Date: 19980116
Docket: 97-443-IT-I
BETWEEN:
STEPHEN D. ROGERS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Bowie J.T.C.C.
[1] The Appellant lost his job in 1994. He realized that his
best course to secure employment was to take a course to upgrade
his skills, and so he enrolled as a student in a course given by
Memorex Telex Inc. (Memorex), to become a Novell Certified
Netware Engineer. Before doing so, however, he consulted Kim
Knox, an employment counsellor at his Canada Employment Centre,
which is part of Human Resources Development Canada (HRDC). He
did this for two reasons. First, he wanted HRDC to contribute to
the fees for his course; second, he wanted to be sure that his
portion of the fees would qualify for the credits under
sections 118.5 and 118.6 of the Income Tax Act (the
Act). She agreed that HRDC would pay half of the fees, and
she assured him that the portion to be paid by him would be
eligible for credits under the Act. In due course, he
filed his return for 1994, claiming both credits. He has since
been reassessed to deny him the credits claimed, and he now
appeals against that reassessment.
[2] The relevant parts of sections 118.5 and 118.6 read as
follows:
118.5(1) For the purpose of computing the tax payable under
this Part by an individual for a taxation year, there may be
deducted,
(a) where the individual was during the year a student
enrolled at an educational institution in Canada that is
(i) a university, college or other educational institution
providing courses at a post-secondary school level, or
(ii) certified by the Minister of Employment and Immigration
to be an educational institution providing courses, other than
courses designed for university credit, that furnish a person
with skills for, or improve a person's skills in, an
occupation,
an amount equal to the product obtained when the appropriate
percentage for the year is multiplied by the amount of any fees
for the individual's tuition paid in respect of the year to
the educational institution if the total of those fees exceeds
$100, except to the extent that those fees
...
118.6(1) For the purposes of this subdivision,
“designated educational institution” means
(a) an educational institution in Canada that is
...
(ii) certified by the Minister of Employment and Immigration
to be an educational institution providing courses, other than
courses designed for university credit, that furnish a person
with skills for, or improve a person's skills in, an
occupation,
...
(2) For the purpose of computing the tax payable under this
Part by an individual for a taxation year, there may be deducted
an amount determined by the formula
...
if the enrolment is proven by filing with the Minister a
certificate in prescribed form issued by the designated
educational institution and containing prescribed information
and, in respect of a designated educational institution described
in subparagraph (a)(ii) of the definition
“designated educational institution” in subsection
(1), the student is enrolled in the program to obtain skills for,
or improve the student's skills in, an occupation.
[3] There is no dispute about the facts. The Minister accepts
that the Appellant enrolled in the course to improve his skills,
that he paid fees in the amount of $3,328.51 over and above the
portion paid by HRDC, and that he attended and completed the
course between September 5, 1994 and January 27, 1995. It is not
disputed, either, that Ms. Knox gave him the advice to which I
have referred above, and that he relied upon it when he decided
to enroll at Memorex.
[4] The Minister’s disallowance is based on two reasons.
First, it is said that Memorex is not an educational institution
that is certified by the Minister of Human Resources
Development.
[5] The second reason is found in the only assumption pleaded
in the Respondent’s Reply to the Notice of Appeal:
6.(a) for the 1994 taxation year, the Appellant failed to
provide an official tax receipt or a form T2202A issued by the
educational institution to attest to the amount of tuition fees
paid.
[6] There is no doubt that Memorex furnishes its students with
skills for an occupation. That is demonstrated by the fact that
the Appellant was able to secure an excellent position as a
Novell Network Engineer upon completion of the course. Exhibit
A-1 at the trial includes a receipt from Memorex for the amount
claimed by him, but it is not on the Minister’s form
T2202A, only because Memorex did not have a supply of these
forms. The dates of the Appellant’s attendance are
established by a letter from Ms. Knox.
[7] It appears that there is no published list of the
educational institutions which are certified by the Minister of
Human Resources Development. Absent such a list, the Appellant
did the sensible thing; he asked an officer of that
Minister’s Department, and he relied on the advice that she
gave him. As matters turned out, he relied on it to his
detriment.
[8] In these circumstances, the Crown is estopped from denying
that Memorex is a certified institution. It is trite that no
estoppel can override the law, and that the Minister is not bound
to misapply the law simply because officials have given incorrect
advice.[1] But
estoppel in pais has always applied against the Crown in a
proper case.[2] The
classic statement of the requirements to raise an estoppel in
pais is found in the judgment of the House of Lords in
Greenwood v. Martins Bank,[3] and was adopted by the Supreme Court of Canada
in Canadian Superior Oil v. Hambly.[4] There must be a representation of
fact which was intended to induce the party asserting estoppel
to act in a particular way, and that party must have acted
upon it, to his subsequent detriment. In this case a Minister of
the Crown, through the employment counsellor, represented that
the institution was one for which the credits under the
Act would be given. The Appellant was intended to, and
did, act on this representation. It is a representation as to a
matter of fact, because all that was in doubt when the Appellant
asked Ms. Knox about the income tax treatment of his portion of
the fees was whether or not Memorex was an institution which had
been certified. The advice given by Ms. Knox amounted to a
statement that her Minister had certified Memorex to be an
institution of the kind described in
subparagraphs 118.5(1)(a)(ii) and
118.6(1)(a)(ii) of the Act. Vital though it is to
the operation of the statute, the certification itself is a
matter of fact, not of law. But for this representation, the
Appellant would have chosen another institution which was
certified. His detriment, of course, lies in the reassessment
from which this appeal is brought.
[9] The Minister’s reassessment, and the confirmation of
it, were based on his assertion that Memorex was not a certified
educational institution. Before the Court, the emphasis shifted
to the absence of a receipt in prescribed form.[5] The Appellant testified that he
was unable to obtain this receipt, and he provided the only
receipt that the institution had given him. I am aware that the
Federal Court of Appeal has recently held that the failure to
file a prescribed form was a fatal omission.[6] In that case, the purpose of the
prescribed form was to record an election made by the taxpayer
under subsection 26(7) of the Income Tax Application
Rules. In the present case, the only purpose of the form is
to prove matters which are not in dispute. In these
circumstances, where the Appellant has tried unsuccessfully to
obtain the receipt in prescribed form, its absence cannot be
considered fatal to his otherwise undisputed right to the
credit.
[10] The appeal is allowed, and the assessment is referred
back to the Minister for reconsideration and reassessment on the
basis that the Appellant is entitled to the credits under
sections 118.5 and 118.6 of the Act as claimed.
Signed at Ottawa, Canada, this 16th day of January, 1998.
"E.A Bowie"
J.T.C.C.
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