Date: 20010525
Docket: 2000-3974-IT-I
BETWEEN:
ELEANOR M. DUNGAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hamlyn, J.T.C.C.
[1]
This is an appeal from a reassessment with respect to a
non-refundable medical expense credit for the 1998 taxation
year.
[2]
Through her agent (her son Robert Dungan) the Appellant submitted
the following:
The Appellant required constant assistance with respect to
maintaining a balanced diet, following personal hygiene regiments
and following her medication requirements;
Due to her constant needs, her family, with the concurrence of
Dr. R.H. Friesen, M.D., her physician, decided to place
her in a facility known as Peterborough Manor; and
Peterborough Manor is not a licensed nursing home. However, it
contained the equipment, facilities and personnel specifically
required by the Appellant to meet her survival needs.
[3]
The Minister of National Revenue (the "Minister")
submitted:
The non-refundable medical expense credit sought by the
Appellant for the 1998 taxation year was in respect of total
occupancy charges in the amount of $33,209.72 that were paid by
the Appellant and her spouse, Bert Dungan, on behalf of
themselves to Peterborough Manor;[1]
Peterborough Manor is a retirement home and not a nursing
home;
The Appellant and Bert Dungan resided in Peterborough
Manor as a retirement home in the 1998 taxation year;
In the 1998 taxation year, Peterborough Manor did not
specifically provide the equipment, facilities or personnel to be
considered a nursing home; and
A medical practitioner did not certify the Appellant and
Bert Dungan as persons who by reason of physical or mental
impairment required the equipment, facilities or personnel
specifically provided by Peterborough Manor.
ISSUE
[4]
Are the total occupancy charges in the amount of $26,009.00 that
were paid in the 1998 taxation year by the Appellant to
Peterborough Manor medical expenses within the meaning of
subsection 118.2(2) of the Income Tax Act (the
"Act")?
SIGNIFICANT EVIDENCE
[5]
One witness only was called, the son of the Appellant,
Robert Dungan. He described the deteriorating and disturbing
state of his parents' health, leading to a crisis by June
1997 where in particular, his mother, the Appellant, had extreme
personal care problems, was severely over-medicated to the point
of organ damage and was not able to look after herself in terms
of nutrition, medication and hygiene.
[6]
He attempted in 1997 to find a nursing home facility but was
unable to do so. He indicated there was a shortage of nursing
homes in the Peterborough area and that entry into the nursing
home system required entry through a 'care access
agency'. He eventually found, through the local Peterborough
community 'care access agency', a retirement home
facility that provided a nursing care station, a nurse call
system, emergency response system, medication supervision, safety
equipment, bathrooms for handicapped, bathing assistance,
mobility assistance and personal care supervision.
[7]
Two documents were filed, both signed by the Appellant's
medical doctor:
(1)
Exhibit A-1, a Disability Tax Credit Certificate dated
November 5, 1998, which stated in part:
Eleanor Dungan
...
... medical diagnosis relevant to the impairment
...
osteoarthritis
early dementia
...
If your patient requires an inordinate amount of time to
perform one of these activities answer "no" to the
applicable question.
...
2. Walking
(question) Is your patient able to walk, using an aid if
necessary? (For example, at least 50 metres on level ground.)
...
(answer) No.
...
4. Mental functions
(question) Is your patient able to think, perceive, and
remember, using medication or therapy if necessary? (For example,
can he or she manage personal affairs or do personal care without
supervision?) ...
(answer) No.
...
7. Elimination
(question) Is your patient able to control and personally
manage bowel and bladder functions, using an aid if necessary?
(For example, has uncomplicated ostomy or uses a catheter.)
...
(answer) No.
...
8. (question) Has the impairment lasted, or is it expected to
last, for a continuous period of at least 12 months?
(answer) Yes.
9. Is the impairment severe enough to restrict the basic
activity of daily living identified above all, or almost all, the
time, even with therapy and the use of appropriate aids and
medication?
...
I certify to the best of my knowledge, the foregoing
information is true and complete.
"R.H. Friesen M.D."
and (2) Exhibit R-3, a letter dated September 8, 2000 reads as
follows:
To Whom it May Concern:
Re: Eleanor M. Dungan, Tax Appeal
My credentials are: I am a duly qualified medical practitioner
licensed to practice in the Province of Ontario. I graduated from
the University of Toronto, then completed a two year residency in
Family Medicine at the University of Western Ontario. I received
my C.C.F.P. in 1981.
Mrs. Dungan first came under my care in June of 1997. At this
time she and her husband had moved to Peterborough Manor after
selling their house in Toronto. This was done because the couple
could no longer look after themselves in an appropriate manner.
They moved into Peterborough Manor because of the care provided
by an institution of this nature. There was good supervision of
Mrs. Dungan which was required because of her progressively
worsening medical problems. This included early dementia, a
diagnosis which was first entertained in 1997 in Toronto. This
indeed became progressively worse to a point where she required
hospitalization in February of 1999. She spent almost one year in
hospital when she was finally discharged back into the community
to the nursing home.
Her medical problems included a history of substance abuse
including alcohol and analgesics as well as progressive dementia
complicated by stroke.
There is no doubt that she will require the supervision
provided by Peterborough Manor during the year of 1998. I trust
this is the information required.
Yours truly,
"Dr. R.H. Friesen, MD, CCFP"
ANALYSIS
[8]
Are the total occupancy charges that the Appellant paid in the
amount of $26,009.00 in the 1998 taxation year to Peterborough
Manor medical expenses within the meaning of subsection 118.2(2)
of the Act?
[9]
The types of medical expenses that qualify for the purposes of
the credit are specified in paragraphs 118.2(2)(a) to
(q). In the present case, there are two paragraphs that
have been brought forth - paragraphs 118.2(2)(d) and
118.2(2)(e) of the Act. In paragraph
118.2(2)(d), the cost of providing full-time care in a
nursing home is an eligible medical expense for a patient with a
severe and prolonged mental or physical impairment. Also, the
paragraph applies to a patient who is and will in the foreseeable
future continue to be dependent on others for his/her personal
needs and care because of a lack of normal mental capacity. Such
a condition must be certified by a medical practitioner
authorized to practice pursuant to the laws of the province or of
the jurisdiction in which the taxpayer resides.
[10] In the
present case, paragraph 118.2(2)(d) is not applicable for
the main reason that Peterborough Manor is not a nursing
home.
[11] Paragraph
118.2(2)(e) is applicable where the patient has been
appropriately certified as a person who by reason of mental or
physical impairment requires equipment, facilities or personnel
specially provided by a school, institution or other place for
the care and training of individuals with the same impairment.
The care received does not have to be full-time to qualify under
this paragraph.
[12] In The
Estate of Harry Title v. The Queen,[2] the Minister denied the deceased
Appellant the deduction of $71,361.60, which had been paid by the
Appellant in respect of his stay in an uncertified nursing home.
The estate of the Appellant appealed to the Tax Court of Canada.
Judge Bell allowed the appeal by focusing on the requirements of
paragraph 118.2(2)(e) of the Act. One of the
requirements present in paragraph 118.2(2)(e) is the
certification that the Appellant requires the assistance offered
by the institution. Judge Bell concluded that the letter by the
Appellant's physician stating "This person requires
supervised setting since January 31, 1995 due to medical
illness. This person requires a 24-hour companion." [3] was sufficient to meet
this requirement. However, the Federal Court of Appeal[4] overturned the decision
of the Tax Court. Sharlow J.A., speaking for the Federal Court of
Appeal, stated:
In our view, a certificate under paragraph 118.2(2)(e)
must at least specify the mental or physical handicap from which
the patient suffers, and the equipment, facilities or personnel
that the patient requires in order to obtain the care or training
needed to deal with the handicap. The certificates in this case
are simply too vague to meet that requirement.
CONCLUSION
[13] In this
case the Appellant's Peterborough medical doctor certified
the Appellant had osteoarthritis and early dementia and whose
walking, mental functions and elimination activities were
severely restricted by reason of the impairments (Exhibit A-1).
The evidence shows Peterborough Manor in 1998 was a retirement
home that provided, amongst other things, 24-hour emergency
response, medication supervision, bathing and hygiene supervision
and assistance, regular nutritionally balanced meals, mobility
assistance, nurse call system and a staffed nursing station. In
Exhibit R-3, the Appellant's medical doctor states that
Peterborough Manor was an institution that provided the care she
needed and the supervision she required because of her
progressively worsening medical problems.
[14] I
conclude, therefore, the expense of $26,009.00 was an amount paid
for the care of the Appellant while at Peterborough Manor. The
Appellant was certified by a medical doctor that by reason of her
diagnosed physical and mental handicap, she required the
facilities and personnel specially provided by Peterborough Manor
for the care of those residents suffering from the handicaps
suffered by this Appellant.
DECISION
[15] The
appeal is allowed and the assessment is referred back to the
Minister of National Revenue for reconsideration and reassessment
on the basis that the amount of $26,009.00 paid by the Appellant
to Peterborough Manor in the 1998 taxation year is medical
expenses within the meaning of paragraph 118.2(2)(e) of
the Act.
Signed at Ottawa, Canada, this 25th day of May 2001.
"D. Hamlyn"
J.T.C.C.
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