Community & Associations Newsletter – February 2017
Published on February 16, 2017 by Josephine Heesh
INTRODUCTION
- ACNC update: PBI Interpretation Statement and some deregistrations
- John XXIII College v Commissioner For ACT Revenue [2016] ACAT 152
- Malek Fahd Islamic School Limited And Minister For Education And Training [2016] AATA 1087
- Good News
The Carroll & O’Dea Community & Associations Team
ACNC UPDATE
Commissioner’s Interpretation Statement on Public Benevolent Institutions
Late last year Susan Pascoe, the ACNC Commissioner, released an Interpretation Statement on Public Benevolent Institutions (PBIs). The release of the Statement “follows consultation with the public, charity sector members and professional advisors on an Exposure Draft Statement”, which we discussed in our June 2016 newsletter.
The Statement is a comprehensive analysis of the new law on PBI’s. You can view the Statement on the ACNC website.
Revocation of charity status
The ACNC has recently revoked the charitable registrations of two high profile organisations.
- Camp Gallipoli
In December 2016 Camp Gallipoli, had its charitable status removed by the ACNC following “compliance investigations into their activities and operations”.
The revocation follows media coverage on Camp Gallipoli’s alleged failure to donate “all surplus funds… to support veterans and their families through the Returned Services League and Legacy”, as had previously been promised. In a Statement, the ACNC explained that “Its registration as a charity was revoked because Camp Gallipoli Foundation Incorporated was unable to demonstrate that it complied with the ACNC Governance Standards, specifically, that it was a not-for-profit entity.”
- Catch The Fire Ministries Inc
The ACNC announced on 17 January 2017 that the charitable status of Catch The Fire Ministries Inc had also been revoked.
Pastor Daniel Nalliah, the public face of the organisation, is reported as saying that the revocation stems from “political articles posted to” the organisation’s website, which allegedly breached the legislative requirement that a registered charity’s purpose cannot involve “promoting or opposing a political party or candidate for political office”, of which Mr Nalliah claims he had no knowledge.
Josephine Heesh, Partner
Merryn Lynch, Solicitor
John XXIII College v Commissioner for ACT Revenue [2016] ACAT 152
On 21 December 2016 the Australian Capital Territory Administrative Tribunal (“the Tribunal”) handed down its decision in John XXIII College v Commissioner for ACT Revenue (Administrative Review) [2016] ACAT 152.
The issue for review by the Tribunal was whether the Commissioner for ACT Revenue (“the Commissioner”) made an error when deciding that John XXIII College (“the College”), a registered charity, did not fall within the definition of a “charitable organisation” for the purposes of section 64(2) of the Duties Act 1999 (ACT) (“the Act”) in force at the time, and was accordingly assessed for stamp duty ad valorem rather than at the concessional rate of $20.
In a decision that could have far reaching consequences for similar organisations, the Tribunal decided that the College was not a charitable organisation for the purposes of the Act, and was therefore assessable for ad valorem stamp duty.
The take away
The “take away” from the decision is that State or Territory revenue bodies continue to separately determine whether an entity, registered at the national level as a charity with the Australian Charities and Not-for-profits Commission (“ACNC”) is a charity, under different State or Territory legislation. The case highlights the limited reach of the Charity Act 2013 definition of “charity” notwithstanding the hope that it could bring uniformity to the sector..
Josephine Heesh, Partner
Nathan Gately, Solicitor
Malek Fahd Islamic School Limited and Minister for Education and Training
[2016] AATA 1087
On 23 December 2016 the Deputy President of the Administrative Appeals Tribunal, Bernard J McCabe, handed down his much anticipated decision in the case of Malek Fahd Islamic School Limited and Minister for Education and Training.
In the case, which received a great deal of media attention, the Tribunal reviewed the decision by the delegate of the Minister for Education and Trading to revoke Malek Fahd Islamic School Limited’s (“the School”) approval under the Education Act 2013 (Cth) (“the Act”). Importantly, being an “approved authority” under the Act entitles a school to receive Commonwealth funding.
The Tribunal decided to let the delegate’s decision stand, making it clear, however, that all the evidence suggests that the School “provides quality education… appears to enjoy support in the community, [and] has the loyalty of its students and staff” and “that the reviewable decision is not directly concerned with the quality of the education provided by the school”.
The take away
The Tribunal noted that it is common, and generally acceptable, for “schools… [to] pay rent on properties they use for educational purposes”. However, what the Tribunal did find unacceptable, or impressible under the Act, was that the funding provided by the Commonwealth was not applied to the School but was instead used for the “payment of inflated rents”, “advance payments without any proper basis” and “[a]dvancing uncommercial loans to a parent entity”.
As the case reflects, when the tenant and School are related parties, it is safer to err on the side of caution. Rent paid by a School should be on the basis of land value only, and should be more in the vein of a ‘gesture’, or acknowledgement, that while the School may own the school buildings, it does not own the land.
At the present time, with the new school year having commenced, the implementation of the Minister’s decision has been delayed pending the College’s appeal of the decision to the Full Bench of the Federal Court.
Josephine Heesh, Partner
Merryn Lynch, Solicitor
Good News
On 1 November, 2016, Carroll & O’Dea Lawyers opened a Melbourne office.
We expect many of our Community and Associations clients will enjoy the facility of using that office if they are located in Victoria.
Our Communities and Associations team can advise on litigation, property transactions, charity and not-for-profit law issues, general commercial advice and estate planning relevant to our Victorian clients.
This is an exciting time at Carroll & O’Dea Lawyers as we extend our services into Victoria. We see that as a natural progression in our 117 year history of providing high quality legal services to all our clients.
Our new premises are located level 11, 533 Little Lonsdale Street, Melbourne.
Josephine Heesh, Partner
Jessica Lobow, Associate
