This class action lawsuits commenced against Redeemer Foundation and Redeemer University College was certified as a class proceeding by the Ontario Superior Court of Justice in Toronto following a hearing on December 19, 2012.
The Ontario Superior Court of Justice also approved settlement of the class action and declared the settlement to be fair, reasonable and in the best interests of Class Members.
Notice will now be distributed containing the terms of settlement and the rights of Class Members to Agreement and the rights of Class Members to receive settlement benefits. A copy of the Notice of Certification and Settlement Approval is attached.
Class Members who do not opt-out by delivering the Opt-out Notice described above are entitled to receive a refund of 10% of the total amount donated to the FLP in 2001 and 2002, (the “Settlement Benefit”), but may choose to direct that the Settlement Benefit be paid to Redeemer University College as a charitable donation.
Specifically, Class Members who do not opt-out will receive a Settlement Benefit Notice that will explain their right to elect either of the following options: (a) to receive payment of the Settlement Benefit; or (b) to direct that the Settlement Benefit be paid to Redeemer University College as a charitable donation, in which case, the Class Member will receive a charitable donation tax receipt.
Class Members who wish to receive the Settlement Benefit must provide the defendants with copies of their Notices of Re-assessment from CRA pertaining to the FLP for taxation years 2001 and/or 2002.
If you wish to remain a Class Member and participate in the settlement, you do not have to do anything at this time.
If you wish to exclude yourself from the class proceeding (“opt-out”), you must sign the attached Opt-out Notice and return it to Redeemer University College within 90 days. Please use the attached, postage pre-paid, envelope to return the Opt-out Notice.
If you do not sign and return the Opt-out Notice, you will be included in the Class by default and will be bound by the terms of settlement. If you opt-out, you will not receive anything under the settlement. In other words, any money that you donated to the FLP in 2001 and 2002 will remain with Redeemer Foundation and Redeemer University College.
Overview of Claim
A Statement of Claim was issued in the Ontario Superior Court of Justice in Toronto on March 21, 2011, proposing a class action claim seeking damages relating to a “Forgivable Loan Program” (“FLP”) established by the Redeemer Foundation and Redeemer University College.
The claim seeks damages of $5 million, plus punitive damages.
The action has been commenced under the Class Proceedings Act, 1992, S.O. 1992, c.6, as amended.
The Statement of Claim alleges that Redeemer Foundation established the FLP in approximately 1989, to generate official donation receipts for payment of tuition and related education costs for attending Redeemer University College. The claim alleges that such payment would not otherwise result in a donation tax receipt, but only an eligible education tuition and textbook receipt.
The plaintiff alleges that students attending Redeemer University College were encouraged to solicit “donations” to Redeemer Foundation, which then in turn loaned those “donated” monies to the student who solicited the funds, to pay for part or all of their tuition and related education costs for an academic year. Provided certain nominal conditions were met, the loan was forgiven at the end of the academic year.
Canada Revenue Agency (“CRA”) disallowed the charitable donation tax credits under the FLP, however, CRA eventually extended a settlement offer to allow 10% of amounts contributed to Redeemer Foundation to be recognized and considered valid gifts.
Participants in the FLP paid an additional amount of 10% above tuition and related education costs of an academic year, such additional amount having said to be required to cover administrative costs.
Participants in the FLP became liable to CRA for interest charges and additional taxes on income tax filing reassessments.
In the Statement of Claim, the plaintiff says that he was not advised of any of the following:
- that CRA had previously conducted audits of Redeemer Foundation and Redeemer University College in respect of the FLP in 1997 and 2001;
- that CRA had cautioned the defendants that it would consider disallowing deductions to parents on their individual tax returns; and,
- that CRA was investigating the link between donors and students and was considering disallowance of charitable donation tax credits claimed by parents who participated in the FLP in support of their student children.
The Statement of Claim contains allegations which have yet to be proven in Court.
We are compiling a database of individuals who participated in the Redeemer Foundation Forgivable Loan Program for the taxation years 2001 and 2002.
If you have not already contacted us, we would appreciate hearing from you as it may assist us in pursuing this claim.
You may contact us by e-mail, telephone, mail, courier, fax, etc.
If you would like more information regarding this claim or wish to be added to our database of claimants, you may e-mail us at: firstname.lastname@example.org
You can contact us directly by telephone at Scarfone Hawkins LLP
You can contact us by fax at 905-523-5878.
Due to the volume of inquiries, please allow one week for a response.