Date: 20010704
Docket: 2001-313-IT-I
BETWEEN:
JO-LYNNE RUSSELL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the Appellant: The Appellant himself
Counsel for the Respondent: Nadine Taylor
Reasons for Judgment
(Edited from transcript of Reasons for Judgment delivered orally from the Bench on June 15, 2001 at Vancouver, British Columbia)
Hershfield, J.E.
This is an appeal under the Informal Procedure from a reassessment of the Appellant's 1998 taxation year which disallowed medical expenses of $11,884.36 for renovations to the Appellant's home, consisting of $6,090.38 for new hardwood floors, $3,477.50 for a new furnace and air cleaner, and $2,316.44 for a new ceramic tile floor. The expenses were claimed pursuant to subsection 118.2(2) in respect of a child of the Appellant suffering from severe and chronic asthma, a condition admitted to by the Respondent in its Reply.
The Appellant placed reliance on two paragraphs of subsection 118.2(2), namely paragraph (l.2) and paragraph (m). The expenses in respect of the hardwood floor and ceramic tile were argued to be deductible pursuant to paragraph (l.2). The expenses in relation to the furnace and air cleaner were argued to be deductable pursuant to paragraph (m), which in turn refers to prescribed outlays under Regulation 5700.
Before reciting the provisions of the Act and Regulations, the application of which are in issue, it is necessary to review the evidence relating to the subject expenses and the circumstances in which they were incurred. The factual evidence is as follows.
The Appellant's son Michael was six years old at the time the subject renovations were undertaken. Michael's doctor, Dr. Edward Coates, recommended, or as I will comment on later, "prescribed", that some of these renovations be undertaken.
Since infancy Michael has been under the care of Dr. Coates, a paediatric allergy immunologist, to whom Michael appears to have been referred by the Appellant's family doctor, Dr. Wiebe. Dr. Coates was not present at the hearing. However, a number of his reports to Dr. Wiebe were submitted as exhibits by the Appellant, including one in 1991 when Michael was four months old. He had been hospitalized for six days for a possible reactive airway disease. The authenticity of the reports has not been put in issue, although Respondent's counsel expressed reservations as to their weight given Dr. Coates was not here to be cross-examined. However, much of the content of the reports were testified to directly by the Appellant who is a Registered Nurse and who had first hand experience with the matters reported on in these exhibits.
During the first hospitalization when Michael was four months old and ever since, Michael has been on a variety of medications, some requiring nebulizer administration. The Appellant testified that given the persistent and severe nature of Michael's respiratory problems, his medication continued in increasing dosages and included research drugs. Even using a variety of medications in adult dosages, Michael was admitted to hospital several more times between 1992 and 1998 due to severe respiratory problems, including hospital admissions in March and again in April of 1998. On June 24, 1998, Dr. Coates wrote to Dr. Wiebe after seeing Michael on June 11 following Michael's admission to the hospital. That report reads in part as follows:
"Thanks for asking me to see Michael again, he has apparently been having severe croup attacks resulting in his having to visit the emergency room at The Children's Hospital where he was observed to have significant respiratory distress, a croupy cough, a tracheal tug and cyanosis; no wheezing was heard. I understand racemic epinephrine and pulmicort were the medications used."
He goes on to refer to continuing complaints of growing pains, that Michael's endurance has been questioned and that his mother has concerns about problematic mood swings. Under the heading "Investigations", the report states:
"On repeat skin testing Michael was positive to dust mites...and histamine control...He was negative to cat, dog, feathers, molds, trees, grasses, weeds, milk, soya, eggs, wheat, fish, and peanuts."
Under the heading "Recommendations", the report contains the following:
"I counselled mother that they needed to work hard at home to control the dust mite population, I went over ways and means that they might do this. I placed Michael on a trial of Flovent three puffs twice daily of the 50 microgram strength in addition to Ventolin one to two puffs on a PRN basis and asked her to continue to monitor his lung functions using a peak flow metre charting the results daily. Hyposensitization therapy is an available option for him although for now lets see how he progresses with the above recommendations."
On June 18th, 1998, that is after the June 11 visit, Dr. Coates wrote the following "To whom it may concern" letter. It was written to support a medical expense claim, but was written at the time that the "prescription" for home renovations was made, which predates the actual renovations which occurred in the fall of 1998. That "To whom it may concern" letter reads as follows:
"Michael has asthma and has been found to be allergic to dust mite forces. In an effort to maximize preventative measures, I asked mother to remove as much carpeting as possible starting with his bedroom (emphasis added) cover both mattress and pillow with dust-proof covers (encase them completely). If they had a forced air heating system an electrostatic filter has to be placed over the cold air return duct (emphasis added) and sometimes a local air filtering unit in the bedroom is helpful (i.e. Bionaire). Any assistance in helping his parents make these modifications would be appreciated and would enable me to maintain Michael on as little medication as possible (emphasis added)."
Before moving on, a number of observations need to be made regarding Michael's condition. It is not expected that Michael's severe asthmatic condition will soon disappear. He still suffers and he may never fully enjoy normal respiratory function. The renovations were not a cure, nor could they be expected to be.
Michael was hospitalized again in 1999. There are also medical reports for three visits to Dr. Coates between October 12, 2000 and November 9, 2000 evidencing the continuing and severe problems. I will read from the November 10 report regarding the November 9, 2000 visit to Dr. Coates. This is a report directed to Dr. Wiebe:
"Mother came in with Michael, his symptoms having previously improved but then he developed a viral cold four days before coming in and his asthma control deteriorated. His behaviour patterns also became more of a problem. Again we have a direct correlation in Michael between asthma control and behaviour patterns. Mother was administering Flovent discus 100 micrograms twice daily, Ventodisc 200 micrograms two to three times daily and Singulair 5 milligrams morning and night. His physical exam revealed moderate wheezing to be present, no crepitations, no dullness to percussion. Given his ongoing significant asthma symptom in spite of the above approach I suggested that we switch him to nebulized Pulmicort 0.25 milligram per ml ampules combined with Ventolin 2.5 milligram ampules administered simultaneously three times daily whilst they continued with Singulair 5 milligrams morning and night. Mother was going to drop by in a weeks time so that I could auscultate Michael's lungs and give her further direction. I will update you at that point."
Michael, now eight years old, continues to live with a condition that is affecting his ability to function as a normal child. At the age of six an allergy to dust mites was detected and Dr. Coates asked his mother, as a preventive measure, to address that problem which was aggravating an already severe condition and increasing his daily medication requirements. Whether I give weight to these reports or not, this is the impact of the Appellant's direct testimony.
Further information regarding a severe condition like Michael's can be taken from two other exhibits tendered by the Appellant. I'm referring to a publication of the Canadian Lung Association and a publication of the Asthma Society of Canada which make reference to indoor air quality, including biological contaminants such as dust mites. The solution for asthmatics with dust-mite problems is to remove carpets from bedrooms and the rest of the house if possible. Both publications also recommend air cleaners as important remedial devices.
As to describing the condition that Michael suffers, the Canadian Lung Association publication provides the following introductory remarks:
"Asthma is a chronic lung condition that can develop at any age. It is most common in childhood and occurs in approximately seven to ten per cent of the paediatric population. Asthma is the most common chronic respiratory disease of children; it accounts for one-quarter of school absenteeism. Asthma affects children in varying degrees, from very mild (only during vigorous exercise) to very severe. Children with severe asthma may have symptoms every day that may cause some lifestyle restriction; in these children symptoms occur more easily and more frequently. There is a general trend of increased deaths and hospitalizations from asthma recorded in all the industrialized countries of the world, Canada included. In Canada, approximately 20 children and 500 adults die each year from asthma. However, with adequate treatment most deaths from asthma can be prevented."
As already noted, that Michael's asthmatic condition is severe has been admitted to in the Respondent's Reply.
I will now turn to the provisions of the Act and Regulations, the application of which are in issue. First consider paragraph (m) of subsection 118.2(2), and the furnace and air-cleaner expenses claimed under that paragraph and Regulation 5700. Paragraph (m) allows as a medical expense an outlay:
"(m) for any device or equipment for use by the patient that;
(i) is of a prescribed kind;
(ii) is prescribed by a medical practitioner,
(iii) is not described in any other paragraph of this subsection, and
(iv) meets such conditions as may be prescribed as to its use or the reason for its acquisition."
Relevant provisions of regulation 5700 prescribing certain devices are:
"(c) device or equipment, including a replacement part, designed exclusively for use by an individual suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation, but not including an air conditioner, humidifier, dehumidifier, heat pump or heat or air exchanger;
(c.2) electric or sealed combustion furnace acquired to replace a furnace that is neither an electric furnace nor a sealed combustion furnace, where the replacement is necessary solely because of a severe chronic respiratory ailment or a severe chronic immune system disregulation."
The Appellant admitted that a gas (sealed combustion) furnace had been replaced with another gas furnace. The effect of this admission is that the furnace replacement in this case is not a prescribed device.
Counsel for the Respondent conceded, however, that the air cleaner qualified as a medical device under paragraph (c) of Regulation 5700. The agreed amount was $1,278.65. That is, of the $3,477.50 claimed for the furnace and air cleaner, only $1,278.65 is allowed. While this concession by Respondent's counsel would include an acceptance that Dr. Coates prescribed the device as required in subparagraph (m)(ii) of subsection 118.2(2), counsel for the Respondent continued to argue that common law on the point did not support that there had been a prescription of anything by Dr. Coates, only recommendations which fall short of constituting prescriptions.
Although Ms. Taylor's concession makes this point moot, I will make further reference to it. Her case authority was Craig v. Her Majesty the Queen, [1996] 3 C.T.C. 2037 an Informal Procedure case of this Court. Obiter dicta in that Informal case notes that a "recommendation" was not in that case a "prescription". That conclusion was expressly stated to be based on what the evidence (the doctor's letter) revealed in that case. That letter, in that case, did not say that the patient required anything. It said that the patient was planning to install a hot tub, suggesting even that it was the patient's idea, which the doctor agreed usually helped.
In McGaugh v. Her Majesty the Queen, [1999] 2 C.T.C. 2908, another case referred to by Respondent's counsel, this Court considered the doctor's "To whom it may concern" letter which used the word "prescribed" in the context of carpet removal. This was accepted as a prescription. In Dr. Coates' "To whom it may concern" letter, he confirms he asked the patient's mother to remove the carpeting and that an air cleaner (electrostatic filter) was to be placed on the furnace. I suggest in the context of the subject renovation, such clear advice and direction confirmed in writing by a medical practitioner prior to the renovations is more than sufficient to constitute a prescription.
In the case of Williams v. Her Majesty the Queen, [1998] 1 C.T.C. 2813, a case referred to in the McGaugh decision, the issue of a prescription by a doctor was dealt with by reference the Coté decision, where the absence of a prescription was found not to be fatal. In the context of paragraph (l.2) that is of course clear but where a prescription is required by the Act, as in paragraph (m), I am of the view that in determining what constitutes a prescription, recognizing a doctor's advice and directive as a prescription is analogous to recognizing a doctor's signed authority to use a controlled medication as a prescription. Indeed, in some circumstances I would suggest that having a doctor's advice and directive to do something is a stronger prescription than having his authority to do it. While a prescription may literally suggest that some act is to be followed, in the context of a doctor-patient relationship, it is nothing more than permission to do (or take) something that it is in the power of the doctor to permit. Here, the Appellant has more than the permission of the doctor that the Act has given him authority to give; she has been asked to do it. Both permission and direction are implicit in that directive. I am satisfied, in this case that we have a prescription for both the carpet removal and the installation of the air cleaner.[1]
This takes me to the analysis of subparagraph (l.2) on which the Appellant relies in claiming the flooring renovations as medical expenses. That subparagraph provides as follows:
"for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks normal physical development or has a severe and prolonged mobility impairment, to enable the patient to gain access to, or to be mobile or functional within, the dwelling."
This section has been judicially considered. There are two lines of cases relied on by Respondent's counsel. Firstly, if the renovation has a general well-being purpose, it is not deductible. The Craig case so provides. This is not a general well-being expenditure. It is to reduce the risk of allergic respiratory reactions, which even in moderate form create dysfunction and in the extreme are life threatening. Just prior to the renovation and the doctor's prescription, Michael had two admissions to the hospital emergency ward for breathing and cough episodes severe enough to warrant such admission. These are not general well-being issues even though the renovations may have also contributed to Michael's general well-being in relieving (with less medication) his less serious problems such as wheezing or general shortness of breath and coughing and the like.
The second line of cases have very similar facts to the case at bar. These are the McGaugh and Williams cases referred to. Both cases involved stripping carpets and putting in hardwood floors. Both cases allowed the renovations on the basis of medical conditions aggravated by air impurities, some of which were attributable or believed to be attributable to broadloom carpets. Both these cases, however, were based on findings that the patient had severe and prolonged mobility impairments and that the installations were necessary to enable the patients to function in the home.
In the Williams case, relying on the French version of paragraph (l.2), Judge Rip found that the requirement was that the renovation enable the patient to be functional in the home, so that he or she may perform daily activities. However, in the case at bar there are no in-home "mobility" issues asserted by the Appellant except during episodes which are not daily events. The Appellant admitted that except for recreational activities, Michael was a relatively normal, active child subject to wheezing, and coughing, shortness of breath and colds and the like provided, however, he was maintained on this onerous daily regime of medication. And, of course, there was a daily threat of the more serious episodes referred to above.
While the Appellants' condition in McGaugh and Williams are not, in my view, easily distinguishable from the case at bar, that they might be is not fatal to this appeal. A finding of mobility impairment on which those cases were based, might also be justified in this case. That is, I might find that the subject renovations were effectively made to enable the patient to be mobile and functional within the home. The daily activities for a 6-year-old include recreation in the home and a daily existence without the regime of medication to which Michael was being subjected; a daily existence with as much relief as possible from the daily effects of coughs, colds, wheezing, shortness of breath; and, a daily existence free of behavioural problems associated with his illness and free of frequent visits to emergency wards. Arguably these can properly be described as mobility impairments to the normal daily existence of a 6-year-old. However, it is not necessary in my view to limit the application of paragraph (l.2) to the mobility requirements of that paragraph. There is a further permissive aspect of the application of the paragraph, which creates another avenue for the deduction of renovation expenses in this case. The expense is allowed if incurred to enable a patient who lacks normal physical development to be functional within the home.
I can find no medical or legal definition of the phrase "normal physical development". I believe it is fair to say it lacks both legal and medical certainty as to its intended meaning and should, therefore, be given a liberal, large meaning according to the common usage and understanding of the words comprising the phrase.
What is lacking for Michael is a natural maturation of his respiratory system. He has an incapacity to function normally due to a physical imperfection. An expense incurred to reduce a condition that contributes to that incapacity is being incurred to enable Michael to be functional at home able to engage in normal daily activities as pertain to a 6-year-old. That the renovation does not present a cure is not relevant. If a daily routine is encumbered by frequent asthma-related problems and is further encumbered by the risk of serious allergic reactions which result in a dysfunctional and dangerous state of being, then any sought-for relief from these encumbrances is to liberate the patient, permitting a more normal daily routine.
Michael lacked normal physical development and certain expenses were incurred to enable him to function in his home on a daily basis as normally as his condition permitted. This, in my view, suffices for the purposes of including these expenses as medical expenses under paragraph (l.2). Such application of that paragraph to the facts of this case are well within the mandate expressed in the Coté decision referred to in Williams. That mandate reads as follows:
"...while there are provisions specifying what medical expenses are, the Court is required to give the most equitable and large interpretation possible to this legislation that is compatible with the attainment of its object."
Turning to the actual flooring renovations expenses claimed as medical expenses, I will deal firstly with the ceramic tile expense. The Appellant testified that the ceramic tile was put in the kitchen and bathroom. She admitted that there was little or no carpeting in these areas where the tile actually replaced linoleum. There is no evidence that replacing linoleum had any connection to the asthmatic condition of the child. The claim is wholly unsupportable.
As to the hardwood floors, they were installed to replace carpeting in the areas in the house where Michael spent most of his time. Such renovation was to help relieve Michael's condition, so as to normalize Michael's physical functioning within the home by reducing medication and providing some relief from the serious and chronic problems associated with his respiratory disease. The renovations were aimed at preventing allergic reactions and at medication reduction. Allergic reactions are a daily issue affecting daily functions. Further, it is axiomatic that if medication is aimed at enabling a patient to be functional (on a daily basis), then that which replaces or permits reduction of it is enabling the patient to be functional (on a daily basis). This renovation meets the requirement of paragraph 118.2(2)(l.2).
Invoices show some 540 square feet of hardwood priced at $5.35 per square foot, totalling $3,293.46 including pre-finishing and taxes. Pre-finishing was required to avoid fumes in the house which would have aggravated or been dangerous to Michael. There is a second invoice for installation of the pre-finished hardwood for a total invoice price of $1,494.36. The total of these two invoices was $4,787.82. There was an estimate for the work of $4,440.06. There is also a quotation for essentially the same work as billed in the installation invoice at the same price.
The next invoice is not an invoice at all and says on the top "Quotation", and it repeats the installation charges referred to in the invoice for $1,494.36. Only by adding the "Quotation" amount to the two invoices do we get a total that equals, or very nearly equals, the amount claimed for the hardwood floor installation.
During cross-examination, counsel for the Respondent asked why the claim was so much higher than the estimate. The Appellant testified that it was for additional work to complete baseboards which were not included in the original estimate. There is no invoice for baseboard installation or work. Given counsel for the Respondent's questioning, the extra expenditure and the Appellant's failure to satisfy me as to the nature, quantum and reasonableness of the extra expenditure, and her failure to evidence it, I would allow only the invoiced amounts, which total $4,787.82 as medical expenses under paragraph (l.2).
To summarize, the appeal is allowed in respect of two of the renovations; in respect of installation of the hardwood floors, the amount of $4,787.82 is allowed and in respect of the installation of the air cleaner, the amount of $1,278.68 is allowed.
Signed at Ottawa, Canada, this 4th day of July 2001.
"J.E. Hershfield"
J.T.C.C.
COURT FILE NO.: 2001-313(IT)I
STYLE OF CAUSE: Jo-Lynne Russell v. Her Majesty the Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: June 15, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge J.E. Hershfield
DATE OF JUDGMENT: July 4, 2001
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Nadine Taylor
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-313(IT)I
BETWEEN:
JO-LYNNE RUSSELL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on June 13, 2001 and judgment rendered orally from the bench on June 15, 2001, at Vancouver, British Columbia, by
the Honourable Judge J.E. Hershfield
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Nadine Taylor
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1998 taxation year is allowed, without costs, for the reasons set out in the attached Reasons for Judgment, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant is entitled to claim the following amounts as medical expenses for the 1998 taxation year:
Hardwood flooring $4,787.82
Installation of air cleaner $1,278.68
The Appellant is entitled to no further relief.
Signed at Ottawa, Canada, this 4th day of July 2001.
|
"J.E. Hershfield" |
J.T.C.C.
[1] While a prescription is not required in respect of the carpet removal under paragraph (l.2), I find Dr. Coate's prescription for its removal supportive of my findings as to the application of that paragraph.