Attorney General: Oversight over Charities

10 octobre 2019 | Sarah Fitzpatrick

( Disponible en anglais seulement )

On July 4, 2019, the Attorney General of British Columbia filed a Notice of Civil Claim (Vancouver Registry No. S-197487) against the Corporation of the District of West Vancouver (“West Vancouver”). In the Notice, the Attorney General claims that West Vancouver breached the terms of a charitable trust. The Attorney General is seeking orders that would require West Vancouver to comply with the trust.

The facts are that Mr. and Mrs. Brissenden wanted to give property to West Vancouver for use as a public park. They discussed this with West Vancouver, which agreed to use the property for that purpose. Both Mr. and Mrs. Brissenden provided in their wills that the property would be given to West Vancouver for use as a public park. Mr. Brissenden passed first and, when Mrs. Brissenden passed away in 1990, the property was left to West Vancouver pursuant to her will.

According to the Attorney General, since it received the property, West Vancouver has not made any changes. It continues to appear to be a private residence. The property has not been used or maintained as a public park. In addition, from at least 2001, West Vancouver has been renting the property out to someone who uses it as their private residence. West Vancouver describes this person as a “caretaker”. The Attorney General alleges, though, that the property does not need a caretaker.

In 2017, West Vancouver filed a petition with the Supreme Court of British Columbia for an order to vary the terms of the trust. If issued, the order would permit West Vancouver to dispose of a significant portion (43%) of the property. The portion that would be sold would first be subdivided into three residential lots. Using the proceeds of sale, the remaining part of the property would be turned into walking trails. The remaining proceeds of sale would be used to acquire additional property that would be turned into a waterfront park with a public building. In that petition, the Attorney General filed a response, opposing the orders sought by West Vancouver.

In the Notice of Civil Claim filed in July, the Attorney General is seeking a declaration that West Vancouver is in breach of the terms of the trust by not using the property as a public park. The Attorney General is also asking for other orders including orders that would require West Vancouver to make the property a public park, disgorge any profits it has made from the property (such as the rent from the caretaker), and hold those profits for the trust.

It may appear strange to charities that the Attorney General is bringing a claim against West Vancouver as the Canada Revenue Agency is often viewed as the regulator of charities. However, the Crown is responsible for protecting the interests of charities as part of its parens patriae (“parent of the country”) role which allows the Crown to step in and protect charitable interests. The Crown is concerned with how charitable trusts are administered and whether the properties and funds in charitable trusts are properly used for the charitable purposes of the trust. The provincial attorney generals as the senior legal representative of the Crown within the provinces have assumed this parens patriae role. Any application to a court by a trustee of a charitable trust (such as a charity that holds property for a particular charitable purpose) to vary the trust must be on notice to the provincial Attorney General (or in Ontario, the Attorney General’s designate, the Public Guardian and Trustee). The Attorney General would then be responsible for advising the court as to whether it has any objections to the variation. In addition, the Attorney General also has the ability to apply for a court order to hold the trustee accountable and to ensure that a charitable trust is being properly administered. In contrast, the Canada Revenue Agency only regulates charities through the requirements that must be met and maintained for qualification for the tax status of being a “registered” charity under the Income Tax Act (Canada).

As the Notice of Civil Claim has only recently been filed, it will be awhile before this claim will finally be resolved. In the meantime, it serves as a reminder of the role that the Attorney General plays in overseeing charities within the province.

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