PARTIES: NORTHERN LAND COUNCIL
v
COMMISSIONER OF TAXES
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: APPEAL FROM LOCAL COURT EXERCISING TERRITORY JURISDICTION
FILE NO: No. LA1 of 2000 (2000/2126)
#DATE 21:12:2001
HEARING DATES: 30 and 31 August 2001
JUDGMENT OF: ANGEL J
DELIVERED: 21 December 2001
Appeal dismissed.
Counsel:
Appellant: Mr J Basten QC with Mr S Glacken
Respondent: Mr J Durack SC with Ms J Kelly
Solicitors:
Appellant: Northern Land Council
Respondent: Clayton Utz
Judgment category classification: B
Judgment ID Number: ang200111
Number of pages: 32
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
BETWEEN:
NORTHERN LAND COUNCIL
Appellant
AND:
COMMISSIONER OF TAXES
Respondent
CORAM: ANGEL J
(Delivered 21 December 2001)
[2] On 11 August 1997 a delegate of the respondent Commissioner issued a
Default Assessment Notice pursuant to s 19(2)(a) of the Act. Pursuant to
s 34(1) of the Act on 27 August 1997 the appellant gave the respondent
Notice of Objection referred to in its letter of 7 August 1997.
[3] The issuing of the default assessment and the making of the objection
followed tidings from the respondent Commissioner of Taxes on 29 July 1996 that
he was "unable to recognise the Northern Land Council as a public benevolent
institution". On 4 September 1996 the respondent gave reasons in support of
his view that the appellant is not a public benevolent institution for the
purposes of s 9 of the Act.
[4] Pursuant to s 34(3) of the Act the respondent considered the
appellant's objection and disallowed it, written notice whereof dated 31
December 1999. The present proceedings involves an appeal pursuant to
s 35 of the Act against the respondent's decision. Declaratory relief is
also sought in the general jurisdiction of the Court.
[5] Section 9(a) of the Act exempts from liability for payroll tax an employer
which is a public benevolent institution where the employer satisfies the
Commissioner that the wages for which the exemption is sought are paid during
the relevant period to an employee exclusively engaged in work of a public
benevolent nature. The present appeal is only concerned with the question
whether the appellant Land Council is a public benevolent institution. This
question can be decided in response to the declaratory relief sought by the
appellant pursuant to the Court's general jurisdiction rather than in the
appeal under the Act: see Commissioner of Taxes v Tangentyere Council
Inc (1992) 107 FLR 470. If the appellant succeeds in obtaining its
principal relief, namely, a declaration that at the time of the assessment it
was a public benevolent institution for the purposes of s 9(a) of the Act,
the parties are agreed that it is appropriate that the appeal to be adjourned
to permit the Commissioner to consider further representations in regard to the
second limb of s 9(a).
[6] Whether the appellant Land Council is a public benevolent institution for
the purposes of s 9(a) of the Act is a jurisdictional fact upon which the
exemption in s 9(a) depends, cf Commissioner of Taxes v Tangentyere
Council Inc, supra, and as such is a fact to be determined, not on the
basis of the material before the Commissioner at the time of the assessment,
but on the evidence before the Court, Corporation of the City of Enfield v
Development Assessment Commission (2000) 199 CLR 135 at 151, cf
Ngurratjuta Pmara Ntjara Aboriginal Corporation v Commissioner of Taxes (No
1) (2000) 155 FLR 146. The Land Council contends that the relevant facts
in the present case are admitted by the Commissioner, Perpetual Trustee Co v
Federal Commissioner of Taxation (1931) 45 CLR 224 at 232 and 234. To the
extent that they are not, it is said they are capable of being known from the
statutory charter of the Land Council and the notorious plight of Aboriginal
people in the Northern Territory. These are matters on which the Court can
inform itself from public or authoritative sources, Gerhardy v Brown
(1985) 159 CLR 70 at 142-143; see also Aboriginal Hostels v Darwin City
Council (1985) 75 FLR 197 at 211, applied in Tangentyere Council Inc v
Commissioner of Taxes (1990) 99 FLR 363 at 369-370, Toomelah
Co-operative v Moree Plains Shire Council (1996) 90 LGERA 48, and Alice
Springs Town Council v Mpwetyerre Aboriginal Corporation (1997) 115 NTR 25
at 39) of the type put forward by the Land Council in the appeal, and to the
extent it is necessary, cf Alice Springs Town Council v Mpwetyerre
Aboriginal Corporation (1997) 115 NTR 25 at 39-40, from the affidavit
evidence of Professor Jon Altman and Mr John Roberts.
[7] The Land Council was established under s 21(1) of the Aboriginal Land
Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act") on
14 January 1997 and its functions and powers are governed by that Act.
The area for which it is responsible is, generally speaking, the northern half
of the Northern Territory. The boundaries of the area are depicted in its
annual reports. [Exhibits JR-9 to JR-23]) and the Aboriginal population in
that area is about 29,000. It is one of four land councils established under
the Land Rights Act, the other three being the Central Land Council
(responsible for the southern half of the Northern Territory), the Tiwi Land
Council (responsible for Bathurst and Melville Islands), and the Anandilyakwa
Land Council (responsible for Groote Eylandt and Bickerton Island), see
generally, House of Representatives Standing Committee on Aboriginal Affairs
and Torres Strait Island Affairs, Unlocking the Future, August 1999, par
2.10 ("HRATSIC Report").
[8] The Land Rights Act was enacted to implement the recommendations of Justice
Woodward in his Second Report of April 1974 and the policy of the Whitlam and
Fraser Governments to confer land rights on Aboriginal people as a means of
correcting past injustices, see Aboriginal Land Rights Commission,
Second Report, April 1974, Second Reading speeches on Aboriginal Land
(Northern Territory) Bill 1975 and Aboriginal Land Rights (Northern
Territory) Bill 1976, Parliamentary Debates, House of
Representatives, 16 October 1975, 2222-2225, 4 June 1976, 3081-3084 and 17
November 1976, 2778-2781, and Ministerial Statement, 1 December 1976, 3044.
The terms of reference were for Justice Woodward to inquire into:
The appropriate means to recognise and establish the traditional rights and
interests of the Aborigines in and in relation to land, and to satisfy in other
ways the reasonable aspirations of the Aborigines to rights in or in relation
to land. (Second Report, p 183)
[9] In his report Justice Woodward stated that the aims underlying the
recognition of land rights for Aborigines included: "the doing of simple
justice to a people who have been deprived of their land without their consent
and without compensation"; the promotion of social harmony; the provision of
land "as a first essential for people who are economically depressed"; and
where possible the preservation "of the spiritual link with his own land which
gives each Aboriginal his sense of identity and which lies at the heart of his
spiritual beliefs". For the reaffirmation of these aims, see HRATSIC Report,
pars 1.25-1.34.
[10] The recommendations made by Justice Woodward and the implementation of
those recommendations by the legislation were designed to give statutory
recognition to Aboriginal traditional law relating to land, which at that time
the common law did not recognise, Milirrpum v Nabalco (1971) 17 FLR 141
cf Mabo v Queensland [No 2] (1992) 175 CLR 1. Thus, the long
title of the Land Rights Act is:
An Act providing for the granting of Traditional Aboriginal Land in the
Northern Territory for the benefit of Aboriginals, and for other purposes.
[11] The Land Rights Act provides for the restoration of traditional Aboriginal
land of two classes. The first class comprises the former Aboriginal Reserves
in the Northern Territory described in Schedule 1, Land Rights Act s 10. Land
so reserved under the Social Welfare Ordinance 1964 (NT), and the earlier
legislation, was dedicated for the "use and benefit' of the Aboriginal people
concerned so as to ensure that the land "should be used solely by Aborigines":
see Report from the Select Committee on Grievances of Yirrkala
Aborigines, House of Representatives 1962-1963, pars 25-28, and Ministerial
Statement, 9 April 1963, Parliamentary Debates, House of Representatives
at 481. See also Aboriginal Land Rights Commission, First Report (1973)
par 66 and Kruger v Commonwealth (1990) 190 CLR 1 at 75-76, 97 and 158.)
The second class comprises unalienated Crown land in the Northern Territory
where it is established that there are traditional Aboriginal owners of that
land: Land Rights Act, ss 11 and 50(1)(a), and definitions of "traditional
Aboriginal owners" and "Aboriginal tradition" in s 3(1). As Brennan J
said in R v Toohey; ex parte Meneling Station (1982) 158 CLR 327 at 358,
the Act recognises that "Aboriginal ownership is primarily a spiritual affair
rather than a bundle of rights".
[12] In providing for the restoration of traditional Aboriginal land the Land
Rights Act seeks to address and rectify the wrongful dispossession of
traditional Aboriginal owners from their lands, cf Mabo v Queensland
[No 2] (1992) CLR 1 at 29 and 108-109 and to ameliorate the harmful social
consequences that flow from that dispossession, cf Aboriginal Hostels v
Darwin City Council (1985) 75 FLR 197 at 211-212.
[13] As at December 1998, 42.1% (566 600 km²) of the Northern Territory
had been granted to its traditional Aboriginal owners, with claims for a
further 11.35% (152 400 km²) then under process, see HRATSIC Report, par
2-8.
[14] As already noted, the Land Council is constituted under s 21(1) of
the Land Rights Act by the Minister responsible for that Act, and by s 22
is a body corporate with perpetual succession. The Northern and Central Land
Councils had first been established in response to the First Report (par 260)
of Justice Woodward, who in his Second Report recommended that they be
incorporated and given the responsibilities identified in that report under the
proposed legislation.
[15] The membership of the Land Council is drawn from Aboriginal people living
in the area for which the Land Council is responsible and are chosen by those
Aboriginal people, Land Rights Act, s 29(1). The Chairperson and Deputy
Chairperson of the Land Council are appointed from and by the members of the
Land Council, Land Rights Act, s 30. Elections are held every three years and
members are elected from the seven regions in the area of the Land Council,
Northern Land Council, Annual Reports 1998-1999 (p 7) and 1999-2000
(p 8). The Land Council may delegate certain powers given to it by the
Act to staff of the Council or to committees of members appointed by the Land
Council, Land Rights Act, ss 28 and 29A. The power of delegation has been used
for Regional Councils or Committees as part of a process of localisation or
regionalisation of decision-making, Northern Land Council, Annual Reports
1998-1999 (p 11) and 1999-2000 (pp 8 and 18).
[16] The functions of the Land Council are specified in s 23(1) of the
Land Rights Act. They are directed to benefiting the Aboriginal community in
the Northern Territory generally, and the traditional Aboriginal owners of
Aboriginal land in the Northern Territory in particular.
[17] The underlying objects of the Land Council are to assist in the
restoration and management of land for the benefit of Aboriginal people living
in its area of responsibility, including both the traditional Aboriginal owners
of and other Aboriginals concerned in Aboriginal land. The functions of the
Land Council are directed to those underlying objects in two principal ways.
First, by assisting in the making of traditional land claim (Land Rights Act,
s 23(1)(a) and (f), and secondly, by supervising Land Trusts as the
holders of title in Aboriginal land to perform their powers for the benefit of
the Aboriginals concerned, Land Rights Act, ss 5 and 23(1)(b), (c), (e), (ea),
(fa) and (h), and Part IV.
[18] In carrying out its functions the Land Council must have regard to the
interests of, and consult and act in accordance with the wishes of Aboriginal
people interested in the land who may be affected by the performance of its
functions, Land Rights Act, s 23(3).
[19] Section 23(1) Land Rights Act confers on the Land Council the following
functions:
(a) To ascertain and express the wishes and the opinion of Aboriginal people
living in the area of the Land Council on the management of Aboriginal land and
appropriate legislation concerning that land, Land Rights Act, s 23(1)(a), cf
Toomelah Co-operative v Moree Plains Shire Council (1996) 90 LGERA 48 at
57-58 and Dareton Local Aboriginal Land Council v Wentworth Council
(1995) 89 LGERA 120 at 125-126. On the distinction between political activity
to change policy that is not a charitable object, and law reform activity to
give effect to existing policy that is a charitable object, see Public
Trustee v Attorney-General (NSW)(1997) 42 NSWLR 600 at 621.
(b) To protect the interests of traditional Aboriginal owners and other
Aboriginals interested in Aboriginal land, Land Rights Act, s 23(1)(b), cf
Maclean Shire Council v Nungera Co-operative Society (1995) 86 LGERA 430
at 433.
(c) To assist in the protection of sacred sites, whether or not on Aboriginal
land, Land Rights Act, s 23(1)(ba).
(d) To consult with traditional Aboriginal owners and other Aboriginal people
interested in Aboriginal land with respect to any proposal relating to the use
of that land and to negotiate agreements for the use of such land, Land Rights
Act, s 23(1)(c), (e), (ea) and (fa), see also Part IV on the granting of
mining interests and s 23(1)(d) for the acquisition of interests in land
the subject of a deed of grant held in escrow.
(e) To assist Aboriginal people claiming to have a traditional land claim, in
particular, by arranging for legal assistance for such a claim at the expense
of the Land Council, Land Rights Act, s 23(1)(f), cf Legal Aid
Commission of Victoria v Commissioner of Pay-roll Tax (1992) 92 ATC 2053 at
2059 and Toomelah Co-operative v Moree Plains Shire Council (1996) 90
LGERA 48 at 59.
The Land Council also has functions to maintain registers recording the names
of its members, the members of Land Trusts and of traditional Aboriginal
owners, Land Rights Act, ss 22 23(1)(g) and 24. It also has a
specific duty to attempt the conciliation of disputes between Aboriginal
people, Land Trusts, Aboriginal Councils and Incorporated Aboriginal
Associations, Land Rights Act, s 25.
[20] The functions of land councils and of land trusts are structured under the
Land Rights Act in such a way as to ensure that traditional Aboriginal owners
of land, and other Aboriginal people with an interest in such land, make
decisions about the use of that land. This gives effect to the principle of
self reliance, which was considered by a Parliamentary Committee to be
"important for the future economic and social development" of Aboriginal
people, HRATSIC Report, pars 1.27-1.28, 3.4-3.6 and 3.77 and cf Tangentyere
Council Inc v Commissioner of Taxes (1990) 99 FLR 363 at 373.
[21] With the approval of the Minister the Land Council may perform other
functions conferred on it by laws of the Northern Territory, including
functions in relation to the protection of sacred sites, access to Aboriginal
land and schemes for the management of wildlife on Aboriginal land. See Land
Rights Act, s 23(2) cf Dareton Local Aboriginal Land Council v
Wentworth Council (1995) 89 LGERA 120 at 126-127. The functions so
conferred concern the management and use of land, for the assistance and
protection of Aboriginal people. See instrument of approval from the Minister
for Aboriginal and Torres Straight Islander Affairs dated 11 May 2000 [Exhibit
JR-2} specifying the laws of the Northern Territory to be: Aboriginal Land
Act, Coburg Peninsula Aboriginal Land, Sanctuary and Marine Park Act, Lands and
Mining Tribunal Act, Mining Act, Nitmiluk (Katherine Gorge) National Park Act,
Northern Territory Aboriginal Sacred Sites Act, Pastoral Land Act, Petroleum
Act, Special Purposes Leases Act and Territory Parks and Wildlife
Conservation Act.
[22] The Land Council has been recognised as a representative Aboriginal and
Torres Strait Island Body under Part 11 of the Native Title Act 1993 (Cth)
("the NTA"). As a representative body it has the functions and powers
conferred under Division 3 of Part 11 of the NTA, which include: the
facilitation and assistance of native title claims, NTA, S 203BB, the
certification of native title claims and the registration of indigenous land
use agreements; NTA, s 203BE, the resolution of disputes about native title,
NTA, s 203BF, the giving of notice to persons who hold or claim to hold
native title or matters affecting their interests, NTA, S 203BG, and the
entering into of indigenous land use agreements, NTA, S 203BH.
[23] I agree with the submission that the underlying objects of the functions
conferred on the Land Council under the NTA concern the restoration of land to
dispossessed Aboriginal people, and once restored, the management of that land
in the area for which the Land Council acts as a representative body, that is,
the northern half of the Northern Territory. This accords with the area of its
responsibility under the Land Rights Act.
[24] The functions of the Land Council as a representative body under the NTA
are structured in such a way to ensure that Aboriginal people who have or claim
native title over land have the primary say in decision making about such land,
NTA, s 203BC.
[25] The annual reports of the Land Council detail its activities carried out
in accordance with its statutory functions. As is apparent from those reports,
the activities of the Land Council are directed to the underlying objects of
the Land Rights Act, that is, by assisting in the restoration and management of
land for the benefit of Aboriginal people.
[26] Insofar as the activities of the Land Council involves the representation
of Aboriginal interests in policy development through law reform, cf Public
Trustee v Attorney General (NSW) (1997) 42 NSWLR 600, those activities are
directed to the function conferred by s 23(1)(a) Land Rights Act that the
Land Council ascertain and express the wishes and the opinion of Aboriginal
people living in the area of the Land Council "as to the management of
Aboriginal land in that area and as to appropriate legislation concerning that
land". That function is incidental to the principal functions of the
restoration of Aboriginal land and the management of Aboriginal land.
[27] The Land Council is financed from the Aboriginal Benefit Reserve, formerly
known as the Aboriginal Benefit Trust Account, established by s 62 of the
Land Rights Act. It replaces the Aborigines Benefits Trust Fund established by
s 21 of the Northern Territory (Administration) Act 1910 (Cth),
from which the Minister was empowered to expend monies for the benefit of
Aborigines in general, a particular class of Aborigines or a particular
Aboriginal. Section 21 was introduced by the Northern Territory
(Administration) Act 1952 (Cth). It provided for the appropriation by the
Fund of amounts received by the Commonwealth under the Mining Act 1939
(NT), as amended in 1952, as royalties for mining on Aboriginal Reserves, which
were fixed at 2.5%, that is, twice the normal rate: Parliamentary
Debates, House of Representatives, 6 August 1952 (44-47), 9 October 1952
(2850-2852), 28 March 1963 (134) and 9 April 1963 (481-484). By s 62A of
the Land Rights Act monies standing to the credit of the Fund were transferred
to the Aboriginals Benefit Trust Account. The Reserve is a statutory fund and
a component of the Reserved Money Fund. It is subject to separate reporting
requirements under the Financial Management and Accountability Act 1997
(Cth). See, for example, Aboriginal Benefit Reserve, Annual Report 1999-2000
where details are given of the s 64(1) payments to land councils (p4),
s 64(3) payments (p5) and the s 64(4)-(5) & (7) discretionary
payments including grants for the benefit of Aboriginal people.
[28] Payments into the Reserve are made, firstly out of the Consolidated
Revenue of the Commonwealth pursuant to standing appropriations, Land Rights
Act s 63(2) and secondly, in respect of mining operations on Aboriginal
land conducted by or on behalf of the Commonwealth, the Northern Territory or a
government authority, the equivalent of royalties payable for those
operations, Land Rights Act, s 63(4)-(5). These payments are known
as "mining royalty equivalents" or "MREs".
[29] The following payments are made out of the Reserve to the land
councils:
(1) Amounts equal to 40% of the amounts paid into the Reserve for mining
royalty equivalents, Land Rights Act, s 64(1)-(2).
(2) Amounts equal to 30% of the amounts paid into the Reserve for mining
royalty equivalents for mining carried out on Aboriginal land within the area
of the relevant land council, Land Rights Act, s 64(3).
(3) Such other amounts as the Minister may direct for the benefit of Aboriginal
people living in the Northern Territory (which may be by way of a loan) or
amounts to meet the expenses of administering the Reserve or the administrative
costs of land councils, Land Rights Act, s 64(4)-(7).
[30] Since 1991, distribution of the mining royalty equivalents have been made
from the Reserve to the four land councils in the following proportions of:
Northern Land Council (22%); Central Land Council (15%); Tiwi Land Council
(2%); Anindilykwa Land Council (1%).
[31] The payments received by the Land Council from the Reserve are to be
applied in the following manner:
[diamond] First, in respect of the proportion it receives of the 40% of the
amounts for mining royalty equivalents in payment of its administrative costs,
Land Rights Act, ss 34 and 35(1).
[diamond] Secondly, the balance, if any, of that sum is to be paid to
Aboriginal Councils, Incorporated Aboriginal Associations, and other eligible
Aboriginal Associations in the area of the Land Council
[diamond] Thirdly, in respect of the money it receives from the Reserve for
mining royalty equivalents, to Aboriginal Councils and Incorporated Aboriginal
Associations in the areas affected by the mining operations.
[32] In addition to funds received from the Reserve, the Land Council receives
payment for mining agreements under Part IV that must be applied in accordance
with such an agreement, or if the agreement makes no relevant provision, to
Aboriginal Councils and Incorporated Aboriginal Associations in the area
affected by the mining operations, Land Rights Act, s 35(3). The Land
Council also receives money for the use of Aboriginal land or for the granting
of interests (other than mining interests) in Aboriginal land, Land Rights Act,
ss 15-16, 19-20 and 35(4). Those amounts are to be paid to or for the benefit
of the traditional Aboriginal owners of the relevant land, Land Rights Act,
s 35(4).
[33] Once the Land Council makes a determination on the distribution of
payments to be made by it, as outlined above, the amount of money held by the
Land Council is held on trust for those purposes, Land Rights Act,
s 35(7)-(9). The Land Council is accountable for the monies received and
expended by it. Land Rights Act, ss 34, 36, 37, 37AA, 37A and 38. It is
also accountable for reporting requirements under the Commonwealth
Authorities and Companies Act 1997 (Cth).
[34] The audited financial statements of the Land Council account for the
receipt and expenditure of payments from the Reserve for mining royalty
equivalents applied to its administrative costs, the receipt and distribution
of money from the Reserve, and payments under the Land Rights Act for the use
of Aboriginal land. Those financial statements also account for special
purpose grants and income and their expenditure. including grants received by
it as a representative body under the NTA.
[35] The role of the Commonwealth Minister responsible for the administration
of the Land Rights Act is limited and defined by the Act, cf Metropolitan
Fire Brigades Board v Commissioner of Taxation (1990) 27 FCR 279 at 280 and
Mines Rescue Board (NSW) v Commissioner of Taxation (2000) 101 FCR 91.
The Land Rights Act confers on the responsible Minister powers for:
[diamond] Consenting to certain uses of Aboriginal land, see cf Land Rights
Act, 12C, 15(1), 18(4)(c), 18A(2), 18B(2), 19(7) and 68(3)
[diamond] The initial establishment of land councils, the approval of functions
to be carried out by land councils under laws of the Northern Territory,
approval of expenditure and receipts by a land trust exceeding $100,000, and
the approval of estimates of expenditure by land councils, see cf Land Rights
Act, 21, 23(2), 27(3) and 34)
[diamond] Establishing land trusts and appointing their membership on
nomination from land councils, Land Rights Act, 4 and 7
[diamond] Making recommendations for grants of Aboriginal land under the Act
either in respect of the Schedule 1 lands or in response to recommendations of
the Aboriginal Land Commissioner. (Land Rights Act, ss 10-11)
[diamond] Giving consents and approvals under Part IV of the Land Rights Act
for exploration and mining activities.
The Minister has other functions and powers in relation to the appointment of
the Aboriginal Land Commissioner, the appointment of a Chair to the Reserve
Advisory Committee, other members being elected by the land councils, and
approval of discretionary payments out of the Reserve, although the latter has
been delegated to officers of ATSIC.
[36] Subject to a few exceptions, the Minister has no power to give directions
to the Land Council on the exercise of its functions, Mines Rescue Board
(NSW) v Commissioner of Taxation (2000) 101 FCR 91. Those exceptions
relate to cases where a land council or land trust may refuse to comply with
obligations assumed by them in agreements for the use of Aboriginal land, Land
Rights Act, ss 22 12C, 19(9A)-(9B) and 20(5). The Minister has no power to
interfere with the core revenue of the Land Council, which is secured by the
standing appropriations made out of the Reserve.
[37] The Land Rights Act confers on the Land Council a funding and
co-ordinating role in respect of Aboriginal Councils, Incorporated Aboriginal
Associations and other eligible Aboriginal Associations, cf Australian
Council for Overseas Aid v Commissioner of Taxation (1980) 49 FLR 278 at
281-282. The Land Rights Act establishes a system whereby these organisations
are the conduit for welfare dispensed by the Land Council, cf Tangentyere
Council Inc v Commissioner of Taxes (1990) 99 FLR 363 at 371, Alice
Springs Town Council v Mpwetyerre Aboriginal Corporation (1997) 115 NTR 25
at 36-37 and Ngurratjuta Pmara Ntjarra Aboriginal Corporation v Commissioner
of Taxes [No 2] (2000) 155 FLR 196 at 197. See also Gumbangerrii
Aboriginal Corporations v Nambucca Council (1996) 131 FLR 115 at
118-1109.
[38] The Aboriginal Councils and Associations Act 1976 (Cth) makes
provision for Aboriginal Councils and Incorporated Aboriginal Associations
(referred to collectively in that Act as Aboriginal Corporations) to be
publicly accountable. An Incorporated Aboriginal Association may be formed for
any lawful object, including the pursuit of profit for its members,
Aboriginal Councils and Associations Act, ss 3 (definition of Aboriginal
Association) 43(2) and 44, but both the objects of an Incorporated Aboriginal
Association and the functions of an Aboriginal Council must be approved by the
Registrar of Aboriginal Corporations or the Minister responsible for the Act
before their establishment, Aboriginal Councils and Associations Act,
ss 16-17 and 43(2)(b). Available evidence suggests that the rules of most
Incorporated Aboriginal Associations preclude payments to individual members:
see HRATSIC Report, par 5.75.
[39] The functions of an Aboriginal Council will include the provision of
services relating to housing, health, infrastructure services, education or
training, relief for the unemployed and welfare, Aboriginal Councils and
Associations Act s 11(2)-(3). An Aboriginal Council is to be
established after the Registrar has considered the needs and resources of the
Aboriginals living in the area of the proposed Council and the absence of local
government in that area that might otherwise be expected to provide like
services, Aboriginal Councils and Associations Act s 16(1), and see
the exemption from pay-roll tax given to local government bodies by s 9(d)
of the Pay-roll Tax Act.
[40] As a recent Parliamentary Inquiry observed "the bulk of areas affected
money [received by these associations from Land Councils] is allocated for
community development activities and infrastructure improvements for the
benefit of all residents living in the areas affected", see HRATSIC Report, par
5.75.
[41] The appellant submitted that Courts have consistently found organisations
like Aboriginal Councils and Incorporated Aboriginal Associations to be public
benevolent institutions. This being so, it was submitted that in so far as the
balance of funds not expended by the appellant Land Council on its
administrative expenses is distributed to these associations under s 35(1)
of the Land Rights Act, the imposition of pay-roll tax on the Land Council
amounts to an indirect tax impost on these tax exempt associations at the
source of their funding.
[42] The appellant submitted that the assistance that the appellant Land
Council provides for the restoration and management of land for the benefit of
Aboriginal people is designed to overcome or reduce the disadvantaged position
of Aboriginal people in the Northern Territory that has occurred from
dispossession and that the restoration of traditional land and restoration and
promotion of cultural and spiritual integrity is itself a benevolent purpose.
It was submitted that the restoration of traditional land provides and has
provided a means by which the socio-economic position of Aboriginal people may
be improved through the provision of health, education, training,
infrastructure and welfare services by incorporated Aboriginal Associations and
Aboriginal Councils which would not be possible without the work of the
appellant Land Council, see Tangentyere Council Inc v Commissioner of
Taxes (1990) 99 FLR 363 at 371-373; Mpwetyerre Aboriginal Corporation v
Alice Springs Town Council (1996) 132 FLR 1 at 18-19; 115 NTR 25 at 36-37
and 40 and Ngurratjuta Pmara Ntjarra Aboriginal Corporation v Commissioner
of Taxes [No 2] (2000) 155 FLR 196 at pars 1 and 12.
[43] Pursuant to a Notice to Admit the respondent Commissioner concedes:
(1) that Aboriginal people in the Northern Territory are in a disadvantaged
position and in need of protection and assistance
(2) that the principal operations and activities of the appellant Land Council
are conducted for the benefit of Aboriginal people in the Northern Territory
(3) that Aboriginal people in the Northern Territory are an appreciable section
of the community.
[44] These admissions are properly made. In deciding whether an association
that had as its principal object the provision of hostel accommodation for
Aboriginal people was a public benevolent institution or a public charity,
Nader J in Aboriginal Hostels v Darwin City Council (1985) 75 FLR 197 at
211 observed:
" ... any ordinary informed person living in Darwin knows that Aboriginal
persons in the Northern Territory are, in general, in considerable need of
special consideration and assistance. There are several statutes both local and
Commonwealth the purposes of which are to relieve the condition of Aboriginal
persons and which give implicit recognition to its existence. I recognise that
there is much debate as to the best ways to go about assisting Aboriginal
persons. Some people are quite strongly opposed to particular methods adopted,
such as the granting of land rights. But, I think that no right thinking
person could quarrel with the general proposition that Aboriginals are in need
of special consideration and assistance."
His Honour, at 212, went on to say:
"The fact that some Aboriginal people in Northern Australia are on an equal
footing with non-Aboriginals so as not to benefit from or need the hostel
accommodation provided by the company does not detract from the fact that the
hostels are of potential benefit to the great majority of Aboriginal people,
and that the provision of the hostels is an attempt to meet an obvious need in
Aboriginal society".
[45] The statement of Nader J has been approved by many Courts when deciding
whether an institution that has as its objects work for the benefit of
Aboriginal people is a public charity or a public benevolent institution,
Tangentyere Council Inc v Commissioner of Taxes (1990) 99 FLR 363 at
369-370, Toomelah Co-Op v Moree Plains Shire Council (1996) 90 LGERA 48
at 53-54, Gumbangerrii Aboriginal Corporation v Nambucca Council (1996)
131 FLR 115 at 121, and Mpwetyerre Aboriginal Corporation v Alice Springs
Town Council (1996) 132 FLR 1 at 13-15, on appeal Alice Springs Town
Council v Mpwetyerre Aboriginal Corporation (1997) 115 NTR 25 at 39. See
also the New South Wales Court of Appeal in Maclean Shire Council v Nungera
Co-Op Society (1995) 86 LGERA 430 at 434 per Handley JA that "the current
disadvantaged position in Australia of Aboriginals is such that any valid
charitable trust for their benefit must also be for public benevolent
purposes".
[46] In Tangentyere Council v Commissioner of Taxes (1990) 99 FLR 363 at
364 I endeavoured to state the law correctly by saying:
"Taxation exemptions have for many years been extended to public benevolent
institutions. A substantial body of case law has evolved around that
collocation of words but that case law has not, as I apprehend, absolutely
defined the expression. It is true that Street CJ in Australian Council of
Social Services Inc v Commissioner of Payroll Tax (NSW) (1985) 1 NSWLR 567
at 568, said: "Those words do have an established scope", but it is not a term
of art and is to be understood in its ordinary English usage (which has no
fixed meaning): Perpetual Trustee Company Ltd v Commissioner of Taxation
(Cth) (1931) 45 CLR 224 at 231, Maughan v Commissioner of Taxation
(Cth) (1942) 66 CLR 388 at 395, and being a compound expression it is to be
treated as such and not analysed word by word. As Dixon J said in Perpetual
Trustee Co Ltd v Commissioner of Taxation (Cth), at 233: "In the present
case little help is provided by dictionaries, statutory usage, or judicial
decision." The expression is to be contrasted with `public charity'
(Ashfield Municipal Council v Joyce [1978] AC 122 at 137) and
`charitable institution' ( Perpetual Trustee Co Ltd v Commissioner of
Taxation (Cth), at 231) which, in the absence of a contrary intention, are
to be treated in a technical legal sense: cf Income Tax Special Purposes
Commissioners v Pemsel [1891] AC 531, `charitable purposes'.
In Perpetual Trustee Co Ltd, Dixon J, having said `benevolent' was not
to be given its general descriptive meaning, and did not merely mean ` benign',
went on to say that he was unable to place upon the expression "public
benevolent institution' a meaning wide enough to include organisations which
did not promote the relief of poverty, suffering, distress or misfortune.
Starke J in the same case (at 232) said that the expression means an
institution `organised for the relief of poverty, sickness, destitution or
helplessness" (my emphasis). And Evatt J said in the same case (at
235):
"Public benevolent bodies vary greatly in scope and character but give relief
freely to those in need of it and unable to care for themselves" (my
emphasis).
By "freely" it appears his Honour meant willingly but not necessarily without
fees. And in Lemm v Commissioner of Taxation (Cth) (1942) 66 CLR 399 at
411, Williams J (with whom Rich and McTiernan JJ concurred) said:
"relief of pain and suffering, physical disability, infirmity, or financial
distress. These are benevolent objects within the meaning of the subsection
..."
and went on to speak of -
"homes, hospitals and institutions organised to render services of a permanent
eleemosynary character to appreciable deserving but needy sections of the
community."
In that case, an institution controlled by a church property trust providing
residential accommodation for 26 aged women in straitened financial
circumstances was held to be a public benevolent institution.
In other cases various factors have been determinative one way or the other as
to whether a taxpayer was a public benevolent institution. Being a compound
expression which is not a term of art, it is for the court to look at the whole
of the circumstances in order to reach a decision as to whether the taxpayer is
or is not, in accordance with the ordinary English usage of the day, a public
benevolent institution."
Having reconsidered the authorities I remain of the view that passage correctly
states the law.
[47] The authorities recognise that public benevolent institutions may take
many forms. It has been said that they are similar to charities, in the
popular, rather than the technical sense, Metropolitan Fire Brigades v
Commissioner of Taxation (1990) 27 FCR 279 at 283-6. I agree with the
submission for the Commissioner that ultimately it is a jury question and the
Court will be guided by matters of impression and degree and that a useful
guide is the similarity of the notion of a benevolent institution and the
popular notion of a charity.
[48] The authorities emphasise the need for a public benevolent institution to
be concerned with the relief of disability of one kind or another and to be so
concerned in the sense that relief is freely or voluntarily given, see
Perpetual Trustee Company v F C of T (1931) 45 CLR 224 at 235; Mines
Rescue Board (NSW) V Commissioner of Taxation (2000) ATC at 4196.7.
[49] It is this element of voluntary giving, an eleemosynary element which
appears to be the key to the characterisation of a body as a public benevolent
institution. Unless the "intrinsic character of the object which (the body)
promotes" (Royal Australasian College of Surgeons v F C of T (1943) 68
CLR 436 at 447.2) or the "predominant and characteristic purpose and activity"
(Commissioner of Payroll Tax v Cairnmillar Institute [1992] 2 VR 706 at
713.4) of the body involves the voluntary relief of disability, the body
will not be a public benevolent institution however beneficial its activities
may be.
[50] Central to the respondent's submissions was paragraph 5 of its written
submission which I set forth in full:
"5. The appellant would not be a public charity for the following reasons
which, cumulatively, create a very strong impression:
(i) The main reason is that it was not formed to act as or in a fashion
analogous to that of a charity. This is an area where there is a fundamental
disagreement between the case for the applicant and that for the respondent.
The respondent says that the evidence makes plain that the Land Rights
Act was introduced not to assist disadvantaged Aborigines but to recognise
the title of traditional owners to land. This was a matter of justice, not
charity. Refer Woodward Report Agreed Bundle p 233, 234, 237.
Parliamentary Debates p 256, 269. The Land Rights Act sec 23(1).
(ii) The notions of charity and benevolence connote gifts or benefits freely
given, out of a sense of compassion or "charity". The benefits provided by the
NLC are prescribed by statute. That need not be fatal but it is ordinarily a
factor weighing in the balance against PBI status. In this case it is the very
same statute which discharged a moral obligation to recognise pre-existing
traditional owners' rights. Moreover, the statute in effect provides that the
NLC's services would be paid for from `royalties' just as the Rescue Service in
Mines Rescue Board was paid for by miners. To treat it as merely dispensing
another form of welfare, as the applicant's submissions suggest (although
Professor Altman denied) is to deprive it of the dignity and significance which
it ought properly to be accorded. In any event even it its services should be
treated as a form of welfare, that is something which people receive as of
right, rather than as a gratuity or act of benefaction. The respondent accepts
that an obligation to act in accordance with its constituent document does not
prevent a body from giving aid "freely", in the charitable sense, but where the
recipients have a right to the performance of the body's functions, that
performance is not charitable.
(iii) The NLC is a body which regards its own primary role as one of providing
representation for Aboriginals in its area in connection with land and it is so
regarded by others:
The Land Rights Act s 23(1)
The Native Title Act - a "representative" body
Annual Reports - eg p 314 of Agreed Bundle
Strategic Plan - "Vision Station" - Ex D4
"Our Land, Our Life" - Ex D4
Professor Altman's paper - Ex D5
Mechanism for election of Council - "Your Voice; Your Choice" - Ex D3
"Land Rights News" - referred to in evidence
The fact that a body performs a representative function is not necessarily
inconsistent with a charitable or benevolent purpose, Public Trustee v AG
(NSW) (1997) 42 NSWLR 600 at 612, but the nature and extent of the
representative role may make it more difficult to apply the ordinary English
expression public benevolent institution to the body, cf: Australia Council
of Social Security Inc v Commissioner of Payroll Tax [1985] 1 NSWLR 567.
(iv) There would be something odd and inappropriate, even patronising and
possibly offensive to Aborigines about the suggestion that their own
representative body, funded from mining royalty equivalents in relation to
their land, should be treated as a charity.
(v) Members of the aboriginal community might greet the statement that their
Land Council was "a benevolent institution" with amazement, perhaps with
indignation. (Perpetual Trustee Co supra 45 CLR at 236.4)
(vi) Finally, the essential requirement of a public charity is that it
dispenses aid to all members of the relevant class of beneficiaries
irrespective of all factors other than need. In Re Compton, Powell v
Compton & Ors [1945] 1 Ch 123 at 129.8 -130.4: Aboriginals Hostels
Ltd v Darwin City Council (1985) 33 NTR 1 at 14.8) That is not the basis
on which land rights are granted. They are granted only to some and "critical
to the whole scheme of the legislation is the concept of `traditional
Aboriginal owners' ", NLC v Aboriginal Land Commissioner (1992) 105 ALR
539 at p 546.5 and 547.5; Tapgnuk v NLC (1996) 5 NTLR 109 at 112,
114 and 118) Indeed this has given rise to tensions and conflict within the
NLC itself. Refer Land Rights Act ss 19(5), 23(3), 42(6), 48A(4), 68(2) and
77A. The discriminatory treatment among Aboriginals themselves is inconsistent
with the notion of a charity simply dispensing benefits according to need.
Clearly the NLC provides benefits to the wider Aboriginal community but the
primacy given to the rights of traditional owners is a major obstacle to the
recognition of the NLC as analogous to a charity."
[51] I am of the opinion that the applicant is not a charity within the popular
meaning of that word and I have reached the conclusion that it is not a public
benevolent institution. I am in broad agreement with the respondent's
submission above. The appellant Land Council's "predominant and characteristic
purpose and activity" is not to assist disadvantaged Aboriginal people, but as
a statutory body to perform its functions under the relevant legislation. The
fact that performance of these statutory functions assists disadvantaged
Aboriginal people is a consequence rather than the object of the legislation.
The fact is that the appellant Land Council was not formed to act charitably or
benevolently, in the eleemosynary sense. I agree that its discriminatory role
in dealing with Aboriginal persons and the primacy accorded traditional owners
is inconsistent with the dispensing of benefits according to need, what may be
generally regarded as charity or benevolence.
[52] The appellant is part of a statutory mechanism put in place to remedy past
injustice. It has acquired a prominence and significance in representing
Aboriginal interests in the north of the Northern Territory which is
inconsistent with the notion that it voluntarily dispenses some form of
welfare. Its formation and continuing activities are, I think, removed from
any "hand out" notion involved in the concept of charity or benevolence. Not
all who benefit from the appellant's activities are objects of compassion or in
states of distress.
[53] Not all of the appellant's functions as prescribed by s 23 Land
Rights Act are necessarily benevolent; that is, I do not construe each of its
functions as necessarily benevolent in itself or as ancillary or incidental to
functions which themselves are benevolent. Particularly is this so in relation
to s 23(1)(ea), assisting Aboriginal people "to carry out commercial
activities ... in any manner that will not cause the Land Council to incur
financial liability or enable it to receive financial benefit". It is well
established that if each function of an institution is either benevolent in
itself or necessarily incidental to other functions which themselves are
benevolent then the institution is a benevolent institution whereas if a
function is non-benevolent and not merely incidental or ancillary to a main
benevolent purpose or function the institution will not be benevolent,
Stratton v Simpson (1970) 125 CLR 138 at 159-160; Royal Australasian
College of Surgeons v Commissioner of Taxation (Clth) (1943) 68 CLR
436 at 447; Gumbangerrii v Nambucca Council (1996) 131 FLR 115 at
121-122.
[54] Having reached the conclusion that the appellant is not a public
benevolent institution I shall hear further from the parties as to any orders
to be made and as to the further disposition of these proceedings.