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Docket: 2003-4393(IT)I |
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BETWEEN: |
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ANNE H. EDMOND, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeal heard on August 11, 2004, at Vancouver, British Columbia.
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Before: The Honourable D.G.H. Bowman, Associate Chief Justice |
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Appearances: |
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Agent for the Appellant: |
Edmond E. Edmond |
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Counsel for the Respondent: |
Lisa Riddle |
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JUDGMENT
It is ordered that the appeal from the assessment made under the Income Tax Act for the 2002 taxation year is dismissed.
Signed at Ottawa, Canada, this 27th day of August 2004.
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"D.G.H. Bowman" |
Bowman, A.C.J.
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Citation: 2004TCC581 |
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Date: 20040827 |
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Docket: 2003-4393(IT)I |
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BETWEEN: |
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ANNE H. EDMOND, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Bowman, A.C.J.
[1] This appeal is from an assessment for the appellant's 2002 taxation year. It involves a claim to deduct, in computing income for that year, moving expenses totalling $32,070.
[2] The appellant is a registered nurse and is married to a medical doctor, Edmond E. Edmond who represented her at trial but did not testify.
[3] The appellant and her spouse immigrated to Canada in May 1997. They bought a house in Mississauga. In 1998, they sold that house and moved to Quesnel, British Columbia where they bought another house.
[4] In August 1999, the appellant and her three children moved from Quesnel, British Columbia to Melbourne, Australia, where she worked as a nurse at St. Vincent's and Mercy Hospital from February 7, 2000 to June 30, 2000. Her spouse continued to reside in the house in Quesnel. In August 2000, the appellant moved back to Canada from Australia. She states in an affidavit which she filed that her moving expenses from Quesnel to Australia and back to Quesnel amounted to $16,571, evidently in Australian dollars.
[5] Upon her return to Canada she and her spouse and children moved to Surrey, British Columbia from Quesnel where she started to work as a nurse.
[6] One of the problems in this case is that the numbers put forward in court are not consistent with the amounts claimed or allowed. Mrs. Edmond filed an affidavit in which she set out the expenses that she says should be treated as moving expenses in respect of an eligible relocation.
5. Moving from Mississauga to Quesnel:
Receipts available
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*TRUCKING/SHIPPING COSTS |
$ 5,350.00 |
Exhibit A |
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*TRAVELLING EXPENSES-TOR.-QUESNEL 2 VEHICLES |
$ 3,280.00 |
Simple Method |
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4000 Km/2 vehicles driven/41C/KM |
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*ACCOMODATION 2 NIGHTS ON THE ROAD |
$ 200.00 |
Simple Method |
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*Carl Edmond (deceased/Suicide Aug.10th 2002) flying to Quesnel. |
$ 550.00 |
NIL |
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* REALESTATE COMM |
$ 14,437.00 |
Exhibit B |
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* LEGAL/Mississauga House |
$ 792.00 |
Exhibit B |
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* MISC. |
$ 47.00 |
Exhibit B |
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* LEGAL/QUESNEL HOUSE |
$ 906.00 |
Exhibit C |
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Total Costs |
$ 25,562.00 |
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6. Moving from Quesnel to Australia and back to Quesnel:
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*TRAVELLING EXPENSES-$6711.00X2 /AIRFARE |
$ 13,422.00 |
Exhibit D |
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* STORAGE/SHIPPING PERSONAL BELONGINGS |
$ 2,510.00 |
Exhibit E |
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* ACCOMODATION 5 days |
$ 639.00 |
Exhibit F |
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Total Costs |
$ 16,571.00 |
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7. Moving from Quesnel to Surrey:
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*TRUCKING/SHIPPING COSTS |
$ 1,800.00 |
receipt given to school |
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* TRAVELLING EXPENSES 650 Km x 42c |
$ 273.00 |
Simple Method |
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* CAR RENTAL 14 D |
$ 700.00 |
Nil/misplaced |
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* MEALS - 5 persons for 5 days |
$ 500.00 |
Estimate |
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Total Costs |
$ 3,273.00 |
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Total moving costs |
$ 45,406.00 |
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[7] In 2002, the appellant claimed $25,714 as an allowable moving expense in her return of income and, in a second moving expense deduction form for 2002, she claimed $31,849 as opposed to $25,714. The discrepancy was not explained. Also, the invoice which she put in evidence from Elmwood Moving and Storage to support the amount of $4,350 is dated June 26, 1998. Precisely the same invoice (it is obvious from looking at it) is attached to her notice of objection with the exception of the date which is shown as August/00. What is so extraordinary about this is not only that it is so obvious but also that the change in date does not assist the appellant one iota. I asked to see the original invoice but it was not produced.
[8] I can state my conclusions fairly readily.
(a) The cost of moving from Mississauga to Quesnel, which the appellant claimed was $25,562 and which may have amounted to something over $20,000, is not deductible in any year because it was not in respect of an "eligible relocation" which is defined as follows in section 248 of the Income Tax Act:
"eligible relocation" means a relocation of a taxpayer where
(a) the relocation occurs to enable the taxpayer
(i) to carry on a business or to be employed at a location in Canada (in section 62 and this subsection referred to as "the new work location"), or
(ii) to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution (in section 62 and in this subsection referred to as "the new work location").
(b) both the residence at which the taxpayer ordinarily resided before the relocation (in section 62 and this subsection referred to as "the old residence") and the residence at which the taxpayer ordinarily resided after the relocation (in section 62 and this subsection referred to as "the new residence") are in Canada, and
(c) the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location
except that, in applying subsection 6(19) to (23) and section 62 in respect of a relocation of a taxpayer who is absent from but resident in Canada, this definition shall be read without reference to the words "in Canada" in subparagraph (a)(i), and without reference to paragraph (b);
The reason for this conclusion is that the move was not to enable the appellant to be "employed at a location in Canada...". The appellant's evidence does not support the conclusion that she moved to Quesnel to work there. It is clear that she did not seek work in Quesnel even though there was a shortage of nurses there.
(b) The appellant's contention that the move to Quesnel from Mississauga, back to Australia, then back to Quesnel and finally from Quesnel to Surrey was simply a circuitous way of getting from Mississauga to Surrey with each stop along the way simply a temporary way station or sojourn in her extended odyssey from Ontario to Surrey. Dr. Edmond relied upon my judgment in Ringham v. The Queen, 2000 DTC 2060. That judgment reads in part as follows at p. 2061:
[10] The essential difference between the appellant and the respondent is this: the respondent says that there were two moves:
(i) from Tiffany Place to Robson Court;
(ii) from Robson Court to Harding Boulevard.
[11] According to the respondent the costs relating to the sale of Tiffany Place are connected with the first move and that does not qualify under subsection 62(1) because the distance from the "old residence" (Tiffany Place) and the new work location (Thornhill) is not 40 kilometres greater than the distance from the "new residence" (Robson Place) to the new work location.
[12] The appellant's position is that there was realistically only one move - from Tiffany Place to Harding Boulevard.
[13] I agree with the appellant. The respondent's position does not take into account the unusual situation in which the appellant found himself as the result of the delays in, and ultimate abandonment of, the Budapest project. Robson Court was a temporary pied-à-terre, a way-station. It was never regarded by Mr. Ringham as his ordinary residence. He kept some of his furnishings in storage and he did not unpack many of the boxes which he stored at Robson Court. It is true he changed his mailing address to Robson Court but I do not regard this as determinative.
[14] It is not in my view realistic to say that he was "ordinarily resident" at Robson Court. He was expecting to move at any time to Budapest and kept himself in readiness for that move. It would make about as much sense to say that he was ordinarily resident in the Holiday Inn in Thornhill. He seems to have spent more time there than at Robson Court.
[15] After all, it took Odysseus ten years to get home to Ithaca from Troy, with numerous sojourns along the way. No one would ever suggest that notwithstanding his protracted stay with Circe on the island of Aeaea he was ever ordinarily resident there.
[16] Counsel referred to the leading case of Thomson v. Minister of National Revenue, [1946] C.T.C. 51 (S.C.C.). That case has stood far over half a century as the ultimate authority on the meaning of ordinarily resident. It does not however deal with the situation where a person on his way from an old residence to a new one is forced to stay temporarily but longer than anticipated in a place that cannot realistically be regarded as his ordinary residence.
[17] In this case there was only one move, from Tiffany Place to Harding Boulevard, with a somewhat longer than anticipated detour through Robson Court and that move was completed in 1997.
That is not the situation here. The move from Mississauga to Quesnel was one move and Quesnel became her and her spouse's ordinary residence. After all, they bought a home there - hardly a mere pied-à-terre.
(c) If I had found that the moving expenses from Mississauga to Quesnel in 1998 were in respect of an eligible relocation, I would not have accepted the respondent's contention that the latest year in which she could claim the moving expenses was 1999. Subsection 62(1) reads:
62.(1) - There may be deducted in computing a taxpayer's income for a taxation year amounts paid by the taxpayer as or on account of moving expenses incurred in respect of an eligible relocation, to the extent that
(a) they were not paid on the taxpayer's behalf in respect of, in the course of or because of, the taxpayer's office or employment;
(b) they were not deductible because of this section in computing the taxpayer's income for the preceding taxation year;
(c) the total of those amounts does not exceed
(i) in any case described in subparagraph (a)(i) of the definition "eligible relocation" in subsection 248(1), the taxpayer's income for the year from the taxpayer's employment at a new work location or from carrying on the business at the new work location, as the case may be, and
(ii) in any case described in subparagraph (a)(ii) of the definition "eligible relocation" in subsection 248(1), the total of amounts included in computing the taxpayer's income for the year because of paragraphs 56(1)(n) and (o); and
(d) all reimbursements and allowances received by the taxpayer in respect of those expenses are included in computing the taxpayer's income.
[9] Obviously, the provision limits the amount that can be claimed to the taxpayer's income for the year from the employment at the new work location. The words "to the extent that they were not deductible because of this section in computing the taxpayer's income for the preceding year..." do not, in my opinion, put a two-year limitation on the deductibility of moving expenses. Assume that an expense is incurred in year one but the taxpayer's income for the new job is nil in that year and, say, is less than the moving expenses in year two. Clearly, the balance is deductible in year three when the income is sufficiently high. The amount deductible in year three is the amount that was not deductible in year two because of the limitation imposed by subsection 62(1). If Parliament wishes to put a limitation on the period in which expenses or losses can be carried forward or back it certainly knows how to say so, as it does with great specificity in section 111.
[10] The move from Quesnel to Surrey is probably an eligible relocation. However, I do not think the expenses have been proved, even using the somewhat less stringent standards than those employed by the Canada Customs and Revenue Agency, which usually requires receipts.
[11] The only witness was Mrs. Edmond and she did not testify about the amounts. Dr. Edmond did not testify under oath but he stated in oral argument that the trucking or shipping costs of $1,800 were paid in cash and no receipt was retained because it was given to the school, for what reason I was not told. $1,800 is a large amount to pay in cash. I have no reliable evidence of the payment of this expense.
[12] None of the amounts claimed for the Quesnel to Surrey move have been adequately proved.
[13] The appeal is dismissed.
Signed at Ottawa, Canada, this 27th day of August 2004.
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"D.G.H. Bowman" |
Bowman, A.C.J.
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CITATION: |
2004TCC581 |
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COURT FILE NO.: |
2003-4393(IT)I |
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STYLE OF CAUSE: |
Anne H. Edmond and Her Majesty The Queen |
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PLACE OF HEARING: |
Vancouver, British Columbia |
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DATE OF HEARING: |
August 11, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable D.G.H. Bowman, Associate Chief Justice |
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DATE OF JUDGMENT AND REASONS FOR JUDGMENT: |
August 27, 2004 |
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APPEARANCES: |
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Agent for the Appellant: |
Edmond E. Edmond |
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Counsel for the Respondent: |
Lisa Riddle |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |