End, means, manner, confusion

New Zealand is reported to have the highest number of charities per capita of anywhere in the world, save for the US. Charities are an integral part of our cultural fabric and civil society, and help to drive innovation, research, thought leadership, policy reform and broader change. As such, the law relating to charities and advocacy plays an important role. This area of law has taken a unique direction in New Zealand, and a recent Court of Appeal decision has put the spotlight back on it.

The four heads of charity

As a precursor to the below, the four heads of charity, classified by Lord Macnaghten in Income Tax Special Purpose Commissioners v Pemsel, were established as:^[1]

• the relief of poverty (first head);
• the advancement of education (second head);
• the advancement of religion (third head); and
• other purposes beneficial to the community (fourth head).

The Greenpeace decision

In Re Greenpeace of New Zealand Incorporated, the Supreme Court of New Zealand made a major departure from the jurisdiction’s previous approach to advocacy^.[2] Until this case, unless merely an ancillary activity, advocacy was held to be a disqualifying factor for charitable status under the fourth Pemsel head of charitable purposes (advancement of other purposes beneficial to the community). In Greenpeace, the Supreme Court held that there was no adequate or principled justification for this ‘political purposes exclusion’. It stated:^[3]

‘Just as promotion of the abolition of slavery has been regarded as charitable, today advocacy for such ends as human rights or protection of the environment and promotion of amenities that make communities pleasant may have come to be regarded as charitable purposes in themselves, depending on the nature of the advocacy, even if not ancillary to more tangible charity.’

However, it cautioned:^[4]

‘Advancement of causes will often, perhaps most often, be non-charitable. That is for the reasons given in the authorities – it is not possible to say whether the views promoted are of benefit in the way the law recognises as charitable. Matters of opinion may be impossible to characterise as of public benefit either in achievement or in the promotion itself … Furthermore, the ends promoted may be outside the scope of the cases which have built on the spirit of the preamble, so that there is no sound analogy on which the law might be developed within the sense of what has been recognised to be charitable.’

The Supreme Court adopted an ‘end, means and manner’ test in determining public benefit, which it described as follows:^[5]

‘… assessment of whether advocacy or promotion of a cause or law reform is a charitable purpose depends on consideration of the end that is advocated, the means promoted to achieve that end and the manner in which the cause is promoted in order to assess whether the purpose can be said to be of public benefit’.

It concluded:^[6]

‘If the object of an entity is the promotion of a cause which cannot be assessed as charitable because attainment of the end promoted or the means of promotion in itself cannot be said to be of public benefit within the sense treated as charitable, the entity will not qualify for registration as charitable. That is because it will not be “established and maintained exclusively for charitable purposes”. Even if an end in itself may be seen as of general public benefit (such as the promotion of peace) the means of promotion may entail a particular point of view which cannot be said to be of public benefit.’

The Family First decision

More recently came the Supreme Court’s controversial decision in Attorney-General v Family First New Zealand.^[7]

Family First New Zealand (FFNZ) is an organisation that believes ‘strong families and strong marriages are the foundation for a strong nation’. In 2012, FFNZ took a leading role in opposing a Bill proposing to allow same-sex marriages. Soon after, it was deregistered as a charity, which it appealed.

The Supreme Court first rejected FFNZ’s argument that its purpose fell within the charitable head of ‘advancement of education’, finding that its activities were of limited educative value and that the primary objective was to advocate rather than to educate.

Applying its conceptual framework developed in Greenpeace, the Supreme Court found that the ends that FFNZ was advocating for, being the promotion of traditional marriage and the fundamental nature of the traditional family and education about the moral framework for a just and democratic society, were not, in contrast to Greenpeace, ends that have come to be regarded as charitable purposes in themselves. Advocating against law reform that would recognise or support other forms of family could be seen as discriminatory.

None of this was self-evidently beneficial and nor could FFNZ establish benefit by showing that the putative intangible benefit outweighs the detriments.

The Supreme Court also believed FFNZ’s engagement on other issues, such as abortion, assisted dying and prostitution, were free-standing political issues, not ancillary activities, and therefore needed to be charitable themselves. They were not, because it was not possible to say whether the views promoted were of benefit in the way the law recognises as charitable, neither their promotion nor their achievement.^[8]

The Better Public Media Trust decision

Better Public Media Trust v Attorney-General considered the application for registration as a charity of Better Public Media Trust (BPMT),^[9] whose application had been declined by the Te Rātā Atawhai Charities Registration Board (the Board). The central issue was whether BPMT’s main purpose of advancing public media was a charitable purpose. The High Court of New Zealand found that not to be the case.

BPMT’s end was to uphold the public function of public media. The judge stated that such an end could have a public benefit because it did not appear to favour one particular form and an analogy could be drawn with other established charitable purposes, being advancement of education and advancement of civil society/democracy.

However, the High Court found that BPMT was not charitable because of the third of its means, as follows:^[10]

‘To paraphrase, the Trust has the following means:

(a)  to promote the role of the media in educating, informing and entertaining;

(b)  to educate and promote informed debate about media issues;

(c)  to support improved access to funding, operating conditions, and platforms of distribution for public media; and

(d)  to represent and advance the interests of public media audiences…

‘[The third means] clearly takes a stance on the adequacy of funding, operating conditions and platforms of distribution for public media. This changes the tenor of Trust’s purpose from agnostically protecting the public role of the media to championing that role at the expense of other interests.’

However, in its recent decision, the Court of Appeal disagreed.^[11] It did not agree that the third stated purpose was disqualifying. It noted that resources ‘are obviously critical to the Trust’s goals’ and advocating for publicly funded media does not in itself mean the trust lacks a charitable purpose.^[12] To the extent that the trust’s benefits competed with privately owned media platforms or conflicting opinions, the Court of Appeal did not consider this to be fatal.

In analysing the means and manner by which the trust achieves its advocacy purpose, the Court of Appeal concluded that they suggest that the trust’s purposes are capable of being beneficial to the community. The trust achieves its purposes through a range of activities like conducting independent research, commissioning public lectures, providing expert commentary and holding school competitions. From the evidence, it found that the trust undertakes its advocacy function in a ‘balanced and measured manner’, recognising and ventilating other perspectives.^[13] It noted that ‘[the] trust’s activities are more aligned with being educational than adversarial, although we are not suggesting that the trust’s purposes qualify under the education head of charity’.^[14]

It concluded that:^[15]

‘While there are obvious differences between the activities of Greenpeace and the Trust, both organisations are driven by altruistic goals. In the case of Greenpeace, its members focus on improving the physical environment. The Trust, on the other hand, focuses on improving the media environment. The Trust aims to ensure that our democratic principles and institutions are enhanced through citizens being better informed about significant issues through public media platforms. Importantly, the Trust also aims to enhance social cohesion by promoting the voices of minority communities through public media.’

A critique

The end, means and manner test is jurisdictionally unique. Unfortunately, it has resulted in not only confusion but also, arguably, the kind of rigidity that the Supreme Court in Greenpeace seemed to want to eschew. In Family First, the Supreme Court failed to clarify the test and added to the confusion by referring to the ‘means and manner’ but not properly explaining how the test was applied or differentiating between the two.^[16] The lower courts and first-hand decision makers have struggled with the test.

In Better Public Media Trust, the High Court elucidated the test as follows:^[17]

‘The end is the ultimate goal or objective for which the organisation is advocating. This will typically be formulated at a high level of abstraction, such as the examples given by the Supreme Court – abolition of slavery, advancement of human rights and protection of the environment. The means is then the way in which the organisation advocates achieving the end. This is more specific and concrete as it pertains to the practical steps the organisation supports being taken to achieve the outcome sought. The manner is the way in which the organisation conducts its advocacy. This is distinct from the means in that it concerns the practical steps the organisation takes to advocate for its cause rather than the steps it advocates should be taken by others.’

However, the Court of Appeal indicated that the High Court may have conflated the task of determining the trust’s purposes with analysing the means by which they are carried out, and applied the test differently, as discussed above.^[18]

A related problem is in determining what is in the public benefit.

Having done away with the political purposes exclusion, the courts are still displaying some of their traditional reluctance to opine on what constitutes the public benefit when it comes to political purpose/advocacy cases. In Greenpeace, the minority noted (being a broadly consistent position with the majority on this point):^[19]

‘… judges are usually not well-placed to determine whether the success of a particular cause would be in the public interest. This may be for reasons of institutional competence. By way of example, a dispute between Greenpeace and the chief executive of the Department of Internal Affairs under the Charities Act does not provide an ideal forum for determining the appropriate policies for New Zealand to adopt towards other states in relation to nuclear weapons and weapons of mass destruction. Similar considerations may apply in relation to Greenpeace’s purpose of protecting the environment, a purpose which is closely intertwined with the advocacy of causes (for instance against genetic engineering) the worth of which are not easily determined by the courts. As well, and leaving aside the practical difficulties of forming a judgment on such issues, a judge may feel that entering into such an inquiry lies outside the proper scope of the judicial role’.

In the High Court Greenpeace decision, after the Board had again denied Greenpeace registration after referral back from the Supreme Court, the judge noted the difficulties as follows:^[20]

‘As one commentator discusses … the decision maker has to determine whether the purpose or activity of the organisation is for the public benefit and this can be particularly difficult where the cause is controversial or the particular viewpoint is contested. She further comments that the Supreme Court has made it even more difficult by requiring an assessment of the benefit of achieving the stated purpose rather than just the benefit of pursuing it.’

The Supreme Court in Family First disagreed with the Court of Appeal that lack of controversy was a touchstone in determining what is and is not charitable in this context. It said:^[21]

‘Such thinking would effectively exclude much promotion of change while favouring charitable status on the basis of majoritarian assessment and the status quo. Just as unpopularity of causes otherwise charitable should not affect their charitable status, we do not think that lack of controversy could be determinative.’

However, it can be difficult to reconcile some of the courts’ statements about the requirement that public benefit be self-evident with their comments on controversy, or at least to apply them in practice. In his separate but concurring judgment in Family First, Justice Williams explained that:^[22]

‘Some (analogous) purposes are, it is said, self-evidently charitable. The promotion of human rights, protection of the environment and (in our particular context) the promotion of post-colonial reconciliation are among the examples referred to. Self-evidently charitable perhaps means no more than that the court accepts there is broad consensus in the community about the utility of the purpose in terms of its contribution to social cohesion and well-being, and its consistency with underlying societal values, and that advocating for it will therefore also be charitable. That is not to say there must be social unanimity about the purpose’s benefits …

‘That said, promoting controversial causes or ideas will not of itself be disqualifying. This is consistent with authority and (more importantly) the pluralist underpinnings of our democratic culture … But care is obviously needed, and it is perhaps in this context that manner and means, and the original charitable principle of selflessness, become very important. An advocacy group that addresses a controversial topic in a balanced way may well be charitable, even if it ultimately favours one side or the other. Honesty and respect in debate is not self-referential. In fact it can contribute to social cohesion and the empowerment of individuals while respecting also the communicator’s right to their point of view.’

Returning to the Court of Appeal’s decision in Better Public Media Trust, the outcome is a sensible one, in which the court took a more simplified approach that elegantly circumvented some of the constraints and complexities of the Supreme Court’s framework. It contrasted the activities of FFNZ, referring back to Williams J’s separate judgment in Family First:

‘… the way the Trust carries out its activities promotes the “cohesiveness of our pluralistic community” because it recognises other perspectives and it respects “individual dignity” by fairly informing recipients of alternative views to those advocated by the Trust’.

Conclusion

The case law is developing unevenly, in a way that makes it difficult for aspiring or actual charities that engage in advocacy to feel confident in their registration and for advisors to provide reliable advice. In Family First, Williams J said that:

‘… one problematic effect of adaptive incrementalism with little guidance in principle has been the steady encrustation of contradictory decisions onto the charitable purpose canon — especially under the fourth (analogous) Pemsel head’.^[23]

This has certainly been so with respect to advocacy cases. The definition of charitable purpose and the issue of advocacy were considered out of scope of the work programme that resulted in amendments to New Zealand’s Charities Act 2005 in 2023. However, particularly in light of the Supreme Court’s Family First decision, submissions from many charities during that process highlighted the need for consistency, clarity and a liberal, human rights-based approach to the issue of advocacy, without which there could be a chilling effect on such activity. As a result, the relevant minister under the previous government advised that more fundamental issues, such as those relating to charitable purpose, would be reviewed at a later stage.

In the meantime, the Court of Appeal decision in Better Public Media Trust is helpful in navigating the Supreme Court’s convolutions. However, while coming to the view that BPMT operated in a way that is consistent with a liberal, pluralistic democracy by airing different perspectives, it did not (and could not) resolve the difficulties under the Supreme Court’s framework that will face aspiring charities that undertake advocacy in a more one-sided manner or for more controversial ends, especially after its Family First decision, which has attracted significant critical commentary. It could still be argued that such advocacy is critical to our functioning as a healthy liberal democracy by fostering the competition of ideas, public dialogue and political participation. Given the reluctance of courts to determine what is for the public benefit in these cases, or even their stated inability to do so, the better approach may be to let people decide for themselves.

Justice Hammond put it this way in Re Collier:^[24]

‘I have to say I have considerable sympathy for the viewpoint which holds that a Court does not have to enter into the debate at all; hence the inability of the Court to resolve the merits is irrelevant. Rather, the function of the Court ought to be to sieve out debates which are for improper purposes; and to then leave the public debate to lie where it falls, in the public arena.’