BILL 63 – 2004
CHARITABLE PURPOSES PRESERVATION ACT

Contents

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Definitions

1 In this Act:

"charitable purpose" means a purpose recognized at law as being charitable, and includes payment of debts or liabilities, including expenses, arising from the actual, intended or purported advancement of that purpose;

"charity" means any entity, whether incorporated or not, that

(a) has the capacity to hold property in trust and to carry out charitable purposes, and

(b) in the case of an entity that is not an individual, is limited by the documents by which the entity was established or constituted to carrying out exclusively charitable purposes;

"discrete purpose" means,

(a) in relation to discrete purpose charitable property in respect of which a court order has not been made under section 3 (4) or 4 (1) (b), the specified charitable purpose referred to in section 2 (1) (a) for which the property was given to the charity that holds the property as discrete purpose charitable property, or

(b) in relation to discrete purpose charitable property in respect of which a court order has been made under section 3 (4) or 4 (1) (b), the charitable purpose specified in the order;

"discrete purpose charitable property" means property that, under section 2 (1) or 4 (2) (c), is discrete purpose charitable property, and includes returns from that property;

"donor" means a person, other than a charity, who gives property to a charity;

"give" includes donate, bequeath or devise;

"hold", in relation to discrete purpose charitable property, includes any or all of keep, administer and use the property;

"property" includes money;

"returns" includes dividends, interest and capital gains, whether realized before, on or after the coming into force of this section.

Discrete purpose charitable property

2 (1) If

(a) a donor gives property to a charity for a specified charitable purpose, whether or not the property is stated to be given in trust,

(b) the donor has, either expressly or through some formula or method, identified with certainty what property is being given to the charity for that purpose, and

(c) the donor's intention in giving the property to the charity is expressly stated to be, or is, by necessary implication, that

(i) the property is to be kept and administered by the charity separately from any other property, and

(ii) the property is to be used exclusively to advance the specified charitable purpose rather than to assist or support the charity generally or to assist or support the charity in advancing any of its goals, purposes or objects,

the property is discrete purpose charitable property if and for so long as that property is kept, administered and used in accordance with the intention referred to in paragraph (c).

(2) For the purposes of subsection (1),

(a) discrete purpose charitable property that is money or other fungible property is deemed to be kept and administered by the charity separately from other property if and for so long as the charity maintains records that allow

(i) the discrete purpose for the money or other fungible property to be identified, and

(ii) the money or other fungible property kept for that discrete purpose to be quantified, and

(b) discrete purpose charitable property does not cease to be administered separately merely because the charity makes decisions respecting that property at the same time as it makes decisions respecting other property.

(3) A charity holding discrete purpose charitable property has no beneficial interest in that property.

(4) Without limiting subsection (3), discrete purpose charitable property held by a charity may not be seized or attached under any process at law or in equity with the object of satisfying a debt or liability of the charity, including, without limitation, a judgment against the charity, except to the extent that the debt or liability is incurred by the charity in advancing, or in attempting or purporting to advance, the discrete purpose for the property.

Obligation of charity holding discrete purpose charitable property

3 (1) Property that is discrete purpose charitable property retains its character as discrete purpose charitable property if and for so long as the property is kept, administered and used

(a) in accordance with the intention of the donor of the property referred to in section 2 (1) (c) or, if the court has made an order in respect of the property under subsection (4) of this section or under section 4 (1) (b), in accordance with the intention expressed in that order, and

(b) without limiting paragraph (a) of this subsection, exclusively for the advancement of the discrete purpose.

(2) If a charity holds discrete purpose charitable property, the law of British Columbia as it applies to trusts and to entities holding trust property applies to the discrete purpose charitable property and to the charity as if the charity were holding that property in trust for the intention referred to in subsection (1) (a), even though the persons who could benefit from the advancement of the discrete purpose were not identified or identifiable when or after the property was given or transferred to the charity.

(3) Unless this Act provides otherwise, the court may make, in relation to discrete purpose charitable property and a charity holding discrete purpose charitable property, any order it may make in relation to any charitable trust property and any charity holding charitable trust property.

(4) Without limiting subsection (3), if a charity holding discrete purpose charitable property is unwilling or unable to continue to keep, administer and use the property to advance the discrete purpose, the court may make whatever orders, including arrangements, it considers appropriate, including transferring the property to a new charity, so that the property is kept, administered and used to

(a) advance the discrete purpose, or

(b) advance another charitable purpose that the court considers is consistent with the discrete purpose.

(5) If the court makes an order under subsection (4),

(a) the property is discrete purpose charitable property, and this Act applies to the property, and to the charity holding that property, if and for so long as

(i) the property is kept and administered by that charity separately from any other property of that charity, and

(ii) the property is used exclusively to advance the charitable purpose specified in the order rather than to assist or support that charity generally or to assist or support that charity in advancing any of its goals, purposes or objects, and

(b) if the discrete purpose charitable property is transferred by the order to a new charity, the new charity must pay from that property, in full or, if that is not possible, rateably, any debts or liabilities arising from the actual, attempted or purported advancement by the former charity of the discrete purpose that applied to that property before the order.

Bankruptcy or winding-up proceedings

4 (1) If a charity holding discrete purpose charitable property goes into bankruptcy or is the subject of a winding-up order, or if a receiver is appointed in respect of all or substantially all of the discrete purpose charitable property, and the trustee in bankruptcy, liquidator or receiver is unwilling or unable to continue to keep, administer and use the property to advance the discrete purpose for which the property was given to the charity or to locate another charity that is willing and able to keep, administer and use the property to advance that discrete purpose, the court must, on application under this subsection,

(a) if it is satisfied that the discrete purpose can be advanced by another charity, make whatever orders, including arrangements, it considers appropriate, including transferring the property to that new charity, so that the property is kept, administered and used to advance that discrete purpose, or

(b) if it is satisfied that the discrete purpose cannot be advanced by another charity, identify another charitable purpose that is consistent with the discrete purpose and make whatever orders, including arrangements, it considers appropriate, including transferring the property to another charity, so that the property is kept, administered and used to advance that other charitable purpose.

(2) If the court makes an order under subsection (1),

(a) the new charity referred to in that subsection must pay from the property transferred to it under that subsection, in full or, if that is not possible, rateably, any debts or liabilities arising from the actual, attempted or purported advancement by the former charity of the discrete purpose that applied to that property before the order,

(b) the new charity may, if a payment is made under paragraph (a) to a person who has a claim in the bankruptcy or winding-up for debts or liabilities referred to in that paragraph, require the person to assign to the new charity the portion of that claim that is equal to the amount of the payment, and

(c) the property, including any money recovered under an assignment under paragraph (b) that remains after payment is made under paragraph (a), is discrete purpose charitable property, and this Act applies to the property, and to the new charity holding that property, if and for so long as

(i) the property is kept and administered by the new charity separately from any other property of the new charity, and

(ii) the property is used exclusively to advance the charitable purpose specified in the order rather than to assist or support the new charity generally or to assist or support the new charity in advancing any of its goals, purposes or objects.

Law not affected

5 Nothing in this Act limits or otherwise affects the law of British Columbia as it applies to trusts, charitable trusts or discrete purpose charitable property except that, in the event of a conflict between the common law and this Act, this Act prevails.

Act to have retrospective effect

6 (1) This Act applies to all discrete purpose charitable property, whether or not the giving of the property occurred before or after the coming into force of this Act.

(2) This Act does not affect the settlement by the provisional liquidator of The Christian Brothers of Ireland in Canada with respect to Vancouver College Limited and St. Thomas More Collegiate Ltd. except that subsection (1) applies to any discrete purpose charitable property resulting from the settlement.

Commencement

7 This Act comes into force by regulation of the Lieutenant Governor in Council.