William T Betz v. Minister of National Revenue, [1984] CTC 2889, 84 DTC 1766

Goetz, TCJ:—This is an appeal by the appellant with respect to his 1978 taxation year whereby the respondent disallowed the claimed deduction for travelling expenses in the amount of $250.

The appellant is a school principal in the city of Winnipeg. His school has an enrolment of 650 students and a staff of 30 teachers. The principals are appointed by the Director of Education with the approval of the School Division of St James-Assiniboia No 2. The bargaining agreement between the School Division of St James-Assiniboia No 2 and the St James-Assiniboia Teachers’ Association No 2 of the Manitoba Teachers’ Society is silent as to the specific duties of a principal in the school system. It is also silent with respect to travelling expenses. The appellant has indicated that he was responsible for the curriculum as set down by the supervisory administrative staff, the introduction of new programs submitted to him by teachers, which he would pass on to his supervisor’s office; teachers’ welfare as well as that of pupils; and the general administration of the school.

The appellant’s duties as principal require him to attend meetings, most of which were at the school board office, although there were meetings of the principals beyond the school board office such as at Gimli, Manitoba. The appellant stated further that he had to make bank deposits and pick up the mail and that he was away from his office for at least one hour a day. He filed as an exhibit a list of all meetings that he attended which were basically principal meetings. There were other meetings such as Christmas Band/Choir program and Principals Family meetings. He stated he required a car for travelling to the various meetings and that he was not paid by the school but had to pay the car expenses himself. He considers that the bargaining agreement permits him to obtain reimbursement, but from whom he does not say. The appellant included, among his travelling expenses, the cost of travelling from his home to his school and in the appeal he abandoned this portion of his travelling expense claim.

Attached to his 1978 tax return was Form T-2200 re Declaration of Employment Conditions — Office or Employment Expenses. This form was signed by an officer of the school board whereby the following questions were answered in the affirmative:

— Was this employee required to pay any expenses incurred in the performance of assigned duties?

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

The following questions were answered in the negative:

— Was this employee reimbursed for any expenses incurred in the performance of assigned duties?

— Was this employee in receipt of an allowance for expenses incurred in the performance of assigned duties?

Findings

No representative of the School Division of St James-Assiniboia No 2 was present at the hearing nor was there any evidence given from that School Division pertaining to the matters in question in the appeal.

The relevant section of the Income Tax Act, SC 1970-71-72, c 63, to which I must give consideration is paragraph 8(1 )(h) which reads as follows:

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 appli- cable 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 busines or in different places,

(ii) under the contract of employment was required to pay the travelling expenses incurred by him in the performance of the 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 expensed by him in the year for travelling in the course of his employment;

The appellant relied quite strongly on the case of The Queen v Mervin J Patterson, [1982] CTC 371; 82 DTC 6326, a decision of Cattanach, J of the Federal Court — Trial Division. The facts of that case were somewhat different but Cattanach, J at 376 and 6330 respectively, states his analysis of the word “ordinarily”:

The authoritative definition of the word “ordinarily” as used in paragraph 8(l)(h) is that given by Thurlow, ACJ (as he then was) in Her Majesty the Queen v Thomas Healy (1978) CTC 355; 78 DTC 6239;

He first referred to the meaning of the word “ordinarily” in a recognized dictionary. Those meanings were:

1. In conformity with rule; as a matter of regular occurrence;

2. In most cases; usually, commonly;

3. To the usual extent,

4. As is normal.

Thurlow, CJ then said at pages 6241 (and 357):

In paragraph 8(1 )(h) the word ordinarily modifies “required to carry on the duties of his employment etc”, and it appears to me to be equivalent to “normal” as opposed to “rarely” or “exceptionally”. The meaning “in most cases” does not fit. That of “as a matter of regular occurrence” does.

Accepting as I do as the premise found to be a fact that the defendant’s employer requires him to attend at various places to carry on the duties of his employment and does so as a matter of frequent and regular occurrence it follows that the defendant’s situation falls precisely within the meaning of paragraph 8(1 )(h).

I find that the appellant, on quite a number of occasions, was required to be away to attend a number of principals’ meetings at the School Board Office and elsewhere. Admittedly, this was expected of him and that would naturally be part of his duties when he was appointed as a principal and for which position he received considerably more remuneration than an ordinary teacher.

The appellant contended that Form T-2200, as filed, implied that the appellant had to pay his own travel expenses and cited Cheshire and Fifoot’s Law of Contract, 9th Edition, 1976 Furmston at 132:

In all these cases the court is really deciding what should be the content of a paradigm contract of hire, of employment, etc. The process of decision is quite independent of the intention of the parties except that they are normally free, by using express words, to exclude the terms which would otherwise be implied. So the court is in effect imposing on the parties a term which is reasonable in the circumstances.

In addition to terms thus imported into particular types of contract, the courts may, in any class of contract, imply a term in order to repair in intrinsic failure of expression. The document which the parties have prepared may leave no doubt as to the general ambit of their obligations; but they may have omitted, through inadvertence or clumsy draftsmanship, to cover an incidental contingency, and this omission, unless remedied, may negative their design. In such a case the judge may himself supply a further term, which will implement their presumed intention and, in a hallowed phrase, give “business efficacy” to the contract. In doing this he purports at least to do merely what the parties would have done themselves had they thought of the matter. The existence of this judicial power was asserted and justified in the case of The Moorcock ((1889), 14 PD 64).

To perform his duties as principal, the appellant was aware, upon acceptance of that position, that it was vital, among other things, that he attend regular meetings at the School Board Offices and with other principals. This was an important contractual duty of a principal as being part of his functions as a school administrator. See Winnipeg Teachers* Association No 1 of the Manitoba Teachers* Society v Winnipeg School Division No 1, 59 DLR (3d) 228.

The case of The Queen v Henry Civ al, [1983] CTC 153; 83 DTC 5168, a decision of the Federal Court of Appeal, involved an employee who worked for the government and although he was working under a general bargaining agreement, he had made a a special arrangement between himself and his employer, whereby he was allowed certain travelling expenses. He exceeded his allowance and sought to claim the extra travelling expenses as an implied term of his contract. The Court held that there was no implied term. (See [1983] CTC 158; 83 DTC 5171.)

In short, the appellant was not ordinarily required to carry on the duties of his employment away from his employer’s place of business, namely, his school or the School Board offices; nor can it be implied that he was required to use his automobile and pay his expenses for so doing. Other trips made by him to the bank, to pick up mail, etc could have been done by his clerical staff.

The appeal is dismissed.

Appeal dismissed.