News: New Zealand Supreme Court follows High Court on political charities

A charity or a trust with a ‘political purpose’ has traditionally been held not to have charitable status (sometimes called the Bowman principle). In Bowman v Secular Society [1917] AC 406, Lord Parker said at 442:

a trust for the attainment of political objects has always been held invalid, not because it is illegal, for every one is at liberty to advocate or promote by any lawful means a change in the law, but because the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift.

This has been subsequently upheld in English case law in cases such as McGovern v Attorney-General [1982] Ch 321 and Hanchett-Stamford v Attorney-General [2009] Ch 173. The latter case held that while a new Charities Act had been enacted in 2006, this did not change the fundamental principle that charities with political purposes were not charitable.

By contrast, in 2010, a majority of the High Court of Australia declined to follow the English case law in Aid/Watch Incorporated v Commissioner for Taxation [2010] HCA 42. At [45]–[46], French CJ, Gummow, Hayne, Crennan and Bell JJ noted that agitation of political and public debate could be a societal good, and that the court did not have to decide on whether the political purposes furthered by the charity were legitimate.

Now, in In re Greenpeace [2014] NZSC 105, a majority of the New Zealand Supreme Court has decided to follow the High Court’s lead. Following the decision of the New Zealand Court of Appeal in Molloy v Commissioner of Inland Revenue [1981] 1 NZLR 688, the Charities Commission in New Zealand had refused to register Greenpeace as a charity on the basis that two of its purposes were political, namely the promotion of disarmament and peace and the agitation of change to government policy and legislation. The Australian approach was an important influence on the Supreme Court’s decision to overturn the political purpose exemption (see [66]–[71] of In re Greenpeace). As with the High Court decision, the New Zealand Supreme Court was not unanimous and there were two dissenting judges. As the majority noted, there is still a possibility that Greenpeace will not qualify as a charity in light of arguments that it furthers illegal purposes by endorsing trespass and other such activities when advocating “non-violent direct action.” Now the question of Greenpeace’s status as a charitable entity has been remitted back to the Charities Commission for reconsideration in light of the New Zealand Supreme Court decision.

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About Katy Barnett

Katy Barnett is a Professor at Melbourne Law School. She has published extensively in the areas of private law and remedies, and is a co-author of ‘Remedies in Australian Private Law’ with Dr Sirko Harder. In 2016 she received the Barbara Falk Award for excellence in teaching.

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