Barton Pepper v. Minister of National Revenue, [1984] CTC 2694, 84 DTC 1613

Christie, TCJ [ORALLY]:—This appeal relates to the appellant’s 1979, 1980 and 1981 taxation years.

The first question is whether this Court has jurisdiction to entertain the appeal in respect of 1981. On April 5, 1982, the Minister mailed a notice of reassessment to the appellant in relation to his 1981 taxation year. The appellant failed to serve a notice of objection to the reassessment as required by section 165 of the Income Tax Act (“the Act”) before instituting his appeal pursuant to section 169 of the Act by letter dated October 25, 1982, addressed to the Registrar of this Court.

In MacDonell et al, [1984] CTC 2279; 84 DTC 1258, it is said at 2281 [1260]:

The right of appeal granted by paragraph 169(a) is purely statutory and, if it is to be invoked, the conditions pertaining thereto must be strictly complied with.

Serving a notice of objection pursuant to section 165 of the Act is clearly a condition precedent which must be met before an appeal can be regarded as properly instituted under section 169. Failure to observe that requirement is fatal to this Court’s jurisdiction in relation to the appellant’s 1981 taxation year. Accordingly, the application to quash that appeal is granted.

The second issue is whether the appellant is entitled to deduct from his income for 1979 and 1980, disbursements made by him for meals. At the hearing, the appellant relied exclusively on paragraph 8(l)(g) of the Act. This observation is made because other paragraphs of section 8 are referred to in the notice of appeal, but the observation is not to be construed as an implication on my part, that the appellant might have succeeded under another of those additional paragraphs. Paragraph 8(l)(g) provides that in computing a taxpayer’s income for a taxation year from employment, disbursements made by him for meals may be deducted if he was an employee of a corporation whose principal business was the transportation of goods, and if the duties of the employment required the taxpayer:

(1) to travel regularly away from the municipality where the employer’s establishment to which he reported for work was located, on vehicles used by the employer to transport the goods; and

(2) while so away, to regularly make disbursements for meals.

The right to make deductions is subject to certain other provisos which need not be enumerated for the purposes of this appeal because it succeeds or fails depending on the validity of the appellant’s contention that the principal business of the corporation known as the British Columbia Hydro and Power Authority (“the Corporation”), was “goods transport” in 1979 and 1980 within the meaning of paragraph 8(l)(g).

The appellant was an employee of the Corporation at all times relevant to this appeal. Pursuant to subsection 12(1) of the Hydro and Power Authority Act, RSBC 1949, c 188, the Corporation has the authority to generate, manufature, distribute and supply power. “Power” is defined in section 1 of that Act as including electricity and gas.

I accept the appellant’s submission that the principal business of the Corporation is the distribution and supplying of electricity and gas. The words “transport” and “goods” taken alone can have a very large significance and, in some contexts, the word “transport” might well include the moving of electrical energy from one place to another by means of wires and related equipment. The same can be said of the movement of gas through pipes: General Motors Corporation v Bowers, 132 NE 213. Also, electricity and gas might be properly regarded as goods in some circumstances. I refer for example, to Consumers’ Gas Co v Schmidt et al, [1971] 3 OR 431, a judgment of the Ontario Court of Appeal in which it was held that natural gas supplied for domestic purposes is “goods” within the meaning of the phrase “goods supplied as necessaries of life” in paragraph 135(l)(g) of the Bankruptcy Act, RSC 1952, c 14 (now RSC 1970, c B-3, s 148). See also in Great Lakes Power Company Ltd v North Canadian Enterprises Ltd, [1972] 3 OR 770, where Vannini, DC J held that electrical energy is “goods” within the meaning of Rule 33(1 )(b) of the Rules of Practice of the Supreme Court of Ontario, which provides that a writ of summons may be specially endorsed where the plaintiff seeks to recover a debt arising upon a simple contract for goods sold and delivered. Nevertheless, in accordance with the established rule of interpretation of statutes, the meaning of the words “principal business was — goods transport” in paragraph 8(1 )(g) of the Act must be gathered from their entire context. When so regarded, I do not believe that the principal business of the British Columbia Hydro and Power Authority can be said to be the transportation of goods within the meaning of the paragraph. In my opinion, what the paragraph contemplates is corporations and individuals whose principal business is what is generally regarded as transportation companies or enterprises such as commercial trucking, railroading, shipping and airlines. I consider the presence of the words “on vehicles used by the employer to transport the goods” in paragraph 8(1 )(g) as conclusive of what I have said.

It follows that the appellant’s appeal in respect of his 1979 and 1980 taxation years is dismissed.

Appeal dismissed.