The Church of Scientology (the Church) is an international organisation which promotes a belief system, doctrines and practices known as Scientology. The Church has its international headquarters in the United States…. The Church has now now established a company incorporated under the Companies Acts and limited by guarantee called Church of Scientology (England and Wales) (CoS) to further its work in this country. In September 1996, CoS applied to the [Charity] Commission [for England and Wales] for registration as a charity pursuant to section 3(2) of the Charities Act 1993…
CoS argues that it is a body established for the charitable purpose of the advancement of religion under the third head of charity law, or, in the alternative, if not so established, that it is established for a charitable purpose which promotes the moral or spiritual welfare or improvement of the community under the fourth head of charity law. Whether under the third head or fourth head of charity law, CoS argues that it is established for the public benefit…
The Commissioners having considered the full legal and factual case put to them by CoS, and having reviewed the relevant law, taking into account the principles embodied in ECHR [European Convention on Human Rights] where appropriate, decided that CoS was not established for charitable purposes or for the public benefit and was therefore not registrable as a charity under section 3(2) of the Charities Act 1993.
In making that determination the Commissioners further concluded that:
(1) The CoS is not charitable as an organisation established for the charitable purpose of the advancement of religion because, having regard to the relevant law and evidence, Scientology is not a religion for the purposes of English charity law.
(a) The Commissioners, considered that the legal authorities establishing the meaning of religion in charity law were ambiguous, but having construed such authorities in a way compatible with ECHR they concluded that the definition of religion was characterised by belief in a supreme being and an expression of belief in that supreme being through worship. Re South Place Ethical Society  1 WLKR 1565, Dillon J at p. 1572 D-E.
(b) … The Commissioners concluded that Scientology believed in a supreme being.
(c) The Commissioners decided that the criterion of worship would be met where the belief in a supreme being found its expression in conduct indicative of reverence or veneration for the supreme being….
The Commissioners decided that auditing and training do not constitute worship as defined and interpreted from legal authorities.
(2) That CoS was not established for the charitable purpose of promoting the moral or spiritual welfare and improvement of the community.
(a) The Commissioners considered that CoS was not analogous to the established legal authorities which governed this area of the law. Re Scowcroft  2 Ch 638, Re Hood  1 Ch 240, Re Price  Ch 422, Re South Place Ethical Society. They concluded CoS was not analogous to the decided cases because it promoted a formal and highly structured system of belief (which it regarded as a religion), necessitating membership of or adherence to a particular organisation for access to or participation in its doctrines, practices and beliefs such that these were not generally available to the public at large. However the Commissioners further concluded that these legal authorities were ambiguous.
(b) The Commissioners considered and interpreted these authorities compatibly with the ECHR and concluded that the key aspects of the charitable purpose of promoting the moral and spiritual welfare or improvement of the community which could be discerned from these authorities was that the doctrines, beliefs and practices involved were generally accessible to the public and capable of being applied or adopted by them according to individual judgement or choice from time to time in such a way that the moral and spiritual welfare or improvement of the community might result, Re Price, Cohen J at 423. Accordingly, the Commission concluded, it would be possible for non-religious belief systems promoted by a membership organisation to be established for such a purpose if those criteria were satisfied.
(c) The Commissioners considered in relation to the doctrines and practices of CoS whether these were so accessible and capable of such application, but concluded that because of the nature and organised practice of the beliefs of Scientology they were on balance neither so accessible nor could be so applied such that the moral and spiritual welfare or improvement of the community might result.
(3) That CoS was not established for the public benefit.
In considering the legal test applied to organisations established for purposes falling within the first three heads of charity law in that they were entitled to the presumption of public benefit and the different legal test applied to the fourth head of charity law where public benefit had to be demonstrated, the Commissioners considered that such a distinction between the legal tests was consistent with ECHR…. For the fourth head of charity, public benefit needed to be established although there were cases where it may be self evident and need to be proved….
The Commissioners considered whether if CoS had been established for the charitable purpose of advancing religion, it was also established for the public benefit….
The Commissioners decided that in the case of CoS, the relative newness of Scientology and the judicial and public concerns which had been expressed about its beliefs and practices, led them to conclude that it should not be entitled to the presumption of public benefit. Accordingly, it was for CoS to demonstrate that it was established for the public benefit….
The Commissioners considered that this test [of public benefit] must be applied to the core practices of such an organisation [as CoS] and not to incidental activities or other activities which may already be regarded as charitable.
After reviewing the practices of auditing and training, considered by CoS to be central features of the practice of Scientology, the Commissioners considered that these are in fact conducted in private and not in public and that in their very nature are private rather than public activities such that no legally recognised benefit could be said to be conferred on the public. It could not be concluded that the benefits of the practice of Scientology extended beyond the participants. Accordingly public benefit was not established.
The Commissioners went on to consider whether, if CoS had been established for a charitable purpose of promoting the moral or spiritual welfare or improvement of the community, it was also established for the public benefit. The Commissioners considered that it was for CoS to establish public benefit as this was a purpose falling within the fourth head of charity law. The Commissioners considered the relevant legal test of public benefit to be applied to organisations established under the fourth head of charity. The Commissioners concluded that the test was that the whole tendency of charity in the legal sense under the fourth head is towards tangible and objective benefits but that in the case of an intangible benefit that at least approval by the common understanding of enlightened opinion for the time being would be necessary before an intangible benefit could be taken to constitute sufficient benefit to the community. National Anti-Vivisection Society v IRC  AC 31, Lord Wright at p. 49. The Commissioners considered that in the case of the purpose of promoting the moral or spiritual welfare or improvement of the community, and thus of CoS, the issue was one of intangible benefit and that in relation to intangible benefit the Commissioners considered the legal test to refer to a common consensus of opinion amongst people who were fair-minded and free from prejudice or bias.
The Commissioners considered the core practices of Scientology, namely auditing and training, and concluded that the private conduct and nature of these practices together with their general lack of accessibility meant that the benefits were of a personal as opposed to a public nature. Accordingly, following the legal test referred to above, public benefit had not been established.
Source: Extracts quoted from:
[The] Charity Commission [for England and Wales]. Decision of the Commissioners [4 pages]
Application by the Church of Scientology (England and Wales) for registration as a charity
[Made on 17th November 1999]
[Emphasis in original]
For full Decision see: http://www.charitycommission.gov.uk/Library/start/cosdecsum.pdf