Re Application of the Members of the Management Committee of the Barristers’ Benevolent Association of New South Wales

1. [1]

   The plaintiffs are the members of the Committee of Management of an unincorporated association known as the Barristers’ Benevolent Association of New South Wales (the Association). They seek advice under s 63 of the Trustee Act 1925 (NSW) as to the interpretation of the rules by which the Association is governed, namely the Rules and Regulations of the Association (the Rules). The Rules record the terms on which the plaintiffs, as trustees, hold property on trust (the Fund) for the objects of the Association.

2. [2]

   Rule 2 states the objects of the Association as follows:

3. [3]

   The particular matter in respect of which the Court’s advice is sought is whether Rule 2 permits the plaintiffs to have recourse to the Fund to pay for costs associated with the counselling service known as ‘BarCare’.

Factual background

1. [4]

   The plaintiffs tendered a statement of facts which referred to and attached a number of documents. It is unnecessary to set the statement of facts out in full. It is however relevant to note the following matters.

2. [5]

   The Association was established in 1921. The Rules as they existed at the time of establishment stated the object of the Association in the following terms:

3. [6]

   The Association has been endorsed as a public benevolent institution since 1 July 2000 and is thereby eligible to access various commonwealth charity tax concessions. The Association was grandfathered into the Commonwealth charity regulatory regime upon the establishment of the Australian Charities and Not-for-profits Commission on 3 December 2012 (and thereby registered as a charity under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) since 3 December 2012). It has remained registered as a charity on a continuing basis since that time.

4. [7]

   Rule 1 provides that the Association ‘shall consist of Subscribers, who are, or have been, Members of the Bar of New South Wales’. Membership subscriptions are addressed by Rules 8 and 9. It is relevant here to note that subscription is not limited to members of the Bar Association of New South Wales. It is open to all members of the Bar.

5. [8]

   I have already referred to Rule 2 in full at paragraph [2] above.

6. [9]

   Rule 4, under the subheading ‘Capital and Income,’ provides:

7. [10]

   Rule 4 contemplates that a donation or bequest may be given subject to a special direction. Such a direction may affect the discretion of the Committee of Management as to the application of that donation or bequest. Such a direction may, depending on the terms of the direction, affect the Committee of Management’s ability to apply the donation or bequest in payment of the expenses of BarCare.

8. [11]

   Rules 5 and 6, also under the ‘Capital and Income’ subheading, provide as follows:

9. [12]

   Rule 7 provides:

10. [13]

    It follows that the Committee of Management would not be entitled to resort to the capital of the Fund to pay for the expenses of BarCare absent compliance with Rule 7. As to the Committee of Management, Rule 12 provides:

11. [14]

    It is lastly relevant to note Rules 13 and 16:

12. [15]

    On 17 August 2000, the Bar Council met and resolved to establish a counselling scheme known as ‘BarCare’, modelled on the Law Society’s LawCare scheme. On 12 July 2001, the Management Committee of the Association met and resolved that the cost of initial consultations under BarCare be a charge against the Fund.

13. [16]

    On 22 January 2008, the Executive of the Bar Council met and settled a Memorandum to the Trustees of the Benevolent Fund concerning the appointment of a ‘Welfare Officer’. A copy of the minutes of the meeting and the annexed Memorandum was before the Court. The Memorandum stated:

14. [17]

    The Memorandum set out Rule 2, then still in its original form, and referred to the power contained in what was then Rule 14 (but which is now Rule 16, set out above) to appoint officers and decide on the amount and mode of all applications for relief.

15. [18]

    There was a meeting of the Management Committee on 31 January 2008. The then Senior Vice President of the Bar Council spoke to the Memorandum. The Management Committee then resolved to appoint a welfare officer.

16. [19]

    The statement of facts describes the operation of the BarCare scheme as follows:

17. [20]

    The plaintiffs propose to use part of the Fund to pay for the following:

    1. (1)

       the costs of consultations with counselling professionals to whom eligible persons are referred by the BarCare Director;

    2. (2)

       the other administrative costs reasonably necessary and incidental to the provision of the BarCare service; and

    3. (3)

       the employment of the BarCare Director, but only insofar as the work of the BarCare Director relates to the BarCare service and not for work done for the New South Wales Bar Association.

Application for Advice

1. [21]

   The plaintiffs seek advice on whether, on the proper construction of the Rules, the plaintiffs are permitted to apply part of the Fund to pay the costs described in the preceding paragraph.

2. [22]

   Mr Sheahan KC and Mr Atkin of counsel, who appeared for the plaintiffs, provided comprehensive and helpful submissions which have made the task of answering this question far more straightforward than it might otherwise have been.

3. [23]

   The critical question for decision concerns the ambit of Rule 2, especially the meaning of the word ‘necessitous’ in the expression ‘…to afford assistance in necessitous and deserving cases …’. Can it be said of a person in need of mental health care of the kind provided pursuant to the BarCare scheme that he or she is ‘necessitous’ in the relevant sense?

4. [24]

   One of the difficulties to which the application gives rise is that the word ‘necessitous’ has sometimes been held to have a very narrow meaning, such as in the context of the former Estate Duty Assessment Act 1914 (Cth) where the expression ‘necessitous circumstances’ in s 8(5) was held to mean ‘having little or nothing to support oneself by; poor, needy; hard up’. On the other hand, in ordinary usage the word is capable of a much wider meaning. The first task will be to identify the sense in which the word is used in the Rules. If, as the plaintiffs contend, the word has a much wider meaning than was identified in the context of s 8(5) of the Estate Duty Assessment Act 1914, it will be necessary to determine whether the purpose of the Association is charitable in the legal sense.

5. [25]

   The question for advice concerns the construction of the Rules. The task is to identify the intention of the authors as objectively manifested in the document by reference to the language used, its context, and the purpose for which it was created.

6. [26]

   The starting point is that the authors plainly intended that the Rules would render the Association to be a charitable institution in the legal sense. It is appropriate to construe the Rules as far as possible to give effect to that aim. Thus, where the Rules are susceptible to multiple constructions, only some of which are consistent with the Fund being held on a charitable trust, the Court will prefer a construction that preserves the validity of the trust: Taylor v Taylor (1910) 10 CLR 218; [1910] HCA 4 per Griffith CJ at 225.

7. [27]

   Whether or not the purposes of the trust are charitable must be determined by reference to the general law. It will be necessary for the plaintiffs to show that on the construction of the Rules for which they contend, the purposes fall within the ‘spirit and intendment’ of the Statute of Charitable Uses 1601 (43 Eliz I, c 4) (the Statute of Elizabeth), being trusts for the relief of poverty, for the advancement of education, for the advancement of religion and for other purposes beneficial to the community: Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 at 583 (Lord Macnaughton); Chesterman v Federal Commissioner of Taxation (1925) 37 CLR 317 at 319-320; Incorporated Council for Law Reporting (Q) v Federal Commissioner of Taxation (1971) 125 CLR 659; [1971] HCA 44 at 666 (Barwick CJ); Aid/Watch Inc v Federal Commissioner of Taxation (2010) 241 CLR 539; [2010] HCA 42 at 548.

8. [28]

   In order to fall within the fourth category, a charitable purpose must satisfy what is often described as a two-stage test: it must be for the benefit of the community or a part of the community; and it must otherwise be within the spirit and intendment of the preamble: J D Heydon and M Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis) (Jacobs) at [10.04]; G E Dal Pont, Law of Charity (3rd ed, 2021, LexisNexis) (Dal Pont) at [11.3] and the authorities there cited.

9. [29]

   So far as concerns the scope of purposes that may be within the fourth category, it is important to recall the objects actually identified in the preamble to the statute and not just the somewhat high-level description of the three categories into which they are commonly sorted. In that regard, I note that the objects include, relevantly, the relief of the aged, impotent and poor; and the support, aid, and help of young tradesmen, handicraftsmen and persons decayed: Monds v Stackhouse (1948) 77 CLR 232; [1948] HCA 47 at 241; Jacobs at [10-02].

10. [30]

    Some matters of immediate context should be noted at the outset.

11. [31]

    The first is that the Rules do not specify the form by which any relief should take. In this respect, Rule 4 gives the Committee of Management a discretion as to whether and how assistance is afforded to eligible persons from donations and bequests to the Association, except in the case of special directions as mentioned above at [10]. Rule 16 gives the Management Committee power to ‘decide on all applications for relief, and the amount and mode of affording it, according to the circumstances of the case and the person to be relieved.’ It also contemplates that officers and employees may be engaged for the purpose of providing services, as determined by the Management Committee.

12. [32]

    Although not free from doubt, I consider that the language of Rule 16 should not be read in such a way as to limit the ‘mode of affording’ relief to the provision of a sum of money. Such a construction might be warranted by reason of the reference to ‘the amount and mode of affording’ relief. However, the rule contemplates that the mode of relief is to be determined by the Association and that it may achieve its objects through services performed by officers or employees. To construe Rule 16 as limiting relief to the provision of an amount of money to individual applicants would all but rob the Management Committee of any say in the mode of relief, which I do not think was intended. This is not to overlook the reference to ‘the amount’. The provision of relief will come at a cost however it is provided. Relief by whatever mode has a monetary ‘amount’ in the sense of having a cost.

13. [33]

    The second and related matter of context concerns the reference in Rule 16 to ‘…the circumstances of the case and the person to be relieved.’ This language echoes the statement of objects in Rule 2, which contemplates that the Association will ‘afford assistance in necessitous and deserving cases to persons…’. This language might be thought to limit the mode of providing relief to that which is directed to individual persons as opposed to members of the Association generally or to a class of members. On this view of Rules 2 and 16, the Management Committee would have no power to consider whether members as a whole or a class of members should be afforded relief even where it had formed the view that the provision of relief to those members was otherwise within the objects of the Association. It would only have a power to provide relief to individuals on a case-by-case basis.

14. [34]

    Given my conclusion that the Management Committee was intended to have a wide discretion to determine the mode by which relief should be granted, I consider that Rule 16 should not be read in such a way as to limit the relief to individuals on a case-by-case basis. I therefore read the reference to the circumstance of the case and the person relieved as including the plural. It is still true to say of relief afforded to members as a whole or to a class of members that individual persons are, in each case, afforded relief. My reading is therefore consistent with both the context and the ordinary language of Rule 16.

15. [35]

    The words ‘necessitous’ and ‘deserving’ must be read conjunctively. It is unlikely that the drafters of the Rules intended the objects to be conditioned on two independent criteria, one of which was whether the potential recipient of relief was ‘deserving’. Ordinarily, the provision of relief to persons who are ‘deserving’ would not be considered a charitable object: Perpetual Trustee Co Ltd v John Fairfax & Sons Pty Ltd (1959) 76 WN (NSW) 226 at 229. Furthermore, under the rules, the question of whether a particular case is ‘deserving’ of assistance is a matter left to the discretion of the Committee of Management or its delegate. As I have found, the Committee has a wide discretion under Rule 16 to determine who should be afforded relief and the manner by which it should be afforded.

16. [36]

    Although not very common in vernacular English, the word necessitous is an ordinary word with no special legal meaning. In the revised 1916 edition of Crabb’s English Synonyms, the following was said of the word:

17. [37]

    The 1933 edition of the Oxford English Dictionary defined ‘necessitous’ as indicating a condition of necessity or poverty. It included the following meanings:

18. [38]

    The necessity to which these definitions referred undoubtedly included the state of financial need. There is however no reason to think that it was limited to that kind of need. Someone may be necessitous of many things, including medical care, food or shelter.

19. [39]

    At the same time, to say that someone is in necessitous circumstances in the sense of being in financial need is very often to say that they need money for something other than money. It very often means the person needs something important but lacks the means to pay for it. To relieve such a state of affairs may or may not be charitable, depending on what it is that the person needs.

20. [40]

    It is therefore hardly surprising that the Courts have resisted the notion that the word ‘necessitous’ has a settled ordinary meaning. In everyday language, the word has a range of meanings, some of which are charitable in the popular sense (such as where a person is necessitous in the sense of being poverty-stricken), some of which would be charitable in the wider legal or Elizabethan sense (such as where someone is not poverty-stricken but nevertheless necessitous of religious instruction or education) and some of which would not be charitable in any sense (such as where someone was necessitous of more funds to meet the costs of an expensive holiday). As Kitto J said of the ordinary meaning of the word in Ballarat Trustees Executors & Agency Co Ltd v Commissioner of Taxation (Cth) (1950) 80 CLR 350; [1950] HCA 19 (‘Ballarat Trustees’) at 355:

21. [41]

    However, as Ballarat Trustees demonstrates, the word ‘necessitous’ may have a narrow meaning depending on the context in which it is used. In that case, the question was whether the gift of a fund was within the exemption in s 8(5) of the Estate Duty Assessment Act 1914 as being for ‘persons in necessitous circumstances’. The fund was to be held by the treasurer of the St Andrew’s Presbyterian Hospital in Melbourne to produce income ‘to provide free accommodation and where practicable medical and surgical services at the said Hospital for persons…who are in the opinion of the Board of Management deserving people who are unable to pay any fees of such fees as private patients in the said Hospital are usually required to pay…’.

22. [42]

    There is no doubt that the bequest was for charitable purposes in the legal sense: see 354. It was not however for charitable purposes in the popular sense, because the income could be used to meet the costs of persons who were not poverty-stricken but who were merely in need of funds to meet their private hospital care in a so-called ‘intermediate’ hospital: see especially 353-354.

23. [43]

    The difficulty for the appellant was that the legislation had been amended following the decision of the Privy Council in Chesterman to make clear that the s 8(5) exemption was not intended to apply to gifts for charitable purposes in the technical and wider legal sense but only to gifts for purposes which were charitable in the popular and narrower sense of being eleemosynary or for the relief of the poor. The difference between these two positions was explained in The Young Men’s Christian Association of Melbourne v Federal Commissioner of Taxation (1926) 37 CLR 351; [1926] HCA 2 at 358-359 by Isaacs J.

24. [44]

    In fact, it was to overcome the result in Chesterman that the exemption was amended by s 5 of the Estate Duty Assessment Act 1928 (Cth) to remove the word ‘charitable’ and to instead insert a reference to ‘necessitous circumstances’. The point of the amendment was to make clear that the exemption was not available to charitable gifts generally. Given this statutory context, it is hardly surprising that his Honour identified the particular dictionary meaning which he did. It is also unsurprising that his Honour reached the conclusion he did about the legal meaning of the word ‘necessitous’ in the context of s 8(5), namely that it meant ‘having little or nothing to support oneself by; poor, needy; hard up’. I note that his Honour explicitly referred to the history of the subsection at p353.

25. [45]

    However, given the statutory history of s 8(5) of the Estate Duty Assessment Act 1914, it would not be appropriate to treat what Kitto J said about the word ‘necessitous’ as shedding much light on what the word means where, as in this case, it is used to describe the objects of an association that are otherwise quite clearly intended to be charitable in the wider legal sense. To adopt the Ballarat Trustees meaning of ‘necessitous’ would be to limit the objects of the Association very considerably. On that view of the Rules, the Association would be entitled to relieve members against destitution but nothing more.

26. [46]

    Objects limited to relieving against destitution would of course still be charitable in the legal sense. But the ordinary language of Rule 2 also admits to a wider construction that is still charitable in the legal sense. The dictionary meaning of the word ‘necessitous’ which Kitto J identified in Ballarat Trustees was entirely appropriate in the circumstances of that case, but it was not the only meaning available at the time. Nor is it the only available meaning today. Necessitous circumstances are those characterised by necessity or poverty. Necessity in this context may appropriately be described as being in a situation of hardship or difficulty. It may also refer to being in need of care, comfort and maintenance. A gift for the ‘care, comfort and maintenance’ of elderly people was held to be within the scope of ‘necessitous circumstances’ in s 8(5) of the Estate Duty Assessment Act 1914 (Cth), even after Ballarat Trustees had been decided: Union Trustee Co of Australia Ltd v Commissioner of Taxation (Cth) (1962) 108 CLR 451; [1962] HCA 52.

27. [47]

    In Trustees of the Indigenous Barristers’ Trust v Commissioner of Taxation [2002] 127 FCR 63; [2002] FCA 1474 Gyles J held that a trust for the ‘relief of poverty, suffering, helplessness, misfortune or other disability of indigenous persons and in particular the relief of any such disabilities which may constitute an impediment to their pursuit of a career at the New South Wales Bar’ was, relevantly, a ‘public fund established and maintained for the relief of persons in Australia who are in necessitous circumstances’ within the meaning of s 30-45 of the Income Tax Assessment Act 1997 (Cth). In so finding, his Honour did not consider that what had been said by Kitto J in Ballarat Trustees foreclosed the issue. His Honour said at [41]:

28. [48]

    In my view, the word necessitous should not be understood in the narrow sense of ‘having little or nothing to support oneself by; poor, needy; hard up’. It remains necessary, however, to identify the precise scope of the word if it is to have some wider meaning.

29. [49]

    As already mentioned at [26] above, it is appropriate to construe the Rules in a way that preserves the validity of the Association as a charitable institution if such a construction is available. The word necessitous is in my view capable of a meaning that is wider than that identified in Ballarat Trustees and, at the same time, within the spirit and intendment of the preamble to the Statute of Elizabeth.

30. [50]

    In this regard, I note that the preamble refers to the ‘relief of aged, impotent and poor people’. In modern terms, relief of the ‘impotent’ has been described as being akin to the advancement of health: see [8.34] of Dal Pont. Courts have held that mental health is included within the ambit of ‘health’ in this context and that institutions which provide care for the mentally unwell are appropriate beneficiaries of charity under this head: see Farwell J in Re James [1932] 2 Ch 25 at 31; Re Chaplin [1933] Ch 155 at 118; Kytherian Association of Queensland v Sklavos (1958) 101 CLR 56; [1958] HCA 47 at 67-68; and Taylor v Taylor at 227 and 233.

31. [51]

    If the word ‘necessitous’ is construed as referring to persons who are in need not only for financial reasons but also because they are in need of care, comfort and maintenance (cf ‘impotent’), then the objects of the Association would be within the spirit and intendment of the preamble. On my preferred construction of Rule 2, to be in need of mental health care is to be ‘necessitous and deserving’.

32. [52]

    Because my preferred construction of Rule 2 brings the objects within the fourth category of charitable purposes, it is necessary to be satisfied that the objects are for the benefit of the public or a section of the public.

33. [53]

    The plaintiffs submitted that the Bar of New South Wales is a public institution, open to any person subject to the provisions of the Legal Profession Uniform Law 2014 (NSW), the Legal Profession Uniform Law Application Act 2015 (NSW) and the instruments made thereunder. I also note that the provision of assistance under the Rules is not limited to members of the Association or to members of the Bar Association. Barristers (and their dependents) are properly described as being a section of the public (while members of the Association or of the Bar Association may not be). In this regard, I note the distinction between a club or association which itself can admit or exclude members of the public and which exists for the benefit of its own members, on the one hand, and a section of the public that adheres to a common calling, on the other, as explained by Lowe J in Re Income Tax Acts [No 1] [1930] VLR 211 at 222-223, and approved by Dixon CJ in Thompson v Commissioner of Taxation (1959) 102 CLR 315; [1959] HCA 66 at 323. The fact that the objects extend to dependent family members of the identified section of the public does not mean that the association fails to benefit the public or a section of the public.

34. [54]

    This case is, at least in this respect, analogous to Victorian Women Lawyers’ Association Inc v Federal Commissioner of Taxation (2008) 170 FCR 318; [2008] FCA 983, where French J (as his Honour then was) accepted that the Victorian Women Lawyers’ Association was a charitable institution: [147]-[149]. His Honour accepted that while the activities of the association may have benefited its members, the larger object of those activities were directed to the betterment of a larger class, being the legal profession in Victoria as a whole.

35. [55]

    It is also important to recognise that BarCare has the potential to benefit a much wider section of the public than just those who take up their profession at the bar. Barristers in NSW have a unique and important role in advocating for the rights of people in the community, including some of the most vulnerable. They have a central role in the administration of justice. Improving the mental wellbeing of the NSW bar and their families may well have positive consequences for the wider community who interact with the justice system and who may have occasion to access the services of those barristers.

36. [56]

    In my view, the provision of assistance to treat mental ill-health among members of the Bar of New South Wales and their dependents is for the benefit of the community or a section of the community in the relevant sense.

Orders

1. [57]

   The Orders of the Court will be as follows:

   1. (1)

      The Court advises that on the proper construction of the Rules and Regulations of the Barristers’ Benevolent Association of New South Wales (the Rules) and subject to Rules 4 and 7, the plaintiffs are permitted to apply part of the property they hold as trustees (the Fund) to pay for the following items in respect of the counselling service known as ‘BarCare’:

   2. (2)

      The costs of these proceedings be paid out of the Fund.