Re North of England Zoological Society
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROMER |
| Judgment Date | 18 June 1959 |
| Judgment citation (vLex) | [1959] EWCA Civ J0618-1 |
| Court | Court of Appeal |
| Date | 18 June 1959 |
[1959] EWCA Civ J0618-1
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls (Lord Evershed).
Lord Justice Romer
Lord Justice Pearce
MS. G.D. SQUIBB, Q.C., and MR. D.G. WIDDICOMBE, instructed by Messrs. Preston, Lane-Claypon & O'Kelly, Agents for Messrs, Gamon & Co, (Chester), appeared for the Appellants (Defendants).
MR. H.I. WILLIS, Q.C., and MR. J. F. COPLESTONE-BOUGHEY, instructed by Messrs, Field Roscoe & Co., Agents for Messrs, Ouseley-Smith & Co, (Chester), appeared for the Respondents (Plaintiffs).
: This is another case (one of a considerable number now) which has come before the courts upon the effect of section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955. Sub-section (1) of that section is in these terms so far as relevant; "This section applies to the following hereditaments, that is to say (a) any hereditament occupied for the purposes of an organization (whether corporate or unincorporated) which is not established or conducted for profit and whose main objects are charitable or otherwise concerned with the advancement of education".
If the respondents to this appeal, the North of England Zoological Society, as regards the hereditament which it occupies, can bring itself within the formula which I have read, then it is exempt at the moment from rates. Such was the conclusion of Mr. Justice Vaisey. From that decision the Rating Authority, the Chester Rural District Council, has appealed to this court. Let me say at once that their anxiety to test the matter further is certainly understandable, since, according to the figures before the court, this society has over a period of years carried on its affairs so that its income has appreciably Exceeded its expenditure. In the year ended 31st December, 1956, that surplus was £16,000, and from the balance sheets it would seem that since its incorporation in 1951 the total accumulated net surplus amounts to £84,000. Having made that statement, however, it is fair to say that the surplus has clearly been used in extending and generally bettering the equipment and general characteristics of the zoological gardens which is the hereditament here in question.
From my reading of the section it will be apprehended that there are here two points, for there is no doubt that this respondent, the Zoological Society, is an organization within the meaning of the section. The two points, expressed interrogatively, are: (1) Is this an organization which is not established or conducted for profit? (2) Is it one whose main objects are charitable or otherwise concerned with the advancement of education? In order to qualify for exemption, the Society must satisfy both those tests; in other words, it must be shown that an affirmative answer should be given to both the questions I have posed.
I will start with some reference to the history of this Society and of its ancestry. It seems that a zoological gardens (which in common usage I might perhaps be allowed to abbreviate to "zoo") was started as long ago as 1931 by a Mr. Mottershead, who began it as an undertaking entirely of his own. Mr. Squibb, who saw Mr. Mottershead and indeed cross-examined him, told us quite fairly and frankly, by way of confirmation of what I would have expected from a reading of his affidavit, that Mr. Mottershead is a man who is passionately enthusiastic, as many people are, about animal life. It cannot be doubted that when in 1931 Mr. Mottershead started this zoo he was not starting something for the purposes of making money, nor was he starting something for the purposes of providing entertainment or amusement or shows to the inhabitants of the north-west part of England. He is an enthusiast over animal life and he was anxious to do something in that part of England which would present in proper and carefully designed conditions species of the animal world, so that those who lived in the neighborhood would have the advantage of being able to see them and, as he hoped, share his enthusiasm for his favourite subject.
It appears, however, that after a little time there was incorporated a company, the Chester Zoological Gardens Limited. It was incorporated as a public company apparently in the ordinary way, but, as has happened to other public companies, its life was somewhat short and financially highly unsatisfactory. After two years it was put into liquidation. The present respondents were then formed, originally with the word "Limited" added, as a company limited by guarantee under the then Companies Act, 1929, and all the assets of the zoo itself, with its inmates, its equipment and so forth, were transferred to this new company. We have not been told what exactly happened about the debts of the old company, but it is quite plain that Mr. Mottershead made no sort of profit out of any of these transactions. He is, as he told Mr. Squibb in the course of cross-examination, the most substantial shareholder or proprietor of this new company, which is a company (as I have said) limited by guarantee, and not being a trading corporation for profit purposes, it has since been allowed to omit and has omitted since 1950 the use of the word "Limited" as part of its name. But it is made clear - Mr. Squibb has again most frankly been ready to admit it - that this is Mr. Mottershead still in another garb. It is quite true that he is now given a salary which is certainly not princely in amount and certainly not indicative that he is doing this work and concerning himself with this Society with any idea at all of its being a money-Baking enterprise. There is no doubt at all about that, and I think that important for reasons to which I shall later revert.
Having stated that history, I come now to the memorandum of association of the respondent. -Of the two points which I have formulated (namely: (1) is it conducted for profit; (2) are its main objects charitable, etc.?) I shall find it convenient to deal with the latter first. In order to answer the question, "What are its main objects?", the first duty of the court is to look at the company's document of incorporation, which is designed to set out the objects for which the Society is formed.
In certain of the cases which have arisen under this legislation the question has been debated to what extent one must confine oneself to the charter or the memorandum of association of the organization concerned and to what extent one is entitled to look at the facts as proved in evidence of the exact operations in which the organization has engaged. I think I can state very briefly, by citing a passage from the judgment of this court delivered by my brother Romer last year, the answer to that question. The reference is to the case which was concerned with the Theosophical Society, Berry v. St. Marylebone Borough Council, which came before this court and which is reported in 1958 (1) Chancery, page 406. At page 4-16 my brother, in reading the court's judgment, said; "In our opinion, Mr. Justice Devlin" - in an earlier case - "was saying no more than that, when an organization has several objects specified in its written constitution, as was the case with the Chartered Insurance Institute" - that was the subject of Mr. Justice Devlin's case - "its activities are relevant to an enquiry as to what should, for the purposes of section 8, be regarded as its main objects. We do not think that the judge was intending to go further than that and, if such was his view, we cannot see that it is open to any criticism. That, however, is a very different thing from saying that, where there is no doubt as to what the main objects of a body are (and there is no doubt in the present case), evidence may be received of what its activities have been either in order to construe the language by which the objects are described or to limit the proper construction of the language by reference to the activities".
With the guidance of that passage, I take it that the court's duty is, first of all, to look at this memorandum of association and then, having looked at it, to see which of the very numerous clauses which are stated to be the objects comprise the main objects of the Society, and to get some assistance from the evidence on the further question, which of them have been so far in fact the main objects. In so far as the language may be equivocal, it can be seen by reference to what has been done 'whether assistance can be obtained in solving the equivocation.
As practitioners well know, those who draw up draft memoranda of association these days do not commonly err on the side of brevity. Here the objects of the Society are contained in paragraphs which, after exhausting the alphabet from (a) "to (z)It then include (aa). It is clear when you look at them that some of the objects are plainly not main objects on any view; they arc more in the nature of powers or are ancillary. Indeed, (aa), although the longest in point of language, is clearly of that nature.
The first three objects of the Society read as follows?" (a) To acquire and take over as a going concern 'and conduct as a scientific and educational undertaking the business heretofore carried on as the Chester Zoological Gardens, Upton-by-Chester, by Chester Zoological Gardens Limited, together with or any part of the real and personal property and assets of the company used in connection with that business or belonging thereto.
"(b) To promote, facilitate, and encourage the study of biology, zoology and animal physiology, aviculture, aquaria, icythyology, entomology, botany and horticulture and all kindred sciences and to foster and develop among the people an interest in and knowledge of animal life.
"(c) To establish, equip, and carry on, and develop...
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