Blackmore v. The Queen

Blackmore v. The Queen
Court (s) Database
Tax Court of Canada Judgments
Date
2013-08-21
Neutral citation
2013 TCC 264
File numbers
2008-101(IT)G
Judges and Taxing Officers
Diane Campbell
Subjects
Income Tax Act
Decision Content
Docket: 2008-101(IT)G
BETWEEN:
WINSTON BLACKMORE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeals heard on January 23, 24, 25, 26, 30, 31,
February 1, 2, 6, 7, 8, 9, 10, 27, 28, 29, March 1, 2 and
May 2, 3, 4, 2012 at Vancouver, British Columbia
Before: The Honourable Justice Diane Campbell
Appearances:
Counsel for the Appellant:
David R. Davies
Natasha S. Reid
Counsel for the Respondent:
Lynn M. Burch
David Everett
Selena Sit
Zachary Froese
____________________________________________________________________
JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 2000, 2001, 2002, 2003, 2004 and 2006 taxation years are dismissed, in accordance with the attached Reasons for Judgment.
The parties shall have sixty days from the date of my reasons to submit written submissions on costs, if they cannot otherwise reach an agreement on this matter.
Signed at Summerside, Prince Edward Island, this 21st day of August 2013.
“Diane Campbell”
Campbell J.
TABLE OF CONTENTS
INTRODUCTION AND OVERVIEW.............................................................. 1
THE APPELLANT’S PERSONAL INCOME TAX FILINGS AND THE REASSESSMENTS.......................................................................................................................... 4
THE LEGISLATIVE HISTORY OF SECTION 143........................................ 5
PRELIMINARY AND PRIMARY ISSUES...................................................... 8
A. Statutory Interpretation
B. Judicial Notice
C. Summary of Preliminary Issues
THE EVIDENCE............................................................................................ 19
A. The Witnesses
B. The Bountiful Site: Layout and History
C. Religion: Mormonism, the LDS and the FLDS Churches
D. Community Composition, Beliefs and Practices
E. UEP Trust
F. J.R. Blackmore & Sons Ltd.
G. Other Companies
H. Personal Property
COURT’S ANALYSIS: THE MEANING OF CONGREGATION................ 31
Introduction and Preliminary Remarks
A. Live and Work Together (p.33)
1. The Appellant’s Submissions
2. The Appellant’s Position
3. The Respondent’s Submissions
4. The Respondent’s Position
5. Analysis
B. Adherence to Practices and Beliefs (p.46)
1. The Appellant’s Submissions
2. The Appellant’s Position
3. The Respondent’s Submissions
4. The Respondent’s Position
5. Analysis
C. Ownership of Property (p.68)
1. The Appellant’s Submissions
2. The Appellant’s Position
3. The Respondent’s Submissions
4. The Respondent’s Position
5. Analysis
D. Devotion of Working Lives to Activities of the Congregation (p.81)
1. The Appellant’s Submissions
2. The Appellant’s Position
3. The Respondent’s Submissions
4. The Respondent’s Position
5. Analysis
PENALTIES................................................................................................... 88
CONCLUSION............................................................................................... 95
Citation: 2013 TCC 264
Date: 20130821
Docket: 2008-101(IT)G
BETWEEN:
WINSTON BLACKMORE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Campbell J.
INTRODUCTION AND OVERVIEW
[1] All appeals that come before me in this Court have something in common: they all have their own unique issue or set of issues that need resolving. That is the reason they are before this Court. Each appeal will have its own novel history in finding its way to this Court. The difference, between these present appeals and other appeals, is that the Appellant, Winston Blackmore, and the community of Bountiful bring with them a lengthy history involving media attention from newspaper to television coverage.
[2] Although there have been many controversies and much media attention surrounding the Appellant, the community of Bountiful, and their practice of polygamy, those debates have no bearing on the ultimate decision I must make in respect to the tax status of the Appellant and his followers in Bountiful.
[3] These appeals address the question of who is liable to pay the tax assessed against the Appellant: is it the Appellant himself or the members of the Bountiful community? The answer to this question depends on the application of a relatively self-contained and obscure provision which, until these appeals, was unknown to many tax practitioners. This is the first time that this Court, or any Canadian court, has considered section 143 of the Income Tax Act (the “Act”).
[4] The outcome of these appeals is entirely dependent upon whether the Appellant and the community of Bountiful can bring themselves within section 143. Although the Appellant was audited and reassessed pursuant to subsection 15(1), paragraph 6(1)(a) and section 5 of the Act to add additional income of approximately $1.8 million, he objected to the reassessments on the basis that section 143 ought to apply. So how would section 143 apply to lessen or erase the Appellant’s tax liability?
[5] Section 143 is located in Division F of Part I of the Act, which is titled “Special Rules Applicable in Certain Circumstances”. It affords separate tax treatment to those communal religious organizations that can bring their community within the statutory definition of “congregation” contained in subsection 143(4). The term “congregation” is employed in the opening words of the provision:
143(1) Communal organizations. Where a congregation, or one or more business agencies of the congregation, carries on one or more businesses for purposes that include supporting or sustaining the congregation’s members or the members of any other congregation, the following rules apply:
[…]
“Business Agency” is also a defined term and, if it is a corporation that carries on business within the community on behalf of the members, the congregation must own the capital stock of the corporation throughout a calendar year. The Appellant’s argument is that he meets all four tests of the definition of “congregation” and that the shares of J.R. Blackmore & Sons Ltd. (the “Company”) held in the names of the Appellant, Kevin, Guy and Richard Blackmore, were beneficially owned on behalf of the members of the congregation.
[6] If the Appellant’s position is correct, and section 143 applies, it will have far-reaching implications for not only the Appellant, but also the members of Bountiful. The provision will operate to deem the existence of an inter vivos trust which would be superimposed upon the community. This means that, for tax purposes, all of the assets and property of the congregation, or of any business agency of the congregation, are deemed to be the assets and property of the deemed trust. Consequently, any income from property or business activities of the congregation will be deemed to be the income of the deemed trust. Since business agencies of the congregation are deemed to have acted as agents of the deemed trust in all congregational matters, their income from business activities will also be deemed to be income of the trust.
[7] Subsection 143(2) then permits a qualifying congregation to make an election to have its income allocated among the members of the congregation. The election, to make a deemed distribution of the income of the congregation among its members, means that the income will be taxed in the hands of its members. Of course, if the income were to be left in the deemed trust, it would be subject to tax at the highest marginal rate applicable to individual taxpayers but, where it can be allocated equally among community members, those individual taxpayers will be subject to their personal graduated tax rates and exemptions.
[8] If section 143 applies in these appeals, the Appellant’s tax burden would be shifted to the members of Bountiful. The Company, in that instance, would be viewed as an agent of the community or an extension of the congregation, holding its assets, property and income for the benefit of the entire congregation and its members. Allocation of income across the qualifying membership in a community recognizes the lack of personal ownership of property and assets, which would be in accordance with the intent and purpose of section 143, and would eliminate any potential for double taxation that would occur with assessments pursuant to subsections 15(1) and 6(1) of the Act.
[9] For the Appellant’s argument to be successful, the community of Bountiful must meet the exhaustive definition of “congregation” contained in subsection 143(4) of the Act. This Court must first establish the parameters of each of the four facets of the definition. Whether the community of Bountiful meets each test requires findings of fact as to how it operated in the years under appeal, as well as an examination of the history and doctrines of Mormonism, an area that this Court would ordinarily not be analyzing. In this respect, expert testimony was essential. As one would expect in debating matters of religious doctrine, some of the expert testimony was inconclusive, while not all experts agreed in respect to portions of the issues in question.
[10] This is an unusual tax case in this Court, not only in the facts, but also in the religious implications, the unique application of this provision and the potential tax treatment that applies to the community that qualifies as a “congregation.”
THE APPELLANT’S PERSONAL INCOME TAX FILINGS AND THE REASSESSMENTS
[11] The Appellant reported total income in each of the years under appeal as follows:
Taxation
Year
Description of Income
Amount
Reported
2000
Employment income from J.R. Blackmore & Sons Ltd.
Business income
Total
$15,915
5,000
$20,915
2001
Employment income from J.R. Blackmore & Sons Ltd.
Business income
Total
$26,578
5,000
$31,578*
2002
Employment income from J.R. Blackmore & Sons Ltd.
Interest
Dividend income from J.R. Blackmore & Sons Ltd.
Total
$30,424
66
14,000
$44,490
2003
Employment income from J.R. Blackmore & Sons Ltd.
Employment income from Bountiful Elementary
Total
$18,677.50
1,000
$19,677.50
2004
Employment income from J.R. Blackmore & Sons Ltd.
Interest
Total
$16,194
64
$16,258
2006
Employment income from Kootenay Preservers Ltd.
Interest
Total
$39,000
53
$39,053
* $31,578 is the amount of reported taxable income for the 2001 taxation year (para 39 of the Further Further Amended Notice of Appeal and admitted by the Respondent at para 1 of the Reply to the Further Further Amended Notice of Appeal). The Respondent, however, quoted this amount as $31,363 at para 32(h) of the Reply.
[12] As a result of a Canada Revenue Agency (“CRA”) employer compliance audit of the Company, the Appellant was reassessed and the following total amounts were added to the Appellant’s income:
Summary of Reassessments
Subsection 15(1)
Section 5
Paragraph 6(1)(a)
2000
$277,395
*
2001
$527,751
*
2002
$235,537
*
$25,468
2003
$174,111
*
$40,953
$241,527
Summary of Reassessments
Subsection 15(1)
Section 5
Paragraph 6(1)(a)
2004
$153,681
$179,945
2006
nil
nil
nil
Assessed as filed
Totals
$1,368,475
$66,421
$421,472
* these amounts were assessed a gross negligence penalty under subsection 163(2) of the Act and section 34 of the B.C. Income Tax Act.
[13] Gross negligence penalties, on the amounts assessed pursuant to subsection 15(1) of the Act, were also added, in respect to the 2000, 2001, 2002 and 2003 taxation years.
THE LEGISLATIVE HISTORY OF SECTION 143
[14] Section 143 of the Act was enacted in response to litigation by some Hutterite colonies and to the eventual Federal Court of Appeal decision in Wipf v Canada, [1975] FC 162 (FCA), respecting this litigation. Bill C-11 of the 30th Parliament, 3rd session, 26 Elizabeth II, 1977, repealed the then section 143, which dealt with steam and energy corporations, and replaced it with the current section that addresses “communal organizations”. The new provision is applicable to 1977 and subsequent taxation years and taxed communities that could come within this provision by superimposing a deemed trust over the communities’ activities and providing an option whereby a community could elect how income would be attributed to its members.
[15] In Wipf v The Queen, 73 DTC 5558 (FCTD), the litigation concerning the Hutterites arose when some of those colonies refused to be bound by an agreement that other Hutterite colonies had reached with the government of Canada respecting how such colonies would be taxed. After those colonies (all members of the Darius‑Leut Hutterian communities), that were in disagreement, challenged their assessments, the Tax Review Board, in 1972, affirmed the assessments issued by the Minister of National Revenue (the “Minister”) in regard to their earned income. That decision was appealed to the Federal Court – Trial Division in 1973. The Federal Court held that the total profits from a colony’s business activities should be apportioned in equal shares among its members, notwithstanding that they had assigned or deposited their share with the colony’s leadership as its trustee or their corporation. The Court concluded that the members earned income through the colony’s farming activities, despite evidence adduced that no colony members had any income, property of any type or money from government sources. In reaching its conclusion, the Federal Court – Trial Division referred to numerous articles contained in the Constitution of the colony’s incorporation provisions.
[16] The Appellants, at the Federal Court – Trial Division in Wipf, at paragraph 16, argued that “… the individual members of each colony because of their renunciation of private property and the right to compensation for their labours had no earnings, and, therefore, no taxable income,” in contrast to other Hutterite colonies that had reached an agreement with government on how they would be taxed.
[17] The Federal Trial Court’s decision was appealed and reversed by the Federal Court of Appeal in favour of the Hutterite plaintiffs. It was argued that, since any distribution of profits was on a needs basis, not a specified percentage, and not on a per capita basis, members earned no income. The Court held that neither the colony’s farming activities, nor the profits, belonged to the individual members but were attributable to the trustee or the corporation of each colony, as the case may be. Thurlow J.A., at paragraph 7, was of the opinion that the profits of the business operations of a community were not the property of any particular member at any point in their relationship with their community. Ryan J.A. and Smith D.J.A. were of the view that the charter of the incorporated communities and the memorandum of the unincorporated communities governed the various support benefits of the members that could be considered as income in respect of services rendered (paras 19-20). The Court ordered the Minister to reassess on the basis that the members’ income was either the value of the subsistence they received from the trustees of the communities or that the members had no taxable income. Unfortunately, the practicalities of determining the value to be assigned to such benefits were not addressed.
[18] On appeal to the Supreme Court of Canada, the government’s appeal was dismissed from the bench in two lines delivered by Chief Justice Laskin: “We do not need to hear you Mr. Matheson. We agree with the judgment of the Federal Court of Appeal and this appeal is, accordingly, dismissed with costs.” ([1976] SCJ No. 125).
[19] As a result of this line of cases and the method of property ownership utilized by Hutterites, Parliament introduced the new section 143 in 1977 to address the issue of taxation of communal religious organizations. Support for this can be found in the debates and proceedings in both the House of Commons and the Senate. While the House of Commons Committee of the Whole and the Standing Committee on Finance, Trade and Economic Affairs was silent on Bill C-11’s treatment of the Hutterites, the Senate Standing Committee on Banking, Trade and Commerce heard evidence which directly addressed the treatment of Hutterites (30th Parliament, 3rd session, No. 2 (November 9, 1977)).
[20] Additional evidence, demonstrating that this provision was enacted to address the special circumstances of the Hutterites, can be found in the Senate Committee’s address from counsel for the Lehrerleut Hutterian Brethren on the Hutterites’ way of life (30th Parliament, 3rd session, No. 9 (November 30, 1977)). It is interesting to note that the opinion expressed by counsel, as well as the Advisor to the Committee, was that the new legislation was crafted to target only the Hutterites, although the wording of the provision might also allow Amish to benefit in certain circumstances. Further evidence, that it was drafted to address taxation of the Hutterite communities, can be found in statements of the then Minister of Finance, The Honourable Jean Chrétien, in addressing questions put to him, that Hutterite communities were required to be on time in filing elections and paying taxes under the new section 143 if they wished to benefit from its income allocation scheme (30th Parliament, 3rd session, No. 12 (November 30, 1977)).
[21] There have been several amendments to section 143 of the Act since its enactment. In 2000, the definition of “congregation” was modified and structured (c.19, subsection 41) to incorporate all characteristics ascribed to the term “congregation” to the definition contained in subsection 143(4). Previously, that part of the four‑pronged test presently referred to as “(b) that adheres to the practices and beliefs of, and operates according to the principles of, the religious organization of which it is a constituent part,” was originally the sole characteristic of the term “congregation.” The 2000 amendment placed it as the second of the present four elements to the definition of “congregation” in subsection 143(4). The other amendments made since 1994 do not affect the application of the section as it applies to the present appeals.
PRELIMINARY AND PRIMARY ISSUES
[22] The primary issue is whether the community of Bountiful meets the definition of “congregation” pursuant to subsection 143(4) of the Act, namely, whether the members of the community:
(a) live and work together;
(b) adhere to the practices and beliefs of and operate according to the principles of the religious organization of which it is a constituent part;
(c) do not permit any of the members to own any property in their own right; and
(d) require the members to devote their working lives to the activities of the congregation.
[23] The final issue is whether the Appellant is liable for gross negligence penalties pursuant to subsection 163(2) of the Act in respect to the 2000 through 2003 taxation years.
[24] There are two preliminary matters that must be addressed before I begin an analysis of section 143 of the Act and, in particular, a determination of the meaning of “congregation” pursuant to subsection 143(4). First, how the statutory interpretive principles are to be applied to section 143 and second, the scope of judicial notice to be accorded the jurisprudence and textbooks relating to the Hutterites, comprise the two preliminary issues.
A. Statutory Interpretation
[25] Counsel for the Appellant argued for a liberal interpretation of section 143. Counsel for the Respondent, in contrast, argued that a more restrictive reading of the provision should be applied by this Court because of its legislative history and the Parliamentary intention in enacting section 143 in light of the Wipf decisions concerning Hutterite communities.
[26] Counsel for the Appellant correctly structured his submissions by adopting the current approach taken by the Supreme Court of Canada decision in Canada Trustco Mortgage Co. v Canada, 2005 SCC 54, [2005] 2 SCR 601, and initially set out in Markevich v Canada, 2003 SCC 9, [2003] 1 SCR 94. Generally, that approach is a combination of a textual, contextual and purposive analysis of a provision, with the words of the provision read in their entire context and in their grammatical and ordinary meaning harmoniously with the scheme and object of the Act as a whole and the intention of Parliament (E.A. Driedger, Construction of Statutes, 2nd ed. 1983 and Markevich, at p. 87).
[27] However, if the “… words of a provision are precise and unequivocal, the ordinary meaning of the words play a dominant role in the interpretive process. …” (Canada Trustco, para 10), allowing taxpayers to rely on the clear meaning of a provision where applicable.
[28] The Supreme Court of Canada in Placer Dome Canada Ltd. v Ontario (Minister of Finance), 2006 SCC 20, [2006] 1 SCR 715, elaborated upon these interpretive principles and stated, at paragraph 23:
The interpretive approach is thus informed by the level of precision and clarity with which a taxing provision is drafted. Where such a provision admits of no ambiguity in its meaning or in its application to the facts, it must simply be applied. Reference to the purpose of the provision "cannot be used to create an unexpressed exception to clear language": see P. W. Hogg, J. E. Magee and J. Li, Principles of Canadian Income Tax Law (5th ed. 2005), at p. 569; Shell Canada Ltd. v. Canada, [1999] 3 S.C.R. 622. Where, as in this case, the provision admits of more than one reasonable interpretation, greater emphasis must be placed on the context, scheme and purpose of the Act. Thus, legislative purpose may not be used to supplant clear statutory language, but to arrive at the most plausible interpretation of an ambiguous statutory provision.
[29] In other words, if the text of a provision is clear and precise, a textual interpretation governs and that is the end of the matter. If it is not clear and precise, in that more than one reasonable interpretation could emerge, then one must resort to a unified approach encompassing context and purpose in order to ascertain the meaning.
[30] The definition of “congregation” involves a four-pronged test, subject to the requirement that all of the four elements of the test must be met for section 143 to be applicable. The word “congregation” is immediately followed by the word “means” as opposed to the word “includes,” indicating that Parliament intended the definition to be an exhaustive one. Counsel for the Respondent rightly pointed out that Parliament has ascribed a definition to the term “congregation” in subsection 143(4) which is distinct, not only from its ordinary meaning but also, from the undefined meaning given to it elsewhere in the Act. Therefore, the definition in subsection 143(4) is clearly specific to that provision.
[31] Counsel for the Respondent submitted that the definition of “congregation” does not permit more than one reasonable interpretation and that, even if there is ambiguity, explicit or latent, the Hutterite colonies should be considered the “gold standard” against which any other “congregation” must be compared. Therefore, contextual and purposive analysis would not reveal any ambiguities.
[32] I disagree with this submission. Although I do agree that the enactment of section 143 is directly and historically related to Hutterite colonies and the Wipf decisions, concerning those colonies, nowhere in the provision does the word “Hutterite” appear. If Parliament had intended that group to be the “gold standard,” it would have said so. While the Hutterites may be considered as an example of a group falling within this provision, the text of section 143 of the Act potentially applies to any religious group that can qualify as a “congregation.”
[33] The very wording of this provision contemplates its application to other communal groups that can bring themselves within the ambit of the four-pronged test. The words used in each of these four elements are neither clear nor precise. In fact, this was evident in the submissions from both the Appellant and Respondent respecting the first element of the test: do the members live and work together. If the preceding four words (which I have emphasized) are clear and self-explanatory, it should have been an easy task for both parties, or one of them, to commence submissions with a precise definition and then explain how the facts supported their position. Neither party did that. Where wording is unclear, it will be essential to look to context and purpose for guidance. None of the elements of the definition of “congregation” are clear and unequivocal and it will be imperative, therefore, that when I discuss each of the elements of this test, I apply a textual, contextual and purposive approach in my analysis. In this vein, I must consider what I can use in establishing ‘context’ in these appeals, particularly as it relates to legislative record and Parliamentary history connected to section 143 and the line of Hutterite cases that led to the enactment.
[34] Prior to the 1990’s, the Courts have generally hesitated in using Parliamentary history, such as Hansard, advisory reports, or debates. Since then, however, numerous Supreme Court of Canada decisions have cited Parliamentary history in its reasons. Despite this, the Court has been cautionary in its use of such material:
… Provided that the court remains mindful of the limited reliability and weight of Hansard evidence, it should be admitted as relevant to both the background and the purpose of legislation. …
(R. v Morgentaler, [1993] 3 SCR 463, at p. 484)
[35] Pierre-André Côté in The Interpretation of Legislation in Canada, (4th ed., Carswell, 2011), at pp. 465-466, summarizes this view as follows:
Approaching the question from the perspective of weight rather than admissibility, a choice unanimously approved by doctrine, side-steps the often sterile debate on admissibility and enables the courts to access information that allows them to render more enlightened decisions, while preserving their right to determine the weight to be given to such information. While the door is open, the judge should prudently hold on to the doorknob.
In addition, according to Pierre-André Côté, at page 579, judicial interpretation can be considered when dealing with legislative context:
Paragraph 1: Judicial interpretation as context
The courts assume the legislature to have been aware of judicial decisions made prior to the statute’s enactment. Such decisions can thus be deemed part of the context of the legislation, and therefore relevant to its interpretation.
Imagine an area which has never been the subject of legislation, but which has been dealt with in one or more court decisions. If the legislature subsequently uses a term to which the courts have given a precise meaning in a particular context, it is deemed to have been aware of the meaning and to have had no intention of changing it:
When an Act of Parliament uses a word which has received a judicial construction it presumably uses it in the same sense.
(FN: Per Lord Loreburn, North British Railway v. Budhill Coal & Sandstone, [1910] A.C. 116, 127, a passage cited by Pigeon J. in Howarth v. National Parole Board, [1976] 1 S.C.R. 453, 473.)
More generally, judicial decisions can explain the purpose of legislative intervention and, as such, constitute an important element of the context. A legislative modification can be considered to be an expression of the intent to set aside a judicial interpretation, to consecrate it legislatively, or to legislate as to its consequences. … (Certain footnotes omitted.)
[36] Consequently, it would be appropriate to consider the judicial decisions in respect to those Hutterite cases as they pertain to the enactment of section 143 and as part of the legislative context. This leads me to the second preliminary matter respecting the parameters of judicial notice and to what extent this Court can take notice of certain findings of fact from those decisions.
B. Judicial Notice
[37] Judicial notice is an important issue because its application has the potential of sidestepping the usual requirements of proof in a court of law, with the result that the rules of admissibility may be lowered. If a fact is accorded judicial notice, then it will not be subjected to the usual burden of proof or, ultimately, to cross‑examination.
[38] “Judicial notice” has been defined as follows:
19.13 Judicial notice is the acceptance by a court or judicial tribunal, in a civil or criminal proceeding, without the requirement of proof, of the truth of a particular fact or state of affairs. Facts which are (a) so notorious as not to be the subject of dispute among reasonable persons, or (b) capable of immediate and accurate demonstration by resorting to readily accessible sources of indisputable accuracy, may be noticed by the court without proof of them by any party. The practice of taking judicial notice of facts is justified. It expedites the process of the courts, creates uniformity in decision-making and keeps the courts receptive to societal change. Furthermore, the tacit judicial notice that surely occurs in every hearing is indispensable to the normal reasoning process. (Emphasis added.)
(Sopinka, Lederman and Bryant, The Law of Evidence in Canada, Butterworths, 3rd ed.)
[39] One of the two criteria cited in the foregoing passage must be met in order for a fact to be given judicial notice. These are commonly referred to as the “Morgan criteria” (E.M. Morgan in “Judicial Notice” (1943-1944), 57 Harv. L. Rev. 269). It is a narrow approach to judicial notice but one that has been affirmed by the Supreme Court of Canada in two decisions: R v Find, 2001 SCC 32, [2001] 1 SCR 863 and R v Spence, 2005 SCC 71, [2005] 3 SCR 458.
[40] Binnie J., on behalf of the Court in Spence, at paragraph 60, stated that “… the permissible scope of judicial notice should vary according to the nature of the issue under consideration” (quoting Professor Kenneth Culp Davis, Administrative Law Treatise (2nd ed. 1980) vol. 3, at p. 139). He elaborated on this principle at paras 61-63:
61 To put it another way, the closer the fact approaches the dispositive issue, the more the court ought to insist on compliance with the stricter Morgan criteria. Thus in Find, the Court’s consideration of alleged juror bias arising out of the repellant nature of the offences against the accused did not relate to the issue of guilt or innocence, and was not “adjudicative” fact in that sense, but nevertheless the Court insisted on compliance with the Morgan criteria because of the centrality of the issue, which was hotly disputed, to the disposition of the appeal. While some learned commentators seek to limit the Morgan criteria to adjudicative fact (see, e.g., Paciocco and Stuesser, at p. 286; McCormick, at p. 316), I believe the Court’s decision in Find takes a firmer line. I believe a review of our jurisprudence suggests that the Court will start with the Morgan criteria, whatever may be the type of “fact” that is sought to be judicially noticed. The Morgan criteria represent the gold standard and, if satisfied, the “fact” will be judicially noticed, and that is the end of the matter.
62 If the Morgan criteria are not satisfied, and the fact is “adjudicative” in nature, the fact will not be judicially recognized, and that too is the end of the matter.
63 It is when dealing with social facts and legislative facts that the Morgan criteria, while relevant, are not necessarily conclusive. There are levels of notoriety and indisputability. Some legislative “facts” are necessarily laced with supposition, prediction, presumption, perception and wishful thinking. Outside the realm of adjudicative fact, the limits of judicial notice are inevitably somewhat elastic. Still, the Morgan criteria will have great weight when the legislative fact or social fact approaches the dispositive issue. …
[41] In these passages from Spence, the Supreme Court of Canada drew a distinction between three kinds of facts:
(a) adjudicative facts, that is, facts relating to the matter being litigated;
(b) legislative facts, that is, those facts relating to legislative or judicial policy; and
(c) social facts, that is, those facts relating to the fact-finding process that constitute the evidence that is defined as social science research used to construct the contextual background in resolution of the issue.
[42] How the courts apply the Morgan criteria to these three different categories of fact will ultimately depend on how close the facts are to the centre of the issue to be resolved: “… the closer the fact approaches the dispositive issue, the more the court ought to insist on compliance with the stricter Morgan criteria.” (Spence, at para 61). As noted by the Court, at paragraph 63 of Spence, when dealing with legislative and social facts, the application of the Morgan criteria will not be necessarily conclusive. A court can be more elastic and less rigid when drawing upon social and legislative facts. In summary, when considering such facts, a court must keep in mind several key questions:
(a) how close is a “fact” to the dispositive issue;
(b) would a reasonable person accept such a “fact” for the particular purpose for which it is to be used; and
(c) what is the potential reliability of the “fact,” which increases relative to the closeness of that fact to the disposition of the matter.
[43] Respondent Counsel requested that I take judicial notice of facts from Hutterite cases that led to the enactment of section 143, as well as the recent British Columbia reference case, Reference re: Criminal Code of Canada (B.C.), 2011 BCSC 1588, [2011] BCJ No. 2211, commonly referred to as the “B.C. Polygamy Reference Case”. The Appellant agreed with the Respondent’s Submissions regarding the doctrine of judicial notice for gleaning facts from other court decisions (Transcript, pp. 3340-3342). In addition, the Respondent sought to rely upon excerpts from two books: The Hutterites in North America, (Rod A. Janzen and Max Stanton, Johns Hopkins University Press, Baltimore, 2010) and The Secret Lives of Saints: Child Brides and Lost Boys in Canada’s Polygamous Mormon Sect (Daphne Bramham, Random House Canada, Toronto, 2008). The Appellant submits that any facts from the excerpts of these books were not introduced as evidence in the present appeals and that, since the excerpts do not meet the strict Morgan criteria, they cannot be introduced in oral submissions to bolster the Respondent’s position. In particular, Appellant Counsel objected to this Court placing reliance on the text, The Secret Lives of Saints, whose author had been present throughout a majority of the court proceedings in these appeals as a member of the media.
[44] Appellant Counsel referred this Court to the Prince Edward Island Superior Court decision in Holland v Prince Edward Island Regional Administrative Unit No. 4 School Board, [1986] PEIJ No. 41, with respect to comments made in that decision on the admissibility and evidentiary value of textbook evidence and scientific treatises. At page 35 of that decision, the Court stated:
… While doubtless deserving of great weight among the practitioners of the discipline which concerns itself with such matters, the same reliance cannot be placed upon them for probative purposes before the Court.
Appellant Counsel pointed out that the P.E.I. reference decision relied upon a 1914 decision, Rex v Anderson (1914), 5 WWR 1052 (Alta SC). At page 36, reliance was placed upon the following quote from the reasons in Anderson:
… The opinion of an eminent author may be, and in many cases is, as a matter of fact entitled to more weight than that of the sworn witness, but the fact is that if his opinion is put in in (sic) the form of a treatise there is no opportunity of questioning and ascertaining whether any expression might be subject to any qualification respecting a particular case. A witness would not be qualified as an expert if his opinions were gained wholly from the opinions of others, …
(Emphasis added)
[45] I turn now to the application of these principles to the Hutterite cases, including the more recent B.C. Polygamy Reference Case, the Hutterite textbooks and finally the text, The Secret Lives of Saints.
[46] The Hutterite cases and, in particular, those referred to as the Wipf decisions, are part of the contextual background relating to the enactment of section 143. Because the four elements of the test in the definition of “congregation” are anything but clear and unambiguous, in interpreting and applying this provision, reference to the legislative context is imperative. Respondent Counsel referred the Court to Parliamentary debates, in both the House of Commons and the Senate, in which direct references were made to Hutterite communities in discussions on the enactment of section 143 (Respondent’s Written Submissions, p. 84, paras 414-416). Appellant Counsel has also acknowledged that the section was drafted in response to the litigation by the Hutterite communities (Appellant’s Written Submissions, para 43) and agreed that this Court could take judicial notice of findings of fact from these decisions.
[47] The Wipf decisions may be helpful in characterizing the type of communities that Parliament had in mind that could qualify as “congregations” pursuant to section 143. Although I agree with Appellant Counsel’s submissions that formality of documentation in respect to congregations is not an essential requirement of this section, it is interesting to note that the clauses of the Memorandum of Association referred to in the Wipf decisions are almost identical to those cited in a United States court case dealing with the taxation of Hutterite colonies that were part of an incorporated church in South Dakota (Hofer v United States, 64 Ct. Cl. 672 (1928)). This is an indicator of the notoriousness of certain facts of Hutterite lifestyle, such as the practice of communal living, their attitude toward property ownership and the level of devotion that is expected of members (Wipf, at para 10).
[48] I am more cautious in my approach to fully endorsing an application of judicial notice to the B.C. Polygamy Reference Case. Respondent Counsel pointed out that the reasons of Bauman J. in that decision contain a history of Bountiful (Respondent’s Written Submissions, p. 93, para 449). It was also submitted that, when a fact forms part of the “contextual milieu”, the strict test in Spence need not be applied (Respondent’s Written Submissions, p. 141, para 630). Generally, this Court may take judicial notice of many facts relating to Bountiful, especially if they are of a more general nature. However, there are obvious risks in taking notice of facts that may have been contested during the hearing in another case. Although I am dealing with the same community as Bauman J. dealt with in the B.C. Polygamy Reference Case, there are entirely different questions under consideration in the appeals before me and the resulting fact-finding process will necessarily be different in that it will take into account the particular facts as they relate to the particular issues before me. In addition, there may be ample testimony from witnesses that were before me in respect to particular contested matters, without the necessity of resorting to evidence given by witnesses in the B.C. Polygamy Reference Case. These were two separate cases, with two separate judicial hearings and their own distinct issues. Consequently, I conclude that this Court may take judicial notice of the B.C. Polygamy Reference Case for general background facts, if necessary, but only if those facts are non-controversial. An example of this would be the history of Bountiful.
[49] However, where the Appellant raised concerns over facts that could be