https://decisia.lexum.com/fca-caf/decisions/en/item/307681/index.do
Ahlul-Bayt Centre, Ottawa v. Canada (National Revenue) (March 22, 2018 – 2018 FCA 61, Rennie, Woods, Laskin (author) JJ. A.).
Précis: The Centre is a registered charity operating an Islamic school in Ottawa. CRA gave notice of its intention to revoke the Centre’s charitable status. The Centre applied pursuant to paragraph 168(2)(b) of the Income Tax Act and rule 300(b) of the Federal Courts Rules, SOR/98-106 for an order staying that decision. The Federal Court of Appeal applied the test for injunctive relief found in RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 SCR 311, 1994 CanLII 117 (SCC) (“the RJR test”). The Court held that the Centre had not met the second prong of the RJR test, i.e., evidence of irreparable harm. Accordingly the application was dismissed from the bench with costs.
Decision: The RJR test is well known to practitioners. This was simply a case of the supporting evidence not meeting the standard of proof of irreparable harm:
[18] In our view, the evidence that the Centre puts forward to support the chain of events leading to irreparable harm does not meet the required standard. Among other things, the evidence as to the Centre’s financial position is unclear or incomplete. The evidence that significant numbers of parents would withdraw their children from the school within one or two months is also neither clear nor compelling.
[19] I will provide some examples.
● The Centre has provided no supporting documentation that would disclose and clarify its current financial position. Its current budget is not before us. There are also no current cash flow statements, reports on donations, or statements of future funding requirements.
● The affidavits on which the Centre relies in asserting that so many students will leave the school that it will have to close within one or two months were sworn in September and October 2017. At the time they were sworn there were still some eight months remaining in the school year. It is now March 2018, and only some three months remain. According to the evidence, students who leave the school before the end of the school year must give two months’ written notice and pay tuition fees for the two month period. There is nothing in the evidence that addresses the impact of the current timing on parents’ decision-making. It appears far from probable that significant numbers of parents would withdraw their children when doing so would oblige them to pay two months’ tuition in any event, and to find new schools for their children for the short period remaining in the school year. The timing relative to the end of the school year distinguishes this case from Cheder Chabad, above, on which the Centre heavily relies.
● There is evidence from only one parent as to the withdrawal of students from the school if the Centre is no longer able to issue tax receipts. He has three children at the school. He testifies only that without a tax receipt, he “would likely need to withdraw one or more of [his] children,” and goes on to say that he “[does] not know if [his] family would qualify for a subsidy.” His evidence also provides no particulars of his financial situation, and does not address the fact that the end of the school year is approaching.
● There is also evidence from only one parent concerning the impact of losing subsidies. He testifies only that if the subsidy ended, he “[does] not think [he] could keep his children at the School.” He too provides no details of his financial position.
● It appears from the evidence that 23 families have applied for subsidies, and that subsidies amount to $140 per student per month. The provision of subsidies for the remainder of the school year, even assuming all of the applicants for subsidies received them, would entail only a relatively modest expenditure.
● While the Centre asserts that “[t]he loss of tuition revenue and the reduction of the donor base for School related fundraising will make ABCO financially incapable of operating the School, leading to its closure,” it has not, as noted above, provided its current budget or other supporting financial information. Nor has it addressed the findings of the Directorate that it operated at a net surplus in every year from 2009 to 2015. Its financial statements for 2016 also show an excess of revenues over expenditures of $307,242.There is no evidence satisfactorily explaining how this surplus position squares with the affidavit evidence submitted by the Centre that the school is operating at a deficit.
● The evidence indicates that the Centre has unencumbered real property assets valued at approximately $2.9 million. While there is evidence that it would be difficult and time-consuming to sell any of these assets or to use them as a source of financing, there is no evidence to demonstrate any efforts that the Centre has made, particularly since the Minister’s September 2017 notice, to do so.
[20] Further examples could be cited. Taken as a whole, the evidence is in our view insufficient to establish irreparable harm. Given this conclusion there is no need to consider the third, balance of convenience part of the test.
As a result the application was dismissed from the bench with costs.