Inc, the decision that was under appeal in Greenpeace (SC). It found that a refusal to register as a charity an entity engaging in activities that had political objects did not breach s 14 of the Bill of Rights. Logically, the same must apply to the deregistration of an entity that has been registered as a charity. The Court of Appeal in Re Greenpeace cited with approval the following extract from the decision of the Canadian Federal Court of Appeal in Human Life International in Canada Inc v Minister of National Revenue: With respect to the Charter argument based on alleged infringement of freedom of expression, the basic premise of the appellant is untenable. Essentially its argument is that a denial of tax exemption to those wishing to advocate certain opinions is a denial of freedom of expression on this basis. On this premise it would be equally arguable that anyone who wishes the psychic satisfaction of having his personal views pressed on his fellow citizens is constitutionally entitled to a tax credit for any money he contributes for this purpose. The appellant is in no way restricted by the Income Tax Act from disseminating any views or opinions whatever. The guarantee of freedom of expression in paragraph 2(b) of the Charter is not a guarantee of public funding through tax exemptions for the propagation of opinions no matter how good or how sincerely held.
[158] CLAANZ argued that an analogy could be drawn with the Ontario decision Canada Without Poverty v Attorney-General of Canada. In that case, the Ontario Superior Court declared unconstitutional a rule of the Canada Revenue Agency restricting the proportion of income a charitable entity may expend on political advocacy and the distinction drawn between political and charitable activities in the relevant legislation. The rule was said to be unconstitutional because it violated the freedom of expression provision in s 2(b) of the Canadian Charter of Rights and Freedoms. We do not see that case as persuasive in the present situation. It concerned a rule limiting the freedom of expression of an entity that had charitable status. That is different from the present situation, where the issue is whether Family First continues to meet the statutory requirements for charitable status. The reasoning in Human Life International in Canada applies.
[159] CLAANZ also cited an article by Jane Calderwood Norton, in which she suggests that a Bill of Rights approach to a decision on charitable status may require a more expansive view of benefit when assessing entities engaged in advocacy and other political expression. However, that was qualified by her later observation that, while entities that provide information to the public to ensure they are informed about proposed legislation and policy matters can be seen to be supporting democratic government, an entity that seeks to advocate for one side of a contentious dispute might have greater difficulty in demonstrating that it supports that same value. And, earlier in the same article, Dr Norton opines: There does not appear to be convincing authority for the argument that removing or denying charitable status is a limitation on freedom of expression. Removal of charitable status is more akin to the permissible withdrawal of a state subsidy rather than the suppression of political expression.
[160] We agree with that conclusion. ...
