COURT OF APPEAL FOR ONTARIO

DATE: 20240524 DOCKET: COA-22-CV-0287

Pepall, George and Dawe JJ.A.

BETWEEN

Fung Loy Kok Institute of Taoism Applicant (Appellant)

and

Municipal Property Assessment Corporation Respondent (Respondent)

AND BETWEEN

Fung Loy Kok Institute of Taoism* and Taoist Tai Chi Society of Canada* Applicants (Appellants*)

and

Municipal Property Assessment Corporation, The Corporation of the City of Brampton, The Corporation of the City of Hamilton, The Corporation of the City of Kingston, City of Ottawa, The Corporation of the Town of Markham, The Corporation of the Town of Newmarket, The Corporation of the Town of Richmond Hill, The Corporation of the City of Sault Ste. Marie, The Corporation of St. Catharines, The Corporation of the City of Windsor, The Corporation of the City of Stratford, City of Toronto, City of Woodstock, The Corporation of the City of Peterborough, and The Corporation of Norfolk County Respondents (Respondents)

Counsel: David G. Fleet, Lauren Lackie and Karina Wong, for the appellants Karey Lunau, for the respondent Municipal Property Assessment Corporation

Heard: February 28, 2024

On appeal from the order of the Divisional Court (Justices F. Bruce Fitzpatrick, Stephen T. Bale, and Freya Kristjanson), dated January 6, 2022, with reasons reported at 2022 ONSC 57, affirming the judgment of Justice Gisele M. Miller of the Superior Court of Justice, dated August 30, 2019, with reasons reported at 2019 ONSC 5035.

Dawe J.A.:

[1] The appellant Fung Loy Kok Institute of Taoism (“FLK”) is a religious organization that owns a number of properties across Ontario. Under the Assessment Act, R.S.O. 1990, c. A.31, s. 3(1), para. 3 (i), land owned by a “religious organization” that is “a place of worship and the land used in connection with it” is exempt from property tax. However, the Act does not define what is meant by “place of worship”.

[2] The central dispute in this appeal is whether the activities that FLK conducts on some of its properties – and, in particular, the tai chi classes that it holds at its various “satellite sites” – renders each of these properties “a place of worship” for the purposes of the Assessment Act.

[3] The application judge found that the disputed properties were not places of worship, and the Divisional Court upheld her conclusion. FLK appeals to this court with leave. Its argument on appeal focuses mainly on the taxable status of the satellite sites. However, there is also a dispute over the status of two areas of FLK’s main property in Mono, Ontario, known as the International Centre.

[4] The second appellant, the Taoist Tai Chi Society of Canada (“the TTCSC”), is a related entity that previously owned some of FLK’s properties. The main respondent, the Municipal Property Assessment Corporation (“MPAC”), is a non‑profit corporation responsible for assessing and classifying all properties in Ontario in compliance with the Assessment Act. The other named respondents are the various municipalities where FLK’s properties are located. They have not participated in the litigation.

[5] The issues that are in dispute between FLK and MPAC have been significantly narrowed. MPAC accepts that “[i]t is a sincere belief of the FLK religion that the practice of FLK Taoist Tai Chi at all of its consecrated properties is worship done in places of worship”, and also accepts that the satellite sites are “consecrated properties”. For its part, FLK does not dispute that tai chi can also be performed in a secular manner that does not constitute “worship”.

[6] With respect to the satellite sites, the Divisional Court concluded that the application judge “did not commit an error of law in assessing what occurred at the Satellite Sites and properly denied these properties an exemption under the Act”. I agree. The application judge made and relied on factual findings about the nature of the activities that are conducted at the satellite sites that were available to her on the evidentiary record, and that are entitled to appellate deference.

[7] The secondary issue on appeal is the taxable status of the two disputed areas of FLK’s International Centre. [1] The application judge found that neither were tax-exempt, and the Divisional Court upheld her conclusions. I agree that the application judge did not commit any reversible errors in making this determination.

[8] I would accordingly dismiss the appeal.

A. Procedural history

[9] In December 2012, FLK commenced an application in the Superior Court of Justice in Orangeville seeking an order that its main site in Mono, Ontario, the International Centre, was exempt from property taxation. A year later, in December 2013, FLK and the TTCSC commenced a similar application in Toronto in relation to a list of properties located in other parts of Ontario. When this second application was commenced in 2013, some of these latter properties were owned by the TTCSC. Ownership of these properties has since been transferred to FLK. The two applications were consolidated in 2018 and heard together in April 2019.

B. Factual background

(1) Evidence regarding Taoism and “Taoist Tai Chi”

[10] The appellants presented expert evidence in the form of an affidavit and report by Dr. James Miller, a Professor of Chinese Religions at Queen’s University.

[11] Dr. Miller defines Taoism as “a continuum of beliefs and practices that straddle the borders of what Western society would define as philosophy, culture and religion.” A central component of Taoist beliefs is a belief in “Qi” (pronounced “chi”), which is “an invisible vital force that flows through meridians, or ‘energy pathways’ in the body and the land.”

[12] Dr. Miller explains further that the martial art of tai chi has longstanding associations with Taoism, stating in his report:

[T]ransformed in its modern version into a ritualized moving meditation practice, [tai chi] draws on a long tradition of body movement practices that date back over two thousand years. In China today, Tai Chi is today a common practice among Taoist monks and is regarded as a physical embodiment of Taoist principles of balance, longevity, discipline and transformation.

[13] The appellants FLK and the TTCSC were both founded by the late Moy Lin- shin, who developed his own form of tai chi, styled “Taoist Tai Chi”. Dr. Miller explains in his report:

Taoist Tai Chi was developed by Moy Lin-shin (1931-1998), and promoted by the Fung Loy Kok Institute of Taoism (FLK), which he founded in Hong Kong in 1968, before bringing it to Toronto in 1970. Taoist Tai Chi is a form of moving meditation, a spiritual practice undertaken by moving the body through a sequence of prescribed forms. Although Tai Chi may be practiced in a variety of ways and for a variety of purposes, the distinctive feature of Taoist Tai Chi is its association with Taoist religion.

Dr. Miller observes that “Taoist Tai Chi cannot easily be distinguished from other, secular, forms of Tai Chi in its outward appearance.” He also notes that Taoism “is not constituted in terms of exclusive membership”, and that “FLK practitioners are not prevented from participating in other religious activities or belonging to other religious associations”.

[14] Dr. Miller’s evidence is that “Taoist Tai Chi”, as it is practiced and promoted by FLK, is based on traditional Taoist religious precepts and practices. He explains in his report:

[T]he practice of Taoist Tai Chi draws upon a deep‑seated Taoist belief in this invisible but impersonal force that pervades the world. In Taoist thought, this force is the manifestation of Tao, or “Way,” the ultimate source of life in the universe.

A chief characteristic of Taoist religion is that these beliefs are not generally codified in texts, but are taught through body cultivation practices. While Jews or Muslims may spend hours studying the Torah or the Koran to understand their doctrines and beliefs, Taoists generally teach through physical practices. This is, indeed, a key feature of the religion: namely, that words cannot capture the essence of the Tao; rather the teachings of the Tao must be experienced through bodily activities. These can include ritual performances at altars, meditation practices conducted in nature, and indeed Tai Chi.

(2) FLK’s properties

[15] FLK owns a number of properties across Ontario, which can be divided into three groups.

[16] The first group consists of the International Centre in Mono, which is FLK’s largest property. MPAC now acknowledges that most of this property is tax-exempt. The status of only two parts are still in dispute: a sales area, and an area known as the “Contemplative Garden”. The application judge found both of these parts of the International Centre to be taxable, and both are in issue on this appeal.

[17] The second group of FLK properties consists of two temple sites, in Markham and Toronto. MPAC now agrees that both of these properties are tax‑exempt. Their status is accordingly not in issue in this appeal.

[18] The third group of properties consists of 19 “satellite sites” in various locations across Ontario. FLK uses these sites to conduct a variety of activities, including tai chi classes. While MPAC acknowledges that some of the activities FLK conducts at the satellite sites – notably, Taoist chanting – are religious in nature, the evidence showed that the satellite sites are predominantly used to hold classes, including tai chi classes. The tax status of most of these properties is the central issue in this appeal. [2]

[19] The application judge found that the satellite sites were taxable, on the basis that they were not primarily used for worship. Central to her conclusion was her finding that FLK’s tai chi classes did not qualify as “worship”. The Divisional Court held that it “was open for her to make that determination on the evidence before her”.

(1) The International Centre

[20] FLK’s International Centre in Mono has 10 buildings located on a 100-acre plot of rural land. When the application was argued, MPAC agreed that most of the buildings were used for worship and were accordingly tax-exempt. However, MPAC took the position that four areas of the complex were not tax‑exempt:

i) “Meditation Suites” used as bedrooms by visitors to the Centre. In the proceedings before the application judge, FLK agreed that this area was taxable;

ii) A retail store in the reception building that sells FLK merchandise (the “sales area”);

iii) The “Contemplative Garden”, which is used primarily for private prayer and contemplation;

iv) A vacant field that is used as a campground during large FLK events.

[21] The application judge determined that the three disputed areas were not tax‑exempt, on the basis that they were not used primarily for “worship”. FLK challenged all three of these findings in its first-level appeal to Divisional Court, but is no longer pursuing its challenge to the application judge’s finding that the field/campground is taxable.

(2) The satellite sites

[22] In an affidavit adduced by MPAC, an MPAC Senior Case Manager named Jonathan Langille explained that the 19 satellite sites “share similar characteristics”:

They all have at least one large room where there is open space with a full length mirror on one of the walls where the members practice Tai Chi, similar to what one would expect at an exercise or dance studio. Each Satellite Site also has a kitchen, bathrooms, and some administrative space. … Each Satellite Site also has some religious figurines, altars, and some other religious scrolls and posters on the wall.

[23] FLK filed affidavits from the manager of its Greater Toronto branches, Christopher Farano, in which he listed some of the Taoist items that can be found in the satellite sites. Mr. Farano explained in his first affidavit:

These sites are used by participants for the practice of the FLK Taoist arts, including FLK Taoist chanting, sitting meditation and moving meditation (which includes FLK Taoist Tai Chi).

[24] In a reply affidavit, Mr. Farano explained further that FLK has conducted “purification ceremonies” at the satellite sites. The application judge noted in her reasons that “[t]he parties agree that the Purification Ceremony can be considered akin to the consecration of a church or chapel in the Christian religion”.

[25] Mr. Farano stated further in his first affidavit that:

The FLK Taoist Tai Chi practices is integral to Taoist spirituality as practiced by FLK. For many individuals, the FLK Taoist Tai Chi practices is also an initial entry point into FLK's religious activities.

FLK Taoism encourages a person's gradual development, moving from subjective wellbeing to a deeper religious and spiritual understanding. FLK Taoist Tai Chi practices is one element of Taoist spirituality.

Participants in FLK Taoist Tai Chi practice (whether at the Centre or any of the Satellite Sites) are engaging, at least to a degree, with Chinese Taoist philosophy, imagery and motifs, and practising self-cultivation rooted in Taoist history and tradition, within a physical space that also hosts religious activities for people who expressly identify as participants of FLK.

FLK Taoist Tai Chi practice is a religious practice. Tai Chi as practiced by other than FLK participants may or may not be a religious practice.

[26] Calendars showing the monthly events that were held at a number of the satellite sites indicate that tai chi classes were the main activity conducted at these locations, although the sites were also used for other things, including Taoist chanting.

[27] In his affidavit, Mr. Langille describes how he attended two beginners tai chi classes, one at a non-religious martial arts studio and the other at one of FLK’s satellite sites in Toronto. He explained:

At both classes, I was taught the same type of movements.

At the FLK Class, there was no discussion of any religious or spiritual aspect to the movements. Despite the religious iconography present, there was no interaction with, or discussion of, the religious symbolism on the walls between the participants and the instructors at the FLK Class. My fellow participants in the FLK Classes were beginners like me. It is my understanding that the more practiced participants attend an ‘intermediate class’.

C. Analysis

(1) The governing legislation

[28] Section 3(1) of the Assessment Act provides that:

All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:

[29] A series of paragraphs then follow that set out a list of exempted properties. The specific provision at issue in this case is para. 3(i), which exempts from taxation:

3. Land that is owned by a church or religious organization or leased to it by another church or religious organization and that is,

i. a place of worship and the land used in connection with it,

[30] The Act does not define either the term “worship” or the related phrase “place of worship”.

(2) Standard of review

[31] The dispute over whether FLK’s disputed properties are “places of worship” for the purposes of the Assessment Act is a question of mixed fact and law. The threshold interpretive issue of the meaning of the phrase “place of worship” in s. 3(1), para. 3(i) of the Act is an extricable question of law, reviewable on a correctness standard. However, the application judge’s conclusions with respect to the activities that take place on the disputed FLK properties involve findings of fact, which are entitled to appellate deference and reviewable only on the basis of palpable and overriding error: see e.g., Belwood Lake Cottagers Association Inc. v. Ontario (Environment and Climate Change), 2019 ONCA 70, 431 D.L.R. (4th) 318, at para. 37; Sarnia (City) v. River City Vineyard Christian Fellowship of Sarnia, 2015 ONCA 494, 336 O.A.C. 373, at para. 22.

(3) The meaning of “place of worship”

[32] In Re Singh and City of Sudbury (1975), 8 O.R. (2d) 377, at p. 380, Loukidelis D.C.J. interpreted the phrase “place of worship” in s. 3(1), para. 3 (i) of the Assessment Act by adopting the Shorter Oxford Dictionary definition of “worship” as meaning:

Reverence or veneration paid to a being or power regarded as supernatural or divine; the action or practice of displaying this by appropriate acts, rites or ceremonies.

[33] FLK takes no issue with this definition, although it prefers the similar Merriam-Webster dictionary definition of worship as “reverence offered a divine being or supernatural power”; “ an act of expressing such reverence”; or “a form of religious practice with its creed and ritual.” I see no substantial difference between these two dictionary definitions.

(4) The “primary purpose” test

[34] The parties agree that once “worship” has been defined, the question of whether a particular location qualifies as a “place of worship” requires a factual determination of whether it is “primarily used” for a purpose that falls within the definition of “worship”. As MacPherson J. (as he then was) explained for the Divisional Court in Buenavista on the Rideau v. Regional Assessment Commissioner, Region No. 2 (1996), 28 O.R. (3d) 272, 134 D.L.R. (4th) 278 (S.C.), at p. 276-77:

[T]he test for determining whether an exemption should be granted is whether the primary purpose of the institution comes within the words defining the exemption in the Assessment Act. This is true with respect to s. 3 of the Assessment Act generally … [Citations omitted.]

[35] As Doherty J.A. stated in Diocese of Toronto Camps (Anglican Church of Canada) v. Municipal Property Assessment Corp. (2004), 246 D.L.R. (4th) 170 (Ont. C.A.), at para. 12, the primary purpose test requires an objective determination of the principal purpose for which the land is used and occupied.

[36] It is undisputed that tai chi classes are the main activity that occurs at FLK’s satellite sites, although these sites are also used for other purposes, including Taoist chanting ceremonies, which MPAC acknowledges are a form of worship. Accordingly, the question of whether the satellite sites are “places of worship” for taxation purposes hinges mainly on whether the tai chi classes that FLK holds at these locations are “worship” within the meaning of the Assessment Act.

[37] Similarly, the dispute over the taxation status of one of the two contested areas of the International Centre, the Contemplative Garden, turns on whether the primary activities conducted in the garden qualify as “worship”. With respect to the second contested part of the property, the sales area, the issue is whether FLK’s sales activities are sufficiently closely linked to the “worship” that occurs elsewhere on the property to make the sales area “land used in connection” with worship for the purposes of para. 3(i) of s. 3(1) of the Act.

(5) The judgments below

(1) The application judge’s decision

[38] The application judge concluded that FLK’s satellite sites were not “places of worship” in large part because she found that the tai chi classes held at these sites did not constitute “worship” within the meaning of the Assessment Act. She stated:

While I accept, on all of the evidence, that the practice of Tai Chi is integral to FLK religion, the opposite is not necessarily so. The evidence does not support FLK's position that the satellite sites are used primarily for worship. The evidence supports MPAC’s position that the persons engaged in the Tai Chi classes at these locations are not worshiping through Tai Chi, but that these classes and the facilities in which they are held are used in an evangelical way.

[39] The application judge also concluded that the two disputed areas of FLK’s International Centre were not “places of worship”. Although she accepted that the Contemplative Garden were “a place where religious statues are placed and are available for private prayer”, she found that it was “not primarily used for or in connection with worship” because the garden was not used for public group activities that could constitute worship. She drew an analogy with the facts of Holy Theotokos Convent v. Whitchurch-Stouffville (Town), 2007 CarswellOnt 934, [2007] O.J. No. 542 (S.C.), where the court held that a convent’s grounds were not a “place of worship” even though members of its religious order sometimes prayed there. (See also Les Sœurs de La Visitation D'Ottawa v. The City of Ottawa, [1952] O.R. 61, aff’d , [1952] 3 D.L.R. 640 (C.A.)). With respect to the International Centre’s sales area, the application judge stated:

I find that the Sales Area is not primarily used for or in connection with worship. Apart from the material used for chanting, the evidence indicates that the other items sold in this space, described by FLK as written, visual and audio FLK materials; FLK logo bearing t-shirts and jackets; and honey and maple syrup produced at the Centre are not used for or in connection with worship.

(2) The Divisional Court’s decision on appeal

[40] The Divisional Court, per Fitzpatrick J., upheld the application judge’s conclusions.

[41] With respect to the satellite sites, the Divisional Court upheld the application judge’s finding that the satellite sites were not primarily used for worship:

The application judge found that the act of worship required for the exemption did not occur on the Satellite Sites. The aspects of practice found on the exempt sites was not observed at the Satellite Sites. This is a finding that is entitled to deference. The application judge agreed with the MPAC position that people were not worshipping while doing Tai-Chi at the Satellite Sites. It was open for her to make that determination on the evidence before her. She found the acts to be in the nature of evangelization. Evangelization is a religious practice. However, it is not one that the Legislature has deemed to attract an exemption.

[42] With respect to the International Centre, the Divisional Court agreed with the application judge’s findings that none of the disputed areas were “places of worship”. As I have noted, FLK is no longer challenging the finding with respect to the field/campground.

[43] With respect to the “sales area”, Fitzpatrick J. held:

Objectively, the commercial activity of the “sales area” … most readily belies a factual finding that worship occurs at that site. The primary purpose of the area was selling things. That is not worship.

With respect to the Contemplative Garden, he found that the application judge had not erred by adopting the distinction between “acts of private prayer and meditation from those of worship” in Holy Theotokos Convent and Les Soeurs de la Visitation D’Ottawa, or by “follow[ing] that logic to find the Contemplative Gardens were not exempt”.

(6) Did the application judge commit reversible errors?

[44] FLK makes a number of arguments in support of its position that the courts below erred by finding that none of the disputed properties were “places of worship”. Some of FLK’s arguments are directed at the application judge’s reasons as a whole, while others focus specifically on her conclusion that the tai chi classes FLK holds at its satellite sites are not “worship”. All of the application judge’s conclusions were upheld by the Divisional Court. Since FLK focused most of its arguments on the taxable status of the satellite sites, I will begin with this aspect of the decisions below, before addressing the separate issues of the status of the International Centre’s sales area and Contemplative Garden.

(1) Did the application judge adopt an unduly narrow definition of “worship”?

[45] FLK’s first argument is that the application judge erred by adopting an unduly narrow definition of “worship”, which FLK contends led to her erroneously concluding that the tai chi classes held at FLK’s satellite sites are not “worship”.

[46] FLK notes that the application judge accepted that tai chi is “an activity with great religious importance to FLK”, that is “integral to FLK religion”. FLK argues that this should have led the application judge to find that FLK’s tai chi classes are “worship”, since according to FLK, “[w]orship includes the religious practices of a recognized religion”.

[47] FLK also places great emphasis on MPAC’s concession in this court that:

It is a sincere belief of the FLK religion that the practice of FLK Taoist Tai Chi at all of its consecrated properties is worship done in places of worship.

Since MPAC does not dispute that the satellite sites are “consecrated properties”, or that these properties are primarily used for FLK’s tai chi classes, FLK argues that MPAC’s concession is tantamount to a concession that the satellite sites are “places of worship”.

[48] As I understand FLK’s argument, it rests on two underlying propositions. First, relying on the Supreme Court of Canada’s decision in Syndicat Northcrest v. Amselem, 2004 SCC 47, [2004] 2 S.C.R. 551, FLK argues that the religious nature of a particular practice must be determined subjectively, and that the only question a court can properly ask is whether the claimant’s belief is honestly and sincerely held. FLK would extend this logic to the related question of whether a particular religious practice constitutes “worship”.

[49] Second, FLK contends that the question of whether FLK’s tai chi classes are “worship” should be determined by considering how these classes are subjectively perceived by FLK’s directing minds, rather than by considering the subjective perceptions and beliefs of the class participants.

[50] On the first point, I do not agree that Amselem goes quite as far as FLK would have it.

[51] In that case, the Supreme Court of Canada held that courts “should avoid judicially interpreting and thus determining, either explicitly or implicitly, the content of a subjective understanding of religious requirement”. I agree with FLK that in light of Amselem it is not the proper role of the courts to second-guess the beliefs of FLK’s directing minds, who sincerely consider the practice of Taoist Tai Chi to be a religious or spiritual activity.

[52] However, I do not think that this automatically requires courts to unquestioningly accept that the tai chi classes FLK conducts at its satellite sites are “worship”. The meaning of the term “worship” in the Assessment Act is a legal question, not a matter of religious doctrine. Moreover, not every activity that is motivated by a religious purpose necessarily qualifies as “worship” for property tax assessment purposes: see e.g., Les Sœurs de La Visitation D'Ottawa v. The City of Ottawa.

[53] That said, MPAC accepts that the people who subscribe to FLK’s religious views sincerely believe that “the practice of FLK Taoist Tai Chi at all of [FLK’s] consecrated properties is worship done in places of worship”. I am prepared to accept that persons who honestly and sincerely believe that their own performance of tai chi is a religious or spiritual act are engaging in an act of “worship” for the purposes of the Assessment Act when they perform tai chi at one of FLK’s properties.

[54] However, I do not accept FLK’s second proposition: namely, that the question of whether FLK’s tai chi classes are “worship” must be determined entirely by considering the views of FLK’s directing minds, and that the purposes of the class participants do not matter.

[55] FLK’s position on this issue is made succinctly in an FLK memorandum that Mr. Farano appended to his affidavit, titled “The Religious Practice of Tai Chi as Taught by Fung Loy Kok”, which states:

Tai chi as taught by FLK is a basic religious practice. Tai chi as practised by other than FLK may be simply an exercise.

Even if a person is not consciously aware of the religious nature of tai chi, as taught by FLK, it is being taught in a religious environment and context. The performance of tai chi as taught by FLK remains a religious activity. [Emphasis added.]

[56] As I understand its position, FLK is essentially arguing that because it views its tai chi classes as religious in nature, the people who participate in these classes are “worshipping”, even if they are not themselves consciously aware that they are doing so. As FLK summarizes its position in its factum, “what is in the mind of individual members as they practice FLK Taoist Tai Chi is an irrelevant and inappropriate inquiry when considering the exemption under the Act.”

[57] I disagree that the purposes of the class participants are irrelevant. The dictionary definitions I referred to earlier describe worship as an act of reverence or veneration that is being “paid”, “display[ed]”, or “express[ed]” through participation in acts, rites, ceremonies or rituals. As I see it, these definitions all focus the inquiry on the intentions of the participant. How the participant’s actions may be perceived or understood by others may be relevant, but it will not be determinative. It is not inconsistent with Amselem for a court to consider whether a person performing an activity is doing so for a religious purpose.

[58] In its factum, FLK takes issue with the propriety of conducting any inquiry into the subjective motivations of the people who participate in its tai chi classes, stating that:

It is hard to imagine that the courts would undertake an investigation into the motivation or the “view and experience” of attendees at a Christian church or a Jewish temple when determining the issue of a religious tax exemption.”

[59] However, someone watching religious services taking place at a Christian church or a Jewish temple would have little doubt that they were seeing a religious ceremony, because similar ceremonies are not generally conducted anywhere for purely secular reasons. In contrast, it is undisputed that FLK’s tai chi classes look virtually identical to the secular tai chi classes that are conducted elsewhere by non-religious providers. Moreover, as explained by the application judge in her reasons:

The classes held at the Satellite Sites are led by volunteers who have reached a certain level of proficiency in performing the movements. The volunteers are not religious leaders or teachers. They are not required to be Taoists or to have any level of Taoist knowledge. The classes are open to the public on a ‘first class free’ basis, but FLK requires participants to join as paying members in order to continue attending future classes. Membership payments are made monthly or annually.

While each Satellite Site has some religious iconography, these are not part of the Tai Chi instruction. The beginner Tai Chi instruction has no prayer or chanting; it focuses only on the practice, memorization and repetition of the Tai Chi movements.

[60] FLK’s own expert witness, Dr. Miller, explained that the differences between a secular tai chi class and FLK’s Taoist Tai Chi classes would not necessarily be apparent “to the untrained observer”. It was his own scholarly expertise, together with his knowledge of FLK’s history, that enabled him to recognize the religious iconography at FLK’s satellite sites and allowed him to situate FLK’s tai chi classes within Taoist religious traditions. However, a casual attendee at one of FLK’s tai chi classes who lacked Dr. Miller’s expertise might easily overlook the class’s religious aspects. Indeed, Mr. Langille’s evidence was that when he attended an introductory tai chi class at one of FLK’s Toronto satellite sites, he noticed the religious iconography in the room but that the class was otherwise essentially the same as the secular class that he attended at a martial arts studio.

[61] In its factum, FLK criticizes Mr. Langille for not properly educating himself in advance, describing him as “willingly uninformed”. However, it cannot be assumed that other people who attend FLK’s introductory tai chi classes will necessarily be any better informed than Mr. Langille, who attended FLK’s class specifically in order to assess its religious character, not merely to get exercise.

[62] Focusing the analysis on the participants in FLK’s tai chi classes rather than on the purposes and goals of the class organizers accords with the approach the court took in another Assessment Act case, Keewaydin Camps Corporation Canada v. Temagami (Municipality). That case involved a wilderness camp that sought a property tax exemption under para. 5 of s. 3(1) of the Assessment Act, which creates an exemption for property used as an “educational seminary of learning”. This is a statutory term of art that requires the activities conducted on the property to have a predominantly educational purpose. Harvison Young J. (as she then was) held that the camp’s purpose was properly assessed from the perspective of the campers and their parents, rather than that of the camp organizers, explaining at paras. 23-24:

In the cases that have found camps to be primarily educational, the parents and/or children attending these camps would have seen the purpose of the camp as such.

In the present case, it is not clear that all campers and the parents who enroll them in the camp share the same sense of purpose as the applicant.

[63] I appreciate that Keewaydin Camps involved a different statutory exemption under s. 3(1) of the Assessment Act than the one that is at issue here. However, as I have explained, the ordinary meaning of the word “worship” in para. 3(i) of s. 3(1) already suggests that the inquiry should focus on the purposes of the people who are said to be “worshippers”. I see no basis for dismissing the purposes of the people who attend FLK’s tai chi classes as “irrelevant” to the s. 3(1), para. 3 (i) inquiry, as FLK submits.

[64] I also see no inconsistency between the approach the application judge took in this case and the Quebec Superior Court’s 2021 decision in Institut de taoïsme Fung Loy Kok c. Ville de Montréal, 2021 QCCS 3873. Although the court in that case found FLK’s properties in Quebec not to be taxable under the Loi sur la fiscalité municipale, RLRQ, c. F-2.1, s. 204, it reached this conclusion by relying on s. 204, para. 12, which exempts property that is used by a religious institution in the immediate pursuit of its constituent religious objectives (“dans la poursuite immédiate de ses objets constitutifs de nature religieuse”). The application judge in that case noted that FLK was not relying on s. 204, para. 8, which exempts property that is “mainly used for the exercise of public worship” (“qui sert principalement soit à l’exercice du culte public”).

[65] In summary, the application judge did not err by focusing her attention largely on the people who actually attend FLK’s tai chi classes, rather than solely on the intentions of the class organizers. The application judge had to draw circumstantial inferences from the objective evidence on the record. She was ultimately not satisfied that FLK had met its burden of establishing that the principal purpose for which the satellite sites were used was worship, because she was not satisfied that the tai chi classes held at the sites were properly viewed as “worship”.

[66] As noted above, in reaching this conclusion the application judge relied on evidence that the volunteers who taught the classes were “not religious leaders or teachers”, nor were they “required to be Taoists or to have any level of Taoist knowledge”. She found further:

While each Satellite Site has some religious iconography, these are not part of the Tai Chi instruction. The beginner Tai Chi instruction has no prayer or chanting; it focuses only on the practice, memorization and repetition of the Tai Chi movements.

The application judge concluded that “the evidence supports MPAC’s position that the persons engaged in the Tai Chi classes at these locations are not worshiping through Tai Chi”.

[67] FLK places great emphasis on the evidence that it requires all new class attendees to sign a membership form. While the form has changed over the years, all versions include a paragraph that outlines some of the precepts of Taoism, and states that “[t]he foundation of this religious practice is established through the Fung Loy Kok Taoist Tai Chi arts”.

[68] However, on all of the different versions of the form that are included in the evidential record, this paragraph only appears on the second page, amidst a series of other paragraphs that address several other topics, including warning class participants that they are assuming all risks, waiving all claims against FLK, and agreeing not to teach tai chi or use any of FLK’s various registered trademarks. Moreover, since the forms all required participants to sign on the first page, it is questionable how many class attendees would have actually read the dense text on the second page.

[69] In any event, the forms do not require class participants to agree to personally adopt FLK’s view of the religious significance of tai chi. At most, even if new members who signed the forms might be said to “understand that, even as beginners … they will be participating in a religious practice that is important to the religion”, as FLK argues, this does not necessarily make their participation in these classes a form of “worship” in their own minds.

[70] The application judge found that she was not satisfied that the evidence “support[ed] FLK’s position that the satellite sites are used primarily for worship”. The Divisional Court agreed, stating:

The application judge found that the act of worship required for the exemption did not occur on the Satellite Sites. The aspects of practice found on the exempt sites was not observed at the Satellite Sites. This is a finding that is entitled to deference. The application judge agreed with the MPAC position that people were not worshipping while doing Tai-Chi at the Satellite Sites. It was open for her to make that determination on the evidence before her.

[71] I agree with the Divisional Court that the application judge’s conclusion was based on factual findings she was entitled to reach on the record before her, and that her assessment of this evidence is entitled to appellate deference.

[72] FLK objects to the finding that the participants in its tai chi classes are not worshiping on the basis that the only direct evidence that affirmatively suggested that class attendees are not motivated by spiritual goals is a 2016-17 FLK survey of program participants around the world. In this survey, only 12% of respondents cited spiritual reasons for taking up the practice of tai chi, while 68% chose “exercise” and 42% chose “physical health issues”. [3] I agree with FLK that the evidential value of this survey was slight. However, the application judge made no mention of it in her reasons, and I do not agree that she must have implicitly relied on it in order to reach her conclusion.

[73] FLK’s argument that the application judge must have implicitly placed more weight on the survey than it can properly bear fails to consider that it was FLK’s burden to persuade the application judge that the people who attended its tai chi classes were predominantly doing so to engage in “worship”, not MPAC’s burden to prove the opposite. The evidence before the application judge, including from FLK’s own expert witness, was that the religious character of FLK’s tai chi classes would not necessarily have been apparent to the class participants. On the evidence as a whole, the application judge was entitled to be left unsatisfied that the people taking part in FLK’s tai chi classes were predominantly doing so as an act of worship, even though she also accepted that the FLK class organizers considered tai chi to be a religious practice.

[74] FLK also takes issue with the application judge’s further finding that the tai chi classes at FLK’s satellite sites, and the sites themselves, “are used in an evangelical way”. FLK submits that “[e]vangelism as a concept is antithetical to FLK’s religious beliefs”, because FLK “does not advocate that it is a singular or exclusive religious belief system”.

[75] Read in context, I do not agree that the application judge’s use of the term “evangelism” was wrong. There was ample evidence in the record that FLK’s main purposes include encouraging people to take up the practice of tai chi and to adopt Taoist beliefs. FLK’s own expert, Dr. Miller, states in his report that “FLK aims to promote the particular version of Tai Chi that [Master] Moy developed”, and adds:

Taoist Tai Chi is a spiritual practice propagated by a religious organization, Fung Loy Kok, that is dedicated to the spread of Taoist beliefs and practices. [Emphasis added.]

FLK’s own promotional literature, some of which was appended to Mr. Farano’s affidavits, are replete with statements about the health and spiritual benefits of Taoist Tai Chi. For instance, one of FLK’s brochures states:

Practice of the Taoist Tai Chi arts helps calm the mind, cultivate the heart and transforms one into a healthier and more harmonious person.

While FLK’s members may not consider their spiritual worldview to be “singular or exclusive”, they evidently believe that other people will benefit, both physically and spiritually, by adopting FLK’s practices.

[76] Since the primary dictionary definition of “evangelism” is specific to Christianity, the application judge’s use of this word may not have been entirely accurate. However, I am satisfied from her reasons as a whole that she was using this term in a looser sense, and merely meant to convey that FLK was using its tai chi and other classes to promote its religious views and practices, including the practice of tai chi.

[77] Even if it is not literally correct to describe FLK as an “evangelistic” organization, there is no real dispute that it exists to promote the spiritual and other beliefs of its founder, Master Moy. I have no difficulty concluding that when FLK conducts introductory tai chi classes, the organizers hope that some class participants will become motivated to learn about, and participate in, the Taoist religion. In my view, this is all the application judge meant when she described FLK as using its satellite sites “in an evangelical way”. I see no error in her reaching this conclusion on the evidence that was before her.

[78] FLK also argues that the application judge erred in law by citing Holy Theotokos Convent v. Whitchurch-Stouffville (Town) for the proposition that “[t]he exemption for places of worship [in the Assessment Act] is strictly construed”. I agree that previous decisions of the Supreme Court of Canada and this court have rejected an automatic rule “that any tax exemption should be strictly construed”: Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon‑Secours, [1994] 3 S.C.R. 3, at p. 18; Ottawa Salus Corp. v. Municipal Property Assessment Corp. (2004), 69 O.R. (3d) 417, at para. 15. However, the Divisional Court concluded from her reasons as a whole that:

The application judge was using the words “strict construction” as a term of contrast as opposed to a principle of statutory construction. This is because a consideration of an application for an exemption under the Act engages a primary purpose test, which is acknowledged as appropriate by both parties on this appeal. The primary purpose test in assessment cases is a rigorous analysis which is analogous to applying a strict construction principle of interpretation in the sense that the use of the property must fit in to the four corners of activities of “worship” in order for the exemption to apply.

[79] I agree that the application judge’s reasons as a whole reveal that she did not decide the case by applying a rule of “strict construction” to the statutory language. Indeed, she not ultimately being asked to decide between two competing definitions of “worship”, one broader and the other narrower. The application judge also did not decide the tax status of FLK’s satellite sites on the basis of a finding that the practice of tai chi could never be a form of worship. Rather, her conclusion rested largely on her being left unsatisfied that the attendees at FLK’s tai chi classes were predominantly participating in these classes for religious purposes, such that they could be found to be engaging in “worship”. This was a factual determination, not a conclusion based on her adopting a “strict construction” of the statutory definition of “worship”.

[80] Finally, FLK argues that the application judge and the Divisional Court both implicitly adopted an unduly narrow and overly Judeo-Christian understanding of religious worship. FLK places great emphasis on legal developments in the United Kingdom, where, in a 2013 decision, the Supreme Court of the United Kingdom overturned an earlier judgment of the Court of Appeal that had defined “religious worship” to mean “reverence or veneration of God or of a Supreme Being”: see Hodkin & Anor, R. (on the application of) v. Registrar-General of Births, Deaths and Marriages, [2013] UKSC 77, rev’g R. v. Registrar General, Ex. p. Segerdal, [1970] 2 QB 697. FLK argues:

While neither Sedergal nor Hodkin is cited in the Original Decision or the Divisional Court Decision, the inappropriately narrow view of worship expressed in Sedergal pervades the reasoning of both courts.

[81] This is not a fair or accurate criticism of either of the decisions on appeal. Neither the application judge nor the Divisional Court suggested or implied that the practice of tai chi at FLK’s satellite sites could not be “worship” because Taoism is not monotheistic. Rather, the application judge concluded that the tai chi classes held at FLK’s satellite sites did not qualify as “worship” in large part because she found that the evidence “supports MPAC’s position that the person engaged in the Tai Chi classes at these locations are not worshiping through Tai Chi”. The Divisional Court then deferred to her assessment of the evidence and findings of fact.

[82] In summary, I would not interfere with the application judge’s fact-driven conclusion that FLK’s satellite sites are not “places of worship” for the purposes of s. 3(1), para. 3 (i) of the Assessment Act, or with the Divisional Court’s decision to uphold this aspect of her judgment.

(7) The International Centre’s Contemplative Garden and sales area

[83] FLK also challenges the application judge and Divisional Court’s conclusion that the International Centre’s Contemplative Garden and sales area are both taxable.

[84] With respect to the Contemplative Garden, FLK argues that the courts below erred by not finding it to be a “place of worship” in the face of “uncontradicted evidence … [which] demonstrates that the Taoist Contemplative Garden is a space open to the public where religious rituals are routinely practiced by groups of practitioners”.

[85] This submission substantially overstates the force of this evidence. Mr. Farano stated in his affidavit that the Contemplative Garden has a statue of Bodhisattva Guanyin, and that “[g]uests and FLK participants visit the statute to pay respect to Guanyin, make donations and to ask for her blessing”. However, on his evidence, organized public ceremonies to celebrate Guanyin are only held in the Contemplative Garden three times a year. While it may be accurate to describe a ceremony held thrice-yearly as “routine”, this evidence falls well short of establishing that the Contemplative Garden is primarily used for organized worship. To the contrary, Mr. Farano’s affidavit implies that it is not used in this manner on most days of the year.

[86] Like the Divisional Court, I am also not persuaded that the application judge erred by treating the Contemplative Garden as analogous to the convent gardens that were at issue in Holy Theotokos Convent v. Whitchurch-Stouffville (Town), which were found not to be “places of worship” for the purposes of s. 3(1), para. 3 (i) of the Assessment Act, even though they contained religious icons and were used by the nuns for private prayer. Contrary to what FLK suggests, the decision in Holy Theotokos Convent did not turn on a finding that the convent gardens were not open to the public. Rather, the application judge in that case concluded at para. 7 of her reasons that:

Even if members of the public frequent the sites where the icons are located on the convent grounds, this is not in my view a place for formal public worship, anymore than the other portions of the property, whether inside or outside the buildings, where no formal public worship is conducted.

It was open to the application judge to draw a similar conclusion about the Contemplative Garden at the International Centre. This was a factual determination that is entitled to deference.

[87] With respect to the International Centre’s sales area, there is no suggestion that it is directly used for worship. As the Divisional Court observed, “the commercial activity of the ‘sales area’ … most readily belies a factual finding that worship occurs at that site”. FLK’s contention is that the sales area is nevertheless tax-exempt on the basis that it is “land used in connection with” the activities that take place elsewhere on the property, which MPAC agrees are “worship”.

[88] While FLK points out that some of the items sold in the sales area can be used by members and guests during the religious rituals that are conducted in other parts of the Centre, this is not true of many of the other items that are available for purchase (e.g., jars of honey).

[89] FLK argues that “MPAC and the courts” would not support denying a tax exemption to a “gift shop in a cathedral”, and that the Centre’s sales area should be afforded similar treatment. However, FLK has not presented any evidence about how gift shops at other religious facilities have been treated historically. The question of how a gift shop or similar store that is associated with a tax-exempt “place of worship” should be treated for property tax assessment purposes is fact-specific and context-driven. I am not satisfied that the application judge made any reversible errors in her analysis that would permit us to interfere with her determination that the sales area at FLK’s International Centre is “not primarily used for or in connection with worship”.

D. Disposition

[90] For these reasons, I would dismiss the appeal. The parties have agreed that costs should be awarded to the successful party on the appeal in the amount of $5,000, all inclusive. I would accordingly order that costs in that amount be payable to MPAC.

Released: May 24, 2024 “S.E.P.” “J. Dawe J.A.” “I agree. S.E. Pepall J.A.” “I agree. J. George J.A.”

[1] A third area of the International Centre was also disputed in the courts below, but FLK has not appealed this aspect of the Divisional Court’s judgment.

[2] FLK acknowledged in the courts below that parts of three of its satellite sites are not tax exempt. For simplicity, I will use the term “satellite sites” to refer to the portions of the sites whose taxable status remains in dispute.

[3] The survey had allowed respondents to pick more than one reason.