New South Wales Supreme Court CITATION : Attorney General for NSW v The NSW Henry George Foundation Ltd [2002] NSWSC 1128 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4608/01 HEARING DATE(S) : 2 October 2002 JUDGMENT DATE : 27 November 2002 PARTIES : Attorney General for New South Wales (P) The NSW Henry George Foundation Limited (D) JUDGMENT OF : Young CJ in Eq COUNSEL : D P F Officer QC and R C Titterton (P) Dr C Birch SC (D) SOLICITORS : I V Knight (Crown Solicitor) (P) Teece Hodgson & Ward (D) CATCHWORDS : CHARITIES [45]- Political purpose- Educational trust including aim to change legislation- Whether charitable. LEGISLATION CITED : Charitable Trusts Act 1993, s 23 Statute of Charitable Uses 1601 Animal Defence & Anti-Vivisection Society v Inland Revenue Commissioners (1950) 66 TLR (Pt 2) 1091 Attorney-General v Sawtell [1978] 2 NSWLR 200 Bowditch v Attorney General 134 NE 796 (Mass) (1922) Bowman v Secular Society Ltd [1917] AC 406 Commissioners of Inland Revenue v Yorkshire Agricultural Society [1928] 1 KB 611 Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531 Congregational Union of NSW v Thistlethwayte (1952) 87 CLR 375 De Themmines v De Bonneval (1828) 5 Russ 288; 38 ER 1035 George v Braddock 18 A 881 (1889) (New Jersey Court of Errors and Appeals) Jackson v Phillips 96 (Mass) 539 (1867) McGovern v Attorney General [1982] Ch 321 National Anti-Vivisection Society v Inland Revenue Commissioners [1948] AC 31 Perpetual Trustee Co Ltd v Attorney General; Re Estate of Walsh (Sydney Morning Herald, 14 October 1939) Public Trustee v AG (1997) 42 NSWLR 600 Re Cole (1980) 25 SASR 489 Re Foveaux [1895] 2 Ch 501 Re Hood [1931] 1 Ch 240 CASES CITED : Re Hopkinson [1949] 1 All ER 346 Re Inman [1965] VR 238 Re Knight [1937] 2 DLR 285 Re Koeppler's Will Trusts [1984] Ch 243; [1986] Ch 423 (CA) Re Murphy's Estate 62 P (2d) 374 (1936) Re Pitt Cobbett (1921) 17 Tas LR 139 Re Shaw; Shaw's Will Trusts [1952] Ch 163 Re The Trusts of the Arthur McDougall Fund [1957] 1 WLR 81 Re Watson [1973] 1 WLR 1472 Re Wilkinson [1941] NZLR 1065 Royal North Shore Hospital of Sydney v Attorney General (1938) 60 CLR 396 Southwood v Attorney General [1998] TLR 652 Stephenson (HA) & Son Ltd v Gillanders, Arbuthnot & Co (1931) 45 CLR 476 Thompson v Thompson (1844) 1 Coll 381; 63 ER 464 Thornton v Howe (1862) 31 Beav 14; 54 ER 1042 Tribune Press, Lahore v Income Tax Commissioner, Punjab, Lahore [1939] 3 All ER 469 Trustees for the Roll of Voluntary Workers v Commissioners of Inland Revenue [1942] SC 47 Vanderbilt v Commissioner of Inland Revenue 93 F (2d) 360 (1937) DECISION : See para 105. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Wednesday 27 November 2002 4608/01 – ATTORNEY GENERAL FOR NEW SOUTH WALES v THE NSW HENRY GEORGE FOUNDATION LTD JUDGMENT 1 HIS HONOUR: The present judgment deals with one principal point only, it being agreed by the parties that other issues in these proceedings may be postponed once that matter is determined. The matter is whether the Court should make a declaration that a trust identified in the statement of claim as "the Carr Trust" is a valid charitable trust. 2 The statement of claim identifies the Carr Trust as a trust inaugurated on 15 September 1941 when a trust deed No 152 Book 1906 was signed and sealed between Frederick Carr, as settlor and Messrs Swan, Dobbie and Donohue as trustees. The recitals to the deed included a statement that the assets of the trust were to be held "for the purpose of promulgating and spreading knowledge of the teachings and economic principles elaborated by Henry George … and also for the objects hereinafter mentioned". 3 Clause 2 of the deed named the trust fund "The New South Wales Henry George Foundation". 4 Clause 3 of the deed is as follows: "The objectives of the Foundation (hereinafter called the Objects) are as follows:- To furnish financial aid and assistance to the Henry George League of New South Wales (hereinafter called 'the League') and/or to other organizations and bodies for the time being engaged in furthering public knowledge of the teachings and economic principles set forth by Henry George in his books 'Progress and Poverty' and 'The Science of Political Economy' and other writings relating to the science of political economy and particularly to land-rent and freedom of trade commerce and industry with the object of establishing the said teachings and economic principles in practical operation by legislation and common usage and financially to aid such organizations and bodies in their publishing lecturing and educational activities and in pursuance of such objects to administer the Trust Fund and the income arising therefrom." 5 Clause 5 of the deed provided that the trustees may pay the income to that League so long as the League shall in the opinion of the trustees be a body actively engaged in furthering the objects set out in clause 3 with the non-binding indication that the League might use the monies: (a) to make contributions or grants to organizations furthering those objects by educational methods or to individuals; (b) to pay salaries etc of officers and employees of the League; and (c) paying monies to any organization or in any way which the trustees shall consider best calculated to further the objects. 6 Clause 6 provided that the trustees shall not apply any funds towards the support of any political party or of any political candidates as such. 7 Clause 11 provided that the operations of the trust should not be limited to the Commonwealth of Australia. 8 Clause 16 provided that when the teachings and principles of Henry George shall "have become completely established in world-wide legislation and usage" the trustees could then apply the funds more or less cy pres. 9 Evidence was given by Professor Groenevegen that Henry George who lived from 1839 to 1897 was born in Philadelphia . After a youth spent in a number of jobs from sea-faring to digging for gold, from journalism to gas meter inspecting, he became a political economist and a political candidate on behalf of the American Democratic Party. He wrote a number of books and pamphlets. In 1868 he wrote a paper entitled "What the Railroad will Bring Us" followed by "Our Land and Land Policy" in 1871. He then developed the basic ideas those papers contained in a major work "Progress and Poverty" published in 1879. "Progress and Poverty" was an immediate success. It was quickly published in many editions in the English speaking countries, where it was widely read by intellectuals in the rapidly growing working class movements. It was through "Progress and Poverty" that George came to lead, in the 1880s and 1890s a major movement. He toured America, Britain, Australia and New Zealand popularising his views. 10 The basic message of "Progress and Poverty" is that in the course of economic development, land ownership in private hands produces on the one hand, wealth for the few and poverty for the many. Progress, accompanied by poverty is said to be the inevitable result of economic development with a system of private land ownership. 11 George considered that, with a system of private land ownership, it was inevitable that there would be a rise of rent which would increase the wealth of land owners and simultaneously cause poverty for the rest of society. He said that there was one way to remove that evil and that was to remove its cause. The solution was to make land common property. He did not advocate abolition of title or seizure to land, in fact he said "It is not necessary to confiscate land: it is only necessary to confiscate rent." As some rent is already taken in taxation, there is only a necessity to alter the method of taxation and to appropriate rent by taxation so that the State may become in effect the universal landlord without calling itself so. Thus, the practical policy prescription of "Progress and Poverty" was "to abolish all taxation save that upon land values". That is why people following George are sometimes called "single taxers". 12 The single tax struck a chord with the men and women of Australia's emerging trade union movement. The Intercolonial Trades Union Congress of 1888 passed without opposition a resolution commending the abolition of all taxation save that on land values. 13 The movement had some success and the George views influenced the introduction of council rates based on unimproved capital value of land and land taxes. However, by Federation, the George Movement had passed its high point. Since the end of the 1890s there has been no prospect of land value taxation being introduced as a single tax. 14 Professor Groenevegen says: "In summary, in the 1880s and 1890s the political debate over land value taxation was a debate as prominent and significant as the debate over the goods and services tax has been in the last 10-15 years. Henry George was a theorist who had most influence on that debate, and it is doubtful Australia would have seen the rating and taxing legislation described above had his publications been unknown in this country. George did not succeed in establishing land value taxation as society's single tax. Most economists would attribute this failure to the impracticality of his programme." 15 I should say that what I have extracted from Professor Groenevegen's report comes from the defendant's side of the record. The plaintiff filed a report from Dr T M Dwyer. Dr Dwyer does not disagree with Professor Groenevegen, but considers that Henry George deserves more credit as both an original economic thinker and as an economic philosopher than Professor Groenevegen would attribute to him. 16 It is not necessary to go into detail of either expert economist's report. 17 In this background I need to determine whether a trust for the purposes of funding the propagation of Henry George's views is charitable. 18 Mr Officer QC and Mr Titterton who appeared for the plaintiff Attorney General, submitted that this question should be answered affirmatively. Dr Birch SC who appeared for the defendant assisted in guiding me to the correct solution of the problem. I should note that up to very shortly before this case was due to be heard, this whole matter was bitterly contested. At least partly as a result of a change in the board of the defendant the attitude taken at the hearing was that whilst it was not conceded that the Carr Trust was a valid charitable trust, nothing substantial was being put in opposition. 19 I have been greatly assisted by copious submissions replete with authority from Mr Officer QC and Mr Titterton. They have also been kind enough to photostat most of the relevant pages in the leading textbooks, law reviews and overseas cases which could be relevant and I am very much in their debt for so doing. 20 Accordingly, I need to consider: (1) Whether the political purposes stated in the objects would mean that under the general law the trust would not qualify as a charitable trust; (2) The relevance of s 23 of the Charitable Trusts Act 1993. (3) There is also an evidentiary question on which I need to rule. I will deal with these matters in turn. 21 (1) The key question is whether the purpose of furthering public knowledge of the teachings and economic principles set forth by Henry George in his books with the object of establishing the said teachings and economic principles in practical operation by legislation and common usage is a charitable trust. 22 The law of charities has gradually been formulated, though the prime sources are still the Statute of Charitable Uses, 1601 and Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531. The result is that charitable trusts must fall into one of four classes, viz: (i) for the relief of poverty; (ii) educational purposes; (iii) religious purposes; (iv) purposes beneficial to the community on analogy with the purposes noted in the Statute of Charitable Uses. 23 The recent Sheppard Report following the enquiry into the definition of charities and related organisations (June 2001) has recommended that the existing categories be retained with the addition of trusts for the advancement of culture and trusts for the advancement of the natural environment and has made observations on trusts involving political purposes which I will mention later in these reasons. 24 It is sufficient for present purposes to say that, provided that there is a sufficient public purpose, trusts for the promotion of education are charitable trusts. The education may be in respect of matters not taught in schools or universities; see eg Re Shaw; Shaw's Will Trusts [1952] Ch 163, where a gift to promote and encourage self control, elocution, oratory and deportment in Ireland was upheld as an educational charity. 25 I cannot see much purpose in discussing the host of authority on the question as to what it is that the Court looks for when considering whether a trust is charitable for the advancement of education. It seems to me that the whole of the authorities point to the fact that if it were not for the political aspects the trust would be charitable. 26 The real problem in the present case is that, in addition to the gifts for education, there is also the element of establishing the teachings and principles by legislation. It is perceived knowledge, though now being challenged, that if an educational trust is for predominantly political or propaganda purposes, then the trust will fail to qualify as a charitable trust for the advancement of education; see the cases discussed in Tudor on Charities 8th ed (Sweet and Maxwell, London, 1995) p 51. 27 Counsel acknowledge that there is a considerable amount of material of high authority which favours the view that "political purposes are not, as a general rule, charitable purposes": (Dal Pont, Charity Law in Australia and New Zealand (Oxford University Press, Melbourne, 2000) p 203)). This generalisation needs to be examined in some detail. 28 Counsel for the Attorney General submit that this is an over-simplistic statement. They say that whilst even cases decided prior to 1980 show that some trusts involving political purposes have been upheld (I will go into this in more detail later), cases decided since then display a growing recognition that one cannot separate out political purposes from educational and other purposes and there has been a greater tendency to uphold trusts involving some political objects. 29 I must confess that I have been particularly influenced by the article by Professor L A Sheridan in (1977) 19 Malaya Law Review 42 and following, headed "The Political Muddle – A Charitable View?" The learned Professor commences his article with two contradictory conclusions from the authorities, viz: "(1) A trust for the promotion of a political purpose is charitable, provided that the purpose is not contrary to public policy and is to be achieved by lawful means. (2) A trust for the attainment of political objects has always been held invalid and never charitable." 30 He says that proposition (1) purports to be a statement of the law of California from Re Murphey's Estate 62 P (2d) 374 (1936) which he considers goes too far even for California, the jurisdiction where charities for political ends have the greatest chance of being upheld and so beyond what a court in a Commonwealth country would accept. 31 He says that proposition (2) which is derived from the well-known case of Bowman v Secular Society Ltd [1917] AC 406 again is an exaggeration. 32 The oft quoted passage from Bowman v Secular Society Ltd is from the speech of Lord Parker at p 442 where he said: "A trust for the attainment of political objects has always been held invalid, not because it is illegal, for everyone 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." 33 Professor Sheridan shows that the difference in views depends upon the fact that United States judges accept the proposition that it may be charitable if one has a purpose which is not contrary to law whose achievement may benefit many members of the community whilst thwarting many others. Australian and English judges do not accept that proposition. 34 However, Sheridan says that Lord Parker's dictum which has been approved by high authority since (see eg the decision of the Privy Council in Tribune Press, Lahore v Income Tax Commissioner, Punjab, Lahore [1939] 3 All ER 469, 476), in fact ignores decisions where English courts have considered trusts which involve changes of the law. I am not convinced that the examples given support this statement, but it is a matter of little moment. It is more significant to note how the law has developed. 35 In Royal North Shore Hospital of Sydney v Attorney General (1938) 60 CLR 396, 426, Dixon J said: "The case law dealing with the distinction between charitable purposes and political objects is in an unsatisfactory condition, but the basal ideas upon which it rests may be seen. It is, of course, quite clear that any purpose which is contrary to the established policy of the law cannot be the subject of a good charitable trust. But there is a further consideration arising from the very nature of the doctrine by which charitable trusts are supported. Under all four heads of the well-known classification to which such trusts are referred, an essential element is the real or imputed intention of contributing to the public welfare. A coherent system of law can scarcely admit that objects which are inconsistent with its own provisions are for the public welfare. Thus, when the main purpose of a trust is agitation for legislative or political changes, it is difficult for the law to find the necessary tendency to the public welfare, notwithstanding that the subject of the change may be religion, poor relief, or education." 36 In Trustees for the Roll of Voluntary Workers v Commissioners of Inland Revenue [1942] SC 47, 56, Lord Moncrieff, in a Scottish case said that charitable purposes do not include "a purpose which proposes to benefit certain of the lieges by thwarting the activities of others. It is not for Courts of law to confer a charitable immunity upon a usurpation by private persons of the functions of government …". 37 In Re Hopkinson [1949] 1 All ER 346, 350, Vaisey J said: "I venture to add as a corollary to that statement that it would be equally true to apply it to the advocating or promoting of the maintenance of the present law, because the court would have no means in that case of judging whether the absence of a change in the law would or would not be for the public benefit." 38 As Professor Sheridan acknowledges at p 55 of his article, a purpose may be disqualified from being charitable if the pursuit of it is likely to lead to a demand for legislation or if legislation is an obvious mode of achieving it even if the promotion of legislation is not a stated object; see eg Animal Defence & Anti-Vivisection Society v Inland Revenue Commissioners (1950) 66 TLR (Pt 2) 1091, 1094-5 and Re The Trusts of the Arthur McDougall Fund [1957] 1 WLR 81, 85. Indeed, even a trust to put political pressure on the legislature may be classed as a political purpose such as where the purpose was to secure the whole-hearted acceptance of the League of Nations by the people of New Zealand: Re Wilkinson [1941] NZLR 1065, 1075-7. 39 On the other hand, in Re Cole (1980) 25 SASR 489, 495, Mitchell J held that a trust may still be a valid educational trust even though, as a result of the educational programme the law might be changed. 40 There is also a line of cases which suggest that where the political aim is a subsidiary matter, the political factor will not prevent the trust from being charitable. It was so held by the English Court of Appeal in Commissioners of Inland Revenue v Yorkshire Agricultural Society [1928] 1 KB 611, 622 (Lord Hanworth MR) and 632 (Atkin LJ). 41 In National Anti-Vivisection Society v Inland Revenue Commissioners [1948] AC 31, 77, Lord Normand said that Lord Parker's dictum in Bowman did not apply: "… when the legislation is merely ancillary to the attainment of what is ex hypothesi a good charitable object. For the charitable purpose, being dominant, would prevail … ". 42 There are many other cases pointing in the same direction. It is not necessary to review these in detail. I will merely cite one, Re Inman [1965] VR 238, 242 where Gowans J considered that although the objects of the Royal Society for the Prevention of Cruelty to Animals contained provisions for seeking more legislation, this was only a means of obtaining the chief object, the prevention of cruelty to animals and did not destroy the entity's charitable status. 43 There are some recent English cases dealing with the problem. In McGovern v Attorney General [1982] Ch 321, the question involved a trust, the Amnesty International Trust, whose object was to secure throughout the world the observance of standards of human rights. After a full review of the cases, Slade J held that it was necessary to define what was meant by the statement that trusts for political objects can never be supported as legal charities (p 334). He noted that the authorities tended to suggest that those trusts were trusts where the main object was to procure a change of the law in this country. However, he held that the same principle should apply to a trust for altering the laws of a foreign country, as a fortiori, one cannot judge whether a proposed change in that law would or would not be for the public benefit. 44 The same ideas were developed in Re Koeppler's Will Trusts [1984] Ch 243; [1986] Ch 423 (CA) and Southwood v Attorney General [1998] TLR 652 (Carnwath J) and [2000] TLR 541 (CA – Chadwick, May and Kennedy LJJ). Counsel provided me with transcripts of the full judgments of the judges who sat on that case. In the Court of Appeal, Chadwick LJ said at [29] that the crux of the case was that "the court is in no position to determine that promotion of the one view rather than the other is for the public benefit. Not only does the court have no material on which to make that choice; to attempt to do so would usurp the role of government. So the court cannot recognise as charitable a trust to educate the public to an acceptance that peace is best secured by 'demilitarisation' in the sense in which that concept is used in the (plaintiff's) background paper and briefing documents. Nor, conversely, could the court recognise as charitable a trust to educate the public to an acceptance that war is best avoided by collective security through the membership of a military alliance – say, NATO." 45 These recent English cases have not been wholeheartedly accepted in Australia. 46 Santow J thoroughly reviewed the law in this area of charitable trusts in Public Trustee v AG (1997) 42 NSWLR 600 and in a later paper published as "Charity in its Political Voice - a Tinkling Cymbal or a Sounding Brass?" (1999) 18 Aust Bar Review 225. 47 His Honour there suggests that the way the law is tending is to say that (a) McGovern's case is in error when it says that if a main purpose of a trust is political then the trust cannot be charitable; (b) that working for a change in the law in the way in which the law tends to be changing does not affect a trust being a charitable trust; and (c) one should look to see whether the object to promote political change is so persuasive and predominant as to disqualify the trust from being a charitable trust (see 621C). 48 Santow J also says, and I think, with respect, that both what I may call mainstream as well as progressive authority is tending in this direction, that it is not necessarily so that judges cannot determine whether a political purpose is for the public benefit. What is for the public benefit may change from time to time. However, to take an obvious example, if Australia has ratified an international treaty but it has not yet become part of domestic law, urging that the country go further may very well be able to be judged by a court as being for the public benefit. 49 However, the recent bevy of English cases has re-emphasised the point made in earlier cases including the passage from Dixon J in the Royal North Shore Hospital case from which I have already quoted that there is a real distinction between the situation where, a or the, principal or dominant object(s) of the trust are political as opposed to that where the political purpose is merely ancillary or subsidiary to, a or the, principal or dominant charitable object(s). 50 Unfortunately, this statement in itself has its problems. 51 The most obvious of these problems is that there are many organisations which do not have dominant and subsidiary aims, but have interlocking aims. Another problem is that aims and objects are set out by the founder based on the conditions as they were at the date of founding of the charity but with the expectation that it will expand so that what at one time might be the dominant object, at another time might be subsidiary. Thus, a charity which starts off as helping war orphans may legitimately in times of peace end up focusing on disabled children or street waifs. This was the sort of concept referred to by Dixon J in the context of main and subsidiary objects in memoranda of association of corporations in H A Stephenson & Son Ltd v Gillanders, Arbuthnot & Co (1931) 45 CLR 476, 490. 52 An even more difficult scenario appears when the objects are stated in such a way that the educational purpose is a prelude to another purpose, particularly where that other purpose is a change of the law. This problem is also linked with the problem as to when education becomes propaganda or when propaganda is education. As Professor Sheridan says: "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." (op cit p 70). 53 The message that cases such as those discussed by Professor Sheridan and those discussed by Santow J in Public Trustee v Attorney General (1997) 42 NSWLR 600, send out is that courts are realising more and more that there is a certain lack of logic in the differentiation some of the cases have made between attempts to educate and persuade the public which may be valid educational charitable trusts and pressure for political change by other means which is not; see eg Public Trustee v AG at 617. 54 Whatever its weaknesses, it would seem that the or a main or dominant purpose test is where the law has reached at the present time. It is notable that the Sheppard Report recommended that the dominant purpose test be retained. This recommendation seems to be picked up by the Federal Government according to the Treasurer's press release of 29 August 2002. The proposed definition of charity for tax purposes will contain the exception, "a charity is an entity … that is not-for-profit and has a dominant purpose or purposes that are charitable and … for the public benefit [but] … the entity must not have a dominant purpose that is: (i) advocating a political party or cause; or (ii) supporting a candidate for political office; or (iii) attempting to change the law or government policy." 55 The third matter of exception mentioned in the Treasurer's statement may go a little further than the Sheppard Report proposed which seemed to consider that it was in the public interest that charities in pursuance of their dominant purpose should be able to advocate at least non-politically for changes in the law which would benefit their clients. 56 Of course, these proposals are merely of side interest for the decision in the present cases which must focus on the present legal position , not what might be in the future. 57 In his work on Charity Law in Australia and New Zealand at pp 208-9, Dal Pont gives a series of guidelines as to how one determines the main purpose of a gift or institution. He says, first, the mere fact that political means may be employed in furthering non-political objects does not necessarily render the gift or institution non-charitable and cites McGovern v Attorney General [1982] Ch 321 at 340 and 343. Secondly, the mere fact that the purposes of a charity may involve seeking amendments to the law does not operate to deny charitable status: National Anti-Vivisection Society v Inland Revenue Commissioners [1948] AC 31, 76. Thirdly, the question is one of degree for activities directed at political change may demonstrate an effective abandonment of charitable objects; see Public Trustee v Attorney General (supra) at 621. Fourthly, it may be, though this is debateable, that one can distinguish between the motive of the founder in setting up the charity and the purpose of the charity; see eg Re Hood [1931] 1 Ch 240. 58 In my view, with respect, Dal Pont's summary is a fair summary of the law. 59 Another aspect of the problem which needs to be considered when working out what is a dominant purpose is to know whether one merely looks at the foundation document of the trust or what the trust is doing in practice. The usual approach is to say that so long as the stated purposes are clearly defined, one looks no further; see Sheppard Report at pp 101-103. There is no need to delve further into this matter in the present case as an examination of the foundation document is sufficient. 60 As I have said, the main reason given by courts as to why an entity which advocates changes in the law is not a charity is that the court is not in any position to rule as to whether that is for the good of the community or not. It is not sufficient that the promoters of the charity may have a pure motive and may strongly feel that the change in the law is for the public benefit, such must be demonstrated objectively. There have been cases where judges have said that a purpose which the founders consider are for the public good and which are not harmful or immoral may be charitable; see eg Re Foveaux [1895] 2 Ch 501, but these have, in English and Australian law been virtually overruled. 61 The literature contains numerous cases where gifts to entities whose aim was to change the law, or trusts whose purposes were to move for a change in the law, were held not to be charitable, probably for this reason. This is so even though under 21st century Australian standards the average person in the street would acknowledge that they were right and proper and indeed the obvious way in which the law had to be amended. 62 Thus, there are a series of cases on votes for women which were held not to be charitable even in the United States. The most fruitful source of material on this issue is in the annotations to Bowditch v Attorney General 134 NE 796 (Mass) (1922) in 28 Am LR 713. This note also gives copious extracts from the seminal case of Jackson v Phillips 96 (Mass) 539 (1867) which is not otherwise available in Sydney. See also Vanderbilt v Commissioner of Inland Revenue 93 F (2d) 360 (1937). The cases seem to say that a trust to put an end to slavery by change of legislation would not be charitable, but a trust for creating a public sentiment that would put an end to slavery was a valid charitable trust; see Jackson v Phillips supra at 555. 63 There is a feeling of what I might call "judicial cop out" in the policy that the court cannot judge the public benefit of proposals to amend the law. Indeed, in many instances, the fact that diverse arguments are presented to the public on issues of importance may itself be important to the community. 64 Indeed, it is clear that when considering what is of benefit to the community, the court rules on what is beneficial at the date of the trust or at the hearing. Courts are well equipped to do this. Moreover, it is clearly recognized that what might be for the community benefit at one time, may not be at another time and vice versa; see Attorney-General v Sawtell [1978] 2 NSWLR 200, 205 and cases there cited. 65 Professor Sheridan agrees that the traditional view that trusts fail because the court is in no position to judge whether the proposed change in the law would be beneficial is a rather weak excuse. He suggests (at p 58) that it would be more logical to adopt a set of tests such as the following (my summary): 1. A trust which objectively cannot promote the public benefit cannot be charitable. 2. A trust to promote legislation in the interests of members of a group such as a professional association is not charitable. 3. A trust for the promotion or defeat of unselfish legislation which is controversial is not charitable. 4. A trust to study and prepare comments on legislative bills is charitable. 5. A trust to promote legislation improving the law is charitable. Judges can tell what would improve the law and what would not. 66 I do not think that, as a single judge, I can go this far. Indeed, I do not have to do so in this case. 67 Reverting to the documents and facts in the instant case, I would have thought, completely unaided, that there is a lot to be said for the proposition that a dominant purpose of the instant trust is to secure changes in legislation because it is only by a change in legislation that Henry George's dream of a single tax could ever be implemented. This may have occurred in the enactment of legislation which imposed Commonwealth land tax and the rating on unimproved land values in New South Wales. Surely, what all the publication and distribution of the works of Henry George is really leading up to is influencing public opinion to have such legislation brought in. 68 However, there have been a number of cases in which courts have considered entities or trusts involving the works of Henry George. 69 In George v Braddock 18 A 881 (1889) (New Jersey Court of Errors and Appeals), the trust there was to distribute gratuitously in the United States of America the works of Henry George on the basis that the recipient should read the book and then circulate it among their neighbours for the purpose of "spreading the light" on social and political liberty and justice in the United States of America. 70 Beasley CJ, in giving the opinion of the Court, upheld the gift. He said at 882 that it did not really matter whether the court thought that the books to be circulated were sound or otherwise so long as they were not hostile to religion, law or morals. He cited the works of Sir Robert Filmer which maintained the divine right of kings as an example. At 883 he cited Thornton v Howe (1862) 31 Beav 14; 54 ER 1042 (a case I will discuss shortly) as supporting his view. 71 Professor Sheridan comments at op cit 72: "The motive for making a gift for circulating the works of Henry George must be conversion of readers to the author's point of view. Although that be not stated as the purpose of the trust, donors do not give their money away for the spread of works by a particular author maintaining a particular opinion unless they share that opinion and would like more people to do so. Nevertheless there is a valid distinction between a trust whose funds are to be spent on converting people to a specified political objective and one whose funds are to be used to make knowledge of the arguments the specified political objective more readily available. I find Beasley CJ's approach irresistible, except that I do not see why books arguing against religion, law or morals should not come within the notion of advancing education, so long as the books themselves are not illegal …". 72 A similar case is Re Knight [1937] 2 DLR 285. There the gift was to promote an understanding of the principles enunciated by Henry George, to engage in the printing, publishing, advertising etc of his works and to engage in such political educational and advocacy work and enterprise as shall have for the purpose the understanding and acceptance by individuals or by the public and by governing authorities of the said principles and the incorporation thereof in political and social institutions. Rose CJHC in the Ontario Supreme Court held at 288 that if the gift had been a perpetual trust it could not have been classed as a valid charitable trust as its objects were political rather than charitable. However, as the gift was an out and out gift, that point was immaterial to the decision of the case. 73 Again we are in the area of the distinction between trying to convert people to a point of view and compelling them to accept it, see ante [52]. 74 Most significantly, in Perpetual Trustee Co Ltd v Attorney General; Re Estate of Walsh, this Court held a gift to establish a college to educate students in the philosophies and principles of Henry George valid. Unfortunately, despite searches by both my staff and by those instructing counsel for the Attorney General, the only report of the case can be found in the Sydney Morning Herald for 14 October 1939. The Judge was Nichols J. 75 According to the Herald's report, Fred Walsh, a patent attorney, after providing for his widow, directed that after her death the estate should pass to the trustees of the Henry George College as an endowment. The Judge said that the gift was a gift for the furtherance of education and would be charitable if it were not for the political elements associated with it. On the whole he did not think the gift lost its charitable character because of this element. He therefore held that the purpose was charitable and left aside the question as to whether the setting up of a college was part of the purpose of the trust or merely a method of carrying out the charitable trust. A further aspect of the case was heard by Helsham CJ in Eq in suit 1670 of 1978 in which his Honour gave judgment on 29 April 1983. The then Chief Judge said that the 1939 decision held that the general promotion of knowledge and interest in the teachings of Henry George was a charitable matter and traced through the history of the trusts of the will of Frederick Joseph Walsh through various cy pres schemes since. 76 It can be seen from what I have digested, that there is precedent for saying that where there is a trust to promote the teachings, philosophies or books of Henry George, then the trust may be charitable notwithstanding that single taxers have an ultimate aim of convincing the legislature that the tax system should be changed. However, where the purpose of the trust gets significantly beyond education a different result may follow. 77 I should interpolate here that even apart from the work of Henry George there is authority for the proposition that educating employees or the general public in matters of political economy tend to be held to be charitable; see the Tasmanian case of Re Pitt Cobbett (1921) 17 Tas LR 139 where the gift was upheld, but no reasons are given. 78 Before focusing on the words of the trust deed, as I must, I should briefly digress to consider the line of cases of which Thornton v Howe (1862) 31 Beav 14; 54 ER 1042 is the prime example. In that case, Romilly MR had to consider a trust to print and propagate the works of Joanna Southcote. That person was under the delusion that she was with child by the Holy Ghost and had conversations with the devil. His Lordship held that, even so, a trust for the distribution of her writings was still able to be a valid charitable trust. 79 The case has been followed on a number of occasions. It seems to be authority for the proposition that a trust to enable distribution of a book on a religious subject is charitable no matter how zany the content. This principle has been applied more generally, at least where the book is not anti-religious; see eg Thompson v Thompson (1844) 1 Coll 381; 63 ER 464. A book dealing with illegal religious matters such as the Roman Catholic doctrines when such were outlawed in England, will of course, fail; see De Themmines v De Bonneval (1828) 5 Russ 288; 38 ER 1035. One might wonder why such trusts did not fail for want of public benefit, but, it now seems that the court presumes public benefit in such cases: Re Watson [1973] 1 WLR 1472. 80 However, in Bowman at 442, Lord Parker said that the Court would actually examine the book and only allow the trust if its objects were charitable in the legal sense. The High Court in Congregational Union of NSW v Thistlethwayte (1952) 87 CLR 375, 445 made a muted suggestion along the same lines. If the court is to read the book and rule on its charitable nature, it might be asked why it could not rule on the public benefit of a suggestion that the law might be changed. 81 I now refocus on the actual terms of the trust under review in the instant case. As I noted earlier, Mr Carr wished his fund to be called The New South Wales Henry George Foundation, to furnish financial aid and assistance to the Henry George League of New South Wales or other organisations engaged in furthering public knowledge of the teachings and economic principles of Henry George in his books. So far, that purpose is purely educational. However, the deed of trust then goes on to say in clause 3: "with the object of establishing the said teachings and economic principles in practical operation by legislation and common usage". (That looks rather political!). Clause 3 then continues: "and financially to aid such organisations and bodies in their publishing lecturing and educational activities and in pursuance of such objects to administer the trust fund of the income arising therefrom." 82 The key question is whether the educational aspects of the trust are merely subsidiary to the object of establishing the teachings and economic principles by legislation and common usage. 83 Were that clause 3 read by itself, there would be difficulties in holding that there was not a predominant political purpose because of the use of the words "with the object" of establishing the principles by legislation and common usage. However, there are other indications which suggest that the word "object" is used in the sense of "motive". These are that clause 3 starts with the words "The objectives of the Foundation" which seems to be inclusive of both the educational and ultimate motive, the use of the word "objects" in the penultimate line of clause 3 and the recitals. The recital concludes that the property is to be held "UPON TRUST to hold and manage the same … for the purpose of promulgating and spreading knowledge of the teachings and economic principles elaborated by Henry George … and also for the objects hereinafter mentioned …". 84 Some limited guidance can be had by reference to the Henry George League of New South Wales which is referred to in clause 3. I use the word "limited" as the trustees might distribute money to other bodies as well. However, the prime object of the Henry George League as existed in 1941, the date of the deed, was the restoration of the land to the people by the imposition of a single tax upon the value of land irrespective of improvements thereby relieving industry of all taxation, the object to be carried out by holding public meetings, by the collection and publication of facts connected with the present system of land tenure and by other suitable methods. Again, the prime focus is on education. 85 It seems to me that in the light of these factors, the trust is one whose dominant purpose is education with the object of persuading the general population around to the views of Henry George, though the ultimate purpose of this education may only be fully realised by legislation. 86 Accordingly, in my view, there is a valid charitable trust. 87 (2) I now pass to consideration of s 23 of the Charitable Trusts Act. In view of what I have decided above, it is not, strictly speaking, necessary to consider this matter in depth, but I should say something about it. 88 Section 23(1) of the Charitable Trusts Act 1993 which re-enacts s 37D of the Conveyancing Act 1919 provides: "A trust is not invalid merely because some non-charitable and invalid purpose as well as some charitable purpose is or could be taken to be included in any of the purposes to or for which an application of the trust property or any part of it is directed or allowed by the trust." 89 The section was last comprehensively reviewed by Santow J in Public Trustee v AG (supra). His Honour said at 614-5 that it is necessary that the court be able to sever the non-charitable objects from the charitable objects in order to apply the section though the complications in the case before him which was a gift to an organisation does not arise in the present case where predominantly the gift is for a purpose. His Honour also held that if, after severing the non-charitable and invalid purposes what remains permits an application for charitable purposes is one way of completing satisfying the testator's presumed intention, the trust will be valid. 90 In the instant case, there is, to my mind, the ability so to sever and to leave in force the educational purposes. Accordingly, even if I had reached a different view on the main question the trust would still have been saved (at least for the most part) by the application of s 23. 91 (3) I now have to consider the admissibility of the extracts from "The Standard" Volume 3 marked for identification 9, and the admissibility of the minutes of the Henry George League marked for identification 10. 92 "The Standard" according to the masthead on the front page of the 1941 issues, was published by the Henry George League of NSW at the price of 2d and was an Australian Journal to advocate the rights of the people in the land. 93 The purpose of the tender of these two sets of documents was to show what the Henry George League did in practice. I was a little concerned during the oral hearing that I did not know sufficient about the intricacies of the case to be able to make a final ruling on admissibility. 94 I have found that the way one approaches the question as to the objects of a trust or body is to look at the constitutional documents and only if these are ambiguous does one look to see how the body or trust was carried out in fact. There is no need to look to how the trust or the Henry George League performed in practice in the instant case in view of the documents. 95 Even if it had been relevant to look at activities, as the obligations of the trustees were to pay the money to the Henry George League or another organisation, there is no real purpose, in any event, in looking to see what happened to the Henry George League as a matter of practice in its day to day activities. 96 Accordingly, I do not admit into evidence MI09 or MI10. 97 The remaining matter is the question of costs. The only issue that I am deciding in the present case is the declaration asked in prayer 1 of the statement of claim that the trust is a valid charitable trust. Other issues may be settled later, or if they are not, may be considered by the Court at a later stage. 98 So far as the actual hearing on 2 October 2002 is concerned, the problem was caused by the settlor and the costs on the indemnity basis of both sets of parties should come out of the trust fund. However, the case has had a long history. It would appear (and I say this advisedly as I have not delved into the depth of the dispute before 30 September 2002) that the matter was bitterly debated before a board room revolution put in a set of directors of the defendant who were more conciliatory in their approach. 99 Mr Officer QC says that the majority of the costs in this case up until the commencement of the hearing on 2 October were caused by the attitude of the defendant including the transfer of the property of the Carr Trust to the defendant company. That conduct generated the whole full blown dispute. 100 On the other hand, Dr Birch SC argues that the core issue in the case would have had to come to the court for decision in any event as the question was clearly arguable. 101 It is quite clear that where a dispute over a charity goes further than a matter of construction or with dealing with a problem that has been caused wittingly or unwittingly by the settlor or the form of the settlement or trust, that the matter should be treated as ordinary adversary litigation and the general rule applies that he or she who wins the case gets costs, and he or she who loses pays costs. 102 Most of the costs before 30 September would appear to fall into this category. However, some would be properly referable to the point I have decided and some would be referable to another discrete point which was dealt with by Gzell J earlier in the year. 103 It seems to me that I really do not know sufficient about whose fault it was, if the fault of anyone, that caused this dispute to blow out. It would thus be wiser merely to make an order in respect of the costs of 2 October in the way that I have indicated and order that the Attorney General may have his costs of the whole suit out of the fund and reserve all other questions of costs for when the next step in this dispute comes before the Court. 104 In the happy event that there is no further dispute before the Court, and there is still an outstanding question of costs, the matter can be relisted before me on a Tuesday or Thursday at 9.30 am or a Friday at 10 am upon five days' notice to my Associate and the opposing parties. 105 I doubt whether any short minutes are needed to give effect to these reasons. The order is simply to declare that the Carr Trust is a valid charitable trust, to make the orders for costs I have indicated and to provide that the balance of the matter be listed before the Registrar on say, 6 May 2003. However, if any party considers that such would be a useful step, the matter can be restored to my list at one of the times mentioned in the last paragraph on the basis that it will not take more than 10 minutes or otherwise may be put in the list for mention at that time to find a convenient time to deal with the short minutes. ******************* Last Modified: 11/28/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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