Date:
20110309
Docket:
A-112-10
Citation:
2011 FCA 90
CORAM: DAWSON J.A.
LAYDEN-STEVENSON
J.A.
MAINVILLE
J.A.
BETWEEN:
SHEILA WOODS
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Ottawa, Ontario, on March 9,
2011)
LAYDEN-STEVENSON
J.A.
[1]
Despite
the able submissions of Mr. Simpson, we are of the view that this appeal from
the judgment of Boyle J., a judge of the Tax Court of Canada (the judge) must
be dismissed. The judge dismissed the appellant’s appeal from a reassessment under
paragraph 56(1)(a) of the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1
(the Act). His reasons are reported as 2010 TCC 106, 2010 D.T.C. 1095.
[2]
The
appellant’s brother, Martin Kaye, died in the summer of 2004 while employed by
QinetiQ Group PLC or QinetiQ Limited (the employer) in the United Kingdom. The employer had established
the QinetiQ Pension Scheme (the plan), a trust fund created to provide a
retirement benefits program for its employees and the employees of associated
employers. The plan also provided for death benefits equal to three times the
employee’s annual salary at the date of death.
[3]
After the
death of Martin Kaye, the plan’s trustees paid death benefits in the amount of
110,466 British pounds sterling to his family members. The appellant, a
Canadian resident, received approximately $65,000 Canadian, representing one
quarter of the total amount. In filing her 2004 income tax return, the
appellant considered the $65,000 to be non-taxable life insurance proceeds. The
Minister of National Revenue (the Minister) reassessed to include the payment
as income to the appellant under paragraph 56(1)(a) of the Act. That paragraph
requires, among other things, that superannuation, pension and death benefits
be included as income. The appellant objected and the Minister confirmed the
reassessment. As stated previously, the judge dismissed the appellant’s appeal
to the Tax Court.
[4]
The
judge’s reasons contain a comprehensive review of the facts, the pertinent
statutory provisions and the applicable jurisprudence. The only issue on this
appeal is whether the judge erred in finding the death benefits paid to the
appellant under the plan constitute superannuation or pension benefits rather
than non-taxable life insurance proceeds. No issue is taken with the judge’s
determination that the payment did not constitute a death benefit within the
meaning of subparagraph 56(1)(a)(iii) of the Act.
[5]
In the
written submissions, relying on the judge’s comment at paragraph 18 of his
reasons that the death benefits provision of the plan may serve as “the
economical functional equivalent of life insurance”, the appellant argues the
judge ought to have given more weight to her submission that the payment was
akin to the proceeds of a life insurance policy. According to the appellant,
the judge elevated form over substance and erred in so doing. Notably, the
appellant fails to acknowledge the context of the judge’s comment – even if it
were the economical functional equivalent, that does not make it life
insurance. At the hearing, the focus of the appellant’s argument was: merely
because the payments in issue were paid under the provisions of the pension
plan does not mean they are not life insurance benefits.
[6]
In Shell
Canada Ltd. v. Canada, [1999] 3 S.C.R. 622 at paragraph 40, the Supreme
Court indicated that economic realities will never take priority over the
application of an unambiguous provision of the Act. The definition of
“superannuation or pension benefit” is found in subsection 248(1) of the Act
and includes “any amount received out of or under a superannuation or pension
fund or plan.”
[7]
The only
source of entitlement to the payments in this case is found in the plan, which
the appellant agrees constitutes a superannuation or pension fund or plan, at
least with respect to payments other than those at issue. The judge’s review of
the financial and administrative provisions of the plan, which are not in
dispute, confirms that the death benefits set out in the plan are inextricably
tied to the more general retirement benefits provided for under the scheme.
[8]
In
essence, the appellant simply seeks to reargue the merits of her case before
us. In our view, the judge’s factual determinations and his characterization of
the plan as a superannuation or pension fund or plan are unassailable. This
Court has repeatedly stated, “in tax law, form matters.” For example, see: Canada
v. Friedberg (1991), 135 N.R. 61, 92 D.T.C. 6031 (F.C.A.).
[9]
For these
reasons, the appeal will be dismissed with costs.
“Carolyn Layden-Stevenson”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-112-10
STYLE OF CAUSE: Woods
v. Her Majesty the Queen
PLACE OF HEARING: Ottawa,
Ontario
DATE OF HEARING: March 9, 2011
REASONS FOR JUDGMENT OF THE
COURT BY: DAWSON J.A.
LAYDEN-STEVENSON J.A.
MAINVILLE
J.A.
DELIVERED FROM THE BENCH BY: LAYDEN-STEVENSON J.A.
APPEARANCES:
|
Bruce F. Simpson
|
FOR
THE APPELLANT
|
|
Pascal Tétrault
|
FOR
THE RESPONDENT
|
SOLICITORS
OF RECORD:
|
Barnes, Sammon LLP
Ottawa, Ontario
|
FOR THE APPELLANT
|
|
Myles J. Kirvan
Deputy
Attorney General of Canada
|
FOR THE RESPONDENT
|
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