Brulé,
T.C.J.:—This
is
an
appeal
for
disallowed
travel
expenses
by
the
appellant
in
the
1980,
1981
an
1982
taxation
years.
Facts
At
all
material
times
the
appellant
carried
on
business
as
a
distributor
for
Amway
of
Canada
Ltd.
in
Cornerbrook,
Newfoundland.
He
claimed
expenses
for
trips
to
the
United
States
as
follows:
1980
—
$4,322.03
for
3
trips
1981
—
$4,152.87
for
3
trips
1982
—
$1,391.54
for
2
trips
Appellant's
Position
Mr.
Roche
told
the
Court
that
he
had
been
sponsored
in
the
organization
by
a
Florida
distributor
and
other
than
obtaining
products
from
the
Canadian
supplier
conducted
his
business
primarily
with
the
American
sponsors.
This
necessitated
the
trips
to
the
United
States,
the
costs
of
which
were
claimed
by
him
in
the
respective
years.
Minister's
Position
Simply
put,
the
Minister
said
that
the
trips
to
the
United
States
were
not
for
the
purpose
of
gaining
or
producing
income
by
the
appellant
in
Cornerbrook,
Newfoundland.
In
the
alternative
it
was
put
forth
that
under
subsection
20(10)
of
the
Income
Tax
Act
only
2
trips
outside
Canada
each
year
were
permitted,
and
finally
it
was
suggested
that
the
amounts
involved
were
not
reasonable
as
required
by
section
67
of
the
Act.
Analysis
The
Minister
in
assessing
the
appellant
admitted
that
he
was
in
business
and
allowed
deductions
(other
than
the
trips
under
appeal)
as
follows:
1980
-
$19,629.78
1981
-
$27,
619.44
1982
-
$19,894.92
The
only
items
denied
were
for
travelling
to
the
United
States
for
meetings
and
conventions.
In
the
recent
case
of
Michayluk
v.
M.N.R.,
[1988]
2
C.T.C.
2236;
88
D.T.C.
1564
the
appellants
were
Amway
distributors
who
had
been
disallowed
travel
expenses.
The
[D.T.C.]
headnote
in
that
case
best
summarizes
the
outcome:
Held:
The
taxpayers'
appeals
were
allowed.
The
Court
found
that
the
expenses
deducted
by
the
taxpayers
were
associated
with
their
attendance
at
business
meetings.
The
taxpayers'
attendance
was
“in
connection
with
the
business",
pursuant
to
s.
20(10)
of
the
Act.
The
Court
accepted
the
taxpayers'
contention
that,
as
business
persons,
they
worked
at
the
stability
and
expansion
of
their
operation
twenty-four
hours
a
day,
no
matter
where
they
were
or
what
they
were
doing.
The
expenses
here
were
reasonable
in
the
circumstances,
pursuant
to
s.
67
of
the
Act.
The
convention
locations
or
the
climatic
conditions
alone
did
not
serve
to
disallow
the
deductions.
In
the
present
case
the
appellant
took
three
trips
in
each
of
1980
and
1981.
As
a
Canadian
taxpayer
he
must
be
restricted
by
the
provisions
of
subsection
20(10)
of
the
Income
Tax
Act
which
reads:
(10)
Convention
expenses.
Notwithstanding
paragraph
18(1)(b),
there
may
be
deducted
in
computing
a
taxpayer's
income
for
a
taxation
year
from
a
business
an
amount
paid
by
the
taxpayer
in
the
year
as
or
on
account
of
expenses
incurred
by
him
in
attending,
in
connection
with
the
business,
not
more
than
two
conventions
held
during
the
year
by
a
business
or
professional
organization
at
a
location
that
may
reasonably
be
regarded
as
consistent
with
the
territorial
scope
of
that
organization.
Accordingly
the
third
trip
in
each
of
1980
and
1981
must
be
disallowed.
The
appeal
therefore
is
allowed
and
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
the
appellant's
trip
in
1980
to
West
Virginia
costing
$1,452.18
and
the
trip
to
Grand
Rapids,
Michigan
in
1981,
the
cost
of
which
was
not
given
to
the
Court
at
the
hearing,
be
disallowed
and
that
the
other
expenses
for
travel
to
the
United
States
being
for
two
conventions
in
each
of
1980,
1981
and
1982
be
allowed.
The
appellant
is
entitled
to
party-and-party
costs,
if
any.
Appeals
allowed
in
part.
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