Incorporated Council of Law Reporting for England and Wales v Attorney-General and Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judgment Date | 14 October 1971 |
| Date | 14 October 1971 |
| Court | Chancery Division |
HIGH COURT OF JUSTICE (CHANCERY DIVISION)-
COURT OF APPEAL-
Charity - Charitable purposes - Publisher of law reports - Company limited by guarantee - Profits not distributable to members - Whether established for charitable purposes only - Income Tax Act 1952 (15 & 16 Geo. 6 & 1 Eliz. 2, c. 10); Charities Act 1960 (8 & 9 Eliz. 2, c.58), s.4.
The Plaintiff Council was incorporated in 1870 as a company limited by guarantee. The primary object set forth in its memorandum of association (to which all the remaining objects were ancillary) was the "preparation and publication, in a convenient form, at a moderate price, and under gratuitous professional control, of reports of judicial decisions in the Superior and Appellate Courts in England". The Council's income and property were applicable solely towards the promotion of its objects and were not transferable to the members by way of dividend or otherwise.
The Council applied to the Charity Commissioners for registration as a charity under the Charities Act 1960, but after considering an objection by the Commissioners of Inland Revenue the Charity Commissioners rejected the application. On appeal to the High Court the Council contended that its purposes were charitable either as being for the advancement of education or, alternatively, as being otherwise beneficial to the community within the fourth head of Lord Macnaghten's classification of charities in Special Commissioners of Income Tax v. Pemsel 3 T.C. 53, at page 96; [1891] A.C. 531. The Attorney-General supported the contention as regards the fourth head. For the Crown it was contended that the purposes of the Council were not wholly charitable because (1) they amounted to no more than carrying on the trade of publishers and sellers of law reports, and (2) one of the Council's main purposes was to advance the interests of the legal profession by supplying it with the tools of its trade.
Held, that the Council was established for charitable purposes only, those purposes being (per Sachs and Buckley L.JJ.) the advancement of education, or alternatively (per Russell L.J., with whom Sachs and Buckley L.JJ. concurred if they were wrong on the first point) other charitable purposes beneficial to the community.
On 1st December 1966 and 14th June 1967 the Plaintiff Council applied to the Charity Commissioners for registration as a charity under s.4 of the Charities Act 1960. The Commissioners of Inland Revenue forwarded a memorandum of objection to the Charity Commissioners. On 6th December 1967 the Charity Commissioners rejected the Council's application. By an originating summons, dated 4th October 1969, under R.S.C., Ord. 108, r.4, the Council applied to the
High Court for a declaration that it was entitled to registration as aforesaid. At their request the Commissioners of Inland Revenue were joined as Defendants in addition to the Attorney-General.The case came before Foster J. in the Chancery Division on 18th, 19th and 20th November 1970, when judgment was reserved. On 1st December 1970 judgment was given against the Crown, with costs. (No costs were awarded to the Attorney-General, who had supported the Council's claim for registration.)
Foster J.-This is an appeal against a decision of the Charity Commissioners for England and Wales by the Incorporated Council of Law Reporting for England and Wales (which I will call "the Council") seeking a declaration that the Council is entitled to be registered as a charity under s. 5(3) of the Charities Act 1960, the Charity Commissioners having refused to register it. By s. 4(1) of that Act it is provided as follows:
There shall be a register of charities which shall be established and maintained by the Commissioners and in which there shall be entered such particulars as the Commissioners may from time to time determine of any charity there registered.
By s. 5(3) of that Act it is provided:
An appeal against any decision of the Commissioners to enter or not to enter an institution in the register of charities…may be brought in the High Court by the Attorney General, or by the persons who… claim to be the charity trustees of the institution.
These appeals are regulated by R.S.C. Ord. 108. Ord. 108, r. 4, provides:
(1) An appeal against an order or decision of the Commissioners shall be heard and determined by a single judge. (2) Such an appeal must be brought by originating summons to which the Attorney General, unless he is the appellant, shall be made a defendant in addition to any other person who is a proper defendant thereto.
In this originating summons there are two Defendants, the Attorney-General and the Commissioners of Inland Revenue (whom I will call "the Crown").
By s. 45(1) of the Act "charity" is defined as "any institution, corporate or not, which is established for charitable purposes and is subject to the control of the High Court in the exercise of the court's jurisdiction with respect to charities". By s. 46 it is provided: ""charitable purposes" means purposes which are exclusively charitable according to the law of England and Wales". The question which arises in this case can therefore be stated as follows: Is the Council established for purposes which are exclusively charitable according to the law of England and Wales?
Submissions
For the Council it was submitted that the purposes for which the Council was established fell within the category of the advancement of education, the second of the four classifications of charity by Lord Macnaghten in Special Commissioners of Income Tax v.Pemsel(1) [1891] A.C. 531, at page 583. Alternatively, it was submitted that it fell within the fourth classification-namely, "other purposes beneficial to the community, not falling under any of the preceding heads"-because it was for the advancement of the administration of the law, and also came within the spirit and intendment of the preamble of the Statute of 43 Eliz. 1, c.4. The Attorney-General did not support the Council's first submission that it was for the advancement of education, but did support the contention that it fell within the fourth classification as being for the advancement of the administration of the law, and was within the spirit of the preamble.
For the Crown it was submitted, first, that the Court could not look outside the memorandum to discover what the Council's purposes were, and that it was irrelevant to inquire into the motives or ultimate aims of those who founded the Council. Secondly, if that was wrong, it was submitted that the purpose was to benefit members of the legal profession in the practice of that profession. Thirdly, it was submitted that the Council was not established for educational purposes, and the question was put: Whoever heard of a lawyer who received his education from the Council? Lastly, it was submitted that the Council's object did not fall within the fourth classification, since it was not analogous to any decided case and was not within the spirit and intendment of the preamble.
The objects of the Council
The Council is a company limited by guarantee and not having a share capital. It was incorporated on 28th July 1870. The objects for which the Council was established are set out in clause 3 of the memorandum of association in these terms:
The Objects for which the Association is established are: 1. The preparation and publication, in a convenient form, at a moderate price,
and under gratuitous professional control, of Reports of Judicial Decisions of the Superior and Appellate Courts in England. 2. The issue, periodically or occasionally, of any subsidiary or other publications relating to legal subjects which it may be considered expedient to combine with the publication of such Reports, including the Statutes of the Realm, or any part thereof, if deemed expedient. 3. The continuation (in furtherance of the above objects) of the Series of Reports called "The Law Reports" (now in course of publication by the present Council of Law Reporting) under their present or any other name, and either in their present form and according to the present system or subject to any alterations of form or system that may be considered conducive to the promotion of the above objects; and the issue periodically or occasionally of any legal Digests or other publications connected with "The Law Reports", or subsidiary thereto, or which may be considered likely to increase the utility thereof; and the acquiring by purchase or otherwise, on such terms or conditions as shall be considered expedient, the copyright of any (rival or) other publications of Law Reports which may now or shall hereafter exist or be in course of publication, and the making of any agreement or arrangement for the purpose of procuring the discontinuance of such Reports, or the publishing thereof, or the discontinuance of preparing Reports for any such publication by any other persons. The taking over and assuming all the assets and liabilities of the existing Council of Law Reporting. 4. The doing all such other lawful things as are incidental or conducive to the attainment of the above objects.Shortly, the object was the preparation and publication of reports of judicial decisions. It is true that there is no statement there saying what the purpose of the preparation and publication of reports was. The Crown relied on three cases to show that the Court should not go outside the actual wording of the memorandum to discover its object; namely,Keren Kayemeth Le Jisroel Ltd. v. Commissioners of Inland Revenue(1) [1931] 2 K.B. 465, Tennent Plays Ltd.v. Commissioners of Inland Revenue (1948) 30 T.C. 107 andBowman v. Secular Society Ltd. [1917] A.C. 406. In the latter case, Lord Buckmaster, at page 468, said this:
Neither the documents preliminary to the incorporation of a company registered with a memorandum of association, nor...
To continue reading
Request your trial
-
VA02.4.054 – Leitrim County Childcare Committee
...v Revenue Commissioners 1 ITR 542 3. IRC v White 55 TC 651 4. Incorporated Council of Law Reporting for England and Wales v AG 3 ALL ER 1029, 47 TC 321 5. Re Dupree’s Deed Trusts [1944] 2 All ER 443 6. Royal Choral Society v IRC 25 TC 263 7. Commissioners for Special Purposes of Income Tax ......