Date: 19991021
Docket: A-912-97
(A-913-97 & A-914-97
CORAM: DESJARDINS, J.A.
MCDONALD, J.A.
SEXTON, J.A.
BETWEEN:
GLEN M. WOOLNER
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
- and -
THE ONTARIO ALLIANCE OF CHRISTIAN SCHOOLS SOCIETIES
Intervenor
Heard at Toronto, Ontario, on Thursday, October 21, 1999
Judgment Delivered Orally from the Bench at Toronto, Ontario on Thursday, October 21, 1999
REASONS FOR JUDGMENT BY: SEXTON J.A.
Date: 19991021
Docket: A-912-97
(A-913-97 & A-914-97)
CORAM: DESJARDINS, J.A.
MCDONALD, J.A.
SEXTON, J.A.
BETWEEN:
GLEN M. WOOLNER
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
- and -
THE ONTARIO ALLIANCE OF CHRISTIAN SCHOOLS SOCIETIES
Intervenor
REASONS FOR JUDGMENT
(Delivered Orally from the Bench at
Toronto, Ontario on Thursday, October 21, 1999)
SEXTON J.A.
[1] The applications A-912-97, A-913-97 and A-914-97, were heard together and this set of reasons applies to all three dockets.
[2] These applications are for judicial review of the decision of Hamlyn T.C.J. in which he held that contributions made by the applicants to the First Mennonite Church could not be considered gifts to the extent they reflected payments of tuition for secular education. He held that the balance of the applicants" contributions could be treated as charitable donations.
Facts
[3] In 1992, Messr. Woolner, Overduin and Burkhardt (the "taxpayers") made contributions to the First Mennonite Church (the "Church"). The Church had established a student mutual aid program and the taxpayers designated their contributions to that program. The Church issued receipts for those contributions, pursuant to s. 1181 of the Income tax Act .
[4] The Church had established a Student Aid Committee (the "Committee") to determine which students should be provided with church-sponsored bursaries to attend various educational institutions, including Mennonite junior and senior high schools. The Committee determined as a policy matter that every student who was a member or the child of a member of the Church and who applied for a bursary should receive one. Parents of children have alway been represented on the Committee. It is also significant that a very small percentage of the Church congregation, all of whom were parents of children who obtained bursaries, donated a large part of the money contributed to the fund out of which the bursaries were paid.
[5] The Church disclosed the details of its program to Revenue Canada and there can be no suggestion of impropriety on the part of the Church or the taxpayers in the present case.
[6] The Tax Court Judge disallowed the portion of money which the parents had donated to the Church on the basis that their contributions were not "gifts" since they were made with a view to obtaining a material advantage.
[7] This Court has held that a gift, within the meaning of the common law, is a voluntary transfer of property from one person to another gratuitously and not as the result of a contractual obligation without anticipation or expectation of material benefit1. In the present case, it is clear that the contributions were voluntary. The main issue for determination is whether or not the contributions were made with the anticipation of a benefit or advantage of a material nature.
[8] In our view, the circumstances of this case are very similar to those in The Queen v. Zandstra, 74 D.T.C. 16 (T.D.), which Stone J.A. followed in McBurney. In Zandstra, the taxpayer made contributions to a school called the "Canadian Christian School." At the time he made those contributions, two of his children attended the school.
[9] The parents in the Zandstra case testified that "they felt a moral obligation to children other than their own which was reflected in their donations to the school society." Heald J. noted that "the Society operates on the basis that the members will pay what they can, based on their own consciences."
[10] Nevertheless, Heald J. concluded that "the payments made by these parents to the School were not payments made without consideration and cannot therefore be considered "gifts" [...]." He held that the taxpayer had "received consideration in the form of education of their children in a separate Christian school in discharge of their duties as parents as they conceived them to be."He then added that "each parent here received a consideration, i.e. , the Christian education of his children." In McBurney , Stone J.A. quoted from Heald J."s judgment in Zandstra , and then explained that "here, too, the respondent saw it as his Christian duty to ensure his children receive the kind of education these schools provided." Therefore, in Stone J.A."s view, the contributions made by the parents in McBurney were not gifts.
[11] In our view, the Zandstra case cannot be distinguished from the circumstances of this case. The taxpayers in this case made their contributions to the Church with the anticipation that their children would be provided with a bursary. While a parent could theoretically not pay any money to the Church for their child to receive a bursary, all parents would also presumably understand that if each and every parent refused to donate money to the Church, there would be insufficient money available to provide students with bursaries.
[12] The taxpayers have argued there is no link between the contributions made and the bursaries awarded. There is clear evidence that such a link existed. When bursaries were being applied for, a request was made that a pledge form also be filled out at the same time. Further in a report by the Student Aid Committee it is stated "It is assumed that the student and/or parents will contribute as much as they are able to the fund". In addition after pledges were made donors were reminded of their pledge when it had not been fully fulfilled.
[13] The taxpayers here argue also that since their children could have been provided a free education in publicly-funded high schools, there was no material benefit. We disagree. These taxpayers desired to have their children schooled in a particular way. Their contributions guaranteed that result. This constituted a material benefit to the taxpayers.
[14] We agree with the reasons of the learned Tax Court Judge in this case and therefore dismiss these applications with costs.
"J. Edgar Sexton"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKETS: A-912-97
| STYLE OF CAUSE: GLEN M. WOOLNER |
Applicant
| THE ATTORNEY GENERAL OF CANADA |
Respondent
| THE ONTARIO ALLIANCE OF CHRISTIAN SCHOOLS SOCIETIES |
Intervenor
DATE OF HEARING: THURSDAY, OCTOBER 21, 1999
PLACE OF HEARING: TORONTO, ONTARIO
| REASONS FOR JUDGMENT BY: SEXTON J.A. |
Delivered at Toronto, Ontario
on Thursday, October 21, 1999
| APPEARANCES: Mr. Patrick J. Boyle and |
SOLICITORS OF RECORD: Fraser Milner
| Deputy Attorney General of Canada |
FEDERAL COURT OF APPEAL
Date: 19991021
Docket: A-912-97
(A-913-97 & A-914-97)
BETWEEN:
Applicant
| THE ATTORNEY GENERAL OF CANADA |
Respondent
| THE ONTARIO ALLIANCE OF CHRISTIAN SCHOOLS SOCIETIES |
Intervenor
__________________
1 The Queen v. McBurney 85 D.T.C. 5433.
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