Court of Appeal Decision of the Week

Charitable Donations: No Strings Attached?

Case: Faas v. Centre for Addiction and Mental Health Foundation, 2019 ONCA 192 (CanLII)

Keywords: Charitable Donation; Donor Investment Agreement; Charities Accounting Act, R.S.O. 1990, c. C.10

Synopsis:

The Appellant, Mr. Andrew Faas, agrees to make a significant charitable donation – $1 million – to the Respondent Centre for Addiction and Mental Health Foundation and Centre for Addiction and Mental Health (collectively referred to as “CAMH”).

The Parties enter a written “Donor Investment Agreement” which includes a provision for an annual status report to Mr. Faas.

Mr. Faas is not satisfied with the way the donation is being spent. He requests changes. The Parties reach an impasse. Mr. Faas complains as to the manner in which the donation funds are “dealt with or disposed of” pursuant to s. 6 of the Charities Accounting Act, R.S.O. 1990, c. C.10. Specifically, Mr. Faas requests that the Public Guardian and Trustee investigate CAMH.

The Motion Judge finds no grounds to do so; that so ordering would serve no identifiable public interest. The Court of Appeal identifies no error in these findings. Mr. Faas’ appeal is dismissed.

Importance:

What do you do if you’ve made a donation to a charity, but are dissatisfied with the manner in which donation funds are utilized by that charity? This case provides some insight and direction for donors and charities alike – for example, by highlighting the use of the Charities Accounting Act, R.S.O. 1990, c. C.10.

Section 6 of the Act provides:

(1) Any person may complain as to the manner in which a person or organization has solicited or procured funds by way of contribution or gift from the public for any purpose, or as to the manner in which any such funds have been dealt with or disposed of.

(3) Wherever the judge is of opinion that the public interest can be served by an investigation of the matter complained of, he or she may make an order directing the Public Guardian and Trustee to make such investigation as the Public Guardian and Trustee considers proper in the circumstances.

(5) The cost of any such investigation, when approved by the Attorney General, forms part of the expenses of the administration of justice in Ontario.

Significantly, the Act provides that “Any person” may complain – which would suggest applications are not simply reserved for a donor. Additionally, should a judge determine that “the public interest” can be served by an investigation, the Act provides that such an investigation proceeds at the expense of the Province.

In this case, the Court of Appeal (along with the Motion Judge prior) determined that the interests of justice would not be served by launching an investigation into CAMH. Why? Although the Court of Appeal does not elaborate on the point, it did note that there had been no suggestion CAMH “…used the funds for purposes outside its own charitable objects”. (See para. 3).

The Court of Appeal showed deference to the findings of the Motion Judge, who was satisfied on the record before him that no mismanagement had occurred and that the funds were “…properly spent on the designated program”. (See para. 5).

Next stop Auditor General, if within their purview?

Counsel for the Appellants: Ronald Lachmansingh and Tyler Murray (Juriansz & Li, Toronto)

Counsel for the Respondents: Rebecca Jones and Kelly Hayden (Lenczner Slaght Royce Smith Griffin LLP, Toronto)

Discuss on CanLii Connects

Posted: Wednesday, March 13, 2019