Field v. The Queen, docket 2000-3754-IT-I (Informal Procedure)

Date: 20010316

Docket: 2000-3754-IT-I

BETWEEN:

PETER D. FIELD,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Rowe, D.J.T.C.C.

[1]            The appellant appeals from an assessment of income tax for his 1996 taxation year wherein the Minister of National Revenue (the "Minister") included into income the sum of $10,815.00 on the basis that amount had been a benefit out of or under a registered retirement savings plan as shown on a T4RSP slip issued by CI Mutual Funds Inc.

[2]            The appellant testified he resides in Vancouver, British Columbia and agreed that during the 1996 taxation year he withdrew certain amounts from several Registered Retirement Savings Plans (RRSP) as set out at paragraph 9(b) of the Reply to Notice of Appeal but states that he did not withdraw the amount of $10,815.00 from CI Mutual Funds as alleged by the Minister. The other amounts withdrawn by him from the named RRSPs – Vengrowth Investment Fund Inc., Canada Trust – Everest Mutual Funds, Global Strategy Financial Inc., were reported by him when filing his return of income for the 1996 taxation year. As for the funds in dispute arising from the Minister’s reassessment, the appellant stated his estranged wife had completed the necessary forms in order to facilitate the redemption of the CI Mutual Funds RRSP but it was registered in his own name and was not a spousal RRSP. Field stated he requested that CI Mutual Funds provide him with a copy of the redemption form – Exhibit A-1 – and when he received one in July, 2000, he noted it had been dated April 12, 1996. The form had been completed in the handwriting of his wife but the appellant stated she had no authority whatsoever to undertake the withdrawal of that RRSP and there was no agreement between them permitting any such action on her part. On the form, there was provision for a direction concerning the proceeds of the RRSP and they were authorized to be sent to an address stated therein which the appellant recognized as the home of his wife’s parents in Mississauga, Ontario. The appellant and his wife had been living in Brampton, Ontario but separated on March 27, 1996. When he vacated the matrimonial home, he failed to remove any of his personal documents. His wife owned and operated Hewmac Investment Services Inc. - the name shown on the letterhead of the redemption form – Exhibit A-1 – and she was licensed to sell life insurance and mutual funds in the Province of Ontario. Having been involved in that activity for 5 years, the appellant stated his wife was well versed in the procedures required to withdraw funds from an RRSP. In May, 1996, the appellant contacted CI Mutual Funds and requested copies of the cheques – Exhibit A-2 - pertaining to the RRSP withdrawal. He noted there were three cheques – all payable to himself – totalling the sum of $9,201.97 and all were deposited to the joint account he and his wife had used in Canada Trust, South Common Mall in Mississauga. He obtained a copy of the bank statement for that particular account – Exhibit A-3 – and discovered there had been a deposit to the account on April 18, 1996 in the sum of $9,201.97 but that two separate sums - $4,201.97 and $5,000.00 – representing the total amount of the RRSP withdrawals - had been transferred out of said account on the same day to a new account opened by his wife. He had never received the T4RSP from CI Mutual Funds and he presumes it had been sent to the address of his wife’s parents at Mississauga. Field stated he contacted Revenue Canada officials about the events he had unravelled and informed them that his wife had no authority to make the RRSP withdrawal. The appellant stated he had not signed any of the required documents and considered the signatures to have been a forgery perpetrated by his wife. On July 23, 1996 an Order – Exhibit A-4 – was issued by the Ontario Court (General Division) which incorporated a separation agreement that had been entered into between the appellant and his wife in which provision had been made for the division of certain matrimonial property. He stated that during a conversation with his wife she admitted she had cashed in the particular CI Mutual Funds RRSP.

[3]            In cross-examination, the appellant stated he was aware the total amount of the RRSP withdrawal was in the sum of $10,815.00. That particular RRSP was two years old and he reiterated he had never received any notice from CI Mutual Funds concerning its redemption. During the negotiations surrounding the settlement and the filing of the Order – Exhibit A-4 – he stated his lawyer had advised him it was not practical to pursue any civil remedy against his wife regarding the particular RRSP withdrawal and he accepted that advice. His wife had acted for him from time to time in her capacity as a licensed broker but he had never provided her with any blank redemption forms that he had signed for her to use later on or at all. He had set out these points in his Notice of Appeal – Exhibit A-5 – and stated therein - as a fact upon which he intended to rely - that the redemption order for the RRSP withdrawal was not in his handwriting and the signature was not his own. In his opinion, that discrepancy is apparent when one compares it with his actual signature as it appears on the said Notice of Appeal.

[4]            The appellant submitted he had been the victim of a fraud as he had not authorized any such RRSP withdrawal nor had he received any benefits whatsoever from those funds. He had elected not to pursue a civil remedy against his wife but had provided clear evidence to Revenue Canada concerning the matter and there could have been an assessment against his wife to include the amount of the RRSP into her income for the 1996 taxation year since it was apparent she had received those funds.

[5]            Counsel for the respondent submitted the appellant was still liable to pay the income tax on the total sum withdrawn from the said RRSP and that the amount had been properly included in his income pursuant to the provisions of paragraph 56(1)(h) and subsections 146(8), 146.01(1), and 146(16) of the Income Tax Act (the "Act").

[6]            The relevant portion of the definition of "benefit" in subsection 146(1) of the Act is as follows:

""benefit" includes any amount received out of or under a retirement savings plan other than ..."

[7]            Subsection 146(8) of the Act reads:

"Benefits taxable – There shall be included in computing a taxpayer’s income for a taxation year the total of all amounts received by the taxpayer in the year as benefits out of or under registered retirement savings plans, other than excluded withdrawals (as defined in subsection 146.01(1) or 146.02(1)) of the taxpayer and amounts that are included under paragraph (12)(b) in computing the taxpayer’s income."

[8]            There is no issue concerning the category of excluded withdrawals or arising from any division of the RRSP – as property – resulting from the breakdown of the marriage and the only issue is whether the manner by which the RRSP was redeemed requires the amount realized to be included in the income of the appellant for the 1996 taxation year pursuant to the provisions of paragraph 56(1)(h) of the Act, which reads:

"56(1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

...

(h) amounts required by section 146 in respect of a registered retirement savings plan or a registered income fund to be included in computing the taxpayer’s income for the year; ..."

[9]            In the case of St-Hilaire v. R., [1997] 3 C.T.C. 2711, the Honourable Judge Garon – as he then was – of the Tax Court of Canada considered the case of a taxpayer who had been disabled by a head injury and his mother had been acting as guardian for 15 years until she died – in 1989 - following which a new guardian was appointed. In 1984, the taxpayer’s mother – in her capacity as guardian - had invested certain life insurance policy proceeds into an RRSP and additional sums were added thereafter. However, the Public Trustee advised the new guardian the RRSP was not an authorized investment and the said guardian withdrew the RRSP deposits in 1992 resulting in the receipt of a sum which the Minister then included into the taxpayer’s income for that year. The new guardian appealed on the basis the investment had been made in error by the former guardian and had not resulted in any benefit to the taxpayer. At pages 2718-2720 of his judgment, Judge Garon stated:

"Although the Court sympathizes with the appellant's situation, it has to reach its decision in accordance with the Act. The Act must be applied uniformly to all Canadian taxpayers, regardless of the knowledge level of the taxpayer or of the person representing him or her. The fact that a taxpayer makes an investment which does not prove to be as worthwhile as expected is not a reason for adopting a broader interpretation of the Act.

To begin with, it is not clear that all the money used to purchase the property that made up the RRSP was part of the money which had already been included in income. The source of the money used to purchase the life insurance policy and the other property covered by the RRSP was not established. For example, it is possible that the life annuity paid as an indemnity was not included in income in view of the provisions of paragraph 81(1)(q) of the Income Tax Act, providing for non-inclusion of certain provincial indemnities in a taxpayer's income, and of paragraph 6501(h)(ii) of the Income Tax Regulations which provides for what that provision means by indemnities in the case of Ontario. However, these provisions only apply to amounts received after January 1, 1978.

In any case, the Court concurs in the viewpoint of the respondent that the clear intent of Parliament is indicated in subsection 146(8) and (8.2). Under subsection 146(8), an amount withdrawn from an RRSP must generally be included in income and the taxpayer can only claim a deduction in the specific situation provided for in subsection 146(8.2). The consequences of the general rule of taxation stated in subsection 146(8) of the Act can be explained at least in part in the instant case by the fact that the income from the RRSP in question was not taxed throughout these years (except for 1991) precisely because this was an RRSP. For example, if this had not been an RRSP, the "interest" portion of the income from the property in question would have had to be included in the appellant's income under paragraph 12(1)(c) and subsection 12(4) of the Act or the earlier provisions, which were applicable at various times for each of the years in which the fund existed. The appellant thus benefited from the postponing of tax on this interest for a great many years. It should be borne in mind that the accumulation of income from an RRSP without having to include these amounts in income for purposes of the Income Tax Act is one of the two benefits resulting from the existence of an RRSP, the other being the deduction of amounts paid as RRSP premiums in computing income. It would not be fair to other taxpayers if such interest was only included in income at the time the RRSP funds were withdrawn.

Additionally, the decided cases have reviewed the application of subsection 4(4) to contributions made to RRSPs for which no deduction was claimed and which are subsequently withdrawn from the plan. I refer in particular to Carroll v. Minister of National Revenue, (1984), 84 DTC 1614 (T.C.C.), in which Judge Cardin made an analysis of earlier decisions and concluded as follows:

For these reasons, I must conclude that the legislators did intend that any and all amounts received or withdrawn from a superannuation or pension plan, including Registered Retirement Savings Plans, are taxable whether or not premiums paid into the plan or fund has been previously deducted from the appellant's income. The amendment to Section 146(1)(b) in 1978 deleting the words "otherwise than as a premium" clarifies and confirms, in my view, that the general principle set out by Mr. Justice Walsh in Herman ... applies equally to income received from RRSPs.

The Court therefore considers that subsection 4(4) of the Act does not apply in the instant case as Parliament obviously intended to include amounts withdrawn from an RRSP in a taxpayer's income."

[10]          In the case of Tatarchuk (W.) Estate v. M.N.R., [1991] 1 C.T.C. 2440, the Honourable Judge Bowman – as he then was - heard the appeal of a taxpayer whose son had forged his name with the result that funds were paid out of the appellant’s RRSP into his chequing account without his knowledge or consent and the son had then appropriated the funds and used them for his own purposes. The Minister had added the amount of the withdrawn RRSP funds into the taxpayer’s income. In finding the withdrawal was the result of fraud, Judge Bowman – at page 2443 of his judgment stated:

"...In making this finding I am applying a civil standard of proof that is commensurate with the gravity of the allegations made. Within a standard of proof that is based upon a balance of probabilities there are degrees of probability depending upon the nature of the matter that is the subject of the evidence. Where fraud is alleged, as it is here, a court must, even in applying a civil standard of proof, scrutinize the evidence with great care and look for a higher degree of probability than would be expected where allegations of a less serious nature are sought to be established."

[11]          In the Tatarchuk Estate case, above, the Minister’s position had been that there had been a deregistration which was a phenomenon which would trigger tax whether or not there was any receipt. The second basis for the assessment was pursuant to subsection 146(8) of the Act. The fact situation in that case involved the death of the holder of the RRSP subsequent to the unauthorized withdrawal of the funds. However, the discussion concerning the so-called deregistration and the effect of the unauthorized withdrawal is relevant to the within appeal and those portions of the judgment of Judge Bowman are as follows:

"It is apparent from subsection 146(12) itself – and the bulletin is consistent with this conclusion – that the mere writing of the letter requesting "deregistration", whether that letter is a forgery or not, does not constitute, in itself, a "deregistration", i.e., a revision, amendment or a substitution of a new plan that results in a revised, amended or substituted plan that does not qualify for registration. The department's view is that one of the events giving rise to tax in the annuitant's hands under subsection 146(12) is the payment out of or under the plan before its maturity. Where the full amount in a plan is paid out to an annuitant prior to maturity of the plan there is no need to regard this payment as resulting in a "deregistration" which gives rise to tax. Taxation arises from the receipt under subsection 146(8). The effect under subsection 146(12) of the payment to the annuitant of only a portion of the property in the plan would, on the department's interpretation, bring into the annuitant's income the entire value of the property in the plan unless the plan permitted such a payment in accordance with paragraph 146(2)(b).

The result of this is that, had the plan not in the Minister's view been "deregistered" by the unauthorized and forged request of April 2, 1986 and the removal of the funds, those funds would still have been in plan no. ER10508 and would have been taxed in any event on the deceased's death under subsection 146(8.8).

It is of assistance in analyzing the matter to set out what I conceive to be the arguments in support of the two conflicting points of view. They are not necessarily expressed in the precise manner in which counsel articulated them.

For the appellant it may be said that the basis of taxation under subsection 146(12) has been destroyed in that no "deregistration" (i.e., an amendment, revision or substitution that would disqualify the plan) took place and the purported request for deregistration was unauthorized, illegal, fraudulent and was made without the deceased's knowledge or consent. Similarly the basis of taxation under subsection 146(8) has been demolished in that the funds from the RRSP were never received by the deceased. The temporary use of the deceased's bank account as part of the fraudulent scheme does not amount to receipt within the meaning of subsection (8). It was merely John's method of perpetrating the theft. If the Minister seeks to rely upon subsection 146(8.8) on the basis that the unauthorized "deregistration" did not in law occur and accordingly the funds should still have been there on December 17, 1986 this runs counter to obvious reality and is an attempt to ascribe to the property in the RRSP a notional or fanciful value based on what would have been there had it not been stolen. Taxation is based upon what in fact happened, not on what might have happened [The Queen v. Bronfman Trust, [1987] 1 S.C.R. 32, [1987] 1 C.T.C. 117, 87 D.T.C. 5059, at page 55 (C.T.C. 129, D.T.C. 5068), citing Matheson v. The Queen, [1974] C.T.C. 186, 74 D.T.C. 6176, at page 189 (D.T.C. 6179)].

The Minister's response to this would, I presume, be that the RRSP regime involves no more than a deferral of tax. Mr. Tatarchuk obtained a deferral when he deducted the premiums that he paid to the plan and a further deferral of tax on the interest earned in it. Ultimately, however, the Act contemplates that these amounts will be taxed, one way or another: either when he takes the money out on or before the plan's maturity or on his death. Mr. Tatarchuk was going to be taxed on the money sooner or later. The theft was perfected not on the alleged "deregistration" but upon the removal of the money from the deceased's chequing account and this in itself cannot alter the incidence of taxation which arose at the latest when the money was paid into the account, albeit without the deceased's knbowledge. Furthermore, his son was probably going to get some or all of the money in any event in accordance with the deceased's stated intention. It should not redound to the detriment of the fisc that John is a forger who appropriated the money before the deceased intended, particularly given that he ultimately would have been taxed on it anyway. The objective fact is that, legally or illegally, the money came out of the RRSP and found its way into the deceased's chequing account from which it was stolen. This objective fact is all that is needed to trigger tax. Either John's action in purporting to "deregister" the plan was a nullity in which case the plan never was deregistered, so that the funds should have been in the plan at the time of the deceased's death, or his purported deregistration was effective. In either case the deceased should be taxed on the funds in 1986. The deceased's estate, or the RRSP trust, has a cause of action against John and National Trust. The appellant's real dispute is with them and not with the Minister of National Revenue.

The appellant's response would be that it is inconceivable that the scheme of the Act should require that the estate pay tax on money that the deceased never received and that was not in the RRSP when he died. That result is contrary to reality and common sense. Taxation cannot be based on a worthless claim against John or a problematical cause of action against National Trust.

Both arguments are compelling in their own way, the Crown's on a theoretical basis, the taxpayer's on a practical one. What tips the balance in favour of the taxpayer in my view is that as a matter of common sense the subject should not, in the basence of clear language to the contrary, be taxed on notional amounts that he or she did not receive.

No such clear language exists in section 146 and I am obliged to look to two general principles enunciated by the Supreme Court of Canada.

As stated by Abbott, J. in Oxford Motors Ltd. v. M.N.R., [1959] S.C.R. 548, [1959] C.T.C. 195, 59 D.T.C. 1119, at page 553 (C.T.C. 202, D.T.C. 1122):

In deciding upon the meaning of income, the Courts are faced with practical considerations which do not concern the pure theorist seeking to arrive at some definition of that term....

This principle applies whether we are dealing with the question whether a gain is on income or capital account, as Abbott, J. was in that case, or a sophisticated statutory regime with which we are concerned here.

The second principle is that stated in the recent decision of the Supreme Court of Canada in Fries v. Canada, [1990] 2 S.C.R. 1322, [1990] 2 C.T.C. 439, 90 D.T.C. 6662 where Sopinka, J. said at page 1323 (C.T.C. 439, D.T.C. 6662):

We are not satisfied that the payments by way of strike pay in this case come within the definition of "income ... from a source" within the meaning of section 3 of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act"). In these circumstances the benefit of the doubt must go to the taxpayers.

In the same vein Estey, J. stated in Johns-Manville Canada Inc. v. The Queen, [1985] 2 S.C.R. 46, [1985] 2 C.T.C. 111, 85 D.T.C. 5373, at page 72 (C.T.C. 126, D.T.C. 5384):

Such a determination is, furthermore, consistent with another basic concept in tax law that where the taxing statute is not explicit, reasonable uncertainty or factual ambiguity resulting from lack of explicitness in the statute should be resolved in favour of the taxpayer.

Similarly the benefit of the doubt must go to the taxpayer here.

Common sense by itself is a rather fragile and subjective need upon which to base a decision in fiscal matters, but it is nonetheless the touchstone against which all such determinations must be tested. The technical basis of my decision is that:

(a) there was no "deregistration" (whatever that term may encompass) of Plan ER10508 for the purpose of subsection 146(12) since a stranger cannot "deregister" a plan without the knowledge and authority of an annuitant;

(b) there was no receipt of the funds by the deceased within the meaning of subsection 146(8) since his chequing account was merely a conduit used by his in the furtherance of his fraudulent schene; and

(c) the value of the funds or property in Plan ER10508 immediately before the deceased's death was nil with the result that subsection 146(8.8) is not applicable.

Accordingly no basis of taxation under section 146 of the amounts appropriated by John has been demonstrated. There should of course be included in the income of the deceased for 1986 the amount of $12,345 withheld and remitted by National Trust as well as the amount of $205 which remained in his chequing account out of the $28,805 after the $28,600 was removed.

The appeal is therefore allowed, with costs, if any, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with these reasons to delete from the deceased's income for 1986 the sum of $28,600. The appellant is not entitled to counsel fee as William J. Tatarchuk appeared on his own behalf as executor."

[12]          The evidence of the appellant concerning the lack of authorization on the part of his estranged wife to redeem the CI Mutual Funds RRSP is clear and was not subject to challenge by the Minister. When filing his Notice of Appeal, the appellant – at paragraphs 4 and 5 - stated his position as follows:

"The T4RSP was issued under fraudulent conditions. I have documented proof that I did not request the RSPs be cashed, that I did not receive the cheques and that I did not ever receive any proceeds from the RSPs.

Among other items, I have a copy of the redemption order from CI Mutual Funds, it is not in my handwriting and the signature is not mine. The address given for the cheque to be issued was not mine nor have I ever lived there."

[13]          The Minister’s Reply to the Notice of Appeal did not take issue with any of those statements but merely relied on the assumptions of fact as set forth in paragraph 9 of said Reply in which the details of the withdrawal of the RRSP from CI Mutual Funds were recited, including an assumption that the appellant had received a benefit in the sum of $10,815.00 which he had not reported when filing his income tax return for the 1996 taxation year. The difference between that amount and the sum of $9,201.97 actually paid out by CI Mutual Funds is probably due to a withholding – by CI Mutual Funds – for income tax – of an amount equal to 15% of the amount redeemed.

[14]          I agree that one must be cautious when making a finding of fact that involves dishonesty or fraud – even in the civil context – especially when the party alleged to have committed the act did not participate in the proceedings before the court. However, it is sufficient for the purposes of the within appeal – from a standpoint of determining the facts – for me to conclude that the actions taken by the appellant’s estranged wife to redeem the particular CI Mutual Funds RRSP were unauthorized and that the signature on the requisite form – Exhibit A-1 – is not that of the appellant. In my opinion, this is obvious when compared to his actual signature as it appears on the Notice of Appeal – Exhibit A-5. One does not have to be a handwriting expert to spot the clumsy attempt at duplicating the somewhat peculiar signature of the appellant which appears to be composed of his initials in a form not unlike that of a logo or symbol. There is no evidence whatsoever that the appellant was careless in permitting such an action to have been taken by his wife following their separation and the fact she had been his investment broker in accordance with her license and special qualifications is no more significant than if he had been the victim of a fraud perpetrated by an officer at a financial institution that had been handling his RRSP portfolio. The court Order forming part of Exhibit A-5 – at paragraph 13 - referred to certain mutual funds as being the property of the appellant free and clear from any claim from his wife. In paragraph 14, there is reference to a Schedule A – not filed as an exhibit – which contained a list of certain mutual funds declared to be owned by the wife free and clear from the appellant. The testimony of the appellant was that he had read the handwritten copy of Schedule A and the particular CI Mutual Funds RRSP was not the subject of any mention in the agreement or subsequent Order. He also stated that in accepting the advice of his solicitor - in the context of the overall resolution of their marital affairs - he elected not to pursue his soon-to-be ex-wife in civil court, even though she had admitted cashing in the RRSP and he had obtained proof in the form of a paper trail in order to demonstrate she had done so without his authorization.

[15]          Counsel for the respondent pointed out that when placing monies into the RRSP, the appellant had obtained the benefit of deducting the amounts from his taxable income. That may be so, but when a taxpayer is the victim of a defalcation by someone licensed to deal with his or her investments, it cannot be the law that the victim – in the meantime – must pay the applicable amount of income tax on the unauthorized withdrawal and then be compelled to pursue the offender through the courts, a bonding company, a bankruptcy trustee, an employer – if relevant – or to wait for relief to be granted by either the federal or provincial government - several years later - following a lengthy investigation and/or public inquiry. It is more sensible – in my view - for the Minister to include the amount of the fraudulently acquired funds into the income of the offending party, especially where the requisite evidence is handed over in sufficient detail to support any such assessment. Further, the Minister could assess the taxpayer – if and when recovery is actually made on the wrongly appropriated funds – on the basis the amount initially realized through the involuntary withdrawal from the plan had not lost its tax-exempt characterization and could still be regarded as money remaining within an RRSP and, as a result, the taxpayer would have to include the recovered amount into income. It might not stand up to a challenge by the taxpayer but it would have a better chance of survival than the proposition currently advanced on behalf of the Minister as the basis for assessment in the within appeal.

[16]          I cannot see how the appellant – in the plain and ordinary sense – "received" any amounts as "benefits out of or under" an RRSP within the language used in subsection 146(8) of the Act. He did not receive any money from the RRSP withdrawal and he did not receive any benefit thereof. The joint account previously operated by the appellant and his wife was used as a conduit to funnel the misappropriated funds into a new account in her sole name and this procedure did not provide any benefit to him.

[17]          It is true the appellant previously obtained some tax relief when depositing monies into the said RRSP. Whether or not the marginal rate avoided by a taxpayer in participating in an RRSP will prove – ultimately – to have been greater than the amount attributable to a withdrawal is arguable when one considers – by way of example - that the combined federal and provincial tax rates deferred in 1984 were substantially less than the applicable rate on a withdrawal of the original funds - together with earned interest - during the 1999 taxation year. I cannot see the fact situation suffered by the appellant to be sufficiently common so as to require a special sitting of Parliament to debate an amendment to the legislation in order to require tax to be paid on any withdrawal from a taxpayer’s RRSP, without regard to the manner by which it occurred. Similarly, I doubt there will be a rash of conspiracies springing up whereby people will now plot to structure a purported unauthorized withdrawal of an RRSP – when it was actually done with the consent of the plan holder – so that the culpable parties could then grow fat on the marginal difference in tax rates, or even enjoy a complete windfall if the person responsible for the actual withdrawal – as in the within appeal - could avoid having the amount included into income. One can imagine the challenge facing the advertising agency retained by a firm doing business as an RRSP-qualified investment vendor attempting to sell a product – during the period just before the tax filing deadline - which would require disclosure to potential investors that they risked paying income tax on any future unauthorized and/or fraudulent withdrawals by the particular retirement fund/plan agent, employee or manager. However, the Minister’s assessment was obviously premised on the legislation permitting such an interpretation. I cannot agree and have not been provided with any jurisprudence supporting such a radical departure from the ordinary rules which apply to the process of determining the meaning of statutory language. The facts in the within appeal are not based on any alleged negligent handling of an account or on some misunderstanding arising from a miscommunication to a broker concerning a withdrawal of funds inside a registered retirement savings plan. The within appeal involves an unauthorized act by a person previously in a position of trust as a licensed investment dealer, from which improper conduct she derived a benefit - and in so doing - harmed the appellant.

[18]          The appeal is allowed with costs and the assessment is referred back to the Minister for reconsideration and reassessment on the basis the sum of $10,815.00 - previously included into income as a benefit out of the CI Mutual Funds RRSP – be deleted.

Signed at Sidney, British Columbia, this 16th day of March 2001.

"D.W. Rowe"

D.J.T.C.C.