Date: 20010330
Docket: 1999-4106-IT-I; 1999-4107-IT-I
BETWEEN:
KEN HARVERSON, CAROLE HARVERSON,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
Agent for the Appellants: Walter T. Bower
Counsel for the Respondent: Charlotte Coombs
Reasons for Judgment
(delivered orally from the Bench on November 2, 2000 at Vancouver, British Columbia)
Campbell, J.
[1] The appeals of both Ken and Carole Harverson were heard together on October 31, 2000.
[2] During the 1995 and 1996 taxation years Ken Harverson (the appellant in file 1999-4106(IT)I) deducted expenses in the amounts of $13,497.24 and $26,820.00 respectively. The amounts were paid for the care given to his mother-in-law, Grace Noren, in a retirement community complex. In reassessing Mr. Harverson for the 1995 taxation year and in assessing him for the 1996 taxation year the Minister refused the said deductions for medical expenses.
[3] During the 1995 and 1997 taxation years Carole Harverson (the appellant in the second file, 1999-4107(IT)I) deducted expenses in the amounts of $13,497.24 and $28,006.24 respectively. These amounts were paid for the care given to her mother, Grace Noren, in two different retirement community complexes. In reassessing Mrs. Harverson for the 1995 taxation year, the Minister refused the deduction. In assessing her for the 1997 taxation year, the amount claimed for medical expenses was reduced by $26,077.50.
[4] The evidence indicated that Grace Noren resided in the basement suite of the Harverson's home for approximately four years until she developed problems with remembering, confusion, et cetera, which necessitated her daughter, Carole Harverson, finding alternate support accommodation for Mrs. Noren. Whitecliff was chosen over a government-run facility because it offered the appropriate environment and the type of living arrangement that would best suit and make her mother happiest. Grace Noren resided at Whitecliff during the 1995 and 1996 taxation years and also during the period from January to October of 1997 taxation year. During November and December of 1997, Grace Noren was moved and resided at Crescent Garden in the congregate living area.
[5] Carole Harverson testified that her mother resided in a self-contained suite while at Whitecliff and at Crescent Garden. This was confirmed by the Administrator and General Manager of Whitecliff and Crescent Garden, both of whom were called as witnesses by the respondent.
[6] The respondent admitted that Grace Noren was a disabled person. However the Minister contends that the expenses claimed were paid for rent and ancillary expenses and contends further that neither Whitecliff or the congregate living area of Crescent Garden were nursing homes where Grace Noren received full-time care at either place. Therefore, the respondent maintains that the appellants are not entitled to the deduction of medical expenses pursuant to section 118.2 of the Income Tax Act.
[7] The issue then is whether the Minister properly reduced the amounts claimed by the appellants as medical expenses for the 1995, 1996 and 1997 taxation years.
[8] More specifically this issue equates to the query whether the monies were paid for full-time attendants or full-time care for Grace Noren during the relevant periods.
[9] The sections of the Act which govern the deduction of such expenses are:
section 118.2, which provides a formula for deduction of such medical expenses and
section 118.2(2), which canvasses the definition of medical expenses in relation to the formula provided for in section 118.2.
[10] The respondent called two witnesses - Mr. Leon Joseph Joyal, a Chief Operating Officer at Crescent Garden, and Sherry Fossum, General Manager of Whitecliff. Mr. Joyal testified that during November and December of 1997, Grace Noren was a resident at Crescent Garden. His evidence was that Crescent Garden was a retirement community with three distinct levels contained within one complex that is - privately owned condos, leased apartments or congregate living area and licenced intermediate care area.
[11] Grace Noren was a resident in the congregate living area. A lease of the apartment had been executed by the appellant, Carole Harverson, on behalf of her mother and a copy of this lease was entered as an exhibit. This was a standard lease with the usual provisions one would expect to find in any lease for an apartment. Monthly rental amount included, according to Mr. Joyal's evidence, such items as security, meals, entertainment and general support services but not full care. Mr. Joyal indicated that although a resident could opt not to utilize all such services, the full monthly rental was to be paid nevertheless. It was his evidence that Grace Noren did not receive care except to the extent that a medical emergency might require it. Nursing care, as such, was not provided to the congregate living residents in such a multi-level care unit. In every sense of the word, Grace Noren was renting premises where the rent included package-services such as meals, security, housekeeping, etc. It was a one-year lease with a damage deposit, notices for renewal and according to Mr. Joyal complied with the Rentalsman Act and Regulations.
[12] The second witness who gave evidence for the respondent was Sherry Fossum, the General Manager of Whitecliff. She confirmed that Grace Noren was a resident at Whitecliff in 1995, 1996 and from January to October 1997. She confirmed that Grace Noren was in a similar type intermediate care unit as Crescent Garden. The lease between Grace Noren and Whitecliff was filed as an exhibit. It was a month-to-month tenancy agreement which included certain services such as housekeeping, laundry, meals, etc. In addition a parking space was made available to Mrs. Noren as she had her own vehicle. The evidence of this witness was clear that the area of Whitecliff rented by Grace Noren was strictly a rental unit and was not licenced for care beyond the services included in the rent. Grace Noren was considered to be living independently and proper qualified nurses did not attend to her needs. In fact, Ms. Fossum testified that at Whitecliff the registered nurses on staff could not attend elsewhere in the facility than as designated.
[13] Although the term "nursing home" is not defined in the Act, I do not feel the need in the present case to engage in a lengthy discourse as to the proper definition. It is clear in the circumstances of this case that Grace Noren was leasing a rental unit or apartment pursuant to the terms of a written lease at both Whitecliff and Crescent Garden. There was no full-time nursing care provided and no full-time attendant looking after her needs other than the requisite help that might be provided in the event of an emergency or the outside help that might be hired and paid for separately from time to time as circumstances dictated for Grace Noren.
[14] Although I commend the family of Grace Noren for choosing to bear the financial burden of maintaining her in a facility that allowed her to continue a safe and dignified lifestyle, I am unable to permit the deductions for such expenses. The evidence just simply does not support that these expenses were incurred either as remuneration for a full-time attendant or for full-time care in a nursing home in accordance with the Act.
[15] In Miles v. Her Majesty the Queen, 99 DTC, 958, at page 962, this Court stated:
There is no doubt that the occupant had an apartment of his own and obviously a very nice apartment and he was able to look after himself, come and go as he pleased except when he had to be attended to. It provided some services by the nursing staff. He had to have his meals prepared for him. There is no indication that he had to be fed or anything of that nature so obviously he had some degree of independence.
In a case of this nature, it is incumbent upon the appellant to establish on a balance of probabilities what the payment was for. Therefore there must be a breakdown in the receipt to show what portion was for attendant care.
[16] In the case before me, however, I am not satisfied that there was any portion of the monthly payment that was for attendant care. The appellants have not satisfied the onus which is upon them; that is, they have not on a balance of probabilities, proved that there was full-time care or a full-time attendant provided for Grace Noren. The monthly expenditure was a rental fee for an apartment which provided additional services included in the rental fee so that individuals such as Grace Noren could maintain an independent lifestyle within the Whitecliff and Crescent Garden complexes. At least the areas of each complex that Grace Noren occupied were not a nursing home as a reasonable individual would define this term.
[17] It is unfortunate that I must therefore dismiss the appeals of both Ken and Carole Harverson and confirm the Minister's assessments in each appeal.
[18] I wish to commend both Mr. Bower and Ms. Coombs for conducting their presentations in a professional manner. I thank them for the clarity with which they presented the issues and the evidence before me.
Signed at Ottawa, Canada, this 29th day of March 2001.
"Diane Campbell"
J.T.C.C.