COURT
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Beaumont(2) and Lee(2) JJ.

CWDS
  Taxation - Debits Tax Administration Act 1982 - exemption of "religious
institution" - meaning of "institution", "religious institution".
  Administrative Appeals Tribunal Act 1975 sub-s.44(1)
  Associations Incorporations Act 1895-1969 (W.A.)
  Debits Tax Administration Act 1982 s.3; sub-s.11(1); paras.11(1)(a) and (b)
  Income Tax Assessment Act 1915-1918
  Land Tax Management Act 1956 (N.S.W.)
  Australian Broadcasting Tribunal v. Bond (1990) 170 CLR 321
  Christian Enterprises Ltd. v. Commissioner of Land Tax (1968) 88 WN (Pt.2)
(N.S.W.) 112
  Church of the New Faith v. Commissioner of Pay-Roll Tax (Vic) (1983) 154 CLR
120
  Commissioner for ACT Revenue Collections v. Council of the Dominican Sisters
of Australia (1991) 91 ATC 4602
  Glebe Administration Board v. Commissioner of Pay-Roll Tax (N.S.W.) (1987)
19 ATR 297
  Hope v. Bathurst City Council (1980) 144 CLR 1
  N.S.W. Associated Blue-Metal Quarries Ltd. v. Federal Commissioner of
Taxation (1955) 94 CLR 509
  Stratton v. Simpson (1970) 125 CLR 138
  The Trustees of the Allport Bequest v. Federal Commissioner of Taxation
(1988) 88 ATC 4436
  The Young Men's Christian Association of Melbourne v The Federal
Commissioner of Taxation (1926) 37 CLR 351

HRNG
PERTH
#DATE 9:4:1992
  Counsel for the Applicant:         Mr N.W. McKerracher
  Solicitors for the Applicant:      Clayton Utz
  Counsel for the Respondent:        Mr W.S. Martin
  Solicitors for the Respondent:     Australian Government Solicitor

ORDER
  THE COURT ORDERS AND DECLARES THAT:
    1.   The appeal be dismissed.
    2.   The applicant pay the respondent's costs of the appeal.
Note:  Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.

JUDGE1
  I have had an opportunity to read the reasons for judgment of my brothers
Beaumont and Lee JJ.  I respectfully agree with the views expressed by their
Honours but would add some observations of my own.
2.  The question of what is and what is not a "religious institution", for the
purposes of the Debits Tax Administration Act 1982 (Cth), is primarily a
question of fact.  The words "religious" and "institution" are ordinary words
of the English language and the term "religious institution" has an ordinary
meaning in English language.  See e.g. Stratton v. Simpson (1970) 125 CLR 138
where Gibbs J., speaking of the word "institution", said at 158:-
      "In its ordinary sense 'institution' means 'an
      establishment, organization, or association, instituted for
      the promotion of some object, especially one of public
      utility, religious, charitable, educational etc.' (The
      Shorter Oxford English Dictionary).  It means, as was said
      in Mayor etc. of Manchester v. McAdam (1896) AC 500, at
      p 511, 'an undertaking formed to promote some defined
      purpose ...' or 'the body (so to speak) called into
      existence to translate the purpose as conceived in the mind
      of the founders into a living and active principle'.
      Although its meaning must depend on its context, it would
      not ordinarily connote a mere trust (cf. Minister of
      National Revenue v. Trusts and Guarantee Co. Ltd. (1940)
      AC 138, at p 149).  A school could appropriately be called
      an institution within the ordinary meaning of the word.
      Similarly the words 'medical service or fund', if construed
      to mean the body set up to organize and control the service
      or administer the fund, could also be regarded as describing
      an institution."
3.  The meaning given to a term by the context of a statute is, however, a
question of law.  The Debits Tax Administration Act uses the term "religious
institution" in the sense in which, for a very long time, that term has been
used in tax and rating statutes, that is as referring to those significant
religious institutions which are a recognised part of society, the
establishment and maintenance of which is seen to provide a public benefit
justifying exemption from fiscal charges and tax.  The use of the term in this
sense is reflected in definition 7a of the definition of "institution" in the
Oxford English Dictionary, which is a dictionary which proceeds on historical
principles.  That definition reads:-
      "7. a. An establishment, organization, or association,
      instituted for the promotion of some object, esp. one of
      public or general utility, religious, charitable,
      educational, etc., e.g. a church, school, college, hospital,
      asylum, reformatory, mission, or the like; as a literary and
      philosophical institution, a deaf and dumb institution, the
      Royal National Life-Boat Institution, the Royal Masonic
      Benevolent Institution (instituted 1798), the Railway
      Benevolent Institution, etc.  The name is often popularly
      applied to the building appropriated to the work of a
      benevolent or educational institution."
The meaning is not so well conveyed by the definition of "institution" in the
Macquarie Dictionary, which dictionary emphasises the current, ordinary use of
a term.  The word "institution" can be used in ordinary parlance in a much
wider sense than it is used in the expression "religious institution" in tax
and rating statutes.
4.  The use of the term in analogous contexts was discussed in Church of the
New Faith v. Commissioner of Pay-roll Tax (Vic) (1983) 154 CLR 120 and Young
Men's Christian Association of Melbourne v. Federal Commissioner of Taxation
(1926) 37 CLR 351, in which the Church of Scientology and the Young Men's
Christian Association were held to be religious institutions.  On the other
hand, in Christian Enterprises Ltd v. Commissioner of Land Tax (1968) 88 WN
(Pt.2) (NSW) 112, Glebe Administration Board v. Commissioner of Pay-Roll Tax
(NSW) (1987) 19 ATR 297, The Trustees of the Allport Bequest v. Federal
Commissioner of Taxation (1988) 88 ATC 4436 and Commissioner for ACT Revenue
Collections v. Council of the Dominican Sisters of Australia (1991) 91 ATC
4602, more limited structures were held not to be within an exemption.
5.  In the Debits Tax Administration Act, the term "religious institution" is
associated with the term "public benevolent institution" in a statute which
imposes a tax or charge.  Thus, the term is used in the sense I have
described.
6.  The learned Judge constituting the Administrative Appeals Tribunal, French
J., applied the term in this sense.  There was no error of law in his doing
so.
7.  As to whether the facts brought the appellant within the description as so
understood was then a matter of fact.  See Hope v. Bathurst City Council
(1980) 144 CLR 1 at 7.  There would be no relevant error of law unless the
decision on fact was not reasonably open on the evidence.  See Kitto J. in NSW
Associated Blue-Metal Quarries Ltd v. Federal Commissioner of Taxation (1955)
94 CLR 509 at 512; Mason J. in Hope v. Bathurst City Council at 7; Mason C.J.
in Australian Broadcasting Tribunal v. Bond (1990) 170 CLR 321 at 355-360. As
Beaumont and Lee JJ. have shown, French J.'s decision on the facts was open to
him.
8.  A number of alleged errors of law were raised by counsel for the
appellant.  Most of the submissions misstated the law.  For example, the first
alleged error in law relied upon was the "the Tribunal erred in law in not
finding that a body established for religious purposes was a religious
institution".  However, there is no principle of law that everybody
established for religious purposes is a religious institution.
9.  I need not deal with each of the errors of law alleged.  Counsel for the
appellant appears to have started from the assumption that the appellant was a
"religious institution" and to have proceeded therefrom to the conclusion that
French J. must have found to the contrary because of some consideration which
was wrong in law.  In my opinion, no error has been shown.
10.  It is clear from the reasons for decision of French J. that his Honour
took into account all the circumstances which were before him and that, after
weighing up the facts, concluded that the appellant was not a "religious
institution" as that term is used in the Debits Tax Administration Act.  To
seize upon any particular observation of his Honour as setting out a reason
why a body which otherwise would be classified as a religious institution
should not be so classified is to misread his Honour's decision.
11.  I see no error of law in his Honour's decision.  The appeal, being
brought under s.44 of the Administrative Appeals Tribunal Act 1975 (Cth), is
of course limited to a question of law.  Therefore the appeal must be
dismissed.
12.  I agree with Beaumont and Lee JJ. that the appellant has the potential to
become a "religious institution", for the value of the medical work done by Dr
P.A. Staer, particularly in Africa, and Dr Staer's commitment to the Christian
ethic are well known and recognised and therefore the organisation may
develop.  Yet, for the moment, the appellant has a character analogous to that
of the private charitable trust considered in the Allport Bequest case rather
than that of a "religious institution" as that term is used in the Debits Tax
Administration Act.
13.  I would dismiss the appeal with costs.

JUDGE2
  Pamas Foundation (Inc.) ("the Foundation") seeks to appeal from a decision
of the Administrative Appeals Tribunal, constituted by French J., on a
question of law pursuant to s.44(1) of the Administrative Appeals Tribunal Act
1975.  The Foundation applied to the Commissioner of Taxation pursuant to
s.11(1) of the Debits Tax Administration Act 1982 for an exemption certificate
on the ground that it was a "religious institution" within the meaning of s.3
of the Debits Tax Administration Act.  Under s.11(1), if the Commissioner is
satisfied that all debits made, or to be made, to the account of an account
holder are, or are likely to be, inter alia, "excluded debits", the
Commissioner shall issue a certificate of exemption in relation to the account
(s.11(1)(a)).  If the Commissioner is not so satisfied, he shall refuse the
application (s.11(1)(b)).  By s.3 of the Debits Tax Administration Act, an
"excluded debit" is defined to mean -
        "...a debit -
  (a)   made to an account kept with a financial institution in the name
        of -
  ...
        (vi)  any of the following:
        (A)   a public benevolent or a religious institution...
being a debit made in relation to a transaction or transactions carried out by
or on behalf of the institution...wholly and exclusively in furtherance of its
objects."  (Emphasis added)
2.  The Foundation's application was refused by the Commissioner.  The
Foundation then applied to the Tribunal for a review of the Commissioner's
decision.  French J. affirmed the decision under review. The Foundation now
seeks to appeal against this decision on the ground that, as a matter of law,
the material before the Tribunal should have led it to conclude that the
Foundation was a "religious institution". In order to understand the issues
which arise in the appeal, it is necessary to refer to the salient features of
the material before the Tribunal as follows.
The material before the Tribunal
3.  The Foundation was incorporated in 1972 under the provisions of the
Associations Incorporations Act 1895-1969 (W.A.).  The objects of the
Foundation were stated in its Rules ("the Rules") as follows:
    "Objects
    The objects of the Association are religious and are the encouragement
    and promotion of Christian Doctrines and Practices in Australia and
    overseas without profit to any individuals and in pursuance of these
    objects to accept donations of any real and personal property and gifts
    by will or otherwise and to borrow or lend money and to purchase or in
    any other manner acquire and hold lands tenements and hereditaments
    goods chattels and effects and all other real and personal estate for
    the purpose of the Association and to let sell manage exchange hire or
    dispose of all or any part of the Property or Assets Real or Personal of
    the Association or otherwise deal with or authorise the Committee of the
    Association to deal with in the same manner as fully and effectually as
    an individual owner could do and for such purpose to execute all such
    transfers deeds mortgages assurances instruments writing and things as
    may be necessary or desirable subject to clause 6 hereof."
4.  (Clause 6 dealt with the affixing of the seal of the Foundation and is not
material for our purposes.)
5.  The role of the Committee of the Foundation was dealt with by the Rules
relevantly as follows:
    "Committee
    The Committee is the controlling body of the Association and shall
    consist of the officers of the Association and may consist of such other
    members of the Association not exceeding 3 as may be deemed necessary by
    the Committee and elected by a majority vote at a general meeting of
    members.  The officers of the Association shall be the Chairman and the
    Secretary.  The Foundation Chairman and Secretary shall permanently
    occupy their position until death or retirement or removal by a 3/4
    majority vote at a general meeting of members...."
6.  Membership of the Foundation was dealt with by the Rules as follows:
    "Membership
    Any person who has attained the age of 21 years may be elected as
    an ordinary member provided he or she signs the following statement:  "I
    desire to join Pamas Foundation and declare I am in agreement with the
    doctrinal statement of the Scripture Union and agree to be bound by the
    Rules of the Association".  The election, removal, retirement and
    resignation of members shall be at the absolute discretion of the
    Committee."
7.  Peter Alfred Staer, who is a medical practitioner, is the Foundation
Chairman.  His wife, Merle Allison Staer, is the Foundation Secretary.  The
Foundation was established by Dr. Staer.  The members of the Foundation and of
its Committee have at all material times consisted of Dr. Staer, Mrs Staer,
and their four adult children together with Alfred Edward Brown and his wife,
Elsie Brown.  Mr Brown, who is a Doctor of Divinity, was formerly the
Principal of the Perth Bible College.
8.  The activities of the Foundation were described by Dr. Staer in a letter
written to the Australian Taxation Office as follows::...to use the funds and
deposits with the Foundation for trading purposes and then distribute the
profits to Christian and Charitable works.  The funds of the Association have
been derived from gifts and also by interest free deposits from interested
persons.  Trading activities have primarily been on interest bearing deposits,
mortgages and rentals."
9.  In the period between 1986 and 1990, the operations of the Foundation
generated income as follows:  1986 - $67,818.42;  1987 - $80,571.16;  1988 -
$61,970.38;  1989 - $133,902.32;  1990 - $134,684.26.  (These references, and
those to follow, to particular annual periods refer to the 12 month period
ended on 30 June of that year.)  In each of those years, the sum of the funds
advanced by Dr. Staer and Mrs Staer to the Foundation by way of interest-free
loans stood as follows:  1986 - $11,221.42;  1987 - $100,605.79;  1988 -
$250,000.00;  1989 - $250,000.00;  1990 - $160,000.00.  These funds were used
to earn income by their investment by the Foundation in various ways,
including the leasing of motor vehicles to Dr. Staer and some other medical
practitioners known to him.  The Foundation was also the principal beneficiary
of Dr. Staer's family trust.  The trust derived income from the provision of
services by a company to Dr. Staer's practice through a unit trust, known as
the Mulier Management Unit Trust.  Dr. Staer's superannuation company also
deposited money with the Foundation, the deposit standing at the following
amounts in each of the respective years: 1987 - $2,000;  1988 - $46,612.71;
1989 - $86,242.23; 1990 - $117,125.41.  About two-thirds of the funds
deposited with the Foundation were advanced to it by Dr. Staer's family's
interests.  Other medical practitioners known to Dr. Staer also deposited
funds with the Foundation, sometimes interest-free and at other times at
interest.
10.  The Foundation has donated funds to organisations involved in Christian
and charitable works as follows:  1986 - $45,962.94 (28 recipients);  1987 -
$51,152.61 (36 recipients); 1988 - $76,289.73 (28 recipients);  1989 -
$85,048.07 (34 recipients);  1990 - $94,486.36 (29 recipients).
The Tribunal's reasons
11.  In his reasons, French J. said (at 20):
    "No question was raised about the bona fides and depth of Dr. A's
    Christian commitment.  And the evidence clearly supports the conclusion
    that the Foundation was formed and operated in order to provide
    financial support to advance the spread of Christian teachings and the
    carrying on by Christian people of charitable and missionary activities
    in various parts of the world."
12.  After referring to the authorities dealing with the meaning of the
expression "religious institution" and in particular Glebe Administration
Board v Commissioner of Pay-Roll Tax (N.S.W.) (1987) 19 ATR 297 and
Commissioner for ACT Revenue Collections v Council of the Dominican Sisters of
Australia (1991) 91 ATC 4602, French J. went on to say (at 29-30):
    "The Foundation was established to further the religious purposes of its
    controllers, Dr and Mrs (Staer), the members of their family and Mr and
    Mrs (Browne).  The ultimate objects it serves are religious and these
    are reflected in its constitution and rules including the adoption of
    the tenets of the Scripture Union...Notwithstanding this, it is my
    opinion that the principal function of the Foundation as revealed in its
    activities, is to hold, invest and disburse funds.  The history of its
    formation indicates that it was established to do just that.  It is
    closely integrated with the business affairs of Dr (Staer) and is the
    vehicle which he and his family use to pursue in a practical way their
    Christian purposes.  But this does not make it a religious institution
    any more than the Glebe Administration Board was a religious
    institution.  In coming to that conclusion I have regard to its
    predominate and immediate purposes in the sense contemplated by the Full
    Federal Court (in the Dominican Sisters case).  Quite apart from that
    the usage of the term 'religious institution' jars against the reality
    of an association which is substantially engaged in commercial activity
    albeit to serve the religious ends of its founders."
The ambit of the appeal
13.  On behalf of the Commissioner, it is submitted that the only issue now
raised on behalf of the Foundation is a question of fact, that is to say, the
ordinary meaning of the expression "religious institution";  and thus, that no
question of law under s.44(1) of the Administrative Appeals Tribunal Act arose
here.  There appears to be some force in the submission.  But we do not find
it necessary to express a concluded view on the point, since we have reached
the conclusion that the Foundation was not a "religious institution" for the
purposes of the Debits Tax Administration Act.
Was the Foundation a "religious institution" for present purposes?
14.  The meaning of the expression "religious institution" has been considered
in other statutory contexts.  For instance, in The Young Men's Christian
Association of Melbourne v The Federal Commissioner of Taxation (1926) 37 CLR
351, it was held that the Association was a "religious institution" for the
purposes of the exempting provisions of the  Income Tax Assessment Act
1915-1918.  The Association was based, by the statement of its Constitution in
its by-laws, on the declaration adopted at the Paris Conference of the Young
Men's Christian Association of all lands in 1855 that "seeks to unite those
young men who, regarding the Lord Jesus Christ as their God and Saviour,
according to the Holy Scriptures, desire to be His disciples in their doctrine
and their life, and to associate their efforts for the extension of His
Kingdom amongst young men."  The object of the Foundation, as stated in its
by-laws, was "the improvement of the spiritual, intellectual, social and
physical condition of young men".  This object was carried out, inter alia, by
the provision of lectures on religious and other subjects, by the equipping of
library and gymnasium, by the holding of religious services, prayer meetings
and bible study circles and by the formation of sports clubs.
15.  Isaacs J. said (at 357):
    "Reading the two first sections (i.e., by-laws dealing with the
    Constitution and objects) and having regard also to the evidence as to
    the way in which the affairs of the Association are conducted, I
    entertain no doubt it is entitled to exemption.  My conclusion rests on
    the essentially 'religious' character of the institution....the
    Association is an institution with a very broad religious platform
    carried out in an extremely practical manner."
16.  Higgins J. said (at 360-1):
    "It has not been argued for the Commissioner that this Association is
    not an 'institution' within the meaning of the Act.  The meaning
    numbered 7 in the Oxford Dictionary applies:  'An establishment,
    organization, or association, instituted for the promotion of some
    object, esp. one of public or general utility, religious, charitable,
    educational, andc., e.g. a church, school, college, hospital, asylum,
    reformatory, mission, or the like;  as a literary and philosophical
    institution, a deaf and dumb institution, the Royal National Life-boat
    Institution,' andc. It is true that the name is often popularly applied
    to the building, appropriated to the work of a benevolent or educational
    institution;  but this is rather a transferred sense.  The existence of
    a distinctive building is not, I think, essential to the word
    'institution.'"
17.  Gavan Duffy J. said (at 361):
    "In my opinion the appellant is substantially an association of persons
    holding specific religious views, and acting together for the purpose of
    comforting and encouraging one another, and of inducing others to adopt
    those religious views and to join that Association."
18.  Rich J. said (at 362):
    "It has not been suggested that the appellant is not an institution.  It
    was incorporated under the provisions of sec.19 of the Hospitals and
    Charities Act 1890.  And I consider that it is religious.  The cardinal
    principle of the Association is:  (The declaration was here set out.)
    That is the basic idea.  Ancillary thereto is 'the improvement of the
    spiritual, intellectual, social and physical condition of young men'
    (by-law 3).
    Reading the by-laws of the Association as a whole document, I find
    nothing in them to exclude or modify the construction I have adopted."
19.  See also the Glebe Administration Board case, above, per Priestley J.A.
at 308 and the Dominican Sisters case, above, per Morling, Neaves and Foster
JJ. at 4,606-7.
20.  The meaning of "institution" has been considered in many statutory
contexts.
21.  In Christian Enterprises Ltd. v. Commissioner of Land Tax (1968) 88 WN
(Pt.2) (N.S.W.) 112, a question arose whether land was exempt from land tax
because it was owned by a company limited by guarantee which was a "religious
society" or, alternatively, because it was a "charitable institution".
Membership of the company was confined to natural persons who accepted certain
articles of faith.  The company's primary object was to raise funds to promote
specified religious purposes.  The income and property of the company were to
be applied solely towards this object.  It was held that the company was not a
"charitable institution" but was a "religious society" for the purposes of the
Land Tax Management Act 1956 (N.S.W.).  Walsh J.A. said (at 118):
    "There are many societies which would not ordinarily be described as
    institutions.  Admittedly, the latter is a vague word.  As was said in
    Minister of National Revenue v Trusts and Guarantee Co. Ltd., 'Its
    meaning must always depend upon the context in which it is found'."
22.  Walsh J.A. (at 119) rejected a submission that every company with
charitable objects is a charitable institution.  He went on to say (at 120):
    "At the relevant time the appellant had only seven members.  But I
    do not think that the question before the court (i.e. whether it was
    a "religious society") turns in any way on that fact.  One cannot
    say that if it had had a hundred members or some other selected
    number of members it would be a religious society but that, with
    only seven members, it is not.  For example, I think that the
    Franciscan Order of Friars Minor, which has a large membership,
    would undoubtedly be properly described as a religious society.  Cf.
    Perpetual Trustee Co. (Ltd.) v Wittscheibe...  But I think also that
    it was already a religious society at the time when St. Francis of
    Assisi and his then quite small group of followers had joined
    together in a community, with the common purpose of devoting
    themselves to preaching, as well as to poverty and prayer.  It may
    well be that, in the ordinary use of the language, one would speak
    of the Franciscans as being now, but not being in those early days,
    an 'institution'.  But, in the term 'religious society' I find no
    notion that size or numbers are of importance." (Emphasis added)
23.  In Stratton v Simpson (1970) 125 CLR 138, Gibbs J. said (at 158):
    "In its ordinary sense 'institution' means 'an establishment,
    organization, or association, instituted for the promotion of some
    object, especially one of public utility, religious, charitable,
    educational etc.' (The Shorter Oxford English Dictionary).  It means, as
    was said in Mayor etc. of Manchester v McAdam...'an undertaking formed
    to promote some defined purpose...' or 'the body (so to speak) called
    into existence to translate the purpose as conceived in the mind of the
    founders into a living and active principle'.  Although its meaning must
    depend on its context, it would not ordinarily connote a mere trust (cf.
    Minister of National Revenue v Trusts and Guarantee Co. Ltd....) A
    school could appropriately be called an institution within the ordinary
    meaning of the word.  Similarly the words 'medical service or fund', if
    construed to mean the body set up to organize and control the service or
    administer the fund, could also be regarded as describing an
    institution."
24.  See also The Trustees of the Allport Bequest v Federal Commissioner of
Taxation (1988) 88 ATC 4436 per Northrop J. at 4,440-1.
25.  In our opinion, the reasoning of Walsh JA. in the Christian Enterprises
case on the meaning of "institution" is applicable in the circumstances of the
present case.  His Honour said (at 119):
    "I find myself in agreement with the statement of Nagle J., who said:
    'Wide and flexible as the word 'institution' may be, I do not think it
    applies to the appellant company in the present situation'."
26.  As has been seen, Walsh J.A. went on to say that it may well be that, in
the ordinary use of language, one would speak of the Order of Franciscans as
being now, but not in their early days, an "institution".  In our opinion,
these observations are also apposite here.  The context in which the
expression "religious institution" appears includes the juxtaposed term
"public benevolent institution" which tends to suggest that the word
"institution" is to be given a meaning greater than a structure controlled and
operated by family members and friends.
27.  The fact that the Foundation is a body corporate by virtue of its
incorporation under the provisions of the Associations Incorporations Act
1895-1969 (W.A.) does not mean that as a corporation it is also an
institution.  The Foundation has a small and exclusive membership which is
limited to Dr. Staer, his family and some close friends.  The scale of its
activities is relatively small.  Looking at the whole of the circumstances, in
our opinion, the Foundation is not a religious institution to which s.3 of the
Debits Tax Administration Act 1982 applies.  We would dismiss the appeal
accordingly.