Date: 20000823
Docket: 1999-4095-IT-I
BETWEEN:
DONALD W. HRYHOR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AND BETWEEN:
Docket: 1999-4096-IT-I
ENID QUINTIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
Beaubier, J.T.C.C.
[1]
These appeals pursuant to the Informal Procedure for the
taxpayers' 1996 and 1997 years were heard at Calgary, Alberta
on July 27, 2000. The Appellants testified and the Respondent
called Chiman Lee, the appeals officer in charge of these files.
As a result of a series of motions by the parties, the following
orders were issued at the outset:
1.
Enid Quintin's appeal for 1996 was quashed because she had
never filed a Notice of Objection for that year.
2.
Donald W. Hryhor's appeal for 1997 is adjourned in respect to
a capital gains matter that he failed to plead in his Notice of
Appeal. In respect to that matter he is to file an amended Notice
of Appeal on or before November 15, 2000 and the
Respondent is to file a Reply thereto within 60 days
thereafter.
3.
The remaining matters in dispute were then ordered to be heard
together on common evidence by consent of the parties.
[2]
The matters remaining in issue were best detailed in the Reply to
Mr. Hryhor's Notice of Appeal. Paragraphs 6 to 13,
inclusive of the Reply read:
6.
In computing his income tax liability for the 1996 and 1997
taxation years, the Appellant claimed, in calculating the medical
expense credit, medical expenses in the amount of $39,586.22 for
1996 and $11,229.13 for 1997.
7.
The original notices of assessment were dated and mailed to the
Appellant on July 27, 1998 for both 1996 and 1997.
8.
In assessing the Appellant for the 1996 taxation year, the
Minister of National Revenue (the "Minister") reduced
the claim for medical expenses by $14,846.30, from $39,586.22 to
$24,739.92.
9.
In assessing the Appellant for the 1997 taxation year, the
Minister assessed the Appellant's claim for medical expenses
as filed.
10.
The Appellant has not been further reassessed for the 1997
taxation year since the original assessment dated July 27,
1998.
11.
In so assessing the Appellant for the 1996 taxation year, the
Minister made the following assumptions of fact:
(a)
the facts admitted and stated above;
(b)
expenses claimed as medical expenses that were disallowed in the
amount of $12,273.55 were in respect of renovations to the home
of the Appellant and his spouse;
(c)
expenses claimed as medical expenses that were disallowed in the
amount of $1,500.00 were in respect of the purchase of carpet and
furniture;
(d)
expenses claimed as medical expenses that were disallowed in the
amount of $684.84 were in respect of the purchase of
vitamins;
(e)
expenses claimed as medical expenses that were disallowed in the
amount of $216.71 were in respect of special food and
clothing;
(f)
expenses claimed as medical expenses that were disallowed in the
amount of 171.20 were in respect of lawn care;
(g)
neither the Appellant or his spouse lack normal physical
development or have a severe and prolonged mobility
impairment;
(h)
the renovations made to the home of the Appellant and his spouse
were not made to enable the Appellant or his spouse to gain
access to or to be mobile or functional within their home;
(i)
the expenses disallowed were not in respect of amounts paid to a
medical practitioner;
(j)
the expenses disallowed were not in respect of a device or
equipment for use by the Appellant or his spouse that is of a
prescribed kind and is prescribed by a medical practitioner;
(k)
the expenses disallowed were not in respect of drugs, medicaments
or other preparations or substances as prescribed by a medical
practitioner and as recorded by a pharmacist;
(l)
the expenses disallowed were the personal or living expenses of
the Appellant and his spouse.
B.
ISSUES TO BE DECIDED
12.
The issues to be decided are:
(a)
whether there is any issue in dispute in respect of the 1997
taxation year upon which this Court can decide; and
(b)
whether the Minister properly disallowed the amount of $14,846.30
claimed as medical expenses for the 1996 taxation year.
C.
STATUTORY PROVISIONS, GROUNDS RELIED ON AND RELIEF
SOUGHT
13.
He relies on, inter alia, section 118.2 of the
Act and on regulation 5700 of Income Tax
Regulations (the "Regulations")
as amended for the 1996 and 1997 taxation years.
[3]
In relation to issue 12(b), subsection 118.2(2), paragraphs
(l.2), (m) and (n) read:
118.2 (2) For the purposes of subsection (1), a medical
expense of an individual is an amount paid
...
(l.2) 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;
...
(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 are prescribed as to its use or the
reason for its acquisition;
to the extent that the amount so paid does not exceed the
amount, if any, prescribed in respect of the device or
equipment;
(n)
for drugs, medicaments or other preparations or substances (other
than those described in paragraph (k)) manufactured, sold or
represented for use in the diagnosis, treatment or prevention of
a disease, disorder, abnormal physical state, or the symptoms
thereof or in restoring, correcting or modifying an organic
function, purchased for use by the patient as prescribed by a
medical practitioner or dentist and as recorded by a
pharmacist;
[4]
"Device or equipment" in paragraph (m) is defined in
Regulation LVII, Sec. 5700. In particular, clothing costs of
$216.71 and lawn care of $171.20 are not within the particulars
set out in subsection 118.2(2). Vitamins of $684.84 do not, of
themselves, fall within paragraph (n) since they were not
"manufactured, sold or represented for use in the diagnosis,
treatment or prevention of a disease, disorder" etc. as
stated therein. Rather, they are a food or a dietary supplement.
Similarly the claim respecting carpet and furniture does not fall
within any of the paragraphs quoted in subsection 118.2(2) and in
particular, carpets in the amount of $1,500, and furniture are
not renovations or alterations to a dwelling; rather they are
chattels.
[5]
The expenses claimed of $12,273.55, which were in respect of
renovations to the home of the Appellants, are therefore the only
matter which remains in dispute for adjudication between the
parties. This turns on paragraph 118(2)(1.2). Paragraph (l.2)
raises the following questions in this appeal.
1.
Were the expenses of $12,273.55 reasonable?
2.
Did either Appellant,
(a)
lack normal physical development or,
(b)
have a severe and prolonged mobility impairment?
3.
Were the renovations or alterations to enable the patient to be
functional within the dwelling?
[6]
The $12,173.55 was allegedly spent to renovate or alter the
Appellants' dwelling so as to remove mold, which had invaded
the house behind wall surfaces and below flooring. At that time
they were both patients of Dr. Logan Stanfield who is now dead.
Dr. Stanfield had attended at their dwelling with an
environmental expert prior to the end of 1996 respecting mold.
Ms. Quintin and Mr. Hryhor were found by Dr. Stanfield to be
supersensitive to hydrocarbons, methane and to the mold and the
repairs were necessary to get rid of the mold. In doing so
products made of hydrocarbons were not used.
[7]
An unspecified part of the $12,173.55 was for the installation of
a hot tub and renovations for that purpose and for ceramic tile
around that. These had nothing to do with the renovation or
alternations required because of the supersensitivities of the
Appellants; they were to purchase and install the hot tub. The
total sum of the necessary plumbing, hot water heater,
electrical, carpentry and ceramic work and other associated costs
were not established by the Appellants. However, it will be
appreciated that they were very substantial.
[8]
The onus is on the Appellants to establish the reasonableness of
the $12,173.55. Their failure to distinguish and remove these
costs from the total of $12,173.55 is fatal to their claims
respecting reasonable expenses. Moreover, while the hot tub may
have alleviated certain other complaints of either or both of the
Appellants, it did not enable either of them to be functional
within the dwelling.
[9]
For these reasons, the appeal of Enid Quintin is dismissed in its
entirety and the appeal of Donald Hryhor is dismissed for the
year 1996.
Signed at Vancouver, British Columbia this 23rd day of August,
2000.
"D. W. Beaubier"
J.T.C.C.
COURT FILE
NO.:
1999-4095(IT)I and 1999-4096(IT)I
STYLE OF
CAUSE:
Donald W. Hryhor v. The Queen
and Enid Quintin v. The Queen
PLACE OF
HEARING:
Calgary, Alberta
DATE OF
HEARING:
July 27, 2000
REASONS FOR JUDGMENT
BY:
The Honourable Judge D.W. Beaubier
DATE OF
JUDGMENT:
August 23, 2000
APPEARANCES:
For the
Appellants:
The Appellants
themselves
Counsel for the
Respondent:
Gwen Mah
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-4095(IT)I
BETWEEN:
DONALD W. HRYHOR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the
appeals of
Enid Quintin (1999-4096(IT)I), at
Calgary, Alberta on July 27, 2000 by
the Honourable Judge D. W. Beaubier
Appearances
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Gwen Mah
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1996 taxation year is dismissed in accordance with the
attached Reasons for Judgment.
The
appeal from the assessment made under the Income Tax Act
for the 1997 taxation year is adjourned pursuant to the attached
Reasons for Judgment.
Signed
at Vancouver, British Columbia, this 23rd day of August,
2000.
J.T.C.C.
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