This is an interesting case because it involves promoters of a donation scheme. The couple were happily married when they set up the schemes, but divorced after the schemes fell apart. So this appeal had the interesting feature of being heard on common evidence under ITA s. 174 (common questions). On the donative intent issue, Justice Miller said:
[90] Notwithstanding the recent decision of the Federal Court of Appeal inCastro v R.,[9] in which the court commented in obiter on the issue of donative intent, the law remains somewhat unsettled as to whether or not a charitable donation tax receipt can constitute a benefit for the purposes of vitiating a gift. …
[92] The Federal Court of Appeal confirms that, with nothing more, an inflated tax receipt by itself is not a benefit that will vitiate a gift. So, what then is the something more beyond the receipt itself that a court can look to in determining whether or not there is a benefit returning to the donor that will therefore deny the gift? In the Federal Court of Appeal decision in Berg it was what the court called pretence documents. In the decision of Webb v The Queen,[10] it was kickbacks.
[93] In the case before me what I find Roberto received as part of the acquisition and donation of the medical supplies was an appraisal at a significantly higher amount. …
[97] To come full circle then, is the tax receipt, inflated 50 fold from Roberto’s cost, a benefit vitiating Roberto’s gift to the charity? It is, only because it does not stand alone but is part of a coincidental transaction that included the provision of a questionable appraisal in circumstances demanding greater scrutiny. I am satisfied there was no intention on Roberto’s part to impoverish himself in any way by transferring these medical supplies to the charity. He was in the business of profiting from buy low – donate high programs and this particular transaction was more in keeping with that profit motive than a charitable donation motive. I conclude he had no donative intent.
Mattacchione v. The Queen 2015 TCC 283 (C Miller)