CHAPEL HILL SCHOOL LTD v. ATTORNEY GENERAL _ ANOR (COMP)
July 22, 2009
SUPREME COURT
GHANA
CORAM
- AKUFFO (MS), JSC
- DATE-BAH (DR.), JSC
- OWUSU (MS), JSC
- B. BONNIE, JSC
Areas of Law
- Tax Law
- Corporate Law
July 22, 2009
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana, per Dr. Date-Bah JSC, addressed the proper interpretation of “educational institution of a public character” under the Income Tax Decree, 1975 (SMCD 5) and the Internal Revenue Act, 2000 (Act 592) in a dispute involving Chapel Hill Preparatory School in Takoradi and the Internal Revenue Service. Founded in 1962 by fourteen individuals and initially limited by guarantee, the school served the public and was financed by fees and endowments. The IRS assessed income tax for 1994–2004; the High Court and Court of Appeal dismissed the school’s challenges. The Supreme Court held that an institution may be of a public character despite private origins, focusing on public benefit and absence of private gain, and drew on charity law and the South African Oxford University Press case. Critically, after the school converted to a company limited by shares in 2001, the potential for private benefit meant it ceased to be of a public character. The Court declared the school public in character until 2001 and upheld the appeal in part.
J U D G M E N T
DR. DATE-BAH JSC:
Introduction
The central issue in this case is the meaning to be given to the expression “educational institution of a public character” within the context of the Income Tax Act 1975 (SMCD 5) and the Internal Revenue Act, 2000 (Act 592). Unfortunately, the Court of Appeal wrongly characterised this central issue in terms of whether the plaintiff school qualifies as a public school. It accordingly addressed the wrong issue when it sought to establish a dictionary meaning for “public school” and “private school”, respectively.
It seems clear that an educational institution may be characterised as being of a public character, although it is privately owned. This much is clear from the Privy Council cases of Dilworth and Ors v The Commissioner of Stamps; Dilworth and Ors v The Commissioner for Land and Income Tax. [1899] AC 99. These two consolidated cases were heard on appeal from the Court of Appeal of New Zealand. In these cases, where a wealthy testator made a gift for the establishment of an institution for the maintenance and education of boys who are orphans or the sons of parents in straitened circumstances, the Privy Council held that the institute, being an educational endowment in perpetuity vested in trustees without personal interest therein, the whole beneficial interest belonging exclusively and inalienably to the public, was a public institution within the meaning of section 2 of the Charitable Gifts Duties Exemption Act, 1883 of New Zealand. The said section 2 was in the following terms:
“In this Act, the term ‘charitable purposes’ includes devises, bequests, and legacies of real or personal property respectively of whatever description to public institutions such as libraries, museums, institutions for the promotion of science and art, colleges and schools, or to hospitals, orphan, lunatic, or benevolent asylums, dispensaries.”
While it is not safe to transport the judicial interpretation of a specific statute from a different jurisdiction into our jurisdiction, it is nevertheless instructive to note that a common law court has not viewed the expression “public institution” as limited to an institution that is publicly owned.
Lord Watson, delivering the judgment of the Privy Council, said (at p. 109):
“Their Lordships have come to the conclusion, not without hesitation, owing to the view taken by the Courts below, that the Ulster Institute, as designed by its founder, does answer the description of