Rennie v. MNR, 90 DTC 1050, [1990] 1 CTC 2141 (TCC)

Christie, A.C.J.T.C.: —The issue is whether in computing his income the appellant is entitled to deduct certain moving expenses. A number of matters raised in the pleadings relating to moving expenses incurred in 1981 and 1983 were settled by the parties prior to trial. What remains in dispute is about the deductibility of moving expenses in the amount of $8,371 in respect of 1984.

The facts are brief. After some years of working for Domtar Ltd. and lecturing part-time in business administration at McGill University the appellant was employed by that university on a full-time basis. This employment was under two contracts for the academic year which runs from September to May. The second contract terminated in May 1981. This brought to an end his association with McGill. During the period just referred to the appellant, his wife and family resided in Montreal in a home he purchased in 1950. He was next employed by the University of Alberta at Edmonton. When he left Montreal he was uncertain regarding his length of employment in Edmonton so he only took with him a minimum of household effects such as a bedroom set, bedding and kitchen appliances and utensils. He turned his home over to a relative who only paid current expenses like heat, electricity and telephone. It was understood that the appellant could return and occupy this home at any time it suited him.

The appellant and his wife moved to Edmonton in August 1981. While there he had academic year contracts with the University of Alberta for employment in the position of Visiting Associate Professor in the faculty of Business Administration. They lived in a rented apartment. While in Edmonton they did not form an intention to reside there permanently. The appellant and his wife maintained ties with Montreal in the sense that they had relations and friends there with whom they kept in contact. When they visited Montreal they stayed at his home. He kept up his membership in the Montreal Athletic Association. After a year in Edmonton he learned that he could have a special non-resident membership so he applied for that change of status in the Athletic Association, which was granted.

The appellant enjoyed Edmonton and the university but he and his wife found the weather hard to take and, considering their age, they decided to explore Victoria as a place to settle. In June 1983 he opened negotiations with the University of Victoria and entered into a contract with that university for one academic year effective September 1, 1983. His employment there was that of Visiting Associate Professor in the Department of Economics. They moved to Victoria in August 1983 and took up residence in rented premises. When his contract was renewed by the University of Victoria at the end of his first year the appellant and his wife decided to make Victoria their permanent home. The Montreal home was thereupon sold and a home was purchased in Victoria.

The designation "Visiting Associate Professor" does not connotate that the appellant was visiting the University of Alberta from McGill or the University of Victoria from the University of Alberta. On moving to Edmonton the appellant distributed the usual change of address notices from Montreal to Edmonton. He received some kind of grant that was distributed under unidentified legislation by the Government of Alberta to tenants resident in that province.

In his 1981 tax return the appellant claimed and was allowed moving expenses from Montreal to Edmonton. He gave his "Former Residence” as 6531 Starnes, Montreal, and his "New Residence” as 11020-53rd Avenue, #1103, Edmonton. His "Former Employer" is stated to be McGill University and his "New Employer" the University of Alberta. This appears on the first page of the return. "Province or Territory of residence on December 31, 1981, was: Alberta.” In his 1983 return the appellant claimed and was allowed moving expenses from Edmonton to Victoria. In his 1984 return of income the appellant makes this statement on page 1: “Your Province or Territory of residence on December 31, 1984, was: B.C.” Included in the claim for moving expenses he states that his “Former Residence" is 6531 Starnes, Montreal, and his "New Residence” is 317 Simcoe, Victoria. His “Former Employer" is said to be McGill University and his "New Employer" is the University of Victoria. July 20 to August 9, 1984, is given as the time of the move.The claimed deductions relate to the cost of transporting the balance of his household effects from Montreal to Victoria, the selling costs of his Montreal residence and legal fees and taxes in respect of his residence in Victoria. These are the deductions that gave rise to this litigation.

It is common ground that the appeal is to be determined on an interpretation of part of section 62 of the Income Tax Act ("the Act") in relation to the facts recited. What must be considered in particular are these provisions in subsections 62(1) and (3). Subsection 62(1) states:

Where a taxpayer has, at any time, commenced to be employed at a location in Canada (in this subsection referred to as his "new work location") and by reason thereof has moved from the residence in Canada at which, before the move, he ordinarily resided (in this section referred to as his “old residence") to a residence in Canada at which, after the move, he ordinarily resided (in this section referred to as his "new residence") so that the distance between his old residence and his new work location is not less than 40 kilometres greater than the distance between his new residence and his new work location, in computing his income for the taxation year in which he moved from his old residence to his new residence or for the immediately following taxation year, there may be deducted amounts paid by him as or on account of moving expenses incurred in the course of moving from his residence to his new residence .. . .

There follows a number of qualifications to the right to deduct that have no application to this appeal.

Paragraphs 62(3)(b), (e) and (f) provide:

62(3) In subsection (1), "moving expenses" includes any expense incurred as or on account of

(b) the cost to him of transporting or storing household effects in the course of moving from his old residence to his new residence,

(e) the selling costs in respect of the sale of his old residence, and

(f) where his old residence is being or has been sold by the taxpayer or his spouse as a result of the move, the cost to him of legal services in respect of the purchase of his new residence and of any taxes imposed on the transfer or registration of title to his new residence,

but, for greater certainty, does not include costs (other than costs referred to in paragraph (f)) incurred by the taxpayer in respect of the acquisition of his new residence.

The argument made by counsel for the appellant, Mr. G. Jones, is founded on the proposition that a person can have two residences simultaneously. As I understand it from what was placed in evidence and said at trial, the argument evolves from that starting point in this way. The appellant had a residence in Victoria in 1984, but he had also continued to have one in Montreal from the time he went to Edmonton and therefore he was in a position to move from Montreal to Victoria within the meaning of section 62 in that year.

I do not believe that the concept of a person being capable of having more than one residence can be applied in the interpretation of the provisions of section 62 already cited in the manner propounded by the appellant. Those provisions relate to each other and constitute a framework that permits persons within it to deduct moving expenses. It is not the word "residence" that governs, but rather the phrase “ordinarily resided". These are the factors that give rise to deductibility: the commencement of employment at a place in Canada that precipitates a move by the taxpayer from the place in Canada where he ordinarily resided before the move to a place in Canada where he ordinarily resided after the move. The requirement regarding the distance of 40 or more kilometres must be met. Also, subject to specified qualifications, the taxpayer may deduct amounts paid by him as moving expenses incurred in the course of making the move in computing his income for the year in which he made the move or for the immediately following taxation year.

In Thomson v. M.N.R., [1946] S.C.R. 209; [1946] C.T.C. 51; 2 D.T.C. 812 (S.C.C.), the meaning of the words “ordinarily resident" [1] in paragraph 9(a) of the Income War Tax Act [2] was considered. Mr. Justice Estey said at page 70 (D.T.C. 813):

A reference to the dictionary and judicial comments upon the meaning of these terms indicates that one is “ordinarily resident” in the place where in the settled routine of his life he regularly, normally or customarily lives.

Mr. Justice Rand said at page 64 (D.T.C. 815):

The expression “ordinarily resident” carries a restricted signification, and although the first impression seems to be that of preponderance in time, the decisions on the English Act reject that view. It is held to mean residence in the course of the customary mode of life of the person concerned, and it is contrasted with special or occasional or casual residence. The general mode of life is, therefore, relevant to a question of its application.

In 1984 the place where, in the settled routine of the appellant's life, he normally lived was Victoria. That was his residence in the course of his customary mode of life at that time. He had moved from Montreal three years earlier and apart from a visit or visits there—the number or duration of which is not in evidence —his home was in Edmonton or Victoria. There is no evidence that the appellant was in Montreal at all in 1984. All of this clearly establishes that in that year the appellant was ordinarily resident in Victoria.

While there is judicial authority for the proposition that for some purposes a person may have more than one residence (although only one domicile), [3] I know of no authority that holds that a person can be ordinarily resident in two places at the same time. Nor is there anything in the wording of section 62 that suggests that possibility for the purpose of deducting moving expenses. Indeed what is essentially envisaged by the section is a taxpayer commencing to be employed and by reason thereof moving a prescribed minimum distance with the consequent termination of his then place of ordinary residence and the creation of a new and different place of ordinary residence. This is not what transpired regarding the appellant in 1984. Additional comments might be made in rebuttal of the appellant's position, but I regard what has already been said to be a sufficient answer to this appeal.

The appeal is dismissed.

Appeal dismissed.