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Citation: 2005TCC567
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Date: 20051011
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Docket: 2005-822(IT)I
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BETWEEN:
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WALTER K. 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 owns 50% of the issued shares of Bloomsbury Farms Ltd. ("Bloomsbury"). The Appellant's wife Marjorie 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.
[2] Trina Preugschas ("Trina") is the daughter of Walter and Marjorie Preugschas.
[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] The Appellant 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] The Appellant 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 had investigated various types of exercise equipment and a number of medical therapies.
[8] The Appellant 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] After carrying out further research with rehabilitation clinics in Europe, after discussions with individuals in Europe who had suffered spinal cord injuries and after discussions with medical practitioners in Europe and the United States, the Appellant purchased the Giger MD, an exercise device manufactured by Combo. The Appellant paid the following amount for the Giger MD:
$9,944.00 (US) x 1.58130 = $15,724.45
GST 1,100.71
Total $16,825.16
[10] 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] When the Appellant filed his income tax return for the 2002 taxation year he deducted the amount of $16,825.16 representing the cost of the Giger MD.
[12] By Notice of Reassessment dated December 1, 2003 the Minister of National Revenue (the "Minister") reassessed the Appellant and disallowed the deduction of $16,825.16.
B. ISSUES:
[13] The issue is whether the Appellant is allowed to claim a medical expense in the amount of $16,825.16 pursuant to section 118.2 of the Income Tax Act (the "Act") in determining his income for the 2002 taxation year.
C. ANALYSIS AND CONCLUSION:
[14] 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
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(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.
[15] In this situation the evidence is clear that the Giger MD that was purchased by the Appellant was not prescribed by a medical practitioner as is required by the specific words of paragraph 118.2(2)(m).
[16] It is not open for the Tax Court to disregard the statutory requirements contained in the Act. I have therefore concluded that the Appellant is not entitled to claim the amount of $16,825.16 as a tax credit in determining his income for the 2002 taxation year.
[17] The appeal is dismissed, without costs.
Signed at Vancouver, British Columbia, this 11th day of October 2005.
Little J.
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