Rip
T.C.J.:
Gregory
Anderson
(“appellant”)
has
appealed
his
income
tax
assessment
for
the
1990
taxation
year
in
which
the
Minister
of
National
Revenue
(“Minister”)
included
in
his
income
an
amount
of
$42,345
paid
to
him
by
a
former
employer
in
settlement
of
litigation
for
wrongful
dismissal
as
reimbursement
of
expenses.
The
Minister
is
of
the
view
that
money
received
by
the
appellant
from
his
former
employer
is
to
be
included
in
his
income
as
a
retiring
allowance
within
the
meaning
of
subparagraph
56(1
)(#)(ii)
(and
subsection
248(1))
of
the
Income
Tax
Act
(“Act”),
and
that
none
of
the
amount
he
received
was
reimbursement
of
expenses.
In
the
alternative,
the
respondent
argues
that
Mr.
Anderson
received
or
enjoyed
a
benefit
in
the
full
amount
he
received
from
his
former
employer
by
virtue
of
his
employment
within
the
meaning
of
section
6
of
the
Act.
Prior
to
1987
Mr.
Anderson
was
employed
by
Ortho
Phamarceutical
(“Ortho”)
which
has
its
offices
in
the
area
of
the
Don
Valley
Parkway
and
Lawrence
Avenue
in
the
City
of
Toronto.
At
the
time,
Mr.
Anderson
lived
with
his
family
in
the
City
of
Scarborough.
In
1987
he
ceased
to
be
employed
by
Ortho
and
commenced
employment
with
Genetech
Canada
(“Genetech”).
Genetech’s
offices
were
in
the
City
of
Burlington,
Ontario.
Mr.
Anderson,
at
the
suggestion
of
Genetech,
purchased
a
home
in,
and
moved
to,
Etobicoke
which
is
located
at
the
western
portion
of
Metro
Toronto.
He
sold
his
home
in
Scarborough
for
$285,000
and
acquired
his
home
in
Etobicoke
for
$350,000.
After
about
a
year
he
and
Genetech
were
not
satisfied
with
their
relationship
and
Mr.
Anderson
ceased
to
be
employed
by
Genetech.
He
rejoined
Ortho
at
a
lower
salary
than
that
paid
to
him
by
Genetech.
Mr.
Anderson
sold
his
home
in
Etobicoke
for
$520,000
and
purchased
a
home
in
the
same
neighbourhood
in
Scarborough
where
he
previously
lived
for
$450,000.
Mr.
Anderson
sued
Genetech
for
wrongful
dismissal.
He
was
unable
to
produce
the
statement
of
claim
against
Genetech.
What
was
produced
was
a
form
of
release
from
liability
to
Genetech
and
its
related
corporations
signed
by
him
when
he
received
payment
of
$93,809
from
Genetech
in
settlement
of
his
action.
The
release
does
not
refer
to
any
reimbursement
of
expenses
but
to
“all
actions,
causes
of
action,
suits,
debts,
demands
and
claims,
including
claims
for
wages,
incentives,
compensation,
bonuses,
termination
pay,
vacation
pay
or
claims
for
notice
of
termination
or
pay
in
lieu
of
notice
of
termination...”.
Mr.
Anderson
agrees
that
of
the
amount
of
$93,809,
$30,532
was
a
retiring
allowance
and
ought
to
be
included
in
his
income.
Mr.
Anderson
produced
a
T-4A
form
sent
to
him
by
Genetech
which
states
that
the
full
amount
of
$93,809
was
a
retiring
allowance;
however
the
income
tax
deducted
and
withheld
by
Genetech
was
only
$9,159.60,
which
Mr.
Anderson
understands
to
be
the
tax
with
respect
to
the
retiring
allowance
of
$30,532.
In
other
words,
Mr.
Anderson
states
that
he
and
Genetech
had
agreed
that
only
$30,532
was
a
retiring
allowance
and
the
balance,
$63,277
was
reimbursement
for
moving
expenses.
The
amount
of
$63,277
was
made
up,
according
to
Mr.
Anderson,
of
the
following
amounts:
a)
$42,345
as
real
estate
commission
on
the
sale
of
his
house
in
Etobicoke,
legal
fees
on
the
sale
of
the
house
and
disbursements
and
actual
moving
of
personal
goods
from
Etobicoke
to
the
Scarborough
residence;
b)
$10,000
to
reimburse
him
for
legal
fees
paid
with
respect
to
the
action
against
Genetech
(This
amount
was
apparently
allowed
as
a
deduction
by
Revenue
Canada.);
and,
c)
$10,932
as
an
interest
expense;
(Mr.
Anderson
stated
that
during
the
period
litigation
commenced
and
up
to
the
time
it
was
settled
he
was
paying
mortgage
interest
on
the
house
in
Scarborough
and
he
wanted
to
be
reimbursed.
In
his
Notice
of
Appeal,
Mr.
Anderson
does
not
dispute
the
Minister’s
inclusion
of
the
amount
of
$10,932
in
his
income).
Mr.
Anderson
has
appealed
only
from
the
inclusion
in
his
income
of
the
$42,345.
The
evidence
was
that
the
distance
between
Mr.
Anderson’s
residence
in
Etobicoke
and
the
place
of
business
of
Ortho
was
less
than
40
kilometres
and
therefore
Mr.
Anderson
was
not
permitted
to
deduct
any
of
the
moving
expenses
to
Scarborough
in
accordance
with
subsection
62(1)
of
the
Act.
He
confirmed
that
Ortho
did
not
compel
him
to
move
from
Etobicoke.
He
explained
that
his
salary
at
Ortho
was
less
than
what
he
received
at
Genetech.
Also,
he
said,
housing
prices
were
cheaper
in
Scarborough
than
in
Etobicoke.
Thus,
he
reasoned
he
could
purchase
a
similar
home
in
Scarborough
and
pay
less
on
a
mortgage
than
he
would
have
to
pay
for
the
mortgage
on
his
Etobicoke
house.
Accordingly,
he
sold
the
Etobicoke
house
and
moved
to
Scarborough,
thus
incurring
expenses.
In
his
Notice
of
Appeal,
Mr.
Anderson
claimed
that
the
amount
of
$42,345
was
paid
to
him
to
return
him
to
the
same
economic
position
prior
to
leaving
Ortho
and
he
was
not
put
in
a
better
economic
position
as
a
result
of
the
payment.
He
also
stated
that
since
the
reimbursement
is
not
more
than
the
amount
of
expenses
incurred,
he
received
no
benefit.
Mr.
Anderson
submitted
that
the
reimbursement
of
expenses
does
not
fall
under
the
Act’s
definition
of
“retiring
allowance”.
The
relevant
provisions
of
the
Act
upon
which
the
Minister
has
assessed
are
subsections
56(1)
and
248(1).
Subsection
56(1)
provides
that:
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(a)
any
amount
received
by
the
taxpayer
in
the
year
as,
on
account
or
in
lieu
of
payment
of,
or
in
satisfaction
of,
(ii)
a
retiring
allowance,
other
than
an
amount
received
out
of
or
under
an
employee
benefit
plan,
a
retirement
compensation
arrangement
or
a
salary
deferral
arrangement,
...
Subsection
248(1)
defines
“retiring
allowance”
to
mean:
an
amount
(other
than
a
superannuation
or
pension
benefit
or
an
amount
received
as
a
consequence
of
the
death
of
an
employee)
received
(a)
upon
or
after
retirement
of
a
taxpayer
from
an
office
or
employment
in
recognition
of
his
long
service,
or
(b)
in
respect
of
a
loss
of
an
office
or
employment
of
a
taxpayer,
whether
or
not
received
as,
on
account
or
in
lieu
of
payment
of,
damages
or
pursuant
to
an
order
or
judgment
of
a
competent
tribunal
by
the
taxpayer
or,
after
his
death,
by
a
dependant
or
a
relation
of
the
taxpayer
or
by
the
legal
representative
of
the
taxpayer;
The
issue
is
whether
or
not
all
of
the
amount
of
$93,809
Mr.
Anderson
received
from
Genetech
was
a
retiring
allowance
or
whether
it
was
a
retiring
allowance
and
something
else.
In
Nowegijick
v.
R.
(1983),
83
D.T.C.
5041
(S.C.C.),
a
decision
of
the
Supreme
Court
of
Canada,
Dickson
J.
(as
he
then
was)
considered
the
words
“or
is
otherwise
subject
to
taxation
in
respect
of
any
such
property”
in
section
87
of
the
Indian
Act.
Speaking
for
the
Court,
Dickson
J.
stated,
at
page
5045:
The
words
“in
respect
of”
are,
in
my
opinion,
words
of
the
widest
possible
scope.
They
import
such
meanings
as
“in
relation
to”,
“with
reference
to”
or
“in
connection
with”.
The
phrase
“in
respect
of”
is
probably
the
widest
of
any
expression
intended
to
convey
some
connection
between
two
related
subject
matters.
This
interpretation
was
further
applied
by
Dickson
J.
in
R.
v.
Savage
(1983),
83
D.T.C.
5409
(S.C.C.)
in
regards
to
paragraph
6(1
)(a)
of
the
Act
which
states
“the
value
of
board,
lodging
and
other
benefits
of
any
kind
whatever
...
received
or
enjoyed
by
him
in
the
year
in
respect
of,
in
course
of,
or
by
virtue
of
an
office
or
employment”.
In
determining
whether
the
damages
received
by
the
appellant
were
a
retiring
allowance,
the
word
“in
respect
of”
in
paragraph
248(1
)(/?)
direct
that
a
broad
scope
of
inclusion
be
considered
as
to
what
constitutes
a
sufficient
connection
between
the
loss
of
employment
and
the
amounts
received.
On
the
facts
before
me,
there
is
a
sufficient
connection
between
the
receipt
of
the
money
by
Mr.
Anderson
from
Genetech
and
his
loss
of
employment.
The
damages
received
by
Mr.
Anderson
arise
from
his
loss
of
employment,
and
the
incidental
damages
related
to
that
loss
of
employment.
This
is
not
a
case
where
damages
were
received
extraneous
to
the
loss
of
employment,
such
as
where
the
taxpayer
was
defamed,
as
in
Bédard
v.
Minister
of
National
Revenue
(1990),
91
D.T.C.
573
(T.C.C.),
or
for
mental
and
physical
injuries
suffered
during
employment,
as
in
Stolte
v.
R.,
[1996]
2
C.T.C.
2421
(T.C.C.).
The
$93,809
paid
to
Mr.
Anderson
by
Genetech
was
on
account
of
damages
he
suffered
as
a
result
of
losing
his
job
at
Genetech
and
moving
back
to
Scarborough.
There
is
a
causal
link
between
the
two.
Accordingly,
Mr.
Anderson
received
an
amount
of
money
in
respect
of
a
loss
of
employment
with
Genetech
as
damages,
and
such
amount
is
properly
regarded
as
a
“retiring
allowance”
within
the
meaning
of
paragraph
248(1
)(b)
of
the
Act.
By
virtue
of
subparagraph
56(
1
)(a)(ii)
these
damages
are
to
be
included
in
his
income
for
the
1990
taxation
year.
The
appeal
is
dismissed
with
costs.
Appeal
dismissed.