The Supreme Court of Canada has denied leave to appeal from the
decision of the British Columbia Court of Appeal in Neville v.
National Foundation for Christian Leadership.
The background to the case involves a prior decision of the Tax
Court of Canada, upheld by the Federal Court of Appeal, denying tax
credits claimed by individuals who had donated to a scholarship
program run by National Foundation for Christian Leadership (NFCL),
a registered charity. Parents and relatives of students
attending certain religious schools had made donations to NFCL
which had in turn resulted in scholarships being awarded to their
children. CRA had denied all tax credits on the basis that no
gift had been made for tax purposes (given the expected benefit to
the donors in the form of scholarships being provided to their
children). The denial of credits was upheld on appeal.
Subsequent litigation was commenced by a few donors to NFCL in
the British Columbia Supreme Court seeking a return of their
donations. The basis for the claim was that, as CRA and the
Tax Court had concluded that no gift had been made, the donated
funds should therefore be returned. The BC Supreme Court held
that notwithstanding the conclusions of the Tax Court as to whether
the transfer of property to NFCL qualified as a gift for tax
purposes, from a property law standpoint there was still a
valid gift and no basis on which to return the property. This
decision was upheld by the BC Court of Appeal, based in part on the
doctrinally less controversial argument that since the donors had
benefitted from their donations, they were not entitled to a
refund. It was from this decision that leave to appeal had
The denial of leave to appeal by the Supreme Court concludes
this case. As is typical, no reasons were provided by the
Supreme Court of Canada in denying leave to appeal. Charities
can take some comfort, on the basis of the BC decisions, that the
tax treatment of receipts issued in respect of a gift will not
affect the validity of the underlying transfer of property to the
charity, at least where a benefit was received by the donor.
The case also serves as a reminder, to both charities and donors,
about the importance of understanding the rules around the issuing
of donation tax receipts and the claiming of tax credits, to ensure
that such receipts are issued and the credits are claimed
Miller Thomson acted for NFCL in this appeal.
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