Economic Development – Charitable?

2011 Article, updated May 2018 The law before the Charities Act The promotion of industry and commerce has been long been held to be charitable in both England and New Zealand.  The decision in Crystal Palace Trustees v Minister of Town and Country Planning [1951] Ch 132; [1950] 2 All ER 857n, concluded that the promotion of industry and commerce for the public benefit was charitable, a decision followed in Re Tennant [1996] 2 NZLR 633. However, some overseas decisions, in particular, CIR v Oldham Training and Enterprise Council (1996) 69 TC 231 and Travel Just v Canada (Canada Revenue Agency), 2006 FCA 343, have laid the seeds of doubt in the collective mind of Charities Services.  In the Oldham decision, despite indicia of charity, the Court concluded that the council promoted the interests of individuals engaged in trade and commerce, providing private benefits regardless of likely beneficial consequences for employment, with the benefits to the community being deemed to be too remote. In the Travel Just case similar conclusions were reached, with the objects there also being held to be “broad and vague” and “subjective.” The Oldham decision also indicates that: To ascertain the objects of an institution . . . where the objects are comprehensively set out in a document, it is necessary to refer to that document. . . .  It is irrelevant to enquire into the motives of the founders or how they contemplated or intended that [the entity] should operate or how it in fact operated.  To determine whether the object, the scope of which has been ascertained by due process of construction, is a charitable purpose, it may be necessary to...

The Need for an Effective Societies’ Complaints Mechanism

2012 Article, updated March 2018 A Society Problem Since I started writing and publishing articles about not-for-profit entities in 2010 they have generated various enquiries and responses, but few are more difficult to answer than the type of enquiry set out below (for obvious reasons, the details have been changed): Hi Mark.  I have just read one of your articles from last year.  We’re having terrible trouble with the Erewhon Community Society.  It built up assets, but a bad committee got in and the society’s premises were closed recently.  The chairman and also the secretary refuse to hold a meeting to wind up society.  The treasurer refuses to let any members see the financial statements, but we got a copy.  They are completely wrong, and the committee and members have not seen or approved them.  The Registrar won’t help us and says it’s an internal matter.  Some of the committee sold off majority of assets without other committee members knowing, and one of them bought some of the equipment for less than a hundred dollars.  You can imagine the rows going on.  We want society wound up legally and financial statements out in public.  Why are they hiding everything?  One of the chairman’s friends is screaming and shouting abuse at anyone who asks the chairman to do the right thing.  We won’t give up on it but we desperately need someone to help us. Information-gathering While some key information is usually provided when I receive an enquiry, there is other information to clarify (some may be obtainable by doing searches into the society through the http://www.societies.govt.nz and http://www.charities.govt.nz websites), including: Is...