Tax Court of Canada Judgments

Date: 19990226

Docket: 95-3194-IT-G; 96-4845-IT-G; 97-948-IT-G

BETWEEN:

VICTOR FITCH, RONALD D. BISSELL, JOHN MCMILLAN,

Appellants,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for judgment

Bowman, J.T.C.C.

[1] These appeals were heard together and form part of a larger group of appeals heard during 1998. As in the case of all other appeals of this group, they are concerned with the deduction under paragraph 8(1)(c) of the Income Tax Act. I need not set out that provision again. It has been done in earlier cases. It involves a two-fold test, status and function. In the cases of Victor Fitch and Donald D. Bissell, their status is admitted – they are admitted to be members of the clergy because they are ordained ministers in the Seventh-day Adventist Church in Canada[1].

[2] The status of John McMillan is, however, in issue. He is a recognized minister and church leader in the Church of Christ. The respondent's position is that he is neither a member of the clergy nor a regular minister of a religious denomination.

[3] The function of all three appellants is in issue for a variety of reasons. In the case of Victor Fitch, it is contended that as President of Canadian Union College ("CUC"), a Seventh-day Adventist Bible College, he is not entitled to the deduction claimed because he is not engaged in full time administrative service "by appointment of a religious denomination" because CUC is not a religious denomination.

[4] In the case of Ronald D. Bissell, a professor of religious studies at CUC, it is contended that he was not ministering to a congregation. The appellant's contention that he was engaged exclusively in full time administrative work was abandoned.

[5] In the case of John McMillan, the President of Western Christian College ("WCC"), the respondent contends that, apart from the argument that he was neither a clergyman nor a regular minister, he was not engaged in full time administrative service "by appointment of a religious denomination".

[6] I shall deal first with Victor Fitch. That he was a member of the clergy engaged exclusively in full time administrative service as President of CUC is undoubted. The sole question is whether he held that position "by appointment of a religious denomination". The Seventh-day Adventist Church in Canada ("SDA"), is course, a religious denomination. The basis of disallowance appears to have been that CUC, according to McRae, "does not qualify".

[7] This misses the point. Assuming for the moment that CUC is, in itself, neither a religious denomination nor a religious order, it is not part of Pastor Fitch's case that it is. His contention is that his position as President of CUC, SDA's Bible College, is by appointment of SDA which is unquestionably a religious denomination.

[8] In assessing the strength of this argument it is necessary to consider briefly the history of SDA and the role of education in that denomination.

[9] The Seventh-day Adventist denomination comprises about 10,000,000 individuals throughout the world. It is a conservative evangelical denomination and among its tenets are a belief in the second coming of Christ (the Advent), the recognition of Saturday, the seventh day of the week, as the Sabbath, and the recognition of the Bible as the sole, final and infallible spiritual authority.

[10] It appears to be characterized by vigorous proselytizing and it is active in missionary work throughout the world. It operates hospitals and educational institutions in North America. It is a highly structured denomination and although it may best be described as "representative", the evidence also indicates that it is a tightly controlled hierarchical structure with clearly defined lines of authority, extending across regions ("conferences") missions and unions.

[11] The structure of the church is described on pages 23-24 of the Seventh-day Adventist Church Manual as follows:

Forms of Church Government

There are four generally recognized forms of church government. These may be summarised as follows:

1. Episcopal—the form of church government by bishops, usually with three orders of ministers, as bishops, priests, and deacons.

2. Papal—the form of church government in which the supreme authority is vested in the Pope. From him the church is governed by cardinals, archbishops, bishops, and priests. The local church or individual member has no authority in church administration.

3. Independent—the form of church polity that makes the local church congregation supreme and final within its own domain. This is usually referred to as congregationalism.

4. Representative—the form of church government which recognizes that authority in the church rests in the church membership, with executive responsibility delegated to representative bodies and officers for the governing of the church. This form of church government recognizes also the equality of the ordination of the entire ministry. The representative form of church government is that which prevails in the Seventh-day Adventist Church.

Four Constituent Levels in the Seventh-day

Adventist Organization

Among Seventh-day Adventists there are four constituent levels leading from the individual believer to the worldwide organization of the work of the church:

1. The local church, a united organized body of individual believers.

2. The local conference or local field/mission, a united organized body of churches in a state, province, or territory.

3. The union conference or union field/mission, a united body of conferences or fields within a larger territory.

4. The General Conference, the largest unit of organization, embraces all unions in all parts of the world. Divisions are sections of the General Conference, with administrative responsibility assigned to them in designated geographical areas.

"Every member of the church has a voice in choosing officers of the church. The church chooses the officers of the state conferences. Delegates chosen by the state conferences choose the officers of the union conferences, and delegates chosen by the union conferences choose the officers of the General Conference. By this arrangement every conference, every institution, every church, and every individual, either directly or through representatives, has a voice in the election of the men who bear the chief responsibilities in the General Conference." — Testimonies, vol. 8, pp.236, 237.

[12] Within this highly structured organization, where does the Bible College, CUC fit? On the evidence, it is an integral part of the Church. This is confirmed by the evidence of the past President and General Secretary of SDA, Douglas Devnich and Victor Fitch, the President of CUC. In the Seventh-day Adventist Church Manual under the head "The Church's Institutions, the following appears:

The Church's Institutions

Within these four constituent levels the church operates a variety of institutions. Seventh-day Adventists see in the gospel commission and the example of the Lord and His apostles the responsibility of followers of Christ to serve the whole person. In their world outreach they have therefore followed the pattern of their beginnings in the development of educational, health-care, publishing, and other institutions.

In Seventh-day Adventist theology and philosophy of church operations, such institutions have been from their inception integral parts of the church, direct instruments in the carrying out of its divine commission. Therefore, the Seventh-day Adventist Church makes use of its denominationally owned and operated institutions such as health care institutions,* publishing houses, health food industries, and educational institutions as integral parts to fulfil health, literature, and teaching ministries; therefore, they are indispensable to and inseparable from the total ministry of the church in carrying the gospel to all the world. *(For North American Division, see Church Manual, NAD Supplement, p. 197.)

The multiple units of the world church, whether congregations, conferences, health-care institutions, publishing houses, schools, or other organizations, all find their organizational unity in the General Conference of Seventh-day Adventists in which they have representation. Through them the world church reaches out in the name of Christ to meet the needs of a distraught world.

[13] The integration of the CUC and the SDA is confirmed equally by a number of passages in the Working Policy of the North American Division:

B 03 North American Division Working Policy

B 03 05 Authoritative Administrative Voice of the Church — The North American Division Working Policy contains the Constitution and Bylaws of the General Conference and the accumulated policies adopted by General Conference Sessions and year-end meetings of the North American Division. It is, therefore, the authoritative voice of the Church in all matters pertaining to the administration of the work of the Seventh-day Adventist denomination in the territory of the North American Division.

B 03 10 Adherence to Policy Required — The North American Division Working Policy shall be strictly adhered to by all organizations in every part of the division. The work in every organization shall be administered in full harmony with the policies of the division. No departure from these policies shall be made without prior approval from the North American Division Committee. The division committee is the authorized body which acts for the General Conference Committee in the North American Division. All conference, mission, and institutional administrators and all committee/board members shall adhere to and cooperate in maintaining these policies as they affect the work in their respective organizations. Only thus can a spirit of close cooperation and unity be maintained in the work of the Church in all parts of the division.

B 03 15 Officers — Administrators to Work in Harmony With Policy — Officers and administrators are expected to work in harmony with the North American Division Working Policy. Those who show inability or unwillingness to administer their work in harmony with policy should not be continued in executive leadership by their respective constituencies or governing boards/committees.

[14] At page 22, under the head "Relationships Between Organizations", it is stated:

B 05 Relationships Between Organizations

B 05 05 Lines of Responsibility — 1. Local Conferences/Missions — Local conferences/missions are responsible to the union conference/mission organization of which they are a part, and are administered in harmony with the policies, which govern the union.

2. Union Conferences/Missions — Union conferences/missions are responsible to the respective division section of which they are a part, and are administered in harmony with the operating policies of the General Conference and of the division.

3. Institutions — Institutions operated by local conferences/missions are responsible to their controlling organizations; institutions operated by union conferences or missions are responsible to their respective unions; general institutions are responsible to their respective division committee or to the General Conference Committee.

[15] The Seventh-day Adventist Church in Canada is a union conference and therefore the CUC is responsible to it. Similarly, at page 28, the following appears:

B 12 Administrative Relationships

B 12 05 General Conference Constitution Expresses Unity of Church — As the Scriptures represent the church of Christ as one body, all the parts members one of another, so our Constitution, adopted by the representatives of the worldwide sisterhood of churches, seeks to express the unity and oneness of all organizations that make up the General Conference, which represents the one undivided remnant church of God.

[16] At page 50:

C 47 Denominational Status for Seventh-day

Adventist Organizations — Criteria

C 47 05 Authority — The North American Division Committee holds the authority to determine, confer, and evaluate denominational status for organizations within its territory in accordance with this policy. So long as an organization retains denominational status, it shall be:

1. Listed in the Seventh-day Adventist Yearbook;

2. Eligible to participate in the appropriate Seventh-day Adventist Church retirement plan, if not-for-profit; and

3. Eligible, if not-for-profit, to be included within group tax exemption that is held and administered by the General Conference of Seventh-day Adventists.

C 47 10 Organizational Structure, Governance, and Operation — Organizations included in the Seventh-day Adventist Yearbook must be affiliated with, and subject to, the general supervision of control of the Seventh-day Adventist Church, and must comply with the following requirements to hold denominational status:

1. Governing Documents — The governing documents of the organization (i.e., articles of incorporation, constitution, bylaws, articles of association, trusts, etc.) shall provide for the following:

a: Relation to Denomination — The organization shall be affiliated with and/or be an integral part of the Seventh-day Adventist Church, and its primary purpose shall be in harmony with, and supportive of, the mission of the Church.

[17] In Division D of the Working Policy (Employees – Accrediting, Transferring, Employment Regulations) paragraph D 3010 provides:

D 30 10 Within a Union — Calls for persons within a union or interchange of employees between local conferences/missions or institutions shall be made through the union.

[18] Finally, in the 1993-1994 Academic Calendar of CUC, the following statement appears:

The Academic Status of Canadian Union College

Academic Status within the Seventh-day Adventist Church. Canadian Union College is a postsecondary institution, which is owned and operated by the Seventh-day Adventist Church in Canada. Its mission is to provide higher education, in a context of academic excellence and Christian commitment, to the members of the church and to others who wish to study in an Adventist setting.

The Seventh-day Adventist Church has a history of academic excellence in higher education. Through its educational governing bodies, the Board of Regents and the Board of Higher Education, it has developed high academic standards with which it regulates the delivery of quality education in all of its institutions. While it is the only Adventist postsecondary institution in Canada, the college belongs to a sisterhood of such institutions in North America. The three universities and nine colleges in the United States are accredited with regional accrediting associations and with various professional associations.

[19] It is clear that both the SDA and the CUC regard the latter as an integral part of the Church. The respondent, however contends that the appointment of Mr. Fitch to his administrative post as President of CUC is not made by the denomination but by the board of CUC. In considering merits of this technical position, it is necessary to consider the legal and factual relationship between SDA and CUC.

[20] CUC was incorporated under the laws of Alberta in 1940 as "The Canadian Junior College". Section 1 of the statutes provides that a number of named individuals

1. ...and all other members of the executive committee of the Canadian Union Conference of Seventh-day Adventists, together with all the qualified voters from time to time of the said Union Conference, are hereby constituted a body corporate and politic under the name of Canadian Junior College and shall under that name have power to establish and conduct at College Heights, or elsewhere in the Province of Alberta, a college for the education of youth and promotion of knowledge where students may obtain a liberal education in the arts and sciences and to promote the study, practice and knowledge thereof including vocational training and in connection with such training to carry on any vocation and to provide for the delivery and holding of lectures, exhibitions, classes and conferences calculated directly or indirectly to advance the cause of education whether general, professional or technical, to award certificates and diplomas, for merit and proficiency and to appoint such professors, associate professors, lecturers, instructors or other officers and servants and such other powers as may be necessary for carrying into effect the objects and purposes of the corporation.

[21] Paragraph 7 of the Alberta Statute provides:

7. The corporation may from time to time make by-laws not contrary to law, for,—

(a) The appointment, subject as herein provided, of a Board of Trustees for the administration, management and control of the property, business and other temporal affairs of the corporation;

(b) The appointment, functions, duties and remuneration of all officers, agents and servants of the corporation;

(c) The appointment of committees and defining their duties;

(d) The calling of meetings, general or special, of the corporation and all committees;

(e) The fixing of the necessary quorum and the procedure at such meetings;

(f) Generally the carrying out of the objects and purposes of the corporation and for the well ordering governing and advancement of the said college;

and all such by-laws when reduced into writing after the common seal of the corporation has been affixed thereto shall be binding on all persons members thereof.

[22] In 1947, the name was changed to Canadian Union College and a further amendment, not relevant to this case, was made in 1951. In 1972 section 1 was struck out and a new section 1 was substituted. Subsection 1(1) reads as follows:

1.(1) The Canadian Union College, heretofore incorporated, is continued as a body corporate and politic by that name, and its membership shall consist of those members of the Seventh-day Adventist Church as are from time to time set forth in the by-laws of the Canadian Union College.

[23] Clause (a) of section 7 was also struck out and the following substituted:

(a) The appointment of the members of Canadian Union College;

(a1) The appointment of trustees to the Board of Trustees, for the administrative, management and control of the property, business and other affairs of Canadian Union College.

[24] New subsection 1(2) of the 1972 Statute was substantially the same as the concluding part of old section 1. In 1979 subsection 1(2) was struck out and new subsections 1(2), (3) and (4) were substituted:

(2) The Canadian Union College shall have the power to establish, maintain, and conduct at College Heights, or elsewhere in the Province, a College for the general education of students and to promote the advancement of learning and the dissemination of knowledge whether theoretical or practical, on the elementary, secondary and post-secondary levels of instructions where students may obtain a liberal education in the arts, sciences, the field of religious studies and vocational training.

(3) The Canadian Union College shall have the power in connection with such education and training:

(a) to appoint such deans, professors, associate professors, lecturers, instructors and other employees, officers and servants as may be necessary to effect the objects and purposes of the Canadian Union College;

(b) to provide for the delivery and holding of lectures, exhibitions, classes, experiments, laboratories and conferences whether general, professional or technical, calculated directly or indirectly to advance the cause of education; and

(c) to grant or confer, for merit and proficiency, degrees in divinity, diplomas and certificates.

(4) The Canadian Union College shall have such other powers as may be necessary for carrying into effect its objects and purposes.

[25] A further amendment was made in 1989 but it is not relevant to this case.

[26] The Bylaws of CUC that were in effect in 1991 provided in Article IV as follows:

ARTICLE IV – MEMBERSHIP

4:01 Members

The membership of the College shall consist of the following members:

a) The North American Division of the Seventh-day Adventist Church (ex-officio)

1. The President

2. The Secretary

3. The Treasurer

4. The Executive Secretary of the Board of Higher Education

5. The Director of the Office of Education, K-12

b) The Seventh-day Adventist Church in Canada (ex-officio)

The members of the Executive Committee

c) Canadian Union College

1. The members of the Board of Trustees (ex-officio)

2. The Vice Presidents (ex-officio)

3. The Registrar (ex-officio)

4. Three (3) members of the instructional faculty to be selected by the faculty in session (elected)

5. Two (2) members of the support staff to be selected by the support staff (elected)

6. The Principal of Parkview Adventist Academy (ex- officio)

7. The President of the Associated Student Body (ex- officio)

8. The President of the Alumni Association (ex- officio)

9. The General Managers of College-owned industries (ex-officio)

d) Conferences and Missions (elected)

Two (2) members without regard to the number of church members in each duly organized Conference or Mission of the Seventh-day Adventist Church in Canada and one (1) additional member for each one thousand five hundred (1,500) members or major fraction thereof. Such members shall be appointed by the Executive Committee of the Conference or Mission. Not more than one-third of the appointees of each Executive Committee shall be employees of the Seventh-day Adventist Church.

[27] Section 5:01 provided:

ARTICLE V – OFFICERS OF THE COLLEGE AND

THEIR DUTIES

5:01 Officers of the College

a) The Chairman shall be the President of the Seventh-day Adventist Church in Canada.

b) The Vice-Chairman shall be the Secretary of the Seventh-day Adventist Church in Canada.

c) The Secretary shall be the President of the College.

[28] Moreover, the Executive Committee of the SDA, the North American Division Committee on Administration or the General Conference Committee had the power under section 6:02 to call a special meeting of the Board of Trustees.

[29] Section 7:01 provided for the creation of a "Standing Nominating Committee" as follows:

ARTICLE VII – COMMITTEES

7:01 Standing Nominating Committee

The Standing Nominating Committee shall consist of the Chairman of the College, who shall serve as Chairman; two (2) members from among the administrators and departmental directors of the Seventh-day Adventist Church in Canada; two (2) members from Canadian Union College; one (1) member from each Conference and Mission of the Seventh-day Adventist Church in Canada; and the Alumni President.

The Standing Nominating Committee shall present for the approval of the members of the College assembled at the time of the Regular Meeting:

a) A list of nominees for the Board of Trustees.

b) A list of the nominees for a Standing Constitution and Bylaws Committee.

c) An auditor who shall annually audit the accounts and service records for the ensuing triennium.

d) Any other committees as deemed necessary by the College.

The Standing Nominating Committee shall recommend to the Board of Trustees nominations to fill vacancies within the elected members occurring during the ensuing triennium, in the Board of Trustees.

[30] The Board of Trustees is appointed by the College from the list of nominees presented for the approval of the members of the college by the "Standing Nominating Committee". Article IX provides in part as follows:

ARTICLE IX – BOARD OF TRUSTEES

9:01 Election of Board

At each regular meeting, the College shall appoint a Board of Trustees consisting of not fewer than fifteen (15) and not more than twenty-eight (28) members.

9:02 Composition of the Board

The Board of Trustees shall be composed of:

a) Ex-officio members: the President of the College; the President, Secretary, Treasurer, and Director of Education of the Seventh-day Adventist Church in Canada; the Presidents of the local Conferences and Mission of the Seventh-day Adventist Church in Canada; and the President of the Alumni Association.

b) Elected members: not more than fifteen (15) other members of whom at least twelve (12) shall not be employees of the Seventh-day Adventist Church and who shall be selected on the basis of having demonstrated:

1. Loyalty to and support of the Seventh-day Adventist Church, its programs, and its leadership.

2. Continued faithful stewardship.

3. Loyalty to and support of Canadian Union College, its mission, its programs and its aspirations.

4. Trust, confidence, and credibility with the local support constituency.

5. Creativity, good judgment, and ability to explore problems in depth.

6. Broad interest and experience in group planning and decision-making.

7. Willingness to give qualify time to the affairs of the College.

9:03 Officers of the Board of Trustees

a) The Chairman shall be the President of the Seventh-day Adventist Church in Canada.

b) The Vice Chairman shall be the Secretary of the Seventh-day Adventist Church in Canada.

c) The Secretary shall be the President of the College.

[31] Section 10:02 provides that one of the duties of the Board of Trustees is:

10:02 Duties

The duties of the Board of Trustees shall be:

a) To appoint or to remove the President of the College in harmony with appropriate procedures and guidelines as determined by the North American Division of Education.

[32] Section 11:01 provides in part as follows:

11:01 The duties of the officers of the Board of Trustees shall be:

a) Chairman

The Chairman shall at all times labour in the general interest of the College. The duties of the Chairman shall be:

1. To call and to conduct meetings of the Board of Trustees.

2. To adhere to the Working Policies of the North American Division of the Seventh-day Adventist Church.

3. To interpret and to apply rules of procedure for conducting business during meetings.

4. To perform such other duties as the Board of Trustees shall direct.

[33] The Executive Committee of the Board of Trustees, under section 12:01, consists of:

ARTICLE XII – EXECUTIVE COMMITTEE

12:01 Members

The Executive Committee of the Board shall consist of:

a) The Chairman of the Board of Trustees, who shall serve as Chairman.

b) The President of the College, who shall serve as Secretary.

c) The Secretary and Treasurer of the Seventh-day Adventist Church in Canada.

d) The Presidents of the Conferences and Mission of the Seventh-day Adventist Church in Canada.

e) Other available members of the Board of Trustees.

[34] Sections 14:02 and 14:04 of the Bylaws read:

14:02 Policies

All funds shall be used in harmony with the financial policies of the North American Division of the General Conference and, in the case of donations, in harmony with the specifications of donors and in compliance with Government regulations.

...

14:04 Financial Statements

The College shall prepare appropriate monthly statements of income and expense balances and shall be responsible for the filing of any financial information directly with the Seventh-day Adventist Church in Canada and the North American Division of the General Conference and, to the extent required by law, with any municipal, provincial, or federal government.

[35] Section 19:01 provides:

ARTICLE XIX – PLANS AND POLICIES

19:01 The plans and policies adopted by the College and the Board of Trustees shall at all times be in harmony with the Working Policy of the North American Division of the General Conference of Seventh-day Adventists and the Seventh-day Adventist Church in Canada and, to the extent required by law, with any municipal, provincial, or federal government.

[36] Section 21:01 provides:

ARTICLE XXI – DISSOLUTION

21:01 On the dissolution or winding up of the College, any and all assets remaining after payment of, or provision for payment of, all debts and liabilities of the College, shall be transferred to the Seventh-day Adventist Church in Canada.

[37] A new set of bylaws came into effect in 1994 but substantially they do not differ in any way that is material to this appeal from the version from which I quoted above.

[38] I have reproduced at length passages from the bylaws and other material adduced in evidence because they demonstrate overwhelmingly that the presence of the SDA permeates all aspects of CUC, including its values, its appointments, its boards and committees and its finances. It goes beyond the type of domination that a parent company might have over its subsidiary. CUC is exactly what both it and the SDA conceive it to be, an integral part of SDA. It follows, therefore, that the appointment of Victor Fitch as President of CUC through the Board of Trustees of CUC was an appointment by a religious denomination.

[39] I turn now to the position of Ronald D. Bissell. He is an ordained minister of the SDA and, like the other witnesses called in this group of cases, is a singularly erudite and articulate individual. His problem is different, however, from that of Mr. Fitch. He is a member of the clergy. He cannot however, on any sensible interpretation of the phrase, be said to be engaged in administrative service and in fact at trial counsel abandoned this argument. Therefore, if he is to be entitled to the deduction under paragraph 8(1)(c) he must be found to be "ministering to a congregation". He is, in fact, a professor of religious knowledge at CUC.

[40] Reverend Bissell's case raises the question whether teaching students in a divinity class in what is clearly a denominational college is ministering to a congregation.

[41] It cannot be denied that ministering to a congregation involves in many instances teaching. It is an important part of the role of a minister. Among the many appellations given to Jesus Christ is "The Great Teacher". Nonetheless, although ministering may include teaching, the converse is not true.

[42] It is important to put Reverend Bissell's activities in their proper perspective. He taught religion to persons intending to become ministers. No doubt he also counselled them, and probably prayed with them. He also preached from time to time to local congregations. Counsel for the appellants referred me to a number of cases in which the courts have recognized that ministering can include specialized ministries. I agree with this as a broad proposition, as far as it goes, but it does not in my view go far enough to assist Reverend Bissell. I do not think that teaching classes of students in a Bible college can be said to be ministering to a congregation in the sense in which I have used the expression in other cases, such as Miller and McGorman or Baker.

[43] As noted above, teaching may well – and frequently does – form a component of ministering, but teaching in itself is not ministering in any ordinarily accepted connotation of that term of which I am aware. Nor do I think that a group of students can be said to be a congregation in the sense of an assemblage or gathering of persons to whom a minister provides spiritual counselling, advice, illumination and inspiration. While for the reasons given in Kraft et al. I do not subscribe to the view of the word congregation expressed in McRae, I do not think that it encompasses a group of college students' assembled for academic instruction.

[44] I must therefore dismiss Reverend Bissell's appeal.

[45] John McMillan was the President of WCC. His case is similar to that of Victor Fitch in that both were engaged in full time administrative service as presidents of Bible Colleges. There are, however, differences and the problem is to determine whether those differences compel a different result from that reached in Victor Fitch's case.

[46] The first difference is that it is conceded that Victor Fitch is a member of the clergy. No such concession is made in the case of Mr. McMillan. He is recognized as a minister and a church leader in the Church of Christ.

[47] The Church of Christ is a denomination with about 125 churches and approximately 6,000 to 7,000 members across Canada and several millions worldwide. In contrast to the Seventh-day Adventist Church, which has a highly structured hierarchy, the Church of Christ is based upon the model of the early Church and is non-hierarchical. Based solely upon the form described in the New Testament it is congregational in nature and has no form of governance beyond the elders. The congregations in Canada have no formal linkage although their informal relationship is close and they are held together by their denominational publication, the Gospel Herald and through its Bible colleges, WCC and Great Lakes Bible College.

[48] The Church of Christ does not have any formal ceremony of elevating its ministers which it calls "ordination". They are, however, accorded a spiritual status by their congregation because of their function.

[49] There can be no question that Mr. McMillan is recognized as a member of the clergy or as a minister within the Church of Christ. He is so recognized in all churches of this denomination in Canada. He started his clerical career after graduating from Oklahoma Bible College in 1968, when he was called as a minister to Weyburn Church of Christ. He has preached and ministered to Church of Christ churches for thirty years. He officiates at marriages, baptisms and funerals.

[50] The point is obvious and I do not understand on what basis the respondent can justify denying him status as either a member of the clergy or a minister. He is recognized, according to the evidence of other witnesses, as the pre-eminent leader of the Churches of Christ in Western Canada.

[51] The respondent places some emphasis on the fact that the Church of Christ's recognition of him is not based upon a formal ceremony called "ordination". I shall not repeat what I said about the use of the word ordination in the Kraft and Baker cases. I shall, however, adopt what was said in the Saskatchewan Court of King's Bench in Re Bien and Cooke, [1944] 2 D.L.R. 187 where the issue was whether the Church of Christ was a denomination and whether the applicant was a minister of a religious denomination. MacLean J. said at pages 188-189:

Although the whole organization is very indefinite considered from a secular point of view and they appear to be without any prescribed procedure in the matter of ordaining the minister, yet various denominations use various forms of ordination and if the procedure is satisfactory to the congregation, as appears to be in this instance, that should be considered sufficient form of ordination.

[52] I shall not refer to any further authorities. They have been referred to in other cases. Even the Department of National Revenue in its T401 report on this appellant acknowledged that Mr. McMillan was a minister.

[53] I turn now to Mr. McMillan's function. He is engaged exclusively in full time administrative service as President of WCC but is it by appointment of the Church of Christ? I had no difficulty in finding that Victor Fitch was appointed to his position by the SDA, based upon the integration of CUC within the structured hierarchical organization of the SDA. Such a finding is more difficult in the case of the WCC, in light of the much looser structure of the Churches of Christ.

[54] I have concluded that the evidence supports a similar finding in the case of Mr. McMillan. WCC was incorporated in 1953 by representative members of the Church of Christ in Western Canada. The corporate membership of WCC is the Western Christian College Society, membership in which is open only to members in good standing of the Church of Christ. The board of directors of WCC are representative members of the Church of Christ, drawn from congregations of the Church across Canada. Of the 13 members of the board, all of which must be members in good standing of the Church of Christ, seven are elected by society members. Three are appointed by the Board of Directors, and three are ex officio - the President of the College, the President of the Alumni Association and the President of the Women's Service Club. Although the governance of the college is legally vested in the Board of Directors, as a practical matter, the Board is accountable to the Western Christian College Society.

[55] In the final analysis, the denomination, Churches of Christ, notwithstanding its much looser, non-hierarchical structure, controls WCC as effectively as the SDA controls the CUC.

[56] It follows, therefore, that John McMillan's selection, recruitment and employment as President of WCC was an appointment by the denomination in accordance with the manner in which the Church of Christ makes its denominational decisions.

[57] One final observation should be made. The reassessment was based upon the premise that although John McMillan was accepted as a minister, "Bible colleges do not qualify". It may well be that the staff of Bible colleges are not by that fact alone members of a religious order, unless it can be established that independently of their position as staff members they belong to a religious order, but this misses the point. Mr. McMillan's claim to the deduction under paragraph 8(1)(c) is not based upon his being a member of a religious order. It is based upon his being a minister engaged exclusively in full time administrative service by appointment of his denomination. He has established his case.

[58] The appeals of Victor Fitch and John McMillan are therefore allowed. The appeal of Ronald D. Bissell is dismissed.

[59] As in the other cases relating to paragraph 8(1)(c) I shall refrain from disposing of the matter of costs until counsel have had an opportunity of making representations.

Signed at Ottawa, Canada, this 26th day of February 1999.

"D.G.H. Bowman"

J.T.C.C.

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