The Charitable Purposes Preservation Act, S.B.C. 2004, c. 59, came into force on March 8, 2007.
This purpose of this British Columbia legislation is to protect assets donated to a charity for a specific purpose from the claims of the charity's creditors. To protect the assets, the charity must adminster the donated assets for the donor's purpose, and keep the assets separate from the charity's other assets.
The impetus for this law arises from the decision of Ontario of Appeal in Christian Brothers of Ireland in Canada, (2000), 184 D.L.R. (4th) 445. The court held that all of the assets of the Christian Brothers of Ireland in Canada were available to satisfy judgments for the victims of sexual assault in a Newfoundland orphanage. This decision had the effect of making the assets of two schools in British Columbia beneficially owned by the Christian Brothers of Ireland in Canada available to those who had successfully sued the Christian Brothers for the assaults.
This case raises interesting policy questions. On the one hand, the decision helps innocent victims of sexual assault get compensated for their injuries. On the other hand, the decision does not respect the intentions of people who donanted to the charity for the specific purpose of assisting schools in Vancouver that had nothing to do with the sexual assaults.
The British Columbia Legislative Assembly has come down on the side of donors who contribute to a charity for a specific purpose.
The Charitable Purposes Preservation Act expressly provides that it "does not affect the settlement by the provisional liquidator of The Christian Brothers of Ireland in Canada with respect to Vancouver College Limited and St. Thomas More Collegiate Ltd."