Conditional gifts are now a safer bet for charities to accept
according to Norman v. Watch Tower Bibleand
Tract Society of Canada. Madam Justice Warren decided that Mr.
and Mrs. Norman's conditional donation to the Watch Tower Bible
and Tract Society ("Watch Tower"), the registered charity
that represents Jehovah's Witnesses in Canada, was valid since
it was not a testamentary document and thus did not have to abide
by strict statutory requirements.
In 2000, the Normans donated $200,000 to Watch Tower and signed
a Conditional Donation Agreement ("Agreement"). The
Agreement stated that the donated money was for the use and benefit
of Watch Tower at their sole discretion, but the Normans could
request a donation refund during their lifetime. Upon their death,
any non-refunded amount would remain the property of Watch
Justice Warren applied the following factors in deciding that
the Agreement was not testamentary:
The intention of the donor is an important consideration that
can be determined through both the document and extrinsic
If the document is intended to and does transfer some interest
in property before the donor's death, it is not testamentary.
The document must not be intended to have any operation until the
An agreement that reserves the right to revoke the transfer or
bring the trust to a close is not necessarily testamentary.
Justice Warren found that the Agreement clearly illustrated the
Normans' intention to create a trust and that Watch Tower had
immediate rights in the donated property. Since the Normans'
right to a refund existed subject to the Agreement, the Agreement
immediately changed the positions of the parties. In other cases, a
lack of consideration has been indicative of a testamentary
document. However, since the Agreement was with respect to a gift,
there is an inherent lack of consideration that is not
Collecting donations through conditional agreements can be risky
for charitable organizations because there are strict statutory
requirements if the gifts are found to be testamentary in nature.
However, this case makes it clear that if a conditional agreement
is drafted properly, even if the donor retains the right to a
refund during their lifetime, the charitable gift may be able to
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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