Her Majesty the Queen v. Thomas Healy, [1978] CTC 355, 78 DTC 6239

The Associate Chief Justice:—This is an appeal from a decision of the Tax Review Board which allowed the defendant’s appeal from an assessment of income tax for the year 1973. The issue is whether the defendant is entitled, in computing his income, to deduct an amount of $504 for the cost of meals claimed as part of his expenses for travelling in the course of his employment.

Under paragraph 8(1)(h) of the Income Tax Act, SC 1970-71-72, c 63,

(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,

he may, subject to the other limitations of the paragraph, deduct

. . . amounts expended by him in the year for travelling in the course of his employment;

It is under this paragraph that the defendant claims the deduction.

But under subsection 8(4)

8.(4) An amount expended in respect of a meal consumed by an officer or employee shall not be included in computing the amount of a deduction under paragraph (1)(f) or (h) unless the meal was consumed during a period while he was required by his duties to be away, for a period or not less than twelve hours, from the municipality where the employer’s establishment to which he ordinarily reported for work was located and away from the metropolitan area, if there is one, where it was located.

The defendant resides in Toronto. For some 25 years, including 1973, he was employed by the Ontario Jockey Club which has its head office in Toronto and operates six racetracks including the Greenwood and Woodbine tracks in Toronto and a racetrack at Fort Erie about 100 miles from Toronto. In 1973 the defendant was employed during the thoroughbred racing season from March 21 to December 1 as a money room division head and at times as a money room captain, all in connection with the pari mutuel operations of the Club. He was assigned to work at differing times during the year at the Greenwood, Woodbine and Fort Erie racetracks. He worked at Fort Erie at two race meetings during the year, the first from April 15 to May 13 and the second from July 18 to September 1. While at Fort Erie he lived at a motel. He received no allowance or reimbursement from his employer in respect of his transportation expenses to or from Fort Erie or for his expenses while there. His claim for a deduction under paragraph 8(1)(h) in respect of his transportation and motel expenses was not challenged but the amount claimed for expenses for meals totalling $504 was disallowed under subsection 8(4). That his expenses for meals amounted to $504 is not in dispute.

The defendant was a member of a union of employees of the Club. At the beginning of the thoroughbred racing season he would find out where he was to work first from an assignment list which would be posted at the union office. Assignment lists for the subsequent race meetings would be posted at the racetrack where a race meeting was in progress. At the beginning of a season, the defendant would not necessarily expect to be working outside Toronto during the year but it was a definite possibility that he would be assigned to go to Fort Erie. On one occasion prior to 1973, he had volunteered to go there when the Club was short-handed and he was sent there each year afterwards except one year when his father was ill and he did not wish to go. In 1973 his first assignment was at the Greenwood track and most of his employment during the racing season was at the Greenwood and Woodbine tracks.

The defendant’s position was that, as he was ordinarily required to carry on the duties of his employment in different places, the amount here in question was deductible as part of his travelling expenses under paragraph 8(1)(h) and the deduction was not prohibited by subsection 8(4) as the racetrack at Fort Erie was not the establishment of his employer “to which he ordinarily reported for work” within the meaning of the subsection.

The meanings given in the Shorter Oxford Dictionary for the word “ordinarily” are:

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 or usual.

In the French language version of the Act, the corresponding expression used in paragraph 8(1)(h) is “d’une manière habituelle” and in subsection 8(4) the word is “habituellement”. The meanings of “habituellement” as given in Dictionnaire Quillet de la Langue Française are: “d’habitude, par habitude; d’ordinaire.” The contrary is given as: “rarement, exceptionnellement.” The meaning given for “habituel, elle” is: “passé à l’état d’habitude; coutumier.” It is contrasted with: “rare, exceptionnel, inaccoutumé, désuet.” “Normal” is suggested as a synonym.

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

In the view I have of the facts, it was a matter of regular occurrence, normal and not exceptional for the defendant to carry out his duties during the racing season as required by his employer at at least two, if not three, different places, that is to say, at Toronto and at Fort Erie or at the Greenwood, Woodbine and Fort Erie racetracks. I conclude, therefore, that the defendant’s situation fell within the meaning of paragraph 8(1 )(h) and that he was entitled to a deduction in respect of his expenses of travelling in the course of his employment. Moreover such expenses would, I think, ordinarily include, but for the effect of subsection 8(4), the cost of his meals while at Fort Erie in the course of his duties.

In subsection 8(4), the word “ordinarily” is part of the phrase “where the employer’s establishment to which he ordinarily reported for work was located’’. In this context it modifies the expression “reported for work” and has the effect of narrowing what the phrase would include if the word were not there. The expression “reported for work” itself refers, I think, to the daily attendance by an employee for work. To give the word “ordinarily” its meaning, it appears to me to be necessary to conceive of and identify the establishment of the employer to which the employee “as a matter of regular occurrence”, “usually” or “normally” reported for work.

When this has been done, the wording of the subsection makes it necessary to go a step further and ascertain the municipality in which that establishment is located.

In the present case there were, in my view, not one but three establishments of the Jockey Club to which the defendant in the course of the racing season usually, normally and as a matter of regular occurrence reported for work, that is to say, the Woodbine, Greenwood and Fort Erie racetracks, depending, in each case, on the race meetings being held and the track to which the defendant was assigned. On the facts I am unable to see any valid basis for distinguishing, for present purposes, any one of the three tracks from the others and I am unable to reach the conclusion that any one of them alone was or that any two of them together were the establishment where the defendant ordinarily reported for work to the exclusion of the other or others.

Under subsections 3(1) and 26(7) of the Interpretation Act, RSC 1970, c I-23, unless a contrary intention appears, words in the singular include the plural and words in the plural include the singular. In subsection 8(4) of the Income Tax Act, I do not think a contrary intention appears and so it is necessary, in my opinion, in applying it to the present situation to read both the word “municipality” and the word “establishment” as including the plural.

The Fort Erie, Woodbine and Greenwood racetracks were all establishments of the Jockey Club to which the defendant ordinarily reported to work. All three, therefore, fall within the meaning of “establishment to which he ordinarily reported for work” in subsection 8(4). It follows, in my opinion, that the municipality in which the Fort Erie track is located and that or those in which the Woodbine and Greenwood tracks are located fall, as well, within the meaning of “municipality” in the subsection. Subsection 8(4) accordingly applies to bar the defendant’s right to the deduction in question.

The appeal will be allowed and the assessment will be restored. Under subsection 178(2) of the Income Tax Act, the Minister of National Revenue will be ordered to pay all reasonable and proper costs of the defendant in connection with the appeal.