http://decisions.fca-caf.gc.ca/site/fca-caf/decisions/en/item/66635/index.do 
Canada v. Berg[1] (January 31, 2014) arose out of another unsuccessful charitable donation scheme. In this case the donated properties were time share units. The value of the units was inflated by purported financing arrangements. The Federal Court of Appeal referred to the documentation as the “pretence documents”. While the Tax Court denied the taxpayer the inflated value of the alleged donations, it did allow him credit for the cash component of the donations:
[15] The judge determined that Mr. Berg was entitled to claim a charitable tax credit to the extent that he was actually impoverished by his purchase and subsequent transfer of the timeshare units (at paragraphs 47-48):
The Appellant was not overwhelmingly and perhaps only marginally motivated by donative intent when he gave the Transferred Units to the Charity. Factually, the Appellant had an intention to give the Transferred Units purchased with the Cash Donation Amounts without the condition of receiving any benefit beyond that of the tax receipts, however perversely inflated they may have been. Both counsel agreed the Appellant received no consideration beyond the possibility of the overstated tax receipt and the concordantly inflated charitable tax credit.
The fact remains however, that to the extent the Cash Donation Amount related to the Transferred Units, the Appellant was impoverished by, paid valuable consideration for, intended to give, and conveyed the Transferred Units which were, in turn, received by the Charity. Whatever opprobrium may be ascribed to the Donation Program, legally the Cash Donation Amount has met the legal test of a charitable gift. In the absence of some other benefit received beyond the Inflated Tax Receipts, no legal authority suggests donative intent as defined by the case law relevant to section 118.1 of the Act has been vitiated or nullified to the extent of the value of the Cash Donation Amount.
[16] The matter was referred back to the Minister for reconsideration and reassessment on the basis that Mr. Berg was entitled to claim charitable gifts in the amount of $242,000.00 and $133,950.00 for the 2002 and 2003 tax years, respectively.
The Federal Court of Appeal rejected this approach and allowed the Crown’s appeal with costs throughout denying the taxpayer any tax credit in respect of the alleged donations:
[28] In my view, on this record, it was not open to the judge to conclude that the pretence documents were “of no value” at the time that Mr. Berg consummated the “deal.” They clearly had value to Mr. Berg – he paid a substantial fee at that time, well in excess of the value of the timeshare units – and it is clear that the pretence documents were part of the package he received in return. Mr. Berg intended to rely on the pretence documents as though they were genuine, and he did so. He used them to support his initial claim for inflated tax credits. He continued to rely on them throughout the audit and objection, and even to the end of examinations for discovery. The fact that his position became untenable upon discovery of the discharge documents does not change the fact that the pretence documents had value when they were delivered to Mr. Berg. In my view, this case is indistinguishable from Maréchaux, and for that reason the Crown’s appeal should succeed.
[29] The Crown is entitled to succeed for a further reason. In my view, it was not open to the judge on this record to conclude that, at the time of the transfer of the timeshare units to Cheder Chabad, Mr. Berg had the requisite donative intent for the purposes of section 118.1 of the Act. In my view, Mr. Berg did not intend to impoverish himself by transferring the timeshare units to Cheder Chabad. On the contrary, he intended to enrich himself by making use of falsely inflated charitable gift receipts to profit from inflated tax credit claims. He consummated the “deal” solely with that objective, and he acted from beginning to end in a manner intended to achieve that result.
VI. Conclusion
[30] For these reasons, I would allow the appeal, set aside the judgment of the Tax Court, and, rendering the judgment that should have been rendered, dismiss Mr. Berg’s appeal from the 2002, 2003, and 2004 taxation year reassessments. The Crown is entitled to its costs in this Court and in the Tax Court.
[1] 2014 FCA 25.