Jaamiah Al Uloom v. R. - FCA: Charity’s appeal from deregistration dismissed

Jaamiah Al Uloom v. R. - FCA:  Charity’s appeal from deregistration dismissed


Jaamiah Al Uloom Al Islamiyyah Ontario v. Canada (National Revenue) (February 10, 2016 – 2016 FCA 49, Ryer (author), Webb, Rennie JJ. A.).

Précis:   The Appellant was deregistered as a charity for failing to keep proper books and records and appealed its deregistration to the Federal Court of Appeal.  The Appellant argued that its failures were not serious enough to justify the Minister’s decision to deregister rather than impose lesser sanctions.  The Court of Appeal disagreed and held that the breach of its foundational duty to keep books and records justified the deregistration.  Accordingly the appeal was dismissed from the bench with costs.

Decision:    The nub of the Court of Appeal’s decision is found in the following paragraphs:

[14]           One of the key responsibilities of the Charity is to maintain proper books and records that will enable that Minister to verify the accuracy and appropriateness of the income tax deductions and credits that the Charity makes available to those who receive charitable donation receipts from it. In the circumstances of this appeal, the Charity failed to provide the Minister with books and records that would allow the Minister to determine if the appropriate amount of income tax relief was being provided by the Charity to its donors at the expense of the fisc.

[15]           In our view, this basic requirement is foundational in the sense that the absence of proper books and records places the Minister in the position of being unable to meet her basic obligation to verify the accuracy and validity of the charitable donation receipts that the Charity has issued. Thus, it is apparent that this non-compliance on the part of the Charity is serious and justifies the Minister’s conclusion that the extreme sanction of revocation is warranted.

[16]           Given this conclusion, and in light of the requirement in subsection 180(3) to hear and determine this appeal in a summary way, there is no need to consider whether any of the other grounds for the Confirmation Decision is also serious enough to justify the revocation of the registration of the Charity.

As a result the appeal was dismissed from the bench with costs.

Comment:  This decision will clearly have the effect of communicating to the charitable sector that the maintenance of adequate books and records is not something to be treated lightly.