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Specific noncharitable trusts
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- Charitable Purposes
- Public Benefit
- Relief of Poverty
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- Advancement of Religion
- Other Purposes Beneficial to the Community
Specific noncharitable trusts24 (1) A trust for a specific noncharitable purpose that creates no enforceable equitable interest in a specific person must be construed as a power to appoint the income or the capital, as the case may be. (2) Unless a trust described in subsection (1) is created for an illegal purpose or a purpose contrary to public policy, the trust is valid so long as and to the extent that it is exercised either by the original trustee or the original trustee's successor within a period of 21 years, even if the disposition creating the trust showed an intention, either expressly or by implication, that the trust should or might continue for a period longer than that period. (3) Despite subsection (2), if the trust is expressed to be of perpetual duration, the court may declare the disposition to be void if the court is of the opinion that by doing so the result would be closer to the intention of the creator of the trust than the period of validity provided by this section. (4) To the extent that the income or capital of a trust for a specific noncharitable purpose is not fully expended within a period of 21 years, or within any annual or other recurring period within which the disposition creating the trust provided for the expenditure of all or a specified portion of the income or the capital, the person who would have been entitled to the property comprised in the trust, if the trust had determined at the expiration of the 21 year period, is entitled to that unexpended income or capital. (5) Nothing in this section applies to any discretionary power to transfer a beneficial interest in property to any person without the furnishing of valuable consideration.
Ratio: Regardless of the trust, the requirement of certainty is such that, regardless of whether construed as a power or not, that there be sufficient certainty in determining the persons entitled. Analysis: Purpose trusts, if valid, still fall under the same certainty requirements as other trusts. Here the conjuctive expression “religions, literary and educational purposes” makes things worse as it is so broad and vague that there can be no possible guidance (without extrinsic evidence). Here, the court determined that it could not actually say with certainty whether an object was religious, literary, or educational based on the lack of specification as well as with the lack of joinder with the various goals and objects of the society. Holding: Trust fails Charitable Purpose Trusts Charitable Purposes Statute of Charitable Uses – Preamble One must draw an analogy to the described groups in order to fall under a charitable head Relief of aged, impotent and poor people Maintenance of sick and maimed soldiers and mariners Schools of learning, free schools and scholars of universities Repair of bridges, havens, causeways, churches, sea banks and highways; Education and preferment of orphans; Relief, stock or maintenance of houses of correction Marriages of poor maids; Supportation, aid and help of young tradesmen, handicraftsmen and persons decayed; The relief of redemption of prisoners or captives and the aid or ease of any poor inhabitants concerning payments of fifteens, setting out of soldiers and other taxes Note: Morice v Bishop of Durham has been quoted as confirming that a charitable purpose in law is one mentioned in the preamble of the Statute of Charitable uses or is analogize to a purpose in the preamble Commissioners for Special Purposes of the Income Tax v Pemsel Facts: A trust was established to apply the rents and profits of lands in maintaining the missionary establishments among heathen nations (lol public policy concern much), a school for ministers and missionaries and certain religious establishments denominated choir houses. They were asked for payment of taxes which Pemsel the treasurer attempted to dispute Issue: Is the trust one that falls within “charitable purposes” within the income tax acts such that they would be tax exempt? Ratio: Charitable purposes are interpreted by their technical legal meaning and not their popular meaning in accordance with the charitable heads documented in the preamble to the statute of charitable uses Analysis: The Scottish nuns were not found as being solely a means through which the Moravians propagated their own religious opinion. They were found to be teaching Christian doctrines that order civilization in the best way to avoid poverty (lol tell that to South America). The judges in the case distilled the categories of charitable uses into 4 forms: The relief of poverty, the advancement of education, the advancement of religion and other purposes beneficial to the community. Drawing analogy to these categories served as the basis going forward for attempting to determine whether something was truly charitable or not Holding: Yes charitable. Public Benefit Oppenheim v Tobacco Securities Trust Co Facts: A trust was assigned to the Tobacco Trust Co with which it was designed to provide for assisting the education of the companies employees children, helping any company or subsidiary and gave the trustees wide discretion on how to do so. The residual estate was obviously not happy that 125k pounds was wrapped up for the benefit of a tobacco company and decided to try and get the trust invalidated. Issue: Was the trust a charitable trust and for the public benefit? Ratio: A trust is not charitable unless it is directed to the public benefit. If it confers only private benefit, it is a mere private trust. Analysis: Here there was no public benefit as the trust was designed solely for the benefit of the tobacco company, its subsidiaries and employees and employees children. There was much discussion about the fact that these possible beneficiaries were of course members of the public (and there were over 110k of them). There may be some cognitive dissonance when so many people are possible beneficiaries (As well as when the education element is completely valid), but the tightly constrained group (or defined group) lacks a public element and inclusiveness that the court wanted for finding it to be a charitable trust. Holding: Not valid Legal Meaning of Charitable Purposes Relief of Poverty Trustees of Mary Clark House v Anderson Facts: A trust was constructed for “ladies in reduced circumstances”. Part of the concern here was determining how poor someone truly is, and what kind of situation they actually needed to be in. Issue: Are the ladies poor, what standard is required? Ratio: Someone is poor if they are in genuinely strained circumstances or are unable to maintain a very modest standard of living for themselves. It does not require abject destitution. Analysis: The fact that they are coming to the poor house is almost proof enough that someone is in strained circumstances. Here, rather than focus on the charitable goals of the poor house (which was providing other services), it was more important to focus on the relief of poverty for each individual Holding: Valid charitable trust Re Brown Facts: A gift was made to the treasurer of a poor house with which the income was applied to providing the basic necessities and even some luxuries for the poor house residents. Issue: Can relief of poverty include some luxuries or excess spending? Ratio: A gift of the proceeds from sale of land to be expended by the treasurer for luxuries is a valid charitable use Analysis: Courts are simultaneously being incentivized to allow the trusts to continue for the good they bring but also disincentivized to allow an ever widening of the charitable category. One must proceed with caution in this regard. Holding: Valid spending and trust Re Hart (Whitman v Eastern Trust Co et al) Facts: The bequest was given to Eastern to apply the income “to enable poor children and parents, belonging to the city of Halifax, to have outing or outings during the summer month” to summer camps. Issue: Is this a valid relief of poverty? Ratio: The court thought so Analysis: Considering it is specifically for poor children to have some fun, the court really didn’t turn much legal thought on the subject. Just slam dunked that junk Holding: Shaq’d Re Planned Parenthood of Toronto and City of Toronto Facts: Planned Parenthood sought tax exemption as a charitable organization for relief of the poor on their properties in Toronto. Many of their clients made over 8k per year (1979-80 money). Issue: How poor must one be to be relieving the poor? Ratio: “the expression ‘poor person’ in a trust for the benefit of poor persons does not meant the very poorest, the absolutely destitute; the word “poor” is more or less relative” – must most likely have some element of economic deprivation. Analysis: If one was drawing the line at $8000 (which the appeal court thought anything below would be poor) then the 2/3rds of people using their services above that line would seem to not be in relief of poverty as their main concern. Furthermore, the services being offered were of a public benefit, not primarily as a means to help poor people (although that happened on an ancillary basis). Lastly, the legislature did not mean for “poor” to be extended this far. Holding: No exemption, no relation to economic deprivation London (City) v Byron Optimist Sports Complex Inc Facts: The Complex was applying for tax exempt status on its lands. They used the land for baseball, soccer, hockey and other stuff. This was the only recreational facility in the area. Given their non-profit status, Byron thought they should get some nice treatment. They won on first instance with the trial judge claiming that their primary goal of providing recreational needs to the community fell under the proper charitable heads Issue: Did it? Ratio: Of course not. There must be SOME element of economic deprivation in order to be in the relief of the poor category. Analysis: Unfortunately for many, sports are not treated as charitable. The trial judge seemed to be extremely stretching the limits in order to facilitate a public benefit proffered by a non-profit entity. But any help to the poor is clearly ancillary to its mission. No findings of economic deprivation were made, and they were out of luck Holding: Appeal allowed, get taxed son Re Scarisbrick Facts: Money was left by the testatrix “for such relations” as in the opinion of the testatrix’s son and daughters (most likely acting as trustees) “shall be in needy circumstances.” Issue: what is the scope of the word relations? Does it extend beyond the family? Ratio: “relations” is a more widely determined word than next of kin. Analysis: By virtue of including people that theoretically are not direct family members, this construction of the world relations allowed the trust to be wide enough to be public, even though the frame for it was still based against the original settlor. The court drew a distinction between a “class of relatives” which is public and charitable and a “class of individuals” which is not. Holding: Charitable trust is valid. Jones v Executive Officers of the T. Eaton Company Facts: Bethel executed a will which left residue to certain people. The one in question was 50k to the “executive officers to be used by them as a trust fund for any needy or deserving Toronto member of the Eaton Quarter Century Club as they in their absolute discretion may decide”. This however was predicated on the death of his wife which happened literally 30 years later. Issues arose with the fact that it said “needy OR deserving” with needy being fine as a matter of charitable concern but deserving possibly relating to meritorious elements which were not. Issue: Is the bequest a valid charitable one? Does it require a public element? Ratio: the courts do not require an element of public benefit in order to declare in favour of the validity of the trust. A trust that has its sole goal as the relief of poverty does not require public benefit to function. Analysis: After much legal wrangling, the judge specifically states in para 31 that even though the public generally is not benefitted, it is irrelevant. The relief of poverty is seemingly a special area where, so long as there is no other purpose, a charitable trust can be set out that has private elements. Some of the benefit of the doubt here was that the group of possible recipients was large, and the construction of the word “or” as conjunctive in the sense that needy qualified the word deserving such that it related to the relief of poverty against economic deprivation, financial depression or a sudden emergency. Ultimately, the testator was an extremely sophisticated business person and it would have been inequitable (in my opinion) to deprive this trust of its meaning. Holding: Valid trust Advancement of Education Societa Unita v Gravenhurst (Town) Facts: The society ran a childrens camp with all sorts of cool crap to do. It had chapel activities, Italian cultural subjects (including learning Italian) swimming, crafts and more. They sought a declaration that the camp was exempt from property tax. Note: This is in Muskoka, cottage country, rich homie Quan. Issue: Is the camp educational to the point where it can get the necessary exemption? Ratio: Where an inducement is such that one learns about the language, history, folklore, customs and religious background of a community, it may fall within the meaning “seminary of learning” and may qualify for tax exemption. Analysis: An overview of all camp activities was pursued and even though there was swimming and jolly good times to be had, the teaching of the various cultural and linguistic points was interspersed throughout all of the activities such that it made the “learning” process more fun for those participating. The use of “seminary of learning” helped to broad the ambit of what would count as educational purposes as well given the wide berth courts have given to religious institutions (as well as going beyond mere religious education) Holding: Only 50 of the 200 acres was exempted Incorporated Council of Law Reporting and Wales v Attorney General Facts: The council was a not-for profit that sought charitable registration status for its production of law reports. The company sold subscriptions but the profits weren’t given to anyone in particular. The council claimed the law reports were tools of the trade for lawyers. Issue: Is the production of reporters charitable as an educational purpose? Ratio: Where the purpose is to make educational materials generally available to the public, it may be enough to consider it an educational purpose Analysis: Not only was there a public element here to the dissemination of materials, but there was also the corollary that it was helping lawyers in their job (which in turn, theoretically, helps everyone else to). The judge also found that furthering the sound development and administration of law in the country provided a broad and general public utility beneficial to the community. Holding: Charitable Re Dupree’s Trusts Facts: Gift set up to encourage young boys to play chess Issue: Charitable Ratio: Sure, why not Analysis: It was held as chess, unlike a game of chance, is “essentially a game which possesses an education value in that it encourages the qualities of foresight, concentration, memory, and ingenuity”. The court addressed the problem of the slippery slope of other games or pursuits by distinguishing between things where chance is present and not present. An author at the time however suggested that Bridge should be included as the element of chance itself was where the educational value lay as it taught players to “face the slings and arrows of outrageous fortune with fortitude” Note: This may be another case in which gentrified games are held to a higher standard whereas more commoner friendly games (often including dice rolls or pure chance) are not seen as suitable for developing the kind of characteristics desireable in English society (as seen through a judges eyes) Analysis: Upheld. Re Shaw’s Will Trusts Quote: “education includes not only teaching, but the promotion or encouragement of the arts and graces of life which are, after all, perhaps the first and best part of the human character” Vancouver Society of Immigrant and Visible Minority Women v Minister of National Revenue Facts: The VSIVMW applied for tax exemption under the ITA. Their goal was to educate and foster social awareness of concerning issues, facilitate immigrants and visible minority women in achieving economic and social independence, providing a support network and to provide any other services incidental to the attainment of their objectives. Primarily, their main goal was helping women to find work, but they also offered reference services for jobs, ESL and more. Issue: Was the society seen as providing educational services such that it would receive exemption? Ratio: The approach to education must be purposive and flexible in accordance with the times. Education subsumes more than formal training and is nominally detracted if the education is designed to promote a particular point of view or political orientation Analysis: Ironically, where the definition of charitable was based on old English statutes, Canada adopted the more contemporary approach of English courts as well. Especially nowadays, the definition of education was seen as needing to include more informal training initiatives suchas teaching life skills or providing information towards a practical end. The “Training of the mind” model which required structured, systematic instruction is under-inclusive and not of use to many groups of people. Where it would clearly fail under the old test, it passed muster under the more expansive iteration. Unfortunately, they attempted to frame themselves as being truly able to eliminate prejudice and discrimination as part of their charitable goals, especially as many women do not face discrimination in finding work. As such, they failed on the public benefit analysis. Note: The act of networking, soliciting job opportunities, referral services, etc are not charitable. Holding: No exemption Re Pinion Facts: Pinion gave a life interest to his sister with the remainder going to the trustees so that they could keep his antiques, paintings and other doo-daws in a collection functioning as a museum. In a codicil, he revoked his sisters life estate (swell guy) and gave clearer instructions on how to set up his museum. The national trust refused his bequest and the AG attempted to support this will as an advancement of education. The collection was full of junk, being described even as “atrociously bad” and even surprising the appraisers that he hadn’t stumbled upon something even worthwhile by accident Issue: If a museum is by default for the purposes of education, does that mean all museums are educational? Ratio: The presumption of a public benefit for a museum or other well established charitable institution can be rebutted. Analysis: Rather than just give him free reign, the court derides the “mass of junk”, frankly pointing out that in reality, it has no educational value and is more of a monument to himself to maintain his repute. No theme or style was represented and rather than be charitable like the original judge, this judge went HAM and had no interest of foisting this burden on the public Holding: Roasted, residue to estate. Advancement of Religion Thornton v Howe Fact: A trust was established to propogate the works of Joanna Southcote, a woman who believed she was impregnated by the holy ghost and would give birth to a new messiah. Her works were described as “incoherent and confused” and she was personally considered foolish and delusional. The trust helped to support the distribution of her crazy pamphlets. Her publication was, of course, made public. Issue: Is there a certain quality that allows a trust to be exempt for religion? Ratio: The law “makes no distinction between one sort of religion and another” Analysis: Clearly there is little to no connection between this womans work and mainsteam religion, but the law (and specifically the judges) have no desire to be in the position to say which religion or spiritual stance has quality or is worth pursuing. Judges are there to interpret the law, which is agnostic. The result of course is that what passes for advancement of religion is seemingly impossible to not allow. Note: the Ontario Law Reform Commission was critical about religions that are “not authentic”, but even this concern draws arbitrary lines that a court would be hesitant to cross Holding: Trust upheld. Re South Place Ethical Society Facts: The organization was designed to “study and disseminate ethical principles and the cultivation of a rational religious sentiment” and to the discovery of truth through intellect, not a supernatural being. Issue: Does this group qualify as advancing religion Ratio: The two essential attributes of a religion are faith and worship. In order to qualify as advancing religious interests, you must both have a deity and worship it. Analysis: Unfortunately for this group which seems rather agnostic, the study of ethics is how man is concerned with relation to other men, not with god. As such, it is not advancing the religion so much as it is advancing other individuals. Whether this would pass charter muster is another story (the CRA currently applies this test). Holding: Valid Gilmour v Coats Facts: A cloistered community of nuns dedicated themselves entirely to prayer and did not take part in any activities outside the convent. Their claim was that their daily prayers offered a benefit to those both inside and outside the convent and that prayer itself bestows a spiritual benefit to mankind enough that there was a public benefit. Issue: Is the gift a valid trust? Ratio: The court cannot recognize an argument that would acknowledge the validity or power of a single religion. Furthermore, the public benefit of religion must be public (At least in the sense that people can directly benefit from it) Analysis: The court was rightly hesitant in accepting that prayer itself provided a public benefit as this would validate roman catholic beliefs at the expense of other religions. Furthermore, they downplayed the public benefit or edification of prayer, as this was a contingent of all prayer methods and was not special to the nuns in this instance. If this was enough to satisfy public benefit, it would be such a low standard that it would essentially not exist. Finally, the existence of the convent for the women doing the praying is not sufficient to constitute a public benefit as it still must have a benefit to the outward facing public, and just for its own sake. Note: A final consideration may be that they don’t want to promote stoicism. Holding: No go Re Hetherington Facts: A trust was given for the saying of “masses for the repose of the souls of my husband and my parents and my sisters and also myself when I die”. Basically guaranteeing that someone will get paid to pray for them, how Christian. Issue: is a trust for this kind of behaviour the advancement of religion? Ratio: Where a ritual act is made possible that is central to the religion, a trust may be advancing a religious purpose Analysis: Unlike the nuns in the convent, these masses were held in large groups and most notably, in a more public forum. The court held that “the celebration of a religious rite in private does not contain the necessary element of public benefit”, the inverse of course, is that if performed in public, it does. The necessary corollary is that the edification goes to the other members around you by virtue of your public ritual as well as the propogation of the actual act itself. Note: Commentators have posited that a less stringent test such as “an act which furthers or arrises out the intended practices of the religion” would be better as it would be more fair to stoic observances. However, tax purposes most likely preclude this kind of interpretation as anyone could start claiming tax exempt status for questionable religious ceremonies that most likely could not be tested (or if they could, the CRA would be inundated with claims) – public benefit and public performance stand as an evidentiary threshold as a result. Holding: Valid. Funnell v Stewart Facts: The testator Le Cren had been holding healing sessions and religious services in a faith healing context. The laying on of hands, prayers and meditation were open 4 times a week to the public with the religious services were open to the public once a month (but held weekly). She left 150k to be used by the group to carry on its “spiritual work” Issue: Advancement of religion for cockney bull like this? Ratio: Sure I guess, extremely low threshold Analysis: While many of the services were held in private, it was sufficiently public for the courts liking to be allowed. There was, of course, no contrary evidence that it had NO benefit (because its all bull anyways). Judge Williamson found that the private element was ancillary to the faith healing practices as these were primarily aimed towards the betterment of others Holding: Religious purposes. Other Purposes Beneficial to the Community Native Communications Society v MNR Facts: the NCS applied for registration as a charitable organization and was refused on multiple attempts. The minister based refusal on the goals of the society being not exclusively charitable. The NCS was a non-profit that attempted to develop communications programs, newspapers, deliver information and do all other things that were required to increase native communication participation. They trained people as well, primarily to develop the radio and tv programming for aboriginal peoples. The NCS would have continued on with their business had the application not gone through, they simply wouldn’t have gained the preferential tax treatment they desired. Issue: With how much adherence does a charitable purpose need to correlate with the Statute of Elizabeth Ratio: Where one does not fall directly within one of the SoE’s provisions, they may still be found to be charitable if they are within the “spirit and intendment” of the preamble. Analysis: Part of the benignant interpretation here rests on the special status aboriginal peoples have within Canadian society. While the provisions of the society could have been more precise, all of their goals were restricted to matters facing native people in BC and throughout the world. The judge found that the minister had to reconsider his decision (judicial review?) on the basis that they were a charitable organization by virtue of their overwhelming desire to help aboriginal peoples as well as by virtue to the fiduciary duty the government has not only to protecting people, but also the intendment of the SoE which was designed to help vulnerable people. Holding: Down for consideration Vancouver Regional FreeNet v MNR Facts: A FreeNet is one that is a volunteer-built network that allows for the exchange of network resources and information on-line. VRF wanted to establish a freenet so as to encourage the flourishing of information, educating people in regards to computer usage and online data access as well as fostering usage of the online resources. It was a not-for profit that was applying to become a registered charity. They argued that they were akin to an electronic library or community centre, but the minister decided not to grant status due to no judicial precedent. Issue: How do we approach the SoE when it did not contemplate certain technologies Ratio: When deciding if someone falls under the 4th category of charities (public benefit) we must determine (by analogy where necessary) whether they fall within the spirit and intendment of the SoE Analysis: Here the judges didn’t want to stretch the analogy too far, but the development of infrastructure which was part of the SoE was likened to the freenet here by virtue of the information that historically and contemporaneously takes place by virtue of our online infrastructure. The spreading of information is no doubt a public good and is just as critical as infrastructure in the sense of developing a more modern and free society. While concern was raised about what the internet would be used for, it was the medium that satisfied the SoE, not the message. Note: Decary in dissent quite rightly brings up the fact that there is no guide or limitation to the means through which the freenet would be used. The majority claims that the bridge is a bridge no matter if highwayman or church goers use it, yet here the medium could in fact be completely divorced from any educational purpose or benefit to society. Holding: Still charitable. Vancouver Society of Immigrant and Visible Minority Women v MNR Facts: Supra – Concerns regarding non-charitable purposes Non charitable purposes are ok as long as they are necessary, ancillary or incidental in the pursuit of the haritable purpose Here the women used the word “conducive” – very broad and unclear, very easy for something to be conducive but not necessary, could even be its own purpose if construed broadly enough This was especially damning given the various non-charitable activities they participatedin. 4th Head: Other Purposes Not unlimited – restrictive in that it needs to satisfy the spirit and intendment Have wide perview to find analogies either here or in other jurisdictions Need to be mindful of exceptions that kick you out (sports) Need to also be mindful of how income and property is used in the discretion of the trustee or directors Need to show there is a real public benefit (usually through evidence) Here they would have been better off if they targeted more specifically people at risk or being prejudiced Common law has to be stringent as a charitable tax benefit essentially serves as a form of public subsidy. With the public helping to foot your bill, your goals must be pure so to speak. Sports already get huge subsidies, are a far more large and nebulous group than other charities Ultimately, there may need to be legislative change as trust law considerations and tax law considerations inform one another but are not necessarily right in fulfilling each others purposes AYSA Amateur Youth Soccer Association v Canada Facts: AYSA’s purpose was to promote amateur soccer in Ontario for the betterment of physical, mental and social benefits, including sportsmanship and fairplay. It could not register as an amateur athletic organization due to being stuck in Ontario so it applied for charitable registration and was denied Issue: Is the promotion of sport within the contemplation of the SoE? Ratio: As part of the test to determine whether something can be recognized at charitable, one can look at the trend of cases to see if the interpretation can be supported currently or is soon to be supported. It may be supported if it is an incremental change Test Court must consider trends of cases and reason by analogy whether the current case is inline with these Examine certain accepted anomalies to see if it lines up Cross check whether the income and property in question can be applied for purposes falling outside the scope of charity Whether it would be an incremental change Must be a public benefit Analysis: It was conceded that sports historically have not been understood to have been charitable, specifically as a mere sport. There were some cases where sport when linked to one of the three charitable heads was found to be ok (analogy to kids going to camp). Unfortunately the general trend was to say that sporting, while beneficial, is not enough to make an organization charitable. While some anomalous cases presented themselves, AYSA would not be an incremental step if granted status given 21 percent of all non-profits were sports related. Note: Once again, protecting the tax base is a huge consideration. Holding: No registration sons Exclusivity Law and Equity Act – S.47 Directory: wp-content -> uploads -> gravity forms -> 1-7d6c8355b7f07846e8789d85deabdb60 -> 2016 gravity forms -> Earl E. Klein Jr gravity forms -> Narrative of how the entry meets the award criteria – July 28, 2016 gravity forms -> Revonda M. Baldwin gravity forms -> Air Atlanta Icelandic November 2006 – Current 2016 -> Ip master Guide 1-7d6c8355b7f07846e8789d85deabdb60 -> Insurance Law can Download 0.79 Mb. Share with your friends:
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