Clément – Tax Court of Canada finds that s. 8(1)(b) did not cover legal costs of an action to extend the period of employment

The taxpayer worked as a provisional judge for the Montreal Municipal Court up until 2005, and then served as a full-time judge up until 2012, at which time he was forced to resign as he had attained the age of 70 – which meant that he was 23 months short of the requisite years of full-time service required to generate a full pension.

Lafleur J found that the legal expenses he incurred in an unsuccessful court action to obtain redress were not deductible under s. 8(1)(b). Respecting the first ground of his action - seeking a declaration that he was entitled to continue to exercise his office as a judge of the Montreal Municipal Court after the age of 70, thereby accumulating credits for obtaining a full pension - Lafleur J essentially noted that this did not represent attempted recovery of amounts he earned for working up to 70, but instead related to an attempted extension of his employment. Respecting his alternative ground - seeking a declaration that the three years during which he acted as a provisional judge be taken into account in the calculating his pension – she noted inter alia that s. 8(1)(b) did not extend to amounts that would have been included in his income under s. 56 rather than s. 5.

Neal Armstrong. Summary of Clément v. The Queen, 2020 CCI 33 under s. 8(1)(b).