Kempo,
T.C.J.:—
Part
I
—
Issue
The
appellant
is
a
former
referee
and
linesman
for
the
National
Hockey
League
(the
“League”).
The
issue
in
these
appeals
is
with
respect
to
the
characterization
of
an
amount
of
$9,450,
received
by
him
from
the
League
following
the
non-renewal
of
his
employment
contract.
The
respondent
reassessed
on
the
basis
that
it
was
a
retiring
allowance
pursuant
to
subparagraph
56(1)(a)(ii)
of
the
Income
Tax
Act
(the
“Act”).
The
appellant
asserts
the
payment
was
damages
for
breach
of
employment
contract
and
that,
in
any
event,
it
was
not
a
retirement
allowance.
Part
II
—
Decision
The
appeals
are
allowed,
with
costs,
and
the
matter
is
to
be
referred
back
to
the
Minister
of
National
Revenue
for
reconsideration
and
reassessment
on
the
basis
that
the
amounts
of
$6,300.16
in
1980
and
$3,149.84
in
1981
be
deleted
in
computing
the
appellant’s
income
for
each
of
those
years,
respectively.
Part
III
—
Reasons
for
Decision
A.
Facts
The
particular
relationship
that
prevailed
between
Mr.
Ashford
and
the
League
spanned
a
period
of
ten
years,
that
is
from
1968
to
1978.
The
appellant
was
contractually
employed
on
a
one-year
term
basis.
He
had
signed
one-year
term
contracts
for
each
of
the
ten
years
with
the
exception
of
one
instance
involving
a
two-year
term
contract.
Normally
each
contract
was
received
in
the
summer
months
and
was
to
have
been
signed
by
September
1
of
each
year;
and
in
most
cases
that
did
occur.
However
the
few
occasions
when
the
formal
agreement
had
not
been
concluded
until
after
the
above-mentioned
date
did
not
preclude
Mr.
Ashford
from
starting
his
pre-season
training.
Apparently
only
the
matter
of
compensation
was
negotiable
as
the
other
terms
were
not.
A
standard
form
of
agreement
had
been
used
by
the
League.
The
specified
term
of
hiring
was
one
year
commencing
September
1.
By
clause
15
of
the
1977-78
Agreement
it
was
provided
that
The
“League”
may,
at
its
option,
tender
to
the
“Referee”
before
July
1st,
1977
a
contract
for
the
ensuing
season
and
the
“Referee”
will,
at
his
option,
enter
into
a
contract
with
the
“League”
for
the
playing
year
1977-78
which
contract
shall
be
signed
and
submitted
to
the
“League”
by
not
later
than
September
1st,
1977
.
.
.
There
was
no
specific
provision
to
provide
for
default.
Mr.
Ashford
was
21
years
old
at
the
making
of
the
first
contract
in
1968.
At
this
time
the
then
supervisor
of
officials
told
him
that
he
had
an
outstanding
opportunity
as
a
career
official
with
the
League.
Upon
signing
the
contract
the
appellant
said
he
had
achieved
his
“goal
in
life.”
His
evidence
was
that
he
had
every
reason
to
believe
and
assume
that
the
length
of
his
official
career
in
the
League
could
extend
up
to
20
years
because
there
were
some
officials
working
in
the
League
who
were
over
40
years
of
age.
Undoubtedly
the
possibility
of
working
for
such
a
long
period
of
time
would
be
conditional
on
his
performance.
Apart
from
the
immediately
preceding
two-year
period
during
which
he
experienced
visual
problems
because
of
an
incorrect
diagnosis
for
contact
lenses,
the
evidence
demonstrated
that
the
appellant’s
proficiency
rating
during
his
last
season
had
satisfied
the
required
norms.
Mr.
Ashford
testified
that
“[t]he
discussions
I’d
had
with
three
supervisors
at
the
time
and
Mr.
Morrison
at
the
end
of
the
season
were
that
they
were
very
satisfied
with
my
work
in
that
season
and
I
had
no
indications
that
I
would
be
fired
prior
to
the
next
season.”
(T.
14,
11.
17-22)
In
addition
to
the
contractual
benefits
of
participation
in
the
League's
group
life
insurance
plan
and
pension
plan,
others
were
provided
that
were
outside
the
contract.
These
included
a
comprehensive
medical
package,
reimbursement
of
the
premiums
paid
for
the
provincial
health
care
plan
and
a
dental
plan.
The
appellant's
ten-year
relationship
with
the
League
was
terminated
by
letter
dated
June
28,
1978.
The
League
stated
it
was
not
in
a
position
to
offer
him
a
contract
for
the
1978-79
season.
The
reasons
advanced
were
based
on
their
financial
situation
requiring
a
cut-back
in
the
number
of
their
officials.
Mr.
Ashford
had
no
prior
warning
or
indication
of
the
severance
or
the
reasons
advanced
therefor.
He
did
receive
his
full
1977-78
season
salary
of
$18,500
by
payments
having
been
made
therefor
between
September
of
1977
and
May
of
1978.
The
annual
salary
was
divided
into
equal
payments
between
September
and
May,
the
latter
time
being
the
end
of
the
playoff
season.
Following
several
discussions
with
the
League,
he
realized
that
his
contract
for
the
next
season
would
not
be
renewed
and
that
nothing
could
be
done
in
this
respect.
He
stated:
“I
started
to
feel
that
I
had
been
unfairly
treated
by
the
National
Hockey
League,
based
on
my
length
of
service
and
the
performance
that
I
had
given
them
over
that
ten-year
period,
so
I
did
approach
legal
counsel
just
to
discuss
what
avenues
were
open
to
me
in
terms
of
any
action
against
the
National
Hockey
League.”
(T.
17,
11.
20-25)
Consequently
the
appellant
sent
letters
of
complaint
to
the
president
of
the
League
asking
for
some
type
of
settlement
and
that
legal
action
may
be
considered.
As
there
was
no
resolution,
the
appellant’s
lawyer
wrote.
The
vice-president
responded
that,
inter
alia,
as
long
as
legal
action
was
being
considered
no
unilateral
recommendation
to
correct
any
perceived
inequitable
situation
would
be
made
to
the
Board
of
Governors.
Accordingly
the
threat
of
legal
action
or
involvement
was
discontinued.
Following
this,
and
on
or
about
February
15,
1980
the
appellant
received
and
accepted
the
following
proposal
from
the
League’s
president
(Exhibit
A-1,
Tab
10):
Thank
you
for
your
patience
with
us
on
this
matter.
I
have
reviewed
your
situation
in
connection
with
the
new
Collective
Bargaining
Agreement
that
we
signed
this
year
with
the
Officials.
Had
you
continued
to
be
in
our
employ,
you
would
have
been
entitled
to
a
severance
based
on
length
of
service
with
the
league.
Your
final
year’s
salary
was
$18,900.
Under
the
agreement
that
is
now
in
effect,
your
length
of
service
would
put
you
in
Category
2,
which
would
provide
for
payment
of
half
of
your
final
year’s
salary
payable
over
twenty-four
months.
If
this
acceptable,
please
advise
so
that
I
can
prepare
the
necessary
documentation
and
advise
our
Accounting
Department
to
commence
the
monthly
payments.
In
the
process
of
settlement
Mr.
Ashford
was
required
to
sign,
and
he
did
sign,
the
following
release
and
discharge
(Exhibit
A-1,
Tab
11):
I,
MALCOLM
ASHFORD,
in
consideration
of
the
agreement
by
the
National
Hockey
League
(NHL)
to
pay
me
the
sum
of
Nine
Thousand
Four
Hundred
and
Fifty
($9,450)
Canadian
Dollars,
payable
over
a
two
year
period
in
twenty-four
(24)
monthly
installments
of
$393.75
(Can.),
commencing
within
one
month
of
the
date
of
execution
hereof,
do
hereby
release
and
discharge
the
NHL
and
each
and
all
of
its
Member
Clubs
from
any
and
all
manner
of
actions,
suits
and
claims
against
them
for
damages
arising
as
a
result
of
my
employment
or
failure
to
be
employed
as
part
of
the
NHL
officiating
staff,
which
I
ever
had,
now
have
or
which
my
heirs,
executors,
administrators
or
personal
representatives
hereafter
may
have
up
to
the
date
hereof.
As
a
result
of
the
settlement
Mr.
Ashford
received
$6,300.16
in
1980
and
$3,149.84
in
1981.
B.
Analysis
The
provisions
of
the
Act
of
application
to
the
time
frame
in
the
case
at
bar
are
subparagraph
56(1
)(a)(ii)
and
the
definition
of
“retiring
allowance”
in
subsection
248(1).
The
former
requires
that
any
amount
received
as
a
retirement
allowance
be
included
as
income.
As
to
the
latter,
where
the
termination
occurred
before
November
13,
1981
(which
is
the
situation
at
bar),
a
“retiring
allowance”
means:
an
amount
received
upon
or
after
retirement
from
an
office
or
employment
in
recognition
of
long
service
or
in
respect
of
loss
of
office
or
employment
.
.
.
The
pertinent
and
telling
matter
in
this
interesting
case
is
that
although
there
was
a
continuum
of
employment
lasting
ten
years
via
a
written
agreement
or
contract
for
each
individual
year,
the
appellant
had
been
given
two-months
notice
that
it
would
be
terminated
in
that
there
would
be
no
renewal
for
the
ensuing
year.
While
I
was
invited
by
counsel
for
the
respondent
to
infer
from
the
evidence
that
the
appellant
had
been
put
on
performance
probation
for
the
last
term
which
would
effectively
break
up
the
ten-year
continuum,
it
is
my
opinion
that
the
evidence
in
respect
thereof
was
insufficient,
if
not
almost
non-existent.
Two
years
of
persistence
on
the
part
of
Mr.
Ashford
produced
a
settlement
and
release.
I
tend
to
agree
with
counsel
for
the
appellant
that
“if
you
pay
someone
a
retiring
allowance
you
don't
normally
obtain
a
release.”
I
also
agree
with
counsel
that
the
situation
here
could
not
be
construed
as
being
like
one
where
an
employer
voluntarily
offers,
upon
termination
of
an
employment
due
to
economic
cutbacks,
a
sum
of
money
in
recognition
of
past
and
lengthy
service.
Such
a
situation
would
similarly
not
normally
call
for
the
execution
of
a
release.
I
believe
counsel
for
the
respondent
is
correct
that
a
release
per
se
does
not
presume
the
existence
of
any
underlying
rights
or
obligations.
But
it
is
nonetheless
an
important
factor
when
viewing
the
matter
in
its
totality.
Here,
legal
action
was
being
threatened
but
it
was
without
civil
adjudication.
Obviously
there
may
be
occasions
where
a
release
is
nothing
more
than
a
mere
formality
or
extraordinary
precaution.
In
view
of
all
the
facts
of
the
case
at
bar,
I
would
be
reluctant
to
hold
that
the
release
signed
by
the
appellant
was
one
of
mere
formality.
The
League
annually
reserved
the
right
not
to
renew
the
contract;
but
at
the
same
time
the
payment
here
could
not,
with
any
certainty,
be
said
to
have
been
made
voluntarily.
In
Boychuk
v.
M.N.R.,
[1981]
C.T.C.
2662;
81
D.T.C.
613
(T.R.B.)
the
Hon.
L.
J.
Cardin,
Chairman
(as
he
then
was),
at
2664
(D.T.C.
614)
found
that
there
was
no
evidence
of
wrongful
or
actionable
dismissal
on
the
facts
as
given,
that
the
payment
there
had
been
voluntarily
made
by
the
employer
and
that
he
found
it
difficult
in
the
circumstances
to
conclude
that
the
payment
was
a
retiring
allowance
as
had
been
alternatively
argued
by
the
Minister.
The
following
comment
in
that
case
may
be
of
equal
force
and
have
application
to
the
case
at
bar,
viz,
‘“‘it
may
be
considerably
easier
to
determine
what
the
payment
is
not,
rather
than
deciding
what
it
actually
is.”
Given
all
of
the
evidence
the
appellant
has
not
satisfied
me,
on
the
balance
of
probabilities,
that
the
payments
in
issue
were
made
and
received
as
a
result
of
wrongful
or
actionable
dismissal
and
I
would
therefore
conclude
that
they
were
not
for
damages.
But
that
does
not
end
the
matter.
Is
it
a
"retiring
allowance”
as
assessed?
The
meaning
of
the
words
"retire”
and
"retirement,”
and
the
phrase
“in
respect
of
loss
of
office
or
employment”
have
been
held
to
include
the
concept
of
withdrawal
of
services
in
Specht
v.
The
Queen,
[1975]
C.T.C.
126;
75
D.T.C.
5069
(F.C.T.D.).
While
the
facts
of
that
case
and
its
immediate
issue
are
different,
the
following
analysis
impacts
heavily
on
the
case
before
me.
At
133
(D.T.C.
5073)
Collier,
J.
states:
In
my
view,
the
payment
here
was
not
made
upon
or
after
the
plaintiff’s
retirement.
The
plaintiff
did
not
retire
or
go
into
retirement
from
his
occupation
with
MacMillan
Bloedel
within
the
ordinary
meaning
of
“retire”
or
“retirement”.
That
is,
he
did
not
withdraw
from
his
employment
because
he
had
reached
the
mutually
stipulated
age,
or
generally
withdraw
from
his
occupation
or
business
activity.
I
have
obtained
some
assistance
on
this
point,
in
endeavouring
to
ascertain
the
ordinary
meaning
of
“retirement”
from
dictionary
definitions:
The
Shorter
Oxford
English
Dictionary
(3rd
ed.
rev.):
“withdrawal
from
occupation
or
business
activity”
The
Living
Webster
(1st
ed.):
“retire”
—
“to
withdraw
from
business
or
active
life”
and
134
(D.T.C.
5074):
I
do
not
propose
to
attempt
any
all-encompassing
statement
as
to
the
meaning
to
be
given
to
that
phrase.
[“in
respect
of
loss
of
office
or
employment”]
Speaking
generally,
it
envisages
a
payment
made
for
loss
of
a
source
of
income,
on
or
after
withdrawal
from
usual
business
activity
or
employment
or
after
withdrawal
by
reason
of
the
elimination
or
expiration
of
the
particular
office
or
employment.
It
would
be
an
error
to
characterize
the
payments
in
issue
as
being
on
account
of
any
"withdrawal”
on
the
part
of
Mr.
Ashford
from
any
relationship
with
the
League.
It
is
obvious
that
he
didn't
withdraw
from
anything.
The
observation
and
statement
of
Mahoney,
J.
in
Lawson
v.
The
Queen,
[1982]
C.T.C.
368
at
371;
82
D.T.C.
6331
at
6333
(F.C.T.D.)
is
easily
analogous
with
and
transposable
to
the
case
at
bar,
namely
that
"[l]t
would
be
euphemism
approaching
irony
to
characterize
[the]
severance
as
retirement.”
And
more
importantly
the
effect
of
the
failure
of
the
League
to
renew
the
contract
of
employment
would
be
that
there
was
no
office
or
employment
extant
from
which
he
could
withdraw
by
reason
of
retirement
or
otherwise.
In
the
same
vein,
as
there
was
no
employment
extant,
there
was
no
office
of
employment
which
had
been
eliminated
or
expired.
To
say
otherwise
would
require
a
finding
on
the
evidence
that
an
employment
situation
subsisted.
Earlier
in
this
analysis
it
has
been
determined
that
such
was
not
shown
to
have
been
the
case.
There
has
been
no
suggestion,
nor
could
it
be
found,
that
the
receipt
of
the
amounts
could
have
had
any
legal
nexus
to
or
any
legal
derivation
from
the
Collective
Bargaining
Agreement
purportedly
signed
two
years
later,
in
1980,
between
the
League
and
its
officials.
Mr.
Ashford
would
have
been
without
any
status
qua
the
League
in
this
respect
in
1980.
In
conclusion,
the
appellant
has
succeeded
in
rebutting
the
Minister's
allegation
as
pleaded
in
paragraph
7(a)
of
his
reply
to
notice
of
appeal,
viz,
the
said
sums
.
.
.
were
income
to
the
Appellant
in
the
form
of
a
retiring
allowance.
While
the
Minister
has
in
his
reply
pleaded
section
3
of
the
Act
as
one
of
the
statutory
provisions
upon
which
he
intends
to
rely,
no
argument
or
submission
had
been
made
or
advanced
in
that
respect
either
in
the
pleadings
or
during
the
argument
following
the
trial.
Accordingly
I
make
no
finding
or
determination
in
that
respect.
The
appeals
are
to
be
allowed
for
each
of
the
1980
and
1981
taxation
years
for
the
reasons
given.
Appeals
allowed.
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