Expected Benefit

"The Tax Court Judge only referred to the definition of gift as set out in The Queen v. Friedberg, [1991] FCJ No. 1255, 92 D.T.C. 6031 (FCA) (Friedberg) and stated, in paragraph 159 of his reasons, that this Court in Friedberg “recognized that to vitiate a gift, a benefit or consideration must actually flow to the donor”. As a result of this conclusion, he focused on whether Mr. Morrison actually received the pharmaceuticals. Consequently, the Tax Court Judge did not reach any conclusion on whether Mr. Morrison anticipated or expected a benefit, namely the expectation that he would receive pharmaceuticals that he could donate to a registered charity. The statement that “[w]hile Mr. Morrison may have expected to receive, in exchange for the payment, pharmaceuticals from CHT to donate to an in-kind charity” suggests that Mr. Morrison may have had this expectation. The Tax Court Judge found a disconnect between the cash payment and the entitlement to receive pharmaceuticals, stating that the participants in the CHT Program may have been encouraged to make a cash donation but that the documents did not suggest there was an obligation to make such a donation. WHI created a structure which might have led Mr. Morrison to believe that it was more likely that he would be appointed a Class A beneficiary if he made a cash donation, but there was no evidence that he was obligated to make a cash donation, that the cash donation was a condition precedent to appointment as a Class A beneficiary, or that the cash donation was a fee payable for appointment as a Class A beneficiary. This factual finding of a disconnect between the cash payment and the entitlement to pharmaceuticals is not directly a finding that Mr. Morrison did not anticipate or expect a benefit. The Tax Court Judge’s decision in Morrison does not assist Mr. Walby and Mr. De Las Alas. The statement in Friedberg that “a gift is a voluntary transfer of property owned by a donor to a donee, in return for which no benefit or consideration flows to the donor” suggests that if a donor voluntarily transfers property with the expectation that the donor will receive a benefit, but no benefit is actually received, the transfer will still qualify as a gift. This characterization of a gift was made in the context of the issues raised in Friedberg. Following Friedberg, the Supreme Court confirmed that a key element of a gift is the absence of any expectation of remuneration. McLachlin J. (as she then was), writing on behalf of the majority of the Supreme Court in Peter v. Beblow, [1993] 1 S.C.R. 980 (Beblow), stated: “The central element of a gift at law – intentional giving to another without expectation of remun"