Phyllis I Moore v. Minister of National Revenue, [1984] CTC 2508, 84 DTC 1452

Goetz, TCJ:—The appellant is appealing with respect to a reassessment relating to her 1980 taxation year claiming that her position as a school principal required her to pay certain travelling expenses in the amount of $2,211.47 which she sought to deduct in filing her 1980 tax returns.

The respondent on the other hand in his reply to notice of appeal, in paragraph 6 thereof, contends:

In its reassessment the Respondent made the following assumptions of fact:

(a) the Appellant was not ordinarily required to carry on the duties of her employment

away from her employer’s place of business or in different places;

(b) under the Appellant’s contract of employment she was not required to pay the travelling expenses incurred by her in the performance of the duties of her office or employment.

Further he relied inter alia on sections 8(l)(a), 8(l)(h), 8(l)(j) and 8(2) of the Income Tax Act, SC 1970-71-72, c 63 as amended, (“the Act”).

Facts

The Collective Agreement between the Winnipeg Teachers’ Association of the Manitoba Teachers’ Society and The Winnipeg School Division was filed by the appellant. Attached to the agreement and forming part thereof were certain bylaws and regulations. The sections relevant to this appeal are as follows:

Section 4. Allowances for teachers not in administrative and supervisory positions.

4.01 Department Head’s Allowance

This section relates to the number of teachers within the respective departments thereby determining the extra salary a department head receives.

4.03 Allowance for Travel

A teacher who is required by the Division to use his own motor vehicle will be paid an allowance in accordance with the Division’s scale of car allowance for employees. A teacher who serves in two different schools in one day will be paid a trip allowance of not less than 53¢ per trip.

5. Salary Schedule for Teachers in Administrative and Supervisory Positions .. . .

This section sets the minimum and maximum salaries based on the level in the school system and the weight of enrolment.

10. Applicability of Regulations, By-laws, and Code of Rules

This agreement is made subject to the provisions of The Public Schools Act, The School Attendance Act and the regulations made under The Education Department Act. Except as hereinafter provided, the regulations, By-laws and Code of Rules shall remain in force during the term of this agreement and it is understood and agreed that no changes shall be made in forms of such agreements or in the said regulations or By-laws or in the Code of Rules of the Division which affect the terms or conditions of employment of teachers by the Division except by agreement of the parties hereto and subject to the approval of the Minister under The Public Schools Act, if such approval is required.

Section 2.19 of the regulations reads:

Transportation of Employees

Necessary and approved transportation required in the performance of the duties of any employee shall be at the expense of the Board. Any employee who uses his own automobile for such transportation shall be entitled to reimbursement at a rate specified by the Board.

Chapter 3.

The Administration of Schools

Section 3.1 — Duties of Principals

This section sets out in detail the functions and duties of a principal.

Section 3.7 — Special School Activities

Special school activities including field trips, educational tours, outside speakers to the classroom or to the school shall be arranged with the approval of the principal.

Pupils making field trips under school auspices shall be accompanied by a teacher who will exercise supervision over them. If transportation is required for such trips, it is preferable to use a public carrier, private automobiles may be used, however, if public liability insurance is carried with limits of not less than fifty and one hundred thousand dollars. If a projected trip extends beyond the boundaries of Metropolitan Winnipeg, a written request and release from the parent for the child to participate in the trip on a form provided by the Division shall be obtained before the pupil is permitted to participate.

The Required Meetings which a principal must attend as part of his duties are as follows:

All Principals — approximately 4-5 meetings per year at the discretion of the Chief Superintendent including:

Annual Meeting — September

Annual Conference

Budget Seminar

Elementary Principals —

10 Council Meetings

3 Nutrition Program Meetings

Secondary Principals —

8 Council Meetings

3 Athletic Council Meetings

The appellant called as a witness a retired payroll master who admitted he had no knowledge of the collective agreement requiring the principals to file a T2200 form which was filed by the appellant. The T2200 form was signed by the Assistant-Secretary Treasurer who answered “yes” to the following question:

Was this employee ordinarily (habitually) required to carry out the duties of employment away from your place of business or in different places?

Two other principals were called by the appellant. Both had been active on the teachers’ negotiating team. They stated Section 2.19 did not apply to principals but rather to teachers, maintenance and supply staff; and this section had been in the agreement for years; that they used their own cars in travelling to meetings and were not reimbursed by the School District; that principals were responsible for the administration of their schools and that no grievance or arbitration procedures were invoked in 1980 by the Teachers’ Association.

The appellant had been principal at Laura Secord School for 17 years including 1980. The enrolment was 375 students. Her duties involved the administration of the school; close liaison with the superintendant and supervisors; the evaluation of teachers; the supervision of the total plant and staff and all programs and supervision of the welfare, safety and nutrition of the pupils as well as other duties delineated in the regulations.

She filed a Manitoba Teachers’ Association diary and calendar for 1980 which showed trips which were specifically set forth in a document she filed entitled:

Business trips on the Request of the School Division

Basically the trips were as follows:

A. — Meetings at Laura Secord School evenings.

B. — Trips to the School Division Offices.

C. — Trips to R.B. Russel School.

D. — Trips to the Universities of Manitoba or Winnipeg by Man.

E. — Other trips on School Division business.

She admitted that a principal was paid additional salary over and above regular teachers. She performed no teaching duties as this would interfere with her administrative function in the school. She made no claim to the District for payment of her expenses nor was she reimbursed. She further admitted that being a principal gave her more prestige and was a step in the path to becoming a member of the School District’s administrative staff.

Findings

The teachers’ bargaining group would be guided by the advice of highly qualified labour relations personnel of the Manitoba Teachers’ Society. The appellant would be fully conversant with the provisions of the bargaining agreement. I can find nothing in the bargaining agreement and regulations, either explicitly or implicitly, to require her to make most of her trips or to be paid expenses therefor. If such was the intention of the parties to the agreement I’m sure it would have been specifically provided for.

The relevant section of the Income Tax Act to be considered is paragraph 8(1)(h) under the heading “deductions allowed”’:

Sec. 8(1) In computing a taxpayer’s income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto:

(h) where the taxpayer, in the year,

(i) was ordinarily required to carry on the duties of his employment away from his employer’s place of business or in different places,

(ii) under the contract of employment was required to pay the travelling expenses incurred by him in the performance of his duties of his office or employment, and

(iii) was not in receipt of an allowance for travelling expenses that was, by virtue of subparagraph 6(l)(b)(v), (vi) or (vii), not included in computing his income and did not claim any deduction for the year under paragraph (e), (f) or (g),

amounts expended by him in the year for travelling in the course of his employ- ment.

To claim a deduction under this section, the appellant must satisfy all the requirements thereof. Counsel for the appellant relied very heavily on the case of The Queen v Patterson, [1982] CTC 371; 82 DTC 6326.

That case can be differentiated from the case before me because no bargaining agreement was filed in evidence but merely a T2200 form. Each case must be decided on its own facts. The appellant embarked on a number of unapproved trips many of which were not necessary and possibly for her own edification and enjoyment. For instance, attending the Women’s Principal Association, attending Portage La Prairie to arrange for housing for a Winnipeg principal’s meeting, attending at the University of Manitoba and University of Winnipeg because she was regent by virtue of her being principal, and attending at Kenora for a six-day camping trip. There were many other trips made by the appellant which were not part of her responsibility as a principal. She had no obligation to take them and did so, unbeknown to the School District. Her trips to school, to and from her home, were to her employer’s place of business. Other than her trips specifically required under the bargaining agreement, she had no obligation to take them.

Whereas section 2.19 is quite specific in this regard, no claim was made thereunder. There was no grievance filed or arbitration sought.

The case of The Queen v Henry Cival, [1983] CTC 153; 83 DTC 5168, a case heard before the Federal Court of Appeal, seems to me most relevant. The taxpayer was requested by his employer to use his own automobile for which he was paid a mileage allowance. His expenses exceeded his allowance and he claimed the excess as a travelling expense. This was disallowed by the Minister. The pertinent portions of the judgment of Ryan, J may be found at 154 [5168] and 158 [5171] respectively as follows:

The question in this appeal is whether Mr Cival was entitled to this deduction under paragraph 8(1)(h). The answer depends on whether he was required by his contract of employment to pay the expenses incurred by him in using the automobile.

The terms of Mr Cival’s employment were contained in a collective agreement between Treasury Board and the Public Service Alliance which was in force during the 1977 taxation year. Mr Cival was a member of the bargaining unit covered by the agreement. His terms of employment may also have included provisions of the Public Service Terms and Conditions of Employment Regulations, at least to the extent they were not inconsistent with the provisions of the collective agreement, and any statutory provisions concerning public employment applicable to him. It was not suggested that any term of employment contained in the collective agreement, in the Regulations or in any statutory provision required him to use his own car in performing his duties or to pay the expenses incurred in its use. To bring himself within subparagraph 8(l)(h)(ii), Mr Cival would, therefore, have to establish that the arrangement about using his car was an employment contract under which he was required to pay the expenses incurred by him in using the car.

I am prepared to assume for purposes of this appeal that Mr Cival could enter into an individual contract with his employer, covering an aspect of his employment, despite his being covered by the collective agreement, so long at least as the contract was not inconsistent with the terms of the agreement. In my view, the arrangement between Mr Cival and his employer, if a contract at all, was at most what is sometimes called a unilateral contract. It was an arrangement under which his employer undertook to reimburse him on a mileage basis for expenses he incurred in using his car in the performance of his duties. I do not interpret the arrangement as involving a promise by Mr Cival to use his car in performing his duties and to pay the expenses out of his own pocket in return for an undertaking by his employer to reimburse him. To put it another way: as I see the arrangement, Mr Cival was not contractually bound to use his car in doing his job to pay the expenses involved: if at any time during 1977 he had refused to use his car for this purpose, he would not have been suable by his employer for breach of contract. It follows that, to adopt the words used in subparagraph 8(l)(h)(ii), he was not required under his contract of employment to pay the expenses incurred by him in using his car in the performance of the duties of his employment. This is enough to dispose of the appeal.

See also McGavin Toastmaster Ltd v Ainscough, [1976] 1 SCR 718, at 725:

The reality is, and has been for many years now throughout Canada, that individual relationships as between employer and employee have meaning only at the hiring stage and even then there are qualifications which arise by reason of union security clauses in collective agreements. The common law as it applies to individual employment contracts is no longer relevant to employer-employee relations governed by a collective agreement which, as the one involved here, deals with discharge, termination of employment, severance pay and a host of other matters that have been negotiated between union and company as the principal parties thereto. To quote again from the reasons of Judson J in the Paquet case, at p 214:

If the relation between employee and union were that of mandator and mandatary, the result would be that a collective agreement would be the equivalent of a bundle of individual contracts between employer and employee negotiated by the union as agent for the employees. This seems to me to be a complete misapprehension of the nature of the juridical relation involved in the collective agreement. The union contracts not as agent or mandatary but as an independent contracting party and the contract it makes with the employer binds the employer to regulate his master and servant relations according to the agreed terms.

To me, if the appellant wanted reimbursement for travelling expenses and the use of her car, a claim should have been made under section 2.19 and go on to arbitration if necessary. On the basis of the relevant provisions of the bargaining agreement and on the evidence adduced, I find that the appellant has not established that she falls within the four corners of paragraph 8(l)(h) and I dismiss the appeal.

Appeal dismissed.