Date: 20010704
Docket: 2001-313-IT-I
BETWEEN:
JO-LYNNE RUSSELL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Nadine Taylor
Reasons for Judgment
(Edited from transcript of Reasons for Judgment delivered
orally from the Bench on June 15, 2001 at Vancouver, British
Columbia)
Hershfield, J.E.
This is an appeal under the Informal Procedure from a
reassessment of the Appellant's 1998 taxation year which
disallowed medical expenses of $11,884.36 for renovations to the
Appellant's home, consisting of $6,090.38 for new hardwood
floors, $3,477.50 for a new furnace and air cleaner, and
$2,316.44 for a new ceramic tile floor. The expenses were claimed
pursuant to subsection 118.2(2) in respect of a child of the
Appellant suffering from severe and chronic asthma, a condition
admitted to by the Respondent in its Reply.
The Appellant placed reliance on two paragraphs of subsection
118.2(2), namely paragraph (l.2) and paragraph (m). The expenses
in respect of the hardwood floor and ceramic tile were argued to
be deductible pursuant to paragraph (l.2). The expenses in
relation to the furnace and air cleaner were argued to be
deductable pursuant to paragraph (m), which in turn refers
to prescribed outlays under Regulation 5700.
Before reciting the provisions of the Act and
Regulations, the application of which are in issue, it is
necessary to review the evidence relating to the subject expenses
and the circumstances in which they were incurred. The factual
evidence is as follows.
The Appellant's son Michael was six years old at the
time the subject renovations were undertaken. Michael's
doctor, Dr. Edward Coates, recommended, or as I will comment on
later, "prescribed", that some of these renovations be
undertaken.
Since infancy Michael has been under the care of Dr. Coates, a
paediatric allergy immunologist, to whom Michael appears to have
been referred by the Appellant's family doctor, Dr. Wiebe.
Dr. Coates was not present at the hearing. However, a number of
his reports to Dr. Wiebe were submitted as exhibits by the
Appellant, including one in 1991 when Michael was four months
old. He had been hospitalized for six days for a possible
reactive airway disease. The authenticity of the reports has not
been put in issue, although Respondent's counsel expressed
reservations as to their weight given Dr. Coates was not here to
be cross-examined. However, much of the content of the
reports were testified to directly by the Appellant who is a
Registered Nurse and who had first hand experience with the
matters reported on in these exhibits.
During the first hospitalization when Michael was four months
old and ever since, Michael has been on a variety of medications,
some requiring nebulizer administration. The Appellant testified
that given the persistent and severe nature of Michael's
respiratory problems, his medication continued in increasing
dosages and included research drugs. Even using a variety of
medications in adult dosages, Michael was admitted to hospital
several more times between 1992 and 1998 due to severe
respiratory problems, including hospital admissions in March and
again in April of 1998. On June 24, 1998, Dr. Coates wrote
to Dr. Wiebe after seeing Michael on June 11 following
Michael's admission to the hospital. That report reads in
part as follows:
"Thanks for asking me to see Michael again, he has
apparently been having severe croup attacks resulting in his
having to visit the emergency room at The Children's
Hospital where he was observed to have significant respiratory
distress, a croupy cough, a tracheal tug and cyanosis; no
wheezing was heard. I understand racemic epinephrine and
pulmicort were the medications used."
He goes on to refer to continuing complaints of growing pains,
that Michael's endurance has been questioned and that his
mother has concerns about problematic mood swings. Under the
heading "Investigations", the report states:
"On repeat skin testing Michael was positive to dust
mites...and histamine control...He was negative to cat, dog,
feathers, molds, trees, grasses, weeds, milk, soya, eggs, wheat,
fish, and peanuts."
Under the heading "Recommendations", the report
contains the following:
"I counselled mother that they needed to work hard at home
to control the dust mite population, I went over ways and means
that they might do this. I placed Michael on a trial of Flovent
three puffs twice daily of the 50 microgram strength in addition
to Ventolin one to two puffs on a PRN basis and asked her to
continue to monitor his lung functions using a peak flow metre
charting the results daily. Hyposensitization therapy is an
available option for him although for now lets see how he
progresses with the above recommendations."
On June 18th, 1998, that is after the June 11 visit, Dr.
Coates wrote the following "To whom it may concern"
letter. It was written to support a medical expense claim, but
was written at the time that the "prescription" for
home renovations was made, which predates the actual renovations
which occurred in the fall of 1998. That "To whom it may
concern" letter reads as follows:
"Michael has asthma and has been found to be allergic to
dust mite forces. In an effort to maximize preventative
measures, I asked mother to remove as much carpeting as possible
starting with his bedroom (emphasis added) cover both
mattress and pillow with dust-proof covers (encase them
completely). If they had a forced air heating system an
electrostatic filter has to be placed over the cold air return
duct (emphasis added) and sometimes a local air filtering
unit in the bedroom is helpful (i.e. Bionaire). Any assistance in
helping his parents make these modifications would be appreciated
and would enable me to maintain Michael on as little
medication as possible (emphasis added)."
Before moving on, a number of observations need to be made
regarding Michael's condition. It is not expected that
Michael's severe asthmatic condition will soon disappear.
He still suffers and he may never fully enjoy normal respiratory
function. The renovations were not a cure, nor could they be
expected to be.
Michael was hospitalized again in 1999. There are also medical
reports for three visits to Dr. Coates between October 12, 2000
and November 9, 2000 evidencing the continuing and severe
problems. I will read from the November 10 report regarding
the November 9, 2000 visit to Dr. Coates. This is a report
directed to Dr. Wiebe:
"Mother came in with Michael, his symptoms having previously
improved but then he developed a viral cold four days before
coming in and his asthma control deteriorated. His behaviour
patterns also became more of a problem. Again we have a direct
correlation in Michael between asthma control and behaviour
patterns. Mother was administering Flovent discus 100 micrograms
twice daily, Ventodisc 200 micrograms two to three times daily
and Singulair 5 milligrams morning and night. His physical exam
revealed moderate wheezing to be present, no crepitations, no
dullness to percussion. Given his ongoing significant asthma
symptom in spite of the above approach I suggested that we switch
him to nebulized Pulmicort 0.25 milligram per ml ampules
combined with Ventolin 2.5 milligram ampules administered
simultaneously three times daily whilst they continued with
Singulair 5 milligrams morning and night. Mother was going to
drop by in a weeks time so that I could auscultate
Michael's lungs and give her further direction. I will
update you at that point."
Michael, now eight years old, continues to live with a
condition that is affecting his ability to function as a normal
child. At the age of six an allergy to dust mites was detected
and Dr. Coates asked his mother, as a preventive measure, to
address that problem which was aggravating an already severe
condition and increasing his daily medication requirements.
Whether I give weight to these reports or not, this is the impact
of the Appellant's direct testimony.
Further information regarding a severe condition like
Michael's can be taken from two other exhibits tendered by
the Appellant. I'm referring to a publication of the
Canadian Lung Association and a publication of the Asthma Society
of Canada which make reference to indoor air quality, including
biological contaminants such as dust mites. The solution for
asthmatics with dust-mite problems is to remove carpets
from bedrooms and the rest of the house if possible. Both
publications also recommend air cleaners as important remedial
devices.
As to describing the condition that Michael suffers, the
Canadian Lung Association publication provides the following
introductory remarks:
"Asthma is a chronic lung condition that can develop at any
age. It is most common in childhood and occurs in approximately
seven to ten per cent of the paediatric population. Asthma is the
most common chronic respiratory disease of children; it accounts
for one-quarter of school absenteeism. Asthma affects
children in varying degrees, from very mild (only during vigorous
exercise) to very severe. Children with severe asthma may have
symptoms every day that may cause some lifestyle restriction; in
these children symptoms occur more easily and more frequently.
There is a general trend of increased deaths and hospitalizations
from asthma recorded in all the industrialized countries of the
world, Canada included. In Canada, approximately 20 children and
500 adults die each year from asthma. However, with adequate
treatment most deaths from asthma can be prevented."
As already noted, that Michael's asthmatic condition is
severe has been admitted to in the Respondent's Reply.
I will now turn to the provisions of the Act and
Regulations, the application of which are in issue. First
consider paragraph (m) of subsection 118.2(2), and the furnace
and air-cleaner expenses claimed under that paragraph and
Regulation 5700. Paragraph (m) allows as a medical
expense an outlay:
"(m) 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."
Relevant provisions of regulation 5700 prescribing certain
devices are:
"(c) device or equipment, including a replacement part,
designed exclusively for use by an individual suffering from a
severe chronic respiratory ailment or a severe chronic immune
system disregulation, but not including an air conditioner,
humidifier, dehumidifier, heat pump or heat or air exchanger;
(c.2) electric or sealed combustion furnace acquired to replace a
furnace that is neither an electric furnace nor a sealed
combustion furnace, where the replacement is necessary solely
because of a severe chronic respiratory ailment or a severe
chronic immune system disregulation."
The Appellant admitted that a gas (sealed combustion) furnace
had been replaced with another gas furnace. The effect of this
admission is that the furnace replacement in this case is not a
prescribed device.
Counsel for the Respondent conceded, however, that the air
cleaner qualified as a medical device under paragraph (c) of
Regulation 5700. The agreed amount was $1,278.65. That is, of the
$3,477.50 claimed for the furnace and air cleaner, only $1,278.65
is allowed. While this concession by Respondent's counsel
would include an acceptance that Dr. Coates prescribed the device
as required in subparagraph (m)(ii) of subsection 118.2(2),
counsel for the Respondent continued to argue that common law on
the point did not support that there had been a prescription of
anything by Dr. Coates, only recommendations which fall short of
constituting prescriptions.
Although Ms. Taylor's concession makes this point moot, I
will make further reference to it. Her case authority was
Craig v. Her Majesty the Queen, [1996]
3 C.T.C. 2037 an Informal Procedure case of this Court.
Obiter dicta in that Informal case notes that a
"recommendation" was not in that case a
"prescription". That conclusion was expressly stated to
be based on what the evidence (the doctor's letter) revealed
in that case. That letter, in that case, did not say that the
patient required anything. It said that the patient was planning
to install a hot tub, suggesting even that it was the
patient's idea, which the doctor agreed usually helped.
In McGaugh v. Her Majesty the Queen, [1999]
2 C.T.C. 2908, another case referred to by
Respondent's counsel, this Court considered the
doctor's "To whom it may concern" letter which
used the word "prescribed" in the context of carpet
removal. This was accepted as a prescription. In Dr.
Coates' "To whom it may concern" letter, he
confirms he asked the patient's mother to remove the
carpeting and that an air cleaner (electrostatic filter) was
to be placed on the furnace. I suggest in the context of the
subject renovation, such clear advice and direction confirmed in
writing by a medical practitioner prior to the renovations is
more than sufficient to constitute a prescription.
In the case of Williams v. Her Majesty the Queen,
[1998] 1 C.T.C. 2813, a case referred to in the McGaugh
decision, the issue of a prescription by a doctor was dealt with
by reference the Coté decision, where the absence
of a prescription was found not to be fatal. In the context of
paragraph (l.2) that is of course clear but where a prescription
is required by the Act, as in paragraph (m), I am of the
view that in determining what constitutes a prescription,
recognizing a doctor's advice and directive as a
prescription is analogous to recognizing a doctor's signed
authority to use a controlled medication as a prescription.
Indeed, in some circumstances I would suggest that having a
doctor's advice and directive to do something is a stronger
prescription than having his authority to do it. While a
prescription may literally suggest that some act is to be
followed, in the context of a doctor-patient relationship, it is
nothing more than permission to do (or take) something that it is
in the power of the doctor to permit. Here, the Appellant has
more than the permission of the doctor that the Act has given him
authority to give; she has been asked to do it. Both permission
and direction are implicit in that directive. I am satisfied, in
this case that we have a prescription for both the carpet removal
and the installation of the air cleaner.[1]
This takes me to the analysis of subparagraph (l.2) on
which the Appellant relies in claiming the flooring renovations
as medical expenses. That subparagraph provides as follows:
"for reasonable expenses relating to renovations or
alterations to a dwelling of the patient who lacks normal
physical development or has a severe and prolonged mobility
impairment, to enable the patient to gain access to, or to be
mobile or functional within, the dwelling."
This section has been judicially considered. There are two
lines of cases relied on by Respondent's counsel. Firstly,
if the renovation has a general well-being purpose, it is
not deductible. The Craig case so provides. This is not a
general well-being expenditure. It is to reduce the risk of
allergic respiratory reactions, which even in moderate form
create dysfunction and in the extreme are life threatening. Just
prior to the renovation and the doctor's prescription,
Michael had two admissions to the hospital emergency ward for
breathing and cough episodes severe enough to warrant such
admission. These are not general well-being issues even though
the renovations may have also contributed to Michael's
general well-being in relieving (with less medication) his less
serious problems such as wheezing or general shortness of breath
and coughing and the like.
The second line of cases have very similar facts to the case
at bar. These are the McGaugh and Williams cases
referred to. Both cases involved stripping carpets and putting in
hardwood floors. Both cases allowed the renovations on the basis
of medical conditions aggravated by air impurities, some of which
were attributable or believed to be attributable to broadloom
carpets. Both these cases, however, were based on findings that
the patient had severe and prolonged mobility impairments and
that the installations were necessary to enable the patients to
function in the home.
In the Williams case, relying on the French version of
paragraph (l.2), Judge Rip found that the requirement was that
the renovation enable the patient to be functional in the home,
so that he or she may perform daily activities. However, in the
case at bar there are no in-home "mobility" issues
asserted by the Appellant except during episodes which are not
daily events. The Appellant admitted that except for recreational
activities, Michael was a relatively normal, active child subject
to wheezing, and coughing, shortness of breath and colds and the
like provided, however, he was maintained on this onerous daily
regime of medication. And, of course, there was a daily threat of
the more serious episodes referred to above.
While the Appellants' condition in McGaugh and
Williams are not, in my view, easily distinguishable from
the case at bar, that they might be is not fatal to this appeal.
A finding of mobility impairment on which those cases were based,
might also be justified in this case. That is, I might find that
the subject renovations were effectively made to enable the
patient to be mobile and functional within the home. The daily
activities for a 6-year-old include recreation in the home and a
daily existence without the regime of medication to which Michael
was being subjected; a daily existence with as much relief as
possible from the daily effects of coughs, colds, wheezing,
shortness of breath; and, a daily existence free of behavioural
problems associated with his illness and free of frequent visits
to emergency wards. Arguably these can properly be described as
mobility impairments to the normal daily existence of a
6-year-old. However, it is not necessary in my view to limit the
application of paragraph (l.2) to the mobility requirements of
that paragraph. There is a further permissive aspect of the
application of the paragraph, which creates another avenue for
the deduction of renovation expenses in this case. The expense is
allowed if incurred to enable a patient who lacks normal physical
development to be functional within the home.
I can find no medical or legal definition of the phrase
"normal physical development". I believe it is fair to
say it lacks both legal and medical certainty as to its intended
meaning and should, therefore, be given a liberal, large meaning
according to the common usage and understanding of the words
comprising the phrase.
What is lacking for Michael is a natural maturation of his
respiratory system. He has an incapacity to function normally due
to a physical imperfection. An expense incurred to reduce a
condition that contributes to that incapacity is being incurred
to enable Michael to be functional at home able to engage in
normal daily activities as pertain to a 6-year-old. That the
renovation does not present a cure is not relevant. If a daily
routine is encumbered by frequent asthma-related problems and is
further encumbered by the risk of serious allergic reactions
which result in a dysfunctional and dangerous state of being,
then any sought-for relief from these encumbrances is to liberate
the patient, permitting a more normal daily routine.
Michael lacked normal physical development and certain
expenses were incurred to enable him to function in his home on a
daily basis as normally as his condition permitted. This, in my
view, suffices for the purposes of including these expenses as
medical expenses under paragraph (l.2). Such application of
that paragraph to the facts of this case are well within the
mandate expressed in the Coté decision referred to
in Williams. That mandate reads as follows:
"...while there are provisions specifying what medical
expenses are, the Court is required to give the most equitable
and large interpretation possible to this legislation that is
compatible with the attainment of its object."
Turning to the actual flooring renovations expenses claimed as
medical expenses, I will deal firstly with the ceramic tile
expense. The Appellant testified that the ceramic tile was put in
the kitchen and bathroom. She admitted that there was little or
no carpeting in these areas where the tile actually replaced
linoleum. There is no evidence that replacing linoleum had any
connection to the asthmatic condition of the child. The claim is
wholly unsupportable.
As to the hardwood floors, they were installed to replace
carpeting in the areas in the house where Michael spent most of
his time. Such renovation was to help relieve Michael's
condition, so as to normalize Michael's physical
functioning within the home by reducing medication and providing
some relief from the serious and chronic problems associated with
his respiratory disease. The renovations were aimed at preventing
allergic reactions and at medication reduction. Allergic
reactions are a daily issue affecting daily functions. Further,
it is axiomatic that if medication is aimed at enabling a patient
to be functional (on a daily basis), then that which replaces or
permits reduction of it is enabling the patient to be functional
(on a daily basis). This renovation meets the requirement of
paragraph 118.2(2)(l.2).
Invoices show some 540 square feet of hardwood priced at $5.35
per square foot, totalling $3,293.46 including pre-finishing and
taxes. Pre-finishing was required to avoid fumes in the house
which would have aggravated or been dangerous to Michael. There
is a second invoice for installation of the pre-finished hardwood
for a total invoice price of $1,494.36. The total of these two
invoices was $4,787.82. There was an estimate for the work of
$4,440.06. There is also a quotation for essentially the same
work as billed in the installation invoice at the same price.
The next invoice is not an invoice at all and says on the top
"Quotation", and it repeats the installation charges
referred to in the invoice for $1,494.36. Only by adding the
"Quotation" amount to the two invoices do we get a
total that equals, or very nearly equals, the amount claimed for
the hardwood floor installation.
During cross-examination, counsel for the Respondent asked why
the claim was so much higher than the estimate. The Appellant
testified that it was for additional work to complete baseboards
which were not included in the original estimate. There is no
invoice for baseboard installation or work. Given counsel for the
Respondent's questioning, the extra expenditure and the
Appellant's failure to satisfy me as to the nature, quantum
and reasonableness of the extra expenditure, and her failure to
evidence it, I would allow only the invoiced amounts, which total
$4,787.82 as medical expenses under paragraph (l.2).
To summarize, the appeal is allowed in respect of two of the
renovations; in respect of installation of the hardwood floors,
the amount of $4,787.82 is allowed and in respect of the
installation of the air cleaner, the amount of $1,278.68 is
allowed.
Signed at Ottawa, Canada, this 4th day of July 2001.
"J.E. Hershfield"
J.T.C.C.
COURT FILE
NO.:
2001-313(IT)I
STYLE OF
CAUSE:
Jo-Lynne Russell v. Her Majesty the Queen
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
June 15, 2001
REASONS FOR JUDGMENT BY: The Honourable
Judge J.E. Hershfield
DATE OF
JUDGMENT:
July 4, 2001
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the Respondent: Nadine
Taylor
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-313(IT)I
BETWEEN:
JO-LYNNE RUSSELL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on June 13, 2001 and judgment
rendered orally from the bench on June 15, 2001, at Vancouver,
British Columbia, by
the Honourable Judge J.E. Hershfield
Appearances
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Nadine Taylor
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1998 taxation year is allowed, without costs, for
the reasons set out in the attached Reasons for Judgment, and the
assessment is referred back to the Minister of National Revenue
for reconsideration and reassessment on the basis that the
Appellant is entitled to claim the following amounts as medical
expenses for the 1998 taxation year:
Hardwood
flooring
$4,787.82
Installation of air
cleaner
$1,278.68
The
Appellant is entitled to no further relief.
Signed at Ottawa, Canada, this 4th day of July 2001.
J.T.C.C.
Email this Content