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Citation: 2005TCC657
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Date: 20051011
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Docket: 2005-826(IT)I
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BETWEEN:
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TRINA D. PREUGSCHAS,
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Appellant,
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And
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little J.
A. FACTS:
[1] The Appellant is the daughter of Walter and Marjorie Preugschas.
[2] Walter Preugschas ("Walter") owns 50% of the issued shares of Bloomsbury Farms Ltd. ("Bloomsbury"). Marjorie Preugschas also owns 50% of the shares of Bloomsbury. Bloomsbury owns and operates a large hog operation near Barrhead in Northwest Alberta (the "Farm"). The Farm consists of 700 acres and approximately 6,000 - 7,000 pigs.
[3] The Preugschas family were involved in an automobile accident near Regina, Saskatchewan in 1997. Their oldest son, Nolan (18), died as a result of the accident and Trina (16) suffered a broken neck.
[4] Following the accident medical doctors concluded that Trina had sustained serious medical injuries. The C4, C5 and C6 discs in Trina's neck had been broken and she was considered to be a quadriplegic. Medical doctors gave Trina minimal chances of ever using her arms and hands again and even less chance that she would be able to walk.
[5] Trina's doctors also indicated that individuals with spinal cord injuries frequently suffer secondary health problems such as pneumonia, bedsores, bladder and kidney infections, pain, heart problems, etc.
[6] Walter Preugschas testified that after the accident Trina's primary focus is to work as hard as she can to get many of her functions back including the ability to walk.
[7] Walter Preugschas also testified that in order to help Trina achieve her goal of getting many of her functions back, including the ability to walk, he and Trina have investigated various types of exercise equipment and a number of medical therapies.
[8] Walter Preugschas testified that in 2002 in their search to locate exercise equipment to increase Trina's chances of improvement they discovered that the Combo Company ("Combo") of Switzerland manufactures exercise equipment used by victims of spinal cord damage.
[9] The Appellant and her father, Walter, carried out further research with rehabilitation clinics in Europe and they also had discussions with individuals in Europe who had suffered spinal cord injuries. They also met with medical practitioners in Canada, Europe and the United States.
[10] From October 22 through October 29, 2003 the Appellant and Walter worked with Thomas Nyfeller of Steinhauser, Switzerland. Mr. Nyfeller is a Neuro-Physiotherapist. By letter addressed to the Saskatchewan Government Insurance and dated October 29, 2003 Mr. Nyfeller said:
... we strongly recommend that she have at her residence both the Giger MD reclining instrument and the Giger Booster impulse instrument. The Giger MD system is a revolutionary therapeutic mechanism. This system of therapy optimizes the motor processes with patients having joint and back problems, arthritis, circulatory problems and complex dysfunctions of the nervous system.
[11] The Appellant accepted the recommendation of Mr. Nyfeller and purchased the Giger Booster at a price of $12,929.00.
[12] When the Appellant filed her income tax return for the 2003 taxation year she deducted the amount of $12,929.00 representing the cost of the Giger Booster.
[13] By Notice of Reassessment dated September 23, 2004 the Minister reassessed the Appellant to disallow the amount of $12,292.00.
B. ISSUES:
[14] The issue is whether the Appellant is allowed to claim a medical expense in the amount of $12,292.00 pursuant to section 118.2 of the Income Tax Act in determining her income for the 2003 taxation year.
C. ANALYSIS AND CONCLUSION:
[15] The Appellant's claim for a medical tax credit is based on paragraph 118.2(2)(m) of the Act which reads as follows:
118.2(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid:
. . .
(m) [prescribed devices] - for any device or equipment for use by the patient that
(i) is of a prescribed kind,
(ii) is prescribed by a medical practitioner,
(iii) is not described in any other paragraph of this subsection, and
(iv) meets such conditions as may be prescribed as to its use or the reason for its acquisition,
to the extent that the amount so paid does not exceed the amount, if any, prescribed in respect of the device or equipment.
[16] I must next consider Part LVII of the Income Tax Regulations (the "Regulations").
[17] Regulation 5700 reads as follows:
5700. For the purposes of paragraph 118.2(2)(m) of the Act, a device or equipment is prescribed if it is a
. . .
(i) device that is designed to assist an individual in walking where the individual has a mobility impairment;
[18] In this situation the evidence is clear that the medical equipment known as the Giger Booster was prescribed by Thomas Nyfeller. I have also concluded that the Giger Booster qualifies as a prescribed device within the meaning of Regulation 5700(m).
[19] Since the Appellant comes within the wording of subsection 118.2(2)(m) and Regulation 5700(m) she is allowed to deduct the amount of $12,929.00 that she paid to purchase the Giger Booster in determining her income for the 2003 taxation year.
[20] The appeal is allowed, without costs.
Signed at Vancouver, British Columbia, this 11th day of October 2005.
Little J.
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