1999-3031(IT)I
BETWEEN:
NICOLA BONGIOVANNI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on September 15, 2000 at Toronto,
Ontario, by
the Honourable Judge Terrence O'Connor
Appearances
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Carol Aultman
JUDGMENT
The
appeal from the reassessment made under the Income Tax Act
for the 1997 taxation year is dismissed in accordance with the
attached Reasons for Judgment.
Signed at Ottawa, Canada, this 24th day
of October, 2000.
J.T.C.C.
Date: 20001024
Docket: 1999-3031(IT)I
BETWEEN:
NICOLA BONGIOVANNI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
O'Connor, J.T.C.C.
[1] This appeal was heard at Toronto,
Ontario on September 15, 2000. The Appellant ably represented
himself.
ISSUE:
[2] The issue is whether an amount of
$34,521 ("Amount") received by the Appellant as a
disability award from the Workers' Compensation Board (the
"WCB") in 1997 should be included in the calculation of
total income and net income for that year or should it be
pro-rated over the years upon which the Amount was based namely,
in this case, the years 1992 through 1997. The negative effect of
including the full Amount in the 1997 year is that under
subsection 180.2(1) of the Income Tax Act
("Act") the Appellant was thus required to have
his Old Age Security clawed-back. Another issue raised by the
Appellant was since he had to pay approximately $6,500
(approximately $3,500 in legal fees and $3,000 in medical
treatments and travel for that purpose) to be entitled to the
award granted by the WCB, the Appellant should be entitled to
deduct that $6,500 from the Amount.
FACTS:
[3] The relevant facts are as follows.
In computing income for the 1997 taxation year the Appellant
included the Amount in the calculation of total income and net
income pursuant to paragraph 56(1)(v) of the Act
and deducted the Amount in computing his taxable income under
subparagraph 110(1)(f)(ii) of the Act.
[4] There is no doubt that the Amount
was totally received in the 1997 taxation year and also there is
no doubt that it relates to a period prior to 1997, namely the
period from 1992 through 1997 (prior to 1992 WCB benefits did not
have to be included in income). The Amount was compensation
received under the worker's compensation law of the Province
of Ontario in respect of an injury or disability.
SUBMISSIONS OF THE APPELLANT:
[5] The Appellant submits that it is
only reasonable to pro-rate the Amount over the years 1992 to
1997 because it was in respect of all of those years that the
Amount was calculated. He adds that, although this point was not
urged upon the Court at the hearing, including the total amount
in the 1997 year with the result that the claw-back provisions
apply is contrary to the Canadian Charter of Rights and
Freedoms ("Charter"). His final submission
is that he should be entitled to deduct the amount of $6,500 as
discussed above.
[6] Counsel for the Minister submits
that the Minister properly assessed the Appellant for the 1997
taxation year in accordance with paragraphs 56(1)(v) and
subparagraph 110(1)(f) of the Act. Counsel submits
further that there should be no deduction for the $6,500 as the
legal fees of $3,500, if incurred, are not deductible because
they were not incurred for the purposes of collecting or
establishing a right to collect wages or a pension (paragraphs
60(o) and 60(o.1) of the Act) nor for the
purposes of producing income from a business or property
(paragraph 8(1)(b) of the Act. Further the balance
of $3,000 for medical treatments and travel to the medical
facilities are not deductible in 1997. If they were deductible,
they should have been deducted as medical expenses in the years
incurred.
ANALYSIS AND DECISION:
[7] In Poulin and Her Majesty the
Queen [1998] 3 C.T.C. 2820, Lamarre Proulx, T.C.J. faced
the exact issues raised in this appeal and concluded that the
Minister was correct. It is the date of the receipt of the WCB
Amount that determines the taxation year in which it is to be
included in income notwithstanding that the Amount may relate to
prior years. She referred to two cases establishing that it is
the date of receipt that is to determine in which year the income
must be included. I am not bound by the decisions of other judges
of this Court but it is clear that Lamarre Proulx, T.C.J.
thoroughly considered the matter and I have no reason to differ
from the conclusion that she reached.
[8] As to the Charter argument,
the cases of Cardin v. Minister of National Revenue, 98
DTC 6195 and Lancey v. Her Majesty The Queen, 94 DTC 6075
(both decisions of the Federal Court of Appeal) considered the
Charter issue in cases very similar to the present and
concluded that the effect of the provisions in issue did not
contravene the Charter. I find the same applies here.
[9] With respect to the
Appellant's alternate position that he should be entitled to
deduct $6,500, I believe the submissions of counsel for the
Respondent are correct. The legal fees (approximately $3,500) are
not deductible for the reasons set forth above and the medical
expenses and related travel expenses could only have been
deducted as medical expenses in the years incurred.
[10] In conclusion, for all of the above
reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 24th day of October,
2000.
J.T.C.C.
COURT FILE
NO.:
1999-3031(IT)I
STYLE OF
CAUSE:
Nicola Bongiovanni v. The Queen
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
September 15, 2000
REASONS FOR JUDGMENT
BY:
The Honourable Judge T. O'Connor
DATE OF
JUDGMENT:
October 24, 2000
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Carol Aultman
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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