William Keating v. Her Majesty the Queen, [1995] 1 CTC 2202, 95 DTC 352

Taylor J.T.C.C.:-These are appeals heard in St. Johns, Newfoundland, on April 13, 1994, under the informal procedure of the Tax Court of Canada, against reassessments for the years 1989, 1990, 1991 and 1992, in which the respondent disallowed claims for non refundable disability tax credits in the amounts of $3,272, $3,327, $4,118 and $4,233 respectively. In so assessing the respondent relied on sections 118.3 and 118.4, and subsection 248(1) of the /ricome Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the ’’Act”). For the record, the following information was supplied to the Court:

Notice of Appeal

We would like to file an appeal to the Tax Court. We have appealed this case twice but we have lost both appeals. We would like to request an informal procedure with the Tax Court.

The appeal is in reference to Revenue Canada requesting moneys being repaid to them after issuing the cheques because of our son’s medical problem. Revenue Canada now states our son’s medical problem was not severe enough to be able to claim the credit.

In reference to the situation to be discussed is the severe and prolonged impairment that markedly restricts our son’s activities of daily living. We have obtained letters that does state that our son is restricted and has a prolonged impairment. These letters can be forwarded to you at your request.

It has come to my attention that a questionnaire was sent to a medical doctor at the St. Lawrence Memorial Hospital to be completed about our son. We do not know what information was reported on the questionnaire but one thing we are certain about is that the medical doctor that completed the questionnaire had little or no contact with our son and knowledge about his condition. Thus, he or she would not be able to complete that questionnaire and state the severity of our son’s Case.

Reply to Notice of Appeal

6(a) the appellant’s son was not suffering from a severe and prolonged mental or physical impairment throughout 1989, 1990, 1991 and 1992 as certified in prescribed form by a medical doctor;

(b) the impairment did not cause the appellant’s son to be markedly restricted in activities of daily living throughout 1989, 1990, 1991 and 1992.

In the reply to notice of appeal, the respondent also conceded that the reassessment for the year 1989 was issued beyond the period provided under subsection 152(3.1) of the Act, and was invalid. For that year, at least, the appeal is to be allowed.

No specific reference was made by the respondent to the requirement under the Act that there be a certification by a medical doctor, and it would appear that a form filed with the 1992 tax return of Mr. Keating fulfilled this stipulation. Certainly, in my opinion that certificate was more than adequate, considering that the boy’s condition had persisted virtually since birth and there appeared only minimal hope that it would ever improve. I would also note that, although there were certain amendments in the Act, during the years under review, the respondent indicated that he was not of the opinion that these had any direct negative impact on the point at issue here.

The testimony of the appellant covered the general circumstances dealt with in the notice of appeal, supra, but further he added some specifics regarding the disability of his son, in response to enquiries from the respondent and from the Court. These specifics, in my opinion, may not have been sufficiently emphasized to the respondent before the reassessments at issue.

..MR. LESLIE: Now, does cerebral palsy, it’s your understanding does it destroy the muscle or does it limit the use of the muscle?

MR. KEATING: It don’t-your muscle don’t grow.

MR. LESLIE: Okay.

MR. KEATING: Like we had calves in our legs here, his legs are straight.

MR. LESLIE: Okay.

MR. KEATING: Like the front is like the back.

MR. KEATING: Well, first of all when he gets up in the morning time, we got to bring him downstairs. We got a two story house, right. We got to bring him down-one of us got to bring him downstairs. Mostly it’s the wife-

HIS HONOUR: What do you mean, ’’bring him downstairs"?

MR. KEATING: Like you’d take up a baby and bring him.

HIS HONOUR: You carry him downstairs.

MR. KEATING: Until he’s up for a certain length of time, he’s not functional, like his body is still asleep. He has to move his legs and that a lot to get the circulation.

HIS HONOUR: So, you carry him downstairs?

MR. KEATING: Carry him downstairs (to the bathroom).

HIS HONOUR: Okay, go ahead from there.

MR. KEATING: He can’t reach back to (cleanse himself after he has gone to the bathroom). He got to get that done for him.

HIS HONOUR: Every day?

MR. KEATING: Every day.

HIS HONOUR: Every time?

MR. KEATING: Every time he uses the bathroom. (Also) he can’t get in and out of the bathtub himself, we have to help him in and out. ...Well, putting on his braces. He can’t put on his braces himself.

HIS HONOUR: By himself?

MR. KEATING: No. We have to help him with his boots. We got to help him up and down the steps from the house, getting into the house and out of the house. He got to be helped into school. He got to— you got to go in with him and take off his outdoor boots and put on his indoor boots for school and be there-and then you got to be there for when he gets out lunchtime to put his boots back on. The way the education system is now, the teachers are not expected to do these kind of things, you know. I know now, I don’t expect someone else to do something for him, because while we’re there, that’s what we’re there for. But it’s not every day we can be there.

HIS HONOUR: Okay, go ahead, tell me the rest of a day’s routine a little bit? You’re doing fine.

MR. KEATING: Other than that, you know, he’s more or less, you could call a typical eight-year old. He loves to wrestle with his brother but, you know, you get an eight-year old getting took down by a six-year old. You know, he got no-his little brother can do what he like with him.

Counsel for the respondent in summary, relied on an interpretation of the term "markedly restricted" as the basis for rejection of the claim:

..The point being, you honour, is that, in order to qualify as markedly restricted, you must permanently be restricted in a very severe manner....He still has as fair amount of mobility. He can still play with other children. He can still ride a bike. He can still walk on his own. He can still climb chairs. He just has more difficulty doing that than other people. So, the Crown is not saying, your honour, they’re not trying to minimize Christopher’s restrictions on his mobility. What they’re merely saying is that those restrictions are not so severe that they would qualify under the Act for the tax credit.

Counsel referenced a recent case of this Court under the informal procedure, Taylor v. Canada, heard at Calgary, Alberta on July 30, 1993, Tax Court file # 1993(805). From that case counsel for the respondent quoted from the judges’ comments:

...I find the appellant in ’89 and ’90 was able to perform the basic activities for independence in every day living, although the performance of those activities caused the appellant significant fatigue. Her fatigue made it difficult for her to perform the activities of daily living but she was not markedly restricted in those activities. I am obliged to give some weight to the adverb markedly, which means having an emphasized character. Although, the appellant’s continuing fatigue causes her some restriction in the performance of many tasks, she was not in ’89 and ’90 markedly restricted in her activities of daily living.

Analysis

With respect, I find Taylor, supra, markedly different from the instant appeals, and I refer to certain answers given directly by that appellant Taylor:

I do drive a car, and I do go out. And I always have a cane in my car. Some days going out isn’t feasible because it’s difficult to think coherently or speaking is slow. But if I do go out, I take my cane and I go along with someone, I don’t drive.

I prepare my own meals.

I have difficulty at times getting off the toilet or getting out of the bathtub. And I do have difficulty going upstairs and I need a handrail.

And I’m not always stable because I have a problem with my balance at times.

When I’m exhausted my speech is slow and slurred. Walking needs to be on a flat surface. Sand and snow are really hard. At night, I sometimes have tightness in my legs, which interrupts my sleep, but 1 may have just a mild pain in my legs, which I just take aspirin for.

Im not working so I usually just wear t-shirts or something I can slip over.

And my shoes are all slip on. So for my running shoes, 1’11 just tie the knot and leave it tied up so I don’t have to undo it. And I need support to put boots on and off or I sit down.

I live in a bungalow, so I don’t have to go up and down stairs.

And in answer to a direct question from Counsel for the respondent in Taylor, supra:

Q. And could you take care of personal grooming matters such as feeding yourself, dressing yourself, preparing meals.

A. Well, those things were not as bad as 1989 because I was no longer working in 1990. But I still was having quite a bit of difficulty in the early part of 1990. And, you know, this making meals as I indicated before, when it came time to make meals, sometimes I could and sometimes I couldn’t.

From a further series of questions and answers reported in that judgment dealing with daily routine functions, it would definitely appear that there was considerably less restriction on that appellant in maintaining herself, as contrasted with the disabilities evident in the instant appeal.

It is difficult for me to accept that the level of impairment-in order to be qualified for such a deduction-should be judged only on the basis of the improved mobility and living standard which can be obtained by the use of additional measures, contraptions and conveniences, even though this seems to be the view of the Act, taken by the respondent. Using those aids usually still leaves the afflicted party functioning at a level well below that which would be regarded as "basic activity of daily living" (See paragraph 118.4( 1 )(d) of the 1992 Act) by any reasonable standard. To suggest that an afflicted person should remain in an almost helpless condition without attempting to improve his lot in life, in my view, would be cynical and callous in the extreme. That such an interpretation was intended by Parliament by the words used in the legislation is highly improbable in my view. At the same time, it is reasonable for an appellant to wonder about the level to which he should seek amelioration of his condition, without risking the loss of any possible deductions. The determination of the extent to which an afflicted person-we might better say "physically challenged"—does qualify for such a deduction ultimately must take into account the primary existing and continuing disability and undue regard should not be given to the mechanical aids which have been adopted. Such a view does not open the gates to every kind of claim-{see Taylor, supra) but neither should the gates remain locked because of often heroic mitigating efforts on the parts of the physically challenged. From Overdyk v. M.N.R., [1983] C.T.C. 2361, 83 D.T.C. 307, at pages 2364-65 (D.T.C. 310), I note:

In summary, this taxpayer qualifies for the deduction, as I read the section, because his affliction leaves him no choice but to spend his time in bed, unless he has direct external aid or assistance of some kind. That he has developed certain mechanisms and processes to reduce this bed-ridden time and, in fact, to gainfully employ his time, does not alter the fact that it is his affliction which determines his physical constraints. That he can also, for a "substantial period of time each day", rid himself of the bed and utilize a chair on wheels, has not resulted in any diminution in the basic incapacitating effects of his illness. And that he has done so should not have any negative effect on his entitlement to the deduction claimed.

While on a slightly different issue, I find that the same general principle should have some application to the circumstances of this appeal. For the years 1989 and 1990, section 118.4 did not provide much enlightenment for the term "markedly restricted", and in my view the parameters indicated above from Overdyk, supra, would be wide enough to include the condition of the appellant’s son in these appeals for those two years. For the years 1991 and 1992 the Legislature attempted some refinement of that term noted above in paragraph 118.4(1)(d) of the Act. However, even under a very limited interpretation and taking into account the devices used by the appellant’s son, which is required by the Act, I am satisfied that he should qualify with regard to at least three of the noted conditions in that section:

—feeding and dressing oneself

—eliminating (bowel and bladder functions)

-walking

I am grateful that in this appeal at least, I am not called on to examine the rationale which would place "working, housekeeping or a social or recreational activity—"at some level, lower than "basic activity of daily living” for qualification, as outlined in paragraph 118.4(1 )(d) of the Act. In the noble desire to eliminate as much as possible any unwarranted claims under this paragraph, it appears to have been a very difficult task for the drafters of the legislation to avoid excluding deserving taxpayers at the same time. One might easily see an overzealous devotion to limitations in this minor deduction section, which might well be more acclaimed, at least by me, if dedicated to a broader and more productive range of possible deductions under the Act.

I am sure that there might be a range of opinion-both medical and legal on the meaning of the term "markedly restricted", but it should apply to a child who is unable to get out of bed himself, unable to attend to the most elementary personal functions himself, unable to dress himself, or change his clothing himself, and is in steel braces on his legs day and night-short braces during the day to allow some movement, and longer braces at night to ensure that the limbs do not further atrophy to whatever degree it can be prevented. If this child’s condition does not warrant the claim made by his father of "markedly restricted", I am not sure the degree of such restriction of daily routine which must be demonstrated in order to warrant such a deduction. The parents deserve commendation and moral support, but that should not be a factor in deciding such an issue. However, I would be remiss, on a human level, if I did not point out that these were among the most dedicated, and least complaining parents I have ever seen even when faced with such circumstances. The purpose of the provisions of the Act under review, as I understand, would be to compensate the care providers in some measure for the direct cost, time and effort required of them to assist their son in having at least a small measure of reasonable living standard. I doubt that any "generous" interpretation of the Act is required for the determination of this appeal, but if needed I would quote from a recent signal judgment of the Federal Court of Appeal—Jastrebski v. Canada, [1994] 2 C.T.C. 136, 94 D.T.C. 6355:

Taxing statutes are to be interpreted in the same manner as other statutes. The Interpretation Act, R.S.C. 1985, c. I-21, applies to the Income Tax Act. According to section 12 of the Interpretation Act, the Income Tax Act is deemed remedial and should be given "such fair, large and liberal construction and interpretation as best ensures the attainment of its objects." The strict construction of taxing provisions has been set aside in favour of the plain meaning rule which is applied purposively (Stubart Investments Ltd. v. The Queen, [1984] 1 S.C.R. 536, [1984] C.T.C. 294, 84 D.T.C. 6305). One must look to the purpose of a provision, therefore, and determine the plain meaning of the provision in light of that purpose.

The appeals are allowed, and costs are to be awarded to the appellant, if applicable.

Appeals allowed