February 2020 Charity & NFP Law Update

Jacqueline M. Demczur

Ontario Court Rules on Trusts in Scouts Land Ownership Dispute

The Ontario Superior Court of Justice released its decision in the case of Tillsonburg Scout Association v Scouts Canada on February 6, 2020 concerning a dispute over the ownership of a 95 acre parcel of land in Muskoka known as “Camp Jackson”. Tillsonburg Scout Association, an unincorporated association (“TSA”), sought a declaration vesting title to Camp Jackson in TSA as the original settlor of a trust held by Scouts Canada (“Scouts”) as trustee. Scouts, however, denied TSA’s proprietary interest in Camp Jackson, and sought a declaration that Scouts holds absolute legal title or, alternatively, that it holds title to Camp Jackson as trustee under a charitable purpose trust.

TSA purchased Camp Jackson in 1960 from Mr. Gordon Jackson, with three individuals holding title as trustees for TSA as beneficiary (“1960 Transfer”). As conditions of transfer, Camp Jackson was only to be used “for the purposes of promoting youth welfare” and any future disposition required Mr. Jackson’s written approval. In 1971, with Mr. Jackson’s written approval, the three trustees transferred title of Camp Jackson to the Kinsmen Club of Tillsonburg (“Kinsmen”) to hold as trustee for TSA (“1971 Transfer”).

Subsequently, TSA and Scouts agreed on a transfer of Camp Jackson to the Scouts, as “Scouts enjoy tax exemption status and TSA and [sic] were satisfied the Scouts real estate policy stipulated any eventual disposal of real estate would be on the recommendation of the local Scouting council and include a plan for the proceeds of sale, provided the proceeds would be used for ‘Scouting purposes in the relevant area.’” In 1983, with Mr. Jackson’s written consent, Kinsmen transferred Camp Jackson to “Provincial Council for Ontario; Boy Scouts of Canada” (which is required by Scouts policy to hold all real estate in Ontario for Scouts) on the same conditions as in the 1960 and 1971 transfers, which were to remain in force until 1985 (“1983 Transfer”).

Unincorporated associations are incapable of owning or holding property. In this regard, the court indicated that they also cannot be beneficiaries or settlors of a trust, as a valid trust requires the settlor, trustee and beneficiary to have capacity. Despite TSA incorporating in 2005, the court found that since TSA was incapable of holding an interest in Camp Jackson at first instance, there was no interest that the incorporated TSA could succeed either as settlor or beneficiary.

The court then considered whether the 1960 Transfer established a valid trust. It considered the “three certainties” (i.e. certainty of intention, subject matter, and objects), and found that Mr. Jackson intended to create a trust through the 1960 Transfer by him to the three trustees, and that the trust clearly described the subject matter as being Camp Jackson. However, concerning certainty of objects, it questioned whether the trust was in favour of persons or a charitable purpose, and whether the class of beneficiaries were described in sufficiently certain terms for trust to be performed.

Although the court did not find a private trust, it held that there was a valid charitable purpose trust. It found that the 1960 Transfer was “of benefit to society, sufficiently public in nature, exclusively charitable and without political purpose,” given the restriction that Camp Jackson must be used “only for the promotion of youth welfare.” It held that this restricted purpose fell within “advancement of education,” and satisfied the certainty of object requirement. Further, it stated that the charitable purpose trust continued with the 1971 Transfer to Kinsmen.

In contrast to the 1960 and 1971 Transfers, the court found that the 1983 Transfer omitted reference to Scouts taking title as trustee. The court concluded that this omission was deliberate. Although TSA argued that Scouts could only take the title as held by the transferor (i.e. as trustee), the court found that Mr. Jackson consented to the disposition of Camp Jackson to Scouts in accordance with his restriction. The court therefore held that Scouts took full legal title to Camp Jackson through the 1983 Transfer. On these grounds, the court dismissed TSA’s application and allowed Scouts’ application in part, with a declaration the Provincial Council for Ontario; Boy Scouts of Canada holds legal title to Camp Jackson, and a declaration that TSA has no beneficial interest in Camp Jackson.

This case is a good illustration of the difficulties associated with real property ownership by unincorporated associations. Further, it is a helpful reminder of the importance of clearly drafted trust documents to outline the intention of parties when entering into a trust arrangement.

Read the February 2020 Issue

Competition Bureau’s Role in Digital Advertising: Implications for Charities and Not-for-Profits
CRA News
-  Excise and GST/HST News No. 107
-  CRA Introduces Digital Processes for Authorizations
-  CRA Charities and Information Sessions and Webinars
CAGP Provides Update on Gifts of Life Insurance in B.C.
Legislation Update 
-  Bill C-7, An Act to amend the Criminal Code (medical assistance in dying)
-  Ontario Bill 175, Connecting People to Home and Community Care Act, 2020
-  Ontario Bill 136, Provincial Animal Welfare Services Act, 2019 Now Proclaimed
Donation Receipts Signed by and in Favour of Charity Officer Denied
Tax Court of Canada Rejects Charitable Donation Scheme… Again
Ontario Court Rules on Trusts in Scouts Land Ownership Dispute
One Incident of Sexual Harassment Justified Termination for Cause
BC Court Finds Indigenous Ceremonies in School Did Not Violate Freedom of Religion
Ministry of Health Revokes its Hospital Naming Directive
Recent Issues in Privacy: Case Law Update
New Canadian UDRP Provider for Resolving Domain Name Disputes
Anti-Terrorism/Money Laundering Update 
-   Further Amendments to Regulations under the PCMLTFA
-   US 2020 National Strategy for Combating Terrorist and Other Illicit Financing
-   UN Working Paper on Impact of Counter-terrorism Legislation on Humanitarian Action
Essential Trademark Issues for Charity and Not-For-Profit Lawyers
Theresa L.M. Man Named to CRA Technical Issues Working Group