The Function (or Malfunction) of Equity in Charity Law of Canada's Federal Courts

• Author: Kathryn Chan
• Position: Assistant Professor, Faculty of Law, University of Victoria
• Pages: 33-63

33

(2016) 2(1) CJCCL

e Function (or Malfunction)

of Equity in the Charity Law of

Canada’s Federal Courts

Kathryn Chan*

is essay explores what, if anything, it means for the Federal Court of Appeal to be

a “court of equity” in the exercise of its jurisdiction over matters related to charitable

registration under the Income Tax Act. e equitable jurisdiction over charities

encompasses a number of curative principles, which the Court of Chancery traditionally

invoked to save indenite or otherwise defective charitable gifts. e author identies

some of these equitable principles and contemplates how their invocation might have

altered the course of certain unsuccessful charitable registration appeals. She then

considers the principal arguments for and against the Federal Court of Appeal applying

these equitable principles when adjudicating matters related to registered charity status.

* Assistant Professor, Faculty of Law, University of Victoria. I thank Peter

Broder, Mark Gillen and Blake Bromley for their helpful comments, and

Ratib Islam, Roark Lewis and Spencer Chang for their excellent research

assistance.

34

Chan, e Function (or Malfunction) of Equity

I. I

II. T E J   F C  A

III. T R  E P   C L  C

A. Benignant Construction

B. Presumption of Lawful Trustee Behaviour

C. Resolution of Technical Defects

IV. I  A  I E P   A 

 R C R

A. e “Moving” Nature of Charity Law

B. Federal-Provincial Consistency

C. Equity and Charitable Corporations

D. Equity and Tax

V. C

I. Introduction

The doctrines and remedies that make up the common law charities

tradition belong to the realm of equity. Inherited from the

ecclesiastical courts, they were, by the fteenth century, being applied by

the Lord Chancellor of England, who granted to charitable gifts the same

privileges that canon law had anciently awarded to legacies ad pias causas.1

roughout the sixteenth, seventeenth, and eighteenth centuries, the

English Court of Chancery developed the law of charities, determining

the boundaries of the legal concept of charity, conrming its privileges,

and expanding the tools for its enforcement. By the early nineteenth

century, when the English law of equity was being introduced into the

colonies of British North America2, there was in place an extensive set of

equitable doctrines relating to charitable trusts, charitable corporations

and charitable gifts.

Today, in Canada, it is arguable that the most signicant heir of

this equitable jurisdiction is the appellate court of “law, equity, and

1. Gareth H Jones, History of the Law of Charity, 1532-1827 (London:

Cambridge University Press, 1969) at 4-9.

2. JE Cote, ‘e Reception of English Law’ (1977) 15 Alberta Law Review

29 at 57-59.