Positive Action Against Pornography v. MNR, 88 DTC 6186, [1988] 1 CTC 232 (FCA)

Stone, J.:—This appeal is from the respondent's decision dated February 24, 1987 denying the appellant registration as a “charitable organization” pursuant to the provisions of paragraph 149.1(1)(b) of the Income Tax Act, R.S.C. 1952, c. 148 as amended by S.C. 1970-71-72, c. 63 and as further amended (the "Act"). The relevant provisions of that paragraph read:

149.1 (1) In this section, section 172 and Part V,

(a) . . .

(b) “charitable organization” means an organization, whether or not incorporated,

(i) all the resources of which are devoted to charitable activities carried on by the organization itself,

(ii) no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settlor thereof,

The appellant was incorporated under the Societies Act, R.S.A. 1980, c. S-18 by Certificate of Incorporation dated August 20, 1985, with the following objects:

2. The objects of the society are —

(a) To provide for the recreation of the members and to promote and afford opportunity for friendly and social activities.

(b) To acquire lands, by purchase or otherwise, erect or otherwise provide a building or buildings for social and community purposes.

(c) [deleted]

(d) To provide a meeting place for the consideration and discussion of questions affecting the interests of the community.

(e) To carry on a literary and debating club for the discussion of topics of general interest, and to encourage the practice of public speaking among its members.

(f) To procure the delivery of lectures on social, educational, political, economic and other subjects, and to give and arrange musical and dramatic entertainments.

(g) To establish and maintain a library and reading room.

(h) To provide all necessary equipment and furniture for carrying on its various objects.

(i) To provide a centre and suitable meeting place for the various activities of the community.

(j) [deleted]

(k) To sell, manage, lease, mortgage, dispose of, or otherwise deal with the property of the society.

(l) To provide educational material to the community regarding the issue.

In October 1985, an application for registration was submitted to the respondent who, in his reply of January 27, 1986, expressed two concerns. The first was that all of the objects in clause 2 with the exception of subclause (1) were of "a diverse general nature" bearing “little if any relationship to what would appear to be the actual purpose of this organization", and that some of them "are not necessarily charitable within the legally established concept of the term". In this connection, the respondent also indicated he was unable to further consider the application until clause 2 was formally amended, except for subclauses (b) and (k) which were viewed as “merely powers or enabling clauses" which could stand unamended. This request, however, appears not to have been further pursued.

The second reservation concerned a statement which accompanied the application, outlining the appellant’s activities as follows (Case Material, page 22) :

1) to develop and distribute educational material concerning the issue of pornography,

2) to initiate and promote projects that develop self-esteem

3) to respond to requests for information and recommendations from the federal, provincial, municipal governments, educational institutes, community organizations and the media.

The respondent expressed concern that these activities "in furtherance of its current object clause (1) will be exclusively educational in the charitable sense" and, accordingly, requested details of the appellant's current and proposed educational and other activities in order to better assess the application with reference to some of the material identified in but not accompanying the statement of activities. In its reply of March 20, 1986 the appellant submitted ten separate items of information, including a comprehensive Information Kit compiled by the appellant for distribution to the public upon request. This kit contains a good deal of material bearing upon the subject of pornography from various points of view and ends with a five page document entitled "What can you do?” It will be necessary to make further reference to its content and significance for this case in due course.

By letter of June 25, 1986, the respondent indicated on the basis of established principles of the common law governing charity, that it was “unlikely” the appellant would qualify for registration. The view was also expressed that the appellant's primary purpose as disclosed in the information submitted, was to provide educational material to the community regarding the issue of pornography and that this purpose could not be viewed as for "the advancement of education" in the charitable sense. In this context the respondent wrote (Case Material, pages 119-120):

In our view, the primary purpose of the Positive Action Against Pornography (Society) is not to educate in the charitable sense but to achieve social change. It appears that through its various activities the intent of the Society is to sway public opinion in support of an issue which must ultimately result in an attempt to affect legislation. As previously stated, when the primary purpose of an organization is to influence general opinion in favour of one view-point on a controversial issue, the courts have held that such an organization is not formed for exclusively charitable purposes. We would add that it is not enough that the approach employed by an organization to achieve its goals is by way of discussion, work shops, and information to the public; the purpose to which such activities are directed must itself be clearly and exclusively charitable if the organization is to qualify for registration under the provisions of the Income Tax Act. We are unable to conclude from the information provided that the end to which the objectives of the Society are directed are exclusively charitable.

A good deal of additional material was submitted by the appellant in its letter of July 30, 1986 in response to an invitation for further written representations. However, by letter of September 10, 1986 the respondent rejected the application outright, on the basis that it could not be considered for the advancement of education in the charitable sense. He wrote (Case Material, page 184):

In our view, the Society does not restrict its role to that of an educational charity as it is not concerned with education for its sake but is, rather, concerned with creating and stimulating awareness of the social problem created by pornography. In other words, it is our view that the imparting of knowledge contemplated by the applicant is inextricably mixed with persuasion to such an extent that it is a non- educational activity. While it is recognized that there is inevitably some bias in all education and that an element of persuasion is common, it is the degree of persuasion that precludes the bestowing of charitable status.

The basis for rejecting the application was further elaborated in the same letter (Case Material, pages 185-86):

Consequently, it is our view that the primary purpose of the Society is not to educate in the charitable sense but to achieve social change. Through its various activities, as evidenced by the above-noted statements (which is not all exhaustive) we remain convinced that the intent of the Society is to sway public opinion in support of minimizing and possibly eliminating pornography from our society.

The degree of bias and persuasion present in the material submitted by the Society clearly places its ultimate goals within the category of political activities in the broad sense of that term. An organization operated for primarily political purposes would not be considered charitable at law. We do not suggest that the applicant, itself, is agitating for a change in legislation affecting the issue of pornography. An organization need not go that far to be categorized as political in nature.

Further, although the Society included in its Information Kit essays for and against legislation, it remains our view that the material submitted is permeated with bias and persuasion to the extent that we are unable to conclude that the end to which the goals of the Society are directed are exclusively charitable. It is not enough that the approach employed by an organization is by way of discussion, workshops and information to the public; the purpose to which such activities are directed must itself be clearly and exclusively charitable if the organization is to qualify for charitable registration.

It should be noted that our decision in this matter is not related to the issue of whether the goals of the applicant are morally or socially right or wrong. Our concern is simply to ensure that the tax benefits of registration are made available only to those organizations which operate within the legal parameters of charity.

Notwithstanding this decision, the application was further reviewed in the light of still more representations. However, by his letter of February 24, 1987 the respondent confirmed his earlier decision, as follows (Case Material, page 207) :

Notwithstanding that the approach employed by the organization to achieve its goals is by way of dissemination of information, it is our view that the Society's emphasis is on decrying pornography's value and on building an anti-pornography attitude of mind. I regret to advise you that we remain of the view expressed in our previous letters that the Society's resources are devoted in large measure to promoting a change in the public’s attitude and treatment of pornography.

The appellant makes two basic attacks on the decision. First, it says that the material supports its case that its activities are directed toward "the advancement of education” and, secondly, that the respondent ought to have considered whether its purposes are otherwise beneficial to the community in a charitable sense. In order to properly assess the relative merits of these attacks, they must be viewed in the light of applicable common law principles, the definition of the word “charity” found in the Act furnishing little or no assistance in answering the questions we are called upon to answer on this appeal. Paragraph 149.1(1)(d) merely defines the word as meaning "a charitable organization or charitable foundation”, both of which terms are in turn defined in paragraphs (a) and (b) respectively of that same subsection but not in any helpful way. Instead, the Act appears clearly to envisage a resort to the common law for a definition of “charity” in its legal sense as well as for the principles that should guide us in applying that definition. In Native Communications Society of B.C. v. M.N.R., [1986] 3 F.C. 471; [1986] 2 C.T.C. 170, this Court made reference to the common law definition of charity as follows, at pages 478-79 (C.T.C. 173-74):

The starting point for a discussion of what may or may not constitute a good charitable purpose is the decision of the House of Lords in the case of Commissioners of Income Tax v. Pemsel, [1891] A.C. 531 and, in particular, the legal meaning of the word “charity” given by Lord Macnaghten, at page 583 of the report:

How far then, it may be asked, does the popular meaning of the word "charity" correspond with its legal meaning? “Charity” in its legal sense comprises four principal divisions: trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads.

That definition has been applied time after time in this country and has been approved by the Supreme Court of Canada (see Guaranty Trust Company of Canada v. Minister of National Revenue, [1967] S.C.R. 133, at page 141). A purpose, to be a good "charitable" one, must possess a charitable nature within "the spirit and intendment" of the preamble to the Statute of Elizabeth entitled "An Acte to redresse the Misemployment of Landes Goodes and Stockes of Money heretofore given to Charitable Uses”. That statute was enacted in England in 1601 during the reign of Elizabeth I as 43 Eliz. 1, c. 4. Nowadays, it is generally known to this branch of the law simply as the “Statute of Elizabeth”. It is unnecessary to recite the whole of that preamble and perhaps also undesirable to attempt its reproduction in the original form and style. I prefer instead to do as Slade J. did in McGovern v. Attorney-General, [1982] Ch. 321, at page 332 where he put the statute's list of charitable objects in modern English as follows:

. . . the relief of aged, impotent, and poor people . . . maintenance of sick and maimed soldiers and mariners, schools of learning, free schools, and scholars in universities . . . repair of bridges, ports, havens, causeways, churches, seabanks and highways . . . education and preferment of orphans .. . . relief, stock or maintenance for houses of correction . . . marriages of poor maids .. . supportation, aid and help of young tradesmen, handicraftsmen and persons decayed . . . relief or redemption of prisoners or captives, and for aid or ease of any poor inhabitants concerning payments of fifteens, setting out of soldiers and other taxes.

With this in mind, I turn now to consider the argument that the appellant is constituted and operated for "the advancement of education”, confining myself to the precise issue so as not to prejudice any trust that might otherwise meet the law's requirements. I should say parenthetically that nothing in the constituting document tells us what is "the issue” that is mentioned in clause 2(1), though it is undoubtedly pornography. Indeed, that much may be readily inferred from the appellant's corporate name which makes clear that the organization is at any rate “against pornography". So far as I am aware, there has never been in this country a case deciding that purposes and activities of the kind here under review are charitable. In England, advancement of education has been fairly broadly viewed, being held to embrace not only the training of the mind as such but, as Buckley, L.J. said in Incorporated Council of Law Reporting for England and Wales v. Attorney General and Others, [1972] Ch. 73 (C.A.), at page 102, "the improvement of a useful branch of human knowledge and its public dissemination”. I am quite unable to find in the record before us anything pointing to “advancement of education" in its legal sense, for neither formal training of the mind nor the improvement of a useful branch of human knowledge is here present. There is simply the presentation to the public of selected items of information and opinion on the subject of pornography. That, in my view, cannot be regarded as educational in the sense understood by this branch of the law.

I move then to consider the second attack on the decision. It is here said that the appellant qualifies for registration under Lord Macnaghten's fourth head of charity and, moreover, that the respondent utterly failed to address that possibility. I can deal with this latter suggestion shortly. Though, undoubtedly, the ground for registration most relied upon was "advancement of education”, the respondent appears also to have taken account of the possible application of this fourth head. In his letter of June 25, 1986, for example, the respondent referred broadly to common law principles governing charity including "other purposes beneficial to the community as a whole in a way which the law regards as charitable”, and then went on to invite "further written representations as to why this organization should be granted . . . registration” under the Act. Though the debate continued to centre on the educational head, this is hardly a reason for condemning the respondent in not expressly dealing with the fourth head of charity, especially as the appellant itself did not see fit to pursue it. I think the only proper way of approaching the question is on the basis that this head was in fact considered and was rejected although, in the circumstances, not expressly.

In discussing this head of charity, I respectfully refer at the outset to the following views expressed on behalf of this Court in the Native Communications Society case, at pages 479-80 (C.T.C. 174):

A review of decided cases suggests that at least the following propositions may be stated as necessary preliminaries to a determination whether a particular purpose can be regarded as a charitable one falling under the fourth head found in Lord Macnaghten's classification:

(a) the purpose must be beneficial to the community in a way which the law regards as charitable by coming within the “spirit and intendment” of the preamble to the Statute of Elizabeth if not within its letter. (National AntiVivisection Society v. Inland Revenue Commissioners, [1948] A.C. 31 (H.L.), at pages 63-64; In re Strakosch, deed. Temperly v. Attorney-General, [1949] Ch. 529 (C.A.), at pages 537-538), and

(b) whether a purpose would or may operate for the public benefit is to be answered by the court on the basis of the record before it and in exercise of its equitable jurisdiction in matters of charity (National Anti-Vivisection Society v. Inland Revenue Commissioners (supra), at page 44-45, 63).

It was also noted in that case, and it bears repetition here as well, that the law of charity under this broad head especially is somewhat elastic, the courts being willing to recognize any relevant change in societal conditions or other special circumstance. Nevertheless, to be charitable, a purpose or activity must be so in a way that the law regards as charitable. There are, no doubt, many purposes and activities that are beneficial to the community in a loose or popular sense though not in the legal sense i.e. that intended by Lord Macnaghten in The Commissioners for Special Purposes of The Income Tax v. Pemsel, [1891] A.C. 531; 3 T.C. 58, or as argued for by Sir Samuel Romilly in Morice v. The Bishop of Durham (1805), 10 Ves. 522, at page 532, namely, "objects of general public utility”.

The appellant submits that the subject of pornography has engaged the attention of Canadian society for some time now and particularly in the past few years, Parliament itself having seen fit, for example, to establish a Special Committee on Pornography and Prostitution whose report is referred to in the material before us. That the subject has also engaged the attention of the courts of this country faced with enforcing the criminal law, is illustrated by a recent decision of the British Columbia Court of Appeal in R. v. Red Hot Video (1985), 18 C.C.C. (3d) 1. And, as counsel for the respondent points out, a Bill is now pending before Parliament (copy of which he handed to the Court during argument) that seeks to amend the law on pornography by introducing a somewhat less restrictive definition to that which the appellant has proposed.

The essential points which counsel for the appellant seeks to make in oral argument as well as in paragraph 27 of his memorandum, is that the public "stands to benefit from the freest and fullest possible public analysis, examination, discussion and review of the issues presented and options available” and that, as the appellant's actions go to facilitate informed discussion and debate on the subject, they ought to be seen as charitable. An alternative argument is that these actions are charitable in any event because they are consistent with a widely accepted view in Canadian society that material condoning violence toward, and the degradation of, women and children is indeed pornographic in a criminal law sense, reference being made to the Red Hot Video case and to a decision of the Alberta Court of Queen's Bench in R. v. Wagner (1985), 36 Alta. L.R. (2d) 301, at pages 315-16, which was upheld on appeal ((1986), 43 Alta. L.R. (2d) 204; 26 C.C.C. (3d) 242). Counsel argues that ridding society of this kind of material or at least controlling and limiting its publication, circulation and use, can be considered as falling within the “spirit and intendment" of the preamble to the Statute of Elizabeth or, at all events, as analogous to objects already found by the courts to be charitable under Lord Macnaghten's fourth head of charity.

As for the first of these arguments, I must agree with the respondent that the purposes and activities of the appellant go well beyond being beneficial to the community in a legal sense. Try as I may, I am quite unable to see how the material in the Information Kit or the other supporting documentation accords with the appellant's claim of neutrality toward this admittedly divisive public issue. If anything, the material seems clearly to prove the contrary, being weighted very much in favour of greater state control rather than either maintenance of the status quo or relaxation of existing legal constraints. The respondent points out, quite fairly, that really only one piece of this material goes so far as to express an “anti-legislation” point of view, but that it simply counsels against reform by legislative action (Case Material, page 90 at page 95). The remaining material appears to advocate a rather strong anti-pornography bias, based no doubt in part on a deeply felt concern for the sort of violence and degradation I have already mentioned (see e.g. Case Material, at pages 40 and 41). That some of it is "political" in the broad sense which that word carries in this branch of the law, is also apparent. For example, it is supportive of “influencing legislators" (page 45), "improving the definition of obscenity in the criminal code" and "establish ing regulations" on pornography (page 53), lobbying “local politicians" and the "federal government" to bring about change in the law (page 61) and, generally, of changing public "attitudes and beliefs" toward pornography (page 107). It is quite true that quite a lot of this material was not produced by the appellant, but its inclusion in the Information Kit or the other documentation may suggest that the views it contains are in harmony with the appellant's own objectives. Significantly, that the appellant seeks legislative change of its own liking becomes even more apparent from the revisions it proposed to the Government of Canada on the "pornography" definition contained in the report of the Special Committee on Pornography and Prostitution. (Case Material, page 32)

The task of the Court under this head is a relatively narrow one. We are not called upon to decide what is beneficial to the community in a loose sense, but only what is beneficial in a way the law regards as charitable. I am satisfied from an examination of the material and of the decided cases that the appellant's primary purposes or activities cannot be classed as beneficial to the community in this latter sense but rather as political in the sense understood by this branch of the law. It must follow, therefore, that it fails eligibility as a “charitable organization". I shall refer to one of the recent cases which has discussed that sense of the word. In McGovern and others v. Attorney General and another, [1982] 2 W.L.R. 222; [1982] Ch. 321, after examining the previous authorities on the point, Slade, J. summed up the current position as follows, at pages 239-40 (Ch. 340):

. . . I therefore summarise my conclusions in relation to trusts for political purposes as follows. (1) Even if it otherwise appears to fall within the spirit and intendment of the preamble to the Statute of Elizabeth, a trust for political purposes falling within the spirit of Lord Parker’s pronouncement in Bowman's case can never be regarded as being for the public benefit in the manner which the law regards as charitable. (2) Trusts for political purposes falling within the spirit of this pronouncement include, inter alia, trusts of which a direct and principal purpose is either —

(i) to further the interests of a particular political party; or

(ii) to procure changes in the laws of this country; or

(iii) to procure changes in the laws of a foreign country; or

(iv) to procure a reversal of government policy or of particular decisions of governmental authorities in this country; or

(v) to procure a reversal of government policy or of particular decisions of governmental authorities in a foreign country.

This categorisation is not intended to be an exhaustive one, but I think it will suffice for the purposes of this judgment; I would further emphasise that it is directed to trusts of which the purposes are political. As will appear later, the mere fact that trustees may be at liberty to employ political means in furthering the nonpolitical purposes of a trust does not necessarily render it non-charitable. [1]

[Emphasis added in (ii) and (iv).]

A review of the material satisfies me that the appellant's purposes and activities fall within this concept as discussed in the decided cases and, accordingly, that they cannot be classified as charitable under Lord Mac- naghten's fourth head of charity.

This brings me to consider the alternative argument advanced under this head of charity. It is that by analogy to certain decided cases we should hold the appellant's purposes and activities to be charitable, seeing that any legislative change that may be advocated is in harmony with what the Canadian public and the courts perceive as pornographic i.e. material depicting violence and degradation. I do not see how this argument can prevail. In the first place, the material shows that the legal “definition” of pornography advocated by the appellant goes well beyond violence in the physical sense discussed in the cases, but would also embrace emotional and/or psychological harm. (Case Material, page 32). Indeed, the violence that would be caught by the definition of pornography proposed by the Bill now pending in Parliament, appears limited to “sexually violent conduct, including assault and any conduct in which physical pain is inflicted or apparently inflicted. . . ." Furthermore, for the very good reasons explained by Lord Parker in Bowman and others v. Secular Society, Limited, [1917] A.C. 406, a trust for alteration of the law has never been accepted as charitable. At page 442 he said:

The abolition of religious tests, the disestablishment of the Church, the secularization of education, the alteration of the law touching religion or marriage, or the observation of the Sabbath, are purely political objects. Equity has always refused to recognize such objects as charitable. It is true that a gift to an association formed for their attainment may, if the association be unincorporated, be upheld as an absolute gift to its members, or, if the association be incorporated, as an absolute gift to the corporate body; but a trust for the attainment of political objects has always been held invalid, not because it is illegal, for every one is at liberty to advocate or promote by any lawful means a change in the law, but because the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift. The same considerations apply when there is a trust for the publication of a book. The Court will examine the book, and if its objects be charitable in the legal sense it will give effect to the trust as a good charity: Thornton v. Howe 31 Beav. 14; but if its object be political it will refuse to enforce the trust: De Themmines v. De Bonneval (1828) 5 Russ. 288. If, therefore, there be a trust in the present case it is clearly invalid. The fact, if it be the fact, that one or other of the objects specified in the society's memorandum is charitable would make no difference. There would be no means of discriminating what portion of the gift was intended for a charitable and what portion for a political purpose, and the uncertainty in this respect would be fatal.

On this same subject, the appellant also relies on the provisions of subsection 149.1(6.2) of the Act which was adopted in 1986 but made retroactive to 1985. It reads:

(6.2) For the purposes of paragraph (1 )(b), where an organization devotes substantially all of its resources to charitable activities carried on by it and

(a) it devotes part of its resources to political activities,

(b) such political activities are ancillary and incidental to its charitable activities, and

(c) such political activities do not include the direct or indirect support of, or opposition to, any political party or candidate for public office,

the organization shall be considered to be devoting that part of its resources to charitable activities carried on by it.

In my view, however, this subsection is of no assistance as the appellant's purposes and activities are not “ancillary and incidental” but, rather, are primarily of a political nature and therefore non-charitable.

I would dismiss this appeal but, in the circumstances, without costs, there appearing no "special reasons" required by Rule 1312 of the Federal Court Rules for making a different order.

Appeal dismissed