A-129-90
Everywoman's Health Centre Society (1988)
(Appellant)
v.
Minister of National Revenue (Respondent)
INDEXED AS: EVERYWOMAN'S HEALTH CENTRE SOCIETY
(1988) v. M.N.R. (CA.)
Court of Appeal, Pratte, Desjardins and Décary
JJ.A.—Vancouver, October 24; Ottawa, November
26, 1991.
Charities — Free-standing abortion clinic — Doctors paid
by provincial health plan — Non-profit society — Impecunious
patients not charged — Society having received citation for
contribution to community health services — M.N.R. denying
charitable registration for lack of public policy on abortion,
favourable public opinion consensus — Whether organiza
tion's activities beneficial to community within intendment of
Statute of Elizabeth — Phrase "medical care for the sick" now
meaning "health care services" — Abortion form of health
care — No authority for proposition no charity at law where
object of charity controversial — Charity may precede, offend
public opinion — If activity apparently within recognized char
itable category, court assumes community benefit unless con
trary shown.
Income tax — Registration as charitable organization —
Appellant operating non-profit abortion clinic and reproduc
tive health service — Physicians paid by provincial Medical
Services Plan — Registration denied on grounds of absence of
public policy, public consensus on abortion — Whether appel
lant's activities beneficial to community — Provision of health
care services prima facie charitable — Public funds presumed
spent in accord with public policy — No requirement charita
ble purpose be supported by official policy, public opinion
Court must decide whether beneficial within law on charities,
not whether public views as beneficial.
This was an appeal under subsectiqn 172(4) of the Income
Tax Act from the respondent's deemed refusal to register the
appellant as a charitable organization.
The appellant was incorporated in 1988 under the laws of
British Columbia. Its objects were to provide necessary medi
cal services to women for the benefit of the community as a
whole and to carry on related educational activities. Its imme
diate goal was to set up a free-standing abortion clinic, its
long-range goal to operate a reproduction services centre. Ser
vices currently provided include Pap tests, screening for sexu
ally transmitted diseases, birth control advice and dispensing,
pregnancy testing, and abortions. The Society operates on a
non-profit basis, and its directors are not paid. It receives no
funding from government. Donations made to the Society are
applied to reduce fees charged to patients. The physicians'
work is paid for by the provincial Health Services Plan.
Patients are accepted and treated without discrimination. They
may be referred by their doctors or may be self-referred. A
prospective patient who is contemplating terminating preg
nancy must make an appointment. Her first meeting is with a
counsellor. That meeting lasts about an hour and a half. The
counsellor apprises the patient of alternatives to abortion, and
ensures that the decision has been freely made. If the patient is
ambivalent, she is invited to return to the clinic at a later date.
As a result of these counselling measures, some 11% of pro
spective abortion patients have resolved to carry on with their
pregnancies. The clinic performs only first trimester abortions.
Access to abortion services being limited in hospitals, the
clinic faces greater demand than it can meet from patients in
Vancouver, rural and northern B.C., the Yukon, and Alberta.
The Society has received a citation for its contribution to com
munity health services from the Public Health Nurses' Associ
ation. Fees are waived for impecunious patients (some 15% of
the clientele to date).
In support of the decision to deny registration, the respon
dent takes the position that "absent clear statements of public
policy and absent public consensus on the abortion issue, it
cannot be said that the (appellant)'s activities are beneficial to
the community in a way the law regards as charitable" and
that, as Parliament has not replaced the provisions of the Crim
inal Code struck down in R. v. Morgentaler, "it cannot be con
cluded that first trimester abortion by choice of the patient,
while clearly legal, reflects public policy on abortion".
Held, the appeal should be allowed.
There are four heads of charitable purposes: (1) the relief of
poverty, (2) the advancement of education, (3) the advance
ment of religion, and (4) other purposes beneficial to the com
munity, not falling under the preceding heads: Native Commu
nications Society of B.C. v. Canada (M.N.R.) (F.C.A.). The
appellant relies on the last head. To come under it, the purpose
must be beneficial to the community in a way the law regards
as coming within the spirit of the Statute of Elizabeth.
Although that enactment is at the source of the law of charities,
it is now accepted that it is the decisions interpreting it which
must be looked to for the legal scope of charity. Fee-charging
hospitals have qualified at common law because they furnished
"medical care for the sick". That phrase should not be read too
literally, the words "for the sick" being surplusage; in the mod
em Canadian context, the equivalent description would be
"health care services". An abortion performed by a physician
would appear to constitute some form of health care. Abortions
are performed in public hospitals which qualify as charitable
organizations, and they are funded by the provincial Health
Services Plan, as permitted by the Canada Health Act.
An organization cannot be charitable if its activities are con
trary to public policy; but an activity cannot be said to offend
public policy when there is no public policy on the matter. It
would impose an unbearable burden on applicants for charita
ble registration to require that there be a clear public policy
approving of their activities. Here, the physicians carrying out
the procedure are paid with public funds. Public funds are pre
sumed to be spent in accordance with public policy. There is
no authority for the proposition that there can be no charity at
law absent public consensus. Some forms of charity precede
public opinion, while others may even offend it. Courts are
asked to decide whether the activity is advantageous to the
public, not whether the public agrees that there is an advan
tage.
Positive Action Against Pornography v. M.N.R. (F.C.A.)
does not apply here. There, the Court had before it "a trust for
alteration of the law" and held that political activities are not
entitled to charitable status. The appellant does not seek the
alteration of the law on abortion, or the propagation of "pro-
choice" views. The controversy surrounding abortion should
not deter the Court from seeking the true purpose of the clinic,
which is to benefit women receiving a legally recognized
health care service in a legally constituted clinic. The law of
charity is a moving subject. When a purpose appears broadly
to fall within one of the categories of charity, the Court will
assume it to be for the benefit of the community unless the
contrary is shown.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada Health Act, R.S.C., 1985, c. C-6.
Federal Court Rules, C.R.C., c. 663, R. 1312.
Income Tax Act, S.C. 1970-71-72, c. 63, ss. 110(8)(c) (as
am. by S.C. 1976-77, c. 4, s. 43; 1984, c. 45, s. 35),
149.1(1)(b) (as enacted by S.C. 1976-77, c. 4, s. 60; as
am. by S.C. 1984, c. 45, s. 57; 1988, c. 55, s. 134),
172(4) (as am. by S.C. 1974-75-76, c. 26, s. 108; 1976-
77, c. 4, s. 87; 1977-78, c. 32, s. 41; 1984, c. 45, s. 72;
1986, c. 6, s. 92; 1988, c. 55, s. 147).
Statute of Elizabeth, 1601 (U.K.), 43 Eliz. I, c. 4.
CASES JUDICIALLY CONSIDERED
APPLIED:
Native Communications Society of B.C. v. Canada
(M.N.R.), [1986] 3 F.C. 471; [1986] 4 C.N.L.R. 79;
[1986] 2 C.T.C. 170; (1986), 86 DTC 6353; 23 E.T.R.
210; 67 N.R. 146 (C.A.); National Anti-Vivisection Soci
ety v. Inland Revenue Commissioners, [1948] A.C. 31
(H.L.).
DISTINGUISHED:
Positive Action Against Pornography v. M.N.R., [1988] 2
F.C. 340; (1988), 49 D.L.R. (4th) 74; [1988] 1 C.T.C.
232; 88 DTC 6186; 29 E.T.R. 92; 83 N.R. 214 (C.A.);
Auckland Medical Aid Trust v Commissioner of Inland
Revenue, [1979] 1 NZLR 382 (S.C.).
CONSIDERED:
In re Resch's Will Trusts, [1969] 1 A.C. 514 (P.C.).
REFERRED TO:
Scarborough Community Legal Services v. The Queen,
[1985] 2 F.C. 555; (1985), 17 D.L.R. (4th) 308; [1985] 1
C.T.C. 98; 85 DTC 5102; 56 N.R. 369 (C.A.); Toronto
Volgograd Committee v. M.N.R., [1988], 1 C.T.C. 365;
(1988), 88 DTC 6192; 83 N.R. 241 (F.C.A.); Brooks v.
Canada Safeway Ltd., [1989] 1 S.C.R. 1219; (1989), 59
D.L.R. (4th) 321; [1989] 4 W.W.R. 193; 58 Man. R. (2d)
161; 26 C.C.E.L. 1; 10 C.H.R.R. D/6183; 89 CLLC
17,012; 94 N.R. 373; R. v. Morgentaler, [1988] 1 S.C.R.
30; (1988), 63 O.R. (2d) 281; 44 D.L.R. (4th) 385; 37
C.C.C. (3d) 449; 62 C.R. (3d) 1; 31 C.R.R. 1; 82 N.R. 1;
26 O.A.C. 1; R. v. Sullivan, [1991] 1 S.C.R. 489; (1991),
55 B.C.L.R. (2d) 1; 63 C.C.C. (3d) 97; 3 C.R. (4th) 277;
112 N.R. 166; Tremblay v. Daigle, [1989] 2 S.C.R. 530;
(1989), 27 Q.A.C. 81; 62 D.L.R. (4th) 634; 11 C.H.R.R.
D/165; 102 N.R. 81; McGovern Attorney v General,
[1981] 3 All ER 493 (Ch.D.).
COUNSEL:
Judith Ashbourne and D. W. Mossop for appel
lant.
Bonnie F. Moon and Linda L. Bell for respon
dent.
SOLICITORS:
Community Legal Assistance Society, Vancou-
ver, for appellant.
Deputy Attorney General of Canada for respon
dent.
The following are the reasons for judgment ren
dered in English by
DÉCARY J.A.: This is an appeal under subsection
172(4) of the Income Tax Act [S.C. 1970-71-72, c. 63
(as am. by S.C. 1974-75-76, c. 26, s. 108; 1976-77, c.
4, s. 87; 1977-78, c. 32, s. 41; 1984, c. 45, s. 72;
1986, c. 6, s. 92; 1988, c. 55, s. 147)] (the Act) from
the deemed refusal by the Minister of National Reve
nue (the Minister) to register the appellant Society
(the Society) as a charitable organization.
The Society was incorporated under the laws of
the Province of British Columbia in July 1988 for the
following purposes:
(1) to provide necessary medical services for women for the
benefit of the community as a whole, and
(2) to carry on educational activities incidental to the above.
The Society is to be carried on an exclusively charita
ble basis with no intention to make a profit. Its direc
tors are not to be paid. Its immediate goal is to set up
a free standing abortion clinic. Its long range goal is
to set up and operate a reproduction centre. It is to he
operated within the law and its doctors are to be paid
through the Medical Services Plan of the Province.
Any surplus or charitable donations are to be used to
reduce charges to patients.
The nature of the services provided by the Society
is best described in a memorandum prepared by an
officer of the Department of National Revenue after a
field visit, on July 31, 1989, to the appellant's clinic.
The most relevant portions of that Memorandum are
the following:
1. Current Services:
Phone counselling
Pregnancy testing
Birth Control counselling and dispensing
Abortion procedures
Screening for STDs (sexually transmitted disease)
Follow-up counselling and examination
Physical Examinations and Pap Smears
Urinalysis; Blood testing for hemoglobin
The patient's first contact with the clinic is by phone; they are
required to respond to a number of questions regarding their
stage of pregnancy and regarding their decision. If the tele
phone counsellor determines that the patient is more than
twelve weeks pregnant, they will be referred to either the Van-
couver General Hospital or the Shaughnessy Hospital in Van-
couver or to .a hospital in their area that performs abortions if
they do not live in Vancouver and their local hospital performs
abortions. If it is determined that the patient is expressing any
ambivalence regarding her decision to have an abortion or is
unsure of what she wants to do, a counselling session will be
scheduled independent of a booking for the procedure itself.
Upon arrival at the clinic at the time of the scheduled appoint
ment, the patient is asked to present proof of Rh testing which
is usually conducted at the Shaughnessy Hospital the morning
of the patient's scheduled appointment. The patient is then
given a pregnancy test and will then meet with a counsellor.
The counselling sessions usually take about an hour and a half.
If the counsellor determines that the patient is ambivalent
about the decision, she will recommend that the patient return
to the clinic at a later date. All options regarding the continu
ance of the pregnancy are explored; referrals will be made to
social service agencies, government departments, adoption
agencies etc. in the event that the patient decides not to termi
nate the pregnancy. Of the approximately 630 patients seen by
the clinic to date, about 70 patients have decided to continue
with the pregnancy.
The Clinic views these counselling sessions as absolutely cru
cial to the patients. The sessions are designed to determine
whether the patient has been coerced into making the decision
to have an abortion; to determine whether the patient has con
sidered all other options available to her; and, whether the
patient has made a firm commitment to the decision to termi
nate the pregnancy.
If the patient, after counselling, decides that she wishes to have
the abortion, she is taken to an examination room and given a
full physical by the physician...
Following the examination, the patient is taken to the operating
room and is given a local anaesthetic. The patient is accompa
nied by a nurse or a counsellor who sits beside the patient and
talks to her during the procedure. The Clinic does not use gen
eral anaesthetics as they believe that part of the healing pro
cess, both emotionally and psychologically, takes place during
the procedure.
The patient is then taken to a recovery room and the Clinic
requires that the patient remain there for at least twenty min
utes, although most stay longer. The patient then meets with
the counsellor again to discuss a birth control program; pre
scriptions can be given or devices fitted.
All patients are provided with a referral letter upon their depar
ture from the Clinic which outlines the treatment they have
received. It is intended that the patient will provide her own
physician with this letter.
2. Resources: Of the time spent at the Clinic, the actual proce
dure takes about 15 to 30 minutes, followed by about a 30 min
ute recovery period. The patient's visit to the Clinic usually
takes between 3 to 4 hours.
No data is available regarding what proportion of the Clinic's
resources are devoted strictly to the abortion procedure and
what portion is devoted to the other services offered by the
Clinic.
3. There are 70 patients scheduled to come to the Clinic in the
month of August. On average, the Clinic is open to perform
procedures 10 to 14 days per month; 7 to 8 abortions are per
formed on these days. At present, the Clinic does not have a
full-time staff physician. The Clinic's Medical Director makes
herself available at the Clinic about 10 to 14 days a month. The
Clinic is hoping to add two on-call physicians who will be
available at the Clinic two half days per week.
4. Referrals: There is no requirement that a patient be referred
by a physician in order to obtain an abortion at the Clinic.
Some patients are referred by their physicians, by social ser
vice agencies (such as Planned Parenthood), or they can be
self-referred.
Parameters: The Clinic only performs first trimester abor
tions (i.e. up to 12 weeks). The telephone interview is designed
to determine the stage of pregnancy. If the Clinic has space
available, an appointment will be booked. If there are no medi
cal contraindications, and both the counsellor and the doctor
are satisfied that the patient has made an informed decision,
the procedure will be performed.
5. The Clinic does not monitor the grounds for which women
are seeking abortions. This is a confidential matter between the
patient and the counsellor...
7. No one can walk in off the street and obtain an abortion.
They must book an appointment with the Clinic and will be
given one only if one is available. They do not use the term
abortion on demand.
9. The Clinic is available to all women regardless of race, eth
nic background, religion, or income level. They do not charge
women a fee for the service if they cannot afford to pay. About
15% of the patients are unable to pay all or a portion of the fee
charged.
The Clinic does careful medical screening to make sure it is
able to [sic] the procedure medically. They want to make sure
that the patient is making an informed decision.
Abortions are not provided to any women under the age of 16;
for women between the ages of 16 and 19, parental consent is
required or alternatively, the consent of two other doctors.
Abortions will not be performed on any women who is [sic]
ambivalent about the decision.
10. Recognition by Provincial/Federal Depts: The Clinic has
been given its own billing number by the MSP. They are cur
rently involved in negotiations with the B.C. College of Physi
cians and Surgeons to be granted certification as a free stand
ing medical clinic. They were granted an award by the Public
Health Nurses' Association for their contribution to commu
nity health services.
11. They do not receive any subsidies from any level of gov
ernment.
12. The clinic only performs first trimester abortions and do
not make any exceptions in the case of rape, incest etc.
16. Counselling: 3 categories — Decision making
— Informed consent
— Individualized birth control
counselling
— educational information regarding options of adoption,
birth control, sexually transmitted diseases, AIDS pre
vention.
17. At the VGH, no counselling is provided in the hospital
before or after the abortion. The procedure is done under gen
eral anaesthetic and the patient is therefore comatose during
the procedure.
VGH has now capped the number of abortions being per
formed at the hospital to 100 per week. Richmond Hospital is
no longer performing abortions.
Patients must be referred by a gynacologist [sic] to the hos-
pital—the patient's doctor has to go through a gynacologist
[sic] because the latter has to book the operating room to per
form the procedure.
re demand; the Clinic has received 30 times the number of
calls it had anticipated. It cannot serve the needs of all those
who request it. At this time, five hospitals in rural B.C. do not
provide any abortion services. In Northern B.C., there are no
hospitals, which provide this service. They get a lot of patients
from the Yukon and from Alberta.
18. The Clinic is much more accessible to women because
they accept referrals from a number of sources, including self
referral.
19. Women choose to come to the Clinic rather than go to a
hospital because they will be treated with respect and dignity;
they will not be faced with judgemental physicians; they will
not be part of an assembly line; they will receive caring and
supportive treatment; they can bring a companion with them
(male or female) to the clinic; the procedure is as medically
unobtrusive as possible; there is a shorter recovery period both
physically and emotionally because of the extensive pre- and
post-abortion counselling provided; the procedure is not avail
able in their local community; they were referred by a doctor,
social worker, friend etc.
21. Fees: $150 if patient has insurance
$250 if patient has no insurance
Fees at Hospital: patient has to pay $89 anaesthetist fee
Insurance pays $215 "tray service" to dr.
$480-510 if patient has no insurance
MSP (insurance) pays the physician's fee, pregnancy test and
urinalysis; all other expenses at the Clinic must be funded by
donations, fees charged etc.
25. Medical services given at clinic:
Counselling; routine testing and treatment of STDs; fitting
and prescription of birth control devices; physical examina
tions; Pap tests.
28. The Clinic has its own emergency protocol; if they are una
ble to handle the matter it will be referred to VGH. They have
a good working relationship with both VGH and Shaughnessy
Hospital.
The basic issue facing the Minister, and now this
Court, is that formulated as follows in an internal
document prepared on November 23, 1988 by an
officer of the Department:
Thus, the controversial point which we must essentially answer
is whether or not the provision of a free standing abortion
clinic is a charitable activity.
The relevant statutory provisions are paragraphs
110(8)(c) [as am. by S.C. 1976-77, c. 4, s. 43; 1984,
c. 45, s. 35] and 149.1(1)(b) [as enacted by S.C.
1976-77, c. 4, s. 60; as am. S.C. 1984, c. 45, s. 57;
1988, c. 55, s. 134] of the Act:
110....
(8)...
(c) "registered charity" at any time means:
(i) a charitable organization, private foundation or public
foundation, within the meanings assigned by subsection
149.1(1), that is resident in Canada and was either created
or established in Canada, or
(ii) a branch, section, parish, congregation or other divi
sion of an organization or foundation described in subpar-
agraph (i), that is resident in Canada and was either cre
ated or established in Canada and that receives donations
on its own behalf,
that has applied to the Minister in prescribed form for registra
tion and that is at that time registered as a charitable organiza
tion, private foundation or public foundation.
149.1(1)...
(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, ...
Registered charities are given special status under
the Act in that they receive the benefit of two excep
tional privileges: first, they are exempted from tax
and, secondly, donors of gifts made to registered
charities are entitled to a deduction in computing
their own taxable income (if a corporation) or in
computing their tax owing (if an individual).
A useful definition of "charitable organization"
under subsection 149.1(1) of the Act is to be found in
the decision of this Court in Native Communications
Society of B.C. v. Canada (M.N.R.):'
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 Commissioners 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.
1 [1986] 3 F.C. 471 (C.A.), at pp. 478-479, per Stone J.A.
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 repro
duction 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 charitable 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 pay
ments of fifteens, setting out of soldiers and other taxes.
It is not contested, in the case at bar, that the
ground relied on by the appellant is the fourth one,
i.e. "trusts for other purposes beneficial to the com
munity". Here again it will be useful to refer to these
words of Stone J.A. in the Native Communications
Society case: 2
A review of decided cases suggests that at least the follow
ing 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 Eliza-
beth if not within its letter. (National Anti-Vivisection Society
2 Supra, note 1, at pp. 479-481.
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 Revenue
Commissioners (supra), at pages 44-45, 63).
Can it be said that the purposes of the appellant fall within
"the spirit and intendment" of the preamble to the Statute of
Elizabeth and, therefore, within the fourth head of Lord
Macnaghten's definition of the word "charity"? In answering
this question we must bear in mind what Lord Greene, M.R.
had to say in In re Strakosch (supra), at page 537:
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 to the Statute of
Elizabeth. That preamble set out what were then regarded as
purposes which should be treated as charitable in law. It is
obvious that as time passed and conditions changed common
opinion as to what was properly covered by the word chari
table also changed. This has been recognized by the courts
as the most cursory examination of the cases shows.
[Emphasis added.]
More recently, in Scottish Burial Reform and Cremation Soci
ety Ltd. v. Glasgow Corpn., [1968] A.C. 138 (H.L.), Lord Wil-
berforce reminds us that "the law of charity is a moving sub
ject". I refer more fully to his opinion on the point as
expressed at page 154 of the report:
On this subject, the law of England, though no doubt not
very satisfactory and in need of rationalisation, is tolerably
clear. The purposes in question, to be charitable, must be
shown to be for the benefit of the public, or the community,
in a sense or manner within the intendment of the preamble
to the statute 43 Eliz. I, c. 4. The latter requirement does not
mean quite what it says; for it is now accepted that what
must be regarded is not the wording of the preamble itself,
but the effect of decisions given by the courts as to its scope,
decisions which have endeavoured to keep the law as to
charities moving according as new social needs arise or old
ones become obsolete or satisfied. Lord Macnaghten's
grouping of the heads of recognised charity in Pemsel's case
([1891] A.C. 531, 583) is one that has proved to be of value
and there are many problems which it solves. But three
things may be said about it, which its author would surely
not have denied: first that, since it is a classification of con
venience, there may well be purposes which do not fit neatly
into one or other of the headings; secondly, that the words
used must not be given the force of a statute to be construed;
and thirdly, that the law of charity is a moving subject which
may well have evolved even since 1891. [Emphasis added.]
The Income Tax Act, at paragraph 149.1(1)(b),
refers to `charitable activities". The Statute of Eliza-
beth [1601 (U.K.), 43 Eliz. I, c. 4], which is at the
source of all those cases that have developed the con
cept of charity trusts, referred to "charitable pur
poses". However, in the case at bar, I do not see any
reason not to apply to the "activities" of an organiza
tion, the principles established with respect to the
"purposes" of an organization unless, of course, the
context prevents us from so doing. 3
Since this is a case of deemed refusal by the Min
ister, we do not, as we had in Native Communications
Society, 4 Positive Action Against Pornography v.
M.N.R., 5 Scarborough Community Legal Services, 6
and Toronto Volgograd Committee, 7 have the benefit
of reasons that the appellant can attack and the Court
can examine. This is not, of course, an ideal situation,
but it is a situation expressly permitted by the Act
and we have to be satisfied with what we find in the
Minister's factum to discover on what grounds the
deemed refusal was made. These grounds, as we shall
see, are rather narrow.
It is beyond question that private, fee-charging
hospitals prima facie qualify as charities at common
law on the basis that "the provision of medical care
for the sick" is accepted as conferring a public bene
fit: 8
A gift for the purposes of a hospital is prima facie a good
charitable gift. This is now clearly established both in Australia
3 See Scarborough Community Legal Services v. The Queen,
[1985] 2 F.C. 555 (C.A.), at p. 579, Marceau J.A. and Toronto
Volgograd Committee v. M.N.R., [1988] 1 C.T.C. 365 (F.C.A.),
at pp. 371-372, Stone J.A.
4 Supra, note 1.
5 [1988] 2 F.C. 340 (C.A.).
6 Supra, note 3.
7 Supra, note 3.
S In re Resch's Will Trusts, [1969] 1 A.C. 514 (P.C.), at pp.
540-541, per Lord Wilberforce.
and in England, not merely because of the use of the word
"impotent" in the preamble to 43 Eliz. c. 4, though the process
of referring to the preamble is one often used for reassurance,
but because the provision of medical care for the sick is, in
modem times, accepted as a public benefit suitable to attract
the privileges given to charitable institutions. This has been
recognised in the High Court in Australia in Taylor v. Taylor
((1910), 10 C.L.R. 218, 227 per Griffith C.J.) and Kytherian
Association of Queensland v. Sklavos ((1958), 101 C.L.R. 56):
in England in In re Smith, decd. ([1962], 1 W.L.R. 763; [1962]
2 All E.R. 563, C.A.).
In spite of this general proposition, there may be certain hos
pitals, or categories of hospitals, which are not charitable insti
tutions (see In re Smith, decd. ([1962] 1 W.L.R. 763; [1962] 2
All E.R. 563, C.A.)). Disqualifying indicia may be either that
the hospital is carried on commercially, i.e., with a view to
making profits for private individuals, or that the benefits it
provides are not for the public, or a sufficiently large class of
the public to satisfy the necessary tests of public character.
Each class of objection is taken in the present case. As regards
the first, it is accepted that the private hospital is not run for the
profit, in any ordinary sense, of individuals. Moreover, if the
purposes of the hospital are otherwise charitable, they do not
lose this character merely because charges are made to the
recipients of benefits ...
[at page 542] Their Lordships turn to the second objection.
This, in substance, is that the private hospital is not carried on
for purposes "beneficial to the community" because it provides
only for persons of means who are capable of paying the sub
stantial fees required as a condition of admission.
In dealing with this objection, it is necessary first to dispose
of a misapprehension. It is not a condition of validity of a trust
for the relief of the sick that it should be limited to the poor
sick. Whether one regards the charitable character of trusts for
the relief of the sick as flowing from the word "impotent"
("aged, impotent and poor people") in the preamble to 43 Eliz.
c. 4 or more broadly as derived from the conception of benefit
to the community, there is no warrant for adding to the condi
tion of sickness that of poverty.
[at page 544] To provide, in response to public need, medi
cal treatment otherwise inaccessible but in its nature expen
sive, without any profit motive, might well be charitable: on
the other hand to limit admission to a nursing home to the rich
would not be so. The test is essentially one of public benefit,
and indirect as well as direct benefit enters into the account. In
the present case, the element of public benefit is strongly pre
sent. It is not disputed that a need exists to provide accommo
dation and medical treatment in conditions of greater privacy
and relaxation than would be possible in a general hospital and
as a supplement to the facilities of a general hospital. This is
what the private hospital does and it does so at, approximately,
cost price. The service is needed by all, not only by the well-
to-do. So far as its nature permits it is open to all: the charges
are not low, but the evidence shows that it cannot be said that
the poor are excluded: such exclusion as there is, is of some of
the poor—namely, those who have (a) not contributed suffi
ciently to a medical benefit scheme or (b) need to stay longer
in the hospital than their benefit will cover or (c) cannot get a
reduction of or exemption from the charges. The general bene
fit to the community of such facilities results from the relief to
the beds and medical staff of the general hospital, the availabil
ity of a particular type of nursing and treatment which supple
ments that provided by the general hospital and the benefit to
the standard of medical care in the general hospital which
arises from the juxtaposition of the two institutions.
I did not understand counsel for the respondent to
argue that performance of abortions by physicians
does not come within the ambit of the expression
"medical care for the sick" used by Lord Wilberforce.
This expression should indeed not be taken too liter
ally: the words "for the sick" are in my view redun
dant in that medical care presupposes a health condi
tion and common parlance relates medical care to
sickness whether or not the health condition can be
properly characterized as a sickness. In a Canadian
context, I would suggest that the words "health care"
or "health care services" be substituted for the words
"medical care for the sick". This would accord with
the language used in the Canada Health Act. 9 While
pregnancy in itself may not be "characterized prop
erly as a sickness", 10 it would appear that abortion,
when performed by a physician, constitutes some
form of health care. Counsel for the respondent did
indeed recognize that abortions are performed in
some public hospitals which qualify as charitable
organizations, that the province of British Columbia
funds abortion as an insured medical benefit under
the Medical Services Plan and that the funding of
abortion is not prohibited by the Canada Health Act.
9 R.S.C., 1985, c. C-6.
10 See Brooks v. Canada Safeway Ltd., [1989] 1 S.C.R.
1219, at p. 1237, per Dickson C.J.
It flows, therefore, from the Minister's factum that
the deemed refusal was made, not because abortion is
not a health care, nor because the Society's activities
were considered to be harmful to the community, nor
because these activities were considered to be of a
political nature, nor because the activities were con
sidered to be illegal, nor because private clinics can
not enjoy the same "charitable" status as public or
private hospitals, nor because the women benefiting
from the services of the clinic were not "the public"
or a sufficient section of the public, but strictly
because "absent clear statements of public policy and
absent public consensus on the abortion issue, it can
not be said that the (appellant)'s activities are benefi
cial to the community in a way the law regards as
charitable". 11 Simply put, the Minister's contention is
that there can be no benefit for the public, and there
fore no charity, where, all other conditions being ful
filled, the object of the charity is controversial.
It is well established that an organization will not
be charitable in law if its activities are illegal or con
trary to public policy. 12 As already noted, it is con
ceded here that the Society's activities are not illegal:
they are contrary neither to criminal law 13 nor to civil
or "Anglo-Canadian law". 14 But, argues the respon
dent, in the absence of clear statements of public pol
icy on the issue of abortion, the Society's activities
cannot be said to accord with public policy: the fail
ure of Parliament to replace the provisions of the
Criminal Code that were struck down in the
Morgentaler decision, leads the respondent to submit
that "it cannot be concluded that first trimester abor-
11 Respondent's memorandum of points of argument, para.
21.
12 See National Anti - Vivisection Society v. Inland Revenue
Commissioners, [1948] A.C. 31 (H.L.) at pp. 65 and 72, per
Lord Simonds.
13 R. v. Morgentaler, [1988] 1 S.C.R. 30; R. v. Sullivan,
[1991] 1 S.C.R. 489.
14 Tremblay v. Daigle, [1989] 2 S.C.R. 530, at p. 565.
tion by choice of the patient, while clearly legal,
reflects public policy on abortion". ' 5
I have found no support for such an approach in
the case law. It is one thing to act in a way which
offends public policy; it is a totally different thing to
act in a way which is not reflected in any, adverse or
favourable, public policy. An activity simply cannot
be held to be contrary to public policy where, admit
tedly, no such policy exists. It would impose an
unbearable burden on those who apply for charity
registration to require that there be a clear public pol
icy approving of their activities. As I read the cases,
for an activity to be considered as "contrary to public
policy", there must be a definite and somehow offi
cially declared and implemented policy. In the case at
bar, there is no such declared and implemented pol
icy. On the contrary, the fact that physicians perform
ing abortions in these clinics are paid with provincial
funds spent in accordance with federal legislation,
would tend to confirm that the performance of abor
tions at these clinics does not offend any public pol
icy. Public funds, in my view, are presumed to be
spent in accordance with public policy and absent
any challenge to the validity of that public spending I
am not ready to assume that public funds are not
spent for the public good.
With respect to the argument that there can be no
charity at law absent public consensus, counsel for
the respondent was unable to direct the Court to any
supporting authority. Counsel was indeed at a loss to
define what she meant by "public consensus", what
would be the degree of consensus required and how
the courts would measure that degree. To define
"charity" through public consensus would be a most
imprudent thing to do. Charity and public opinion do
not always go hand in hand; some forms of charity
will often precede public opinion, while others will
often offend it. Courts are not well equipped to assess
15 Respondent's memorandum of points of argument, para.
32.
public consensus, which is a fragile and volatile con
cept. The determination of the charitable character of
an activity should not become a battle between poll
sters. Courts are asked to decide whether there is an
advantage for the public, not whether the public
agrees that there is such an advantage.
Counsel for the respondent relies particularly on
the decision of this Court in Positive Action Against
Pornography v. M.N.R., 16 where Stone J.A. held, at
pages 350-353:
... the law of charity under this broad head especially is some
what elastic, the courts being willing to recognize any relevant
change in societal conditions or other special circumstance.
Nevertheless, to be charitable, a purpose or activity must be so
in a way that the law regards as charitable. There are, no doubt,
many purposes and activities that are beneficial to the commu
nity in a loose or popular sense though not in the legal sense
i.e., that intended by Lord Macnaghten in Commissioners of
Income Tax v. Pemsel, [1891] A.C. 531 (H.L.), or as argued for
by Sir Samuel Romilly in Morice v. Durham (Bishop of)
(1805), 10 Ves. Jun. 522 (H.C. of Ch.), at page 532, namely,
"objects of general public utility".
Counsel argues that ridding society of this kind of material or
at least controlling and limiting its publication, circulation and
use, can be considered as falling within the "spirit and intend-
ment" of the preamble to the Statute of Elizabeth or, at all
events, as analogous to objects already found by the courts to
be charitable under Lord Macnaghten's fourth head of charity.
The task of the Court under this head is a relatively narrow
one. We are not called upon to decide what is beneficial to the
community in a loose sense, but only what is beneficial in a
way the law regards as charitable. l am satisfied from an exam
ination of the material and of the decided cases that the appel
lant's primary purposes or activities cannot be classed as bene
ficial to the community in this latter sense but rather as
political in the sense understood by this branch of the law.
With respect, I do not see how these comments can
be of any help to the respondent. The Court was there
dealing with what it found to be "trusts for political
16 Supra, note 5.
purposes" and, more particularly, with "a trust for
alteration of the law":"
Furthermore, for the very good reasons explained by Lord
Parker in Bowman v. Secular Society, [1917] A.C. 406 (H.L.),
a trust for alteration of the law has never been accepted as
charitable. At page 442 he said:
The abolition of religious tests, the disestablishment of the
Church, the secularization of education, the alteration of the
law touching religion or marriage, or the observation of the
Sabbath, are purely political objects. Equity has always
refused to recognize such objects as charitable .... but a
trust for the attainment of political objects has always been
held invalid, not because it is illegal, for every one is at lib
erty to advocate or promote by any lawful means a change
in the law, but because the Court has no means of judging
whether a proposed change in the law will or will not be for
the public benefit, and therefore cannot say that a gift to
secure the change is a charitable gift ....
In the case at bar, according to the evidence before
the Court, the "trust" is for dispensation of health
care to women who want or need an abortion; it is
not a "trust" for alteration of the law with respect to
abortion, nor is it a "trust" for the political purpose of
promoting the "pro-choice" view. The controversy
that surrounds abortion should not deter us from
seeking the true purpose of the clinic, which is to
benefit women receiving a legally recognized health
care service in a legally constituted clinic. The record
before us does not contain even the slightest hint that
the Society engages or intends to engage in political
activities and, as I have already noted, the respondent
does not allege political purpose.
Counsel for the appellant relied heavily on the
decision of Chilwell J. in Auckland Medical Aid Trust
17 Supra, note 5, at p. 354. See also, National Anti-Vivisec
tion Society, supra, note 12 (purpose of awakening the cons
cience of mankind to the iniquity of torturing animals); McGo-
vern v Attorney General, [1981] 3 All ER 493 (Ch.D.)
(purpose of securing the release of prisoners of conscience);
Toronto Volgograd Committee, supra, note 3 (purpose of pro
moting the understanding between people in a Canadian city
and those in a Soviet city); Scarborough Community Legal
Services, supra, note 3 (purpose of operating a community-
based legal clinic the essential part of whose activities was
devoted to influence the policy-making process).
v Commissioner of Inland Revenue, 18 where the long-
range goal of the trust at issue was similar to the one
of the appellant in the case at bar. That decision con
tains helpful statements, but it does not have the
importance counsel claims it has. Following a Royal
Commission report, comprehensive legislation on
human reproduction, including abortion, was enacted
in New Zealand and public policy was therein
defined, with the result that the issue of public policy
was not really addressed.
The duty of this Court in a case such as this one
was well explained by Stone J.A. in the Native Com
munications Society: 19
If, as Lord Wilberforce says (and I agree), "the law of charity
is a moving subject", then our duty must be to see whether in
the circumstances disclosed by the record before us the appel
lant's purposes at this point in time fall within Lord Macnaght-
en's fourth head of charities in Pemsel's case.
The record contains a lengthy report prepared by
an officer of the respondent with respect to the
Society's activities. I have reproduced most of that
report in the earlier part of these reasons and I now
wish to come back to it. The report gives a very
detailed description of what goes on at the clinic and
does so in most flattering terms. The clinic obviously
takes great pain in ensuring the quality of the health
care services it provides. It has a good working rela
tionship with the Vancouver General Hospital and the
Shaughnessy Hospital in Vancouver. It provides an
environment and some services, such as counselling,
which are not provided in a hospital. It is available to
all women regardless of race, ethnic background,
religion or income level. It does not charge women a
fee if they cannot afford to pay. About 15% of the
patients are unable to pay all or a portion of the fee
charged. It does not accept patients under the age of
16 and requires parental consent for women between
the ages of 16 and 19, or alternatively, the consent of
two doctors. Abortion is not performed on any
woman who is ambivalent about the decision.
Patients who are more than twelve weeks pregnant
are referred to a hospital. The clinic has been granted
an award by the Public Health Nurses' Association
for its contribution to community health services. The
18 [1979] 1 NZLR 382 (S.C.).
19 Supra, note 1, at p. 482.
clinic has received 30 times the number of calls it had
anticipated and cannot serve the needs of all those
who request it. The Vancouver General Hospital has
capped the number of abortions being performed at
the hospital to 100 per week. Richmond Hospital is
no longer performing abortions. Five hospitals in
rural British Columbia do not provide any abortion
services. In Northern British Columbia, there are no
hospitals which provide this service. The clinic also
gets a lot of patients from the Yukon and from
Alberta.
With respect to medical fees, the record discloses
that there are two fee schedules relating to the per
formance of abortion in British Columbia, depending
on whether the abortion was performed before or
after 14 weeks. No distinction is made between the
funds paid to physicians to perform an abortion on
the basis that one was performed in a hospital and
one was performed in a free standing clinic. The fee
paid by the Medical Services Plan covers the physi
cian's fee as well as the pregnancy test and the
urinalysis. It does not cover the cost of counselling.
The Plan's policy with respect to the payment of fees
for an abortion is no different from that applied to
any other medical procedure. 20
Furthermore, in the case at bar, the respondent has
filed no evidence that would suggest that the
Society's activities are not for the benefit of the com
munity. The respondent has even stated that his posi
tion is not "that the Appellant's activity of providing
abortion, or the controversy surrounding the abortion
issue, is harmful to the community". 21 That being so,
and this being a case where the activity—provision of
health care—is prima facie charitable, the Court
should follow the advice given by Lord Simonds in
National Anti-Vivisection Society: 22
20 A.B., at pp. 82 and 258.
21 Respondent's memorandum of points of arguement, para.
22.
22 Supra, note 12, at p. 65.
I would rather say that, when a purpose appears broadly to fall
within one of the familiar categories of charity, the court will
assume it to be for the benefit of the community and, therefore,
charitable, unless the contrary is shown, and further that the
court will not be astute in such a case to defeat on doubtful
evidence the avowed benevolent intention of a donor.
All in all, I have been persuaded that in the cir
cumstances disclosed by the record before us, the
Society's purposes and activities at this point in
time 23 are beneficial to the community within the
spirit and intendment, if not the letter, of the pream
ble to the Statute of Elizabeth and that the Society is a
charitable organization within the evolving meaning
of charity at common law and qualifies as a "charita-
ble organization" for the purposes of paragraph
149.1(1)(b) of the Act.
In view of the conclusion I have just reached, it
becomes unnecessary to deal with the Charter argu
ments alternatively raised by the appellant.
The appellant is asking for costs. Rule 1312 of the
Federal Court Rules [C.R.C., c. 663] provides that
there shall be no costs "unless the Court, in its discre
tion, for special reasons, so orders". The special rea
son alleged by the appellant is that "the record shows
that the respondent delayed and avoided its legisla
tive duty to make a decision". The respondent can
hardly be said to have "delayed and avoided its legis
lative duty" when subsection 172(4) of the Act
expressly authorizes the Minister not to "deal with
the charitable tax application within 180 days". The
23 A "charitable organization" status may be revoked by the
Minister. As was said by Lord Simonds in National Anti-Vivi
section Society, supra, note 12, at p. 74:
A purpose regarded in one age as charitable may in another
be regarded differently ... If by a change in social habits
and needs, or, it may be, by a change in the law the purpose
of an established charity becomes superfluous or even ille
gal, or if with increasing knowledge it appears that a pur
pose once thought beneficial is truly detrimental to the com
munity, it is the duty of trustees of an established charity to
apply to the court ... And I can well conceive that there
might be cases in which the Attorney-General would think it
his duty to intervene to that end.
See also Native Communications Society, supra, note I, at
pp. 484-485.
respondent, in the present case, did precisely what the
statute empowers him to do. This is not a case for
costs.
DISPOSITION
For these reasons, I would allow the appeal, set
aside the deemed refusal of the Minister of National
Revenue herein and refer the matter back to the Min
ister for reconsideration on the basis that the appel
lant is a "charitable organization" within the meaning
of paragraph 149.1(1)(b) of the Income Tax Act.
PxA1 iE J.A.: I agree.
DESJARDINS J.A.: I agree.
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.