New Zealand High Court rules that funding of cryonics research is charitable purpose

The High Court of New Zealand has held that the purpose of the Foundation for Anti-Aging Research (FAAR) and the Foundation for Reversal of Solid State Hypothermia (FRSSH) (collectively, the Foundations) was to fund cryonics research and that this purpose fell under the "advancement of education" head of charity and was charitable in law. The Court ordered that the Foundations were to be registered as charities under the Charities Act 2005 with effect from the date of the judgment.

The facts

The Foundations' applications for registration as a charity were lodged in late 2011 and declined by the New Zealand Charities Registration Board (the Board) in July 2013. The Board had formed the view that the Foundations’ principal purpose was to fund cryonics research, which the Board defined as research into cryopreservation and reanimation of people, and this object neither fell under one of the established heads of charity nor was for the benefit of the public.

As part of the application process, the Foundations had each separately submitted information and analysis in support of their applications. At the conclusion of the process, the chief executive of the Department of Internal Affairs (the chief executive) provided the Board with two reports covering the legal and factual issues to be considered along with a recommendation that the applications be declined. The reports included reference to material that had not been submitted to him by the Foundations, namely: (a) material from the Cryonics Institution website, and (b) a 2001 book that was available online entitled Death to Dust: What Happens to Dead Bodies? by Kenneth V Iseron.

The Board's subsequent two decisions dated 18 July 2013 adopted both the chief executive's recommendations and his reasoning. (The Board’s decisions are referred to in the judgment as the FAAR decision.) The Board concluded that the Foundations’ purpose was to fund cryonics research and that that purpose did not advance education in a way that was charitable in law. The Board considered that cryonics research was not a "useful" subject of study because cryonics research was not an “accepted academic discipline”. The Foundations had not provided evidence to show that cryonics was “an area which education may cover” in New Zealand and there was a strong consensus in the research community that it was not. The Board also found that not all cryonic research facilities and providers considered that cryonics research was “current science”, and there was a lack in the mainstream scientific community as to the feasibility and benefit of the research. However, the Board accepted that knowledge acquired as a result of the research would be disseminated to others. The Board was not satisfied that the Foundations cryonics research provided sufficient public benefit and that the Foundations' purposes were not charitable under the recognised fourth head grounds of protecting human life, promoting human health, and relief of human suffering and distressed.

The Foundations appealed to the High Court against the decision of the Board and also sought judicial review of aspects of the Board's processes.

The Foundations submitted that the Board was wrong in holding that: (a) their purposes were not charitable as advancing education (b) their purposes were not charitable as relief of the aged and impotent (c) their purposes were not charitable as any other matter beneficial to the community, and (d) FAAR had an independent (non-ancillary) purpose of funding cryonics research. The Foundations were also critical of the Board's reliance on material sourced from the internet. The Foundations submitted that the judicial review concern only became relevant if the Court upheld the Board’s decision in the appeals. In that event, the primary challenge to the process followed was that the relationship between the Board and the Department of Internal Affairs was too close and the Board had failed to act independently. The application for review also challenged the adequacy of the information relied on by the Board, and the failure of the Board to hear from the Foundations directly.

The High Court's decision

The High Court held that funding cryonics research fell under the established "advancement of education" head of charity and that the Board was wrong to hold that the purpose of funding cryonics research was not useful, did not provide sufficient public benefit, and therefore was not charitable. The Court said that the research more than met the minimal usefulness threshold and that the fruits of that research would be disseminated. There was a presumption that such research would be for the public benefit and that presumption was not rebutted in this case. The Court found as follows:

The "usefulness" test

1. The Board erred in its interpretation and application of the "usefulness" test.

2. The authorities made it clear that "usefulness" constitutes a minimal standard designed only to exclude the nonsensical areas of research and study that were demonstrably devoid of merit (Re Collier [1998] 1 NZLR 81 (HC) cited).

3. The evidence was that the proposed research was 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.

4. In the absence of clear evidence that cryonics research was nonsense and would not advance human knowledge, it did not matter whether such research was presently "accepted academic discipline" or "current science". As far as being "an area which education may cover" in New Zealand, there was no doubt that, as in any new or developing area of scientific endeavour, whatever knowledge the research yielded would be taught as the research progressed. It was for that reason that future dissemination was regarded as implicit in the concept of research.

Additional public benefit requirement

5. The presumed public benefit involved in the proposed research was not rebutted by any of the matters relied on by the Board. On the contrary, the public benefit was readily apparent. The Foundations' purposes were clearly charitable under the advancement of education head.

Approach to evidence and the chief executive's ability to make his own inquiries

6. In addition to the information provided by the Foundations, the chief executive obtained information about cryonics from the internet and both he and the Board relied on that information. The Board was wrong to put any store in the information obtained from the internet by the chief executive in this case.

7. It was arguable that the chief executive did not have any ability to rely on material that was not provided to him by an applicant. The requirement in s 18(3)(a)(iii) of the Charities Act that he must have regard to "any other information that it considers is relevant" is plainly a reference to information that is perceived as relevant by the entity that is seeking charitable status.

8. To the extent that the chief executive may have regard to information from outside sources, it is unclear why he would do so. Even putting resourcing issues to one side, such an approach seemed likely to give rise to increased natural justice concerns and lead to justifiable demands for formal hearings and cross-examination. It was also fraught with danger, particularly where information is obtained from the internet.

9. Making inquiries that were independent of an applicant risked moving some way from the long-established orthodox analysis which focused on establishing the purpose of the specific entity seeking charitable status.

Other heads of charity

10. In relation to the relief of the aged and impotent ground, the relevant need against which relief was proposed to be provided by the Foundations was far from obvious. The types of need that were evident from the cases were all incidents of being a person who is alive, albeit elderly or somehow afflicted (DV Bryant Trust Board v Hamilton City Council [1997] 3 NZLR 342 (HC) cited).

11. It was not clear how the pursuit by the Foundations of their purposes would relieve any relevant need that did exist. Even if funding research might eventually lead to medical discoveries that would assist people who are alive (but aged and impotent) that kind of "relief" seemed to be too indirect and too contingent to qualify as charitable under this head.

12. The Board's conclusion that the Foundations' purposes were not charitable under the recognised fourth head grounds of protecting human life, promoting human health, and relief of human suffering and distress, which was based on the proposition that as cryonics only benefits those who are dead, may have been unduly narrow. It was accepted that medical advances which may be capable of relieving suffering were likely to fall out of the proposed research but the pursuit of such advances would merely constitute an ancillary (charitable) purpose which was confirmatory of the Foundations’ principal purpose, namely funding scientific research.

FAAR's separate ground of appeal

13. The Board's finding that FAAR's purposes included the funding of cryonics was not correct as FAAR's stated purposes did not include the funding of cryonics.

14. An entity's activities are regarded as relevant only to the extent that the entity's constituent documents were unclear as to its purpose or where there was evidence of activities by an entity that displaced or belied its stated charitable purpose (Institution of Professional Engineers New Zealand Inc v C of IR [1992] 1 NZLR 570 (HC) cited).

15. The critical question is whether an applicant’s activities were sufficiently connected with the relevant charitable purpose, not whether the activity itself was charitable. Whether or not a particular activity is itself charitable can, in many cases, only be determined by reference to an entity's purpose (Re Greenpeace of New Zealand Inc [2015] 1 NZLR 169; Re Family First New Zealand (2015) 27 NZTC ¶22-017 cited).

16. The Board's approach and conclusions in finding that the identified activity was FAAR's principal purpose and that that activity/purpose was not charitable were wrong.

Judicial review

17. The Foundations' application for judicial review was not dealt with in this judgment. If the Foundations were adamant that a judgment was required and that the issues were not moot, then counsel for the applicants should file a memorandum explaining why and the Crown would have an opportunity to respond.

Re The Foundation for Anti-Aging Research and the Foundation for Reversal of Solid State Hypothermia [2016] NZHC 2328, 30 September 2016

SOURCE: New Zealand High Court rules that funding of cryonics research is charitable purpose