Date: 20000626
Docket: 1999-3003-IT-I
BETWEEN:
FRANÇOIS PIGEON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Tardif, J.T.C.C.
[1] This is an appeal with respect to the 1995, 1996 and 1997 taxation years.
[2] The Department of National Revenue disallowed $5,318, $6,036 and $6,690 claimed by the appellant as other employment expenses for the 1995, 1996 and 1997 taxation years.
[3] The appellant had claimed those amounts against his income for each of the years at issue as expenses incurred in performing his work in Montréal.
[4] The appellant testified in support of his appeal. He explained that, after a career in real estate, he applied to become a syndic, a position provided for by Bill 119 on securities trading.
[5] There was a competition and the appellant was successful. However, various personality problems resulted in his eligibility being challenged on the ground that he did not have the qualifications required by that legislation to obtain the position he sought.
[6] As a result of that challenge to his qualifications and eligibility, the opposing parties each asked for a legal opinion. Two contrary opinions were submitted, first by the law firm of Martineau Walker and then by the firm of Flynn, Rivard.
[7] Despite the contradictory opinions, the appellant was still offered the position, amid controversy.
[8] He was therefore hired, and he obtained a very fragile contract of employment, which was signed on April 22, 1994. Given the very unusual circumstances in which he obtained the position, the appellant considered his status very precarious in view of the real possibility of a challenge based on the opinion prepared by Martineau Walker.
[9] Because of that precariousness, the appellant was unable to make an informed and final decision to set up his principal residence in the Montréal area. He was granted a lump sum of $150 a week to pay his transitional expenses.
[10] The appellant went to Montréal regularly to do the work for which he had been hired. To reduce his expenses, he preferred to rent accommodation, and he claimed the price of that accommodation as a deduction for the years at issue.
[11] During his second year, his employer decided to add the allowance initially provided for by paragraph 2 of the contract of employment to his annual income.
[TRANSLATION]
2. The Employee's place of work shall be in Montréal at the Association's office located at 500, boul. René-Lévesque ouest, Suite 800. The Association shall allow the Employee to work a maximum of one day a week in the city of Québec. The Association shall pay the Employee a lump sum of $150.00 a week to cover the expenses incurred for the day worked—if applicable—in the city of Québec.
[12] The appellant explained that his relationship with the institution's executive director never improved, and it was that person who required the expense allowance to be added to his salary. The appellant, who was still worried and afraid of losing his job, therefore postponed his decision to move.
[13] In actual fact, he has returned to the Québec area and the expenses he incurs when he has to work outside the city of Québec are now reimbursed on the submission of vouchers.
[14] The evidence showed that this was an unusual and very specific case in terms of the circumstances and the context and that the atmosphere of tension with the executive director continued, all of which had the direct effect of making the appellant feel insecure and worried about his future. It was risky to decide to move his family when there was so much uncertainty about his status. Moreover, time has confirmed that his decision was correct, since he is now working out of the Québec area.
[15] Accordingly, it appears to me to be reasonable and justified to conclude that what is involved is a temporary allowance that was reasonable and appropriate. In the circumstances, the appellant was entitled to deduct the amounts of $5,318, $6,036 and $6,690 from his income for the 1995, 1996 and 1997 taxation years.
[16] For these reasons, the appeal is allowed.
Signed at Ottawa, Canada this 26th day of June 2000.
"Alain Tardif"
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 30th day of April 2001.
Erich Klein, Revisor