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SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

Legal test of “public benefit” for charities: The Church of Scientology of New Zealand Inc. passes the test

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On 30 June 2008 The Church of Scientology of New Zealand Inc. (“CoSNZ”) was registered as a charity by the Charities Commission headed at that time by Mr Trevor Garrett. The now disestablished Commission, recently absorbed into the Department of Internal Affairs, accepted this entity (CoSNZ) as a charity under the third head of charity law – “the advancement of religion” (referred to under the Commission’s terminology as “Religious Activities”). In doing so, the Commission took the legal position that CoSNZ constituted a genuine religion for the purposes of charity law – “religion” defined as being characterised by a belief in a supreme being and an expression of belief in that supreme being through worship. Re South Place Ethical Society [1980] 1 WLR 1565, Dilon at p. 1572 D-E. [Emphasis added].

However, the Charity Commission for England and Wales, in its well-publicised 1999 decision in which it refused to grant the Church of Scientology (England and Wales) [“CoS“] charitable status; while concluding that Scientology believed in a supreme being, decided that in applying the test criterion of “worship”, it was NOT a religion. The legal criterion of worship would be met, the Commission stated “where the belief in a supreme being found its expression in conduct indicative of reverence or veneration for a supreme being”. CoS (England and Wales) failed this test.

The Commissioners (England and Wales) “considered the activities of auditing and training, which Scientology regards as its worship, and concluded that auditing is more akin to therapy or counselling and training more akin to study and that both auditing and training are not in their  essence exhibitions of reverence paid to a supreme being and such Scientology practices are not worship for the purposes of charity law.”

The Commissioners decided that auditing and training do not constitute worship as defined and interpreted from legal authorities.

In direct contrast, the New Zealand Charities Commission Registration Team and officials, having no doubt thoroughly scrutinised the controversial activities of CoSNZ, as well as presumably examined the UK Charity Commission decision re CoS; took the opposite view. Scientology according to the NZ Commission is a bona fide religion for the purposes of charity law.

Clearly both Commissions cannot be right on this important legal matter: the legal definition of “religion”.

Leaving aside the issue of whether or not Scientology constitutes a religion, under the legal definition of “religion” in charity law, Scientologists in their application for charity status with the UK Commission, contended that Scientology served a “public benefit”: the latter a prerequisite for acceptance as a charity (under all four charity law heads). Their case for charitable status was subjected to the “public benefit” legal test and it failed.

In contrast the New Zealand Charities Commission, having no doubt carefully and thoroughly examined the “public benefit” test applying to CoSNZ, took the opposite view: CoSNZ was ruled both a bona fide religion AND one that serves a “public benefit”. This legal position is at complete variance with that issued by the UK Commission, even though both sets of Charities experts examined essentially the  same practices of the Church: auditing and training.

The Commissioners for England and Wales, also considered CoS for charitable status under the fourth head of charity law: that it is arguably established “for a charitable purpose which promotes the moral or spiritual welfare or improvement of the community”. They concluded that even if CoS could be ruled as fulfilling this test under the fourth head, it failed under the “public benefit” test. They concluded, with reference to their examination of “auditing and training” that:

“… the private conduct and nature of these [CoS] practices together with their general lack of accessibility meant that the benefits were of a personal as opposed to a public nature. Accordingly, following the legal test referred to above, public benefit had NOT been established.” [Emphasis added]

Again, to emphasis the point, the New Zealand Charities Commission accepted that The Church of Scientology of New Zealand Inc. did pass the “public benefit” test and constituted a bona fide “religion”; while the UK Commission took the opposite view legally on both counts.

It would appear that the New Zealand Charities Commission’s decision concerning The Church of Scientology sets a benchmark as to how it approaches the “public benefit” test for charitable status. Numerous other decisions it has issued that are analogous to this controversial one, provide a clear direction to how charity law in New Zealand has been applied in the last five years with respect to “public benefit”.

The Commissioners for England and Wales recognised that the “public benefits” CoS was claiming, amounted to “intangible benefits”. Whilst recognising that these could be real, the Commissioners concluded:

“…the test [for “public benefit”] was that the whole tendency of charity in the legal sense under the fourth head is towards tangible and objective benefits but that in the case of an intangible benefit that at least approval by the common understanding of enlightened opinion for the time being would be necessary before an intangible benefit could be taken to constitute sufficient benefit to the community [Emphasis added]. National Anti Vivisection Society v IRC [1948] AC 31, Lord Wright at p. 49.”

Clearly, the New Zealand Charities Commission in 2008 considered the “intangible benefits” gained by the NZ public  (non-scientologists) from the practices of Scientology, constituted solid and abiding evidence that this “religion” was worthy of charitable status, as it conferred an undeniable (in their view) “public benefit”.

References:

Source: Extracts quoted from:

[The] Charity Commission [for England and Wales]. Decision of the Commissioners [4 pages]

Application by the Church of Scientology (England and Wales) for registration as a charity

[Made on 17th November 1999]

[Emphasis in original]

For full Decision see: http://www.charitycommission.gov.uk/Library/start/cosdecsum.pdf

 

Legal test of “public benefit” applied to charities: the Church of Scientology (England and Wales) fails test

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The Church of Scientology (the Church) is an international organisation which promotes a belief system, doctrines and practices known as Scientology. The Church has its international headquarters in the United States…. The Church has now now established a company incorporated under the Companies Acts and limited by guarantee called Church of Scientology (England and Wales) (CoS) to further its work in this country. In September 1996, CoS applied to the [Charity] Commission [for England and Wales] for registration as a charity pursuant to section 3(2) of the Charities Act 1993…

CoS argues that it is a body established for the charitable purpose of the  advancement of religion under the third head of charity law, or, in the alternative, if not so established, that it is established for a charitable purpose which promotes the moral or spiritual welfare or improvement of the community under the fourth head of charity law. Whether under the third head or fourth head of charity law, CoS argues that it is established for the public benefit…

The Commissioners having considered the full legal and factual case put to them by CoS, and having reviewed the  relevant law, taking into account the principles embodied in ECHR [European Convention on Human Rights] where appropriate, decided that CoS was not established for charitable purposes or for the public benefit and was therefore not registrable as a charity under section 3(2) of the Charities Act 1993.

In making that determination the Commissioners further concluded that:

(1) The CoS is not charitable as an organisation established for the  charitable purpose of the advancement of religion because, having regard to the  relevant law and evidence, Scientology is not a religion for the purposes of English charity law.

(a) The Commissioners, considered that the legal authorities establishing the meaning of religion in charity law were ambiguous, but having construed such authorities in a way compatible with ECHR they concluded that the definition of religion was characterised by belief in a supreme being and  an expression of belief in that supreme being through worship. Re South Place Ethical Society [1980] 1 WLKR 1565, Dillon J at p. 1572 D-E.

(b) … The Commissioners concluded that Scientology believed in a supreme being.

(c) The Commissioners decided that the criterion of worship would be met where the belief in a supreme being found its expression in conduct indicative of reverence or veneration for the supreme being….

The Commissioners decided that auditing and training do not constitute worship as defined and interpreted from legal authorities.

(2) That CoS was not established for the charitable purpose of promoting the moral or spiritual welfare and improvement of the community.

(a) The Commissioners considered that CoS was not analogous to the established legal authorities which governed this area of the law. Re Scowcroft [1898] 2 Ch 638, Re Hood [1931] 1 Ch 240, Re Price [1943] Ch 422, Re South Place Ethical Society. They concluded CoS was not analogous to the decided cases because it promoted a formal and highly structured system of belief (which it regarded as a religion), necessitating membership of or adherence to a particular organisation for access to or participation in its doctrines, practices and beliefs such that these were not generally available to the public at large. However the Commissioners further concluded that these legal authorities were ambiguous.

(b) The Commissioners considered and interpreted these authorities compatibly with the ECHR and concluded that the key aspects of the charitable purpose of promoting the moral and spiritual welfare or improvement of the  community which could be discerned from these authorities was that the doctrines, beliefs and practices involved were generally accessible to the public and capable of being applied or adopted by them according to individual judgement or choice from time to time in such a way that the moral and spiritual welfare or improvement of the community might result, Re Price, Cohen J at 423. Accordingly, the Commission concluded, it would be possible for non-religious belief systems promoted by a membership organisation to be established for such a purpose if those criteria were satisfied.

(c) The Commissioners considered in relation to the doctrines and practices of CoS whether these were so accessible and capable of such application, but concluded that because of the nature and organised practice of the beliefs of Scientology they were on balance neither so accessible nor could be so applied such that the moral and spiritual welfare or improvement of  the  community might result.

(3) That CoS was not established for the public benefit.

In considering the legal test applied to organisations established for purposes falling within the first three heads of charity law in that they were entitled to the presumption of public benefit and the different legal test applied to the fourth head of charity law where public benefit had to be demonstrated, the Commissioners considered that such a distinction between the legal tests was consistent with ECHR…. For the fourth head of charity, public benefit needed to be established although there were cases where it may be self evident and need to be proved….

The Commissioners considered whether if CoS had been established for the charitable purpose of advancing religion, it was also established for the public benefit….

The Commissioners decided that in the case of CoS, the relative newness of Scientology and the judicial and public concerns which had been expressed about its beliefs and practices, led them to conclude that it should not be entitled to the  presumption of public benefit. Accordingly, it was for CoS to demonstrate that it was established for the public benefit….

The Commissioners considered that this test [of public benefit] must be applied to the core practices of such an organisation [as CoS] and not to incidental activities or other activities which may already be regarded as charitable.

After reviewing the practices of auditing and training, considered by CoS to be central features of the practice of Scientology, the Commissioners considered that these are in fact conducted in private and not in public and that in their very nature are private rather than public activities such that no legally recognised benefit could be said to be conferred on the public. It could not be concluded that the benefits of the practice of Scientology extended beyond the participants. Accordingly public benefit was not established.

The Commissioners went on to consider whether, if CoS had been established for a charitable purpose of promoting the moral or spiritual welfare or improvement of the community, it was also established for the public benefit. The Commissioners considered that it was for CoS to establish public benefit as this was a purpose falling within the fourth head of charity law. The Commissioners considered the relevant legal test of public benefit to be applied to organisations established under the  fourth head of charity. The Commissioners concluded that the test was that the whole tendency of charity in the legal sense under the fourth head is  towards tangible and objective benefits but that in the case of an intangible benefit that at least approval by the common understanding of  enlightened opinion for the time being would be necessary before an intangible benefit could be taken to constitute sufficient benefit to the community. National Anti-Vivisection Society v IRC [1948] AC 31, Lord Wright at p. 49. The  Commissioners considered that in the case of the purpose of promoting the moral or spiritual welfare or improvement of the community, and thus of CoS, the issue was one of intangible benefit and that in relation to intangible benefit the Commissioners considered the legal test to refer to a common consensus of opinion amongst people who were fair-minded and free from prejudice or bias.

The Commissioners considered the core practices of Scientology, namely auditing and training, and concluded that the private conduct and nature of these practices together with their general lack of accessibility meant that the benefits were of a personal as opposed to a public nature. Accordingly, following the legal test referred to above, public benefit had not been established.

Source: Extracts quoted from:

[The] Charity Commission [for England and Wales]. Decision of the Commissioners [4 pages]

Application by the Church of Scientology (England and Wales) for registration as a charity

[Made on 17th November 1999]

[Emphasis in original]

For full Decision see: http://www.charitycommission.gov.uk/Library/start/cosdecsum.pdf

 

Promotion of ethical standards of conduct, good citizenship and public participation in the prevention of crime

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The Promotion of ethical standards of conduct, spiritual welfare or improvement, good citizenship,  moral improvement, public participation in the prevention of crime. and the sound administration of the law, have ALL been considered charitable purposes within the Fourth Head of English Charity Law (Lord Macnaghten’s fourth head of charity)

“The Charity Commissioners [for England and Wales: [1999] Ch. Comm. Dec. November 17 (the Church of Scientology), p. 29]] have suggested that Re Price and Re South Place Ethical Society provide authority for saying that an organisation that disseminates ideas which are broadly philosophical and which are generally accessible to and can be applied within the community and which can be adopted freely from time to time according to individual choice or judgment by member of the public should be charitable. Such a purpose is compatible with ECHR [European Convention on Human Rights] principles if charitable status is not denied because the organisation is promoting a belief system which is not a religion in terms of English charity law or because membership adherence to the organisation is not necessary.

“The Charity Commissioners have determined that the promotion of racial harmony is charitable by analogy to the promotion of spiritual welfare or improvement. In particular, the Community Security Trust was registered with one of its objects being the promotion of good race relations between the Jewish community and other members of society by working towards the elimination of racism in the form of anti-Semitism.

“The Charity Commissioners have also entered on the register a number of trusts within this category as promoting good citizenship…

“The promotion of good citizenship can cover the promotion of public participation in the prevention of crime, particularly that which is  racially motivated.

“The Commissioners have indicated that they regard the promotion of ethical standards of conduct by organisations as charitable within this category [See (1994) 2 Ch. Com. Dec., pp.5, et seq (Public Concern at Work)]. The promotion of the sound administration of the law can also be regarded as charitable as being the promotion of moral improvement [[1996] Ch. Com. Rep., paras 60-65 (JUSTICE)].”

Source: Extracts from The Law and Practice Relating to Charities, 4th Edition Hubert Picardo QC (pp. 126-127)

Promotion of mental or moral improvement as a general charitable purpose

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“In Re Scowcroft [ [1898] 2 Ch 638] Stirling J. held that a devise … of a building “to be maintained for the furtherance of Conservative principles and religious and mental improvement” was a good charitable gift. The furtherance of religious and mental improvement was an essential portion of the gift and the gift might, as the judge observed, be supported on the ground that it was for the public benefit just as a gift of a library or museum would have been held to be a good charitable gift. Thus the decision did not depend solely on the element of mental improvement since there was also an element of general public utility. Similar considerations applied in Re Hood [ [ 1931] 1 Ch. 240] to a gift for the promotion of temperance otherwise than by political means. Both elements were present.

“In Re Price [[1943] Ch.422] the charitable character of the bequest depended exclusively on the element of moral improvement…

On the evidence of the actual teachings apart from the evidence of benefit to individuals, Cohen J was satisfied that the teachings [of Dr. Rudolf Steiner – ] were directed to the mental or moral improvement of man and that they were not contra bonos mores. He held as a matter of law that the court was not concerned to determine whether the carrying on of the teachings of Rudolf Steiner would in fact result in the mental or moral improvements of anyone, and he did not find as a fact that they would. His Lordship’s finding of fact was that the teachings might have that result, and his conclusion of law was that this was sufficient to satisfy the requirement of public benefit.

“Although Cohen J. considered that the trusts of the residuary gift resembled trusts for the advancement of religion, he treated the gift as falling under Lord Macnaghten’s fourth head of charity.

“In Re South Place Ethical Society [[1980] 1 W.L.R.. 1565], Dillon J. held, as an alternative ground for his decision, by analogy with Re Scowcroft, Re Hood and Re Price, that the objects of the Society were charitable within the fourth head of Lord Macnaghten’s classification as being for mental or moral improvement.

“None of the cases considered provide a reasoned argument for the promotion of mental and moral improvement as a general charitable purpose, nor do they set any guidelines for the future application of this category of charity although the overall purpose is now fully acceptable as charitable

Extract from The Law and Practice Relating to Charities, 4th Edition Hubert Picardo QC (pp. 124-126)

“Promotion of Moral or Spiritual Welfare or Improvement” and “the Charitability of Moral Improvement”.

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Extract from The Law and Practice Relating to Charities, 4th Edition Hubert Picardo QC (pp. 220-221)

It now appears to be possible to isolate a further [4th] head of charity [in addition to relief of poverty, advancement of education and advancement of religion] consisting of ‘trusts for certain purposes which are not religious but tend to promote the moral or spiritual welfare of the community or a sufficiently important section of the community’. [Emphasis added]

Note: A trust to elevate the community spiritually has been upheld in Canada: see Re Orr (1917) 40 OLR 567.

See Tudor on Charities (9th edn) 115-117 [for discussion on what constitutes “a sufficiently important section of the community”]

This far from compendious [4th] head [of charity] is admittedly fashioned from heterogeneous materials. No general principle should be deduced from animal charities which are an anomaly. Trusts for the promotion of temperance are more surely justified as charities by reference to the promotion of health than by reference to the somewhat vaguer concept of moral improvement….

Re Price ….[involving] an unincorporated association called the Anthroposophical Society of Great Britain …. The learned judge [Cohen J] on hearing evidence that the teachings of Dr Rudolf Steiner were directed to the mental or moral improvement of man and were not contra bonos mores decided that they might result in such mental or moral improvement and upheld the gift under Lord Macnaghten’s forth head of charity….

Certainly religion has been described as ‘fostering the moral or mental improvement of the community‘ [ Waltz v Tax Comrs of City of New York 397 US 664 (1970)]. But the notion of moral improvement was further upheld as charitable in Re South Place Ethical Society [ [1980] 1 WLR 1565] and there are other Commonwealth cases supporting the charitability of moral improvement. [See Re Wright (1923) 56 NSR 364 (training in higher ideals); cf Cameron v Church of Christ Scientist (1918) 57 SCR 298 at 304 (uplifting of humanity).