Docket:
2013-421(IT)I
BETWEEN:
Carrie Pekofsky,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on April 28, 2014, at Montreal, Quebec.
Before:
The Honourable Justice Lucie Lamarre
Appearances:
|
For the Appellant:
|
The Appellant herself
|
|
Counsel for the Respondent:
|
Gabriel Girouard
|
JUDGMENT
The
appeal made under the Income Tax Act (ITA) is allowed and the
determination dated March 12, 2012, is referred back to the Minister of
National Revenue for redetermination on the basis that the appellant is
entitled to the credit for mental or physical impairment with respect to her
daughter pursuant to sections 118.3 and 118.4 of the ITA, for the 2009, 2010,
2011 and 2012 taxation years.
Signed at Ottawa, Canada, this 3rd day of June 2014.
“Lucie Lamarre”
Citation:
2014 TCC 183
Date: 20140603
Docket: 2013-421(IT)I
BETWEEN:
Carrie Pekofsky,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent.
REASONS
FOR JUDGMENT
Lamarre J.
[1]
The appellant is appealing a determination by
the Minister of National Revenue (Minister) disallowing the disability
tax credit amount transferred from an individual that she claimed, pursuant to
sections 118.3 and 118.4 of the Income Tax Act (ITA), in respect
of her daughter for the 2010, 2011 and 2012 taxation years.
[2]
The appellant’s daughter was born in March 1997.
She has been diagnosed with Tourette syndrome and is dyslexic. Although she is
able to perform day‑to‑day functions such as washing, eating and
dressing by herself, she does, according to her own testimony and the
appellant’s, have significant difficulty with her short-term memory, and also
experiences serious difficulties with goal setting and judgment (being slower
than her peers in reasoning and decision making). The daughter testified that
she is constantly isolated at school to enable her to catch up on what the
others learn in regular school hours. At home, her mother constantly has to
remind her of the things she has to do during the day (including taking her
pills regularly).
[3]
The Minister disallowed the credit on the basis
that he was not convinced that the daughter had anything more than academic
problems, which, according to the case law, do not constitute an impairment
that qualifies one for the credit.
[4]
The appellant filed a psychologist’s report prepared
after her daughter had completed her elementary school, which diagnosed a
learning disability in reading comprehension and which recommended that she
continue receiving tutoring at high school (Dr. Yaniv Elharrar’s Report, Exhibit
A-1). While in elementary school, she completed the full Davis Dyslexia
Correction Program at Dyslexiability Inc. (Exhibit A-8).
[5]
Dr. Elharrar completed, on October 25, 2010,
an Application for a Supplement for Handicapped Children form for the Régie des rentes du Québec, indicating that
the appellant’s daughter was diagnosed with a learning disability on
June 25, 2009 (Exhibit A‑2).
[6]
On March 18, 2011, Dr. Elharrar completed a
disability tax credit certificate (Exhibits R-1, and A-3). Although he indicated
that the appellant’s daughter was not markedly restricted in performing the
mental functions necessary for everyday life, he also indicated that she had
been suffering since 2009 from impairments of speaking and mental functions,
the cumulative effect of which was equivalent to a marked restriction in a
basic activity of a daily living. The mental functions referred to were adaptive
functioning, memory, problem-solving, goal-setting and judgment.
[7]
In that same certificate, Dr. Elharrar
explained that the appellant’s daughter had a neurological disorder caused by
Tourette syndrome with a comorbid learning disability.
[8]
In May 2013, the appellant’s daughter was seen
by another psychologist, Dr. Elsa Lo, who confirmed the diagnosis of
Tourette syndrome with comorbid attention difficulties (Exhibit A-4).
Dr. Lo completed a disability tax credit certificate in which she
indicated that her patient was markedly restricted in performing the mental
functions necessary for everyday life all or substantially all of the time, and
added that this situation had existed presumably since the child’s birth in 1997
(Exhibit A-5).
[9]
Dr. Lo explained that the appellant’s
daughter suffered from Tourette syndrome with comorbid attention deficit/hyperactivity
disorder, which resulted in significant impairment in memory (both verbal and
visual-spatial) and poor executive functioning that affected planning and
self-monitoring.
[10]
Dr. Lo answered “no” to the question
whether the impairment had improved to such an extent that the patient would no
longer be markedly restricted.
Statutory
Provisions
[11]
The relevant portions of sections 118.3 and
118.4 of the ITA are appended to the present reasons.
Analysis
[12]
The purpose of sections 118.3 and 118.4 of the
ITA has been analyzed in Johnston v. Canada, [1998] CarswellNat 169,
[1998] F.C.J. No. 169 (QL). The Federal Court of Appeal said the following:
10 The
purpose of sections 118.3 and 118.4 is not to indemnify a person who suffers
from a severe and prolonged mental or physical impairment, but to financially
assist him or her in bearing the additional costs of living and working
generated by the impairment. As Bowman T.C.J. wrote in Radage v. R. at
p. 2528:
The
legislative intent appears to be to provide a modest relief to persons who fall
within a relatively restricted category of markedly physically or mentally
impaired persons. The intent is neither to give the credit to every one who
suffers from a disability nor to erect a hurdle that is impossible for
virtually every disabled person to surmount. It obviously recognizes that
disabled persons need such tax relief and it is intended to be of benefit to
such persons.
The
learned Judge went on to add, at p. 2529, and I agree with him:
If the
object of Parliament, which is to give to disabled persons a measure of relief
that will to some degree alleviate the increased difficulties under which their
impairment forces them to live, is to be achieved the provisions must be given
a humane and compassionate construction.
11 Indeed,
although the scope of these provisions is limited in their application to
severely impaired persons, they must not be interpreted so restrictively as to
negate or compromise the legislative intent.
[13]
It is clear that here the appellant’s daughter
has a severe and prolonged impairment in mental functions. The other condition
for the credit is that the impairment in mental functions be such that the
daughter’s ability to perform a basic activity of daily living is markedly
restricted, and this must be certified by a medical practitioner in prescribed
form.
[14]
Mental functions necessary for everyday life are
defined in paragraph 118.4(1)(c.1) of the ITA as being memory, problem
solving, goal-setting and judgment, and adaptive functioning. Further the
patient must, all or substantially all of the time, be unable or require an
inordinate amount of time to perform those mental functions.
[15]
In Canada (Attorney General) v. Buchanan,
2002 FCA 231, 2002 CarswellNat 1204, [2002] 3 C.T.C. 301, 2002 DTC 7397,
it is stated at paragraph 18 that “[t]he Tax Court’s consideration of the
matter will be on the basis of the evidence adduced in the Tax Court, even if
that evidence was not before the Minister when he made his assessment.”
[16]
Dr. Elharrar’s report indicated that the
appellant’s daughter had significant restrictions the cumulative effect of
which was such that her ability to perform a basic activity of daily living was
markedly restricted. Dr. Lo’s report indicated that her patient was
markedly restricted in performing the mental functions necessary for everyday life
all or substantially all of the time.
[17]
I am therefore satisfied that, read together,
the certificates completed by those two different psychologists support the
conclusion that the appellant’s daughter was markedly restricted in her ability
to perform a basic activity of daily living. The filing of those certificates
was not opposed or challenged by the respondent.
[18]
It has however been held in the case law that
the filing of completed medical practitioners’ forms is not determinative. This
Court must also be satisfied that the legal requirements are in fact met (Walkowiak
v. The Queen, 2012 TCC 453, 2012 CarswellNat 5006, [2013] 2 C.T.C. 2087,
2013 DTC 1036).
[19]
I had the privilege of seeing and hearing both the
mother and the daughter in court.
[20]
Although not a psychologist myself, I was able
to sense the accuracy of the conclusions reached by the psychologists. It is my
understanding that the daughter has problems in coping not only with her
learning activities at school but also with her daily activities, on account of
her short-term memory impairment and her dysfunction with regard to the ability
to use her judgment. The mother explained, amongst other things, that she
constantly needs to supervise her daughter and that everything takes more time for
her daughter to accomplish than is the case for other children of her age.
[21]
I am therefore prepared to accept that the legal
requirements for the disability tax credit (the disability here being the
impairment of the mental functions necessary for everyday life) have been met.
[22]
A question was raised in court with respect to
the years for which the credit should be granted. The appellant is asking that
she receive it for 2009 and the years following.
[23]
In the Reply to the Notice of Appeal, it is
stated that the respondent disallowed the credit for 2010, 2011 and 2012. Neither
the T2201 form nor the determination under appeal was filed in evidence. As
mentioned earlier, the Notice of Appeal did not specify any particular year.
One of the medical certificates completed specifies that the disability was
diagnosed in 2009. Dr. Lo’s certificate indicates that the disability has
existed since birth.
[24]
Paragraph 118.3(1)(b) of the ITA requires
that the individual claiming the credit have filed with the Minister the
medical certificate for the relevant taxation year. In my view, the
certificates filed in evidence cover the 2009 taxation year and the years thereafter.
[25]
I would therefore allow the appeal and refer the
determination back to the Minister for redetermination on the basis that the
appellant is entitled to the credit for mental or physical impairment with
respect to her daughter pursuant to sections 118.3 and 118.4 of the ITA, for
the 2009, 2010, 2011 and 2012 taxation years.
Signed at Ottawa, Canada, this 3rd day of June 2014.
“Lucie Lamarre”
Income Tax Act
118.3 (1) Credit for mental or physical impairment — Where
(a) an individual has one or more
severe and prolonged impairments in physical or mental functions,
(a.1) the effects of the impairment
or impairments are such that the individual’s ability to perform more than one
basic activity of daily living is significantly restricted where the cumulative
effect of those restrictions is equivalent to having a marked restriction in
the ability to perform a basic activity of daily living or are such that the
individual’s ability to perform a basic activity of daily living is markedly
restricted or would be markedly restricted but for therapy that
(i) is essential to sustain a vital
function of the individual,
(ii) is required to be administered at
least three times each week for a total duration averaging not less than 14
hours a week, and
(iii) cannot reasonably be expected to be
of significant benefit to persons who are not so impaired,
(a.2) in the case of an impairment
in physical or mental functions the effects of which are such that the
individual’s ability to perform a single basic activity of daily living is
markedly restricted or would be so restricted but for therapy referred to in
paragraph (a.1), a medical practitioner has certified in prescribed form
that the impairment is a severe and prolonged impairment in physical or mental
functions the effects of which are such that the individual’s ability to
perform a basic activity of daily living is markedly restricted or would be
markedly restricted, but for therapy referred to in paragraph (a.1),
where the medical practitioner is a medical doctor or, in the case of
(i) a sight impairment, an optometrist,
(ii) a speech impairment, a speech-language
pathologist,
(iii) a hearing impairment, an audiologist,
(iv) an impairment with respect to an
individual’s ability in feeding or dressing themself, an occupational
therapist,
(v) an impairment with respect to an
individual’s ability in walking, an occupational therapist, or after February
22, 2005, a physiotherapist, and
(vi) an impairment with respect to an
individual’s ability in mental functions necessary for everyday life, a
psychologist,
(a.3) in the case of one or more
impairments in physical or mental functions the effects of which are such that
the individual’s ability to perform more than one basic activity of daily
living is significantly restricted, a medical practitioner has certified in
prescribed form that the impairment or impairments are severe and prolonged
impairments in physical or mental functions the effects of which are such that
the individual’s ability to perform more than one basic activity of daily
living is significantly restricted and that the cumulative effect of those
restrictions is equivalent to having a marked restriction in the ability to
perform a single basic activity of daily living, where the medical practitioner
is, in the case of
(i) an impairment with respect to the
individual’s ability in feeding or dressing themself, or in walking, a medical
doctor or an occupational therapist, and
(ii) in the case of any other impairment, a
medical doctor,
has certified in prescribed form that the impairment
is 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 or would be markedly restricted but for therapy
referred to in paragraph (a.1),
(b) the individual has filed for a
taxation year with the Minister the certificate described in paragraph (a.2)
or (a.3), 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,
there may be deducted in computing the individual’s
tax payable under this Part for the year the amount determined by the formula .
. . .
118.4 (1) Nature of impairment — 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;
(b.1) an individual is considered to
have the equivalent of a marked restriction in a basic activity of daily living
only where all or substantially all of the time, even with therapy and the use
of appropriate devices and medication, the individual’s ability to perform more
than one basic activity of daily living (including for this purpose, the
ability to see) is significantly restricted, and the cumulative effect of those
restrictions is tantamount to the individual’s ability to perform a basic
activity of daily living being markedly restricted;
(c) a basic activity of daily living
in relation to an individual means
(i) mental functions necessary for everyday
life,
(ii) feeding oneself or 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;
(c.1) mental functions necessary for
everyday life include
(i) memory,
(ii) problem solving, goal-setting and
judgement (taken together), and
(iii) adaptive functioning;
(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; and
(e) feeding oneself does not include
(i) any of the activities of identifying,
finding, shopping for or otherwise procuring food, or
(ii) the activity of preparing food to the
extent that the time associated with the activity would not have been necessary
in the absence of a dietary restriction or regime; and
(f) dressing oneself does not include any of
the activities of identifying, finding, shopping for or otherwise procuring
clothing.
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CITATION:
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2014 TCC 183
|
|
COURT FILE
NO.:
|
2013-421(IT)I
|
|
STYLE OF
CAUSE:
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Carrie Pekofsky v. HER MAJESTY THE QUEEN
|
|
PLACE OF
HEARING:
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Montreal, Quebec
|
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DATE OF
HEARING:
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April 28, 2014
|
|
REASONS FOR JUDGMENT
BY:
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The Honourable Justice Lucie Lamarre
|
|
DATE OF JUDGMENT:
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June 3, 2014
|
APPEARANCES:
|
For the
Appellant:
|
The Appellant
herself
|
|
Counsel for
the Respondent:
|
Gabriel
Girouard
|
COUNSEL OF RECORD:
For the Appellant:
|
Name:
|
|
|
Firm:
|
|
|
For the Respondent:
|
William F. Pentney
Deputy Attorney General of Canada
Ottawa, Canada
|
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