Good Governance Series #6

Do Letters Patent Dictate the Religious Character of our Beloved Schools?

It seems there’s a belief in some circles that the Letters Patent under which the PMSA was formed provide the basis for the religious character of our four (4) schools and, specifically, the involvement of the doctrines of the Uniting and Presbyterian Churches.

We are not sure from where this belief has originated, but we could hazard a guess. The aim of this blog is to correct the misinformation, dispel the rumours and quell the fear.

Letters Patent

In the blog “Who’s running our much loved schools?” published on 8 February 2017, we explained the legalities around the Letters Patent. Here’s a refresher:

The Letters Patent were issued on 28 June 1918 and were issued by the then Governor of Queensland pursuant to The Religious Educational and Charitable Institutions Act 1861 (Qld). This one-page document (the Letters Patent) bestowed on 24 distinguished individuals the benefit of incorporating “The Presbyterian and Methodist Schools Association” such that they and their successors “forever, holding the offices aforesaid, shall be such a Body Corporate”.

That really is the only document of any legal standing in relation to the large and valued businesses that comprise the 4 PMSA schools today, and this document is 99 years young.

The Religious Educational and Charitable Institutions Act 1861 (Qld) was repealed by the Associations Incorporation Act 1981 (Qld).

However, section 144 of the Associations Incorporation Act 1981 (Qld) states that:

“Subject to the provisions of this Act, letters patent issued pursuant to the Religious Educational and Charitable Institutions Act 1861 continue to be of full force and effect and to be subject to that Act as if this Act had not been passed”.

Effectively it makes the Letters Patent still legally enforceable, but without imposing on the corporations incorporated under such Letters Patent any of the conditions, regulations or requirements of the Associations Incorporation Act 1981 (Qld). Any regulatory or additional conditions imposed on organisations incorporated under such Letters Patent disappeared with the Repeal of the Religious Educational and Charitable Institutions Act 1861 (Qld).

Part IIA Division 2 of the Associations Incorporation Act 1981 (Qld) specifically deals with entities incorporated by Letters Patent under the Religious Educational and Charitable Institutions Act 1861 (Qld) and gives those bodies an easy mechanism to transfer their incorporation to one of a company limited by guarantee.

For whatever reason this opportunity has never been implemented up by the PMSA.

The outcome of the continued operation of the Letters Patent is that, unlike an incorporated association in Queensland, there are neither mandatory reporting requirements to the Office of Fair Trading annually, nor the requirement to hold an AGM in accordance with the Associations Incorporation Act 1981 (Qld).

Due to the fact that the conversion to a company limited by guarantee was not adopted, there is no requirement under the Corporations Act 2001 (Cth) to lodge various reporting documents with the Australian Securities and Investments Commission, or hold an AGM in accordance with that Act.

However, due to the registration of the PMSA as a charity, it does have the requirement to meet very basic reporting requirements under the Australian Charities and Not-for-profits Commission Act 2012 (Cth). But the fact that the PMSA presents a consolidated annual report to the ACNC makes evaluation of the individual schools and their individual viability and performance practically impossible.

The other implication of falling outside of the Associations Incorporation Act 1981 (Qld) and the Corporations Act 2001 (Cth) is that there is very little regulatory compliance or monitoring in relation to the PMSA’s governance documents.

Letters Patent (always plural) are not a religious document or process. Letters Patent do not impose a particular religion or religions. Letters Patent have nothing to do with religion.

Letters Patent are an archaic legal instrument. They are in the form of a written order issued by the head of state granting rights to a person or group of people, including the creation of a corporation. When the monarch ruled absolutely, in the absence of a Parliament, Letters Patent were used by the monarch to issue orders. (That is not only a good indication of how outdated the PMSA’s governance arrangements truly are, but also of the existence of a level of attraction to what some in the PMSA might perceive as a kind of regal or aristocratic status being bestowed upon them.)

With the creation of Parliamentary democracies, Letters Patent were issued less and less. Today, in Australia, issuing Letters Patent is a rare, but significant, form of legislation that does not require the consent of Parliament.

So, the PMSA’s Letters Patent are a legal document or process under an Act of Parliament in 1861 – 157 years ago – that was applicable to charities and designed to incorporate a group of people. Put another way, the PMSA’s Letters Patent granted body corporate or corporation status and protections to a group of people. That was the way charities were established in those days.

For those interested in archaeology, here’s the first page of the Act itself, followed by the PMSA’s Letters Patent.

So, you see, revocation of the PMSA’s Letters Patent will have absolutely no effect whatsoever on religious character of our four (4) schools and, specifically, the involvement of the doctrines of the Uniting and Presbyterian Churches.

From Where Does the Religious Character Come?

The religious character comes from the PMSA’s Constitution, just like the character of every other organisation.

Any organisation, whether a corporation under the Corporations Act 2001 (Cth) or an association under the Incorporation of Associations Act 1981 (Qld) or the now repealed Religious Educational and Charitable Institutions Act 1861 (Qld) or whatever, will have a Constitution.

A Constitution sets out the rules that form the basis of how an entity operates. This includes its objects or purposes. The objects are legally significant parts of a Constitution. For example, for not-for-profit and charitable organisations, the objects are the grounds upon which they obtain a variety of tax concessions and their Deductible Gift Recipient status under the Income Tax Assessment Act 1997 (Cth) and the A New Tax System (Goods and Services Tax) Act 1999 (Cth). The objects also form the basis for which an organisation is a ‘charity’ under the Charities Act 2013 (Cth) and is regulated by the ACNC under the ACNC Act.

A principal duty of directors (or Councillors as in the case of the PMSA) is to act in the best interests of the organisation, to which its objects are relevant. For example, if directors of a charity act contrary to the stated objects, it may breach tax laws and jeopardise the organisation’s tax and charity status.

The PMSA Constitution currently provides that:

“2. OBJECTS

The Association is formed to establish and carry on schools where pupils may obtain an education which is in accordance with sound educational principles and which is consistent with basic Christian doctrine.”

The low standards of governance and drafting have left no clause unaffected. It might be passable if it contained, for example, “according to the principles and traditions of the Uniting and Presbyterian Churches of Australia.” But, as the Constitution currently stands, the objects of the PMSA have nothing to do with the two (2) Churches. It could be argued, then, that decisions and actions that provide sound education consistent with Catholicism or other Christian religions are perfectly valid.

The specific religions are, however, addressed in subsequent clauses of the Constitution regarding Councillor appointments and qualifications. Much has been said already about the current composition of the PMSA Council and its adverse effects, but here is one more.

If we were to take the Beyond PMSA position that the Constitution needs an overhaul and the Councillor qualifications need to limit Church membership to two (2) Councillors, what would be the effect on the religious character of the schools? Nil. Zero.

One simply needs to amend the Objects clause. Yes, it’s that easy. And that’s because Councillors have a duty to perform their responsibilities in a manner that is consistent with the organisation’s objects, irrespective of their individual religion or Church membership.

It makes a complete mockery of the current arrangements, and makes you wonder why the PMSA Council is refusing to amend the councillor qualification and appointment clauses in the Constitution, doesn’t it?