Kervel v. R., [1996] 2 CTC 2526 (Informal Procedure)

Archambault J.T.C.C.: — The Appellant is appealing under the Informal Procedure from an income tax assessment by the Minister of National Revenue (Minister) for the 1993 taxation year. The issue is whether the Appellant is entitled to a tax credit for a severe and prolonged physical impairment within the meaning of subsection 118.3(1) of the Income Tax Act (Act). For the 1993 taxation year, this subsection read as follows:

118.3(1) Where

(a) an individual has a severe and prolonged mental or physical impairment,

(a.l) the effects of the impairment are such that the individual’s ability to perform a basic activity of daily living is markedly restricted,

(a.2) a medical doctor, or where the impairment is an impairment of sight, a medical doctor or an optometrist, has certified in prescribed form that the individual has a severe and prolonged mental or physical impairment the effects of which are such that the individual’s ability to perform a basic activity of daily living is markedly restricted,

(b) the individual has filed for a taxation year with the Minister the certificate described in paragraph (a.2), and

(c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than by reason of paragraph (2)(b. 1) thereof) for the year by the individual or by any other person,

for the purposes of computing the tax payable under this Part by the individual for the year, there may be deducted an amount determined by the formula

AX $4,118

where

A is the appropriate percentage for the year.

For the same taxation year, subsection 118.4(1) of the Act read as follows:

118.4(1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection,

(a) an impairment is prolonged where it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months;

(b) an individual’s ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living;

(c) a basic activity of daily living in relation to an individual means

(i) perceiving, thinking and remembering,

(ii) feeding and dressing oneself,

(iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual,

(iv) hearing so as to understand, in a quiet setting, another person familiar with the individual,

(v) eliminating (bowel or bladder functions), or

(vi) walking; and

(d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living.

It must be observed that the requirements of the Act are very restrictive. Indeed, not all cases of impairment constitute impairments for the purposes of the disability tax credit. Only those which are severe and prolonged qualify. An impairment is considered prolonged only if it has lasted or may reasonably be expected to last for a continuous period of at least 12 months. An impairment is considered a severe one only if its effects are such that the individual’s ability to perform a basic activity of daily living is markedly restricted. An individual’s ability to perform such an activity is markedly restricted only where all or substantially all the time that the individual is unable (or requires an inordinate amount of time) to perform a basic activity of daily living even with therapy and the use of appropriate devices and medication.

The Act provides an exhaustive definition of a basic activity of daily living so it is not appropriate to refer either to an ordinary or a specialized dictionary to determine the scope of this expression. Only the nine activities described in the six subparagraphs of paragraph 118.4(l)(c) of the Act are to be considered. For greater certainty, the legislator goes out of its way to make sure that working, housekeeping, social and recreational activities shall not be considered as basic activities of daily living.

The Act does not define what “all or substantially all” means. In Sarkar v. R. (sub nom. Sarkar v. Canada, [1995] 2 C.T.C. 2750 (T.C.C.), Judge Sarchuk of this Court made the following comments on this expression:

[Para. 19] “‘All or substantially all” is not defined. However, “all” means everything. And when you say “all”, without modification, it simply means everything.

[Para. 20] In terms of time, “all of the time” means exactly that. Reference to “all of the time” between twelve and four means every minute of that period of time. “Substantially”, which is used in that phrase as a modifier means, in substance, or substantially, or in the main. There is no mathematical formula by which one can determine what “substantially all” might be, but in my view it means almost all or essentially all of the time.

[Para. 21] This, to my way of thinking, precludes a finding that intermittent bouts of illness, even causing a severe impairment on a sporadic basis, is sufficient for the purposes of this section.

Judge Sarchuk also acknowledged the restrictive application of the disability tax credit provisions in the same judgment:

[Para. 22]...I note that subsection 118.4(1) was amended by 1990, chapter 49, subsection 91(1), applicable to the 1991 and subsequent taxation years. The current definition appears to be narrow and restrictive. However it is obvious that Parliament, as a matter of policy, intended to create a high threshold regarding the level of disability which must be met in order to qualify. That is the only way to read that section, particularly in view of the fact that it was not worded as strictly before and the legislators amended it to make it stricter. I cannot read it in any other fashion.

Facts

Mr. Kervel was diagnosed in 1985 with multiple sclerosis (MS). MS is a disease process that occurs in the white matter of the central nervous system. It is characterized by episodes of remission and exacerbation that vary from case to case. Manifestations of MS vary and can include spasticity, weakness, fatigue, incoordination, sensory deficits, dysarthria and visual disfunction as well as changes in cognition and judgment. Ninety per cent of all cases, after the first symptoms, have relapses followed by remissions and, about five years after the first symptoms, 60 per cent of patients will enter a progressive phase of the disease with infrequent relapses and remissions. (See “1994 Conn’s Current Therapy”, an article on multiple sclerosis by Dr. Wallace W. Tourtellotte and Robert

W. Baumhefner, page 893-894.) The authors of this article also discuss the guidelines for predicting late prognosis for the first 10 years after the first symptoms, when the majority of patients are in their relapsing phase. They noted that there was a correlation between disability and the duration of the attack, e.g. patients with symptoms present for more than one year do not usually recover.

In Mr. Kervel’s case, his first symptoms were double vision, numbness at the end of his fingers and problems in writing. From 1985 to the spring of 1993, he experienced various relapses and remissions. During this period, he was able to maintain pretty much a normal life. For instance, in 1992, Mr. Kervel was able to work in Edmonton in a compact disk (CD) rental shop which belonged to one of his very close friends. He was able to process customers’ requests and walk to and from the displays where the CDs were located. He was working five days a week from 4:00 p.m. to 10:00 p.m. Sometimes, he would feel very tired if the night had been a very busy one and he had been unable to rest for a 15-minute period during the evening. He was able to drive his car and do his own grocery shopping. He shared an apartment with some friends.

During the 1992 Christmas season, Mr. Kervel visited his parents in Regina. On New Year’s Day, he suffered a serious attack and was unable to walk by himself for a few days. He was able to return by himself to Edmonton and to resume his functions at the CD rental shop until he suffered from another serious attack in May 1993. He had to miss work for about two months. During this period, he suffered from extreme fatigue, could not move his legs and had no balance. He was limited to his couch and needed help to walk. Toward the end of the summer, he went back to work on a part-time basis. He worked four days a week, four hours a day. His work was limited to processing requests from the customers at the counter. He could not walk to the CD displays. To go to work, he would use his car and park in front of the shop. He could not do his own grocery shopping. In October, his employment was terminated because of his inability to do the work expected from him. His close friend was sad to let him go. In January of 1994, because of his serious limitations, Mr. Kervel had to move back to Regina to live with his parents.

In 1994, he worked for a month doing clerical work at his mother’s office. Later on, he also took employment at Sears which had a special program for disabled people. He could not walk the long distance inside the store to go to his workstation, so he was taken there in a wheelchair pushed by a colleague. Mr. Kervel said that he could not walk half a block without having to stop to rest. He could not lift his legs easily; he had to drag them.

In his therapy, Mr. Kervel took some steroid drugs. However, he suffered from serious side effects. The therapy he followed had limited impact on his ambulatory functions. He acquired a walking cane only in 1995. Prior to this, he did not want to accept the fact that he could not walk without the help of a cane. He attributed this attitude to a lack of maturity. His doctor from Edmonton signed the Disability Tax Credit Certificate on January 25, 1994. This doctor confirmed that his impairment was permanent and affected his mobility and communication functions. Mr. Kervel is described in the certificate as having MS “with intermittent exacerbations of profound weakness, occasionally causing inability to walk or talk”. In his questionnaire, Mr. Kervel stated that he “suffered from extreme fatigue all the time”. He indicated that he “had difficulty standing or walking for even short periods, occasionally needing the assistance of a walking cane to get around”.

Determination

In my view, Mr. Kervel meets the narrow criteria contained in paragraph 118.4(1 )(b) and subparagraph 118.4(1 )(c)(vi) of the Act in that all or substantially all the time he requires an inordinate amount of time to perform a basic activity of daily living, i.e. walking. I am satisfied that the situation affecting Mr. Kervel went from a relapsing/remitting situation to a chronic/progressive one after the serious relapse that occurred in the spring of 1993. In this regard, Mr. Kervel falls in the 60 per cent group of relapsing/remitting cases which switch to a progressive course about five years after the first symptoms. Furthermore, I believe that it was reasonable to expect that the impairment causing the serious effects on Mr. Kervel’s basic activities of daily living would continue for a period of at least twelve months. Not being able to work or to do one’s grocery shopping are not considered to be basic activities of daily living. However, the fact that he could not perform these activities corroborates the fact that in 1993, after his spring relapse, Mr. Kervel was, all or substantially all of the time, unable to walk without taking an inordinate amount of time, even with therapy and the use of appropriate devices and medication.

Although each case must be decided on its own merits, it is appropriate to mention some decisions of this Court. In Conner v. R. (sub nom. Conner v. Canada), [1995] 1 C.T.C. 2371, 95 D.T.C. 198 (T.C.C.), Judge Sobier stated at paragraph 4: “To be able to walk 100 metres and have to stop and take the time that Ayou take is an inordinate amount of time”.

Judge Hamlyn dealt with a similar case in Murphy v. R. (sub nom. Murphy v. Canada), [1995] 1 C.T.C. 2857(D), 95 D.T.C. 415. In paragraphs 23 and 24, he stated:

23. In this case before the Court, the Appellant cannot walk in any respect to keep up a normal pace. She must stop periodically and rest. She must monitor her fatigue level so that she does not injure herself physically and performs the activity with difficulty and in considerable pain and with fatigue. At best, when able to walk, she cannot go much further than a block.

24 The conclusion is therefore that the total amount of time she spends walking, when she is able to walk, is an inordinate amount of time, thus the effect of the impairment of the chronic fatigue syndrome and myalgia on the Appellant’s ability to perform this basic activity of daily living of walking is markedly restricted....

Similarly, Judge Bowman in Jeanlouis v. R. (sub nom. Jeanlouis v. Canada), [1995] 2 C.T.C. 2200 (T.C.C.), stated at paragraph 11 (C.T.C. 2203):

...Mr. Jeanlouis testified that when he came to the hearing at this Court he took the GO train from Oakville to Union Station in Toronto and walked from Union Station to the Court which is located at the corner of University Avenue and King Street. It takes between seven to eight minutes to cover that distance, walking at a normal and unhurried pace. It took the appellant one half hour, and he had to stop at frequent intervals. His ability to walk has not deteriorated since 1992 or 1993. I find that it takes him an inordinate length of time to perform the basic activity of daily living, i.e. walking.

Therefore, the appeal does fall within the provisions of paragraph 118.4( 1 )(b) of the Act and Mr. Kervel’s appeal is allowed. The assessment will be referred back to the Minister for reconsideration and reassessment on the basis that Mr. Kervel was entitled to his disability tax credit for the 1993 taxation year.

Appeal allowed.