National Foundation for Christian Leadership v. Canada (Minister of National Revenue)

National Foundation for Christian Leadership v. Canada (Minister of National Revenue) Court (s) Database Federal Court of Appeal Decisions Date 2005-01-19 Neutral citation 2005 FCA 20 File numbers A-708-04 Decision Content Date: 20050119 Docket: A-708-04 Citation: 2005 FCA 20 Present: PELLETIER J.A. BETWEEN: NATIONAL FOUNDATION FOR CHRISTIAN LEADERSHIP Appellant and THE MINISTER OF NATIONAL REVENUE Respondent "Heard by teleconference between Ottawa, Ontario, and Vancouver, British Columbia, on January 5, 2005." Order delivered at Ottawa, Ontario, on January 19, 2005. REASONS FOR ORDER BY: PELLETIER J.A. Date: 20050119 Docket: A-708-04 Citation: 2005 FCA 20 Present: PELLETIER J.A. BETWEEN: NATIONAL FOUNDATION FOR CHRISTIAN LEADERSHIP Appellant and THE MINISTER OF NATIONAL REVENUE Respondent REASONS FOR ORDER PELLETIER J.A. [1] The appellant seeks an order staying the order of Gibson J. dismissing the appellant's motion for an order setting aside the ex parte order which he granted pursuant to subsection 231.2(3) of the Income Tax Act (the Act). That order authorized the imposition on the appellant of a requirement to provide certain information with respect to unnamed donors to the appellant's organization. In the alternative, the appellant seeks an order staying the order authorizing the imposition of the requirement, or such further relief as the Court deems just. [2] As a result of questions raised by the Court, the appellant sought leave to amend its motion to seek an order staying the requirement dated September 24, 2004 itself pending the hearing of its appeal from Gibson J's dismissal of its motion for a review of the authorization. Counsel for the Minister frankly admitted that the Minister suffered no prejudice as a result of the amendment. Consequently, the appellant's notice of motion was amended to include the additional relief sought by the appellant. The relief claimed by the appellant has been granted on a previous occasion by this Court. See Bining v. Canada, 2003 FCA 286, [2003] F.C.J. No. 1013. [3] In the main, the facts are straightforward. The Minister served a first notice of requirement on the appellant which was not authorized by order. When a motion was brought to set it aside on that ground, on the assumption that it sought information about unnamed persons, the Minister abandoned the requirement. Four months later the Minister applied for and was granted the authorization which underlies this appeal on an ex parte basis. The foundation for the authorization was that the Minister was seeking information about a group of unnamed persons, namely donors who had been issued charitable donation receipts. The Minister's concern was that some of these donations were given in the expectation that a bursary would be granted to a student who had a family or other personal connection to the donor. Since a charitable donation must be made without expectation of a reciprocal benefit, there is an issue as to whether donations made in the expectation of a benefit being provided to a student qualify as a charitable donation, and are therefore properly the subject of a charitable donation receipt. The Minister's requirement is designed to identify which donors may have been ineligible to receive charitable donation receipts because their donation was made in the expectation of some reciprocal benefit. [4] The appellant brought a motion pursuant to subsection 231.2(5) of the Act for a review of the authorization. That motion was dismissed. An appeal has now been taken from that dismissal. The motion before the Court is for a stay of the requirement pending the hearing of the appeal. The motion is necessary because the Minister has refused to extend a previous agreement to suspend compliance with the requirement until January 7, 2005. [5] The test for a stay is well known. The appellant must show that there is a serious issue to be tried, that it will suffer irreparable harm if the stay is not granted, and that the balance of convenience is in its favour. RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 at 334. [6] I am of the view that the requirements for the issuance of a stay have been met in this case. Notwithstanding the suggestion by counsel for the Minister that the appeal is simply an attempt to have the Federal Court of Appeal exercise the discretion which is conferred upon the reviewing judge by subsection 231.2(5), I am of the view that there is a serious issue as to whether the Minister satisfied the criteria for the issuance of the authorization, in particular whether the requirement is necessary to determine whether the unnamed persons have complied with any duty under the Act as provided in paragraph 231.2(3)(b). The issue arises because of the admission by the Minister's representative in the course of his cross-examination on his affidavit that the appellant and not the donors was being audited. It is only if the appellant is found to have wrongly issued charitable donation receipts that the donors will be audited. Consequently, there is a question as to whether the requirement is directed to the appellant's compliance with the Act or the donors' compliance. This question is not frivolous and is sufficient to satisfy the low threshold defined by "a serious issue to be tried". [7] The issue of irreparable harm is more difficult. The requirement asks for: 1) a list of donors to whom charitable receipts have been issued; 2) donor forms with respect to those donors which, presumably contain further information about them and their donations; 3) in the case where the donor information form is not available, the information contained on the donor information card; 4) application forms for 10 named students; and 5) an explanation of the manner in which their eligibility for a bursary was determined. The appellant says that if it must turn over this information prior to the hearing of the appeal, the appeal will be rendered moot since the information will have been provided, and it cannot be retrieved. Furthermore, the appellant says that some of the information is personal information which is entitled to be protected until any question as to its disclosure is resolved. [8] Counsel for the Minister says that the issue of the lawfulness of the authorization will remain an issue even if the information is provided and so the appeal will not be moot. As for personal information, the Minister is bound to keep the confidential information acquired in the course of administering the Act. [9] I am not persuaded that the donors would suffer irreparable harm if the information with respect to charitable receipts and donor forms were required to be produced. Presumably they have already claimed their deduction for charitable donation so that the Minister already has part of the information requested. I do not regard the disclosure of the donor forms as causing them irreparable harm even if the appeal is subsequently allowed. As for the information with respect to the students, the requirement demands production of their application forms, which presumably include information not relevant to the Minister's inquiry and which is personal to 10 named students. The right to have that information remain confidential will be lost if it must be turned over before the lawfulness of the authorization is decided. For the students, and for the appellant who is responsible for safeguarding that information, this constitutes irreparable harm. [10] As for the balance of convenience, I find that it follows irreparable harm. I note the Minister's argument that the clock is running against him in terms of the normal reassessment period of donors whose contributions may not qualify as charitable donations. This is a legitimate concern but I believe that it can be addressed by having the appeal go forward on an expedited basis. If there is any difficulty in that regard as a result of the appellant's conduct, the Minister may apply to lift the stay before the hearing of the appeal. [11] In the result, there will be an order staying execution of the requirement dated September 24, 2004 until the hearing of the appeal in this matter. "J.D. Denis Pelletier" J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-708-04 MOTION FOR A STAY OF THE ORDER DATED DECEMBER 15, 2004, No. T-1556-04 STYLE OF CAUSE: NATIONAL FOUNDATION FOR CHRISTIAN LEADERSHIP Appellant and THE MINISTER OF NATIONAL REVENUE Respondent PLACE OF HEARING: HEARD BY TELECONFERENCE BETWEEN OTTAWA AND VANCOUVER DATE OF HEARING: JANUARY 5, 2005 REASONS FOR ORDER BY: THE HONOURABLE MR. JUSTICE PELLETIER DATED: JANUARY 19, 2005 APPEARANCES: Mr. Daniel Kiselbach FOR THE APPELLANT Mr. Robert Carvalho FOR THE RESPONDENT SOLICITORS OF RECORD: Miller Thompson LLP Vancouver, B.C. FOR THE APPELLANT John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Ontario FOR THE RESPONDENT