Nunawading Shire v Adult Deaf & Dumb Society of Victoria [1921] HCA 6; (1921) 29 CLR 98 (16 March 1921)

HIGH COURT OF AUSTRALIA

The President, Councillors and Ratepayers of The Shire Of Nunawading Defendants, Appellants; and The Adult Deaf and Dumb Society of Victoria Plaintiff, Respondent.

H C of A

On appeal from the Supreme Court of Victoria.

16 March 1921

Knox C.J., Rich and Starke JJ.

Owen Dixon, for the appellants.

J. R. Macfarlan K.C. and Lowe, for the respondent.

Owen Dixon, in reply.

The written judgment of the Court was as follows:—

March 16

Knox C.J.,

Rich and Starke JJ.

This was an appeal by special leave from a decision of McArthur J. in an action by the respondent, the Adult Deaf and Dumb Society of Victoria, against the appellants, the President, Councillors and Ratepayers of the Shire of Nunawading, for a declaration that certain land at Blackburn occupied by them and on which rates had been assessed under the Local Government Acts of 1903 and 1915 was exempt from rating. This land was rated as a single tenement, and no part of it was separately occupied or rated. Exemption was claimed under sec. 249 of the Acts on the ground that the land was used exclusively for charitable purposes. McArthur J. decided that this contention was well founded.

The memorandum of association of the Society contains some objects which are charitable, e.g., to provide maintenance and technical education for the adult deaf; and others which are not, e.g., to establish and carry on farms, nurseries, orchards, homes, and to breed, grow and deal in all kinds of stock, plants and produce, and generally develop the resources of such farms, nurseries and orchards, and to manufacture, buy, sell, supply and deal in goods of all kinds, and establish and carry on any business for the purpose of furnishing employment to or otherwise aiding the adult deaf.

The question at issue is not, however, whether the purposes of the Society are exclusively charitable, but whether the land is used exclusively for charitable purposes. The objects of the Society may throw some light upon the use of the land, but they are certainly not conclusive. Now, the word "exclusively" in sec. 249 of the Acts cannot be disregarded (R. v. Cockburn[1]). The use must be so as to exclude all purposes but the particular purpose. Thus, in Hadfield v. Mayor &c. of Liverpool[2], Wills J. said that used exclusively for a given purpose meant used exclusively for that purpose, and nothing else, and Ridley J. said the words meant used for that purpose only. Again, in Commissioners of Inland Revenue v. Forrest[3], Lord Watson points out the importance attached to the use of the word "exclusively" in rating statutes. "Then it is not sufficient compliance with the plain language of the Act that a society be established chiefly for the purpose of promoting science, literature, or the fine arts. One or other of these must be its exclusive object; so that an institution which also contemplated some other, though altogether subsidiary object, could not claim the benefit of the exemption." See also Guardians of Waterford Union v. Barton[4].

The facts of this case are not really in dispute. A number of unfortunate persons who are deaf and dumb were housed upon the land, and were treated, trained and instructed. A flower garden has been made and is maintained as a method of treating, training and instructing these persons. But the flower-growing scheme went far beyond these purposes. A business, which consisted of selling flowers to the public, was carried on, with the result that a large return accrued to the Society in each year. (See Annual Reports of the Society 1910-1918.) It is true that the motive for establishing the flower garden was the treatment and instruction of the deaf and dumb. The inquiry, however, is not what was the motive for bringing, or, to use the language of McArthur J., the sequence of ideas that brought, the land into use, but whether that use was exclusively for charitable purposes. It is not enough that the primary or main object of the use of the land was for charitable purposes, unless it can be affirmed that the land was used for these purposes only. The use of the land in the present case was twofold—(1) the treatment and training of the inmates of the Home, and (2) the carrying on the business of growing and selling flowers to assist in the upkeep of the institution. The latter purpose is not in any sense a charitable purpose, and so excludes the exemption claimed. Some reliance was placed upon the fact that the proceeds from the sale of flowers were applied to the upkeep of the institution, but the appropriation of these proceeds is not the criterion for determining the purpose for which the land was used. In addition to using the land for a flower garden, the Society habitually allowed boating and picnic parties to enter upon and use portions of the land, charging various sums of money for such use, and the sums received were not inconsiderable. We are not called upon in this case to say whether a use of the land on some isolated occasion for some trivial purpose would exclude the exemption claimed by the Society. See Kelly v. Mayor &c. of Fitzroy[5] and Mayor &c. of Sale v. Bearup[6]. The use of the land as a kind of recreation reserve for boating and picnicking parties is not a charitable purpose, and consequently excludes the exemption claimed by the Society.

Special leave to appeal was granted on the representation of the appellants that the interpretation of sec. 249 was of general importance to rating authorities, and as a condition of granting leave the Court required an undertaking from the appellants to abide by any order the Court might make as to costs. We think a just provision as to costs in the special circumstances of the respondent will be that the appellants pay the costs of this appeal, and that otherwise the parties abide their own costs of the action.

Action dismissed, the judgment of the Supreme Court set aside, the appellants to pay the respondent's costs of the appeal to this Court.

Appeal allowed. Judgment appealed from set aside. Action dismissed. Appellants to pay respondent's costs of this appeal.

Solicitors for the appellants, Maddock, Jamieson & Lonie.

Solicitors for the respondent, Derham, Robertson & Derham.

[1] 16 Q.B., 480, at p. 491.

[2] 80 L.T., 566.

[3] 15 App. Cas., at p. 348.

[4] (1896) 2 Ir., 538.

[5] 29 V.L.R., 604; 25 A.L.T., 194.

[6] 16 V.L.R., 658; 12 A.L.T., 97.