Mogan,
T.CJ.:—
The
issue
in
this
case
is
a
question
of
law
construing
paragraph
110(i)(a)
and
subsections
(1.2)
and
(2.1)
of
section
110
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
as
those
provisions
applied
to
the
1982
and
1983
taxation
years.
I
am
not
concerned
with
subsequent
amendments
to
section
110.
The
statutory
provisions
are
set
out
below
following
a
summary
of
the
facts.
The
appellants
are
the
executors
and
trustees
(the
"executors")
of
the
Estate
of
the
late
Jeffrey
O'Brien
(the
"Testator")
who
died
on
August
4,
1983.
Letters
Probate
were
granted
on
October
19,
1983.
Under
the
terms
of
the
Testator's
will,
he
gave
the
whole
of
his
estate
to
his
executors
upon
trust
to
convert
the
same
into
money;
to
invest
such
money;
to
pay
his
debts
out
of
the
capital
of
his
estate;
and
to
pay
any
or
all
of
the
income
from
the
investments
as
the
executors
in
their
absolute
and
uncontrolled
discretion
consider
advisable
to
or
for
the
benefit
of
the
Testator's
nephew,
Michael
O’Brien,
during
his
lifetime.
The
will
also
contained
the
following
provisions.
For
the
first
21
years
after
the
death
of
the
Testator,
any
annual
income
not
paid
to
Michael
O'Brien
was
to
be
accumulated
and
added
to
the
capital
of
the
estate.
If
Michael
O'Brien
survived
the
Testator
for
21
years,
any
annual
income
after
the
21st
year
not
paid
to
Michael
O'Brien
was
to
be
paid
to
St.
Augustine's
Seminary,
a
charitable
organization
in
Metropolitan
Toronto
and
a
registered
charity
within
the
meaning
of
paragraph
110(1)(a)
of
the
Income
Tax
Act.
Upon
the
death
of
Michael
O’Brien,
the
residue
of
the
estate
plus
any
accumulated
income
was
to
be
paid
to
St.
Augustine's
Seminary.
There
is
no
clause
in
the
will,
which
would
permit
the
executors
to
encroach
upon
the
capital
of
the
estate
for
the
purpose
of
making
payments
to
Michael
O'Brien
or
to
the
Seminary
before
the
death
of
Michael
O’Brien.
The
statements
of
account
administered
by
the
appellants
indicated
that,
at
the
date
of
the
Testator's
death,
the
estate
held
assets
valued
at
approximately
$558,700.
When
preparing
the
Testator's
1983
terminal
income
tax
return,
the
appellants
deducted
the
amount
of
$18,000
as
a
charitable
donation
to
St.
Augustine's
Seminary.
In
so
doing,
the
appellants
relied
on
subsection
110(2.1)
of
the
Income
Tax
Act.
The
appellants
also
claimed
an
additional
charitable
donation
of
$24,184
to
St.
Augustine's
Seminary
in
respect
of
the
Testator's
1982
taxation
year.
For
1982,
the
appellants
relied
on
subsection
110(1.2)
of
the
Income
Tax
Act.
The
respondent
disallowed
both
of
the
amounts
$18,000
and
$24,184
as
charitable
donations
on
the
basis
that
neither
the
value
of
the
income
interest
nor
the
value
of
the
residual
interest
of
the
estate
could
be
determined
with
any
certainty.
The
1982
and
1983
taxation
years
are
under
appeal
in
this
case
and
the
relevant
statutory
provisions
are
set
out
below:
110.
(1)
For
the
purpose
of
computing
the
taxable
income
of
a
taxpayer
for
a
taxation
year,
there
may
be
deducted
from
his
income
for
the
year
such
of
the
following
amounts
as
are
applicable:
(a)
the
aggregate
of
gifts
made
by
the
taxpayer
in
the
year
(and
in
the
five
immediately
preceding
taxation
years
to
the
extent
of
the
amount
thereof
that
was
not
deductible
in
computing
the
taxable
income
of
the
taxpayer
for
any
preceding
taxation
year)
to
(i)
registered
charities,
(ii)
.
.
.
not
exceeding
20%
of
the
income
of
the
taxpayer
for
the
year
computed
without
reference
to
subsection
137(2),
if
payment
of
the
amounts
given
is
proven
by
filing
receipts
with
the
Minister
that
contain
prescribed
information;
110.
(1.2)
For
the
purposes
of
paragraphs
(1)(a),
and
(b.1)
and
a
gift
made
by
an
individual
in
the
year
of
his
death
shall
be
deemed
to
have
been
made
by
him
in
the
immediately
preceding
year
to
the
extent
that
the
amount
thereof
was
not
deductible
in
computing
his
taxable
income
for
the
year
of
his
death.
110.
(2.1)
Where
a
taxpayer
who
died
after
1971
has,
by
his
will,
made
a
gift
to
a
donee
described
in
paragraph
(1)(a),
(b)
or
(b.1),
the
gift
shall,
for
the
purposes
of
this
section,
be
deemed
to
have
been
made
by
the
taxpayer
in
the
taxation
year
in
which
he
died.
Considering
first
the
provisions
of
subsection
110(2.1),
all
of
the
conditions
are
satisfied
because
(i)
the
Testator
died
after
1971;
(ii)
he
did
by
his
will
make
a
gift
to
St.
Augustine's
Seminary;
and
(iii)
the
Seminary
as
a
registered
charity
is
a
donee
described
in
paragraph
110(1)(a).
Once
the
conditions
are
satisfied,
subsection
110(2.1)
provides
that
"the
gift
shall
be
deemed
to
have
been
made
by
the
taxpayer
in
the
taxation
year
in
which
he
died".
The
respondent
concedes
that
the
remainder
interest
is
a
gift
to
a
registered
charity
but
argues
that
it
is
a
vested
and
defeasible
remainder
interest
because
of
certain
powers
granted
in
the
will
to
the
executors.
Specifically,
counsel
for
the
respondent
referred
to
the
following
powers
in
the
will.
Article
V
granted
broad
powers
to
deal
with
securities
including:
In
giving
to
my
Trustees
the
foregoing
powers,
it
is
my
intention
to
give
to
them
power
to
deal
with
the
interest
held
by
my
estate
in
any
company
or
corporation
to
the
same
extent
and
as
fully
as
I
could
do
if
I
were
alive.
Article
VII
granted
broad
powers
to
deal
with
real
estate.
Article
IX
granted
broad
powers
to
invest.
And
Article
XIV
granted
broad
powers
to
carry
on
a
business
including
power
to
encroach
upon
the
capital
or
income
of
the
estate
for
use
in
such
business.
The
inclusion
of
such
powers
in
a
trust
will
is
not
extraordinary.
Indeed,
such
powers
have
become
part
of
the
boilerplate
of
trust
wills.
A
testator
must
have
great
confidence
in
his
chosen
executors
and
those
boilerplate
powers
are
included
to
protect
the
executors
from
the
claims
of
beneficiaries.
The
inclusion
of
such
powers
in
a
will
is
not
an
open
invitation
to
imprudent
or
negligent
conduct
on
the
part
of
executors.
Robert
Kellough,
a
trust
officer
of
The
Canada
Trust
Company,
testified
as
a
witness
for
the
appellants.
He
is
a
long-time
employee
of
Canada
Trust
responsible
for
the
administration
of
about
300
estates
including
the
O'Brien
Estate.
Mr.
Kellough
produced
a
document
(Exhibit
A-2)
which
outlined
the
fiduciary
investment
policy
of
Canada
Trust
when
administering
property
for
some
third
party
like
the
O'Brien
Estate.
Needless
to
say,
such
policy
emphasized
prudence,
caution
and
the
duty
to
safeguard
the
trust
property.
In
particular,
Exhibit
A-2
contained
the
following
statements:
No
amount
of
authority
in
a
document
will
relieve
a
trustee
of
his
obligation
to
be
prudent.
(page
2)
The
Canadian
test
as
stated
by
a
legal
authority
(Underhill)
is
as
follows:
"The
trustee
must
exercise
the
degree
of
care
required
of
an
ordinary
prudent
man
who
invests
for
the
benefit
of
other
people
for
whom
he
feels
morally
bound
to
provide",
(page
3)
It
is
fundamental
to
trustee
law
that
the
trustee
must
hold
an
even
hand
between
beneficiaries.
A
trustee
must
be
impartial
between
the
life
tenant
who
is
entitled
to
the
income
of
the
trust
fund,
and
the
residuary
beneficiary
who
is
entitled
to
the
capital
upon
the
death
of
the
life
tenant.
This
rule,
considered
one
of
the
canons
of
trusteeship,
requires
that
the
trustee
must
not
show
favouritism
toward
one
beneficiary
against
another
and
necessitates
careful
and
constant
attention
to
see
that
the
trustee
is
neither
seeking
a
higher
annual
return
at
the
risk
of
capital,
or
unduly
safeguarding
principal
to
the
detriment
of
income:
(page
5)
Mr.
Kellough
explained
his
company's
policy
of
meeting
with
co-executors
on
a
regular
basis
to
determine
an
appropriate
balance
between
equity
and
fixed
income
investments.
They
decided
to
invest
up
to
60
per
cent
of
the
capital
of
the
O'Brien
Estate
in
equity
stock
in
"maximum
market
conditions"
but,
because
the
executors
concluded
that
maximum
market
conditions
did
not
exist,
only
47
per
cent
of
the
estate
capital
was
invested
in
equities.
Mr.
Kellough
also
produced
a
list
of
the
current
assets
of
the
estate
(Exhibit
A-4)
which
he
described
as
a
very
stable
investment
portfolio.
None
of
Mr.
Kel-
lough's
evidence
was
challenged
in
cross-examination.
The
only
other
witness
for
the
appellants
was
Robert
F.
McGlynn
who
was
accepted
by
the
Court
as
an
expert
witness
on
structured
settlements.
Mr.
McGlynn
is
an
employee
and
officer
of
McKellar
Structured
Settlements
Inc.
and
he
is
knowledgeable
in
the
area
of
valuing
periodic
payments
in
lieu
of
a
lump
sum
payment.
He
produced
a
written
report
of
the
McKellar
Company
dated
June
8,
1990
prepared
for
the
appellants’
solicitors.
The
thrust
or
the
McKellar
Report
appears
in
its
first
five
paragraphs:
Your
instructions
are
to
provide
you
with
the
fair
market
value
as
of
August
4,
1983
of
an
estate
worth
$558,700.00
which
is
to
revert
to
a
charity
at
the
end
of
a
life
interest.
To
be
specific
Michael
O'Brien
born
October
21,
1948
is
to
have
use
of
all
funds
generated
by
the
capital
of
$558,700
until
his
death.
At
that
time
the
estate
will
transfer
to
the
charity.
Two
things
must
be
calculated
in
order
to
give
you
a
specific
figure
for
the
date
of
August
4,
1983.
The
first
is
what
interest
rate
pertained
at
that
time.
This
is
easily
accessible.
Of
more
complexity
is
calculating
the
point
in
the
future
at
which
time
the
$558,700
would
be
available
to
the
charity.
The
most
reasonable
way
to
calculate
this
is
to
set
aside
an
amount
of
capital
which
if
deposited
on
August
4,
1983
would
produce
the
$558,700
upon
Mr.
Michael
O'Brien's
death.
This
necessitates
calculating
the
date
of
his
death.
Obviously
this
is
impossible
as
to
the
specific
life
of
Michael
O'Brien
but
is
statistically
possible
as
to
a
male
his
age
and
in
his
health.
In
fact,
this
is
how
life
insurance
actuaries
calculate
premiums
required
for
future
death
benefits.
On
August
4,
1983
Mr.
O'Brien
was
35
years
and
9
months
old.
Normal
life
expectancy
would
be
an
additional
37
years.
However,
Mr.
O'Brien
was
diagnosed
at
the
age
of
3
with
Osteogenesis
Imperfecta.
While
once
again,
no
one
knows
specifically
what
this
condition
will
do
to
Mr.
O'Brien's
life
expectancy
there
are
life
insurance
statistics
which
can
be
factored
into
this
calculation.
The
McKellar
Report
went
on
to
describe
the
sources
of
certain
medical
and
life
insurance
information
and
the
computations
which
permitted
the
author
to
conclude
that
$49,361.15
was
the
fair
market
value
as
of
August
4,
1983
(the
date
of
death
of
the
Testator)
of
an
estate
worth
$558,700
which
would
revert
to
the
Seminary
upon
the
death
of
Michael
O'Brien.
According
to
my
calculations,
the
McKellar
Report
was
not
accurate
in
stating
Michael
O'Brien's
age
on
the
valuation
date.
If
he
was
born
October
21,
1948,
then
I
think
he
was
34
years
(not
35)
and
9
months
old
on
August
4,
1983.
It
is
apparent
from
the
McKellar
Report
that
the
author
assumed
that
Michael
O'Brien
would
receive
all
of
the
income
from
the
estate
during
his
lifetime
even
though
the
executors
are
given
a
discretion
in
that
matter.
Mr.
Kellough
stated
that
all
of
the
annual
income
had
in
fact
been
paid
to
Michael
O'Brien
who
presented
a
budget
to
the
executors
as
to
his
needs.
Apparently,
he
is
confined
to
a
wheelchair.
In
any
event,
the
McKellar
Report
is
conservative
in
assuming
that
Michael
O'Brien
would
receive
all
of
the
income
from
the
estate
because
that
assumption
places
a
minimum
value
as
at
August
4,
1983
on
the
gift
which
vested
in
the
Seminary
on
that
date.
Any
other
assumption
concerning
an
allocation
of
annual
income
from
the
estate
would
increase
the
value
of
that
gift.
Mr.
McGlynn
acknowledged
in
cross-examination
that
the
McKellar
Report
was
prepared
without
seeing
the
will
or
having
any
legal
opinion
as
to
the
effect
of
the
will.
The
respondent
did
not
challenge
any
of
the
basic
assumptions
in
the
McKellar
Report
concerning
the
life
expectancy
of
Michael
O’Brien,
the
prevailing
rates
of
interest
or
the
actual
computation
of
fair
market
value.
The
Seminary
did
not
receive
any
payment
from
the
estate
at
the
date
of
death
(August
4,
1983)
or
in
any
of
the
intervening
years.
What
it
did
receive
was
a
right
to
the
capital
of
the
estate
and,
according
to
the
uncontradicted
evidence
of
the
McKellar
Report,
that
right
had
a
value
of
$49,361.15
at
the
date
of
death.
The
first
question
is
whether
the
broad
powers
granted
in
Articles
V,
Vil,
IX
and
XIV
of
the
will
should
be
regarded
as
powers
to
encroach
upon
the
capital
of
the
estate
which
could
dissipate
the
remainder
interest
left
to
the
Seminary.
Counsel
for
the
respondent
relied
on
the
decisions
of
the
Exchequer
Court
in
Halley
Estate
v.
M.N.R.,
[1963]
C.T.C.
108;
63
D.T.C.1090
and
Ansell
Estate
v.
M.N.R.,
[1966]
C.T.C.
785;
66
D.T.C.
5508.
In
Halley,
an
appeal
under
the
Estate
Tax
Act,
there
could
be
deducted
from
the
value
of
property
passing
on
death
the
value
of
any
gift
made
by
will
to
a
charitable
organization
where
such
gift
"can
be
established
to
have
been
absolute”.
The
deceased
William
Halley
had
given
in
his
will
a
power
to
encroach
on
the
capital
of
his
estate
for
the
benefit
of
his
sister.
The
Exchequer
Court
held
that
the
gift
to
the
charity
was
not
deductible
because
it
was
not
"absolute".
The
Halley
case
is
easily
distinguished
from
this
case
because,
in
the
O'Brien
will,
there
was
no
power
to
encroach
on
capital
for
the
benefit
of
a
named
beneficiary.
In
Ansell,
the
deceased
left
a
will
under
which
the
executors
were
to
invest
the
residue
of
the
estate
and
make
certain
monthly
payments
to
the
deceased's
sister
and
nephew
with
power
to
encroach
on
capital
if
necessary.
Upon
the
death
of
the
sister,
50
per
cent
of
the
residue
was
to
be
set
aside
to
provide
income
for
the
nephew
and
the
balance
was
to
be
distributed
to
three
designated
charities.
No
provision
was
made
in
the
will
for
the
disposition
of
excess
income
of
the
estate
during
the
lifetime
of
the
sister.
In
each
of
the
years
1958,
1959
and
1960,
the
estate
had
substantial
amounts
of
excess
income
which
were
taxed
by
the
Minister
in
the
hands
of
the
estate
under
subsection
63(2)
of
the
1952
Income
Tax
Act.
The
Ansell
case
is
about
the
possible
allocation
of
income
between
an
estate
and
three
charities
whereas
this
case
is
about
the
possible
deduction
of
an
amount
in
computing
taxable
income.
The
issue
in
Ansell
concerning
whether
a
charity
was
entitled
in
the
year
to
enforce
payment
of
the
amount
which
the
estate
sought
to
allocate
is
quite
different
from
the
issue
in
this
case
concerning
the
deductibility
in
computing
taxable
income
for
a
particular
year
of
a
charitable
gift
deemed
to
have
been
made
but
not
in
fact
made
in
that
year.
As
in
Halley,
the
Ansell
will
contained
a
specific
power
to
encroach
on
capital
for
the
benefit
of
two
named
beneficiaries.
I
do
not
find
the
decisions
in
Halley
or
Ansell
helpful
in
this
case
because
the
specific
power
to
encroach
on
capital
for
the
benefit
of
named
beneficiaries
in
those
two
decisions
has
no
parallel
in
the
O'Brien
will.
There
is
no
doubt
that
the
powers
granted
to
the
executors
in
Articles
V,
VII,
IX
and
XIV
of
the
will
are
very
broad
but
they
do
not
include
a
power
to
encroach
on
capital
for
any
named
beneficiary.
In
other
words,
there
is
no
individual
whom
the
Testator
wanted
to
protect
with
a
particular
level
of
income
to
the
extent
that
the
executors
could
encroach
on
capital
so
as
to
maintain
that
income.
In
like
manner,
no
such
protection
was
given
to
any
charity
including
the
Seminary.
The
only
specific
power
to
encroach
on
capital
is
in
Article
XIV
with
respect
to
carrying
on
a
business
and
the
relevant
words
are:
Without
being
liable
for
any
loss
occasioned
thereby
to
enter
into
or
continue
any
business
or
businesses
whether
or
not
owned
by
me
or
by
any
corporation
or
corporations,
including
any
business
which
I
may
own
or
in
which
I
may
be
interested
or
which
I
may
control
at
the
time
of
my
death,
.
.
.
and
my
Trustees
may
do
all
things
they
shall
in
their
absolute
and
uncontrolled
discretion
consider
advisable
for
the
carrying
on
of
any
such
business
or
businesses,
and
in
particular,
but
without
limiting
the
generality
of
the
foregoing:
(i)
they
may
employ
in
any
such
business
or
businesses
for
effectually
carrying
it
or
them
on,
or
withdraw
therefrom,
all
or
any
part
of
the
capital
or
income
of
my
estate
from
time
to
time,
with
or
without
taking
security;.
.
.
Article
XIV
appears
to
be
one
of
those
boilerplate
clauses
which
would
be
totally
unnecessary
in
the
vast
majority
of
wills.
In
the
absence
of
any
evidence
that
the
Testator
owned
a
business
at
the
date
of
death
which
he
desired
to
maintain
and
keep
within
his
family,
I
would
not
regard
Article
XIV
as
a
power
to
encroach
which
could
dissipate
the
remainder
interest
left
to
the
Seminary.
There
was
no
evidence
that
the
Testator
was
an
entrepreneur
or
ever
owned
a
business
at
any
time
in
his
life.
Therefore,
the
power
which
is
granted
in
Article
XIV
is
in
conflict
with
the
duty
of
executors
and
trustees
to
act
prudently.
Note
the
first
sentence
quoted
above
from
page
2
of
Exhibit
A-2.
In
Fales
v.
Canada
Permanent
Trust
Co.,
[1977]
2
S.C.R.
302;
70
D.L.R.
(3d)
257,
the
Supreme
Court
of
Canada
restated
the
requirement
of
prudence
for
trustees
in
these
words
at
page
268:
Every
trustee
has
been
expected
to
act
as
the
person
of
ordinary
prudence
would
act.
This
standard,
of
course,
may
be
relaxed
or
modified
up
to
a
point
by
the
terms
of
a
will
and,
in
the
present
case,
there
can
be
no
doubt
that
the
co-trustees
were
given
wide
latitude.
But
however
wide
the
discretionary
powers
contained
in
the
will,
a
trustee's
primary
duty
is
preservation
of
the
trust
assets,
and
the
enlargement
of
recognized
powers
does
not
relieve
him
of
the
duty
of
using
ordinary
skill
and
prudence,
nor
from
the
application
of
common
sense.
Having
regard
to
the
long
established
duty
imposed
on
trustees,
and
in
the
absence
of
any
power
to
encroach
on
capital
for
the
benefit
of
a
named
beneficiary,
I
hold
that
the
wide
powers
granted
to
the
appellants
as
the
Testator's
executors
create
no
greater
possibility
for
the
dissipation
of
the
capital
of
the
estate
than
any
other
reasonably
remote
possibility
like
the
sudden
collapse
of
the
stock
market,
excessive
inflation
over
a
period
of
years
or
the
failure
of
the
Canadian
economy.
Having
held
that
there
is
no
power
to
encroach,
and
that
the
capital
of
the
estate
should
be
regarded
as
passing
to
the
Seminary
on
the
death
of
the
life
tenant,
I
think
that
this
case
becomes
a
question
of
valuation.
The
respondent
called
no
evidence
to
challenge
the
value
of
the
gift
to
the
Seminary
expressed
in
the
McKellar
Report,
and
none
of
the
basic
assumptions
in
that
Report
was
proved
to
be
wrong.
I
therefore
accept
the
McKellar
Report
and
hold
that
the
value
of
the
gift
to
the
Seminary
as
at
August
4,
1983,
was
$49,361.15.
The
respondent's
last
argument
is
that
gifts
to
registered
charities
are
deductible
under
paragraph
110(1)(a)
only
if
payment
of
the
amounts
given
"is
proven
by
filing
receipts
with
the
Minister
that
contain
prescribed
information".
In
this
case,
the
Seminary
did
not
issue
a
receipt
to
the
appellants
for
1983
or
1982
because
it
did
not
receive
any
tangible
gift
from
the
estate
in
either
year.
Therefore,
the
appellants
cannot
comply
with
the
statutory
requirement
to
file
a
receipt
with
the
Minister
for
either
year.
If
I
am
to
disallow
the
deductions
for
1983
and
1982
because
the
appellants
have
not
filed
the
prescribed
receipts
and
will
never
be
able
to
file
them
because
the
Seminary
did
not
in
fact
receive
any
tangible
gift
from
the
estate
in
either
year
and
cannot
in
good
faith
issue
a
receipt
for
something
not
received,
I
would
permit
the
absence
of
a
receipt
to
cancel
what
I
regard
as
the
intended
effect
of
subsections
110(2.1)
and
110(1.2).
Conversely,
if
I
am
to
allow
those
deductions
in
order
to
give
effect
to
subsections
110(2.1)
and
110(1.2),
I
must
ignore
the
absence
of
the
receipts
required
by
paragraph
110(1)(a).
There
is
a
conflict
within
section
110
of
the
Income
Tax
Act
between
what
I
would
call
the
immediate
gift
in
paragraph
110(1)(a)
and
the
deferred
gift
in
subsection
110(2.1).
By
requiring
the
filing
of
a
receipt,
paragraph
110(1)(a)
assumes
an
immediate
transfer
of
a
tangible
gift
for
which
a
registered
charity
could
acknowledge
value
received
within
a
particular
year.
Subsection
110(2.1),
however,
assumes
that
a
taxpayer
has
made
a
gift
by
his
will
(possibly
a
deferred
transfer
of
tangible
value)
and
then
deems
the
gift
to
have
been
made
in
the
year
in
which
he
died.
If
the
gift
by
will
is
vested
and
not
defeasible,
it
is
only
a
right
to
property
and
therefore
intangible
at
the
time
of
death
and
for
some
period
thereafter.
Even
if
the
gift
by
will
were
an
immediate
bequest,
it
is
unlikely
that
any
tangible
value
would
be
transferred
to
the
charity
until
a
year
after
death
when
the
executors
would
have
brought
together
for
administration
the
assets
of
the
deceased.
And
if
the
gift
were
a
residuary
interest
after
a
life
estate
(as
in
this
case),
then
the
charity
would
not
receive
any
tangible
value
until
after
the
death
of
the
life
tenant.
Under
any
circumstances
then,
a
gift
made
by
will
to
a
registered
charity
will
not
necessarily
cause
that
charity
to
receive
in
the
year
of
death
any
tangible
value
for
which
it
could
issue
a
receipt.
Considering
this
conflict
within
section
110,
what
are
the
reasonable
expectations
of
the
statute?
When
a
tangible
gift
is
in
fact
made,
the
registered
charity
can
be
expected
to
issue
a
receipt
for
value
received
and
it
is
reasonable
to
expect
the
donor
to
comply
with
paragraph
110(1)(a)
by
filing
the
prescribed
receipt.
But
when
a
tangible
gift
is
not
in
fact
made
and
the
registered
charity
is
given
only
an
intangible
but
vested
future
interest
in
property,
the
charity
cannot
be
expected
to
issue
a
receipt
because
the
value
of
the
gift
can
frequently
be
determined
only
with
the
knowledge
of
many
facts
(like
the
age
and
health
of
the
life
tenant
as
in
this
case)
which
may
not
be
available
to
the
charity,
and
the
value
has
not
yet
been
received.
In
these
circumstances,
it
does
not
seem
reasonable
to
expect
the
donor
to
comply
with
paragraph
110(1)(a)
by
filing
the
prescribed
receipt.
As
I
construe
these
statutory
provisions,
the
requirement
of
a
receipt
in
paragraph
110(1)(a)
assumes
only
a
tangible
gift
(cash
or
property
like
land
or
a
work
of
art)
which
can
be
delivered
in
a
particular
taxation
year
and
which
is
relatively
easy
to
value;
and
that
requirement
does
not
assume
an
intangible
gift
(like
a
vested
future
interest
in
property)
which
cannot
be
delivered
at
the
time
the
gift
comes
into
existence
and
which
can
be
valued
only
by
using
some
abstract
study
like
actuarial
science.
When
Parliament
made
the
filing
of
a
receipt
a
requirement
for
paragraph
110(1)(a)
assuming
that
tangible
value
would
in
fact
have
been
received,
and
then,
in
subsection
110(2.1),
provided
for
a
gift
to
be
deemed
to
have
been
made
in
a
taxation
year
when
the
donee
would
not
have
received
any
tangible
value,
Parliament
must
have
recognized
the
impossibility
of
obtaining
and
filing
a
receipt
for
a
gift
deemed
to
have
been
made
before
its
time.
Because
subsections
110(2.1)
and
110(1.2)
deem
an
intangible
gift
to
have
been
made
to
a
charity
in
a
year
prior
to
the
year
when
the
charity
would
receive
any
tangible
value
with
respect
to
that
gift,
I
think
Parliament
realized
that
the
donor
would
have
no
receipt
from
the
charity
for
the
year
when
the
gift
was
deemed
to
have
been
made.
In
the
special
circumstances
of
a
gift
to
charity
made
by
will
and
deemed
to
have
been
made
in
the
year
of
death
by
subsection
110(2.1),
and
in
the
special
circumstances
of
a
portion
of
a
gift
to
charity
deemed
to
have
been
made
in
the
year
preceding
death
by
subsection
110(1.2),
I
am
of
the
view
that
the
form
of
receipt
required
by
paragraph
110(1)(a)
need
not
be
filed
with
the
Minister
as
a
condition
of
the
taxpayer's
entitlement
to
a
deduction
under
paragraph
110(1)(a)
for
the
taxation
years
when
such
gifts
are
deemed
to
have
been
made.
To
hold
otherwise
would
permit
the
administrative
requirement
for
a
receipt
in
paragraph
110(1)(a)
to
thwart
what
I
regard
as
the
obvious
substantive
purpose
of
subsections
110(2.1)
and
110(1.2).
Counsel
for
the
appellants
suggested
that
I
might
allow
the
appeal
without
the
receipts
on
condition
that
the
appellants
produce
the
receipts
within
30
days
after
judgment
or
that
the
parties
come
back
before
me
within
90
days
after
judgment.
I
will
not
accept
such
conditions
and,
by
implication,
expect
a
registered
charity
to
issue
receipts
to
a
donor
for
the
1983
and
1982
taxation
years
for
tangible
value
that
was
not
received
from
that
donor
in
those
years.
Having
held
that
the
value
($49,361.15)
of
the
gift
to
the
Seminary
at
the
date
of
death
exceeded
the
aggregate
of
the
amounts
deducted
($18,000
and
$24,184)
under
subsections
110(2.1)
and
110(1.2)
respectively,
the
appeal
is
allowed
with
costs.
Appeal
allowed.
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