Lawyer Yavar Hameed

Lawyer Yavar Hameed represents International Relief Fund for the Afflicted and Needy, an aid group accused by Ottawa of ties to Hamas. Canada added IRFAN-Canada to a terrorist list last week. (Adrian Wyld/Canadian Press)

A panel of judges has handed the federal government a loss in its ongoing dispute with a charitable group that it accuses of being involved in terrorism.

Lawyers for the International Relief Fund for the Afflicted and Needy, or IRFAN-Canada, were before the Federal Court of Appeal in Ottawa Tuesday.

They were set to argue that the group’s charitable status, which was revoked in 2011, should be reinstated. Instead, they asked that their appeal be set aside until the group could resolve a more pressing matter.

Last week, Public Safety Canada declared the group a terrorist entity under the Criminal Code. The government alleges that, between 2005 and 2009, the group funnelled $14.6 million to Hamas, the militant group that controls the Gaza Strip.

Yavar Hameed, representing IRFAN-Canada before the Court of Appeal, told the three-judge panel the group could not reasonably argue its charitable status be reinstated until the terrorist label was lifted.

"This is probably one of the greatest stigmas that any organization can have against it," Hameed told court.

Rosemary Fincham, the lawyer representing the minister of national revenue, took the opposite position; arguing the appeal should go ahead. The judges repeatedly and vigorously questioned that reasoning, asking how the court could possibly ignore the fact IRFAN-Canada had been branded a terrorist group by the government.

'Extraordinary position'

In one exasperated exchange, one judge asked Fincham point-blank whether the position of the Crown was that IRFAN-Canada could be both a registered charity and a terrorist organization at the same time.

"It is our position, your honour," Fincham replied.

Her answer was met with several seconds of silence from the bench.

"It is an extraordinary position," Justice Marc Noel finally responded.

"I say that with respect. It is an extraordinary position."

After a brief adjournment, the judges returned with their decision; ruling in favour of IRFAN-Canada. The group's attempt to have its charitable status reinstated will be put off while it tries to get itself removed from the federal government’s terrorism list.  

IRFAN-Canada’s lawyer welcomed the ruling.

"I think it underscores the absurdity of the entire process," said Hameed.

Hameed said his clients will now contact the office of Public Safety Minister Steven Blaney to ask why they were placed on the terrorist list and request that he reconsider. Failing that, he says IRFAN-Canada would go to Federal Court to challenge the government’s decision.

RCMP investigation

As all this unfolds, IRFAN-Canada is still awaiting the outcome of an RCMP investigation into its operations. Last week, as the government was placing the group on its terrorism list, the RCMP announced they had carried out raids on IRFAN-Canada’s head office in Mississauga and at a residence in Montreal.

The Mounties have released few details about what they were looking for, so far saying only that they seized "an extensive amount of documentary evidence along with stored media, money and other records."

The Canada Revenue Agency has been investigating IRFAN-Canada for years. After an audit of its books, the CRA wrote to the group in 2004 warning that "at least some of the foreign agencies with which IRFAN works are alleged to be controlled by Hamas."

Before suspending the group’s charitable status in 2011, the CRA wrote that "IRFAN-Canada has partnered with organizations that, variously: are run by members of the Hamas government; openly support and provide funding to Hamas; have been raided or listed as unlawful associations in Israel for affiliation with Hamas; or have had their bank accounts seized for connections to Hamas."