|
Citation: 2003TCC833
|
|
Date: 20031113
|
|
Docket: 2003-582(IT)I
|
|
BETWEEN:
|
|
EDWARD BEARDWOOD,
|
|
Appellant,
|
|
and
|
|
|
|
HER MAJESTY THE QUEEN,
|
|
Respondent.
|
REASONS FOR JUDGMENT
Sheridan, J.
[1] This is an appeal of the decision
of the Minister of National Revenue (the "Minister")
disallowing the Appellant's claim for a disability tax credit for
the 2001 taxation year.
FACTS
[2] Mr. Beardwood is a 75 year-old
gentleman who, since his heart by-pass surgery in 1986, has
suffered a sharp decrease in his normal physical activities. For
example, he can no longer shovel snow or go skating. He testified
that he has difficulty breathing, especially at night. On
cross-examination, Mr. Beardwood estimated that it would take him
"about 10 minutes" to walk a block; rather than relying
on walking aids, he prefers to stop and rest until he is able to
continue.
[3] He relies daily on certain
medications: the "nitro-puffer" and the "nitro patch". He stated
that he can not function without these medications. If he did not
take them, he said, he would be at great risk of a stroke or
heart attack. On cross-examination he admitted he has not
been hospitalized for any problems arising from his heart
condition but sees his family doctor and cardiologist regularly
to monitor his condition.
[4] From 1986-2000, Mr. Beardwood had
successfully claimed the disability tax credit. For the 2001
taxation year, he submitted two Form T2201 medical certificates
to Canada Customs and Revenue Agency: one from Dr. Costaris
(Exhibit R-1) and another from Dr. Cheung (Exhibit R-2).
The Minister was of the view, however, that these certificates
failed to satisfy the statutory criteria in that the physicians'
responses to the questions did not support the conclusion that
Mr. Beardwood suffered from "a severe and prolonged
impairment" as contemplated by the legislation.
ISSUE
[5] The only issue in this appeal is
whether Mr. Beardwood has met the requirements necessary to
qualify for a disability tax credit as set out in
sections 118.3 and 118.4 of the Income Tax Act (the
"Act").
STATUTORY PROVISIONS
[6] The relevant provisions of the
Act (2001) read as follows:
118.3 (1) Where
(a) an individual has a severe and prolonged mental or
physical impairment,
(a.1) the effects of the impairment are such that the
individual's ability to perform a basic activity of daily
living is markedly restricted or would be markedly restricted but
for therapy that
(i) is essential to sustain a vital function of the
individual,
(ii) is required to be administered at least three times each
week for a total duration averaging not less than 14 hours a
week, and
(iii) cannot reasonably be expected to be of significant
benefit to persons who are not so impaired,
(a.2) in the case of
(i) a sight impairment, a medical doctor or an
optometrist,
(i.1) a speech impairment, a medical doctor or a
speech-language pathologist,
(ii) a hearing impairment, a medical doctor or an
audiologist,
(iii) an impairment with respect to an individual's
ability in feeding and dressing themself, or in walking, a
medical doctor or an occupational therapist,
(iv) an impairment with respect to an individual's ability
in perceiving, thinking and remembering, a medical doctor or a
psychologist, and
(v) an impairment not referred to in any of subparagraphs (i)
to (iv), a medical doctor
has certified in prescribed form that the impairment is a
severe and prolonged mental or physical impairment the effects of
which are such that the individual's ability to perform a
basic activity of daily living is markedly restricted or would be
markedly restricted but for therapy referred to in paragraph
(a.1),
(b) the individual has filed for a taxation year with
the Minister the certificate described in
paragraph 118.3(1)(a.2), and
(c) no amount in respect of remuneration for an
attendant or care in a nursing home, in respect of the
individual, is included in calculating a deduction under section
118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the
year by the individual or by any other person,
there may be deducted in computing the individual's tax
payable under this Part for the year the amount determined by the
formula [set out in the section].
...
[7] Section 118.4 provides definitions
for some of the terms in the preceding section:
118.4. (1) For the purposes of subsection 6(16),
sections 118.2 and 118.3 and this subsection,
(a) an impairment is prolonged where it has
lasted, or can reasonably be expected to last, for a continuous
period of at least 12 months;
(b) an individual's ability to perform
a basic activity of daily living is markedly restricted only
where all or substantially all of the time, even with therapy and
the use of appropriate devices and medication, the individual is
blind or is unable (or requires an inordinate amount of time) to
perform a basic activity of daily living;
(c) a basic activity of daily living in
relation to an individual means
(i) perceiving, thinking and remembering,
(ii) feeding and dressing oneself,
(iii) speaking so as to be understood, in a quiet setting, by
another person familiar with the individual,
(iv) hearing so as to understand, in a quiet setting, another
person familiar with the individual,
(v) eliminating (bowel or bladder functions), or
(vi) walking; and
(d) for greater certainty, no other
activity, including working, housekeeping or a social or
recreational activity, shall be considered as a basic activity of
daily living.
ANALYSIS
[8] The case law is clear that the
criteria set out in sections 118.3 and 118.4 must be rigidly
applied. In Craven v. Canada, [1995] T.C.J. No. 239,
Associate Justice Bowman held that although the Appellant
suffered from a "severe and prolonged" condition, he
did not come within the narrow confines of the statutory
requirements so as to qualify for a disability tax credit.
[9] Counsel for the Respondent cited
the following passage in support of his contention that the
appeal ought to be dismissed:
Yet [the Appellant] does not meet the rigid criteria set out
in subsection 118.4(1). He can perform the activities listed in
paragraph 118.4(1)(c), albeit painfully, but on any realistic
view of the matter he is severely and permanently disabled. The
application of the inflexible tests in section 118.4 leaves the
court no room to apply either common sense or compassion in the
interpretation of the disability tax credit provisions of the
Income Tax Act -- provisions that require a compassionate and
commonsense application. The act draws an unfair distinction
between persons who meet the harsh tests set out in subsection
118.4(1) and those, such as the appellant, who are severely and
permanently disabled in other ways, but do not meet those
tests.
[10] Mr. Justice Létourneau of the
Federal Court of Appeal tempered this analysis somewhat in
Johnston v. Canada, [1998] F.C.J. No. 169 when he
cautioned that ( ¶ 11):
... although the scope of these provisions is limited in their
application to severely impaired persons, they must not be
interpreted so restrictively as to negate or compromise the
legislative intent.
[11] That the Johnston decision has
only a very narrow application was demonstrated in Radia v.
Queen [2000] T.C.J. No.87. In dismissing, with regret, the
Appellant's appeal, Mr. Justice Bowie stated:
In recent decisions, the Federal Court of Appeal has approved
the humane and compassionate approach to the interpretation of
sections 118.3 and 118.4 which was developed by Judge Bowman in
such cases as Noseworthy, [1996] 2 C.T.C. 2006,
Cotterell [1996] T.C.J. No. 1781 (QL), Radage, 96
D.T.C. 1615 and Lawlor, [1996] 2 C.T.C. 2005. However.
The language of the subsection, although no model of
simplicity and clarity, admits of no ambiguity as to the
requirement that each of the five conditions set out there must
be satisfied before the taxpayer is entitled to the tax
credit. The unusual facts of this case cry out for relief.
However, it is not for the courts to provide that relief, in the
face of statutory requirements which the Appellant simply cannot
meet. ... [Emphasis added.]
[12] If Mr. Beardwood is to be granted the
relief he hopes for, he must be able to meet the statutory
requirements of sections 118.3 and 118.4. Counsel for the
Respondent argued that he had not done so. Specifically, counsel
cited that Mr. Beardwood's failure to clear the hurdle
presented by subsection 118.3(1)(a.2) i.e., the filing of a
medical certificate that substantiates, according to the
statutory criteria, the taxpayer's claim of an impairment.
[13] Counsel relied on a decision of the
Federal Court of Appeal, MacIsaac v. Canada, [1999] F.C.J.
No. 1898, in which Mr. Justice Sexton concluded that:
( ¶ 5) Section 118.3(1)(a.2) of the Income Tax Act is not
merely directory. It is
mandatory. Simply put, there must be a certificate
by the doctor that the individual suffers impairments in the
language of these subsections. This Court held to the same
effect in Partanen v. Canada, [1999]
F.C.J. 751 and we feel bound by this decision.
[Emphasis added]
[14] In Buchanan v. Canada [2002]
F.C.J. No. 838, Mr. Justice Rothstein specified that the
legislation required the filing of a "positive"
certificate as "condition precedent" to qualifying for
a disability tax credit:
( ¶ 19): The difficulty is that a positive medical
certificate is a condition precedent to the Minister granting a
disability tax credit.
[15] A "positive" medical
certificate as described by Rothstein, J.A. is a Form T2201
medical certificate in which at least one of the questions in the
series pertaining to the taxpayer's impairment is answered in the
negative.
[16] In the case at hand, not one of the
Form T2201 questions generated a negative response from his two
physicians. For each of the questions listed below, Dr.
Costaris and Dr. Cheung checked the box for "yes" on the
form:
Can your patient
see?
Can your patient
walk?
Can your patient
speak?
Can your patient perceive, think and
remember?
Can your patient
hear?
Can your patient feed or dress
himself?
Can your patient personally manage bowel and bladder
functions?
[17] While one may wonder at the suitability
of this format to rendering a meaningful medical diagnosis, these
questions clearly reflect the language found in subsection
118.4(1). There are listed the impairments that must be found to
exist before it can be determined that an individual is suffering
from an impairment that restricts his ability "to perform a
basic activity of daily living"as defined by that paragraph.
In the present case, from the information in the certificates he
filed, it is not possible to conclude that his medical condition
comes within the statutorily defined impairments set out in
subsection 118(1)(a.2).
[18] Given the decision in McIssac,
Mr. Beardwood's inability to produce a "positive"
medical certificate is a complete bar to his qualifying for a
disability tax credit unless he can show that his case falls
within the exception described by Mr. Justice Rothstein in
the Buchanan decision:
... it is possible for the taxpayer to ask the physician to
reconsider his answers on the certificate or perhaps to obtain a
positive certificate from another physician who does not
misinterpret the requirements of the Act.
...
In an appropriate case, the taxpayer may
seek relief in the Tax Court. Proceedings in the Tax Court
are not a judicial review of the correctness or reasonableness of
the Minister's assessment. Rather, the function of the Tax
Court is to arrive at the correct assessment itself (unless it is
unable to do so and considers it necessary to refer the
assessment back to the Minister for reconsideration under
subparagraph 171(1)(b)(iii) of the Income Tax Act). The
Tax Court's consideration of the matter will be on the
basis of the evidence adduced in the Tax Court, even if that
evidence was not before the Minister when he made his assessment.
[Emphasis added.]
[19] On the basis of the evidence adduced in
the Tax Court, there was nothing to suggest that either of Mr.
Beardwood's physicians misinterpreted the requirements of the
Act. Indeed, Mr. Beardwood stated that if he himself were
a doctor, he would have answered the questions in precisely the
same way as Dr. Costaris and Dr. Cheung. Mr. Beardwood's
objection to the questions had to do with their substance, not
his physicians' responses to them. He stated with some force
that, in his view, such "ridiculous" questions were not
useful in assessing a taxpayer's entitlement to claim a
disability tax credit.
[20] Mr. Beardwood is not the first and is
unlikely to be the last to express frustration with the operation
of the disability tax credit provisions in the Act. That,
however, is not sufficient to permit the Court to grant the
relief sought.
[21] Although sympathetic to and respectful
of Mr. Beardwood's health problems, counsel for the
Respondent rightly argued that the requirements of the Act
and the case law were very clear, that the evidence showed that
Mr. Beardwood had not filed a "positive medical
certificate" and that having failed to satisfy this
condition precedent, he was not entitled to claim a disability
tax credit. The fact that he had been able to do so for the
taxation years 1986-2000 is irrelevant to this appeal.
[22] Accordingly, the Court has no
alternative but to dismiss the appeal.
Signed at Ottawa, Canada, this 13th day of November 2003.
Sheridan, J.
Email this Content