Date: 19990319
Docket: 98-49-IT-I
BETWEEN:
ODETTE PÉPIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for judgment
Tardif, J.T.C.C.
[1] This is an appeal for the 1995 taxation year. The Minister
of National Revenue (the “Minister”) denied the
appellant a non-refundable tax credit of $1,139 ($6,700 x
17 percent) in respect of tuition fees.
[2] The facts are relatively easy to summarize.
[3] The appellant began a course of study to earn a nursing
diploma. In December 1995, she had a skiing accident and suffered
as a result a temporary total disability for a brief period of
time and a partial disability, also temporary, for a longer
period.
[4] Through the use of a wheelchair, the appellant was able to
take her theory courses. Following those courses, she was to
complete her training with a mandatory internship but could not
do so on account of the physical disability caused by her skiing
accident.
[5] Her failure to do her internship had serious consequences.
As she was unable to earn her diploma, she risked losing the job
that had been guaranteed her at the Hôpital Maisonneuve
Rosemont (the “Hospital”). Furthermore, as a result
of certain program changes at the Collège Bois-de-Boulogne
(the “College”), she would have to wait a number of
months before being able to do or redo her internship. Lastly,
the fact that she was a single parent during this period added to
the already considerable difficulty of being able to eventually
complete her education so that she could become financially
self-sufficient.
[6] In view of all these constraints and disastrous
consequences, she decided to resort to the only available
solution that would enable her to complete her studies by the
scheduled date: pay $6,700 for a private instructor to provide
her with the coaching she required, which would be in lieu of the
internship.
[7] According to the evidence, the instructor was hired with
the approval of the College and the Hospital, the
appellant’s eventual employer.
[8] The appellant says she also consulted an accountant
concerning the deductibility of the required outlays.
[9] The appellant indicated that she was the only student who
enjoyed this kind of cooperation from the College and
Hospital.
[10] Under the agreement approved by the College, she signed a
contract with Marie-Stella Turbide
(Exhibit I-1). The Collège
Bois-de-Boulogne was neither a party to nor an
intervener in this contract.
[11] However, the appellant indicated that
Marie-Stella Turbide was an accredited member of the
College’s teaching staff.
[12] Relying in particular on section 118.5 and more
specifically on paragraph 118.5(1)(a) of the Income Tax
Act, the Minister contended that the appellant was not
entitled to the credit.
[13] The respondent argued that the credit cannot be granted
since payment was not made directly to the College and the
receipt was not issued by it.
[14] The amount of the tuition fees was of course not paid to
the College. However, it was paid to a member of the
College’s teaching staff. Furthermore, that amount was paid
for training provided by the College in question. Lastly,
although neither a party to nor an intervener in the contract
(Exhibit I-1), the Collège Bois-de-Boulogne
gave its approval and recognized the validity of the content of
the contract, since the performance of that contract enabled the
appellant to obtain her diploma at the same time as all the other
students who had been able to take the normal program of courses
and internships provided by the College. In other words, the
Collège Bois-de-Boulogne approved the hiring of the
private instructor since it recognized the worth and
qualifications of that instructor by agreeing to include the
appellant in the process leading to the awarding of the
diploma.
[15] The diploma awarded represented confirmation, as it were,
of the quality of instruction received, but also, and above all,
recognition that all the diploma prerequisites had been
successfully met.
[16] It would of course have been preferable for the appellant
to pay the fees in issue directly to the educational institution.
And it would definitely have been advantageous for the appellant
to obtain a receipt issued by the College. However, I do not
believe that the appellant should be penalized merely because all
the parties concerned wanted, in good faith, to avoid the
administrative complexities involved in a payment to the College,
which would clearly then have handed the money over to the
instructor, Ms. Turbide.
[17] There is no doubt in my mind that the amount in issue was
paid in respect of fees for tuition received and for recognized
and accredited training, which training was an essential
prerequisite for the diploma which the appellant moreover
obtained. Furthermore, the teacher to whom the amount was paid
was, according to the evidence adduced, a servant of the
Collège Bois-de-Boulogne; the receipt that she issued
could therefore be considered, in the very particular
circumstances of this case, as having been issued by the
College.
[18] For these reasons, I allow the appeal.
Signed at Ottawa, Canada, this 19th day of March 1999.
“Alain Tardif”
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 27th day of January
2000.
Erich Klein, Revisor
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