Had Dr. Synge been looking for a slightly catchier title, she might have borrowed from Hans Christian Andersen's The Emperor's New Clothes for, put very briefly, her point is this. The alteration by the Charities Act 2006 of the legal meaning of charity is to be found in Part 1 of the Act, which comprises just five sections. Section 1 is formal. Section 2 enlarges the list of charitable purposes in Special Commissioners of Income Tax v Pemsel [1891] A.C. 531. Section 3 provides that, in determining whether the requirement (of s. 2(1)) that a charitable purpose must be for the public benefit, it is not to be presumed that a purpose of a particular description is for the public benefit. Section 3 further, and crucially, provides at subsection (3) that ”any reference to the public benefit is a reference to the public benefit as that term is understood for the purposes of the law relating to charities in England and Wales”.
Section 4 requires the Charity Commission to issue guidance in pursuance of its public benefit objective (introduced by s. 7), namely to promote awareness and understanding of the operation of the public benefit requirement. Section 5 makes certain special provisions about recreational charities, sports clubs, and the like by amending the Recreational Charities Act 1958. The other sections of the Act introduce various sensible and useful changes, but it is Part 1 that alters the meaning of “charity” and “charitable purpose” and that alteration, on any natural reading, is minimal. Dr. Synge argues – carefully and persuasively – that there was never any presumption that a charitable purpose was for the public benefit anyway, though it was often thought that trusts for education, religion, or the relief of poverty enjoyed a (rebuttable) presumption to that effect. Moreover, as she observes, her view was shared by the Upper Tribunal in the R (Independent Schools Council) v Charity Commission [2012] Ch 214. Therefore, the 2006 Act does not and cannot justify the spin that has been put on it, by politicians, by the Charity Commission, and indeed even by the Upper Tribunal.
Expressed very much more bluntly than in Dr. Synge's careful and measured argument, the Act was used to scare the charity trustees of fee-charging charities into compliance with changes to a legal definition that Parliament had not in fact materially changed. Moreover, charity trustees of fee-charging charities, and most especially of independent schools, scurried around to comply with the new diktat – the insidiousness of which (as Dr. Synge describes) was exacerbated by the ill-defined nature of the Charity Commission's guidance, now required of it by law – until someone had the will, and the resources, to challenge the matter in court. The decision of the Upper Tribunal (though it fell materially short of a declaration of nakedness) came as a great relief to charity trustees and led to the Charity Commission withdrawing its guidance and reissuing it in significantly amended form. Yet the Upper Tribunal's decision – fairly in the reviewer's view – is itself criticised by Dr. Synge for being too long and for lacking the full analysis of case law that the case demanded in view of the plain terms of s. 3(3), noted above.
Dr. Synge's book focuses on the issue set by her title and treats it in depth at every level, examining not only the law and Charity Commission guidance, but also the Commission's ill-fated experience in examining independent schools, the scene in Scotland, and more recent developments (including the post-legislative scrutiny of the 2006 Act by the Public Accounts Select Committee, the Hodgson Report, and the Government's responses to those documents).
At paragraph 20 of their report, the Public Accounts Committee say: “In its approach to the question of public benefit, the Charity Commission chose not to rely on previous jurisprudence, as it could be argued Parliament intended, in the light of the vacuum of definition left by the Act. Ultimately the Charities Act 2006 is critically flawed on the question of public benefit and should be revisited by Parliament.”
Coming from a committee of Members of Parliament, that is a bit rich – s. 3(3) left no vacuum whatsoever and, if the 2006 Act is critically flawed on the question of public benefit, whose responsibility do they imagine that to be? There is a tendency nowadays, discernible amongst both lawyers and politicians, to disregard the fact that the law should be enacted by Parliament in written Acts (and secondary legislation) so that members of the public can consult and understand it. The decision of the House of Lords in Pepper v Hart [1992] 3 W.L.R. 1032 was unfortunate in that regard, as its effect is that the true meaning of the written word of Parliament can sometimes be not what the written language says, but what a Minister mistakenly thought that it meant. However, Pepper v Hart limited its scope to use “as an aid to the construction of legislation which is ambiguous or obscure or the literal meaning of which leads to an absurdity” – a criterion, it may be noted, that rules out its application to Part 1 the 2006 Act, the words of which are plain. Indeed, attempts to amend them on the public benefit aspect were made and defeated in the passage of the Bill through Parliament.
Dr. Synge's book is built on her PhD dissertation and comprises 10 chapters, starting with an Introduction and ending with Conclusions. The legal heart of the book is in two pairs of chapters, dealing respectively with Charitable Status and Public Benefit (chapters 2 and 3) and Poverty and the Charging of Fees (chapters 4 and 5). The chapters of each pair are concerned respectively with “The Law” and “The Commission”. Later in the book, chapter 8 (“The Guidance Is Challenged: The Upper Tribunal”) analyses the judgment in the Independent Schools Case. Those chapters make an excellent and thorough analysis of the case law and the legislation and discuss carefully what can, and what cannot, properly be derived from it. Her criticism of the Charity Commission is the more telling for its moderation and scholarship and for the devastating thoroughness with which it is presented. Is her criticism fair? For, as she herself recognises, the Commission has a vast workload and has been progressively starved of the resources to deal with it. Moreover, the Commission – which she (fairly) criticises for failing to provide clear guidance to charity trustees – was itself left by Parliament in the deeply unenviable position of having neither clear guidance nor the proper tools to meet the apparent expectations of those in power. In fact, it is difficult to resist a sense that, in being propelled on its crusade for public benefit, the Commission was set up to fail. Yet, bearing that mitigation in mind, the Commission is nevertheless properly open to criticism and is justly criticised. Sometimes it is the small points that are the most revealing. Thus, in chapter 3, Dr. Synge observes (stressing the differences shown underlined below) that, at paragraph 2.10 of its 2008 Analysis of the Law Underpinning Charities and Public Benefit, the Commission quotes Lord Wright in National Anti-Vivisection Society v Inland Revenue Commissioners [1948] A.C. 31 as saying “An assumed prospect or possibility of gain which is vague, intangible or remote could not justly be treated” by the courts as establishing that the purpose is actually of benefit, whereas in fact his words were “an assumed prospect, or possibility of gain so vague, intangible and remote cannot justly be treated.”
If one is going to quote from judgments, then one ought to use the judge's words.
The other chapters – chapter 6 (“The Commission's Implementation of the Public Benefit Requirement”), chapter 7 (“Charitable Status in Scotland”) and chapter 9 (“More Recent Developments”) – move into somewhat more discursive territory. The comparison with the Scottish experience is particularly interesting, for Scotland has broadly succeeded in achieving the policy objective, sought ineffectively by the Charity Commission for England and Wales, of securing a changed approach by fee-charging charities in relation to public benefit beyond their immediate purposes. How was that done? First, the Scottish Parliament, in enacting the Charities and Trustees Investment (Scotland) Act 2005, provided the Office of the Scottish Charity Regulator (which was established by the Act) with the tools to do the work. Secondly, the Act defines a charity as a body with exclusively charitable purposes which provides public benefit. Contrast the definition in England, which is deeply embedded in English law and unaltered by the Charities Act 2006, of a body with exclusively charitable purposes that are for the public benefit. Thirdly, Scottish law recognises the validity of trusts for public purposes that do not meet the charity test, which in principle enables movement in and out of charitable status as the trustees' execution of the trust's purposes vary in its provision of public benefit. Dr. Synge does not express a personal view as to what element of wider public benefit should be delivered by fee-charging charities, but she comes down unequivocally in favour of the clean and generally coherent approach in Scotland by comparison with the English experience.
In her words, at the start chapter 10 (“Conclusions”), “The preceding chapters have told a sorry tale of development in charity law”.
Indeed they have, and she has told her tale very well.
