Kempo,
T.C.J.:
Part
I
—
Issue
This
is
an
appeal
as
to
the
appellant’s
1981
taxation
year.
The
issue
is
as
to
the
proper
tax
treatment
of
$64,200
received
by
the
appellant
from
his
former
employer
after
he
was
dismissed
from
his
position
without
notice.
The
appellant
pleads
that
the
entire
$64,200
was
a
receipt
of
damages
and
that
its
taxability
is
to
be
calculated
as
a
termination
payment
as
defined
in
subsection
248(1)
of
the
Income
Tax
Act
(the
"Act”).
On
reassessment
the
Minister
allocated
and
treated
$13,702.50
of
the
said
$64,200
as
an
amount
received
by
the
appellant
in
the
character
of
accumulated
sick-leave
credits
and
therefore
included
it
in
the
appellant’s
income
as
remuneration
within
the
meaning
of
subsection
5(1)
of
the
Act,
or
as
a
benefit
received
or
enjoyed
by
the
appellant
in
respect
of,
in
the
course
of,
or
by
virtue
of
an
office
or
employment
within
the
meaning
of
paragraph
6(1
)(a)
of
the
Act.
Part
II
—
Decision
For
the
reasons
following,
the
appeal
is
allowed,
with
costs,
and
the
matter
is
referred
back
to
the
Minister
of
National
Revenue
for
reconsideration
and
reassessment
on
the
basis
that
the
entire
amount
of
$64,200
received
by
the
appellant
in
his
1981
taxation
year
is
taxable
as
a
termination
payment
under
subparagraph
56(1)(a)(viii)
of
the
Act
as
defined
in
subsection
248(1)
of
the
said
Act.
Part
III
—
Law
The
applicable
provisions
of
the
Act
that
are
in
play
are
as
follows:
5
(1)
Subject
to
this
Part,
a
taxpayer’s
income
for
a
taxation
year
from
an
office
or
employment
is
the
salary,
wages
and
other
remuneration,
including
gratuities,
received
by
him
in
the
year.
6
(1)
There
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
as
income
from
an
office
or
employment
such
of
the
following
amounts
as
are
applicable:
(a)
the
value
of
board,
lodging
and
other
benefits
of
any
kind
whatever
..
.
received
or
enjoyed
by
him
in
the
year
in
respect
of,
in
the
course
of,
or
by
virtue
of
an
office
or
employment.
56
(1)
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(a)
any
amount
received
in
the
year
as,
on
account
or
in
lieu
of
payment
of,
or
in
satisfaction
of,
(vill)
a
termination
payment.
248
(1)
In
this
Act,
“termination
payment”,
for
a
taxation
year,
means
an
amount
equal
to
the
lesser
of
(a)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
received
in
the
year
in
respect
of
a
termination
of
an
office
or
employment,
whether
or
not
received
pursuant
to
an
order
or
judgment
of
a
competent
tribunal,
other
than
(i)
an
amount
required
by
any
provision
of
this
Act
(other
than
subparagraph
56(1)(a)(viii))
to
be
included
in
computing
the
income
of
a
taxpayer
for
a
year,
(b)
the
amount
by
which
50%
of
the
aggregate
of
all
amounts
each
of
which
is
the
amount
that
may
reasonably
be
considered
to
be
the
employee’s
salary,
wages
and
other
remuneration
from
an
office
or
employment
for
the
12
months
preceding
the
date
that
is
the
earlier
of
(i)
the
date
on
which
the
office
or
employment
was
terminated,
and
(ii)
the
date
on
which
an
agreement,
if
any,
in
respect
of
the
termination
was
entered
into
exceeds
the
amount
determined
under
paragraph
(a)
for
each
previous
year
in
respect
of
that
termination
whether
the
recipient
is
the
officer
or
employee
whose
office
or
employment
was
terminated
or
a
dependant,
relation
or
legal
representative
of
the
officer
or
employee.
Part
IV
—
Reasons
for
Decision
Facts
The
appellant
is
a
registered
industrial
accountant.
He
took
the
position
of
Deputy
Finance
Commissioner
and
City
Treasurer
with
the
City
of
London
in
September
of
1971
and
in
1973
he
was
appointed
to
the
position
of
Finance
Commissioner
and
City
Treasurer.
The
facts
surrounding
the
appellant’s
dismissal
are
as
set
out
in
the
reasons
of
Montgomery,
J.
of
the
Divisional
Court
of
the
Supreme
Court
of
Ontario
dated
January
26,
1981
(Exhibit
A-2)
and
are
as
follows:
This
is
an
application
by
Dennis
John
Date
for
judicial
review
of
and
for
an
order
quashing
two
decisions
of
the
respondent,
Municipal
Council
of
the
City
of
London,
namely:
(a)
a
resolution
dated
the
17th
day
of
March,
1980,
dismissing
the
applicant
from
his
office
as
Treasurer
of
the
City
of
London;
(b)
a
by-law
dated
March
31,
1980
confirming
the
applicant’s
dismissal.
The
applicant
became
an
employee
of
the
respondent,
the
City
of
London
on
September
4,
1971.
He
was
hired
as
Deputy
Finance
Commissioner
and
City
Treasurer.
On
May
1,
1973,
the
applicant
was
appointed
to
the
positions
of
Finance
Commissioner
and
City
Treasurer.
On
March
17,
1980,
the
Committee
of
the
Whole
of
the
City
Council
held
a
meeting
when
a
Resolution
was
passed
removing
the
applicant
from
his
office
as
Treasurer
of
the
City
of
London.
The
Committee
of
the
Whole
met
in
camera;
the
applicant
was
not
permitted
to
be
present
at
this
meeting,
nor
had
he
been
forewarned
that
the
Committee
would
take
such
action
or
indeed
any
action
that
affected
his
position
as
Treasurer
of
the
City
of
London.
Immediately
following
the
meeting
of
the
Committee
of
the
Whole,
the
applicant
was
advised
by
the
Mayor
that
a
Resolution
that
had
been
passed
by
the
Committee
of
the
whole
dismissing
the
applicant
would
be
momentarily
confirmed
by
council.
Some
minutes
after
the
Committee
of
the
Whole
had
passed
the
resolution
dismissing
the
applicant,
the
Resolution
was
brought
onto
the
“public
agenda"
and
passed
by
the
Municipal
Council
of
the
City
of
London.
At
no
time
prior
to
the
passing
of
the
March
17
Resolution
and
at
no
time
after
was
the
applicant
informed
by
the
respondent
or
anyone
acting
for
or
representing
the
Respondent,
of
any
reasons
whatsoever
for
the
action
of
the
Municipal
Council
on
March
17,
1980,
dismissing
him
from
the
office
of
Treasurer.
The
following
day,
March
18,
1980,
the
applicant
was
divested
of
his
duties
as
Treasurer.
On
that
day,
the
applicant
was
summoned
by
the
Mayor
who
informed
him
that
his
dismissal
as
Treasurer
was
settled
and
that
Mr.
Stanley
Readings
was
the
new
Treasurer
and
would
thereafter
carry
out
all
the
duties
of
Treasurer.
At
no
time
after
March
18,
1980
was
the
applicant
called
upon
to
carry
out
any
function
as
Treasurer;
from
March
18,
1980,
Mr.
Stanley
Readings
acted
as
Treasurer
and
attended
the
meetings
of
the
Board
of
Control
in
that
capacity.
Between
March
20,
1980
and
March
27,
1980
the
applicant
was
consulted
by
Mr.
Readings
to
assist
in
developing
new
job
descriptions
for
Financial
Commissioner
and
City
Treasurer,
as
well
as
an
organizational
chart
for
the
Finance
Department
designed
to
reflect
the
changes
brought
about
by
the
action
of
the
Council.
Section
238
of
The
Municipal
Act,
R.S.O.
1970,
c.
284
requires
a
hearing
if
requested
before
a
municipal
treasurer
may
be
dismissed.
This
section
reads
as
follows:
238.(1)
Subject
to
subsection
2,
all
officers
appointed
by
a
council
shall
hold
office
during
the
pleasure
of
the
council,
and
shall,
in
addition
to
the
duties
assigned
to
them
by
this
Act,
perform
all
other
duties
required
of
them
by
any
other
Act
or
by
by-law
of
the
council.
(2)
No
chief
administrative
officer,
clerk,
treasurer
or
engineer
shall
be
dismissed
from
the
office
except
after
a
hearing
by
the
council
or
a
committee
of
the
whole
council
if
requested
by
the
officer
concerned.
It
is
clear
on
the
facts
that
there
was
no
compliance
with
s.
238
of
the
Act
as
of
March
17,
1980,
the
date
of
the
Resolution
of
council.
After
the
in
camera
meeting
of
council,
the
mayor
advised
Mr.
Date
of
his
dismissal.
If
that
date
of
the
17th
of
March
is
considered
to
be
the
date
of
notice
to
the
applicant,
was
the
city
entitled
to
assume
that
the
applicant
had
abandoned
his
right
to
a
hearing?
The
by-law
confirming
the
Resolution
of
council
to
divest
the
applicant
of
the
treasurership
of
the
City
was
passed
March
31st.
The
applicant
was
never
told
when
the
by-law
would
be
passed.
In
our
view,
fourteen
days
is
not
a
long
enough
period
of
time
to
show
that
the
applicant
had
abandoned
his
right
to
apply
for
a
hearing
under
s.
238.
It
might
have
been
a
reasonable
time
if
the
municipality
had
told
the
applicant
ahead
of
time
of
the
date
of
the
proposed
passing
of
the
by-law.
We
reject
the
argument
of
the
respondent
that
promissory
estoppel
exists
on
these
facts
to
invoke
the
case
of
Central
London
Property
Trust
v.
Hightrees
House
Ltd.
[1947]
K.B.
130.
The
respondent
must
conduct
a
hearing
in
accordance
with
s.
238.
The
Resolution
of
March
17,
1980
is
quashed.
That
part
of
the
by-law
dated
March
31,
1980
confirming
the
applicant’s
dismissal
as
treasurer
is
quashed.
Costs
to
the
applicant.
The
only
evidence
called
on
the
appeal
was
that
of
the
appellant
himself.
He
said
that
his
function
or
status
with
the
City
of
London
following
the
March
17,
1980
dismissal
was
that
of
a
mere
“shell
position”
and
that
he
remained
on
the
payroll
in
that
reduced
capacity
until
1981.
Following
the
decision
of
the
Divisional
Court,
the
City
of
London
did
not
reinstate
the
appellant
to
his
former
position
but
rather
indicated
they
would
proceed
to
reintroduce
dismissal
proceedings
in
accordance
with
The
Municipal
Act.
Accordingly
negotiation
for
resolution
and
settlement
was
commenced
and
conducted
through
counsel
for
each
party.
Apparently
the
appellant's
termination
in
1980
had
been
announced
publicly
as
a
dismissal
and
not
as
a
resignation
as
had
happened
with
one
Murray
E.
MacLean
who
had
been
the
City’s
Chief
Administrative
Officer
(see
MacLean
v.
M.N.R.
[1983]
C.T.C.
2331;
83
D.T.C.
305
(T.R.B.)).
The
appellant's
position
as
City
Treasurer
was
a
high
profile
one
in
the
community
and,
in
his
opinion,
his
reputation
had
been
materially
damaged
by
the
attendant
publicity.
The
appellant
was
adamant
that
he
was
at
all
times
seeking
damages
because
of
the
wrongful
dismissal.
He
said
that
throughout
the
negotiations
he
had
been
conscious
of
many
factors
which
would
have
been
taken
into
account.
These
included
measures
referable
to
the
value
of
negotiated
pay
increases
in
place
during
the
1980
year,
one
to
two
years'
salary
in
lieu
of
notice,
attendant
lost
fringe
benefits
of
pension,
group
health,
life
insurance
and
sick
leave.
The
amount
he
received
was
said
to
be
one
of
compromise,
rounded
to
$64,200,
and
was
less
than
what
he
sought.
Apparently
By-law
No.
A-4369-50
to
regulate
civic
employees'
sick-leave
pay
had
been
in
force
since
1978.
It
was
filed
as
Exhibit
R-1
in
the
proceedings
and
the
relevant
portions
are
as
follows:
1.
That
the
Personnel
Department
shall
maintain
records
with
respect
to
the
sick
leave
credits
due
to
all
permanent
employees,
with
the
exception
of
the
Police
Department.
2.
Each
permanent
employee
shall
be
eligible
to
a
credit
of
one
and
one-half
days
sick
leave
for
each
month
of
service
with
the
Corporation,
such
credit
to
be
cumulative.
3.
Each
employee,
after
acquiring
seniority
with
the
Corporation
shall
be
eligible
to
receive
sick
leave,
at
full
salary
or
wage
rate,
for
any
time
lost
by
illness
to
the
full
extent
of
Sick
Leave
Credits
available
to
him
at
the
time
of
such
absence.
4.
Except
as
otherwise
herein
provided,
the
number
of
days
an
employee
is
absent
on
account
of
illness
shall
be
deducted
from
his
cumulative
Sick
Leave
Credits.
5.
Proof
of
illness
shall
be
established
by
submission
of
a
“Certificate
for
Sick
Leave
with
Pay”.
6.
An
employee
who
is
absent
because
of
sickness
for
thirty
days
or
more
shall,
on
request,
provide
the
Head
of
his
Department
with
a
certificate
from
a
qualified
physician
certifying
as
to
his
inability
to
return
to
work
and
on
a
similar
request
shall
do
so
at
the
conclusion
of
each
thirty
day
period.
7.
Where
an
employee
is
absent
as
a
result
of
an
accident
while
at
work,
or
illness
inherent
to
occupation,
and,
as
a
result,
is
receiving
Workmen's
Compensation,
as
awarded
by
the
Workmen’s
Compensation
Board,
he
shall
be
paid
by
the
Corporation
the
difference
between
his
regular
pay
and
the
Board’s
award
and
he
shall
be
paid
such
amount
for
the
period
of
the
Award
or
until
such
time
as
the
employee
ceases
to
draw
salary
from
the
Corporation.
9.
Sick
Leave
Credit
earned
by
service
in
any
Department
shall
be
credited
to
the
employee
concerned,
and
sick
leave
pay
to
which
the
employee
is
entitled
shall
be
authorized
by
the
Department
in
which
the
employee
is
employed
at
the
time
of
illness.
10.
Every
employee
who
is,
at
the
time
of
his
retirement,
actively
engaged
at
his
duties
or
absent
on
duly
authorized
leave,
shall
be
entitled
to
receive
a
sick
leave
gratuity
on
one,
but
not
both,
of
the
following
bases:
(i)
On
the
date
of
retirement,
he
may
be
granted
a
sick
leave
gratuity
in
cash
equal
to
his
salary,
wages
or
other
remuneration
for
one-half
the
number
of
days
standing
to
his
credit
and
in
any
event
not
in
excess
of
the
amount
of
one-half
year's
earnings
at
the
rate
received
by
him
immediately
prior
to
termination
of
employment;
or
(ii)
With
the
consent
of
his
Department
Head,
in
lieu
of
the
sick
leave
gratuity
which
would
otherwise
be
paid
in
cash
in
accordance
with
the
foregoing,
such
employee
may
be
granted
retirement
leave
with
full
pay
for
a
period
equal
to
one-half
the
number
of
days
standing
to
his
credit
and
in
any
event,
not
in
excess
of
a
period
of
six
months.
Such
leave
shall
be
completed
as
of
the
date
of
normal
retirement.
11.
An
employee
who,
on
termination
of
his
employment
with
the
Corporation,
and,
in
the
case
of
a
Local
101,
C.U.P.E.
member,
or
a
Local
142,
I.A.F.F.
member,
has
at
least
eight
(8)
years
of
service;
or
in
the
case
of
a
Local
107
or
Local
739,
C.U.P.E.
member,
has
at
least
seven
(7)
years
of
service;
or
in
the
case
of
a
Non-Union
staff
member,
has
at
least
five
(5)
years
of
service
with
the
Corporation,
or
the
Estate
of
an
employee
who
dies
while
in
the
employ
of
the
City,
having
a
minimum
of
the
same
number
of
years
of
service
as
outlined
herein,
shall
be
entitled
to
receive
pay
for
the
period
equal
to
one-half
the
number
of
days
standing
to
his
credit
and,
in
any
event,
not
in
excess
of
the
amount
of
one-half
year's
earnings
at
the
rate
received
by
him
immediately
prior
to
termination
of
employment.
12.
Whenever
an
employee,
formerly
employed
by
another
municipality
or
local
Board
which
had
established
a
Sick
Leave
Credit
Plan
under
this
or
any
other
general
or
special
Act,
leaves
the
employ
of
that
municipality
or
local
Board,
and
immediately
transfers
to
the
employ
of
the
City
of
London,
without
interruption
of
employment
by
another
employer,
the
Personnel
Director
shall
take
such
action
as
may
be
necessary
to
place
such
sick
leave
credits
to
the
new
employee's
credit
in
the
records
of
the
City
of
London.
The
settlement
negotiations
resulted
in
Minutes
of
Settlement
and
a
bylaw
was
enacted
on
April
6,
1981
authorizing
the
Mayor
and
the
City
Clerk
to
execute
them,
the
Minutes,
extracted
from
Exhibit
A-1(a),
are
as
follows:
IN
THE
MATTER
OF
an
employment
dispute
between
The
Corporation
of
the
City
of
London
and
Dennis
J.
Date,
the
Finance
Commissioner
and
City
Treasurer
MINUTES
OF
SETTLEMENT
In
order
to
avoid
protracted
litigation
the
parties
hereto
have
agreed
to
the
following
settlement:
1.
Dennis
J.
Date
will
go
on
vacation
commencing
March
19,
1981
and
ending
on
May
11,
1981.
2.
The
employment
of
Dennis
J.
Date
by
the
Corporation
of
the
City
of
London
will
terminate
as
of
May
11,
1981.
3.
The
Corporation
of
the
City
of
London
shall
pay
Dennis
J.
Date
the
sum
of
$64,200.00
less
whatever
amounts
are
required
by
law
to
be
withheld
by
the
municipality
for
Income
Tax,
Canada
Pension
Plan,
OMERS
and
Unemployment
Insurance.
4.
In
consideration
of
the
foregoing
the
parties
hereto
release
and
forever
discharge
each
other
from
any
and
all
actions,
causes
of
action,
claims
and
demands
for
damages,
loss
or
injury
howsoever
arising
which
heretofore
may
have
been
or
may
hereafter
be
sustained
in
consequence
of
the
employment
of
the
said
Dennis
J.
Date
by
the
City
and
without
limiting
the
generality
of
the
foregoing
the
said
Dennis
J.
Date
waives
any
right
he
may
now
or
hereafter
have
to
request
a
hearing
pursuant
to
Section
238(2)
of
The
Municipal
Act,
R.S.O.
1970,
Chapter
284.
The
Minister’s
Position
As
referred
to
earlier,
the
Minister
had
assessed
tax
on
the
basis
that
a
component
of
the
settlement
amount
received
was
for
accumulated
sick-
leave
credits.
The
assessing
position
is
pleaded
in
the
Minister's
reply
to
notice
of
appeal
thus:
7.
The
Minister
of
National
Revenue,
when
making
his
reassessment
for
the
Appellant's
1981
taxation
year,
relied,
inter
alia,
on
the
following
facts:
(a)
the
Appellant,
a
chartered
accountant,
was
hired
in
1971
by
the
Corporation
of
the
City
of
London
(the
City),
first
as
a
Deputy
Finance
Commissioner
and
City
Treasurer,
and
later
was
appointed
to
the
position
of
Finance
Commissioner
and
City
Treasurer;
(b)
by
resolution
dated
March
17,
1980,
the
City
counsel
removed
the
Appellant
from
his
office
as
Treasurer
of
the
City,
but
the
Appellant
remained,
albeit
in
a
lower
capacity,
on
the
payroll
of
the
City
up
to
May
11,
1981;
(c)
as
a
result
of
such
dismissal,
the
Appellant
took
legal
action
against
the
City,
with
the
result
that
the
Divisional
Court
of
the
Supreme
Court
of
Ontario,
by
order
dated
January
26,
1981,
quashed
the
City
counsel's
resolution
dismissing
the
Appellant;
(d)
as
a
result
of
this
Order,
the
City
and
the
Appellant
entered
into
negotiations
which
culminated
by
an
agreement,
providing,
inter
alia:
(1)
the
termination
of
the
Appellant’s
employment
with
the
City
as
of
May
11,
1981,
(2)
the
payment
to
the
Appellant
by
the
City
of
a
sum
of
$64,200.00;
(e)
provided
they
have
served
in
excess
of
five
years,
and
have
sick
leave
credits,
the
executives
of
the
City
are
paid
sick
leave
benefits
on
termination
of
employment,
in
accordance
with
the
sick
leave
By-law;
(f)
as
of
May
11,
1981,
the
Appellant
had
in
bank
78.75
days
of
accumulated
sick
leave
credits,
which
equates
to
an
amount
of
money
of
$13,702.50;
(g)
the
detail
of
the
calculation
of
the
amount
of
$64,200.00,
accepted
by
the
Appellant
as
a
final
settlement
of
his
employment
dispute
with
the
City
is
as
follows:
|
Damages
|
$50,497.50
|
|
Accumulated
Sick
Leave
credits
|
13,702.50
|
|
TOTAL
|
$63,200.00
[sic]
|
(h)
the
Appellant’s
salary
from
his
employment
for
the
12
months
preceding
April
1981,
was
of
$46,266.34;
8.
The
respondent
further
states
that
in
filing
his
1981
income
tax
return,
the
Appellant
reported
an
amount
of
$23,133.17,
pursuant
to
subsection
56(1)(a)(viii).
9.
He
further
states
that
the
basis
of
the
reassessment
dated
December
22,
1983
is
twofold:
(a)
acknowledgment
by
the
Respondent
of
the
reception
by
the
Appellant
of
a
termination
payment
as
defined
in
section
248
of
the
Income
Tax
Act
of
$50,497.50;
(b)
inclusion
in
the
Appellant’s
income
of
accumulated
sick
leave
credits
in
the
amount
of
$13,702.50.
10.
He
relies,
inter
alia,
upon
sections
3,
5(1),
6,
56(1)(a)(viii)
and
subsection
248(1)
of
the
Income
Tax
Act,
R.S.C.
1952,
chapter
148
as
amended.
In
argument
counsel
stated
that
the
Minister
accepts
that
the
appellant
had
been
wrongfully
dismissed
as
per
the
Ontario
court
ruling
and
that
he
was
in
receipt
of
an
amount
of
damages
from
the
City
of
London
but
that
the
damage
amount
was
equal
to
$50,497.50.
It
was
submitted
that
the
Minister’s
assumptions
as
pleaded
are
to
be
taken
as
fact
unless
disproved
by
the
appellant,
that
the
Minutes
of
Settlement
specifies
only
the
total
amount
without
recitation
of
the
underlying
factors
that
went
into
it,
that
there
is
no
clear
provision
therein
that
the
$64,200
was
solely
in
payment
of
damages
and
that
the
sick-leave
entitlement
had
its
source
in
the
employment
contract,
that
it
had
accrued
to
the
appellant
and
was
his
own
property
prior
to
his
termination.
In
support
of
the
latter
position
counsel
relied
on
Molleur
v.
M.N.R.,
37
Tax
A.B.C.
78;
64
D.T.C.
788
(T.A.B.);
affirmed
[1965]
C.T.C.
267;
65
D.T.C.
5166
(Ex.
Ct.)
and
Quebec
Photo
Service
Inc.
v.
M.N.R.,
[1967]
Tax
A.B.C.
425;
67
D.T.C.
315
(T.A.B.)
as
exemplification
of
the
nature
of
the
sick-leave
plan.
It
was
also
urged
that
the
fiscal
issue
for
determination
in
the
case
of
MacLean,
supra,
was
so
different
from
that
of
the
case
at
bar
that
its
relevance
is
minimal.
MacLean
was
a
taxpayer
who
was
London's
Chief
Administrative
Officer
and
who
was
in
fact
fired
at
the
same
time
as
the
appellant.
The
Minister
had
assessed
the
entire
amount
received
by
MacLean
as
income.
The
Appellant’s
Position
The
appellant
relies
heavily
on
the
MacLean
circumstances
and
decision
because
the
dollar
amounts
had
been
spelled
out
by
the
parties
including
that
of
a
very
substantial
sick-leave
benefit
(see
page
306
of
the
decision)
all
of
which
was
held
to
be
damages.
He
also
relies
on
the
decision
of
The
Queen
v.
Robert
B.
Atkins,
[1975]
C.T.C.
377;
75
D.T.C.
5263
(F.C.T.D.),
affirmed
[1976]
C.T.C.
497;
76
D.T.C.
6258
(F.C.A.)
as
being
of
application.
The
appellant
further
stresses
that,
in
his
case,
many
factors
had
been
taken
into
account
in
the
computation
of
the
damages.
He
was
aware
that
he
had,
and
would
have
continued
to
have
had
sick-leave
entitlements
and
benefits,
that
he
was
not
aware
of
any
particular
dollar
value
thereof
as
at
May
11,
1981
and
that
the
$64,200
was
a
rounded,
negotiated
amount
representative
of
many
things
which
did
not
specifically
include
$13,702.50
as
accrued
sick-leave
entitlements.
The
appellant
submits
that
the
Minutes
of
Settlement
should
be
viewed
in
its
entirety,
that
a
mutual
release
and
waiver
as
to
all
actions,
claims
and
demands
for
damages
is
included
and
is
clearly
stated
to
be
consideration
for,
inter
alia,
the
payment
of
the
$64,200
amount.
Finally,
and
based
on
his
experience
as
former
City
Treasurer,
it
was
highly
likely
that
the
City
may
have
entered
the
amount
of
$13,702.50
against
their
own
computation
of
his
banked
days
of
sick-leave
credit,
as
well
as
having
made
other
accounting
entries,
but
that
would
have
been
for
their
own
purposes
and
not
as
a
consequence
of
a
specific
term
of
the
settlement
agreement.
In
other
words,
it
was
no
more
than
a
unilateral
act
for
their
own
accounting
purposes.
Analysis
In
determining
the
true
nature
or
characterization
of
the
$64,200
received
by
the
appellant,
due
regard
must
be
given
to
the
following
matters:
the
appellant
had
been
wrongfully
dismissed
from
a
high
profile
position,
he
was
entitled
to
and
negotiated
damages
therefor,
the
damage
calculations
would
have
included
many
factors
to
be
bargained
for
and
valued
and
that
dissection
of
its
components
should
be
approached
with
caution
and
then
should
be
attempted
only
if
there
is
shown
to
be
some
practical,
realistic
or
reasonable
basis
and
means
to
do
so:
see
The
Queen
v.
Atkins,
[1975]
C.T.C.
377
at
387;
75
D.T.C.
5263
at
5271.
To
a
considerable
degree
much
of
the
Minister's
position
rests
on
an
accurate
determination
of
the
true
nature
and
characterization
of
this
appellant's
sick-leave
plan.
In
this
regard
all
I
have
to
draw
on
are
the
provisions
of
the
by-law
itself,
Exhibit
R-1,
supra.
The
authorities
given
in
support
of
the
Court
making
the
characterization
sought
by
the
Minister
are
of
interest
but
of
little
assistance
because
of
their
factual
differences.
In
Molleur,
supra,
at
271
(D.T.C.
5169)
the
Court
agreed
with
the
finding
of
the
Tax
Appeal
Board
member
that
the
sickness
benefit
fund
had
been
set
up
by
the
accumulation
of
salaries
withheld
from
the
employees
by
the
employer.
The
same
funding
format
had
evidently
been
employed
by
management
in
the
Quebec
Photo
Service
Inc.
case,
supra,
where
it
is
noted
at
434
(D.T.C.
317),
“[t]hat
which
the
Appellants
were
withholding
at
the
end
of
each
month
out
of
salary
earned
by
each
employee
was
a
remuneration,
the
benefits
whereof
were
deferred
in
case
of
sickness”.
Returning
to
the
case
at
bar,
in
the
absence
of
further
and
better
evidence,
I
am
unable
to
decide
with
any
degree
of
certainty
that
the
plan
carried
by
the
City
of
London
was
funded
and
treated
in
the
same
manner
as
aforenoted
such
that
each
credit
actually
arose
out
of
Mr.
Date's
own
remuneration
which
had
been
withheld
and
deferred
and
therefore
could
be
viewed
as
having
been
his
own
money
or
property.
Alternatively,
the
other
difficulty
that
persists
relates
to
the
accuracy
of
the
value
of
the
accumulated
credits
assumed
by
the
Minister
to
be
$13,702.50.
The
appellant
neither
admitted
nor
disputed
same
as
he
was
neither
aware
of
any
particular
valued
amount
nor
had
he
bargained
specifically
for
same.
He
did
note,
however,
that
the
quashing
of
the
firing
by-law
should
have
legally
resulted
in
a
retroactive
entitlement
to
a
salary
increase
in
1980.
Therefore,
if
it
can
reasonably
be
inferred
that
the
appellant
actually
accepted
and
received
what
counsel
for
the
Minister
described
as
“his
own
property”
from
the
sick-leave
plan
then
it
is
also
reasénable
to
infer
that
a
fully
informed
recipient
or
beneficiary
would
have
bargained
for
an
enriched
calculation.
But
I
have
no
reason
to
disbelieve
the
appellant
when
he
says
that
this
did
not
happen,
that
what
he
bargained
for,
and
got,
was
$64,200
in
damages
for
wrongful
dismissal
and
that
anything
else
that
may
have
been
obtainable
was
released
and
waived
to
get
a
settlement.
Accordingly,
to
try
and
dissect
it
into
any
meaningful
components
having
any
reliable
values
is
neither
practical
nor
realistic
on
the
facts
of
the
case
at
bar.
The
appellant's
salary
for
the
year
preceding
April
1981
was
$46,266.34
and
if
he
had
not
been
wrongfully
dismissed
it
may
have
been
higher.
The
ten-year
period
of
employment
together
with
the
executive
post
held
may
have,
if
litigated,
realistically
entitled
him
to
notice
of
termination
of
12
to
24
months
or
salary
and
benefits
in
lieu
thereof.
Against
this
background
the
amount
of
$64,200
as
damages
does
not
appear
to
be
unreasonable
or
carry
the
suspicion
that
it
would
contain
matters
other
than
that
of
damages.
I
find
that
there
was
no
agreement
made
contemporaneously
with
the
appellant’s
termination
in
1981
to
treat
or
allocate
a
$13,702.50
component
as
satisfaction
of
accumulated
sick-leave
credits.
Indeed
the
weight
of
the
evidence
points
the
other
way
and
effectively
rebuts
any
inferences
that
could
be
drawn
simply
from
the
City
of
London's
accounting
practices.
In
conclusion,
there
is
one
remaining
matter
to
be
addressed.
The
appellant
relied
very
heavily
on
the
decision
of
Judge
Bonner
of
this
Court
with
respect
to
the
taxation
of
the
Murray
MacLean
settlement;
see
MacLean,
supra.
Because
the
facts
of
that
case
are
not
the
same,
and
because
the
issue
called
upon
for
decision
was
so
very
different,
that
decision
would
be
of
little
relevance
to
the
matter
at
bar.
For
the
reasons
given,
the
assessment
is
referred
back
to
the
Minister
for
reassessment
in
accordance
with
the
decision
given
in
Part
II
hereof.
Appeal
allowed.
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