Date: 20020624
Docket:
2001-3700-IT-I
BETWEEN:
PHILLIP J.
STEELE,
Appellant,
and
HER MAJESTY THE
QUEEN,
Respondent.
Reasonsfor
Judgment
Miller, J.
[1]
These appeals by Phillip J. Steele by way of informal procedure
are to set aside the assessment of the Minister of National
Revenue (the Minister) denying him the disability tax credit for
the 1999 and 2000 taxation years. Mr. Steele resides in
Australia. He was unable to attend in Canada for hearing of this
matter so submissions by the parties were made in writing. This
approach has unfortunately not afforded me the opportunity to
observe Mr. Steele personally, however, I believe that the
documents agreed to be submitted by Mr. Steele and the Respondent
satisfactorily describe the situation. In any event, it is not my
role to diagnose Mr. Steele. I am to take what the
physicians have provided and apply legal principles to the
circumstances described in determining if Mr. Steele qualifies
for disability tax credits.
[2]
There is no dispute that Mr. Steele has bipolar affective
disorder. He has suffered from this mental illness for over 20
years. He has been unable to work and lives at home with his
mother. As one physician expressed it, he requires a quiet
environment. Mr. Steele claimed a disability tax credit for
1999 and 2000. He has relied upon two disability tax credit
certificates, one dated September 6, 2000 and the other dated
June 22, 2001, both of which were signed by Dr. Robert Ah
Hoon. In these appeals, he has also presented a letter from
Dr. J. Earl, Principal House Officer -
Psychiatry, Coastal Community Adult Mental Health Service of
Queensland dated February 1, 2002. Mr. Steele maintains he is
unable to remember substantially all of the time and indeed
cannot remember matters from one day to the next and forgets
simple daily things.
[3]
The Respondent has relied upon two follow-up questionnaires sent
to Dr. Ah Hoon by Canada Customs and Revenue Agency
(CCRA) dated October 10, 2000 and April 4, 2001 as well as
one follow-up questionnaire from the Department of Justice
provided by Dr. Ah Hoon dated February 26, 2002.
[4]
I will set out what I believe to be the salient points from each
of these documents.
(i)
Disability Tax Credit Certificate signed by Dr. Ah Hoon on
September 6, 2000:
Q. Is your
patient able to think, perceive, and remember, using medication
or therapy if necessary?
A.
No.
Q. Has the
impairment lasted, or is it expected to last, for a continuous
period of at least 12 months?
A.
Yes.
Q. Is the
impairment severe enough to restrict the basic activity(ies) of
daily living identified above all, or almost all, the time, even
with therapy and the use of appropriate aids and
medication?
A.
Yes.
(ii)
CCRA's questionnaire completed by Dr. Ah Hoon on October 10,
2000.
Q. Could
your patient understand the concepts of time, danger, or
money?
A.
Yes.
Q. Did your
patient need constant supervision for his personal care
activities?
A.
No.
Q. Was your
patient able to work?
A.
No.
Q. Did your
patient attend therapy?
A.
Yes.
Q. Did your
patient require medication?
A.
Yes.
Q. Was your
patient's condition or impairment controlled with medication
or therapy?
A.
Partially.
Q. For the
year 1999, what percentage of time was your patient UNABLE to
think, perceive and remember, even with the use of medication or
therapy
A.
25%.
Q. Do you
expect the severity of your patient's functional limitations
will change?
A.
No.
(iii)
CCRA's questionnaire completed by Dr. Ah Hoon on April 4,
2001:
Q. Could
your patient understand the concepts of time, danger, or
money?
A. Not when
manic or severely depressed.
Q. Did your
patient's condition restrict the ability to operate a motor
vehicle?
A.
No.
Q. Would
your patient be able to live independently?
A.
No.
Q. Did your
patient need constant supervision for his personal care
activities?
A.
No.
Q. Please
indicate who provided the supervision and how
frequently?
A. Does not
need constant supervision of care
activity.
Q. For the
year 1999, what percentage of time was your patient UNABLE to
think, perceive and remember, even with the use of medication for
therapy.
A.
40%.
Other comments: Patient has
a severe mental illness - hospitalized 33 times in 13
years, currently still living with his mother.
(iv)
Disability Tax Credit Certificate signed June 22, 2001 by Dr. Ah
Hoon.
Q. Can your
patient perceive, think and remember?
Answer no only if, all or almost all the time, even with therapy,
medication, or a device, your patient cannot perceive, think, and
remember. For example, answer no if he or she cannot manage or
initiate personal care without constant supervision.
A.
No.
Q. Has your
patient's ... marked restriction in a basic activity of daily
living ... lasted, or is expected to last, for a continuous
period of at least 12 months?
A.
No.
Q. Is the
impairment likely to improve sufficiently such that the patient
may no longer be ... markedly restricted in a basic activity of
daily living?
No answer.
Diagnosis:
Bipolar Affective Disorder (Severe mental illness) (Hospitalized
33 times in 13 years - No admission past 2
years)
(v)
Letter dated February 1, 2002 from Dr. J. Earl, Principal House
Officer - Psychiatry, Coastal Community Adult Mental Health
Service:
Re: Phillip John STEELE
This gentleman suffers from a prolonged and severe mental
illness. As a result of his condition his thinking and perception
are impaired for up to 40% of the time. It is also noted that he
has extensive memory difficulties and requires everything to be
written down in order for him to remember. He was first diagnosed
in 1980 and has been hospitalised 33 times in the last 12 years
for mania and depression. He only recently became a client of our
service but was in the Prince Charles Hospital community mental
health service for six years prior to this. His condition is
likely to persist long term.
(vi)
Completion of Department of Justice questionnaire by Dr. Ah Hoon
signed February 26, 2002.
Q. Was Mr.
Steele able to function well enough to engage in routine tasks
such as:
a) going to the grocery
store;
Yes
b) doing household
chores;
Yes
c) preparing meals for himself;
Unknown, lived with his mother
d) dressing
himself;
Yes
e) having conversation with other
people; Yes
Q. Did Mr.
Steele have periods of acute illness in 1999 and 2000 and if so
how long did they last?
A. Episodic
depressive episodes (mild to moderate) lasting up to 2 weeks at a
time.
Q. Did Mr.
Steele have periods in 1999 and 2000 in which he was able to
remember, perceive and think normally and if so how long did
these periods last?
A. Yes
- impaired during depressive episodes.
Q. Did Mr.
Steele take medication to control his illness in 1999 and 2000
and if so how effective was this medication?
A. Yes.
Quite successful - No hospitalization during 1999 or
2000.
Q. Mr.
Steele claims to have been unable to remember 90% of the time in
1999 and 2000. Is this accurate? If not, could you please
indicate the extent, if any of Mr. Steele's memory problems
e.g. are both his short term and long term memory impaired? Is
Mr. Steele simply absent minded or does he have difficulty
remembering things such as what he did one day earlier, the fact
he has left the oven on etc.
A. Mr.
Steele did complain of poor memory - may have been related
to alcohol use of 5 standard drinks per day for greater than 30
years. I doubt that claim to be unable to remember 90% of the
time in 1999/2000 is accurate. When tested by me formally on June
13, 2001 - minor memory deficits detected only.
[5]
The provisions for the disability tax credit are found in
sections 118.3 and 118.4 of the Income Tax Act (the
Act) which read as follows:
118.3. Where
(a)
an
individual has a severe and prolonged mental or physical
impairment,
(a.1)
the effects of the impairment are such that the individual's
ability to perform a basic activity of daily living is markedly
restricted.
(a.2) in the
case of
...
(iv)
an impairment with respect to an individual's ability in
perceiving, thinking and remembering, a medical doctor or a
psychologist, and
has certified in
prescribed form that the impairment is a severe and prolonged
mental or physical impairment the effects of which are such that
the individual's ability to perform a basic activity of daily
living is markedly restricted
(b)
the individual has filed
for a taxation year with the Minister the certificate described
in paragraph (a.2), and
(c)
no
amount in respect of remuneration for an attendant or care in a
nursing home, in respect of the individual, is included in
calculating a deduction under section 118.2 (otherwise than
because of paragraph 118.2(2)(b.1)) for the year by the
individual or by any other person,
for the purposes of
computing the tax payable under this Part by the individual for
the year, there may be deducted an amount determined by the
formula ...
118.4(1)
For the purposes of subsection 6(16), sections 118.2 and 118.3
and this subsection,
(a)
an impairment is prolonged where it has lasted, or can reasonably
be expected to last, for a continuous period of at least 12
months;
(b)
an
individual's ability to perform a basic activity of daily
living is markedly restricted only where all or substantially all
of the time, even with therapy and the use of appropriate devices
and medication, the individual is blind or is unable (or requires
an inordinate amount of time) to perform a basic activity of
daily living;
(c)
a basic activity of daily living in relation to an individual
means
(i) perceiving, thinking and remembering,
...
(d)
for greater certainty, no
other activity, including working, housekeeping or a social or
recreational activity, shall be considered as a basic activity of
daily living.
[6]
Section 118.3 of the Act lists three requirements to claim
a disability tax credit:
a)
The individual must have a severe and prolonged mental or
physical impairment;
b)
The effects of the impairment are such that his ability to
perform a basic activity of daily living is markedly
restricted;
c)
He must provide a doctor's certificate certifying 1 and
2.
So, even if I find
that conditions 1 and 2 have been met, for Mr. Steele to succeed
in these appeals, I must still find that a physician has
certified that Mr. Steele was unable to remember
substantially all of the time. Putting this conversely, if I find
Mr. Steele has presented a doctor's certificate complying
with section 118.3 (a positive certificate), can I then turn
around and say no, the doctor must be wrong; in my view,
Mr. Steele does not have a severe and prolonged impairment,
or if he does, the effect of it does not render him unable to
remember substantially all of the time (i.e. he has not met one
or both of the first two conditions). That appears to be what the
Respondent is asking me to do. I read the Respondent's
argument as firstly requesting that I interpret the disability
tax credit certificates of Dr. Ah Hoon as negative certificates,
which would end the matter and, secondly, should I find the
certificates are positive certificates, to then find that one or
both of the first two conditions have not been met.
[7]
I will deal first with the issue of whether there is a positive
section 118.3 medical certificate. The first disability tax
credit certificate of September 6, 2000 is completely
unambiguous. It states that Mr. Steele is unable to think,
perceive and remember, the impairment has lasted for a continuous
period of 12 months and is severe enough to restrict the basic
activity almost all the time. Before the second certificate, Dr.
Ah Hoon completed two questionnaires, which the Respondent claims
clarifies the certificate to the point that Dr. Ah Hoon must have
erred in the first certificate. I do not draw the same inference
from these questionnaires that Dr. Ah Hoon erred in his answers
in the first certificate. He certainly does not explicitly
indicate any mistake in the certificate. Indeed, subsequent to
these questionnaires he again completes a second certificate of
June 22, 2001, certifying Mr. Steele cannot perceive, think
and remember almost all the time. There is some ambiguity in this
second certificate as Dr. Ah Hoon answers no to the
question, "Has your patient's marked restriction in a
basic activity of daily living lasted, or is expected to last,
for a continuous period of at least 12 months?", yet Dr. Ah
Hoon does not answer the second part of the "Duration"
section which reads: "Is the impairment likely to improve
sufficiently such that the patient may no longer be markedly
restricted in a basic activity of daily living, or need
life-sustaining therapy (as outlined above)?".
[8]
I find some real confusion in the drafting of this part of the
certificate which deals with the prolonged nature of the
impairment. The question reads:
Has your patient's
marked restriction in a basic activity of daily living lasted or
is expected to last for a continuous period of 12
months?
The definition of
"prolonged" in section 118.4 reads:
an
impairment is prolonged where it has lasted, or can
reasonably be expected to last, for a continuous period of at
least 12 months.
The impairment must
surely be the disease or illness from which the individual
suffers. The effect of the impairment must be that it markedly
restricts the basic activity of daily living such as remembering.
The question in the certificate confuses the marked restriction
and the impairment. It is the impairment, that is the mental
illness, which must be prolonged, not necessarily the marked
restriction. I respectfully suggest the question does not reflect
the legislation and is indeed misleading. This becomes most
significant when dealing with a disease such as bipolar affective
disorder.
[9]
In the first certificate, where the question is indeed in keeping
with the Act, Dr. Ah Hoon said yes to the prolonged nature
of the impairment, and in the second certificate he said no,
though went on to indicate in that same certificate that Mr.
Steele had been hospitalized 33 times in 13 years though no
admissions in the past two years. The Minister's response to
this certificate was to confirm the disallowance. As the
Respondent stated in his written submissions:
In
response to the denial of a DTC for 1999 and 2000, the Appellant
submitted a second DTC certificate dated June 22, 2001. That
certificate, was also signed by Dr. Hoon and stated that the
Appellant was unable to think, perceive and remember almost all
of the time.
The Minister was not
satisfied that the Appellant's condition rendered him unable
to think, perceive or remember almost all of the time and
confirmed the disallowance of the DTC for 1999 or
2000.
[10]
Once again the Government, now the Department of Justice,
attempts to clarify the certificate presumably on the correct
assumption that it would be highly unlikely an Australian doctor
would appear in a Canadian Tax Court. While I recognize the
Appellant was prepared to have the written responses of
Dr. Ah Hoon put before me in this matter, it clearly
presents a dilemma as to how much reliance to put upon such
material, given no opportunity for cross-examination.
Nowhere in these follow-up questions by the Department of Justice
does Dr. Ah Hoon explicitly indicate that he completed the
certificate incorrectly.
[11]
Dr. Ah Hoon has twice completed the prescribed certificate
stating Mr. Steele's mental impairment is severe enough
to restrict the basic activity of daily living almost all the
time. There is nothing ambiguous in those responses, nor do I
read Dr. Ah Hoon's answer to subsequent questionnaires as any
acknowledgement that he has made a mistake on the certificates. I
therefore see no reason to interfere with that aspect of the
certificates.
[12]
With respect to the ambiguity in the second certificate regarding
the prolonged duration of the mental impairment, I find nothing
in any of Dr. Ah Hoon's follow-up questionnaires
which indicate Mr. Steele's suffering with bipolar affective
disorder was not prolonged. The reports all suggest a
long-term and ongoing suffering of bipolar affective
disorder. The combination of the confusing nature of the form of
question in the second certificate and the fact
Dr. Ah Hoon did not answer the second part of the
'Duration' section leads me to discount the value of that
certificate. I rely primarily on the first certificate for the
purpose of meeting the third condition required under section
118.3 of the Act for a medical certificate. If I had to
rely on the second certificate, I would interpret that
certificate as a positive certificate due to the misleading
nature of the question posed. Dr. Ah Hoon was answering a
question dealing with the continuous nature of the marked
restriction not the impairment itself. His responses to the
questionnaires confirmed the impairment was
prolonged.
[13]
Now it reverts back to me to determine if the first two
conditions of section 118.3 of the Act have been met, even
though I find I have a certificate as required by the third
condition. I will deal first with the issue of a prolonged
impairment. The very nature of the bipolar affective disorder, in
my non-medical understanding of it, is that the individual
suffers periods of manic behaviour and periods of depressive
behaviour. This disorder itself does not go away - it is
continuous. The acute manifestations of the disease appear in the
form of episodes of one extreme or the other. I am satisfied from
a review of Dr. Ah Hoon's and Dr. Earl's
explanations that the impairment suffered by Mr. Steele is
prolonged as defined in the Act. He has suffered the
impairment for many years and there is no indication it is going
to go away.
[14]
With respect to the second condition requiring a finding that Mr.
Steele cannot remember substantially all of the time, I have some
difficulty. Given that the definition of "a basic
activity" includes thinking, perceiving and remembering, and
given Associate Chief Judge Bowman's finding in the
Radage
case that each of these three characteristics qualifies as a
basic activity, I will recite what the legislation requires for a
marked restriction on a basic activity, as follows:
An
individual's ability to remember is markedly restricted only
where substantially all of the time the individual is unable to
think, perceive or remember.
[15]
A definition of "remembering" is not as integral to
making a determination of an individual's ability to
remember, as is the individual's own assessment, supported or
rejected by friends and family as well as by qualified
caregivers. The latter is a requirement of the Act, which
I can only surmise was incorporated into the Act based on
an understanding that the medical profession is best able to
identify how much of the time an individual can remember. I
remain just a bit sceptical that the medical profession has
advanced to the point that the complexities of the brain's
receipt, storage and retrieval of data can be identified with
such an accuracy that would allow a psychiatrist to proclaim that
an individual is unable to remember 25%, 50% or 90% of the time.
However, the legislation demands a finding that substantially all
of the time, Mr. Steele is unable to perform this basic activity
of daily living.
[16]
Notwithstanding Dr. Ah Hoon twice filled in certificates
certifying Mr. Steele could not remember substantially all
the time, his follow-up answers are not entirely supportive,
though not so contrary for me to interpret the positive
certificate on this point as a negative certificate. To
appreciate what is required for a court to make such a contrary
finding I refer to the recent Federal Court of Appeal decision in
Buchanan,
which interpreted Judge Campbell's decision in the Tax Court
as doing just that. In that case, a negative certificate was
found to be positive on the basis that the physician had applied
a blatant misunderstanding to what the certificate questions
really meant. Had he appreciated the true legal nature, the
answers would clearly have been different and therefore the
certificate could be interpreted as a positive
certificate.
[17]
In this case, I am guided by principles laid down by Associate
Chief Judge Bowman in the Radage decision,
specifically the following:
(a)
The legislative intent appears to be to provide a modest amount
of tax relief to persons who fall within a relatively restricted
category of markedly physically or mentally impaired persons. The
intent is neither to give the credit to everyone who suffers from
a disability nor to erect a hurdle that is impossible for
virtually every disabled person to surmount. It obviously
recognizes that disabled persons need such tax relief and it is
intended to be of benefit to such persons.
(b)
The court must, while recognizing the narrowness of the tests
enumerated in sections 118.3 and 118.4, construe the provisions
liberally, humanely and compassionately and not narrowly and
technically. ...
(c)
If there is doubt on which side of the line a claimant falls,
that doubt should be resolved in favour of the
claimant.
[18]
While there is some question as to the degree of restriction on
his memory, I give the benefit to Mr. Steele, primarily based on
Dr. Earl's letter that stated Mr. Steele:
... has extensive memory
difficulties and requires everything to be written
down in order for him to remember.
This does not sound
like mere absentmindedness. Dr. Ah Hoon, on the written
questionnaire from the Department of Justice, indicated he
doubted Mr. Steele's claim to be unable to remember 90% of
the time. This possible doubt did not cause Dr. Ah Hoon to alter
his certificate regarding Mr. Steele's ability to remember.
Indeed, Dr. Ah Hoon did indicate a 40% failure to remember rate.
I cannot tell from the fact that he gave 40% as the percentage of
time Mr. Steele was unable to think, perceive and remember
whether he meant (a) on any reception of data by Mr. Steele,
there is a 40% chance he will forget it; (b) 60% of the year or 7
months of the year, Mr. Steele can remember everything;
(c) four out of every ten days, he forgets everything; or
(d) only during manic or depressed episodes which cover about 40%
of the time can he not remember anything. Given Mr. Steele's
submission that for years he has been unable to remember from one
day to the next, I am inclined to accept alternative (a) as the
most likely interpretation. What a tremendous handicap that is,
not knowing for every bit of information received whether your
brain will or will not be able to store and retrieve it. It is no
wonder everything had to be written down. I therefore do not
accept the 40% answer of Dr. Ah Hoon's as in any way negating
a finding that Mr. Steele's basic activity of daily living,
being thinking, perceiving and remembering, was restricted
substantially all of the time.
[19]
For these reasons, while there is doubt, I resolve the doubt in
favour of the taxpayer.
[20]
The Respondent referred me to another bipolar affective disorder
case, Larivière,
in which Judge Mogan found the Appellant was not sufficiently
impaired to qualify for the disability tax credit. In that case,
however. the doctor involved answered yes to the question,
"Is your patient able to perceive, think or remember?"
In the case before me, Dr. Ah Hoon has consistently answered no
to those questions.
[21]
In summary, I am not prepared to interpret the first certificate
by Dr. Ah Hoon in any way other than as it is answered,
as a positive certificate. With respect to the second
certificate, I find the awkward and imperfect wording of the
question dealing with the duration of the impairment, plus Dr. Ah
Hoon's failure to answer part of that section create an
ambiguity in the certificate which again I resolve in favour of
the taxpayer due to a clear and unambiguous first certificate,
and due to no compelling evidence from Dr. Ah Hoon to clearly
contradict the first certificate. The recent Federal Court of
Appeal decision of Buchanan, supra, confirms that a
positive physician's certificate remains a condition of
section 118.3 of the Act for an individual to
successfully claim a disability tax credit. However, a
certificate can be proven to be not what it purports to be in
special circumstances; thus the original negative certificate in
the Buchanan case was found to be a positive certificate,
after having heard evidence of the physician. As Justice Stone
indicated:
The Court must be faithful
to the words of the Income Tax Act. The Act
requires the positive certificate of a physician. That means that
the function of the Tax Court Judge is not to substitute his or
her opinion for that of a physician, but to determine, based on
medical evidence, whether a negative certificate should be
treated as a positive certificate.
I do not take this
to mean, however, that the Tax Court judge cannot still find a
taxpayer does not qualify for the disability tax credit
notwithstanding a physician's positive certificate. The words
of the Act in section 118.3 specifically require the three
conditions I mentioned at the outset. The certificate is only one
of those conditions. Naturally, I will be influenced by a
physician's positive certificate, however, as in this case, I
believe I still must make a finding on the first two
conditions.
[22]
In Mr. Steele's case, I accept the first certificate as
having met the necessary requirements of the Act. I also
have found that the first two conditions, being the prolonged
nature of the impairment and the marked restriction on
Mr. Steele's ability to remember have both been met and
I therefore allow the appeals and refer the matter back to the
Minister for reassessment on the basis that Mr. Steele is
entitled to the disability tax credit in each year.
Signed at Ottawa, Canada, this 24th day
of June, 2002.
"Campbell J.
Miller"
J.T.C.C.
COURT FILE
NO.:
2001-3700(IT)I
STYLE OF
CAUSE:
Phillip J. Steele v. The Queen
PLACE OF
HEARING:
DATE OF
HEARING:
REASONS FOR JUDGMENT
BY: The Honourable Judge Campbell J.
Miller
DATE OF
JUDGMENT:
June 24, 2002
PARTICIPANTS:
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Michael Ezri
COUNSEL OF RECORD:
For the
Appellant:
Name:
N/A
Firm:
N/A
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-3700(IT)I
BETWEEN:
PHILLIP J. STEELE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals determined from written submissions of
the parties by
The Honourable Judge Campbell J.
Miller
Participants
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Michael Ezri
JUDGMENT
The appeals from assessments of tax made under the Income Tax
Act for the 1999 and 2000 taxation years are allowed, without
costs, and the assessments are referred back to the Minister of
National Revenue for reconsideration and reassessment on the
basis that the Appellant is entitled to claim a disability tax
credit in each year.
Signed at Ottawa, Canada, this 24th day of June,
2002.
J.T.C.C.
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