ACNC Decision Impact Statement: Equality Australia Ltd

Citations

Equality Australia Ltd and Commissioner of the Australian Charities and Not-for-profits Commission [2023] AATA 2161

Equality Australia Ltd v Commissioner of the Australian Charities and Not-for-profits Commission [2024] FCAFC 115

Brief summary of the facts

1. The judgment of the Full Federal Court and the reasons for decision of the Administrative Appeals Tribunal concerned an application by Equality Australia Ltd (the applicant) to the ACNC to be registered with the ‘Public Benevolent Institution’ (PBI) subtype of charity.
2. The applicant was already registered as a charity and registered with the subtype ‘advancing public debate’.¹ The applicant focused on advocacy activities primarily directed towards changing laws and social practices that can cause distress to LGBTIQ+ people. The applicant’s motivation for seeking these changes was to relieve the distress caused to many members of the LGBTIQ+ community by the current laws and social practices.
3. In line with the then Commissioner’s Interpretation Statement: Public Benevolent Institutions, the ACNC refused to register the applicant with the PBI subtype of charity.
4. The applicant argued that it was organised, conducted or promoted for benevolent relief to people in need because:
   1. Its advocacy activities were directed toward relieving distress among the LGBTIQ+ community, and
   2. It also engaged in activities that provided direct relief to members of the LGBTIQ+ community who are in distress.

History of review and appeal

5. The applicant sought review of the ACNC’s refusal decision in the Administrative Appeals Tribunal (Tribunal). The Tribunal's decision was split, with a two-member majority of Deputy President McCabe and Member Bygrave (majority) upholding the ACNC’s decision that the applicant was not entitled to registration with the PBI subtype of charity.
6. The applicant appealed the Tribunal’s decision to the Full Court of the Federal Court of Australia (Full Court). The Full Court found unanimously that the Tribunal’s decision did not contain any error of law and upheld the decision to refuse to register the applicant with the PBI subtype of charity.

Tribunal majority decision

7. The majority found that LGBTIQ+ individuals are a class of people in need of benevolent relief. The Tribunal considered evidence from experts and determined that LGBTIQ+ people are capable of being regarded as people experiencing distress due to minority stress caused by, amongst other things, structural discrimination in the form of discriminatory laws, policies and practices (paragraphs 20–35, 80).
8. Based on a ‘holistic analysis’ of the applicant’s purpose and activities, including descriptions of the applicant’s activities and the skills and experience of its staff, (paragraphs 37–79, 84) the majority determined that the applicant was organised to address distress experienced by LGBTIQ+ people and focused on advocacy (particularly in relation to law reform and social change) and policy development (paragraphs 69, 79). To the extent that the applicant provided direct support to individuals in the LGBTIQ+ community, the majority found that such support was incidental to its core focus on advocacy and policy development (paragraphs 67, 80).
9. In considering whether the applicant’s focus on advocacy and policy development meant that the applicant was organised, conducted or promoted to relieve the distress of people in the LGBTIQ+ community, the majority acknowledged that it is not necessary for a PBI to provide relief directly (paragraph 86). The majority also said that a PBI may engage in activities that are preventative in nature (paragraph 83). However, the majority stated that there must be a sufficiency of connection between the applicant’s activities and the benevolent ends it pursues (paragraphs 86, 88).
10. The majority concluded that the substantial advocacy for law reform and social change that the applicant was focused on, considering all the circumstances, was ‘(at least in this instance) too far removed from the traditional concepts of benevolence, even allowing for the evolution that has occurred in our understanding of that term’ (paragraph 88).
11. Therefore, the majority determined that the applicant was not a PBI.

Minority opinion at the Tribunal

12. Senior Member O’Connell in the minority considered that it was not necessary to determine whether seeking to change the law could amount to benevolent relief because the applicant engaged in a broader range of activities that were directed toward the relief of distress of the LGBTIQ+ community (paragraph 149). Senior Member O’Connell was satisfied that, considered on a holistic basis, the applicant was a PBI (paragraph 152).
13. As Senior Member O’Connell was in the minority, her dissenting opinion did not impact the decision that the applicant was not a PBI.

Full Federal Court appeal

14. The applicant appealed against the majority decision of the Tribunal to the Full Court.

Scope of appeal

15. The Full Court first needed to consider whether there was a question of law for it to decide in this case. The Full Court can only decide questions of law on appeal. It cannot decide questions of fact.
16. Whether or not the applicant satisfied the ordinary meaning of the expression ‘Public Benevolent Institution’ was a question of fact for the Tribunal to determine. The Full Court’s role was not to substitute its own view of whether the applicant satisfied the ordinary meaning and, as such, was entitled to registration as the PBI subtype of charity. Instead, the Full Court could only set aside the Tribunal’s decision that the applicant was not a PBI if it found that the Tribunal’s decision was affected by an error of law.
17. The Full Court stated that an administrative decision-maker (such as the ACNC and the Tribunal) could make an error of law when deciding a question of fact if the decision-maker:
    1. exceeds the bounds of reasonableness
    2. applies the wrong legal test to reach a conclusion on a finding of fact
    3. gives an expression that has an ordinary meaning a meaning or qualification of their own, rather than identifying and applying the ordinary meaning, or
    4. adopts a meaning contrary to the meaning established by court authority (paragraph 27).

Decision of the Full Court

18. The questions of law for the Full Court to determine in this appeal were:
    1. whether the Tribunal majority misapprehended or misconstrued the ordinary meaning of PBI by introducing a qualification of its own to that meaning being the requirement of sufficient proximity, or a direct connection, between an entity’s activities and its benevolent ends (paragraphs 31 and 98); and
    2. whether the AAT majority’s determination that the applicant was not a PBI exceeded the bounds of reasonableness (paragraph 31).
19. The applicant argued that, by including the requirement for a ‘sufficiency of connection’ between the activities of a PBI and its benevolent ends as part of the ordinary meaning of PBI, the Tribunal had introduced a qualification of its own which was inconsistent with the ordinary meaning applied by the Federal Court in The Hunger Project Australia v Federal Commissioner of Taxation [2013] FCA 693. This decision was upheld upon appeal to the Full Court².
20. In the Hunger Project decisions, it was held that there was no requirement for a PBI to provide relief directly. The applicant argued that the Tribunal majority’s requirement for a ‘sufficiency of connection’ effectively reintroduced a ‘directness’ requirement (paragraphs 62-63).
21. The Full Court rejected this argument. It noted that the Hunger Project cases addressed the question of ‘directness’ in a different sense – whether a PBI must deliver relief itself or whether it can do so through an intermediary (paragraph 99).
22. The Full Court stated that, by distinguishing a mere ‘logical connection’ between an entity’s activities and its benevolent ends from a ‘sufficiency of connection’, the Tribunal was drawing attention to the fact that whether activities are ‘apt to achieve’ benevolent purposes is a question of fact and degree (paragraph 101).
23. After considering the passages regarding the ordinary meaning of PBI in the judgments of the High Court of Australia in Public Trustee (NSW) v Federal Commissioner of Taxation (1934) 51 CLR 75 and Perpetual Trustee Co Ltd v Commissioner of Taxation (1931) 45 CLR 224, the Full Court stated:

Built into each of these formulations is the idea that public benevolent institutions pursue particular aims, by means that bear an appropriate relationship to those aims. For this reason, the requirement of the majority in the Tribunal that there be a sufficient connection between an entity’s activities and its objects [i.e. the benevolent relief it seeks to achieve] was not a qualification of the Tribunal’s own (paragraph 103).

24. The Full Court further stated that, in proceeding on the understanding that sufficient proximity was required between the activities of a PBI and relief from distress, the Tribunal majority was not:
    1. treating the ordinary meaning of PBI as irrelevant
    2. supplying only part of the test
    3. giving PBI a meaning so clearly at odds with its generally accepted meaning as to transgress the bounds of reasonableness
    4. giving PBI a meaning that was contrary to what had been established by legal authority (paragraphs 104-105).
25. Therefore, the Full Court concluded that the Tribunal majority had not made an error of law by misconstruing the ordinary meaning of PBI, as the applicant had contended (paragraph 106).
26. The Full Court then considered the applicant’s submission that the Tribunal majority could only reasonably have concluded that there was a sufficiency of connection between the applicant’s activities and the benevolent ends it sought to achieve (paragraph 111).
27. The Full Court summarised the relevant findings of fact of the Tribunal majority in the following way:

First, the majority accepted that LGBTIQ+ people are persons in relevant distress, which may be relieved by acts of benevolence. Secondly, the majority found that Equality Australia’s purpose was to address that distress by particular means – being, in short, advocacy. Thirdly, the majority found that the means selected were directed to achieving law reform. Fourthly, the majority found that this law reform “may”, in turn, relieve the distress of LGBTIQ+ people (paragraph 112).

28. The Full Court noted that the Tribunal majority recognised a ‘logical’ connection between the applicant’s advocacy activities and relief of distress. However, the Tribunal majority reasoned that recognising a logical connection does not lead inevitably to a conclusion that the applicant’s activities were sufficiently connected with the relief of distress for the applicant to be a PBI. The Full Court stated that remained a question of fact and degree for the Tribunal to determine on its view of all the circumstances (paragraph 115).
29. The Full Court went on to state:

In applying the criterion of a sufficient connection, the majority evidently considered the whole sweep of [the applicant’s] activities and considered the nature and extent of the connection between these activities and the relief of the identified distress. Without any further articulation of how and why analysing the issues in this way involved a misapplication of the criterion selected by the majority, we are unable to see how the majority reached a factual conclusion that was not open to it as a matter of law (paragraph 118).

30. The Full Court found that the Tribunal majority had not exceeded the bounds of reasonableness in concluding that the applicant was not a PBI (paragraph 119).
31. As the applicant had not demonstrated that the Tribunal majority had made any error of law, the Full Court dismissed the appeal.

Our view of the Full Court decision

32. The Full Court decision affirmed that there is a difference between the concept of ‘direct relief’:
    1. in the sense considered in the Hunger Project decisions, and
    2. in the sense of a ‘sufficiency of connection’ between means and benevolent ends considered by the Tribunal in relation to the applicant.
33. According to the Hunger Project decisions, a PBI does not need to provide relief itself and may do so via one or more intermediaries.
34. However, according to the Full Court decision, a decision-maker will not make an error of law if they consider the relationship between an organisation’s activities and the benevolent relief it aims to achieve through those activities when determining whether it is organised, conducted or promoted for benevolent relief. Considering whether there is a ‘sufficiency of connection’ between the activities and the intended benevolent relief is a means of determining this. A mere logical connection will not necessarily be sufficient.
35. Whether there is a ‘sufficiency of connection’ between an organisation’s activities and the benevolent relief it seeks to achieve is a matter of fact and degree. All relevant circumstances must be taken into consideration. There are no rigid rules, no particular activities that can be treated as qualifying or disqualifying and no individual activity is necessarily determinative (Tribunal, paragraph 83; Full Court paragraph 50, 161).
36. If the ACNC is considering whether an organisation meets the definition of PBI, and the organisation is predominantly organised to address benevolent need through a program of advocacy, education and campaigning to achieve law reform and social change, the ACNC will need to undertake a holistic consideration of the purpose and activities of the organisation, and the nature of the benevolent need. To show that there is a sufficient connection between the organisation’s activities and benevolent purposes, the organisation may have to show more than a logical connection.

Impact on guidance

37. The Commissioner’s Interpretation Statement: Public Benevolent Institutions dated 31 August 2023 (PBI CIS) draws on and refers to the Tribunal decision. The PBI CIS will be updated to refer to the Full Court decision. Once that occurs, this paragraph and heading will be removed from this Decision Impact Statement.

Footnotes

1. The subtype is described in item 12 of the table in s 25-5(5) of the Australian Charities and Not-for-profits Commission Act 2012.

2. Federal Commissioner of Taxation v The Hunger Project Australia [2014] FCAFC 69.

Date of effect: 7 July 2025