The International Journal
of Not-for-Profit Law

Volume 3, Issue 1, September 2000

by Kathryn Bromley

In 1813, Elizabeth Mary Bates settled an inter vivos trust in England, one half of whose profits went to the Moravian Church for the purpose of “maintaining, supporting and advancing the missionary establishments among heathen nations”. Every year the Moravian Church applied for a return of the income tax paid on this income, and every year until 1886 the Church received it. In 1886, John Pemsel, the treasurer of the Moravian Church, was refused the tax rebate of 73 pounds, and so he sued the Income Tax Commissioners on the Church’s behalf. The Court of Appeal awarded the tax rebate to John Pemsel, on the basis that the religious purposes specified in Elizabeth Bates’ trust were charitable. The Commissioners appealed to the House of Lords. In 1891, Lord MacNaghten confirmed the analysis of the Court of Appeal in a decision which remains the leading case on the definition of charity.

The issue which this paper will address is whether the Supreme Court of Canada would reach the same decision on the same set of facts today.

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