Guy
Tremblay
[TRANSLATION]:—This
case
was
heard
at
Montreal,
Quebec
on
May
15,
1981.
1.
Point
at
issue
The
question
is
whether,
in
computing
her
income
for
the
fiscal
year
1976,
the
appellant
is
entitled
to
claim
deductions
in
the
amounts
of
$3,289.30
for
court
costs,
$169.75
for
moving
expenses
and
$750
for
the
cost
of
cancelling
a
lease.
2.
Burden
of
proof
2.1
the
appellant
has
the
burden
of
showing
that
the
respondent’s
assessment
is
incorrect.
This
burden
of
proof
results
not
from
a
single
section
of
the
Income
Tax
Act
but
from
several
judicial
decisions,
including
the
judgment
of
the
Supreme
Court
of
Canada
in
Johnston
v
MNR
[1948]
CTC
195,
3
DTC
1182.
The
same
Court
has
further
held
that
the
facts
presumed
by
the
respondent
in
making
the
assessment
or
reassessment
are
also
presumed
to
be
true
unless
the
appellant
demonstrates
the
contrary.
2.2
The
facts
presumed
by
the
respondent
in
the
case
at
bar
in
support
of
his
assessment,
made
on
December
13,
1977,
are
described
in
the
reply
to
the
notice
of
appeal
in
paragraph
7.
It
reads
as
follows:
7.
In
assessing
the
appellant
for
the
taxation
year
1976
the
respondent,
the
Minister
of
National
Revenue,
relied
inter
alia
on
the
following
facts:
(a)
prior
to
her
taxation
year
1976,
the
appellant
held
the
position
of
head
of
external
services
for
the
EPC
library
of
the
University
of
Montreal;
(b)
on
July
1,
1975
the
appellant
signed
a
lease
for
twenty-four
months
at
$250
a
month
for
an
apartment
located
in
the
City
of
Outremont,
Quebec;
(c)
early
in
1976,
the
appellant
was
dismissed
from
the
position
she
held
at
the
library
of
the
University
of
Montreal;
(d)
this
dismissal
was
highly
prejudicial
to
her
professional
status
and
eventual
working
conditions,
and
the
appellant
decided
to
appeal
the
decision:
for
this
purpose,
she
retained
the
services
of
a
lawyer;
(e)
the
objective
of
the
appellant
in
filing
this
appeal
was
to
be
reinstated
in
the
position
of
head
of
external
services
at
the
EPC
library;
(f)
by
a
letter
dated
January
26,
1978,
the
Rector
of
the
University
of
Montreal
told
the
appellant
that
he
accepted
the
recommendation
of
the
members
of
the
appeal
committee
that
the
dismissal
should
be
upheld;
this
letter
further
stated
that
the
appellant’s
dismissal
in
no
way
reflected
on
her
professional
competence,
and
that
she
could
obtain
a
letter
to
this
effect
from
the
library
service
of
the
University
of
Montreal;
(g)
the
appellant’s
legal
fees,
amounting
to
$3,289.30,
were
paid
by
cheque
in
the
amount
of
$200.00,
dated
February
4,
1976,
and
by
cheque
in
the
amount
of
$3,089.30,
dated
March
1,
1977;
(h)
on
June
30,
1976,
the
appellant
moved
to
Victoriaville,
Quebec
as
she
had
found
a
new
job
with
the
CEGEP
in
the
area;
(i)
the
appellant,
who
had
been
separated
de
facto
from
her
husband
since
1974,
sublet
the
apartment
she
had
in
Outremont
to
the
latter,
after
vainly
attempting
to
cancel
the
lease;
the
respondent
accordingly
denied
the
deduction
of
an
amount
of
$750.00
claimed
by
the
appellant
for
the
costs
of
cancelling
the
lease;
(j)
of
the
amount
of
the
deduction
claimed
by
the
appellant
for
moving
expenses,
the
respondent
denied
$169.75
on
the
ground
that
no
expenses
had
been
incurred
and
that
the
claim
was
not
supported
by
documentation;
3.
Facts
3.01.1
The
appellant
admitted
the
facts
presumed
by
the
respondent
which
are
described
in
subparagraphs
(a),
(b),
(c),
(d),
(f),
(g)
and
(i)
of
paragraph
7
of
the
reply
to
the
notice
of
appeal,
cited
above.
3.01.2
She
denied
subparagraph
(e),
stating
that
the
purpose
of
bringing
the
appeal
was
to
re-establish
her
professional
and
administrative
integrity
and
competence,
as
the
effect
of
the
dismissal
had
been
to
place
these
in
doubt,
and
also
for
the
purpose
of
enabling
her
to
continue
her
profession
of
librarian
in
the
working
world.
A
letter
to
this
effect
was
indeed
filed
by
Mr
Paul
Lacoste,
Rector
of
the
University
of
Montreal,
but
the
dismissal
was
upheld
by
the
members
of
the
appeal
committee
to
whom
the
appellant
had
appealed.
The
document
stated
that
the
“dismissal
had
nothing
to
do
with
your
professional
competence”.
Another
letter
to
the
same
effect
was
written
by
the
director
and
assistant
director
of
the
University
of
Montreal
library
service.
These
documents
were
filed
as
No
1-1,
pp
21
and
22.
3.01.3
She
admitted
subparagraph
(h),
except
that
she
moved
to
Victoriaville
on
June
14,
1976
and
not
June
30,
1976.
3.01.4
With
regard
to
subparagraph
(j),
the
appellant
specified
that
an
expense
of
$69.75
had
to
be
incurred
during
the
period
between
June
14
and
June
30,
1976
for
midday
meals.
She
was
working
at
the
Victoriaville
centre
while
staying
at
the
Hotel
des
Bois
Franc
at
Arthabaska.
With
regard
to
the
balance
of
$100,
this
was
rental
of
a
Tilden
Rent-A-Car
truck
to
take
her
furniture
from
Montreal
to
Victoriaville.
The
appellant
paid
in
cash
and
had
no
proof
of
payment.
3.02
In
filing
her
1976
tax
return,
the
appellant
claimed
an
expense
of
$2,058.59
as
moving
expenses.
This
amount
included
$750
for
cancellation
of
her
lease.
The
respondent
initially
allowed
$1,007.09
in
his
first
assessment,
and
an
additional
$131.75
following
the
notice
of
objection
filed
by
the
appellant,
thereby
disallowing
a
balance
of
$169.75
for
moving
costs
and
$750
for
the
cost
of
cancelling
her
lease.
3.03
Regarding
the
amount
of
$750
relating
to
the
cancellation
of
her
lease,
the
appellant
testified
that
she
sublet
the
apartment
to
her
husband
for
$200
a
month
beginning
July
1,
1976
when
she
was
herself
making
monthly
rental
payments
of
$250
to
the
owner
under
the
lease.
She
accordingly
paid
the
owner
up
to
June
1977
inclusive,
the
date
the
lease
terminated.
The
lease
was
filed
as
No
I-1,
p
23.
3.04
Court
costs
of
$3,289.30
were
paid
to
the
law
firm
Décary,
Jasmin,
Riv-
est,
Laurin
and
Castiglio.
A
receipt
to
this
effect
was
filed
as
No
I-1,
p
16.
4.
Act
—
case
law
—
analysis
4.01
Act
The
provisions
of
the
Income
Tax
Act
involved
in
the
case
at
bar
are
paragraph
8(1
)(b)
and
subsections
62(1)
and
(3).
4.02
Case
law
and
legal
theory
1.
Marvin
R
V
Storrow
v
HMQ,
[1978]
CTC
792;
78
DTC
6551;
2.
Otto
John
Rath
v
HMQ,
[1979]
CTC
183;
79
DTC
5140;
3.
André
Vézina
v
MNR,
[1979]
CTC
3089;
79
DTC
861;
4.
Planiol,
Marcel,
Traité
élémentaire
de
droit
civil,
Paris,
LGDJ,
3rd
ed,
1905,
Tome
II,
pp
445-446
and
p
578;
5.
Craies’
Statute
Law,
7th
ed,
1971,
pp
112-115.
4.03
Analysis
4.03.1
Interpretation
Before
applying
the
Income
Tax
Act
to
the
facts
proven
before
the
Board,
it
is
useful
to
recall
certain
principles
of
interpretation
which
are
binding
on
the
Board,
as
they
are
on
the
Federal
Court
and
even
on
the
Supreme
Court
of
Canada.
As
the
Income
Tax
Act
is
a
public
law
statute,
it
has
to
be
strictly
interpreted.
This
strict
interpretation,
which
consists
in
giving
words
their
ordinary
meaning
(unless
the
word
itself
has
been
defined
by
the
Act)
operates
in
favour
of
the
taxpayer
when
a
section
imposing
a
tax
is
ambiguous
and
has
to
be
interpreted.
In
that
case,
the
taxation
does
not
apply.The
principle
derives
from
Roman
law,
which
provided
that
any
obligation
imposed
on
citizens
by
the
legislator
was
void
if
the
obligation
was
not
clearly
defined.
This
principle
is
in
turn
based
on
the
fundamental
principle
of
the
freedom
of
the
individual.
That
freedom
cannot
be
restrained
by
a
legislative
body
unless
the
duty
imposed
is
clearly
stated.
Once
the
duty
or
fiscal
burden
has
been
clearly
stated,
however,
the
following
rule
applies:
“Taxation
is
the
rule
and
exemption
the
exception”.
It
follows
that
when
an
exempting
section
has
to
be
interpreted,
if
this
exemption
has
not
been
clearly
stated,
the
interpretation
must
this
time
op-
erate
in
favour
of
the
Department,
of
the
taxing
authority,
so
that
a
court
must
allow
the
least
possible
exemption
or
none
at
all.
It
must
now
be
considered
how
these
principles
of
interpretation
should
be
applied
to
the
sections
in
question
and
also
how
the
said
sections
are
to
be
applied
in
light
of
the
evidence
presented
to
the
Board.
4.03.2
Court
costs
First,
it
is
beyond
question
that
paragraph
8(1
)(b)
regarding
court
costs
is
a
so-called
exempting
provision,
because
it
authorizes
an
exemption
in
computing
an
employee’s
income.
This
is
the
provision
which
applies
to
the
appellant,
since
she
is
an
employee.
The
provision
applies
when
the
recovery
of
salary
or
wages
owed
by
the
employer
or
former
employer
is
in
question.
In
the
Income
Tax
Act
(subsection
248(1))
“salary
or
wages”
means:
“salary
or
wages”
except
in
sections
5
and
63
and
the
definition
“death
benefit”
in
this
subsection
means
the
income
of
a
taxpayer
from
an
office
or
employment
as
computed
under
subdivision
a
of
Division
B
of
Part
I
and
includes
all
fees
received
for
services
not
rendered
in
the
course
of
the
taxpayer’s
business
but
does
not
include
superannuation
or
pension
benefits
or
retiring
allowances;
According
to
the
Petit
Larousse
Illustré,
1979
edition,
“traitement”
[wages]
means
(p
1033):
“employee
remuneration”;
and
“salaire”
[salary]
means
(p
919):
“remuneration
for
work
done
by
an
individual
for
another
pursuant
to
a
contract
of
employment
or
a
paid
commission”.
The
appellant
argued
that
“wages”
includes
“professional
and
administrative
competence”,
a
point
which
she
obtained
with
the
letters
received
from
her
employer,
the
University
of
Montreal
(see
paragraph
3.01.2).
The
Board
cannot
subscribe
to
this
argument.
It
would
mean
giving
the
words
of
the
Act
a
meaning
other
than
that
given
by
the
Act
itself
(subsection
48(1))
and
other
than
that
given
by
the
dictionary.
Paragraph
8(1
)(b)
is
clear
in
itself
and,
unfortunately
for
the
appellant,
the
Board
cannot
allow
the
appeal
as
to
this
expenditure
for
legal
costs.
4.03.3
Costs
of
cancelling
lease
This
expense
is
provided
for
in
subsection
62(1)
and
defined
in
paragraph
62(3)(d).
According
to
the
latter
provision,
“moving
expenses”
include
“any
expense
incurred
as
or
on
account
of
the
cost
.
.
.
of
cancelling
the
lease”.
This
provision
is
also
an
exempting
section.
The
definition
section
(section
248)
does
not
define
the
word
“cancelling”.
Resort
must
therefore
be
had
to
the
dictionary.
According
to
Robert,
Paul,
Dictionnaire
alphabétique
et
analogique
de
la
langue
française,
Paris,
Société
du
Nouveau
Littré,
1972,
Vol
1,
p
1534,
the
word
“résilier”
[cancel]
means
“dissolve;
to
dissolve
(a
contract)
either
by
mutual
consent
or
for
successive
contracts
at
the
instance
of
one
party”.
The
Petit
Larousse
Illustré,
1979
edition,
at
p
889
defines
“résiliation”
[cancellation]:
“rescission
of
a
contract
by
simple
agreement
of
all
parties:
cancellation
of
a
lease”;
“to
cancel”:
“to
terminate
an
agreement
or
a
contract”.
The
evidence
showed
that
the
appellant
did
not
cancel
her
lease
when
she
left
Montreal
in
June
1976,
since
she
herself
continued
to
pay
the
monthly
rental
of
$250
to
the
lessor
until
July
1,
1977.
The
sub-tenant
meanwhile
paid
the
sub-rental
of
$200
(see
paragraph
3.03).
In
applying
principles
of
interpretation,
the
Board
has
no
authority
to
extend
the
meaning
of
“cost
of
cancelling
the
lease”
to
include
expenses
which
an
employee,
who
is
obliged
to
sublet
her
apartment
for
less
than
the
rental
actually
paid
to
the
landlord,
must
incur.
The
Board
does
recognize
that
it
would
be
in
keeping
with
equity
for
the
legislator
to
allow
such
an
expense
in
moving
costs;
but
the
legislator
would
have
to
expressly
provide
for
such
an
expense
in
the
Act.
This
is
the
function
of
Members
of
Parliament,
not
of
those
who
preside
over
tribunals.
The
Board
is
therefore
obliged
also
to
dimiss
the
appeal
of
the
appellant
regarding
the
costs
of
cancelling
her
lease.
4.03.4
Moving
costs
—
$169.75
This
item
concerns
$69.75
of
meal
expenses
and
$100
for
rental
of
the
truck
(see
paragraph
3.01.4).
The
expense
is
provided
for
in
paragraph
62(3)(a).
Once
again,
this
is
an
exempting
section.
The
problem
arose
primarily
from
the
supporting
documentation
needed
to
prove
the
expense.
Before
the
Board,
counsel
for
the
respondent
admitted
the
evidence
regarding
the
sum
of
$69.75
for
meals.
For
its
part,
the
Board
admits
the
evidence
regarding
rental
of
the
truck.
This
furniture
had
to
be
transported.
The
Board
admits
the
oral
evidence.
5.
Conclusion
The
appeal
is
allowed
in
part
and
the
matter
referred
back
to
the
respondent
for
reassessment
in
accordance
with
the
foregoing
reasons
for
judgment.
Appeal
allowed
in
part.