CHARITIES |
Canadian Magen David Adom for Israel v. M.N.R.
A-433-01
2002 FCA 323, Sharlow J.A., Rothstein J.A. (dissenting)
13/09/02
51 pp.
Appeal under Income Tax Act, s. 172(3) from MNR notification proposing to revoke appellant's registration as charitable organization--Appellant incorporated as corporation without share capital--Stated corporate object to donate emergency medical supplies and ambulances directly to people of Israel--Two grounds stated as justifica-tion for revocation--First ground referring to gifting of resources to Magen David Adom (MDA); second ground relating to activities of appellant in contravention of Canadian public policy--Discussion of first and second grounds indicating Minister's real concern related to relationship between appellant and MDA, in particular appellant's failure to control and monitor use of ambulances and related equipment provided to MDA--Concerning contravention of Canadian public policy, Court found record in appeal fell far short of establishing definite, officially declared, implemented policy prohibiting Canadian charitable organization from operating in occupied territories--In absence of such legislation or some equally compelling public pronouncement, M.N.R. cannot justify revocation of registration of appellant solely on basis MDA operating in occupied territories--Minister's fundamental concern related to appellant not taking appropriate steps to ensure ambulances and related equipment provided to MDA would be used for charitable purposes-- Charitable organization having obligation to carry on charitable activities itself--Charitable organization wishing to operate in location without any officers or employees must somehow act through person living at location in question-- However, charitable organization must establish acts taken by charitable organization effectively authorized, controlled, monitored by charity--M.N.R. entitled to insist on credible evidence regarding activities of charitable organization to make sure activities carried on by charitable organization itself--Remaining issue concerning whether Minister erred in finding charitable goods policy not applying to appellant's provision of ambulances and related equipment to MDA-- Court unable to find in record evidence supporting reasonable expectation establishing use of ambulances and related equipment provided to MDA only for charitable purposes-- Therefore Court concluded M.N.R. did not err in finding charitable goods policy not applying to ambulances, related goods provided to MDA by appellant--Appellant argued on existence of agency relationship between appellant and MDA --Court unable to find evidence supporting agency relationship between appellant and MDA or any evidence concerning appellant taking any steps to control or monitor use by MDA of ambulances and related equipment provided to MDA--Therefore, revocation of appellant's registration as charity justified--Preceding reasons sufficient to dismiss appeal, except for appellant's argument concerning breach of requirement of procedural fairness--M.N.R. may have taken into account three factual allegations without giving opportunity to appellant to comment--Even if three factual allegations disclosed in advance to appellant and refuted, revocation of appellant's registration still justified--Appeal dismissed--Per Rothstein J.A. (dissenting): Minister's decision flawed for two reasons--One based on irrelevant considerations and second based on breaches of procedural fairness during proceedings--Regarding irrelevant considerations, record indicating Minister did not consider gifting issue as independent ground for revocation--Gifting issue outstanding for some 15 years, suggesting gifting issue not of pressing importance for Minister--Regarding breach of procedural fairness, M.N.R. relied on evidence without giving appellant opportunity to comment in relation to evidence-- Evidence related to use of ambulances in occupied territories for transportation of armed personnel, ammunition and other Armed Forces activities not consisting in charitable activities --Evidence prejudicial to appellant, therefore appellant should have had opportunity to comment--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 172(3) (as am. by S.C. 1994, c. 7, Sch. II, s. 141; 1998, c. 19, s. 46).