On 3 July 2013 the Administrative Appeals Tribunal
upheld the decision of the Commissioner of Taxation to refuse
endorsement of Home Health Pty Ltd as a public benevolent
institution or a charitable institution.
Home Health Pty Ltd (Home Health), a mental
health services provider is a proprietary company incorporated on 9
June 1997. The Tribunal refused endorsement on the basis that Home
Health is not an 'institution'.
The Tribunal considered the elements of recognising a
'public benevolent institution' as set out in Perpetual
Trustee Co Ltd v Federal Commissioner of Taxation  HCA
20. Perhaps self-explanatory, but significant nonetheless, a public
benevolent institution must be: (i) public, (ii) benevolent and
(iii) an institution.
Home Health satisfied the "public" requirement as the
relief provided by the organisation was directed to a sufficiently
large sector of the community.
Home Health also satisfied the "benevolent"
requirement due to the nature of work conducted and the
not-for-profit clause which was inserted into its constitution in
However, Home Health did not satisfy the "institution"
What is an institution?
The term institution is not defined for the purposes of section
50 of the ITAA 97 and the Tribunal noted that it was by no means
easy to give a definition that would cover every use. In
determining the use of the term for this matter, the Tribunal
considered itself bound by previous cases including:
Pamas Foundation Inc v Commissioner of Taxation 
FCA 154 (Pamas Foundation) where membership
consisting of a husband, wife, 4 children and 2 other people was
not sufficient to constitute a 'religious institution';
Christian Enterprises Ltd v Commissioner of Land Tax
(NSW) (1968) 72 SR (NSW) 72 (Christian
Enterprises), membership of 7 persons was insufficient to
be recognised as a 'charitable institution'.
The Tribunal held that the control (held unilaterally by Mr
Archard, the sole director of Home Health) and the small and
exclusive membership (which consisted only Mr Archard and his wife)
was not sufficient to constitute an institution. In fact, Home
Health was found to be even smaller and more exclusive than what
existed in either Pamas Foundation or Christian Enterprises. The
Tribunal held that Home Health was neither a public benevolent
institution nor a charitable institution.
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