National Foundation for Christian Leadership v. Canada (Minister of National Revenue), 2005 FCA 246

Date: 20050623

Docket: A-708-04

Citation: 2005 FCA 246

CORAM:        LÉTOURNEAU J.A.

SEXTON J.A.

SHARLOW J.A.

BETWEEN:

                        NATIONAL FOUNDATION FOR CHRISTIAN LEADERSHIP

                                                                                                                                            Appellant

                                                                           and

                                       THE MINISTER OF NATIONAL REVENUE

                                                                                                                                        Respondent

                                   Heard at Vancouver, British Columbia on June 23, 2005.

             Judgment delivered from the Bench at Vancouver, British Columbia on June 23, 2005.

REASONS FOR JUDGMENT OF THE COURT BY:                                        LÉTOURNEAU J.A.

SEXTON J.A.

SHARLOW J.A.

Date: 20050623

Docket: A-708-04

Citation: 2005 FCA 246

CORAM:        LÉTOURNEAU J.A.

SEXTON J.A.

SHARLOW J.A.

BETWEEN:

                        NATIONAL FOUNDATION FOR CHRISTIAN LEADERSHIP

                                                                                                                                            Appellant

                                                                           and

                                       THE MINISTER OF NATIONAL REVENUE

                                                                                                                                        Respondent

                                     REASONS FOR JUDGMENT OF THE COURT

              (Delivered from the Bench at Vancouver, British Columbia on June 23, 2005.)

SHARLOW J.A.

[1]                On September 28, 2004, on the ex parte motion of the Minister, a Judge of the Federal Court made an order under subsection 231.2(3) of the Income Tax Act, R.S.C. 1985, C. 1 (5th Supp.), authorizing the Minister to require the National Foundation for Christian Leadership to provide certain information relating to its donors. After receiving the requirement letter, the Foundation applied under subsection 231.2(6) for an order reviewing and cancelling the September 28, 2004 order. That motion was dismissed in an order dated December 17, 2004. The reasons are reported as Canada (Minister of National Revenue - M.N.R.) v. National Foundation for Christian Leadership, [2005] 1 C.T.C. 185, 2005 D.T.C. 5034 (F.C.). The Foundation now appeals the December 17, 2004 order.

[2]                The September 28, 2004 order and the resulting requirement letter arose from an audit of the Foundation. The Minister became concerned that a particular program might involve donations of money to the Foundation that would not qualify as gifts, and therefore would not qualify for a tax credit, because of the expectation of a benefit as consideration. It appeared to the Minister that the Foundation was issuing official tax receipts for all such donations.

[3]                The issue before the Judge was whether the September 28, 2004 order was justified by the evidence presented by the Minister in support of the ex parte motion. The Judge found that it was.

[4]                The central dispute is whether the evidence presented by the Minister in support of the ex parte motion established that the Minister was seeking the required information to verify compliance by the donors with any duty or obligation under the Income Tax Act. That is the condition in paragraph 231.2(3)(b) of the Income Tax Act for the granting of a judicial authorization to require information about unnamed persons. The Judge was satisfied that the requirement related initially to the audit of the Foundation but that if further investigation disclosed some impropriety in the issuance of receipts, an audit of the donors would be virtually automatic because the Minister would be obliged to determine whether any donors had made a claim for a tax credit on the basis of an improper receipt. He concluded that the Minister was seeking the donor information for the statutory purpose. That conclusion is correct in law and is supported by the record.

[5]                It is also argued for the Foundation that the September 28, 2004 order should have been set aside because the Minister failed to provide the Federal Court with full and fair disclosure. This is based in part on the contention that the affidavit evidence did not address the portion of the requirement that referred to donor forms and related information. The Judge found that there was an omission that regard, but he did not consider the omission to be sufficiently serious to warrant setting aside the September 28, 2004 order. That conclusion was open to the Judge on the material before him.

[6]                After reviewing the record and considering the submissions of counsel for the Foundation, we find no basis for the intervention of this Court. This appeal will be dismissed with costs.

                                                                                        "K. Sharlow"

________________________________

J.A.