High Court Overturns Charities Board Decision

Rosie Clark

This article appeared in the Otago Daily Times, November 2016.

The High Court has recently overturned the decision of The Charities Registration Board not to grant charitable status to The Foundation for Anti-Aging Research (FAAR).

Long term readers of this column may remember a piece I wrote about FAAR in 2014. At that point FAAR’s application for charitable status had been refused on the grounds that its main purpose was not charitable. The Board had concluded that FAAR’s overwhelming purpose was to fund cryopreservation and reanimation research. Evidence available to the Board described this research as having “as its primary goal the cryopreservation and future revival of a person after a terminal illness or a presently-fatal accident, in the hope that medical science will be able to revive that person in the future, when life extension and medical technologies are sufficient to restore that person to health”.

In New Zealand we recognise four heads of charitable purpose, relieving poverty, advancing education, advancing religion, and providing a benefit to the community. To become registered as a charity an organisation needs to advance at least one of these purposes.

The Board was not satisfied that FAAR’s cryopreservation and reanimation research had sufficient academic credibility to support a conclusion that FAAR was advancing education or a broader benefit to the community. FAAR’s application to be registered as a charity was declined and it was barred from enjoying the benefits of charitable status, namely income tax exemptions and donor tax refunds.

In the High Court, FAAR challenged both the Board’s decision that FAAR’s purposes were not charitable and the process followed by the Board in reaching its decision.

The High Court considered the extent to which research must be considered “useful” before it will be seen as advancing education. In doing so it relied on authority that “usefulness” constitutes a minimal standard designed only to exclude “nonsensical” areas of research that are “demonstrably devoid of merit”. Thus, the High Court adopted a low bar for determining whether research will fall within the “advancing education” head of charitable purposes. The High Court was not prepared to exclude research simply because it might be regarded by mainstream academics as being on the fringe. Furthermore, it was not persuasive that the goals of the research might only be achieved in the distant future. The High Court drew a comparison with the Mar Society New Zealand Charitable Trust which was registered as a charity in 2013 with the purpose of encouraging and inspiring space science and research leading to New Zealand’s participation in the exploration and settlement of Mars. Furthermore, the High Court noted that “the research is likely to lead to advances in areas such as organ transplant medicine, in vitro fertilisation, stem cell research, treatment of a range of diseases and disorders and enabling biodiversity”.

Ultimately the High Court was satisfied that FAAR’s research and the dissemination of that research fell within the “advancement of education” head of charitable purposes and made orders for FAAR to be registered as a charity.

Having concluded that FAAR should be registered as a charity the High Court turned to comment on whether the Board had acted appropriately when it assessed FAAR’s application for registration. In addition to reviewing FAAR’s application, trust deed and additional material provided by FAAR in response to requests from the Board, the Board also undertook its own research about cryonics on the internet. The High Court did not need to decide this point, but expressed concerns about the Board relying on information that has not been provided by an applicant, particularly information sourced from the internet.

This decision will be seen as a “win” by those organisations seeking charitable status whose activities are not necessarily viewed as mainstream -- and I for one support it as I would very much like to see how Dunedin is looking in 2500.