Judgments

Decision Information

Decision Content

A-710-86
Toronto Volgograd Committee (Appellant)
v.
Minister of National Revenue (Respondent)
INDEXED AS: TORONTO VOLGOGRAD COMMITTEE V. M.N.R.
Court of Appeal, Mahoney, Marceau and Stone JJ.—Ottawa, January 19 and March 3, 1988.
Income tax — Exemptions — Charities — Appeal from refusal of registration as charitable organization — Constitut ed objects including re-creation of link between residents of Toronto and Volgograd — Activities including sponsoring and organizing exchange visits and publicity — Appeal dismissed — Whether registration requiring exclusively charitable pur poses — Use of "activities" in s. 149.I (1)(b)(i) and 'purposes" in s. 149.1(1) (a) — Necessary to look to both purposes and activities — Statute not expressly barring consideration of purposes — Law regarding purposes or activities aimed at promoting attitude of mind as political — Outside ambit of "advancement of education" and non-charitable — Activities not beneficial to community in way law regards as charitable as not within "spirit and intendment" of Statute of Elizabeth.
Charities — Appellant's purposes including promoting understanding between residents of Toronto and Volgograd — Activities including sponsoring and organizing exchange visits — Registration as charitable organization refused — Whether charitable registration requiring exclusively charitable pur poses — Whether activities charitable as being for "advance- ment of education" or 'for other charitable purposes" — Trust fails as political in nature.
This was an appeal from a decision of the Minister of National Revenue rejecting the appellant's application for registration as a "charitable organization". The stated objects of the appellant were to re-create the link between residents of Toronto and Volgograd (formerly Stalingrad), create a people- to-people relationship touching on common issues, i.e. the risk of nuclear war, and to enhance this relationship through exchanges to promote understanding, reduce tensions and help the two societies find peaceful ways of living together. The appellant's activities included sponsoring exchanges between the residents of both cities, by paying travelling expenses, organizing visits to ensure contacts with locals and arranging publicity concerning the travellers' experiences abroad. The Minister pointed out that in order to qualify for registration under the Act an organization must be constituted and oper ated for exclusively charitable purposes in the common law sense. The appellant was found not to be a charity under the head of "advancement of education or as a purpose beneficial to the community as a whole in a way which the law regards as charitable". The first issue was whether he erred in finding that in order to qualify for registration an organization must be
constituted and operated "for exclusively charitable purposes", emphasis being placed on the word "purposes". The appellant argued that the respondent should have considered only its actual activities and not the objects for which it was formed. The appellant relied upon the use of "activities" in subpara- graph 149.1(1)(6)(i) (which requires that all of an organiza tion's resources be devoted to charitable activities carried on by the organization itself) in contrast with the use of "purposes" in paragraph 149.1(1)(a), (which requires a charitable foundation be constituted and operated exclusively for charitable pur poses). The second issue was whether the respondent erred in ruling that the appellant's activities were not charitable as being for "the advancement of education" or for "other chari table purposes". Finally, did the respondent err in holding that the information provided by the appellant was aimed at "advocating or promoting a particular viewpoint with respect to an issue or cause"?
Held, the appeal should be dismissed.
Per Stone J.: The first issue did not have to be decided because the appellant conceded that the Court should look at both purposes and activities in deciding whether it is entitled to registration as a charitable organization. It was, however, to be noted that although subparagraph 149.1(1)(6)(i) does not expressly address itself to the documented purposes of a chari table organization, it does not expressly bar consideration of an organization's purposes. If devotion of its resources in the manner prescribed by the Act was the only test, the Act would be impossible to administer as the respondent would have to constantly monitor the conduct of every registered organiza tion. On the other hand, if the charitable nature of an organiza tion is determined by reference to its constituting document, it would only have to show, when required, that it did carry on charitable activities to which it devoted all its resources.
To say that advancement of education means advancement of education for its own sake in order that the mind may be trained may be stating the matter too narrowly. However, several cases were cited as establishing that purposes or activi ties aimed at creating a particular climate of opinion and at promoting an attitude of mind fall outside the ambit of "advancement of education" because the law regards them as political. The reasoning of those cases demonstrated that a trust for the espousal of a political cause is not charitable. The appellant's purposes and activities were non-charitable in the sense of those cases and they did not satisfy the test of "advancement of education".
The appellant's motives were altruistic and the community could only benefit from this sort of exchange. However, the activities were not beneficial to the community in a way the law regards as charitable. The cause was not charitable, but politi cal. Trusts to promote an attitude of mind have repeatedly been held not to come under the fourth head of charity because they
do not come within the spirit and intendment of the Statute of Elizabeth.
Per Mahoney J. (concurring): In both Native Communica tions Society of B.C. v. Canada (M.N.R.) and Alberta Institute on Mental Retardation v. Canada, the organizations were held to be entitled to registration as charities although achievement of the charitable purpose was an indirect result of the organiza tion's activities. Neither organization could have met the test proposed by Marceau J. The appeal should be dismissed for the reasons given by Stone J.
Per Marceau J. (concurring in the result): According to the definitions in section 149.1, a "charitable foundation" is estab lished "for charitable purposes only", while a charitable organi zation devotes its resources exclusively to charitable activities. Parliament meant to distinguish between institutions which are merely repositories of funds whose income is distributed peri odically to help carry on the activities of others and, institutions which join together people who intend to carry on by them selves some specific activities. If the defined objects are deter- minative for a foundation, it is not so for an organization. While the classification of an activity requires that it be considered in relation to the reason for which it is carried on, it is not to be confused with the intention of the actor; the activity is in the real and concrete world, not merely in the minds of individuals.
Lord Macnaghten's judgment in Commissioners of Income Tax v. Pemsel setting out four classes of charities, was con cerned with trusts, and was developed to encompass all possible objects capable of giving validity to institutions set up in an altruistic spirit for the furtherance of some beneficial objective. The Supreme Court of Canada decision in Guaranty Trust Company of Canada v. Minister of National Revenue, which applied the Pemsel case, also dealt with a trust. The classifica tion adopted had to be elaborated liberally and with "pur- poses", not "activities", in mind. In the context of tax law, some adaptation was required. To be assigned to one of the four headings, activities must be considered with respect to their immediate result and effect, not their possible eventual conse quence. An activity draws its charitable quality from what it itself accomplishes not from what may be indirectly achieved by it. The issue thus was whether the appellant's activities had the immediate effect of relieving poverty, advancing education or religion, or realizing something beneficial to the community as a whole. While the appellant's activities may eventually produce worthwhile results, immediately they merely satisfied intellectual curiosity. None of the activities were charitable within the spirit and intendment of the Act.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Charities Act, 1960 (U.K.), 8-9 Eliz. II, c. 58, s. 45(1). Federal Court Rules, C.R.C., c. 663, R. 1312.
Income Tax Act, S.C. 1970-7l-72, c. 63, ss. 110(8)(c) (as
am. by S.C. 1984, c. 45, s. 35), 149.1(1)(a) (as enacted
by S.C. 1976, c. 4, s. 60; S.C. 1984, c. 45, s. 57), (b)
(as am. by S.C. 1984, c. 45, s. 57).
CASES JUDICIALLY CONSIDERED
APPLIED:
Commissioners of Income Tax v. Pemsel, [1891] A.C. 531 (H.L.); Anglo-Swedish Society v. Commissioners of Inland Revenue (1931), 16 T.C. 34 (K.B.); Buxton and Others v. Public Trustee and Others (1962), 41 T.C. 235 (Ch. D.); Strakosch, decd., In re. Temperley v. Attorney- General, [1949] Ch. 529 (C.A.); In re Koeppler Will Trusts, [1985] 3 W.L.R. 765 (C.A.).
DISTINGUISHED:
Re Laidlaw Foundation (1984), 48 O.R. (2d) 549 (H.C.).
CONSIDERED:
Native Communications Society of B.C. v. Canada (M.N.R.), [1986] 3 F.C. 471; 86 DTC 6353 (C.A.); Scarborough Community Legal Services v. The Queen, [1985] 2 F.C. 555 (C.A.); Alberta Institute on Mental Retardation v. Canada, [1987] 3 F.C. 286; 87 DTC 5306 (C.A.).
REFERRED TO:
Shaw, decd., In re. Public Trustee v. Day, [1957] 1 W.L.R. 729 (Ch.D.); Macduff, In re. Macduff v. Mac- duff, [1896] 2 Ch. 451 (C.A.); In re Hopkins' Will Trusts, [1965] Ch. 669; Incorporated Council of Law Reporting for England and Wales v. Attorney-General, [1972] Ch. 73 (C.A.); Guaranty Trust Company of Canada v. Minister of National Revenue, [1967] S.C.R. I 33.
AUTHORS CITED:
Ballow, H. A Treatise of Equity, Book II, London: Strahan & Woodfall, 1793 rev. and ed. by John Fon- blanque London: Garland Publishing Inc., 1979.
COUNSEL:
Harry B. Radomski and Graham D. Smith for appellant.
Deen C. Olsen and Johanne D'Auray for respondent.
SOLICITORS:
Goodman & Goodman, Toronto, for appel lant.
Deputy Attorney General of Canada for respondent.
The following are the reasons for judgment rendered in English by
MAHONEY J.: I have had the advantage of reading in draft the reasons for judgment of my colleagues herein and agree that the appeal should be dismissed for the reasons given by Mr. Justice Stone. My difficulty with the approach adopted by Mr. Justice Marceau may be shortly illustrated by reference to two recent decisions of this Court which have held that the organizations in issue were entitled to be registered as charities under the Income Tax Act: Native Communications Society of B.C. v. Canada (M.N.R.), [1986] 3 F.C. 471; 86 DTC 6353 (C.A.); and Alberta Institute on Mental Retardation v. Canada, [1987] 3 F.C. 286; 87 DTC 5306 (C.A.), leave to appeal refused January 28, 1988.
The "activities" of the first of those organiza tions were the collection and dissemination of information of interest and concern to the native peoples of British Columbia. The "activities" of the latter were solely the collection and resale, at a profit, of used goods; the net profit was remitted to another organization whose charitable status was not in question.
It seems to me that, divorced from purposes which would only indirectly be achieved, neither organization could have met the test proposed. In the one case, actual benefit to the mentally retard ed could only follow the intervention of the activi ties of a third party. In the other, the real chari table purpose did not lie in making available information and vehicles for its exchange but in the expectation of their advantageous use by native peoples; achievement of the charitable purpose was inherently an indirect result of the organization's activities.
• - fi
The following are the reasons for judgment rendered in English by
MARCEAU J. (concurring in the result): I readi ly agree with my brother Stone J. that the applica tion of the appellant for registration as a charity under paragraph 110(8)(c) of the Income Tax Act, S.C. 1970-71-72, c. 63, as amended [by S.C. 1984, c. 45, s. 35] (the "Act") was rightly reject ed. However the reasoning which led me to my conclusion is different from that adopted by my colleague in his reasons for judgment, and in view of the importance of the subject involved, which surprisingly enough has only recently and on a few rare occasions been considered by this Court,' I think I ought to express my personal view of the matter.
I will start with two observations which, in my understanding, are fundamental and ought to govern the whole approach to be adopted to resolve the issue.
The first observation is drawn from the defini tion of "charity" as found in the Act. Since 1976, when Parliament proceeded to a major overhaul of the rules governing charities for income tax pur poses, an overhaul which was completed later, more especially in 1984, two types of "charity" are recognized: the charitable foundation (either public or private) and the charitable organization. They are defined in paragraphs 149.1(1)(a) [as enacted by S.C. 1976, c. 4, s. 60; S.C. 1984, c. 45, s. 57] and 149.1(1)(b) [as am. by S.C. 1984, c. 45, s. 57] of the Act as follows:
149.1 (1) In this section, section 172 and Part V,
(a) "charitable foundation" means a corporation or trust con stituted and operated exclusively for charitable purposes, no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member,
' The only decisions of this Court respecting charities which I am aware of are: Scarborough Community Legal Services v. The Queen, [1985] 2 F.C. 555; Native Communications Socie ty of B.C. v. Canada (M.N.R.), [1986] 3 F.C. 471; and Alberta Institute on Mental Retardation v. Canada, [1987] 3 F.C. 286.
shareholder, trustee or settlor thereof and that is not a chari table organization;
(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 proprie tor, member, shareholder, trustee or settlor thereof,
Among the several differentiating elements which can be drawn from an analysis of these two definitions, there is one which is immediately strik ing. A "charitable foundation" is established and organized "for charitable purposes only" (the cor responding phrase in French being "à des fins charitables") while a "charitable organization" devotes its resources "exclusively to charitable activities" (in French: "à des activités de bienfai- sance"). And indeed, in each and every subsequent provision establishing the rules governing each type of charity, when dealing with a "charitable foundation", the Act speaks of purposes; and when dealing with a charitable organization, it speaks of activities (see, for example, subsections 149.1(2), (3),(6),(6.1),(6.2)). That this differentiation is fundamental in the legislative scheme is not to be doubted. These usual and ordinary words, which, in both languages, refer to completely different but quite simple concepts, were certainly used for what they really mean since they are squarely put in opposition to one another, it being provided that only organizations can have activities. In fact, as it is well known, Parliament meant to distinguish generally between, on the one hand, institutions or legal entities which are merely repositories of funds and whose income is distributed periodically with a view to helping the carrying on of activities by others, and, on the other hand, institutions, which do not even have to be supported by a corporate entity, but join together people who intend to carry by themselves some specific activi ties. The French word for the latter, the word "oeuvre", is quite revealing in this respect, its meaning being "word", "action", "task".
So, while a "foundation" will be entitled to registration as a "charity" as soon as the purposes for the pursuit of which the administrators or
trustees are mandated and empowered to distrib ute money from its fund are "charitable"—a fact that can be determined only by considering the document by which the institution was set up—, an "organization" will be entitled to be registered as a charity only if its activities are and remain charitable—a condition which requires an exami nation of what its members actually do. In other words, if the goals, the objects, the intentions, as defined in its constituting document, are by them selves determinative for a "foundation", it is not so for an "organization". It is true that the classifica tion of an activity requires that it be considered in relation to the reason for which it is carried on, but nevertheless it is not to be confused with the intention of the actor; the activity is in the real and concrete world, not merely in the minds of the individuals.
The second observation is suggested by the first one, but it is specifically directed to the meaning of the word "charitable" in the definitions of the two types of "charity". As it is well known, in the absence of any statutory indication as to what exactly was meant by that word, the commentators and the courts have turned to the common law for guidance. The well-known judgment of Lord Mac- naghten in Commissioners of Income Tax v. Pemsel, [1891] A.C. 531 (H.L.) has become the leading authority, more particularly the following famous passage thereof [at page 583]:
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.
This passage, which has been seen in England as embodying the common law test to identify chari table trusts, was in effect given the same preemi nence in this country following the judgment of the Supreme Court in Guaranty Trust Company of Canada v. Minister of National Revenue, [1967] S.C.R. 133. There is one difficulty however with Lord Macnaghten's judgment, a difficulty which,
in my opinion, is too often overlooked: it was a judgment strictly concerned with charitable trusts and was elaborated with a view to reaching all possible objects capable of giving validity to insti tutions set up in an altruistic spirit for the further ance of some beneficial objective (the Guaranty Trust Company case was similarly concerned with the validity of a trust). The classification adopted therein had therefore to be elaborated liberally and with "purposes" and not "activities" in mind. When used with respect to activities and in the context of tax law, some adaptation will undoubt edly be required to make it capable of identifying those activities sufficiently beneficial to be entitled to the very special tax treatment conferred by the Act. For one thing, it seems to me obvious that the vagueness of the fourth heading is particularly troubling when applied to activities as it appears almost totally meaningless if not somehow refor mulated with more precise language. But the point I really wish to make here is that, to be assigned validly and usefully to one of the four headings of the classification, activities must necessarily, it seems to me, be considered with respect to their immediate result and effect, not their possible eventual consequence. In other words, the activity will draw its charitable quality from what it itself accomplishes not from what may eventually flow from it or be somehow indirectly achieved by it.
If these basic observations I have just made are correct, the issue raised by the appeal is quite simple and can be dealt with quickly. The appel lant Committee, an unincorporated organization, had the right to be registered as a "charity", contrary to the decision of the Minister, if, and only if, its activities (and that is to say, it having no legal entity, the activities of its members) have the immediate effect of relieving poverty, advanc ing education or religion or, possibly, realizing something beneficial to the community as a whole.
The first step is therefore to inquire as to what exactly the members of the Committee do in their
capacity as members. The evidence on this point is clear: put simply, the activities of the Committee and its members consist, as I understand it, in sponsoring exchanges and meetings between resi dents of Toronto, and residents of Volgograd in Russia. In more concrete terms, the Committee and its members select candidates of one city interested in visiting the other city, pay for all travelling expenses, make sure that the visitors' stay is organized so as to encourage contacts with local people, and finally arrange for publicity, by way of media coverage and speaking engagements, of the travellers' experience abroad and the impressions they have gathered during their jour ney. To these activities would have to be added, I suppose, when members are themselves chosen as candidates, this actual travelling abroad, the actual meeting of people and the actual conveying of impressions. So these are all the activities with respect to which we have to ask ourselves whether they can have, as their immediate effect, the relief of poverty, the advancement of education and religion, or the realization of something beneficial to the community as a whole. In my judgment, there is not much place for hesitation. The organi zation or the making of trips and visits, the making of acquaintances and the conveying of personal impressions and experience are all activities which may be very good and instructive, and may eventu ally produce worthwhile results, but immediately they can hardly have any effect beyond the satis faction of intellectual curiosity and the acquisition of human experiences for those who carry them on. None, it seems to me, can be said to be charitable within the spirit and intendment of the Act.
It is on the basis of this view of the matter that I would dispose of this appeal as suggested by my brother Stone J.
* * *
The following are the reasons for judgment rendered in English by
STONE J.: This is an appeal from a decision of the respondent dated October 23, 1986 rejecting an application by the appellant for registration as
a "charitable organization" pursuant to the provi sions 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 appellant is an unincorporated voluntary association formed in October 1983. At its organi zational meeting held that month, it adopted a constitution which sets out its objects in the follow ing context:
WHEREAS we are deeply concerned about world tensions, including the increasing threat of a nuclear holocaust;
AND WHEREAS we are worried about the stereotyping of peo ples and societies that fed this tension: and whereas we believe it is important to break down these barriers and to ,increase understanding;
THEREFORE BE IT RESOLVED that the objects of the committee are to:
(i) re-create the link between residents of Toronto and Volgo- grad, a link first officially made during the Nazi siege in 1942-43;
(ii) create a people-to-people relationship touching on issues that we as city people have in common, including the risk of nuclear war;
(iii) enhance this relationship through exchanges to promote understanding, reduce tensions and help our societies find peaceful ways of living together.
The organization does not intend to acquire real property.
The organization will be carried on without purpose of gain for its members, and any profits or other accretions shall be used to promote the objects of the organization.
The appellant's application for registration was submitted in November, 1985. It was accompanied by required supporting material including a state ment outlining its activities. In addition, letters urging favourable consideration were received from a number of leading residents of Toronto, their authors expressing the view that the appli cant's activities are "educational" in nature and therefore charitable.
The statement of activities merits careful con sideration. It describes in somewhat greater detail what the appellant regards as activities entitling it to recognition as a "charitable organization" under the Act. Thus, we find statements of the appellant's purposes and activities.
The Toronto Volgograd Committee was formed with a view to benefiting the community by providing the public at large with an opportunity to understand and experience the lifestyle and concerns of the people of Volgograd (formerly Stalingrad). As the Committee is deeply concerned about world tensions and the stereotyping of peoples and societies that feed this tension, it is felt that it is important to break down these barriers and to increase understanding.
Therefore, the three main objectives of the Committee are as follows:
L To benefit the community as a whole by educating the Canadian people and increasing the understanding with respect to the concerns and the lifestyle of the people of Volgograd. In order to do so, the Committee will try to re-create the link between the residents of Toronto and Volgograd, a link first officially made during the Nazi siege in 1943-44.
2. To increase public awareness by creating a people-to-people relationship touching on issues that we as city people have in common, including the risk of nuclear war; and
3. To educate people by sponsoring exchanges and meetings
between the residents of Toronto and Volgograd.
(Case Material, page 64)
One method used by the Committee to further the education of people with regards to the concerns and lifestyle of the citizens of Volgograd is by sponsoring exchanges and meetings between the residents of Toronto and Volgograd. To date there have been four exchanges. In February, 1984 (the 40th anniversary of Toronto's first twinning with Volgograd, then Stalingrad), two people from Volgograd came to Toronto for a week. In October, 1984, 13 delegates from Toronto spent a week in Volgograd, first visiting Moscow and later Leningrad. In May, 1985, four people from Volgograd came to Toronto for a week. This was followed by a visit by twelve delegates from Toronto to Volgograd in April, 1986. Currently planned is a visit by eight people from Volgograd in mid October, 1986.
Visits are arranged directly between the Toronto Volgograd committee and the Mayor's office in Volgograd. Volgograd City Hall chooses the delegates who will come to Canada. The offices of the Canadian Ambassador to the Soviet Union and the Russian embassy in Ottawa are contacted for help in various arrangements.
Itineraries are arranged as much as possible in advance, and include both formal and informal functions. All four exchanges have included meetings with and receptions held by mayors in both cities and a chance to meet leading local figures in each city. Members of each group indicate areas of interest and the itinerary attempts to include appropriate visits and meetings in these areas. A considerable amount of time is set aside for informal discussions, visiting in homes, and generally getting to know each other on a personal level. Attached are copies of the itineraries for the Fall 1984 trip to Volgograd and the May 1985 visit to Toronto.
Media Coverage
Significant use of the media has been made to help educate those not otherwise familiar with the Committee's work. There have been several newspaper articles about both visits and impressions by return delegates and appearances on both radio and television. The following is a partial list of radio and television stations on which Toronto Volgograd Committee members have had an opportunity to talk about the Commit tee's work:
Speaking Engagements
Another method of promoting understanding is to have mem bers give speeches to interested groups about their visits to the Soviet Union and to have visitors from the Soviet Union speak to groups in Toronto.
Members who have visited Volgograd are expected to arrange lectures or speaking engagements to share their experience with as many people as possible. In 1985 speeches were made to a wide range of groups including Management Accountants of Canada, criminologists and social workers, St. Philip the Apos tle Anglican Church, teachers and students at Jarvis Collegiate, Canadian Institute of International Affairs. Approximately 5,000 people heard members speak in 1985.
(Case Material, pages 65-66)
The record before us contains copies of several of the appellant's newsletters, one of which includes an account of a visit of four Soviet citi zens to Toronto in May 1985. It reads in part:
Our four visitors, Mikhail Babushkin, Gen. Theodor Pekarsky, Larissa Mitina and Victor Shourubov had a very busy week here from May 23-29th. We tried to make sure they saw a lot of Toronto, including St. Lawrence Market on a Saturday morning, some historic sites—Old Fort York and the Marine Museum, as well as visiting in homes all over the city and area.
We also arranged for them to meet many Torontonians during their stay. In addition to the Steering Committee and the membership—who joined them at a reception one evening at the Heliconian Club—they met Rotarians, members of the Canada/USSR Association, city administrators, teachers and students at Jarvis Collegiate, our Mayor and some members of Council and representatives of a number of Toronto peace groups. They had "time off' at Niagara Falls, including a gourmet picnic in the rain, on shopping sprees, and at a performance of CATS.
They were well received by the media on the whole, with the exception of one hostile session with three aldermen, invited guests and media in a committee room at City Hall. Our
visitors endured rude and angry questions from a number of people who relished the opportunity to vent their frustrations on real live Russians. We and our guests survived the ordeal, the latter retaining their composure and good humour under con siderable pressure. Perhaps it helped them towards a larger perspective of the wide-ranging viewpoints of Toronto citizenry, and to understand the need for the existence of our project—an unpleasant if necessary exercise.
(Case Material, page 91)
An undated newsletter (apparently circulated in late 1985) contains a report on a return visit of members of the appellant to the Soviet Union. It is worthwhile to recite a portion of that report:
By now many of you will have heard that the Volgograd trip was a great success. Although it was known that we were not an official delegation we were well received both formally and informally in Moscow and Volgograd. The Canadian ambassa dor, Peter Roberts and wife Glenna held a large reception for us, enabling us to meet with a range of Canadian and Soviet officials and journalists.
Arriving in Volgograd on a gloriously sunny day, we were greeted at the airport by Loudmila, bearing bouquets of red roses, her boss, Mr. Shustov, and Mr. Starovatykh, the first Deputy Mayor. Alexandre was visibly delighted to see us again, and joined us for many of the functions to follow.
The official events included a meeting with Mayor Atopov in his office at City Council, laying flowers at two war memorials, formal presentation of our group at a meeting of the Volgograd Council of Deputies in the Gorky Theatre, and a splendid boat tour and banquet on the Volga River as guests of mayor Atopov.
(Case Material, page 90)
The report goes on to relate how the individual interests and requests of the members were met by their Soviet hosts. There were, for example, visits to a school, a factory, a day care centre, a polyclin- ic and activity centre for youth and a discussion with a group of Soviet citizens with professional backgrounds who had studied and spoke English. Some time was also spent with the local Peace Committee where the delegation referred to con cerns over human rights and disarmament.
In his letter of October 23, 1986 (Case Ma terial, pages 94-96), the respondent observed that to qualify for registration under the Act, an organ ization "must be constituted and operated for exclusively charitable purposes" in the common law sense. It was his view that the appellant could not qualify "under the advancement of education or as a purpose beneficial to the community as a whole in a way which the law regards as chari table". He continued:
In the context of charity, the advancement of education has been defined by the courts to mean the advancement of educa tion for its own sake in order that the mind may be trained. This does not include the provision of information as a means of advocating or promoting a particular viewpoint with respect to an issue or cause.
Under the fourth head, other purposes beneficial to the commu nity as a whole in a way which the law regards as charitable, common law has determined that an ultimate intent to educate people and foster better understanding between residents of two communities would not be charitable. Specifically, in Anglo- Swedish Society v. C.L.R. (1931) T.C. 34 (K.B.D.), an organi zation whose dominant object was "promoting a closer and more sympathetic understanding between English and Swedish people" was held not to be charitable.
It is our understanding that the Committee's activities are directed toward educating Canadian people with regard to the concerns and lifestyle of the citizens of Volgograd in an attempt to foster better understanding between residents of Toronto and Volgograd, to reduce tensions including the increasing threat of a nuclear holocaust, and to help the societies find peaceful ways of living together. In our view, this purpose is analogous to what the courts have determined is not charitable. Therefore, while doubtlessly laudable, we cannot conclude that the Com mittee's activities are charitable in the common law sense of the term.
(Case Material, page 95)
Three errors are alleged by the appellant against this decision. First, it is said that the respondent erred in finding that in order to qualify for regis tration an organization must be constituted and operated "for exclusively charitable purposes". Second, that a further error was made in deciding that" the appellant's activities were not charitable as being for the "advancement of education" or for "other charitable purposes". Finally, it is contend ed that in refusing registration the respondent erred by his apparent decision that the appellant provides information "as a means of advocating or
promoting a particular viewpoint with respect to an issue or cause".
These issues must, of course, be addressed in the light of relevant statutory provisions and common law principles. Paragraph 149.1(1) (b) of the Act reads:
149.1 (I) In this section, section 172 and Part V,
(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 proprie tor, member, shareholder, trustee or settlor thereof,
The common law principles I have in mind are those found in the judgment of Lord Macnaghten in Commissioners of Income Tax v. Pemsel, [1891] A.C. 531 (H.L.). They were the subject of comment by this Court in Native Communications Society of B.C. v. Canada (M.N.R.), [1986] 3 F.C. 471, at pages 478-479:
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 Commisioners 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 divi sions: trusts for the relief of poverty; trusts for the advance ment 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. I, 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 chari table objects in modern English as follows:
... the relief of aged, impotent, and poor people ... mainte nance 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 respect to the first ground of appeal, it is said that the respondent misdirected himself in deciding that the appellant was not constituted and operated "for exclusively charitable purposes", stress being placed on the word "purposes". According to the appellant, the respondent should have paid more attention to its actual "activities" and less to the objects or purposes for which it was formed. This proposition, it is argued, becomes clear from an examination of the very language of subparagraph 149.1(1) (b) (i), requiring that all of an organization's resources be devoted "to chari table activities" carried on by the organization itself. The appellant contrasts the word "activities" with the word "purposes" appearing in paragraph 149.1(1)(a), requiring a charitable foundation to be "constituted and operated exclusively for chari table purposes", and submits that in this latter situation regard would necessarily have to be paid to a foundation's purposes while in the former only the "activities" of an organization are of concern.
I agree with this analysis to the extent that subparagraph 149.1(1) (b) (i) does not, strictly speaking, expressly address itself to the document ed purposes of a "charitable organization" but rather to ensuring that the organization maintains "charitable activities" to which it devotes all of its resources if it is to enjoy the benefits of registra tion. Conversely, the statute does not expressly bar consideration of an organization's purposes as spelled out in its constituting document, for that document must obviously represent not only a
guide or blueprint for its future actions but also a definition of its essential nature or character. If devotion of its resources in the manner prescribed by the section is to be considered the only test to which a charitable organization is answerable, the statute might well be found rather difficult if not impossible to administer. Such a proposition would enable an organization to conduct its affairs in a manner .necessary to satisfy that test for the pur poses of securing registration but allow it to pursue other activities authorized by its constituting docu ment although not charitable ones in the legal sense. This would place the respondent in the position of having to monitor the conduct of every registered organization on a constant basis. If, on the other hand, the basic charitable nature of an organization is to be determined by reference to its constituting document, it would have only to show, as and when required, that it did, as well, carry on charitable activities to which it devoted all its resources in order to enjoy or to continue to enjoy the benefits of the statute. Put another way, it would have not only to speak charity, it would have to do charity. Fortunately, I am relieved of expressing a final view on the question because of counsel's concession during argument that we should, indeed, look at both purposes and activities in deciding whether the appellant is entitled to registration as a "charitable organization". I may add that this position appears to accord with the traditional English view held at a time when the task of superintending charities was left to the equitable jurisdiction of the old Court of Chan cery, for that Court seems to have taken close notice of the express purposes of a particular charity. 2
2 Section 45(1) of the current United Kingdom statute, the Charities Act, 1960 (U.K.), 8-9 Eliz. II, c. 58, defines "chari- ty" as meaning inter alia "any institution, corporate or not, which is established for charitable purposes ....", but I think the English jurisprudence is generally applicable in determining whether "activities" are charitable. The role of the court in former times is discussed in Ballow's A Treatise of Equity, Book (I, London: Strahan & Woodfall, 1793 [Rev. and ed. by John Fonblanque, London: Garland Publishing Inc., 1979], where we find the following in the footnote at pages 209-210:
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The second issue in fact breaks down into two separate questions. In the first place, was an error committed in ruling that the appellant has no educational purpose because it was not constituted and operated for "the advancement of education" under the second head of charity found in Lord Macnaghten's classification? Secondly, if the respondent was correct in so ruling, did he never theless err in ruling that the appellant was not constituted and operated for "other purposes beneficial to the community" under Lord Mac- naghten's fourth classification? The third issue may itself be conveniently addressed in conjunc tion with the first of these questions, for it is there argued that the appellant cannot qualify under the second head, in any event, because the information it puts out is aimed at "advocating or promoting a particular viewpoint with respect to an issue or cause".
In determining whether a given organization qualifies for registration in accordance with Lord Macnaghten's classification of charities, it is desir able to bear in mind the following principles, which are not intended to be exhaustive. To begin with, as the Act does not provide a useful defini tion of "charity", "charitable purpose" or "chari- table activity", a court is left to supply one. That may be contrasted, for example, with a statute that actually does contain a definition as, for instance, the Ontario legislation that was before the Divi-
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(a) Sir W. Blackstone observes, that the king, as parens patriae, has the general superintendance of all charities, which he now exercises by the keeper of his conscience, the Chancellor. And, therefore, whenever it is necessary, the attorney general, at the relation of some informant, who is usually called the relator, files ex officio an information in the Court of Chancery, to have the charity properly estab lished. 3 Com. 427. This proposition is too general; for, though it be true, that where a charity is established, and there is no charter to regulate it, as there must be somewhere a power to regulate, the king has, in such case, a general jurisdication; yet, if there be a charter with proper powers, the charity must be regulated in the manner prescribed by the charter, and there is no ground for the controling interpo sition of the Court of Chancery. Attorney General v. Middle- ton, 2 Vez. 328. [Emphasis added.]
sional Court in Re Laidlaw Foundation (1984), 48 O.R. (2d) 549 (H.C.) on appeal from the Surro gate Court. That statute had adopted Lord Mac- naghten's definition as its own, leading the Court to interpret its language as Southey J. did at page 586, in "a more liberal" way having regard to its statutory setting. Secondly, as was pointed out by Mr. Justice Marceau in Scarborough Community Legal Services v. The Queen, [ 1985] 2 F.C. 555 (C.A.), at page 571, "charities" to which the Act applies enjoy a special status in that "not only are they exempted from tax . .. but . .. all donations made to them are deductible by donors in comput ing their own taxable incomes". Finally, the result is not to place the Court in a kind of judicial strait jacket, prevented from making a determination of eligibility under the Act in light of current societal conditions bearing on the case. Pemsel's case makes it clear that we ought not to take that approach. That, instead, we are to have regard to prevailing circumstances or conditions, was most recently emphasized in the Native Communica tions Society case where a number of the modern English cases were discussed. Those cases furnish yet another example of the inherent ability of the common law to adapt to changing conditions in society to the extent required in order to produce a just result.
I turn first to consider the question of whether the appellant may be regarded as for the "advancement of education" and the related third issue. In doing so, I must resist any temptation to paint with a brush that is broader than necessary to dispose of the point raised for decision. The appellant attacks the respondent's suggestions that advancement of education in its charitable sense has been defined to mean "advancement of educa tion for its own sake in order that the mind may be trained" and that it does not include "provision of education as a means of advocating or promoting a particular viewpoint with respect to an issue or a cause". The first of these positions appears to state the meaning of advancement of education some-
what too narrowly as, indeed, the respondent seems to concede in paragraph 15 of his written argument where he says that this head of charity should disclose activities concerned with "teach- ing, education, or training" or be concerned with activities that are directed toward "enhancing par ticular branches of human knowledge and its public dissemination". A number of authorities are there relied upon, including Shaw, decd., In re. Public Trustee v. Day, [1957] 1 W.L.R. 729 (Ch. D.), at pages 737-738; Macduff, In re. Macduff v. Macduff, [1896] 2 Ch. 451 (C.A.), at pages 472- 473; In re Hopkins' Will Trusts, [1965] Ch. 669, at page 680; and Incorporated Council of Law Reporting for England and Wales v. Attorney- General, [1972] Ch. 73 (C.A.), at pages 92-93, per Sachs L.J., and, at pages 100-101, per Buckley L.J.
Several English cases are also cited by the respondent as establishing that purposes or activi ties aimed at creating a particular climate of opin ion and at promoting an attitude of mind fall outside the ambit of "advancement of education" because the law regards them as political: Anglo- Swedish Society v. Commissioners of Inland Revenue (1931), 16 T.C. 34 (K.B.); Buxton and Others v. Public Trustee and Others (1962), 41 T.C. 235 (Ch. D.); and Strakosch, decd., In re. Temperley v. Attorney-General, [1949] Ch. 529 (C.A.). In the first of these cases, the court had to decide whether a trust for the "promotion of a closer and more sympathetic understanding be tween the English and Swedish peoples" by afford ing "opportunities for Swedish journalists to visit the United Kingdom, and to study at first hand British modes of thought and British National Institutions" was a good charitable trust. In decid ing that it was not, Rowlatt J. said, at page 38:
Now what is this? It is a trust really to promote an attitude of mind, the view of one nation by another; that is all really that it is. There may be many trusts to influence general opinion the results of which influence may be very good, but where the immediate trust is only to influence general opinion in favour of some theory or view or aspiration, or whatever it may be, I cannot myself see that the statute of Elizabeth is
looking to that sort of thing at all. Education and relief of poverty and all these things seems to me to materialise, if I may use the expression, in some fairly proximate way. Perhaps the least one says about it the better, because, as I said this morning, as Lord Haldane said, it is much easier to say that a certain case does not come within the doctrine than to define the limits of the doctrine affirmatively.
The objects before the Court in the Strakosch case [at pages 535-536] i.e. "to strengthen the bonds of unity between the Union of South Africa and the Mother Country and which incidentally will con duce to the appeasement of racial feeling between the Dutch and English speaking sections of the South African community", we found not to be educational. Lord Greene M.R., speaking for the Court of Appeal, at page 536, had this to say:
We realize the truth of the contention that the objects to which the gift is to be devoted are matters of great public concern both in the Union of South Africa and in the Mother Country. In particular the appeasement of racial feeling in the Union cannot but benefit all inhabitants of the Union, not merely the members of the two sections of the community expressly referred to. But the very wide and vague scope of the gift and the unrestricted latitude of application which its language permits make it impossible in our opinion to find that it falls within the spirit and intendment of the preamble to the Statute of Elizabeth.
And, later, at page 538 he added:
It is unfortunate if, as may well be, these methods were in the testator's mind that he did not seek to constitute a trust which might well have been valid as an educational trust notwith standing that the education had the ultimate aim as set out in the will. We, however, find it impossible to construe this trust as one confined to educational purposes. These may be the best methods but they are certainly not the only methods. The problem of appeasing racial feeling within the community is a political problem, perhaps primarily political. One method con ducive to its solution might well be to support a political party or a newspaper which had such appeasement most at heart. This argument gains force in the present case from the other political object, namely, the strengthening of the bonds of unity between the Union and the Mother Country. It would also we think be easy to think of arrangements for mutual hospitality which would be conducive to the purposes set out but would not be charitable.
Finally, in the Buxton case the objects claimed to be for the advancement of education but judged to be non-charitable instead, read [at page 37]:
"To promote and aid the improvement of international rela tions and intercourse by (a) Educating or informing public opinion by the methods (among others) of periodical maga zines and papers, books and pamphlets, lectures, prizes, scholarships and research work. (b) Encouraging or assisting personal intercourse between the inhabitants of different countries including the payment of travelling expenses and maintenance. (c) Assisting any other persons or bodies having similar objects and purposes to the above. (d) Assist ing any persons by paying their expenses in connection with their standing for election for Parliament or other public Assemblies. (e) Employing or following any other methods which in the opinion of the Trustees may conduce to the attainment of the above-mentioned objects and purposes."
Plowman J., after referring to both the Anglo- Swedish and the Strakosch cases, said this, at page 240:
... I ask myself the question whether a charitable educational purpose clearly comes within the ambit of "the improvement of international relations and intercourse". In my judgment it does not. I think that Mr. Stamp was right in his submission that the objects of this trust have nothing at all to do with charity.
And, again, at page 242 he added:
So here it seems to me that the objects of this trust are really public utility or political. The only element of education which might be said to be comprehended in those objects appears to me to be education for a political cause, by the creation of a climate of opinion and that is not, in my judgment, education of a kind which is charitable. As Mr. Stamp said, it is really no more than propaganda.
In my view, the reasoning of these cases is germane. It demonstrates that a trust for the espousal of a political cause or aspiration is not charitable. A recent illustration of its application may be found in the judgment of Slade L.J. in In re Koeppler Will Trusts, [1985] 3 W.L.R. 765 (C.A.), where he said, at page 771:
Furthermore, if read by themselves, they would cover modes of expenditure which would plainly not be charitable, simply, for example, the espousal of the political cause of the Common Market: compare In re Strakosch, decd. [1949] Ch 529, par ticularly at pp. 538-539 per Lord Greene M.R.; Buxton v.
Public Trustee (1962) 41 T.C. 235 and Anglo-Swedish Society v. Inland Revenue Commissioners (1931) 16 T.C. 34.
To my mind, the appellant's purposes and activi ties are non-charitable in the sense of these cases and, accordingly, do not satisfy the test of "advancement of education" as understood in this branch of the law.
The remaining question is whether by its pur poses and activities the appellant qualifies for registration as a charitable organization on the basis that it comes under Lord Macnaghten's fourth head of charity i.e. a trust for purposes beneficial to the community not falling within his first three heads. As I think the trust fails because of its essential political nature, it is not strictly necessary to deal with this issue and I will not do so at any length even though it was fully argued before us. At the outset, I remind myself of what was said about this head of charity in the Native Communications Society case, at pages 479-480:
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 Anti-Vivisection Society v. Inland Revenue Commissioners, [1948] A.C. 31 (H.L.), at pages 63-64; In re Strakosch, decd. Temperley 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 Reve nue Commissioners (supra), at pages 44-45, 63).
I have already discussed the common law princi ples which appear to govern this aspect of the appeal. They are found in the Anglo-Swedish, Strakosch and Buxton cases which, though not on
all fours factually, establish principles which I think apply. The appellant's purposes and activi ties, directed as they are by a group in Canada toward a group in the Soviet Union, are interna tional in their aspect. I do not question that the motives which lay behind them are entirely altruis tic. The very strong view is plainly held that nothing but good can flow to the wider community from this sort of people-to-people contact, especial ly in times of international tensions and the threat of nuclear war, because it serves to promote mutual understanding and friendship between groups in two countries professing distinct political ideologies. The only question we are called upon to decide, however, is whether these activities, though laudable and worthwhile in themselves, meet the test of "charity" in the sense that they are benefi cial to the community in a way the law regards as charitable. In my respectful opinion that test is not met. The cause being pursued is not a charitable cause but, rather, a political one in the sense already discussed. Two of the decisions I have mentioned, Anglo-Swedish and Strakosch, lay down the principle that must be applied and also illustrate why it is that trusts of this variety do not come under the fourth head of charity. I shall repeat what I have already recited from the judg ment of Rowlatt J. in the first of these cases, this time enlarging on it so as to give the full context in which those views are found. He said this, at page 38:
There is no doubt that the people who formed the Society acted with perfectly altruistic motives in endeavouring to achieve what they thought would be a very useful public object; and I dare say they are perfectly right, but I am bound to say in this difficult matter I cannot bring myself to think that this is a charitable trust within the analogy of the statute of Elizabeth. I have said that I think it is a trust of public utility, whether or not a particular person might agree with the particular applica tion of it. That is the kind of trust it is; it is a trust to bring about what the people who founded it think is an improvement in public matters, and therefore it is a trust for matters of public utility. But it is, of course, well settled that it is not every
trust for matters of public utility that is a charity. In other words, it would not be a true definition of the words "charitable trust" to say that it was a trust for public utility. That is very trite law now.
Now what is this? It is a trust really to promote an attitude of mind, the view of one nation by another; that is all really that it is. There may be many trusts to influence general opinion the results of which influence may be very good, but where the immediate trust is only to influence general opinion in favour of some theory or view or aspiration, or whatever it may be, I cannot myself see that the statute of Elizabeth is looking to that sort of thing at all.
Finally, I adopt the reasoning of Lord Greene M. R., at page 537 of the Strakosch case, where he said:
As Roxburgh J. read them the terms of the disposition comprehend any application which in the opinion of the testa- tor's trustees is calculated to promote or subserve what is in truth a political cause or aspiration, viz., that of closer collabo ration or relations between two national groups, those of the United Kingdom and the Union of South Africa, and at the same time closer collaboration or relations between those of English and Dutch descent within the confines of one of those national groups, viz., South Africa. We do not think the case is altered if it be assumed in the appellants' favour that the unlimited discretion given to the trustees extends only to the first limb of the objective and not to the second. For in that case the result is that (as Sir Cyril Radcliffe put it) the drawing together of the two divergent races in South Africa (which on this hypothesis is made a condition of any application of the fund) is a part or incident of the broader aim of drawing together two communities which form part of the politicial organization of the British Commonwealth of Nations: and that which is made the condition is still what we have called a political cause or aspiration. In Williams' Trustees v. Inland Revenue Commissioners ([1947] A.C. 447), the House of Lords has laid down very clearly that in order to come within Lord Macnaghten's fourth class, the gift must be not only for the benefit of the community but beneficial in a way which the law regards as charitable. In order to satisfy the latter it must be within the "spirit and intendment" of the preamble of the Statute of Elizabeth.
I would dismiss this appeal but, in the circum stances, without costs, there appearing no "special reasons" required by Rule 1312 of the Federal Court Rules [C.R.C., c. 663] for making a differ ent order.
 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.