Dockets: A-311-25
A-312-25
Citation: 2026 FCA 166
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CORAM:
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GLEASON J.A.
BIRINGER J.A.
ROCHESTER J.A.
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Docket: A-311-25
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BETWEEN:
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BARRY MALONE
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Appellant
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and
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HIS MAJESTY THE KING
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Respondent
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Docket: A-312-25
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AND BETWEEN:
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BRANDON MALONE
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Appellant
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and
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HIS MAJESTY THE KING
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Respondent
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REASONS FOR JUDGMENT
BIRINGER J.A.
[1] Barry Malone and Brandon Malone each appeal from a judgment dated March 27, 2025 of the Tax Court of Canada. The Tax Court heard the appeals based on common evidence and issued common reasons for judgment: 2025 TCC 43 (TC Reasons). The Tax Court found that purported charitable donations made by Barry and Brandon Malone to the Global Learning and Gifting Initiative (GLGI) were not eligible for donation tax credits claimed by them under section 118.1 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) and dismissed the appeals. In this appeal, the parties filed separate memoranda of fact and law, but Barry Malone made common submissions at the hearing on his own behalf and on behalf of Brandon Malone. These are common reasons for both appeals.
[2] Under the GLGI program, participants make a cash contribution, purportedly receive software licenses with a value many times greater than the cash contribution, which are then donated to a participating GLGI charity. Two tax receipts are issued, one for the cash paid and another for the purported value of the software licenses.
[3] Donations made to the GLGI have been the source of approximately 1,500 appeals in the Tax Court, possibly the “most litigated charitable donation program/initiative/scheme/sham (depending on one's perspective) before the Tax Court”
: TC Reasons at para. 2. Mariano v. The Queen, 2015 TCC 244 [Mariano], the leading case concerning the GLGI, was decided a decade ago, but the principles established have been applied and upheld repeatedly by the Tax Court and by our Court in other GLGI appeals: see, for example, Hassall v. The King, 2026 TCC 98; Aidoo v. The King, 2025 TCC 100; Bacchus v. The King, 2024 TCC 62; Walby v. The King, 2023 TCC 164; Tudora v. The Queen, 2020 TCC 11; Aslam v. The King, 2024 FCA 193 [Aslam]. Many decisions in GLGI appeals are unreported as the trial judges gave oral reasons for judgment: Kelly v. The King, 2026 TCC 53 at footnote 3.
[4] In not one case has a taxpayer successfully challenged the denial of a donation tax credit.
[5] The appellants allege that the Tax Court committed several errors. At the hearing, the appellants focused on their allegation that the Court’s reasons were insufficient, relying on R v. Sheppard, 2002 SCC 26 [Sheppard 2002]. The appellants referred to what they said was a missing “middle step”
between conclusory statements in the Tax Court’s reasons and the underlying evidence.
[6] The appellants also submit that the Tax Court erred in concluding that: (a) they lacked “donative intent”
, one of the necessary elements of establishing a charitable gift: Friedberg v. R., [1991] F.C.J. No. 1255 (F.C.A.) at para. 4; Mariano at para. 17; (b) the software had nominal value; and (c) they did not own the software licenses. The appellants contend that they provided uncontradicted testimony and other evidence to the contrary and that the Tax Court failed to address this evidence and inappropriately relied on the Court’s findings in Mariano.
[7] The standard of review for the Tax Court’s judgment is that set out in Housen v. Nikolaisen, 2002 SCC 33: questions of law are reviewable for correctness and questions of fact or of mixed fact and law, absent an extricable question of law, are reviewable for palpable and overriding error. In addition, as these appeals arise from the Tax Court’s informal procedure, the appellants must establish that any factual error was made “in a perverse or capricious manner or without regard for the material before it”
: Federal Courts Act, R.S.C. 1985, c. F-7, para. 27(1.3)(d).
[8] The arguments made on the alleged substantive errors of the Tax Court (aside from the sufficiency of reasons) all relate to factually suffused findings, based on assumptions of fact made by the Minister and the evidence in this case, as in Aslam (at para. 2). While the appellants seek to avoid the highly deferential standard applicable to this Court’s review of these findings by alleging insufficiency of reasons and asking us to remit the matter back to the Tax Court, there is no basis for us to do that. The Tax Court did not err in its findings, and its reasons are sufficient.
[9] On the issue of donative intent, the appellants submit that the Tax Court did not consider testimony about their charitable intent regarding the GLGI transactions or their broader history of charitable donations. The appellants’ general history of charitable giving is not relevant to the issue of “donative intent”
regarding the GLGI and the Tax Court did not err in failing to consider this or explain why. While a taxpayer’s subjective intent regarding the transaction at issue may be relevant, the test for donative intent is ultimately an objective one. It considers whether the donor intended to impoverish themselves, based on all the circumstances: Symes v. Canada, [1993] 4 S.C.R. 695 (S.C.C.) at p. 736; Walby v. Canada, 2025 FCA 94 at para. 50. The Tax Court properly applied this test, expressly considered the appellants’ “win-win”
testimony that included a desire to help people in need (TC Reasons at para. 26), and concluded that the expectation of a tax refund significantly exceeding the cash contributed meant that they lacked donative intent: TC Reasons at paras. 23–26. There is no reviewable error in that conclusion.
[10] On the Tax Court’s valuation finding, while the Court noted that the appraisals submitted by the appellants were identical to those submitted by the taxpayers in Mariano, the Tax Court directly addressed the appraisals submitted by the appellants in the matter at hand. The Tax Court found the appraisals to be misaligned with the program version years and the value of the licenses to be “infinitesimally small”
compared to the amount claimed on the donation receipts: TC Reasons at paras. 15 and 33. Thus the Tax Court did not improperly rely on factual findings from Mariano. The record supports the Tax Court’s conclusion on the misaligned date of these documents, but it is also worth noting that they address a different set of transactions than in the GLGI—the “Global Learning Systems”
transactions and software.
[11] The appellants also submit that the Tax Court erred in finding “no further given value”
of the software (in addressing the appellants’ donative intent) and directed the Court to Exhibit E from the Tax Court record, “Assignment of License Dated October 8, 2010”
. They claim this is a valuation within range for the relevant taxation years. Exhibit E is not a valuation, but only states certain “appraised values”
. When offered as evidence at the Tax Court, the appellants were unable to identify who authored the document. Thus, the Tax Court did not err in concluding that there was “no reliable evidence”
to suggest that the software was worth anything other than a fraction of its “receipted value”
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[12] Regarding ownership of the software licenses, the Tax Court found the appellants’ testimony vague and inexact, concluding that there was “no evidence of ... actual possession, dominion or control”
over the “mysterious software”
: TC Reasons at para. 35. The appellants allege that contrary to the Tax Court’s conclusion, they did more than “limited viewing”
of the software and had access to it. That is not evidence of ownership, but more importantly, as this Court reminded in Aslam (at para. 3), this Court does not reweigh evidence on an appeal. The Tax Court engaged directly with the appellants’ testimony and concluded that the Minister’s assumption that they did not own the software licenses was unassailed: TC Reasons at para. 35. In a tax appeal, the general principle is that the initial onus is on the taxpayer to disprove the assumptions of fact made by the Minister in assessing the taxpayer: Hickman Motors Ltd. v. R, 1997 CanLII 357 (S.C.C.) at para. 92; House v. The Queen, 2011 FCA 234 at para. 30. There is no basis for this Court to intervene with the Tax Court’s findings.
[13] Finally, the Tax Court’s reasons were sufficient. The issues and the analysis are clearly and comprehensively laid out and summarized (TC Reasons at para. 36), providing a meaningful basis for appellate review: R. v. Sheppard, 2025 SCC 29 at para. 45 [Sheppard 2025], citing Sheppard 2002 at para. 42. The logical connection between “what”
was decided and “why”
it was decided is apparent: R. v. R.E.M., 2008 SCC 51 [R.E.M.] at para. 17.
[14] Reasons need not describe every piece of evidence or every argument made by each party: Hennessey v. Canada, 2016 FCA 180 at para. 10, and must be read together with the record, the parties’ submissions, and the history of the case: Sheppard 2025 at para. 46, citing R.E.M. at para. 17; Dnow Canada ULC v. Grenke Estate, 2020 FCA 61 at para. 21. With due regard to the record, there are no concerns with the adequacy of the Tax Court’s reasons.
[15] Therefore, I would dismiss the appeals with costs in the all-inclusive amount of $500 against each appellant.
“Monica Biringer”
“I agree.
Mary J.L. Gleason J.A.”
“I agree.
Vanessa Rochester J.A.”
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