Minister of National Revenue v. Frank Albert Ritchie, [1971] CTC 860, 71 DTC 5503

Heald, J.:—This is an appeal by the Minister of National Revenue from the decision of the Tax Appeal Board dated June 4, 1970, reported [1970] Tax A.B.C. 630, wherein an appeal by the respondent from his 1967 income tax assessment was allowed.

The facts are not in dispute. During the 1967 taxation year, the respondent who lives in St. Clair Beach, Ontario, a suburb of Windsor, Ontario, was employed on a full-time basis by the Ford Motor Company at Windsor as Plant Manager of the Transmission and Chassis Division. His gross income from his Ford employment in 1967 was slightly over $36,000.

During the calendar year 1967, the respondent attended classes at the University of Michigan, Dearborn Campus, approximately one evening per week. The respondent’s evidence was that he held a Bachelor of Science degree in Mechanical Engineering obtained from Queen’s University in 1942. He com- menced employment with Ford Canada while still a student at Queen’s, and ‘has been in their employ ever since. In 1951, he commenced taking classés at the University of Michigan, Dearborn Campus, leading to a Master’s degree in business administration. Because of his full-time employment with Ford, he was only able to take these courses at night. As a matter of fact, he said that the course he was taking was designed for people who worked all day elsewhere. Finally, as a result of taking these night classes one night a week through the years (excepting 1956, 1957 and 1958 when his employment with Ford required him to travel a ‘great deal) he obtained the degree, Master of Business Administration, in 1969.

The respondent’s evidence was that in 1967 his normal working day with Ford commenced at 7 a.m. and ended at 5 p.m., and his normal working week was 5 to 514 days per week. His night class at Michigan commenced at 7 p.m. and ended at 10 p.m.: In 1967, his Michigan attendance was mostly one night per week but there was a period of two or three months when his particular course was given two nights a week. On filing his income tax return for 1967, the respondent claimed as a deduction, in computing his income, the sum of $375 paid as a tuition fee by him to the University of Michigan for the said night class. The appellant disallowed this deduction. The respondent appealed to the Tax Appeal Board where his appeal was allowed ({1970] Tax A.B.C. 630).

The respondent? s submission is that the said deduction is permitted under Section 11(1) (qb) of the Income Tax Act which reads as follows :

11. (1) Notwithstanding paragraphs (a), (b) and (h) of subsection (1) of section 12, the following amounts may be deducted in computing the income of a taxpayer for a taxation year:

(qb) where a taxpayer was during the year a student in full-time attendance at a university outside Canada in a course leading to a degree, the amount of any fees for his tuition paid to the university in respect of a period not exceeding 12 months r j commencing in the year and not included in the calculation

of a deduction under this. subsection for a previous year except any such fees

(i) paid in respect of a course of less than 13 consecutive weeks’ duration; or

(ii) paid on his behalf by his employer to the extent that the amount thereof exceeds an amount included in his income for the year in which such payment was made in respect of such payment;

The evidence establishes that the respondent was a student at a university outside Canada in a course leading to a degree. It is also clear that neither of the exceptions enumerated in Section 11(1) (qb) apply to this case. Accordingly, the sole question for decision here is whether or not the respondent can be said to be ‘‘a student in full-time attendance’’ within the meaning of Section 11(1) (qb).

In dealing with matters relating to the general public, statutes are presumed to use words in their popular, rather than their narrowly legal or technical sense. . . . If an Act is directed to dealing with matters affecting everybody generally, the words used have the meaning attached to them in the common and ordinary use of language.* [1]

The Shorter Oxford English Dictionary, 3rd ed., page 760, defines ‘‘full-timer’’ as: ‘‘ A child that attends school during school hours; opp. to half-timer.’’ It does not define ‘‘full-time’’. I think they both have the same meaning. I am of the opinion that used in its popular and ordinary sense in this context, the phrase must mean to attend a university outside Canada on a full-time basis.

The respondent submits that ‘‘full-time attendance’’ does not mean that one must be a full-time student but refers to attendance at all lectures pertaining to a particular course. By analogy, he argues that a person who is a member of a church and in full- time attendance can only mean that that person is present at all church functions or church services. Therefore, he submits that a full-time employee can have a full-time attendance at church, at a symphony concert series, or at night school.

Accordingly, inasmuch as the respondent was present all the time—i.e. in full-time attendance at his night school course in the year 1967, as attested to by the University of Michigan— he contends that his deduction is valid.

Mr. St-Onge, for the Tax Appeal Board, agreed with the respondent’s interpretation of the said Section 11(1) (qb) and, in effect, disagreed with the Board’s decision in Reddam v. M.N.R., 35 Tax A.B.C. 345. With every deference, I am unable to agree with the decision of the Tax Appeal Board in the case at bar. I agree with the interpretation given this section in the Reddam case (supra) where the pertinent facts are nearly identical to the facts in this ease. In Reddam there appears the following statement:

When a person is a full-time employee somewhere, how can he also be a full-time student elsewhere within the same 24 hours?

. . . when an individual has full-time status in respect of one regular activity throughout a working day, as in the present instance, any other activity indulged in during that same 24 hour day will necessarily be only a part-time activity. . ..

This particular subsection was also considered in the case of Hart J. Levin v. M.N.R., [1971] C.T.C. 66. However, the Ex- chequer Court dismissed the taxpayer’s appeal on the ground that the course undertaken by the taxpayer was not a course “leading to a degree” and therefore the taxpayer did not fulfill the requirements of Section 11(1) (qb).

On the question of what constitutes ‘‘full-time attendance’’, my Brother Kerr had this to say at page 74:

There was the further argument that the appellant was not ‘‘a student in full-time attendance” at the university. I express no final opinion on that argument, but I am inclined to think that attendance at what is regarded as a half-time course at a university outside Canada for only two days per week while carrying on the practice of dentistry in Canada the rest of the time hardly constitutes full-time attendance at a university outside Canada within the intent of Parliament expressed in paragraph (qb). . . .

I agree with the above obiter of Mr. Justice Kerr. In the case at bar; the respondent is a very senior employee of the Ford Motor Company of Canada, occupying a very responsible full- time position with that company for which his remuneration in 1967 amounted to over $36,000. Surely the respondent was in “full-time attendance’’ at his Ford job in 1967—if this is so, then any other activity indulged in would have to be “part-time”. I agree with the reasoning in the Reddam case (supra) that it is only possible to have one ‘‘full-time job’’ or one ‘‘full-time attendance’’ during a particular period. I cannot accept the very narrow interpretation urged by learned counsel for the respondent. In his submission, ‘‘full-time’’ attendance relates to “perfect” attendance. He relies on the Shorter Oxford English Dictionary meaning of ‘‘full’’ as: ‘‘Complete, entire, perfect.’’* [2] Thus he argues that ‘‘full-time attendance’’ at church means “perfect” attendance; “full-time attendance’’ at all home games of the Detroit Red Wings hockey club means “perfect” attendance and that ‘‘full-time attendance” at a course leading to a degree means ‘‘perfect’’ attendance.

I do not think the subsection in question means this. If a student in this night school course was ill a particular night and unable to attend his lecture, he would not be permitted to deduct his tuition fees under this subsection since he did not attend all of the lectures, if the respondent’s interpretation is correct.

I would also observe that the respondent’s interpretation would result in the Department of National Revenue acting somewhat in the capacity of a truant, officer for non-Canadian universities and I doubt that that was the intent of Parliament. Section 11(1) (qc) deals with the deductibility of tuition fees paid to Canadian educational institutions. Paragraph (qb) requires that an educational institution outside of Canada must be a university ; the student’s course must lead to a degree ; and the student must be in full-time attendance at that university. None of these requirements are contained in paragraph (qc) for students attending an institution in Canada: the institution need not be a university, the course need not lead to a degree, and the student need not be in full-time attendance. Thus, under the respondent’s interpretation, a student in a Canadian school could “skip” lectures and still deduct his tuition fees while a Canadian at a university outside Canada, would lose deductibility even though he missed one class through serious illness.

But the respondent answers that “full-time” means full- time in the eyes of the university and not necessarily ‘‘full- time’’ taken literally—in other words, if the university is prepared to say by a. certificate that a particular student was in full-time attendance, then that ends the matter whether there was de facto perfect attendance or not. I feel that here, the respondent, for the purposes of this submission, departs from his own definition of ‘‘full-time attendance”.

I am of the opinion that to give the words in question the construction urged by the respondent would be to give them an unreasonable construction. It is an essential canon of construction that if words are susceptible of a reasonable and also of an unreasonable construction, the former construction must prevail.* [3]

Maxwell on Interpretation of Statutes, 12th ed., states the rule to be followed very clearly on page 199 :

In determining either the general object of the legislature, or the meaning of its language in any particular passage, it is obvious that the intention which appears to be most in accord with convenience, reason, justice and legal principles should, in all cases of doubtful significance, be presumed to be the true one : An . intention to produce an unreasonable result is not to be imputed to a statute if there is some other construction available.

I said at the trial that I was sympathetic to the respondent’s position. He and others like him are to be commended for their industry, their perseverance and their dedication to self-improvement. It may well be that the respondent and other taxpayers in a similar position should be able to deduct tuition fees in these circumstances. However, it is not the Court’s function to legislate—it can only interpret the statute as it presently exists.

I therefore find that the respondent was not, during the taxation year 1967, a student in full-time attendance at a university outside Canada in a course leading to a degree and is, accordingly, not entitled to deduct tuition fees paid by him in the sum of $375 to the University of Michigan, from his 1967 income.

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At the trial, the appellant’s counsel advised that the appellant had undertaken to the respondent to pay all his costs on a solicitor and client basis.

The appeal is therefore allowed without costs.