Digests

Canadian Committee for the Tel Aviv Foundation v. Canada

A-357-00

2002 FCA 72, Malone J.A.

1/3/02

23 pp.

Statutory appeal from Minister's decision to notify appellant of intention to revoke appellant's registration as "charitable organization" pursuant to Income Tax Act, s. 168--S. 168(1)(b) permitting Minister to revoke charity's registration when ceases to comply with requirements of Act for registration--S. 149.1(2) setting out grounds for de-registration of charitable organization--Appellant registered as charity in 1985--Charitable objectives relating to promotion of education, relief of poverty, sickness in Tel Aviv, Israel--Registration predicated on representations to Minister that activities would be carried out through agent in Tel Aviv pursuant to written agency agreement-- Minister auditing appellant twice before audit of 1997 fiscal year, which gave rise to intention to revoke--After audit of 1993 fiscal year, Minister advising appellant of 11 contraventions of Act--In response appellant undertaking to conform strictly to requirements of Revenue Canada, including specific provisions of agency agreement--Based on undertaking, Minister allowing appellant to retain charitable organization status--1997 audit identifying seven repeat deficiencies, including lack of control over disbursement of funds by agent, failure to demonstrate adherence to system of continuous, comprehensive reporting as required by agency agreement, donation receipts not complying with Regulations, failure to issue T4A to entertainer to whom paid fees--As result, and because of perception appellant not observing undertaking, Minister advising appellant grounds for revoking charitable status--Appellant attempted to explain situation, address Minister's concerns, asked Minister to clarify concerns about spoiled receipts--Minister issued notice of intention to revoke charitable status--Appeal dismissed--(1) Canadian Bill of Rights, s. 2(e) providing no law of Canada shall be construed, applied so as to deprive person of right to fair hearing in accordance with principles of fundamental justice for determination of rights or obligations-- Parliament intended statutory appeals involving charities should not involve rigid rules, cumbersome procedures--S. 168 silent on matters of procedure--S. 180(1) outlining appeal process to this Court--S. 180(3) limiting proceeding to summary hearing, determination-- Renaissance International v. Minister of National Revenue, [1983] 1 F.C. 860 (C.A.) holding rules of procedural fairness, natural justice requiring only that Minister give charity opportunity to respond to allegations against it before sending notice of intention to revoke--According to Singh et al. v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177, principles of natural justice not imposing necessity of oral hearing in all cases; nature of legal rights at issue, severity of consequences to individuals concerned most important factors in determining procedural content of fundamental justice--While consequences of de-registration severe, s. 168 not depriving appellant of status without benefit of reasonable procedural protection-- Appellant informed during two earlier audits of failure to comply with Act, and given opportunity to respond-- Knowing registration in jeopardy, provided undertaking which prevented de-registration, thus proving written submissions can prevent de-registration--Given detailed exchange of written submissions during 1997 audit, no need either for oral hearing or cross-examination of auditor-- Legislative scheme not violating Bill of Rights, s. 2(e)--(2) As no evidence appellant either unaware of case against it or unable to respond meaningfully, Minister's administration of Act not contravening Bill of Rights--(3) No valid reason to depart from Strayer J.A.'s analysis in Human Life International in Canada Inc. v. M.N.R., [1998] 3 F.C. 202 (C.A.) holding onus on charity to prove charitable organization status should not be revoked--That Parliament directed summary procedure with jurisdiction solely in Federal Court of Appeal, process much like application for judicial review, supporting Strayer J.A.'s conclusions as to burden of proof--Requirement to demonstrate compliance with undertaking, by meeting burden of proof, not working unreasonable or unjust hardship on appellant--Burden on appellant to convince Court Minister erred in issuing notice of intention to revoke--(4) Under scheme of Act, charity may conduct overseas activities through agent, but cannot merely be conduit to funnel donations overseas--Appellant ignored agency agreement--Minister not satisfied appellant's explanations of conduct overseas sufficient to overcome conclusion appellant had no direction, control over how funds spent--Evidence suggesting appellant merely acting as conduit for Canadian donors to overseas donees--Little evidence from which Court might conclude appellant exercising control, direction claimed--In light of conflict between agency agreement, alleged oral arrangements with agent, other concerns raised by Minister i.e. improper recording of expenditures, agent's failure to keep separate bank account, lack of documentary evidence of direction, control by appellant, not unreasonable for Minister to conclude appellant not in control of agent--(5) Pursuant to s. 149.1(1) charity must devote all its resources to charitable activities carried on by organization itself--While charity may carry on charitable activities through agent, charity must be prepared to satisfy Minister at all times both in control of agent and in position to report on agent's activities--Minister's main reasons for revocation that appellant could not demonstrate, through documentary evidence that exercised sufficient degree of control over use of funds by agent and appellant not keeping proper books, records of activities carried on by agent--Even though reasons couched in terms of non-compliance with agency agreement, requirements under latter simply means of ensuring compliance with Act--S. 230(2) requiring every charity keep records, books of account containing information enabling Minister to determine whether any grounds for revocation of registration under Act, duplicate of each receipt containing prescribed information for donation--S. 230(3) providing Minister may require person to keep such records as Minister may specify--Appellant not maintaining proper records as required by s. 230(2), (3)--Minister not erring in concluding appellant not complying with requirements of Act--(6) Minister citing failure to file T4A slip as example of continuing failure to fulfil undertakings, not as leading to de-registration itself--In light of overwhelming evidence supporting Minister's main reasons for de-registration, issue of little significance--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, ss. 149.1 (as am. by S.C. 1994, c. 21, s. 74), 168, 180 (as am. by S.C. 1994, c. 7, Sch. II, s. 142), 230 (as am. by S.C. 1994, c. 21, s. 105)--Canadian Bill of Rights, S.C. 1960, c. 44 [R.S.C., 1985, Appendix III], s. 2(e).