The High Court unanimously allowed the appeal. It held that the Company’s constitution and purposes brought it within the legal definition of a charity. The Commissioner contended that the Company acted so much under the control and influence of government that it could be seen to be furthering government objectives rather than performing its own. The Court held that the Company, like many charities, had a purpose shared by the Commonwealth, in this case to improve patient care and health. This did not alter its essential character as a charity. The Court held that the Company’s purpose was charitable, within the legal meaning of that term, even though the government was the source of its funds and even though the Company consented to conditions being attached to those funds: Central Bayside General Practice Association Limited v Commissioner of State Revenue  HCA 43 (High Court; Gleeson CJ, Kirby, Callinan, Heydon and Crennan JJ; 31 August 2006).
In Non-Profit News Service No 0151 entitled "High Court decision in Central Bayside Division of General Practice Ltd", the ATO confirmed that the High Court decision is consistent with the ATO’s interpretation of charity as outlined in Taxation Ruling TR 2005/21.
For a copy of the decision, go here
For a copy of Non-Profit News Service No 0151, go here