Citation: Rowland et al. v. Christian Brothers Date: 20000811 et al. 2000 BCSC 1221 Docket: A981297 A981616 A981617 A990098 Registry:

IN THE SUPREME COURT OF

DOCKET: A981297 2000 BCSC 1221 (CanLII) REGISTRY: VANCOUVER

BETWEEN:

BROTHER PASCAL ROWLAND, BROTHER ANTHONY MURPHY, BROTHER KIERAN MURPHY AND BROTHER J. BARRY LYNCH

PETITIONERS

AND:

VANCOUVER COLLEGE LIMITED, THE ROMAN CATHOLIC ARCHDIOCESE OF VANCOUVER, REPRESENTED BY MOST REV. , THE ROMAN CATHOLIC ARCHBISHOP OF VANCOUVER, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF THE ROMAN CATHOLIC ARCHDIOCESE OF VANCOUVER, THE CHRISTIAN BROTHERS OF IRELAND IN (IN LIQUIDATION), THE ATTORNEY GENERAL OF BRITISH COLUMBIA, THE ATTORNEY GENERAL FOR NEWFOUNDLAND, FOUNDATION, VANCOUVER COLLEGE PARENTS ASSOCIATION AND VANCOUVER COLLEGE ALUMNI ASSOCIATION AND REPRESENTATIVE COUNSEL FOR PERSONS HAVING CLAIMS AS A RESULT OF PHYSICAL, SEXUAL OR EMOTIONAL ASSAULT OR ABUSE OR WHO OTHERWISE HAVE TORT CLAIMS IN THE LIQUIDATION, APPOINTED BY THE ONTARIO COURT OF JUSTICE IN THE MATTER OF THE WINDING-UP OF THE CHRISTIAN BROTHERS OF IRELAND IN CANADA

RESPONDENTS

IN THE SUPREME COURT OF BRITISH COLUMBIA

DOCKET: A981616

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 2

REGISTRY: VANCOUVER

RE: ST. THOMAS MORE COLLEGIATE LTD.

-AND-

IN THE MATTER OF THE COMPANY ACT, R.S.B.C. 1996, SS. 68 AND 206

BETWEEN:

ST. THOMAS MORE COLLEGIATE LTD. 2000 BCSC 1221 (CanLII)

PETITIONER

AND:

JOHN T. BURNELL, THE ROMAN CATHOLIC ARCHIDOCESE OF VANCOUVER, REPRESENTED BY MOST REV. ADAM EXNER, WHO IS THE ROAMN CATHOLIC ARCHIBISHOP OF VANCOUVER, ON HIS OWN BEHALF AND ON BEHALF OF ALL THE CHRISTIAN BROTHERS OF IRELAND IN CANADA (IN LIQUIDATION), THE ATTORNEY GENERAL OF BRITISH COLUMBIA, THE ATTORNEY GENERAL OF NEWFOUNDLAND AND REPRESENTATIVE COUSNEL FOR PERSONS HAVING CLAIMS AS A RESULT OF PHYSICAL, SECUAL OR EMOTIONAL ASSAULT OR ABUSE OR WHO OTHERWISE HAVE TORT CLAIMS IN THE LIQUIDATION, APPOINTED BY THE ONTARIO COURT OF JUSTICE IN THE MATTER OF THE WINDING-UP OF THE CHRISTIAN BROTHERS OF IRELAND IN CANADA

RESPONDENTS

IN THE SUPREME COURT OF BRITISH COLUMBIA

DOCKET: A981717 REGISTRY: VANCOUVER

RE: IN THE MATTER OF ST. THOMAS MORE COLLEGIATE LTD.

- AND -

THE TRUSTEE ACT, R.S.B.C. 1996, C. 464 AND AMENDMENTS THERETO

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 3

BETWEEN:

JOHN BURNELL, ST. THOMAS MORE COLLEGIATE LTD. PETITIONERS

AND:

THE CHRISTIAN BROTHERS OF IRELAND IN CANADA (IN LIQUIDATION), THE ROMAN CATHOLIC ARCHDIOCESE OF VANCOUVER, REPRESENTED BY MOST REV. ADAM EXNER, WHO IS THE ROMAN CATHOLIC ARCHBISHOP OF VANCOUVER, ON HIS OWN BEHALF AND ON BEHALF OF ALL MEMBERS OF THE ROMAN CATHOLIC ARCHDIOCESE OF VANCOUVER, THE ATTORNEY GENERAL OF BRITISH COLUMBIA, THE ATTORNEY GENERAL OF NEWFOUNDLAND AND REPRESENTATIVE COUNSEL FOR PERSONS 2000 BCSC 1221 (CanLII) HAVING CLAIMS AS A RESULT OF PHYSICAL, SEXUAL, OR , EMOTIONAL ASSAULT OR ABUSE OR WHO OTHERWISE HAVE TORT CLAIMS IN THE LIQUIDATION, APPOINTED BY THE ONTARIO COURT OF JUSTICE IN THE MATTER OF THE WINDING-UP OF THE CHRISTIAN BROTHERS OF IRELAND IN CANADA

RESPONDENTS

IN THE SUPREME COURT OF BRITISH COLUMBIA

DOCKET: A990098 REGISTRY: VANCOUVER

BETWEEN:

THE CHRISTIAN BROTHERS OF IRELAND IN CANADA (IN LIQUIDATION)

PETITIONER

AND:

BROTHER PASCAL ROWLAND, BROTHER ANTHONY MURPHY, BROTHER KIERAN J. MURPHY, BROTHER J. BARRY LYNCH, JOHN BURNELL, ST. THOMAS MORE COLLEGIATE LTD., THE ROMAN CATHOLIC ARCHDIOCESE OF VANCOUVER, AS REPRESENTED BY HIS MOST REVEREND ADAM EXNER. OMI ON HIS OWN BEHALF AND ON BEHALF OF ALL THE OTHER MEMBERS OF THE ROMAN CATHOLIC ARCHDIOCESE OF VANCOUVER, VANCOUVER COLLEGE LIMITED, VANCOUVER COLLEGE FOUNDATION,

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 4

VANCOUVER COLLEGE PARENTS ASSOCIATION AND VANCOUVER COLLEGE ALUMNI ASSOCIATION

RESPONDENTS

REASONS FOR JUDGMENT OF THE HONOURABLE MADAM JUSTICE LEVINE

Counsel for the Petitioners in W.S. Berardino, Q.C. Petition A981297: S. Martin, R. Deol and 2000 BCSC 1221 (CanLII) M. Parrish (Articled Student)

Counsel for the Petitioners in R.R. Sugden, Q.C. Petition A981616 and A981617: R.N. McFee

Counsel for the Vancouver College G.K. Macintosh, Q.C. Limited: L.A. Warren

Counsel for the Vancouver College D.G. Sanderson, Q.C. Foundation, Vancouver College (To March 17, 2000) Parents Association and Vancouver J.J.L. Hunter, Q.C. College Alumni Association: (From March 20, 2000) S.L. McHugh and E.J. Duncan Counsel for the Roman Catholic M.M. MacKinnon Archdiocese of Vancouver: A.T. Clarke and J.D. Cotter

Counsel for the Liquidator: B.G. Baynham, Q.C. D. Wingfield, J.P. Sullivan And J.K. Dow (Articled Student)

Counsel for the Attorney General of G.A. Urquhart, Q.C. Newfoundland and Labrador: S. Grattan-Doyle

Counsel for Persons having claims as D.G. Garbig a result of physical, sexual or emotional assault or abuse or who otherwise have tort claims in the liquidation, appointed by the Ontario Court of Justice in the matter of the winding-up of the Christian Brothers of Ireland in Canada:

Dates and Place of Hearing: February 14-17,21-23, March 6-9,13-17,20-24,27-31, April 10-14,2000 Vancouver, B.C.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 5

TABLE OF CONTENTS

I. INTRODUCTION 7 II. BACKGROUND OF THESE PROCEEDINGS 10 A. The Congregation of Christian Brothers and the Christian Brothers of Ireland in Canada 10 B. Mount Cashel and the Claims 11 C. Winding-Up of CBIC 12 D. Motion for Advice and Directions 12 E. Appeal from the Order of Blair J. 16 F. Implications for the Schools 16 III. THE PETITIONS 18 A. Vancouver College (Petition A981297) 18 1. The Petitioners 18 2. Other Parties 19 3. Relief Claimed 20 2000 BCSC 1221 (CanLII) B. St. Thomas More Collegiate (A981616 & A981617) 21 1. The Petitioners 21 2. Other Parties 22 3. Relief Claimed 22 (a) Rectification of STM Share Register 22 (b) Charitable Purpose 23 4. Standing of STM 24 C. The Liquidator (A990098) 25 1. Background 25 2. Relief Claimed 27 3. Positions of the Schools 27 4. Petition Dismissed 27 IV. LEGAL FRAMEWORK 28 A. "Charitable Purpose Trust" 31 B. "Specific Charitable Purpose Trust" 33 C. Intention of the Donor 36 D. Gifts or Trusts for Unincorporated Associations 1. Unincorporated Associations 40 2. Incorporated Entities 42 3. Bequests to Christian Brothers 43 4. Conclusion 45 E. Alternatives to Purpose Trusts: Contract, 46 Agency, Mandate F. Enforcement of a Charitable Use 47 G. Ownership of Property for a Charitable Purpose 49 50 V. FACTS 51 A. Vancouver College 51 1. The Parties 52 (a) The Archbishop and the Archdiocese 52 (b) The Christian Brothers 54 (c) The Local Committee 55 2. The Conditions 56 3. Fund-Raising 58 4. Acquisition of the Land 68 5. Incorporation of VCL 69 6. Declarations of Trust 73 7. Operation of the School 74 (a) Financing 75

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(b) Management 80 8. Ownership 82 B. St. Thomas More Collegiate 86 1. The Parties 88 (a) The Archbishop and the Archdiocese 88 (b) The Christian Brothers 89 (c) The Parishes 90 2. Commitments by the Archdiocese and the Congregation 3. Acquisition of the Land 90 4. Construction of the School 91 5. STM Agreement 92 6. Incorporation of STM 93 7. Operation of the School 96 (a) Operating Deficits 98 (b) Expansions 99 8. Ownership 104 (a) Marian High School 105 2000 BCSC 1221 (CanLII) (b) Joint Equity Agreement 107 111 VI. ANALYSIS 114 A. Vancouver College 115 1. Intention to Create a Trust 115 2. Subject-Matter of the Trust 122 3. Object of the Trust 124 4. Settlors of the Trust 125 5. Trustee of the Trust 127 6. Summary 130 B. St. Thomas More Collegiate 130 1. Intention to Create a Trust 130 (a) The Archdiocese 134 (b) Incorporation of STM 135 (c) Transfer of STM Shares to CBIC 136 (d) Transfer of Land to STM 138 2. Subject-Matter of the Trust 138 3. Object of the Trust 139 4. Settlor of the Trust 139 5. Trustee of the Trust 140 6. Rectification of STM's Share Register 140 7. Summary 143 VII. EVIDENCE TENDERED BY REPRESENTATIVE COUNSEL 144 VIII. COSTS 144 IX. SUMMARY OF FINDINGS 145

I. INTRODUCTION

[1] Vancouver College and St. Thomas More Collegiate are Catholic schools located in Vancouver and Burnaby, British Columbia. Vancouver

College has operated as a school since 1922 and St. Thomas More Collegiate

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 7 since 1960. This case concerns the beneficial ownership of the shares of

Vancouver College Limited ("VCL") and St. Thomas More Collegiate Ltd.

("STM"), corporations which hold the property in which the schools operate.

[2] The schools claim that the shares are owned by trustees for the specific charitable purpose of operating the schools. The Liquidator of the Christian Brothers of Ireland in Canada ("CBIC"), a corporation incorporated by special Act of Parliament in 1962, claims that CBIC owns 2000 BCSC 1221 (CanLII) them. The Liquidator wishes to sell the shares and use the proceeds to pay claims for damages brought against CBIC by men who as boys in the 1960s to the 1980s were victims of sexual, physical and emotional abuse at the

Mount Cashel Orphanage in St. John's, Newfoundland. The schools resist the

Liquidator's claims.

[3] The path to these court proceedings is both tragic and tortuous. In addition to the schools, CBIC and the Liquidator, these proceedings involve the Congregation of Christian Brothers, established in Ireland as a world-wide Catholic teaching order in 1802; many individual Catholics and non-Catholics in Vancouver and neighbouring communities who, starting in 1922, contributed funds and volunteer efforts to establish and maintain the schools; close to 90 men who as boys suffered abuse at the hands of some members of the Congregation at Mount Cashel and other schools operated by the Congregation (not including Vancouver College and St.

Thomas More Collegiate); the Roman Catholic Archbishop and Archdiocese of

Vancouver; the Government of Newfoundland and Labrador; the Ontario

Superior Court of Justice and Court of Appeal; and this Court.

[4] The issues before this Court are:

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(a) who owns the shares of VCL and STM?

(b) what is the nature and scope of the trusts under which the shares are held?

[5] While the answers to these questions will be determined from the facts found and law applied by this Court, the practical and legal significance of the answers will be determined to a large extent by proceedings in the Ontario Courts. This unusual process provides the context of the issues in this Court. I will therefore set out the background to these proceedings, before dealing with the evidence and law 2000 BCSC 1221 (CanLII) specifically in issue here.

II. BACKGROUND TO THESE PROCEEDINGS

[6] This summary of the background to these proceedings is derived from the evidence and submissions made in this Court and from the reasons for judgment of Blair J. in Re Christian Brothers of Ireland in Canada (1998),

37 (O.R.) (3d) 367 (Ont.Ct. Gen. Div.) and of the Ontario Court of Appeal on the appeal from Blair J.'s judgment: (2000), 47 O.R. (3d) 674 (Ont.

C.A.).

A. The Congregation of Christian Brothers and the Christian Brothers of Ireland in Canada

[7] The Congregation of Christian Brothers is a worldwide Catholic teaching order. It was founded in 1802 in Ireland by Edmund Ignatius Rice and recognized by Papal Decree in 1820 as a "" of the

Roman . Its mission is to evangelize and educate Catholic youth, especially the poor. The Congregation was formerly known as "The

Christian Brothers of Ireland".

[8] The Congregation's presence in North America began when three

Brothers came to Newfoundland in 1876 to teach Catholic youth. In 1898,

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 9 the Congregation opened the Mount Cashel school and orphanage for boys in

St. John's. In 1922, members of the Congregation came to Vancouver to open and operate Vancouver College and in 1960, the Congregation agreed to establish and operate St. Thomas More Collegiate. During its active life in Canada, the Congregation was involved in the management and operation of 29 schools.

[9] The Congregation world-wide is organized geographically into

"Provinces". Canada was originally part of the North American Province, 2000 BCSC 1221 (CanLII) but in 1963 it became a Vice-Province and in 1966 a Province. In preparation for becoming a separate Province, CBIC was incorporated in

1962 under a special Act of Parliament, An Act to Incorporate the

Christian Brothers of Ireland in Canada, 11 Elizabeth II, Chap. 22.

[10] In these reasons, a reference to the "Congregation" generally denotes the unincorporated association of Christian Brothers. Members of the Congregation will sometimes be referred to individually or collectively as “Christian Brothers” or "Brothers".

B. Mount Cashel and the Claims

[11] In 1989, the Newfoundland Government appointed a Royal Commission to inquire into allegations made by boys who were resident at the Mount

Cashel Orphanage that they were sexually, physically, and emotionally abused by some members of the Congregation. The findings of the Commission resulted in criminal charges and convictions of a number of Christian

Brothers and numerous civil actions for damages for the abuse.

[12] The first civil claim, against CBIC and the Government of

Newfoundland, was settled in 1995. Since then, the Government of

Newfoundland has settled 43 claims for $11,200,000. By July 1999, the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 10 aggregate amount claimed from CBIC by 77 claimants was approximately

$67,000,000. The Government of Newfoundland and Labrador is the largest claimant.

C. Winding-Up of CBIC

[13] By 1996 the Congregation and CBIC realized that the claims for damages far exceeded their ability to satisfy them. On October 28, 1996,

CBIC made application to be wound up under the Winding-Up and

Restructuring Act, R.S.C. 1985, c. W-11. The application was made to the 2000 BCSC 1221 (CanLII)

Ontario Court (General Division), the court in the province where the head office of CBIC is situated (section 12 of the Act) (the "Winding-Up

Court"). Houlden J. ordered that CBIC be wound up (section 10 of the Act) and appointed the Liquidator (section 23 of the Act).

D. Motion for Advice and Directions

[14] In July 1997, the Liquidator asked the Winding-Up Court for advice and directions on legal questions relating to whether charities or their assets are immune from liability for or exigibility to satisfy tort claims. The Liquidator also asked the Winding-Up Court for directions concerning the defence or compromise of claims for which CBIC may be liable.

[15] Houlden J. referred these questions to be heard by a judge of the

Winding-Up Court on notice to persons affected by the hearing, including the claimants against the Congregation and CBIC, the charitable objects or purposes of CBIC, the Governments of Newfoundland, Ontario and British

Columbia, and Vancouver College and St. Thomas More Collegiate. He appointed counsel to represent the claimants and the charitable objects.

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[16] On November 14, 1997, Blair J. granted leave to the schools, pursuant to section 21 of the Act, to bring petitions in this Court to determine the ownership of the shares of VCL and STM and the nature and scope of any trust under which they are held. Those petitions are the subject of these proceedings.

[17] The application for advice and directions was heard in December

1997. In his reasons for judgment released on February 27, 1998 (Re

Christian Brothers of Ireland in Canada), Blair J. held that charities are 2000 BCSC 1221 (CanLII) not immune from liability for tort claims and all of their assets are exigible to satisfy judgments for tort claims. With regard to the schools, however, he said at pp. 401-2:

(a) if the shares of Vancouver College Limited and/or the shares of St. Thomas More Collegiate Limited are beneficially owned by The Christian Brothers in Ireland of Canada -- albeit subject to some moral directive as to their use, such as the operation of a religious Catholic school in British Columbia - - they are exigible in response to the claims of the Mount Cashel victims; but,

(b) if the shares of the two schools are held by The Christian Brothers of Ireland in Canada subject to a true charitable purpose trust -- established in accordance with general trust principles -- for a specific charitable purpose, such as the operation of a religious catholic school in British Columbia, those shares are only exigible to satisfy claims arising out of the administration of the particular charitable purpose in question and, in the circumstances of this case, would not be available to satisfy the tort claims of the victims who have asserted claims against the Corporation.

I accept the submission by counsel for the two schools and by representative counsel for the charitable objects that the only "charitable purpose trust" assets potentially available to satisfy tort claims against the corporation are those with which the wrongs committed have some connection. While different considerations would apply to the three claimants in the winding-up who were not abused at Mount Cashel, to the extent that specific charitable purpose trust assets are available to satisfy the claims of the 86 Mount Cashel claims they are limited to specific charitable purpose trusts that constitute or include the operation of . Non-trust assets of The Christian Brothers of Ireland in

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 12

Canada, wherever situated and for whatever they are used are exigible at the instance of such claimants and distributable to that end in the winding-up.

[18] Blair J. made it clear that he could not, on the record before him, decide the questions of the ownership of the schools. He noted, however, at p. 376:

It is inevitable, though, that some of the directions given here, in response to the questions posed by Justice Houlden's order, will have a bearing on the way in which the findings of the British Columbia court -- once those determinations have been made -- will fit into the winding-up proceedings 2000 BCSC 1221 (CanLII) regarding the Christian Brothers of Ireland in Canada.

[19] Blair J.'s order reflected his reasons as follows:

Where it is established that property is held by the Corporation subject to a true "charitable purpose trust" - established in accordance with trust law - the charitable purpose assets of such a trust are exigible at the instance of tort victims whose claims arise in relation to the particular charitable purpose trust in question. However, claims against one charitable purpose trust are not transportable against the assets of another charitable purpose trust managed or controlled by the same trustee.

[20] Blair J. further ordered the Liquidator to admit liability on the part of CBIC for any claim that a Brother of the Congregation sexually, physically or emotionally assaulted or abused a person in attendance at an institution managed or operated by CBIC.

E. Appeal from the Order of Blair J.

[21] The Liquidator appealed the order of Blair J. with respect to the exigibility of assets held in a charitable purpose trust. On April 10,

2000, the Ontario Court of Appeal reversed Blair J. and held that all assets of CBIC, whether held legally or beneficially, for a general or specific purpose, are exigible to satisfy the claims of the victims of abuse.

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[22] The Court of Appeal expressly acknowledged that the factual findings regarding ownership and any particular terms of ownership of the shares of

VCL and STM are to be determined in this Court.

F. Implications for the Schools

[23] The value of the assets of CBIC, apart from the schools, was about

$4,000,000 at the date of the winding-up. Blair J. stated in his reasons for judgment (at p. 382) that the Liquidator had sold most of the properties identified as "clearly owned" by CBIC. 2000 BCSC 1221 (CanLII)

[24] Blair J. also stated that appraisals obtained by the Liquidator valued VCL's assets at approximately $31,500,000 and STM's assets at approximately $7,000,000.

[25] Thus, if the schools are not owned by CBIC and cannot be sold to satisfy the claims against it, the claims will not be satisfied. On the other hand, if CBIC is the owner of the schools, whether as trustee or otherwise, it appears that the schools will be sold and the proceeds used to satisfy the claims.

[26] To fit within Blair J.'s order, VCL and STM had to establish in these proceedings that their shares were held by a trustee (CBIC or others) in a "true charitable purpose trust". The effect of the Ontario

Court of Appeal's reversal of Blair J.'s order is that VCL and STM have to establish, to avoid the Liquidator's claims, that whether the shares are held in a true charitable purpose trust or not, CBIC is neither the beneficial owner nor the trustee.

[27] Counsel for the schools have asked that this Court determine both questions; that is, who owns the shares and whether the shares are held in a true charitable purpose trust. Although the second question may, at this

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 14 stage of the proceedings, be moot, counsel have indicated that they intend to apply for leave to appeal the decision of the Ontario Court of Appeal to the Supreme Court of Canada. At that stage, or in further proceedings in the Winding-Up Court, it will be important that further consideration of these issues be made in a factual context, as Feldman J.A. of the

Ontario Court of Appeal pointed out at p. 711 of her reasons for judgment.

III. THE PETITIONS

[28] The petitions of Vancouver College and St. Thomas More Collegiate 2000 BCSC 1221 (CanLII) are brought by leave of the Winding-Up Court under section 21 of the

Winding-Up and Restructuring Act, which provides:

After a winding-up order is made in respect of a company, no suit, action or other proceeding shall be proceeded with or commenced against the company, except with the leave of the court and subject to such terms as the court imposes.

[29] The Liquidator commenced proceedings directly in this court under a separate petition.

[30] Each of these petitions is described below.

A. Vancouver College (Petition A981297)

1. The Petitioners

[31] The petitioners in the Vancouver College petition are four members of the Congregation who own all of the issued shares of VCL. Brother J.

Barry Lynch is the registered owner of 200 shares. Each of Brothers Pascal

Rowland, Kieran Murphy and Anthony Murphy is the registered owner of one share. Throughout the history of VCL, the shareholders have always been individual members of the Congregation.

[32] Each of the current shareholders of VCL has executed a Declaration of Trust with respect to the shares he holds. It reads as follows:

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 15

I HEREBY ACKNOWLEDGE AND DECLARE that I hold ___ share of the capital stock of VANCOUVER COLLEGE LIMITED under certificate no ___ in trust for CHRISTIAN BROTHERS OF IRELAND and that the said share and share certificate are the property of the said CHRISTIAN BROTHERS OF IRELAND and that the title thereto and all dividends, profits and advantages accruing in respect thereto and arising therefrom, are and shall be held by me and my legal representatives subject to the direction, and for the use and benefit of, the said CHRISTIAN BROTHERS OF IRELAND.

2. Other Parties

[33] Of the named respondents, VCL , Vancouver College Foundation,

Vancouver College Parents Association, Vancouver College Alumni 2000 BCSC 1221 (CanLII) Association (these three associations are collectively referred to as the

“Foundation”) and The Roman Catholic Archdiocese and the Roman Catholic

Archbishop of Vancouver (collectively the “Archdiocese”) support the petitioners.

[34] In these reasons, a reference to Vancouver College includes the petitioners and those of the respondents that support them.

[35] The “true” respondents are The Christian Brothers of Ireland in

Canada (In Liquidation), represented in these proceedings by counsel for the Liquidator (the “Liquidator”), the Government of Newfoundland and

Labrador (“Newfoundland”) and Representative Counsel for Persons Having

Claims as a Result of Physical, Sexual or Emotional Assault or Abuse or

Who Otherwise Have Tort Claims in the Liquidation, Appointed by the

Ontario Court of Justice in the Matter of the Winding-Up of the Christian

Brothers of Ireland in Canada (“Representative Counsel”). Newfoundland and

Representative Counsel were joined as respondents by the order of Blair J. granting leave to bring the petitions.

[36] The Attorney General of British Columbia, also named as a respondent in the petition, did not appear.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 16

3. Relief Claimed

[37] The petitioners claim the following relief:

1. A declaration that the shares of Vancouver College Limited (the "Shares") are held by the Petitioners as trustees for the charitable purpose of operating Vancouver College in British Columbia as a Catholic school committed to the mission of the Christian Brothers.

2. In the alternative, a declaration that the Shares are held by the Petitioners as trustees on such terms as the Court may determine.

[38] In submissions, counsel for VCL requested a declaration, pursuant to 2000 BCSC 1221 (CanLII) the alternative relief sought as set out in paragraph 2 above, that the shares in VCL are held by the Petitioners as trustees for the specific charitable purpose of operating Vancouver College as a Catholic educational institution in British Columbia.

B. St. Thomas More Collegiate (A981616 and A981617)

1. The Petitioners

[39] There are three issued shares of STM. Two shares are held by CBIC and the third share is held by Mr. John Burnell, a teacher at the school.

In a Declaration of Trust dated November 30, 1986, John Burnell declared that he holds the share registered in his name in trust for The Christian

Brothers of Ireland in Canada.

[40] There are two petitions brought with respect to STM. STM is the petitioner in the first petition (A981616) (the "rectification petition") and STM and John Burnell are the petitioners in the second petition

(A981617) (the "charitable purpose petition").

2. Other Parties

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 17

[41] Mr. Burnell is a respondent in the rectification petition. He and the Archdiocese support the petitioner, STM. The “true” respondents are the Liquidator, Newfoundland and Representative Counsel.

[42] Similarly, in the charitable purpose petition, the Archdiocese supports the petitioners and the “true” respondents are the Liquidator,

Newfoundland and Representative Counsel.

[43] In these reasons, a reference to St. Thomas More Collegiate includes the petitioners and those of the respondents that support them. 2000 BCSC 1221 (CanLII)

3. Relief Claimed

(a) Rectification of STM Share Register

[44] STM, as petitioner, seeks an order that the share register of the company be rectified, pursuant to the Company Act, R.S.B.C. 1996, c. 62, sections 68 and 206, to comply with the articles of the company.

[45] Article 2(b) of the Articles of Association of STM provide:

Membership in the Company shall be restricted to members of that religious society or community known as The Christian Brothers of Ireland.

[46] Mr. Burnell is not and never has been a member of the Congregation or a Christian Brother. CBIC is not a member of the Christian Brothers of

Ireland.

(b) Charitable Purpose

[47] STM and Mr. Burnell are the petitioners in the charitable purpose petition. Mr. Burnell seeks:

(a) the opinion, advice and direction of this Honourable Court respecting the ownership of the aforesaid share;

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(b) a declaration that the share is held by himself as Trustee for the charitable purpose of the establishment and carrying on of a Roman Catholic high school at 7450 - 12th Avenue, Burnaby, British Columbia;

(c) in the alternative, a declaration that the share is held by the Petitioner, John Burnell, as Trustee on such terms as this Court may determine.

[48] STM seeks the following relief:

(a) a declaration that the shares of St. Thomas More Collegiate Ltd. are held by the shareholders as Trustees for the charitable purpose of establishing and carrying on a Roman Catholic high school at 7450 - 12th Avenue, 2000 BCSC 1221 (CanLII) Burnaby, British Columbia;

(b) a declaration that St. Thomas More Collegiate Ltd. is a charitable purpose trust corporation whose charitable purpose is the establishment and carrying on of a Roman Catholic high school at 7450 - 12th Avenue, Burnaby, British Columbia;

(c) in the alternative, a declaration that the shares of St. Thomas More Collegiate Ltd. are held by the shareholders as Trustees on such terms as the Court may determine;

(d) for the opinion, advice and direction of this Honourable Court respecting the beneficial ownership of the capital stock of St. Thomas More Collegiate Ltd.

4. Standing of STM

[49] At the conclusion of his submissions, the Liquidator challenged the standing of STM to seek the relief sought in the charitable purpose petition. He argues that none of the Trustee Act, R.S.B.C. 1996, c. 464, sections 36 and 86, Rules 10(1)(a) and (d) of the Rules of Court or the inherent jurisdiction of this Court allow STM to ask the Court to declare that its shares are held for a charitable purpose or that it is a charitable purpose trust corporation.

[50] I agree with STM's counsel that the order of Blair J. granting leave to STM to seek relief by petition in this Court must be considered to have dealt with the issue of STM's standing to do so. He expressly set out the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 19 relief sought by STM at p. 376 of his reasons. That matter is res judicata

(see Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 2nd ed.

(Butterworths: Toronto, 1999) at pp. 1078-9; Welk v. Mantelli (1995), 5

B.C.L.R. (3d) 387 at 397-8 (S.C.)).

[51] I further agree with counsel for STM that this Court has jurisdiction to grant declaratory relief when the issue is the challenge to the private right of the corporation to carry out its objects (Canadian

Pacific Railway Co. v. Teamsters Union, Local 213 (1975), 60 D.L.R. (3d) 2000 BCSC 1221 (CanLII) 249 at 263 (B.C.C.A.)).

[52] I therefore find that STM has standing to claim the relief sought in the charitable purpose petition.

C. The Liquidator (A990098)

1. Background

[53] On the application for advice and directions, Blair J. considered the status of CBIC and ordered:

...the intent and legal effect of "An Act to Incorporate the Christian Brothers of Ireland in Canada", 11 Elizabeth II, Chap. 22 is to establish a corporate body which is the civil law entity through which the Congregation of Christian Brothers (the "Congregation") conducts its temporal affairs in Canada and that the Corporation is in all respects the temporal identity and actor of the Congregation of Christian Brothers in Canada.

[54] The Liquidator interprets this order to mean that since the incorporation of CBIC in 1962, the Congregation has no temporal (as opposed to spiritual) existence separate from CBIC and cannot own property, legally or beneficially, separately from CBIC. Thus, according to the Liquidator, CBIC owns all of the property owned legally and beneficially by the Congregation before 1962. This is so although there is

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 20 no vesting clause in the special Act under which CBIC was incorporated and only in some cases was legal or beneficial ownership of property expressly transferred or conveyed to CBIC (not including the shares of VCL).

[55] The Liquidator takes the position that Blair J.'s order with respect to the status of CBIC in the winding-up cannot be challenged in this or any other court, without the leave of the Winding-Up Court, because the

Winding-Up Court has exclusive constitutional jurisdiction over all matters concerning the winding-up of CBIC, including its status and what 2000 BCSC 1221 (CanLII) assets are available for the winding-up. The Liquidator submits that the petitioners challenge the validity of the order in these proceedings and they and the Archdiocese have indicated that they may do so in future proceedings.

[56] The Ontario Court of Appeal considered the effect of Blair J.'s order with respect to the status of CBIC. Feldman J.A. said (at p. 710):

"This determination was made and has effect for all purposes within the liquidation, and is equally effective in respect of all assets of the corporation, wherever situated.”

2. Relief Claimed

[57] In its petition, the Liquidator seeks declarations that "any findings" made by the Winding-Up Court or Ontario Court of Appeal in the

"Winding-Up Proceeding", and in particular the finding of Blair J. concerning the status of CBIC, are not justiciable in British Columbia in any litigation relating to the Christian Brothers of Ireland in Canada.

3. Positions of the Schools

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[58] Counsel for the schools take the position that the Liquidator's petition should be dismissed because it is irrelevant to these proceedings and not supportable in law.

4. Petition Dismissed

[59] In my view, it is neither necessary nor relevant to these proceedings that the constitutional effect of Blair J.’s order as to the status of CBIC be decided. I am not prepared to make a determination of law for the purpose of binding future courts in possible future 2000 BCSC 1221 (CanLII) proceedings, particularly in the absence of a factual context (bearing in mind the admonition of Feldman J.A. at p. 711 of her reasons).

[60] The Ontario Court of Appeal has settled the question of the binding nature of Blair J.'s order within the liquidation, of which these proceedings are a part.

[61] The ruling of the Ontario Court of Appeal does not, however, preclude me from interpreting the order. I must do so in order to decide one of the issues for which Blair J. expressly granted leave: specifically, who is the owner of the shares?

[62] I therefore dismiss the Liquidator’s petition.

IV. LEGAL FRAMEWORK

[63] In his submissions, the Liquidator described the legal theories propounded by the schools on the one hand and the Liquidator on the other as “two ships passing in the night”. I prefer the metaphor of the parties viewing the issue from opposite ends of a telescope. From the schools’ point of view, the question is: “Who owns the schools?”, while from the

Liquidator’s point of view, the question is: “Are the schools immune from tort claims?”

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[64] The schools’ position is that at the time the schools were established, in the 1920s in the case of Vancouver College and in the

1960s in the case of St. Thomas More Collegiate, charitable trusts for the purposes of the schools were created by the community members who contributed funds specifically for the purpose of establishing the schools. They rely on evidence that is contemporaneous with the donations to demonstrate the intentions of the donors with respect to the purpose for which the funds were given. The schools say the only question before me is whether trusts were created at the time the schools were 2000 BCSC 1221 (CanLII) established. If they were, the consequences are not for me but for the

Winding-Up Court to determine. If no trusts were created at that time, that is the end of the matter (subject, of course, to appeal).

[65] The Liquidator, on the other hand, says that the analysis must begin at the date of the liquidation with the question of whether the schools are assets of CBIC that can be used to satisfy tort claims. Because trust assets are not immune from exigibility to satisfy tort claims, he says there is no legal reason to consider the intentions of donors to determine whether a trust for the schools was created. In response to the schools’ submissions, he says that no legal theory supports them and furthermore, neither evidence contemporaneous with the establishment of the schools nor evidence of subsequent conduct on the part primarily of the Christian

Brothers supports a finding that trusts for the schools exist.

[66] To a great extent, these two views meet in the reasons for judgment of the Ontario Court of Appeal. The effect of its decision that assets held in a special purpose charitable trust are not immune from exigibility is to largely undermine the force of the schools’ arguments in the context of the liquidation of CBIC. In the interest of fairness to the schools and

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 23 to complete the process begun by Blair J.’s order granting leave to bring these petitions, however, I am of the view that the determinations sought from this Court should be made.

[67] At this stage of the analysis, I will outline my understanding of the legal principles to be applied in determining whether a special purpose charitable trust exists. I will not deal with the issues of immunity, as they are not within the terms of the petitions and have been thoroughly dealt with by the Ontario Court of Appeal. 2000 BCSC 1221 (CanLII)

A. “Charitable Purpose Trust”

[68] The concept of a “charitable purpose trust” is derived from cases in which courts of equity have provided assistance to validate charitable bequests or gifts that would otherwise fail because of uncertainty of objects or violation of the rule against perpetuities.

[69] There are three requirements for a trust to come into existence, referred to by D.W.M. Waters, in Law of Trusts in Canada, Second Edition

(Toronto: The Carswell Company Limited, 1984) at p. 107 as “the three certainties”. These are certainty of intention, certainty of subject- matter and certainty of objects, as explained by Waters at p. 503:

It must be clear that the settlor intended to create a trust, it must be clear exactly what assets are to form the trust property, and the beneficiaries (the objects) of the trust must be ascertained or ascertainable.

[70] With respect to objects, Waters explains at p. 122:

“Objects” is a neutral word, and properly so, because trusts may be created in favour of persons, but also to a limited extent in favour of purposes which the settlor or testator would like to see carried out.

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[71] Waters explains at p. 128 that trusts for purposes are generally void because there is no person, a beneficiary, to enforce the obligations of the trustee. Trusts for charitable purposes, however, will be valid,

“in recognition and encouragement of acts of giving which are concerned to improve the welfare of society or sizeable groups within it.” A charitable purpose trust is enforced by the Crown, through the Attorney-General, as part of its inherent parens patriae responsibility for charitable activities. 2000 BCSC 1221 (CanLII)

[72] There is a similar exception from the rule against perpetual duration. That part of the rule against perpetuities prohibits persons from controlling their property for too long a period into the future.

“Charitable trusts are exempt from the rule, since they are for the public benefit and are to be encouraged to continue forever.” (Eileen E. Gillese,

The Law of Trusts (Concord, Ontario: Irwin Law, 1997) at p. 60).

[73] These concepts are demonstrated in cases cited by the schools, including Leahy v. Attorney-General (N.S.W.), [1959] A.C. 457 at 478-9 and

484 (P.C.); Re Vernon’s Will Trusts, [1972] Ch. 300 at 303; Re Finger’s

Will Trusts, [1972] Ch. 286 at 294-5; Re Meyers, [1951] Ch. 534 at 541-2;

Re Grant’s Will Trusts, [1980] 1 W.L.R. 360 at 368-9 (Ch.D.); Re Lucas,

[1948] 2 All E.R. 22 at 25-6 (C.A.); Re Satterwaite’s Will Trusts, [1966]

1 All E.R. 919 at 925 (C.A.). They are discussed in Re Christian Brothers of Ireland in Canada by Blair J. at pp. 397-401 and by Feldman J.A. at pp.

701-705.

B. "Specific Charitable Purpose Trust"

[74] It is a matter of construction of a bequest or gift in trust for a charitable purpose to determine whether it is for the general purposes of the charity or for a specific or restricted purpose: Re Ulverston &

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 25

District New Hospital Building Fund, [1956] 3 All E.R. 164 at 168-9

(C.A.); Attorney-General for Queensland v. Cathedral Church of Brisbane

(1977), 136 C.L.R. 353 at 371 (H.C. of A.); In re Young Women's Christian

Association Extension Campaign Fund, [1954] 3 W.W.R. 49 at 52 (Sask.

K.B.); Re Church Army (1906), 94 L.T. 599 (C.A.); Re Lucas at p. 26; Re

Finger’s Will Trusts at pp. 296-7.

[75] The Re Ulverston, Attorney General for Queensland and In re Y.W.C.A.

Extension Campaign Fund cases concerned public appeals for funds to be 2000 BCSC 1221 (CanLII) used for particular purposes of a charity. In each case, the purpose could not be carried out, and an application was made to decide what use should be made of the funds. In all of these cases, it was decided that the gifts were made for the specific purpose for which the funds were raised and could not be used for the general purposes of the charity.

[76] In Re Church Army, on the other hand, the court found that a public appeal for funds to support a number of different purposes of a charity, including building new headquarters, did not create a special trust for the headquarters.

[77] Re Lucas and Re Finger’s Will Trusts concerned testamentary gifts.

In each of these cases, the court construed the words of the will to determine whether the gifts were gifts to the trustees of the charity for the general purposes of the charity or trusts for the specific work or purpose carried out by the charity.

[78] Although the Ontario Court of Appeal disagreed with Blair J.’s conclusions about the effect of a “specific charitable purpose trust” on immunity, it did not say that such a trust does not exist in law, as argued by the Liquidator. At pp. 701–705 of her judgment, Feldman J.A.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 26 discusses the “Modern Recognition of ‘a Special Purpose Trust’” as it applies to corporations incorporated to carry out charitable objects. She points out at p. 703:

The issue of whether a gift was given “in trust” to an incorporated charity has arisen in those cases in the context of determining whether a testamentary gift can be saved which was left to charity but with problems of interpreting the true intent of the donor; specifically, whether a gift left to a named corporate or unincorporated charity which either no longer existed or which had changed its objects by the time the gift was to take effect, was intended as a gift to that corporation or charity or, alternatively, as a trust for the purposes of the corporation or charity. 2000 BCSC 1221 (CanLII)

She goes to cite Re Finger’s Will Trusts.

[79] At p. 704, she said:

The authors of Tudor on Charities, 8th ed. (1995), p. 159, have extrapolated from this law the proposition that a charitable company may hold particular property on trust for specific charitable purposes, distinct from its other property, and that “clearly to misapply such property would be a breach of trust”. I agree with the authors of Tudor on Charities as to the obligations of the charity when it accepts such a gift, but with the following qualifications: (a) as long as the charity is in operation, and (b) subject to any cy-pres order of the court, the charity would be obliged to use the funds for the purpose stipulated by the trust.

[80] Thus, contrary to the position taken by the Liquidator, the cases which consider whether a special purpose trust has been created by will for the purposes of determining whether the gift is valid or void do have application to the question in issue here: whether a special purpose trust was created by inter vivos gifts to a charitable organization. All of the circumstances of the making of the gift must be reviewed to determine its terms and effect.

C. Intention of the Donor

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 27

[81] One of the three requirements for a trust to come into existence is

“certainty of intention”: it must be clear that the person conveying property, the settlor, intended to create a trust. Waters puts it this way at p. 107:

This means that the alleged settlor, whether he is giving the property on the terms of a trust or is transferring property on trust in exchange for consideration, must employ language which clearly shows his intention that the recipient should hold on trust. No trust exists if the recipient is to take absolutely, but he is merely put under a moral obligation as to what is to be done with the property. 2000 BCSC 1221 (CanLII) and at p. 108:

There is no need for any technical words or expressions for the creation of a trust. Equity is concerned with discovering the intention to create a trust; provided it can be established that the transferor had such an intention, a trust is set up.

[82] In Smith v. Kerr, [1900] 2 Ch. 511, Cozens-Hardy J. considered whether a deed executed in 1618, conveying property known as Clifford’s

Inn to an unincorporated society for the price of £600, created a charitable trust. He held at p. 522:

It is true the word “trust” is not found, but that word is not necessary, if upon the fair construction of the whole document it is manifest that a trust or duty or obligation was intended.

[83] Where there is no trust document, the court will consider other evidence to determine the intention of the settlor, including contemporaneous documents and usage, the circumstances surrounding the execution of any trust document, the donor’s contemporaneous acts, the early application or distribution of the fund and the construction placed on doubtful questions which arose in the early administration of the trust: Shore v. Wilson (1842), 9 Cl. & Fin. 355 at 390 (H.L.); Attorney-

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 28

General v. Trinity College, Cambridge (1856), 24 Beav. 383 at 399;

Halsbury’s Laws of England, vol. 5(2), 4th ed. (London: Butterworths,

1993) at para. 98; J. Warburton and D. Morris, Tudor on Charities, 8th ed.

(London: Sweet & Maxwell, 1995) at p. 168.

[84] Evidence of the use of property by the trustees over a long period of time may assist in determining the intention of the settlor: Attorney-

General v. Brazen Nose College (1834), 1 C.L.& F. 295 at 330 (C.A.);

Attorney-General v. Smythies (1831), 2 R.& M. 717 at 249-50. 2000 BCSC 1221 (CanLII)

[85] Both schools say that the donors of funds used to establish the school intended to create a trust of the funds for the specific charitable purpose of the operation of the school. There is no trust document in the case of either school expressly setting out the intentions of the donors to create such a trust, so the schools rely on the type of evidence described above.

[86] The Liquidator argues that a donor’s intention, motive or purpose in making a gift is not the same as an intention to create a trust and the intention to create a trust cannot be inferred from evidence that a donor had a purpose in mind when the donor made a gift: Bowman v. Secular

Society, Limited, [1917] A.C. 406 at 440 (H.L.); Liverpool and District

Hospital for Diseases of the Heart v. Attorney-General, [1981] 1 All E.R.

994 at 1006-7 (Ch.D.); Roman Catholic Archiepiscopal Corp. of v.

Ryan (1957), 12 D.L.R. (2d) 23 at 29 (B.C.C.A.).

[87] The Liquidator’s argument focuses on the distinction that must be drawn between gifts by way of trust and gifts by way of an immediate, absolute transfer (see Waters at pp. 505). All of the authorities make it clear that in determining whether a transfer of property creates a trust

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 29 or an absolute gift, it is the intention of the donor that is the focus of the court’s analysis.

[88] In his submissions concerning the intent of the donors of funds to establish Vancouver College, counsel for VCL relied on Attorney–General for Queensland. In that case, the High Court of Australia found that funds raised for the rebuilding of a hospital on land owned by an incorporated chapter of the Anglican Cathedral were impressed with a trust for the particular charitable purpose of the hospital. Jacobs J. said at p. 371, 2000 BCSC 1221 (CanLII) in analyzing the intention of the donors for the hospital: “...if the purpose of the gift is a charitable purpose, the charitable purpose will more likely than not impress the subject matter of the gift with a charitable trust.”

[89] The Liquidator argues that Attorney-General for Queensland is not good law in Canada. In Australia, the courts have determined that gifts or bequests received by charitable corporations are presumptively held in trust rather than received beneficially by the corporation to be used for its charitable purposes generally: Sir Moses Montefiore Jewish Home v.

Howell & Co. (No. 7) Pty Ltd., [1984] N.S.W.L.R. 406 (N.S.W.S.C.); Sydney

Homeopathic Hospital v. Turner (1959), 102 C.L.R. 188 (H.C. of A.). This presumption was rejected by Blair J. in Re Christian Brothers of Ireland in Canada at p. 391. Neither Blair J. nor the court in Sir Moses

Montefiore referred to Attorney-General for Queensland.

[90] In my view, the reasoning of Jacobs J. in Attorney-General for

Queensland reveals the presumption rejected by Blair J. Nonetheless, his analysis of the donors’ intentions and the balance of his reasoning remains useful in these proceedings.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 30

D. Gifts or Trusts for Unincorporated Associations

[91] Vancouver College and the Liquidator devoted much legal argument to the question of whether unincorporated associations can legally receive property either absolutely and beneficially or in trust for purposes.

Waters comments on this issue at pp. 505-6:

Gifts to these bodies have raised all the three problems: purpose objects, certainty of objects and perpetuity. The three principles converge at this point in a maze of interaction, and legal commentary on the subject abounds. Like the point of confluence of three rivers, the waters swirl and eddy, constantly being seen in a new light as the currents 2000 BCSC 1221 (CanLII) cross, re-cross and intermingle.

He then points out the issue which animated the arguments here:

In the first place, a clear distinction has to be drawn between a gift by way of trust and a gift by way of immediate, absolute transfer.

[92] Vancouver College argues that at the time the school was established, the Christian Brothers were an unincorporated charitable association and because of that status, were legally incapable of beneficially owning the shares of VCL. They could only own the shares as trustees for a charitable purpose. The Congregation was simply the aggregate of its members. They could not, individually or collectively, own the shares for their own benefit, because they are precluded by their own rules from having any personal benefit in any assets owned by the organization. All of the organization’s assets are dedicated to its charitable purposes: the evangelization and education of youth. Thus, the shares must be held in trust for a charitable purpose, which Vancouver

College says is to operate the school. While the status of the

Congregation may have changed on incorporation of CBIC, the trust continues.

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[93] (St. Thomas More’s argument focuses not on the status of the

Congregation at the time the school was established, but on the purpose for which the funds were raised and the land acquired by the Archdiocese.

St. Thomas More argues that the Archdiocese held the funds and land in trust for the school, and the trust continued when the land and buildings were conveyed to STM.)

[94] The Liquidator's submissions were directed to demonstrating that unincorporated associations can legally own property beneficially. He 2000 BCSC 1221 (CanLII) distinguished the authorities relied on by Vancouver College on the basis that they dealt with testamentary rather than inter vivos gifts and were concerned with saving gifts that would be void for uncertainty or because of perpetuities.

1. Unincorporated Associations

[95] From my review of the authorities cited, it appears that an unincorporated association, whether charitable or non-charitable, can receive gifts absolutely, provided that, to avoid the rule against perpetual duration of ownership, the members of the association at the time of the gift can take the property for their own benefit or dispose of or use all of it in its operations.

[96] Gifts to unincorporated non-charitable associations were thus found to be valid in Re Ogden, [1933] 1 Ch. 678 at 682; Re Turkington, [1937] 4

All E.R. 501 at 504 (Ch.D.); Re Recher’s Will Trusts, [1972] 1 Ch. 526 at

539; Re Lipinski’s Will Trusts, [1977] 1 All E.R. 33 at 45-6 (Ch.D.). In

Cocks v. Manners (1871), L.R. 12 Eq. 574 at 584 and 586, and Re Delaney’s

Estate, [1882] L.R.I. 226 at 241 and 245 (Ch.D.), gifts to unincorporated non-charitable orders of nuns were found to be valid on the basis that the members of the order could take the benefit of the gifts personally.

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[97] In Cocks, an absolute gift to an unincorporated charitable order of nuns was also found to be valid as a charitable gift. There was evidence before the court, which it noted at p. 584, that the order could dissolve and the members take the property for their own benefit. This is the only case provided by counsel in their very thorough submissions in which an unincorporated charitable organization took a gift absolutely.

[98] The members of an unincorporated charitable association are usually precluded from taking the property of the association for their own 2000 BCSC 1221 (CanLII) benefit. An unincorporated charitable association can, however, by its members, hold property as trustee for a charitable purpose: Leahy; Re

Vernon’s Will Trusts; Re Finger’s Will Trusts; Re Lucas; Re Meyers. The charitable purpose for which property is held is determined by construing the bequest or gift by reference to the charitable purposes of the association and the intention of the donor: Re Ulverston; Attorney-General for Queensland; In re Y.W.C.A. Extension Campaign Fund; Re Lucas; Re

Finger’s Will Trusts.

2. Incorporated Entities

[99] Most of the authorities relied on by the Liquidator considered whether incorporated charitable or non-charitable entities could receive gifts absolutely or in trust: Bowman; Re Church Army; Liverpool and

District Hospital; Roman Catholic Archiepiscopal Corp. of Winnipeg.

[100] It is trite to state that any corporation can legally own property absolutely. Corporations incorporated to carry out charitable objects (so- called "charitable corporations") generally do not hold property on trust for any of their objects or purposes, but are presumed to hold their assets beneficially as do all corporations: Re Christian Brothers of

Ireland in Canada, Blair J. at pp. 390-2; Feldman J.A. at pp. 701-702.

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[101] A corporation cannot hold property on trust for a non-charitable purpose, as such a trust would be void for uncertainty of objects or as offending the rule against perpetual duration. A corporation can, however, hold property as a trustee for a charitable purpose, where “there are circumstances which show that the recipient is to take the gift as a trustee.” (Re Vernon’s Will Trusts at p. 303.)

[102] Where a charitable corporation is not a trustee for a specific charitable purpose, it will nonetheless be obligated to use its assets to 2000 BCSC 1221 (CanLII) further its charitable purposes. The equitable jurisdiction of the court extends to intervene to enforce those purposes: Liverpool and District

Hospital at pp. 1009-10; In Re Christian Brothers of Ireland in Canada,

Feldman J.A. at pp. 701-702.

[103] The Liquidator cited Ferguson v. MacLean, [1930] S.C.R. 630 as authority that an unincorporated charitable organization, a religious congregation, could be the beneficiary of a trust. My reading of the case, however, is that the religious congregation was one of a chain of statutorily incorporated entities and trusts and not an unincorporated charitable organization.

3. Bequests to Christian Brothers

[104] It is worth noting two cases in which bequests to the Christian

Brothers were considered. In Re Delaney’s Estate, the court (at pp. 241 and 244) referred to Hogan v. Byrne, 13 Ir.C.L.R. 166, in which a bequest of a house to “monks called Christian Brothers” was in issue, and in

Leahy, one of the issues was a bequest of property to “the Christian

Brothers”.

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[105] In Hogan, the gift was found to be void for uncertainty. The testator could not have intended to give a house to some 200 individuals, in 42 establishments in Ireland and England, in their individual capacity.

There is no indication that the court considered whether the gift could be found valid as a trust for the Brothers’ charitable purposes.

[106] In Leahy, on the other hand, the bequest was found valid as a trust for the charitable purposes of the order (see p. 486). Notably, it was expressed to be “upon trust” for an order selected by the executors. The 2000 BCSC 1221 (CanLII) court also considered that it could not be a gift to the individual members of the order, because of the same uncertainties noted in Hogan

(the numbers and geographic dispersion) and because it was doubtful that the members had the capacity to put an end to their association and distribute the assets.

4. Conclusion

[107] I conclude from the authorities and submissions of counsel that an unincorporated charitable association, such as the Congregation, cannot receive and own property absolutely where its members are precluded from taking any personal benefit from the property. Individually or collectively, the members of the Congregation hold property as trustees for charitable purposes, whether general or specific.

[108] A charitable corporation, such as CBIC, generally holds property absolutely to be used for its charitable purposes, but may hold property as trustee for a specific charitable purpose.

E. Alternatives to Purpose Trusts: Contract, Agency, Mandate

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[109] A donor’s wishes or intention with respect to the use of property that is the subject of a gift may be legally enforced by means other than a trust, including a contract, agency relationship or mandate.

[110] The Liquidator says that the relationship between the donors to the schools, including the Archdiocese, and the Christian Brothers was contractual. The contract is contained in “conditions” entered into between the Archdiocese and the Congregation with respect to the establishment of each school. 2000 BCSC 1221 (CanLII)

[111] The schools say that the “conditions” are not legally binding contracts and in any event, do not preclude a trust relationship.

[112] Alternatively, the Liquidator conceptualizes the relationship between the petitioners and CBIC as an agency relationship. Relying on the terms of the Declarations of Trust, he characterizes the shareholders of

VCL and STM as “bare trustees” (Trident Holdings Ltd. v. Danand

Investments Ltd. et al. (1988), 64 O.R.(2d) 65 at 73-4, 77 (C.A.)), holding the shares for the benefit of the Congregation, which in Canada, he says, is CBIC.

[113] I will consider the legal effect of the “conditions” and the

Declarations of Trust after I deal with the facts.

[114] A variation on the concept of agency is the “mandate”, a concept developed in Conservative and Unionist Central Office v. Burrell, [1982] 2

All E.R. 1 at 7 (C.A.). The Court of Appeal considered how an unincorporated association, in which the members were not contractually bound by mutual agreement, could receive donations. The solution in Re

Recher’s Will Trusts was to treat the gift as an accretion to the funds of the association, which were the subject-matter of the contract between the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 36 members. That solution was not available in Burrell, because there was no such contract. The Court of Appeal suggested that a mandate or agency would solve the legal problem. A contributor would give money to an individual who would have an obligation to use the money for the purposes indicated by the contributor.

[115] The concepts of agency and mandate adopted in Burrell had the effect of saving a gift that would otherwise be void, because the purposes of the unincorporated association to which the gift was given were not 2000 BCSC 1221 (CanLII) charitable. A decision that the gift was void would frustrate the intentions of the donors. Where the purpose of a gift is charitable, the well-established concept of a trust achieves the intentions of the donor, because an unincorporated charitable association is legally capable of receiving gifts in trust for its charitable purposes.

[116] The Liquidator suggests further that the Declarations of Trust evidence trusts established by the Congregation as settlor, because it was the only organization that ever had an interest in the shares of VCL and

STM. But, the Congregation was legally incapable of holding the shares beneficially, so it could not have given them to the shareholders to hold on trust for itself.

F. Enforcement of a Charitable Use

[117] A donor’s wishes that property be used for a charitable purpose may be enforced without the use of a trust. The equitable jurisdiction of the court and the obligation of the Crown, through the Attorney-General, to intervene to enforce charitable objects, applies to a charitable corporation that is legally bound, either by a trust or by its constitution, to apply its assets for charitable purposes: Liverpool and

District Hospital at pp. 1009-10; as well as to charitable trusts: Re

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 37

Christian Brothers of Ireland in Canada, Ontario Court of Appeal at p.

702.

G. Ownership of Property for a Charitable Purpose

[118] A trustee is generally considered to hold legal title to trust property, while the beneficial or equitable title belongs to the beneficiary. In trusts for charitable purposes, however, there is no beneficiary. In Re Christian Brothers of Ireland in Canada, Feldman J.A. considered this concept of the duality of ownership of property as it 2000 BCSC 1221 (CanLII) applies to trusts for charitable purposes, commenting at pp. 695-6:

It is problematic to conceptualize charitable purposes as "owning" the equitable interest in trust property. In this context, whether the purposes can be said to "own" the equitable interest in trust property, that property is held by the trustees for use only for the charitable purposes and that obligation is enforced by the Attorney General through the courts.

[119] Thus, the "purpose" of a specific charitable purpose trust may not be the beneficial owner of the trust property, separate from the legal ownership of the trustee, as would be the case where there is a trust for a beneficiary.

[120] In any event, the result of the decision of the Ontario Court of

Appeal is that, whatever the effect of a specific charitable purpose trust on the beneficial ownership of the property held for the purposes of the trust, the court will not enforce the charitable purpose when the trustee is a charitable corporation being wound up and the creditors are claimants in tort for sexual, physical and emotional abuse.

V. FACTS

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[121] Having outlined the legal principles applicable to the determination of whether special charitable purpose trusts for the schools exist, I will now consider the factual background.

A. Vancouver College

[122] Vancouver College was founded in 1922, when two Christian Brothers began teaching Catholic boys in an old building in downtown Vancouver.

Over the next few years, through the efforts of representatives of the

Archdiocese, the Christian Brothers and the local community, land was 2000 BCSC 1221 (CanLII) acquired in the Shaughnessy area of Vancouver. School buildings were erected on the site and have been occupied continuously since 1925. The land was transferred to VCL after it was incorporated in 1927 and 203 shares were issued to four Christian Brothers.

[123] In December 1998, Vancouver College had an enrollment of approximately 1,000 boys in kindergarten through grade 12. All came from the Lower Mainland of British Columbia; approximately 58 per cent were from Vancouver. Approximately 20 per cent of the students were not

Catholic.

[124] The involvement of the three parties and the events that occurred in the establishment of the school, as recorded in contemporaneous documents, form the basis for the school's position that a trust was created for the specific purpose of operating the school. The Liquidator presents evidence of meticulous and prudent management of the school and later expressions of ownership by Christian Brothers to demonstrate that the Congregation, and later CBIC, operated the school as its beneficial owner.

1. The Parties

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 39

(a) The Archbishop and the Archdiocese

[125] The Archdiocese of Vancouver is the Roman Catholic Church in the geographical area that comprises a large portion of southwest British

Columbia. "The Roman Catholic Archdiocese of Vancouver", a corporation sole, incorporated under the Roman Catholic Archbishop Incorporation Act,

S.B.C. 1909, c. 62, as amended S.B.C. 1938, c. 69, is the civil law entity which holds and administers on behalf of the Archdiocese all property rights of the Archdiocese. 2000 BCSC 1221 (CanLII)

[126] The Archbishop has the responsibility, within the Archdiocese, to foster the "Catholic Education Apostolate". The Catholic Education

Apostolate involves the operation of Roman Catholic schools to foster the religious purposes of the Church. Under canon law, Catholic schools can operate within an Archdiocese only with the authorization and spiritual supervision of the Archbishop.

[127] In 1906, 1912 and 1915, the Archdiocese asked the Christian

Brothers to come to Vancouver to operate a Catholic school, but because of financial and other conditions in the Archdiocese and the Congregation, the invitations were refused. Finally, in 1921, after the Brother Superior of the Congregation (Brother Hennessy) visited Vancouver, the Archbishop issued a further invitation, which was accepted by the Congregation.

[128] Father William P. O'Boyle, a priest of a parish in the Archdiocese, represented the Archbishop in his relations with the Congregation with respect to the establishment of the school. In 1915, Father O'Boyle introduced Brother Hennessy, then assistant to the Brother Superior, to members of the Vancouver Catholic community and pressed Brother Hennessy for the establishment of a Catholic school for boys in Vancouver. Father

O'Boyle represented the Archbishop in negotiations with the Christian

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 40

Brothers of the conditions under which they would come to Vancouver. He was active in all aspects of fund-raising and acquiring the land for the school.

(b) The Christian Brothers

[129] By 1921, the Congregation had been in existence for over 100 years and Christian Brothers had been teaching at Catholic schools in Canada since 1876. By 1915, they were operating schools in Victoria and Seattle. 2000 BCSC 1221 (CanLII) [130] In 1922, the Congregation in Canada was part of the North American

Province, based in New York and headed by the "Brother Provincial"

(Brother Ryan) and the "Provincial Council". The Congregation world-wide was based in Dublin, Ireland and headed by the "Brother Superior" (Brother

Hennessy) and the "General Council". The Brother Provincial and Brother

Superior are assisted by other Brothers, referred to as "consultors". The

Canadian Province is now based in Toronto and the General Council in .

[131] In 1922, Brother Doorley, a consultor to the Brother Provincial, visited Vancouver and negotiated with Father O'Boyle, on behalf of the

Archbishop, the conditions under which the Brothers would come to

Vancouver. In August 1922, Brothers Jerome Lannon and Patrick Keane arrived in Vancouver to begin teaching. Brother Lannon was the first principal of Vancouver College and was active in every aspect of the formation of the school, including fund-raising, acquiring the land, building the school, and teaching at and operating the school.

(c) The Local Committee

[132] Father O'Boyle, Charles F. Stafford, James D. McCormack and Mr.

Justice Murphy were instrumental in raising funds and acquiring the land for the school. In a letter to Brother Hennessy in January 1922, Father

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 41

O'Boyle referred to them as the "advisory board...-- a group of hardheaded businessmen and a few with technical experience in educational matters such as Judge Murphy."

[133] Mr. Justice Murphy was a justice of this court. He was one of the group who attended the meeting with Brother Hennessy arranged by Father

O'Boyle in 1915. In 1924, he intervened when the Archbishop signed a contract with the Jesuits which conflicted with the conditions the

Archdiocese and the Christian Brothers had agreed to for the establishment 2000 BCSC 1221 (CanLII) of Vancouver College.

[134] Charles Stafford, with Father O'Boyle, raised funds in anticipation of the opening of the school in 1921 and 1922. Mr. Stafford and Father

O'Boyle later took title to the land in trust for the Christian Brothers, before the incorporation of VCL. Mr. Stafford remained involved in fund- raising for the school throughout the 1920s.

[135] James McCormack became involved with fund-raising for the school in

1924. He was instrumental in obtaining permission from the Archbishop for a fund-raising drive in the Catholic parishes of Vancouver. Mr. McCormack became the principal benefactor of the school, donating large sums and fund-raising from others throughout the 1920s and into the 1930s.

2. The Conditions

[136] In July 1922, Brother Doorley visited Vancouver and he and Father

O'Boyle settled the conditions under which the Christian Brothers would come to Vancouver to open a school.

[137] By the time of Brother Doorley's visit, Father O'Boyle and the advisory board had begun negotiating with the Canadian Pacific Railway for a permanent site for the school and had raised $17,000 towards the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 42 purchase. Brother Doorley wrote to Brother Provincial Ryan that Father

O'Boyle suggested that: "the site when secured be deeded free & clear to the Brothers and that we undertake to build a school & residence there".

Father O'Boyle had determined that the school would not be a parochial or parish school but would be open to the whole community on a fee-paying basis. The need to take boarders "to meet the demand as the boys in the province of British Columbia have no boarding school" was noted by Brother

Doorley in a letter to another consultor, as was the competition from "the

Benedictines or Jesuits" to start a boarding school. In the same letter, 2000 BCSC 1221 (CanLII)

Brother Doorley commented on a school in Seattle in which "the Brothers and Bishop will be co-trustees...Permanency will be secure in that way...".

[138] The "Conditions Under Which the Christian Brothers of Ireland

Undertake to Open and Conduct a Catholic School in Vancouver, B.C." were signed by Archbishop Casey and Brother Superior Hennessy. The signed document bears the date "June 1922", but correspondence between various

Brothers and Father O'Boyle indicates that the Archbishop signed the

Conditions in August 1922 and Brother Superior Hennessy likely signed them in October 1922.

[139] The Conditions are as follows:

The Brothers undertake to afford a suitable secular education with the addition of that Catholic training which the Church expects Catholic boys to receive, on the following conditions:

1. That, in order to secure permanency for the work, a site suitable for a school be acquired and deeded to the Brothers free of all encumbrance, before January 1st, 1923.

2. That the Brothers, with the co-operation of the Archbishop, clergy and laity, may collect funds by public drive or other methods to enable them to erect and maintain school buildings and a residence on the new site.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 43

3. That, pending the erection of the new school building, temporary class-room accommodation be provided rent free and equipped.

4. That, a suitable residence for the Brothers, rent free and furnished, be provided until a residence is erected on the new site.

5. That the Brothers are to left free in the control and management of the school, keeping in view always the educational standards of the Province. They shall charge the pupils such fee as may be considered advisable.

6. That the travelling expenses of three Brothers from Ireland and one from the American Province be paid by the Archbishop. 2000 BCSC 1221 (CanLII) 7. That the Archbishop provide a weekly Mass in the Brothers' oratory in order to comply with the regulations for the reservation of the Most Holy Sacrament.

8. The Brothers undertake to open the school with four Brothers in September, 1922 commencing with first year high school and classes in the grades.

9. If conditions are favorable the Brothers will consider the advisability of admitting boarders.

10. The Brothers may at any time establish and conduct classes of College or University standard.

3. Fund-Raising

[140] In anticipation of the opening of a school, in 1921 and 1922 Father

O'Boyle and Charles Stafford raised approximately $13,000 in cash and pledges from 12 named donors. In January 1922, the advisory board decided to approach the C.P.R. for a site for the school and in the meantime to equip temporary quarters. By July 1922, the advisory board was negotiating with the C.P.R. for a site and had raised $17,000 from 40 people. In

September 1922, the advisory board entered into an agreement with the

C.P.R. for the acquisition of six and a half acres of property at the present site of the school for $19,590. They made a down payment of

$5,087, which was paid from the $17,000 which had been raised. These

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 44 matters were carried out by the advisory board before or just after the

Conditions were signed and Brothers Lannon and Keane arrived in Vancouver.

[141] Further funds had to be raised to build the school. In correspondence dated December 10, 1922, Brother Superior Hennessy made it clear to Brother Lannon that the Christian Brothers could not incur any obligation for raising funds or put any money into the building of the school. No fund-raising drive could take place in parishes in the

Archdiocese without the permission of the Archbishop. 2000 BCSC 1221 (CanLII)

[142] In the fall of 1923, Father O'Boyle was given a three-month leave of absence and travelled to the east, ostensibly to raise funds for the school, but was unsuccessful. The Archbishop was ill and would not give approval for a drive.

[143] In early 1924, Brother Lannon and Charles Stafford each visited

Father O'Boyle about the matter in the same week. Father O'Boyle arranged for Brother Lannon to meet James McCormack. Mr. McCormack took an immediate interest. He and Father O'Boyle visited the Archbishop in hospital and obtained permission for the fund-raising drive, Mr. McCormack having promised to donate $10,000 himself.

[144] The Archbishop's formal consent to Brother Lannon for the fund- raising drive was in the following terms:

According to arrangements made a few years ago with the Christian Brothers of Ireland, by which a school and classical college were to be provided for Vancouver, I hereby cordially endorse your effort to raise funds by an associated parish drive to complete the purchase of the site and to erect adequate buildings.

[145] The advisory board was joined by Brother Lannon and decided that he should conduct the fund-raising drive. They determined that the school

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 45 building would cost $65,000. Together with $14,000 due for the land, a total of $79,000 had to be raised.

[146] The Brother Provincial freed Brother Lannon from his teaching duties in the spring of 1924 and a local businessman, Mr. Dominic Burns, donated a downtown office for his use.

[147] In March 1924, Father O'Boyle and Brother Lannon called on all of the pastors in the parishes in Vancouver and received their support for the fund-raising drive for the school. Brother Lannon wrote: "A city 2000 BCSC 1221 (CanLII) committee was named and a working group was formed of persons of means in all parishes."

[148] Brother Lannon had previously booked the Orpheum Theatre for a show to be presented by the students of Vancouver College. The entertainment was attended by 1,700 persons. The following week, a fund-raising banquet was held at the Hotel Vancouver at which $30,400 was raised to build the school. Contributions were made by non-Catholics as well as Catholics.

[149] By May 1924, the advisory board established the "Associated Parish

Drive". The balance remaining of the $17,000 previously raised by Father

O'Boyle and Charles Stafford was added to the funds of the Associated

Parish Drive. In correspondence to the Brother Superior and the C.P.R.,

Brother Lannon referred to the drive as:

...a logical part of the Drive which began in 1922 by the work of Father O'Boyle and Mr. Stafford. They collected $[illegible] and the second Drive is a logical part of that movement for a New School. As a proof that is the same Drive witness the appeal put before the C.P.R. in connecting with our appeal to them for a loan. You will notice that we add together the sums received and the C.P.R. have considered that the sums received in the Drives a proof that the Committee had been doing something very worthy of recognition.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 46

(The Committee referred to by Brother Lannon is the 1922 fund-raising advisory board consisting of Father O'Boyle, Mr. McCormack, Mr. Stafford and Mr. Justice Murphy.)

[150] The Drive was publicized in the local Catholic newspaper in June

1924. The following form was provided for making subscriptions to the

Drive:

THE ASSOCIATED PARISH DRIVE

to aid in the erection of the 2000 BCSC 1221 (CanLII)

CHRISTIAN BROTHERS COLLEGE

For the purpose of completing the purchase of a site and of erecting and equipping buildings for a School or College to be conducted by the Christian Brothers of Vancouver, B.C. which projects will be entered as soon as possible and in consideration of the subscription of others, I promise to pay to Rev. Br. M.J. Lannon or the Superior for the time bring of the Christian Brothers at Vancouver, B.C. the sum of ______...

[151] The advisory board met with Newton J. Ker, the local agent of the

C.P.R., who arranged a meeting for them with Mr. Beatty, the President of the C.P.R. Brother Lannon wrote to Mr. Ker on behalf of the advisory board requesting that the C.P.R. lend $25,000 and continue to carry the land. He noted that: "the Loan will be granted in the names of Rev. Father O'Boyle and Charles F. Stafford in whose names the intended property of the school on Shaughnessy is being held in trust for the Brothers." The C.P.R. ultimately approved a loan in September 1924. $10,000 was advanced in 1925 to build a residence for the Brothers and boarders, which was secured by a

$25,000 mortgage, covering the $10,000 loan and $15,000 owing on the purchase price for the land.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 47

[152] Brother Lannon also requested a loan from the Brother Superior. In his letter, he pointed out that the Drive was an extension of the early fund-raising by Father O'Boyle and Mr. Stafford and continued:

...the Church as a whole is interested...This fact seems to make the school more than a private venture in as much as it becomes a dire necessity for the Catholic Boys of the city to have a school large enough to receive them...

...men like Judge Murphy and Mr. McCormack and Mr. Stafford hold themselves bound to see that the school is safely erected. In fact the school has become to them a deeply personal affair of which they are so proud that their chief desire is to see it safely erected.... 2000 BCSC 1221 (CanLII)

Suppose then that we cannot go ahead with the loan these men and their efforts must cease and the school becomes an impossibility. We shall also meet with the condition of men who have promised sums of money for the erection who will not give any till the school takes practical shape. For years they have been hoping for a proper Catholic School and the conditions were never so favorable for any Catholic accomplishment in the history of the city. It really ceases to be a private venture and although we shall own the school and no one ever disputes that fact yet its necessity in the city and its present success makes it assume the features of a Catholic Institution necessary for the very life of the Church.

Father O'Boyle and Mr. Stafford have been the men who gathered the previous fine sum in relation to our coming and they administered the funds with full detailed account of every penny they received.... Our condition here in view of not being able to go ahead is utterly unfavorable....we shall lose the confidence of those who have promised to help us to build a school....we feel that we shall be exposed to the view of the critical as being untrue to the promise which we had made of erecting a school for the Catholic boys of the city.

[153] In August 1924, Brother Superior arranged a loan of $30,000 through the European bankers of the Congregation, with interest payable half yearly at 4%.

[154] Thus, the construction of the school building was financed with

$35,000 in donations from the community and the $30,000 loan arranged by the Brother Superior of the Congregation. Both the loans from the C.P.R.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 48 and the Congregation's European bankers were ultimately paid from the fees charged to students of the school.

[155] The cornerstone of the school building was laid in October 1924.

Mr. Stafford chaired the proceedings. Mr. Justice Murphy, the Archbishop,

Father O'Boyle, Mr. McCormack and Brother Lannon addressed the audience.

[156] As the construction of the school neared completion, it became apparent that a residence for the Brothers and boarders was necessary. Its cost was $30,000. Mr. McCormack gave $10,000 to build the residence and 2000 BCSC 1221 (CanLII)

$5,000 to pay some debts. He solicited funds from people outside of

Vancouver, including from a friend in Chicago, Mr. Edward Swift, who donated $500. Mr. Patrick Burns of Calgary, an important benefactor of the school who had donated $5,000 for the school building, donated an additional $2,500 for the residence. Mrs. McNeely, another significant benefactor, had contributed $5,000 to the original fund-raising campaign of Father O'Boyle and Brother Stafford in 1921-22 and a total of $11,000 to the school by 1925. $10,000 of the C.P.R. loan was used for the residence. The residence was completed in August 1925.

[157] In 1927, Mr. Patrick Burns arranged to purchase for $14,080 and donate to the school three and a half acres of land adjoining the six and a half acres acquired from the C.P.R. in 1922. This land became known as

Burns' Field. In the 1930s, due to financial problems, one half of Burns'

Field was sold to pay municipal taxes owing on the school property.

[158] In 1927, Mr. McCormack donated $75,000 to build a new wing for the school, which was completed in 1928 and called McCormack Hall. Mr.

McCormack's dedication of McCormack Hall and Brother Lannon's response are

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 49 reported in the first edition of the Vancouver College Annual, 1927-28, as follows:

"And now," he said, "I have much pleasure in turning over this building to you, Reverend Brother Lannon, who represents here that great teaching body of men -- the Christian Brothers of Ireland -- to be used for the education of youth, to the honour and glory of God in gratitude for many blessings received from Him and in loving memory of those who were most intimately associated with my life -- my father, my mother and my wife. I firmly believe that every boy that is taught and trained in this school will as a result of that teaching and training the better understand his duty to his God, to his fellow man and to his country." 2000 BCSC 1221 (CanLII) Brother Lannon received the gift tendered to the Brothers, and on the part of his superiors, expressed most sincere thanks. He felt that the obligation which such a gift placed upon him and those who would follow him was one demanding a most sincere devotion not only to the solid ground work of secular education, but also to every element which would tend to develop fine men and good citizens.

Mr. McCormack ended his speech with an appeal for the school.

[159] The sources of funds for the purchase of the land and erection of the buildings in the 1920s may be summarized as follows:

Community Fund-Raising:

1921-1922 $17,000.00 (Donors of approximately $10,500 are identified.)

1924: Opening Banquet Associated Parish Drive 30,400.00 (cash and pledges) (this may include the amount raised at the opening 42.701.31 banquet)

Principal Benefactors:

James D. McCormack: 1924: to open the Drive 10,000 1925: residence and to pay debts 15,000 1927: McCormack Hall 75,000

Mrs. McNeely: 11,000

Patrick Burns: 1924: Drive 5,000 1925: residence 2,500

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 50

1927: Burns' Field 14,080

Christian Brothers: 1924: Loan arranged 30,000 1926: Loan £1,000

Canadian Pacific Railway: 1922: Agreement for Sale of Land 14,863 1925: Loan 10,000

4. Acquisition of the Land

[160] Father O'Boyle and Mr. Stafford entered into the agreement with the 2000 BCSC 1221 (CanLII)

C.P.R. in October 1922 to acquire the land for the school. There is no document of that agreement in evidence.

[161] On March 15, 1925, the Royal Trust Company conveyed the land on which the school and residence had been constructed to Father O'Boyle and

Mr. Stafford. The correspondence from the C.P.R. referred to Father

O'Boyle and Mr. Stafford as "Trustees of the Christian Brothers School".

The application for registration of title in the Land Registry (Land

Registry Act Form A) referred to Father O'Boyle and Mr. Stafford as "joint trustees of Christian Brothers School", but these words were crossed out.

At the time, the Land Registry Act, R.S.B.C. 1924, c. 127, s. 147, required a written trust deed in order to register land in trust, and no written trust deed existed. The Certificate of Indefeasible Title in the names of Father O'Boyle and Mr. Stafford was registered May 14, 1925.

[162] The land was conveyed to VCL, after its incorporation, on July 6,

1927.

5. Incorporation of VCL

[163] Correspondence between Brother Superior Hennessy, Brother

Provincial Ryan and Brother Lannon in 1922 reveals that the Congregation

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 51 gave consideration at that time as to how it would hold the land to be deeded to them in accordance with the Conditions.

[164] In 1926, the Christian Brothers applied to the Legislature of

British Columbia to incorporate by Private Act as "The Christian Brothers of Ireland". Sections 3 and 4 of the Act provided that the corporation was to have the "power to carry on schools, academies and colleges of education within the Province of British Columbia" and to "acquire and hold for the general purposes of the Corporation any lands, tenements or 2000 BCSC 1221 (CanLII) hereditaments and personal property in the Province of British Columbia."

Section 13 of the Bill provided:

If in or by any will, grant, conveyance, assignment, deed of gift, or other instrument any property, real or personal, is expressed to be devised, bequeathed, granted, conveyed, assigned or given to any of the schools, academies or colleges heretofore owned or operated by the Association or hereafter owned by the Corporation by the name by which such school, academy, or college is commonly or usually known or designated, such devise, legacy, grant, conveyance, assignment or gift shall not fail or become inoperative merely because or by reason of the devise, legacy, grant, conveyance, assignment or gift, not being made to the Association or Corporation by its proper name; but where any devise, legacy, grant, conveyance, assignment, or gift shall be made to any particular school, academy, or college owned or operated by the Association or Corporation by its common or usual name or designation, or by any name or designation by which the intention to devise, grant, assign, bequeath or give to the school, academy, or college manifestly appears, then the said devise, legacy, grant, conveyance, assignment or gift may be taken, held and accepted by the Corporation for the benefit of the particular school, academy or college named; subject, however, to any trust contained in the said will, grant, conveyance, assignment or deed of gift affecting the same.

[165] The Legislature rejected the Bill. The Journals of the Legislative

Assembly record that the Standing Committee on Private Bills and Standing

Orders reported that the "promoters of the Bill" could incorporate under the Companies Act or Societies Act. As to the concern that a company

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 52 incorporated under one of those statutes could not take or hold property on trust, the Committee reported that:

The promoters can apply for incorporation under the "Societies Act" and acquire property subject to a trust, and could under section 3(c) of the "Trust Companies Act" apply to the Lieutenant-Governor in Council to be approved as exempted from the "Trust Companies Act".

[166] The Private Bill having been rejected, VCL was incorporated under the Companies Act, S.B.C. 1921, c. 10 on February 18, 1927. The memorandum 2000 BCSC 1221 (CanLII) of association sets out the objects for which the company was incorporated. The first object was:

(a) To build, erect, furnish, equip, maintain, carry on and conduct schools, academies and colleges of education within the Province of British Columbia.

[167] Minutes of the first directors' meeting of VCL, dated February 26,

1927, record that in consideration of the transfer of the land held by

Father O'Boyle and Mr. Stafford to VCL, VCL allotted 203 shares to four

Christian Brothers, 200 to Brother Superior Hennessy and one each to

Brother Provincial Ryan, Brother Lannon and Brother Coleman (a teacher at the school at that time). Companies Act, 1921, Form 18, "Particulars of a

Contract Not Reduced to Writing", states that:

The consideration for the allotment of the shares herein noted is the transfer to the Company of Blocks 932 and 952, District Lot 526, Group 1, New Westminster District, Vancouver B.C. heretofore held in trust by Reverend William Patrick O'Boyle and Charles Frances Stafford for the "Christian Brothers of Ireland" as represented by the said allottees.

Membership in this Company is confined by the Articles of Association to members of the Christian Brothers of Ireland. This Society established a School known as Vancouver College in Vancouver B.C. on the above described property which property was purchased in the names of the parties above mentioned on the understanding and agreement (verbal) that they should hold the same as Trustees for

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 53

the Christian Brothers of Ireland to be transferred when the Society became incorporated and legally entitled to hold property in British Columbia. This Company was formed by the Society and the property transferred and the shares by agreement between the parties allotted to the representatives of the said Society named herein as allottees.

[168] The shareholders of VCL have always been four Christian Brothers.

Until the creation of the Canadian Province of the Congregation in 1966, the Brother Superior and Brother Provincial of the Congregation, the principal of the school and another Brother resident in Vancouver were the 2000 BCSC 1221 (CanLII) shareholders. After the Canadian Province was created and CBIC incorporated, the Brother Provincial became the holder of 200 shares and one share was generally held by each of the principal of the school and two other Vancouver-based Brothers.

[169] The board of directors of VCL consisted solely of Christian

Brothers until 1985. Shareholders consistently served as directors. In

1985, the articles of association of VCL were amended to provide that shareholders and directors were no longer required to be Christian

Brothers. Since then, VCL's Board of Directors has included lay members, appointed by the Provincial Council of the Congregation. Today, the Board consists of 14 lay members and two Christian Brothers. The Board is involved in the selection of new Board members and the school principal, who has always been a Christian Brother.

[170] In 1985, the memorandum of VCL was amended to delete the reference to the "objects of the company" and to provide instead that "The businesses that the Company is permitted to carry on are restricted to the following:". Those businesses are the former objects, including the first:

"to build, erect, furnish, equip, maintain, carry on and conduct schools,

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 54 academies and colleges of education within the Province of British

Columbia."

6. Declarations of Trust

[171] Each of the shareholders of VCL has executed a Declaration of

Trust, in the form set out in paragraph 32 above, since 1969. There is no evidence of any trust declaration existing before 1969 or of the circumstances under which trust declarations were executed. 2000 BCSC 1221 (CanLII) [172] In an affidavit sworn in these proceedings when he was the principal of Vancouver College, Brother Kieran Murphy stated:

I believe that at all times since incorporation in 1927 legal title to the shares of Vancouver College Limited has been held exclusively by individual Christian Brothers in trust for the "Christian Brothers of Ireland". I rely on the company and school records described below.

The documents he refers to are the Certificate of Incorporation of VCL, the Particulars of a Contract Not Reduced to Writing, the memorandum of association of VCL, annual reports of VCL from 1928 to 1971, the register of members of VCL from 1972 to 1998, the declarations of trust executed since 1972, the original articles of association and the memorandum and articles of association of VCL as amended in 1985.

[173] The Liquidator relies on the Declarations of Trust to claim that

CBIC is the beneficial owner of the shares. The schools say that the

Declarations of Trust can have no legal effect on the terms of a trust established almost 50 years earlier, and in any event, the question to be determined is for what purpose the members of the Congregation held the shares.

7. Operation of the School

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 55

[174] From its inception and through the following 75 years, the

Congregation, and after its incorporation, CBIC, controlled the operation and management of the school, including the finances, academic and personnel matters and physical plant.

(a) Financing

[175] Vancouver College is an "independent" or fee-paying school. It is not a "diocesan" school, supported and operated by the Archdiocese, or a

"parochial" school, supported by a particular parish for the benefit of 2000 BCSC 1221 (CanLII) the members of the parish. Nor is it governed by the Catholic School

Board, in Vancouver the "Catholic Public Schools of the Vancouver

Archdiocese" ("CPSVA"). Students pay tuition fees to attend Vancouver

College and the operations of the school are funded from those fees and since 1978, funding from the British Columbia government.

[176] The Christian Brothers live in communities, or "houses", associated with the schools at which they teach. Each Brother takes a vow of poverty when he becomes a member of the Congregation, and therefore does not receive personally the income or salary earned from teaching. Any income earned belongs to the Congregation. It is used to pay the expenses of the

"house" and a portion (called the "pro rata") is remitted to the Province for the payment of expenses of the Province and the General Council.

[177] At Vancouver College, the expenses of the school and the Brothers'

"house", including the "pro rata", were paid from tuition fees paid by students. Until 1978, the Brothers received no salaries for teaching.

Since the British Columbia Government began making financial contributions to the school in 1978, the Brothers have been paid salaries equivalent to those received by lay teachers. The salaries were used to pay the expenses

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 56 of the Brothers' "house", the "pro rata" and the portion in excess of the

Brothers' needs was contributed to the school.

[178] A note to the financial statements of VCL for 1987 states that the portion of their salaries contributed to the school by the Christian

Brothers had been recorded previously as a form of donation income. In that year, they were recharacterized as contributed surplus, and recorded in that manner until 1997. In 1997, the form of the VCL financial statements was changed again, and the contributed surplus entry 2000 BCSC 1221 (CanLII) eliminated. The amount of contributed surplus that had been recorded from

1990 through 1996 was $1,574,413.

[179] Over the years, donations were made to the school by parents and members of the community, primarily to pay for capital improvements. The most notable of these are:

(i) In 1945, the school alumni began fund-raising to

build a gymnasium. The Vancouver College Building

Committee, chaired by Mr. H.J. Mackin, joined an

Archdiocese "Drive for Education" on the

understanding that it would receive 15% of the

funds raised. In 1948, the Archdiocese forwarded

to the Vancouver College Gymnasium Committee a

cheque for $43,309.30. Approximately $50,000 was

raised between 1948 and 1950, from alumni,

parents, friends of the school and Vancouver

businesses, including in response to a fund-

raising initiative by the school principal,

Brother Penny. Of the $50,000 donated, Mr. Mackin

gave $2,500, pledged another $5,000 and raised

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 57

$6,000 from others. $10,000 was borrowed, with the

permission of the Brother Superior of the

Congregation, to complete the gymnasium in 1950 at

a cost of $105,000.

(ii) In 1957, Mr. Mackin donated $125,000 to build a new wing

for the school, to be called Mackin Hall, on the

condition that an equal amount was raised elsewhere.

$20,000 was donated by the Mother's Auxiliary Building

Fund. $110,000 was borrowed, with the approval of the 2000 BCSC 1221 (CanLII)

Brother Provincial of the Congregation, from the Bank of

Montreal.

(iii) In 1964, the Archdiocese of Vancouver contributed

$125,000 to add a wing containing new classrooms and a

science laboratory. The total cost was estimated at

$157,159. The balance of the funds were raised from

private donations solicited for the purpose of building

the new wing, called Nichol Hall.

(iv) The Vancouver College Foundation was incorporated as a

society in 1972. It was initially formed to fund-raise

for capital projects for the school and to create a fund

the income of which would be used to assist in meeting

the school's operating expenses. It subsequently became

financially unable to finance operating expenses, but

has successfully raised funds for capital projects for

the school. These include:

• $1,935,816 raised in 1979-81 from corporate donors,

alumni, parents, past parents, friends and faculty to

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 58

build a new residence for the Brothers, a new

athletic field and elementary school playground and

perform repairs and maintenance on existing

buildings, and

• $2,400,000 raised in 1990-92 from 566 persons,

including prominent persons in the community, parents

and members of the community of Christian Brothers

residing at Vancouver College to fund a $3,750,000 2000 BCSC 1221 (CanLII)

building project, including a new building containing

classrooms, changerooms, and facilities for programs,

expansion of the gymnasium and remodelling of the

campus.

All moneys raised by the Foundation were paid to VCL to fund

construction costs or repay loans borrowed to fund

construction of the capital improvements.

(v) From 1949 through 1998, VCL has received donations

ranging from a few thousand dollars to almost $200,000

annually from parents and alumni to fund capital

improvements, purchase of equipment, repairs and

renovations, bursaries, and to pay operating debt.

[180] The Congregation supported the school through financial difficulties in the 1930s and 1940s, carrying debt of $70,000 by 1936 and making a loan of $5,000 in 1941. The Christian Brothers at Vancouver

College did not pay a "pro rata" to the Province in those years. In 1950,

VCL owed Brother Superior $53,025 and the Province of the Congregation considered sending $25,000 on behalf of VCL (which would then become a

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 59 loan from the Province to VCL). The loans made or arranged by the

Congregation were ultimately paid out of tuition fees or private donations.

(b) Management

[181] Christian Brothers vow obedience to their superiors in the

Congregation upon becoming members. Furthermore, the internal regulations of the Congregation require the Brothers who operate a school to obtain approval from the Provincial or the General Council with respect to all 2000 BCSC 1221 (CanLII) financial matters, including any fund-raising drives, loans and expenditures of a capital nature (such as to purchase vehicles or undertake renovations or repairs to buildings). The Provincial Council also makes decisions concerning the administration and operation of schools by the Brothers, including the appointment and transfer of teachers and the granting of holidays to Brothers.

[182] The Christian Brothers followed these regulations meticulously in their management of the school. The records show that the Provincial and

General Councils were involved in all manner of small and large decisions relating to repair and maintenance of the buildings, acquisition of furniture and equipment, building of new facilities, and assignment of teachers and administrative personnel.

[183] The Liquidator argues that the close control exercised by the

Congregation over the school demonstrates that the Congregation did not hold the property in trust but beneficially owned it. He cites as an example the decision made in the early 1930s to sell one-half of Burns'

Field because the school could not afford to pay the taxes. He submits that the Congregation made the decision without reference to VCL or the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 60 local community. There is evidence, however, that Mr. McCormack and Mr.

Burns were extensively involved in the decision to sell.

[184] In 1934, Mr. McCormack wrote to Brother Lannon that he had discussed with Mr. Ker of the C.P.R. whether the C.P.R. would take back the land and pay to the school the money paid to the C.P.R. by Mr. Burns.

He also said he would write to Mr. (then Senator) Burns in Ottawa and ask him to arrange to see the president or vice-president of the C.P.R. Mr.

McCormack and Brother Sterling (then the principal of Vancouver College) 2000 BCSC 1221 (CanLII) met with each other and with Mr. Ker several times to attempt to make arrangements with the C.P.R. to take back the land either for cash or a reduction in the mortgage debt owed to the C.P.R. Brother Sterling met with Mr. Burns in Vancouver and advised him of the tax problems. Mr. Burns said he could not provide the funds to pay the taxes and VCL should allow the City to take it. Mr. Ker finally suggested that one-half of the property be sold and Mr. McCormack suggested that Brother Sterling write to the Brother Superior for permission. Permission was ultimately obtained from the Vatican, as required by the regulations of the Congregation for alienations over a certain value. One-half of the property was sold in

1938.

[185] There is also evidence that in 1938 the Brother Superior turned down a request by the Brother Provincial that the Brother Superior arrange a loan in Dublin to pay the Vancouver College mortgage, on the grounds that each of the Provinces of the Congregation should manage their own finances.

8. Ownership

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 61

[186] Much of the evidence submitted by the Liquidator was led to show that the Christian Brothers regarded themselves, and they and others referred to the Congregation or CBIC, as the "owner" of Vancouver College.

[187] The Liquidator submits that the following factors indicate beneficial ownership of VCL by the Congregation or CBIC:

(a) There is a dichotomy between "diocesan" and "congregationally-

owned" schools. Since Vancouver College was not a diocesan school,

it must therefore be congregationally-owned. 2000 BCSC 1221 (CanLII)

(b) The Brothers exercised close control over the operation and

management of Vancouver College.

(c) In some financial statements of the Congregation and CBIC, VCL

is shown as a "wholly-owned subsidiary". There is evidence that

separate financial statements were not kept for the Brothers'

"house" at Vancouver College and for VCL until 1978.

(d) Consideration was given by the Province leadership in 1969 to

dissolving VCL and transferring its assets into CBIC.

(e) VCL's initial registration with Revenue Canada as a

"registered charity" was in the name "Christian Brothers of Ireland

-- Vancouver College".

(f) At various times, members of the Board of Directors of VCL

referred to the Christian Brothers as the owners of the school.

[188] The schools argue that this evidence is irrelevant to the question of whether a specific charitable purpose trust was established in 1927, when the shares of VCL were issued to four individual Christian Brothers.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 62

In their reply submissions, they address each of these factors in detail, pointing to contrary and inconsistent evidence and providing alternative interpretations to those of the Liquidator.

[189] I do not find it necessary to review all of the evidence and submissions on these issues. The nature of the trust of the shares of VCL must be found in the intentions of the settlors. If those intentions cannot be ascertained or are ambiguous, the court will examine the use to which the property has been put over time. But statements of opinion or 2000 BCSC 1221 (CanLII) assertions of beneficial ownership by the trustees or third parties are of no assistance.

[190] Further, from my review of all of the evidence, I find:

(a) The dichotomy between "diocesan" and "congregationally-owned"

schools is not supported by the evidence, does not exist in fact and

does not assist in determining ownership. The Christian Brothers

operated schools across Canada under a variety of arrangements with

the local Bishop or Archbishop. These depended upon the conditions

in the communities into which the Brothers were invited. Sometimes

they held title to school property, subject to reversion to the

Bishop or Archbishop if they ceased to operate the school. In other

cases, there was an express trust that provided ownership in the

Archdiocese. The financial arrangements with respect to the

Brothers' salaries, however, were consistent at all schools: where

they received salaries, they paid the expenses of their "house", the

"pro rata" to the Province, and contributed the excess to the

school. This seems to have been done at all schools, whether

diocesan or not, with some exceptions in circumstances of particular

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 63

financial need or difficulty where the Brothers decided not to

contribute.

(b) The control of the operation and management of the school by

the Christian Brothers is as consistent with their role as trustees

as of owners. The evidence submitted by the Liquidator, including

primarily minutes of the meetings of the Provincial Council, show

that the Brothers exercised the same degree of management over all

schools that they operated, including diocesan schools. 2000 BCSC 1221 (CanLII)

(c) The financial statements of the Congregation and CBIC,

discussions of the Province leadership regarding dissolution of VCL,

registration of VCL with Revenue Canada and statements by members of

the Board of Directors of VCL and others regarding the ownership of

VCL are themselves ambiguous and not probative of the question

before me. Most of the latter matters arose when the Congregation

faced the spiritual and financial crisis brought about by the claims

that are at the heart of these proceedings. The discussions,

proposals and opinions that circulated during that time reveal lack

of knowledge and fact upon which to found careful analysis. That is

the purpose of these proceedings.

B. St. Thomas More Collegiate

[191] St. Thomas More Collegiate commenced operation as St. Thomas More

High School on September 1, 1960, at its present location on the border of

Burnaby and New Westminster, B.C. The school was established pursuant to an agreement reached in 1957 between the Archbishop and the Congregation under which the Congregation would establish and conduct a regional Roman

Catholic high school on land and with financial assistance provided by the

Archdiocese. Land was acquired by the Archdiocese in 1960 and transferred

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 64 to STM in February 1964. STM was incorporated on July 5, 1962. In November

1963, two shares of STM held by two American Christian Brothers were transferred to CBIC, and a third share was allotted to the Congregation’s solicitor, who held the share in trust for CBIC. That share is now owned in trust for CBIC by John Burnell.

[192] In November 1998, St. Thomas More Collegiate had an enrollment of

570 students in high school through grade 12. It serves students from

Burnaby, New Westminster, Port Coquitlam, Coquitlam and Port Moody, 2000 BCSC 1221 (CanLII) British Columbia.

[193] Similar to the position taken by Vancouver College, St. Thomas More

Collegiate takes the position that the events and contemporaneous documents recording the involvement of the Archbishop, the Archdiocese, the parishes served by the school and the Congregation in the establishment of the school show that a trust was created for the specific purpose of operating the school.

[194] The Liquidator presents a different picture of the involvement of the various parties. He takes the position that there was no trust established, but that in return for legal and beneficial ownership of the school, the Congregation, then CBIC, took the responsibility for financing and managing the construction of the school and operating it after it was built.

1. The Parties

(a) The Archbishop and the Archdiocese

[195] In January 1957, Archbishop Duke of Vancouver invited the Christian

Brothers to establish and conduct a regional Roman Catholic high school in the Burnaby and New Westminster area. The Brothers initially refused the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 65 invitation for financial reasons, but discussions continued between the

Archdiocese, represented by Most Rev. Martin M. Johnson, Coadjutor

Archbishop and later Archbishop, and the Congregation, represented by

Brother Provincial Arthur Loftus.

[196] Monsignor John Edward Brown, who provided affidavit evidence in these proceedings, was personal secretary to Archbishop Duke from 1942 to

1958, and Chancellor of the Archdiocese and Pastor of St. Francis de Sales

Church in Burnaby, B.C., located close to the site of the school, from 2000 BCSC 1221 (CanLII) 1958 to 1971. He was the official delegate of the Archbishop to the school from 1958 to 1971. In that capacity, he was the leader of the pastors in the parishes neighbouring the school and the personal representative of the Archbishop in dealings with the school principal. In 1961, the

Archbishop appointed Monsignor Brown Chairman of the Financial Committee for the school.

(b) The Christian Brothers

[197] St. Thomas More High School was established while the Congregation in Canada was part of the North American Province, headquartered in New

Rochelle, New York.

[198] Brother Joseph Eymard Darcy was a consultor of the North American

Province from 1960 to 1963, the first Vice-Provincial of the Vice-Province of Canada and the West Indies from 1963 to 1966 and the first Brother

Provincial of the Canadian Province from 1966 to 1972.

[199] Brother Gabriel McIntyre was assigned in July 1960 to become the first principal of St. Thomas More High School. He was involved in the construction, financing, fundraising and operation of the school during

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 66 his tenure as principal, from September 1, 1960 to June 1966. He returned to St. Thomas More High School as a teacher from 1972 to 1975.

[200] Brothers Darcy and McIntyre gave affidavit evidence in these proceedings.

(c) The Parishes

[201] St. Thomas More High School served as a regional high school for students primarily from the neighbouring parishes. The parishes contributed financially to the acquisition of the land and the costs of 2000 BCSC 1221 (CanLII) expanding the school from time to time, as well as to annual operating deficits.

[202] There is no evidence of major individual donors to the school

(other than the Archdiocese).

2. Commitments by the Archdiocese and the Congregation

[203] In April 1957, the Archdiocese and the Congregation reached an agreement to open the school. The Archdiocese agreed to provide the land for the school, $100,000 towards the construction costs, assistance in arranging a construction loan, permission to conduct a fundraising campaign with a guarantee of a net minimum of $50,000, and a pledge that the Archdiocese would come to the assistance of the Congregation to meet interest and principal obligations.

[204] The Congregation agreed to erect the school and buy a house in the area for a monastery. Brother Provincial Loftus made it clear that “we have no money available for the project as the Province is heavily in debt.”

3. Acquisition of the Land

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 67

[205] The Archdiocese purchased the land for the school from the

Novitiate of the Fathers of Mercy. Negotiations with the Fathers of Mercy extended from 1957 through 1960. The Archdiocese acquired title to the land on April 22, 1960.

[206] The purchase price for the land initially agreed to by the Fathers of Mercy was $20,000. After protracted negotiations, the price ultimately paid by the Archdiocese was $110,000. Seven of the neighbouring parishes were assessed a total of $75,000 of the cost of the land. 2000 BCSC 1221 (CanLII)

[207] In 1958, the Archdiocese proposed that the Congregation take a 99- year lease, instead of title, to the land. The draft lease provided that the land would be “used and occupied only for the purposes of the

Christian Brothers and the purpose of a Catholic High School” and would be void at the option of the Archbishop if the land was used for “any other purpose other than for the purposes of a Catholic High School or for the purposes of education and instruction of Catholics without the written consent of the Archbishop...”.

[208] The lease was not executed. In 1961, the Archbishop instructed his lawyer to transfer title to the Congregation for $1.00. STM was incorporated on July 5, 1962, on the advice of counsel, to take title to the land. Transfer of title was delayed due to a number of issues including consolidations and subdivision of the property and settling a gas station lease on a portion of the property. Title was finally transferred from the Archdiocese to STM on February 18, 1964.

4. Construction of the School

[209] Construction of the school commenced during 1959, under the direction of Brothers Bates and Lyons, who were then resident at Vancouver

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 68

College. The Archdiocese was so anxious that the school open in September

1960 that construction started before the Archdiocese had received title to the land. Construction was halted for some months while negotiations ensued with the Fathers of Mercy.

[210] When Brother McIntyre arrived in July 1960, he became directly involved with the architect, the contractor and suppliers. The initial contract price for the construction of the building was $210,329, but cost overruns were experienced. The Archdiocese paid $100,000 of the 2000 BCSC 1221 (CanLII) construction costs, and Brother McIntyre, with the guarantee of the

Archbishop, arranged a loan of $127,000 from the Bank of Montreal, in the name of the “Christian Brothers Institute”.

5. STM Agreement

[211] The agreement reached in 1957 between the Archdiocese and the

Congregation was formalized in a written agreement dated September 1,

1960, but signed some time in 1964. The signed agreement is called the

“STM Agreement” in these proceedings.

[212] The terms of the STM Agreement were settled during the time that arrangements were made to transfer title to the land to the Congregation.

The STM Agreement was drafted by the Congregation’s lawyers in New York and reviewed on behalf of the Archdiocese by its Vancouver lawyer, Mr.

Douglas E. Andrews.

[213] The STM Agreement was signed by Archbishop Duke and Coadjutor

Archbishop Johnson on behalf of the Archdiocese (referred to in the agreement as the “Ordinary”) and by Brother Superior Clancy on behalf of the Congregation (referred to in the agreement as the “Brothers”). The key terms of the STM Agreement are as follows:

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 69

WHEREAS, The Ordinary is desirous of engaging the Brothers to conduct the regional high school for boys at 10th and 12th Avenues and Kingsway, New Westminster, in the Province of British Columbia, Dominion of Canada (hereinafter referred to as the "School"), and the Brothers are willing to accept such engagement.

NOW THEREFORE, in consideration of the foregoing and of the covenants and agreements hereinafter set forth, it is agreed:

FIRST: The Ordinary shall

(a) Pay all of the construction costs, equipment, fees and expenses in the construction and erection of the school building provided for in paragraph (a) of Article Second hereof to the extent of One hundred thousand ($100,000) Dollars (Can.) and any additional cost shall be borne by the 2000 BCSC 1221 (CanLII) Brothers;

(b) transfer, assign and convey in fee simple absolute by good and sufficient deed to the Brothers or to such other corporation wholly controlled and operated by them as the Brothers may designate, the land and buildings which constitute the School, said land to consist of not less than nine acres part of which shall be suitable for the development of an athletic field;

(c) personally guarantee and indemnify annually the Brothers for so long as they shall conduct said School against any loss or losses arising annually as a result of the expenses of operating said school (including, among other things, interest and amortization on any debt, any tax, assessment or other governmental imposition or charge which may now or at any time hereafter be paid, levied or assessed against the School, the land, the buildings or the Brothers, as well as extraordinary repairs and capital improvements to the school buildings and the equipment therein);

(d) personally guarantee the collection in the Archdiocese of Vancouver by the Brothers of not less than the sum of Fifty thousand ($50,000) Dollars under the program to raise funds as hereinafter mentioned in Article Second, paragraph (h) hereof; otherwise such sum or so much thereof as shall not have been collected by the Brothers shall upon receipt of advice from the Brothers of the deficiency (if any) be disbursed by the Ordinary to the Brothers for their use in said school;

(e) arrange as promptly as possible for a loan of not less than One hundred thousand ($100,000) Dollars to the Brothers or to such other corporation operated by the Brothers as they may designate, upon suitable terms and conditions and to arrange future financing with respect to the School for the future construction of a gymnasium and for such buildings and facilities as may be deemed reasonably necessary by appropriate educational authority of the Province of British

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 70

Columbia or by both parties to this agreement to the operation or expansion of said School.

SECOND: The Brothers shall

(a) Cause a suitable eight class room high school building (inclusive of one science class room) to be erected on the School premises and to be furnished and equipped with necessary school furnishings, library and science apparatus, in accordance with the educational standards required by the laws and regulations of the Province of British Columbia or any appropriate educational authority;

(b) establish, maintain and conduct on said premises a Catholic school (grades 7-12) under the patronage of the Ordinary; 2000 BCSC 1221 (CanLII)

(c) prescribe curriculum and designate text books in accordance with the educational standards referred to in paragraph (a) of Article Second hereof;

(d) promulgate and enforce rules for admission, discipline and expulsion of pupils;

(e) prescribe and conduct a program of extra curricular activities for the pupils;

(f) assign teachers and superiors as may be necessary to the conduct and operation of the school;

(g) employ and dismiss from employment lay teachers, athletic coaches and employees necessary for the maintenance of the school;

(h) have the right to conduct a program to raise not less than Fifty thousand ($50,000) Dollars toward the capital cost of constructing the school;

(i) fix, charge and collect tuition fees subject to the approval of the Ordinary;

(j) support themselves and the school from the tuition fees charged the pupils and the proceeds of athletic and other school events or functions, provided, however, that if the income collected by the Brothers from the foregoing sources in any school year is insufficient to support the Brothers in the school then the Ordinary shall in each school year pay to the Brothers a sum which the Brothers shall certify is the difference between the amount received by them and the amount required for their support and the support of the school. Included in the amount required by the Brothers for their support shall be the “pro rata” then currently payable by them to the Provincialate of the Brothers in respect of each Brother of the school.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 71

6. Incorporation of STM

[214] Brother McIntyre sought advice on behalf of the Congregation from

Mr. Andrews, the solicitor for the Archdiocese, who recommended that STM be incorporated to take title to the school property. The Provincial

Council approved, and STM was incorporated under the Companies Act,

R.S.B.C. 1960, c. 67 on July 5, 1962.

[215] The memorandum of association of STM specified the following objects for the company: 2000 BCSC 1221 (CanLII)

(a) To establish and carry on at 7450 – 12th Avenue, Burnaby, British Columbia, or in the vicinity thereof, a high school and to provide for the delivering and holding of lectures, exhibitions, public meetings, classes and conferences calculated directly or indirectly to advance the cause of education for the general, professional or technical.

[216] The articles of association provided:

2(b) The number of members is limited to Fifty (50) or less, the number so limited being exclusive of persons who are in the employment of the Company and of persons who are members while in the employment of the Company and continue to be members after the termination of such employment. Membership in the Company shall be restricted to members of that religious society or community known as The Christian Brothers of Ireland.

[217] The first shareholders of STM were Mr. Hans Swinton, the lawyer who incorporated the company, and his secretary, Ms. Nancy Perry-Whittingham.

As subscribers, they appointed the first directors: Brothers Darcy,

Filehne, McIntyre and Penny. These four Brothers became the first officers of the company.

[218] By resolution dated August 31, 1962, the two issued shares were transferred to Brother Provincial Penny and Brother Filehne, both of whom were resident in New York.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 72

[219] Subsequent to the incorporation of STM, CBIC was incorporated in

December 1962.

[220] On November 23, 1963, on the instructions of Mr. Andrews, the shares held by Brothers Penny and Filehne were transferred to CBIC and one share was allotted to Mr. Andrews. The share allotted to Mr. Andrews today belongs to John Burnell, who holds it subject to a declaration of trust in favour of CBIC. On November 29, 1963, the directors of the company were

Brothers Darcy and McIntyre and Mr. Andrews. 2000 BCSC 1221 (CanLII)

[221] Mr. Swinton’s evidence is that the transfer of the shares held by

Brothers Penny and Filehne and the allotment of one share to Mr. Andrews was a mistake, as it was contrary to the provisions of the articles of association which required that all members of the company be members of

The Christian Brothers of Ireland.

[222] In 1982, STM, which was incorporated as St. Thomas More High School

Ltd., changed its name to St. Thomas More Collegiate Ltd. In addition, the memorandum of STM was amended to delete the restrictions on the businesses that the company was permitted to carry on (the former "objects").

7. Operation of the School

[223] Consistent with the terms of the STM Agreement, the Congregation and CBIC administered the operations of the school, including construction and expansion, administration and, with significant involvement of the

Archdiocese, financing. Brother Darcy’s evidence is that the Provincial

Council became involved only in major decisions, such as plans to expand the school or appoint a new principal.

[224] St. Thomas More Collegiate was established to serve as a regional high school for the parishes in the geographic area it serves. Like

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 73

Vancouver College, students pay tuition fees to attend the school and since 1978, the British Columbia government has provided funding. The parishes served by St. Thomas More Collegiate have been the source of funds for operating deficits and expansions.

(a) Operating Deficits

[225] During the first year of operation of the school, the Archbishop appointed Monsignor Brown to head the committee of parish priests of the parishes served by the school. That committee became known as the 2000 BCSC 1221 (CanLII)

Financial Committee for the school. The Financial Committee reviewed the annual financial statements presented by the principal and allocated deficits to the parishes, in accordance with the commitment by the

Archdiocese to indemnify the Congregation for any annual losses. According to the evidence of Brother McIntyre, Monsignor Brown ensured the parishes paid their required contributions.

[226] In 1961, the Financial Committee was expanded to include a representative of the Provincial Council of the Congregation, the Regional

Catholic School Board, the school Fathers’ Club and Mothers’ Club and representatives of the parishes.

[227] From 1961 through 1964, 13 to 18 parishes were assessed to cover the operating deficit of the school, proportionate to the number of families in the parish and the number of pupils in the school. In 1964, the tuition fees were raised, with the permission of the Archbishop, in order to eliminate the annual deficit. Brother McIntyre and Monsignor

Brown recall, however, that the school always had an operating deficit that was paid by the parishes.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 74

[228] In 1966, Monsignor Brown became Chairman of the Committee for High

Schools in the Burnaby/New Westminster area. In that capacity, he exchanged correspondence with Brother Provincial Darcy concerning the formation of the St. Thomas More High School Committee. The Committee was formed consisting of a priest named by the Archbishop as Spiritual

Director of the school, the principal and vice-principal of the school

(who shared one vote), the treasurer of the school, one member each of the

Fathers’ Club and the Mothers’ Auxiliary, a representative of each parish served by the school who wishes to participate, and one representative of 2000 BCSC 1221 (CanLII) the Provincial Council of the Congregation.

[229] The committee was to meet four times a year. The quorum would be fifty percent plus one. The duties of the committee (which are the same as those of the Financial Committee formed in 1961) were to approve a yearly budget, approve the annual financial statement, certify and approve the annual subsidy, approve alterations of plant and scholastic services involving a financial outlay for which the committee (that is, the parishes) would be responsible, and consult with the principal and make recommendations regarding such school matters as curriculum, activities, community relations, etc. According to Monsignor Brown, this advisory committee continues to the present.

[230] By 1966, the parishes were having difficulty meeting their assessments of annual operating deficits, which included interest and principal payments on the loan from the Bank of Montreal. Correspondence and discussions ensued between the St. Thomas More High School Committee, the Archbishop, represented by Monsignor Brown, and the Congregation, including Brother Provincial Darcy.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 75

[231] Brother Darcy’s evidence is that there was some discussion about whether the Archdiocese or the Congregation was responsible for paying interest on the bank loan. Brother Darcy requested an interpretation of the STM Agreement from the Congregation’s New York lawyers, who advised that the Archdiocese had indemnified the Congregation for all annual losses, including principal and interest on the loan.

[232] While these matters were being worked out, the Congregation guaranteed the loan amortization for the year ended June 30, 1967. In June 2000 BCSC 1221 (CanLII) 1967, an agreement was reached whereby the Archdiocese paid $30,000 of the outstanding debt to the Bank of Montreal and the Congregation agreed that the balance (about $90,000) would be paid by the Brothers at St. Thomas

More Collegiate. In order to assist the Brothers, the Archdiocese approved a salary increase for the Brothers of $500 per year for three years starting in 1967-68. The parishes served by St. Thomas More

Collegiate remained directly responsible to subsidize operating losses, including interest on the debt.

[233] In September 1968, Brother Darcy made the position of the

Congregation clear in a letter to the then principal of the school,

Brother Foran, in response to a suggestion that the Province take responsibility for the debt. He wrote:

(1) The debt is the responsibility of St. Thomas More High School, Inc. The Brothers accepted the school only on condition that they would not suffer any financial loss. Eventually the responsibility for the debt is that of the diocese.

(2) Originally, the subsidy charged to the parishes included both capital and interest costs. However, this was not carried through with and the interest and capital costs began to mount up. Rather than re-assess the parishes for these costs, the Archbishop (he does not want this known) contributed $30,000 towards debt reduction and approved the raising of the Brothers’ salaries so that they could take care of the debt

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 76

reduction, the interest charges still remaining the responsibility of the school.

. . .

(4) Provincial Headquarters is not prepared to accept responsibility for the debt. This is the responsibility of the diocese and people served by the school.

(5) The Province is already making a substantial financial contribution to the school in the greatly reduced pro rata charged.

(6) The increased salaries are not the property of the community. The increase was negotiated on condition that it be applied directly to debt reduction. It may not be used for other purposes. 2000 BCSC 1221 (CanLII)

(7) The Provincial Council has already in a previous year, guaranteed $15,000 but only on condition that this would not be a precedent.

. . .

(9) What the Bank wants and what it will get are two different things. Cyril’s suggestion seems reasonable with me. Whatever agreement you can make with the bank which can be met from community funds in o.k., but I cannot give permission or authority for you to make any commitment involving the funds of the Province. This is directly contrary to the terms of our contract.

. . .

Sorry if I appear un-cooperative here, but this is a matter of principle. If a community such as Vancouver wants Catholic Schools, they must be prepared to support them and not to expect money to be taken from the people of poorer provinces to support them, nor can they expect the religious who staff the schools to assume responsibility for their support....

[234] In later years, direct assessments of the parishes ceased, but the parishes continued to subsidize the tuition fees of parishioners attending the school.

[235] After the British Columbia Government began contributing to the school in 1978, the salaries paid to Brothers teaching at the school were equivalent to those received by lay teachers. The Brothers donated to the school that part of their salaries that was in excess of the needs of the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 77 school, their sustenance and the “pro rata”. By 1993, the amount that had been donated to the school by Brothers teaching there was approximately

$1,300,000. This was recorded on the STM financial statements as

“contributed surplus”, as was the case at VCL.

(b) Expansions

[236] In 1964, Brother McIntyre received permission from the Archbishop to conduct a financial drive for funds to build a gymnasium for the school. The fund-raising drive was to be limited to the parishes served by 2000 BCSC 1221 (CanLII) the school. The five largest neighbouring parishes were assessed and paid a total of $100,000 to build the gymnasium, which cost $111,549.28 to complete. The Congregation contributed $10,492.95, of which $2,500 was a loan.

[237] Other expansions of the school took place over the succeeding years. In 1970, four classrooms were added to the school. The Congregation contributed $15,000 and lent $15,000 interest-free, which was repaid by the school over five years. In 1978, four more classrooms were added and a number of smaller expansions completed. These were financed out of school revenues.

[238] A major renovation occurred in 1982, involving the construction of a cafeteria, four additional classrooms and an extension to the library. A school fund-raising campaign, authorized by the Archdiocese, raised

$400,000 to $500,000 from parishes in the St. Thomas More Collegiate region, parents of past and present students, alumni and businesses in the

New Westminster/Burnaby area.

8. Ownership

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 78

[239] As in his submissions with respect to Vancouver College and VCL, the Liquidator led evidence in which the Congregation referred to itself or acted as the “owner” of St. Thomas More Collegiate. Some of the factors which the Liquidator submits indicate beneficial ownership by the

Congregation or CBIC are those raised with respect to Vancouver College and VCL, including the dichotomy between “diocesan” and “congregationally- owned” schools; the control by the Congregation over the operation and management of the school; the fact that STM was shown on the financial statements of CBIC as a “wholly-owned subsidiary” and separate financial 2000 BCSC 1221 (CanLII) statements were not kept for the Brothers’ “house” at St. Thomas More

Collegiate and for the school until 1978; and consideration by the

Province leadership of dissolving STM into CBIC. I have dealt with these factors in relation to Vancouver College and VCL and it is not necessary to repeat myself in relation to St. Thomas More Collegiate and STM.

[240] The Liquidator raised two further matters which he submits are evidence of ownership of St. Thomas More Collegiate and STM by the

Congregation. The first is the history of Marian High School, which is presented essentially as “similar fact evidence”. The second matter involves negotiations which took place in the 1990s between the

Congregation and the Archbishop regarding their interests in the school, referred to as the “Joint Equity Agreement”.

(a) Marian High School

[241] Marian High School was established as a regional high school for girls in 1965, pursuant to an agreement between the Archbishop and the

Sisters of Charity of St. Louis. In 1978, the Sisters of Charity sold the school to The Catholic Public Schools of Vancouver Archdiocese. The

Liquidator submits that the sale of the school by the Sisters of Charity

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 79 shows that the Sisters had beneficial ownership of the school, and by analogy, CBIC has beneficial ownership of St. Thomas More Collegiate and

STM.

[242] The background of the establishment and operation of Marian High

School is similar to that of St. Thomas More Collegiate. The Sisters of

Charity were invited by a representative of the Archdiocese to establish the school. The Archdiocese committed to purchase and donate the land for the school, guarantee a loan to construct the school and subsidize 2000 BCSC 1221 (CanLII) operating expenses, including interest on the loan.

[243] The agreement between the Archbishop and the Sisters of Charity, entered into in December 1964, contains terms similar to the STM

Agreement. The Archbishop agreed to:

1.(a) Transfer, assign and convey in fee simple absolute a good and sufficient Deed to the Sisters or to such other corporation wholly controlled and operated by them as the Sisters may designate, an amount of land to consist of not less than eight (8) acres in St. Michael’s Parish, Municipality of Burnaby, Province of British Columbia, part of which shall be suitable for the development of an athletic field.

(b) Subsidize and pay to the Sisters any deficit incurred in operating the school for the first five years thereof.

[244] The Sisters of Charity agreed to:

2.(a) Cause a suitable high school building to be erected on the lands referred to in paragraph 1(a)...

(b) Establish, maintain and conduct on said premises a Catholic Girls High School under the patronage of the Archbishop...

...

(i) Support themselves and the school from the tuition fees charged to pupils and the proceeds of athletic and other school events or functions subject to the provisions of paragraph 1(b) of this agreement.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 80

3. The Sisters will submit annually within the term of the subsidy aforesaid, a budget indicating the revenues and expenditures projected for the ensuing year to the Archbishop or any authority designated by him to receive same, it being understood and agreed that the Archbishop or any authority designated by him shall have final approval of the said budget; PROVIDED FURTHER that the said budget shall include provision for the amounts required annually to service, but not to amortize, any loan incurred by the Sisters to build the school referred to in paragraph 2(a) hereof. IT IS FURTHER UNDERSTOOD AND AGREED that the salaries of the religious teachers will be set at a maximum amount of Two Thousand ($2,000.00) Dollars per annum per religious teacher.

[245] In 1965, the Archdiocese purchased 8.7 acres of land for the school 2000 BCSC 1221 (CanLII) for $79,133. The Sisters of Charity contributed $19,133 of the cost of the land. The remaining $60,000 was paid by the neighbouring parishes that were serviced by the school. The land was conveyed by the Archdiocese to the Sisters of Charity. The school was constructed at a cost of approximately $250,000, borrowed by the Sisters of Charity from the Bank of Montreal.

[246] In 1977, the Sisters of Charity decided to close the school and sell the building and property. They gave as their reason the failure of the neighbouring parishes to live up to their agreement to pay the operating deficit of the school. They wrote to the Catholic Public School

Board that the Sisters were not paid any salary for three years and the operating deficit as well as their living expenses were paid by the

Sisters’ mother house. In a 1974 letter to the Archbishop, the Mother

Superior of the school advised that their Sisters in Alberta and

Saskatchewan were making monthly contributions to the debt.

[247] In March 1977, the Sisters of Charity offered to sell the school to the Archdiocese for $400,000, $81,000 for the land and $310,000 for the buildings. The book value of the school on the balance sheet of the

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 81

Sisters of Charity as at July 31, 1978 was $404,909, including the land.

Archbishop Carney accepted the offer in September 1977, and the land was conveyed to The Catholic Public Schools of Vancouver Archdiocese in August

1978.

[248] Counsel for the Archdiocese provided a copy of the British Columbia

Assessment Authority Roll for 1978 which indicates that the “actual value” of the land and buildings owned by the Sisters of Charity was $874,250, allocated as to $421,450 for the land and $452,800 for the buildings. 2000 BCSC 1221 (CanLII)

[249] St. Thomas More Collegiate argues that the Sisters of Charity were compensated and reimbursed for their monetary contributions to the land and buildings and were not paid full value as owners of the school.

[250] The similarity between the background to the establishment and operation of the two schools is striking, but it does not support the

Liquidator's submissions that it is probative of the question of beneficial ownership of STM for two reasons.

[251] First, the Sisters of Charity sold Marian High School to the

Archdiocese, which carried on the purpose for which the school was established, at least until 1988 when the school was closed. In 1993, the

Archdiocese sold the property to the Burnaby School Board. There is evidence that at that time consideration was given to compensating the parishes for their contributions.

[252] Secondly, the evidence indicates that the Sisters of Charity did not receive full value for the school, but rather demanded and received compensation or reimbursement for their contributions over the years that they operated the school. Whether this was poor bargaining or an

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 82 acknowledgment that they did not beneficially own the property cannot be determined.

(b) Joint Equity Agreement

[253] After the closure of Marian High School for girls, the Archdiocese sought to make St. Thomas More Collegiate coeducational. This involved substantial renovations to the school. The Archdiocese suggested that the

Congregation seek financial contributions from the neighbouring parishes, but expressed the view that the parishes might not contribute if the issue 2000 BCSC 1221 (CanLII) of the future ownership of the school was not settled.

[254] In this context, in 1994, correspondence was exchanged concerning equity and ownership of St. Thomas More Collegiate in the event that the

Congregation ceased to operate the school in the future. Archbishop Exner wrote to Brother Provincial Lynch on December 23, 1994, asking for a clear statement from the Provincial Council indicating the Congregation’s intention to transfer ownership to the Archdiocese if it was forced to give up its work. Brother Provincial Lynch replied, in a letter to the

Archbishop dated January 26, 1995, that the Congregation wished to maintain equity and ownership in the school, while recognizing that the

Archdiocese also had equity in the school and ownership could be negotiated in the future if the Congregation was not able to continue the administration of the school.

[255] Archbishop Exner outlined the objectives of the Archdiocese in a letter to Brother Provincial Lynch dated February 2, 1995:

Essentially what the Archdiocese needs is an agreement which:

1. recognizes the right of the Archdiocese to assume ownership of St. Thomas More Collegiate in the event the Christian Brothers are unable to continue administration of the school, and

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 83

2. establishes the amount of compensation to be paid to the Brothers in the event of such a transfer of ownership.

[256] Brother Provincial Lynch responded on April 10, 1995, that the

Brothers agree the Archdiocese should get ownership of the school if the

Congregation ceases to operate it, but only after “a mutual agreement has been reached on compensation to the Congregation of Christian Brothers for its financial contribution over the years to St. Thomas More.”

[257] The Archdiocese offered $1,379,429, the total of the contributed 2000 BCSC 1221 (CanLII) surplus and a loan payable by the school to the Congregation. The

Liquidator presented evidence that indicates the Congregation was advised that the offer by the Archdiocese was “unrealistic”; however, this matter was not pursued by either party.

[258] As is the case with the history of Marian High School, this evidence has little probative value for the purposes of these proceedings.

These negotiations took place long after the events that led to the establishment of the school, between parties who had no role and uncertain knowledge concerning those events. They took place in the context of the financial crisis faced by the Congregation, where conflicting and changing factual disclosure and legal advice led the Congregation to pursue some actions that were later abandoned.

[259] To the extent that the negotiations have probative value, they indicate that the Congregation recognized an right to ownership by the Archdiocese, subject to receiving appropriate compensation for the contributions made by the Brothers. This is consistent with what occurred with respect to Marian High School: the purpose for which the school was established would be maintained, while the Congregation would be

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 84 reimbursed for its contributions. How much they would have received had the negotiations continued to an agreement is unknowable.

[260] The evidence of these matters does not assist in determining whether STM is a charitable purpose trust corporation or the shares of STM are held by the shareholders in a specific charitable purpose trust.

VI. ANALYSIS

[261] The question to be determined is this: Do all of the circumstances surrounding the establishment and operation of the schools result in the 2000 BCSC 1221 (CanLII) creation of specific charitable purpose trusts for the schools or in absolute gifts to the Congregation or CBIC of the shares of VCL and STM?

[262] At the outset, I find the evidence is overwhelming that in the case of both schools, the intentions of all of the parties (that is, the identifiable donors of funds, the Archbishop and his representatives and the representatives of the Congregation) were to establish the schools and not to further the general charitable objects of the Congregation. That is, none of those involved in establishing and operating the schools had any intention or took any steps to provide for the Congregation to use the schools’ property for any purpose other than to operate schools for the use of the communities they were established to serve.

[263] Having so found, is the correct legal conclusion that specific purpose charitable trusts were created? The answer requires an analysis of the specific steps taken in the case of each school.

A. Vancouver College

1. Intention to Create a Trust

[264] I find that the intentions of the parties involved in the establishment and early operation of Vancouver College, as revealed in

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 85 their reported statements, correspondence and written records, as well as the documents entered into, reveal the intention to create a trust. The evidence includes:

(a) records of the donations made in 1921-22, before the Christian

Brothers arrived. The funds were raised to purchase a permanent site

for the school.

(b) statements and correspondence of the principal benefactors of

the school, such as Mr. McCormack and Mr. Patrick Burns. All 2000 BCSC 1221 (CanLII)

references are to the objective of establishing a school for the

education of Catholic youth in British Columbia.

(c) records of the fundraising Drive, in particular the

subscription form, which solicited funds “for the purpose of

completing the purchase of a site and of erecting and equipping

buildings for a School or College to be conducted by the Christian

Brothers of Vancouver, B.C....”.

(d) records of communications, correspondence and documents

recording transactions with the C.P.R. The C.P.R. consistently

referred to Father O'Boyle and Charles Stafford as "Trustees of the

Christian Brothers School". The references to the "School" are of

primary importance.

(e) documents relating to the registration of the transfer of land

and allotment of shares of VCL to the Congregation. The land

registration documents, before registration, referred to Father

O'Boyle and Mr. Stafford as "joint trustees of Christian Brothers

school". The reference was removed, apparently due to statutory

requirements. The "Particulars of a Contract Not Reduced to

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 86

Writing", filed when the shares of VCL were allotted to the four

Christian Brothers, referred to the land held in trust by Father

O'Boyle and Mr. Stafford for the "Christian Brothers of Ireland".

Thus, the parties understood that the land and the shares were

subject to a trust. The trust was passed to new trustees. The

question is the purpose or terms of the trust.

(f) the terms of the Conditions. They are titled "Conditions Under

Which the Christian Brothers of Ireland Undertake to Open and 2000 BCSC 1221 (CanLII) Conduct a Catholic School in Vancouver, B.C." They provide for

transfer of title of property for the school to the Brothers "in

order to secure permanency for the work". It is clear from the

balance of the Conditions that the "work" is the school to be

conducted by the Christian Brothers in Vancouver, B.C. The

Congregation was the means through which that end could be achieved.

The educational goals of the Congregation were consistent with those

of the Archdiocese, which was responsible for Catholic education

within its geographical area. The Brothers had the educational

expertise and history of permanence. They had been conducting

Catholic schools in Ireland for over 100 years and in Canada for

almost 25 years when the Conditions were settled.

(g) the memorandum of association of VCL. It provided that the

first object for which the company was incorporated was "to build,

erect, furnish, equip, maintain, carry on and conduct schools,

academies and colleges of education within the Province of British

Columbia".

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 87

[265] All of these records and documents, taken together, demonstrate that the efforts of everyone involved in establishing and operating the school in the 1920s had only that goal in mind.

[266] Evidence to the contrary is the absence of any reference in any of the documents reviewed to a trust for the purpose of establishing and operating the school, particularly in the Conditions and the documents transferring the land to VCL and allotting the shares of VCL to the

Christian Brothers, and contemporaneous references by members of the 2000 BCSC 1221 (CanLII) Congregation to “ownership” of the school by the Congregation.

[267] The absence of words expressly creating a trust for the purpose of the school is of little consequence. In the absence of express words, all of the circumstances surrounding the acquisition of the shares of VCL by the Christian Brothers must be construed to determine the legal result.

All of those circumstances demonstrate the intent that the funds raised and the property purchased were to be used exclusively for the establishment and operation of the school.

[268] The references by certain Christian Brothers to the ownership of the school by the Congregation are also of little consequence. They became legal owners of the property in accordance with the terms of the

Conditions. The question is whether they were trustees of the school property for the purpose of operating the school.

[269] The conduct of the Congregation in operating the school over 75 years is consistent with the intention of those involved in its establishment. At no time did the Christian Brothers take any action with respect to the school and the school property that was not for the benefit of the school. They have acted throughout as prudent trustees. Before

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 88

Burns' Field was sold, they consulted with the donors. The reason for the sale was to preserve the balance of the school property and improve the finances of the school so it could continue to operate.

[270] In the 1990s, the Brothers discussed with the VCL Board various proposals concerning the use of the school property, including for other

Christian Brothers projects. These discussions did not lead to any action, no doubt because of this litigation. If the Congregation had taken any steps to deal with the property for purposes other than the school, 2000 BCSC 1221 (CanLII) presumably that would have raised squarely the question now before me.

[271] The law supports my finding on the facts that a trust was created for the purpose of the school.

[272] First, the contemporaneous documents use the word "trust" in reference to the land and in connection with the allotment of the shares of VCL. Thus, the creation of a trust was expressly contemplated.

[273] There is no real dispute that the four individual shareholders of

VCL hold the shares in trust for the Congregation. Vancouver College made some submissions, after receipt of the judgment of the Ontario Court of

Appeal in Re Christian Brothers of Ireland in Canada, that the shareholders personally assumed the duties of trustees of the shares for the purpose of the school. This is contrary to all of the evidence. The

Congregation, not individual members, was invited and accepted the responsibility to establish and operate the school. It retained that responsibility throughout, although the individual shareholders changed from time to time. As argued by the Liquidator, the individual shareholders were nominees, agents or "bare trustees" for all of the members of the Congregation.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 89

[274] It is inconsistent with all of the evidence of the intentions of the parties, however, to conclude that the use of the word "trust" meant only the holding of nominal title with no attendant trust responsibilities. In my view, the use of the word "trust" was used to denote the responsibilities of the Congregation as trustee for the purpose of using the property, the shares, for the purpose of the school.

[275] Second, at the time the shares were allotted, the Congregation was an unincorporated association and could not legally hold property, except 2000 BCSC 1221 (CanLII) through its members: see Re Christian Brothers of Ireland in Canada, Blair

J. at pp. 378-9. Its members could not hold property as trustees for the benefit of the association unless all of the members collectively could own it for their own benefit or dispose of or use it in its operations.

Because the Christian Brothers took a vow of poverty, they could not own property for their individual or collective benefit. Therefore, the allotment of shares of VCL to members of the Christian Brothers as members of an unincorporated association could take effect only as a trust for a charitable purpose. The only question is whether the trust is for the general purposes of the Congregation or the specific purpose of the school. The evidence demonstrates that the trust was for the purpose of the school.

2. Subject-Matter of the Trust

[276] The subject-matter of the trust is the shares of VCL; they are the property owned by the Congregation in trust and the property in issue in these proceedings.

[277] The trust was established when the funds were raised by public appeal. As in Re Ulverston, Attorney General for Queensland and In Re

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 90

Y.W.C.A. Extension Campaign Fund, the funds were solicited for a single purpose, in this case Vancouver College.

[278] The funds donated for Vancouver College were the original subject matter of the trust, held by Father O'Boyle and Charles Stafford for the purpose of acquiring the land for a site for the school. The land became property of the trust after it was acquired.

[279] When VCL was formed, the trustees transferred the trust property to it. VCL does not hold the property as a trustee; as a corporation 2000 BCSC 1221 (CanLII) incorporated to carry out charitable objects, it owns its property beneficially. No trust is necessary to protect the assets, in VCL, from use other than for the school (see Roman Catholic Archiepiscopal Corp. of

Winnipeg).

[280] The Christian Brothers to whom the shares of VCL were allotted, in trust for the Congregation, became the trustees in the place of Father

O'Boyle and Mr. Stafford. The transaction as carried out telescoped some of the logical steps. Pursuant to the Conditions (to which Father O'Boyle and Mr. Stafford were not parties), the land was to be transferred to the

Congregation. Father O'Boyle and Mr. Stafford transferred the land, the trust property, to VCL. Instead of issuing the shares to Father O'Boyle and Mr. Stafford, who would in turn transfer them to the Christian

Brothers, VCL issued the shares directly to some Christian Brothers, representing the Congregation. The shares were substituted for the land

(and presumably any balance of funds raised for the school) and became the property of the trust.

[281] Waters describes the substitution of trust property at p. 122:

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 91

Certainty of subject-matter requires only that the trust property be initially defined or ascertainable; if it is changed in character by, for example, the sale of land and the purchase of shares the trust property obviously retains its ascertainability.

In the related footnote, he comments:

Initial ascertainability does not exist, so far as case law is concerned, unless specific property is earmarked as the trust property. Once this has occurred, and the trust has come into effect, the trust beneficiary can trace that property, whether it is converted into other forms, or, if money, it is mixed with other funds. 2000 BCSC 1221 (CanLII)

3. Object of the Trust

[282] The "object" or purpose of the trust is clear from the evidence summarized above. I adopt the wording requested by VCL: the shares of VCL are held for the specific charitable purpose of operating Vancouver

College as a Catholic educational institution in British Columbia.

[283] The Vancouver College petitioners included in their claim for relief a declaration that the school is "committed to the mission of the

Christian Brothers". The Liquidator argued that the mission of the

Christian Brothers included the payment of compensation to the victims of abuse. He relied principally on a letter sent by Brother Provincial Lynch to Superior General Brother Garvey on August 26, 1996. In that letter,

Brother Provincial Lynch expressed his personal views concerning the responsibility of the Congregation to the victims, and suggested that the spiritual mission of the Brothers had to include compensation.

[284] It is not necessary to define the mission of the Christian Brothers for the purposes of these proceedings. The Christian Brothers were invited to establish and operate Vancouver College because of their ethos, expertise and experience, all of which were consistent with the Catholic

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 92

Education Apostolate. They had demonstrated their abilities to fulfill the functions of trustees and educators and were the prime candidates to carry out the purpose of the Vancouver Catholic community: to establish a permanent Catholic educational institution in British Columbia.

[285] Whether Vancouver College will be part of the compensation paid to victims of abuse will not be determined by the intentions of those who established Vancouver College, which determine whether a trust was created, but by the law as interpreted by the Winding-Up Court. 2000 BCSC 1221 (CanLII)

[286] The terms of the trust are set out in the Conditions and the memorandum of association of VCL. They are the basis on which the

Congregation accepted the obligations of the trust on which it acquired the shares.

4. Settlors of the Trust

[287] The trust was established when the funds were raised to acquire the site for the school. Those funds were the subject-matter of the trust, to which the land was added when it was acquired. The donors of the funds were therefore the settlors of the trust.

[288] Some of the major donors are identified, but many are not. In Re

Ulverston, the Court of Appeal considered whether anonymous contributions were made for specific, as opposed to general, charitable purposes. The appeal for funds had been made for the specific purpose of building a new hospital, and the Court had no difficulty determining on the facts that the named donors intended their donations for that specific purpose.

Because the hospital had never been built, those donors were entitled to have their contributions returned. The question was whether anonymous donors, to whom contributions could not be returned, must be considered to

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 93 have given their money absolutely with a general charitable intention, and if so, whether that intention must be imputed to the known donors. The

Court of Appeal decided that because the appeal was made only for the specific purpose of building the hospital, a general charitable intention should not be imputed to either the named or anonymous donors.

[289] The appeal for funds for Vancouver College was for the purpose of establishing the school and for no other purpose. All of the donors, named and anonymous, may be taken to have given their money with the intention 2000 BCSC 1221 (CanLII) that it be used for that purpose and no other, and it has been so used.

They are the settlors of a trust for that purpose.

[290] Those who lent money for construction of the school are not donors and are not settlors of the trust. Those who later made contributions to

VCL, including individual Christian Brothers, the Congregation and members of the Vancouver College and larger Vancouver community, are not settlors of or contributors to a trust, but made gifts absolutely to VCL.

5. Trustee of the Trust

[291] The nominal trustees of the trust are the four Christian Brothers who own the shares of VCL. They own the shares in trust for the

Congregation.

[292] The Declarations of Trust signed by the present shareholders of VCL have no effect on my conclusion that the shareholders hold the shares in trust for the Congregation. The Declarations were signed long after the trust came into existence, and do not reflect the true nature of the trust: that the shares are held for the specific purpose of operating

Vancouver College.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 94

[293] The final question to be answered with respect to VCL is: who is the present trustee of the shares? Is it CBIC?

[294] The Liquidator takes the position that the only possible interpretation of the order of Blair J., confirmed by the Ontario Court of

Appeal, that CBIC is "the temporal identity and actor of the Congregation of the Christian Brothers in Canada", is that CBIC became, on its incorporation, the owner of all property owned by the Congregation before

1962, including the shares of VCL. 2000 BCSC 1221 (CanLII)

[295] Vancouver College has offered no other interpretation of the order, but point outs that there is no vesting clause in the legislation incorporating CBIC and there has been no legal transfer of the shares of

VCL to CBIC. They submit, in opposition to the Liquidator's position and petition on this issue, that this Court has full jurisdiction to answer the questions raised in the Vancouver College petition and Vancouver

College has not asked for any findings which conflict with those of the

Winding-Up Court. VCL says there is no evidentiary basis for concluding that the shares of VCL are vested in CBIC.

[296] The Liquidator did not argue that Blair J.'s order was res judicata. Presumably that is because the facts with respect to the VCL shares were not before Blair J. What he considered was the effect of the incorporation of CBIC on the status of the Congregation. He concluded in his reasons (at p. 378) that:

I am satisfied on the evidence, and hold, that the intent and legal effect of this development was to establish a corporate body which is the civil law entity through which the Congregation conducts its temporal affairs in Canada.

and at p. 408 said:

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 95

It is apparent from a reading of the record as a whole that matters relating to the creation, erection, organization, maintenance, operation, direction and administration of the schools and educational facilities of the Congregation in Canada were under the aegis of the corporation. Consequently, I have little difficulty in concluding -- as I do -- that the organization and operation of Mount Cashel, since 1962, in all of its non-spiritual aspects, has been the responsibility of The Christian Brothers of Ireland in Canada.

[297] The exercise of the responsibilities of the trustee of the shares of VCL is a temporal matter, which, according to the judgment of the

Winding-Up Court, became the responsibility of CBIC after its 2000 BCSC 1221 (CanLII) incorporation. As trustee for the specific charitable purpose of operating the school, CBIC carried out the temporal affairs of assigning and transferring teachers, approving financial expenditures and all other administrative matters involved in operating the school that were not handled by the Brothers locally at Vancouver College.

[298] The fact that there has been no statutory or formal vesting of the shares of VCL in CBIC is consistent, in my view, with the position of the

Congregation as trustee of the shares, as opposed to absolute owner. CBIC became the trustee because of the change in status of the Congregation, not because of any change in the role of CBIC as trustee for the purpose of operating Vancouver College.

[299] Indeed, Blair J. held at p. 390 of his reasons:

I accept that any property held by a Brother subject to a trust -- as opposed to being held generally for the charitable objects of the Congregation -- and transferred to The Christian Brothers of Ireland in Canada in 1962 or thereafter, remains subject to the trust. Property which is held as trust property cannot be deprived of that characteristic by the simple expedient of transferring it to a corporation.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 96

[300] Here the property was not transferred to the corporation; the corporation became the trustee by virtue of the Congregation's disappearance for temporal purposes.

6. Summary

[301] CBIC is the trustee of the shares of VCL for the specific charitable purpose of operating a Catholic educational institution in

British Columbia.

B. St. Thomas More Collegiate 2000 BCSC 1221 (CanLII)

1. Intention to Create a Trust

[302] I find that the evidence contemporaneous with the establishment of

St. Thomas More Collegiate reveals the intention to establish a regional high school to serve certain parishes in the Archdiocese, to be conducted by the Christian Brothers. There is no evidence of an intention to provide the Congregation or CBIC with property which it could use to establish or operate other Catholic educational institutions in other locations, or its own institutions, such as a novitiate.

[303] The evidence of the intention to establish St. Thomas More

Collegiate is found in:

(a) the correspondence between the Archdiocese and the

Congregation in the late 1950s. The correspondence related solely to

the establishment of a regional high school in the Archdiocese.

(b) the efforts of the Archdiocese to acquire the land for the

school. These efforts persisted over several years, as the price

escalated from $20,000 to $110,000.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 97

(c) the STM Agreement, under which the Archdiocese "engaged" the

Christian Brothers to "conduct" the regional high school for boys,

and provided the land, funds and a guarantee of a loan for

construction of the school, and an indemnity for annual operating

losses. The Christian Brothers agreed to "establish, maintain and

conduct" a Catholic high school under the patronage of the

Archdiocese.

(d) the memorandum of STM on incorporation, which specified as its 2000 BCSC 1221 (CanLII) first object, "to establish and carry on at 7450 - 12th Avenue,

Burnaby, British Columbia, or in the vicinity thereof, a high

school...".

(e) the contributions of the neighbouring parishes to the cost of

the land and operating deficits.

(f) the participation of representatives of the Archdiocese and

the lay community as financial advisors for the school.

[304] There are references in this evidence to purposes that might be construed more broadly than the specific purpose of establishing the school. In the draft 99-year lease, the parties had agreed to terms which required the Christian Brothers to use the land "only for the purposes of the Christian Brothers and the purpose of a Catholic high school". The STM memorandum included in the first object of the company, "delivering and holding public lectures, exhibitions, public meetings, classes and conferences calculated directly or indirectly to advance the cause of education for the general, professional and technical." In my view, these references provide context for the specific purpose of the school, but do

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 98 not suggest an intention to establish an institution other than St. Thomas

More Collegiate.

[305] There is no reference in any of the documents to a "trust" of any kind.

[306] Although all of the parties whose intentions are known acted to establish and operate St. Thomas More Collegiate, finding that a trust was created is complicated by the structures chosen and the sequence of events that occurred in implementing the intention. The Archdiocese, STM and CBIC 2000 BCSC 1221 (CanLII) were all incorporated at the time they acquired the property used for the purpose of the school. Thus, all were legally capable and presumed, according to the authorities, to hold property beneficially for any of their corporate purposes. Furthermore, STM was incorporated and the shares issued before STM owned any property. Was the subject-matter of a trust identifiable at that stage of the transactions?

[307] If each step in these transactions is analyzed separately, and the presumption applicable to corporations applied, the conclusion may be that no trust was created. Viewing these transactions in their entirety, however, I find that the Congregation acquired the shares of STM for the specific purpose of establishing and operating St. Thomas More Collegiate and the trust continued when the shares were transferred to CBIC.

(a) The Archdiocese

[308] The actions of the Archdiocese in acquiring the land and engaging the Christian Brothers to establish and operate the regional high school are entirely consistent with its responsibilities to foster the Catholic

Education Apostolate within the Archdiocese. If the Archdiocese had decided, after acquiring the land, to use it for a different purpose or to

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 99 sell it, some individual parishioners may have been disappointed. As long as the alternate use was consistent with the purposes of the Archdiocese, however, none of the authorities I have reviewed would apply, in my view, to require the Archdiocese to apply the land to the specific use of St.

Thomas More Collegiate or to return the contributions to the parishes.

[309] Unlike Attorney General for Queensland, Re Ulverston and In re

Y.W.C.A. Extension Campaign Fund, as well as Vancouver College, there is no evidence of a public appeal or that funds were solicited in the 2000 BCSC 1221 (CanLII) parishes for the specific purpose of establishing the school. The evidence is that the parishes were assessed for contributions to the land and the operating deficit. There is no evidence that funds were solicited or individual donors contributed for those specific purposes, as opposed to the general charitable purposes of the Archdiocese.

[310] I find there was no trust for the purpose of the school in existence during the period the Archdiocese held the land.

(b) Incorporation of STM

[311] The next events that occurred were that STM was incorporated by the

Congregation, and the shares issued to the original subscribers were transferred to two Christian Brothers representing the North American

Province. These shares were held by the individual Brothers in trust for the Congregation. Did the Congregation hold the shares for the specific purpose of the school?

[312] Before its incorporation as CBIC, the Congregation was an unincorporated association, which could not hold property absolutely, but only on trust for charitable purposes. STM was incorporated by the

Congregation for the specific purpose of holding title to the school

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 100 property, as set out in the objects of STM. The charitable purpose for which the Congregation held the shares had to be consistent with the underlying purpose of STM, which was the purpose of the school. There was no other reason to incorporate and acquire shares in STM.

(c) Transfer of STM Shares to CBIC

[313] Next, the shares of STM were transferred to CBIC and an additional share issued in trust for CBIC. Although the transfer was contrary to the articles of association of STM, it is consistent with the purposes for 2000 BCSC 1221 (CanLII) which CBIC was incorporated: to conduct the temporal affairs of the

Congregation in Canada, including holding title to property.

[314] The shares were subject to a pre-existing trust in the hands of the members of the Congregation. The shares remain subject to the trust in the hands of CBIC.

[315] Even if there were no pre-existing trust of the shares in the hands of the members of the Congregation, I would find that CBIC held the shares of STM in trust for the specific purpose of the school.

[316] In Roman Catholic Archiepiscopal Corp. of Winnipeg, the British

Columbia Court of Appeal considered whether a bequest to the Corporation was made in trust for a specific charitable purpose or given absolutely for the Corporation's general purposes. The will provided that the primary purpose of the gift was to benefit a particular church in the archdiocese, but also provided for it to be used "otherwise as the said Corporation shall see fit..." Davey J.A. found (at p. 28) that the intention of the testator was "to promote the spiritual welfare of Roman Catholic communicants in the archdiocese", which was coextensive with the purposes of the Corporation. He said at p. 29:

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 101

...the Act creating the Corporation excludes purposes not permitted by the discretion given by the will to use the gift "otherwise as the said corporation shall see fit" -- that is for the promotion of the work of the Roman Catholic Church in the archdiocese.

Hence the constitution of the Corporation permits the gift to be used for the primary purpose stated in the will, and prevents it being used for purposes not permitted by the will; therefore, there is no reason to imply a trust to compel the Corporation to do that which its constitution requires it to do.

[317] In this case, the object for which STM was created was to implement the intention to establish and operate St. Thomas More Collegiate, and not 2000 BCSC 1221 (CanLII) for the broader purposes of the Congregation or CBIC. It is consistent with that object that the shares of STM are held in trust for that purpose. If no trust was created, even absent the special circumstances of the present liquidation of CBIC, the shareholders could exercise their rights as shareholders, including liquidating STM's assets, and use them for purposes other than the school. This is clearly contrary to the intentions evident in the actions of the Archdiocese and the Congregation when the school was established.

(d) Transfer of Land to STM

[318] The last step in the sequence of events was the transfer of the land by the Archdiocese to STM. St. Thomas More Collegiate argues that STM is a charitable purpose corporation that holds the land for the purpose of the school. That may be the corporate purpose of STM, but that does not, as the authorities hold, make it a trustee of its property for that purpose. The purpose for the transfer of the land was coextensive with the corporate objects of STM, as in Roman Catholic Archiepiscopal Corp. of

Winnipeg. No trust is necessary to compel STM to do that which its constitution requires it to do.

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 102

[319] One of the orders sought by the St. Thomas More Collegiate petitioners is a declaration that STM is a charitable purpose trust corporation. I decline to make that declaration, as I can give no legal meaning to the phrase "charitable purpose trust corporation". STM is a corporation that was incorporated for a particular charitable purpose, but it is not a trustee of its assets for that purpose.

2. Subject-Matter of the Trust

[320] The subject-matter of the trust is the shares of STM. Had the 2000 BCSC 1221 (CanLII)

Archdiocese transferred the land directly to CBIC, the land would have been the subject-matter of the trust. The interposition of STM does not change the nature of CBIC's ownership of the school or the purpose for the transfer.

3. Object of the Trust

[321] The object or purpose of the trust is the establishment and operation of a Roman Catholic high school for the benefit of the parishes of the Archdiocese in the vicinity of the present location of St. Thomas

More Collegiate.

[322] The object is clearly reflected in the evidence summarized above under "Intention to Create a Trust". The terms of the trust are set out in the STM Agreement and the memorandum of STM, prior to its amendment in

1982.

4. Settlor of the Trust

[323] The Archdiocese is the settlor of the trust. It acquired the land, using its own funds and funds collected from the parishes which would benefit from the establishment of the school. It paid a large proportion of the construction costs out of its own funds, and guaranteed a loan for

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 103 the balance. It provided an indemnity for operating deficits, and facilitated both fund-raising and assessments in the parishes to meet its obligations.

[324] The actions of the Archdiocese provided the financial underpinning for the school. It clearly intended that its contributions be used only for the purpose of the school. It transferred the land and funds to STM, which was incorporated and its shares issued to the Congregation for that purpose. 2000 BCSC 1221 (CanLII)

5. Trustee of the Trust

[325] CBIC holds two shares of STM directly and John Burnell holds title to one share of STM as nominee, agent or "bare trustee" for CBIC. CBIC is trustee of three shares for the purpose of the operation of the school.

6. Rectification of STM's Share Register

[326] STM seeks an order that its share register be rectified, pursuant to section 68 of the Company Act, so that the shares are held by three

Christian Brothers now teaching at the school, in accordance with the requirements of STM's articles. The articles restrict membership in STM to members of "The Christian Brothers of Ireland".

[327] Section 68 of the Company Act provides:

(1) If

(a) the name of a person is, without sufficient cause, entered in, or omitted from, the register of members of a company, or

(b) default is made or unnecessary delay takes place in entering in the register of members the fact that a person ceased to be a member,

the person aggrieved, a member of the company, the personal representative or trustee in bankruptcy of the person

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 104

aggrieved or of the member of the company, or the company, may apply to the court for rectification of the register.

(2) The court may order rectification of the register of members and payment by the company of damages sustained by a party aggrieved and may, despite the summary nature of the process, decide a question relating to the title of a person who is a party to the application, and generally may decide a question necessary or expedient to be decided for rectification of the register.

[328] STM also pleaded section 206 of the Company Act, which provides that the court may make an order to rectify the consequences in law of a default in compliance with the articles of the company. In its 2000 BCSC 1221 (CanLII) submissions, however, STM relied on section 68.

[329] All of the members of the Congregation in Canada are members of

CBIC, and the only members of CBIC are the Canadian members of the

Congregation (Re Christian Brothers of Ireland in Canada, Blair J. at p.

380). STM argues, however, that CBIC is not a member of "The Christian

Brothers of Ireland", whether that phrase refers to the Congregation or

CBIC, as it cannot be a member in itself.

[330] STM is technically correct. CBIC holding shares of STM is contrary to the provisions of the articles of STM. Authorities cited by STM, such as Re Champion & White Ltd., [1943] 2 D.L.R. 145 (B.C.C.A.) and Harvey v.

Harvey, [1979] 2 W.W.R. 661 (B.C.C.A.), support STM's argument that the provisions of the articles are mandatory, the registration of shares contrary to the articles constitutes registration "without sufficient cause" and rectification may be ordered. Other authorities cited, such as

Re Transatlantic Life Assurance Co. Ltd., [1980] 1 W.L.R. 79 (Ch.D.), make it clear that rectification is a discretionary remedy.

[331] In this case, rectification of the register of STM to substitute three individual Christian Brothers in the place of CBIC would have no

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 105 practical or legal effect. As discussed above in the context of the shareholdings of VCL, the four individual shareholders of VCL hold the shares as nominees for the Congregation. The Congregation's temporal acts and identity, including the holding of property, were assumed by CBIC on its incorporation. Thus, if the shares of STM were held by individual members of the Congregation, they would be nominees or agents or "bare trustees" for CBIC, as are the four individual Christian Brothers who hold the shares of VCL. As I have found, CBIC holds the shares as trustee for the purpose of operating the school. 2000 BCSC 1221 (CanLII)

[332] There is nothing in the evidence which gives any clue to why the articles of STM were not amended in 1982, when the memorandum was amended, to remove the restriction on membership. I suspect that no one thought there was any significance to the legal difference between "The Christian

Brothers of Ireland", the unincorporated association that existed at the time STM was incorporated, and "The Christian Brothers of Ireland in

Canada", the incorporated CBIC. There is no difference in the purpose for which the shares are held or in the manner in which the school is operated by the Christian Brothers.

[333] In these circumstances, I decline to exercise my discretion to rectify the share register of STM.

7. Summary

[334] CBIC is the trustee of the shares of STM for the purpose of operating a Roman Catholic high school for the benefit of the parishes of the Archdiocese in the vicinity of the present location of St. Thomas More

Collegiate.

VII. EVIDENCE TENDERED BY REPRESENTATIVE COUNSEL

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 106

[335] During pre-hearing proceedings and at the hearing of these petitions, I ordered that affidavits filed by Representative Counsel be sealed and the names of the affiants be the subject of a publication ban.

At the hearing, I ruled that the evidence contained in the affidavits was inadmissible, as it was not relevant to the issues raised by the petitions.

[336] With the release of these reasons, and subject to any further submissions on matters such as costs, these proceedings are at an end. 2000 BCSC 1221 (CanLII)

[337] I order that the affidavits filed by Representative Counsel be unsealed. The ban on publication of the names of the affiants will continue.

VIII. COSTS

[338] No order for costs was sought and there were no submissions made with respect to costs at the hearing of the petitions. In these circumstances, I make no order as to costs.

IX. SUMMARY OF FINDINGS

[339] In answer to the Vancouver College petition, I declare that CBIC is the trustee of the shares of VCL for the specific charitable purpose of operating a Catholic educational institution in British Columbia.

[340] In answer to the STM petitions, I declare:

(a) the petition seeking rectification of the share register of

STM is dismissed;

(b) John Burnell holds one share of STM as nominee for CBIC;

Brother Pascal Rowland et al. v. The Christian Brothers of Ireland in Canada et al. Page 107

(c) CBIC holds three shares of STM as trustee for the purpose of

operating a Roman Catholic high school for the benefit of the

parishes of the Archdiocese in the vicinity of the present location

of St. Thomas More Collegiate.

[341] The petition of the Liquidator is dismissed.

"R.E. Levine, J." The Honourable Madam Justice R.E. Levine 2000 BCSC 1221 (CanLII)