FCA dismisses appeal by Gateway City Church

May 12, 2013 | By: .(JavaScript must be enabled to view this email address)
Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law

In Gateway City Church and The Minister of National Revenue, the Federal Court of Appeal dismissed Gateway’s appeal to prevent the Minister from revoking its charitable status. CRA revoked the registered charity’s registration for 3 reasons namely “Failure to maintain adequate books and records, failure to devote all of its resources to its own charitable activities, and provision of personal benefits to a proprietor, member, shareholder, trustee or settlor”. The Court noted ”...the Church’s application can be granted only if the Church meets the test for the granting of stays and injunctions. The Church must show as per (RJR-MacDonald v. Canada (Attorney General): it has an arguable case against the revocation, it will suffer irreparable harm if the revocation is allowed to happen, and the balance of convenience lies in its favour.” The FCA found that Gateway did not meet the test for irreparable harm and dismissed the application. The FCA provided a detailed analysis of the irreparable harm requirement including some tangible examples of why Gateway did not meet the test.

In terms of “irreparable harm” the Court noted:


“[13] If the Church’s registration as a charity is revoked, it will not be able to issue receipts for donations. Future donors will not be able to claim deductions for their donations. The Church says donations will fall off, preventing it from doing essential work for its congregation and the wider community.

[14] Such a general assertion is insufficient to establish irreparable harm: Holy Alpha and Omega Church of Toronto v. Canada (Attorney General), 2009 FCA 265 at paragraph 22. That sort of general assertion can be made in every case. Accepting it as sufficient evidence of irreparable harm would unduly undercut the power Parliament has given to the Minister to protect the public interest in appropriate circumstances by publishing her notice and revoking a registration even before the determination of the objection and later appeal.

[15] General assertions cannot establish irreparable harm. They essentially prove nothing:
It is all too easy for those seeking a stay in a case like this to enumerate problems, call them serious, and then, when describing the harm that might result, to use broad, expressive terms that essentially just assert – not demonstrate to the Court’s satisfaction – that the harm is irreparable. (Stoney First Nation v. Shotclose, 2011 FCA 232 at paragraph 48.)  Accordingly, “[a]ssumptions, speculations, hypotheticals and arguable assertions, unsupported by evidence, carry no weight”: Glooscap Heritage Society v. Minister of National Revenue, 2012 FCA 255 at paragraph 31.

[16] Instead, “there must be evidence at a convincing level of particularity that demonstrates a real probability that unavoidable irreparable harm will result unless a stay is granted”: Glooscap, supra at paragraph 31. See also Dywidag Systems International, Canada, Ltd. v. Garford Pty Ltd., 2010 FCA 232 at paragraph 14; Canada (Attorney General) v. Canada (Information Commissioner), 2001 FCA 25, 268 N.R. 328 at paragraph 12; Laperrière v. D. & A. MacLeod Company Ltd., 2010 FCA 84 at paragraph 17.

[17] In this case, the evidence tendered by the Church falls short in a number of respects:
? The evidence shows that the Church’s members seem loyal and have donated much in past years. Much is said about the Church’s importance and value to its congregation and the community. Will donors suddenly reduce their donations to zero because they cannot obtain a charitable receipt?
? There is no evidence from donors in the record. It is speculative to conclude that donations will fall off to such an extent that the Church’s existence is imperilled.
? Even if donations fall off to some extent, there is no evidence showing how this will affect the Church’s overall budgetary position. What is the Church’s budgetary position? What assets does it have? What liabilities does it have? Between now and the ultimate determination of the Church’s objection or later appeal, what financial events will take place? The record is silent.
? The Church asserts that it will no longer be able to rent facilities for its services and Bible classes. It adds that benevolence assistance to local food banks and single-parent households in need will stop. It says that other beneficial payments it makes will stop. But without information about the financial circumstances of the Church and the size of these expenditures, these assertions cannot qualify as irreparable harm.

[18] Irreparable harm must be demonstrated, not just asserted. Demonstration is achieved by supplying particular information that empowers the Court to find the existence of harm that cannot be repaired later. In the record before this Court, there is only assertion, not demonstration.

[19] Counsel for the Church fairly conceded that particularity was missing from the evidence the Church tendered. However, he urged the Court to view this in the context of this application – a proceeding brought urgently, with little time to prepare.

[20] I accept there was urgency in bringing this application. However, to some extent, the urgency was created by the Church’s delay in retaining and instructing counsel.

[21] In her notice of intention, the Minister told the Church it had thirty days to apply to this Court for relief. Thirty days was more than enough time for the Church to retain counsel and file evidence disclosing the particular information known to it and readily at hand.”


Here is a copy of the Federal Court of Appeal decision:

Gateway City Church v. Minister of National Revenue_.pdf

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