Citation: 2008TCC172
Date: 20080326
Docket: 2006-3353(IT)G
BETWEEN:
JOAN M. MEREDITH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Webb J.
[1] The issue in this case is whether the appeal filed by
the Appellant in relation to the assessment of her 2001 taxation year should be
quashed on the basis that the claim made by the Appellant for a medical expense
tax credit in 2001 was based on an amount that had already been considered by
this Court in a decision rendered in 2005 in relation to a claim for a medical
expense tax credit claimed by the Appellant in 2000.
[2] The issue raised by the Appellant in her appeal filed in relation to
the assessment of her 2001 taxation year was as follows:
The issue is whether I (the Appellant) am entitled to a non-refundable
medical expense credit in respect of any of the disallowed medical expenses in
the 2001 taxation year in the amount of $112,547.45.
This amount of $112,547.45 is the balance paid in 2001 for a wheelchair
accessible housing, which is made up of the following:
Balance owing $232,247.45 -- this amount does not include the approved
med. exp for year 2000
Less $120,000 market value of old condo when sold
Leaving a balance of $112,547.45 paid in year 2001.
[3] I am assuming that the reference to the “Balance owing” of $232,247.45
should be $232,547.45.
[4] The Appellant confirmed that the amounts as set out above in her Notice
of Appeal for 2001 are related to her purchase of a condominium for $302,000
and that this condominium is the same condominium that was the subject of the
claim for a medical expense tax credit by the Appellant in 2000. The interim
closing date for this condominium was August 14, 2000. At the interim closing
the Appellant provided a first mortgage to the vendor in the amount of
$226,500, which was paid by her in January of 2001. The amount that she was
claiming in her 2001 tax return was based on the amount paid in January 2001 to
the vendor under this first mortgage. It appears that the amount paid
($232,547.45) was the principal amount of $226,500 plus interest.
[5] The Appellant had earlier claimed an amount for medical expenses in the
year 2000 in relation to the purchase of this same condominium. The amount
claimed was the subject an appeal to this Court and the decision of this Court
was reported as [2005] T.C.J. 669, 2007 TCC 694, 2008 DTC 2135 and 162 A.C.W.S.
(3d) 848. In his decision Justice Paris stated in part as follows:
14 In her 2000 tax return, Ms. Meredith claimed the difference
between the cost of the new condominium, $302,000, and the value of her
previous condominium, $122,500, as a medical expense under paragraph 118.2(2)(l.21)
of the Income Tax Act....
...
38 The Appellant suggests that the cost or value of the former
residence should be taken as the base amount and that the incremental or
additional costs referred to in paragraph [118.2(2)(l.21)] are any costs
for construction of a new residence that a taxpayer must lay out beyond what he
or she would realize from the sale of the former residence.
39 In her case, she incurred the difference between the price of her
new residence and the value of her old residence solely in order to gain an
access to and be more mobile or functional in her home.
40 In my view, the interpretation suggested by counsel for the
Respondent is to be preferred. That interpretation recognizes that not all of
the construction costs of a residence designed for a person with mobility
limitations can be said to be incurred to enable the person to gain access to,
or to be more mobile or functional within the residence.
41 It appears that the legislative purpose here is to give relief for
the costs of necessary modifications and amenities that are required in the construction
of a residence for a person with mobility limitations, rather than for the cost
of the entire construction.
42 Although Ms. Meredith is claiming only the difference between the
value of her old residence and the cost of her new one, under the
interpretation of the provision that she is suggesting, the entire cost of
construction would be deductible to a person who previously did not own a home.
43 All of the costs of construction would be incremental costs to a
person in that situation. I do not believe that to have been the intention of
Parliament in enacting Paragraph 118.2(2)(l.21).
44 The difficulty in this case is determining the amount of the
incremental costs incurred by Ms. Meredith for what I will refer to as the
accessibility features of her new residence.
45 Those features were substantial and I accept that there would be a
substantial cost associated with them.
46 According to the evidence, Ms. Meredith looked at many units in
her area when she decided she had to move. She said that used two-bedroom
condominiums were similar in size and location to her new residence, but lacked
the accessibility features of her new condominium, and they were selling for
between $210,000 and $230,000.
47 I accept that the difference in price between these units and the
new unit was largely attributable to the additional features as stated and
therefore that the cost of these extra features was between $72,000 and
$92,000.
48 I accept the lower end of this range as being the more likely cost
given that some adjustments should be made for the fact that Ms. Meredith's
residence was new construction and the comparables to which she referred were
used, and a buyer of a new residence pays a certain premium for new
construction.
49 Therefore, on all of the evidence, I find that Ms. Meredith is
entitled to an additional medical expense tax credit on a basis that $72,000 of
the cost of her new residence qualified as a medical expense under Paragraph
118.2(2)(l.21) of the Act.
[6] Therefore it is clear from the decision of Justice Paris that he
determined what portion of the amount of the purchase price of $302,000 payable
by the Appellant for her condominium would be allowed as a medical expense for
2000. Therefore the current appeal, which is based on an amount payable for the
same condominium and which amount was included in the purchase price of
$302,000, raises an issue that has already been adjudicated between the
parties. The Appellant cannot treat the amount paid on the first mortgage as a
separate amount paid as it is related to the acquisition of the same
condominium that was the subject of the earlier proceeding in this Court and
this amount was already included in the purchase price of $302,000 that was
considered by Justice Paris.
[7] In Apotex Inc. v. Merck & Co., 19 C.P.R. (4th) 163, the
Federal Court of Appeal stated as follows:
[24] The relevant principles behind the doctrine of res judicata were
established in two leading Supreme Court of Canada decisions: Angle v. M.N.R.,
[1975] 2 S.C.R. 248, 47 D.L.R. (3d) 544, and Grandview (Town) v.
Doering, [1976] 2 S.C.R. 621, 61 D.L.R. (3d) 455. In Angle, supra,
at p. 254, Dickson J. noted that res judicata essentially encompasses two forms
of estoppel, being "cause of action estoppel" and "issue
estoppel", both based on similar policies. First, there should be an end
to litigation, and second, an individual should not be sued twice for the same
cause of action.
[25] These two estoppels, while identical in policy, have separate applications.
Cause of action estoppel precludes a person from bringing an action against
another where the cause of action was the subject of a final decision of a
court of competent jurisdiction. Issue estoppel is wider, and applies to
separate causes of action. It is said to arise when the same question has been
decided, the judicial decision which is said to create the estoppel is final,
and the parties to the judicial decision or their privies are the same persons
as the parties to the proceedings in which the estoppel is raised (see Carl
Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853, at
p. 93, cited by Dickson J. in Angle, supra, at p. 254).
[8] Leave to appeal this decision of the Federal Court of Appeal to the
Supreme Court of Canada was dismissed ([2002] S.C.C.A. No. 323).
[9] In this case since the portion of the $302,000 purchase price of her
new condominium that can be claimed as a medical expense was already determined
by decision of this Court, the Appellant is precluded from bringing any further
action based on a claim for any medical expense tax credit related to any
portion of the $302,000 purchase price of this condominium.
[10] As a result the Respondent's Motion is granted, without costs, and the
Appellant's appeal in relation to her 2001 taxation year is quashed.
Signed at Halifax, Nova Scotia, this 26th day of March 2008.
“Wyman W. Webb”
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