Date: 20020531
Docket: A-416-01
Neutral citation: 2002 FCA 231
CORAM: STONE J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Appellant
and
JAMES W. BUCHANAN
Respondent
and
COUNCIL OF CANADIANS WITH DISABILITIES,
CANADIAN MENTAL HEALTH ASSOCIATION AND
CANADIAN ASSOCIATION FOR COMMUNITY LIVING
Interveners
Heard at Toronto, Ontario, on May 15, 2002.
Judgment delivered at Ottawa, Ontario, on May 31, 2002.
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: STONE J.A.
SEXTON J.A.
Date: 20020531
Docket: A-416-01
Neutral citation: 2002 FCA 231
CORAM: STONE J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
JAMES W. BUCHANAN
Respondent
and
COUNCIL OF CANADIANS WITH DISABILITIES,
CANADIAN MENTAL HEALTH ASSOCIATION AND
CANADIAN ASSOCIATION FOR COMMUNITY LIVING
Interveners
REASONS FOR JUDGMENT
[1] This judicial review of a decision of the Tax Court involves disability tax credits under the Income Tax Act.
FACTS
[2] The facts may be briefly stated. In his 1997 and 1998 income tax returns, the respondent claimed disability tax credits. The Minister of National Revenue reassessed the respondent for each of those years, disallowing the disability tax credits claimed on the assumption that the respondent:
was not suffering from a prolonged mental or physical impairment, the effects of which were such that the ability of the [respondent] to perform a basic activity of daily living was markedly restricted all or substantially all of the time.
[3] The respondent appealed the assessment to the Tax Court under the Informal Procedure. The primary issue in the Tax Court related to the certificate of the respondent's psychiatrist. In the certificate, the psychiatrist stated that the respondent was permanently, markedly restricted in mental functions. However, he then answered "yes" to the question:
Is your patient able to think, perceive, and remember, using medication or therapy if necessary? (For example, can he or she manage personal affairs or do personal care without supervision?)
The psychiatrist answered "no" to the question:
Is the impairment severe enough to restrict the basic activity of daily living identified above all, or almost all, the time, even with therapy and the use of appropriate aids and medication?
It appears it was on the basis of the psychiatrists's negative certificate that the Minister disallowed the disability tax credits claimed by the respondent.
[4] The Tax Court Judge, after considering the viva voce evidence of the psychiatrist and documents written by him, concluded that the psychiatrist's certificate was not "indicative of an independent, unbiased medical opinion". She also found that the psychiatrist misunderstood and misinterpreted the provisions of the Income Tax Act dealing with disability in completing the certificate. She allowed the respondent's appeal and remitted the matter to the Minister for reassessment on the basis that the respondent was entitled to the disability tax credits claimed by him.
ISSUES
[5] The Minister now seeks judicial review of the decision of the Tax Court Judge on three grounds:
1. In the absence of a positive medical certificate as required by the Act, the respondent was not entitled to disability tax credits.
2. The Tax Court Judge made palpable and overriding errors of fact.
3. The Tax Court Judge overlooked the psychiatrist's testimony that the respondent was not markedly restricted to perform a basic activity of daily living by reason of mental disability.
[6] In his factum, the respondent argued that the Minister's judicial review was filed out of time. However, this argument was abandoned by respondent's counsel at the hearing of the judicial review application.
ANALYSIS
1. The Medical Certificate
[7] With respect to the requirement for a medical certificate in order to obtain disability tax credits, subsection 118.3(1) of the Income Tax Act provides, in relevant part:
| 118.3. (1) Where (a) an individual has a severe and prolonged mental or physical impairment, (a.1) the effects of the impairment are such that the individual's ability to perform a basic activity of daily living is markedly restricted, (a.2) in the case of (i) [...] (ii) [...] (iii) [...] |
118.3. (1) Le produit de la multiplication de 4 118 $ par le taux de base pour l'année est déductible dans le calcul de l'impôt payable par un particulier en vertu de la présente partie pour une année d'imposition, si les conditions suivantes sont réunies: a) le particulier a une déficience mentale ou physique grave et prolongée; a.1) les effets de la déficience sont tels que la capacité du particulier |
| (iv) an impairment with respect to an individual's ability in perceiving, thinking and remembering, a medical doctor or a psychologist [...] (v) [...] has certified in prescribed form that the impairment is a severe and prolonged mental or physical impairment the effects of which are such that the individual's ability to perform a basic activity of daily living is markedly restricted, (b) the individual has filed for a taxation year with the Minister the certificate described in paragraph 118.3(1)(a.2), and (c) [...] |
d'accomplir une activité courante de la vie quotidienne est limitée de façon marquée; a.2) l'une des personnes suivantes atteste, sur formulaire prescrit, qu'il s'agit d'une déficience mentale ou physique grave et prolongée dont les effets sont tels que la capacité du particulier d'accomplir une activité courante de la vie quotidienne est limitée de façon marquée: (i) [...] (ii) [...] (iii) [...] (iv) [...] (v) s'il s'agit d'une déficience sur le plan de la perception, de la réflexion et de la mémoire, un médecin en titre ou un psychologue; b) le particulier présente au ministre l'attestation visée à l'alinéa a.2) pour une année d'imposition; [...] |
The subsection then proceeds to provide a formula for the calculation of the tax credit.
[8] The requirement for a medical certificate was addressed in the decision of this Court in Attorney General v. McIsaac, [2000] D.T.C. 412. In that case, it was determined that paragraph 118.3(1)(a.2) was mandatory and not directory and that a certificate by a doctor that the individual suffers impairment in the language of the section was a requirement. At paragraph 5, Sexton J.A. stated:
Section 118.3(1)(a.2) of the Income Tax Act is not merely directory. It is mandatory. Simply put, there must be a certificate by the doctor that the individual suffers impairments in the language of these subsections. This Court held to the same effect in Partanen v. Canada, [1999] F.C.J. 751, and we feel bound by this decision.
[9] In this case, a negative medical certificate was filed by the taxpayer. The Tax Court Judge found the certificate to be deficient. The deficiencies, according to the Judge, were that the certificate was not an independent, unbiased medial opinion and that it was completed by a psychiatrist who misinterpreted the requirements of the Income Tax Act.
[10] It is not necessary to deal with the question of bias and I make no finding in that regard. However, it is clear from the record and the findings of the Tax Court Judge that the respondent's psychiatrist did misinterpret the definition of a basic activity of daily living in paragraph 118.4(1)(c) of the Income Tax Act.
[11] Paragraph 118.4(1)(c) describes the nature of impairments necessary to qualify for a disability tax credit.
| 118.4. (1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection, (a) [...] (b) [...] (c) a basic activity of daily living in relation to an individual means (i) perceiving, thinking and remembering, (ii) feeding and dressing oneself, (iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual, |
118.4. (1) Pour l'application du paragraphe 6(16), des articles 118.2 et 118.3 et du présent paragraphe: a) [...] b) [...] c) sont des activités courantes de la vie quotidienne pour un particulier: (i) la perception, la réflexion et la mémoire, (ii) le fait de s'alimenter et de s'habiller, (iii) le fait de parler de façon à se faire comprendre, dans un endroit calme, |
| (iv) hearing so as to understand, in a quiet setting, another person familiar with the individual, (v) eliminating (bowel or bladder functions), or (vi) walking; and [...] [Emphasis added] |
par une personne de sa connaissance, (iv) le fait d'entendre de façon à comprendre, dans un endroit calme, une personne de sa connaissance, (v) les fonctions d'évacuation intestinale ou vésicale, (vi) le fait de marcher; |
It is apparent that the basic activities listed in subparagraphs 118.4(1)(c)(i) to (vi) are disjunctive and that activities in only one subparagraph need be markedly restricted for purposes of obtaining a disability tax credit.
[12] In evidence was a "STATEMENT ON DISABILITY TAX CREDIT" drafted by the psychiatrist. It was sent by the psychiatrist to the respondent, together with the negative certificate. In the statement, the psychiatrist sets forth his position on disability tax credits.
In fact, most patients with mood disorders such as depression and bipolar disorder DO NOT qualify for this tax credit, which is intended for persons so severely disabled that they have difficulties with very basic self-care activities such as feeding themselves, dressing, using the toilet or carrying on a simple conversation, without assistance. The disability can be in the area of "perceiving, thinking and remembering", but again must be severe enough to interfere with very basic self-care activities.
In his viva voce testimony, the psychiatrist reiterated his position. As to why he answered "yes" to the question of whether his patient was able to think, perceive and remember, whereas he had previously answered that the respondent was permanently markedly restricted in mental functions, the psychiatrist explained his interpretation of the term "basic activities of daily living" for purposes of a medical certificate:
The question on the second page is very difficult to answer yes/no. My understanding, after researching the Tax Act and studying this form, was that the impairment had to affect basic activities in daily living, and normally that term [...] it is not very clearly defined in the Act, but normally in medicine, the term "basic activities in daily living" refers to very simple things, like getting dressed, brushing your teeth, looking after your personal hygiene, climbing stairs, walking around the block, or holding simple conversation, and I felt that Mr. Buchanan is not impaired in those [...] although he is fairly impaired with his illness, I thought he was not impaired in those very basic activities in daily living.
Q. So, in other words, when you apply the concept of basic activity of daily living and
A. Yes.
Q. [...] to the impairment, the question changed?
A. Yes. I felt he was not impaired in those very basic activities.
Q. And your response to number [9] [sic] at the bottom: Is the impairment severe enough to restrict the basic activity of daily living identified all or almost all the time even with therapy and the use of appropriate aids and medication question, you answered "no"; is that correct?
A. That's correct.
Q. Dr. Cooke, can you summarize your observations that led you to answer this way.
A. Well, as I was saying, the term "basic activities in daily living" is what I used in making these judgments, and I could not find a very clear definition of that in the Income Tax Act when I did my own research, so I used the definition that is commonly used in medicine, where it refers to things like climbing stairs, walking around the block, perhaps, or a short distance, looking after personal care or hygiene, feeding oneself or perhaps carrying on a simple conversation.
Mr. Buchanan was able to do these things, he could carry on a conversation, he was generally well-groomed, he could come to appointments on his own, so he was not impaired in the most basic activities in daily living.
[13] It is clear from the psychiatrist's evidence that in completing the certificate, he had misinterpreted the requirements of paragraph 118.4(1)(c) in respect of what basic activities of daily living had to be markedly restricted in order to qualify for a disability tax credit. In the case of the respondent, the basic activity in issue was only "perceiving, thinking and remembering" under subparagraph (i) of paragraph 118.4(1)(c) and not, as the psychiatrist thought, getting dressed, brushing teeth, looking after personal hygiene, climbing stairs, walking around the block or holding a simple conversation, some of which activities are under different subparagraphs of paragraph 118.4(1)(c).
[14] The Income Tax Act places a burden on a physician when completing the certificate described in paragraph 118.3(1)(a.2), to have regard to what constitutes a marked restriction in the performance of a basic activity in daily living, as defined in paragraph 118.4(1)(c). This does involve an interpretation of law. Nonetheless, the certificate must be completed by a physician (or a psychologist, in the case of a mental disorder) and if the physician misinterprets the requirements of the Act, errors in completing the certificate may occur.
[15] In the present case, it is apparent that the Tax Court Judge was correct in concluding that the psychiatrist misinterpreted paragraph 118.4(1)(c) and applied the wrong legal test of a basic activity of daily living in completing the certificate.
[16] The question then is, what remedy is there for a taxpayer who obtains a negative certificate incorrectly completed by his or her physician because the physician is under a misapprehension as to the legal test of a basic activity of daily living.
[17] Of course, it is possible for the taxpayer to ask the physician to reconsider his answers on the certificate or perhaps to obtain a positive certificate from another physician who does not misinterpret the requirements of the Act. However, there are practical limitations with respect to these alternatives. For example, in many cases, the taxpayer will not have a sufficient grasp of the requirements of the Income Tax Act to convince the physician that he or she has misinterpreted its requirements. In any event, I do not think that these are the only recourses available to the taxpayer.
[18] In an appropriate case, the taxpayer may seek relief in the Tax Court. Proceedings in the Tax Court are not a judicial review of the correctness or reasonableness of the Minister's assessment. Rather, the function of the Tax Court is to arrive at the correct assessment itself (unless it is unable to do so and considers it necessary to refer the assessment back to the Minister for reconsideration under subparagraph 171(1)(b)(iii) of the Income Tax Act). The Tax Court's consideration of the matter will be on the basis of the evidence adduced in the Tax Court, even if that evidence was not before the Minister when he made his assessment. See Johnston v. Minister of National Revenue, [1948] 3 D.T.C. 1182 at 1183 per Rand, J. Therefore, the fact that the Minister based his assessment on a negative medical certificate is not conclusive.
[19] The difficulty is that a positive medical certificate is a condition precedent to the Minister granting a disability tax credit. As the positive medical certificate is a mandatory requirement of the Act, I do not think it is open to a Tax Court Judge to ignore that requirement and simply substitute his or her opinion for that of a medical practitioner. It seems to me that a number of alternatives present themselves.
[20] First, there is authority for the proposition that a certificate can be corrected through viva voce evidence. In R. v. Bykowski (1980), 23 A.R. 426 (C.A.), leave to appeal to S.C.C. refused, McDermid J.A. stated at page 430:
In my opinion, the certificate could be so corrected, if such was necessary, by the evidence of a constable who was present when the samples were taken.
See also R. v. Ryden (1993), 145 A.R. 194 at 198 (C.A.) and R. v. Ziemers (1994), 132 N.S.R. (2d) 147 at 149 (C.A.).
[21] Bykowski was a straightforward case of a simple documentary error being corrected in evidence. Thus, if a physician, in giving evidence in the Tax Court, agrees to correct a certificate, I think that is compliance with the requirement for a positive certificate under paragraph 118.3(1)(a.2). The Minister here concedes that, in the case of a simple straightforward error, a physician could correct a certificate through viva voce evidence. I think it also follows that if a different physician gave evidence that convinced the Tax Court Judge that a positive certificate should have been given by the original physician, it would be open to the Judge to so find. This is because the finding is based on medical evidence. In either case, the Judge would remit the matter to the Minister with a direction to reassess on the basis of a positive certificate.
[22] At the other end of the spectrum would be the case of a taxpayer appealing a disallowance of a disability tax credit on the basis of a negative medical certificate where the taxpayer is simply dissatisfied with the medical judgment of the physician who completed the certificate. In the absence of conflicting testimony from another physician, it is difficult to envision a case in which the Tax Court Judge, in these circumstances, could find that a negative certificate should be treated as a positive certificate. In this type of case, it would seem that if the Tax Court Judge was doubtful as to the correctness of the negative certificate, at most, the recourse would be to remit the matter to the Minister for reassessment on the basis that the taxpayer file a new positive certificate, if one could be obtained.
[23] The appeal at bar falls between the two extremes. Here, there is a finding that in completing the negative certificate, the psychiatrist made a legal error. In this type of case, the question will be whether, with the Judge applying the correct legal test (or where bias is found, with the Judge exercising impartial judgment), it is apparent that the physician would have issued a positive certificate, or whether there is still room for medical judgment to be exercised as to whether the certificate should be positive or negative. In the former case, I think it is open to the Tax Court Judge to find that the certificate should be treated as positive and to remit the matter to the Minister for reassessment on that basis. In the latter, absent medical evidence of the kind referred to in paragraph 20 above, I think the recourse must be to dismiss the appeal or remit the matter to the Minister for reassessment on the basis of the taxpayer filing a new positive certificate if one can be obtained.
[24] I am not unmindful that the obtaining of a positive medical certificate in these circumstances may be difficult or, indeed, in some cases, impracticable. Individuals with disabilities so severe that they may be entitled to a disability tax credit, may well be under the long-term care of a specialist. As counsel explained, finding another specialist may be difficult, and asking for even a temporary transfer of records simply to obtain a positive medical certificate from another doctor, may well disrupt the relationship between the original physician and the taxpayer. Further, it is certainly arguable that it is contrary to the public interest to encourage "doctor shopping" by patients.
[25] However, the Court must be faithful to the words of the Income Tax Act. The Act requires the positive certificate of a physician. That means that the function of the Tax Court Judge is not to substitute his or her opinion for that of a physician, but to determine, based on medical evidence, whether a negative certificate should be treated as a positive certificate. Where the Tax Court Judge is unable to reach that conclusion, either the appeal must be dismissed or the matter must be remitted to the Minister with a direction to reassess, should the taxpayer provide a positive certificate.
[26] I have said that I recognize that, in many cases, obtaining a positive certificate from the original or another physician may be difficult or impracticable. Further, limiting the basis upon which the Tax Court Judge may find that a negative certificate should be treated as a positive one, may seem restrictive. However, a positive medical certificate is a requirement of subsection 118.3(1). The Court does not have a policy-making role. If the requirements of the Act are seen to be impracticable, it is Parliament that must address the necessary changes.
[27] With these considerations in mind, I turn to the findings of fact by the Tax Court Judge and the evidence in this case. Based upon the evidence given by the psychiatrist, I believe it was open to the Tax Court Judge to conclude that the respondent's inability to perceive, think and remember was of such severity that the respondent was unable to perform the necessary mental tasks required to live and function independently and competently in every day life. In particular, she found that this was an obvious case and noted that the respondent received the disability tax credit until the psychiatrist was asked for a new medical certificate and, in providing it, misinterpreted the Act. Given these findings, based on the evidence of the psychiatrist and his misinterpretation of the Act, I think it was open to the Tax Court Judge to conclude that the medical certificate was incorrectly completed and that, applying the correct legal test, the negative certificate should be treated as a positive one.
2. and 3. Palpable and Overriding Errors of Fact and Overlooking Evidence
[28] The Minister argues that the Tax Court Judge made palpable and overriding errors of fact and ignored or overlooked evidence. I am not satisfied that the Tax Court Judge made any such palpable or overriding error of fact or overlooked or ignored evidence. While there was some contradictory evidence from the psychiatrist, it was open to the Judge to weigh his evidence and accept that evidence she thought deserving of the greater weight and draw inferences on the basis of the evidence she accepted. She did so in this case.
CONCLUSION
[29] The appeal should be dismissed with costs.
"Marshall Rothstein"
J.A.
"I agree
A.J. Stone
J.A."
"I agree
J. Edgar Sexton J.A."
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-416-01
STYLE OF CAUSE: THE ATTORNEY GENERAL OF CANADA
Applicant
- and -
JAMES W. BUCHANAN
Respondent
- and -
COUNCIL OF CANADIANS WITH DISABILITIES,
CANADIAN MENTAL HEALTH ASSOCIATION AND
CANADIAN ASSOCIATION FOR COMMUNITY LIVING
Interveners
DATE OF HEARING: WEDNESDAY, MAY 15, 2002
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
CONCURRED IN BY: STONE J.A.
SEXTON J.A.
DELIVERED AT OTTAWA, ONTARIO ON FRIDAY, MAY 31, 2002.
DATED: FRIDAY, MAY 31, 2002
APPEARANCES BY: Mr. Eric Noble, and
Mr. Scott Simser
For the Applicant
Mr. Douglas Mathew, and
Mr. Matthew Williams
For the Respondent
Mr. William Holder, and
Mr. Harry Beatty
For the Interveners
SOLICITORS OF RECORD:Morris Rosenberg
Deputy Attorney General of Canada
For the Applicant
Thorsteinssons
Barristers & Solicitors
P.O. Box 611
BCE Place
36th Floor, 161 Bay Street
Toronto, Ontario
M5J 2S1
For the Respondent
ARCH: A Legal Resource Centre for Persons with Disabilities
425 Bloor Street East, Suite 110
Toronto, Ontario
M4W 3R5
For the Interveners
FEDERAL COURT OF APPEAL
Date: 20020531
Docket: A-416-01
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
- and -
JAMES W. BUCHANAN
Respondent
- and -
COUNCIL OF CANADIANS WITH DISABILITIES, CANADIAN MENTAL HEALTH ASSOCIATION AND CANADIAN ASSOCIATION FOR COMMUNITY LIVING
Interveners
REASONS FOR JUDGMENT