97-108(IT)I
BETWEEN:
JAMES D. SMITH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on December 10, 1997, at Belleville, Ontario
by Christie, A.C.J.T.C.
Appearances
For the Appellant: The appellant himself
Counsel for the Respondent: Dona Gilbertson
JUDGMENT
The appeal from the reassessment made under the Income Tax Act for the 1994 year is dismissed.
Signed at Ottawa, Canada, this 22nd day of December 1997.
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"D.H. Christie" |
A.C.J.T.C.C.
Date: 19971222
Docket: 97-108(IT)I
BETWEEN:
JAMES D. SMITH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Christie A.C.J.T.C.
[1] This appeal is governed by the informal procedure provided for under section 18 and following sections of the Tax Court of Canada Act. The year under review is 1994.
[2] In computing his tax payable for that year the appellant claimed in the computation of his non-refundable tax credits the sum of $4,233.00 in unused tax credits for medical impairment transferred to him from his spouse Lori Smith. The Notice of Appeal reads:
"As previously stressed to Revenue Canada, Sudbury Taxation Centre, my appeal is based on the discrimination of my spouse's disability in accordance to the Disability Tax Credit Criteria Guidelines, not with whether or not she meets the Guidelines already in place.
The Disability Tax Credit Guidelines do not indicate any upper appendage limitations in order to qualify for disability tax credit. Why is being able to reach, lift with arms or hands, grasp with hands, pull with arms or hands, or any upper appendage movement, not as important as speaking or hearing?
As instructed by Revenue Canada I went through all the preliminary channels from being ignored at my M.P.'s office to being politically consoled by Ministers in charge with still nothing being resolved.
My spouses disability is genuine as indicated by a sample of some medical documents attached. Unfortunately Revenue Canada does not think that this disability is important enough to be included in their criteria. I strongly disagree. My basic activities of daily living would be greatly reduced if my arms and hands did not function properly.
I do not feel my request for the disability tax credit has been fairly considered. I respectfully request that allowance for the disability tax credit be reconsidered. Also the criteria guidelines be changed to include upper body limitations.
As noted by rehabilitation professionals, Wellness Works and Associative Rehabilitation Inc. this disability does affect basic living activities."
[3] The opening paragraph and paragraphs numbered 1 to 8 of the Reply to the Notice of Appeal read:
"In reply to the Notice of Appeal for the 1994 taxation year, filed on January 14, 1997, the Deputy Attorney General says:
A. Statement of Facts
1. He says that the statements in the Notice of Appeal are made principally by way of argument and does not admit any allegations of fact incidentally contained therein.
2. He says that the documents attached to the Notice of Appeal speak for themselves.
3. The Minister of National Revenue (the 'Minister') initially assessed the Appellant's income tax return for the 1994 taxation year by Notice of Assessment dated March 6, 1995.
4. In computing his tax payable for the 1994 taxation year, the Appellant claimed in the computation of his non-refundable tax credits, the amount of $4,233.00 for the unused credit for mental or physical impairment transferred from his spouse.
5. By Notice of Reassessment dated November 27, 1995, the Minister reassessed the Appellant's income tax return for the 1994 taxation year and disallowed the said unused credit for mental or physical impairment transferred from his spouse referred to in paragraph 4 above.
6. The Appellant served on the Minister a Notice of Objection dated January 10, 1996 with respect tot he 1994 taxation year.
7. By Notification of Confirmation dated October 16, 1996, the Minister confirmed that the reassessment, not to allow the unused credit for mental or physical impairment transferred from his spouse with respect to the 1994 taxation year, was made in accordance with the provisions of the Income Tax Act (the 'Act').
8. In so confirming the reassessment of the Appellant's income tax return for the 1994 taxation year, the Minister made the following assumptions of fact:
(a) the Appellant's spouse suffered a fractured neck in a multi-vehicle accident in August 1991 and subsequently developed a right Thoracic Outlet Syndrome which needed surgical correction in February 1995;
(b) the Disability Tax Credit Certificate, as prepared and signed by the Appellant's spouse physician and dated August 30, 1995, fail to certify that the Appellant's spouse has a severe and prolonged mental or physical impairment the effects of which are such that the Appellant's spouse ability to perform a basic activity of daily living is markedly restricted, all or almost all the time, even with the use of appropriate aids, devices, medication, or therapy;
(c) the Appellant's spouse was not suffering from a severe and prolonged mental or physical impairment, which markedly restricted her ability to perform a basic activity of daily living during the 1994 taxation year; and
(d) the Appellant's spouse was not entitled to the credit for a mental or physical impairment pursuant to subsection 118.3(1) of the Act during the 1994 taxation year and hence no unused credit was available to be transferred to the Appellant from his spouse for the purposes of computing his non-refundable tax credits and tax payable for 1994 taxation year."
Subsection 118.3(1) of the Income Tax Act ("the Act") provides:
"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) a medical doctor, or where the impairment is an impairment of sight, a medical doctor or an optometrist, has certified in prescribed form that the individual has 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 (a.2), and
(c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year by the individual or by any other person,
for the purposes of computing the tax payable under this Part by the individual for the year, there may be deducted an amount determined by the formula
A x $4,118
where
A is the appropriate percentage for the year."
Subsection 118.4(1) provides:
"For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection,
(a) an impairment is prolonged where it has lasted, or can reasonably be expected to last, for a continuous period of at least 12 months;
(b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living;
(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,
(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
(d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living."
It will be seen that under paragraph 118.3(1)(a.2) that a medical doctor must certify that an individual has 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. Under paragraph 118.3(1)(b) such a certificate must be filed with the Minister of National Revenue.
[4] The only certificate filed with the Minister that pertains to these proceedings is in evidence as Exhibit R-1. It reads:
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Patient: Social insurance number Lori Smith XXX-XXX-XXX |
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When the basic activity of daily The patient will be restricted in a basic activity of daily living: living became restricted: 08-1991 Permanently Year Please give the year the restriction Temporarily/indefinitely ceased or should be re-evaluated.
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Indicate medical diagnosis relevant tot he impairment and describe aids used:
Patient had a MVA accident in Aug. 91 - # Neck. Numerous surgeries etc. She is left with a Chronic Pain Syndrome & Post-Traumatic Stress Disorder. She is on constant analgesic. She also has Bilateral Thoracic Outlet Syndrome. |
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Complete the boxes that apply. Yes No |
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Vision Is your patient able to see, using corrective lenses if necessary? (visual acuity of 20/200 or better in either eye, and 20 degrees or more visual field in the best eye, after correction) CNIB # _________ X
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Walking Is your patient able to walk, using an aid if necessary? (For example, at least 50 metres on level ground.) X
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Speaking Is your patient able to speak so as to be understood in a quiet setting, using an aid if necessary? X
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Mental functions Is your patient able to think, perceive, and remember, using medication or therapy if necessary? (For example, can manage personal affairs or do personal care without supervision.) X
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Hearing Is your patient able to hear so as to understand a spoken conversation in a quiet setting, using an aid if necessary & (Exclude language differences.) X
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Feeding & dressing a) Is your patient able to feed himself/herself, using an aid if necessary? X
b) Is your patient able to dress himself/herself, using an aid if necessary? X
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Elimination Is your patient able to control and personally manage bowel and bladder functions, using an aid if necessary? X (For example, has uncomplicated ostomy or uses a catheter.) Has the impairment lasted, or is it expected to last, for a continuous period of at least 12 months? X Yes No Is the impairment severe enough to restrict the basic activity of daily living identified above, all or almost all the time, even with the use of appropriate aids, devices, medication, or therapy? X
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Having read this form, I certify that to the best of my knowledge the foregoing information is true and complete.
Signature of doctor or optometrist Date Telephone Number "Ronald Sears" Aug. 30/95 705-324-9111 86 Angeline St. S., Lindsay, Ontario K9V 6C5
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The answer to the question about dressing and the answer to the last question are emphasized. This certificate is of no assistance to the appellant in respect of this appeal. Indeed it has the opposite effect.
[5] In Cusson v. M.N.R., [1993] 1 C.T.C. 2471 the headnote reads:
"The appellant claimed a tax credit pursuant to section 118.3. She had had a mastectomy which she claimed caused her much discomfort. The physician's certificate which the appellant filed certified the existence of a prolonged but minor impairment. At issue was whether the appellant had suffered a severe and prolonged physical impairment within the meaning of subsections 118.3(1) and 118.4(1).
Held:
A certificate by a medical doctor stating that the individual is suffering from a severe impairment was essential. The medical doctor only certified the existence of a minor impairment. That was insufficient. Appeal dismissed."
Lamarre Proulx, T.C.J. said at page 2472:
"A certificate by a medical doctor stating that the individual is suffering from a severe impairment is essential to the application of these provisions, i.e. subsections 118.3(1) and 118.4(1)"
[6] The foregoing is sufficient of itself to dispose of this appeal in favour of the respondent.
[7] I might add that at the hearing the appellant alleged that the legislation was in an unspecified manner discriminatory in relation to him and he spoke of his unsuccessful attempts through representations of a political nature to have it changed. This, however, cannot bear on the proper interpretation to be placed on the legislation by this Court.
[8] A letter dated May 23, 1996 signed by R.S.R. Sears, M.D. and addressed to Revenue Canada was placed in evidence by the appellant. It reads:
"Re: James D. Smith, Account Number XXX XXX XXX
60 Victoria Dr. RR 2
Cameron, OntarioK0M 1G0
I have been asked by Jim Smith to write to you with respect to assisting you in determining eligibility for Jim Smith's spouse, Laurie Smith for disability tax credit.
Laurie suffered a fractured neck in a multi vehicle accident on August, 1991. She subsequently developed a right Thoracic Outlet Syndrome which needed surgical correction on February 1, 1995. She is left with chronic pain and disability in her upper back, shoulders, both arms, more-so in her right arm. Because of this, it takes her longer to dress herself. When the husband or daughter are at home, they assist her with dressing.
In your letter to Mr. Smith dated May 6, 1996, you used the term 'excessive amount of time'. I'm not sure how you would define excessive, but Laurie certainly spends alot longer dressing than the average person.
I hope that this is the information you require. If I can be of any further assistance, please feel free to call on me."
Under subparagraph 118.4(c)(ii) of the Act a basic activity of daily living in relation to an individual means of feeding and dressing oneself. Even if this were to be read disjunctively Dr. Sears' letter would not establish the appellant's entitlement to the tax credits in issue. It has been said with reference to paragraphs 118.3(1) and 118.4(1) "that in order for a taxpayer to qualify for a disability tax credit he must meet rigorous requirements. Parliament intended the deduction to be available only to individuals who suffer from the most extreme disabling conditions": Luxton v. The Queen, [1996] T.C.J. No. 848.
[9] The appeal is dismissed.
Signed at Ottawa, Canada, this 22nd day of December 1997.
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"D.H. Christie" |
A.C.J.T.C.C.
COURT FILE NO.: 97-108(IT)I
STYLE OF CAUSE: James D. Smith v.
Her Majesty the Queen
PLACE OF HEARING: Belleville, Ontario
DATE OF HEARING: December 10, 1997
REASONS FOR JUDGMENT BY: Christie, A.C.J.T.C.C.
DATE OF JUDGMENT: December 22, 1997
APPEARANCES:
For the Appellant: The appellant himself
Counsel for the Respondent: Dona Gilbertson
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: George Thomson
Deputy Attorney General of Canada
Ottawa, Canada